Ag Growth International Inc. (TSX: AFN) today reported its financial results for the three and twelve months ended December 31, 2011, and declared dividends for March, April and May 2012.
|(thousands of dollars)||
Three Months Ended
|Twelve Months Ended December 31|
|Trade sales (1)||$67,039||$49,369||$301,014||$262,260|
|Adjusted EBITDA (1)||$8,444||$6,702||$53,274||$59,730|
|Basic Profit per Share||$0.26||$(0.03)||$1.97||$2.43|
|Fully Diluted Profit per Share||$0.26||$(0.03)||$1.95||$2.40|
(1) See non-IFRS measures.
Overview of Results
Ag Growth achieved record sales and EBITDA in the fourth quarter of 2011 as strong preseason activity throughout the Company’s North American distribution network drove post-harvest demand for portable handling equipment. Sales of commercial handling equipment in the period increased over the same quarter in the prior year due primarily to continued strength in the domestic market. Adjusted EBITDA, net profit and profit per share all increased significantly over the same period in the prior year.
Adjusted EBITDA in fiscal 2011 benefited from high levels of domestic demand for commercial equipment, strong post-harvest demand for portable grain augers and lower expenses related to stock based compensation and performance related bonuses. Adjusted EBITDA for the fiscal year decreased compared to 2010 due to the impact of foreign exchange, start-up challenges at the Company’s greenfield storage bin plant and regional market issues at the Company’s Finland-based Mepu division. These three items negatively impacted adjusted EBITDA by approximately $13.5 million compared to the prior year.
“We are very pleased with our fourth quarter results”, said Gary Anderson, President and Chief Executive Officer. “Strong preseason sales of portable equipment in both Canada and the U.S. provide an indication that our dealer network is looking to 2012 with optimism. Strong demand for commercial equipment continued into the fourth quarter and as result we achieved record domestic commercial sales in 2011. The positive results from Q4 were not enough, however, to offset the negative impacts of foreign exchange, poor regional conditions at Mepu and the start-up issues at Twister experienced throughout the year.”
“Entering 2012 we believe the challenges at Mepu and Twister have largely been resolved. Conditions in Mepu’s regional market in northern Europe appear to have normalized due largely to a favourable 2011 harvest. Interest in our storage bin product line remains strong both domestically and overseas and management retains a very positive outlook for contributions from this plant in 2012, although targeted gross margins may not be immediately achieved.”
“We enter 2012 on a positive footing and look forward to the upcoming year with excitement on a number of fronts. The USDA is forecasting U.S. farmers will plant 94 million acres of corn in 2012 and a U.S. corn crop of over 14 billion bushels for the first time. Large volumes of grain positively impact all of our businesses, particularly the demand for portable handling equipment. Demand for commercial equipment in North America remains strong, and overseas we expect growth in commercial storage and handling due to positive agricultural fundamentals and the further development of our international infrastructure. We remain very positive with respect to our prospects internationally and have recently established a sales and support team based in northern Europe and have opened two new sales offices in South America. Our continued focus in new international markets has contributed to increasing sales quoting activity and an international order backlog well above 2011 levels."