SMG Industries Inc. (SMGI)·Q4 2022 Earnings Summary

Executive Summary

• Q4 2022 revenue is implied at $17.43M, down sequentially from Q3’s $19.33M as the year finished with record FY 2022 revenue of $71.02M (+36% YoY) and positive adjusted EBITDA of $4.81M, marking tangible operational progress despite continued losses and leverage .
• Strengths were driven by higher volumes and pricing in industrial/heavy-haul plus a full-year contribution from the asset-light 5J Logistics brokerage launched in 2022; management emphasized diversification into infrastructure hauling (bridge beams, compressors, refinery components) .
• Headwinds included high interest expense ($9.43M) and a GAAP net loss ($11.61M) for FY 2022, alongside liquidity and indebtedness constraints flagged in the 10-K risk disclosures, which temper near-term earnings power .
• No formal numeric guidance was issued; management reiterated acquisition-led growth ambitions and signaled efforts toward a potential national exchange listing, which could be catalysts if executed (listing readiness, accretive deals) .

What Went Well and What Went Wrong

What Went Well

• Record FY performance with revenue of $71.02M (+36% YoY) and a swing to positive adjusted EBITDA of $4.81M, reflecting improved pricing, mix, and utilization in the industrial division .
• Quarterly execution: Q3 revenue rose to $19.33M (+31% YoY) with adjusted EBITDA of $0.90M; management cited “record revenues and EBITDA” with momentum from infrastructure hauling and brokerage .
• Strategic diversification: “heavy haul… bridge beams, compressors and refinery components” plus brokerage made “strong inroads” with retail/industrial customers, broadening end-market exposure beyond upstream O&G .

Quoted management remarks:

• “The Company benefited from higher activity levels and increased pricing… heavy haul… infrastructure including bridge beams, compressors and refinery components contributed to the increase in revenues during 2022” .
• “The Company’s asset-light brokerage business, 5J Logistics Services, finished its first full fiscal year and made strong inroads into retail and some industrial customers” .
• “Record revenues and EBITDA for the third quarter 2022… improvement in gross margin and adjusted EBITDA from customer demand, higher volumes and better pricing” .

What Went Wrong

• Profitability headwinds: FY 2022 net loss of $11.61M and interest expense of $9.43M weighed on earnings; gross profit remained modest at $5.74M given cost structure and depreciation in COGS .
• Balance sheet constraints: fully drawn credit, significant debt and accounts receivable pledges to senior lender; management highlighted ongoing liquidity needs and reliance on external financing for operations and acquisitions .
• Going concern and operating environment risks: recurring losses and net capital deficiency raised “substantial doubt” about going-concern status; labor shortages and working capital constraints could force curtailed operations .

Financial Results

Quarterly Revenue and EBITDA

Sequential change:

• Q4 vs Q3 revenue: −$1.90M (−9.8%) .
• Q3 vs Q2 revenue: +$1.25M (+6.9%) .

Adjusted Margin Indicators

Note: Adjusted metrics exclude depreciation within cost of sales per company disclosures .

Full-Year Summary (context for Q4)

Segment breakdown

(Company does not disclose segment revenues quantitatively in these filings.)

KPIs (operational)

Guidance Changes

Earnings Call Themes & Trends

Note: No Q4 2022 earnings call transcript was furnished in SEC filings; themes synthesized from press releases and 10-K.

Management Commentary

• Strategy and performance: “The Company benefited from higher activity levels… heavy haul transport of infrastructure including bridge beams, compressors and refinery components contributed to the increase in revenues during 2022. The Company’s asset-light brokerage business… finished its first full fiscal year and made strong inroads” .
• Outlook and catalysts: “SMG is hopeful to achieve further growth via acquisitions this year… started conversations for a listing of its common stock on a national stock exchange” .
• Q3 execution: “record revenues and EBITDA for the third quarter 2022… improvement in gross margin and adjusted EBITDA from customer demand, higher volumes and better pricing” .

Q&A Highlights

• No Q4 2022 earnings call transcript was available in the filings; no Q&A content to report.

Estimates Context

• Wall Street consensus (S&P Global Capital IQ): Consensus EPS and revenue estimates for SMGI Q4 2022 were unavailable; microcap OTC companies like SMGI often have limited analyst coverage. Where estimates are not available, comparisons to consensus cannot be made.

Key Takeaways for Investors

• Sequential moderation in Q4 revenue ($17.43M) after strong Q3 ($19.33M) is consistent with project timing and seasonality in infrastructure logistics; the FY result still marks record-scale operations .
• Non-GAAP profitability improved (FY adjusted EBITDA $4.81M) but GAAP losses persist due to a high interest burden and fixed costs; monitoring debt structure, interest rates, and liquidity access remains critical .
• The mix shift toward infrastructure hauling and brokerage is working; these end-markets and asset-light contributions should continue to support pricing and utilization in 2023 absent macro shocks .
• Near-term catalysts include accretive acquisitions and progress on exchange listing readiness; execution could broaden investor base and lower cost of capital, though governance, internal controls, and going-concern disclosures warrant scrutiny .
• With no formal guidance and limited analyst coverage, traders should anchor decisions on contract wins, backlog visibility in heavy/super-heavy haul and brokerage run-rate, and financing developments (AR facilities, term loans) .
• Watch Q1/Q2 prints for confirmation of margin trajectory (price/cost discipline) and whether adjusted EBITDA continues to scale in line with volumes .