Mr. Paul Householder reports

AGI ANNOUNCES RECORD THIRD QUARTER REVENUE AND SUSTAINED UPTICK IN MARGIN PERFORMANCE; FULL YEAR OUTLOOK FOR ADJUSTED EBITDA MARGINS INCREASED

Ag Growth International Inc. has released its financial results for the three months ended Sept. 30, 2023.

Third quarter 2023 highlights:

• Revenue of $410-million increased by 2 per cent on a year-over-year basis; 5 per cent sequentially from second quarter 2023;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $85-million increased by 11 per cent on a YOY basis;
• Adjusted EBITDA margin percentage increased by roughly 165 basis points to 20.6 per cent from 19.0 per cent on a YOY basis;
• Net debt leverage ratio of 3.2 times at Sept. 30, 2023, versus 4.1 times at Sept. 30, 2022, or 3.3 times at June 30, 2023.

Nine-month year-to-date 2023 highlights:

• Revenue of $1,147-million increased by 6 per cent on a YOY basis;
• Adjusted EBITDA of $221-million increased by 20 per cent on a YOY basis;
• Adjusted EBITDA margin percentage increased by roughly 230 basis points to 19.2 per cent from 16.9 per cent on a YOY basis.

Outlook:

• Management is reiterating full-year 2023 adjusted EBITDA guidance to be at least $290-million.
• Full-year 2023 adjusted EBITDA margin percentage guidance is increased to be at least 18.5 per cent, up from 18.0 per cent prior.
• Order book continues to be strong and is up 3 per cent YOY as of Sept. 30, 2023.

"Our third quarter performance again delivered strong margins and continued progress against our stated strategic priorities," noted Paul Householder, president and chief executive officer of AGI Growth. "Our company-wide operational excellence initiatives gained additional traction and have steadily translated into a clear positive trend in our margin performance. As our new business management processes become further ingrained in our teams and culture, we expect this new level of margin performance to be sustained and expanded upon over the long term. As a result, we have again raised our full-year adjusted EBITDA margin guidance to 18.5 per cent from 18.0 per cent, up notably from our originally stated 2023 objective of 17.0 per cent. Heading into the fourth quarter and early 2024, we are committed to complementing our new margin levels with continued revenue growth, which will unlock significant value for all stakeholders."

"Our sustained focus on balance sheet priorities continued to deliver solid progress in the quarter," added Jim Rudyk, chief financial officer of AGI Growth. "Our net debt leverage ratio again notched downward, now at 3.2 times, which decreased from 4.1 times year over year and 3.3 times quarter over quarter. In addition, our working capital metrics continue to make significant improvements across the organization, particularly with regard to inventory levels. As progress on inventory is solidified, we can turn our collective attention to other elements of working capital for a similar program of sustained focus and improvement."

Outlook

Its third quarter results continue to demonstrate the strength of its balanced and diversified business strategy. In addition to its revenue and business mix diversification strategies, it has layered in significant operational excellence initiatives to help strengthen margins across AGI Growth. As a result, it is reiterating its full-year guidance for 2023 adjusted EBITDA to be at least $290-million and increasing its full-year guidance for adjusted EBITDA margin percentage to be at least 18.5 per cent, up from 18.0 per cent previously.

Director resignation

The company also announced that Claudia Roessler has resigned as a director of the company.

"On behalf of our management and board of directors, I want to thank Claudia for her significant contributions to AGI and wish her the best in her current and future endeavours," said Janet Giesselman, chair of the board. "With her extensive digital and ag-technologies knowledge and international experience, Claudia brought valuable insight and perspectives to the board, and provided important input on AGI's developing digital strategy."

Ms. Roessler joined the board of directors in March, 2020, and has served as a valuable member of the environmental, health and safety committee (formerly the environmental, health, safety and sustainability committee).

Management's discussion and analysis and financial statements

AGI Growth's unaudited interim condensed consolidated financial statements and management's discussion and analysis for the three months ended Sept. 30, 2023, can be obtained electronically on SEDAR+ and on AGI Growth's website.

Conference call

AGI Growth management will hold a conference call on Wednesday, Nov. 8, 2023, at 8 a.m. ET, to discuss the company's results for the three months ended Sept. 30, 2023. To participate in the conference call, please preregister by clicking on the AGI Growth Q3 2023 conference call registration link and following the instructions. Dial-in details will be provided onscreen and by e-mail in the form of a calendar booking. Registration will remain open until the call has concluded. An audio replay of the call will be available for seven days. To listen to the audio replay, please dial 1-800-319-6413 if calling from Canada or the United States and 1-604-638-9010 internationally. Please quote passcode 0442 for the audio replay.

About Ag Growth International Inc.

AGI Growth is a provider of the equipment and solutions required to support the efficient storage, transport and processing of food globally. AGI Growth has manufacturing facilities in Canada, the United States, Brazil, India, France and Italy, and distributes its product worldwide.

We seek Safe Harbor.