Yunhong Green CTI (YHGJ) Q1 2024 earnings summary

Executive summary

• Net sales for Q1 2024 were $4.89M, down 3% from $5.05M in Q1 2023, with declines in foil balloon sales partially offset by growth in film products and other revenues.

• Gross margin decreased to 18% from 22% year-over-year, impacted by lower sales volume, mix inefficiencies, and unusual repair and maintenance expenses.

• Net loss attributable to common shareholders was $590,000 for Q1 2024, compared to net income of $385,000 in Q1 2023; basic and diluted EPS were $(0.03) versus $0.02 year-over-year.

• Cash used in operations was $767,000 in Q1 2024, an improvement from $1.37M used in Q1 2023; cash balance at March 31, 2024 was $49,000.

• Substantial doubt exists about the company’s ability to continue as a going concern due to recurring losses and low liquidity.

Financial highlights

• Q1 2024 net sales: $4.89M (down 3% year-over-year); gross profit: $895,000 (down from $1.13M); gross margin: 18% (down from 22%).

• Operating loss: $353,000 in Q1 2024 versus operating income of $12,000 in Q1 2023.

• Interest expense increased to $218,000 from $142,000 year-over-year.

• Net loss: $576,000 in Q1 2024 versus net income of $396,000 in Q1 2023.

• Cash and cash equivalents at quarter-end: $49,000, down from $130,000 at March 31, 2023.

Outlook and guidance

• Management plans to focus on the most profitable business elements and explore alternative funding sources.

• No assurance can be given that the company will successfully execute its plans or secure additional financing.

• Ongoing impacts from COVID-19, supply chain constraints, inflation, and helium costs are expected to continue.