Concierge Technologies Reports Fiscal 2019 Financial Results

Company Files Annual Report Form 10-K with Profitable Results

Balance Sheet Remains Strong, Stockholder Equity Increases Despite Downturn in Commodities

SAN CLEMENTE, CA / ACCESSWIRE / September 30, 2019 / Concierge Technologies, Inc. (OTCQB:CNCG), a diversified global holding firm, today announced financial results for the fiscal year and fourth quarter ended June 30, 2019.

For the year ended June 30, 2019, the company reported revenues of $26.9 million, compared with $28.7 million for the prior year. Concierge reported net income of $261,849, equal to $0.01 per fully diluted share, for fiscal 2019, versus $1.7 million, or $.05 per fully diluted share, for the prior year.

Concierge’s balance sheet remained strong at fiscal year-end, with cash and cash equivalents of $6.5 million in addition to $3.8 million in cash investments, essentially no debt, and total assets of $21.3 million.

The company said that, as expected, results for fiscal 2019 were impacted primarily by a continuing market-related decline in average assets under management (AUM) to $2.7 billion from $3.4 billion at its Wainwright Holdings funds management subsidiary. Wainwright, under the operating name, USCF Investments, currently manages ten commodity exchange-traded products (ETPs) and three exchange-traded funds (ETFs) that are all listed on the New York Stock Exchange.

Concierge said each of its other business units-Gourmet Foods, Brigadier Security Systems and Original Sprout-recorded increases in revenues and income.

For the fourth fiscal quarter ended June 30, 2019 and 2018, Concierge reported revenues of $5.1 million and $7.4 million, respectively. The decline in revenues was a direct result of lower AUM in 2019 as compared with 2018. Net operating income for the 2019 fiscal fourth quarter totaled approximately $500,000 but depreciation expense, accrued incentive bonuses and income tax, produced a net loss of approximately $116,000 or ($0.00) per share, compared with net income of approximately $900,000, or $0.02 per fully diluted share, for the 2018 fiscal fourth quarter.

“Our fourth quarter is when we accrue the full year incentive bonuses, calculate and accrue income tax domestically and abroad, and otherwise accrue all of the expenses anticipated to apply to the fiscal year just ended”, explained David Neibert, Chief Operations Officer, “thus this quarter presents a skewed operating result.”

“Our long-term strategy is to build a diverse, profitable company, with balance among our businesses to offset cyclicality in any one sector,” said Nicholas Gerber, Chief Executive Officer of Concierge Technologies. “Concierge established its current holding company structure just four years ago. During this time, we have put together a talented team and built a solid, high quality platform from which to grow by acquisition of profitable companies in our current and new sectors, as well as organically.”

Stuart Crumbaugh, Chief Financial Officer, added, “Our three non-financial services subsidiaries combined have been accounting for an increasing percentage of the company’s total revenues, offsetting, in part, the dominance of our financial services business unit during this cyclical downturn. In fiscal 2019, the non-financial operating units accounted for 44 percent of total revenues on a combined basis, versus 35 percent in fiscal 2018 and 25 percent in fiscal 2017. The table below depicts this trend.

$’s in thousands
  Financial Services     Other Operating Units     Concierge Corporate     Consolidated  
 
  2019     2018     Change     2019     2018     Change     2019     2018     Change     2019     2018     Change  
 
              $     %                 $     %                 $     %                 $     %  
Revenue
  $ 15,021     $ 18,744     $ (3,723 )     -20 %   $ 11,928     $ 9,967     $ 1,961       20 %                           $ 26,949     $ 28,711     $ (1,762 )     -6 %
% of total revenue
    56 %     65 %             -9 %     44 %     35 %             9 %                                                        
Cost of revenue
                                  $ 6,936     $ 5,915     $ 1,021       17 %                           $ 6,936     $ 5,915     $ 1,021       17 %
Gross profit
  $ 15,021     $ 18,744     $ (3,723 )     -20 %   $ 4,992     $ 4,052     $ 940       23 %                           $ 20,013     $ 22,796     $ (2,783 )     -12 %
operating expenses
  $ 14,095     $ 15,527     $ (1,432 )     -9 %   $ 3,950     $ 3,488     $ 462       13 %   $ 1,212     $ 974     $ 238       24 %   $ 19,257     $ 19,989     $ (732 )     -4 %
% of total operating expenses
    73 %     78 %             -5 %     21 %     17 %             4 %     6 %     5 %             1 %                                
Income (loss) from operations
  $ 926     $ 3,217     $ (2,291 )     -71 %   $ 1,042     $ 564     $ 478       85 %   $ (1,212 )   $ (974 )   $ (238 )   $ (24 )   $ 756     $ 2,807     $ (2,051 )   $ (73 )
Other (expense)/income
  $ (148 )   $ (324 )   $ 176       54 %   $ 25     $ 43     $ (18 )     -42 %   $ (24 )   $ (25 )   $ 1       4 %   $ (147 )   $ (306 )   $ 159       -52 %
Income (loss) before income taxes
  $ 778     $ 2,893     $ (2,115 )     -73 %   $ 1,067     $ 607     $ 460       76 %   $ (1,236 )   $ (999 )   $ (237 )     -24 %   $ 609     $ 2,501     $ (1,892 )     -76 %

“While this past year our fund management business experienced a decline in AUM, the business is fundamentally sound and continues to be profitable. Three years ago, AUM was $4.5 billion, and as is the nature of commodity-focused financial products, we fully expect the sector to rebound,” Crumbaugh 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.

