Alpine 4 Holdings, Inc. (ALPP) announced today its Q1 2022 results and highlights.
First Quarter 2022 Consolidated Results and Highlights
- Consolidated revenues of $25.6 million, up 195% over Q1 2021 with organic growth of 14.9%
- By the end of Q1 2022 the company had proforma revenue for remaining quarters of 2022 in excess of $100 million
- Shareholder Equity of $68.0 million up from $46.1 million in Q1 2021
- Total assets of $130.4 million up from $84.7 million in Q1 2021
- Total working capital decreased to $15.1 million in Q1 2022 from $33.1 million in Q1 2021. As a result of cash used for acquisitions and paying off current and non-current debt.
- Increased total inventory to $24.2 million up from $3.4 million in Q1 2021
Kent Wilson CEO had this to said, "Most of our industry segments in Q1 2022, including our Construction Services holdings, showed improvement over Q4 2021 and Q1 2021. The Company is managing many complex challenges, including labor force access and supply chain constraints, which did very well considering the enormity these two factors present on the global business front. With investments into automation, we were able to augment our talented workforce to create greater efficiency. When you combine that with our long-term healthy vendor relationships, companies like QCA and RCA, unlike many of their competitors, can procure components and product supplies with only modest interruption to our customer base. All in all, it was a good first quarter for Alpine 4 and our holdings, and barring any further degradation in the supply chain, the Company expects its gross profit margins to continue to improve."
Financial Measures That Supplement GAAP
Alpine 4 believes it is important for shareholders, stakeholders, and inventors to be presented with non-GAAP financial measures to evaluate performance and trends of the total company and its businesses. This includes adjustments in recent periods to GAAP financial measures to increase period-to-period comparability following actions to strengthen our overall financial position and how we manage our business.
Consolidated Company Results
| Three months ended March 31, | ||||||||||||
Dollars in thousands; per-share amounts in dollars, diluted | 2022 | 2021 | Quarter on Quarter | |||||||||
GAAP Metrics | ||||||||||||
*Cash | $ | 901 | $ | 35,691 | $ | (34,791 | ) | |||||
EPS | (0.02 | ) | (0.04 | ) | 0.02 | |||||||
Revenues | $ | 25,592 | $ | 8,668 | $ | 16,924 | ||||||
Net Profit (Loss) | $ | (4,176 | ) | $ | (6,129 | ) | $ | 1,954 | ||||
EBITDA | $ | (2,162 | ) | $ | (3,935 | ) | $ | 1,774 | ||||
Non-GAAP Metrics | ||||||||||||
*Cash | $ | 901 | $ | 35,691 | $ | (34,791 | ) | |||||
EPS | (0.02 | ) | (0.04 | ) | 0.02 | |||||||
Revenues (a) | $ | 24,647 | $ | 9,043 | $ | 15,603 | ||||||
Net Profit (Loss) (b) | $ | (3,380 | ) | $ | (5,597 | ) | $ | 2,217 | ||||
EBITDA (c) | $ | (1,366 | ) | $ | (3,403 | ) | $ | 2,037 | ||||
(a) Includes supply chain eliminations
(b) Excludes insurance, non-operating benefit costs, loss on write offs (accounts receivables, inventory), and debt extinguishment
(c) Excludes insurance, interest and other financial charges, non-operating benefit costs, loss on write offs (accounts receivables, inventory, intangible assets), and debt extinguishment
*Cash as of the date of this report was approximately $2.5 million.
Results by Reporting Segment (GAAP)
The following segment discussions and variance explanations are intended to reflect management's view of the relevant comparisons of financial results.
A4 Manufacturing
(in thousands) | Organic Growth Q1 2022 |
|
|
Q1 |
|
| Quarter on Quarter |
|
| With Alt Labs Q1 2022 |
|
|
Q1 |
|
| Quarter on Quarter |
|
| Three Months Ended March 31, 2022 |
|
| Three Months Ended December 31, 2021 | Quarter on Quarter | |||||||||||||
Revenues | $ | 4,824 | $ | 3,738 | 29.0 | % | $ | 8,648 | $ | 3,738 | 131.3 | % | $ | 8,648 | $ | 5,869 | 47.4 | % | ||||||||||||||||||
Segment Gross Profit | $ | 1,103 | $ | 912 | 20.9 | % | $ | 2,004 | $ | 912 | 119.7 | % | $ | 2,004 | $ | (164 | ) | 1,319.7 | % | |||||||||||||||||
Segment Profit/(Loss) Margin | 22.9 | % | 24.4 | % | (6.3 | )% | 23.2 | % | 24.4 | % | (5.0 | )% | 23.2 | % | (2.8 | )% | 927.7 | % | ||||||||||||||||||
Segment Operating Income (Loss) | $ | 334 | $ | 254 | 31.5 | % | $ | (653 | ) | $ | 254 | (357.0 | )% | $ | (653 | ) | $ | (3,838 | ) | 83.0 | % | |||||||||||||||
Segment EBITDA | $ | 513 | $ | 397 | 29.3 | % | $ | (234 | ) | $ | 397 | (159.0 | )% | $ | (234 | ) | $ | (3,631 | ) | 93.6 | % | |||||||||||||||
Quality Circuit Assembly had an organic revenue growth of $915 thousand which was an increase of 26.9% over Q1 2021. This increase was primarily driven by increased demand from our EV customers. The acquisition of Alternative Laboratories in May 2021 attributed to non-organic revenue growth of $3.8 million. The decline in organic margin was a function of supply chain issues and the Company expects margins to increase starting in Q3 2022.
