Hemisphere To Exit All Non-Ag Related Businesses

Hemisphere GPS Inc, said it will exit its non-agriculture-related business and cut 38% of its total workforce. The company, which appointed Rick Heiniger chief executive in September, said it expects to save $7 million annually from the restructuring. The total workforce will be reduced from 273 to about 170.

Hemisphere said diversification into marine, construction and other industries had increased costs, absorbed cash and distracted management focus from its core agriculture business.

The agriculture business contributed 81% to the company’s revenue in the first nine months of 2012. The company, valued at $46.4 million, reported a wider quarterly loss and said it no longer expects to meet its target of 10% revenue growth in the year. Net loss widened to $2.8 million in the third quarter, from $1.6 million a year earlier. Revenue remained flat at $14 million.

Consolidated revenue growth was 22% in Canada and 6% in the U.S., the company reported in their third-quarter financial results. European sales were down 1% due to Europe’s struggling economies, and sales to other international regions including Australia, Asia and South America decreased by 25%, compared to the third quarter of 2011 primarily due to a single large order in the previous year that wasn’t repeated this year.

In August 2012, the company announced the launch of Outback MAX™, its new flagship product for the precision agriculture market. Market and customer reception has been positive and initial sales have been encouraging, building optimism for 2013.

Segmented revenues from the Company’s core Agriculture business increased revenue contribution to 75% of total third quarter revenues, compared with 71% in the third quarter of 2011. Precision Products contributed 25% of total revenue in the third quarter of 2012 compared to 29% in 2011.

Hemisphere GPS, Association member since 2004; hemispheregps.com.