HIAWATHA, KS, Nov. 13, 2013 /CNW/ - AgJunction today reported financial results for the three and nine-month periods ended September 30, 2013. All currency amounts are expressed in U.S. dollars.
Third quarter Financial Review
On September 5, 2012, the Company announced a corporate restructuring to focus exclusively on its agriculture business, subsequently selling its non-agriculture business on January 31, 2013. To increase clarity of results for continuing operations of the agriculture business after divesting the non-agriculture business, and in accordance with International Financial Reporting Standards (IFRS), the Company has reported the divested components of its business as "discontinued operations" in a separate line item in both the current and prior comparative periods.
For the third quarter ended September 30, 2013, the Company reported revenues of $11.4 million, an increase of 9% from $10.5 million in the third quarter of 2012. Strong quarterly results in the OEM and Agronomy Service divisions, up 27% and 41%, respectively, from the comparative period, were partially offset by revenue declines in Outback and Air of 2% and 21%, respectively. European revenue growth increased 133% from the comparable period, driven primarily by OEM sales, while the US and Canada both declined by 7%, from the third quarter of 2012.
"I am pleased to report positive earnings during the third quarter which is typically the slowest period during the year," stated Rick Heiniger, President and CEO. "Our return to profitability is a result of our focused efforts in simplifying and streamlining operations. At the same time we have structured the business to scale efficiently as we begin to turn our focus to sustained growth in our business segments."
Third quarter gross margin contribution increased to 46% or $5.2 million, compared to 45% and $4.8 million for the third quarter of 2012.
Operating expenses, including restructuring costs, improved to $5.2 million in the current quarter versus $6.8 million in the third quarter of 2012, a reduction of 24%. Research and development and sales and marketing expenditures declined by $0.6 million (27%) and $0.7 million (27%), respectively, as the company continues to benefit from the restructuring it initiated in Q3 2012. General and administrative expenses trended up $.1M (12%) compared to the third quarter of 2012.
The Company reported a net income from continuing operations of $32 thousand, or $0.00 per share (basic and diluted), compared to a net loss of $1.9 million, or ($0.03) per share (basic and diluted) from continuing operations in the third quarter of 2012.
Only a nominal loss from discontinued operations of $29 thousand was recorded for the quarter compared to a loss from discontinued operations of $0.8M in the third quarter of 2012.
Comprehensive income for the quarter was $3 thousand, or $0.00 per share (basic and diluted), compared to comprehensive loss of $2.7 million, or ($0.04) per share (basic and diluted), in the third quarter of 2012.
For the nine months ended September 30, 2013, AgJunction reported revenues of $44.4 million compared to $45.3 million for the same period in 2012. Gross margin for the first nine months of 2013 was $20.0 million (45%) versus $20.4 million (45%) in the comparable period. Operating expenses, including restructuring costs, have declined $2.5 million on a year-over-year basis primarily due to cost reductions within research and development, sales and marketing and restructuring costs. The Company generated net profit from continuing operations of $2.6 million, or $0.04 per share (basic and diluted) during the first nine months of 2013, compared to a net profit of $0.3 million, or $0.00 per share (basic and diluted), during the same period of 2012. Comprehensive income of $5.2 million, or $0.08 per share (basic and diluted) has been recognized through the first nine months of 2013, compared to a comprehensive loss of $1.7 million or $(0.03) per share (basic and diluted), during the comparative period.
At September 30, 2013, the Company held cash of $11.8 million compared to $2.6 million on December 31, 2012. Working capital was $22.6 million, and the Company had 69,472,230 common shares outstanding at September 30, 2013.
Conference Call - November 14 at 11:00AM Eastern Time
A conference call and webcast to discuss the results has been scheduled for November 14 at 11:00 a.m. Eastern Time to discuss the financial results and provide an update on operations.
To participate in the conference call, please dial +1 (647) 427-7450 or 1-888-231-8191 approximately 10 minutes before the conference call and provide Conference ID: 8389 5893. The call will be also webcasted live and archived on the Company's web site at http://www.corp.agjunction.com/InvestorCenter/ConferenceCallsOtherEvents.aspx
A recording of the call will be available through November 30. Please dial 1-855-859-2056 and enter passcode 8389 5893 to listen to the rebroadcast.
