3Q24 revenue grew 6% to $514.2 million. Growth was driven by continued market share gains and volume growth, which mitigated ongoing deflation in input prices throughout Brazil and Colombia. Gross profit decreased -16% to $60.2 million. Gross margins narrowed by -310 basis points to 11.7%, primarily due to the ongoing input price deflation and a less favorable sales mix resulting from a greater proportion of low margin Grain revenue. The Crop Care segment remained a strong performer, with revenue rising 30% to $22.1 million and gross profit up 14% to $9.1 million, mainly fueled by robust growth in biological products. Net loss for 3Q24 narrowed to $64.8 million from a loss of $74.3 million in the prior year quarter. This improvement reflects the absence of last year's Nasdaq listing non-recurring expenses, partially offset by lower gross profit, increased finance costs, and higher income taxes. Adjusted EBITDA for the quarter was $3.7 million, compared to $24.8 million in the prior year period, resulting from lower gross profit, and higher operating expenses. Adjusted net loss was $62.7 million, compared to adjusted net loss of $7.9 million last year, with the variation reflecting lower gross profit, increased financial costs and income taxes. In light of more challenging market conditions than anticipated, Lavoro has updated its FY2024 guidance. SÃO PAULO, Brazil, June 03, 2024 (GLOBE NEWSWIRE) -- Lavoro Limited (NASDAQ:LVRO, LVROW)), the first U.S.-listed pure-play agricultural inputs retailer in Latin America, today announced its financial results for the fiscal third quarter of 2024, which ended on March 31, 2024. Ruy Cunha, CEO of Lavoro, commented, "Farmer profitability, a fundamental driver for our industry, is expected to improve in the upcoming 2024/2025 crop year. However, in the near term, we continue to observe farmers' behavior in Brazil remaining more risk-averse, which is translating to postponement of purchasing decisions closer to need. This is resulting in the current industry bookings curve of purchase orders for the upcoming crop year being even further delayed as compared to the same time last year. Consequently, a portion of products that we projected to ship in 4Q24 are being pushed to next year, adversely impacting our results in the quarter ahead." "In addition, the combined effects of El Nino on farmer profitability in key ag producing states, coupled with the weakness in grain commodity prices is prompting farmers to postpone the sale of their stored grains, and has led to widespread delays in farmer repayments to retailers across the industry. While our stringent credit standards and industry-leading average client creditworthiness have shielded us from meaningful surprises, we opted to comply to requests for short-term payment term extensions for a number of our long-standing profitable clients. We did so to further these long-term relationships, and drive greater wallet share over time. However, our prudent credit approval policy compels us to wait for these clients to repay us before shipping them additional products on credit, and as a result of these decisions, we expect an adverse impact to our 4Q24 results compared to our prior expectations." Mr. Cunha concluded. "Our view remains that the secular fundamentals for Brazil farmers remain intact and that these short-term deflationary headwinds and climate events will dissipate leading to a resumption of growth. We remain focused on controlling what we can control, improving our commercial efficiency, bolstering our technical sales team, and positioning ourselves to capture additional value as the market recovers. Our year-to-date results continue to demonstrate our ability to counteract these severe pricing and climate-driven market headwinds in Brazil via our ability to drive market share gains and generate volume growth. Notably, our Brazil Ag Retail segment Inputs revenue decreased by -4% in Brazilian reais terms during this period, contrasting with an estimated decrease of over 25% for the total retail inputs market. In addition, our proactive efforts to recruit seasoned agronomists who are bringing in new clients to our platform continues to be fruitful, with an additional $35 million in future net sales potential from new hires in the quarter, pushing our total for the year to over $150 million. Finally, our Crop Care segment continues to excel, particularly considering the challenging environment for specialty products this year, with year-to-date revenue and gross profit growth of 18% and 9%, respectively." FY3Q24 Financial Highlights Consolidated revenue for Lavoro in 3Q24 increased by 6% year-over-year (y/y) to $514.2 million, compared to the prior year period, with positive y/y contributions from all three operating segments. Grains revenue associated with our barter operations, grew +61% to $87.5 million, while Inputs revenue declined -1% y/y to $426.7 million, as robust volume growth, contribution from recent M&A and currency tailwinds, continued to be offset by the deflationary headwinds from input price declines. Brazil Ag Retail segment revenue grew by 5% to $450.0 million in 3Q24, reflecting market share gains, robust volume growth across all categories, the impact from the acquisitions of Referencia and Coram, which collectively contributed 5% to 3Q24 segment revenue, and a 5% currency tailwind from translating our results to USD. Latam Ag Retail segment saw a 5% increase in revenue to $50.5 million, driven by strength in fertilizer and specialty product sales volumes, as well as the appreciation of the Colombian peso. Crop Care revenue increased by 30% to $22.1 million, led by the strong performance of biologicals where revenues grew +53%, in addition to the benefit of newly acquired Cromo Química, which contributed 5% to segment revenue in the quarter. Consolidated gross profit decreased by -16% to $60.2 million in 3Q24, as gross margins contracted by -310 bps y/y to 11.7%, driven by an increased mix of Grains revenue, the impact of inputs price deflationary environment across all segments, and increased freight expenses as % of revenue. Gross profit as % of Inputs revenue declined -250 bps y/y to 14.1% in 3Q24, a sequential improvement from -350 bps in 2Q24 and -820bps in 1Q24. Similarly, the contraction in Gross Margins (Inputs) in 3Q24 was driven by the inputs price declines, and headwinds from increased in freight rates (-60 bps y/y impact). Net loss for 3Q24 was $64.8 million, compared to a net loss of $74.3 million in the prior year period. The $9.5 million year-over-year positive improvement reflects the absence of a one-time Nasdaq listing expense incurred in 3Q23 (+$61.5 million impact relative to prior year quarter), partly offset by (i) a decrease in gross profit (-$11.7 million), (ii) an increase in SG&A (-$12.0 million), led by higher D&A expenses (-$2.9 million) and an increased allowance for expected credit losses (-$4.3 million), (iii) higher total financial costs (-$20.4 million) led by a loss on fair value of commodity forward contracts & derivatives (-$4.9 million) and foreign exchange differences ($6.4 million), and (iv) an increase in income tax expenses (-$11.3 million). Adjusted EBITDA2 was $3.7 million in 3Q24 compared to $24.8 million in the prior year period, with Adjusted EBITDA margin contracting by -440 bps to 0.7%, reflecting the gross margin compression detailed above, along with a 150 bps y/y increase in the SG&A (excluding D&A) as a percentage of revenue. Adjusted Net Loss2 was $62.7 million in 3Q24, compared to $7.9 million in the prior