Stockhouse.com uses cookies on this site. By continuing to use our service, you agree to our use of cookies. Cookies are used to offer you a better browsing experience and to analyze our traffic. We also use them to share usage information with our partners. See full details.
I Agree
×
Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Privacy Policy | Disclaimer

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Privacy Policy | Disclaimer
Please Try Again {{ error }}

Send my password

Return to Login
SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
News   Press Releases

SMG Industries, Inc. Reports Financial Results for Fiscal Year 2020

SMGI | April 19, 2021

Transportation Services Company Reports $26.6 million in revenue for 2020, net of discontinued operations, an increase of $26.1 million from 2019

HOUSTON, TX, April 19, 2021 (GLOBE NEWSWIRE) -- via NewMediaWire -- SMG Industries, Inc. (the “Company”) (OTCQB:SMGI), a growth-oriented transportation services company focused on the domestic infrastructure logistics market, today reported financial results for the full year ended December 31, 2020 and released its 2020 Annual Report on Form 10-K.

Fiscal Year 2020 Highlights

· Net of Discontinued Operations (MG Cleaners and Trinity Services), Revenues increased to $26.6 million in 2020, or about 5,100% from $508 thousand for the year 2019.

· Pro forma revenues for 2020, illustrating the Feb. 27, 2020 acquisition of 5J for the full year 2020, (net of discontinued operations), was $34.2 million.

· Selling, General and Administrative expenses were 19.8% of sales for 2020.

· Net loss from continuing operations for 2020 was $14.1 million, which included acquisition expenses of the transportation services business and one-time, non-operational write downs and impairment expenses associated with the oil and gas focused services and assets held for sale.

· Total Assets grew to approximately $27.4 million in 2020 from $6.4 million in 2019.

The Company made significant strides in its announced transformation to transportation services from an upstream oil and gas focused services company during the fiscal year 2020. SMGI acquired 5J Trucking and 5J Oilfield Services, sold its MG Cleaners subsidiary in December 2020, and positioned its other upstream oil and gas divisions, such as Trinity Services, for divestiture or sale. The Company’s pivot and focus last year to transportation services was in response to volatile oil prices and the global COVID pandemic effects on economic activity.

The discontinued operations of MG Cleaners and Trinity Services removed approximately $4.3 million in annual revenues from our results in 2020. See footnote 9 in our Company’s Annual Report on Form 10-k for more information and for the 2020 pro forma revenues presentation.

Mr. Jeffrey Martini, CEO of SMG, stated, “In the face of challenges including negative oil prices, industry volatility, and economic activity reductions caused by the COVID pandemic in 2020, the Company made strategic pivots in its business focus to reduce its exposure in upstream oil and gas concentration and focus more in transportation services including infrastructure. Currently, we believe the Company will continue to expand its service offerings in transportation organically and through acquisition with our Buy & Build strategy continuing to acquire market share of the estimated $700 billion US transportation industry.” Mr. Martini continued, “With the 5J acquisition, the Company’s total assets have grown to approximately $27.4 million, currently representing more than 100 tractors and semis, about 250 multi-axle trailers, 10 cranes, and 25 forklifts that serve more than 200 customers. Our 5J Transportation Group is particularly excited about the possible infrastructure investments proposed by the U.S. government and industry that could represent additional activity in wind energy, power transformers, compressors and bridge beams that we haul for customers.”

Further information is available, including management’s discussion and analysis of the financial results and disclosures, in the Company’s 2020 Annual Report on Form 10-k filed April 19, 2021.

About SMG Industries, Inc.: SMG Industries is a growth-oriented transportation services company focused on the domestic infrastructure logistics market. Through several of the Company’s wholly-owned subsidiaries branded as the 5J Transportation Group, it offers heavy haul, super heavy haul, hot shot and drilling rig mobilization services. 5J’s dimensional permitted jobs can support up to 500-thousand-pound loads which include cargo associated with wind energy, power generation components, bridge beams, compressors, and refinery and construction equipment. SMG Industries, Inc. headquartered in Houston, Texas has facilities in Floresville, Henderson, Odessa, Palestine, Tomball, and Victoria, Texas. Read more at www.SMGIndustries.com .

Contact:

Matthew Flemming, SMG Industries, Inc. +1-713-821-3153

Source: SMG Industries, Inc.

SMG INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2020 2019
ASSETS
Current assets:
Cash and cash equivalents $ 263,814 $ 29,568
Restricted cash 715,274 -
Accounts receivable, net of allowance for doubtful accounts of $691,098 and $42,182
as of December 31, 2020 and 2019, respectively 4,920,967 -
Prepaid expenses and other current assets 1,409,996 102,567
Current assets of discontinued operations 437,787 1,572,127
Total current assets 7,747,838 1,704,262
Property and equipment, net of accumulated depreciation of $5,991,572 and $451,195
as of December 31, 2020 and 2019, respectively 16,337,914 1,311,991
Right of use assets - operating lease 1,270,989 46,882
Other assets 499,707 2,620
Other assets of discontinued operations, net 1,568,700 3,365,629
Total assets $ 27,425,148 $ 6,431,384
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 3,171,086 $ 603,129
Accounts payable - related party 205,444 -
Accrued expenses and other liabilities 2,373,057 258,543
Right of use liabilities - operating leases short term 575,517 29,313
Deferred revenue 30,000 30,000
Secured line of credit 4,046,256 10,204
Current portion of unsecured notes payable 2,187,436 76,374
Current portion of secured notes payable, net 4,010,627 717,504
Current portion of convertible note, net 50,000 -
Current liabilities of discontinued operations 2,243,037 4,042,055
Total current liabilities 18,892,460 5,767,122
Long term liabilities:
Convertible note payable, net 2,417,335 260,926
Notes payable - unsecured, net of current portion 1,040,223 -
Notes payable - secured, net of current portion 14,038,409 727,701
Right of use liabilities - operating leases, net of current portion 846,212 17,569
Long term liabilities of discontinued operations 1,008,362 579,514
Total liabilities 38,243,001 7,352,832
Commitments and contingencies
Stockholders' deficit
Preferred stock 1,000,000 shares authorized:
Series A preferred stock - $0.001 par value; 2,000 shares authorized; 2,000 shares issued 2 2
and outstanding at December 31, 2020 and 2019
Series B convertible preferred stock - $0.001 par value; 6,000 shares authorized; no shares issued
and outstanding at December 31, 2020 and 2019, respectively - -
Common stock - $0.001 par value; 250,000,000 shares authorized; 19,446,258 and 14,881,372 shares
issued and outstanding at December 31, 2020 and 2019, respectively 19,447 14,881
Additional paid in capital 10,978,254 4,756,194
Accumulated deficit (21,815,556) (5,692,525)
Total stockholders' deficit (10,817,853) (921,448)
Total liabilities and stockholders' deficit $ 27,425,148 $ 6,431,384
The accompanying notes are an integral part of these consolidated financial statements


SMG INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2020 and 2019
December 31, 2020 December 31, 2019
REVENUES $ 26,665,719 $ 508,659
COST OF REVENUES 29,477,208 967,305
GROSS PROFIT (2,811,489) (458,646)
OPERATING EXPENSES:
Selling, general and administrative 5,267,186 1,707,982
Impairment expense 1,084,671 565,466
Acquisition costs 1,485,829 70,945
Total operating expenses 7,837,686 2,344,393
LOSS FROM OPERATIONS (10,649,175) (2,803,039)
OTHER INCOME (EXPENSE)
Interest expense, net (3,801,020) (573,028)
Other income 74,587 14,159
Other expense (30,000) -
Gain (loss) on settlement of notes payable (14,204) (101,251)
Gain on sale of assets 220,315 3,669
Gain on extinguishment of debt 94,339 -
Total other income (expense) (3,455,983) (656,451)
NET LOSS FROM CONTINUING OPERATIONS (14,105,158) (3,459,490)
Gain on disposal of discontinued operations 572,741 -
Loss from discontinued operations (2,336,573) (524,868)
NET LOSS (15,868,990) (3,984,358)
Preferred stock dividends (254,041) (30,740)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (16,123,031) $ (4,015,098)
Net loss per common share
Continuing operations $ (0.80) $ (0.25)
Discontinued operations $ (0.10) $ (0.04)
Net loss attributable to common shareholders $ (0.90) $ (0.29)
Weighted average common shares outstanding
Basic 17,860,452 13,824,474
Diluted 17,860,452 13,824,474
The accompanying notes are an integral part of these consolidated financial statements


