AmeraMex International, Inc. (OTCQB:AMMX) Q2 2022 Results Conference Call August 15, 2022 1:00 PM ET
Company Participants
Marty Tullio – MD, McCloud Communications, LLC
Lee Hamre – CEO
Hope Stone – CFO
Conference Call Participants
Allan Cohen – B&C Financial
Operator
Greetings, and welcome to the AmeraMex Second Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.
And with that, I would now like to turn the call over to Marty Tullio. Thank you. You may begin.
Marty Tullio
Thank you, Darryl. Good morning, everyone.
Before we begin today’s call, it’s important that everyone understands that statements made in this conference call that relate to future financial results, market size or growth plans, are forward-looking and involve certain risks, uncertainties associated with demand for the Company’s products and services and development of markets for the Company’s products and services. Actual results, events and performance may differ materially. Conference call participants are cautioned not to place undue reliance on these forward-looking statements, which speak only as the date of this conference call. AmeraMex is not obligated to release publicly any revisions to these forward-looking statements as a result of unanticipated events after the date of today’s call.
Now, I’d like to turn the call over to AmeraMex’ CEO, Lee Hamre. Good morning, Lee.
Lee Hamre
Good morning, Marty. Thank you. And thanks to all of you for joining us this morning for our second quarter conference call.
With me today is our CFO, Hope Stone; and Board member, Marty Tullio. Brian Hamre, our new President, is in the field visiting some of our larger customers, so he’s not on the call this morning.
2021 was a great year for us as we experienced pent-up demand from being partially shut down due to COVID restrictions and business uncertainties. We reported revenue of [$24.7] million. To maintain our growth, we have added new lines of equipment to our inventory with the latest being a rotating telescopic handler, manufactured by Magni, an Italian company. We received floorplan financing for the equipment, parallel with successfully introducing it at a recent heavy equipment show. Additionally, we are now an approved vendor for the Clean Off-Road Equipment voucher Incentive program. The California Air Resources Board in partnership with CALSTART launched the program to encourage California companies to purchase or lease zero-emission off-road equipment. The project provides a voucher program for purchasing companies to offset the higher cost of such technologies.
We will be selling the Elise 900, a fully electric skid steer loader, that lifts up to 1,984 pounds and operates 6 to 8 hours on a battery charge. The Elise uses a lithium battery and retails for about $122,000 a piece.
June 3rd, we were pleased to announce the appointment of Brian Hamre to the position of President, effective July 1st. Brian is my nephew and worked with us for 22 years before leaving in 2009, I believe, to join Ritchie Brothers, the world’s largest industrial equipment auctioneer. While working for them, Brian gained invaluable experience in the heavy equipment industry that he’s brought back to AmeraMex. Not only does he have an amazing network of contacts, huge asset with our industry, but he also brings a skill set to assist the management team and strategically expanding into other markets to promote future growth.
Before I turn the call over to Hope, I would like to add that I am pleased with what we have accomplished in the second quarter, but as you can understand, disappointed that more than 50% of our sales revenue and $2.7 million in gross profit for the second quarter has slipped into the third quarter due to backordered parts, interstate trucking delays and lack of ability of third-party shippers. It’s been real difficult going through the recovery from COVID, and things are getting better, but there’s still a problem. Our team is working hard to avoid these situations going forward.
I would now like to turn the call over to our CFO, Hope Stone, to provide an overview of our financials for the quarter. Hope?
Hope Stone
Good morning, everyone. Let’s begin with an overview of the statement of operations for the quarter and six-month period ended June 30, 2022.
Revenue was approximately $2.4 million versus $6.3 million for the comparable quarter and $7.3 million versus $10.3 million for the comparable six-month period. Had all sold equipment shipped, we would have reported approximately $9.6 million for the period. Gross profit was approximately $420,000 versus $970,000 for the comparable quarter. The gross profit margin was 18% versus 15%. Gross profit for the comparable six-month period was $1.7 million versus $2.1 million with a gross profit margin of 23% versus 21%. If sold equipment had shipped as planned, gross profit would have been approximately $4.4 million for the six-month period.
