PORTLAND, Ore., Oct. 20,
2022 /PRNewswire/ -- Schmitt Industries, Inc.
(NASDAQ: SMIT) (the "Company" or "Schmitt") provides updates
following its recent 10-K filing, and discusses its proposed rights
offering and receipt of Nasdaq deficiency notices.
Fiscal 2022 Earnings
Highlights
Schmitt announced its operating results for the fiscal year
ended May 31, 2022. Highlights and
year-over-year changes include:
- Consolidated revenues increased $4,292,751, or 76.6%, to $9,893,210.
- Ice Cream Segment revenue increased $4,272,050, or 105.7%, to $8,315,486.
- Gross margin increased to 51.2% for the fiscal year ended
May 31, 2022, as compared to
36.9%.
- Operating expenses increased $3,188,154, or 25.5%, to $15,684,457.
- The Xact product line, which includes ultrasonic-based remote
tank monitoring products and related monitoring revenues, is
classified as "held for sale" and reported separately as
discontinued operations. Income from discontinued operations
decreased $120,383, or 22.1%, to
$425,108 for the fiscal year ended
May 31, 2022.
- Net loss was ($3,283,776), or
($0.86) per fully diluted share, for
the fiscal year ended May 31,
2022.
- The Company finished the fiscal year with $1,050,910 in cash, as compared to $4,032,690 for the year ended May 31, 2021.
"The Ample Hills team has made significant operational progress
over the past year, opening two new iconic scoop shop locations in
Manhattan's Upper West Side and
Queens' Long Island City. These shops have quickly
become top performers and are indicative of Ample Hills' unique
brand and offerings. Revenue and margins continue to improve at
Ample Hills as there has been additional strength in our primary
markets, and we look forward to opening three additional locations
in the coming months with more to come," said Michael R. Zapata, Chairman and CEO of Schmitt
Industries.
"The past year has not come without its operational challenges,
primarily as Schmitt Industries consolidates and manages the two
distinct business segments, Ample Hills and Schmitt Measurement
Systems. The difficulty and cost of these processes has been
significantly higher than expected. The operational challenges have
impacted the timing of our periodic filings with the SEC and
required the recent restatements of financial statements for the
first, second and third quarters of fiscal 2022, which had an
impacted our previously announced letter of intent for a potential
transaction and interrupted a capitalization plan for Ample
Hills."
"While we are actively evaluating approaches to simplify the
financial operations portion of our business, our focus remains on
Ample Hills. We continue to see the opportunity to grow the Ample
Hills footprint and gain scale to benefit from the four-wall
economics of our scoop shops as we build up our wholesale and
e-commerce divisions. As we make further progress on our financial
reporting, we fully expect these cost impacts to moderate and
further improve our results. To facilitate the necessary growth, we
have announced a proposed rights offering. The proposed rights
offering will provide our shareholders with an opportunity to
invest in our future growth while maintaining their pro-rata
ownership. We are excited for the future growth and progress as we
continue to bring this unique brand to our neighborhoods," Zapata
continued.
Nasdaq Deficiency
Notification
On October 19, 2022, we received
written notice from the Listing Qualifications Department (the
"Staff") of The Nasdaq Stock Market LLC ("Nasdaq") notifying us
that we did not file our Quarterly Report on Form 10-Q for the
fiscal quarter ended August 31, 2022
(the "Form 10-Q") by October 17,
2022, as required for continued listing on the Nasdaq
Capital Market pursuant to Nasdaq Listing Rule 5250(c)(1). Under
Nasdaq rules, we now have 60 calendar days, or until December 19, 2022, to submit to Nasdaq a plan to
regain compliance with the Nasdaq rules. If Nasdaq accepts the
plan, we will have until April 17,
2023 to regain compliance. We are working towards finalizing
the Form 10-Q and intend to file the Form 10-Q in November to
regain compliance.
As discussed in the Company's Current Report on Form 8-K filed
with the SEC on October 20, 2022, on
October 14, 2022, the Company also
received notification from the Staff of Nasdaq that the Company (1)
did not satisfy the continued listing requirement under Nasdaq
Listing Rule 5550(b)(1) for the Nasdaq Capital Market, which
requires that a listed company's stockholders' equity be at least
$2.5 million, and (2) no longer was
in compliance with Nasdaq's audit committee requirements as set
forth in Nasdaq Listing Rule 5605 due to the resignation of Ms.
Tung from the Company's Audit Committee.
There can be no assurance that the Company will be able to
regain compliance with Nasdaq Listing Rule 5550(b)(1), Nasdaq
Listing Rule 5605, Nasdaq Listing Rule 5250(c)(1) or maintain
compliance with any other listing requirements. The notification
has no immediate effect on the listing or trading of the Company's
common stock, which will continue to be listed and traded on the
Nasdaq Capital Market under the symbol "SMIT", subject to the
Company's compliance with the other Nasdaq listing
requirements.
About Schmitt Industries
Schmitt Industries, Inc., founded in 1987, designs, manufactures
and sells high precision test and measurement products, solutions
and services through its Acuity® and Xact® product lines. Acuity
provides laser and white light sensor distance measurement and
dimensional sizing products, and our Xact line provides
ultrasonic-based remote tank monitoring products and related
monitoring revenues for markets in the Internet of Things
environment. The Company also owns and operates Ample Hills
Creamery, a beloved ice cream manufacturer and retailer based in
Brooklyn, NY.
Safe Harbor Statement
This document may contain forward-looking statements made
pursuant to the Private Securities Litigation Reform Act of 1995.
These statements are not guarantees of future performance and
involve risks and uncertainties that are difficult to predict.
Actual outcomes and results may differ materially from what is
expressed or forecasted in such forward-looking statements due to
numerous factors. A complete discussion of the risks and
uncertainties that may affect Schmitt's business, including the
business of its subsidiary, is included in "Risk Factors" in the
Company's most recent Annual Report on Form 10-K as filed by the
Company with the Securities and Exchange Commission.
No rights offering will be made until the Company announces the
definitive terms of the rights offering and the registration
statement incorporating those terms is declared effective by the
SEC.
For more information
contact:
|
Michael R. Zapata,
President and CEO
Phillip Bosco, CFO and
Treasurer
(503)
227-7908
|
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SOURCE Schmitt Industries, Inc.