Mr. Paul Householder reports

AGI ANNOUNCES FIRST QUARTER 2024 RESULTS FEATURING CONTINUED MARGIN STRENGTH AND REAFFIRMS FULL YEAR ADJUSTED EBITDA OUTLOOK

Ag Growth International Inc. has released its financial results for the three months ending March 31, 2024.

First quarter 2024 highlights:

• Revenue of $315-million decreased by 9 per cent on a year-over-year (YOY) basis.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $50-million increased by 4 per cent on a YOY basis.
• Adjusted EBITDA margin percentage increased by roughly 200 basis points to 15.9 per cent from 13.9 per cent on a YOY basis.
• Net debt leverage ratio was 2.9 times at March 31, 2024, versus 3.6 times at March 31, 2023.

Outlook:

• The company reaffirms its previously stated adjusted EBITDA guidance for 2024 of at least $310-million.
• Order book was up 12 per cent YOY to $729-million as of March 31, 2024, with significant strength in the international regions of the company's commercial segment.
• While its overall outlook for the full year has not changed, the company has observed a trend in commercial project timing, which has further shifted expected deliveries into the second half of the year.
• As a result, the company expects all of the full-year 2024 adjusted EBITDA growth over 2023 to occur in the second half of 2024, with adjusted EBITDA results in the first half of 2024 generally expected to be down relative to first half 2023.

"We are encouraged by our first quarter results, which are largely on track with how we expected the year to begin given our order book mix," commented Paul Householder, president and chief executive officer of Ag Growth. "The increase in first quarter adjusted EBITDA, driven by favourable margins, reinforces our confidence that AGI's profitability levels have structurally expanded. With high activity levels across most areas of the company, we are closely monitoring the North American farm segment where pockets of cautious purchasing behaviour existed through the first quarter and will impact second quarter farm segment results. Over all, we remain confident in our full-year outlook and reaffirm our 2024 adjusted EBITDA guidance of at least $310-million given the support of a near-record level order book and strong commercial activity internationally."

"Balance sheet metrics remain in focus for the entire team across AGI," added Jim Rudyk, chief financial officer of Ag Growth. "Our net debt leverage ratio again moved downward year over year, from 3.6 times to 2.9 times, edging upwards from 2.8 times quarter over quarter. The increase was largely due to inventory investment required for the commercial portion of our order book. This is the first time this ratio has ticked up quarter over quarter since early 2022. We remain squarely focused on moving this ratio below the 2.5-time level in 2024, which is well within our operating plan. In advance of reaching our leverage milestones, we continue the financial analysis and strategic planning for various high-priority growth investments under consideration."

Order book

An attached table presents YOY changes in the company's order book as at March 31, 2024.

Farm segment

Farm segment revenue and adjusted EBITDA grew by 4 per cent and 17 per cent YOY, respectively, in Q1. Revenue growth was primarily driven by international markets as the company's Brazilian operations completed several key projects for customers. Adjusted EBITDA margin per cent increased 273 basis points to 23.8 per cent YOY in Q1, benefiting from manufacturing efficiency initiatives, effective revenue management and a revenue mix weighted toward higher-margin portable grain handling equipment.

Commercial segment

Commercial segment revenue and adjusted EBITDA decreased 24 per cent and 40 per cent YOY, respectively, in Q1. The decrease in revenue was primarily a result of the company's international markets, as well as Canada. Internationally, performance was impacted by timing with 2024 revenue biased to the second half of the year and a strong Q1 2023 comparable period. In Canada, a general slowdown in the pace of customer activity persisted through the quarter. The overall decrease in revenue directly impacted adjusted EBITDA margin percentage moving to 10.5 per cent from 13.3 per cent YOY. The current order book for the company's commercial segment is up significantly YOY, particularly due to strength in international regions, and sets up a strong second half as current efforts are focused on completing upfront engineering and manufacturing activities.

MD&A (management's discussion and analysis) and financial statements

AG Growth's unaudited consolidated financial statements (consolidated financial statements) and the MD&A for the quarter ended March 31, 2024, can be obtained electronically on SEDAR+ and on AG Growth's website.

Conference call

AG Growth will hold a conference call on Tuesday, April 30, 2024, at 8 a.m. ET, to discuss its results for the three months ending March 31, 2024. To attend the event, participants can dial in using 1-800-319-4610 if calling from Canada or the United States or 1-604-638-5340 internationally. A replay of the webcast will be made available on AG Growth's website. In addition, an audio replay of the call will be available for seven days. To access the audio replay, please dial 1-800-319-6413 if calling from Canada or the U.S. or 1-604-638-9010 internationally. Please quote passcode 0763 for the audio replay.

About AG Growth International Inc.

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

Basis of presentation

The company has identified its reportable segments as farm and commercial, each of which are supported by the corporate office. These segments are strategic business units that offer specific products and services to their respective markets. Certain corporate overheads are allocated to each segment based on revenue, as well as applicable cost drivers. Taxes and certain other expenses are managed at a consolidated level and are not allocated to the reportable operating segments.

During the year ended Dec. 31, 2023, AG Growth replaced the term sales with revenue; however, there has been no change to the underlying calculation. Revenue is the sale of goods primarily recognized at a point in time when the company satisfies a performance obligation and control of the goods is transferred from AG Growth to its customer. Revenue from contracts with customers is recognized at an amount that reflects the consideration to which the company is entitled to in exchange for those goods. Additionally, AG Growth has simplified the disclosure on revenue to Canada, the U.S. and international, removing further regional breakdown. Financial information for the comparative period has been restated to reflect the new presentation.

Non-IFRS (international financial reporting standards) and other financial measures

This news release makes reference to certain specified financial measures, including non-IFRS financial measures, non-IFRS ratios and supplementary financial measures. Management uses these financial measures for purposes of comparison with prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of continuing operations and in analyzing the company's business performance and trends. These specified financial measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable with similar measures presented by other companies. Rather, these measures are provided as additional information to complement the company's financial information reported under IFRS by providing further understanding of the company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the company's financial information reported under IFRS.

We seek Safe Harbor.