AGT Food and Ingredients Inc. Announces Third Quarter 2014 Results and Dividend; Third Line Expansion at Minot Food Ingredient Facility

SYMBOL: TSX: AGT

REGINA, Nov. 12, 2014 /CNW/ - AGT Food and Ingredients Inc. (TSX:AGT) ("the Company" or "AGT") has announced its financial results for the three and nine months ended September 30, 2014. 

Results include:

  • EBITDA* was $21.1 million for the three months ended September 30, 2014 compared to $14.4 million for the three months ended September 30, 2013, an increase of 46.5%.
  • EBITDA* improved to $80.8 million for the trailing twelve months ended September 30, 2014 compared to $54.3 million for the trailing twelve months ended September 30, 2013 and compared to $74.1 million for the trailing twelve months ended June 30, 2014.
  • Revenue was $287.7 million for the three months ended September 30, 2014 compared to $240.5 million for the three months ended September 30, 2013. EBITDA* as a percentage of revenue increased to 7.33% for the three months ended September 30, 2014 compared to 5.98% for the three months ended September 30, 2013 and compared to 6.79% for the three months ended June 30, 2014.
  • Adjusted earnings per share increased to $0.46 ($0.45 fully diluted) for the three months ended September 30, 2014 compared to $0.24 ($0.24 fully diluted) for the three months ended September 30, 2013 and $0.44 ($0.43 fully diluted) for the three months ended June 30, 2014.
  • Dividend of $0.15 per share for the quarter ($0.60 per share on an annualized basis).

"We are very pleased with AGT's continued ability to execute our earnings growth strategy and deliver positive performance in our business. Our legacy segments continue to recover, with significant volumes moving though our system. Harvest in North America is complete and the result has been a marketable crop that we expect can fill the demands of global customers and markets. Continuing strong import volumes in regional consumption markets like India and Turkey have provided volume gains which have positively impacted capacity utilization at our facilities and provided opportunity for margin gain for AGT both now and in the traditional shipping periods ahead of us. Our food ingredients and packaged foods segment is one that we feel may be the future of our company and continues to advance as we have forecasted, both through our own sales programs and as our partnership with Ingredion develops, with our pulse ingredient products moving into Ingredion's distribution network. Food company customers are viewing our ingredients positively and we feel this may contribute to the growth of this business unit that we have expected," said Mr. Murad Al-Katib, President and CEO of AGT.

AGT is also pleased to announce the approval by management of the Company's plans to add a third production line to its Minot, North Dakota food ingredient production facility, which is expected to begin commissioning in the first quarter of 2015. The addition of this third processing line is expected to effectively bring the manufacturing capacity of the Minot plant to full capacity at approximately 105,000 metric tonnes per annum. Other expansions or conversions of capacity to food ingredient production and other projects that may add further value to the Minot facility are being considered, including pre-cooking lines, sterilization lines and blending facilities to produce pre-mixes and formulated systems, which are combinations of ingredients that are marketed to fill a specific function within a food manufacturing system that may be used by various food clients worldwide.

"The planned expansion to three lines in Minot is a result of the positive feedback we are receiving from our food company customers and the expectations we have from our distribution agreement with Ingredion. As we begin delivery of pulse ingredient products to customers through Ingredion's sales network, we expect this partnership, along with our Cargill agreement, to provide the intended result of more rapidly developing marketing and sales opportunities for AGT ingredient products through our partners' sales and marketing strength, and in the case of Ingredion, application research strength. Customer reaction to AGT's high quality pulse ingredients has been increasingly positive, and we hope to capitalize on these opportunities in the near term. We expect the added capacity at Minot, as well as some of the other expansions or additions we are considering, to assist in developing this program," added Mr. Al-Katib.

"AGT continues to realize the opportunities that our global system and strong presence in local pulses and staple foods markets have provided. The relative strength in our legacy segments seen in these past quarters provides the strong foundation for growth that AGT needs as our food ingredients and packaged foods business grows. The recent bought deal equity financing of $80 million, our expansion plans and our other initiatives are important components to realizing the benefits of the continued growth opportunities we expect from this segment, providing balanced growth for AGT and enhancing our shareholder value in the long term," said Mr. Huseyin Arslan, Executive Chairman of AGT's Board of Directors.

The financial statements and notes thereto for the three and nine months ended September 30, 2014, as well as the related management's discussion and analysis, have been filed under AGT's profile on www.sedar.com and have been posted on AGT's website at www.agtfoods.com. All amounts are reported in Canadian dollars.

AGT has also announced a cash dividend for the quarter ending December 31, 2014 of $0.15 per common share. The dividend will be payable on January 8, 2015 to shareholders of record on December 31, 2014. This dividend is an eligible dividend for Canadian income tax purposes. AGT's current annualized cash dividend rate is approximately $0.60 per share.

AGT invites you to join our Third Quarter 2014 conference call on Thursday, November 13, 2014 at 1:00 p.m. Eastern time. To join the conference, please dial 1-800-319-4610 (Toll free in Canada & the U.S.) or +1-604-638-5340 (Outside Canada & the U.S.). 

A recording of the call will be available at www.agtfoods.com on Friday, November 14, 2014.  A telephone replay will also be available until midnight Eastern time, Friday, November 28, 2014.  To access the replay, please call 1-800-319-6413 (toll free from Canada & the U.S.) or +1-604-638-9010 (from outside Canada & the U.S.). When prompted, enter the code 4537, followed by the number sign (#).

AGT Food and Ingredients Inc. Profile
AGT Food and Ingredients Inc. (AGT) is a processor of value-added pulses, staple foods and ingredients for export and domestic markets as well as a supplier of retail packaged and canned foods to retail and food service sectors. Through its offices and processing facilities located in some of the best agricultural growing regions in Canada, the U.S., Turkey, China, Australia and South Africa, merchandising and sales offices in the U.K., the Netherlands, Spain, Switzerland and India and origination offices in Russia, AGT produces a full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canary seed as well as food ingredients such as pulse flours, proteins, starches and fibres. Through its subsidiaries in Turkey, the Arbel Group, AGT also produces staple foods such as Arbella Pasta, rice, and milled wheat products, including bulgur and semolina.

Cautionary Statements
Certain statements in this press release are forward-looking statements. In particular, this press release contains forward-looking statements with respect to, among other things, meeting global demand, the promise of the food ingredients and packaged foods segment, the addition and capacity of the third processing line at the Minot, North Dakota food ingredient production facility and the results of the Ingredion Incorporated ("Ingredion") and Cargill, Incorporated ("Cargill") partnerships. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by AGT at the time of preparation, may prove to be incorrect. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of AGT (including its operating subsidiaries) to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the actual results of harvests, fluctuations in the price of lentils and other crops, failure of plant, equipment or processes to operate as anticipated, accidents or labour disputes, risks relating to the integration of acquisitions or to international operations, as well as those factors referred to in the section entitled "Risk Factors" in the Annual Information Form of AGT dated March 31, 2014 which is available on SEDAR at www.sedar.com, and which should be reviewed in conjunction with this document. Although AGT has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. AGT expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.

Non-IFRS Financial Measures
AGT provides some non-IFRS measures as supplementary information that management believes may be useful to investors to explain AGT's financial results.  These non-IFRS measures include EBITDA* (earnings before finance expense, income taxes, depreciation and amortization, restructuring costs and any effects of non-cash, non-recurring and other costs and foreign exchange adjustment), Adjusted Net Earnings* (earnings before any effects of non-cash, non-recurring and other costs, restructuring costs and foreign exchange adjustments), Net Debt* (bank indebtedness, short term financing and long term debt less cash) and Net Working Capital* (current assets less current liabilities). Adjusted Net Earnings* do not include the tax effect of non-cash, non-recurring and other costs and foreign exchange.  Management believes that EBITDA* and Adjusted Net Earnings*, Net Debt* and Net Working Capital* are important indicators of AGT's ability to generate liquidity through operating cash flow to fund future working capital needs, service outstanding debt and fund future capital expenditures and uses the metric for this purpose. The exclusion of non-cash and foreign exchange adjustments eliminates the non-cash impact on EBITDA* and Adjusted Net Earnings*. EBITDA* and Adjusted Net Earnings*, Net Debt* and Net Working Capital* are also used by investors and analysts for the purpose of valuing AGT. The intent of these measures is to provide additional useful information to investors and analysts and the measure does not have any standardized meaning under IFRS. EBITDA* and Adjusted Net Earnings*, Net Debt* and Net Working Capital* should therefore not be considered in isolation or used as a substitute for measures of performance prepared in accordance with IFRS.  For a reconciliation of net earnings (loss) determined in accordance with IFRS to EBITDA* and Adjusted Net Earnings*, see the table on page 47 in the related management's discussion and analysis for the three and nine months ended September 30, 2014.

SOURCE: AGT Food and Ingredients Inc.

For further information: Investor Relations: Omer Al-Katib, (306) 244-1318, ir@agtfoods.com

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