CEA Industries Inc. (NASDAQ:CEAD) reported results for the three months ended September 30, 2023, showcasing a revenue of $0.9 million, down from $5.1 million in Q3 2022 due to decreased bookings over the past year.
Q3 2023 Financial Results
- Net bookings were $0.4 million, down from $2.2 million in the same period last year. Quarter-end backlog dropped to $0.5 million from $6.8 million in Q3 2022, attributed to reduced capital expenditures by cannabis operators and a scaled-back sales effort.
- Gross profit was $0.1 million, with a gross margin of 11.4%, down from $0.6 million and 11.8%, respectively, in Q3 2022. The decline is primarily attributed to lower revenue and increased fixed costs as a percentage of revenue.
- Operating expenses decreased by 58% to $0.7 million, driven by reductions in personnel, marketing and product development costs.
- Net loss improved to $0.8 million or $0.10 per share, compared to a net loss of $1.0 million or $0.13 per share in Q3 2022.
- Cash and cash equivalents on September 30, 2023 were $13.3 million, down from $18.6 million on December 31, 2022, with working capital decreasing by $1.6 million. The company remains debt-free.
Tony McDonald, chairman and CEO of CEA Industries stated, "Given the state of our operations, our current corporate assets, and our service position in the cannabis and controlled agricultural sectors, our focus is to work through our backlog and take action to mitigate operating expenses and preserve cash."
McDonald continued, "As previously announced on August 14, 2023, the Board of Directors continues to review strategic alternatives, including a sale, merger, or other potential strategic or financial transaction. We will provide updates on any material developments that may result from this process."
Price Action
CEAD's shares were trading 3.02% higher at $0.51 per share at the time of writing on Wednesday afternoon.
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