Executive Summary

Record revenue of $19.33M and positive Adjusted EBITDA of $0.90M; gross margin improved to 6.5% on higher volumes and pricing. Management highlighted “record revenues and EBITDA” and expects continued growth driven by infrastructure demand and potential accretive acquisitions .
Net loss narrowed year over year (to $(3.20)M vs $(3.61)M), but remains driven by elevated interest expense ($2.64M this quarter) and working capital constraints; gain on debt settlement ($0.565M) partially offset the drag .
Sequential momentum: revenue grew from $18.08M in Q2 to $19.33M in Q3 and Adjusted EBITDA increased from $0.74M to $0.90M; gross margin ticked up from 6.3% to 6.5% .
No formal numerical guidance; management tone constructive (“anticipates further growth” and continues to pursue acquisitions). Potential stock catalysts include sustained pricing power in heavy/super-heavy haul and progress on deleveraging/liquidity actions .

What Went Well and What Went Wrong

What Went Well
- Record quarterly revenue ($19.33M, +31% YoY) and positive Adjusted EBITDA ($0.90M) with improved gross margin (6.5%), reflecting higher volumes and better pricing in infrastructure logistics .
- Sequential profitability progress: Adjusted EBITDA rose to $0.90M from $0.74M in Q2; gross margin improved to 6.5% from 6.3% .
- Debt settlement actions provided a $0.565M gain, supporting bottom line and signaling active balance sheet management .
- Quote: “The Company is pleased to report record revenues and EBITDA for the third quarter 2022… improvement in gross margin and adjusted EBITDA from customer demand, higher volumes and better pricing” – Matt Flemming, Chairman .
What Went Wrong
- Continued net losses despite operational improvement (Q3 net loss $(3.20)M), primarily due to elevated interest expense ($2.64M) from high-cost debt and non-cash financing amortization .
- Liquidity pressures persist: working capital deficit increased to $13.63M; management continues to rely on lines of credit, borrowings, and stock sales; going concern uncertainty noted previously in the year .
- Operating cost headwinds: higher fuel and freight, and broader inflation; risk factors include driver shortages and potential increases in driver compensation .

Financial Results

Headline results vs prior year and prior quarter

Metric	Q3 2021	Q2 2022	Q3 2022
Revenue ($M)	$14.77	$18.08	$19.33
Gross Profit ($M)	$(0.52)	$1.14	$1.26
Gross Margin %	(3.5)%	6.3%	6.5%
Net Income (Loss) ($M)	$(3.61)	$(3.02)	$(3.20)
Diluted EPS ($)	$(0.16)	$(0.08)	$(0.09)
Interest Expense ($M)	$2.06	$2.18	$2.64
Adjusted EBITDA ($M)	N/A	$0.74	$0.90
Adjusted Gross Margin ($M)	N/A	$2.54	$2.65

2022 quarterly progression

Metric	Q1 2022	Q2 2022	Q3 2022
Revenue ($M)	$16.18	$18.08	$19.33
Net Income (Loss) ($M)	$(3.63)	$(3.02)	$(3.20)
Diluted EPS ($)	$(0.11)	$(0.08)	$(0.09)
Gross Margin %	9.0%	6.3%	6.5%
Interest Expense ($M)	$2.62	$2.18	$2.64
Adjusted EBITDA ($M)	N/A	$0.74	$0.90

Balance sheet snapshot (quarter-end)

Metric	Mar 31, 2022	Jun 30, 2022	Sep 30, 2022
Total Assets ($M)	$32.03	$26.45	$24.62
Total Liabilities ($M)	$51.40	$48.82	$49.40
Working Capital Deficit ($M)	$9.96	$10.93	$13.63

Segment/KPI notes

The company reports revenue from services in the southern U.S. and does not provide a multi-segment revenue breakdown; disaggregation beyond services/region is not disclosed .
Non-GAAP highlights: Q3 Adjusted EBITDA $0.903M; reconciliation excludes depreciation ($1.390M), amortization ($0.984M), interest ($1.200M), taxes ($0.043M), non-cash stock compensation ($0.015M), and one-time consulting fees ($0.045M) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue, margins, EBITDA	FY/near-term	None provided	No formal quantitative guidance; management “anticipates further growth” driven by diversification and infrastructure demand; pursuing accretive acquisitions	Maintained no numeric guidance

Notes: Company provides qualitative outlook; no numerical ranges were issued. Forward-looking statements caution remains in place .

