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)