Nature's Miracle Holding Inc. Announces Third Quarter 2024 Financial Results

~ Revenue Growth of 13.5% to $3.1 Million from Q3 2023~

ONTARIO, Calif., Nov. 15, 2024 /PRNewswire/ -- Nature's Miracle Holding Inc. (NASDAQ: NMHI) ("Nature's Miracle" or the "Company"), a leader in vertical farming technology and infrastructure, today announced its financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 Financial and Business Updates

• Revenue for the third quarter of 2024 increased 13.5% to $3.1 million compared to $2.7 million in the same year ago period.
• Gross profit of $228,113 and $158,768 for the third quarter of 2024 and 2023, respectively.
• Gross margin expanded by 160 basis points to 7.5% from 5.9% in the third quarter of 2023.
• Net loss of $2.8 million as compared to net loss of $0.4 million in the third quarter of 2023.
• Adjusted EBITDA for the third quarter of 2024 was a loss of $1.1 million compared to a loss of $0.2 million in the same year ago period.
• Completed $2.1 million of debt reduction with forgiveness agreement from Uninet Global Inc. which improved its shareholder equity position.
• Delivered first shipment of Efinity brand dehumidifier product to Fiacre Inc., a major indoor grower in the San Francisco Bay Area.
• Received record $2.4 million purchase order of Efinity LED grow lights from a top indoor grower.
• Entered a sales order agreement with What Rebates for $5.1 million of grow light products for use by the U.S. energy rebate market that will contribute to 2024 full year revenue.
• Closed an underwritten public offering for gross proceeds of $1.2 million in July.

Management Commentary

James Li, Chairman and CEO of Nature's Miracle, commented, "We are encouraged with third quarter's double digit revenue growth while making significant operational progress in the third quarter and thus far in the fourth quarter to accelerate our growth objectives. As previously announced, on November 12^th, we closed a $3 million equity raise, which significantly improved our liquidity position for the execution of our growth plan. While our core business in the Controlled Environment Agriculture industry has performed strongly as we launched a variety of new products and initiatives that resulted in customer growth, we are excited to enter the EV space with our recently announced agreement with Robostreet. This strategic pivot to the marketing and distribution of electric powered agriculture vehicles for commercial use, combined with our core vertical farming business is a venture that aligns with convenience culture and is currently underrepresented in the market. Our ultimate goal is to market and distribute our EV trucks to the commercial and agriculture markets in the United States and South America as we continue to cultivate and diversify our revenue streams and generate value for all shareholders over the long-term."

Subsequent Operational Updates

• Launched a wholly owned subsidiary, NM Rebate Inc., to facilitate the Company's energy rebate financing segment.
• Announced an agreement with Robostreet Inc. to order a total of 150 LS450 electric trucks from to convert into mobile vertical farms targeting the Los Angeles market.
• Announced Hydroman, Inc., its 100% owned subsidiary, will become Hydroman Electric Corporation to launch its electric-powered mobile vertical farms throughout the United States and South America.
• Received aggregate gross proceeds of approximately $3 million from an underwritten public offering in November.

Third Quarter 2024 Financial Summary

For the third quarter of 2024, revenue totaled $3.1 million, an increase of 13.5%, compared to $2.7 million in the same year ago period. Revenue increased due to rising demand from new and existing customers as a result of an expansion of the sales team in 2024 and the introduction of new product lines in 2024.

Cost of revenue totaled $2.8 million in the third quarter of 2024, compared to $2.5 million in the same year ago period. The increase in the cost of revenue was primarily due to the increase in revenue, driven by a higher volume of product sales on an increase in customer demand.

Gross profit totaled $228,113 in the third quarter of 2024, or 7.5% of revenue, an increase from $158,768 and 5.9% of revenue, in the third quarter of 2023. The increase in gross profit and margin was due to a combination of customers shifting to premium grow lighting, such as our own "Efinity" brand, favorable purchasing conditions from suppliers and consistent fixed costs over higher volume of sales.

Operating expenses in the third quarter of 2024 were $2.2 million, as compared to $0.6 million for the third quarter of 2023. The increase was mainly due to the introduction of public company costs in 2024, resulting in an increase in payroll and compensation expense, increased professional fees and increased stock compensation expense which were not components of private entity operations in 2023.

Net loss in the third quarter of 2024 was $2.8 million, as compared to net loss of $0.4 million in the third quarter of 2023. The increase in losses was a result of additional personnel and stock compensation expense after the de-SPAC transaction, a higher level of legal and accounting costs related to the Nasdaq listing and SEC filings, higher public relations costs, new corporate offices and higher interest expense.