WINNIPEG, March 17, 2020 /CNW/ - Ag Growth International Inc. (TSX: AFN) ("AGI", or the "Company") today announced the declaration of a cash dividend of $0.20 per common share for the month of March 2020. The dividend will have a record date of March 31, 2020 and will be paid on April 15, 2020. The dividend is an eligible dividend for Canadian income tax purposes. Today's announcement is being made in advance of AGI's quarterly earnings release, as is normal practice, as AGI's Q4 2020 scheduled release date of March 25, 2020 occurs too late to meet regulatory advance notice requirements. Going forward, out of an abundance of caution due to the uncertainties in the current environment, dividend announcements will be made on a monthly basis. AGI's current annualized cash dividend rate is $2.40 per share.

COVID-19

Due to the unprecedented environment AGI is providing the following information to address investor inquiries.

Management reiterates its previously released guidance with respect to Q4 2019 of adjusted EBITDA of approximately $23 million. Business activity in Q1 2020 prior to the outbreak of COVID-19 was in line with management expectations, and AGI's sales order backlog remains higher than at the same time in 2019. Our liquidity metrics are strong and covenant levels are well below required thresholds, in part due to an $85 million bond issuance in January 2020, the proceeds of which were applied against senior debt.

At this point in time, it is difficult to predict the duration and extent of the pandemic and its impact on our business. The emergence of COVID-19 is expected to impact results in the short-term.  However, AGI remains confident in the macro business outlook notwithstanding the expected impact from the COVID crisis in the coming months due to expectations of robust demand in our North American Farm markets as we move into the planting season with strong backlogs, positive indications of soil moisture and stabilizing global demand. In addition, AGI's international backlog remains very strong and above 2019 levels, with strength in India, Brazil, EMEA and Southeast Asia.

AGI's manufacturing footprint is heavily weighted toward North America and these facilities are currently operating at normal capacity. In Europe, border closures have resulted in supply chain and delivery delays. Due to travel restrictions and self-quarantine initiatives, AGI has ceased production at its Sabe facility in France and anticipates possible production interruptions at its facilities in Italy, the UK and Brazil. In India and Brazil, production is currently operating at normal capacity. Like the rest of the world, we are monitoring these operations on a very fluid basis. During disruptions in production all of our facilities are continuing with design and engineering work critical to continuing to execute against our backlog and pipeline to best position our business for resumption of operations. Due largely to the impact on operations in EMEA, management currently anticipates a negative impact on sales and adjusted EBITDA in the first and second quarters, and we plan to provide a more fulsome update on business conditions when we release fourth quarter results on March 25, 2020.

"In these unprecedented times we are focused on the safety of our employees, their families, and doing our part to minimize the overall impact of this pandemic", said Tim Close, President and CEO of AGI. "While we expect near term impact on our some of our facilities, we remain confident in our business returning to our pre-crisis expectations as the world normalizes.  Our customers form the backbone of the world's food infrastructure, a part of the economy that is critical in good times and that much more so in times like these.  Our products and services are imbedded in each stage of food production from planting through harvest, and we supply systems around the world to transport, protect, and process the world's grain supply.  Demand for the world's grain supply for our animals and for us doesn't take a break and we will stand by our team members and customers throughout this crisis to help ensure the world's food supply continues uninterrupted."  

Company Profile

AGI is a leading provider of equipment solutions for agriculture bulk commodities including seed, fertilizer, grain, feed and food processing systems. AGI has manufacturing facilities in Canada, the United States, the United Kingdom, Brazil, France, Italy and India, and distributes its product globally.

Further information can be found in the disclosure documents filed by AGI with the securities regulatory authorities, available at www.sedar.com and on AGI's website www.aggrowth.com.

FORWARD-LOOKING INFORMATION

This press release contains forward-looking statements and information [collectively, "forward-looking information"] within the meaning of applicable securities laws that reflect our expectations regarding the future growth, results of operations, performance, business prospects, and opportunities of the Company. All information and statements contained herein that are not clearly historical in nature constitute forward-looking information, and the words "anticipate", "believe", "continue", "could", "expects", "intend", "plans", "postulates", "predict", "will" or similar expressions suggesting future conditions or events or the negative of these terms are generally intended to identify forward-looking information. Forward-looking information involves known or unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. In addition, this press release may contain forward-looking information attributed to third party industry sources. Undue reliance should not be placed on forward-looking information, as there can be no assurance that the plans, intentions or expectations upon which it is based will occur. Such forward-looking information reflects our current beliefs and is based on information currently available to us, including certain key expectations and assumptions concerning: anticipated grain production in our market areas; financial performance; the financial and operating attributes of recently acquired businesses and the anticipated future performance thereof and contributions therefrom; business prospects; strategies; product and input pricing; regulatory developments; tax laws; the sufficiency of budgeted capital expenditures in carrying out planned activities; political events;  currency exchange and interest rates; the cost of materials; labour and services; the value of businesses and assets and liabilities assumed pursuant to recent acquisitions; the impact of competition; the general stability of the economic and regulatory environment in which the Company operates; the timely receipt of any required regulatory and third party approvals; the ability of the Company to obtain and retain qualified staff and services in a timely and cost efficient manner; the timing and payment of dividends; the ability of the Company to obtain financing on acceptable terms; the regulatory framework in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its products and services. Forward-looking information involves significant risks and uncertainties. A number of factors could cause actual results to differ materially from results discussed in the forward-looking information, including changes in international, national and local macroeconomic and business conditions, as well as sociopolitical conditions in certain local or regional markets, weather patterns, crop planting, crop yields, crop conditions, the timing of harvest and conditions during harvest, the ability of management to execute the Company's business plan, seasonality, industry cyclicality, volatility of production costs, agricultural commodity prices, the cost and availability of capital, currency exchange and interest rates, the availability of credit for customers, competition, AGI's failure to achieve the expected benefits of recent acquisitions including to realize anticipated synergies and margin improvements; and changes in trade relations between the countries in which the Company does business including between Canada and the United States. These risks and uncertainties are described under "Risks and Uncertainties" in our MD&A, our annual MD&A and in our most recently filed Annual Information Form, all of which are available under the Company's profile on SEDAR [www.sedar.com]. In addition, the extent and duration of the effects and impacts of the recent coronavirus disease (COVID-19) outbreak on AGI's business, extent and the global economy and markets are largely unknown at this time and could cause AGI's actual results to differ materially from the forward-looking statements contained in this news release. These factors should be considered carefully, and readers should not place undue reliance on the Company's forward-looking information. We cannot assure readers that actual results will be consistent with this forward-looking information. Readers are further cautioned that the preparation of financial statements in accordance with International Financial Reporting Standards requires management to make certain judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. These estimates may change, having either a negative or positive effect on profit, as further information becomes available and as the economic environment changes. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information included in this press release is made as of the date of this press release and AGI undertakes no obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

SOURCE Ag Growth International Inc. (AGI)

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