FOR IMMEDIATE RELEASE: August 22, 2022
TSX-V:FARM
Toronto,Ontario– Deveron Corp. (TSX-V: FARM) (!Deveron” or the !Company”), a leading agriculture data company in North America, is pleased to report Q2 2022 year-over-year revenue growth of 183%. Revenue grew to $5,183,378 in Q2 2022 from $1,832,078 in Q2 2021, driven by 64% organic growth. In Q2 2022, Deveron recorded one month of revenue from its recently completed transaction with A&L Canada in May 2022.
SecondQuarter2022FinancialHighlights
The Company”s revenue improved over the previous year”s quarter, driven by strong organic growth of our collection, insight, and carbon products, as well as the launch of new features within Farm Dog, the Company”s data platform. Q2 2022 saw the Company begin to bundle its lab testing and collection products for enterprise level clients. Deveron continued to execute on the integration of the agronomy, crop advisor & lab businesses that joined the Company in 2021.
- The Company’s data collection product sales grew 93% year over year to $1,470,656 from
$762,152 in Q2 2021
- The Company’s data analytics product sales grew 247% year over year to $3,712,722 from
$1,069,926 in Q2 2021
Operating expenses in Q2 2022 grew to $7,343,366 from $2,114,710, reflecting the costs associated with the addition of A&L Canada, totaling $1,356,921. Additionally, operating expenses grew due to the Company”s investment in digital products, engineering, and the scaling of its sales organization. As a result of these investments, the Company expects to achieve positive Non-IFRS Adjusted EBITDA in the second half of 2022.
!Deveron achieved exceptional triple digit revenue growth in the second quarter,” commented David MacMillan, Deveron”s President and CEO. !In Q2 2022, the Company achieved its highest quarterly revenue to date. This was driven by strong organic growth from our sales and operations groups, growth from businesses that joined Deveron in 2021, as well as one month of
revenue recognized from A&L Canada. We are beginning to see our investments in a technology empowered, vertically integrated soil ecosystem yield higher revenues in typically slower seasons. As we enter our busier season, we feel well positioned to see strong results and positive EBITDA in the second half of the year. !
Second Quarter 2022 Operational Highlights A&L Canada Laboratories East, Inc.
On May 24th, 2022, the Company announced the completion of its transaction with A&L Canada
Laboratories East, Inc., the leading Canadian soil health and plant tissue testing laboratory. Pursuant to the terms of the share purchase agreement, the Company has the option to purchase the remaining 33% of A&L following the three-year anniversary of the closing of the transaction, and an obligation to purchase the remaining 33% following the five-year anniversary.
A&L is the largest soil and tissue laboratory in Canada. Based in London, Ontario, A&L operates a 54,500 square foot laboratory with significant growth capacity and currently employs 140 people, including a large R&D group that has produced patented, crop specific yield and disease solutions. A&L processes over 435,000 soil samples per year. Deveron and A&L have cooperated in Canadian soil testing and analysis since 2019 and jointly own and operate Wood”s End Laboratory in the United States. During the 12-month period ended December 31, 2021, A&L had unaudited revenue of $26.7 million and EBITDA of $11.6 million. As of December 31, 2021, A&L had total unaudited assets of $19.8 million and total unaudited liabilities of $6.7 million. Following the transaction, on a pro forma 2021 basis, Deveron”s revenue would be $35.3 million with EBITDA of $8.3 million.
Product Update
Since the launch of the carbon services platform in Q3 2021, the Company has continued to see strong growth and engagement with the product. At the end of Q2 2022 Deveron had surpassed 500,000 acres, in the United States, utilizing the Company”s streamlined and scalable digital soil ecosystem for measuring agricultural carbon. The Company has begun to leverage this infrastructure for other data collection products to help create operational efficiencies across all business units.
Q2 2022 also saw the release of the document dashboard function in Farm Dog, Deveron”s data platform. The new feature acts as hub for crop advisors and agronomists to share information with their growers easily and within one platform. This feature is a critical step in the Company’s product road map to make independent agricultural data accessible and useful. Since the launch
of the new feature the Company has seen strong initial engagement, with thousands of documents shared across the Company”s growing user base.