Defense
| Three months ended | ||||||||||||||||||||||||
(in thousands) | March 31, 2022 | March 31, 2021 | Quarter on Quarter | March 31, 2022 | December 31, 2021 | Quarter on Quarter | ||||||||||||||||||
Revenues | $ | 2,688 | - | 100.0 | % | $ | 2,688 | $ | 1,600 | 68.0 | % | |||||||||||||
Segment Gross Profit | $ | 843 | - | 100.0 | % | $ | 843 | $ | (28 | ) | 3,141.1 | % | ||||||||||||
Segment Profit Margin | 31.4 | % | - | 100.0 | % | 31.4 | % | (1.7 | )% | 1,910.7 | % | |||||||||||||
Segment Operating Income | $ | 423 | - | 100.0 | % | $ | 423 | $ | (151 | ) | 380.4 | % | ||||||||||||
Segment EBITDA | $ | 495 | - | 100.0 | % | $ | 495 | $ | (108 | ) | 558.6 | % | ||||||||||||
In May 2021, the Company acquired Thermal Dynamics International ("TDI"). The Company recognized $2.68 million in revenues in Q1 2022. Which was 68% growth over Q4 2021.
A4 Technologies
| Three months ended | ||||||||||||||||||||||||
(in thousands) | March 31, 2022 | March 31, 2021 | Quarter on Quarter | March 31, 2022 | December 31, 2021 | Quarter on Quarter | ||||||||||||||||||
Revenues | $ | 9,794 | - | 100.0 | % | $ | 9,794 | $ | 1,543 | 534.5 | % | |||||||||||||
Segment Gross Profit | $ | 2,122 | - | 100.0 | % | $ | 2,122 | $ | 457 | 364.8 | % | |||||||||||||
Segment Profit Margin | 21.7 | % | - | 100.0 | % | 21.7 | % | 29.6 | % | (26.7 | )% | |||||||||||||
Segment Operating Income | $ | 290 | - | 100.0 | % | $ | 290 | $ | (162 | ) | 278.3 | % | ||||||||||||
Segment EBITDA | $ | 533 | - | 100.0 | % | $ | 533 | $ | (79 | ) | 772.2 | % | ||||||||||||
In November 2021 and December 2021, the Company acquired ElecJet Corp. and RCA Commercial (DTI Services Limited Liability Company) ("RCA"), respectively. During the three months ended March 31, 2022, ElecJet recognized $557 thousand in revenues while RCA recognized $9.2 million.
A4 Construction Services
| Three months ended | ||||||||||||||||||||||||
(in thousands) | March 31, 2022 | March 31, 2021 | Quarter on Quarter | March 31, 2022 | December 31, 2021 | Quarter on Quarter | ||||||||||||||||||
Revenues | $ | 4,056 | $ | 4,930 | (17.7 | )% | $ | 4,056 | $ | 2,430 | 66.9 | % | ||||||||||||
Segment Gross Profit/(Loss) | $ | 365 | $ | (158 | ) | 331.4 | % | $ | 365 | $ | (1,871 | ) | 119.5 | % | ||||||||||
Segment Profit/(Loss) Margin | 9.0 | % | (3.2 | )% | 381.3 | % | 9.0 | % | (77.0 | )% | 111.7 | % | ||||||||||||
Segment Operating Loss | $ | (636 | ) | $ | (2,104 | ) | 69.8 | % | $ | (636 | ) | $ | (2,752 | ) | 76.9 | % | ||||||||
Segment EBITDA | $ | (413 | ) | $ | (1,766 | ) | 76.6 | % | $ | (413 | ) | $ | (2,191 | ) | 81.2 | % | ||||||||
For the three months ended March 31, 2022, Construction Services saw improvements in gross margin, operating loss, and EBITDA for Q1 2022 over Q1 2021 and Q4 2021. The margin compression that occurred in 2021 and has continued into 2022 was primarily due to steel prices increasing by 200%. The Company expects gross margin to rise to 17.4% by 2023 and for our Construction Services holdings to return to profitability.
A4 Aerospace
| Three months ended | ||||||||||||||||||||||||
(in thousands) | March 31, 2022 | March 31, 2021 | Quarter on Quarter | March 31, 2022 | December 31, 2021 | Quarter on Quarter | ||||||||||||||||||
Revenues | $ | 406 | - | 100.0 | % | $ | 406 | $ | 260 | 56.2 | % | |||||||||||||
Segment Gross Profit | $ | 303 | - | 100.0 | % | $ | 303 | $ | 138 | 120.2 | % | |||||||||||||
Segment Profit Margin | 74.6 | % | - | 100.0 | % | 74.6 | % | 53.0 | % | 40.9 | % | |||||||||||||
Segment Operating Loss | $ | (851 | ) | $ | (2,218 | ) | 61.6 | % | $ | (851 | ) | $ | (1,057 | ) | 19.4 | % | ||||||||
Segment EBITDA | $ | (552 | ) | $ | (1,610 | ) | 65.7 | % | $ | (552 | ) | $ | (454 | ) | (21.4 | )% | ||||||||
The Company acquired Vayu Aerospace in February of 2021 as a growth stage company. In October 2021 the Company also acquired Identified Technologies ("ITC"). During Q1 2022, A4 Aerospace recognized revenues of $406 thousand which was an increase of 56.2% over Q4 2021. This increase in revenue was driven by Vayu Aerospace's sales to ENSCO and increased revenue from its 3D mapping services from Identified Technologies. The revenue produced gross margin of 74.6%.