Ag Growth International Inc.
TSX : AFN

Ag Growth International Inc.

October 01, 2010 10:15 ET

Ag Growth Announces Acquisition of Franklin Enterprises

WINNIPEG, MANITOBA--(Marketwire - Oct. 1, 2010) - Ag Growth International Inc. (TSX:AFN) ("Ag Growth" or the "Company") today announced the acquisition of the assets of Franklin Enterprises Ltd. and certain related entities ("Franklin") (www.franklinenterprises.com), for $7.1 million plus working capital, effective October 1, 2010. Franklin is a custom manufacturer that provides manufacturing, design and engineering services across North America. Franklin was established in 1979 and is based in Winnipeg, Manitoba.

Franklin operates from a facility of approximately 100,000 square feet and has significant manufacturing flexibility and a wide range of modern and sophisticated Computer Numerical Control ("CNC") fabrication equipment including CNC plasma cutting, CNC punching machines and CNC brakes, as well as laser cutters and a modern welding department that includes several robotic machines. "We are very fortunate that the opportunity to acquire Franklin was presented to us", said Rob Stenson, Chief Executive Officer of Ag Growth. "We are very pleased that the management of Franklin, headed by John Gergely, will continue in their positions post-acquisition."

Mr. Stenson continued, "The acquisition of Franklin greatly increases our manufacturing capabilities. Although we do not anticipate Franklin will contribute significant EBITDA in the short-term, the addition of Franklin provides Ag Growth with considerable manufacturing flexibility and enhanced prototyping and design capabilities. Franklin will continue as a custom manufacturer but will also manufacture components for several of our divisions thereby reducing costs and increasing our production capacity, particularly in periods of high in-season demand."

Company Profile

Ag Growth is a leading manufacturer of portable and stationary grain handling, storage and conditioning equipment, including augers, belt conveyors, grain storage bins, grain handling accessories, grain aeration equipment and grain drying systems. Ag Growth has nine manufacturing facilities in Canada, the U.S. and Finland and its sales, marketing, and distribution system distributes product in 48 states, nine provinces, and internationally.

Non-GAAP measures

References to "EBITDA" are to earnings before interest, income taxes, depreciation and amortization. Management believes that, in addition to net income or loss, EBITDA is a useful supplemental measure in evaluating the Company's performance. EBITDA is not a financial measure recognized by GAAP and does not have a standardized meaning prescribed by GAAP. Management cautions investors that EBITDA should not replace net income or loss as indicators of performance, or cash flows from operating, investing, and financing activities as a measure of the Company's liquidity and cash flows. Ag Growth's method of calculating EBITDA may differ from the methods used by other issuers.

Forward-Looking Statements

This press release contains forward-looking statements that reflect our expectations regarding the future growth, results of operations, performance, business prospects, and opportunities of the Company. Forward-looking statements may contain such words as "anticipate", "believe", "continue", "could", "expects", "intend", "plans", "will" or similar expressions suggesting future conditions or events. In particular, the forward looking statements in this press release include statements relating to the benefits of the acquisition to our business and strategy, including cost reductions and increased capacity, the impact of crop conditions in our market areas, the impact of current economic conditions on the demand for our products, our working capital and capital expenditure requirements, capital resources and the payment of dividends. Such forward-looking statements reflect our current beliefs and are based on information currently available to us, including certain key expectations and assumptions concerning anticipated financial performance, business prospects, strategies, product pricing, regulatory developments, tax laws, the sufficiency of budgeted capital expenditures in carrying out planned activities and the cost of labour and services. Forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual results to differ materially from results discussed in the forward-looking statements, including changes in international, national and local business conditions, crop yields, crop conditions, seasonality, industry cyclicality, volatility of production costs, commodity prices, foreign exchange rates, and competition. In addition, actual results may be materially impacted by the pace of recovery from the recent economic downturn, including the cost and availability of capital and the possibility of deterioration in the Company's working capital position. These risks and uncertainties are described under "Risks and Uncertainties" in our MD&A for the year ended December 31, 2009 and in our most recently filed Annual Information Form. Although the forward-looking statements contained in this press release are based on what we believe to be reasonable assumptions, we cannot assure readers that actual results will be consistent with these forward-looking statements and we undertake no obligation to update such statements except as expressly required by law.

Contact Information

  • Ag Growth International Inc.
    Steve Sommerfeld
    Investor Relations
    204-489-1855
    steve@aggrowth.com