year period, driven by the items detailed above, and lower non-recurring expense items2. Consolidated Results (USD)   3Q23 3Q24 Chg. %   9M23 9M24 Chg. % (in millions of US dollars)                                   Revenue by Segment   486.4   514.2   6 %   1,534.9   1,616.0   5 % Brazil Ag Retail   426.5   450.0   5 %   1,309.6   1,390.5   6 % Latam Ag Retail   48.2   50.5   5 %   172.0   172.6   0 % Crop Care   17.1   22.1   30 %   110.7   130.6   18 % Intercompany eliminations3   (5.4 ) (8.4 )     (57.4 ) (77.8 )                     Revenue by Category   486.4   514.2   6 %   1,534.9   1,616.0   5 % Inputs revenue   432.2   426.7   (1 %)   1,453.1   1,474.1   1 % Grains revenue   54.2   87.5   61 %   81.9   141.8   73 %                   Gross Profit   71.9   60.2   (16 %)   286.3   222.7   (22 %) Brazil Ag Retail   51.6   43.5   (16 %)   220.7   152.4   (31 %) Latam Ag Retail   7.6   7.3   (4 %)   28.6   26.4   (8 %) Crop Care   8.0   9.1   14 %   46.1   50.3   9 % Intercompany elim.   4.7   0.3       (9.0 ) (6.4 )                     Gross Margin   14.8 % 11.7 % -310 bps   18.7 % 13.8 % -490 bps Brazil Ag Retail   12.1 % 9.7 % -240 bps   16.9 % 11.0 % -590 bps Latam Ag Retail   15.8 % 14.4 % -130 bps   16.7 % 15.3 % -140 bps Crop Care   46.8 % 41.2 % -550 bps   41.6 % 38.5 % -310 bps                   Gross Margin (% of Inputs revenue)   16.6 % 14.1 % -250 bps   19.7 % 15.1 % -460 bps Brazil Ag Retail   13.9 % 12.0 % -190 bps   17.9 % 12.1 % -570 bps Latam Ag Retail   15.8 % 14.6 % -120 bps   17.3 % 16.0 % -130 bps Crop Care   46.8 % 41.2 % -550 bps   41.6 % 38.5 % -310 bps                   SG&A (excl. D&A)   (50.1 ) (60.8 ) 21 %   (150.2 ) (185.8 ) 24 % Other operating income (expense)   (64.0 ) 0.4       (57.9 ) 4.8     EBITDA   (42.2 ) (0.2 )     78.1   41.8     (+) Adjustment items   66.9   3.9       70.7   13.3     Adjusted EBITDA   24.8   3.7   (85 %)   148.8   55.1   (63 %) Brazil Ag Retail   17.2   1.4   (92 %)   114.6   32.2   (72 %) Latam Ag Retail   2.7   0.9   (66 %)   14.3   8.7   (39 %) Crop Care   0.5   1.9   268 %   27.3   23.6   (13 %) Corporate & Intercompany elim.   4.3   (0.5 )     (9.4 ) (9.7 )                     Adjusted EBITDA Margin %   5.1 % 0.7 % -440 bps   9.7 % 3.4 % -630 bps Adjusted EBITDA Margin (% of Inputs)   5.7 % 0.9 % -490 bps   10.2 % 3.7 % -650 bps                   Share of profit of an associate   -   0.5       -   0.2     D&A (incl. PPA amortization)4   (8.4 ) (9.8 ) 16 %   (24.1 ) (27.0 ) 12 % Finance income (costs)   (29.4 ) (49.7 ) 69 %   (91.4 ) (113.0 ) 24 % Income taxes, current and deferred   5.6   (5.6 )     13.4   20.6     Net profit (loss)   (74.3 ) (64.8 ) n.m.     (23.9 ) (77.5 ) n.m.   (+) Adjustment items   68.9   3.3       75.2   13.2     (+) Income tax impact of adjustments   (2.5 ) (1.1 )     (4.7 ) (4.5 )   Adjusted net profit (loss)   (7.9 ) (62.7 ) 691 %   46.7   (68.8 ) n.m.                     Consolidated Results (BRL)   3Q23 3Q24 Chg. %   9M23 9M24 Chg. % (in millions of Brazilian reais)                                   Revenue by Segment   486.4   514.2   6 %   1,534.9   1,616.0   5 % Brazil Ag Retail   426.5   450.0   5 %   1,309.6   1,390.5   6 % Latam Ag Retail   48.2   50.5   5 %   172.0   172.6   0 % Crop Care   17.1   22.1   30 %   110.7   130.6   18 % Intercompany eliminations   (5.4 ) (8.4 )     (57.4 ) (77.8 )                     Revenue by Category   486.4   514.2   6 %   1,534.9   1,616.0   5 % Inputs revenue   432.2   426.7   (1 %)   1,453.1   1,474.1   1 % Grains revenue   54.2   87.5   61 %   81.9   141.8   73 %                   Gross Profit   71.9   60.2   (16 %)   286.3   222.7   (22 %) Brazil Ag Retail   51.6   43.5   (16 %)   220.7   152.4   (31 %) Latam Ag Retail   7.6   7.3   (4 %)   28.6   26.4   (8 %) Crop Care   8.0   9.1   14 %   46.1   50.3   