Earnings Call Themes & Trends

Note: We did not locate a Q3 2022 earnings call transcript in the document set; themes are synthesized from the Q1–Q3 10-Qs and Q2/Q3 press releases .

Topic	Previous Mentions (Q1 2022, Q2 2022)	Current Period (Q3 2022)	Trend
Demand & Pricing	Q1: Higher volumes and more favorable pricing improved gross margin . Q2: Continued higher volumes/pricing; gross margin 6.3% .	Q3: Demand and “better pricing” cited; gross margin 6.5% .	Improving/stable margins on sustained demand.
Infrastructure/heavy haul mix	Q1/Q2: Bridge beams, over-dimensional infrastructure, compressors, rig moves drove growth .	Q3: Customer demand for infrastructure components (industrial components, bridge beams) expected to support growth .	Positive mix tailwind persists.
Inflation/fuel/driver costs	Liquidity sections cite inflationary pressures (fuel); cost of goods impacted by fuel/freight .	Continued headwinds noted; risk of driver shortages/compensation increases .	Persistent headwind.
Margin trajectory	Q1 gross margin 9.0% (positive) ; Q2 6.3% .	Q3 6.5% .	Slight sequential improvement.
Leverage/interest burden	Interest expense elevated: Q1 $2.62M; Q2 $2.18M .	Q3 $2.64M; non-cash financing amortization significant .	Elevated; balance sheet actions ongoing.
M&A/“buy and build”	Strategy reiterated; accretive acquisitions highlighted in Q2 PR .	Acquisitions remain a growth component in Q3 PR .	Active pipeline emphasized.

Management Commentary

Strategic positioning: “The Company is pleased to report record revenues and EBITDA for the third quarter 2022, which included improvement in gross margin and adjusted EBITDA from customer demand, higher volumes and better pricing” .
Outlook and growth drivers: “Currently the Company anticipates further growth from diversification [and] additional lines of business being initiated and… increased customer demand of infrastructure components such as industrial components and bridge beams. The Company also views accretive acquisitions as an important component of our anticipated future growth” .

Q&A Highlights

We did not locate a Q3 2022 earnings call transcript for SMGI in the document archive; therefore, Q&A themes and specific analyst questions/management clarifications are unavailable in this cycle [List: earnings-call transcripts not found].

Estimates Context

S&P Global (Capital IQ) consensus estimates for Q3 2022 were unavailable for SMGI (no CIQ mapping present). As a result, we cannot assess revenue/EPS beats or misses versus Wall Street consensus this quarter. Values not shown due to unavailability via S&P Global.

Key Takeaways for Investors

Execution: Strong top-line momentum with three consecutive quarterly revenue increases (Q1–Q3: $16.18M → $18.08M → $19.33M) and sustained positive Adjusted EBITDA, reflecting pricing power and infrastructure-heavy mix .
Profitability trajectory: Gross margin improved YoY and sequentially to 6.5%; operational improvements are evident, but operating leverage is constrained by high interest expense .
Balance sheet risk: Working capital deficit widened to $13.63M and total liabilities exceed assets; liquidity depends on credit facilities and financing, contributing to going concern uncertainty earlier in the year .
Cost headwinds: Fuel/freight costs and potential driver wage inflation remain key variables; watch for margin resilience if diesel costs rise or if labor tightens .
Corporate actions: Debt settlement gains (Q3: $0.565M) and lease optimization actions are positives; continued progress on deleveraging would be a material re-rating catalyst .
M&A optionality: Management continues to emphasize accretive acquisitions; balance sheet capacity and financing terms will determine pace and shareholder value accretion .
Trading setup: Near-term moves likely track evidence of sustained pricing/volume in heavy/super-heavy haul, quarterly EBITDA expansion, and concrete steps to reduce financing costs and improve working capital.

Supporting detail and sources:

Q3 2022 8‑K/press release: revenue, Adjusted EBITDA, qualitative outlook, and non‑GAAP reconciliation .
Q3 2022 10‑Q: GAAP income statement, gross margin, interest expense, working capital/liquidity, and balance sheet .
Q2 2022 10‑Q & 8‑K: comparative revenue/margins and Adjusted EBITDA trend .
Q1 2022 10‑Q: starting point for 2022 trajectory .

SMG Industries Inc. (SMGI)·Q3 2022 Earnings Summary