FOR IMMEDIATE RELEASE: May 25, 2021
TSX-V: FARM
Toronto,Ontario– Deveron Corp. (TSX-V: FARM) (“Deveron”or the “Company”) a leading agriculture digital services and analytics provider in North America is pleased to report Q1 2021 year over year revenue growth of 136% driven by 178% growth in the Company’s higher margin data insight products.
First Quarter 2021 Financial and Operational Highlights
The Company’s financial performance improved over the previous year’s quarter, driven by organic growth across its product and services divisions due to expanding farm engagement and uptake in the Company’s digital offerings. For the three-month financial results ended March 31, 2021 (and comparable period ended March 31, 2020):
- Revenue in Q1 2021 grew 136% year over year to $667,726 from $283,420 in Q1 2020;
- Gross profit in Q1 2021 was $383,668 up 113% from Q1 2020; and
- Organic revenue growth was 68%.
“This quarter, we executed on a number of key strategic initiatives that deepened our digital ecosystem and grew our engaged farm acre base.” said David MacMillan, President and CEO of Deveron Corp. “We have made strategic investments in our sales team, which is delivering organic growth. We also are driving expansion efforts with accretive acquisitions that help accelerate our ability to provide independent and agronomic solutions to farmers and agribusiness throughout North America. In what is historically a quarter with seasonally low activity, we are pleased to see triple digit revenue growth, which we believe highlights the significant impact our strategy is having on our growth rates.”
“Additionally our acquisition of Farm Dog, has accelerated development of our digital ecosystem. As we continue to integrate our products and services and engage historical Farm Dog users with our bundled offerings, we see a continued and growing value proposition emerging for our
customers. We ended 2020 with roughly 600,000 engaged acres in our ecosystem. With recent new business announced and our acquisitions, Deveron has nearly tripled its access to customers. Given the growth illustrated in Q1, we believe the three components of our strategy – digital ecosystem, strong agronomic insights, and responsive sales team are on schedule for full integration which we believe will continue our growth in the coming quarters.”
SummaryofFinancialResults
| Results of operations | For the three months ended | ||
| March31,2021 | March 31, 2020 | % Change | |
| Total Revenue | $667,726 | $283,420 | 136% |
| Gross Profit | $383,668 | $180,212 | 113% |
| Gross Profit Margin % | 57% | 64% | -7% |
| Operating Expenses | $ 1,363,136 | $748,995 | 82% |
| Adjusted EBITDA (loss)* | $(591,373) | $(435,978) | -36% |
| Total Comprehensive Loss | $(979,468) | $(568,783) | 72% |
| Weighted Average Common Shares Outstanding | 68.4 M | 38.1 M | |
| Per Share: | |||
| Comprehensive Net Loss | $(0.01) | $(0.01) |
*Non-IFRSmeasure.Adjustedearningsbeforeinterest,taxes,depreciationandamortization(“AdjustedEBITDA”) shouldnotbeconstruedasalternativestocomprehensivelossorincomedeterminedinaccordancewithIFRS. AdjustedEBITDAdoesnothaveanystandardizedmeaningunderIFRSandthereforemaynotbecomparabletosimilar measurespresentedbyotherissuers.TheCompanydefinesAdjustedEBITDAasIFRScomprehensivelossless interestexpense,depreciationandamortizationexpense,share-basedpayments,incometaxexpense,integrationcosts,andimpairmentofgoodwill,property,plant,andequipmentandright-of-useassets(ROU).TheCompanybelieves that Adjusted EBITDA is a meaningfulfinancialmetric as itmeasures cash generated from operations which theCompanycanusetofundworkingcapital requirements, servicefutureinterest andprincipal debt repaymentsandfundfuturegrowthinitiatives.
Adjusted EBITDA(Loss) Calculation
| 2021 | 2020 | |
| Total Net income (Loss) | $(979,468) | $(568,783) |
| Less: Interest | $16,110 | $12,691 |
| Less: Depreciation & Amortization | $51,177 | $50,468 |
| Less: Share Based Payments | $320,807 | $69,648 |
| Less: Income Taxes | $0 | $0 |
| Less: Other Charges | $0 | $0 |
| Non-IFRS Adjusted EBITDA | $(591,373) | $(435,978) |
OperationalHighlightsforQ1:
- On January 26th , Deveron announced the launch of a fixed wing imagery pilot program for the 2021 season in Ontario, Canada;
- On February 22nd, Deveron announced the acquisition of Farm Dog, an award winning mobile first data platform. Farm Dog is an agriculture data platform that helps farmers, agronomists, and agribusinesses record, organize and leverage on-farm information to make better decisions;
- On March 8th, Deveron announced the signing of three new, multi-year service agreements with global leaders in the agriculture industry with a focus on carbon, seed and weather;
- On March 12th, Deveron announced the appointment of Craig Hogan, CPA,CA as VP, Finance.
