William Sumner
Surna Inc. (SRNA) today announced its financial and operational results for the quarter ending on March 31, 2018.
The company’s net bookings rose 88%, increasing from $2,454,000 in the previous quarter to $4,623,000. Revenue declined sequentially by 11%, falling from $2,309,000 in the previous quarter to $2,055,000. Compared to the same period in the previous year, however, revenue increased by 29%.
Over the last year, the company’s gross profit margins decreased by eight percentage points from 27% to 19%. Compared to the same period in the previous year, the company’s net loss increased by approximately 88%, rising from a loss of $1,001,00 to $1,884,000. The net loss for this quarter included $641,000 of non-cash, stock-based compensation expenses and $21,000 of non-cash gain related to debt instruments. The company’s quarter-end backlog rose to its highest levels ever, increasing 58% to $ 7,024,000.
In a statement, Surna CEO Chris Bechtel expressed disappointment in the company’s less than stellar financial results but remained confident in the company’s positioning for the future.
“While we are not satisfied with our recent declines in gross margin, and which was partly attributable to legacy internal procedures, we remain focused on improvement in this area through a combination of more disciplined pricing using enhanced pricing software, better absorption of fixed costs as we convert our increased bookings into revenue, and the implementation over time of lower-cost supplier alternatives,” stated Bechtel.
The company also announced today that co-founder Brandy M. Keen would resign from her position as Vice President and Secretary, and as a member of the board; effective on May 10, 2018. Keen will continue as a Senior Technical Advisor through 2020. Additionally, Keen’s husband and company co-founder, Stephen Keen, has agreed to terminate his consulting agreement with the company effective May 31, 2018. The company has agreed to purchase shares held by Keen and her husband for a total of $400,000. However, the repurchase of these shares is dependent on the closing of a $1.5 million private placement, of which there is no assurance that the company will be able to complete.
Stock Performance
The stock fell almost 3% to lately trade at 19 cents on the disappointing earnings and departure of the founders. It has declined from a year’s high of 48 cents, which the company hit in January.
