Good morning. My name is Jessica and I will be your conference operator today. At this time, I would like to welcome everyone to AGI's Third Quarter Results Release and Conference Call. [Operator Instructions] Thank you. Mr. Tim Close, you may begin your conference.

Good morning. And thank you for joining Steve Sommerfeld and I to discuss our Q3 results, our business update and outlook. I'd like to start by addressing the charge we took in the quarter. This one-time charge related to product design issues that were discovered during execution of projects. And we determined that we needed to amend the design and add additional time and materials to ensure the projects were completed to the expectation of our customers. A charge of this type is exceptionally rare at AGI. While commercial projects can be subject to changes, additions and redesign; we complete hundreds of projects annually without incurring a similar circumstance in our entire history. We identified the root cause, quarantined the issue and moved to ensure we limit this to a onetime event. This event actually highlights a competitive advantage in the AGI model. We stand behind our work, we are accountable, responsive, and we work to ensure our customer comes first. We are confident we have the team, the products and processes to ensure this type of event remains extremely rare. And our accountability creates the competence that our customers need to entrust us with supplying their critical business infrastructure. Moving to the quarter. Despite significant global headwinds and excluding acquisitions, sales across AGI were equal to our record results in 2018 in both the third quarter and year-to-date. Inclusive of acquisitions, we grew sales by 7% in Q3 and year-to-date, as we brought on our platform in India, expanded our food platform into beverages and grew our technology platform. The contribution from these three areas further diversifies AGI, adding growth levers outside of our traditional base in North American grain. Our diversification is also gaining momentum in international markets with solid backlogs heading into the end of the year in Brazil, India, and Southeast Asia. Paul Householder joined our team in June, as Executive Vice President International, coming with extensive industrial products experience at Air Products, with a career spent growing businesses internationally. Paul has restructured our International sales and execution structures, putting key people in regional teams to continue a global growth. During the quarter, we grew our capacity in India with a new production line in Italy, expanded our product lines in India, achieved positive EBITDA in Brazil, and began to see growth in our fertilizer systems backlog in global markets. We have made solid progress in building our regional teams internationally, to put our expertise and production closer to our customers, to be more responsive and deliver tailored solutions for each market. We expect to see continued growth in each of these key markets as the world responds to changes in regional crop production and consumption, driven by shifting trade, regional dietary changes and food processing changes. We are making excellent progress in our sensor and technology business. During the quarter we brought together and rebranded our technology products and services as AGI SureTrack. On the farm AGI SureTrack is now a leading farm and grain management system that extends from seed selection information right through to grain marketing tool. Farmers are connecting with grain buyers on our platform and being paid premiums for using SureTrack to provide grain content, crop traceability and visibility to the grain bins on the farm. On the grain buyer side, AGI SureTrack allows the operators to monitor their facility and inventory levels then utilize the platform to manage their supply chain from the grain held at their sites, then extend that to live monitoring the crop they've contracted to purchase, as it sits in grain bins at farmer's sites. By applying technology to our equipment, combined with sensors throughout the farm, Farmobile data captured in the field and a grain marketing platform, we are automating the collection of over 10 layers of data, and we've automated the population of our farm and facility management tools. All this data is controlled by the farmers to use with their partners to better plan their crop, grow their crop, storm protect the crop and find the best market for that crop. Now, imagine a global processor that is buying from thousands of farms globally and can now watch the crops they are buying go in the ground, watch the application of nutrient and crop protection in season, watch the crop being harvested, and then see the crop in bins around the world. On top of that, they can see what the content of the grain is; the protein, oil and starch content of the crop in every bin. They can see the precise volume of grain in the bins or if you're an ag retailer, you can see the precise volume of the fertilizer, chemical and seed that you have in every bin, every container, every tank at every facility. That is robust supply chain visibility and supply chain management, and that is AGI SureTrack. Our focus with this platform is to expand our relationship with our customers to add more value and differentiate our entire product offering, and we expect this deeper relationship to have a positive impact on sales across every division of AGI. With that, and those comments, I'll turn the call over to Steve, to discuss the quarter and then we'll circle back for questions.

