Although the COVID pandemic has put the global economy under heavy pressure, several major industries have seen companies report record revenues and profits. From technology to cannabis, there are a number of industries that have been bright spots in the pandemic and we have been focused on companies that have benefited from the spreading of the virus.
Earlier this week, Surna reported second quarter financial results that caught our attention and we want to provide an update after the release. During the period, Surna recorded a $614,000 net loss on more than $1.6 million of revenue. When compared to the same period last year, the company reported significantly less revenue, and this is a trend that we do not expect to continue. Although the business was impacted by the COVID pandemic, we expect the drop-off in revenue to be transitory.
Surna is led by a management team that was able to quickly adapt to the current market environment. Through a series of cost cutting initiatives, the company has been able to substantially lower its cash burn and this is a trend that we find to be significant. From a capital standpoint, Surna has been able to raise capital through a few avenues and we believe that the focus on strengthening the balance sheet is key to the long-term success of the business.
What we find to be most interesting is that several businesses in these top performing industries have been trending lower from a stock price and a valuation standpoint. For example, take a look at the performance of Surna Inc. (SRNA) which recently announced the signing of a sales contract that is valued at $2.8 million.
The project is in Illinois and is for a multi-state operator that Surna has previously worked with in other states. The facility is approx. 88,000 square feet and Surna is under contract to provide a full suite of climate control products and technologies for cultivation and processing, the supply of major mechanical equipment, SentryIQ environmental controls, and system start-up.
This announcement comes a few months after Surna reported $1.8 million of revenue for the entire first quarter. The Illinois contract represents a major milestone for the business since the cost of the projects is greater than all of the revenue that was reported in the first quarter.
From a cash flow and balance sheet standpoint, Surna is well positioned to execute on previously announced growth initiatives and our readers should be aware of this. 2020 has been a challenging year for Surna and we believe that the management team did a great job at cutting costs to stay afloat. Going forward, we expect to see business ramp up in the back half of the year and in early 2021.
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