Supply Chain Challenges Impact First Quarter Results; Expects Strong Organic Growth for the Year
WICHITA, Kan “ AgEagle Aerial Systems Inc. (NYSE American: UAVS) (AgEagle or the Company), a leading provider of a unified line of industry trusted drones, sensors and software, today announced its financial results for the three months ended March 31, 2022.
Financial Highlights for the Comparable Three-Month Periods Ended March 31, 2022 and March 31, 2021
- Revenues climbed 126% to $3.84 million compared to $1.70 million.
- The increase was attributable to sales of eBee drone products and software subscriptions related to the HempOverview and Ground Control platforms, offset by lower revenues reported for the Company's sensor products. The decline in sensor sales was caused by ongoing global supply chain issues primarily affecting delivery of nearly $1 million in purchases for new Altum-PT ™ and RedEdge-P™ sensors.
- AgEagle's global market penetration efforts have resulted in the Company expanding its geographic footprint. Revenues generated in specific geographic regions during the first three months of 2022 were 46% in North America; 41% in Europe, Middle East and Africa; 12% in Asia Pacific and 1% in other regions worldwide.
- Gross profit margin on sales was 36% compared to 63% in the prior year period. The decline was due in part to supply chain challenges increasing the cost of components, inflation and adverse labor market conditions; and the continued shift and expansion of product offerings relating to the Company's acquisitions of MicaSense, Measure and senseFly in the prior year.
- Net loss was $7.58 million compared to $2.93 million. The overall increase in net loss was primarily attributable to greater operating costs resulting from the Company's acquisitions of Measure and senseFly in 2021.
- The Company's cash position was $9.19 million as of March 31, 2022, and stockholders' equity was $78.37 million, which compared to cash on hand of $14.59 million and stockholders' equity of $76.58 million as of December 31, 2021.
- During the three months ended March 31, 2021, the Company raised an additional $4.58 million through its ATM Offering with co-agents Stifel Nicholas & Company, Incorporated and Raymond James & Associates, Inc.
Commenting on the results, Nicole Fernandez-McGovern, Chief Financial Officer and Executive Vice President of Operations at AgEagle, said, We are pleased with the growing global demand from our network of over 150 resellers and from direct customers for AgEagle's expanding line of drones, sensors and software solutions. However, supply chain challenges and inflationary pressures impacted our ability to convert order book sales into reported revenues during the first quarter of this year. We do expect to alleviate our current supply chain issues as we progress through the year through innovation and access to alternative supply channels worldwide. Despite the supply chain challenges impacting the start of the year, we continue to believe that 2022 will prove to be a record year of organic growth for AgEagle.
Recent and First Quarter 2022 Operational Highlights
- In January, AgEagle's Board of Directors reappointed Company Chairman Barrett Mooney as AgEagle's CEO. Subsequent to the end of the first quarter, the Company expanded Michael O'Sullivan's role with his appointment as Chief Commercial Officer and promoted Edouard Rosset to Executive Vice President of Technology. This expansion of AgEagle's executive team with seasoned professionals is helping to grow AgEagle's global operations and establish a strong management foundation for the future.
- In March, AgEagle's award-winning, NDAA-compliant eBee TAC™ Unmanned Aerial System completed required testing, evaluation and demonstration processes pursuant to the U.S. government's Blue UAS project and was approved by the Defense Innovation Unit for procurement by the U.S. Department of Defense, including all branches of the military and other federal government agencies. As a result, dozens of eBees have been purchased and shipped to government/defense agencies worldwide for use in providing military ground forces with vital, high-resolution geographical intelligence in tactical environments.
- Orders for AgEagle's newest multispectral sensors, the Altum-PT and the RedEdge-P have continued to climb, with nearly $1 million in units expected to be shipped (and revenues booked) in the coming quarters.
- For the past several quarters, AgEagle's software development and engineering teams have also remained focused on introducing key new and enhanced technological features and capabilities for Measure Ground Control. In May, the Company announced details relating to these new features and capabilities and is experiencing a notable increase in global interest in the platform from prospective new and current customers serving the Energy, Infrastructure, Agriculture and other commercial industry sectors worldwide.
Growth in the global drone industry remained robust in the first quarter of 2022, resulting in a number of respected industry research firms predicting highly dynamic market growth ahead. For instance, in Drone Industry Insights' Drone Application Report 2022, researchers note that the commercial drone market, in particular, will generate over $41.30 billion by 2026, growing at a Compound Annual Growth Rate of 9.4% with top commercial drone applications being in Energy, Construction and Agriculture, and the most popular application methods being mapping & surveying and inspection.
AgEagle Chairman and CEO Barrett Mooney, stated, Our first quarter results reflect the emphasis we have placed on pioneering new research and development, and on addressing the current market challenges with launching new innovative products. We continue to execute on our key strategic growth initiatives designed to position AgEagle as a trusted and reliable source for an even broader line of autonomous robotics solutions and services moving forward. There is prevailing demand for our products quantified by the volume of orders we continue to receive. I am confident in the groundwork we have laid over this last quarter in creating a solid foundation for continued growth this year.
For more details relating to the Company's first quarter 2022 results, please refer to the 10-Q filed with the U.S. Securities and Exchange Commission and accessible at www.sec.gov or on AgEagle's website at www.ageagle.com.
Corporate Update Webcast
Given AgEagle's leadership team recently held a corporate update webcast on April 12, 2022, the Company will not be holding an update webcast to discuss its financial results for the first quarter ended March 31, 2022. AgEagle's leadership team anticipates holding a corporate update webcast in August 2022 when the Company expects to report its financial results for the second quarter ended June 30, 2022.
About AgEagle Aerial Systems Inc.
AgEagle and its wholly owned subsidiaries are actively engaged in designing and delivering best-in-class drones, sensors and software that solve important problems for our customers. Founded in 2010, AgEagle was originally formed to pioneer proprietary, professional-grade, fixed-winged drones and aerial imagery-based data collection and analytics solutions for the agriculture industry. Today, AgEagle is a leading provider of full stack drone solutions for commercial and government customers worldwide. For additional information, please visit our website at www.ageagle.com.
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements involve risks and uncertainties that could negatively affect our business, operating results, financial condition, and stock price. Factors that could cause actual results to differ materially from management's current expectations include those risks and uncertainties relating to our competitive position, the industry environment, potential growth opportunities, and the effects of regulation and events outside of our control, such as natural disasters, wars, or health epidemics. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions, or circumstances on which any such statement is based, except as required by law.