FORT WORTH, TX - (NewMediaWire) - January 25, 2024 - Just Right Products Inc., the wholly owned subsidiary of ADM Endeavors ("ADM" or the "Company") (OTCQB: ADMQ), announces a corporate update, including preliminary Q4 2023 results.
Preliminary Q4 2023 Financials
ADM Endeavors provides unaudited fourth quarter 2023, ending December 31, 2023, preliminary results.
The Company anticipates:
- Revenues of $1.3M, representing 43% year-over-year growth
- Adjusted EBITDA of $134K, which grew 200% over the year-ago quarter
- Net income of $116K, a 200% increase over the fourth quarter of 2022
At the end of the quarter the Company had cash of $300K and access to a line of credit for $3.5M and is well capitalized to execute on its growth plans.
"The fourth quarter of 2023 was part of a transformational quarter for the Company," said ADM Endeavors CEO Marc Johnson. "Our fourth quarter projected results are a true indication that our strategic targeting of recession resistant government customers is working and can produce a sustainable profit. We anticipate organic growth in 2024 through both our existing and new customer opportunities. We are also exploring potential inorganic growth through M&A and expect to have our new facility online towards the end of the year, which would increase our capacity by up to five times."
New customer wins and contract renewals
Over the course of 2023, ADM has placed an emphasis on longer term, stable customers, which separates the Company from others in the sector. The majority of major promotional product and decorated apparel companies focus on large corporate clients and operate through a broker model on a global scale. ADM differentiates itself by focusing on cities, counties, schools, and government agencies by going direct to consumer, and currently operates primarily in the Dallas / Fort Worth area where the markets are large and fragmented. This strategy has been working and should drive consistent organic growth in 2024 and beyond.
Some of the recent contracts signed include:
A contract was finalized with Dallas County, Texas to provide employee uniforms and other requested items. The addition of Dallas County has the ability to double the current customer base due to positive exposure to all cities within Dallas County. ADM has already begun to fulfill orders, realizing revenue of over $60K.
Tarrant County renewed their contract with ADM because all contract obligations and extensions had been successfully fulfilled. This contract includes additional opt-ins that could push the total contract value beyond $500K. Tarrant County has used ADM for the last four years and we view them as a trusted partner.
An annual contract with City of Flower Mound to provide uniform services has also been renewed. ADM has been providing the City of Flower Mound with uniforms since 2021. Flower Mound continues to be a strong government partner and has referred several new government customers to the Company.
Our uniform contract with the City of Allen continues to grow with orders totaling over $110K in 2023, an increase of over 800% from 2022.
Our uniform contract with the City of Arlington remains strong, with a 30% increase in orders from 2022 to 2023, totalling over $80K in revenue.
Our uniform contract with the North Texas Municipal Water District continues to grow annually with orders up over 60% from 2022, delivering over $120K in orders in 2023. North Texas Municipal Water District services 13 cities and 10 counties in North Texas, and is a reliable source of future sales as the population continues to grow in the North Texas metro.
New facility will add up to 5x production capacity
ADM is expected to bring a new, 80,000 sq. ft. facility online in the Fall of this year. ADM expects to receive building permits and commence construction in the coming months. The building is bank financed with a construction loan at 10 year, 5 12% that can be drawn against to make necessary payments. The custom fabricated metal for the building has already been paid for and is on site. The building is expected to be completed in Fall 2024, with operations commencing before the end of the year.
Beyond acting as a new manufacturing facility, the building will host a retail storefront. This storefront will increase ADM's school uniform footprint and enable the addition of a medical uniform segment and workwear segment to the product mix. This will encompass both retail and bid contract sales, further diversifying ADM's offerings. The new store front will allow ADM to expand margins and better service existing government contract customers. As the current retail space is operating at maximum capacity, this new storefront will also allow ADM to pursue more school uniform contracts. The addition of a new medical uniform segment will enable the Company to seek out government contracts in an untapped market.
Organic Growth and Strategic M&A
In the Dallas / Fort Worth area, ADM dominates the government vendor sector. Unlike major competitors who rely on carriers, ADM handles all embellishments in house, ensuring quicker service and lower product costs. ADM's dedicated delivery route, operated by full-time drivers, further accelerates delivery compared to traditional carriers. This successful model could be replicated in other regions through strategic acquisitions of existing decorators or brokers.
One of ADM's competitive advantages is having control of manufacturing. By having all manufacturing done in-house, ADM can quickly adjust to meet specific requests and strict requirements. There exists the opportunity for consolidation of regional competitors, bringing the target manufacturing in-house. ADM has been exploring potential candidates for accretive M&A and will continue to conduct due diligence and be opportunistic with potential future transactions. The completion of the new facility will allow for consolidation of everything under one roof and is expected to unlock further synergies for the Company.
Additional capacity at the new facility will empower ADM to unlock more spending from current accounts, facilitating growth in current retail accounts and opening doors for the acquisition of new corporate customers.
Increased market share in government-supported business is expected to materialize without substantial additional marketing expenditure. The consistent demand for uniforms in schools, as well as uniforms for municipal employees, positions ADM well in this market. To expand and improve current offerings, the Company plans to introduce a workwear retail segment. Leveraging the labour from the school uniform store and the stock workwear products currently used in existing contracts, ADM will prevent inventory stagnation, increase margins, and provide enhanced service to government customers.
Historic financial performance and outlook
The previous year served as a period of regrouping and restructuring for ADM as the Company faced the challenge of recovering from a US$2.5 million revenue loss in YouTube influencer merchandise sales. This experience underscored the importance of diversifying the customer base and building resilience against economic downturns. Today, ADM has no single client making up more than 3% of their total revenue mix. In 2022, ADM had single customers representing as much as 20% of sales. We encourage investors to review the new ADM Investor Presentation and subscribe here for Company news and investor updates.
ADM Engages Sophic Capital for Capital Markets Advisory Services
The Company also announces that it has engaged Sophic Capital Inc. ("Sophic") to provide capital markets advisory services under an agreement dated January, 22 2024 (the "Agreement"). "ADM is a profitable and scalable business that we've been monitoring since they shifted their focus to secure government contracts," said Sean Peasgood, President and CEO of Sophic Capital. "Promotional products and uniforms have become ubiquitous, and with spending on the rise among both brands and governments, we see substantial opportunities for ADM to consolidate its position and bolster its presence in the industry. On behalf of Sophic's partners and employees, I'd like to thank ADM for selecting us to craft its capital markets strategy and enhance communication amongst the investment community. " Services to be provided by Sophic pursuant to the Agreement will include assisting the Company in the preparation of an investor communications plan, investor materials, news releases, roadshows and conference calls. Sophic will also introduce the Company to its network of institutional and retail investors.
About ADM Endeavors
ADM Endeavors is a diversified, direct marketing and value-added manufacturing company providing customers with customized promotional products and wearables. Since 2010, our wholly owned subsidiary, Just Right Products, Inc., has been consistently increasing our recession resistant customer base, with sales topping $5.3 million for the last reported 12 months. The Company sells "Anything With A Logo" on its website, www.JustRightProducts.com, developing products ranging from unique business cards to coffee cups, T-shirts to boots, with tens of thousands of other unique products from which to select. Just Right Products, Inc. operates a diverse vertical integrated business in the Dallas/Fort Worth area, consisting of a retail sales division, screen print production, embroidery production, digital production, import wholesale sourcing, and uniforms. For more information, please visit:
https://admendeavors.com/
https://www.fwpromo.com/
https://fortworth.academicoutfitters.com/
https://www.facebook.com/groups/admqshareholders/
Forward Looking Statement
This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Any statements that are not historical facts contained in this press release are "forward-looking statements" that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Words such as "strategy," "expects," "continues," "plans," "anticipates," "believes," "would," "will," "estimates," "intends," "projects," "goals," "targets" and other words of similar meaning are intended to identify forward-looking statements but are not the exclusive means of identifying these statements. Such forward-looking statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, transactions that may be cancelled, and other factors that may cause our actual results, performance or achievements, or developments in our industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties related to the fluctuation of global economic conditions or economic conditions with respect to the retail industry, the COVID-19 pandemic, the performance of management, actions of government regulators, vendors, and suppliers, our cash flows and ability to obtain financing, competition, general economic conditions and other factors that are detailed in our filings with the Securities and Exchange Commission. We intend that all forward-looking statements be subject to the safe -harbor provisions. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For further information about ADM Endeavors, please contact:
Marc Johnson, CEO
Phone: 817.231.8048
Email: info@admendeavors.com
For investor information for ADM Endeavors, please contact:
Sean Peasgood, Investor Relations
Phone: (647) 255-7570
E-mail: sean@sophiccapital.com
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