Ceres Global Ag Corp. Announces Results for the Second Quarter
TORONTO, ON, (November 13, 2013) – Ceres Global Ag Corp. (“Ceres” or the “Corporation”) announces it has released its financial results for the three-month and six-month periods ended September 30, 2013. The following are key highlights during the quarter:
At the Annual General and Special Meeting of the shareholders, 5 new independent directors were elected and a new Chief Executive Officer appointed, and immediately began a review of Ceres’ business strategy with management;
- The internalization of the management of Ceres has begun with all expenses concerning the termination of the management agreement recognized in this past quarter;
- Riverland Ag returned to profitability during the quarter;
- The Stewart Southern Railway continued its strong operating performance; and
- Mass grading and general site preparation work continues at the proposed Northgate Commodities Logistics Centre.
This was a transformative quarter for Ceres. At the annual general and special meeting on September 27, 2013, the shareholders elected to terminate the management agreement with Front Street Capital and internalize Ceres’ management. As a result, one-time charges were incurred in the amount of $8.0 million. These charges include a provision for (i) a $5.0 million payment due to Front Street Capital on October 1, 2013, (ii) an amount of $1.4 million representing the fair value of two contingent payments of $1.0 million each should Ceres’ share price increase to $10.00 and $11.00 respectively within the next five years, (iii) $0.8 million for HST related to the payments to Front Street Capital, and (iv) $0.8 million for fees and expenses related to the Special Committee of the Board of Directors formed to consider the management termination agreement. While amounts have been provided for in the accounts, the contingent payments will not be made until the terms and conditions related to the management termination agreement have been met.
As previously announced, at the meeting five new independent directors (including Harvey T. Joel, Jacob P. Mercer, Gary W. Mize, Shannon T. Shelf and Douglas E. Speers, the latter also being appointed Lead Independent Director) were elected to the Board, together with Thomas P. Muir and Gary P. Selke, the chair of the Board of Directors. The new Board of Directors and Ceres’ new Chief Executive Officer, Michael Detlefsen, are in the midst of a complete review of Ceres’ business strategy and individual investments and assets.
Commenting on the Company’s current results, Ceres’ new Chief Executive Officer, Michael Detlefsen, said, “Despite management being consumed over the last few months by shareholder 12675197.3 matters, operating progress was made on several fronts, as Riverland Ag and the SSR showed strong performance during this quarter and we managed to re-energize our development efforts at Northgate. With the support and guidance of a revitalized Board of Directors with substantial industry experience, we are looking to maximize value for shareholders by continuing to review and consider all available options, including asset sales, organic growth and incremental investments.”
The following is a summary of the financial results for the fiscal quarter ended September 30, 2013, and certain figures reporting the financial position as at that date, for Ceres on a consolidated basis, and for its operating subsidiaries Riverland Ag Corp. and Riverland Agriculture, Ltd. (collectively referred to as “Riverland Ag”). Figures for 2012 are for the quarter ended September 30, 2012, as applicable: