MOUNT VERNON, N.Y., August 15, 2022--(BUSINESS WIRE)--Applied UV, Inc. (NasdaqCM: AUVI) ("Applied UV" or the "Company"), a pathogen elimination technology company that applies the power of narrow-range ultraviolet light ("UVC") for surface areas and catalytic bioconversion technology for air purification to destroy pathogens safely, thoroughly, and automatically, announced its financial results for the second quarter 2022.
Recent Business Highlights
Expanded global distribution via M/S Novatek Pakistan, a company distributor, that was awarded as the sole source provider of Airocide air purification systems for government hospitals for the KPK Province in Pakistan
Installed Lumicide Surface and Drain UVC Disinfecting Systems initially, in 17 patient rooms at Mt. Sinai Medical Center Morningside in New York City
Received a substantial order from Cellarius, the company’s European distribution partner, expanding its use in wineries and food processing
Received a significant order from Tru Infusion, a cannabis retailer, for Airoclean™ 420 air purification technology for use in 79 facilities
Received a large, multi-unit, follow-on order from MedLine, the company’s North American Scientific Air Management healthcare distribution partner, for its patented S200 mobile air purification system
Granted a patent pertaining to the company’s system to neutralize pathogens on ATM surfaces
Received an order for air purification solutions that were installed by Advance Beauty College at its campuses located in the state of California
Strengthened corporate governance with the addition of Mr. Jos Luhukay and Ms. Monica Woo to the board of directors
John F. Andrews, Applied UV's Chief Executive Officer commented, "Second quarter revenue was a record $5.9 million fueled by both organic growth and the integration of recent acquisitions. Our Disinfection segment was strengthened by a number of key wins across a number of industries including cannabis, food preservation and healthcare. In Hospitality, we completed the integration of our Visionworks acquisition. We are encouraged by the growing market opportunities in each of our business segments as the hospitality industry is rebounding, and there is growing global demand for pathogen elimination technologies such as ours."
Summary of Financial Results
The Company has three reportable segments: the design, manufacture, assembly and distribution of disinfecting systems for use in healthcare, hospitality, and commercial municipal and residential markets (Disinfection segment); the manufacture of fine mirrors and furniture specifically for the Hospitality industry (Hospitality segment); and the Corporate Segment, which includes expenses primarily related to corporate governance, such as board fees, legal expenses, audit fees, executive management, and listing costs.
Net sales of $5.9 million represented an increase of $4.0 million, or 213.5% for the three months ended June 30, 2022, as compared to net sales of $1.9 million for the three months ended June 30, 2021. This increase was attributable to both the Disinfection segment, which increased $819,000, largely as a result of the strategic acquisitions of KES and Scientific Air in third and fourth quarters of 2021, respectively, and the Hospitality segment, which increased $3.2 million primarily as a result of the fulfillment of orders that were delayed from the first quarter and the addition of orders fulfilled from the recent VisionMark acquisition.
Gross profit increased $771,000, or 144.5%, to $1.3 million for the three months ended June 30, 2022, as compared to $533,000 for the three months ended June 30, 2021, driven by volume growth from both the Disinfection and Hospitality segments. Gross profit as a percentage of sales decreased from 28.3% in Q2 of 2021 to 22.1% in Q2 of 2022, driven primarily by the initial costs required to complete projects in process and to integrate and absorb the VisionMark operations. As the Company continues to integrate its strategic acquisitions, the focus will be on realizing cost synergies from the consolidation and streamlining of the manufacturing and distribution operations.
Selling, General, and Administrative (SG&A) Expense
SG&A costs for the three months ended June 30, 2022, increased to $4.0 million as compared to $2.7 million for the three months ended June 30, 2021. This increase of approximately $1.3 million was driven primarily by the expansion of the Disinfection segment with the additional acquisitions of KES and SciAir; the expansion of the Hospitality segment with the addition of the VisionMark acquisition; and Corporate segment expenses due to increased consulting, legal, accounting and infrastructure costs related to the initial integration of the operations of our strategic acquisitions. The Company incurred one-time costs of approximately $739,000 related primarily to the integration of VisionMark operations and the establishment of strategic marketing programs. The Company anticipates efficiency gains in the coming year as it fully integrates its acquisitions and leverages synergies where practical.
Other expense was $79,000 for the three months ended June 30, 2022, which includes $49,000 in interest expense and $32,000 in non-cash expense related to the change in fair value of warrant liability. This compares to other income of $37,000 for the three months ended June 30, 2021.
The Company recorded a net loss of $2.9 million for the three months ended June 30, 2022, compared to a net loss of $2.1 million for the three months ended June 30, 2021. The increase in net loss of $744,000 was mainly due to the increase in SG&A expense incurred in support of business acquisitions and expansion of both the Disinfection and Hospitality segments.
The Company had approximately $3.0 million of unrestricted cash available on its consolidated balance sheet as of June 30, 2022.
Conference Call/Webcast Information
Applied UV's management team will host an investor conference call and live webcast at 9 a.m. ET on August 15, 2022. Investors can access the live webcast at https://www.webcaster4.com/Webcast/Page/2626/46351.
