Bullboard - Stock Discussion Forum Ag Growth International Inc T.AFN

Alternate Symbol(s): T.AFN.DB.F | T.AFN.DB.G | T.AFN.DB.H | T.AFN.DB.I | T.AFN.DB.J | AGGZF

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Ag Growth International Inc. is a provider of the equipment and solutions required to support the storage, transport, and processing of food globally. The Company provides equipment solutions for agriculture bulk commodities, including seed, fertilizer, grain, rice, feed, and food processing systems. It has manufacturing facilities in Canada, the United States, Brazil, Italy, France, and India... see more

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TSX:AFN - Post Discussion

Ag Growth International Inc > TD

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Post by retiredcf on Nov 09, 2022 8:36am

TD

This is a flash report so there's certainly potential for them to raise their current target of $49.00. GLTA

Ag Growth International Inc.

(AFN-T) C$37.21

Q3/22 First Look: Significant Beat; 2022 Guidance Increased Event

AGI reported Q3/22 adj. EBITDA that was ~19% above consensus. Results were supported by higher-than-expected revenues and margins.
Management increased its 2022 adj. EBITDA guidance to "at least $228mm" (vs. "at least $215mm", previously), which compares to consensus of $219.9mm.
Conference call at 8:00 a.m. ET (1-800-319-4610).

Impact: POSITIVE

Q3/22 adj. EBITDA was $76.3mm (quarterly record) vs. consensus of $64.4mm and TD at $66.6mm. Meanwhile, adj. EPS was $1.41 vs. consensus/TD at $1.11/ $1.28.
Adj. EBITDA margin was 19.0% (+420bps y/y) vs. consensus and TD, both at 16.6%. Relative to our forecast, margin outperformance was driven by strong Commercial segment margins of 17.8% (vs. TD at 14.0%) and Farm segment margins of 26.3% (vs. TD at 24.0%), partly offset by Digital margins of -34.2% (vs. TD at -9.0%).
Revenue was $402.1mm (quarterly record; +28% y/y), above consensus of $387.9mm and our $401.9mm estimate. Revenue growth was broad-based, with all of AGI's reporting segments and geographies realizing healthy y/y growth.

Geographically, International and U.S. generated particularly strong y/y growth

(+44% and +27%, respectively); while Canada was +12% y/y. Regarding AGI's segments, y/y growth was: Commercial +40%; Farm +20%; and Digital +9%.

Consolidated backlog growth was +4% y/y (dollar value not provided).
Cash flow from operations (turned positive in Q3/22 following two negative

quarters) was +$58.2mm (vs. +$23.8mm in Q3/21).
AGI's total net leverage ratio declined to 4.1x (vs. 4.8x in Q2/22).
Guidance/Outlook Commentary:
AGI characterized its pipelines as robust, and noted that the company

continued to see strong interest from customers across all segments and regions. As such, AGI now expects full year 2022 adj. EBITDA of "at least $228mm", driven primarily by organic growth.
- AGI's guidance implies Q4/22 adj. EBITDA of at least $44.3mm, which compares to consensus Q4/22 adj. EBITDA of $48.1mm. However, we note that AGI increased its adj. EBITDA guidance in each of the last two quarters, and as such, we suspect that there may be some conservatism in AGI's implied Q4/22 guidance.
- AGI indicated that it is positioned to realize another record year in sales and adj. EBITDA in 2022, and has good momentum heading into 2023.