About AgJunction
AgJunction provides innovative hardware and software applications for precision agriculture worldwide. The Company holds numerous patents and markets its products and services under leading brand names including Outback Guidance®, Satloc®, and AgJunction® Cloud Services. AgJunction supports advanced farming practices and enables seamless data connectivity among growers and their agricultural service providers. The Company is headquartered in Hiawatha, Kansas, with facilities in Arizona, Pennsylvania, Manitoba and Queensland. AgJunction is listed on the Toronto Stock Exchange (TSX) under the symbol "AJX" and is one of the TSX Cleantech designated companies. For more information, please go to www.corp.agjunction.com.
The above disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond AgJunction's control, including: the impact of general economic conditions, industry conditions, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to the announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. AgJunction' actual results, performance or achievement could differ materially from those expressed in, or implied by these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceed, that AgJunction will derive therefrom.
| AgJunction Inc. Condensed Consolidated Statements of Financial Position (Unaudited - expressed in U.S. dollars) |
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| September 30, | December 31, | ||||||||||||
| 2013 | 2012 | ||||||||||||
| Assets | |||||||||||||
| Cash and cash equivalents | $ | 11,778,297 | $ | 2,645,605 | |||||||||
| Accounts receivable, net of bad debt provisions of $891,875 and $825,000 as of September 30, 2013 and December 31, 2012, respectively |
7,137,749 | 6,187,216 | |||||||||||
| Inventories | 10,704,519 | 13,777,915 | |||||||||||
| Prepayments and deposits | 774,496 | 661,790 | |||||||||||
| Assets held for sale | - | 7,567,133 | |||||||||||
| 30,395,061 | 30,839,659 | ||||||||||||
| Property, plant and equipment, net | 3,424,120 | 3,438,472 | |||||||||||
| Intangible assets, net | 7,400,673 | 7,703,947 | |||||||||||
| Goodwill | 21,230,519 | 21,230,519 | |||||||||||
| $ | 62,450,373 | $ | 63,212,597 | ||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||
| Current liabilities: | |||||||||||||
| Accounts payable and accrued liabilities | $ | 4,573,802 | $ | 6,449,665 | |||||||||
| Bank indebtedness | - | 550,000 | |||||||||||
| Provisions | 875,343 | 3,226,234 | |||||||||||
| Deferred revenue | 1,656,769 | 1,748,928 | |||||||||||
| Collateralized borrowing | 326,885 | - | |||||||||||
| Finance lease | - | 52,184 | |||||||||||
| Current portion of contingent consideration | 400,000 | 500,000 | |||||||||||
| Debt | - | 1,140,699 | |||||||||||
| 7,832,799 | 13,667,710 | ||||||||||||
| Deferred revenue | 690,679 | 746,820 | |||||||||||
| Contingent consideration | - | 400,000 | |||||||||||
| Shareholders' equity: | |||||||||||||
| Share capital | 120,702,326 | 119,341,668 | |||||||||||
| Equity reserve | 6,181,359 | 7,182,124 | |||||||||||
| Accumulated deficit | (72,956,790) | (78,125,725) | |||||||||||
| 53,926,895 | 48,398,067 | ||||||||||||
| $ | 62,450,373 | $ | 63,212,597 | ||||||||||
| AgJunction Inc. Condensed Consolidated Statements of Comprehensive Income and Loss (Unaudited - expressed in U.S. dollars) |
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| Three months ended | Nine months ended | |||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
| Sales | $ | 11,437,654 | $ | 10,511,800 | $ | 44,352,769 | $ | 45,277,154 | ||||||||||||||
| Cost of sales | 6,232,257 | 5,734,961 | 24,386,751 | 24,824,832 | ||||||||||||||||||
