Total net sales up 105% for nine months ended June 30 compared to same period in 2017
Gross profit as percentage of net sales was 65.4% in Q3 and 73.3% for nine months ended June 30
Net income of $206,074 in Q3 & $477,542 for nine months ended June 30 vs. losses in year ago periods
Level Brands, Inc. (NYSE American: LEVB), an innovative brand management and licensing company that provides bold, unconventional, and socially responsible branding for leading businesses, on Tues., Aug. 14, 2018 announced financial and operating results for its third quarter and nine months ended June 30, 2018.
The Backstory: Here are some of the financial highlights:
Total net sales increased 79% and 105% to $3.2 million and $7.0 million, respectively, for the three and nine-month periods ended June 30, 2018 from the comparable periods in fiscal 2017.
Gross profit as a percentage of net sales was 65.4% for the three months ended June 30, 2018. For the nine-month period, gross profit as a percentage of net sales was 73.3%.
Net income attributable to common shareholders improved 197.8% to $206,074 in the three months ended June 30, 2018 from the comparable period in fiscal 2017. For the nine-month period, net income improved 134.1% to $477,542, up from a loss of $1.4 million in the prior-year comparable period.
Here are the nine-month 2018 and recent operational highlights:
Signed 10-year, multimillion-dollar cannabidiol (CBD) products license deal with Isodiol International Inc. (CSE: ISOL) (OTCQB: ISOLF) (FSE: F)
Isodiol launched first five new CBD kathy ireland® Health & Wellness branded products as part of Isodiol license agreement
Brought together Isodiol and SG Blocks, another Level Brands’ client, to roll-out KURE Corp.’s specialty Vape Pod™ stores
Signed five-year licensing agreement with Gravocore fitness system, launched in 2017 in an exclusive partnership with Amazon
Partnered with BMG, a multinational record label and the world’s fourth-largest music-publishing company, to launch new record label with three project agreement
Signed seven-year licensing agreement with Boston Therapeutics to market its diabetes supplement, Sugardown®; deal generates $850,000 in upfront fees plus royalties on gross sales
Party to a three-year licensing agreement with Lamps Plus to showcase artwork of world-renowned neo-pop artist Romero Britto
Damiva launched 100% natural women’s personal care products into health food stores with kathy ireland® Worldwide
Signed a five-year licensing deal with Dynasty Group USA, one of the largest American-owned manufacturers of high-quality, cruelty-free cosmetic brushes
Signed a licensing agreement with Society Hill Spirits for new Beauty & Pin-Ups vodka line
Opened corporate office and design studio in Los Angeles
Key Quote: “We’re pleased to report another quarter of profitability. While we continue to generate strong year-over-year revenue growth, it’s important to note the royalty components of many of the licensing deals signed this year have yet to be generated and therefore are not reflected in our reported numbers. As we execute on these agreements and continue to sign more clients, our pipeline of potential future royalties grows exponentially, and with no inventory and tight cost controls, we believe our high margin operation should see much of this reach our bottom line, which should lead to significant shareholder value creation.” Martin A. Sumichrast, Chairman & CEO, Level Brands
Disclosure
(Level Brands [NYSE: LEVB] is a client of RedChip Companies. LEVB agreed to pay RedChip a monthly cash fee and 5,000 shares of Rule 144 stock for four months of RedChip investor awareness services.)
Ligand Pharmaceuticals Inc. (NASDAQ: LGND) and Vernalis PLC (OTC: VNLPY) announce that Ligand has declared its firm intention to acquire the entire issued and to be issued shares of Vernalis through a UK scheme of arrangement conditional on approval by the Vernalis shareholders. Vernalis is a structure-based drug discovery biotechnology company with a broad pipeline of partnered programs and ongoing collaborations.
The Backstory: Under the terms of the proposed UK scheme of arrangement, Ligand would pay Vernalis shareholders £0.062 per share in cash, valuing Vernalis at approximately £32.8 million, equivalent to approximately $43 million. This proposal – which requires approval by a majority of the shareholders representing at least 75% or more in value of the company’s outstanding shares voting on the transaction – has received the support and irrevocable undertakings from the Board of Directors of Vernalis and its two largest shareholders, who own in aggregate approximately 67% of the outstanding shares of the company.
What It Means: The acquisition of Vernalis would provide Ligand with the following:
A portfolio of more than 8 fully-funded partnered programs, or shots on goal, including programs in the respiratory, oncology and CNS sectors. Partners include Corvus, Verona, Celgene, Servier, Menarini, Tris and CTI.
A 70-person R&D team based in Cambridge, England focused on fragment- and structure-based drug discovery and partnering, with an active portfolio of collaboration agreements generating over $8 million per year of service revenue matched by a comparable level of costs, and partnerships that have the potential to generate additional near-term shots on goal. Ongoing collaboration partners include Servier, Daiichi Sankyo, Lundbeck, Asahi Kasei and an undisclosed Japanese partner.
An established compound library and additional early-stage, unpartnered programs in oncology, CNS and other areas that will provide business development out-licensing and corporate formation opportunities.
Galaxy Next Generation, Inc. (OTC: FLCR), a U.S. distributor of interactive learning technology hardware and software that create fully collaborative instructional environments, announced the completion of the third phase of a four phase installation of its SAM series G2 computer touch screens for the Bacon County School District in Alma, Georgia.
Why It Matters: The Bacon County School District project includes the installation of approximately 110 SAM series G2 panels. With the completion of the third phase of the installation, approximately 80 units have been installed, including 23 in the current reporting period, generating an estimated $100,000 in revenue for Galaxy.
Key Quote: “This is another project that provides a clear demonstration of the seismic shifts in technological demands and innovation driving industry growth. With a proven history of customer success stories and industry-leading technology, we’re well-positioned to capitalize on this significant opportunity.” – Gary LeCroy, Founder & CEO
What’s Next: Galaxy expects to grow revenue 200% in the current fiscal year ending June 30, 2019. They’ve previously reported an opportunity pipeline of $10 million and are in the midst of what is normally a high-volume sales period for the company. If Galaxy achieves its sales goal of $20 million to $22 million for fiscal year 2019, it’s expected to report net income of approximately $3 million.
Disclosure
(Galaxy Next Generation [OTC: FLCR] is a client of RedChip Companies, Inc. FLCR agreed to pay RedChip Companies, Inc. a monthly cash fee for 4 months of investor awareness services.)
GSRX Industries (OTCQB: GSRX), a cannabis stock developing vertically integrated operations in Puerto Rico, California, and other markets, announced the completion of construction of its fourth medical cannabis dispensary in Puerto Rico last week. GSRX already operates three dispensaries on the island, plus one in the seaside town of Point Arena, California.
Why It Matters: There are only a limited number of licenses available in Puerto Rico, and GSRX has a strong start to building the dominant medical cannabis dispensary brand on the island, which is estimated to have a potential market value of $500 million annually.
What’s Next: GSRX has plans to rapidly scale its business in the months and quarters ahead. To learn more about its strategy and long-term potential, watch our exclusive webinar with CEO Les Ball:
RedChip.com
Disclosure
GSRX Industries (OTCQB: GSRX) is a client of RedChip Companies. RedChip Companies, Inc. received 1,000,000 registered shares of GSRX for consulting services and 50,000 shares for investor awareness services. Be advised RedChip intends to sell some or all of its shares at any time, including when you are buying.
Spectrum Global Solutions (OTC: SGSI), a single-source provider of end-to-end next-generation wireless and wireline network services and staffing solutions to the service provider (carrier) and corporate enterprise markets, announced another $1.9 million in new contract awards.
Why It Matters: The customer orders include network audit, fiber deployment, structured cabling, fiber and small cell design services and staffing solutions to support next generation wireless and wireline services across the nation. This work has commenced through our AW Solutions and ADEX subsidiaries, and the revenue will be realized from Q3 onwards into 2019.
