Fourth Quarter 2022 Highlights

• Record fourth quarter results for sales and adjusted EBITDA
• Sales increased 14% to $374 million on a year-over-year (‘YOY’) basis
• Adjusted EBITDA¹ increased 14% to $51 million on a YOY basis
• Adjusted EBITDA margin² of 13.6% vs 13.7% on a YOY basis
• Total leverage ratio² of 3.7x at December 31, 2022 vs 4.1x at September 30, 2022 and 4.7x at December 31, 2021

Full year 2022 Highlights

• Third consecutive year of record sales and adjusted EBITDA results with growth largely attributable to organic growth efforts and initiatives
• Sales increased 22% to $1.46 billion on a YOY basis
• Adjusted EBITDA¹ increased 33% to $235 million on a YOY basis
• Adjusted EBITDA margin² of 16.1% vs 14.7% on a YOY basis

Outlook

• Management expects full year 2023 adjusted EBITDA to be at least $260 million¹, representing continued growth and momentum
• Backlog³ is up 10% YOY as of December 31, 2022, despite the deferred or cancelled orders as a result of the conflict in Ukraine, and is sitting at record-levels for year-end and near-record levels all-time

Farm Segment

The Farm segment delivered impressive results in the fourth quarter, with sales and adjusted EBITDA growing by 24% and 4% YOY, respectively. In addition, full year sales and adjusted EBITDA growth of 20% and 16%, respectively, continue the trend of strong momentum over an already historic performance in 2021. This growth was fueled by the continued demand for portable grain handling equipment in Canada, the U.S., and Asia Pacific, as well as permanent grain handling and storage solutions in South America. As consumption continues to increase globally, we are seeing sustained demand for our Farm segment products as growers around the world increase production. The fourth quarter adjusted EBITDA margin decreased as compared to the fourth quarter of 2021 as that quarter benefited from the price increases we implemented ahead of rising input costs which peaked in 2022.

OUTLOOK

Sustained demand for agriculture equipment and infrastructure enabled AGI to cap off another record year in sales and adjusted EBITDA with excellent momentum heading into 2023.

Source:

AGI continued its strong performance in the third quarter with another record for sales and Adjusted EBITDA, which increased 28% and 65%. “Our all-time record quarterly results for sales continue to highlight the strength and growth of AGI,� commented Paul Householder, President and CEO of AGI.

In the farm segment, which includes grain, seed, and fertilizer handling equipment, aeration products, grain and fuel storage solutions, and more, sales increased by 20%. In particular, sales of portable grain handling equipment remain robust as rising crop sizes and low dealer inventories combined to create solid demand.  Looking ahead, AGI anticipates Farm Segment’s Q4 performance to be in line with Q4 2021.

The commercial segment, which includes, among other things, larger diameter grain storage bins, high-capacity grain handling equipment, seed and fertilizer storage and handling systems, sales increased by 40% for the quarter. Overall, the Commercial segment is seeing continued demand with backlogs up 6% YOY in Q3.

Summary

The record third quarter results in sales and reflect their significant market share in North American portable grain handling equipment, the strength in Commercial capabilities and product offerings as well as the continued growth in various international regions. The strategy of product, geographic, and customer diversification provided AGI with stability and resilience during the trade wars of 2019, the COVID crisis in 2020, the extreme supply chain environment in 2021, and the inflationary pressure and Russia-Ukraine conflict in 2022. Their focus on achieving operational excellence and creating value for customers has led to various efficiency improvements, particularly in the North America Commercial segment, resulting in sales growth and margin expansion. AGI expects the momentum and success from these efforts to carry across the organization more broadly and to further support our results going forward.

Their pipelines remain robust and they are continuing to see strong interest from customers across all segments and regions as they continue to invest in critical infrastructure equipment and solutions. They now expect full year 2022 Adjusted EBITDA of at least $228 million which represents another very strong year, driven primarily by organic growth. Their ability to capture the ongoing demand for agriculture equipment, infrastructure and solutions have positioned them to cap off another record year in sales and Adjusted EBITDA with good momentum heading into 2023.

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Member since 1996 | 

“On behalf of the Board and everyone at AGI, I want to thank Tim for his service and passionate dedication to AGI and all of its stakeholders and for his tremendous leadership and highly valued contributions to AGI’s strong position today,” said Bill Lambert, Chair of the Board. “Tim joined the Company in August 2012 as Vice President, Strategic Planning and Development, was appointed President in March of 2015 and became President and Chief Executive Officer in January 2016. “

Mr. Lambert added, “We are fortunate to have Paul Householder stepping in to serve as our President and CEO. Paul joined AGI in 2019 after a long and successful career in the industrial chemicals sector where he ran substantial global businesses with multiple facilities across several geographies. “

Source:

In the farm segment, which includes grain, seed, and fertilizer handling equipment, aeration products, grain and fuel storage solutions, and more, sales grew 28 percent in Q4. Farm backlog is up 48 percent over the prior year.