| 5,205,397 | 4,776,839 | 19,966,018 | 20,452,322 | |||||||||||||||||||
| Expenses: | ||||||||||||||||||||||
| Research and development | 1,675,842 | 2,287,734 | 6,289,327 | 7,299,484 | ||||||||||||||||||
| Sales and marketing | 1,945,319 | 2,647,318 | 6,574,891 | 8,214,041 | ||||||||||||||||||
| General and administrative | 1,530,703 | 1,367,817 | 4,495,856 | 4,010,747 | ||||||||||||||||||
| Acquisition costs | - | - | - | 117,475 | ||||||||||||||||||
| Restructuring costs | 18,287 | 471,395 | 244,226 | 471,395 | ||||||||||||||||||
| 5,170,151 | 6,774,264 | 17,604,300 | 20,113,142 | |||||||||||||||||||
| Results from operating activities | 35,246 | (1,997,425) | 2,361,718 | 339,180 | ||||||||||||||||||
| Foreign exchange gain (loss) | 29,912 | 7,146 | 304,029 | (89,222) | ||||||||||||||||||
| Interest and other income | 11,161 | - | 15,359 | 1,773 | ||||||||||||||||||
| 41,073 | 7,146 | 319,388 | (87,449) | |||||||||||||||||||
| Profit (loss) for the period before Income tax | 76,319 | (1,990,279) | 2,681,106 | 251,731 | ||||||||||||||||||
| Income tax | 43,953 | - | 43,953 | 48,650 | ||||||||||||||||||
| Profit (loss) for the period | 32,366 | (1,990,279) | 2,637,153 | 203,081 | ||||||||||||||||||
| Other comprehensive income | - | 123,000 | - | 90,750 | ||||||||||||||||||
| Net profit (loss) from continuing operations | 32,366 | (1,867,279) | 2,637,153 | 293,831 | ||||||||||||||||||
| Comprehensive gain (loss) from discontinued operations | (29,004) | (799,366) | 2,531,782 | (1,995,414) | ||||||||||||||||||
| Comprehensive income (loss) | $ | 3,362 | $ | (2,666,645) | $ | 5,168,935 | $ | (1,701,583) | ||||||||||||||
| Earnings per share: | ||||||||||||||||||||||
| Basic and diluted income (loss) | $ | 0.00 | $ | (0.04) | $ | 0.08 | $ | (0.03) | ||||||||||||||
| Basic and diluted income (loss) continuing operations | $ | 0.00 | $ | (0.03) | $ | 0.04 | $ | 0.00 | ||||||||||||||
| Basic and diluted income (loss) discontinued operations | $ | 0.00 | $ | (0.01) | $ | 0.04 | $ | (0.03) | ||||||||||||||
| AgJunction Inc. Condensed Consolidated Statements of Changes in Equity (Unaudited - expressed in U.S. dollars) |
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|
Share capital |
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Equity reserve |
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Accumulated deficit |
|
Hedging reserve |
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Total equity |
Number of shares |
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| Balance at January 1, 2012 | $ | 115,168,510 | $ | 4,783,284 | $ | (43,528,081) | $ | - | $ | 76,423,713 | 60,824,409 | |||||||||||||||
| Profit for the period | - | - | (1,824,583) | - | (1,824,583) | - | ||||||||||||||||||||
| Accumulated other comprehensive loss | - | - | - | 123,000 | 123,000 | - | ||||||||||||||||||||
| Issue of common shares, net of share issue cost |
4,078,919 | - | - | - | 4,078,919 | 5,447,410 | ||||||||||||||||||||
| Business acquisition | - | 2,014,000 | - | - | 2,014,000 | - | ||||||||||||||||||||
| Share-based payment transactions | - | 269,434 | - | - | 269,434 | - | ||||||||||||||||||||
| Stock options exercised | 7,435 | - | - | - | 7,435 | 8,958 | ||||||||||||||||||||
| Transfer from equity reserve on exercise of stock options |
3,621 | (3,621) | - | - | - | - | ||||||||||||||||||||
| Balance at September 30, 2012 | 119,258,485 | 7,063,097 | (45,352,664) | 123,000 | 81,091,918 | 66,280,777 | ||||||||||||||||||||
| Balance at December 31, 2012 | 119,341,668 | 7,182,124 | (78,125,725) | - | 48,398,067 | 66,404,215 | ||||||||||||||||||||
