HIAWATHA, KS, Dec. 30, 2015 /CNW/ - (TSX: AJX) — AgJunction Inc. ("AgJunction" or "the Company") announces that it has concluded an internal review to identify operating synergies following the completion of its merger with Novariant, Inc. on October 16, 2015. As a result of such review, today the Company is implementing a program which will consolidate operations and redundant resources reducing its global workforce by approximately 20% by the end of Q3-2016.
The program will take place over the first nine months of 2016, with the bulk of the costs being recorded in the fourth quarter of 2015. The cash cost of the program is estimated at $0.6 million. This program is intended to streamline the Company's overall business and, upon completion, synergies from the program are estimated to lower total expenses by approximately $3.3 million per annum through reduced operating overhead, manufacturing costs, and improved operating margins. During the streamlining of the organizational structure the core business and customers of the Company will not be interrupted.
"As part of the Company's initiative for sustainable profitability, we have undertaken this near-term program to leverage the immediate business synergies available which reduces costs and improves operating efficiencies," said Dave Vaughn, AgJunction's Chief Executive Officer. "We are also aligning our workforce to our current needs to focus on the core business. We are reviewing longer-term synergies under which we can rationalize products, engineering projects and geographic markets."
AgJunction (www.agjunction.com) provides innovative hardware and software applications for precision agriculture worldwide. The Company holds more than 140 patents and markets its products and services under leading brand names including Novariant, Outback Guidance® and Satloc®. The Company is headquartered in Hiawatha, Kansas, with facilities in Silicon Valley, Scottsdale, Arizona, Calgary, Winnipeg, and Queensland, Australia. AgJunction is listed on the Toronto Stock Exchange (TSX) under the symbol "AJX." For more information, please go to www.agjunction.com.
This press release contains forward-looking information and forward-looking statements (collectively, "forward-looking information") within the meaning of applicable securities laws and is based on the expectations, estimates and projections of management of each of AgJunction as of the date of this news release, unless otherwise stated. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information. More particularly and without limitation, this press release contains forward-looking information concerning: the estimated reduction to the Company's global workforce by Q3-2016; the estimated cash cost of the proposed program to consolidate operations and redundant resources; the intended outcome of the proposed program to consolidate operations and redundant resources, including the anticipated effect of streamlining the Company's overall business on operating efficiencies and reducing costs, including total expenses, operating overhead, manufacturing costs and operating margins; and the Company's future plans. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to its current and future operations. Investors are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Accordingly, readers should not place undue reliance on such forward-looking information contained in this press release. In respect of the forward-looking information, AgJunction has provided such information in reliance on certain assumptions that it believes are reasonable at this time, including, but not limited to, expected synergies, capital efficiencies and cost-savings from the proposed program to consolidate operations and redundant resources; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labor and services; that AgJunction's future results of operations will be consistent with management expectations in relation thereto; the continued availability of capital at attractive prices to fund future capital requirements relating to existing and future assets and projects; future operating costs; that counterparties to material agreements will continue to perform in a timely manner; that there are no unforeseen events preventing the performance of contracts; availability of key supplies, components, services, networks and developments; the impact of increasing competition; conditions in general economic, agricultural and financial markets; and the continuity of existing business relationships.
Since forward-looking information addresses future events and conditions, such information by its very nature involves inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to the risks associated with the industries in which AgJunction operates; failure to realize the anticipated benefits of the merger and to successfully integrate AgJunction and Novariant; failure to realize the expected synergies, capital efficiencies and cost-savings from the proposed program to consolidate operations and redundant resources; the estimated cash cost of the proposed program to consolidate operations and redundant resources will not be the amount anticipated by the Company; ability to access sufficient capital from internal and external sources; changes in legislation; departure of key personnel or consultants; competition; inability to introduce new technology and new products in a timely manner; legal claims for the infringement of intellectual property and other claims; fluctuation in foreign exchange or interest rates; uncertainties in the global economy; negative conditions in general economic, agricultural and financial markets; availability of key supplies and components; product liability; and changes in the Global Navigation Satellite System and other systems outside of our control. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the Company's operations or financial results, are included in reports of AgJunction on file with applicable securities regulatory authorities, including but not limited to, AgJunction's Annual Information Form for the year ended December 31, 2014 which may be accessed on its SEDAR profile at www.sedar.com. The forward-looking information contained in this press release is made as of the date hereof and each of AgJunction undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
SOURCE Agjunction Inc.
For further information: Dave Vaughn, Chief Executive Officer, (510) 933-4822, DVaughn@agjunction.com; Michael Manning, Interim Senior Vice President and CFO, (785) 742-5149, MManning@agjunction.com; Cory Pala, Investor Relations, (416) 657-2400, 1-877-657-5276, Cory.Pala@evestor.com.