Gaithersburg, MD, Sept. 21, 2020 (GLOBE NEWSWIRE) — Verus International, Inc. (“Verus” or the “Company”) (OTCQB: VRUS) reported record results for its third fiscal quarter ended July 31, 2020. In conjunction with this release, the Company is also providing additional details on significant business developments occurring subsequent to its quarter end.
For fiscal Q3 2020, management is noting the following items of importance:
- Revenue achieved an all-time 3rd quarter record, reaching $6.2 million, an increase of 78% over the $3.5 million reported in Q3 2019;
- Q3 revenue marked the Company’s 9th consecutive quarter of double- or triple-digit year-over-year revenue growth;
- The global pandemic continued to impact suppliers, customers and transport during Q3, but did show gradual improvement during the quarter;
- Gross profit margin was 14.8%, 60 basis points higher than the 14.2% reported in Q3 2019;
- Operating expenses of $1.2 million were $0.6 million lower than the $1.8 million reported in Q3 2019, primarily due to the completion of the CEO’s stock-based compensation program during Q2 2020, resulting in no related stock-based compensation expense for Q3 2020, partially offset by a net increase in other operating expenses to support the 78% revenue increase;
- Operating loss of $0.3 million improved significantly, declining from $1.3 million in Q3 2019, a 79% year-over-year improvement;
- Net loss was $1.3 million for Q3 2020 compared to a net loss of $1.4 million for Q3 2019. The Company experienced a one-time increase in interest expense of $0.8 million related to the conversion of certain convertible notes payable during Q3 2020; and
- Stockholders’ equity achieved a new record at $0.6 million, which is significantly higher than the stockholders’ deficit of $0.9 million reported at fiscal year-end October 31, 2019.
“The retail recovery in our markets was a little choppier than we anticipated during Q3, but we were pleased to improve our revenue both on a sequential and year-over-year basis,” explained Verus CEO Anshu Bhatnagar. “We faced downward uncertainties in all of our markets and had some delays late in the quarter, but still generated 78% revenue growth, extending our streak of double- or triple-digit revenue growth into its third year. We believe we have a great line up in place to carry our positive growth trend into 2021.”
On a forward basis, the Company is providing the following update and guidance:
- Verus continues to engage with retail customers that delayed or suspended orders due to store closures and sports season uncertainty, and expects to sign some of these target chains during the fall and early winter seasonal buying periods;
- The Big League Foods (“BLF”) division expects to have product in four chains, T.J. Maxx, Marshalls, Meijer and Big Five Sporting Goods in October 2020;
- The newly acquired Eliot’s Nut Butters is already preparing for a product line expansion;
- National Hockey League (“NHL”) candy products are in development, with an in-store target to coincide with the start of the NHL season during December 2020;
- The Pachyderm Labs division is now 44 products strong with an initial wholesale distribution launch through 20 distribution warehouses across 6 states;
- Verus reduced its convertible debt by approximately 50% from approximately $1.3 million at the end of Q3 2020 to approximately $0.6 million as of September 18, 2020; and
- The Company completed its authorized equity funding under its effective S-1 with White Lion Capital.
“We made a conscious effort to become more U.S.-centric in our sales efforts this quarter, based on better margins and opportunities for growth in our domestic lines,” said CEO Bhatnagar. “We also made some tough decisions in terms of our debt and financing activities, which we will describe in detail during our earnings call. Simply put, we took a series of actions designed to immediately reduce our cash burn, increase our working capital, and put us in a position to gain commercial credit. Our goal is to end our reliance on the kind of convertible debt treadmill that left us with a chronic shortage of working capital in the past. We have the best product line in our history and believe that our way back will be paved via increased growth, so that is our goal through the remainder of 2020.”
Financial Results and Corporate Update Conference Call
Verus management will host a conference call for analysts and investors on Tuesday, September 22, 2020 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss the Company’s financial results and provide a corporate update.
To listen to the live conference call, parties should connect approximately 15 minutes prior to the start of the call as follows:
- Dial-in number: (877) 269-7756
Please note there is no access code required to join the call.
A live and archived webcast of the conference call will be accessible on the “Investor Relations” section of the Company’s website at www.verusfoods.com. To access the live webcast, please log in 15 minutes prior to the start of the call to download and install any necessary audio software.
About Verus International
Verus is a global, 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 (OTCQB: 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, the Eliot’s Adult Nut Butters website, www.eliotsnutbutters.com; and via the official Twitter feed @Verus_Foods, the Big League Foods subsidiary Twitter feed @BigLeagueFoods 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.
Investor Contact: MKR Group Inc. Todd Kehrli or Mark Forneyvrus@mkr-group.com
Verus International, Inc.