HIAWATHA, Kan. — AgJunction Inc. (TSX: AJX) ("AgJunction" or the "Company"), a leading provider of innovative hardware and software solutions for precision agriculture worldwide, reported financial results for the third quarter ended Sept. 30, 2017. All currency amounts are expressed in U.S. dollars.
- Third quarter revenue up 35% year-over-year to $9.0 million; up 8% year-to-date to $36.9 million.
- Third quarter gross margin increased 310 basis points to 36.0%; up 210 basis points year-to-date to 42.2%.
- Third quarter net loss improved to $3.1 million ($(0.02) per share) vs. a loss of $14.4 million ($(0.12) per share) in the year-ago quarter; year-to-date net loss of nil ($0.00 per share) vs. a loss of $15.3 million (($0.12) per share) year-to-date 2016.
- Third quarter adjusted EBITDA was unchanged at $(2.6) million; up year-to-date to $1.4 million vs. $(2.6) million year-to-date 2016.
- Cash at Sept. 30, 2017 was $16.0 million, up $3.2 million since Dec. 31, 2016.
“Our third quarter marked the second consecutive quarter of double-digit year-over-year revenue growth, driven by healthy OEM demand in two of our three major regions," said Dave Vaughn, president and CEO of AgJunction (AJXGF). "We remain ahead of our operating plan and see signs of market optimism as more of our customers are realizing the benefits of precision ag to drive profits. Given our progress and this recent optimism, we have begun to increase our investment in R&D and marketing in preparation for several new projects kicking off early next year.”
Third Quarter 2017 Financial Results
Total sales in the third quarter of 2017 increased 35% to $9.0 million compared to $6.7 million in the third quarter of 2016. This was driven by strong OEM business growth in the Europe, Middle East and Africa (EMEA) and Americas regions.
Gross profit in the third quarter of 2017 increased 47% to $3.2 million compared to $2.2 million in the third quarter of 2016. Gross margin increased 310 basis points to 36.0% compared to 32.9% in the third quarter of 2016. The increase was primarily due to the absorption of production overhead by the higher sales volumes.
Total operating expenses increased to $6.3 million compared to $5.3 million in the third quarter of 2016 primarily due to higher employee compensation costs. As a percentage of sales, operating expenses declined to 70% compared to 79.1% in the third quarter of 2016.
Net loss in the third quarter was $3.1 million or $(0.02) per share, compared to a net loss of $14.4 million or $(0.12) per share in the third quarter of 2016. The year-ago quarter included an $11.3 million non-cash goodwill impairment charge
Adjusted EBITDA in the third quarter of 2017 was unchanged compared to the year-ago quarter at $(2.6) million.
Cash and cash equivalents at the end of the third quarter of 2017 totaled $16 million compared to $12.9 million at the end of 2016. Working capital was unchanged from the end of 2016 at $22.4 million. The Company continues to carry no debt and has access to its full $3 million line of credit.