Agrify Announces Record Fourth Quarter and Fiscal Year 2021 Results

BILLERICA, Mass. – Agrify Corporation (Nasdaq:AGFY), announced financial results for the fourth quarter and fiscal year ended December 31, 2021.

“During 2021, we drove significant year-over-year growth, launched our Total Turn-Key Solution for cannabis cultivators, created a significant backlog of future high-margin recurring revenues, drove tremendous pipeline velocity, implemented innovative technological advancements to our Vertical Farming Unit, and established ourselves as the leader in premium extraction solutions through a series of well-executed acquisitions,” said Raymond Chang, Chairman and Chief Executive Officer of Agrify. “We look forward to continued accelerated growth in 2022 and beyond.”

Fourth Quarter and Fiscal Year 2021 Financial Results

• Revenue was $25.3 million for the fourth quarter, an increase of 481% compared to $4.4 million for the prior year period. Revenue was $59.9 million for the fiscal year, an increase of 395% versus $12.1 million for the prior year period.
• New bookings were $377 million for the fiscal year, an increase of 919% compared to $37 million for the prior year period.
• Total backlog was $837 million at the end of the fourth quarter, an increase of 1,319% compared to $59 million at the end of the prior year.
• Gross profit for the fourth quarter totaled $5.6 million, or 22.3% of revenue, compared to $(290) thousand, or (6.7)% of revenue, in the prior year period. Gross profit for the fiscal year was $5.2 million, or 8.7% of revenue, compared to $570 thousand, or 4.7% of revenue in the prior year.
• Operating expenses were $19.0 million for the fourth quarter, compared to $3.9 million in the prior year period. Operating expenses were $40.3 million for the fiscal year, compared to $13.2 million in the prior year. The comparative increase in our fourth quarter operating expenses is largely attributable to $10.4 million of one-time expenses related to direct acquisition costs, incremental expense related to the addition of Precision Extraction Solutions and Cascade Sciences operations, a change in contingent consideration, an increase in reserves, an increase in depreciation and amortization, and an increase in stock-based compensation.
• Net loss for the fourth quarter was $13.3 million, or $0.60 per diluted share, compared to net loss of $13.1 million, or $2.23 per diluted share, in the prior year period. Net loss totaled $32.5 million, or $1.69 per diluted share, for the fiscal year, compared to net loss of $21.6 million, or $5.32 per diluted share, in the prior year.
• Cash flow used in operating activities was $12.6 million for the fourth quarter, compared to $4.1 million in the prior year period. Cash flow used in operating activities was $30.2 million for the fiscal year, compared to $14.8 million in the prior year period.
• Adjusted EBITDA (a non-GAAP financial measure) was a loss of $5.5 million in the fourth quarter (see “Non-GAAP Financial Measures” below for further discussion of this non-GAAP term, including a reconciliation to the most comparable GAAP measure), compared to a loss of $2.8 million in the prior year period. Adjusted EBITDA was a loss of $20.0 million in the fiscal year ended December 31, 2021, compared to a loss of $8.4 million in the prior fiscal year.

Recent Business Highlights

• As of March 23, 2022, Agrify has contractual commitments for 3,729 Vertical Farming Units that will be powered by the Agrify Insights SaaS cultivation software. Most of these commitments will also include the value-added services offered as part of the Agrify Total Turn-Key Solution. Cumulatively, all of the 10-year agreements under Agrify’s TTK Solution program are projected to generate an estimated $837 million in total revenue.
• As of March 23, 2022, the total qualified pipeline of opportunities is approximately $571 million.
• On February 2, 2022, Agrify announced its acquisition of Lab Society, a leader in distillation and solvent separation solutions for the cannabis extraction industry. This marked Agrify’s fourth acquisition in the extraction space since October 1, 2021, and further established the Company as a leading provider of premium extraction solutions.
• On January 5, 2022, Agrify announced the completion of its acquisition of PurePressure, the leader in solventless extraction and advanced ice water hash processing equipment in the cannabis and hemp industry. Solventless extraction is the fastest growing subcategory in the cannabis extraction industry, and PurePressure has proven to be a strong complement to the Company’s extraction division, which is a core part of its business and plans for acceleration of growth. This acquisition brought Agrify one step closer to cornering the market for the top solutions that produce the highest quality and the widest range of extracted cannabis products at scale.
• On January 4, 2022, Agrify announced it had entered into a TTK partnership with Gold Leaf Florida LLC, expanding Agrify’s footprint to the lucrative and fast-growing Florida cannabis market. The partnership, which includes the installation of 1,510 VFUs, is expected to generate more than $380 million of estimated total revenue over the full 10-year term of the agreement, of which $343 million is estimated to be derived from production success fees and SaaS fees.

2022 Outlook

As a result of the strong demand for Agrify’s cultivation and extraction solutions, management is expecting revenue to be in the range of $140 million to $142 million for Fiscal Year 2022.

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, integration of prior acquisitions, our ability to realize revenue from the bookings, backlog, pipeline and specific transactions described herein, the revenue expected from any Agrify TTK Solution transactions and the duration of those revenue streams, project timelines, 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, 2020 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.

(This information is primarily sourced from Agrify.  Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).