PORTLAND, Oregon., October 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 the receipt of deficiency notices from Nasdaq.
Highlights of Fiscal 2022 Results
Schmitt announced its operating results for the year ended May 31, 2022. Highlights and year-over-year changes include:
Consolidated revenues increased $4,292,751i.e. 76.6%, at $9,893,210.
Ice Cream segment revenue increase $4,272,050i.e. 105.7%, at $8,315,486.
Gross margin increased to 51.2% for the year ended May 31, 2022against 36.9%.
Operating expenses increased $3,188,154i.e. 25.5%, at $15,684,457.
The Xact product line, which includes remote ultrasonic tank monitoring products and related monitoring revenue, is classified as “held for sale” and presented separately as a discontinued operation. Income from discontinued operations decreased $120,383i.e. 22.1%, at $425,108 for the year ended May 31, 2022.
The net loss was ($3,283,776)Where ($0.86) per fully diluted share, for the year ended May 31, 2022.
The Company ended the year with $1,050,910 in cash, 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 stores in from manhattan Upper West Side and queens City of Long Island. These stores have quickly become top performers and are a testament to Ample Hills’ unique brand and offerings. Revenues and margins continue to improve at Ample Hills due to additional strength in our core markets, and we look forward to opening three additional locations in the coming months and more to come,” said Michael R. ZapataChairman and CEO of Schmitt Industries.
“The past year has not been without operational challenges, primarily as Schmitt Industries consolidates and manages the two separate business segments, Ample Hills and Schmitt Measurement Systems. The difficulty and cost of these processes has been significantly higher than The operational challenges have impacted the timing of our periodic SEC filings and necessitated the recent financial statement restatements for the first, second and third quarters of fiscal 2022, which impacted on our previously announced letter of intent for a potential transaction and discontinued a capitalization plan for Ample Collines.”
“As we actively evaluate approaches to simplify the financial operations portion of our business, we remain focused on Ample Hills. We continue to see opportunity to grow the Ample Hills footprint and gain scale to benefit from the four-wall economy of our stores scoop as we grow our wholesale and e-commerce divisions. As we progress through our financial reporting, we expect these cost impacts to moderate and further improve our To facilitate the necessary growth, we have announced a proposed rights offering.” The proposed rights offering will provide our shareholders with the opportunity to invest in our future growth while retaining their pro rata ownership. We are excited for future growth and progress as we continue to bring this unique brand to our neighborhoods,” Zapata continued.
Nasdaq Deficiency Notification
On October 19, 2022we have received written notice from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) advising us that we have not filed our Quarterly Report on Form 10-Q for the quarter fiscal completed August 31, 2022 (the “Form 10-Q”) by October 17, 2022, as required for continued listing on the Nasdaq Capital Markets pursuant to Nasdaq Listing Rule 5250(c)(1). According to Nasdaq rules, we now have 60 calendar days, or until December 19, 2022, to submit to Nasdaq a plan to regain compliance with Nasdaq rules. If the Nasdaq accepts the plan, we will have up to April 17, 2023 to regain compliance. We are working on finalizing Form 10-Q and intend to file Form 10-Q in November to regain compliance.
As noted in the company’s current report on Form 8-K filed with the SEC on October 20, 2022on October 14, 2022the Company has also received a notification from Nasdaq staff that the Company (1) has failed to meet the continued listing requirement under Nasdaq Listing Rule 5550(b)(1) for the Nasdaq Capital Market, which requires that a listed company’s equity be at least $2.5 millionand (2) was no longer in compliance with the Nasdaq Audit Committee Requirements as set forth in Nasdaq Listing Rule 5605 due to Ms. Tung’s resignation from the Company’s Audit Committee.
There can be no assurance that the Company will be able to restore compliance with Nasdaq Listing Rule 5550(b)(1), Nasdaq Listing Rule 5605, Nasdaq Listing Rule 5250(c)( 1) or to maintain compliance with any other registration 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 compliance by the Company 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 white light and laser sensor ranging and sizing products, and our Xact range provides ultrasonic remote tank monitoring products and associated monitoring revenue for the environmental markets of the Internet of things. The company also owns and operates Ample Hills Creamery, a beloved ice cream maker and retailer based in Brooklyn, New York.
Safe Harbor Statement
This document may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Such statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual results may differ materially from what is expressed or anticipated in these forward-looking statements due to numerous factors. A complete discussion of the risks and uncertainties that could affect Schmitt’s business, including the operations of its subsidiary, is included in the “Risk Factors” section of the company’s most recent Annual Report on Form 10-K, such as filed by the company with the Securities and Exchange Commission.
No rights offering will be made until the Company announces the final terms of the rights offering and the registration statement incorporating such terms has been declared effective by the SEC.
For more information contact:
Michael R. Zapata, President and CEO
Phillip Bosco, Chief Financial Officer and Treasurer
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