Equity Research Focusing on the Consumer Sector, Small Cap Consumer Research

Small Cap Consumer Research

Equity Research Focusing on the Consumer Sector

Small Cap Consumer Research, LLC is a leading company-sponsored equity research provider focusing on the consumer sector (apparel, brand licensing and specialty retailing segments).

Equity Bottom-Up

<ul><li>We are reiterating our Buy recommendation, $8 price target and projections as we look at key trends for 2H2024 and beyond for urban-gro.</li><li>Given the increase in Controlled Environment Agriculture ("CEA") contract momentum, the pending reclassification from a Schedule I to a Schedule III drug for marijuana, the potential for Florida to legalize recreational cannabis on Election Day, and what we believe has been continued demand for commercial services, we believe the potential for top and bottom line upside for the company has continued to increase.</li><li>That said, we have, given urban-gro's prior history and the current valuation, remained conservative in our projections.</li></ul>

We are reiterating our Buy recommendation, $8 price target and projections as we look at key trends for 2H2024 and beyond for urban-gro.Given the increase in Controlled Environment Agriculture ("CEA") contract momentum, the pending reclassification from a Schedule I to a Schedule III drug for marijuana, the potential for Florida to legalize recreational cannabis on Election Day, and what we believe has been continued demand for commercial services, we believe the potential for top and bottom line upside for the company has continued to increase.That said, we have, given urban-gro's prior history and the current valuation, remained conservative in our projections.

UGRO; 2H Signposts: Leaving the CEA Wilderness?; Reiterate Buy, $8 PT

<ul><li>We are reiterating our Buy rating, projections and price target for urban-gro after meeting with management at their Centennial, CO headquarters.</li><li>After a period where the company has repositioned the business model around the commercial real estate space, urban-gro is optimistic on the prospects for a return to growth for Controlled Environment Agriculture ("CEA"), driven by the pending reclassification of cannabis by the Drug Enforcement Administration and the potential for Florida to legalize recreational cannabis in November.</li><li>Further, management is breaking down silos between functions to be able to offer more services and register stronger overall returns.</li></ul>

We are reiterating our Buy rating, projections and price target for urban-gro after meeting with management at their Centennial, CO headquarters.After a period where the company has repositioned the business model around the commercial real estate space, urban-gro is optimistic on the prospects for a return to growth for Controlled Environment Agriculture ("CEA"), driven by the pending reclassification of cannabis by the Drug Enforcement Administration and the potential for Florida to legalize recreational cannabis in November.Further, management is breaking down silos between functions to be able to offer more services and register stronger overall returns.

UGRO: Management Focused On Driving Growth, Returns; Reiterate Buy, $8 PT

<ul><li>We are reiterating our Buy rating and $8 price target and conservatively leaving our 2024 and 2025 revenue and Adjusted EBITDA projections unchanged after urban-gro registered upside in 1Q top and Adjusted EBITDA and reiterated prior 2024 guidance.</li><li>That said, with the Drug Enforcement Agency approving the reclassification of cannabis from a Schedule I to Schedule III drug, and the potential for Florida to approve recreational cannabis usage in November, we believe our 2H24 and especially 2025 projections could prove highly conservative.</li><li>As such, we are reiterating our Buy rating and $8 price target.</li></ul>

We are reiterating our Buy rating and $8 price target and conservatively leaving our 2024 and 2025 revenue and Adjusted EBITDA projections unchanged after urban-gro registered upside in 1Q top and Adjusted EBITDA and reiterated prior 2024 guidance.That said, with the Drug Enforcement Agency approving the reclassification of cannabis from a Schedule I to Schedule III drug, and the potential for Florida to approve recreational cannabis usage in November, we believe our 2H24 and especially 2025 projections could prove highly conservative.As such, we are reiterating our Buy rating and $8 price target.

UGRO: 1Q Review: Remain Calm & Conservative; Reiterate Buy, $8 PT

<ul><li>We are reiterating our Buy rating, $8 price target and projections for urban-gro with the company reporting 1Q24 (March) results after the close on Tuesday.</li><li>We believe, given the timing of the initial guidance (March 28th), management will achieve 1Q results and reiterate initial 2024 guidance of revenue over $84 million and positive Adjusted EBITDA. Further we expect continued positives in terms of backlog and the potential for closed environment agriculture ("CEA") to eventually shift into a positive driver.</li><li>Given prior quarterly misses, we believe "making" guidance will be considered a positive by investors, and we look forward to urban-gro hopefully moving on the offensive later in 2024 as their integrated business model captures further cannabis and non-cannabis market share.</li></ul>

We are reiterating our Buy rating, $8 price target and projections for urban-gro with the company reporting 1Q24 (March) results after the close on Tuesday.We believe, given the timing of the initial guidance (March 28th), management will achieve 1Q results and reiterate initial 2024 guidance of revenue over $84 million and positive Adjusted EBITDA. Further we expect continued positives in terms of backlog and the potential for closed environment agriculture ("CEA") to eventually shift into a positive driver.Given prior quarterly misses, we believe "making" guidance will be considered a positive by investors, and we look forward to urban-gro hopefully moving on the offensive later in 2024 as their integrated business model captures further cannabis and non-cannabis market share.

UGRO: 1Q Preview: When Ho-Hum is OK; Reiterate Buy, PT

<ul><li>We are reiterating our Buy rating and $8 price target, but lowering our 2024 projections after urban-gro reported disappointing 4Q23 (December) results, as the company had three material commercial contracts shift from late 4Q into 2024, obscuring what would have been a strong end to the year.</li><li>While the contracts are expected to be materially completed in 2024, management has decided to be highly conservative in their guidance and rebuild credibility going forward.</li><li>Given the current valuation, we believe investors are discounting the urban-gro business model and the potential for the company to register positive EBITDA. While we understand investor skepticism, we believe CEO Brad Nattrass and his team have aggressively cut costs and positioned urban-gro to surprise low Street expectations.</li></ul>

We are reiterating our Buy rating and $8 price target, but lowering our 2024 projections after urban-gro reported disappointing 4Q23 (December) results, as the company had three material commercial contracts shift from late 4Q into 2024, obscuring what would have been a strong end to the year.While the contracts are expected to be materially completed in 2024, management has decided to be highly conservative in their guidance and rebuild credibility going forward.Given the current valuation, we believe investors are discounting the urban-gro business model and the potential for the company to register positive EBITDA. While we understand investor skepticism, we believe CEO Brad Nattrass and his team have aggressively cut costs and positioned urban-gro to surprise low Street expectations.

UGRO: 4Q Review: Stuff Happens; Reiterate Buy & PT after Tough 4Q

United States

FreightCar America Inc. designs and manufactures aluminum and steel bodied railroad freight cars.  The Company also refurbishes and sells replacement parts for railcars.  FreightCar America's primary customers are leasing companies, utilities and railroads.

Hurco Companies, Inc. designs and produces interactive computer controls, software, and computerized machine systems for the worldwide metal cutting and metal forming industry.  The Company's customers include independent job shops and short-run manufacturing operations within large corporations.  Hurco's products are sold in the United States, Europe, and Asia.

Commercial Vehicle Group, Inc. supplies interior systems, vision safety solutions and other cab-related products for the heavy-duty truck market, the construction market, and other specialized transportation markets.  The products include suspension seat systems, interior trim systems, mirrors, wiper systems, controls and switches specifically designed for applications in cabs.

NN, Inc., a diversified industrial company, combines advanced engineering and production capabilities with in-depth materials science expertise, to design and manufacture high-precision components and assemblies for a variety of markets on a global basis.

Twin Disc, Incorporated designs, manufactures, and sells heavy duty off-highway power transmission equipment.  The Company's products include marine transmissions and surface drives, power-shift transmissions, power take-offs and reduction gears, industrial clutches, and control systems.  Twin Disc sells its products to customers in the marine, energy, government, and other markets.

L.B. Foster Company manufactures, fabricates, and distributes rail and trackwork piling, highway products, earth wall systems, and tubular products.  The Company supplies its products to railroads, and to the mining and construction industries.  L.B. Foster also sells and rents steel piling and H-bearing pile for foundation and earth retention requirements.

Somero Enterprises, Inc., together with its subsidiaries, designs, assembles, refurbishes, sells, and distributes concrete leveling, contouring, and placing equipment. It also offers related parts and accessories, as well as provides training services The company?s proprietary products include the S-22E Laser Screed, CopperHead, Mini Screed C, S-840 Laser Screed, S-15R Laser Screed, STS-11m Spreader, S-485 Laser Screed, S-940 Laser Screed, and S-10A Laser Screed machines, as well as 3-D Profiler Systems and Somero Floor Levelness Systems, which employ laser guided proprietary technology to achieve a level of precision in concrete surface flatness. It also provides STS-132 Topping Spreader; SP-80 Concrete Placer; SXP Laser Screed; SiteShape, a machine-controlling software package for fine subgrade machines; Mini Screed C concrete leveling equipment; and PowerRake 3.0 for placing concrete or grading fine-granular materials. The company markets and sells its products primarily to concrete contractors through direct sales force, external sales representatives, and dealers in North America, Europe, India, the Middle East, South Africa, and internationally. Somero Enterprises, Inc. was founded in 1985 and is headquartered in Fort Myers, Florida.

DMC Global Inc. operates as a technology company. The Company offers collaboration, research, development, and other services. DMC Global conducts its business worldwide.

Gencor Industries Inc. manufactures asphalt plants, soil remediation plants, combustion systems, and screening equipment for the construction industry. The Company is a global manufacturer serving North America, Europe, the Middle East, and Asia.

Graham Corporation designs and builds vacuum and heat transfer equipment for process industries around the world. The Company markets to chemical, petrochemical, petroleum refining, and electric power generating industries, including cogeneration and geothermal plants. Graham's products include ejectors, liquid ring vacuum pumps, condensers, and heat exchangers.

Renheng Enterprise Holdings Ltd is principally engaged in the manufacture, sale and provision of maintenance, overhaul and modification services in respect of tobacco machinery products in the PRC. The Company specializes in casing and flavouring systems, pneumatic feeding systems (PF systems), and pre-pressing packing machines (PP systems).

TAKEDA MACHINERY CO., LTD. manufactures and wholesales steel related machinery. The Company's products include frame processors, benders, cutters, and surface treatment machines.  Takeda Machinery also produces environmental equipment such as paper compactors.

S&W Corporation manufactures bolts and nuts used for shipbuilding, nuclear power plant, and construction.  The company also produces inlet & exhaust valve spindles and cam shafts for a marine engine.

NAVITAS CO., LTD. manufactures decorative printing machinery used for stamping plastic products including consumer electronics and office equipment.  The Company's product line consists of hot stamp machines, roll-on machines, pad printers, ink jet systems, silk screen printers, and dry offset printers.

NIKKO COMPANY manufactures pottery and porcelain products including ceramic tableware.  The Company also produces electronic ceramics used in the communications industry and housing-environment equipments such as bathroom fixtures and water treatment systems.

Wong Engineering Corporation Berhad is an investment holding company.  The Company, through its subsidiaries, manufactures and trades high precision metal components.  Wong Engineering also manufactures automated equipment and provides transportation services.

Kumpulan H & L High-Tech Berhad is an investment holding company. The Company, through its subsidiaries, manufactures and sells precision moulds, dies, jigs, fixtures, tools, and other precision machine parts. Kumpulan H & L also manufactures customized precision plastic injection molding thermoplastic and has operation in leasing of properties and property investment.

Zhejiang Tengy Environmental Technology Co Limited is an atmospheric pollution control solutions provider. The Company provides precipitators & installations.

Zhejiang Tengy Environmental Tech (1527 HK)

Eureka Design PCL designs and manufacturing machines for the automotive industry. The Company products include machines for machining, assembling and testing car and motorcycle's components.

Nitin Fire Protection Industries Limited designs, supplies, installs engineers and maintain fire protection systems. The Company services systems located in India, UAE and South East Asia.

urban-gro, Inc. operates as an agricultural technology systems integrator. The Company designs irrigation and water treatment systems, inventory monitoring, cultivation equipment, and pest management solutions for cannabis growing industry. urban-gro serves customers in the United States and Canada.

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Urban-Gro (UGRO US)

UGRO; 2H Signposts: Leaving the CEA Wilderness?; Reiterate Buy, $8 PT

We are reiterating our Buy recommendation, $8 price target and projections as we look at key trends for 2H2024 and beyond for urban-gro. Given the...

Small Cap Consumer Research

UGRO: Management Focused On Driving Growth, Returns; Reiterate Buy, $8 PT

We are reiterating our Buy rating, projections and price target for urban-gro after meeting with management at their Centennial, CO...

Small Cap Consumer Research

UGRO: 1Q Review: Remain Calm & Conservative; Reiterate Buy, $8 PT

We are reiterating our Buy rating and $8 price target and conservatively leaving our 2024 and 2025 revenue and Adjusted EBITDA projections...

Small Cap Consumer Research

UGRO: 1Q Preview: When Ho-Hum is OK; Reiterate Buy, PT

We are reiterating our Buy rating, $8 price target and projections for urban-gro with the company reporting 1Q24 (March) results after the close...

Small Cap Consumer Research

UGRO: 4Q Review: Stuff Happens; Reiterate Buy & PT after Tough 4Q

We are reiterating our Buy rating and $8 price target, but lowering our 2024 projections after urban-gro reported disappointing 4Q23 (December)...

Small Cap Consumer Research

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