First Quarter 2021 Financial Summary vs. First Quarter 2020
- Revenue was $2.5 million compared to $5.2 million
- Gross margin was 40.2% compared to 56.6%
- Operating expenses improved to $3.4 million compared to $3.5 million
- Net loss was $(2.4) million or $(0.02) per share, compared to a net loss of $(0.5) million or nil per share
- EBITDA was $(1.6) million compared to $0.7 million
“Continued investment in research and development has led to great progress with our autonomous modules, Whirl cloud, and has increased our software subscriptions,” said Dr. M. Brett McMickell, president and CEO of AgJunction. “The COVID-19 pandemic has led to delays in new vehicle launches by OEMs; however, we continue to onboard new OEM customers as a result of strong performance of our modular product portfolio.
“Recently, we announced a joint project with the world’s largest tractor manufacturer by volume, Mahindra & Mahindra Ltd. (“Mahindra”). The project is making solid progress as our automation solution is performing well in the field testing in Turkey. We will build upon our relationship with Mahindra, while also continuing to work to onboard additional OEM partners.
“For our VAR business, we worked to reset this channel in the first quarter by strategically restructuring our partnerships focusing on larger VARs across the globe to create regional hubs. Regional hubs provide strong distribution, customer support, and repair capabilities. While we just launched this new structure, we have already noticed improvements as we leverage our VAR partners to expand the global reach of our products.
“Our direct channel has seen momentum fueled by a favorable agricultural environment with strong commodity pricing. This aspect of our business grew 174% year-over-year in North America with an increasing number of customers purchasing our more advanced offerings, the Wheelman Pro HP and Wheelman Flex HP, along with our subscription offering. Not only are sales increasing, but we are also seeing a year-over-year increase in the average revenue per user. We expect this trend to continue, especially with the recent launch in Australia, where we have already had a steady flow of pre-orders, and we look forward to announcing further geographic expansion of this business.
“As 2021 progresses, our team is busy working to onboard new OEM customers, realize increased revenue from our new VAR ‘hub and spoke’ structure, and looking for ways to further accelerate growth in our subscription and e-commerce businesses. We are taking the right steps on our path to recovery and believe we have a solid foundation to build from.”
First Quarter 2021 Financial Results
Total revenue in the first quarter of 2021 was $2.5 million compared to $5.2 million in the first quarter of 2020. The decrease is primarily due to the reduced volume from a North American VAR customer that allegedly breached a supply agreement with AgJunction and infringed certain of its patents.
Gross profit in the first quarter of 2021 was $1 million compared to $2.9 million in the first quarter of 2020. Gross margin was 40.2% compared to 56.6% in the first quarter of 2020. The reduction in margin was primarily attributable to a higher percentage of fixed costs relative to a lower revenue base and the reduced volume from the North American VAR customer that had a higher margin.
Total operating expenses in the first quarter of 2021 improved to $3.4 million compared to $3.5 million in the first quarter of 2020. The slight improvement was attributed to a reduction in variable costs.
Net loss in the first quarter of 2021 was $(2.4) million or $(0.02) per share, compared to a net loss of $(0.5) million or nil per share in the first quarter of 2020. The decline was primarily a result of the aforementioned revenue decline.
EBITDA in the first quarter of 2021 was $(1.6) million compared to $0.7 million in the first quarter of 2020.
Cash and cash equivalents at March 31, 2021, totaled $7.3 million compared to $6.8 million at the end of 2020. Working capital was $13.1 million at March 31, 2021 as compared to $13.7 million at the end of 2020. The Company operates with limited debt of $1.5 million from an outstanding paycheck protection program loan at March 31, 2021 and has an undrawn $3.5 million line of credit.