United States Antimony Corporation (NYSE American: UAMY) — Q1 2024 10-Q
Reporting period: Three months ended March 31, 2024; unaudited. The company produces antimony and zeolite products and recovers precious metals. On March 11, it shut down its USAMSA operations in Mexico and classified them as discontinued operations; the company plans to sell the subsidiary, operations, or assets over the next year. Continuing-operations comparisons below exclude USAMSA.
Key financial results
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Revenue | $2.83 million | $2.21 million |
| Gross profit | $823,000 | $395,000 |
| Gross margin | 29.1% | 17.9% |
| Operating income (loss) | ($69,000) | $80,000 |
| Income from continuing operations | $86,000 | $293,000 |
| Net loss, including discontinued operations | ($323,000) | ($807,000) |
| Net cash from continuing operating activities | $350,000 | ($1.07 million) |
| EBITDA, non-GAAP | $193,000 | $366,000 |
Revenue rose 28.1%. Antimony revenue increased 38.2%, primarily on higher sales volume; pounds sold rose 52.2%, while average sales price per pound declined 9.2%. Zeolite revenue increased 25.1%, but its gross result shifted to a $293,000 loss from $29,000 profit. Precious-metals revenue was zero versus $116,000. Operating expenses rose 183%, including higher general and administrative costs, salaries and benefits, and professional fees. The reported net loss includes a $409,000 loss from discontinued operations, compared with $1.10 million in Q1 2023.
Liquidity, debt, and balance sheet
- Cash and cash equivalents were $11.94 million at March 31, 2024, versus $11.90 million at year-end. Cash, cash equivalents, and restricted cash increased about $42,000 during the quarter.
- Working capital from continuing operations was $13.04 million, compared with $12.96 million at December 31, 2023.
- Continuing-operations cash flow was positive $327,000: $350,000 from operations, $2,000 used in investing, and $21,000 used in financing. The filing attributes improved operating cash flow chiefly to working-capital management. Discontinued operations used $285,000 of cash.
- Debt was $7,170, all current, due in April 2024. The company reported no long-term debt balance.
- Total assets were $28.01 million, including $6.43 million of assets classified as held for sale. Stockholders’ equity was $25.40 million.
Outlook, risks, and notable items
- Management said cash, operating cash generation, and potential capital raised are expected to cover requirements for the next 12 months. It also cautioned that access to additional capital is not assured and that insufficient funding could require curtailing operations, changing plans, or disposing of assets. No numerical earnings or revenue guidance was provided.
- The company is actively seeking buyers or leasing opportunities for USAMSA assets; the timing and proceeds are uncertain. USAMSA reported a $409,000 quarterly loss. Its assets and liabilities held for sale were $6.43 million and $695,000, respectively.
- Zeolite operations faced increased maintenance costs, older-equipment repairs, inefficient facility and labor costs, and production downtime. The company recorded an $80,000 write-down of zeolite inventory to net realizable value.
- Management identified continued operating losses, reliance on external antimony ore suppliers, commodity-price and energy-cost volatility, customer concentration, operational and permitting risks, and risks concerning Mexican operations and the USAMSA sale, among others.
- Disclosure controls and procedures were deemed ineffective due to material weaknesses management attributed to the small accounting staff and limited segregation of duties. Management relies on direct oversight and external accounting and legal professionals; no material changes in internal control over financial reporting were reported during the quarter.
- Bear River Zeolite received four significant and substantial MSHA citations during Q1; the company stated they had been rectified before filing. No related assessment was accrued.
- The company received a favorable March 2024 appeal ruling regarding a Mexican tax assessment and reported no assessment due. A lower-court final ruling will address whether the decision can be appealed by Mexican authorities.
- Equity awards included 2.475 million RSUs and 3.6 million stock options granted in Q1. The company recognized $206,000 of share-based compensation; potential dilution and future compensation expense merit attention.
Important facts for investors to verify
- Progress, terms, and expected proceeds from the planned USAMSA sale, including any remaining Mexican tax or asset-recovery exposure.
- Whether antimony sales volumes and margins can be sustained, and the availability, cost, and concentration of ore supply.
- Whether zeolite maintenance and downtime issues improve, and whether inventory write-downs or operating losses recur.
- Cash generation, liquidity needs, and any plans for financing or share issuance; confirm the April 2024 debt maturity was repaid.
- Remediation of the disclosed material weaknesses and whether future filings report effective disclosure controls.