HIAWATHA, KS, Aug. 13, 2013 /CNW/ - (TSX: AJX) -- AgJunction today reported financial results for the second quarter ended June 30, 2013. All currency amounts are expressed in U.S. dollars.
Second 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 second quarter ended June 30, 2013, the Company reported revenues of $16.3 million, an increase of 4% from $15.7 million in the second quarter of 2012. Strong quarterly results in the OEM and Air divisions, up 36% and 30%, respectively, from the comparative period, were partially offset by a 20% decline in Outback sales during the period. The company experienced robust revenue growth in the US and Europe compared to the same quarter last year, 26% and 41%, respectively, while Canada and Australia declined by 26% and 58%, respectively, from the second quarter of 2012.
"AgJunction' s financial performance in the second quarter of 2013 is yet more validation of the strategic plans we put into motion during late-2012" stated Rick Heiniger, President and CEO. "The efforts put into revamping our product portfolio, streamlining supply chain and distribution activities, and rationalizing the cost structure, have provided the foundation for a profitable business model. During the second quarter we grew revenues, increased gross margins, and net profit from continuing operations improved by $1.0 million".
Second quarter gross margin contribution was 43% or $7.0 million, compared to 43% and $6.7 million for the second quarter of 2012.
Operating expenses, including restructuring costs, were $6.1 million in the current quarter versus $6.7 million in the second quarter of 2012, a reduction of 9%. Research and development and sales and marketing expenditures declined by $0.4 million (16%) and $0.3 million (11%), respectively, while general and administrative expenses trended up slightly, largely due to finalizing the closure of our Calgary office. Restructuring costs were $0.07 million during the quarter primarily related to the AgJunction name change.
The Company reported a net profit from continuing operations of $1.1 million, or $0.02 per share (basic and diluted), compared to a net loss of $0.2 million, or $0.00 per share (basic and diluted), in the second quarter of 2012.
The loss from discontinued operations of $0.9M for the quarter was largely due to severance, rent, and salary expense incurred throughout the period. The Company reported a loss from discontinued operations of $0.5M in the second quarter of 2012.
Net and comprehensive income, was $0.2 million, or $0.00 per share (basic and diluted), compared to a net and comprehensive loss of $0.6 million or ($0.01) per share (basic and diluted), in the second quarter of 2012.
For the six months ended June 30, 2013, AgJunction reported revenues of $32.9 million compared to $34.8 million for the same period in 2012. Gross margin for the first six months of 2013 was $14.8 million (44.8%) versus $15.7 million (45.1%) in the comparable period. Operating expenses, including restructuring costs, have declined $0.9 million on a year-over-year basis primarily due to cost reductions within research and development and sales and marketing. The Company generated net profit from continuing operations of $2.6 million, or $0.04 per share (basic and diluted) during the first six months of 2013, compared to a net profit of $2.2 million, or $0.04 per share (basic and diluted), during the same period of 2012. Net and comprehensive income of $5.2 million, or $0.08 per share (basic and diluted) has been recognized through the first half of 2013, compared to net and comprehensive income of $1.0 million or $0.02 per share (basic and diluted), during the comparative period.
At June 30, 2013, the Company held cash of $12.6 million compared to $2.6 million on December 31, 2012. Working capital was $22.3 million, and the Company had 69,233,482 common shares outstanding at June 30, 2013.