9 % Intercompany elim.   4.7   0.3       (9.0 ) (6.4 )                     Gross Margin   14.8 % 11.7 % -310 bps   18.7 % 13.8 % -490 bps Brazil Ag Retail   12.1 % 9.7 % -240 bps   16.9 % 11.0 % -590 bps Latam Ag Retail   15.8 % 14.4 % -130 bps   16.7 % 15.3 % -140 bps Crop Care   46.8 % 41.2 % -550 bps   41.6 % 38.5 % -310 bps                   Gross Margin (% of Inputs revenue)   16.6 % 14.1 % -250 bps   19.7 % 15.1 % -460 bps Brazil Ag Retail   13.9 % 12.0 % -190 bps   17.9 % 12.1 % -570 bps Latam Ag Retail   15.8 % 14.6 % -120 bps   17.3 % 16.0 % -130 bps Crop Care   46.8 % 41.2 % -550 bps   41.6 % 38.5 % -310 bps                   SG&A (excl. D&A)   (50.1 ) (60.8 ) 21 %   (150.2 ) (185.8 ) 24 % Other operating income (expense)   (64.0 ) 0.4       (57.9 ) 4.8     EBITDA   (42.2 ) (0.2 )     78.1   41.8     (+) Adjustment items   66.9   3.9       70.7   13.3     Adjusted EBITDA   24.8   3.7   (85 %)   148.8   55.1   (63 %) Brazil Ag Retail   17.2   1.4   (92 %)   114.6   32.2   (72 %) Latam Ag Retail   2.7   0.9   (66 %)   14.3   8.7   (39 %) Crop Care   0.5   1.9   268 %   27.3   23.6   (13 %) Corporate & Intercompany elim.   4.3   (0.5 )     (9.4 ) (9.7 )                     Adjusted EBITDA Margin %   5.1 % 0.7 % -440 bps   9.7 % 3.4 % -630 bps Adjusted EBITDA Margin (% of Inputs)   5.7 % 0.9 % -490 bps   10.2 % 3.7 % -650 bps                   Share of profit of an associate   -   0.5       -   0.2     D&A (incl. PPA amortization)5   (8.4 ) (9.8 ) 16 %   (24.1 ) (27.0 ) 12 % Finance income (costs)   (29.4 ) (49.7 ) 69 %   (91.4 ) (113.0 ) 24 % Income taxes, current and deferred   5.6   (5.6 )     13.4   20.6     Net profit (loss)   (74.3 ) (64.8 ) n.m.     (23.9 ) (77.5 ) n.m.   (+) Adjustment items   68.9   3.3       75.2   13.2     (+) Income tax impact of adjustments   (2.5 ) (1.1 )     (4.7 ) (4.5 )   Adjusted net profit (loss)   (7.9 ) (62.7 ) 691 %   46.7   (68.8 ) n.m.   Segment Results Brazil Ag Retail 3Q24 segment revenue increased by 11% (6% in BRL terms) to $450 million, driven by Grains revenue which grew +61% to $86.8 million, the contribution of Referencia and Coram, which accounted for 5% of segment revenues. Inputs revenue declined -3% to $363.2 million, as the impact of input price deflation and the adverse effects of the drought caused by El Nino more than offset significant volume increases in crop protection (+20%), fertilizer (+34%), specialty product (+47%), and seed (+40%) product categories. This increase in volumes is primarily driven by market share gains, as the retail inputs market is estimated to have seen volume increases ranging low- to mid-single digits across product categories this year. Seed product revenue rose by 29%, in part benefiting from a shift in the timing of farmers' purchasing decisions, which had postponed purchasing of corn seeds from 2Q24 to 3Q24. The impacts of El Nino continues to be felt in parts of our operations most exposed to the effects of the drought. Our operations in Brazil Cluster South, comprising the states of Parana, Rio Grande do Sul and Santa Catarina, which were mostly spared from the drought conditions, saw Inputs revenue grow 9% y/y in 3Q24, compared to an Inputs revenue decline of -17% in our Brazil Cluster North operations which comprise the State of Mato Grosso, most affected by the drought. Gross margin contracted by -240 bps y/y to 9.7% in 3Q24, while Gross Margin (Inputs), which excludes the mix-effect of Grains revenue, contracted by -190 bps to 12.0%, a sequential improvement in y/y trends compared to 2Q24 (-510 bps y/y) and 1Q24 (-1,060 bps). While prices at the farmgate for crop protection and fertilizer prices declined year-over-year and quarter-over-quarter in 3Q24, our average cost of goods sold continued to gradually improve with the cycling of higher-cost inventory in favor, helping drive this sequential improvement. Adjusted EBITDA was $1.4 million in 3Q24, compared to $17.2 million in the prior year quarter, with Adjusted EBITDA margins contracting -370 bps to 0.3%. This margin contraction is attributable to gross margins headwinds cited above, as well as increase in SG&A expense ratio due to a higher allowance for expected credit losses (increased by $5.6 million over prior year quarter, a -120 bps y/y margin headwind) related to the impact El Nino on delaying payments from farmer clients. Brazil Ag Retail (USD)   3Q23 3Q24 Chg. %   3Q23 3Q24 Chg. % (in millions of US dollars)                                   Inputs revenue   372.5   363.2   (3 %)   1,234.0   1,256.4   2 % Grains revenue   54.0   86.8   61 %   75.6   134.1   77 % Revenue   426.5   450.0   5 %   1,309.6   1,390.5   6 %                   Gross Profit   51.6   43.5   (16 %)   220.7   152.4   (31 %) Gross Margin   12.1 % 9.7 % -240 bps   16.9 % 11.0 % -590 bps Gross Margin (% of Inputs)   13.9 % 12.0 % -190 bps   17.9 % 12.1 % -570 bps                   Adjusted EBITDA   17.2   1.4   (92 %)   116.6   32.2   (72 %) Adjusted EBITDA margin   4.0 % 0.3 % -370 bps   8.9 % 2.3 % -660 bps Adjusted EBITDA margin (% of Inputs)   4.6 % 0.4 % -420 bps   9.5 % 2.6 % -690 bps Brazil Ag Retail (BRL)   3Q23 3Q24 Chg. %   9M23 9M24 Chg. % (in millions of Brazilian reais)                                   Inputs revenue   1,934.6   1,798.0   (7 %)   6,459.4   6,205.5   (4 %) Grains revenue   280.5   429.8   53 %   393.5   660.1   68 % Revenue   2,215.0   2,227.8   1 %   6,852.9   6,865.6   0 %                   Gross Profit   268.1   215.4   (20 %)   1,155.7   754.9   (35 %) Gross Margin   12.1 % 9.7 % -240 bps   16.9 % 11.0 % -590 bps Gross Margin (% of Inputs)   13.9 % 12.0 % -190 bps   17.9 % 12.2 % -570 bps                   Adjusted EBITDA   89.4   6.7   (92 %)   611.3   162.0   (74 %) Adjusted EBITDA margin   4.0 % 0.3 % -370 bps   8.9 % 2.4 % -660 bps Adjusted EBITDA margin (% of Inputs)   4.6 % 0.4 % -420 bps   9.5 % 2.6 % -690 bps Latam Ag Retail Segment revenue was $50.5 million in 3Q24, marking a 5% increase from the prior year quarter (roughly flat y/y in BRL terms), led by the currency tailwind stemming from the appreciation of the Colombian Peso relative to the US dollar (+22% y/y in 3Q24) and Brazilian real (+16%), robust growth in fertilizer sales volumes (+51%), partly offset by (i) input price declines in crop protection and fertilizers, (ii) lower corn seed revenue due to drought conditions in the north of the country stemming from El Nino reducing planted corn acres by an estimated -10%, and (iii) the ongoing impact of the discontinuation of a major herbicide from a major supplier's product lineup. Segment gross profit was $7.3 million in 3Q24, a decrease of -4% over the prior year period, while gross margins declining by -130 bps to 14.4%, due primarily to the above-mentioned impact of pricing deflation to crop protection and fertilizer distribution margins, as well as the negative mix impact from lower contribution from higher margin seed product sales. Adjusted EBITDA was $0.9 million in 3Q24 compared to $2.7 million in the prior year quarter, and Adjusted EBITDA margins compressed by -380 bps to 1.8%. In addition to the impact of gross margin decline, Adjusted EBITDA margins were negatively impacted by a higher allowance for expected credit losses (increased by $0.5 million y/y, a -110 bps y/y margin impact) and a -80bps y/y margin impact from an increases in operating expenses driven partly be the appreciation of the peso. Latam Ag Retail (USD)   3Q23 3Q24 Chg. %   3Q23 3Q24 Chg. % (in millions of US dollars)                                   Inputs & services revenue   48.0   49.9   4 %   165.7   164.9   (0