SubsequentEvents:
- On April 6th, Deveron acquired Woods End Laboratories to build out its soil health product platform. Woods End had unaudited revenue of US$1.8 M and EBITDA of US$900,000.
- On April 27th, Deveron announced the appointment of Pranay Joshi as VP, Engineering.
- On May 17th, Deveron announced the acquisition of Tana Ag Solutions Group LLC, an Oklahoma based independent agronomic consultant company. Tana Ag has 120,000 acres under management and 2020 unaudited revenue of US$271,000 and EBITDA of
$98,000.
BusinessOutlook
Deveron’s goals for 2021 are to; i) continue to organically expand its acre footprint of farm and agribusiness users for its core data insights and collection products; ii) leverage its acquisition of Farm Dog to further build out its digital ecosystem helping its customers standardize and organize
all in-field data; and iii) continue to pursue synergistic acquisitions of agriculture advisory businesses in key local areas throughout North America.
Deveron’s positive outlook for the coming quarters is driven by its high customer retention rate, increasing margins from expanding digital product sales and the vertical integration of soil health and testing. To date in 2021, the Company has also announced total revenue through acquisitions equal to 2020 revenue. With strong organic growth, coupled with acquisition success, Deveron continues to be on a path for another year of record high revenue and farm acres under management.
The Management’s Discussion and Analysis for the period and the accompanying financial statements and notes are available under the Company’s profile on SEDAR at www.sedar.com. This news release is not in any way a substitute for reading those financial statements, including the notes to the financial statements.
AboutDeveron:Deveron is an agriculture technology company that uses data and insights to help farmers and large agriculture enterprises increase yields, reduce costs and improve farm outcomes. The company employs a digital process that leverages data collected on farms across North America to drive unbiased interpretation of production decisions, ultimately recommending how to optimize input use. Our team of agronomists and data scientists build products that recommend ways to manage fertilizer, seed, fungicide and other farm inputs better. Additionally, we have a national network of data technicians that are deployed to collect various types of farm data, from soil to drone, that build a basis of our best in class data layers. Our focus is the US and Canada where 1billionacresareactivelyfarmedannually.
For more information and to join our community, please visit www.deveronuas.com/register or reach us on Twitter @DeveronUAS or @MyVeritas_HQ
David MacMillan
President & CEO Deveron Corp. 416-367-4571 ext. 221
NeitherTSXVentureExchangenoritsRegulationServicesProvider(asthattermisdefinedinpoliciesoftheTSX Venture Exchange) accepts responsibility for the adequacy or accuracy of thisrelease.
Thisnewsreleaseincludescertain“forward-lookingstatements”withinthemeaningofthatphraseunderCanadian securitieslaws.Withoutlimitation,statementsregardingfutureplansandobjectivesoftheCompanyareforwardlooking statementsthatinvolvevariousdegreesofrisk.Forward-lookingstatementsreflectmanagement’scurrentviewswith respecttopossiblefutureeventsandconditionsand,bytheirnature,arebasedonmanagement’sbeliefsand assumptionsandsubjecttoknownandunknownrisksanduncertainties,bothgeneralandspecifictotheCompany. AlthoughtheCompanybelievestheexpectationsexpressedinsuchforward-lookingstatementsarereasonable,such statementsarenotguaranteesoffutureperformanceandactualresultsordevelopmentsmaydiffermateriallyfrom thoseinourforward-lookingstatements.ThefollowingareimportantfactorsthatcouldcausetheCompany’sactual
resultsto differmaterially from those expressed orimplied by such forward looking statements:changes in the world- widepriceofagriculturalcommodities,generalmarketconditions,risksinherentinagriculture,theuncertaintyoffuture profitabilityandtheuncertaintyofaccesstoadditionalcapital.Additionalinformationregardingthematerialfactorsandassumptionsthatwereappliedinmakingtheseforwardlookingstatementsaswellasthevariousrisksanduncertaintieswefacearedescribedingreaterdetailinthe“RiskFactors”sectionofourannualandinterimManagement’sDiscussion andAnalysisofourfinancialresultsandothercontinuousdisclosuredocumentsandfinancialstatementswefilewith theCanadiansecuritiesregulatoryauthoritieswhichareavailableatwww.sedar.com. TheCompanyundertakesno obligationtoupdatethisforward-lookinginformati law.TheCompanyrelieson
litigation protection for forward looking statements.