Q3 2025 Ag Growth International Inc Earnings Call

Conference call and webcast.

Operator: Conference call and webcast. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star then one on your telephone keypad. As a courtesy to management and other participants on the call, please limit yourself to two questions and rejoin the queue if you have further questions. Should anyone need assistance during the conference call, they may reach an operator by pressing star then zero. Before we begin, we caution listeners that this call contains forward-looking information and that actual results could differ materially from such forecasts or projections. Further, in preparing the forward-looking information, certain material factors and assumptions were used by management.

As a reminder, all participants are in a listen-only mode. And the conference is being recorded.

After the presentation, there will be an opportunity for analysts to ask questions.

To join the question queue. You may press star then 1 on your telephone keypad,

As a courtesy to management and other participants on the call, please limit yourself to 2 questions and rejoin the queue. If you have further questions,

should anyone need assistance during the conference call they may reach an operator by pressing star then zero.

Before we begin, we caution listeners that this call contains forward-looking information and that actual results could differ materially from such forecasts or projections.

Further in preparing before, looking information, certain material factors and assumptions were used by management.

Operator: Additional information about the material factors that could cause actual results to differ materially from the forecasts or projections and the material factors and assumptions used by management in preparing the forward-looking information are contained in our Q3 MD&A and press release, which are available on the AGI website. I would now like to turn the conference over to Paul Householder, President and CEO of AGI. Please go ahead, sir.

Additional information about the material factors that could cause actual results to differ materially from the forecasts, or projections, and the material factors and assumptions used by Management. In preparing, the forward-looking information are contained in our third quarter, mdna

And press release.

Which are available on the AGI website.

I would now like to turn the conference over to Paul householder president and CEO of AGI. Please go ahead, sir.

Paul Householder: Good morning, thank you for joining Ag Growth International's Q3 2025 results call. Today, I'll review our Q3 performance and how the execution of our strategy is driving results. After my remarks, I'll turn the call over to Jim for additional commentary on the quarter. I'll begin with safety, which remains a top priority at Ag Growth International. Our recordable incident rate decreased 15% year over year to a new all-time low. In addition, more than half of our production facilities have now surpassed 1 year without a lost-time accident. Clear evidence of our progress on safety and the benefits of embracing a zero harm culture. We continue to invest in proactive measures, including enhanced training, digital monitoring, and near-miss reporting. Safety isn't a standalone metric.

Good morning, and thank you for joining oggies. Third quarter, 2025 results. Call

Today, I'll review our Q3 performance and how the execution of our strategy is driving results.

After my remarks, I'll turn the call over to Jim for additional commentary on the quarter.

I'll begin with safety which remains a top priority at AGI.

Our recordable incident rate decreased 15% year-over-year to a new all-time low.

In addition more than half of our production facilities have now surpassed 1 year without a lost time, accident, clear evidence of our progress on safety and the benefits of embracing a zero harm culture.

We continue to invest in proactive measures including enhanced training digital monitoring and near misreporting.

Paul Householder: It's embedded in how we plan, operate, and make decisions each and every day across the entire company, from our facilities to our corporate offices. To begin our prepared remarks this quarter, I would like to first address the delay in filing our results. This quarter, we experienced a delay in our Q3 filings and were unable to meet the prescribed timelines for releasing financial results and related disclosures. We concluded that further time was required to confirm and finalize the accounting treatment of operations in Brazil as we have become aware through our internal channels of various financial reporting and internal control matters that required additional time to evaluate. Additionally, over a relatively short period of time, we created and launched a new business model, secured several large and comprehensive projects, and formed an investment fund to support current and future projects.

Safety isn't a standalone metric. It's embedded in how we plan operate and make decisions each and every day across the entire company from our facilities to our corporate offices.

To begin our prepared remarks, this quarter, I would like to First address the delay in filing our results.

This quarter. We experienced a delay in our third quarter filings and were unable to meet the prescribed timelines for releasing Financial results and related disclosures.

We concluded that further time was required to confirm and finalize, the accounting treatment of operations in Brazil as we have become aware through, our internal channels of various financial reporting and internal control matters that required additional time to evaluate.

Paul Householder: These measures, while delivering favorable profitable growth, added significant complexity to our business, which contributed to our auditors needing to fully review. Additionally, our audit committee performed an independent and comprehensive review of various matters relating to our financial reporting and internal controls with respect to operations in Brazil. Through this comprehensive review, we identified specific opportunities to improve our financial reporting processes and internal controls related to Brazil. These findings were determined to constitute a material weakness in our internal control over financial reporting. We are actively addressing this material weakness and have initiated remediation measures which are further detailed in the disclosure controls and procedures and internal control over financial reporting section of the MD&A. Turning to a recap of our Q3 results as well as a broader discussion on our key corporate strategies.

Additionally over a relatively short period of time we created and launched a new business model secured, several large and comprehensive projects and formed an investment fund to support current and future projects, these measures while delivering favorable profitable growth, added significant complexity to our business which contributed to our Auditors needing to fully review.

Additionally, our audit committee performed an independent and comprehensive review of various matters, relating to our financial reporting and internal controls with respect to operations in Brazil.

Through this comprehensive review, We identified specific opportunities to improve our financial reporting processes and internal controls related to Brazil.

These findings were determined to constitute a material weakness, in our internal control over financial reporting.

We are actively addressing this material weakness and have initiated remediation measures, which are further detailed in the disclosure controls and procedures and internal control over financial reporting section of the mdna.

Turning to a recap of our Q3 results as well as a broader discussion on our key corporate strategies.

Paul Householder: AGI delivered a solid quarter with growth in both revenue and Adjusted EBITDA despite a challenging market segment backdrop. Consolidated revenue reached CAD 389 million, which represents 9% growth year-over-year. Importantly, this is consistent with our prior commentary on realizing H2 revenue growth. Adjusted EBITDA came in at CAD 71 million, up 4% versus prior year. Our Q3 results reflect both the strength of our strategy and the realities of our markets. While the North America farm market navigates challenging ag equipment dynamics, our commercial segment, in particular within the international regions of our business, are quite strong and continue to demonstrate a steady growth profile. Our Q3 results are perhaps the clearest example yet of the benefits we're realizing from the successful execution of the key strategies and tactics put into place over the last few years.

AGI delivered, a solid quarter. With growth in both revenue and adjusted ibida, despite a challenging market segments backdrop.

Consolidated Revenue reached 389 million which represents 9% growth year-over-year.

Is consistent with our prior commentary on realizing second, half Revenue growth.

Adjusted to the ibida came in at 71 million up 4% versus prior year.

Are quite strong and continue to demonstrate a steady growth profile. Our third quarter results are perhaps the clearest example yet of the benefits we're realizing from the successful execution of the key strategies and tactics put into place over the last few years.

Paul Householder: AGI is now better positioned to capitalize on market opportunities across diverse geographies. As a reminder, we've organized our corporate strategies into 3 areas: profitable organic growth, operational excellence, and balance sheet discipline. As we get into our Q3 results, I'd like to use this framework to provide updates across all 3 of these areas, including where these strategies have been implemented over recent years and how they are delivering value and supporting growth potential. I'll begin with profitable organic growth. Recall this strategy included 3 areas: product transfers, emerging markets, and growth platforms. An inherent strength of our strategy is that each of these areas are interrelated, which serves to reinforce their effectiveness. I will address each in order. Undoubtedly, product transfers have been a growth driver for AGI.

AGI is now better positioned to capitalize on Market opportunities across diverse geographies.

As a reminder, we've organized our corporate strategies. Into 3 areas profitable organic growth, operational, excellence and balance sheet disciplines

As we get into our third quarter results, I'd like to use this framework to provide updates across all 3 of these areas including where these strategies have been implemented over recent years and how they are delivering value and supporting growth potential.

I'll begin with profitable organic growth recall. This strategy included 3 areas, product transfers, emerging markets and growth platforms.

An inherent strength of our strategy is that each of these areas are interrelated which serves to reinforce their effectiveness.

I will address each in order.

Undoubtedly product transfers have been a growth driver for AGI.

Paul Householder: As a reminder, product transfers involve taking highly successful products from one region within AGI and running an internal transfer program to migrate the sales through to manufacturing capabilities to other attractive regional markets. Product transfers often include some local market product customization to ensure it will fit the requirements of a new customer base within that new region. Similar to the H1 of the year, international commercial segments benefited from our efforts on executing product transfers. Customer demand for complete solutions is high in Brazil, and our team is actively advancing several major projects secured in both 2024 and 2025 across food, feed, and fertilizer, in addition to our long-standing presence in the grain market. All these elements have come together to deliver strong customer engagement and a high pace of activity.

As a reminder product transfers involve taking highly successful products from 1 region within AGI and running an internal transfer program to migrate the sales through to manufacturing capabilities, to other attractive Regional markets.

product transfers often include some local market product, customization to ensure it will fit the requirements of a new customer base within that new region

similar to the first half of the Year International commercial segments benefited from our efforts on executing product transfers.

Customer demand for complete Solutions is high in Brazil and our team is actively advancing several major projects secured in both 2024 and 2025 across food, feed and fertilizer, in addition to our long-standing presence in the grain market.

All these elements have come together to deliver strong, customer engagement and a high pace of activity.

Paul Householder: Our comprehensive offering is a competitive advantage which has enabled us to rapidly grow market share in one of the most strategically important and high-growth agriculture markets in the world. We are encouraged by the highly active pipeline and note the significant opportunities remain as we move into 2026. Product transfers have also been a key part of our success in areas outside of Brazil. In India, our storage bins, permanent material handling, and portable material handling solutions have added important capabilities which are providing top-line stability and serving as a catalyst to access large and rapidly growing markets within India and across Asia Pacific. As a relatively early entrant into this emerging market, we remain optimistic about the potential of these new in-country capabilities to provide long-term profitable growth.

Our comprehensive offering is a competitive Advantage which has enabled us to rapidly grow market share in 1 of the most strategically important and high growth agriculture markets in the world.

We are encouraged by the highly active Pipeline and note the significant opportunities remain as we move into 2026.

Product transfers have also been a key part of our success in areas outside of Brazil.

In India, our storage bins, permanent Material, Handling and portable Material, Handling Solutions have added important capabilities which are providing Topline stability and serving as a catalyst to access large and rapidly growing markets within India and across asia-pacific.

As a relatively early entrant into this Emerging Market, we remain optimistic about the potential of these new in-country capabilities to provide long-term profitable growth.

Paul Householder: Food, feed, and fertilizer product transfers are the next areas of focus for India as we look towards 2026 and beyond, building on our success in Brazil. The second pillar of our profitable organic growth strategy is a focus on emerging markets, particularly within our EMEA business. A strategic deployment of business development resources into the Middle East has yielded several large project wins. Activity has also been steady in Africa and Southeast Asia with a consistent stream of new project wins. Preliminary visibility into potential new projects in Ukraine has begun to emerge. In aggregate, we have expanded our presence in many areas of the world, which supports the overall diversification and resilience of our business. Finally, the third pillar of our profitable organic growth strategy is our growth platforms. These include food and feed equipment businesses as well as our digital products.

Food feed and fertilizer product transfers are the next areas of focus. For India, as we look towards 2026 and Beyond building. On our success in Brazil,

the second pillar of our profitable organic growth. Strategy is a focus on Emerging Markets particularly within our EA business.

A strategic deployment of Business Development resources into the Middle East, has yielded. Several large project wins?

Activity has also been steady in Africa, and Southeast Asia with a consistent stream of new project wins.

Preliminary visibility into potential new projects in Ukraine has begun to emerge.

In aggregate, we have expanded our presence in many areas of the world, which supports the overall diversification and resilience of our business.

Finally, the third pillar of our profitable organic growth strategy. Is our growth platforms.

These include food and feed equipment businesses as well as our digital products.

