Deveron Reports Third Quarter Fiscal 2024 Financial Results

Toronto, Ontario–(Newsfile Corp. – May 28, 2024) – Deveron Corp. (TSXV: FARM) (“Deveron” or the “Company”), a leading agricultural services and data company in North America, is pleased to report results for the three and nine months ended March 31, 2024. The results Complete financial statements are available at www.sedarplus.ca.

Q3 2024 Financial Highlights

• Non-IFRS EBITDA for the quarter improved 57% year over year to a loss of $1,449,703 from a loss of $3,378,030. Non-IFRS adjusted EBITDA grew 674% year-over-year in the nine-month period ended March 31, 2024, to $3,273,198, from $423,158.

• Gross revenue for the quarter grew 2% year over year to $5,453,028 from $5,358,540. Gross revenue grew 3% in the nine-month period ending March 31, 2024, to $28,480,027, from $27,691,334.

• Third quarter fiscal 24/24 operating expenses decreased 15% year over year to $4,277,906 from $6,134,379 as the Company achieved results from previously announced cost optimizations.

While fiscal 2024 Q3 is typically seasonally weak, revenue grew 2% in the quarter. This was due to warmer conditions in March, allowing for a testing window in early spring before growers planted their seeds for the season.

The Company’s gross profit margin and adjusted EBITDA margin profiles showed substantial improvements year over year due to the completion of previously announced cost optimization programs, which are expected to generate cost savings of $2.4 million annually. The Company significantly reduced operating costs at the end of 2023 due to its decision to deprioritize collection services within its carbon business unit based on actual and expected customer volumes.

“Deveron made substantial strides to improve profitability in the third quarter of fiscal 2024. This quarter, we began to see the benefits of our recent cost changes as we focus more on profitability and our core fertility business unit” , said David MacMillan, president and CEO of Deveron Corp. “Due to the nature of our business, the third quarter of fiscal 2024 is the slowest season for the company. With positive improvements in EBITDA, operating expenses and profit margin, we feel we have found our footing from a business perspective. costs. Deveron, which help farmers optimize their inputs and increase productivity and reduce environmental impact. The company expects revenue to be high margin, as all service revenue is linked to testing, with 60% in the fertility and segment. 40% related to total organic carbon testing. Based on sales success to date and the company’s high customer retention rates and low turnover, total U.S. sales in 2024 are expected to demonstrate significant growth in comparison. with 2023 sales.”

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Summary of Financial Results

*Non-IFRS measure. Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) should not be interpreted as an alternative to loss or comprehensive profit determined in accordance with IFRS. Adjusted EBITDA does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Company defines Adjusted EBITDA.” as IFRS net loss excluding interest expense, depreciation and amortization expense, share-based payments, income tax expense, integration costs, one-time acquisition costs and impairment of goodwill, property, plant and equipment and right-of-use assets (ROU). The Company believes that Adjusted EBITDA is a meaningful financial metric because it measures the cash generated from operations that the Company can use to finance working capital needs, pay future interest and principal debt repayments, and finance future growth initiatives.

^ Calculation of non-cash expenses

Q3 2023 Operational Highlights

About February 7th, the Company announced the conclusion of a new business agreement with a leading player in PFAS remediation in water. PFAS are synthetic chemicals that have attracted significant attention due to their widespread use and potential environmental and health concerns.

After the end of the quarter

About April 25, the Company announced the closing of an insider-led non-brokered private placement through the issuance of 575 unsecured convertible debentures at a price of $1,000 per debenture for gross proceeds of $575,000. The Company intends to use the net proceeds from the Offering for general working capital.

On May 27, the Company announced that it has received a letter (the “Demand Letter”) from two unsecured creditors demanding repayment of unsecured loans evidenced by promissory notes dated May 20, 2022 (collectively, the “Loans”) issued by Deveron in connection with the acquisition of a 67% interest in A&L Laboratories Canada East, Inc. (“A&L”).

In addition to its press releases dated May 10, 2022 and May 18, 2022, whereby the Company issued 7.0% unsecured convertible debentures (each, a “Debenture”) for aggregate gross proceeds of U.S. $10 million. Pursuant to the Debentures, the Company elected to pay the interest accrued for the second year through the proposed issuance of 6,146,373 common shares (each, a “Common Share”) in the capital of the Company at a price of US$0, 11406 per Ordinary Share.

The issuance of Common Shares remains subject to receipt of all necessary corporate and regulatory approvals, including the approval of the TSX Venture Exchange. All issued Common Shares are subject to a statutory hold period of four months plus one day from the date of issuance in accordance with applicable securities legislation.

The Management’s Discussion and Analysis for the period and the financial statements and explanatory notes are available on the Company’s profile on SEDAR+ at www.sedarplus.ca. This press release is in no way a substitute for reading these financial statements, including the notes to the financial statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About Deveron: Deveron is an agricultural technology company that uses data and insights to help farmers and large agricultural companies increase productivity, reduce costs and improve agricultural outcomes. The company employs a digital process that leverages data collected on farms across North America to drive an unbiased interpretation of production decisions, ultimately recommending how to optimize input use. Our team of agronomists and data scientists creates products that recommend ways to better manage fertilizers, seeds, fungicides, and other agricultural inputs. Additionally, we have a national network of data technicians deployed to collect various types of agricultural data, from soil to drones, that build the foundation of our best-in-class data layers. Our focus is the USA and Canada, where 1 billion acres of farmland are actively cultivated annually.

For more information and to join our community, visit www.deveron.com/investors or contact us on Twitter @Deveron.

Philip Linton
Vice President of Corporate Development
plton@deveron.com
Tel: 647-622-0076

This press release includes certain “forward-looking statements” within the meaning of that phrase under Canadian securities laws. Without limitation, statements regarding the Company’s future plans and objectives are forward-looking statements that involve varying degrees of risk. Forward-looking statements reflect management’s current view with respect to possible future events and conditions and, by their nature, are based on management’s beliefs and assumptions and are subject to known and unknown risks and uncertainties, both general and specific to the Company. Although the Company believes that the expectations expressed in such forward-looking statements are reasonable, such statements are not guarantees of future performance and actual results or developments could differ materially from those in our forward-looking statements. The following are important factors that could cause the Company’s actual results to differ materially from those expressed or implied in such forward-looking statements: changes in the world price of agricultural commodities, general market conditions, risks inherent in agriculture, the uncertainty of future profitability and the uncertainty of access to additional capital. Additional information about the material factors and assumptions that have been applied in making these forward-looking statements, as well as the various risks and uncertainties we face, are described in more detail in the “Risk Factors” section of our Annual and Interim Management’s Discussion and Analysis of our financial results and other continuous disclosure documents and financial statements that we file with Canadian securities regulatory authorities, available at www.sedarplus.ca. The Company undertakes no obligation to update this forward-looking information except as required by applicable law. The Company has litigation protection for forward-looking statements.

To view the original version of this press release, please visit https://www.newsfilecorp.com/release/210862

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