Concierge Technologies Reports Fiscal Second Quarter Financial Results

– Strategic Initiatives to Drive Diversification and Long-Term Shareholder Value –

– Balance Sheet Remains Strong, with Essentially No Debt –

SAN CLEMENTE, CA / ACCESSWIRE / February 18, 2020 / Concierge Technologies, Inc. (OTCQB:CNCG), a diversified global holding firm, today announced financial results for the second fiscal quarter ended December 31, 2019.

"Results for the quarter were in line with expectations, as we continued to invest in growth initiatives for each of our core business segments," said Nicholas Gerber, chairman and chief executive officer.

"In financial services, progress was made during the quarter developing a new fintech product that we expect to launch this spring under the name, ‘Marygold'. Our hair and skin care company completed the development of a new, branded line of vegan haircare products, ‘Worry Free,' and subsequent to the end of the second quarter launched the line at a large national retailer, representing entry into a new channel for us. We also built a solid backlog for our Brigadier Security business, and in alignment with our strategic growth initiatives, we continued to explore acquisition targets.

"Concierge Technologies has had excellent growth since its formation as a holding company, just five years ago," added Gerber. "We are staying true to our mission of not being reliant on any one business or sector by building a profitable, diverse organization through organic growth, acquisitions and new ventures, and creating tangible long-term value for all of our stakeholders."

For the three months ended December 31, 2019, revenues were $5.8 million, compared with $6.7 million for the prior year. Net loss for the most recent three-month period amounted to $74,914, equal to break-even per share, versus income of $88,518, also equal to break-even per share, for the comparable prior year period.

Results for the fiscal 2020 second quarter, as anticipated, were impacted primarily by lower assets under management (AUM) at the company's USCF Investments fund management subsidiary as compared to the prior year. USCF Investments manages nine commodity-oriented and two equity exchange-traded funds (ETFs) that are listed on the New York Stock Exchange, currently with approximately $2.2 billion in assets under management.

The company's Other business segment, which comprised approximately 51 percent of total revenues in the most recent second quarter vs 41 percent of total revenues in last year's second quarter, achieved a 7% improvement in revenues for the fiscal 2020 period. The Other segment is comprised of Gourmet Foods, Brigadier Security Systems and Original Sprout.

Concierge's balance sheet further strengthened at the end of the second fiscal quarter. Cash and cash equivalents remained steady at approximately $6.5 million, after the cash investment in our the new fintech venture and payment of annual employee incentive rewards at the subsidiary level. Total stockholders' equity increased to $17.5 million at December 31, 2019 from $17.2 million at June 30, 2019. The company has essentially no debt.

"Operating results for USCF held fairly steady throughout the second quarter," said Stuart Crumbaugh, chief financial officer of Concierge Technologies. "We believe the downward trend cycle in assets under management is coming to an end, with the eventual up-swing anticipated as the historical nature of commodities in general would suggest. Regardless, our business model operates well in fluctuating markets, since many of our expenses are variable in nature and move in concert with revenues to sustain profitability at lower levels of AUM."

"Our ‘Other' operating units had a productive quarter despite some one-time expenses," said David Neibert, Concierge Technologies' Chief Operations Officer. "Original Sprout successfully made the transition to nationwide retail distribution for their new ‘Worry Free' line of hair care products, and Gourmet Foods had a near-record holiday season of sales. Brigadier Security Systems was seasonally hampered by frigid cold in Saskatoon, which, in turn, helped build a solid backlog for the next quarter. Our Other operating units were all cash flow positive, and we only posted a small net loss on a consolidated basis, due, in part, to non-cash expenses, including $150,000 in depreciation expense for the quarter," Neibert said.

Business Units

Gourmet Foods, https://gourmetfoodsltd.co.nz/, acquired in August 2015, is a commercial-scale bakery that produces and distributes iconic meat pies and pastries throughout New Zealand under the brand names Pat's Pantry and Ponsonby Pies.

Brigadier Security Systems, www.brigadiersecurity.com, acquired in June 2016 and headquartered in Saskatoon, Canada, provides comprehensive security solutions to homes and businesses, government offices, schools and other public buildings throughout the province.

