HIAWATHA, KS, Aug. 13, 2018 /CNW/ - AgJunction Inc. (TSX: AJX) ("AgJunction" or the "Company"), a leader in advanced guidance and autosteering, is reporting financial results for the second quarter ended June 30, 2018. All currency amounts are expressed in U.S. dollars.
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Second Quarter 2018 Financial Summary vs. Second Quarter 2017
- Revenue up 3% to $13.8 million versus $13.3 million.
- Gross profit was 39.3% compared to 41.3%.
- Net loss was $2.3 million or $(0.02) per share, versus a net loss of $0.5 million or $0.00 per share.
- EBITDA was $(1.9) million versus $(0.0) million.
Year-to-Date 2018 Financial Summary vs. 2017
- Revenue up 6% to $29.6 million versus $27.9 million.
- Gross profit was 41.3% compared to 44.2%.
- Net loss was $3.3 million or $(0.03) per share, versus net income of $3.1 million or $0.02 per share.
- EBITDA was $(2.4) million versus $4.1 million.
Management Commentary
"AgJunction continued its year-over-year growth during the second quarter despite the uncertainty facing the worldwide agricultural market," said Dave Vaughn, president and CEO of AgJunction. "Farmers that have invested in Precision Ag equipment continue to experience lower cost and higher yields, helping them cope with the effects of higher tariffs and lower grain prices.
"During the second quarter, AgJunction continued its investment in research and development, making significant progress with our Hands-Free Farm mission to bring autosteering to all farmers. Yesterday we announced Wheelman™ powered by Whirl™, our revolutionary new autosteering device and smart software that is priced to bring Precision Ag within the reach of millions of smaller farms.
"Looking to the second half of 2018, our financial results will benefit from the large bulk purchase order we began shipping in July. In fact, we anticipate the purchase order will help us drive both revenue and profit, even as we continue to invest heavily in R&D. We believe this investment, as well as the launch of Wheelman, expands the market by bringing precision technology currently available to only the largest farm operations to millions of smaller farms. We believe creating revolutionary products and opening new markets is key to driving shareholder value."
Second Quarter 2018 Financial Results
Total revenue in the second quarter of 2018 increased 3% to $13.8 million compared to $13.3 million in the second quarter of 2017. This was driven by an increase in sales in the Company's Europe, Middle East and Africa (EMEA) region.
Gross profit in the second quarter of 2018 was $5.4 million compared to $5.5 million in the second quarter of 2017. Gross profit was 39.3% compared to 41.3% in the second quarter of 2017. The decrease was primarily due to a lower margin mix of products sold versus the prior year.
Total operating expenses increased to $7.7 million compared to $6.0 million in the second quarter of 2017, primarily due to higher R&D costs associated with new corporate initiatives, as the Company invests in improving and developing new products. As a percentage of revenue, operating expenses increased to 56.3% compared to 45.3% in the second quarter of 2017.
Net loss in the second quarter was $2.3 million or $(0.02) per share, compared to a net loss of $(0.5) million or $0.00 per share in the second quarter of 2017. The decrease was driven by the aforementioned increase in operating expenses as the company continues to make investments in R&D.
EBITDA in the second quarter of 2018 was $(1.9) million compared to $(0.0) million in the second quarter of 2017.
Cash and cash equivalents at the end of the second quarter of 2018 totaled $11.0 million compared to $13.9 million at the end of 2017. The Company used some cash to build inventory ahead of the large bulk purchase it began to deliver in July. Working capital was $17.7 million at the end of the second quarter compared to $20.3 million at the end of 2017. The Company continues to carry no debt and has access to its full $3.0 million line of credit.
Year-to-Date 2018 Financial Results
Total revenue in the first six months of 2018 increased 6% to $29.6 million compared to $27.9 million in the same period of 2017. This was driven by an increase in sales in the Company's EMEA region.
Gross profit in the first six months of 2018 was $12.2 million compared to $12.3 million in the same period of 2017. Gross profit was 41.3% compared to 44.2% in the same period of 2017. The decrease was primarily due to a lower margin mix of products sold versus the prior period.
Total operating expenses increased to $15.6 million compared to $12.3 million in the prior year period, primarily due to higher R&D costs related to the Company investing in improving and developing new products. As a percentage of revenue, operating expenses increased to 52.7% compared to 43.9% in the first six months of 2017.
Net loss in the first six months of 2017 was $3.3 million or $(0.03) per share, compared to net income of $3.1 million or $0.02 per share in the same period of 2017. The decrease was driven by the aforementioned increase in operating expenses associated with the Company's investments in R&D.
EBITDA in the first six months of 2018 was $(2.4) million compared to $4.1 million in the same period of 2017.
Conference Call
AgJunction will hold a conference call tomorrow at 11:00 a.m. Eastern time to discuss its second quarter results, followed by a question-and-answer session.
Date: Tuesday, August 14, 2018
Time: 11:00 a.m. Eastern time (8:00 a.m. Pacific time)
Toll-free dial-in number: 1-888-231-8191
International dial-in number: 1-647-427-7450
Conference ID: 5693578