Organto Foods Inc., an integrated provider of fresh organic vegetables and fruits announced expected record revenues for the fourth quarter and fiscal year ended December 31, 2019. In addition, Organto announced it will be hosting an investor call on Monday, February 24, 2020 at 11:00 am EST, to update on current market conditions, ongoing operations and plans for the future.
Fourth Quarter 2019 Revenue Guidance
The quarter ended December 31, 2019 saw record fourth quarter revenues of approximately CDN $1.5 to CDN $1.6 million, an increase of approximately 45% versus the same quarter in the prior year. Fourth quarter revenues were driven by sales of organic asparagus, avocado, mangos and other fruits and vegetables, which were sold to a diverse customer base of traditional retailers, specialty organic retailers, food service and distributors located in the Netherlands, U.K., Germany, France, Spain, Russia, Sweden, Norway and Denmark. Gross margins are expected to be significantly improved versus the prior year, as a result of Organto's reengineered business model.
"We are very pleased with our projected record fourth quarter revenues which reflect the efforts we have made to reposition our business in the fast-growing fresh organic vegetables and fruits category. We believe the opportunity in organic vegetables and fruits is very strong as the global trend towards healthy eating and wellness continues to drive growing demand on a global basis," commented Rients van der Wal, Chief Operating Officer of Organto and CEO of Organto Europe B.V.
Fiscal 2019 Revenue Guidance
Revenues for the year ended December 31, 2019 will also be an annual revenue record for Organto with revenues expected in the range of approximately CDN $3.65 to CDN $3.75 million, an increase of approximately 140% versus the prior year. The majority of revenues in fiscal 2019 were realized in the last two quarters of the year as the Company's repositioned business model gained traction in the third quarter, leading to increases in both revenue and margins. Gross margins are expected to be approximately 6% for Fiscal 2019 versus -38% for Fiscal 2018 as our business continued to grow in the back half of the year.
Over the past eighteen months, Organto has repositioned its organic foods platform shifting from an asset heavy, single revenue stream business model, to an asset light, multi-stream business model. Organto has also streamlined its cost base and expanded its product offering from high-value organic vegetables including organic green beans, sugar snaps and snow peas to other value-added organic and conventional vegetables and fruits including asparagus, avocado, blueberries, mango and other products. Organto continues to pursue new strategic supply sources around the globe as it works to complete year-round supply of its core product offerings and also bring new complementary products to its existing portfolio.