The company's USCF Investments operation, www.uscfinvestments.com, acquired as part of the Wainwright Holdings transaction in December 2016 and based in Walnut Creek, Calif., serves as manager, operator or investment adviser to 13 exchange traded products, structured as limited partnerships or investment trusts that issue shares trading on the NYSE Arca.

Acquired by Concierge at the end of 2017, California-based Original Sprout, www.originalsprout.com, produces and distributes a full line of vegan, safe, non-toxic hair and skin care products, including a "reef safe" sun screen, in the U.S. and its territories, the U.K., E.U., Turkey, Middle East, Africa, Taiwan, Singapore, Hong Kong, Malaysia, New Zealand, Australia and Canada. A second line of products, "Worry Free" was created to target mainstream U.S. nationwide consumers and began distribution in January 2020.

About Concierge Technologies, Inc.

Concierge Technologies, originally founded in 1996, was repositioned as a global holding firm in 2015, and currently has operating subsidiaries in financial services, food manufacturing, security systems and beauty products. Offices and manufacturing operations are in the U.S., New Zealand and Canada. For more information, visit www.conciergetechnology.net.

Forward-Looking Statements

This press release may contain "forward-looking statements" that include information relating to Concierge Technologies' future events and future financial and operating performance. Such forward-looking statements, including, but not limited to, adding new distribution channels and an expectation for the USCF operating subsidiary to benefit when the cyclical trend for commodities shifts upward, should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

For a more detailed description of the risk factors and uncertainties affecting Concierge Technologies or its subsidiary companies, and more detailed information about the individual operating entities, please refer to the Company's Securities and Exchange Commission filings, which are available on the Company's website, (http://www.conciergetechnology.net), or at www.sec.gov.

Financial Tables Follow:

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

 
December 31,
2019
 
 
June 30,
2019
 

 
 
 
 
(AUDITED)
 

 
ASSETS
 

CURRENT ASSETS

Cash and cash equivalents

 
$
6,532,285
 
 
$
6,481,815
 

Accounts receivable, net

 
 
811,699
 
 
 
939,649
 

Accounts receivable – related parties

 
 
1,002,708
 
 
 
1,037,146
 

Inventories

 
 
1,219,403
 
 
 
1,008,662
 

Prepaid income tax and tax receivable

 
 
1,346,703
 
 
 
1,754,369
 

Investments

 
 
3,792,918
 
 
 
3,756,596
 

Other current assets

 
 
272,814
 
 
 
546,105
 

Total current assets

 
 
14,978,530
 
 
 
15,524,342
 

Restricted cash

 
 
13,468
 
 
 
13,436
 

Property and equipment, net

 
 
1,298,455
 
 
 
757,014
 

Operating lease right-of-use asset

 
 
928,964
 
 
 
–
 

Goodwill

 
 
915,790
 
 
 
915,790
 

Intangible assets, net

 
 
2,490,590
 
 
 
2,659,723
 

Deferred tax assets, net

 
 
859,696
 
 
 
859,696
 

Other assets, long – term

 
 
523,607
 
 
 
523,607
 

Total assets

 
$
22,009,100
 
 
$
21,253,608
 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
 

CURRENT LIABILITIES

Accounts payable and accrued expenses

 
$
2,118,950
 
 
$
2,867,081
 

Expense waivers – related parties

 
 
288,119
 
 
 
325,821
 

Current portion operating lease liabilities

 
 
366,617
 
 
 
–
 

Notes payable – related parties

 
 
3,500
 
 
 
3,500
 

Loans – property and equipment, current portion

 
 
13,556
 
 
 
26,241
 

Total current liabilities

 
 
2,790,742
 
 
 
3,222,643
 

LONG TERM LIABILITIES

Notes payable – related parties

 
 
600,000
 
 
 
600,000
 

Loans – property and equipment, net of current portion

 
 
384,412
 
 
 
61,057
 

Long-term operating lease liabilities

 
 
600,231
 
 
 
–
 

Deferred tax liabilities

 
 
176,578
 
 
 
176,578
 

Total long-term liabilities

 
 
1,761,221
 
 
 
837,635
 

Total liabilities

 
 
4,551,963
 
 
 
