Despite lower sales caused by weather related factors, Canadian greenhouse grower and young plant propagator Bevo Agro Inc. has been able to maintain consistent gross margins in their third quarter.
Bevo reports that record snow and below seasonable temperatures from December to March (almost two degrees below seasonal on average) slowed plant growth and maturity dates as well as delayed the Pacific North West gardening season. "Our state of the art climate controlled greenhouses allowed us some control over plant maturities and we were able to compensate. Normal March shipments to customers are being delivered in May which is anticipated to positively impact our fourth quarter results."
Bevo's sales for the nine months ending March 31, 2017 totaled $17,199,698, compared to sales of $18,056,722 for the same nine months last year, reflective of the weakened sales performance in the third quarter referred to in the foregoing. "While delayed deliveries impacted our greenhouse space, we were fortunate that the 8 acre expansion substantially completed in September can be used for greenhouse vegetable orders."
The company's gross profit for the nine months ending March 31, 2017 totaled $5,514,027 (32%) compared to the gross profit of $5,321,160 (27%) for the nine months the previous year. The gross margin was $192,867 higher than last year even with lower sales.
Operating expenses for the three months were $1,402,770 compared to $1,306,405 in the same period last year. The slight increase is a result of increased amortization (a non cash expense) and interest.