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WINNIPEG, Manitoba--(BUSINESS WIRE)--Nov 10, 2022--
Farmers Edge Inc. (“Farmers Edge” or the “Company”) (TSX: FDGE), a pure-play digital agriculture company reports its unaudited financial results for the three months ended September 30, 2022. All amounts are expressed in Canadian dollars. Certain metrics are non-GAAP and other financial measures or key performance indicators. See “Key Performance Indicators and Non-GAAP and Other Financial Measures” below.
Business Highlights
“We have implemented a cost turnaround plan to streamline our operations, lower operating expenses and reduce the cash burn rate,” said Vibhore Arora, Chief Executive Officer of Farmers Edge. “At the same time, we are investing in our technology in order to better serve our growers and enterprise customers. Our technological advancements, combined with our emphasis on a new B2B enterprise strategy, will strengthen our market position and drive top-line growth.”
OPERATING HIGHLIGHTS
in thousands, except per share amounts
Three Months Ended
Nine Months Ended
Unaudited
2022
2021
2022
2021
FINANCIAL PERFORMANCE for periods ended September 30
Digital Ag and Fertility solutions revenue
$
4,624
$
4,953
$
15,333
$
16,905
Add: channel partner subsidies
—
400
—
2,416
Digital Ag and Fertility solutions subscriptions
4,624
5,353
15,333
19,321
Business analytic solutions
379
856
797
2,504
Agronomic services
315
279
528
696
Crop input sales
625
336
5,524
336
Revenues (1)
$
5,943
$
6,824
$
22,182
$
22,857
Operating expenses (2)
$
(24,379
)
$
(23,147
)
$
(79,936
)
$
(56,541
)
Non-recurring items (3)
2,606
359
5,880
(6,335
)
Adjusted EBITDA (4)
$
(15,830
)
$
(15,964
)
$
(51,874
)
$
(40,019
)
Net loss (6)
$
(21,125
)
$
(19,359
)
$
(66,826
)
$
(46,616
)
Loss per share - basic & diluted (5)
$
(0.50
)
$
(0.46
)
$
(1.59
)
$
(1.33
)
Adjusted Free Cash Flow (4)
$
(15,061
)
$
(18,295
)
$
(57,730
)
$
(61,165
)
September 30, 2022
December 31, 2021
FINANCIAL POSITION as at date specified
Total assets
$
83,618
$
135,783
Total liabilities
$
42,644
$
31,749
Total equity
$
40,974
$
104,034
September 30, 2022
June 30, 2022
KEY PERFORMANCE INDICATORS AND OTHER FINANCIAL MEASURES as at date specified
Digital Agronomy Acres (6)
11,790
14,208
Other Acres (6)
494
1,127
Total Subscribed Acres (6)
12,284
15,335
Annual Recurring Revenue (ARR) (6)
$
43,039
$
49,014
(1) Revenues include $0.4 million and $2.4 million subsidies revenue related to commercial partner agreements for the three months and nine months ended September 30, 2021, respectively. There was no similar item in the three months and nine months ended September 30, 2022.(2) Operating Expenses include Cost of revenue, Data and technology infrastructure expenses, Selling and marketing expenses, Product research and development expenses, and General and administrative expenses including restructuring expenses and legal fees as set out on the Company’s Statements of Operations and Comprehensive Loss in its Financial Statements.(3) Non-recurring items include restructuring expenses of $0.2 million and legal and consulting fees of $2.4 million in Q3 2022 compared to $0.4 million in Q3 2021 related to legal and consulting fees. Non-recurring items also include restructuring expenses of $1.4 million and legal fees of $4.5 million in Q3 YTD 2022 compared to $0.5 million related to costs incurred to become a public company and legal fees of $1.4 million in Q3 YTD 2021. Satellite imagery settlement gain of $8.2 million is also included in the YTD 2021 numbers.(4) Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP financial measures used throughout this MD&A. See “Key Performance Indicators and Non-GAAP and Other Financial Measures” for more information on each non-GAAP financial measure. A quantitative reconciliation of Adjusted EBITDA to Net loss and Free Cash Flow, the most directly comparable IFRS financial measures are disclosed in our financial statements to which Adjusted EBITDA and Adjusted Free Cash Flow relates, is in the “Results of Operations” section of this MD&A.(5) Dilutive securities have been excluded from the calculation of diluted loss per share because including them would be anti-dilutive. The loss per share – basic and diluted for the periods ended September 30, 2021 and 2022 have been retrospectively adjusted to reflect the consolidation of common shares on a 7:1 basis, which occurred at the time of the IPO.(6) Digital Agronomy Acres, Other Acres, Total Subscribed Acres and ARR are supplementary financialmeasures used throughout this MD&A. See “Key Performance Indicators and Non-GAAP and Other Financial Measures” for more information on each supplementary financial measure. These numbers are unaudited.