Paul Householder: These businesses have a focus on enhancing processing capabilities, which naturally complement our core storage and handling expertise. In addition, these areas all participate in very large and growing addressable markets. So far, our efforts have been mostly on enhancing and developing solution offerings, leveraging capabilities within AGI and pulling them together into comprehensive standalone global business units. With that process largely complete, we are now gaining momentum and making positive contributions to our financial results. The feed business has a large pipeline with numerous opportunities in advanced quoting stages. The food platform is benefiting from concentrated efforts to develop new customer relationships and diversify across global end markets. Finally, the digital business, which has primarily been a North America offering, is now being taken to new regions around the world, most notably into Brazil.

These businesses have a focus on enhancing processing capabilities which naturally complement our core storage and handling expertise.

In addition, these areas all participate in very large and growing addressable markets.

So far, our efforts have been mostly on enhancing and developing solution offerings.

Leveraging capabilities within AGI and pulling them together into comprehensive Standalone Global business units.

With that process largely complete. We are now gaining momentum and making positive contributions to our financial results.

With numerous opportunities in advanced quoting stages.

The food platform is benefiting from concentrated efforts to develop new customer relationships and diversify across Global and markets.

and finally, the digital business which has primarily Been a North America offering is now being taken to new regions around the world, most notably into Brazil

Paul Householder: Overall, these three strategies, implemented just a few years ago, have generated favorable financial and strategic results for AGI. These strategies are collectively driving the above-market growth we are delivering in the commercial segment. As conditions in the farm market eventually stabilize, our strategy provides upside potential to our results, which fundamentally did not exist just a few years ago. A few further comments on the other two core elements of our corporate strategy, operational excellence and balance sheet discipline. Our operational excellence program continues to progress and is designed to optimize the business and deliver margin-enhancing efficiencies. Two significant facility consolidations within North America are nearing completion, enabling us to streamline production and remove costs, helping to create a more agile manufacturing network that can quickly and efficiently respond to market shifts and customer needs.

Overall, these 3 strategies implemented just a few years ago, have generated favorable financial and strategic results for AGI.

These strategies are collectively, driving the above market growth. We are delivering in the commercial segment.

As conditions in the farm market. Eventually stabilize our strategy provides upside potential to our results which fundamentally did not exist just a few years ago.

a few further comments on the other 2 core elements of our corporate strategy, operational excellence and balance sheet, discipline

Our operational excellence program continues to progress and is designed to optimize the business and deliver margin enhancing efficiencies.

Do significant facility consolidations within North. America are nearing completion. Enabling us to streamline production and remove costs helping to create a more agile, manufacturing Network that can quickly and respond to Market shifts and customer needs.

Paul Householder: In addition, towards the end of 2025, we also divested one of our smaller non-core Canadian facilities to a new owner, further streamlining our footprint within North America. Building on these consolidations, we've advanced several initiatives to optimize manufacturing throughput and streamline our supply chain. Our teams have implemented process improvements across key sites, rationalized product lines, and enhanced logistics coordination. These efforts are already delivering benefits in cost structure and working capital efficiency and set the stage for improved profitability as volatile market conditions stabilize and demand rebounds in the North America farm market. Finally, our ERP implementation remains a cornerstone of our overall transformation. This enterprise-wide initiative is now progressing through a series of deployment phases.

In addition towards the end of 2025, we also divested 1 of our smaller, non-core Canadian facilities to a new owner further, streamlining our footprint within North America.

Building on these consolidations, we've Advanced several initiatives to optimize manufacturing throughput and streamline our supply chain.

Our teams have implemented process improvements across key sites, rationalized product lines, and enhanced Logistics coordination.

These efforts are already delivering benefits and cost structure and working capital efficiency and set the stage for improved profitability as volatile market conditions, stabilize and demand rebounds in the North America Farm Market.

Finally, our Erp implementation remains a Cornerstone of our overall transformation.

Paul Householder: Once fully implemented, our new ERP platform will unify our systems, accelerate quoting and engineering workflows, and unlock significant efficiencies across finance, operations, and supply chain, among other areas, which all ultimately serve to enhance the customer experience. This expanded organizational capability will deliver cost savings in addition to the potential for additional revenue through a more effective and integrated information system. While we are encouraged by the progress we've made in managing what is in our control by streamlining costs and finding more efficient ways to operate the business, as we look towards 2026, we expect to take additional steps to improve our operating efficiency across North America. These actions are designed to both optimize our operating cost structure while enhancing the customer experience. The measure of success of these actions will be to strengthen our North America operating margins across 2026.

This enterprise-wide initiative is now progressing through a series of deployment phases. Once fully implemented, our new Erp platform will unify our systems accelerate quoting and engineering workflows and unlock significant efficiencies across Finance operations, and supply chain among other areas, which all ultimately serve to enhance the customer experience.

This expanded organizational capability will deliver cost Savings. In addition to the potential for additional Revenue through a more effective and integrated information system.

While we are encouraged by the progress we've made in managing, what is in our control by streamlining costs and finding more efficient ways to operate the business.

As we look towards 2026, we expect to take additional steps to improve our operating efficiency across North America.

These actions are designed to both optimize our operating cost structure while enhancing the customer experience.

the measure of success of these actions will be to strengthen our North America operating margins across 2026,

Paul Householder: Finally, an update on our balance sheet discipline strategy. We continue to make meaningful progress on working capital, advancing the deployment of upgraded and consistent processes, tools, and capabilities to each of our facilities, and improving overall working capital visibility and control across the organization. In September, we launched a new commercial investment fund in Brazil, complementing the existing fund structure. This innovative investment vehicle allows us to bring differentiated offerings to the market while monetizing AGI's long-term financing receivables tied to large commercial projects. With the fund now in place, future cycles of project financing and receivables monetization will be more streamlined, creating structural competitive advantages for our Brazil business. The first monetization of financing receivables occurred shortly after Q3. We expect additional inflows in early 2026, providing both liquidity and support for debt reduction.

Finally, an update on our balance sheet discipline strategy, we continue to make meaningful progress on working capital advancing the deployment of upgraded and consistent processes tools and capabilities to each of our facilities and improving overall, working capital visibility and control across the organization.

In September, we launched a new commercial investment Fund in Brazil. Complementing, the existing farm structure this Innovative investment vehicle allows us to bring differentiated offerings to the market while monetizing oggies, long-term financing receivables, tied to large commercial projects,

With the fund now in place future cycles of project, financing and receivables. Monetization will be more streamlined, creating structural competitive advantages for our Brazil business.

the first monetization of financing receivables, occurred shortly after Q3

We expect additional inflows in early 2026, providing both liquidity and support for debt reduction.

Paul Householder: Finally, through a partnership with a leading Canadian financing institution, we have initiated a payables optimization program aimed at improving terms and increasing our average length of payables with certain high-volume suppliers. This will help maximize cash flow and incrementally further reduce overall working capital. Moving on to our order book. Our current order book remains healthy, supported by momentum in the commercial segment. At the end of the quarter, our order book stood at approximately CAD 667 million, up slightly year over year. Consistent with the H1 of the year, the order book is heavily weighted towards commercial, given ongoing industry-wide challenges in the farm ag equipment segment. With over 90% of the order book allocated to commercial, our order book is more impacted by the timing of successfully winning large commercial projects.

Finally, through a partnership with the leading Canadian financing institution. We have initiated a payables optimization program aimed at improving terms and increasing our average length of payables with certain high volume suppliers.

This will help maximize cash flow and incrementally further reduce overall working capital.

Moving on to our order book.

At the end of the quarter, our order book stood at approximately 667 million up slightly year-over-year.

Consistency in the farm a equipment segment.

With over 90% of the order book, allocated to commercial, our order book is more impacted by the timing of successfully winning large commercial projects.

Paul Householder: The overall composition of our order book reflects a strategic shift towards higher-value projects with longer execution timelines. This approach enhances revenue visibility, strengthens customer relationships, while partially mitigating the impact from the slow farm segment activity. A few comments on tariffs and recent developments. Tariff dynamics remain fluid, and our internal teams are actively monitoring developments across key markets. New regulations and increased tariff rates were introduced in Q3. Our teams continue to explore available avenues to mitigate the effect of tariffs, including modifying and redesigning our supply chain. Overall, our agile organization, global sourcing strategies, and flexible supply chain enable us to manage these uncertainties effectively, minimizing disruption and margin impacts. We will continue to closely monitor the situation for new developments. Progressing through Q4, activity and quoting pipeline across our international commercial segment remained steady.

The overall composition of our order book, reflects a strategic shift towards higher value projects with longer execution timelines.

This approach enhances Revenue visibility.

Strengthens customer relationships while partially mitigating, the impact from the slow Farm segment activity.

A few comments on tariffs and recent developments.

Tariff Dynamics, remain fluid, and our internal teams are actively monitoring developments across key markets.

New regulations and increased tariff rates were introduced in the third quarter.

Our teams continue to explore available Avenues to mitigate the effect of tariffs including modifying and redesigning our supply chains.

Overall, our agile organization, Global sourcing strategies and flexible supply chain, enable us to manage these uncertainties effectively, minimizing disruption and margin impacts. We will continue to closely monitor the situation for new developments.

progressing through the fourth quarter activity and quoting pipeline across our International commercial segment, remained steady

Paul Householder: However, soft sentiment across the North America agriculture sector, particularly in our Canadian farm business, continues to weigh on our overall performance with unclear timing for a meaningful farm market recovery. The near-term focus for our North America farm business is order intake and a successful execution of our early order program. In addition, business activity in India and North America commercial, historically strong markets for AGI, began to slow through the end of the year with expectations to remain subdued into early 2026. Despite these headwinds, the strength of our order book within certain areas of the commercial segment highlight the resiliency of our diversified business model, helping to partially offset the challenges across certain markets. Overall, Q4 expectations are for lower Adjusted EBITDA sequentially and versus prior year, largely from challenging market conditions, negative mix, and notably higher SG&A costs from a comparatively lower prior year.

However soft sentiment across the North American agriculture sector. Particularly in our Canadian Farm business continues to weigh on our overall performance with unclear timing for our meaningful Farm Market recovery.

The near-term focus for our North America Farm business is order intake and a successful execution of our early order program.

In addition, business activity, in India, and North America commercial, historically strong markets for AGI, began to slow through the end of the year, with expectations to remain subdued into early 2026.

despite these headwinds, the strength of our order book within certain areas of the commercial segment highlight the resiliency of our Diversified business model, helping to partially offset, the challenges across certain markets,

Overall Q4 expectations are for lower adjusted ibida sequentially. And versus prior year, largely from challenging market conditions, negative mix and notably higher STNA costs from a comparatively lower prior year.

Paul Householder: We remain excited about the potential of the company with the compounding impact of our strategy delivering international commercial momentum combined with an eventual rebound in the North America ag equipment segment. I'll now turn the call over to Jim.

We remain excited about the potential of the company with the compounding impact of our strategy, delivering International commercial, momentum combined with an eventual Rebound in the North America a equipment segment.

On now, turn the call over to Jim.

Jim: Thank you, Paul, and good morning, everyone. Today, I'll touch on a few areas that includes an overview of our Q3 results, an update on key balance sheet metrics, some comments on cash flow, and a quick recap of our capital allocation priorities. Total revenue for Q3 was CAD 389 million, up 9% year over year, while Adjusted EBITDA reached CAD 71 million, an increase of 4%. Adjusted EBITDA margin came in at 18.2%, down about 100 basis points from last year, primarily reflecting the mix shift toward commercial projects. Our commercial segment continues to deliver strong year-over-year revenue growth. This performance reflects our execution of large-scale projects across multiple international markets. Brazil remains a standout contributor. Customer demand for comprehensive solutions is high, and our team is actively advancing several major projects secured in both 2024 and 2025.

Thank you, Paul, and good morning everyone. Today, I'll touch on a few areas that includes an overview of our third, quarter results and update on key balance sheet. Metrics some comments on cash flow and a quick recap of our Capital allocation priorities.

Total revenue for Q3 was 389 million up 9% year-over-year while adjusted ibitta reached 71 million, an increase of 4%.

Adjusted Eva to margin. Came in at 18.2% down about 100 basis points from last year, primarily reflecting the mixed shift toward commercial projects.