Net income was approximately $146,172 versus $78,000 for the comparable quarter. Net income for the six-month period was $404,489 versus $443,879 for the comparable period. Earnings per share for the 6-month period was $0.03. Had all sold equipment shipped, net income for the six-month period would have been $1.3 million with earnings of $0.08 per share.
Our balance sheet overview is total assets increased by $3.1 million as equipment didn’t get shipped out of inventory. Total liabilities increased $2.7 million due in part to the new line of credit and the lease liability under long-term liabilities.
I would like to turn the call back to Lee.
Lee Hamre
Okay. Thank you, Hope. We’re pleased with the progress in the second quarter and are doing everything within our ability to alleviate the parts and shipping issues encountered last quarter. We’re looking forward to a great third quarter and another dynamite year. Operator, we’d like to begin the question-and-answer.
Question-and-Answer Session
Operator
[Operator Instructions] Our first questions come from the line of Allan Cohen with B&C Financial. Please proceed with your questions.
Allan Cohen
Hi Lee, this is Allan Cohen. Congratulations on the very good — it sounds like a very good quarter and you’re on the right track. I’m a little confused. And maybe this question is for Hope. According to the release, your revenues were approximately $2.4 million, and you said it would have been a little over $5 million. The difference is roughly $2.6 million. And then, when I look at gross profit, it said your gross profit was $420,000, but it should have been $3 million if you would have shipped everything, which brings us back to that same $2.6 million. So, it looks like 100% of that sales increase is being added through gross profit. Am I making a mistake or is it something wrong? Do you understand the question?
Lee Hamre
Absolutely. Let me see. So, what happened is the revenue was added back in and the cost of goods sold was not taken back out of that number.
Allan Cohen
I still didn’t understand what you say. Let’s start from the beginning. $2.4 million was your revenue. Correct? You said it would have been over $5 million. That’s a $2.6 million difference in sales. Gross sales would have been $2.6 million higher. And you’re saying gross profit would have been $2.6 million higher.
Hope Stone
Right. Gross sales and gross profit are the same thing.
Allan Cohen
Gross sales and gross profit are the same thing?
Hope Stone
If you — revenue and — so are we talking revenue, or are we talking sales, or are we talking profit? Are we talking…
Allan Cohen
We’re talking revenue. Revenue would have been $2.6 million greater. Sales would have been $2.6 million greater than what was reported. And yet you’re saying gross profit would have been $2.6 million greater also.
Hope Stone
Right. So, here’s the issue. The $2.6 million was added into — back into the number, but the cost of goods sold that come out of that $2.6 million were not subtracted back out. So, the gross profit number isn’t correct for the could have been, and we can revise that and get that out.
Allan Cohen
Yes. Obviously, it’s going to be a lot lower. It’s going to be only approximately 20% of $2.6 million is going to be added to gross profit, not the entire $2.6 million.
Hope Stone
Correct. Yes, the cost of the machines was not taken out of that number.
Allan Cohen
So, is that an error in the news release?
Hope Stone
I don’t — if there is an error, that we’ll correct it.
Allan Cohen
We have the same problem with the six-month sales. You said six-month sales of $7.3 million and it would have been $9.6 million. I got $9.9 million, but you’re saying $9.6 million. And then, you’re saying gross profit was $1.7 million and it would have been $4.4 million. So, once again, we’re adding the entire $2.6 million of unrecorded sales to gross profit.
Hope Stone
Right. We are going to be making an adjustment — a revised news release.
Allan Cohen
Okay. Thank you very much. I’ll wait to see the revision.
Operator
Thank you. There are no further questions at this time. I would like to turn the call back over to management for any closing comments.
Lee Hamre
Well, thanks for tuning in for today’s second quarter conference call. We look forward to speaking with you again at the end of the third quarter. Have a great day.
Operator
Thank you. This does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.
Be the first to comment