Conference Call Notice
Farmers Edge will hold a live audio webcast at 8:30 a.m. Eastern Time on Tuesday November 15, 2022, to discuss the Company’s financial results and business highlights. All interested parties are invited to listen to the live audio webcast at https://www.gowebcasting.com/12263 Following the event, a replay of the webcast will be available on the Farmers Edge Investor Relations website.
Key Performance Indicators & Non-GAAP and Other Financial Measures
This press release makes reference to certain non-GAAP and other financial measures and key performance indicators (“KPIs”). These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We make reference to the following non-GAAP measures: “Adjusted EBITDA” and “Free Cash Flow”. This press release also makes reference to “Annual Recurring Revenue” or “ARR” and “Digital Agronomy Acres”, “Other Acres” and “Subscribed Acres”, which are operating metrics used in our industry. These non-GAAP measures and KPIs are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers. Our management also uses non-GAAP measures and KPIs in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation.
Adjusted EBITDA is the net loss before income tax expense, other income, finance costs, foreign exchange (gain) loss, depreciation and amortization after adjusting for the effects of any unusual non-recurring items. Adjusted EBITDA is a non-GAAP financial measure and its more directly comparable financial measure that is disclosed in our financial statements is net loss. The Company’s management and Board use this measure to evaluate consolidated operating results. In addition, this measure is used to make operating decisions as it is an indicator of the performance of the business and how much cash is being used by the Company and assists in determining resource allocation decisions. This measure may not be comparable to similar measures presented by other companies. See reconciliation under “ Results from Operations ”.
Free Cash Flow is net loss, adjusted for other income excluding government subsidies and financial assistance, finance costs, foreign exchange (gain) loss, depreciation and amortization as set out in the Company’s consolidated statement of operations and comprehensive loss in the financial statements, stock-based compensation, net additions to property and equipment and intangible assets, repayment of right‑of‑use obligations, and any unusual non‑recurring items. Free Cash Flow is a non-GAAP financial measure and its more directly comparable financial measure that is disclosed in our financial statements is net loss during the period. The Company’s management and Board use this measure to assess the availability of the Company’s cash. See reconciliation in “ Results of Operations ”.
Adjusted Free Cash Flow is net loss, adjusted for other income excluding government subsidies and financial assistance, finance costs, foreign exchange (gain) loss, depreciation and amortization as set out in the Company’s consolidated statement of operations and comprehensive loss in the financial statements, stock-based compensation, net additions to property and equipment and intangible assets, repayment of right‑of‑use obligations, any unusual non‑recurring items and changes in non-cash working capital. Free Cash Flow is a non-GAAP financial measure and its more directly comparable financial measure that is disclosed in our financial statements is net loss during the period. The Company’s management and Board use this measure to assess the availability of the Company’s cash. See reconciliation in “ Results of Operations ”.
Adjusted Free Cash Flow is useful as a performance measure to analyze the cash used in operations before the seasonal impact of changes in working capital items or other unusual items.
Adjusted EBITDA and Net Loss
in thousands
Three Months Ended
Nine Months Ended
for the periods ended September 30
2022
2021
2022
2021
Digital Agronomy operations
$
(16,324
)
$
(15,964
)
$
(51,580
)
$
(40,019
)
E-commerce operations
494
—
(294
)
—
Adjusted EBITDA (1)
(15,830
)
(15,964
)
(51,874
)
(40,019
)
Foreign exchange (gain) loss
52
(815
)
594
(2,595
)
Depreciation of property and equipment
2,506
2,634
7,542
7,669
Amortization of intangible assets
2,143
2,010
5,432
5,677
Finance costs
449
155
740
7,586
Other income
(2,461
)
(948
)
(5,236
)
(5,405
)
Non-recurring items (2)
2,606
359
5,880
(6,335
)
Net loss
$
(21,125
)
$
(19,359
)
$
(66,826
)
$
(46,616
)
Digital Agronomy operations
$
(20,070
)
$
(19,031
)
$
(64,953
)
$
(46,288
)
E-commerce operations
(1,055
)
(328
)
(1,873
)
(328
)
Total net loss
$
(21,125
)
$
(19,359
)
$
(66,826
)
$
(46,616
)(1) Adjusted EBITDA is a non-GAAP financial measure. See “Key Performance Indicators and Non-GAAP and Other Financial Measures” for more information on each non-GAAP financial measure. This table provides a quantitative reconciliation of Adjusted EBITDA to Net loss, the most directly comparable IFRS financial measure disclosed in our financial statements to which Adjusted EBITDA relates.(2) Non-recurring items include restructuring expenses of $0.2 million and legal and consulting fees of $2.4 million in Q3 2022 compared to $0.4 million in Q3 2021 related to legal and consulting fees. Non-recurring items also include restructuring expenses of $1.4 million and legal fees of $4.5 million in Q3 YTD 2022 compared to $0.5 million related to costs incurred to become a public company and legal fees of $1.4 million in Q3 YTD 2021. Satellite imagery settlement gain of $8.2 million is also included in the YTD 2021 numbers.