Key Quote: “We have now reported in the last 12 weeks nearly $12 million in new contract awards.” – Roger Ponder, CEO
What’s Next: The new contracts and purchase orders are coming in at a much higher pace this year over last. As SGSI’s customers continue to deploy new network infrastructure to bolster their end client services, the company is well-positioned to rapidly deploy resources to meet the demand, setting it up to report very positive results in the quarters ahead.
Disclosure
Spectrum Global Solutions (SGSI) is a client of RedChip Companies, Inc. SGSI agreed to pay RedChip Companies, Inc. a monthly cash fee for six (6) months of RedChip investor awareness services.
Ampco-Pittsburgh (NYSE: AP), a leading manufacturer of forged and cast engineered products and air and liquid processing units, reported mixed second quarter results last week, with revenue up 15% to $127.4 million and a net loss of $2.1 million, down marginally from a loss of $1.9 million in the year ago period.
Key Quote: Commenting on the quarter’s results, Brett McBrayer, Ampco-Pittsburgh’s CEO stated, “As we navigate Ampco-Pittsburgh through this challenging period, I am thoroughly evaluating the current state of our commercial relationships and plant operations. Additionally, we face new headwinds. The tariffs imposed by the U.S. on imported steel products from Canada are having a significant negative impact on our Canadian subsidiary, ASW. We are also seeing a lower frac block order intake due to what we believe to be inventory adjustments in the supply chain. We are moving to mitigate these headwinds through a number of actions, several of which are already in progress.”
Strong Case for Investing in Small Caps in Today’s Market
A tumultuous global landscape is fueling the appeal of domestic, small-cap stocks that tend to be insulated from the threat of trade war and a strong dollar.
Small-cap stocks are made more attractive by the juxtaposition of increased U.S. retail sales and consumer spending alongside dampened optimism for synchronized global growth—all pointing to an American economy that may have more room to run.
According to S&P Dow Jones Indices data, small-caps are outperforming large-caps by the most in eight years.
In a blog posted last month, the firm's managing director and head of U.S. equities, Jodie Gunzberg, wrote, "In the past four months, the smaller companies have outperformed larger companies by 10.1%, contributing to the fifth biggest realized small-cap premium in the first half of any year in history."
The small-cap rally has been fueled by several factors:
Tax cuts and deregulation
Domestic economic growth
Mergers and acquisitions
Stronger dollar
In a note last month, JPMorgan U.S. equity strategist Dubravko Lakos-Bujas wrote, “We continue to recommend small-caps as a ‘catch-all trade’ for its high cyclical, reflation and tax policy exposures, as well as lower sensitivity to ongoing trade risk.”
Small-caps can fly under investor radar because they are often overshadowed by larger, household names. Even in an age when information is at our fingertips, small-cap companies often suffer from thin analyst coverage and, therefore, developments and/or innovations can go unnoticed. Subscribing to the RedChip Money Report is one way to find these undiscovered opportunities.
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Quote of the Week
"Microcaps are not for the casual investor."
- Greg Sichenzia, Sichenzia Ross Friedman Ference LLP
RedChip Companies, an Inc. 5000 company, is an international investor relations, media, and research firm focused on small-cap and mid-cap companies. Since 1992, RedChip has delivered concrete, measurable results for its clients through the most comprehensive service platform in the industry for small-cap and mid-cap companies. These services include a worldwide distribution network for its stock research written by analysts holding the CFA designation; retail and institutional roadshows in major U.S. cities; outbound marketing to stock brokers, RIAs, institutions, and family offices; a digital media investor relations platform that has generated over 2.3 million unique investor views; quarterly global online institutional and retail investor conferences that reach over 10,000 investors annually; "The RedChip Money Report" television show which airs in 100 million homes across the U.S. on The Family Channel; a weekly newsletter delivered to 60,000 investors; TV commercials in local and national markets; corporate and product videos; website design; and traditional investor relation services, which include press release writing, development of investor presentations, quarterly conference call script writing, strategic consulting, capital raising, and more.
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