WINNIPEG, Jan. 17, 2018 /CNW/ - Ag Growth International Inc. ("AGI" or the "Company") (TSX: AFN) announced today that it recently acquired CMC Industrial Electronics ("CMC") and Junge Control Inc. ("JCI"). Combined sales and adjusted EBITDA1 for the two entities in their most recently completed fiscal years were approximately $15 million and $4 million, respectively.
CMC is a leading supplier of hazard monitoring sensors and systems used in agricultural material handling applications. CMC also manufactures commercial bin monitoring sensors and systems. Founded in 1997, CMC has locations in Burnaby, BC, and Minneapolis, MN. CMC has strong relationships with domestic and multinational customers and provides AGI with new products to better serve its customers in an environment of increasingly stringent safety standards.
JCI is a leading manufacturer of automation, measurement and blending systems for the agriculture and fuel industries. Founded in 1979, JCI is based in Cedar Rapids, Iowa. JCI's precision blending and measurement systems, focused primarily on liquid fertilizer blending, are highly complementary to AGI's fertilizer product offering and further broadens AGI's fertilizer platform.
The acquisitions of CMC and JCI add significant strength to our applied technology platform, and continue to evolve our product and solution portfolio enabling us to serve current and future customers with broader solutions. AGI is proud to welcome the teams from CMC and JCI to the AGI family.
1 See "Non-IFRS Financial Measures" below.
AGI is a leading manufacturer of portable and stationary grain and fertilizer handling, storage and conditioning equipment, including augers, belt conveyors, chain conveyors, grain storage bins, grain handling accessories, grain aeration equipment and grain drying systems. AGI has manufacturing facilities in Canada, the United States, the United Kingdom, Brazil, South Africa and Italy and distributes its product globally.
Non-IFRS Financial Measures
In analyzing our and CMC's and JCI's results, we supplement our use of financial measures that are calculated and presented in accordance with International Financial Reporting Standards ("IFRS") with a number of non-IFRS financial measures. A non-IFRS financial measure is a numerical measure of a company's historical performance, financial position or cash flow that excludes (includes) amounts, or is subject to adjustments that have the effect of excluding (including) amounts, that are included (excluded) in the most directly comparable measures calculated and presented in accordance with IFRS. Non-IFRS financial measures are not standardized; therefore, it may not be possible to compare these financial measures with non-IFRS financial measures of other companies' having the same or similar businesses. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.
In particular, this news release refers to the combined "adjusted EBITDA" of CMC and JCI for their most recently completed fiscal years, which is, in the case of CMC: earnings of CMC before income taxes, finance costs, depreciation and amortization and certain adjustments including vendor compensation and expenses related to the transaction; and in the case of JCI, is earnings of JCI before income taxes, finance costs, depreciation and amortization and certain adjustments including vendor compensation, related party expenses and expenses related to the transaction.
Management believes that, in addition to sales, profit or loss and cash flows from operating, investing, and financing activities, adjusted EBITDA is a useful supplemental measure in evaluating CMC's and JCI's performance. Management cautions investors that adjusted EBITDA should not replace sales or profit or loss as indicators of performance, or cash flows from operating, investing, and financing activities as a measure of a company's liquidity and cash flows. AGI's method of calculating adjusted EBITDA may differ from the methods used by other issuers.
In addition, the combined sales and adjusted EBITDA amounts of CMC and JCI included in this news release are derived from their respective financial statements, which are prepared in accordance with generally accepted accounting principles for private enterprises in Canada and the United States, respectively, which differ in some material respects from IFRS, and accordingly may not be comparable to the financial statements of AGI or other Canadian public companies.
This news release contains forward-looking information within the meaning of applicable securities laws that reflects our expectations regarding the future growth, results of operations, performance, business prospects, and opportunities of the Company. Forward-looking information may contain such words as "anticipate", "believe", "continue", "could", "expect", "intend", "plan", "will" or similar expressions suggesting future conditions or events. In particular, the forward looking information in this news release includes information relating to our outlook for our financial and operating performance, including statements with respect to our enhanced competitive position as a result of the acquisitions of CMC and JCI and the anticipated impact of the acquisitions on AGI's business.
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 grain production in our market areas, contributions from CMC and JCI and other recent acquisitions, financial performance, business prospects, strategies, product pricing, regulatory developments, political events, tax laws, the sufficiency of budgeted capital expenditures in carrying out planned activities, currency exchange rates and the cost of materials, labour 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 changes in international, national and local macroeconomic and business conditions, weather patterns, crop planting, crop yields, crop conditions, the timing of harvest and conditions during harvest, seasonality, industry cyclicality, volatility of production costs, agricultural commodity prices, the cost and availability of capital, currency exchange rates, the availability of credit for customers, competition and AGI's failure to achieve the expected benefits of the CMC, JCI and other recent acquisitions. Further, there can be no assurance that any of the anticipated strategic and other benefits of the CMC and JCI acquisitions will be realized. These and other risks and uncertainties are described under "Risks and Uncertainties" and "Forward-Looking Information" in our most recently filed Management's Discussion and Analysis and Annual Information Form. These factors should be considered carefully, and readers should not place undue reliance on the Company's forward-looking information. We cannot assure readers that actual results will be consistent with these forward-looking information and we undertake no obligation to update such information except as expressly required by law.
SOURCE Ag Growth International Inc. (AGI)
For further information: Investor Relations, Steve Sommerfeld, 204-489-1855, [email protected]