Ag Growth Announces 2Q Results

Ag Growth International Inc., Winnipeg, Manitoba, Canada reported its financial results for the three month period ended June 30, 2012. Trade sales totaled $98.9 million versus $86.1 million the year prior.

The company said trade sales and adjusted EBITDA increased over the same periods in 2011 due to strength in portable and commercial grain handling equipment and the October 2011 acquisition of Airlanco, a manufacturer of aeration products and filtration systems.

Preseason demand for portable grain handling equipment was robust due to a record number of corn acres planted in the U.S. and a significant increase in seeded acres in western Canada. Sales of commercial equipment also remained strong due to continued investment in facility upgrades and capacity expansion throughout the North American commercial infrastructure.

“We remain very optimistic with respect to the Company’s international sales development as our investment in international sales and support infrastructure continues to bear fruit. Our strategy of bundling commercial grain handling equipment with commercial size storage bins manufactured at our greenfield Twister facility has been very effective. Our international sales and order backlog are up significantly compared to 2011 as we increase penetration in key markets including Russia, Ukraine and Kazakhstan and gain further momentum in other important areas such as South America and Asia,” said Gary Anderson, President and Chief Executive Officer.

The company said the short-term impact of the U.S. drought will be significant, with the ultimate effect on Ag Growth somewhat difficult to forecast due to differing crop production estimates, the variability of crop conditions within regions and the unknown of the timing of harvest and weather conditions during the harvest season.

Ag Growth said results in the second half will also be impacted by more typical factors including the western Canadian harvest and the timing of commercial and international sales. Nonetheless, based on current weather conditions and industry forecasts management estimates adjusted EBITDA in the second half of 2012 will approximate 2011 levels. The Company’s payout ratio will likely increase compared to 2011 however the Company’s dividend policy will not be altered in response to this short-term weather event.

Ag Growth International, Association member since 2005; aggrowth.com.