Conference Call - Wednesday, August 14 at 11:00AM Eastern Time
A conference call and webcast to discuss the results has been scheduled for Wednesday, August 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 (647) 427-7450 or 1-888-231-8191 approximately 10 minutes before the conference call and provide Conference ID: 17463430. 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 August 31. Please dial 1-855-859-2056 and enter passcode 17463430 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 doing business as AgJunction and 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) | |||||
June 30, | December 31, | ||||
2013 | 2012 | ||||
Assets | |||||
Cash and cash equivalents | $ | 12,617,066 | $ | 2,645,605 | |
Accounts receivable | 8,421,686 | 6,187,216 | |||
Inventories | 9,722,192 | 13,777,915 | |||
Prepayments and deposits | 542,629 | 661,790 | |||
Assets held for sale | - | 7,567,133 | |||
31,303,573 | 30,839,659 | ||||
Property, plant and equipment | 3,432,567 | 3,438,472 | |||
Intangible assets | 7,599,298 | 7,703,947 | |||
Goodwill | 21,230,519 | 21,230,519 | |||
$ | 63,565,957 | $ | 63,212,597 | ||
Liabilities and Shareholders' Equity | |||||
Current liabilities: | |||||
Accounts payable and accrued liabilities | $ | 4,851,282 | $ | 6,449,665 | |
Bank indebtedness | - | 550,000 | |||
Provisions | 1,027,138 | 3,226,234 | |||
Deferred revenue | 1,922,597 | 1,748,928 | |||
Collateralized borrowing | 760,563 | - | |||
Finance lease | - | 52,184 | |||
Current portion of contingent consideration | 400,000 | 500,000 | |||
Debt | - | 1,140,699 | |||
8,961,580 | 13,667,710 | ||||
Deferred revenue | 886,223 | 746,820 | |||
Contingent consideration | - | 400,000 | |||
Shareholders' equity: | |||||
Share capital | 120,456,866 | 119,341,668 | |||
Equity reserve | 6,221,440 | 7,182,124 | |||
Deficit | (72,960,152) | (78,125,725) | |||
53,718,154 | 48,398,067 | ||||
$ | 63,565,957 | $ | 63,212,597 |
AgJunction Inc. | ||||||||||
Condensed Consolidated Statements of Comprehensive Income and Loss | ||||||||||
(Unaudited - expressed in U.S. dollars) | ||||||||||
Three months ended | Six months ended | |||||||||
June 30, | June 30, | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Sales | $ | 16,304,358 | $ | 15,743,937 | $ | 32,915,115 | $ | 34,765,354 | ||
Cost of sales | 9,291,488 | 9,051,281 | 18,154,494 | 19,089,871 | ||||||
7,012,870 | 6,692,656 | 14,760,621 | 15,675,483 | |||||||
Expenses: | ||||||||||
Research and development | 2,325,399 | 2,754,759 | 4,613,485 | 5,011,750 | ||||||
Sales and marketing | 2,280,138 | 2,551,421 | 4,629,572 | 5,566,723 | ||||||
General and administrative | 1,422,176 | 1,379,653 | 2,965,153 | 2,642,930 | ||||||
Acquisition costs | - | - | - | 117,475 | ||||||
Restructuring costs | 69,456 | - | 225,939 | - | ||||||
6,097,169 | 6,685,833 | 12,434,149 | 13,338,878 | |||||||
Results from operating activities | 915,701 | 6,823 | 2,326,472 | 2,336,605 | ||||||
Foreign exchange (gain) loss | (221,524) | 21,862 | (274,117) | 96,368 | ||||||
Interest and other loss (income) | 2,783 | (1,523) | (4,198) | (1,773) | ||||||
(218,741) | 20,339 | (278,315) | 94,595 | |||||||
Profit (loss) for the period before | ||||||||||
Income tax | 1,134,442 | (13,516) | 2,604,787 | 2,242,010 | ||||||
Income tax | - | - | - | 48,650 | ||||||
Profit (loss) for the period | 1,134,442 | (13,516) | 2,604,787 | 2,193,360 | ||||||
Other comprehensive income (loss) | - | (146,788) | - | (32,250) | ||||||
Net profit (loss) from | ||||||||||
continuing operations | 1,134,442 | (160,304) | 2,604,787 | 2,161,110 | ||||||
Income (loss) from discontinued | ||||||||||
operations, net of tax | (913,113) | (464,171) | 2,560,786 | (1,196,048) | ||||||
Net income (loss) and | ||||||||||
comprehensive income (loss) | $ | 221,329 | $ | (624,475) | $ | 5,165,573 | $ | 965,062 | ||
Earnings per share: | ||||||||||