For those planning to participate on the call, please dial +1-888-506-0062 (for domestic calls), or +1-973-528-0011 (for international calls), passcode 660050.
A replay of the conference call will be available online on the Applied UV web site, and a dial-in replay will be available for one week following the call at +1-877-481-4010 (for domestic calls) or +1-919-882-2331 (for international calls), replay passcode 46351.
About Applied UV
Applied UV is focused on the development and acquisition of technology that address infection control in the healthcare, hospitality, commercial and municipal markets. The Company has two wholly owned subsidiaries – SteriLumen, Inc. ("SteriLumen") and Munn Works, LLC ("Munn Works"). SteriLumen’s connected platform for Data Driven Disinfection™ applies the power of ultraviolet light (UVC) to destroy pathogens safely, thoroughly, and automatically, addressing the challenge of healthcare-acquired infections ("HAIs"). Targeted for use in facilities that have high customer turnover such as hospitals, hotels, commercial facilities, and other public spaces, the Company’s Lumicide™ platform uses UVC LEDs in several patented designs for infection control in and around high-traffic areas, including sinks and restrooms, killing bacteria, viruses, and other pathogens residing on hard surfaces within devices’ proximity. The Company’s patented in-drain disinfection device, Lumicide Drain, is the only product on the market that addresses this critical pathogen intensive location. SteriLumen’s Airocide® air purification devices are research backed, clinically proven and developed for NASA with assistance from the University of Wisconsin. Airocide® is listed as an FDA Class II Medical device, utilizes a proprietary photo-catalytic (PCO) bioconversion technology that draws air into a reaction chamber that converts damaging molds, microorganisms, dangerous airborne pathogens, destructive VOCs, allergens, odors and biological gasses into harmless water vapor and green carbon dioxide without producing ozone or other harmful byproducts. Airocide® applications include healthcare, hospitality, grocery chains, wine making facilities, commercial real estate, schools, dental offices, post-harvest, grocery, cannabis facilities and homes.
For more information about Applied UV, Inc., and its subsidiaries, please visit the following website: https://www.applieduvinc.com/.
The information contained herein may contain "forward‐looking statements." Forward‐looking statements reflect the current view about future events. When used in this press release, the words "anticipate," "believe," "estimate," "expect," "future," "intend," "plan," or the negative of these terms and similar expressions, as they relate to us or our management, identify forward‐looking statements. Such statements include, but are not limited to, statements contained in this press release relating to the view of management of Applied UV concerning its business strategy, future operating results and liquidity and capital resources outlook. Forward‐looking statements are based on the Company’s current expectations and assumptions regarding its business, the economy and other future conditions. Because forward–looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. The Company’s actual results may differ materially from those contemplated by the forward‐looking statements. They are neither statements of historical fact nor guarantees of assurance of future performance. We caution you therefore against relying on any of these forward‐looking statements. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward‐looking statements to conform these statements to actual results.
-- Tables Follow –
Applied UV, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
As of June 30, 2022 and December 31, 2021
Cash and cash equivalents
Accounts receivable, net of allowance for doubtful accounts
Costs and estimated earnings in excess of billings
Prepaid expense and other current assets
Total Current Assets
Property and equipment, net of accumulated depreciation
Other intangible assets, net of accumulated amortization
Right of use asset
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses
Billings in excess of costs and earnings on uncompleted contracts
Due to landlord (Note 2)
Financing lease obligations
Operating lease liability
Total Current Liabilities
Due to landlord-less current portion (Note 2)
Note payable- less current portion
Operating lease liability-less current portion
Total Long-Term Liabilities
Preferred stock, Series A Cumulative Perpetual, $0.0001 par value, 19,990,000 shares authorized, 552,000 shares issued and outstanding as of both June 30, 2022 and December 31, 2021
Preferred stock, Series X, $0.0001 par value, 10,000 shares authorized, 2,000 shares issued and outstanding as of both June 30, 2022 and December 31, 2021
Common stock $.0001 par value, 150,000,000 shares authorized; 12,930,674 shares issued and 12,817,189 shares outstanding as of June 30, 2022, and 12,775,674 shares issued and outstanding as of December 31, 2021
Treasury stock at cost, 113,485 shares as of June 30, 2022 and 0 shares as of December 31, 2021
Additional paid-in capital
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity
Applied UV, Inc. and Subsidiaries
Unaudited Condensed Interim Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2022 and 2021
Three Months Ended
Six Months Ended
Cost of Goods Sold
Research and development
Selling, general and administrative expenses
Loss on impairment of goodwill
Total Operating Expenses
Other Income (Expense)
Change in Fair Market Value of Warrant Liability
Loss on change in Fair Market Value of Contingent Consideration
Gain on Settlement of Contingent Consideration (Note 2)
Total Other Income (Expense)
Loss Before Provision for Income Taxes
Provision from Income Taxes
Net Loss attributable to common stockholders:
Dividends to preferred shareholders
Net Loss attributable to common stockholders
Basic and Diluted Loss Per Common Share
Weighted Average Shares Outstanding - basic and diluted
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Applied UV Inc.
John F. Andrews
Applied UV CEO, Director
Applied UV Investor Relations
Brett Maas, Managing Principal