Alpine 4 Holdings, Inc, a leading operator and owner of small market businesses, said its third-quarter revenue grew 23% quarter-over-quarter as it makes “great strides” in recovering from the effects of coronavirus (COVID-19).
The innovative incubation firm posted overall revenue of $17.39 million for the three months ended September 30, 2021, up from $14.13 in the earlier quarter. Compared with 3Q 2020, revenue was up 99%. Net profit for the quarter reached $2.48 million.
The company’s president and CEO Kent Wilson said in a statement that the growth came despite its continuing supply chain issues in the construction services, manufacturing, and aerospace holdings, and the impact of COVID-19 on its workforce. The supply chain issues are likely to continue into the first two quarters of 2022, he added.
READ: Alpine 4 debuts on the NASDAQ and acquires Identified Technologies
“Alternative Laboratories experienced significant delays of critical manufacturing nutrients during the quarter,” Wilson said.
“These delayed deliveries and inhibited labor force, due to COVID-19, resulted in roughly $1.2 million in postponed revenue which would have driven 3Q revenue to over $18.59 million.”
Alpine 4 said the continued improvement in its gross profit stems from more robust gross profit performance at its A4 Manufacturing companies, Quality Circuit Assembly, and Alternative Laboratories.
Conversely, it said the A4 Construction Services portfolio of companies, Morris Sheet Metal and Excel Fabrication, continue to have suppressed gross profit due to escalating prices in steel in the first three quarters of the year. As these prices stabilize, it expects the gross profit margin in this holding group to improve, pushing combined gross profit further upward.
The company attributed net profit gains to a big decline in general & administration (G&A) expenses, a lower interest bill, a rise in other income, and debt forgiveness of its Paycheck Protection Program (PPP) loans.
It said its balance sheet continues to be a ‘bright spot’ in its success, with assets swelling by $3.08 million in Q3 even as it continues to use its cash to provide its subsidiaries with the best competitive position by allowing them to offer more favorable terms to customers to win new business, resulting in a growing accounts receivable balance.
“For example, our inventory levels grew by $1.8 million in 3Q 2021 versus 2Q 2021,” explained Wilson.
“As many competitors struggle to bring materials in to make their products, Alpine 4 is empowering our subsidiaries to purchase in bulk where we can with the goal to make our vendors choose us as a priority customer versus our competitors.”
Following its listing on Nasdaq in October, Wilson said Alpine 4 is starting the next chapter in its story and will begin to report and break out each of its operating companies into their units, including A4 Manufacturing, A4 Construction Services, A4 Technologies, A4 Defense Services, and A4 Aerospace.
"We are doing this to enhance the visibility of our operating segments as a whole and also to allow institutional investors greater insight to how our holdings perform in the ebbs and flows of our economy,” Wilson concluded.
Alpine 4 Holdings is a conglomerate that acquires businesses that fit into its disruptive DSF business model of Drivers, Stabilizers, and Facilitators.
The company’s focus is on how the adaptation of new technologies, even in brick-and-mortar businesses, can drive innovation. It also believes that its holdings should benefit synergistically from each other, have the ability to collaborate across varying industries, spawn new ideas, and create fertile ground for competitive advantages.
Contact the author at stephen.gunnion@proactiveinvestors.com