National bank commentsThis morning, Ag Growth announced the recent failure of a commercial grain storage bin at a customer's export terminal in North Vancouver. While the cause of the failure is currently under investigation, we suspect the product line in question is related to the previously-announced rework costs for equipment supplied to two distinct projects, increasing the potential for further escalation in rework charges. Last Friday, a commercial grain storage bin manufactured by AGI located at a customer's export terminal in North Vancouver collapsed, fortunately without any resulting injuries. With the investigation ongoing few details are yet available regarding the cause of the failure and potential costs incurred by AGI. The bin is part of a new product line and one of 15 located at the export facility (with 20 other bins from the product line manufactured but not yet commissioned), all of which will be inspected. We suspect this product line is related to the previously-announced rework costs for equipment supplied to two projects (dating back to Q3/19). At this point, it is difficult to estimate a potential increase in rework costs (if any), but we believe an increase is likely assuming the failure is deemed to be a related issue, given that the aforementioned rework cost estimates have increased from $7 mln initially to $20 mln concurrent with the release of Q2/2020 results. While the bin failure (and the underlying cause) remains a concern, as we await further detail from the discovery process we note what we view as limited customer concentration risk for AGI and significant capacity on the balance sheet to absorb additional rework charges. In the company's 2019 annual report, AGI highlighted that no single customer represents 10% or more of the company's sales (similarly noting that no single customer group represents a significant concentration of credit risk) which assuming mitigation of the underlying cause of the failure and a low risk of rework costs related to other product lines provide a less than dire worst-case scenario for AGI. With AGI exiting Q2 with ~$23 mln in cash on the balance sheet and well over $100 mln in available liquidity via credit facilities, we believe Ag Growth is well-positioned to absorb a potential increase in rework charges (if any) in the near term. We make no changes to our estimates at this juncture as we continue to look for 2020e EBITDA of $149 mln, 6% above the street at $141 mln. We maintain our Outperform rating as we await further details from the discovery process and reiterate our $42.00 target driven by an unchanged 8.9x 2021e EV/EBITDA.