| Profit for the period | - | - | 5,168,935 | - | 5,168,935 | - | ||||||||||||||||||||
| Issue of common shares | 1,007,000 | (1,007,000) | - | - | - | 2,723,705 | ||||||||||||||||||||
| Share-based payment transactions | - | 114,389 | - | - | 114,389 | - | ||||||||||||||||||||
| Stock options exercised | 245,504 | - | - | - | 245,504 | 344,310 | ||||||||||||||||||||
| Transfer from equity reserve on exercise of stock options |
108,154 | (108,154) | - | - | - | - | ||||||||||||||||||||
| Balance at September 30, 2013 | $ | 120,702,326 | $ | 6,181,359 | $ | (72,956,790) | $ | - | $ | 53,926,895 | 69,472,230 | |||||||||||||||
| AgJunction Inc. Condensed Consolidated Statements of Cash Flows Nine months ended September 30, 2013 and 2012 (Unaudited - expressed in U.S. dollars) |
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| 2013 | 2012 | ||||||||||||
| Cash flows from (used in) operating activities: | |||||||||||||
| Net profit from continuing operations | $ | 2,637,153 | $ | 203,081 | |||||||||
| Items not involving cash: | |||||||||||||
| Depreciation | 489,842 | 959,854 | |||||||||||
| Amortization | 772,896 | 1,492,248 | |||||||||||
| Share-based payment transactions | 114,389 | 201,235 | |||||||||||
| 4,014,280 | 2,856,418 | ||||||||||||
| Change in non-cash operating working capital: | |||||||||||||
| Accounts receivable | (1,057,326) | (1,859,118) | |||||||||||
| Income tax credits receivable | - | 97,752 | |||||||||||
| Inventories | 3,073,396 | 162,015 | |||||||||||
| Prepayments and deposits | (112,706) | (187,430) | |||||||||||
| Accounts payable and accrued liabilities | (1,875,863) | 676,930 | |||||||||||
| Provisions | (2,350,891) | 100,569 | |||||||||||
| Deferred revenue | (148,300) | 619,792 | |||||||||||
| (2,471,690) | (389,490) | ||||||||||||
| Cash used in discontinued operations | (2,964,469) | (1,992,791) | |||||||||||
| Cash flows from (used in) operating activities | (1,421,879) | 474,137 | |||||||||||
| Cash flows from (used in) financing activities: | |||||||||||||
| Payment of finance lease liability | (52,184) | (75,519) | |||||||||||
| Repayment of bank loan | (550,000) | - | |||||||||||
| Issue of debt | - | 1,500,000 | |||||||||||
| Repayment of debt | (1,140,699) | (150,000) | |||||||||||
| Issue of share capital | 245,504 | 7,435 | |||||||||||
| Cash used in discontinued operations | (299,464) | - | |||||||||||
| Cash flows from (used in) financing activities | (1,796,843) | 1,281,916 | |||||||||||
| Cash flows from (used in) investing activities: | |||||||||||||
| Purchase of property and equipment | (489,700) | (612,781) | |||||||||||
| Intangible asset addition | (1,899,088) | (1,252,408) | |||||||||||
| R&D expense reimbursement | 1,429,466 | - | |||||||||||
| Payment of contingent consideration | (500,000) | - | |||||||||||
| Proceeds from sale of assets, net of cost | 13,810,736 | - | |||||||||||
| Business acquisition | - | (2,071,081) | |||||||||||
| Cash used in discontinued operations | - | (232,980) | |||||||||||
| Cash flows from (used in) investing activities | 12,351,414 | (4,169,250) | |||||||||||
| Increase (decrease) in cash position | 9,132,692 | (2,413,197) | |||||||||||
| Cash and cash equivalents, beginning of period | 2,645,605 | 6,721,314 | |||||||||||
| Cash and cash equivalents, end of period | $ | 11,778,297 | $ | 4,308,117 | |||||||||
SOURCE: Agjunction Inc.
Wes Dittmer
Chief Financial Officer
AgJunction Inc.
785-742-5149
[email protected]
Cory Pala
Investor Relations
e.vestor Communications Inc.
416-657-2400
[email protected]
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