Agrify Corporation (Nasdaq:AGFY) (“Agrify” or the “Company”), the
most innovative provider of advanced cultivation and extraction
solutions for the cannabis industry, today announced certain
preliminary financial results for the second quarter ended June 30,
2022 and also announced that its scheduled conference call to
discuss its complete financial results for the second quarter ended
June 30, 2022 will now be held on Monday, August 15, 2022.
Preliminary Financial
Results
Based on the information currently available for
the second quarter ended June 30, 2022, the Company is announcing
preliminary financial results as follows:
- Revenue is expected to be $19.3 million; and
- Adjusted EBITDA (a non-GAAP financial measure), prior to
consideration of any potential impairment charges against the
carrying value of the Company’s long-lived assets, is expected to
be a loss of $(19.4) million (see “Non-GAAP Financial Measures”
below for further discussion of this non-GAAP term, including a
reconciliation to the most comparable GAAP measure).
These financial results for the second quarter
ended June 30, 2022 are preliminary, have not been reviewed or
audited, are based upon Agrify’s estimates, and were prepared prior
to the completion of the Company's financial statement close
process. The preliminary financial results should not be viewed as
a substitute for the Company’s full second quarter results and do
not present all information necessary for an understanding of
Agrify’s financial performance as of June 30, 2022. Accordingly,
undue reliance should not be placed on these preliminary results.
The Company will report its final audited financial results for the
second quarter in advance of the call on Monday, August 15,
2022.
Review for Impairment
Agrify requires additional time to finalize its
quarterly closing and financial reporting process as the Company is
currently concluding its impairment analysis associated with the
carrying value of its goodwill and intangible assets. The Company
expects that this analysis will result in significant non-cash
impairment charges as of June 30, 2022.
Credit Facility
The Company has reached an agreement in
principle with its institutional lender to amend its existing
credit facility to modify certain financial covenants which, once
complete, should give the Company additional flexibility to operate
and meet its long-term strategic goals while also allowing it to
responsibly adjust to the many challenges currently facing the
cannabis industry.
2022 Outlook
Given the current difficult macro business
environment, and specifically a drastic downturn in the cannabis
industry, Agrify has re-evaluated its near-term strategic
initiatives and business prospects. Consequently, the Company’s
prior revenue guidance for Fiscal Year 2022 is withdrawn and should
no longer be relied upon. Management will provide additional
information regarding its revenue guidance for Fiscal Year 2022 in
conjunction with the upcoming release of its full second quarter
2022 financial results.
Conference Call and Webcast
Information
- DATE: Monday, August 15, 2022
- TIME: 8:30 a.m. ET
- WEBCAST (live and available for
replay):
https://ir.agrify.com/news-and-events/investor-calendar
- DIAL-IN (only for those who would like
to ask a question during the live call):
https://register.vevent.com/register/BIb8c61fe580584e14b7ad2a0c5faaf8d1
About Agrify (Nasdaq:AGFY)
Agrify is the most innovative provider of advanced cultivation
and extraction solutions for the cannabis industry, bringing data,
science, and technology to the forefront of the market. Our
proprietary micro-environment-controlled Vertical Farming Units
(VFUs) enable cultivators to produce the highest quality products
with unmatched consistency, yield, and ROI at scale. Our
comprehensive extraction product line, which includes hydrocarbon,
ethanol, solventless, post-processing, and lab equipment, empowers
producers to maximize the quantity and quality of extract required
for premium concentrates. For more information, please visit Agrify
at https://www.agrify.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
concerning Agrify and other matters. All statements contained in
this press release that do not relate to matters of historical fact
should be considered forward-looking statements including, without
limitation, statements regarding future financial results,
including expected revenue and Adjusted EBITDA, the Company’s
expectations regarding its impairment of the carrying value of its
goodwill and intangible assets, the Company’s expectations
regarding its ability to restructure its existing credit facility
and the expected benefits of any such restructuring, and Agrify’s
ability to deliver solutions and services. In some cases, you can
identify forward-looking statements by terms such as "may," "will,"
"should," "expects," "plans," "anticipates," "could," "intends,"
"targets," "projects," "contemplates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of these
terms or other similar expressions. The forward-looking statements
in this press release are only predictions. We have based these
forward-looking statements largely on our current expectations and
projections about future events and financial trends that we
believe may affect our business, financial condition and results of
operations. Forward-looking statements involve known and unknown
risks, uncertainties and other important factors that may cause our
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. You should
carefully consider the risks and uncertainties that affect our
business, including those described in our filings with the
Securities and Exchange Commission (“SEC”), including under the
caption “Risk Factors” in our Annual Report on Form 10-K filed for
the year ended December 31, 2021 with the SEC, which can be
obtained on the SEC website at www.sec.gov. These forward-looking
statements speak only as of the date of this communication. Except
as required by applicable law, we do not plan to publicly update or
revise any forward-looking statements, whether as a result of any
new information, future events or otherwise. You are advised,
however, to consult any further disclosures we make on related
subjects in our public announcements and filings with the SEC.
