WINNIPEG, MB, Nov. 12, 2020 /CNW/ - Ag Growth International Inc. (TSX: AFN) ("AGI", the "Company", "we" or "our") today announced its financial results for the three and nine-months ended September 30, 2020.

AGI FS 2020 Q3 (CNW Group/Ag Growth International Inc. (AGI))




[thousands of dollars except per share amounts]

Three-months Ended September 30

Nine-months Ended September 30

2020

$

2019

$

2020

$

2019

$

Trade sales [1][2]

282,450

261,134

772,745

770,344

Adjusted EBITDA [1][3]

51,769

39,091

121,513

121,083

Profit (loss)

(12,261)

(2,819)

(46,633)

22,919

Diluted profit (loss) per share

(0.66)

(0.15)

(2.49)

1.21

Adjusted profit [1]

32,276

17,542

51,522

42,739

Diluted adjusted profit per share [1][4]

1.62

0.91

2.70

2.26


[1]

See "Non-IFRS Measures".

[2]

See "OPERATING RESULTS – Trade Sales" in our Management Discussion and Analysis for the period ended September 30, 2020 ('MD&A').

[3]

See "OPERATING RESULTS – EBITDA and Adjusted EBITDA" in our MD&A.

[4]

See "Diluted profit (loss) per share and diluted adjusted profit per share".

Continued robust performance in North American Farm markets, EMEA, Brazil, and India was offset by lower results in North American Commercial markets resulting in a record third quarter for sales and adjusted EBITDA despite ongoing COVID-19 challenges. As indicated throughout 2020, Commercial backlogs had been weighted to Q3. Sales in the quarter were also augmented by a relatively early harvest across North America.  COVID-19 has had a material impact on North American Commercial markets as customers have delayed projects or are facing challenges in project progress.  AGI's Q3 2020 trade sales of $282.5 million grew 8.1% from Q3 2019 and adjusted EBITDA of $51.8 million grew 32.4% over Q3 2019.  Farm sales in Q3 were up 24% over Q3 2019 and 9% year-to-date ('YTD').  North America Commercial sales were down 20% and 23% respectively in the three and nine months ended 2020 versus 2019. The International business continues to excel over the previous year despite the obstacles of COVID-19 with a sales increase of 10% in the quarter and 16% YTD.  Excluding the Milltec acquisition, international sales in the nine- months ended September 30, 2020 increased 5% over 2019.

"Q3 2020 was a record third quarter for AGI in terms of both sales and adjusted EBITDA with broad-based and robust performance across all platforms except for NA Commercial, which has been hardest hit with COVID challenges.", said Tim Close, President and CEO of AGI. "Q3 was also a record quarter for adjusted EBITDA, just beating Q2 2019 which was our prior high water mark. This strong performance in the quarter highlights the benefits of our diversification investments over the past five years, the resiliency of our business and our leadership in the global food infrastructure sector."

"We have taken a significant accrual in the quarter due to an incident that occurred at a customer's Commercial facility, as previously disclosed in September 2020.  This incident, in addition to prior warranty costs, are both distinct and rare in our history, and an investigation is currently being conducted to determine the cause of the incident. The Company is taking this accrual on the basis of potential required remediation to the equipment that was supplied by AGI."

"While AGI has accrued $40 million in this quarter, the Company believes that this amount will be partially offset by insurance coverage and result in a lower net impact. AGI will provide more information once the investigation is completed."

"We are committed to supporting our customers to ensure we mitigate the impact of the incident and strengthen our business as result of this experience."

Gross margin grew in the quarter to 33.7%, an increase of 240 basis points ('bps') over Q3 2019.  The strong results in Q3 also delivered a 70 bps gain in gross margin on a YTD basis as compared to September 30, 2019.  The Adjusted EBITDA result in Q3 represents a record quarter for AGI, slightly higher than the prior high water mark in Q2 2019.  Q3 Adjusted EBITDA margin of 18.3% increased 336 bps over Q3 2019 bringing the YTD total Adjusted EBITDA margin to a 1 bps improvement over September 2019 results despite the significant and ongoing impact of COVID-19 and the negative contribution of AGI's growing technology platform.  Adjusted profit increased 84% in the quarter while Adjusted Profit per share increased 78% over Q3 2019.  Adjusted profit and Adjusted Profit per share grew 19% YTD. Loss and loss per share were negatively impacted by the Company's estimated warranty accrual, non-cash losses on the Company's equity compensation swap, non-cash losses on foreign exchange translation, other transaction and transitional costs, non-cash asset impairment charge and the Company's share of associate's net loss, while adjusted profit and adjusted profit per share increased over the prior year.

