Verus International Reports Fiscal 2021 Q2 Financial Results; Posts Significant Improvement in ...
Gaithersburg, MD, June 22, 2021 (GLOBE NEWSWIRE) -- Verus International, Inc. (“Verus” or the “Company”) (OTC Pink: VRUS), an international food, CBD and hemp-based products company, reported financial results for the fiscal 2021 second quarter, which ended April 30, 2021. In conjunction with this release, the Company is also providing additional details on business developments subsequent to the quarter’s end.
For fiscal Q2 2021, management is noting the following items of importance:
- Revenue decreased 28% on a year-over-year basis to $3.3 million during fiscal Q2 2021, compared to $4.6 million during fiscal Q2 2020, due in part to a continuing planned product line repositioning that is expected to continue contributing higher margin revenue in future quarters;
- Gross profit margin continued to improve compared to preceding quarters, reaching approximately 23% for fiscal Q2 2021, which is approximately 600 basis points higher than the 17% generated during fiscal Q1 2021, and approximately 1,100 basis points higher than the 12% generated during fiscal Q4 2020;
- Operating expenses of $0.9 million were 89% lower than fiscal Q2 2020 operating expenses of $7.6 million, primarily due to the completion of the former CEO’s stock-based compensation program and expense rationalization measures across nearly all expense categories;
- Operating loss of $0.1 million was 98% lower than the $6.7 million reported in fiscal Q2 2020;
- Net loss from continuing operations was $0.7 million, a 90% improvement over the $7.0 million reported in the prior year period, with non-cash expenses increasing $0.3 million year-over-year
“Our U.S. sales achieved double digits (approximately 11%) as a percentage of our total revenue for the first time,” explained Verus CEO Andy Dhruv. “Even at this modest percentage from the Pachyderm Labs product lines, you can already see the positive effect on gross margins, which were close to 600 basis points higher than the prior quarter. Based on current sales forecasts, we expect our higher margin U.S. product lines to continue capturing a larger share of our overall revenue in subsequent quarters. This trend, coupled with our significant rationalization of expenses, has quickly repositioned us into a more sustainable company. Overall, our strategy of cost rationalization and new higher margin product lines has put us on track to generate improved operating results in the future. Our next goal is to layer on growth, so we plan to have our own booth at the upcoming Champs show in Las Vegas, NV, which runs from July 27th through July 30th. Industry trade shows have been a tremendous source of new business, so we are particularly excited to showcase our product lines at a venue of this size and importance.”
Operationally, the new Waffles product line continues to sell out, with reorder rates above historical averages for both food and CBD lines. The Company is currently working to secure additional working capital and capacity to meet this growing demand. Based on recent orders and inventory turns, Verus believes that it will return to revenue growth in upcoming quarters.
In terms of M&A activity, management continues advancing previously announced M&A discussions, although management cannot be certain of the timing or the outcome of these active M&A discussions, which involve companies of equal or greater size than Verus’ current operations.
About Verus International
Verus is an emerging multi-line consumer packaged goods (CPG) company developing branded product lines in the U.S. and on a global basis. The Company trades on the OTC market (OTC Pink: 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 Pachyderm Labs subsidiary Twitter feed @PachydermLabs.
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.