SummaryofFinancialResults
| Results of Operations | For the three months ended | For the six months ended | ||||
| June 30, 2022 | June 30, 2021 | % Change | June 30, 2022 | June 30, 2021 | % Change | |
| Total Revenue | $5,183,378 | 1,832,078 | 183% | $6,590,339 | 2,499,804 | 164% |
| Gross Profit | 3,168,174 | 1,259,131 | 152% | 3,905,848 | 1,642,799 | 138% |
| Gross Profit Margin % | 61% | 69% | -8% | 59% | 66% | -7% |
| Operating Expenses | 7,343,366 | 2,114,710 | 247% | 11,630,918 | 3,477,846 | 234% |
| Adjusted EBITDA (Loss)* | (2,002,060) | (554,010) | -261% | (4,628,458) | (1,145,384) | -304% |
| Net Loss | (4,214,092) | (855,579) | -393% | (7,763,970) | (1,835,047) | -323% |
| Weighted Average Common Shares Outstanding | 110,529,358 | 71,171,406 | 104,820,853 | 71,317,926 | ||
| Per Share: | ||||||
| Net Loss | (0.04) | (0.01) | (0.07) | (0.03) |
*Non-IFRSmeasure.Adjustedearningsbeforeinterest,taxes,depreciationandamortization(!AdjustedEBITDA”)shouldnotbeconstruedasalternatives tocomprehensiveloss orincomedeterminedin accordancewithIFRS.AdjustedEBITDA doesnot have anystandardized meaningunder IFRSandthereforemay not becomparableto similar measures presented by other issuers.The CompanydefinesAdjustedEBITDAasIFRSnetlossexcludinginterestexpense,depreciationandamortizationexpense,share-based payments,incometax expense, integrationcosts, onetimeacquisition costs, and impairment of goodwill, property,plant,and equipmentand right-of-useassets (ROU). TheCompanybelieves that AdjustedEBITDAis ameaningfulfinancialmetric asitmeasurescashgeneratedfromoperationswhichtheCompanycanusetofundworkingcapitalrequirements,servicefuture interest andprincipal debt repayments andfund futuregrowthinitiatives
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 better manage fertilizer, seed, fungicide, and other farm inputs. 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 1billionacresoffarmlandareactivelyfarmedannually.
For more information and to join our community, please visit www.deveron.com/investors or reach us on Twitter @Deveron.
David MacMillan
President & CEO Deveron Corp. dmacmillan@deveron.com
Tel: 647-963-2429
NeitherTSXVentureExchangenorits RegulationServicesProvider(asthattermisdefinedinpoliciesoftheTSX Venture Exchange)accepts responsibility for the adequacy or accuracy of thisrelease.
Thisnewsreleaseincludescertain“forward-lookingstatements”withinthemeaningofthatphraseunderCanadian securitieslaws.Withoutlimitation,statementsregardingfutureplansandobjectivesoftheCompanyareforwardlooking statements thatinvolve variousdegreesofrisk.Forward-lookingstatements reflectmanagement’scurrentviews with respecttopossiblefutureeventsandconditionsand,bytheirnature,arebasedonmanagement’sbeliefsandassumptionsandsubjecttoknownandunknownrisksanduncertainties,bothgeneralandspecifictotheCompany. Although theCompany believesthe expectationsexpressed insuch forward-lookingstatementsare reasonable,such statementsarenotguaranteesoffutureperformanceandactualresultsordevelopmentsmaydiffermateriallyfrom thoseinourforward-lookingstatements.ThefollowingareimportantfactorsthatcouldcausetheCompany’sactual results to differmateriallyfromthose expressed orimplied by suchforward looking statements:changes inthe world- widepriceofagriculturalcommodities,generalmarketconditions,risksinherentinagriculture,theuncertaintyoffuture profitabilityandtheuncertaintyofaccesstoadditionalcapital.Additionalinformationregardingthematerialfactorsand
assumptionsthatwereappliedinmakingtheseforwardlookingstatementsaswellasthevariousrisksanduncertainties wefacearedescribedingreaterdetailinthe“RiskFactors”sectionofourannualandinterimManagement’sDiscussion and Analysisof ourfinancialresults and othercontinuous disclosuredocuments and financialstatements wefile with theCanadiansecuritiesregulatoryauthoritieswhichareavailableatwww.sedar.com. TheCompanyundertakesno obligationtoupdatethisforward-lookinginformatinexceptasrequiredbyapplicablelaw.TheCompanyrelieson
litigation protection for forward looking statements.