4,060,278
 

STOCKHOLDERS' EQUITY

Preferred stock, $0.001 par value; 50,000,000 authorized

Series B: 53,032 issued and outstanding at December 31, 2019 and at June 30, 2019

 
 
53
 
 
 
53
 

Common stock, $0.001 par value; 900,000,000 shares authorized; 37,412,519 shares issued and outstanding at December 31, 2019 and 37,237,519 at June 30, 2019

 
 
37,412
 
 
 
37,237
 

Additional paid-in capital

 
 
9,292,955
 
 
 
9,178,838
 

Accumulated other comprehensive (loss)

 
 
(6,122
)
 
 
(175,659
)

Retained earnings

 
 
8,132,839
 
 
 
8,152,861
 

Total stockholders' equity

 
 
17,457,137
 
 
 
17,193,330
 

Total liabilities and stockholders' equity

 
$
22,009,100
 
 
$
21,253,608
 

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

 
For the Three-Month Periods Ended
 
 
For the Six-Month Periods Ended
 

 
December 31,
 
 
December 31,
 

 
2019
 
 
2018
 
 
2019
 
 
2018
 

Net revenue

Fund management – related party

 
$
2,839,718
 
 
$
3,939,004
 
 
$
5,880,287
 
 
$
8,161,988
 

Food products

 
 
1,320,357
 
 
 
1,145,410
 
 
 
2,570,334
 
 
 
2,339,704
 

Security systems

 
 
733,533
 
 
 
714,069
 
 
 
1,506,753
 
 
 
1,561,100
 

Beauty products and other

 
 
902,928
 
 
 
897,457
 
 
 
1,866,601
 
 
 
1,799,786
 

Net revenue

 
 
5,796,536
 
 
 
6,695,940
 
 
 
11,823,975
 
 
 
13,862,578
 

Cost of revenue

 
 
1,724,507
 
 
 
1,751,280
 
 
 
3,493,827
 
 
 
3,584,431
 

Gross profit

 
 
4,072,029
 
 
 
4,944,660
 
 
 
8,330,148
 
 
 
10,278,147
 

Operating expense

General and administrative expense

 
 
986,392
 
 
 
1,076,585
 
 
 
2,106,392
 
 
 
2,148,468
 

Fund operations

 
 
727,450
 
 
 
1,144,734
 
 
 
1,537,287
 
 
 
2,410,388
 

Marketing and advertising

 
 
634,871
 
 
 
762,742
 
 
 
1,210,003
 
 
 
1,634,484
 

Depreciation and amortization

 
 
150,485
 
 
 
174,657
 
 
 
300,148
 
 
 
349,096
 

Salaries and compensation

 
 
1,673,443
 
 
 
1,721,688
 
 
 
3,216,485
 
 
 
3,104,842
 

Total operating expenses

 
 
4,172,641
 
 
 
4,880,406
 
 
 
8,370,315
 
 
 
9,647,278
 

(Loss) Income from operations

 
 
(100,612
)
 
 
64,254
 
 
 
(40,167
)
 
 
630,869
 

Other (expense) income:

Other (expense) income

 
 
(31,347
)
 
 
(320,048
)
 
 
(22,458
)
 
 
(493,083
)

Interest and dividend income

 
 
26,403
 
 
 
351,582
 
 
 
52,239
 
 
 
355,364
 

Interest expense

 
 
(10,246
)
 
 
(7,269
)
 
 
(21,248
)
 
 
(15,377
)

Total other (expense) income, net

 
 
(15,190
)
 
 
24,265
 
 
 
8,533
 
 
 
(153,096
)

(Loss) Income before income taxes

 
 
(115,802
)
 
 
88,519
 
 
 
(31,634
)
 
 
477,773
 

Benefit (Provision) of income taxes

 
 
40,888
 
 
 
(25,358
)
 
 
11,612
 
 
 
(129,106
)

Net (loss) income

 
$
(74,914
)
 
$
63,161
 
 
$
(20,022
)
 
$
348,667
 

Weighted average shares of common stock

Basic

 
 
37,412,519
 
 
 
29,559,139
 
 
 
37,368,769
 
 
 
29,559,139
 

Diluted

 
 
