Ag Growth Reports Positive Earnings

Ag Growth, Winnipeg, Manitoba, Canada, announced that sales and earnings before interest, taxes, depreciation and amortization (EBITDA), for the three month period ended September 30, 2010 significantly exceeded the record levels established in 2009 as positive agricultural fundamentals resulted in a significant increase in sales of commercial grain handling equipment.

Sales of portable grain handling equipment were propelled by another successful harvest in the U.S. but were negatively impacted by the poor crop conditions in Canada that resulted from excessive moisture.

Ag Growth said they were able to maintain very strong gross margin and EBITDA percentages despite foreign exchange headwinds and a change in sales mix towards slightly lower margin commercial products.

Sales for the three and nine months ended September 30, 2010, excluding the results of recently acquired Finland based Mepu Oy, were $77.9 million (2009 – $68.3 million) and $198.5 million (2009 – $190.4 million).

Reported sales in 2010 were negatively impacted by the stronger Canadian dollar. Had the foreign exchange rates experienced in 2009 been in effect in 2010, reported sales for the three and nine month periods ended September 30, 2010, excluding the acquisition of Mepu, would have been approximately $81.6 million and $215.9 million, representing increases of 19% and 13% over the same periods in 2009.

“We are very pleased with our third quarter results,” said Gary Anderson, Interim Chief Executive Officer of Ag Growth. “Strength in commercial grain handling led to another outstanding quarter in the U.S., where sales in base currency were up 20% over the third quarter of 2009. We expect results in the fourth quarter of 2010 to approximate the levels experienced a year ago, primarily due to continued strength in commercial equipment and we look forward with excitement to 2011 as we capitalize on investments made in 2010.”

The company said that in the first quarter of 2011 they expect to bring online capacity to their new storage bin facility in Alberta which, they said, should enhance Ag Growth’s market share both domestically and overseas. Domestically, the company expects the large 2010 harvest in the U.S. and higher than historical commodity prices to be supportive of demand for their portable and commercial grain handling equipment. ◆