Just weeks after disclosing a preliminary sales report that indicated record revenue in 2021, Urban-gro Inc. (Nasdaq: UGRO) is adding $2 million to its stock buyback program, which now totals $7 million.
“We are pleased to announce the extension of our share repurchase program that allows us to return value to our shareholders,” UG CEO Bradley Nattrass said in a statement. “This action underscores our confidence in the strength of our balance sheet, quality of our assets and our ongoing ability to generate free cash flow. At recent market price levels, we believe the repurchase program is an excellent opportunity to buy our common shares at a significant discount to their intrinsic value and presents an attractive investment.”
Urban-gro reported this month that it expects to record $62 million in sales for the 2021 fiscal year, a greater than 140% increase compared with the prior year.
“The timing and amount of stock repurchases under the program, if any, will be at the discretion of management and will depend on a variety of factors, including price, available cash, general business and market conditions and other investment opportunities,” the company said in a news release.
Urban-gro’s stock price hovered around $9.50 on Tuesday and has shed more than 10% since the beginning of 2022.
Should the company decide to buy shares back, it’s bet will be that the current price is undervaluing the company and will rise.
Urban-gro had an eventful 2021. In February, it went public with a $62.1 million initial public offering. In June, Urban-gro purchased for $9 million the architecture and interior design firm MJ12 Design Studio, making it the first integrated architecture, engineering and cultivation company in the marijuana space. In August, it posted a quarterly profit for the first time in its history.
This month, Urban-gro invested $2.5 million in XS Financial (CSE: XSF), a company that provides financing and equipment leasing services to cannabis firms.
Urban-gro was also hit by $5.1 million in what it called fraudulent wire transfers in October and is suing its bank for allegedly allowing the fraud to occur.
This article was first published by BizWest, an independent news organization, and is published under a license agreement. © 2022 BizWest Media LLC.
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