37,412,519
 
 
 
38,298,159
 
 
 
37,368,769
 
 
 
38,298,159
 

Net income per common share

Basic

 
 
(0.00
)
 
$
0.00
 
 
$
(0.00
)
 
$
0.01
 

Diluted

 
$
(0.00
)
 
$
0.00
 
 
$
(0.00
)
 
$
0.01
 

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)

 
Three Months Ended December 31,
 
 
Six Months Ended December 31,
 

 
2019
 
 
2018
 
 
2019
 
 
2018
 

Net (loss) income

 
$
(74,914
)
 
$
63,161
 
 
$
(20,022
)
 
$
348,667
 

Other comprehensive income (loss):

Foreign currency translation gain (loss)

 
 
135,588
 
 
 
(47,125
)
 
 
169,537
 
 
 
(58,708
)

Comprehensive income

 
$
60,674
 
 
$
16,036
 
 
$
149,515
 
 
$
289,959
 

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

 
For the Six-Month Periods Ended
 

 
December 31,
 

 
2019
 
 
2018
 

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income

 
$
(20,022
)
 
$
348,667
 

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

 
 
300,148
 
 
 
349,096
 

Stock based vendor compensation

 
 
114,292
 
 
 
–
 

Bad debt expense

 
 
91
 
 
 
–
 

Unrealized loss on investments

 
 
688
 
 
 
314,313
 

Loss on disposal of equipment

 
 
–
 
 
 
1,434
 

Operating lease right-of-use asset – Non-cash lease cost

 
 
184,876
 
 
 
–
 

Decrease (increase) in current assets:

Accounts receivable, net

 
 
130,917
 
 
 
142,174
 

Accounts receivable – related party

 
 
34,437
 
 
 
226,377
 

Prepaid income taxes and tax receivable

 
 
427,260
 
 
 
(64,010
)

Inventories

 
 
(207,324
)
 
 
(306,271
)

Other current assets

 
 
94,986
 
 
 
178,635
 

Increase (decrease) in current liabilities:

Accounts payable and accrued expenses

 
 
(781,736
)
 
 
(309,587
)

Operating lease liabilities

 
 
(184,068
)
 
 
–
 

Expense waivers – related party

 
 
(37,702
)
 
 
(273,655
)

Net cash provided by operating activities

 
 
56,843
 
 
 
607,173
 

CASH FLOWS FROM INVESTING ACTIVITIES:

Cash paid for acquisition of business assets

 
 
–
 
 
 
(45,000
)

Purchase of real estate and equipment – net of disposal

 
 
(495,579
)
 
 
(8,984
)

Sale of investments

 
 
–
 
 
 
180,000
 

Purchase of investments

 
 
(29,060
)
 
 
(346,759
)

Net cash (used in) investing activities

 
 
(524,639
)
 
 
(220,743
)

CASH FLOWS FROM FINANCING ACTIVITIES:

Loans – real estate, property and equipment

 
 
404,518
 
 
 
–
 

Repayment of equipment loan

 
 
(94,613
)
 
 
(96,525
)

Net cash provided by (used in) financing activities

 
 
309,905
 
 
 
(96,525
)

Effect of exchange rate change on cash and cash equivalents

 
 
208,393
 
 
 
(30,515
)

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 
 
50,502
 
 
 
259,390
 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING BALANCE

 
 
6,495,251
 
 
 
7,524,114
 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE

 
$
6,545,753
 
 
$
7,783,504
 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the period for:

Interest paid

 
$
8,990
 
 
$
–
 

Income taxes-U.S.

 
$
159,363
 
 
$
43,000
 

Non-Cash financing and investing activities:

Acquisition of operating right-of-use assets through operating lease obligations

 
$
1,150,916
 
 
$
–
 

Reclassification of deposit from other current assets to property and equipment

 
$
178,276
 
 
$
–
 

The accompanying notes are an integral part of these consolidated financial statements.

Investors and media, for more information, contact:                                                                                       

Roger S. Pondel
PondelWilkinson Inc.
310-279-5980
rpondel@pondel.com                                                                                     

SOURCE: Concierge Technologies, Inc.

ReleaseID: 576585