Thanks Tim. Trade sales in the third quarter of 2019 increased over the prior year due to higher sales, affordable grain handling and drying equipment, sales growth in Brazil and a strong performance from AGI's recent acquisition in India. Sales growth in the quarter was tempered by challenging farm positions at both Canada and the U.S., as well as by global economic uncertainties and their impact on the timing of consumer commitments, most notably in offshore markets. Our gross margin percentage in the quarter remained strong and was consistent with 2018, despite the impact of challenging market conditions on some product lines. Adjusted EBITDA as a percentage of sales did decline by 150 basis points compared to Q3 2018. However, this impact was due to AGI's continued investment in sales and marketing initiatives, digital tools, and a technology platform. The benefit from these investments is expected to gain momentum in future quarters and to accelerate as our end user markets normalize with the transient’s items experienced in 2019. AGI's businesses have performed well in 2019, despite significant headwinds in North America and offshore. And Management anticipate adjusted EBITDA in the fourth quarter of 2019 to approximate 2018 level. EBITDA percentages in the fourth quarter of 2019 are expected to decrease compared to the prior year, largely due to investments in marketing and technology, the impact of poor harvest conditions on certain product categories, and due to commercial sales mix. Several factors exist today that suggests we are positioned to enter 2020 on very solid footing. First, there is a growing expectation that U.S. farmers will plant a record amount of corn acres in 2020, which would positively impact the amount of portable grain handling equipment and grain storage systems. AGI Brazil continued to make progress with their manufacturing efficiency down market development, and Management anticipates improved results in the country in 2020.Internationally, our backlog related to 2020 has started to build and we currently expect to enter the year with a strong book of business. Finally, we expect growth from our platform acquisition in India, due to increase market development and synergy with other AGI divisions. In summary, while we face certain headwinds in 2019, we look forward to increasing our pace of growth in fiscal 2020. And with those comments, I'll turn the call over to Jessica for Q&A.

[Operator Instructions] Your first question comes from Jacob Bout of CIBC. Please go ahead.

Had a question on the 2020 outlook. So, seeing that things look a little better, talk a bit about what you think that ramp looks like? I know you talked about higher U.S. acreage, is this kind of a second half 2019 in the U.S. and then Canada, any indication that the on-farm in Canada start to improve?

Our on-farm business has been very strong really throughout 2018 or throughout 2019.When we're looking forward to 2020, really, I think you begin with the new planting season in Q2. There's really nothing to differentiate Q1 of 2020 from the back half of 2019. But I believe once, like every year when the seed goes in the ground and a new set of conditions is in front of our farmers customer base, we expect that planted acreage and similar drivers we experienced in 2019 on the portable grain handling equipment and lead to a very strong year on the farm.

And then as far as backlog, when you look at Canada, U.S. International, there were some comments in MD&A but maybe can you provide a bit more color it sounds like, international is up, how does U.S. compare to Canada?

Our backlogs are quite strong as they were in 2018 our record year. So looking at it by geography, I mean, the farm backlogs when we get into this time of year, Jacob, as you know, we're kind of winding up in a very late harvest, not quite as relevant as they will be - as we enter 2020. However, the farm backlogs are higher than they were at this time last year. Our commercial backlogs are consistent and are strong than they were in 2018. It's a bit of a mix in the U.S. regarding the platforms we're stronger in fertilizer and food currently than we were at the same time last year and that is a testament to our diversification in recent years into these separate platforms. Internationally, our backlog is tracking along with a strong 2018. We're building a nice book of business for 2020. The backlog is geographically diverse, Brazil in particular is strong as Europe and Eastern Europe. So we're very comfortable with where our backlogs sit today and we believe will enter 2020 on a good footing.

And the inks that your clients were talking about earlier on in the year as far as international trade is. Is any of that subsided at all?

Yes, I think Jacob I think we're seeing signs of it subsiding or making - our customers making adjustments to what they perceive as new reality. And there is been changes in trade and where the crops being consumed where it’s being processed. And so, we are seeing a resumption of activity, I guess you'd call it. Our pipeline is strong and it's recently seeing an uptick in the closing rates. So, yes, I think there are positive signs internationally around whether it’s a resumption or whether it's just - but a little bit of both I guess it's our expansion into new markets, both by product and regionally and then resumption of activity.

Last question any insurance recovery for the subline charge?

No, there has not been and we don't expect to receive insurance on that charge Jacob.

Your next question comes from Steve Hansen with Raymond James. Please go ahead.

First question is on India, I'm just hoping you could give us a bit of a sense for what's been transpiring there months and conditions have improved, which I think you know since you helped Milltec out. But I think you've also alluded to some internal product development efforts or market development efforts more broadly, just trying to get a sense for the status of that recent platform acquisition?

Yes, the team there has got a phenomenal innovation product development team. And so they've moved into expanding the product lines, they've traditionally been building our product, robust product line, complete turnkey capability in - we would call sort of medium sized processes. And now we're extending to launch to complete product line for large processes as well. So we extend really across the market now in India, and then expanding it their efforts geographically within India and then in the region, and seeing good traction momentum in both of those efforts, and then building out the additional product lines so far boiling equipment within India is to sort of I'd say round out the turnkey offering.

Okay, that's helpful. And just may be a question on the technology side, you've compiled a number of assets in your technology portfolio you rebranded that now SureTrack. Can you perhaps describe how you're now going to go to market with this new offering? Is this something that has a new wholesale lever attached to it and you're going to new customers, and that's happening soon? Or is it just sort of rebranding what you already have and continuing as is. I'm still understanding how the customer side is changing if at all, or if you're just, what's new in this rebranding effort from a sales standpoint?

Yes, it's a little bit of both. We do have dealers that handle some of the hardware that we're talking about. And then we have a direct sales team at SureTrack and that sales team is talking both to farmers and to - on the commercial side to grain buyers and so we would, we're going directly to grain buyers to get them on the system using it to manage the facilities and their supply chain. So it's a combination of - those things and those continue to evolve. And as we build on the capabilities of the platforms that exist today, and that will be slightly different as we take that internationally as well.

And just to follow up there if I may, how does that mix look on a relative basis commercial versus on farm today. And then how you envision in the future is there going to be a shift towards larger commercial assets or is it stay on farm or is it a combination of both?

From a numbers perspective, it's very, very weighted to farmers. And now we're ramping up the efforts on the commercial side. And so, as you can imagine each green buyer deals with hundreds or thousands of farmers and as we bring on commercial customers partner with them for their capabilities. They then bring the surrounding those hundreds of thousands of farmers that need to be on boarded onto the SureTrack system so that you get that supply chain connection. So it's a - numbers wise it will always be a lot more farmers on the system just because that's the reality of the market. So but the disproportionate impact is as commercial customers come on, they bring hundreds to thousands of farmers.

Next question comes from Michael Doumet of Scotiabank. Please go ahead.

Just given the crop conditions in North America I thought the increase in sales in the portable handling equipment was quite impressive. I mean, are you seeing any, is the main driver they're still replacement demand. And if not is there an element of share growth?

Yes, thanks Michael. Yeah, the sales of portable are very strong as we expected, the product line as you know is largely replacement driven. When you get into a late harvest, like we're experiencing in 2019 with harvest conditions are very tough on our farmers. It's wet, the days are short, and it's very tough on the grain orders and it drives in season demand. It was a surge in demand that we expected and it will leave us in a good place heading into 2020. As our dealers are doing very well here in Q4 and will enter a 2020 with lower inventory amounts.

And maybe a higher level question obviously, understanding that this year has been really challenging across a number of your geographies. If we assume 2020 is a normal year, if that exists, I guess in the Ag space. And I think you alluded to this already, but what businesses do you think could see the most catch up potential in 2020. And from a geography standpoint is that - am I right to think that's mostly the U.S. and international?

I think that's right Michael. The businesses of ours that were most impacted by the conditions in 2019, were the green storage systems business in the U.S. Such a wet - wild year in the U.S. that business had - or that that sector had difficulty gaining momentum in 2019. We did reasonably well through new customer acquisition. As that market normalizes in 2020, we would expect to accelerate our growth in the U.S. Green storage systems. Internationally also as you mentioned, would be the second area you know the trade noise we’ll see if it dissipates or changes. It's certainly becoming more of the new normal than it was even six months ago. So we expect growth internationally also

And just on Canada, I mean obviously, you've had a number of strong consecutive years in the commercial business there. With the build out in grain and fertilizer infrastructure based on the backlog and the discussions that you're having with your customers, and would you consider the ramp up in activity levels somewhat mature at this point?