WARRANTY ACCRUAL

Insurance Coverage Expected to Partially Offset Accrual Charge

The Company has taken a $40.0 million accrual in the third quarter 2020 due to the collapse of a commercial grain storage bin (a large hopper storage product (the "Hopper") as described below) manufactured by the Company at a customer's commercial project, which was previously reported in September 2020 (the "Incident").  While the cause of, and the responsibility for, the Incident has not been determined, the Company is taking this accrual, in accordance with accounting and other disclosure obligations, on the basis of potential required remediation to the equipment that was supplied by AGI to this commercial facility and one other facility.

While AGI has accrued $40.0 million in this quarter, the Company believes that this amount will be partially offset by insurance coverage and result in a lower net impact.  AGI is working with insurance providers and external advisors to determine the extent of this cost offset.  The accrual represents AGI's probability weighted estimate, in consultation with our external advisors, of the direct costs involved, including clean up and equipment remediation, at the two sites. AGI's contract contain exclusions for indirect or consequential damages.

The investigation of the Incident is ongoing and if the investigation determines that AGI contributed to or caused the Incident, the Company will take responsibility for its actions and the related remediation. The safety and security of our customers and products is our top priority and AGI has responded with a thorough analysis of the relevant processes, procedures, people and products.

Unrelated Rework Costs and Accruals

This Incident accrual is in addition to the $20.0 million in cost and accruals taken over 2019 and 2020 due to rework of equipment supplied by AGI to the same commercial facility where the reported bin Incident occurred (the "Rework"). The Rework was required to address issues with the equipment designed and supplied only to this facility, and as disclosed in the Company's Q3 and Q4 2019 MD&As. This Rework did not involve the Hopper product.

The Incident and the Rework are Isolated

AGI manufactures thousands of bins each year.  The Company is involved in hundreds of projects each year, supplying a variety of equipment solutions to customers around the world.  The AGI engineering team has access to the world's top resources and significant experience designing and providing leading products in our industry. 

The Incident and the Rework are isolated and discrete. AGI will manage, mitigate, learn and grow from addressing these two issues, irrespective of the results of the ongoing investigation. Quality control has and will continue to be of paramount importance for AGI.

AGI follows industry leading and all applicable engineering, building, safety codes and standards, and regularly reviews its internal design and manufacturing processes to maintain optimal product quality. Despite our robust talent and procedures across AGI, we will go further to ensure the root causes involved are addressed.

Important Context for Hopper Design and Installation

Over the past three years, and in response to market demand, AGI developed the Hopper as an extension of our storage product line.  These Hoppers are used to increase throughput capacity and minimize clean out time to increase productivity of a commercial facility.

Similar to any new product line, AGI carefully considered and developed the Hopper based on extensive analysis from our engineering teams.  AGI's design and engineering teams utilized their decades of experience and considered all applicable code and standards in developing the Hopper.

The Hopper was first sold to a customer for use in a frac sand operation, a niche application. This customer purchased two Hoppers. AGI was not retained to construct and install the Hoppers. Rather, the Hoppers were constructed and installed by an independent third party. One of these two Hoppers failed during start-up of the facility. An investigation was commenced immediately and is currently ongoing. This failure prompted AGI to conduct additional and robust reviews of the Hopper design.  While the cause of the failure has not yet been identified, AGI's review indicates that there were clear indications of improper construction and installation of the Hopper at this facility that led to or contributed to this failure.

Subsequent to the additional review and design work, AGI sold 35 Hoppers to two different customers constructing grain storage projects.  On September 11, 2020, the Incident occurred when one Hopper at one of the facilities collapsed during the commissioning process.  AGI immediately issued a demand to each customer to suspend use of the Hopper at both sites.  

There are a total of 15 Hoppers on the site of the Incident and 20 Hoppers on the second site.  The second site has yet to be commissioned. The site with the Incident is still being cleaned up to enable a proper investigation.

OUTLOOK

Farm

Year-over-year increases in planted acreage and generally favourable weather contributed to strong crop volumes across North America.  A relatively early harvest further underpinned strong momentum in Farm results in the quarter.   Demand was broad based across regions and products driven by positive dynamics and has led to relatively lower inventory levels across our dealers and stocking points.  The backlog for Farm sales at the end of the third quarter is down 11% year-over- year ('YOY'), however, the majority of this decrease is due to a positive reduction in our AGI SureTrack backlog, a business with distinctly different fundamentals.   We have increased automation and inventory at SureTrack to substantially reduce lead times for customers.  Our annual early order programs that launched across Farm products in September are expected to be positive as dealers replenish inventory in preparation for 2021 and consequently management anticipates Farm Sales to be slightly higher than 2019 levels in Q4 and positioning us well for H1 2021.

Commercial North America

COVID-19 has had a substantial impact on project activity, quoting, project development and project progression across North America.  We expect a rebound in Commercial activity post COVID-19 as customers move to address mandatory maintenance, facility automation, capacity expansion, and loading efficiencies.

In Canada over the last few years there has been a cycle of increased spend in infrastructure due to new entrants in the market which we expect to normalize in the coming years. That moderation will be offset by pent up demand from incumbents investing in their infrastructure to address competitive dynamics including operational and logistical efficiencies. We expect a continued trend towards increased capacity, and a relocating of facilities for better rail access to improve logistics which will require continued investment in the commercial solutions that AGI supplies.  The Canadian Commercial backlog is down 44% compared to 2019 due to a tough comparable period driven by several large projects in the prior year and the impact of COVID-19.  Moving into 2021, we expect a rebound in activity across Canada as our customers address pent up capital projects for maintenance, expansion, automation, and productivity.

In the United States we expect Commercial projects to continue at recent levels in the near term with a steady flow of maintenance and smaller capital projects.  Trade tensions over the last two years have further contributed to delays in the US Commercial space however as the market dynamics are better understood and we move through COVID-19 we expect a pick-up in investment across the US grain infrastructure.  The US Commercial backlog is slightly up compared to September 30, 2019 and we expect intake to increase the gap to 2019 in Q4.  We are seeing particular strength in our Food platform with backlog in this segment offsetting any decrease in grain and fertilizer sales backlog.  Quoting activity remains strong in the Food segment as our customers respond to increased demand for certain processed food products.

Overall, we expect lower sales in North American Commercial as we head into our seasonally slower fourth quarter and see the ongoing impact of COVID-19 on this segment. Management expects a slow rebound in North American Commercial activity going into 2021.

International

The International group continued to demonstrate strength and resiliency in light of the headwinds created by the COVID-19 crisis.   Our International sales grew 10% over Q3 2019 and overall international sales increased 16% YTD over 2019.  Quoting activity is rebounding across all regions leading to an increase in order intake post Q3 resulting in solid backlogs that are equal to a strong 2019 comparative.

In India, a favourable monsoon season and increasing rice exports are offsetting a challenging environment due to COVID-19. Recent product launches have expanded our addressable markets in India and adjacent rice focused regions with development of products targeted at both larger and smaller rice processors.  Expansion into these adjacent markets has been augmented with a rebound in our exports to pre-COVID-19 levels. Backlogs are consistent year over year as order intake has increased significantly to make up for earlier quarters which were more heavily impacted by the uncertainties created by COVID-19. 

Momentum remains strong in Brazil where the macro environment continues to be supportive for investment with historically low interest rates and inflation.  The favourable environment extends to the fundamentals for AGI's end markets with large and growing crop volumes, increasing global demand for Brazil agriculture products, and supportive crop prices setting up positive and sustainable structural conditions. Favourable weather augmented crop volumes in 2020 contributing to the tailwinds we have experienced YTD.  Backlogs are up 76% in Brazil and order intake continues to grow as we move to the end of 2020.

Our platform in EMEA contributed a strong Q3 with sales increasing 15% YOY and this region posted margin improvement driven by our recent investments in automation and successful product launches.  Despite the aforementioned COVID-19 challenges and strong YTD sales, our backlogs are equal to the prior year with positive order intake.  Pipeline activity is rebounding as customers resume capital projects across the region.  Management expects results to be above prior year in Q4 and backlog to grow through the end of the year positioning us well for 2021.

Technology

AGI SureTrack continues to grow significantly with retail equivalent sales increasing 42% in Q3 YOY against a robust comparative in 2019. From an earnings perspective, if we normalized for a retail equivalent sales method as opposed to the current hardware as a service subscription model, SureTrack (inclusive of Affinity) would have represented a positive EBITDA despite significant continued investments, including expansion of the sales team, engineering, software developers, product management and facilities. Our move to our new facility in Lenexa, Kansas has significantly increased our capacity leading to strategically lower backlog to substantially reduce customer lead times.  We are forecasting continued robust growth following an extensive internal review and incorporating product, sales and channel development recommendations from a leading third-party consulting firm.

Summary

Management is very pleased with how resilient AGI has been through the challenges that COVID-19 has presented.  AGI's 5-6-7 strategy to provide system solutions across five platforms, 6 continents, and across 7 components has led to the diversification in terms of products, geographies, and customers which has proven valuable during these uncertain times.   

