AgJunction Reports 2013 Q2 Results

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 [phone] 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.

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]