Executive Summary
MacKenzie Realty Capital Inc (MKZR) delivered a challenging QQ3 2024 quarter characterized by revenue growth on a year-over-year basis but sharply negative bottom-line results driven by elevated non-operating costs and sizable interest and depreciation charges. Revenue of 4.27 million rose about 4.8% year-over-year, while gross profit reached 1.52 million (gross margin ~35.6%). However, operating income fell to -5.83 million and net income declined to -6.55 million, resulting in earnings per share of -0.47 for the quarter. EBITDA was negative at -0.80 million with an EBITDARatio of -0.19, underscoring margin compression and the weight of fixed costs and financing charges on quarterly profitability. The quarter also reflected meaningful non-operating spending (other expenses totaling approximately 5.30 million), which significantly contributed to the net loss despite modest cash flow from operations.
Key Performance Indicators
QoQ: -28.00% | YoY:-117.73%
QoQ: -32.78% | YoY:-104.09%
QoQ: -20.51% | YoY:-80.77%
Key Insights
Revenue and gross margin dynamics: Revenue of 4,273,646 with gross profit of 1,520,085 and a gross margin of 35.57% (YoY gross margin up ~4.1%; QoQ margin down materially due to cost structure). YoY revenue growth of 4.77% contrasts with a QoQ decline of -46.41%, signaling seasonality or quarterly mix shifts that disproportionately affected topline in QQ3 2024. Operating profitability and margins: Operating income of -5,830,470 and an EBITDA of -796,599 imply substantial fixed-cost absorption an...
Financial Highlights
Revenue and gross margin dynamics: Revenue of 4,273,646 with gross profit of 1,520,085 and a gross margin of 35.57% (YoY gross margin up ~4.1%; QoQ margin down materially due to cost structure). YoY revenue growth of 4.77% contrasts with a QoQ decline of -46.41%, signaling seasonality or quarterly mix shifts that disproportionately affected topline in QQ3 2024. Operating profitability and margins: Operating income of -5,830,470 and an EBITDA of -796,599 imply substantial fixed-cost absorption and non-cash charges. EBITDARatio stands at -0.186. Net profitability: Net income of -6,545,266 and EPS of -0.47 reflect a material quarterly loss despite marginal revenue gains. Cash flow and liquidity: Net cash provided by operating activities was 743,262; free cash flow reported as 743,262, with a net increase in cash of 3,110,473 and ending cash of 16,148,534. Balance sheet health and leverage: Total assets of 226.09 million, total liabilities 118.37 million, and stockholders’ equity of 86.31 million; long-term debt of 110.16 million yields a net debt position of 94.70 million. Liquidity indicators are stressed (current ratio and quick ratio both ~0.0392), signaling limited near-term cushion. Valuation and profitability metrics: Price-to-book ~0.332, debt-to-equity ~1.97, and an enterprise value multiple of -19.84, indicating a substantial discount to book value and the impact of accumulated deficits. Revenue and profitability trends (YoY/QoQ) indicate a deteriorating profit profile notwithstanding modest revenue growth, raising questions about near-term earnings leverage and capital allocation.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
4.27M |
4.77% |
-46.41% |
| Gross Profit |
1.52M |
4.06% |
-72.16% |
| Operating Income |
-5.83M |
-117.73% |
-28.00% |
| Net Income |
-6.55M |
-104.09% |
-32.78% |
| EPS |
-0.47 |
-80.77% |
-20.51% |
Key Financial Ratios
operatingCashFlowPerShare
$-0.17
freeCashFlowPerShare
$-0.17
dividendPayoutRatio
-2.63%
Management Commentary
No earnings call transcript is available in the provided data. Consequently, there are no management quotes or theme-driven highlights to extract at this time. If a transcript becomes available, a themes-by-episode summary (strategy, operations, market conditions) with contextual quotes will be added.
Forward Guidance
There is no explicit forward guidance in the QQ3 2024 filing. In the absence of management targets, the forward-looking assessment centers on deleveraging and portfolio optimization as likely levers for improvement. Key factors to monitor include: (1) debt refinancing activity and cost of capital for long-term funding given the leverage profile (long-term debt of 110.16 million); (2) potential asset dispositions or portfolio rebalancing to reduce non-core exposure and deleverage; (3) occupancy, lease renewals, and average rent per unit to support recurring revenue; (4) cost-control measures to reduce SG&A and other operating costs and to mitigate the impact of high depreciation and interest expenses. Investor focus should be on interim liquidity management, runway for earnings stabilization, and any explicit guidance on FFO-like metrics or distributions going forward.