Based on existing conditions, management anticipates adjusted EBITDA for 2020 to approximate 2019 results and continued momentum going into 2021.

Diluted profit (loss) per share and diluted adjusted profit per share

The Company's diluted profit (loss) per share for the three and nine-month periods ended September 30, 2020 was loss of $(0.66) and loss of $(2.49), respectively, versus $(0.15) and $1.21, respectively in 2019. Profit (loss) per share in 2020 and 2019 has been impacted by the items enumerated in the table below, which reconciles profit (loss) to adjusted profit.




[thousands of dollars except per share amounts]

Three-months Ended September 30

Nine-months Ended September 30

2020

$

2019

$

2020

$

2019

$

Profit (loss)

(12,261)

(2,819)

(46,633)

22,919

Diluted profit (loss) per share

(0.66)

(0.15)

(2.49)

1.21






Loss (gain) on foreign exchange

(5,333)

4,006

10,663

(2,413)

Fair value of inventory from acquisition [2]

-

522

-

1,742

M&A expenses (recovery)

75

(18)

1,346

3,046

Other transaction and transitional costs [3]

3,927

301

11,077

6,427

Loss (gain) on financial instruments

(290)

7,592

16,477

3,060

Loss (gain) on sale of PP&E

(10)

124

119

124

Gain on settlement of leases

(3)

-

(5)

-

Equipment rework [4]

40,000

7,000

50,000

7,000

Share of associate's net loss

1,060

788

3,367

788

Impairment [5]

5,111

46

5,111

46

Adjusted profit [1]

32,276

17,542

51,522

42,739

Diluted adjusted profit per share [1]

1.62

0.91

2.70

2.26







[1]

See "Non-IFRS Measures".

[2]

Non-cash expenses related to the sale of inventory that acquisition accounting required be recorded at a value higher than manufacturing cost.

[3]

Includes restructuring and other acquisition related transition costs, as well as the accretion and other movement in contingent consideration and amounts due to vendors.

[4]

To record the pre-tax charge for the estimated cost of rework including additional time, material and services.

[5]

See "DETAILED OPERATING RESULTS - Impairment Charge" in our MD&A.

MD&A and Financial Statements

AGI's financial statements and management's discussion and analysis (the "MD&A") for the three and nine-months ended September 30, 2020 can be obtained at https://www.newswire.ca/news-releases/ and will also be available electronically on SEDAR (http://www.sedar.com) and on AGI's website (http://www.aggrowth.com).

Conference Call

Management will hold a conference call on Thursday November 12, 2020, at 8:00 a.m. EST to discuss AGI's results for the three and nine-months ended September 30, 2020. To participate in the conference call, please dial 1-888-390-0546 or for local access dial 416-764-8688. An audio replay of the call will be available for seven days. To access the audio replay, please dial 1-888-390-0541 or for local access dial 416-764-8677. Please quote passcode 381657# for the audio replay.

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.

NON-IFRS MEASURES

In analyzing our results, we supplement our use of financial measures that are calculated and presented in accordance with International Financial Reporting Standards ("IFRS") with a number of non-IFRS financial measures including "trade sales", "EBITDA", "Adjusted EBITDA", "gross margin", "funds from operations", "payout ratio", "adjusted profit", and "diluted adjusted profit per share".  A non-IFRS financial measure is a numerical measure of a company's historical performance, financial position or cash flow that excludes [includes] amounts, or is subject to adjustments that have the effect of excluding [including] amounts, that are included [excluded] in the most directly comparable measures calculated and presented in accordance with IFRS. Non-IFRS financial measures are not standardized; therefore, it may not be possible to compare these financial measures with other companies' non-IFRS financial measures having the same or similar businesses. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

We use these non-IFRS financial measures in addition to, and in conjunction with, results presented in accordance with IFRS. These non-IFRS financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our IFRS results and the accompanying reconciliations to corresponding IFRS financial measures, may provide a more complete understanding of factors and trends affecting our business.

In this press release, we discuss the non-IFRS financial measures, including the reasons that we believe that these measures provide useful information regarding our financial condition, results of operations, cash flows and financial position, as applicable, and, to the extent material, the additional purposes, if any, for which these measures are used. Reconciliations of non-IFRS financial measures to the most directly comparable IFRS financial measures are contained in our MD&A.

Management believes that the Company's financial results may provide a more complete understanding of factors and trends affecting our business and be more meaningful to management, investors, analysts and other interested parties when certain aspects of our financial results are adjusted for the gain (loss) on foreign exchange and other operating expenses and income. These measurements are non-IFRS measurements. Management uses the non-IFRS adjusted financial results and non-IFRS financial measures to measure and evaluate the performance of the business and when discussing results with the Board of Directors, analysts, investors, banks and other interested parties.