AGI also said that drought in the Canadian Prairies led to a 27 percent reduction in backlog in the farm segment there.

The commercial segment, which includes, among other things, larger diameter grain storage bins, high-capacity grain handling equipment, seed and fertilizer storage and handling systems, sales increased 60 percent for the quarter. Backlog in commercial increased by 23 percent.

AGI made note of how supply chain challenges have affected the commercial segment.

“Many of AGI’s commercial platform contracts include provisions to pass along some or all of the key raw material cost increases,� the report said. “Open sales quotes are continuously reviewed and updated for changes in market conditions. Ongoing disruption of raw material, freight, and labor could lead to ongoing pressure on adjusted gross margin performance of the platform.�

Sales in the digital segment increased by 27 percent for the quarter.

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Eastern operates three facilities in Canada—two in Prince Edward Island and one in Ontario—and has relationships with some of the world’s largest multinational food processors.

“AGI Food has grown rapidly over the past several years as we brought together an outstanding team that delivers a unique combination of design, supply, and project management to food processors globally,� noted AGI President and CEO Tim Close. “Eastern builds on a solid foundation in our food platform, bringing a very talented team along with market leading products, services, manufacturing capacity and, most importantly, customer relationships built on years of high-quality execution.�

Source: Yahoo Finance |Member since 1996 |

Farm segment trade sales grew 11 percent. Demand in the segment continues to be robust as customers focus on securing critical products based on the increase in crop volumes and the potential for supply chain disruption. Farm backlog is up 202 percent over prior year as of Sept. 30.

“Our team continued to execute very well amid challenging supply chain conditions,â€� noted Tim Close, president and CEO of AGI. “While supply chain dynamics led to margin compression, comprehensive supplier and market initiatives mitigated the full potential impact in the quarter. We are seeing cost increases ease and input availability improve, meaning margins will steadily improve into the fourth quarter and 2022. Our backlog has continued to grow into the fourth quarter and sits at record levels setting up for a very strong fourth quarter and 2022.”

Source: AGI

Tatge co-founded and was CEO of Farmobile, a business recently acquired by AGI. Tatge will lead integration of the Farmobile and SureTrack organizations and drive sales growth.

“As an experienced operator in the agriculture sector, with a deep knowledge of the AgTech landscape, Jason has the pedigree to make a major impact on the growth trajectory of the business,� said AGI President and CEO Tim Close.

Member since 1996 |

President and CEO Tim Close said the quarter was a record “in terms of both sales and adjusted EBITDA with broad-based and robust performance across all platforms except for (North American) commercial, which has been hardest hit with COVID challenges.�

AGI took a $40 million accrual in the third quarter due to the collapse of a commercial grain storage bin manufactured by the company at a customer’s commercial project. The collapse was reported in September.

While “the cause of, and the responsibility for, the incident has not been determined, the company is taking this accrual, in accordance with accounting and other disclosure obligations, on the basis of potential required remediation to the equipment that was supplied by AGI to this commercial facility and one other facility,� information from the company said.

AGI expects the $40 million to be partially offset by insurance coverage and result in a lower net impact.

Member since 1996 | | Source: AGI

The company and Board of Directors have initiated a search for the next CFO; Sommerfeld will remain in the role to ensure a smooth transition.

President and Chief Executive Officer Tim Close said this: “As a founding member of AGI, Steve has been instrumental in the successful growth of the company. I could not have asked for a more capable and knowledgeable partner, and I know I am speaking for all of AGI in that view. It has been a true pleasure to work alongside Steve and benefit from his knowledge and passion for our business.�

Member since 1996 |

Winnipeg-based AGI announced last week it has bought all outstanding shares in Ontario-based Affinity Management Ltd., developer of the Compass brand of farm and agribusiness management software.

Affinity, which was founded by Neal Dilawri in 2007 and built through partnership with chemical firm BASF, has 18 employees. Dilawri will now take a senior leadership role on the AGI SureTrack platform and provide “vision and guidance� going forward, AGI said.

The Compass product suite is “highly complementary to AGI’s current offering and will be a key component of the full AGI SureTrack platform,� AGI said.

The SureTrack platform, formerly known as Intellifarms, includes the SureTrack Farm system for farmers and the SureTrack Pro system for processors, merchandisers and grain buyers.

The platform is meant to bring together data from “across the farm, providing our customers with the ability to manage their crop production, manage their overall business, and market their grain based on content and robust traceability,� AGI CEO Tim Close said.

In an update last week on its fourth-quarter financials, AGI said it has “demonstrated the success of its AGI SureTrack subscription model� in 2019, by “increasing retail equivalent sales by 70 percent, despite capacity constraints and a challenging U.S. ag market.�

Source: Glacier FarmMedia Network | Member since 1996 |