Yes, there's still a lot of activity in Canada, across the five platforms. There is you're right, there is been a fairly sizable build and you see that build that port facilities and then, the knock on effect, those that you need to build in the inland facilities to enable that supply chain. So it’s great to have port access, but you have to get the crop gathered locally, regionally, and get it to port. So, on the green side we are still seeing momentum in the build and bead and seed likewise. So as fertilizers sort of a consistent spend across Canada. So will it moderate over the next three to five years? Probably, but - right now we're seeing good positive signs.

And maybe just one last, if I can squeeze it in. Good quarter on free cash flow. Now, understanding the second half is easily stronger for cash generation, I mean, what do you expect for the full year in terms of free cash flow?

We expect Q4, again, will generate positive cash flow from working capital, which is consistent with our historical seasonality. We, as we always will, as we have done in the past, we'll strategically acquire steel, if and when we believe the time is right to enter the market, which would introduce that variable I guess were seasonality. However, including it, we expect positive cash flow in Q4 from working capital.

Your next question comes from David Newman with Desjardins. Please go ahead.

Your confidence in India and Brazil has grown and certainly it's great to see you turning to EBITDA positive in Brazil. Maybe just an update on how you're tracking there, as far as where you're at versus potential? And just in India, maybe a comment on the banking liquidity issues that prevailed earlier in the year, is that beginning to subside such that they can buy?

Yes, well in Brazil, in both places we have strong backlogs and giving us good visibility into the coming quarter. That's growing on the - in Brazil, good expansion of our farm sales and then with contribution from commercial sales. So we're seeing that right combination, that right mix to get us to volumes we wanted to see in Brazil. So, as we look out Q4, Q1 into 2020, we see the right backlog going into the year and then the right momentum in projects in Brazil to give us some competence in that region. And like wise in India, I mean, that's a fairly, we've got good backlogs there and good pipeline, good expectations for the coming year in India. And Steve, do you want to comment on banking there?

Sure, yes. So last quarter, we talked about a couple of things. One being the liquidity in India, the second being the timing of the monsoon. Of those two, the timing of monsoon was far more important of the two. Regarding bank liquidity, I would say it's moderating, slightly. It's far from a crisis. It's a somewhat negative factor, I suppose, on the growth of our market. AGI is obviously able to provide any support our team in India requires on the financing side of things. So it's not a significant factor in our growth. It's still a slightly, I guess a slightly negative factor that we believe is dissipating modestly.

Do you guys think the random walk on Brazil, I think as said previously, that one quarter could be down, one quarter could be up, and earlier on the year it was a little weak in Brazil. Then now, this quarter was pretty decent and EBITDA positive. Do you think you're kind of getting firmer footing there and getting [tractionally] in, and are you seeing market share gains and things like that, like what has been the surprise to you guys in India?

I wouldn't characterize that surprise - yes, right, with Brazil. I wouldn't characterize it as a surprise. We're gaining momentum in the country without question. Our backlogs are building further and advance than they had in previous quarters, which would lead to more consistency in the manufacturing flow and improved margins. So, well, looking ahead to 2020, we are going to enter 2020 with the best backlog we've ever had entering a fiscal year in Brazil. And our team and our market penetration and product awareness, the increase in it, we believe that momentum will continue throughout the year.

And then last one from me guys; just overall, as you head into 2020, I know that it's more of a corn crop in the U.S., but do you get any sense when you're kicking the tires of buying intentions at the farm level or commercial level overall, despite crop prices, where they are and the trade wars? And in Canada, obviously, recently the Chinese lifted the ban on pork, hopefully on Canola. So maybe just a comment on just at the farm level and the commercial level, just given all the myriad of things that were challenging this year?