Non-GAAP Financial Measures
To supplement our financial information presented in accordance
with generally accepted accounting principles in the United States,
or U.S. GAAP, we use Adjusted EBITDA, which is a non-U.S. GAAP
financial measure to clarify and enhance an understanding of past
performance. We believe that the presentation of Adjusted EBITDA
enhances an investor’s understanding of our financial performance.
We further believe that Adjusted EBITDA is a useful financial
metric to assess our operating performance from period-to-period by
excluding certain items that we believe are not representative of
our core business. We use certain financial measures for business
planning purposes, measuring our performance relative to that of
our competitors and determining our compliance with certain debt
instruments. We utilize Adjusted EBITDA as a key measure of our
performance.
We calculate Adjusted EBITDA as net loss adjusted to exclude (i)
tax provision and benefit; (ii) interest income and expense, net;
(iii) other income and expense, net; (iv) depreciation and
amortization, (v) stock-based compensation expense, (vi)
acquisition-related expenses; (vii) investment banker termination
fees; (viii) restructuring charges; (ix) gains and losses
associated with the extinguishment of debt; (x) changes in
derivative liabilities; (xi) changes in contingent consideration;
(xii) gain associated with the forgiveness of PPP loans; (xiii)
impairments to long-lived assets; (ix) legal settlement charges;
and (x) other items affecting our results that we do not view as
representative of our ongoing operations, including losses
associated with write-offs.
We believe Adjusted EBITDA is a commonly used by investors to
evaluate our performance and that of our competitors. However, our
use of the term Adjusted EBITDA may vary from that of others in our
industry. Adjusted EBITDA should not be considered as an
alternative to net loss before taxes, net loss, loss per share or
any other performance measures derived in accordance with U.S. GAAP
as measures of performance.
Adjusted EBITDA has important limitations as an analytical tool
and you should not consider it in isolation or as a substitute for
analysis of our results as reported under U.S. GAAP. Some of the
limitations of Adjusted EBITDA include (i) Adjusted EBITDA does not
properly reflect capital commitments to be paid in the future, and
(ii) although depreciation and amortization are non-cash charges,
the underlying assets may need to be replaced and Adjusted EBITDA
does not reflect these capital expenditures. Our public offering
and acquisition-related expenses, including legal, accounting and
other professional expenses, reflect cash expenditures and we
expect such expenditures to recur from time-to-time. Our Adjusted
EBITDA may not be comparable to similarly titled measures of other
companies because they may not calculate Adjusted EBITDA in the
same manner as we calculate the measure, limiting its usefulness as
a comparative measure.
In evaluating Adjusted EBITDA, you should be aware that in the
future we will incur expenses similar to the adjustments in this
presentation. Our presentation of Adjusted EBITDA should not be
construed as an inference that our future results will be
unaffected by these expenses or any unusual or non-recurring items.
Adjusted EBITDA should not be considered as an alternative to loss
before benefit from income taxes, net loss, earnings per share, or
any other performance measures derived in accordance with U.S.
GAAP. When evaluating our performance, you should consider Adjusted
EBITDA alongside other financial performance measures, including
our net loss and other GAAP results.
The following table presents a reconciliation of Adjusted EBITDA
from the most comparable GAAP measure, net loss, for the three- and
six-month periods ended June 30, 2022 and 2021, respectively:
AGRIFY CORPORATION AND
SUBSIDIARIESReconciliation of GAAP Net Loss to
Non-GAAP Adjusted EBITDA(In
thousands)(Unaudited)
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(23,494) |
|
|
$ |
(5,436) |
|
|
$ |
(32,375) |
|
|
$ |
(9,279) |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
(62) |
|
|
|
- |
|
|
|
(262) |
|
|
|
- |
|
Interest (income) expense |
|
1,927 |
|
|
|
- |
|
|
|
1,245 |
|
|
|
- |
|
Other (income) expense |
|
3 |
|
|
|
8 |
|
|
|
- |
|
|
|
40 |
|
Depreciation and
amortization |
|
1,149 |
|
|
|
166 |
|
|
|
2,201 |
|
|
|
313 |
|
Stock-based compensation |
|
941 |
|
|
|
931 |
|
|
|
1,894 |
|
|
|
3,066 |
|
Direct acquisition expenses |
|
79 |
|
|
|
- |
|
|
|
716 |
|
|
|
- |
|
Investment banker termination
fees |
|
- |
|
|
|
- |
|
|
|
637 |
|
|
|
- |
|
Restructuring charges |
|
188 |
|
|
|
- |
|
|
|
575 |
|
|
|
- |
|
Gain on extinguishment of notes
payable |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,685) |
|
Change in contingent
consideration |
|
(907) |
|
|
|
- |
|
|
|
(907) |
|
|
|
- |
|
Legal settlement costs |
|
800 |
|
|
|
- |
|
|
|
800 |
|
|
|
- |
|
Adjusted EBITDA |
$ |
(19,379) |
|
|
$ |
(4,331) |
|
|
$ |
(25,476) |
|
|
$ |
(8,545) |
|
Company Contacts
Agrify Timothy Oakes Chief Financial
Officer tim.oakes@agrify.com (781) 760-7512
Investor Relations InquiriesAnna Kate
Heller ICR agrify@icrinc.com
Media InquiriesJustin BernsteinMATTIO
Communications agrify@mattio.com
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