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01/11 05:02
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals. Financial performance shows revenue growth and improved gross margins, but net income and EPS have declined due to higher expenses from the beverage division launch. The Q&A reveals plans for further expansion, which may strain financials. Despite a strong revenue increase, cash flow challenges and increased operating costs pose risks. The lack of a shareholder return plan discussion and potential G&A rate increases further contribute to a neutral sentiment. Without market cap data, the stock reaction is uncertain, but no strong catalysts for significant movement are evident.
Net Revenue $8 million, a 12.4% increase year-over-year from $7.1 million. The increase reflects growth in the company's operations and product sales.
Gross Margin 70.9%, up from 67.2% in the same quarter last year. The increase was primarily driven by a favorable shift in product mix.
Operating Expenses $4.4 million, up from $3.7 million in the year-ago quarter. The increase was primarily due to incremental costs associated with being a public company and the added cost of launching the beverage division.
Income from Operations $1.28 million, a 21.8% increase year-over-year from $1.05 million. This reflects improved operational efficiency and revenue growth.
Net Income $125,300, down from $783,600 in the year-ago quarter. The decrease was due to other income in the same period last year and higher expenses this year to launch the beverage division.
Earnings Per Share (EPS) $0.01 per diluted share, down from $0.11 per diluted share in the year-ago quarter. The decrease was due to the same factors affecting net income.
Adjusted EBITDA Per Share $0.15 per diluted share, down from $0.18 per diluted share in the year-ago quarter. The decrease was due to higher expenses related to the beverage division launch.
EBITDA $1.31 million, a 1.3% decrease year-over-year from $1.33 million. The decrease was due to higher expenses related to the beverage division.
Adjusted EBITDA $1.52 million, a 13.4% increase year-over-year from $1.34 million. This reflects improved operational performance.
Cash and Cash Equivalents $1 million as of September 30, 2025, up from $687,900 as of December 31, 2024. The increase reflects improved cash management.
Inventory $2.1 million as of September 30, 2025, up from $1.7 million as of December 31, 2024. The increase is largely due to inventory buildup for the growing beverage division.
Working Capital $16.68 million surplus as of September 30, 2025, compared to a $1.12 million deficit as of December 31, 2024. The improvement reflects better financial positioning and operational efficiency.
Cash Used in Operating Activities $3.21 million for the nine months ended September 30, 2025, compared to $1.38 million for the same period in 2024. The increase primarily reflects higher prepaid expenses for inventory deposits and reductions in accounts payable and accrued liabilities.
Functional Beverages: Secured major distribution wins, expanding retail availability nationally and internationally. EG of America to launch beverages in 1,600 locations in Q4 2025. Wakefern Food Group to carry five SKUs across 365 locations. Regional partnerships with AlaBev and Atlantic Importing Company to expand footprint in the Southeast U.S. and New England.
Supplements: FOCUSfactor named #1 pharmacist-recommended OTC memory supplement for 2025-26. Kroger to launch three SKUs in 1,600 locations in April 2026. Uniprix in Canada to introduce supplements in 300 stores in February 2026. Costco Mexico to receive first purchase orders in December 2025.
Domestic Expansion: EG of America and Wakefern Food Group partnerships to expand beverage availability in the U.S. Regional partnerships with AlaBev and Atlantic Importing Company to strengthen presence in the Southeast and New England.
International Expansion: First purchase orders from Costco Mexico for supplements. Management attending Middle East Organic Natural Products Expo in Dubai to develop international footprint.
Leadership Additions: Teresa Thompson joined the Board of Directors, bringing extensive experience from Costco Wholesale. Bob Anderson appointed as Director of Direct Store Distribution to optimize beverage distribution.
Financial Performance: Net revenue increased by 12.4% year-over-year to $8 million. Gross margin improved to 70.9% from 67.2%. Operating expenses rose due to public company costs and beverage division launch. Adjusted EBITDA increased by 13.4% to $1.52 million.
Public Offering: Raised $4.4 million in equity capital to support retail rollouts, inventory buildup, and marketing initiatives.
Incremental Costs of Being a Public Company: The company experienced an increase in operating expenses due to incremental costs associated with being a public company, which could strain financial resources and impact profitability.
Beverage Division Launch Costs: Higher expenses were incurred to launch the beverage division, which has contributed to a decrease in net income and EBITDA compared to the previous year.
Net Income Decline: Net income for the third quarter dropped significantly to $125,300 from $783,600 in the same quarter last year, indicating potential challenges in maintaining profitability.
Cash Flow Challenges: Cash used in operating activities increased to $3.21 million for the nine months ended September 30, 2025, compared to $1.38 million in the same period in 2024, reflecting higher prepaid expenses and reductions in accounts payable.
Inventory and Prepaid Deposits: The company has increased inventory and prepaid deposits, particularly for the beverage division, which ties up capital and could pose risks if demand does not meet expectations.
Domestic Expansion: EG of America will launch focus and energy beverages in over 1,600 high-traffic locations nationwide in Q4 2025. Wakefern Food Group will carry five focus and energy SKUs across 365 retail locations.
Regional Partnerships: New partnerships with AlaBev and Atlantic Importing Company will expand beverage distribution across Alabama, Massachusetts, Connecticut, and Rhode Island.
Supplement Business Expansion: Kroger will launch 3 SKUs for FOCUSfactor supplements across 1,600 locations starting April 2026. Uniprix in Canada will introduce supplements across 300 stores beginning February 2026.
International Expansion: Costco Mexico will receive its first purchase orders for FOCUSfactor supplements in December 2025. Management will attend the Middle East Organic Natural Products Expo to develop international footprint.
Capital Utilization: $4.4 million raised in August 2025 will support retail rollouts, inventory buildup, production, and marketing initiatives.
Growth Outlook: Synergy is positioned to accelerate growth through the remainder of 2025 and into 2026, driven by new retail authorizations, expanded distribution partnerships, and leadership additions.
The selected topic was not discussed during the call.
The earnings call presents mixed signals. Financial performance shows revenue growth and improved gross margins, but net income and EPS have declined due to higher expenses from the beverage division launch. The Q&A reveals plans for further expansion, which may strain financials. Despite a strong revenue increase, cash flow challenges and increased operating costs pose risks. The lack of a shareholder return plan discussion and potential G&A rate increases further contribute to a neutral sentiment. Without market cap data, the stock reaction is uncertain, but no strong catalysts for significant movement are evident.
The company shows strong financial performance with increased EPS and EBITDA margins, effective cost management, and strategic growth initiatives. The debt refinancing plan is expected to enhance cash flow, and the licensing agreements promise future revenue growth. Despite a 13% revenue decline due to a non-recurring event, the outlook is optimistic with expansion into new markets and partnerships with major retailers. The Q&A session provided clarity on revenue expectations and strategic plans. Overall, the positive indicators outweigh the risks, suggesting a stock price increase in the short term.
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