AgJunction Reports Second Quarter 2019 Earnings Results

SCOTTSDALE, AZ, August 7, 2019 – AgJunction Inc. (TSX: AJX) (“AgJunction” or the “Company”), the Autosteering Company™, is reporting financial results for the second quarter ended June 30, 2019. All currency amounts are expressed in U.S. dollars.

Second Quarter 2019 Financial Summary vs. Second Quarter 2018

  • Revenue was $13.3 million versus $13.8 million
  • Gross margin at 34.8% compared to 39.3%
  • Operating expenses decreased to $5.4 million from $7.7 million
  • Net loss improved to $0.7 million or $(0.01) per share, versus a net loss of $2.3 million or $(0.02) per share
  • EBITDA improved to $(0.1) million versus $(1.9) million

Management Commentary

“Uncertainty in the agriculture market continued in the second quarter with historic spring floods resulting in significantly less planting and lowered crop yield expectations,” said Dave Vaughn, president and CEO of AgJunction. “Despite these challenges, we remain confident in our two core strategies to deliver the most innovative and easy-to-use autosteering solutions to OEM and VAR partners, along with selling direct-to-farmer through our Handsfreefarm® ecommerce store.

“During the quarter, we continued to make progress in both channels. In our direct-to-farmer business, we significantly bolstered our digital media presence through new video ads across various social media channels, which drove a substantial increase in website traffic. We also began selling autosteering solutions beyond the traditional precision ag customer to ranchers who value Wheelman’s ease-of-use and price point for more efficient pasture management and cattle feeding processes.

“Within our indirect channel, we remained committed to delivering adaptable autosteering components that have kept pace with the new innovations and selling solutions from our OEM and VAR partners. We also continued to expand our footprint as we began working with one of the largest tractor manufacturers in Eastern Europe, and completed the next stage of the onboarding process for a new European OEM partner in preparation for launch.

“Looking to the remainder of 2019, we will continue to aggressively market our Wheelman products, while growing our OEM and VAR channels through providing advanced, easy-to-use autosteering technologies at a cost-effective price point. We are working hard to expand our relationships and sales partnerships to replace the sales volume we have sold through the bulk purchase order announced last year, which is expected to be fully shipped by the end of the third quarter.”

Second Quarter 2019 Financial Results

Total revenue in the second quarter of 2019 was $13.3 million compared to $13.8 million in the second quarter of 2018. The decline was primarily driven by the sale of the Outback and Satloc businesses in September 2018 and November 2018, respectively, partially offset by the fulfillment of shipments related to the bulk purchase order (BPO).

Gross profit in the second quarter of 2019 was $4.6 million compared to $5.4 million in the second quarter of 2018. Gross margin was 34.8% compared to 39.3% in the second quarter of 2018. The margin decline was primarily related to an increase in cost of the product mix sold.

Total operating expenses in the second quarter of 2019 declined to $5.4 million compared to $7.7 million in the second quarter of 2018, primarily driven by a decrease in employee compensation costs related to the aforementioned sale of the Outback and Satloc businesses. As a percentage of revenue, operating expenses declined to 40.4% compared to 56.3% in the second quarter of 2018.

Net loss in the second quarter of 2019 improved to $0.7 million or $(0.01) per share, compared to a net loss of $2.3 million or $(0.02) per share in the second quarter of 2018. The improvement was primarily driven by the aforementioned decrease in total operating expenses.

EBITDA in the second quarter of 2019 improved to $(0.1) million compared to $(1.9) million in the second quarter of 2018.

Cash and cash equivalents at the end of the second quarter of 2019 totaled $18.9 million compared to $21.4 million at the end of 2018. Working capital was $25.5 million compared to $26.7 million at the end of 2018. The Company continues to operate debt free and has access to an unutilized $3.0 million line of credit.

Conference Call

AgJunction will hold a conference call tomorrow at 11:00 a.m. Eastern time to discuss its second quarter 2019 results, followed by a question-and-answer session.

Date: Thursday, August 8, 2019

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: 3889731

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

A replay of the conference call will be available after 2:00 p.m. Eastern time on the same day through August 22, 2019.

Toll-free replay number: 1-855-859-2056

International replay number: 1-404-537-3406

Replay ID: 3889731

About AgJunction

AgJunction Inc., the Autosteering Company™ is a global leader of advanced guidance and autosteering solutions for precision agriculture applications. Its technologies are critical components in over 30 of the world’s leading precision Ag manufacturers and solution providers and it holds approximately 200 patents and patents pending. AgJunction markets its solutions under leading brand names including Novariant®, Wheelman™, Whirl™ and Handsfreefarm® and is committed to advancing its vision by bringing affordable hands-free farming to every farm, regardless of terrain or size. AgJunction is headquartered in Scottsdale, Arizona, and is listed on the Toronto Stock Exchange (TSX) under the symbol “AJX.” For more information, please go to

Non-IFRS Measures

This press release uses EBITDA, which is a financial measure that does not have any standardized meaning prescribed under International Financial Reporting Standards (“IFRS”). EBITDA is defined as net income before interest, income tax, depreciation and amortization. The Company believes that this non-IFRS measure provides useful information to both management and investors in measuring financial performance. As this measure, does not have a standard meaning prescribed by IFRS, it may not be comparable to similarly titled measures presented by other publicly traded companies, and should not be construed as an alternative to other financial measures determined in accordance with IFRS. This non-IFRS measure is provided as additional information to complement IFRS measures by providing further understanding of operations from management’s perspective. Accordingly, non-IFRS measures should never be considered in isolation nor as a substitute to using net income as a measure of profitability or as an alternative to the IFRS consolidated statements of income or other IFRS statements. See “Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) Reconciliation” herein for additional information.

Forward-Looking Statements

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 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. 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. These statements are only predictions and actual events or results may differ materially. Although the Company’s management believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, performance or achievement since such expectations are inherently subject to significant business, economic, competitive and political uncertainties and contingencies. Many factors could cause the Company’s actual results to differ materially from those expressed or implied in any forward-looking statements made by the Company. In particular, forward-looking statements in this press release include, but are not limited to statements with respect to: the Company’s strategy, plans, objective and focus; and marketing the Company’s Wheelman products, ability to grow the Company’s OEM and VAR channels. 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, 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/or 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; demand for the Company’s products; 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; 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; reduced demand for the Company’s products; 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 which may be accessed on its SEDAR profile at

The forward-looking information contained in this press release is made as of the date hereof and 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.



Jeff Morris, Corporate Communications, AgJunction


Amy McEvoy, Associate Public Relations Director, Rhea + Kaiser


Investor Relations

Gateway Investor Relations

Cody Slach, Managing Director


Q2, 2019 Financial Statement