Core Viewpoint - Ag Growth International (AGI) reported solid third-quarter results with year-over-year growth in revenue and adjusted EBITDA, despite facing challenges in the North American farm equipment market. The company is addressing internal control weaknesses related to financial reporting in Brazil while pursuing strategic initiatives to enhance profitable growth and operational excellence [2][4][6]. Financial Performance - AGI posted consolidated revenue of CAD 389 million, reflecting a 9% increase year over year. Adjusted EBITDA was CAD 71 million, a 4% rise from the previous year, while the adjusted EBITDA margin decreased to 18.2%, down approximately 100 basis points due to a shift towards commercial projects [3][6][10]. - The commercial segment, particularly driven by Brazil, remains the primary growth engine with an order book of about CAD 667 million, over 90% of which is commercial [5][11]. Operational Developments - The company launched a new business model and secured several large projects, which improved profitable growth but added complexity to financial reporting and audit reviews [1][4]. - Management emphasized the importance of enhancing internal controls and technical accounting knowledge to address identified weaknesses in Brazil's financial reporting processes [7][9]. Market Conditions - The North American farm market remains under pressure, with mixed regional performance. Brazil showed improvement, while the U.S. experienced a slight revenue decline, and Canada was described as broadly in line with the U.S. [12][13]. - Early feedback from AGI's annual early order program for portable grain handling equipment indicated that purchasing trends may reflect last year's weak performance, with ongoing uncertainty expected to persist into early 2026 [13]. Cash Flow and Leverage - AGI reported a net debt leverage ratio of 3.9x, attributed to temporary working capital investments for large projects, particularly in Brazil. Operating cash flow was strong, but free cash flow was impacted by additional project financing requirements [14][15]. - The company initiated a fund structure in Brazil to monetize long-term financing receivables tied to large commercial projects, with expectations of positive free cash flow once the fund is fully operational in 2026 [15][16]. Future Outlook - Management anticipates that fourth-quarter adjusted EBITDA will be lower sequentially and compared to the prior year due to challenging market conditions, negative mix, and higher SG&A costs [17][18].