Basic and diluted income per share | $ | 0.00 | $ | (0.01) | $ | 0.08 | $ | 0.02 | ||
Basic and diluted income per share | ||||||||||
continuing operations | $ | 0.02 | $ | 0.00 | $ | 0.04 | $ | 0.04 | ||
Basic and diluted income per share | ||||||||||
discontinued operations | $ | (0.02) | $ | (0.01) | $ | 0.04 | $ | (0.02) |
AgJunction Inc. | |||||||||||||
Condensed Consolidated Statements of Changes in Equity | |||||||||||||
(Unaudited - expressed in U.S. dollars) | |||||||||||||
Share | Equity | Hedging | Total | Number of | |||||||||
capital | reserve | Deficit | reserve | equity | shares | ||||||||
Balance at January 1, 2012 | $ | 115,168,510 | $ | 4,783,284 | $ | (43,528,081) | $ | - | $ | 76,423,713 | 60,824,409 | ||
Profit for the period | - | - | 1,008,062 | 1,008,062 | - | ||||||||
Accumulated other comprehensive | |||||||||||||
loss | - | - | - | (43,000) | (43,000) | - | |||||||
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 | - | 207,600 | - | - | 207,600 | - | |||||||
Stock options exercised | 7,435 | - | - | - | 7,435 | 8,958 | |||||||
Transfer from equity reserve on exercise of stock options |
3,621 | (3,621) | - | - | - | - | |||||||
Balance at June 30, 2012 | 119,258,485 | 7,001,263 | (42,520,019) | (43,000) | 83,696,729 | 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 | - | - | 5,165,573 | - | 5,165,573 | - | |||||||
Issue of common shares | 1,007,000 | (1,007,000) | - | - | - | 2,723,705 | |||||||
Share-based payment transactions | - | 79,703 | - | - | 79,703 | - | |||||||
Stock options exercised | 74,811 | - | - | - | 74,811 | 105,562 | |||||||
Transfer from equity reserve on exercise of stock options |
33,387 | (33,387) | - | - | - | - | |||||||
Balance at June 30, 2013 | $ | 120,456,866 | $ | 6,221,440 | $ | (72,960,152) | $ | - | $ | 53,718,154 | 69,233,482 |
.
AgJunction Inc. | |||||
Condensed Consolidated Statements of Cash Flows | |||||
Six months ended June 30, 2013 and 2012 | |||||
(Unaudited - expressed in U.S. dollars) | |||||
2013 | 2012 | ||||
Cash flows from (used in) operating activities: | |||||
Net profit from continuing operations | $ 2,604,787 | $ 2,193,360 | |||
Items not involving cash: | |||||
Depreciation | 397,212 | 974,355 | |||
Amortization | 514,294 | 632,468 | |||
Share-based payment transactions | 79,703 | 155,052 | |||
3,595,996 | 3,955,235 | ||||
Change in non-cash operating working capital: | |||||
Accounts receivable | (1,473,907) | (3,803,096) | |||
Income tax credits receivable | - | (240,748) | |||
Inventories | 4,055,723 | 847,171 | |||
Prepayments and deposits | 119,161 | (103,265) | |||
Accounts payable and accrued liabilities | (1,598,383) | 1,367,419 | |||
Provisions | (2,199,096) | 136,055 | |||
Deferred revenue | 313,072 | 997,284 | |||
(783,430) | (799,180) | ||||
Cash used in discontinued operations | (3,668,607) | (1,755,545) | |||
(856,041) | 1,400,510 | ||||
Cash flows from (used in) financing activities: | |||||
Payment of finance lease liability | (52,184) | (47,643) | |||
Repayment of bank loan | (550,000) | - | |||
Issue of debt | - | 1,500,000 | |||
Repayment of debt | (1,140,699) | - | |||
Issue of share capital, net | 74,811 | 7,435 | |||
(1,668,072) | 1,459,792 | ||||
Cash flows from (used in) investing activities: | |||||
Purchase of property and equipment | (405,517) | (371,451) | |||
Intangible asset addition | (1,014,956) | (903,080) | |||
Other | 605,311 | - | |||
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) | |||
12,495,574 | (3,578,592) | ||||
Increase (decrease) in cash position | 9,971,461 | (718,290) | |||
Cash and cash equivalents, beginning of period | 2,645,605 | 6,721,314 | |||
Cash and cash equivalents, end of period | $ 12,617,066 | $ 6,003,024 |
SOURCE: Agjunction Inc.
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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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