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, growing the business platform and an expectation for commodity-related financial products to rebound, 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.

Investors and media, for more information, contact:

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

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

 
  June 30, 2019     June 30, 2018  
 
           
ASSETS
           
             
CURRENT ASSETS
           
Cash and cash equivalents
  $ 6,481,815     $ 7,524,114  
Accounts receivable, net
    939,649       1,068,240  
Accounts receivable – related parties
    1,037,146       1,458,159  
Inventories
    1,008,662       931,065  
Prepaid income tax and tax receivable
    1,754,369       2,138,636  
Investments
    3,756,596       3,204,005  
Other current assets
    546,105       374,617  
Total current assets
    15,524,342       16,698,836  
 
               
Restricted cash
    13,436       13,536  
Property and equipment, net
    757,014       1,080,471  
Goodwill
    915,790       915,790  
Intangible assets, net
    2,659,723       2,995,231  
Deferred tax assets, net
    859,696       865,120  
Other assets, long – term
    523,607       532,165  
Total assets
  $ 21,253,608     $ 23,101,149  
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
                 
CURRENT LIABILITIES
               
Accounts payable and accrued expenses
  $ 2,867,081     $ 3,249,387  
Expense waivers – related parties
    325,821       662,650  
Purchase consideration payable
          1,205,000  
Notes payable – related parties
    3,500       3,500  
Equipment loans, current portion
    26,241       46,705  
Total current liabilities
    3,222,643       5,167,242  
 
               
LONG TERM LIABILITIES
               
Notes payable – related parties
    600,000       600,000  
Equipment loans, net of current portion
    61,057       149,491  
Deferred tax liabilities
    176,578       208,419  
Total liabilities
    4,060,278       6,125,152  
 
               
STOCKHOLDERS’ EQUITY
               
Preferred stock, $0.001 par value; 50,000,000 authorized
               
Series B: 53,032 issued and outstanding at June 30, 2019 and 436,951 at June 30, 2018
    53       437  
Common stock, $0.001 par value; 900,000,000 shares authorized; 37,237,519 shares issued and outstanding at June 30, 2019 and 29,559,139 at June 30, 2018
    37,237       29,559  
Additional paid-in capital
    9,178,838       9,186,132  
Accumulated other comprehensive (loss) income
    (175,659 )     148,808  
Retained earnings
    8,152,861       7,611,061  
Total stockholders’ equity
    17,193,330       16,975,997  
Total liabilities and stockholders’ equity
  $ 21,253,608     $ 23,101,149  

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

 
  Year Ended     Year Ended  
 
  June 30, 2019     June 30, 2018  
 
           
 
           
Net revenue
           
Fund management – related party
  $ 15,021,439     $ 18,744,313  
Food products
    4,747,358       4,968,158  
Security systems
    3,558,580       3,303,584  
Beauty products and other
    3,621,246       1,694,534  
Net revenue
    26,948,623       28,710,589  
 
               
Cost of revenue
    6,936,421       5,914,719  
 
               
Gross profit
    20,012,202       22,795,870  
 
               
 
               
Operating expense
               
General and administrative expense
    4,205,389       4,828,241  
Fund operations
    4,494,001       4,933,437  
Marketing and advertising
    2,910,447       3,554,507  
Depreciation and amortization
    702,320       576,674  
Salaries and compensation
    6,944,457       6,096,232  
Total operating expenses
    19,256,614       19,989,091  
 
               
Income from operations
    755,588       2,806,779  
 
               
 
               
Other (expense) income:
               
Other (expense) income
    (484,028 )     (316,337 )
Interest and dividend income
    366,796       111,929  
Interest expense
    (29,493 )     (101,089 )
Total other (expense) income, net
    (146,725 )     (305,497 )
 
               
Income before income taxes
    608,863       2,501,282  
 
               
Provision of income taxes
    347,014       766,596  
 
               
Net income
  $ 261,849     $ 1,734,686  
 
               
Weighted average shares of common stock
               
Basic
    32,588,418       29,559,139  
Diluted
    38,298,159       38,298,159  
 
               
Net income per common share
               
Basic
  $ 0.01     $ 0.06  
Diluted
  $ 0.01     $ 0.05  

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 
  Year Ended     Year Ended  
 
  June 30, 2019     June 30, 2018  
 
           
Net income
  $ 261,849     $ 1,734,686  
 
               
Other comprehensive income (loss):
               
Foreign currency translation (loss) gain
    (44,516 )     (214,284 )
Changes in short-term investment valuation
          243,754  
Comprehensive income
  $ 217,333     $ 1,764,156  

SOURCE: Concierge Technologies, Inc.

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