Our commercial segment continues to deliver strong year-over-year Revenue growth.

This performance reflects our execution of large-scale projects across multiple International markets.

Brazil remains a standout contributor customer demand for comprehensive Solutions is high and our team is actively advancing several major projects secured in both 2024 and 2025.

Jim: Thanks to our product transfer program, technical support from strategic third-party partners, and customized financing options, we are able to maintain a high pace of activity. Elsewhere, our EMEA region continues to make meaningful contributions, driven by the execution of several major projects in the Middle East and Africa. Strong Q3 revenue growth was coupled with excellent cost control initiatives to enable an outsized capture of incremental Adjusted EBITDA contribution from this region. As a result of execution of large-scale projects, increased volume, and disciplined cost containment, our commercial segment's Adjusted EBITDA margin expanded to 19.5%, up from 17.9% year over year. It is worth clarifying that we did have some commercial revenue, which was anticipated in Q4, move into Q3 based on project timing and accelerated achievement of certain milestones.

Thanks to our product transfer program. Technical support from strategic third-party partners and customized financing options. We are able to maintain a high pace of activity.

Elsewhere, our Amia region continues to make meaningful contributions driven by the execution of several major projects in the Middle East and Africa.

Strong third quarter Revenue. Growth was coupled with excellent cost, control initiatives to enable an outsized capture of incremental adjusted Eva contribution from this region.

As a result of execution of large-scale projects, increased volume and discipline Cost, Containment our commercial segments adjusted Eva margin expanded to 19.5%.

% year-over-year.

It's worth clarifying that we did have some commercial Revenue, which was anticipated in Q4 move into Q3 based on Project timing and accelerated achievement of certain milestones.

Jim: Though this doesn't impact our overall outlook for H2 revenue growth on a fully consolidated basis, which also includes expectations for a strong Q4 result for our Commercial segment. Turning to our Farm segment. While overall revenue declined this quarter, performance varied across regions. Brazil showed improvement with revenue and order book up quarter-over-quarter. The US saw only a slight revenue decline and early signs of order book stabilization. Canada softened after a strong 2024, with conditions now broadly in line with the US. Low commodity prices continued to pressure farmer income, and while dealer inventory for portable equipment declined through Q3, it's still above historic levels. As a result, our Farm segment Adjusted EBITDA margin remains compressed due to lower volumes and an unfavorable product mix.

Though, this doesn't impact our overall outlook for second, half Revenue growth on a fully Consolidated basis. Which also includes expectations for a strong key for a result for our commercial segment.

turning to our farm segment, while overall Revenue declined, this quarter performance varied across regions

Brazil showed improvement with revenue and order book up quarter over quarter.

The US saw only a, slight, Revenue Decline and early signs of order books stabilization.

And Canada softened after a strong 2024 with conditions. Now, broadly in line with the US

low commodity prices continue to pressure farmer income and while dealer inventory for portable equipment declined, through Q3, it's still above historical levels.

As a result, our farm segment adjusted, Evita margin remains compressed due to lower volumes and an unfavorable product mix.

Jim: We recently launched our annual early order program for portable grain handling equipment, a category hit hard by current market conditions. Adjustments have been made to better align with today's environment, but early feedback suggests purchasing trends may mirror last year's weak performance. While the program offers insight into sentiment, it is too early to call a trough in the overall market. Conditions remain challenging and we are focused on cost control and preparing for a recovery. The simple reality is that industry conditions within our farm market have not changed. Crop prices are still low, dealer inventories are still high, and tariffs and subsidy support remain uncertain. We expect the near-term uncertainty in the North American farm market to persist into early 2026. One final comment on some of the details of our Adjusted EBITDA in the quarter.

We recently launched our annual early order program for portable grain handling equipment. A category hit hard by current market conditions.

Adjustments have been made to better align with today's environment but early feedback suggest purchasing Trends May mirror last year's week performance.

while the program offers insight into sentiment,

it's too early to call a trough in the overall Market.

Conditions, remain challenging and we're focused on cost control and preparing for a recovery.

A simple reality is that industry conditions within our farm market have not changed. Crop prices are still low dealer, inventories are still high.

And tariffs and subsidy support remain uncertain.

We expect the near-term uncertainty in the North American Farm Market to persist into early 2026.

1 final comment on some of the details of our adjusted ebita in the quarter.

Jim: It's worth calling out the transactional, transitional and other line item in our Adjusted EBITDA reconciliation. We have diligently worked to reduce this figure as we have now progressed through several one-time expenses and projects related to streamlining the business. As a percentage of total Adjusted EBITDA, this line item is largely immaterial this quarter. While certain transient projects and one-time expenses can come up on occasion, we believe we are now in a place where this line item should be smaller and less variable than prior quarters, enhancing our overall earnings quality. Moving on to our balance sheet and cash flow. Our net debt leverage ratio held steady at 3.9x on a quarter-over-quarter basis. This was primarily due to the sizable but temporary working capital investments required to support large-scale projects, particularly in Brazil.

It's worth calling out the transactional transitional and other line item in our adjusted Eva reconciliation. We have diligently worked to reduce this figure as we have now progressed through several 1-time expenses and projects related to streamlining the business.

As a percentage of total adjusted Evita, this line item is largely immaterial this quarter.

While certain transient projects and 1-time expenses can come up on occasion.

We believe we are now in a place where this line item should be smaller and less variable than prior quarters enhancing, our overall earnings quality.

Moving on, to our balance sheet and cash flow.

Our net debt leverage ratio held steady at 3.9 times on a quarter over a quarter basis.

This was primarily due to the sizable but temporary working capital Investments, required to support large-scale projects, particularly in Brazil.

Jim: Importantly, operating cash flow in the quarter remained strong, demonstrating the underlying strength of our business. Though free cash flow was impacted by the requirement for some additional project financing in Brazil. We anticipate this cash flow dynamic will shift in the coming months and quarters as a previously announced investment fund set up in Brazil steadily monetizes these long-term receivables. This increases our cash flow while decreasing our overall working capital investment. The process of monetizing these receivables through the investment fund has already started with AGI collecting some initial inflows in Q4. As we proceed into 2026, further monetization actions are expected. Strategically, with the investment fund in place, further projects and related transactions will be able to more rapidly move through our balance sheet and produce cash inflows, a unique advantage for AGI in the Brazilian market.

Importantly, operating cash flow in the quarter remains, strong demonstrating the underlying strength of our business, though. Free cash flow was impacted by the requirement for some additional project financing in Brazil.

We anticipate this cash flow Dynamic, will shift in the coming months, and quarters as the previously announced investment fund set up in Brazil, steadily monetizes these long-term receivables.

this increases our cash flow while decreasing our overall working capital investment

The process of monetizing these receivables through the investment fund has already started with AGI. Collecting some initial inflows in Q4.

As we proceed into 2026 further, monetization actions are expected. Strategically with the investment Fund in place further projects and related transactions, will be able to more rapidly move through our balance sheet and produce cash inflows. A unique Advantage for AGI in the Brazilian Market.

Jim: Finally, a few comments about our capital spending plans for 2025. We remain on pace for total CapEx of approximately CAD 30 million for the full year 2025, with about CAD 21 million incurred through Q3. The expenses for our ERP implementation are not included in these figures. We're continuing to evaluate larger, more strategic capital investment opportunities and are advancing planning efforts in parallel. In closing, I would like to reiterate the importance of AGI delivering a solid Q3 amid varied market conditions. This is a tangible signal that our strategic initiatives are working and delivering real value to the business. Thank you for your continued support, and we look forward to updating you on our progress in the quarters ahead. Now back over to you, operator, to open up the call for questions.

And finally, a few comments about our Capital spending plans for 2025.

We remain on Pace for total capex of approximately 30 million for the full year 2025 with about 21 million incurred through the third quarter.

The expenses for our Erp implementation are not included in these figures.

In closing, I would like to reiterate the importance of AGI, delivering a solid Q3 amid varied market conditions.

This is a tangible signal that our strategic initiatives are working and delivering real value to the business.

Thank you for your continued support. And we look forward to updating you on our programs. In the quarters ahead.

Now, back over to you, operator, to open up the call for questions.

Operator: The first question today comes from Gary Ho with Desjardins. Please go ahead.

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The first question today, comes from Gary hoe with this jar on. Please go ahead.

Gary Ho: Thanks. Good morning, gentlemen. Just maybe just to start off with respect to the reporting delay, there's a lot of accounting and legal jargon in the release. Maybe just can you walk us through kind of what the weakness in internal controls were related to? Was it uncertainty with revenue recognition, segregation of duties? Maybe just high level, like what didn't the accountants get comfort with? I'm assuming that's all been resolved and working through the remediation. Like, we shouldn't experience any delays looking out.

Thanks, uh good morning gentlemen. Um, just maybe just to start off with respect to the reporting delay. Um, there's a lot of accounting and legal jargon in the release, so maybe just can you walk us uh, through kind of what the weakness in internal controls were related to? Was it uncertainty with re Revenue recognition? Segregation of Duties maybe just high level like what what didn't the accountants, um, get comfort with and I'm assuming that's all been resolved and working through the remediation like we shouldn't experience any delays uh looking looking at

Jim: Hey, Gary. Thanks for the question. Good morning. You know, we did a lot of business opportunities in Brazil happened throughout the year. Large projects, complex projects, new stuff to us. We felt it necessary to do a deeper dive in our operations in Brazil. Really it was great to do, make sure that we established the right foundation and structure, 'cause these opportunities are quite large and we expect them to continue for quite some time. We took the time, and as you can probably appreciate, new businesses, new things going on and studied how we were doing anything.

Jim: The areas of focus that came out of it centered around a few areas related to things that you'd probably expect. Segregation of duties. In new businesses, typically you have fewer people involved running with them and doing things. We have an opportunity to have more people involved, spread that responsibilities around, improve our segregation of duties. From a technical accounting perspective, these deals and the legal agreements are quite complex. There's an opportunity there. I mean, we rely on third parties, but there's an opportunity there to enhance our specific accounting knowledge in these complicated areas and help with training people, providing more information for people, and having more people internally be involved in the process.

Hey Gary, thanks, thanks for the question and then, good morning. Um, yeah. And and so, uh, you know, it, we did, uh, a lot of, uh, business opportunities in Brazil, uh, um, happened throughout the year, large projects, complex, projects, new new stuff to us and, uh, we felt it necessary to do a, a deeper dive in our operations, in Brazil. And, and, and really, it was great to do. Make sure that we, we established the right foundation and structure, uh, because these opportunities are are quite large and, and, and we expect them to continue for for quite some time. So, we took the time, and you can probably appreciate new businesses, new things going on and, uh, and studied how we were doing anything and the areas of focus that that uh uh came out of it uh centered around a few areas, uh, related to things that you

Jim: The last thing too that we've, we're establishing is really just extra review processes and making sure that, you know, all the right sets of eyes are involved, scrub it, and make sure that everyone's comfortable going forward. I think this is something that happens inevitably whenever a business gets involved in a new area. Fortunately, we were able to do all the work, and it's quite exhaustive work, and come out of it with a very good remediation plan.

Probably expect segregation of Duties. So, a new businesses typically, you have, uh, fewer people involved running with them and doing things. And so, we have an opportunity to, uh, uh, have more people involved. Spread that responsibilities around improve, our segregation of Duties, uh, from a technical accounting perspective. Uh, um, these these deals are are and, and the legal Agreements are quite complex. And so, there's an opportunity there. I mean, we rely on third parties, but there's an opportunity there to, uh, enhance our specific accounting, knowledge, in these complicated areas, uh, and and, and help with training people fighting more information for people and having more people internally, uh, uh, uh, be involved in the process. And then and then the last thing too, that uh, that we've uh, we're establishing is really just extra review processes and making sure that uh um you know, all the right set of sets of eyes are are involved, scrub it, and make sure

Sure, that everyone's comfortable going forward. I think this is something that happens inevitably, whenever whenever a business, gets involved in, in, in a new area and so, uh, fortunately, we were able to do all the work and it's quite exhaustive work and come out of it with a very good remediation plan.