Yes, the demand drivers on the farm remain very strong, and it hadn't changed. And the weather conditions in Canada in the U.S. were by far the biggest factor in tempering our growth in 2019. We had a very solid year despite the weather. Anticipating a more normal year in 2020, you would expect those demand drivers to become right to the top and allow us to grow at the pace we expect it to grow.

Your next question comes from Greg Colman with National Bank. Please go ahead.

I just wanted to start with your near-term outlook and apologize in advance for the pedantic nature here. But I'm a little confused and was looking for some clarity. It is all just lifted right of your prepared press release. You mentioned that adjusted EBITDA in the fourth quarter will approximate 2018 levels, which on the surface seems very clear and easy to understand. But when we come into the details there, you mentioned that sales in both farm and commercial should be flat year-over-year. But EBITDA percentages in aggregate should decline year-over-year. So I'm trying to reconcile how sales will be flat EBITDA percentages will decline, but EBITDA will somehow be flat. Does the sales perhaps guidance exclude acquisitions?

Again, with all of our guidance, we're providing general guidance Greg, and I think maybe you're splitting here a little bit. Our general guidance is that Q4 EBITDA will approximate Q4 of 2018.

So that should trump any sort of nuances underneath that?

Pluses and minuses, yes.

And then does that Steve, just about the charge and we've already talked about it a little bit, but I just want to be clear, the one-time charges that entirely isolated to Q3 or should it trickle into Q4 and if it does trickle into Q4 does your comments about approximating year-over-year, EBITDA incorporate that?

The $7 million charge we accrued in Q3 remains our best estimate of the total cost of - related to those two projects. We have no information that leads us to believe that number will change.

Just and then on the backlog, it is great to see the fertilizer and food components contributing there in a meaningful way. Can you give us any idea how much of the backlog is in those sort of but I guess I'll call emerging divisions? Is it coming up on I don't know, quarter, a third, a half or is it still sort of a much smaller percentage of the overall backlog?

It's a smaller percentage of our overall business, feed and fertilizer and food today would - depending on the quarter, of course comprise 10% to 15% of our total sales. Now the backlog by platform can vary from quarter-to-quarter, but fertilizer and food are growing pieces of our business.

And then just my last one here still on the backlog - we talked a little bit about the trade tensions and how things are normalizing a little bit. But just to be totally clear as things get a little bit better. Have there been projects, I guess any meaningful projects that have been taken out of your backlog with the changes in sort of the global picture there?

Not over the backlog, Greg, there is plenty of on the pipeline projects that are on the sort of drawing board around the world. There is changes in timing of those, there always is, but maybe there has been more throughout '19 and then previously, but the backlog is solid, nothing no changes there.

[Operator Instructions] Your next question comes from Steve Hansen with Raymond James. Please go ahead.

Just a follow-up on Brazil manufacturing efficiencies which you sight in the release. I recognize there is still relatively early innings here but could you just give us a sense for where your utilization levels might be your new site. I know you size that for future growth but would you try and get a sense for what degree of skill benefits we still have to realize as the sales ramp up here - can you just rough magnitudes where your utilization sits?

Well, you seen it Steve, it's obviously it has a lot of capacity and we're nowhere close to it. I guess it would be a high level way to answer your question. So we have plenty of room to grow within that facility and plenty of room to improve on our manufacturing margins.

And then just on the sales cycle in Brazil, and the ability to get third-party credit to facilitate sales that's been an obstacle historically. Just wanted to describe some of the efforts that you're taking down there to allow that fluidity or that capital to be available for third-parties just to get the sale cycle moving?

Right so, the government financing is, as it has always been, it's loaded to make its way to the farmers. So some of it does make its way to the farmers however, what we've done, as we've discussed in recent quarters is provided alternative financing through what's called the CPR where we will accept as collateral, the crop of a farmer. And it's a very well recognized efficient legal instrument in Brazil. And it's a very favorable instrument for us in obtaining new farm business in Brazil.

As you're recognizing traction on those efforts then?

Absolutely it's a key piece of our sales strategy. And as our sales team becomes more mature and more, I guess familiar with the instrument which they are now - its relatively new in our space. We believe that will accelerate in future quarters.

And there are no further questions at this time, please proceed.

Okay, thank you. We'll close it up there. Thanks very much for participating.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.