SMG INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2020 and 2019
December 31, 2020 December 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations $ (14,105,158) $ (3,459,490)
Adjustments to reconcile net loss to net
cash used in operating activities:
Stock based compensation 66,566 246,099
Depreciation and amortization 4,901,689 240,318
Amortization of deferred financing costs 609,396 516,956
Amortization of right of use assets - operating leases 286,790 305,903
Impairment expense 1,084,671 565,466
Bad debt expense 474,708 52,737
Loss on settlement of liabilities 21,407 69,512
Gain on disposal of assets (220,315) (3,669)
Gain extinguishment of debt (94,339) -
Changes in:
Accounts receivable 2,782,038 29,716
Prepaid expenses and other current assets 558,182 (77,568)
Accounts payable (2,158,362) 936,797
Accounts payable - related party 130,444 -
Accrued expenses and other liabilities 2,067,828 198,506
Right of use operating lease liabilities (136,050) (305,903)
Deferred revenue - 30,000
Net cash used in operating activities from continuing operations (3,730,505) (654,620)
Net cash used in operating activities from discontinued operations (242,162) 340,317
Net cash used in operating activities (3,972,667) (314,303)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition of 5J Entities, net (6,320,168) -
Cash paid for acquisition of Trinity Services, LLC - (500,000)
Cash paid for disposal of MG Cleaners, LLC (75,000) -
Cash received from sale of property and equipment 4,200 -
Cash paid for purchase of property and equipment (404,200) (28,107)
Net cash used in investing activities from continuing operations (6,795,168) (528,107)
Net cash used in investing activities from discontinued operations (42,368) (15,325)
Net cash used in investing activities (6,837,536) (543,432)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of deferred financing costs (223,558) -
Proceeds from secured line of credit, net 4,156,238 -
Payments on secured line of credit, net - (33,015)
Proceeds from notes payable 5,584,048 1,180,000
Payments on notes payable (1,385,535) (819,105)
Proceeds from sales of common stock - 359,000
Proceeds from convertible notes payable 3,144,295 50,000
Payments in MG Cleaners acquisition - related party - (21,000)
Net cash provided by financing activities from continuing operations 11,275,488 715,880
Net cash provided by financing activities from discontinued operations 484,235 170,130
Net cash provided by financing activities 11,759,723 886,010
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 949,520 28,275
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period 29,568 1,293
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $ 979,088 $ 29,568
Supplemental disclosures:
Cash paid for income taxes $ - $ -
Cash paid for interest $ 1,979,483 $ 221,140
Noncash investing and financing activities
Capitalization of ROU assets and liabilities - finance $ - $ -
Capitalization of ROU assets and liabilities - operating $ - $ 352,785
Non-cash consideration paid for business acquisitions $ 4,380,000 $ 1,939,000
Non-cash consideration paid for increase in secured notes payable $ 5,840,622 $ -
Non-cash consideration paid for prepaids from debt financing $ 331,065 $ -
Non-cash consideration increase in convertible notes payable $ 225,000 $ -
Intangible assets acquired from issuance of note payable, related party $ - $ -
Debt discount from issuance of common stock warrants $ 59,439 $ 214,090
Preferred stock dividend $ 254,041 $ 30,740
Expenses paid by related party $ 69,516 $ -
Settlement of accounts payable and accrued interest with common stock issuance $ 66,000 $ 144,016
Settlement of notes payable with common stock issuance $ - $ -
Settlement of accounts payable with note payable $ - $ 123,818
Prepaid expenses financed with note payable $ 100,997 $ 234,914
Equipment received in exchange for settlement of notes receivable $ 223,200 $ -
Shares issued for deferred financing costs $ 419,788 $ -
Note payable for property and equipment $ 1,353,500 $ -
Beneficial conversion feature on convertible notes payable $ 1,057,710 $ -
Capitalized accrued interest $ - $ 4,559
The accompanying notes are an integral part of these consolidated financial statements



Primary Logo

GlobeNewswire
April 19, 2021 - 1:02 PM PDT

Related News

Recent U.S. Press Releases

More Press Releases »

Get the latest news and updates from Stockhouse on social media

Follow STOCKHOUSE Today