The company said it is “laser-focused” on identifying additional efficiencies.
Colorado-based Urban-Gro (Nasdaq: UGRO) this week reported nearly identical losses in its second quarter of 2023 to the first quarter, up to $5.4 million in the red from $5.1 million sequentially, which is driving the company to further explore diversification.
Revenue rose to $18.8 million, up 12% sequentially and 16% year-over-year, which Urban-Gro pegged on the acquisition of competitor Emerald in April 2022 that brought with it $8.1 million “in construction design-build revenues.”
However, revenue for the first half of 2023 was down compared to last year, falling 5% to $35.6 million from $37.3 million.
As of June 30, Urban-Gro reported a project backlog of $79 million in uncompleted contracts, including $70 million in construction deals, $5 million in equipment systems, and $4 million in professional services.
CEO Brad Nattrass said in a statement that the quarter’s performance was “consistent with the expectations we communicated in May,” and added that the path forward is through spreading its revenue streams and overall footprint.
“Our diversification playbook continues to drive strong growth of non-CEA revenue,” Nattrass said. “While we continue to see some positive signs within the cannabis industry, we are not immune to the well-known pressures facing the sector. For this reason, we continue to remain laser-focused on reallocating resources and optimizing our spending where appropriate to ensure that our infrastructure is aligned with the size of our business.”
The unending search for efficiencies and possible cost-cutting continues, Nattrass said.
“We are a leaner and more efficient organization than we were a year ago, and we will continue to position our business for long term, profitable growth,” he said.
At the close of the quarter, Urban-Gro had $8.6 million in the bank and zero debt, but was carrying $31.8 million in total liabilities against $61.2 million in total assets.
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