LAFAYETTE, CO - urban-gro, Inc. (NASDAQ:UGRO), a professional services and Design-Build firm, has been awarded a construction contract by the Brazilian restaurant chain Fogo de Chão for a new establishment in Katy, Texas. The contract, which encompasses preconstruction, construction, and post-construction phases, is set to begin immediately with revenue recognition expected largely within the first quarter of 2025.
The collaboration between urban-gro and Fogo de Chão began in 2023 with urban-gro providing Mechanical, Electrical, and Plumbing (MEP) engineering services. This new contract signifies an expansion of their relationship, with urban-gro now taking on the construction responsibilities for the retrofit project.
Bradley Nattrass, Chairman and CEO of urban-gro, expressed gratitude for the opportunity to deepen the partnership with Fogo de Chão, highlighting the company's dedication to supporting the restaurant chain's growth and enhancing urban-gro's market presence.
urban-gro is known for delivering architectural, engineering, and construction management solutions to various sectors including Controlled Environment Agriculture (CEA), industrial, healthcare, and commercial industries. The firm's approach is driven by innovation, collaboration, and creativity, aiming to provide exceptional customer experiences.
Fogo de Chão is an internationally acclaimed restaurant originating from Brazil, famous for its churrasco-style cooking, which involves roasting high-quality meats over an open flame. It offers a prix fixe Full Churrasco Experience and a Market Table with seasonal selections, catering to various dining occasions.
The press release also contains forward-looking statements regarding urban-gro's financial projections and business strategy, cautioning readers about the inherent risks and uncertainties that could cause actual results to differ from those anticipated.
This news article is based on the press release statement issued by urban-gro, Inc. and does not contain any additional analysis or opinion. The information provided is intended to convey the key facts surrounding the new construction contract between urban-gro and Fogo de Chão.
In other recent news, urban-gro, a professional services and Design-Build firm, has announced several significant developments. The company has been contracted to renovate the Davidson Student Center at Columbus State University, aiming to modernize student service areas and activity spaces. Additionally, urban-gro has secured a project to build a new P.F. Chang's restaurant location in Westminster, Colorado, which is expected to commence in the third quarter of 2024.
These developments are part of urban-gro's recent activities, which also include contracts in the cannabis sector valued at approximately $12 million for various cultivation and retail dispensary projects. The firm expects to recognize most of the revenue from these deals by the end of the third quarter of 2024.
Furthermore, urban-gro has expanded its stock incentive plan by an additional 1.2 million shares and appointed Sadler, Gibb & Associates LLC as its new independent registered public accounting firm. In terms of financial performance, the company exceeded its first quarter 2024 revenue guidance by $15.5 million and maintains its full-year revenue guidance of over $84 million. These are the recent developments at urban-gro.
InvestingPro Insights
While urban-gro's new contract with Fogo de Chão signals potential growth opportunities, it's important to consider the company's current financial position. According to InvestingPro data, urban-gro's market capitalization stands at $15.77 million, reflecting its small-cap status. The company's revenue for the last twelve months as of Q1 2024 was $70.32 million, with a revenue growth of 12.08% over the same period.
However, InvestingPro Tips highlight some challenges facing the company. Urban-gro is "quickly burning through cash" and "suffers from weak gross profit margins." These factors may impact the company's ability to fully capitalize on new contracts like the one with Fogo de Chão. The gross profit margin for the last twelve months as of Q1 2024 was 15.03%, which supports the concern about weak margins.
On a more positive note, urban-gro is "trading at a low revenue valuation multiple," which could present an opportunity for investors who believe in the company's growth potential. This aligns with the company's efforts to expand its services and client base, as evidenced by the Fogo de Chão contract.
For readers interested in a more comprehensive analysis, InvestingPro offers 11 additional tips for urban-gro, providing a deeper understanding of the company's financial health and market position.
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