Ag Growth International Inc. (TSX: AFN) reported its record financial results for the 3 and 12 months ended December 31, 2010.
Sales and EBITDA for the three and twelve month periods ended December 31, 2010 exceeded the record levels established in 2009 as sales of commercial equipment surged due to positive agricultural fundamentals and a significant increase in international sales. Sales of portable grain handling equipment benefited from another successful harvest in the U.S., but were negatively impacted by poor crop conditions in Canada.
Sales for the three and twelve months ended December 31, 2010, excluding the results of companies acquired in 2010, were $49.0 million (2009 - $46.8 million) and $247.5 million (2009 - $237.3 million), respectively. Sales in 2010 were negatively impacted by the stronger Canadian dollar. Had the foreign exchange rates experienced in 2009 been in effect in 2010, sales for the 3 and 12 month periods ended December 31, 2010, excluding acquisitions, would have been approximately $50.8 million and $266.5 million, respectively, representing increases of 9% and 12% over the same periods in 2009.
“We are very pleased with our performance in 2010,” said Gary Anderson, Chief Executive Officer of Ag Growth. “After a 45% increase in adjusted EBITDA in 2009 we entered 2010 with the goal of consolidating our gains and laying the foundation for growth in 2011 and beyond. Adjusted EBITDA in 2010 exceeded 2009 levels despite significant foreign exchange headwinds and less than optimal crop conditions.
“In addition, we have equipped the company for future growth through the acquisitions of Mepu, Franklin and Tramco, and the construction of a new storage bin manufacturing facility in Alberta. In 2011 we anticipate modest growth in sales of our portable grain handling equipment. Our order backlog for commercial equipment is considerably higher than at this time in 2010. However, sales may ultimately be influenced by macro-economic factors including the availability of credit in developing markets. On balance, we expect the strategic initiatives undertaken in 2010 to be our primary drivers of growth in 2011 and we look forward with excitement to the coming year as we begin to capitalize on these investments.”
Ag Growth's financial statements and management's discussion and analysis for the year ended December 31, 2010 are available electronically from SEDAR (www.sedar.com ) or from Ag Growth's website (www.aggrowth.com).
Ag Growth also announced cash dividends of $0.20 per common share for the months of March 2011, April 2011 and May 2011. The dividends are eligible dividends for Canadian income tax purposes. Ag Growth's current annualized cash dividend rate is $2.40 per share.
The March 2011 dividend is payable on April 29, 2011 to holders of common shares of record on March 31, 2011. The April 2011 dividend is payable on May 30, 2011 to holders of common shares of record on April 29, 2011. The May 2011 dividend is payable on June 30, 2011 to holders of common shares of record on May 31, 2011.
Ag Growth is a leading manufacturer of portable and stationary grain handling, storage and conditioning equipment, including augers, belt conveyors, grain storage bins, grain handling accessories, grain aeration equipment and grain drying systems. Ag Growth has eleven manufacturing facilities in Canada, the United States, the United Kingdom and Finland and its sales, marketing, and distribution system distributes product in 48 states, nine provinces, and internationally.
References to “EBITDA” are to earnings before interest, income taxes, depreciation, amortization, Conversion costs and Accelerated Vesting and Death Benefits. References to “Adjusted EBITDA” are to EBITDA before the Company’s gain or loss on foreign exchange. Management believes that, in addition to net income or loss, EBITDA and Adjusted EBITDA are useful supplemental measures in evaluating the Company’s performance. EBITDA and Adjusted EBITDA are not financial measures recognized by GAAP and do not have a standardized meaning prescribed by GAAP. Management cautions investors that EBITDA and Adjusted EBITDA should not replace net income 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. Ag Growth’s method of calculating EBITDA and Adjusted EBITDA may differ from the methods used by other issuers.