Paul Householder: Yeah. Maybe, Gary, just building on that for the second half of your question, building on Jim's comments. Yes, that remediation plan, which is outlined in the MD&A, we've obviously internally built that out into a pretty comprehensive plan that our teams are focused on executing and implementing. The whole intention there, obviously, Gary, is to better position us to handle these projects in the future and avoid any type of delays in the future. To, again, to the second half of your question.

Yeah, maybe Gary just building on that to the second half of your question, uh, building on Jim's comments. Yes, that, that remediation plan, which is outlined in the mdna. We've obviously internally built that out into a pretty comprehensive plan that our teams are focused on, uh, executing and implementing.

And then the whole intention there, obviously Gary is to better position us to handle these projects in the future and avoid uh any type of delays in the future again to the second half of your question.

Gary Ho: Great. Thanks. Okay. My second question, just on the, maybe for Jim, just on the long-term receivables that moved up, CAD 127 million in Q2, CAD 169 million in Q3. I know you talked a little bit about the Brazil financing vehicle. Maybe just walk us through how quickly you can monetize these receivables and bring cash in and deleverage throughout 2026.

In and and The Leverage um, throughout 2026.

Jim: Yeah. We talked, we did an announcement a little while ago about we put the fund in place. The fund is quite sizable and allows us to fund, it's now increased actually, but we announced a 1.2 billion dollars, or sorry, reais of availability. That structure is put in place. It's a unique solution. Part of the challenge of taking some time is this isn't an off-the-shelf solution. We've been working with our partners to get that put in place properly. It's in place. We have the investors lined up, the money's committed, and so now it's a matter of administratively for each of our deals, making sure all the steps are followed. That's what's taking a bit of time.

Yeah, so so um, we talked, we did an announcement a little while ago about, we put the fund in place, the fund uh uh is quite sizable and allows us to uh fund. Uh, it's now increased actually but uh, we announced that 1.2 billion dollars uh, or sorry realized of of availability.

Jim: That the administrative process for some of these tasks in Brazil is onerous. We expect to have those completed through the early part of 2026. No risk on the funding, no risk on things being done. It's really more procedural, administrative. You've got a lot from a legal perspective, part of the great feature of what we've put in place is that we have lower cost of funding. The reason for that is because we're not just selling receivables, there's some collateral involved, and that collateral needs to be registered. That requirement is just administratively takes a bit longer in Brazil.

That structure is put in place, it's a unique solution. So part of the challenge of of taking some time is this isn't an off-the-shelf solution. We've been working with our partners to get that. Put in place properly. Uh, it's in place. We have the investors lined up the money's committed, uh, and so now it's a matter of administratively for each of our deals, making sure all the uh the steps are followed it and and so that's what's taking a bit of time um um that the administrative process for some of these tasks in Brazil,

His owner is, um, um, and so we expect to have those uh, completed through the early part of 2026. Uh, and uh, um, um um, um, no risk on, on, on the funding. No risk on things being done. It's really, uh, more procedural. Administrative. Uh, you've got a lot of, uh, uh, uh, um, from, from a legal perspective, part of the part of the great feature of what we've put in place is that we have

Lower cost of funding. And and the the reason for that is because we've got, we're not just selling receivables, there's some collateral involved and that collateral needs to be registered.

And uh, uh, and that requirement is just administratively. Takes a bit longer in Brazil.

Gary Ho: Okay. Maybe just final point. As we end next year, like, from now until end of 2026, how much would you think you can monetize through that or a range?

Okay, maybe it's just a final Point as we end. Uh next year. How like from now until end of 26, how much would you think you can monetize?

Through that or or a range.

Jim: Well, it depends on the opportunities that we continue to take on. We expect of the current opportunities that we have, we would monetize a good percentage of it. You know, we've talked about in the past monetizing 60% to 80% of the amount of the sales at a minimum. We expect to continue. That would be our expectation of the percentage. We do keep some of the financing ourselves. Our intention, the way we're setting this up, Gary, is to make sure that all of our costs are funded through this monetization vehicle so that effectively we're not dipping into our working capital or to our own cash to fund these deals or the cost of these deals.

well, it depends on on the opportunities that we continue to, uh, uh, uh, uh, uh,

Take on. Uh, so so we expect of the current opportunities that we have, we would monetize a good percentage of it. So, you know, we've talked about in the past, monetizing 60 to 80% of the, uh, uh, uh, uh uh, amount of the sales uh, at at a minimum. And so we expect to continue to to that would be our expectation of the percentage. We do keep some of the financing uh, our ourselves, but uh, Our intention, and the way we setting this up, Gary is to make sure that all of our costs

Are funded through this monetization vehicle so that effectively we're not dipping into our working capital or to our own cash to fund these deals or the cost of these deals.

Gary Ho: Okay. That makes sense. Okay, thanks for this. I'll requeue and congrats on pushing through and getting these out.

Okay, that that that makes sense. Okay, thanks for this. I'll uh I'll reach you and congrats and pushing through and getting these out.

Thanks Gary.

Jim: Thanks, Gary.

Operator: The next question comes from Steve Hansen with Raymond James. Please go ahead.

Next question comes from Steve Hansen with Raymond James, please go ahead.

Steve Hansen: Yeah. Good morning, guys. Thanks for the time. Look, real mixed emotions over this filing delay and the outcome, frankly. I mean, I don't know. I don't think anything about it was normal, really, from an external standpoint. I think it just has to be said. I can appreciate the need for all the deep dives, that sends the reason, the delay was nothing normal course. Maybe just a question about it all. Were you surprised by the outcome at all and why did it take so long, ultimately is the question? Again, the complexity I can understand, the timing and the delay, I don't think I really understand. Just maybe when you got into this, was it a surprise to you that it would take so long to go through all this review with the auditors?

Steve Hansen: You know, just maybe just give us a sense for how the outcome, you know, reflected your initial expectations. Thanks.

Yeah, good morning guys, thanks for the time. Um, look real mixed emotions over this filing, delay in the outcome. Frankly, I mean, I don't know, I don't think anything about it was normal. Really from an external standpoint, I think it just has to be said, I can appreciate the need for all the Deep Dives um, that that sends the reason, but the delay was nothing, normal course, but maybe just the question about it all. Were you surprised by the outcome at all? And and why does it take so long? Ultimately is the question. I again the complexity I can understand, but the timing and the delay I don't think I really understand so just met maybe when you got into this was it a surprise to you? That it would take so long to go through all this review with the with the the Auditors or you know, just maybe just give us a sense for how the outcome the

Your reflected, your initial expectations. Thanks.

Jim: Thanks, Steve Hansen. Appreciate the question and certainly appreciate the sentiment as well, one shared by us. As Jim commented, you know, the activity that we undertook in Brazil, you know, was quite complex. The complexity was related to both the projects as well as the fund that was set up that Jim just outlined. As we started to understand that it was going to take more time to complete the audit and complete the internal reviews, compounded by some concerns and questions that were raised internally. Steve Hansen, the focus quickly went to making sure that we got this right. We were patient. We worked through it diligently. We wanted to make sure that we got it right.

Yeah. Thanks Steve. Appreciate the question and certainly appreciate the sentiment, uh, as well. 1 1, shared by, uh, shared by us, uh, as Jim commented, uh, you know, the activity that we undertook in Brazil. Um, you know, was quite complex. It was the complexity was related to both the projects as well as the fund that was set up that Jim just outlined. Uh, as we started to understand that it was going to take more time to complete, uh, the audit and complete the internal reviews compounded by uh, some concerns and questions that were raised internally. See the focus quickly went to making sure that we got this right. Uh, so uh, we were patient. Uh, we worked through it diligently, we wanted to make sure that we got it right. We wanted to make sure that we

Jim: We wanted to make sure that we fleshed out all of the opportunities for improvement so that we were better set up to handle this type of activity in the future. Net-net, it did take a while. That was certainly unfortunate. You know, it was compounded a bit by some of the holiday seasons that we ran into. To get to your question on the outcome, as Jim outlined, and as written in the MD&A, some very valuable opportunities for us to enhance the structure of our finance and accounting procedures related to these, which again, as we implement those changes, will better position us in the future.

Certainly unfortunate. Um, you know, it was compounded a bit, uh, by some of the holiday, uh, Seasons that we ran into, uh, but to get to your question on the outcome, uh, as as Jim outlined as and as written in the mdna, some very valuable opportunities for us to enhance the structure of our Finance and Accounting, procedures related to these which again as we Implement, those changes will better position us in the future.

Steve Hansen: Okay. Appreciate that. Just turning back to the fundamentals for a minute. Can you maybe just describe where you think we're at on the inventory side for portable in North America? I know, I know you described it as above average, it has been coming down, I think, by most accounts. The question is when do we start to get to sort of that basement level or normalization level where we can start to move off the floor? This all integrates back into your own production profile, of course. You know, where do you think we're at? You know, are we 10% above average, 50% above average?

Steve Hansen: Just give us a sense for that and then, you know, how you think the front half of the selling season is gonna play out here, and can we get back into sort of a higher operating rate in the back half? Thanks.

Okay, appreciate that. Um, just turning back to the fundamentals then for a minute. Just can you maybe just described where you think we're at on the inventory side for portable in North America? I know, I know you described it as above average but it has been coming down. I think, by most accounts, the question is is, when do we start to get to sort of that sort of basement level or normalization level, where we can start to move off the floor, because it's all in integrates back into your own production profile. Of course, you know, you know, where do you think we're at? You know, are we 10% above average, 50% above average, just give us a sense for that. And then, you know, how you think the the front half of the selling season is going to play out here and can we get back into sort of a higher operating rate in the back half? Thanks.

Jim: Yeah, terrific question, Steve. You know, obviously our portable product line, you know, fundamental to our farm business, very important across North America, as well, certain pockets, internationally. As you rightfully point out and as we've been commenting on the past, one of the headwinds that we have had with our portable equipment is a high level of inventory that's been maintained at our dealers. That inventory levels really spiked at the tail end of 2024. The teams have really done a nice job partnering with our dealers across North America to implement various incentives to work that dealer inventory down. I would say, Steve, across the H1 of 2025, those inventory levels were a bit slow to move. That certainly accelerated across the H2 of the year.

Yeah, it's terrific question Steve. And, you know, obviously our portable product line, you know, fundamental to our farm business, very important across North America uh, as well, certain Pockets internationally, uh, as you rightfully point out. And as we've been commenting on, on the past 1 of the headwinds that we have had, uh, uh, with our portable equipment is a high level of inventory. That's been maintained,

Jim: We end 2025 in a much better inventory position than we started. As you noted, it's still above historical levels, but we're getting much closer. There's not a holistic answer to that question. What I mean by that, Steve, is in the US, our inventory levels are actually in a bit of a better position. That's likely because the, you know, the challenges that we saw in the market started first in the US, that cycle is just a little bit more progressed, and you see that in our portable inventory levels being in a little bit of a better shape.

Did our dealers that inventory levels really spiked uh at the tail end of of 2024. The teams have really done a nice job partnering with our dealers across North America, to implement various incentives to work that dealer inventory down. I would say, Steve across the first half of 2025. Those inventory levels were a bit slow to move. That certainly accelerated across the second half of the year. Uh, we end 2025 in a much better inventory position than we started. As you noted. It's still above historical levels but we're getting we're getting much closer. Uh, there's not a holistic answer to that question. Uh, and what I mean by that Steve is in the US, are inventory levels are actually in a bit of a better position. That's likely because the, uh, uh, you know, the challenges that we saw saw on the market started first, uh, in the US. And so that that cycle is just a little bit more progressed and

Paul Householder: We're confident that we're gonna see the same result up in Canada, certainly across H1 2026. Jim did comment that our early order program continues to progress. At this point in time, we see it slightly ahead of where we were last year. Again, that's predominantly on the strength in the US, and that improved dealer inventory levels.

