urban-gro Announces Financial Results for Fourth Quarter and Fiscal Year 2019

• 2019 Revenue was $24.2 million, a 20% increase over the $20.1 million realized in 2018.
• 2019 Professional services revenue was $3.2 million, a 241% increase over the $0.9 million realized in 2018.
• During 2019, secured 76 new Engineering Design Services projects totaling 1.9 million square feet.
• In March 2019, acquired MEP industry leader Impact Engineering Inc. (d/b/a Grow2Guys), a firm with a portfolio of 300+ projects across North America.

LAFAYETTE, Colo., May 19, 2020 (GLOBE NEWSWIRE) -- urban-gro, Inc. (OTCQX: UGRO) (“urban-gro” or the “Company”), a leading engineering design services company that integrates complex equipment systems into high-performance indoor cultivation facilities for the global commercial horticulture market, has announced its financial results for Q4 and the fiscal year ended December 31, 2019.

Bradley Nattrass, Chairman and CEO of urban-gro stated, “With the changes in the capital markets, 2019 proved to be a challenging year for the cannabis industry and the urban-gro team.  I am very proud of how we efficiently and successfully began restructuring the organization to focus on the company’s core services and achieving positive cash flow in 2020. As a result of making significant reductions to our operating expenses and downsizing our team at all levels in Q4 2019, we enter 2020 as a much more nimble and streamlined organization that is operating with a laser focus on profitability and driving shareholder value.  Due to the changes implemented in 2019, we believe we have a plan that can be executed and are in a much better position to manage the impact of COVID-19.”

The following financial, product, and service highlights serve as a strong foundation upon which the streamlined urban-gro can build in 2020:

Financial Highlights:

• Our Q4 2019 revenue was $7.1 million, a 33% increase compared to $5.4 million in Q4 2018.
• Our 2019 revenue was $24.2 million, an increase of 20%; or $4.1 million, compared to $20.1 million for 2018.
  - Our 2019 professional services revenues increased by $2.3 million to $3.2 million, a 241% increase compared to $0.9 million for 2018.
  - Our recurring revenue focused division, the Environmental Sciences Group, recognized revenues of $4.2 million in 2019, a 24% increase compared to $3.4 million for 2018.
• Gross profit for 2019 was $6.6 million, an increase of 7.6% from $6.2 million in 2018.  The decrease in gross profit margin, from 30.7% in 2018 to 27.4% in 2019, was predominantly impacted by lower margins on LED lighting sales.
• For 2019, our operating loss and net loss were $5.8 million and $8.4 million, respectively.  This compares to a 2018 operating loss and net loss of $3.8 million and $3.9 million.  This $4.5 million increase in net loss is the result of the impact of the following operating expenses: