OTC:LBRA
1847 Holdings LLC
A financially distressed holding company with collapsing revenues, massive accumulated deficits, and negative working capital facing imminent solvency challenges.
Key Metrics
Investment Thesis
Bull Case
A speculative investor might consider LBRA only if there is a pending debt restructuring or a strategic acquisition offer from a larger industry player willing to absorb the distressed assets at a nominal cost. The company holds significant non-cash adjustments and deferred revenue which could potentially be unlocked if operations stabilize, though this remains highly theoretical given the negative equity position. Any potential turnaround would require immediate access to capital markets, which is unlikely for a firm with such a deteriorated balance sheet.
Bear Case
The stock should be avoided entirely as the company has exhausted its cash reserves and relies on debt financing to cover operational losses that have widened dramatically in 2024. With negative shareholders' equity of -$96.5M and a retained earnings deficit of -$175.1M, there is little to no book value left for shareholders to capture upon any potential recovery. The massive non-operating loss of -$95.5M indicates that the core business is not generating enough profit to cover interest expenses and overhead costs.
About 1847 Holdings LLC
1847 Holdings LLC (LBRA) is a distressed entity operating within the broader industrial services or holding sector, currently facing severe liquidity constraints and significant accumulated deficits. The company's recent financial trajectory shows a sharp contraction in revenue from $68.7M in 2023 to $15.7M in 2024, coinciding with a massive widening of its net loss to -$100.5M. While the balance sheet reveals substantial non-cash adjustments and deferred revenue, the firm carries total liabilities of $130.1M against only $33.6M in assets, indicating deep insolvency risks.
Analysis
Management Discussion
Management appears unable to halt the bleeding as operating profit dropped to -$12.0M and the company recorded a massive non-operating loss of -$95.5M, likely due to asset write-downs or restructuring costs totaling nearly $100M. The reliance on financing cash flow of $15.2M to offset operational deficits suggests a 'burn' strategy that is unsustainable given the depletion of cash reserves and the accumulation of a retained earnings deficit of -$175.1M. With current liabilities at $124.6M significantly higher than current assets of $12.6M, the firm lacks the liquidity to meet short-term obligations without further dilutive financing.
Industry Overview
The broader industry landscape appears highly competitive and cyclical, where companies with weak balance sheets like LBRA are struggling to survive amidst rising operational costs and declining demand. Firms in this sector often face pressure from suppliers and creditors when cash flow turns negative, leading to forced liquidations or bankruptcies as seen in the drastic reduction of accounts receivable relative to revenue.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $48.9M | $68.7M | $15.7M |
| Cost of Revenue | $33.2M | $45.1M | $7.9M |
| Gross Profit | $15.7M | $23.5M | $7.8M |
| Operating Expenses | $54.7M | $43.5M | $19.8M |
| Operating Income | $-5.7M | $-19.9M | $-12.0M |
| G&A | $9.9M | $13.0M | $5.0M |
| D&A | $2.0M | $2.2M | $655.7K |
| Depreciation | $578.3K | $235.8K | $404.7K |
| Other OpEx | $44.8M | $30.5M | $14.8M |
| Non-Operating Income | $-6.7M | $-11.3M | $-95.5M |
| Interest Expense | $4.6M | $11.4M | $39.2K |
| Pre-Tax Income | $-12.5M | $-31.2M | $-107.5M |
| Income Tax | $-1.7M | $391.9K | $-702.0K |
| Continuing Ops | $-10.2M | $-31.6M | $-106.8M |
| Discontinued Ops | $-642.3K | $0 | $6.3M |
| Net Income | $-10.8M | $-31.6M | $-100.5M |
| Minority Interest | $-642.3K | $-1.6M | $0 |
| Net to Common | $-10.2M | $-30.0M | $-100.5M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $11.2M | $18.7M | $12.6M |
| Cash & Equivalents | $1.1M | $766.4K | $2.5M |
| Accounts Receivable | $5.2M | $7.6M | $5.8M |
| Inventory | $4.2M | $9.0M | $474.7K |
| Prepaid Expenses | $379.9K | $1.0M | $568.5K |
| Other Current Assets | $366.9K | $358.9K | $3.3M |
| Long-Term Assets | $34.3M | $20.7M | $21.0M |
| PP&E (Net) | $1.9M | $1.9M | $1.1M |
| Intangibles | — | $5.0M | $12.5M |
| Goodwill | $19.5M | $9.8M | $5.3M |
| Operating Leases | $2.9M | $3.8M | $2.0M |
| Other LT Assets | $10.1M | $153.7K | $49.5K |
| Total Assets | $45.5M | $39.4M | $33.6M |
| Current Liabilities | $14.2M | $28.1M | $124.6M |
| Current Leases | $713.1K | $1.0M | $598.5K |
| Deferred Revenue | $3.1M | $5.5M | $1.2M |
| Taxes Payable | — | — | $79.5K |
| Other Current Liab | $10.4M | $21.6M | $122.5M |
| Long-Term Liabilities | $28.4M | $31.3M | $5.6M |
| LT Operating Leases | $2.2M | $2.9M | $1.5M |
| Other LT Liab | $26.2M | $24.7M | $4.1M |
| Total Liabilities | $42.6M | $59.4M | $130.1M |
| Shareholders' Equity | $2.9M | $-20.0M | $-96.5M |
| Paid-In Capital | $44.0M | $57.7M | $79.4M |
| Retained Earnings | $-41.9M | $-74.8M | $-175.1M |
| Total L&E | $45.5M | $39.4M | $33.6M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-10.8M | $-31.6M | $-100.5M |
| Non-Cash Adjustments | $3.1M | $21.5M | $90.5M |
| Working Capital Changes | $3.6M | $2.5M | $-2.6M |
| Cash from Operations | $-4.1M | $-7.5M | $-12.6M |
| Capital Expenditures | $256.7K | $240.8K | $1.2K |
| Cash from Investing | $-160.4K | $-3.9M | $891.8K |
| Share Buybacks | $590.2K | — | — |
| Dividends Paid | $1.1M | — | — |
| Cash from Financing | $4.0M | $11.1M | $15.2M |
| FX Effect | $0 | $0 | $-1.7M |
| Net Change in Cash | $-304.2K | $-312.9K | $1.8M |
| Beginning Cash | $1.4M | $1.1M | $673.4K |
| Ending Cash | $1.1M | $766.4K | $2.5M |
Frequently Asked Questions
How does 1847 Holdings LLC make money?
The company's financial structure suggests operations reliant on deferred revenue streams totaling $1.2M and significant non-cash adjustments of $90.5M, likely derived from asset impairments or restructuring charges rather than organic operational cash generation. Given the total liabilities exceeding assets by nearly $100M and a net profit deficit of -$100.5M, the business segments appear to be struggling with severe underperformance or potential discontinued operations that contributed a small positive $6.3M against an overall -$106.8M loss from continuing operations.
What are the main risks for LBRA?
The company faces an immediate risk of insolvency with total liabilities of $130.1M against total assets of only $33.6M, resulting in significant negative shareholders' equity. Cash flow from operations turned negative at -$12.6M while cash flow from financing provided $15.2M, indicating the company relies entirely on external capital injections to survive rather than organic business generation. The sharp decline in revenue from 2023 to 2024 combined with a net loss increase from -$31.6M to -$100.5M points to a complete breakdown in core business viability.
What is LBRA's competitive advantage?
The company possesses a large paid-in capital base of $79.4M which could theoretically serve as a buffer, though it is currently outweighed by debt and liabilities. The substantial goodwill of $5.3M and operating net intangible assets of $12.5M suggest past acquisitions that may have failed to generate expected synergies given the recent loss expansion. High levels of deferred revenue ($1.2M) indicate some level of customer trust or recurring billing structures, though this is heavily offset by massive current liabilities.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.