And you see that in our portable inventory levels being in a little bit of a better shape. Uh, we're confident that we're going to, uh, see the same result up in Canada. Uh, certainly across uh, the first half of 2026. Uh, Jim did comment that, uh, our early order program, uh, continues to progress, uh, at this point in time, we see it slightly ahead of where we were last year. And again, that was that's predominantly on the strength in the US. Uh and that improved uh dealer uh,

Inventory levels.

You the car, thanks.

Steve Hansen: Appreciate the color. Thanks.

You got it, Steve.

Paul Householder: You got it, Steve.

Operator: The next question comes from Andrew Wong with RBC Capital Markets. Please go ahead.

The next question comes from Andrew Wong. With RBC Capital markets, please go ahead.

Andrew Wong: Hey, good morning. Thank you for taking my question. Maybe let's just start with, in the commercial segment, the large scale projects in Brazil, they've been a big success in terms of driving revenue, and they account for a lot of that year-over-year revenue growth in 2025. Maybe just 2 questions is, one is how long do you anticipate these projects to run for? Is there enough momentum to kind of sustain that level of revenue or even grow that level of revenue in the coming years? Should we expect maybe some more variability in the contribution year to year, just given how large these projects are? Secondly, could other competitors also implement a similar receivables monetization type of solution like you have right now? Thank you.

Hey, good morning. Um, thank you for taking my questions, so maybe it was just start with, um, in the commercial segment. Um, the large scale projects in Brazil, they've been, you know, a big success in terms of driving Revenue, um, and the account for a lot of that year-over-year Revenue growth in 2025. So maybe just 2 questions, is 1, is how long do you anticipate these projects run for? And is there enough momentum to kind of sustain that um, that that, that level of Revenue and or even grow that level of Revenue, um, in the coming years? Or should we expect maybe some more variability, um, in the contribution year to year just giving how large these projects are and then, secondly, could other competitors also Implement a similar receivables? Monetization type of solution like you have, for example.

Paul Householder: Yeah, Andrew, terrific question. Thanks for that. You know, we are encouraged. We are excited about these large scale projects that we've done. Team's done an excellent job really building very valuable customer relationships in this area that position us very well, you know, to look at future projects. Our pipeline here is attractive. You know, the opportunities do exist going forward. We'll continue evaluating those opportunities, looking to make the best decisions to deliver value to the company. The opportunities do exist. We enter 2026 with some projects still in our order book that we will execute across 2026, so those will contribute to our 2026 results.

Yeah, Andrew. Terrific question. Uh, uh, thanks for that. Yeah, you know, we, we are encouraged, we are excited about, uh, these large-scale projects that we've done, uh, team's done an excellent job, really building. Very valuable customer relationships, uh, in this area that position us very well. Um,

You know to look at at at at Future projects are pipeline here uh is attractive it. It is a that, you know, the opportunities do exist going forward. We'll continue evaluating those opportunities, uh, looking to make the best decisions to deliver value, uh, to the company. So, so, the opportunities do exist.

Paul Householder: In addition to that, there are opportunities for us to sign new deals within the year that could also further contribute. Again, we'll look to evaluate each of those on a case-by-case basis. You do, Andrew, raise a very valid point in terms of the variability, because these are large projects, right? The signing of them comes in chunks. You know, if and as you sign one or two projects in a certain quarter, you know, you see the impact initially in the order book and then translates later into our revenue. You are right. This does create a bit of a lumpiness and a variability in our order book.

The year that could also further contribute. But again, we'll look to evaluate. Uh, each of those on a, uh, on a Case by case uh, basis

Paul Householder: Obviously, the revenue recognition and the percentage of completion helps steady that out a bit from a, from a financial results standpoint. Your final point there, Andrew, from a competition element. I mean, it's certainly possible for competitors to implement similar programs as we have. That being said, it's a heavy lift, and we would say that we have a significant head start that would form a level of differentiation for some time yet before any competitor is in a position to mirror what we've been able to put in place, both from a financial structure standpoint as well as partnership execution capabilities, and other areas.

You do. And to raise a very valid point in terms of the variability because these are large projects, right? That the the signing of them comes in chunks. Uh, so you know, if and as you sign 1 or 2 projects in a certain quarter, you know, you see the impact initially in the order book and then translates later, uh, into our Revenue. Uh, so you are right. This does create a bit of a lumpiness, and a very ability, uh, in our order book, obviously the revenue recognition, and the percentage of the of completion helps, uh, steady that out a bit from a, from a, uh, a financial results standpoint. Your final point there Andrew from from a competition. Uh, uh, uh, element. I mean, it's it's certainly possible for uh, competitors to implement similar programs as we have.

Uh, that being said, uh, it it, it, it it, it's a heavy lift. Ugh. And we would say that we have a significant Head Start, uh, that was that would form a level of differentiation. For some time yet before any competitor is in a position to uh, mirror, what we've been able to put in place, both from a financial structure standpoint, as well as partnership uh execution capabilities, uh in other areas.

Andrew Wong: Okay, great. Then maybe just on other parts of the commercial segments. Obviously Brazil has been strong, but it sounds like there maybe was some headwinds or a little bit of slowdown in India and North America. Can you just maybe comment on that and provide a little bit more details? Then just looking at the order book, it's up about 1% in Q3. Is that a reasonable growth expectation for 2026? Like maybe just help us frame, like how to think about commercial in 2026, just given how much of a big revenue driver it was in 2025.

Okay, great. Um, and then maybe just on other parts of the commercial segments, um, you know, it, it sound, obviously, Brazil has been strong, but sounds like they're maybe with some headwinds or or a little bit of slowdown in India, and North America. And you just maybe comment on that and provide a little bit more details. Um, and then just looking at the order book, it's up about 1%, um, in Q3, is that

A reasonable growth expectation for 2026. Like, I just trying to help.

Maybe just help us frame like how the things about commercial in 2026, just giving how much of a big Revenue driver. It was in 2025

Paul Householder: Terrific, Andrew. All good points there. All good questions. Let me take them individually. We will start out in India. We really like our India business, our India position that's been focused traditionally on rice milling for the past 4 or 5 years. You know, really up to 2025, we experienced tremendous growth, very strong market conditions. We have seen those market conditions shift across 2025, particularly in H2. We expect those market conditions to remain soft entering 2026. Andrew, at a very high level, it's a similar dynamic as we are seeing in North America, but at a different magnitude. Obviously not at the same magnitude, but basically it's a supply demand. The supply of rice is quite high. The demand is lower. That puts pressure on pricing.

Yeah, terrific. Andrew, uh, all all good points, there all good questions, but let me take them individually. We'll start out at India. Uh, we really like our our India business, our India Physicians that's been focused traditionally on Rice Milling, uh, for the, uh, past 4 or 5 years, you know, really up to 2025. We experienced tremendous growth, very strong market conditions, we have seen those market conditions shift across 2025, particularly in the second half of the year. We expect those market conditions, uh, to remain soft entering 2026. Uh, Andrew at a very high level. It's a similar Dynamic, uh, as we're seeing in North America, but at a different magnitude, obviously not at the same magnitude,

Paul Householder: It puts pressure on the overall supply chain and ultimately leads to a softening of demand. We expect it to take yet a couple of quarters for that to work through. That's, that's our position on India, specifically on the rice milling. Fortunately, we've been very successful in product transfers, in our grain handling and storage area, the bins, the material handling. That gives us another avenue to explore market growth, which we expect can partially offset some of that headwind in India. To your next part of your question, North America commercial. Yes, we have seen some softening of that market activity really coming on here in just the latter part of 2025. We expect those softening conditions to continue in 2026.

But yeah, basically it's it's a supply demand. Uh, the supply of rice is quite High. The demand is lower that puts pressure on pricing. It puts pressure on the overall supply chain and ultimately leads to a softening of demand, uh, and we expect it to take yet a couple of quarters for that to work through. So, that's that's our position on India, specifically on the rice, Milling. Fortunately, uh, we've been very successful in product transfers, uh, in our grain handling and storage area. The bins, the material handling that gives us another Avenue to explore, um, uh, market growth, uh, which we expect can partially offset, uh, some of that headwind in India.

Paul Householder: Would suggest that this is consistent with some of the difficult farm ag market conditions that we have been experiencing over the past 18 to 24 months now translating a bit over to the commercial segment impacting investment decisions. The same kind of dynamics, lower commodity prices, trade uncertainty, volatility in tariffs, likely impacting investment decisions around the commercial business in North America. Another dynamic is we have seen that investment by a large grain trader shift from North America into out to the international and into emerging markets, where they see a lot of growth potential. Fortunately, our business positions in these markets enable us to capitalize on that. Finally, the order book. Yeah, we're pleased with where the order book is right now.

Uh to the uh your next part of your question North America commercial guests. We had seen some softening. Is that market activity really coming on here in the in just the latter part of 2025. We expect those softening conditions to continue in 2026 would suggest that this is consistent with some of the difficult uh, Farm, a market conditions that we have been experiencing over the past 18 to 24 months. Now translating a bit over to the commercial statement, impacting investment decisions. So the same kind of Dynamics, lower commodity prices, uh, trade uncertainty, uh, volatility and tariffs, uh, likely impacting, uh, investment decisions around the, the commercial business in North America. Another Dynamic, uh, is we have seen that investment, you know, by, um, a large grain Trader shift from North.

America into, uh, out to the international and into Emerging Markets, uh, you know, where they see a lot of growth, uh, potential. Fortunately, our, our uh, business positions in these markets, enable us to, uh, to capitalize on that.

Paul Householder: You know, we still have Q4 to work through, Andrew Wong, before we have visibility into 2026. As we've commented, we remain cautious on the outlook for 2026. We, we are now saying that the trough in North America was not 2025. We expect those soft conditions to persist into 2026. We also anticipate because our order book is weighted so heavily to commercial, that the timing of signing large commercial projects will impact our order book. You know, if we, if we don't sign large projects in one quarter, and then we do in next, obviously you'll get swings in the order book. You know, we're looking forward to 2026, the challenges of 2026.

Paul Householder: We do anticipate that, you know, the challenging market conditions will persist.

Anticipate because, um, our our order book is weighted so heavily to commercial, uh, that the timing of signing a large commercial projects uh will impact our order book. You know, if we, if we don't sign it a large projects in 1 quarter, uh and then we do a next, obviously you'll get, you'll get, uh, you'll get swings in the order book. So, uh, you know, we're, we're looking forward to 2026, the challenges of 2026. We do anticipate that, um, you know, the, the challenging market conditions will persist

Andrew Wong: Okay. Appreciate all of that detail. Thank you very much.

Okay, I appreciate all of that detail. Thank you very much.

You got it, Andrew. Thanks Andrew.

Paul Householder: You got it, Andrew. Thanks, Andrew.

Operator: The next question comes from Michael Tupholme with TD Cowen. Please go ahead.

The next question comes from Michael to home with TD Cowen. Please go ahead.

Thank you. Good morning.

Michael Tupholme: Thank you. Good morning.

Um,

Paul Householder: How you doing, Michael?

Michael Tupholme: Morning. Just regarding the filing delay and the review that was completed by the audit committee. I guess I'm just wondering if you can talk a little bit about whether or not this was—I mean, it seems clearly like it was focused on Brazil, but was there any consideration given to possibly needing to look at any other areas? As it relates to the remediation plan, can you sort of lay out a bit of a roadmap as to how that's gonna unfold and at what point you would expect for all of the measures to be implemented?

Delay in the the review that was completed, uh, by the audit committee? I guess I'm just wondering if if you can, um,

talk a little bit about whether or not this was, I mean, it seems clearly like it was focused on Brazil. But was there any consideration given to uh, possibly needing to look at any other areas. Uh, and then, as it relates to the remediation plan, can you sort of lay out a bit of a road map as to how that's going to unfold and at what point you would expect uh for all of the measures to be implemented,

Paul Householder: Thanks, Michael. You know, two good questions there. Again, I think we've covered a good bit of this in our MD&A. Just to further, yes, the focus of the audit was specifically on Brazil. We did not have any reasons nor do we have any concerns to look into any of our other regions. Just to be clear on that, the focus of it was specifically on Brazil. In terms of the remediation plan that is outlined in the MD&A, obviously we have built that out into further details here internally. You know, we are assigning accountabilities on the specific actions. We're putting a project plan in place that has specific timing around it.

Yeah. Thank thanks. Michael. Uh, and you know, but 2 2, good questions there and again I think we we've, uh, been uh, we we've covered a good bit of this in our mdna, but just to further. Yes. The, the, uh, focus of the audit was specifically on Brazil. Uh, we did not have any reasons, nor do we have, any concerns to look, uh, into, uh, any of our other, uh, regions. So, yeah, just to be clear on that. The focus of it was, uh, specifically on Brazil,

Paul Householder: This is obviously a top priority for us. We will work through it diligently. Our plan is to get this implemented as quickly as possible. You know, we don't, you know, we don't yet have a specific timing in which all of these items will be completed. It will probably vary. Some of the things will get done and put in order pretty quickly. Others, when you talk about training, knowledge transfer, and learning across the organization, you know, that could take a little bit more time. Nonetheless, this is a top priority for us, and we'll get it done quite quickly.

In terms of the remediation plan that is outlined in the mdna. Obviously, we have built that out into further details, uh, here internally, um, you know, we are assigning accountability on the specific actions. We're putting in a project plan in place that has specific timing around it. This is obviously a top priority for us uh and we will work through it uh diligently. Our plan is to get this implemented as quickly as possible. Um you know we we don't you know, we don't yet. Have a specific timing in, which all of these items will be completed. It will probably vary some of the things we'll get, uh, done and put in order pretty quickly. Uh, others when you, when you talk about training, knowledge, transfer and learning across the organization, uh, you know, that could take a little bit more time. But, but nonetheless, this is a top priority for us and we'll get it done quite quickly.

Michael Tupholme: Okay. That's helpful and good to understand. Regarding the commentary you provided around Q4, specifically talking about a sequential decline in Adjusted EBITDA, I'm wondering if you can provide any more detail on that outlook, particularly given the fact that we're in early January here. Also maybe, you know, to what extent this is reflected in sort of dynamics in farm versus commercial. I mean, I think it's clear that commercials, you know, we're even seeing most of the strength and farm more challenged, but any kind of commentary at the segmented level. I'm also curious about the SG&A costs that you're suggesting are going to be higher in Q4.

Okay, that's helpful and good to understand. Um, regarding the the commentary you provided around the fourth quarter, specifically talking about a sequential decline in adjusted. Uh, um, I'm wondering if you can provide any more detail, uh, on that Outlook particularly given the fact that we're we're in early January here. Um, and and, and also, maybe, you know, to what extent this is, um, reflected in, in sort of Dynamics, in farm versus commercial. I mean, I think we it's it's clear that commercials, uh, you know, where you've been seeing most of the strengths, and, and farm more challenge, but but any kind of commentary at the segmented level. And then, I'm also curious about the sg&a costs that you're

Michael Tupholme: Is that specifically related to some of this review, process, or is there something else going on? Will these remain elevated, or is this more of a Q4 specific dynamic that ceases to be sort of higher costs when you get beyond Q4?

Suggesting you're going to be higher in the fourth quarter. Is that specifically related to some of this review uh process or is there something else going on and and will these remain elevated? Or is this more of a Q4 specific Dynamic that um that ceases to be sort of higher costs when you get the on Q4?

Paul Householder: Terrific, Michael. I'll address the first half of your question, and then I'm gonna turn it over to Jim on the SG&A side. You know, you're absolutely right. You know, we do expect Q4, as we commented on, to be down sequentially and down versus prior year. A good portion of this is market related, and some of the challenges that we're seeing both in North America, specifically Canada farm and a bit North America commercial, as well as in India. Those are two business drivers, market drivers that are a headwind to our Q4 results and are impacting EBITDA consistent with what we've outlined in our prepared marks. SG&A is also a variable when you look to prior year, and I'll let Jim comment on that.

Yeah it's a terrific Michael uh I I'll address the first half of your question and then I'm going to turn it over to Jim on the next DNA side but you know you're you're absolutely right. Uh you know what we do expect you for as as we commented on to be down sequentially and down versus prior year, a good portion of this is um Market related and some of the challenges that we that we're seeing both in North America.

Jim: Michael, SG&A is more of a Q4 dynamic. Last year as we entered Q4, got caught a bit off guard with the lower than expected US farm or farm results, that required us to do an adjustment to our bonuses primarily across the company. That adjustment was done in Q4 last year. SG&A last year was slightly lower. This year, we've been on top of the bonus recordings and expectations throughout the year, you don't have that adjustment as you did in Q4. Really just a one-time dynamic for Q4.

Recordings and, and expectations throughout the year. So you don't have that adjustment as you did in Q4. So really just a a 1-time dynamic.

For Q4.

Paul Householder: Yeah. Just to pick up on Michael, we wouldn't expect this to be something that continues going forward. SG&A remains a focus for us. We understand the importance of ensuring that our cost structures align with our market and revenue realities.

Yeah so so just to pick up on Michael we we wouldn't expect this to to to be something that they continues. Uh going forward, scna remains a focus for us, we understand the importance of ensuring that that our cost structures aligned with our market and revenue realities.

Okay, that's helpful. Thank you.

Michael Tupholme: Okay. That's helpful. Thank you.

Operator: The next question comes from Tim Monachello with ATB Capital Markets. Please go ahead.

The next question comes from Tim, Montello with ATB Capital markets, please go ahead.

Hey, good morning.

Tim Monachello: Hey, good morning.

Paul Householder: Hey, Tim.

Tim Monachello: Most of my questions have been answered, could you just remind us how much was monetized under the fund structure in Q4?

Most of my questions have been answered, but could you just remind us? Um, I guess how much was monetized or the Deep structure in Q4

Paul Householder: Well, we did monetize some in Q4, a smaller amount. We'll get into those details as we report our Q4 results. That's good. One of the first deals went through the fund. The fund structure works. We know how that all flows through. Now we're focused on monetizing the other ones as quickly as possible, which will be done in early 2026.

Well, so we did monetize some in Q4 uh, a, a smaller amount. So we'll, we'll get into those details as we report our Q4 results. Uh, so that's good. So, the first 1 of the first deals went through the fund. So, the fund structure works, uh, we know how that all flows through and now we're focused on monetizing the other ones as quickly as possible, which will be done in early 2026.

Okay. Um,

Tim Monachello: Okay. In terms of some of the efficiency initiatives that you're implementing in 2026, I'm wondering if you could provide a little bit more detail on the facility closures and facility consolidations that are ongoing and the impact that you see to margins due to these initiatives and potentially any operational impacts that you see.

And then in terms of some of the um efficiency initiatives that you're implementing in 2026. So I'm wondering if you provide a little bit more detail on the facility closures um and Facilities consolidations that are ongoing and the impact that you see to margins uh due to these initiatives, and potentially any operational impacts that you see.

Paul Householder: Tim, thanks. Terrific questions. I mean, obviously, as we've noted, the challenging ag equipment market dynamics have continued in North America across 2025. This does give us an opportunity to continue to review, you know, what I'll call our integrated supply chain to ensure that we've got the right and the optimized cost structure. When I say integrated supply chain, you know, you can think of manufacturing in the middle, but obviously our supply, our suppliers, as well as our inventory, working capital, all of those things fall within that integrated supply chain review. There is opportunity, given the softness, for us to optimize our cost structure, make sure that we do, you know, are running an efficient operations.

Yeah Tim Tim thanks terrific uh questions. Let me I obviously as we've noted uh the account Gene, a equipment Market Dynamic, have continued uh in North America across 2025. Uh this does give us an opportunity to continue to review. You know what, what I'll call our integrated supply chain to ensure that we've got the, the right and the optimized cost structure. And when I say integrated supply chain, you know, you can think of manufacturing in the middle, but obviously our supply, our suppliers um, as well as our, our inventory working capital, all of those things fall within that, that that integrated supply chain review. So there is opportunity given the softness for us to optimize uh, our our cost structure. Make sure that we do, you know, are running an efficient, um uh operations.

Paul Householder: We actually kicked off this initiative just at the onset of Q4. We expect actions to take place across Q4 as well as Q1, which should put us in a better position, you know, to run a more efficient operations across 2026. As we've noted, the measure of our progress in this area will be gross margins. When you look at our gross margins across our farm business, they are depressed in 2025. A number of factors are contributing to that. We obviously had tariffs as a headwind. We had a bit of mix within our farm business as a headwind. The third one is the point that you brought out, just the opportunity to improve the efficiency of our operations.

We actually kicked off this initiative, uh, just at the onset of Q4. Uh, we expect actions to to take place across Q4, as well as q1, uh, which should put us in a better position, uh, to, you know, to run a, a, a more efficient.

Paul Householder: We expect to get that in a pretty good shape at the tail end of Q1, which then should be something that is a bit favorable from a margin standpoint in H2 2026.

Operations across 2026 as we've noted, uh, the measure, uh, of our progress in this area will be gross margins. When you look at our uh, gross margins across our farm business, they are depressed in 2025 a number of factors are contributing to that, we obviously had tariffs as, as a headwind. We had a bit of mix, uh, within our farm business as a headwind. And then the third 1 is the point that you brought out just the opportunity to improve the efficiency of our operations. So, uh, we expect to get that, uh, in a pretty good shape at the tail end of q1. Uh, which then should be, uh, something that is, uh, a bit favorable from a margin standpoint in the second half of 2026.

Tim Monachello: Can you say any specifics around, you know, which facilities are being consolidated and any commentary around any proceeds from the facility divestiture you received in Q4?

Can you say anything specific to your own? You know which facilities were are being Consolidated? And um

And any uh, commentary around maybe proceeds from the facility to the Future. Received the key for

Paul Householder: Yeah. Yeah, for sure, Tim. We had 2 facility consolidations that we initiated throughout 2025. One of those was a facility in North America that we commented on, you know, really at the tail end of 2024, as we consolidated our bin manufacturing to our facility in Canada. The second one that we implemented more towards the middle of 2025 was a smaller operations in Canada that we also consolidated within one of our other Canada manufacturing facilities. I'll note, you know, both of the consolidations increased our activity within Canada, but ultimately improved our manufacturing footprint.

Yeah. Yeah, for sure Tim. So we we had uh, 2 facilities. Consolidations that we initiated throughout 2020. Uh 5. Uh, 1 of those was a a facility in uh, North America, uh, that we commented on, you know, really at the tail end of 2024. Uh, as we Consolidated our bin manufacturing to our facility in Canada. Uh, the second 1 that we implemented more towards the middle of 2025 was a smaller operations in Canada that we also Consolidated, uh, within 1 of our other, um, Canada manufacturing facilities. So, I'll note, uh, you know, both, uh, of the consolidations, uh, increased, our our, our activity within Canada, uh, but ultimately improved our uh, manufacturing footprint.

Paul Householder: In terms of the, small, facility non-core that we moved to a new owner, that did not have a significant impact. I would categorize that, Tim, as less than CAD 10 million.

Uh, in terms of the the, uh, small, um, uh, facility non-core, that we move to a new owner that was, that did not have a significant impact. Uh, I would categorize that, uh, Tim as less than 10 million.

Tim Monachello: Okay. Do you expect any one-time costs or increase in, I guess, transaction, transitional or other costs in Q4, Q1 related to some of the initiatives that are being implemented today?

And you expect any 1, time costs or increase in this transaction, transactional other costs and Q4 q1 related to some of the um initiatives that are being implemented today.

Paul Householder: Yeah. There will be some additional costs, some legal costs that will run through there. Not significant, not anywhere near the magnitude of what you've seen in the past. A lot of our, you know, as we commented in the script, a lot of those large unusual items that have happened in the past are behind us. Going forward, you'll only have a smaller amount of costs that we'll identify out for you to be able to do what you want with in terms of how you view them. They'll be related to a non-operational, just, more restructuring type costs or unusual legal costs.

