Finally, AJX posts an Earnings Beat!By all accounts, that was a relatively strong quarter and much stronger than the competition (AJX appears to be decisively gaining market share).
Having a B/E Q3 is a great achievement. Finally some tangible proof that AJX is actually delivering.
AgJunction Delivers Q3 Profit
HIAWATHA, KS, November 13, 2013 - (TSX: AJX) -- 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.