Ag Growth Announces 3Q Results

Ag Growth International Inc. reported its financial results for the three and nine month periods ended September 30, 2012, and declared dividends for December 2012, January 2013 and February 2013.

Trade sales in the three and nine month periods ending September 30, 2012 increased $1.6 million (2%) and $20.7 million (9%) over the same periods in the prior year. The largest single driver of sales growth in the three and nine month periods was a substantial increase in international business, particularly in the countries of the former Soviet Union. Also contributing to growth in sales was robust demand in western Canada and the acquisition of Airlanco. The company achieved sales growth despite a decline in U.S. sales that resulted from a severe drought that significantly impacted third quarter demand.

“After a strong first half in which the company demonstrated significant operational improvements and a return to higher levels of profitability it is certainly disappointing that the historic drought that has gripped our key U.S. market will negatively impact our second half results”, said Gary Anderson, President and Chief Executive Officer.

Management remains optimistic with respect to the company’s prospects in 2013. Although the 2012 drought resulted in higher than typical inventory carryover at the company’s U.S. dealers, the impact is not expected to extend beyond the second quarter of 2013. In the upcoming year U.S. farmers may again plant significant corn acreage to capitalize on high commodity prices which would then be expected to result in robust demand for portable grain handling equipment in the second half of 2013.

Demand in the Canadian market is expected to be strong in 2013 and Ag Growth remains very optimistic with respect to its international business and the potential of bundling commercial grain handling equipment with storage bins and other Ag Growth products. In summary, although management anticipates some softness in the U.S. in first half of 2013, based on current conditions the company anticipates a return to favorable conditions with the new crop year and expects sales and adjusted EBITDA in 2013 to increase significantly compared to the drought impacted results of 2012.

Ag Growth International; Association member since 2005; AgGrowth.com.