Gaithersburg, MD, April 29, 2020 (GLOBE NEWSWIRE) -- Verus International, Inc. (“Verus” or the “Company”) (OTCQB: VRUS) reported results for its first fiscal quarter ended January 31, 2020. In conjunction with this release, the Company is also providing additional details on recently announced business opportunities that will impact the 2020 financial year.
For Q1 2020, management is noting the following items of importance:
- Revenue set an all-time record of $6.2 million, an increase of 153% over the $2.4 million reported in Q1 2019.
- Gross profit margin improved to 18.4%, approximately 340 basis-points higher than the 15.0% reported in Q1 2019 and 320 basis-points higher than the average of the trailing four fiscal quarters.
- Operating expenses of $2.7 million were $2.3 million higher than the $0.4 million reported in Q1 2019, as a result of a $1.7 million increase in stock-based compensation and higher expenses across all other categories to support the record revenue including costs related to enhancements of our Major League Baseball (“MLB”) branded products.
- Operating loss of $1.6 million was $1.5 million higher than the $0.1 million loss reported in Q1 2019, as a result of non-cash expenses that more than offset the gross profit increase. On a proforma basis, Q1 2020 generated proforma operating income of approximately $139,000, after excluding non-cash expenses (stock-based compensation, intangible assets amortization, and depreciation).
- Net loss was $2.5 million for Q1 2020 compared to a net loss of $0.3 million for Q1 2019. On a proforma basis, Q1 2020 generated net income of approximately $88,000, excluding non-cash expenses (stock-based compensation, intangible assets amortization, convertible notes payable related items, and depreciation).
“Our best line items in the quarter were our record revenue, a return to a higher triple digit revenue growth rate, and our improving margins,” explained Verus CEO Anshu Bhatnagar. “We are currently in the process of addressing our non-cash charges and are working on a plan to mitigate some of the expense line items that are masking our improved performance. Overall, this quarter reflected the period just before the lockdown during February 2020. We were very lucky to participate in some trade shows, vendor and customer meetings, and complete extensive travel prior to the global travel ban, which helped position us well for the current environment.”
On a forward basis, the Company is providing the following update and guidance:
- During April 2020, Verus received $105,000 in funding under the government’s COVID-19 Payroll Protection Program (PPP), which carries a 1% interest rate, a two-year repayment term, and forgiveness of the entire balance in the event certain criteria are met
- The Company applied for a COVID-19 Economic Injury Disaster Loan (EIDL) in the amount of up to $2 million and is awaiting the results of that application
- In the newly launched Verus Cares division, the Company received its first order for medical protective gear (disposable gowns) and is in the process of coordinating the product sampling phase with potential customers in the U.S. and other countries
- The Big League Foods division has successfully completed the redesign of its candy line (packaging and shapes) and all major orders placed prior to the retail lockdown are still intact
- Verus is exploring additional vertical integration opportunities, both for its Texas facility and other potential locations
“The global pandemic has created many challenges, but it has also brought great opportunities,” said CEO Bhatnagar. “We are very lucky, because we have a solid base of revenue from our traditional product lines, a fully redesigned candy line that is ready to take off once retail returns, and a new protective gear business where demand is tremendous – and our remaining challenges are mostly logistical. We are growing revenue at a triple digit rate before flipping a number of very significant switches, which is a testament to the outstanding team we have assembled over the last year. Closed stadiums and store fronts are just temporary obstacles, but in the meantime, we have a diversified set of three uncorrelated sources of revenue for the first time in our history. We have pent up demand in all of our business units, which makes us very optimistic about the remainder of 2020.”
About Verus International
Verus is a global, emerging multi-line consumer packaged goods (CPG) company developing branded product lines in the U.S. and the Middle East; and medical protective supplies on a global basis. The Company trades on the OTC market (OTCQB: VRUS). Investors can find real-time quotes and market information for the Company on www.otcmarkets.com. Additional information is also available at the Company’s website, www.verusfoods.com, and via the official Twitter feed @Verus_Foods and the Big League Foods subsidiary Twitter feed @BigLeagueFoods.
Safe Harbor Statement
This press release contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are identified by the use of the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project” and similar expressions that are intended to identify forward-looking statements. All forward-looking statements speak only as of the date of this press release. You should not place undue reliance on these forward-looking statements. Although we believe that our plans, objectives, expectations and intentions reflected in or suggested by the forward-looking statements are reasonable, we can give no assurance that these plans, objectives, expectations or intentions will be achieved. Forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from historical experience and present expectations or projections. Actual results could differ materially from those in the forward-looking statements and the trading price for our common stock may fluctuate significantly. Forward-looking statements also are affected by the risk factors described in the Company’s filings with the U.S. Securities and Exchange Commission. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
Contacts
Investor Contact:
MKR Group Inc.
Todd Kehrli or Mark Forney
vrus@mkr-group.com