Vegalab Inc (OTCMKTS: VEGL) recently reported its earnings, and while OTC stock earnings don’t usually grab my attention, this report proved to be overwhelmingly positive. Today, we’ll talk about:
- The earnings;
- why the report was so impressive; and
- what we’ll be watching for ahead.
VEGL Reports Earnings
As mentioned above, Vegalab recently reported its earnings for the quarter ending on March 31, 2018. Ultimately, the report proved to be overwhelmingly positive with revenues reaching more than $7 million and revenue from VEGL product sales increasing by more than 1200%.
Much of the strong growth has to do with the company’s acquisition activitie. In fact, recently, the Agronomy Group, a producer and distributor of environmentally friendly agrochemicals. Previously, the Agronomy Group had been the company’s strongest sales organization in the United States. With the acquisition, the company was able to bring this sales force in house while expanding its product portfolio.
What We Saw From Earnings
At the end of the day, the financial results reported proved to be overwhelmingly positive. Here’s what we saw:
- Revenue – Revenue saw massive year over year growth. During the quarter, revenue came in at $7,288,629 growing around 30-fold on a year over year basis from $208,816. Revenue from products produced by Vegalab came in at $2,729,141, increasing from $208,816 on a year-over-year basis. Also, in october, VEGL purchased all of the assets of a produce packing business known as M&G Packing. This proved to be a great acquisition as $4,559,488 was generated from packing an processing.
- Cost Of Goods – On the agrochemicals side of the business, cost of goods came to $1,345,165. In terms of the packaging business, cost of goods came to $4,350,936.
- Net Loss – After provision for interest and income taxes, net losses for the quarter came in at $56,769, which works out to under a penny per share. That also showed incredible year over year growth from a net loss of $225,148, or $0.01 per share.
In a statement, Mr. Selakovic, CEO at VEGL, had the following to offer:
The acquisition of The Agronomy Group, LLC, was a strategic business decision that expanded the Company’s offerings and footprint in the United States. Additionally, due to Company improvements and better streamlining of operations, revenue from the sale of Vegalab products increased 1206 percent compared to the three months ended March 31, 2017. We will continue to build out our business and expand our footprint in key regions. Management continues to seek strategic partners who will help increase our market share in North and South America.” He concluded, “Demand for our natural and organic products that help restore the earth’s damaged soil continues to grow, and we look forward to serving the stewards of better agriculture.
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on VEGL. In particular, we’re interested in following the company’s continued growth as their value adding acquisitions continue to lead to ramps in revenue and declines in quarterly losses. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!