|AgJunction Reports First Quarter 2020 Earnings Results|
SCOTTSDALE, Ariz., May 12, 2020 (GLOBE NEWSWIRE) -- AgJunction Inc. ( AJX.TO) ("AgJunction" or the "Company") is reporting financial results for the first quarter ended March 31, 2020. All currency amounts are expressed in U.S. dollars.
First Quarter 2020 Financial Summary vs. First Quarter 2019
- Revenue was $5.2 million versus $14.0 million (Q1 2019 included $8.7 million of revenue related to the bulk purchase order (BPO)).- Gross margin increased significantly to 56.6% compared to 41.1%. - Operating expenses declined to $3.6 million compared to $5.7 million.- Net loss was $0.7 million or $(0.01) per share, versus net income of $0.1 million or nil per share.- EBITDA was $0.5 million versus $0.6 million.
“Our first quarter reflected momentum from the refined strategy we announced earlier this year,” said Dr. M. Brett McMickell, president and CEO of AgJunction. “As a reminder, our year-over-year comparisons don’t paint the whole picture as our first quarter of last year included a significant amount of revenue from a bulk purchase order that was completed in the third quarter of 2019. During the first quarter, sales in our indirect channel exceeded internal expectations as we are now better positioned to meet the specific needs of OEM and VAR partners with our flexible modules. Additionally, we experienced an uptick in demand for our direct-to-consumer Wheelman products that exceeded our internal expectations as interest in our unique offerings continue to increase through word-of-mouth and industry trade coverage.
“As we move forward in this ever-changing market environment (due to COVID-19), we continue to operate at full strength and have experienced limited disruptions as a result of the COVID-19 pandemic. However, we are diligently monitoring the situation, particularly in our global supply chain, and have contingency plans in place in an effort to mitigate risk. Despite these macro challenges, the ag industry seems to be recovering from a historically difficult 2019 and we do not currently see any factors that we believe will materially impact demand in 2020. In fact, we have generated a higher backlog of orders in our second quarter than we originally anticipated, and our team is doing an excellent job fulfilling the heightened demand.
“Although there is much uncertainty in the market, we remain confident in our refined strategy and continue to expect growing sales by providing technologically advanced modules that are among the most innovative in the industry. Given our strong cash balance and exceptional workforce, we believe we are well-positioned to weather challenges that may arise in this environment and look forward to continue meeting the evolving needs of our customers.”
First Quarter 2020 Financial Results
Total revenue in the first quarter of 2020 was $5.2 million compared to $14.0 million in the first quarter of 2019. Excluding $8.7 million of revenue generated from the BPO in the prior year period, revenue in the first quarter of 2020 was nearly flat compared to the first quarter of 2019.
Gross profit in the first quarter of 2020 was $2.9 million compared to $5.8 million in the first quarter of 2019. Gross margin increased significantly to 56.6% compared to 41.1% in the first quarter of 2019. The margin improvement was primarily driven by an increase in flexible module product mix sold, a reduced impact of the BPO sales, and lower manufacturing costs due to streamlining processes.
Total operating expenses in the first quarter of 2020 declined to $3.6 million compared to $5.7 million in the first quarter of 2019. The improvement was primarily driven by cost-savings from the reduction in staffing and closure of certain facilities as a result of the Company’s previously implemented consolidation strategy.
Net loss in the first quarter of 2020 was $0.7 million or $(0.01) per share, compared to net income of $0.1 million or nil per share in the first quarter of 2019. The decline was primarily driven by the aforementioned decrease in revenue related to the BPO.
EBITDA in the first quarter of 2020 was $0.5 million compared to $0.6 million in the first quarter of 2019.
Cash and cash equivalents at March 31, 2020, totaled $15.6 million compared to $17.2 million at the end of 2019. Working capital was $18.6 million compared to $19.2 million at the end of 2019. The Company continues to operate debt free and has access to an unutilized $3.0 million line of credit.
AgJunction will hold a conference call tomorrow at 11:00 a.m. Eastern time to discuss its first quarter 2020 results, followed by a question-and-answer session.
Date: Wednesday, May 13, 2020
Time: 11:00 a.m. Eastern time (8:00 a.m. Pacific time)
Toll-free dial-in number: 1-877-573-5992
International dial-in number: 1-270-215-9903
Conference ID: 7958447
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 1-949-574-3860.
The conference call will be broadcast live and available for replay here and via the investor center section of the company’s website at https://agjunction.com/.
A replay of the conference call will be available after 2:00 p.m. Eastern time on the same day through May 27, 2020.
Toll-free replay number: 1-855-859-2056
International replay number: 1-404-537-3406
Replay ID: 7958447