Paul Householder: You know, we did have this work done in Q4, so we'd expect to see a small amount going through there in Q4.

Yeah, there will, there will be some additional costs, some legal costs that will run through their not significant, not not anywhere near the magnitude of of what you've seen in the past, a lot of our, our, you know, the as we commented in, in the uh, in the script, uh, the a lot of the uh those those large unusual items that have happened in the past are behind us. Uh, and so going forward, you'll only have a a a a smaller amount of of uh costs that will identify out for you to to be able to do what you want with in terms of how you view them. But they'll be related to uh, non-operational just uh, more restructuring type costs, or unusual legal costs. So, you know, we did have this work done in Q4 so we'd expect to see a small amount going through there in Q4.

Tim Monachello: Okay, thanks. Then I just wanna talk a little bit about, I guess, signals that you're seeing on the demand side in North American farm. You talked about sort of historical cadence of demand and sort of the troughs and how long they last. It would suggest or seem that you were probably reaching a sort of new record timeline for a dearth of portable demand. While you see inventories declining at the dealer, do you have any commentary or feedback from your dealers related to, I guess, demand that they're seeing coming in their doors? Like, is that changing at all? Is it weakening or strengthening in any way?

Okay, thanks. Um, and then

I just want to talk a little bit about um, I guess signals that you're seeing on on the demand side and North American Farm. Um, you've talked about sort of historical, uh, Cadence of demand and and sort of the the troughs and how long they last and it would suggest or seeing that that you were probably reaching a sort of new record timeline for a

of, um, portable demand are are

In well you see inventories declining at the dealer. Um do you have any commentary or feedback from your dealers related to I guess um, demand that they're seeing coming in their doors? Like, are are, is that changing at all? Is it, is it we getting your strength and in any way.

Paul Householder: Yeah. Thanks. Thanks, Tim. Obviously, the North America farm market is one that we're paying extremely close attention to. You know, we're looking at very various macro level indicators that could go provide us insights into where we are in this cycle. As well, Tim, as you've noted, you know, specific feedback from our dealers and insights on market activity. You know, as we sum all of those insights up, it does lead us to the conclusion, you know, consistent with what, you know, some of the other players in the market have articulated, that 2025 is not expected to be the trough. Likely, more 2026 is the trough.

Yeah, thanks. Thanks. Tim, uh, obviously the the North America Farm Market uh, is is uh, 1 that we're paying extremely close attention to, you know what? We're looking at very various, um, macro level indicators that could go provide us insights into where we are in the cycle, uh, as well, Tim as you've noted, um, you know, specific feedback from our dealers and insights on Market activity. You know what we as we sum all of those uh, insights up, it does lead us to the conclusion, you know, consistent with what, you know, some of the other players in the market, have articulated that 2025 is not expected to be the trough, uh, likely more 2026. It is, is the trough

Paul Householder: That's not significantly different from the look back at historical ag market cycles that we've commented previously, you know, where peak to peak can be in a 6-year timeframe. If you put that into context, you know, 2026 as a trough is not unreasonable. Getting to the second half of your question, you know, what are we hearing from dealers? What are we hearing about their inventory levels? As we've commented from the portable equipment, inventory levels are certainly coming down. That is encouraging. We are in a much better place in aggregate than we were entering 2025. That is also encouraging. A little bit more strength in the US than in Canada, likely from a timing standpoint.

That that's not significantly different from the look back at uh, historical a market cycles that we've commented. Uh, but uh, previously you know, where Peak to Peak can be in a in a 6 year time frame. So if you put that into into context uh you know 26 uh as a as a trough is not unreasonable uh, getting to the second half of your question. You know what, what are we here?

Paul Householder: You know, our dealers, you know, I would say remain cautious. I think that's probably the best description. Our dealers remain cautious heading into 2026, as do we. You know, we recognize the importance of that relationship with dealers. We're partnering with them. We're very close to them on navigating this market cycle. You know, we'll continue to work with them going forward.

Hearing from dealers. What are we hearing about the rim inventory levels? Uh, as we've commented on from the, portable equipment, inventory levels are certainly coming down. That is encouraging. Uh, we are in a much better place in aggregate, uh, than we were, uh, entering 2025, uh, that is also, uh, encouraging. A little bit more strength in the US, uh, than in Canada likely from a timing standpoint, uh, you know, so our, our our dealers. Um, you know, I would say it, remain cautious. Uh, I think that's probably the best description. Our dealers, remain cautious heading into 2026. Uh, as do we, you know, we we recognize the importance of that relationship with dealers. We're partnering with them. We're very close to them, uh, on on navigating, uh, this Market cycle. Um, and you know, we'll we'll we'll continue to to work forward, uh, or work with them going forward.

Tim Monachello: Okay. I appreciate the comment. Sorry about that.

Okay, I appreciate the call. I'm sorry. Sorry, sorry about that.

Jim.

Paul Householder: Sure, Tim.

Operator: The next question comes from Maxim Sytchev with National Bank Financial. Please go ahead.

Please go ahead.

Maxim Sytchev: Hi, good morning, gentlemen.

Um, good morning, man.

Paul Householder: Good morning, Max.

Maxim Sytchev: Jim, maybe the first question for you, if I may, just circling back to accounts receivables, do you mind maybe qualifying sort of like should we be concerned around the aging of these receivables? I mean, that's the first kind of part of the question. The second part, when you use the fund to monetize what you already have. Can you just utilize this for new projects, or can you use it sort of like in the bucket of overall projects as those are cycling through the percentage of completion dynamic? Can you provide a bit more color there? I mean, I guess ultimately it's also sort of linking to how we should be thinking about the free cash flow generation on a prospective basis. Thank you.

Paul Householder: The first part of your question, Max, in terms of concerns on the aging. Our receivables, overall, generally, the aging has not deteriorated. It remains consistent across our company. We've got extremely low write-offs historically in terms of concerns with customers not paying. The aging is not a concern. However, for these new deals, and as you get through and go through the financial statements, you'll see commentary. Terms offered for some of these deals are typically 5 years. A large one, though, is at 15 years. You know, offering that length of financing is why what's exciting about this fund that we've created helps us with.

Paul Householder: We can monetize and reduce our risk of the length of that financing time, and by having these investors provide us with the cash upfront. Your second part was about what can I use the fund for? These are.

So okay. So the first part of your question, Max in terms of concerns on the Aging. So our our receivables overall, generally the Aging has not deteriorated it remains consistent across, uh, our company. Uh, we we've got extremely extremely low, uh, write offs. Historically in terms of concerns with customers, not paying. Uh, so the Aging is not a concern. However, for these new deals, uh, and as you get through and go through the financial statements, you'll see commentary terms, offered for some of these deals are are typically. Uh, 5 years, a large 1 though is at 15 years. And so that's, you know, offering that length of financing is why what's exciting about this fund, that we've created helps us with and so we can monetize and reduce our risk of all those Finance the length of that financing time time and and by by having these investors uh provide us with the cash

Up front. Um,

Maxim Sytchev: Right.

Paul Householder: I mean, it's not just for any type of receivables. It's for certain these larger projects, certain types of customers where the investors like the profile, they like the dynamics of it, they like the areas, the industry that they're focused on. And we have a governance structure set up whereby there's an approval required at the fund level to determine on which projects will get funded. That said, how we set it up was based on the projects that we have in our pipeline and the customers and what we see coming down the pipe. We expect to be able to fully utilize the entire amount of that fund over the coming year.

your question in terms of what your second part was about, which what can I use the fund for, uh, these are I mean, it's it's not just for any type of receivables. It's for certain, uh, uh, uh, uh, these larger projects, uh, certain types of customers, or the investors, uh, like the profile. The, like the Dynamics of it, they like the areas, uh, uh, the industry that that, they're, they're focused on.

Uh, and we have a governance structure set up whereby, uh, um, um, there's an approval required, uh, at the, at the fund level to determine on on which, uh, uh, uh, uh, projects will get funded. Uh, that said, how we set it up, was based on the projects that we have in our Pipeline and the customers and and what we see coming down the pipe. So we expect to be able to fully utilize, uh, the entire amount of that fund over the coming year.

Maxim Sytchev: Okay. Thank you for that. And I guess, do you mind maybe commenting about the installation dynamic around free cash flow? How we should be thinking about this?

Okay um thank you for that and I guess. Um, do you mind maybe commenting about the inflection Dynamic uh around free cash flow how we should be thinking about this?

Paul Householder: Yeah. You know, the timing, it's the free cash flow for this year. If you look at the LTM in our MD&A, it's CAD -61 million. Initial expectations were for that funding to happen in Q4, which would flip that into a positive. That will be stretched out into early part of 2026.

Jim: The funding is significant. When that does happen, we will not be impacted by doing these types of deals from a free cash flow perspective. Said differently, we expect positive free cash flow in 2026, and we'll be able to continue to take on these larger deals and not have it impact our free cash flow going forward once this fund is up and running and moving very, very smoothly through the process.

Yeah so so you know the timing that it's it's it's the free cash flow for this year. If you look at the LTM in our mdna uh uh uh it's a negative negative -61 million uh initial expectations were were for that funding to happen in Q4 which would flip that into a positive that will be stretched out into early part of 2026. Uh, and and the funding is significant. Uh, and when that does happen, uh, um, we will not be impacted by by doing these types of deals from a free cash flow perspective. So said differently. We expect positive free cash flow through in 2026. Uh and and we'll be able to continue to uh um take on these larger deals and not have an impact, our free cash flow going forward. Once this fund is up and running and moving

Very, very smoothly through the through the process.

Maxim Sytchev: Okay. Okay. Understood. Thank you for that. Paul, if I may, just two quick ones. In terms of, I mean, obviously, there was speculation that, you know, Kepler Weber could be potentially acquired in Brazil. Just was wondering if you have any initial thoughts on that in terms of the competitive dynamic. If you can also provide a bit of an update on ERP implementation, just in terms of milestones, et cetera. That's it for me. Thank you.

And also, I think of that. And then, if I may just 2 quick ones, um, in terms of, um, I mean obviously there are speculation that, you know, Capital Weber could be potentially acquired in Brazil. Just was wondering if you have any initial thoughts on on that in terms of the competitive Dynamic. And if you can also provide a bit of an update on Erp implementation just in terms of Milestones Etc. And that's it for me. Thank you.

Paul Householder: Yeah. Thanks. Thanks, Max. We're aware of some of the conversations around Kepler Weber that have surfaced publicly. Obviously, you know, we're not gonna speculate on how that could play out. As I've noted in prior commentary, Kepler Weber is a good competitor, long-standing competitor down in Brazil. Traditionally have had the number one market share. You know, we like the competition. We've learned a lot from Kepler Weber. You know, we expect regardless of what transpires down there, that they will continue to be a good competitor for us in the market. Regarding ERP, you know, we're now fully in what we would call the deployment phase of ERP. We've completed the global design.

Paul Householder: We are now deploying it across our facilities. An important milestone, we completed our first deployment at a Canada facility this year. That was a great learning for the team. Fantastic participation by that facility. Great work by our ERP implementation team. 2026 will be specifically focused on implementations. Our next one is planned for India, which we are targeting to get done, you know, somewhere around the H1 of this year. After India, expectation is that we will move to a North America farm. We're excited to get into the deployment phase.

Yeah, thanks. Thanks Max. Uh, you know what? We're aware of of, some of the, the, the conversations around Capitol, weer that have, uh, surfaced, uh, publicly obviously, uh, you know, we're not going to speculate on how that, uh, could play out as I've noted in Prior commentary Kepler Weber. Uh, is a is a good competitor, long-standing competitor down in Brazil. Uh, traditionally you have had the number 1 market share, um, you know, we, we like the competition. We've learned a lot from Kepler Weber, uh, and, uh, you know, we expect regardless of of what transpires down there, that they will continue to be a good competitor for us, uh, in the market, uh, regarding Erp, uh, you know, we were now fully in the, uh, what we would call the deployment phase of Erp. We've completed the global design. We are now deploying it, uh, across our facilities. Uh, an important Milestone. We completed our first deployment. Uh,

Paul Householder: We're focused on having a very efficient ERP implementation, but also one that we quickly work through, you know, so that we can start to realize the benefits that the new ERP system is gonna deliver.