References to "EBITDA" are to profit before income taxes, finance costs, depreciation, amortization and share of associate's net loss. References to "adjusted EBITDA" are to EBITDA before the gain or loss on foreign exchange, non-cash share based compensation expenses, gain or loss on financial instruments,  M&A expenses, other transaction and transitional costs, gain or loss on the sale of property, plant & equipment, gain on settlement of leases, equipment rework costs, fair value of inventory from acquisitions and non-cash asset impairment charge. Management believes that, in addition to profit or loss, EBITDA and adjusted EBITDA are useful supplemental measures in evaluating the Company's performance. Management cautions investors that EBITDA and adjusted EBITDA should not replace profit or loss as indicators of performance, or cash flows from operating, investing, and financing activities as a measure of the Company's liquidity and cash flows. See "Operating Results –EBITDA and Adjusted EBITDA" in our MD&A for the reconciliation of EBITDA and Adjusted EBITDA to profit before income taxes.

References to "trade sales" are to sales net of the gain or loss on foreign exchange. Management cautions investors that trade sales should not replace sales as an indicator of performance. See "Operating Results - Trade Sales" in our MD&A for the reconciliation of trade sales to sales.

References to "gross margin" are to trade sales less cost of inventories, and thereby exclude depreciation, amortization, fair value of inventory from acquisitions and equipment rework from cost of sales. Management believes that gross margin provides a useful supplemental measure in evaluating its performance. See "Operating Results – Gross Margin" in our MD&A for the calculation of gross margin.

References to "funds from operations" are to adjusted EBITDA less interest expense, non-cash interest, cash taxes and maintenance capital expenditures. Management believes that, in addition to cash provided by (used in) operating activities, funds from operations provide a useful supplemental measure in evaluating its performance. References to "payout ratio" are to dividends declared as a percentage of funds from operations. See "Funds from Operations and Payout Ratio" in our MD&A for the calculation of funds from operations and payout ratio.

References to "adjusted profit" and "diluted adjusted profit per share" are to profit for the period and diluted profit per share for the period adjusted for the gain or loss on foreign exchange, fair value of inventory from acquisitions, M&A expenses or recoveries, other transaction and transitional costs, gain or loss on financial instruments, gain or loss on sale of property, plant and equipment, cost of equipment rework, share of associate's net loss and non-cash asset impairment charge. See "Diluted profit (loss) per share and diluted adjusted profit per share" in our MD&A for the reconciliation of diluted profit per share and diluted adjusted profit per share to profit.

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. In particular, the forward-looking information in this press release includes information relating to our business and strategy, including our outlook for our financial and operating performance including our expectations for our future financial results including sales, EBITDA and adjusted EBITDA for the 2020 year and fourth quarter, industry demand and market conditions, the anticipated ongoing impacts of the COVID-19 outbreak on our business, operations and financial results; the estimated costs to the Company that may result from the Incident and the availability of insurance coverage to offset such costs; the sufficiency of our liquidity; long term fundamentals and growth drivers of our business; future payment of dividends and the amount thereof; and with respect to our ability to achieve the expected benefits of recent acquisitions and the contribution therefrom. Such forward-looking information reflects our current beliefs and is based on information currently available to us, including certain key expectations and assumptions concerning: the anticipated impacts of the COVID-19 outbreak on our business, operations and financial results; 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 the effects of global outbreaks of pandemics or contagious diseases or the fear of such outbreaks, such as the recent COVID-19 pandemic, including the effects on the Company's operations, personnel, and supply chain, the demand for its products and services, its ability to expand and produce in new geographic markets or the timing of such expansion efforts, and on overall economic conditions and customer confidence and spending levels, 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; changes in trade relations between the countries in which the Company does business including between Canada and the United States; cyber  security risks; the risk that the assumptions and estimates underlying the provision for warranty accrual and remediation related thereto and insurance coverage for the Incident will prove to be incorrect as future information because available to the Company . 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]. 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 IFRS 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. Without limitation of the foregoing, the provision for warranty accrual and remediation related to the Incident required significant estimates and judgments about the scope, nature, timing and cost of work that will be required. It is based on management's assumptions and estimates at the current date and is subject to revision in the future as further information because available to the Company. 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.

AGI MDA 2020 Q3 (CNW Group/Ag Growth International Inc. (AGI))

SOURCE Ag Growth International Inc. (AGI)

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