AGI Provides Update On The Progress Of Product Transfer Growth Initiatives

WINNIPEG, Manitoba, February 06, 2024--(BUSINESS WIRE)--Ag Growth International Inc. (TSX: AFN) ("AGI", "we", "our", or the "Company") is pleased to provide an update on the progress of several concurrent product transfer growth initiatives underway across the organization.

To-date, total orders¹ received that were enabled by product transfer activities exceeds $55 million. A minority of the total orders received to-date will be reflected in the Company’s 2023 revenue figures with the majority of product transfer-related revenue recognition for orders received to-date expected to materialize in 2024. Quoting and pipeline activity is ongoing across all product transfers and would represent further incremental contribution above and beyond the orders received to-date.

"Product transfers are a key element of our profitable organic growth strategy," commented Paul Householder, President & CEO of AGI. "By taking highly successful products in one region and transferring the sales-through-to-manufacturing knowledge to other attractive regional markets, we unlock meaningful growth opportunities by leveraging internal capabilities that require minimal incremental capital investment or product development costs. We are in routine contact with our customers to understand their needs which enables us to identify growth opportunities that product transfers address. With many initiatives now moving past the ramp-up phase and into full commercialization, we are seeing initial orders materialize, helping to accelerate overall revenue generation potential entering 2024."

The Company has updates to several specific product transfers initiated in 2023, including:

• Portable grain handling equipment to India: With production capability established and initial products field tested, we have received our first orders from a leading Australian equipment dealer.

• Grain storage bins to India: With production capability established, we have attracted several orders including a significant order from a large customer for supply across seven sites. Following this order, we see potential to secure further work with this customer across additional sites as a part of their broader growth strategy.

• Fertilizer equipment to EMEA: With production capability of several key components of fertilizer processing equipment transferred to our Italian facilities, the team has secured multiple project wins from customers across the region, including notable success in Africa.

• Fertilizer equipment to Brazil: With production capability of several key pieces of fertilizer processing equipment completed, the team has secured several project wins including a significant initial order from a global leader in the fertilizer production industry.

• Light duty grain handling equipment to North America: Low-capacity grain handling equipment that’s competitively priced and suitable for the North American farm market was first developed in Brazil and recently transferred to our North American facilities. Initial North American orders have been received, supported by robust ongoing quoting activity.

"We look forward to building on our early successes and further expanding our product transfer activities," added Householder. "The tremendous collaboration and efforts of our teams around the world, fundamental to our product transfer initiative, is a clear example of the powerful One AGI culture we are embedding across the organization."

Company Profile

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

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. 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. 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: that the orders received to-date will materialize into revenue in the future and the timing thereof; that the Company will continue to generate additional orders through product transfer activities and that such orders will materialize into revenue; that product transfers will remain a key component of the Company's organic growth strategy; that the Company will be able to unlock meaningful growth opportunities by leveraging internal capabilities that require minimal capital investment or product development costs through product transfers; that product transfers will continue to address the Company's customers equipment needs; in respect of the Company's ability to obtain orders and convert the orders into revenue through its various product transfer initiatives currently underway; that the Company will be able to obtain another large order from a current customer in India as part of a broader growth strategy; that the production capability of several key components of fertilizer processing equipment will allow the Company to continue to secure orders in the EMEA; that low capacity grain handling equipment recently transferred to our North American facilities will result in robust orders in that region; and that the Company will continue the early successes of the product transfer activities by expanding the product transfer activities.

Such forward-looking information reflects our current beliefs and is based on information currently available to us, including certain key expectations and assumptions concerning: anticipated crop yields and production in our market areas; the conversion of orders into revenue and the timing thereof; the demand for the Company's products in other regions and the related success of the Company's product transfer initiative; anticipated financial performance; future debt levels; business prospects and strategies; product and input pricing; regulatory developments; tax laws; the sufficiency of budgeted capital expenditures in carrying out planned activities; currency exchange rates, inflation rates and interest rates; the cost of materials, labour and services and the impact of inflation rates and/or supply chain disruptions and/or labour activity thereon; 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 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: that management is ultimately unable to execute the product transfer initiative successfully, or that if executed, that the benefits anticipated to be derived therefrom do not meet expectations; that some or all of the total orders received to date that were enabled by product transfer activities are not converted into revenue and/or that the magnitude of such orders is not indicative of the magnitude of orders received in connection with product transfer activities in the future and that variances are material; general economic and business conditions and changes in international, national and local macroeconomic and business conditions, as well as sociopolitical conditions in certain local or regional markets, and the respective response thereto from other countries and institutions (including trade sanctions and financial controls), which has created volatility in the global economy and could continue to adversely impact economic and trade activity; the effects of global outbreaks of pandemics or contagious diseases; fluctuations in agricultural and other commodity prices, interest rates, inflation rates and currency exchange rates; crop planting, crop conditions and crop yields; weather patterns, the timing of harvest and conditions during harvest; volatility of production costs, including the risk of production cost increases that may arise as a result of ongoing high inflation rates and/or supply chain disruptions, and the risk that we may not be able to pass along all or any portion of increased costs to customers; governmental regulation of the agriculture and manufacturing industries, including environmental and climate change regulation; actions taken by governmental authorities, including increases in taxes, changes in government regulations and incentive programs, and actions taken in connection with local or global outbreaks of pandemics or contagious diseases; risks inherent in marketing operations; credit risk; the availability of credit for customers; seasonality and industry cyclicality; potential delays or changes in plans with respect to capital expenditures; the cost and availability of sufficient financial resources to fund the Company’s capital expenditures; competition for, among other things, customers, supplies, acquisitions, capital and skilled personnel; the availability of capital on acceptable terms; dependence on suppliers; changes in labour costs and the labour market, including the risk of labour cost increases that may arise as a result of ongoing high inflation rates and/or a scarcity of labour and/or labour activities; the impact of climate change and related laws and regulations; changes in trade relations between the countries in which the Company does business, including between Canada and the United States; cyber security risks; and adjustments to and delays or cancellation of our order book. These and other risks and uncertainties are described under "Risks and Uncertainties" in our MD&A and in our most recently filed Annual Information Form, all of which are available under the Company's profile on SEDAR+ (www.sedarplus.ca).

We cannot assure readers that actual results will be consistent with this forward-looking information. Further, AGI cannot guarantee that the anticipated revenue from orders will be realized. Delays, cancellations and scope adjustments occur from time-to-time with respect to contracts reflected in AGI’s order book, which can adversely affect the revenue and profit that AGI actually receives from the orders.

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.

NON-IFRS AND OTHER FINANCIAL MEASURES

This press release makes reference to "orders", which is a supplementary financial measure. This specified financial measure is not a recognized measure under International Financial Reporting Standards ("IFRS"), does not have a standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies. Rather, this measure is provided as additional information to complement our financial information reported under IFRS by providing further understanding of our results of operations from management's perspective. Accordingly, it should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use specified financial measures to provide supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not to rely on any single specified financial measure.

"Order" is a supplementary financial measure that is referenced throughout this press release. An "Order" is defined as the value of a committed sales order that has not yet been fulfilled that: (a) has a high certainty of being performed as a result of the existence of a purchase order, an executed contract or work order specifying job scope, value and timing; or (b) has been awarded to the Company or its divisions, as evidenced by an executed binding letter of intent or agreement, describing the general job scope, value and timing of such work, and where the finalization of a formal contract in respect of such work is reasonably assured. AGI uses the term "order book" in its other public filings, which is an aggregation of all "orders" received at a particular point in time on an operating segment basis and/or regional basis and/or enterprise basis. AGI previously used the term "backlogs" instead of "order book", however there has been no change to the definition or underlying calculation.

1

Supplementary financial measure. See "Non-IFRS and Other Financial Measures".

 

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Contacts

For More Information:
Andrew Jacklin
Director, Investor Relations
+1-437-335-1630
investor-relations@aggrowth.com