Free Cash Flow
in thousands
Three Months Ended
Nine Months Ended
for the periods ended September 30
2022
2021
2022
2021
Net loss
$
(21,125
)
$
(19,359
)
$
(66,826
)
$
(46,616
)
Foreign exchange (gain) loss
52
(815
)
594
(2,595
)
Depreciation of property and equipment
2,506
2,634
7,542
7,669
Amortization of intangible assets
2,143
2,010
5,432
5,677
Finance costs
449
155
740
7,586
Other income excluding government subsidies and financial assistance
(1,165
)
(162
)
(1,766
)
(445
)
Stock-based compensation
176
842
646
2,616
Additions to property and equipment (net of proceeds)
(666
)
(1,010
)
(6,435
)
(6,024
)
Additions to intangible assets (net of proceeds)
(1,117
)
(846
)
(3,494
)
(2,880
)
Repayment of right-of-use obligations
(885
)
(715
)
(2,700
)
(2,254
)
Non-recurring items (1)
2,606
359
5,880
(6,335
)
Free Cash Flow (2)
$
(17,026
)
$
(16,907
)
$
(60,387
)
$
(43,601
)
Changes in non-cash working capital
1,965
(1,388
)
2,657
(17,564
)
Adjusted Free Cash Flow (2)
$
(15,061
)
$
(18,295
)
$
(57,730
)
$
(61,165
)(1) Non-recurring items include restructuring expenses of $0.2 million and legal and consulting fees of $2.4 million in Q3 2022 compared to $0.4 million in Q3 2021 related to legal and consulting fees. Non-recurring items also include restructuring expenses of $1.4 million and legal fees of $4.5 million in Q3 YTD 2022 compared to $0.5 million related to costs incurred to become a public company and legal fees of $1.4 million in Q3 YTD 2021. Satellite imagery settlement gain of $8.2 million is also included in the YTD 2021 numbers.(2) Adjusted Free Cash Flow is a non-GAAP financial measure. See "Key Performance Indicators and Non -GAAP and Other Financial Measures". This table provides a quantitative reconciliation of Adjusted Free Cash Flow to net loss during the period, the most directly comparable IFRS financial measure disclosed in our financial statements to which Adjusted Free Cash Flow relates.
About Farmers Edge
Farmers Edge is leading the next agricultural revolution with the industry’s broadest portfolio of proprietary technological innovations, spanning hardware, software, and services. Powered by a unique combination of connected field sensors, artificial intelligence, big data analytics, and agronomic expertise, the Company’s digital platform turns data into actions and intelligent insights, delivering value to all stakeholders of the agricultural ecosystem. Farmers Edge disruptive technologies accelerate digital transformation on the farm and beyond, protecting our global resources and ensuring sustainable food production for a rapidly growing population.
For more information, please visit www.farmersedge.ca and SEDAR ( www.sedar.com ).
Forward-Looking Information
This press release may contain forward-looking information within the meaning of applicable securities legislation. Such information includes, but is not limited to, statements related to the Company’s anticipated results and future cost savings and its future business prospects, partnerships and opportunities, including the planned further expansion into the carbon credit market, and the anticipated benefits therefrom. Words such as “expect,”, “anticipate”, “intend,”, “may,”, “will”, “estimate” and variations of such words and similar expressions are intended to identify such forward-looking information. This information is based on the Company’s reasonable assumptions and beliefs in light of the information currently available to it and the statements are made as of the date of this press release. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such assumptions, risks and uncertainties include, but are not limited to, the factors discussed under “ Forward-Looking Information ” and “ Risk Factors ” in the Company’s most recent Annual Information Form and under the “ Risk Factors ” section in the Company’s management discussion and analysis filed today, November 10, 2022, each of which are available on the Company’s website ( www.farmersedge.ca/investor-relations/ ) and on SEDAR ( www.sedar.com ). The Company cautions that the list of risk factors and uncertainties is not exhaustive and other factors could also adversely affect the Company’s results. Readers are urged to consider the risks, uncertainties and assumptions associated with these statements carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. The Company does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
View source version on businesswire.com:https://www.businesswire.com/news/home/20221110006171/en/
CONTACT: For further information:
Farmers Edge Investor Relations:
InvestorRelations@FarmersEdge.ca
KEYWORD: NORTH AMERICA CANADA
INDUSTRY KEYWORD: DATA MANAGEMENT TECHNOLOGY OTHER TECHNOLOGY AGRICULTURE NATURAL RESOURCES SOFTWARE HARDWARE
SOURCE: Farmers Edge Inc.
Copyright Business Wire 2022.
PUB: 11/10/2022 06:00 PM/DISC: 11/10/2022 06:02 PM
http://www.businesswire.com/news/home/20221110006171/en