To uh, North America Farm. We're excited to get into the deployment phase. Uh, we're focused on having a very efficient, uh, Erp implementation but also 1 that we quickly work through. Um, you know, so that we can start to realize the benefits that the ER, the new Erp system is going to deliver

Thank you so much.

Maxim Sytchev: Okay. Excellent. Thank you so much.

You got it, Max.

Paul Householder: You got it, Max.

The next question.

Comes from.

Operator: The next question comes from Steve Hansen with Raymond James. Please go ahead.

Hansen with Raymond James, please go ahead.

Steve Hansen: Yeah. Thanks, guys. Just 1 quick follow-up. You know, notwithstanding all of the accounting review stuff that we've already talked about, Jim, do you feel like you've got the people and the team in place in Brazil to manage all of these big projects? I'm thinking more on the operational, the engineering side, the upfront side, and then even as it dovetails into that, into the downstream manufacturing side. Like, what else do you need to do to really capitalize on this opportunity? That sounds like it's not 12 months, it sounds like it's multi-year. Just trying to understand what else you need, where you need to invest, if at all, to take advantage of the opportunity. Thanks.

Yeah, thanks guys. Just just 1, quick follow up. Just, you know, notwithstanding all of the accounting review stuff that we've already talked about Jim. Do you feel like you've got the people and the team in place in Brazil to manage uh all of these big projects. I'm thinking more in the operational, the engineering side, The Upfront side, and then even even as a dub, Tales into that into the downstream manufacturing side. Like, what else do you need to do to really capitalize on this opportunity? That sounds like it's not 12 months, it sounds like its multi-year. So just trying to understand what else you need where you need to invest if at all to take advantage of the opportunity. Thanks.

Paul Householder: Hey, Steve. Excellent question. That is absolutely one of the areas that we're going to look on and address as part of our comprehensive remediation plan. As we've outlined in the MD&A, you know, specific around the training and development of that team as we look at these large complex projects, as well as the complexities of the fund transfer that Jim has outlined. We do expect that there could be additional resources that we would look to add to complement the capabilities that we already have in Brazil. As you've noted, Steve, you know, that would be very appropriate given the opportunities that exist in front of us. We wanna make sure that we are well set up.

Hey Steve. Uh excellent question and and that is absolutely um, 1 of the areas that we were go that were, um, going to look on and address as part of our comprehensive, remediation plan, as we've outlined in the mdna, you know, specific around the training and development uh uh of that team. As we look at these large complex projects, as well as the complexities of the fund transfer that Jim has outlined. Uh, we do expect, uh, that

Paul Householder: We got the capabilities, we got the knowledge, to efficiently handle these. Yes, adding resources, adding capabilities down into Brazil is absolutely something that we're gonna take a look at.

That there could be additional resources that we would look to add to complement the capabilities that we already have in Brazil, uh, as you've noted. Steve, uh, you know, that that would be very appropriate given the opportunities that exist. Uh, in front of us, we want to make sure that we are well set up. We got the capabilities, we got the knowledge, um, to to uh, efficient efficiently handle these so so yes. Adding resources adding capabilities down into Brazil is absolutely uh, something that we're going to take a look at.

Okay, thanks.

Steve Hansen: Okay, thanks.

You're welcome.

Paul Householder: You're welcome.

Operator: The next question comes from Krista Friesen with CIBC. Please go ahead.

The next question comes from Christa Friesen with CIBC please. Go ahead.

Krista Friesen: Hi. Thanks for taking my question. I was just wondering if there's any other levers you're able to pull on in 2026. Like previously, you've talked about a rebate program to try and help stimulate some demand. I'm just wondering if there's anything else that can be done at this point. Thanks.

Hi, thanks for taking my question. Um I was just wondering if there's any other

Lovers, you're able to to pull on in 2026, like previously. Previously, you've talked about a rebate program to try and help stimulate some demand. I'm just wondering if there's anything else that can be done at this point. Thanks.

Paul Householder: Yeah. It's a terrific question, Krista. Just based on your question, as you're referencing levers, I assume that's related to the North America farm market and what we can do to stimulate demand. You know, what I would say is that we're looking across all available levers. That is a very appropriate question. We have used rebates, and we continue to use rebates in very targeted areas, and those rebates are around driving down inventory levels, which certainly helps to stimulate demand. You know, we are also looking at a number of different areas, how we can continue to improve our cost structure for our portable equipment so that we can further improve the competitiveness of our products.

Yeah, to terrific question. Uh Chris uh am um, just based on your question as you're referencing levers. I assume that's related to the North America Farm Market and, and what we can do to stimulate demands, you know what, what what what I would say is that we're looking across all of all of available levers. So that is a very appropriate question. Uh, we have used rebates, uh, and we continue to use rebates in very targeted.

Paul Householder: We actually launched a number of new products on our portable product line. We introduced those new products, Krista, at some of these large farm shows across 2025. Those new product lines were very well received. We've now introduced those out into the market. That is a significant lever for us to pull to stimulate demand. Our product development, product enhancement initiatives, along with cost, along with rebates, are all levers that we would look to pull. It's a spot on question. You know, the team is doing a lot of great work in that area.

Areas and and those rebates are around driving down inventory levels, uh, with certainly helps to stimulate demand. Uh, you know, we are also looking at a number of different areas how we can continue to improve our cost structure for our portable equipment so that we can further improve the competitiveness of our of our products. Uh, we actually launched a number of new products on our portable product line. We introduced those, uh, new products Krista at some of these, uh, large farm shows, uh, across 2025 those. New product lines were very well received. We've, now, introduced those out into the markets that is a significant lever for us to pull to stimulate demand. So, our product development, uh, product enhancement initiatives along with cost, uh, along with rebates, uh, Are all, uh, levers that we would look to pull. So, uh, it it's a, it's a spot-on question. Uh, and, uh, you know that the team is doing a lot.

A lot of great work in that area.

Okay, great. Thanks. And then

Krista Friesen: Okay, great. Thanks. Maybe just to think about margins on that front. You spoke to a previous question that the length of this downturn maybe isn't too different than previous ones. Using history as a guide, how are you thinking about margins in 2026? Yeah, any color there would be great.

Maybe just to think about margins on that front. You you spoke to a previous question that the length of this downturn maybe isn't too different than previous ones using history as a guide. How how are you thinking about margins in in 2026? Um, uh, yeah, any color there would be great.

Paul Householder: Yeah, for sure. Krista, we did comment on margins. We commented on the opportunity for us to enhance our operational efficiencies in 2026, a measure of which would be improved margins. If you look specifically at North America farm, you know, our portable team has done an outstanding job in managing the business and maintaining margins. Really, our focus is more on the permanent side as well as other complementing into a North America commercial. It's in those areas that we wanna make sure that we've got the right cost structure in place. We got the right capabilities built out from a customer service, customer engagement standpoint. In those areas, we would expect to make improvements in the early part of 2026 that support margins in the H2.

Make sure that we've got the right cost structure in place. We got the right capabilities built out from a um a customer service. Uh customer engagement standpoint. And in those areas we would expect to make improvements, uh, in the early part of 2026 that support, um, margins in the second half.

Krista Friesen: Thanks. That's it for me. Appreciate the color.

Thanks, that's it from me. Appreciate the color.

You're welcome. Thanks Krista.

Paul Householder: You're welcome. Thanks, Krista.

Operator: The next question comes from Kyle McPhee with Cormark Securities. Please go ahead.

Next question comes from Kyle Mixie with core Mark Securities. Please go ahead.

Kyle McPhee: Hi. I'd like one final clarification on the Brazil accounting issues. The very back of your MD&A does state that the material weakness cannot be considered remediated yet, and you've defined, you know, material weakness as leaving potential for finding or incurring a reporting misstatement. Is it fair to say that we can't yet rule out the need for a restatement or a change to how you account for the operations in Brazil, or is that risk fully gone?

Hi. Um, I'd like 1 final clarification on the Brazil accounting issues, the very back of your mdna does state that the material weakness cannot be considered remediated yet and and you've defined, you know, material weakness as leaving potential for finding our incurring a a reporting misstatement. So is it fair to say that? We can't yet rule out the need for a restatement or a change to how you account for the operations of Brazil or is that risk fully gone?

Jim: Well, the work has stopped in terms of the review, and there was no restatement. I mean, that's stated in the MD&A. In terms of the timing of getting everything remediated, as Paul talked to earlier in his response, you know, some of these things and activities just take time. It's really just that simple. It's just a number of initiatives being done to put in place. There's no expectation of any issues. There's no material adjustment, as you noted. It's really just a few of the activities will take some time to put in place.

Well the the work work has stopped in terms of the the review and there was no restatement. So I mean that's that's uh, uh, uh, stated in the mdna in terms of the timing of of getting everything remediated as Paul talked to you earlier in his response, you know, some of these things and activities just take time. Uh, and and, uh, and that. And that's it's really just that simple. Just, uh, um, a number of initiatives, uh, being done to put in place.

Uh and there's no no expectation of any any issues, there's no material uh uh adjustments as you noted. Uh and so uh it's really just a few of the activities.

Will take some time to put in place.

Kyle McPhee: Okay. Thank you. Last one, just, can you provide any color on the terms you expect as you monetize these long-term accounts receivable related to Brazil? Like pennies on the dollars you're expected to get. Notably, given we now see these are, you know, 5 to 10 year receivables, and you do have that first little case study. Looks like you monetized CAD 8 million in Q4. Any color there, if you can.

Thank you. And then last 1 just

Is is can you provide any color on the terms? You expect, as you monetize these long term accounts receivable related to Brazil, like any's on the dollars you're you're expected to get notably given. We now see these are, you know, 5 to 10 years receivables. And you do have that first little case study looks like you monetized 8 million in Q4. So any color there, if you can

Jim: When you say the terms, what do you mean the terms? You know, the amount? Are you looking for the amount?

Uh, so when you say the terms, what, what do you mean the terms?

Kyle McPhee: You're presumably not selling the receivables at full face value. I mean, anything you can tell us from what you learned about the first CAD 8 million at the very least? On how much of a discount?

You know the amount are you looking for the amount? You're probably not selling the the receivables that full face value. So I mean anything you can tell us um, from what you learned about the first 8 million, at the very least,

Jim: Well, so the rate that we're being charged for the monetization is similar to the rate that we're using to discount what we record. You know, one of the unique features about this whole monetization is the way we set it up. You know, the collateral that's provided, the percentage of receivable that we're monetizing is very different than your traditional factoring of receivable approach. The cost to us is significantly lower and fully reflected in our financials.

And how much of a discount, uh, so well. So, so, so, so the, the the rate that we're being charged for the monetization, uh, is Sim is, is similar to the rate that we're, we're using to Discount the what we record, you know, 1 of the unique features about this whole monetization is the way we've set it up, you know, the, the collateral that's provided the percentage of receivable that we're monetizing is very different than your traditional factoring of receivable approach. So the cost to us is significantly lower and fully reflected in our financials,

Okay, I'll go look. Thank you.

Kyle McPhee: Okay, Paul. Go look. Thank you.

Paul Householder: Yeah. Thanks for the question, Kyle. We really appreciate all the questions and participation that we've had in the call this morning. We look forward to further discussions on the quarter over the next week. Thanks everybody for dialing into the call this morning.

Yeah, thanks for the question. Uh, Kyle and uh, we really appreciate, uh, all the questions and participation that we've had uh, in the call this morning. Uh, we look forward to uh, further discussions, uh, on the quarter over the next week. Uh, so thanks everybody for dialing into the call this morning.

Operator: The conference is now concluded. Thank Thank you for attending today's presentation. You may now disconnect.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect