Good morning. My name is Sylvie, and I'll be your conference operator today. At this time, I would like to welcome everyone to the AGI's Third Quarter Results Release and Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. Tim Close, you may begin your conference.

Good morning. Thank you for joining us this morning to review our Q3 results and outlook. I'm very pleased to have Jim Rudyk, our new CFO, joining me this morning. Jim joined AGI in late September, and brings an impressive career across several industries, with experience including finance and operational roles that bring relevant experience to AGI. As we move into the next stage of our growth, the experience Jim brings to the table, will be critical in navigating and implementing improvements in our system, operations, and bringing leadership to our global finance teams to facilitate our ongoing growth. We will start with a summary of the quarter, then discuss the significant accrual we are taking in the quarter, and close with a detailed review of a regional results, fundamentals, and outlook. Just a quick reminder that the cautionary language about forward-looking information and the use of non-IFRS measures contained in our Q3 release, also applies to the discussion during today's call. As indicated over the prior three quarters, 2020 has been setting up for a Q3 weighted performance, with our commercial production schedules weighted to Q3. A relatively short and early harvest across North America, also contributed to the Q3 weighting. However, the COVID crisis acted to significantly offset these positive elements in the quarter, with a material impact on commercial projects globally. Development of commercial projects slowed, or projects were postponed due to the varying regional conditions due to COVID. Our customers have been dealing with limited access to sites, availability of resources, and uncertainties in end markets, which all contributed to lower our commercial sales globally, and in particular, in North America. That said, our commercial sales remained at 94% of Q3 2019, and 92% year-to-date versus 2019. All factors taken together, and at a consolidated level, Q3 2020 was a record third quarter for AGI in terms of sales and adjusted EBITDA. It was also a record quarter overall for adjusted EBITDA, just beating Q2 from 2019, which was our prior high watermark. This strong performance in the quarter, again highlights the benefits of our diversification in investments over the prior five years, demonstrates the resiliency of our business, and confirms our place in the global food infrastructure, with demand fundamentally driven by global consumption. Now, before we get into the details of our results, we'd like to address the incident that occurred during the quarter. On September 15, we reported that there was a collapse at a customer's project of a commercial grain storage bin that was manufactured by AGI. The cause and the responsibility for the incident, has not been determined, and there is an investigation underway. As disclosed this morning, the company has taken a $40 million accrual in the third quarter, in accordance with accounting and other disclosure obligations, on the basis of potential remediation of equipment that was supplied by AGI to this commercial facility, and one other facility. The accrual represents AGI’s estimate, in consultation with our external advisors, of the direct costs involved, including cleanup and equipment remediation at the two sites. AGI's contracts contain exclusions for indirect or consequential damages. While AGI has accrued $40 million in this quarter, we believe that this amount will be partially offset by insurance coverage, and result in a lower net impact. We are working with insurance providers and external advisors to determine the extent of this cost offset. If the investigation determines that AGI contributed to or caused the incident, AGI will take responsibility for the action and related remediation. This incident accrual is in addition to the previously reported $20 million in costs and accruals taken over 2019 and 2020 that was due to the rework of equipment supply by AGI to the same commercial facility where the incident occurred. The rework was required to address issues with the equipment designed and supplied only to this facility. We want to stress that the incident that occurred in September and the rework, are isolated and discreet. They’re also extremely rare. AGI manufacturers thousands of bins each year, and we are involved in hundreds of projects each year for different customers around the world. Our engineering team has significant experience designing and providing leading products in our industry. Quality control and safety and security of our customers, will always be our top priority. Over the past three years, and in response to market demand, AGI developed a large hopper storage product as an extension of our storage product line. AGI sold 35 of these hoppers to two different customers constructing grain storage projects. There are a total of 15 hoppers on the site of the incident, and 20 hoppers on the second site. After the grain bin collapsed, under an abundance of caution, AGI immediately issued a demand to each customer to suspend the use of the hopper, and we are supporting our customers to ensure that we mitigate the impact of the incident. As noted, the cause of the incident has not been determined. In the meantime, AGI has responded by conducting a thorough analysis of the company's relevant processes, procedures, systems, and engineering tools. We are committed to strengthening our business as a result of this experience. We welcome questions about the incident after the prepared remarks. However, please note that we will be able to provide more details on the cause of the incident, potential required remediation, and the accrual, pending the findings of the investigation. Let's return to a more detailed review or our Q3 results, our fundamentals, and our outlook. This record quarter is a result of very strong results in North American Farm, Brazil, India, EMEA, and our technology group, and offset by lower commercial results in North America. As indicated throughout 2020, the strong performance of our farm business in North America continued in Q3, with sales climbing significantly year-over-year and up year-to-date. The robust performance is driven by core demand, with solid crop volumes across North America driven by an annual increase in planted acres, and favorable weather conditions, resulting in good crop yields and a sizeable crop. Farmers continue to invest in mandatory equipment and systems required to handle these crops, position themselves with adequate storage capacity to effectively market their crop. Demand has been broad-based across North American regions and products, with inventories across our dealers currently at low levels, leading to expectations for solid early order programs and sales as we move into Q4. Our farm system sales continued to grow in the key US market, double-digit year-to-date organic growth in this strategic category. As a reminder, we expanded from our portable grain handling products in the US with our acquisition of Global Industries in 2017. With this acquisition, AGI gained a small regional market position in grain systems. We have been integrating our products, sales and dealer development, since the acquisition. We are seeing positive traction in this market, and believe our combination of market-leading design services, storage, handling, conditioning, and technology products, coupled with additional dealer tools and service, will lead to steady continued organic growth. Despite an earlier and much drier harvest across North America, we expect stable sales in the farm category into Q4, holding our gains in the year, and confirming our traction across the category, and our growth in the US farm systems business. We expect positive conditions to continue into 2021, starting with solid early order programs now, and continuing into the fall in both Canada and the US. Q3 was a record result in Brazil in both sales and EBITDA. Sales increased 55% sequentially and 52% year-over-year. We narrowly beat our previous best sales figure. EBITDA increased substantially in the quarter, as margins grew to double-digit numbers, closer to our consolidated results, as we grew sales, achieved favorable product mix, and saw the benefits of recent lean initiatives. We continue to have a very positive environment in Brazil. Favorable weather, increased acreage, better seed and nutrient usage, strong fundamental crop demand, low interest rates, and low inflation, are all leading to a steady increase at the farm level, investments in the infrastructure to store grain and to maximize profitability from sophisticated grain marketing. We expect these conditions to continue into Q4 2021 and beyond. Our pipeline and backlog remain strong in Brazil, leading to good visibility on continued momentum on our sales. We do expect more volatility in margins as we optimize product mix, balance farm and commercial projects, and optimize manufacturing efficiencies. Overall, we are very pleased with our progress in Brazil. India delivered record Q3 numbers, despite the significant COVID impact. Sales grew 44% year-over-year, off of solid Q3 in 2019, and EBITDA margins expanded significantly year-over-year, as we continue to work on manufacturing and SG&A efficiencies. We also achieved favorable product mix in the quarter in India. Our teams continued to successfully execute on our market expansion strategies in India, taking us from our traditional focus on mid-sized rice processors, into both the markets for smaller and larger processors, while growing our integrated system sales. We achieved this expansion through product and service developments designed to address the nuances at both ends of the market. We also saw positive traction in larger projects in the quarter. Our export sales returned to pre-COVID levels, which serve to augment our sales growth in what is traditionally a slower quarter in India. Overall, conditions remain favorable in India, with a good monsoon season leading to growth in rice production, and facilitating a substantial increase in rice exports from India. Despite COVID, the earlier monsoon season and a strong Q3, our pipeline and backlog remained equal to this point last year, setting up for continued performance into Q4. We're also positive about the environment heading into 2021, and expect to maintain our momentum in this strategic market. We also have strong results in Italy, with solid growth in year-over-year sales and substantial margin growth, as we continue to see the impact of a recent investment in our automated production facility, and product development efforts over the past 18 months. Commercial project demand is now returning, as we moved through the COVID crisis, and we're seeing broad-based strength across the region, with activity levels picking up in Eastern Europe, Russia, Africa, and the Middle East. This increasing activity, puts our pipeline and backlog in a strong position, and current intake levels point to an increasing profile for our Italy backlog going into the end of 2020 and into 2021. Over the past three years, we've been moving our sales engineering design teams, as well as our products, and ultimately our manufacturing, into each of our strategic regions, Brazil, Italy, Southeast Asia and India. This deliberate and strategic effort, in addition to the challenges from COVID, have combined to lower our commercial sales in the international markets from North America. This does naturally serve to offset the sales growth from the regions. However, these moves act to make us more competitive in each region, positions us to better serve our customers, and build closer relationships that lead to a more sustainable, defensible business, with improving margins, and products best configured for the nuances of each market. Our technology business, AGI SureTrack, continues to grow. SureTrack is a market-leading grain monitoring and automated conditioning platform that extends to a grain marketing and overall farm management platform. The foundation of this business is a robust suite of IoT sensors integrated into our system, providing live monitoring and data feeds to our farm and commercial customers. This platform is having a positive impact across our equipment, and playing a strategic role in our market expansion that goes beyond the technology platform. We currently have been selling SureTrack equipment to customers using a subscription model, which spreads out the revenue over several years. However, to look at the underlying performance of the SureTrack business, we look at how the business performs on a retail equivalent basis, which would show what sales and earnings would be if we recognize the sale upfront, versus over a number of years. The challenge with the subscription model is that it can make the early reporting results look weak, as the costs get recognized upfront, but the revenue was spread over many years. If we look at the SureTrack business on a retail equivalent basis, SureTrack sales increased 45% year-to-date, over the very strong organic growth numbers posted in 2019. On this same basis, SureTrack would have contributed significant positive EBITDA year-to-date, instead of a significant drag in the year-to-date period. The production of SureTrack equipment was relocated to the new facility in the quarter, substantially increasing our capacity and driving key manufacturing efficiencies. From a sales perspective, we are introducing additional financing options for our customer, and revisiting our subscription model, which we expect will result in stronger recognized sales. The SureTrack platform continues to grow. We are very excited about the positive contribution of this business going forward. I will turn the call over to Jim for a more detailed review of the quarter.

Thank you, Tim. I'm very excited to be part of the AGI team, and I am looking forward to helping us execute our strategy, as we continue to grow the company. to start off, as Tim mentioned, we had very strong results, as sales and adjusted EBITDA in the third quarter of 2020 were $282.5 million and $51.8 million, respectively, compared to $261.1 million and $39.1 million in the prior year. Looking at sales, robust farm demand in North America, and solid results in Brazil, EMEA and India, contributed to a strong performance in Q3 2020, despite the headwinds presented by the emergence of COVID-19. Our results reflect the resilience of our business in the face of COVID-19 challenges, as well as the benefits of diversification across geographies and product lines. From a product platform perspective, our farm business was very strong, due to high customer demand from solid crop volumes across North America. Demand has been broad-based across North American regions and products, and inventories across our dealers are currently at low levels, which will lead to sales in Q4 that are consistent with the prior year. Our commercial business continued to be lower than prior year, as customers cautiously managed their large capital projects as a result of the COVID-19 challenges. From a geographical perspective, the US and international businesses showed strong double digit sales growth, while Canada was slightly up year-on-year. Our international business results, led by the strong performance in EMEA, Brazil, and India, was due to the previous focus and investment in those areas, and continue to represent strong growth opportunities. Our overall sales backlog remains consistent with the prior year. We expect to see continued strength in our farm business through the first half of 2021, due to the depleted dealer inventory levels, and strong crop volumes in North America, as well as some rebound in our commercial business, as those customers start to make decisions on pent up capital projects. Turning now to our gross margins and adjusted EBITDA. Our results in Q3 2020 reflect a very strong operational performance across our businesses and geographies, as our gross margin in the quarter increased to 34% in 2020, from 31% in 2019. It is significant that the gross margin percentage was achieved despite COVID-19 related operational protocols at all of our facilities. Our gross margin growth was a result of a continued strong farm performance, as well as sustainable increases in our international business margins, that resulted largely from strategic capital projects in EMEA, and strong momentum in Brazil. As a percentage of sales, our adjusted EBITDA margin of 18.3%, increased 336 basis points from prior year. These strong results were driven by the large improvement in gross margin, and our steady management of SG&A costs. With respect to our earnings outlook, overall, we expect adjusted EBITDA for 2020 to be in line with our 2019 results, and we're looking forward to an encouraging first half of 2021. My final commentary relates to our liquidity position. As you may recall, we amended our credit facilities in April, given the substantial uncertainty caused by the emergence of COVID-19. The amendment enabled us to suspend our covenant tests until October 31, and also provided us with increased liquidity. Although our covenant tests were suspended at the end of Q3, our net senior debt to adjusted EBITDA ratio of 2.89 times, is consistent with the prior year ratio, and remains well below the pre-suspension requirement of 3.75 times. We do not have any covenant concerns now or going forward. In April 2020, we also expanded our credit facility to add flexibility and additional liquidity. And as at September 30, 2020, we have $164 million of undrawn revolver capacity, plus a $100 million untapped accordion. Our strong results, reduced growth CapEx needs, and our modified dividend payout, will give us higher free cash flow, and a much stronger balance sheet. So with that, we will turn it back to the operator to take any questions.

Thank you. [Operator Instructions] And your first question will be from Jacob Bout at CIBC. Please go ahead.

Good morning. I’d like to get a few more details on the $40 million accrual, trying to understand what the probability weighted estimate actually means. Could the cost actually be higher than $40 million?

Yes. I guess - Jacob, I appreciate the question. As we stated, we’re still going through that in the investigation. So we - this is a good estimate of the direct costs that we think are involved here. So, as we get through that, we’ll obviously be providing more clarity, but we're comfortable with that accrual at this point.

But just to understand this correctly, so that's your estimate, but that wouldn't be necessarily the total cost?

Yes, go ahead.

I think - that's our estimate of the total cost, Jacob.

Okay. And what if the claim goes against you, what would insurance cover?

Yes. Again, we're working through that with our insurance companies. We have - we're working with our advisors and our positions that covers these, that the direct result of the incident. So - but we have - certainly have our initial position, but we are going through this investigation. So we're - and then incorporating those boxes as they become more and more clear. So, we've indicated that we think it be an offset here, I think, a partial offset. We think that that's a good sized number, but we'll be working through it over the coming weeks and months.

Okay. And then the bin failure at the two sites, similar circumstances at both sites?

No. it was a distinctly different application, and the two sites that we've indicated here that are involved in the accrual, those are very similar. Those are both grain facilities.

Okay. But to be clear, you're the equipment provider at both sites?

That’s right.

You’re only the equipment provider at both sites?

That's right. Our role is as the equipment provider to two sites.

So not involved in the construction or any of the op or site preparation?

That’s correct.

Okay. And from a historical perspective, has Westeel ever seen anything similar to the bin failures we've seen with the hopper line?

Look, the bins - there are incidents with bins around the world, but they're very different products. So it's very difficult to draw comparisons here. There are issues in commissioning, and that can be for a wide variety of circumstances, from construction of the foundation and civil works and weather instances, as well as other factors. So it's - there are bin incidents around the world, but it's really hard to draw comparisons to any other specific examples.

Last question from me. Changes that you've made or considering from internal controls perspective?

Yes, absolutely. Yes. We've been taking a deep dive across all of our internal controls systems people, and have made changes, are making changes in order to strengthen our processes, the systems and pillars we're using across the board. We can always do that. We can get better and we will - we are committed to getting better. And those changes are - a lot of those are in hand and in scope right now. We in stride in making those or made a significant amount of changes to bolster our procedures and policies, both internally and using our external resources.

Specifically, what are you considering?

We’ve implemented new engineering systems. Within - from FEA analysis perspective, we've changed and added to those processes, the bid review processes. Every commercial bid that comes in now is administered very early on in the process, and gets senior engineering review at a very early process. And that guides then the design and the steps going forward on every single commercial project worldwide. Product development has been strengthened across the board and has new leadership in product development - product management worldwide. And we're adding to that team, have added to that team in North America. We’ve built out a very good team engineering wise in EMEA, in Brazil, in Southeast Asia, where we just added senior leadership to that group in Southeast Asia. And in North America, we've made changes to that team and added to the team, added talent across the board. I mean, I guess I would add to that we are - as one of the biggest grain bin manufacturer in the world, we have a significant amount of expertise across AGI, and bringing that together in new ways to ensure early and additional review across existing products, is being done right now. And then a significant change to product development processes that will benefit and mitigate this type of event, possible event going forward.

Do you think you've taken a reputational hit here? Because it looks at commercial backlog is down quite a bit.

Well, look, I guess your reputation is defined in moments like this. We are stepping up in supporting our customers in every way we can. We are very committed to that across the board in every instance. And these are the times where that reputation is built, is cemented in. And we are very committed to that. We build, as I said, thousands of bins. We have robust expertise in this around the world. We are - there's hundreds of projects, both farm commercial projects around the world that we are implementing and working on every day, every year. And we - that forms the foundation of reputation we have to date, and we intend to maintain that credibility and reputation going forward.

Okay. I'll leave it there. Thank you.

Thank you. Next question will be from David Newman at Desjardins. Please go ahead.

Good morning, gentlemen, and welcome, Jim. So just to - not to belabor the point, but just on the - besides the insurance recovery, any recourse that you might have with suppliers on materials and things like that? I mean, I know you're still doing your investigation, but as you go back in the supply chain, is there any other areas that you can offset some of the accrual?

Good question, David. I think it would really come down to the final determination around cause - causation and there is certainly that possibility. I think we'll determine that as we go forward and investigation gets - comes to conclusions.

Okay. And then on the guidance, just on the guidance, you're calling for flat EBITDA year-over-year, which implies 4Q and a squeeze-out, could look a little bit softer. Is it related to the sort of the commercial COVID? Because obviously the farm outlook looks very, very good and it looks like it could continue to move through the next couple of quarters here, obviously strong crops, et cetera, and then inventory is depleted. But if you look at the commercial side, it seems like COVID weighed a little bit heavier. And is that really what you're kind of looking at? What's causing, I guess, the little less confidence on the fourth quarter in terms of your outlook?

Yes. Well, a couple of things. We’ve been trying to stress throughout 2020, and even end of 2019 that this year was setting up to be Q3 weighted. And that was - our production schedules in commercial globally and in farm, were weighted to a Q3 coming into 2020. So that allocation between the quarters is not unexpected. I guess I'd say often that an early harvest then augments that, because you pull - a late harvest would see some of the rush, the final year rush in Q4. And that harvest happened in Q3 across North America. And it was dry, dry and early, generally speaking. So that augmented the weighting to Q3 as is now. So in that context, Q4 looks quite strong. We are - as you noted, inventory levels at our dealers are low. They’ll be replenishing those as we move through Q4. Our early order programs are set to do that, set up to do that to load our production across our facilities, particularly in farm. So we see it setting up nicely into the back end of this year, and then position as well into 2021, both in the farm site. Now, commercial - COVID, no question, had an impact in commercial globally. And so we noted that in this quarter, our - places like India, places like EMEA, strong results, despite the COVID impact. We do expect to see a rebound in commercial as we move into Q4 and into 2021. There are - just simply, there are straightforward maintenance-related or scheduled automation or expansion projects across the board that had been postponed in 2020 that we see now picking up at the tail end of this year and into next year. That quoting activity is rebounding globally. And we'll set up for further expansion of our backlogs into the back - or expected expansion of our backlogs into Q4 and into 2021.

And just last question for me, just on the commercial side, are you - when you talk to your customers internationally, I mean, obviously a lot of decision-making has been deferred because of COVID and et cetera, but also because of the White House and changing policies every other day. So, I mean, if you get more stability in the White House and Pfizer and a vaccine and things like that, I mean, are you seeing some early sort of - kind of looking at the files and maybe starting to work on sort of deferred projects, starting to restart them?

Well, for whatever reason, I think it's just to the delays in COVID, but whether it's geo-specific or political reasons, activity is picking up worldwide and across the board, whether it's in processing food or grain or FERC. So there is - we see that positive rebound activity happening now. Look, some parts of the world were dramatically affected by COVID in the commercial space. Those parts of places like Southeast Asia, were just completely shut down. There was zero access, zero travel, zero access to sites. And you can see that in - across the reporting of those regions. Other places have - had made progress during - in places in EMEA in particular, had made more progress, been a little bit more travel during this period. So, it’s a little bit by case-by-case across regions, but overall, we do see activity returning

And if I can just squeeze one in, maybe more for Jim. So, Jim’s financial stewardship, any changes that you expect in terms of interaction to the Street, guidance, transparency, and things like that? Any touch points that you guys might look to do?

Yes, that's - thanks, David. What we're - so I've been on now seven weeks. And as I looked through what we’ve provided to the Street now, I think there's an opportunity to clarify some of the information that we provide. We’ll try to be a little bit more transparent in our results by region, and then dive a little bit more deeper into the specific regions. I think that’s an opportunity we're going to take through Q4 and think about how to re-update our MD&A and our press release and the information we provide. The other thing that we're going to do, you'll notice we set up times to meet with each of you in the next couple days. We'll spend some more time with you on a regular basis. I think we continue to do marketing as appropriate, based on what's available and what's out there. But yes, that's certainly an intention of mine, is to spend more time with our investor group and our analysts, to make sure that they have a clear picture of the story. I mean, it's a fairly complicated business quite frankly as I'm learning. And I think there's an opportunity to simplify this to everyone so that you really can appreciate the exciting growth opportunities we have, and how well the business is operating in, because there's so many things going on. So it's important to clarify and simplify this to you.

Excellent. Look forward to it. Thanks, gentlemen.

Thank you. Next question will be from Andrew Wong at RBC Capital Markets. Please go ahead.

Hi, good morning. So I'm just going back to the bin incidents. Just, do you anticipate any additional costs related to the hoppers that have already been installed, but were not involved in the incident? Maybe any additional work or any, I don’t know, like refund. I don't know how that works, but could you help us understand that.

Good morning. The accrual we're taking here is comprehensive of all the costs at the two sites as assessed by us.

Okay. So that would include everything. And then just, I guess, more of a question on how you go forward operationally. I mean, it sounds like some of the issues was just having third parties install the equipment. Would you consider having maybe some sort of like a list of approved installers? I think, you actually already has something like that, but then other customers can just go to other installers. Like, how would you handle that going forward?

Yes. No, I just want to clarify. There is - we haven't indicated that that is the cause on this - in this incident. So, just make sure that everybody is getting the facts straight. That is - we are still investigating the causes here, but we haven't indicated anything about installation.

Okay, that's fair. And I guess just on the performance, the margin performance was really impressive. And it sounds like there was strong performance across the business. Some of it sounds like it's sustainable changes like in commercial, based on the commentary. And some of it just sounds like it's more of a - maybe it's from the farm side because it's seasonal, or can you just help us understand what's sustainable and what's more of a seasonal pattern?

Yes. Hi, David, it's Jim. So, yes, from a gross margin perspective - I'm sorry, Andrew, I apologize. Yes, strong improvement year-on-year, 34% to 31%. And it's the result of a couple of areas. Mix certainly is helping, not unusual in certain quarters where you have a mix weighted more towards farm versus commercial. The farm margins we do see to be slightly stronger than the commercial business. So, mix certainly has an impact. But we are seeing two real long-term sustainable benefits. One is from the improving operations in international areas. So, Brazil, India, EMEA, all of those areas. As we continue to ramp up and scale the business, we're seeing some significant operational benefits from that that are reflected in gross margins. The other thing too is, if you recall in the historical quarters, we've made some investments in facilities and operations overseas to manufacture things there as opposed to doing it here, which will benefit us. I mean, we're seeing that benefit from a gross margin perspective. So, those are long-term sustainable operational benefits that we expect to continue.

That's perfect. Thank you.

Thank you. Your next question will be from Steve Hansen at Raymond James. Please go ahead.

Yes, good morning guys. Hate to detract from an otherwise solid quarter, but I do want to follow up here again on the incident issue. Tim, just to clarify on one of the questions asked earlier, what is the range of estimates that you contemplated in this probability weighted estimate? I was trying to get the book ends here, low end, high end, if you're willing to disclose.

We haven't indicated a range. The $40 million is our assessment.

Okay, fair. No, I think importantly is just trying to understand here, does the booking or sort of the accrual include any liability that you might have related to the damages incurred by the terminal operators and shippers here? Visibly those bodies or those parties are not very happy with the outcome right now. I'm just trying to understand who bears the cost of them being down during what's otherwise a peak shipping season here.

Yes, sure. No, we understand the position they're in. look, the - and not everything that is in scope for us is included in our accrual. And we - as we noted, our contracts exclude consequentials.

Okay. How long do you think the investigation is going to take? Just, I've been trying to get one where we get some sort of clarity. Are you going to give us piecemeal news along the way, or should we expect it in six months? I'm just - it sounds like the original incident, the frac sand site is still not resolved. And I think that was early ‘19. So I'm just trying to get a sense for timing here.

Yes. I know we expect to move much, much earlier than that over the coming - I think over the next four to six weeks, we're going to have a very a good - good amount of this investigation completed.

Okay. That's great. That's helpful. I'll leave that there, and then just turn over to the regular fundamentals, if I may. Just trying to get a sense for Brazil. Sounds like it was a really strong period. The fundamentals there on the macro side look really strong as well. What are your capabilities like, or what are your restrictions down there, if any thus far? I know that site you built down there has got a lot of capability, but we're just sort of maturing into it. Is there any capital that needs to go in to facilitate a greater ramp up from here or staffing wise? How do you feel there?

We are adding to some of the automated equipment there in a relatively minor way that we built the facility and staged in some of the additional production equipment. And so given the ramp up in volumes, we are adding some of that equipment as we speak. By and large though, the main components of that plant are built for much higher volume. And then, you're right. Staffing wise, we - is more variable based on volume growth. So we - fantastic team there when we have the good local labor force and part of - across that operation, one of our most automated facilities.

Okay, helpful. Just the last one, if I may, on SureTrack. It sounds like you've got the relocation completed and your footprint has been redesigned here now to scale. I'm just trying to understand again, if you have any limitations on that side in terms of what you can do or what sort of capabilities you can add to customers. Just trying to get a sense for the growth plan here ultimately for SureTrack over the next couple of years. Is this a business that will grow 25% a year, 50% a year? As I think you recently described. Just trying to get a sense for medium term range, and then when it will be cash flow positive. I know you referenced some accounting measures in your commentary, but just from a cash flow contribution standpoint, how do you stand?

Yes. So that’s a few questions there. Capacity wise, we have substantial capacity across the board in that business. We - in the move to the new location, we're automating. We’re insourcing and that - the combination of those will enable us to substantially increase those capacities. We're also - we noted substantially reducing backlogs in that business, which is a critical element. We want to have product in customers’ hands immediately. It's more of a retail type environment. We want to reduce lead times to - as much as we can, quite frankly, to be shipping a product as near to order as we can. And we have that capacity in that business, on the IoT hardware side, and have made additions to our channels to market and our installation teams to be able to ramp up, to continue the kind of pace of growth that we have, which we expect to continue in the foreseeable future. So, wonderful opportunity here for us to expand that business. And in doing so, they'll expand our relationships across all farm segments, and then the commercial space touches really every part of our business. We’re focused on North America for the time being. There’s substantial amount of growth opportunity just here in North America. And then - but somewhat concurrently looking at other priorities or regions from a technology perspective, including Brazil and working all at the same time. They cash flow comment, yes, we try to normalize out on a sort of retail equivalent basis. We - the subscription model has been very successful. Our customers like the combination of sort of hardware-as-a-service and continued warranty. And you think of the core capabilities of SureTrack more than utility, that it's always available. And there's plenty of examples in the tech world that parallel. So we expect that to continue. We do - we are introducing additional financing options for those customers, and that - we expect the combination of those things and the different sales methods, to mean more of that businesses recognized upfront in the near term than just on the deferred revenue basis of a subscription model. So all that said, we expect the - in the near term, to see cash flow positive. And now, it really depends on how much those subscriptions and longer dated programs, how much they expand and how much shifts to the cash sale or a direct just a finance sale. But overall …

Okay, appreciate it.

Yes, I would say, economics wise across the business, we're very happy with where we stand and how we're going forward.

Any further questions, Mr. Hansen?

No, I’m fine. Thank you, operator.

Thank you. [Operator instructions]. And your next question will be from Michael Doumet at Scotiabank. Please go ahead.

Hey, good morning, Tim. Welcome, Jim. I wanted to go back to the 2020 guidance for a minute. Again, it implies a flat Q4 EBITDA. And if my memory serves me correct here, last year, I remember EBITDA being under pressure due to the accounting change in SureTrack. I think there was a wet harvest in the US and the postponement of some commercial business in Canada in the US. I'm trying to bridge a really strong Q3 to what could look like a soft Q4, and then optimism in the first half of 2021. How much visibility do you have to the first half ‘21 improvement?

Yes. So, let's just go back and make sure that this is clear. Q3, I'd encourage you to look at H2. So H2 and the allocation between Q3 and Q4. We’ve been talking about a heavy Q3 for a little while here. We had visibility in that for quite a while, given production schedules for commercial in particular. And then as per my comments, the early harvest then affects the timing of a fair bit of farm related sales. So just leading up to a harvest, there's - farmers are making an assessment of their equipment, and then making any changes that they need or replacing any equipment that needs to be ready with certainty for harvest. So that early - it was very early harvest across the board in North America. And that all happened in Q3. So that would have just been a bit of an allocation between - well, that's a meaningful allocation between Q3, Q4, and in addition to the setup in commercial production. So when you move into this, where we sit today, without any of that harvest related volume in Q4, that sets for what looks like a very good Q4, relatively speaking there. So, and then when you think about 2021, while inventory levels are low at our dealers, our early order programs will be addressing that right now. And those are the backlogs that give us visibility into 2021. So we expect that momentum in farm to carry into 2021. The backlogs we see - we have now, and we see growing into the back end of this year in international, set us up well for that early part of say H1 2021. And we see a stable to rebounding interest in activity in North American commercial. So, all said, we've got pretty good visibility heading into sort of the end of this year, but into H1 of 2021.

Got you. Okay. So if I do look at the second half EBITDA this year based on the guidance, it would be up 20% year-on-year versus the second half last year. and then on top of that, going into next year, okay now I'm obviously going off of my own numbers here, but Tim, I mean, Q1, some headwinds there, the comp. and then Q2, we had COVID. So obviously is the comp there too. So presumably, we've got 20%. Again, I know maybe you don't want to comment specifically on numbers, but that type of growth looks at least somewhat sustainable into next year, at least until we face some tougher comps i.e. Q3.

I think you you've got all of those dynamics right, yes. There's - in Q2 last year, there was some COVID impact, Q1 being a little softer. Yes, you've got those right. And so, we certainly see some continued strengthening in farm, North American farm.

Got you. Okay. Well, that’s encouraging. Look, just another question, I guess, for Jim, particularly, I mean, this question was asked, but I'll ask it, maybe to look for some of your perspective on the financials specifically and opportunities that you see at Ag Growth, I mean, just in terms of capital allocation or reallocation, working capital efficiencies, et cetera. I mean, do you see any opportunities right off the bat? I know you've only been here for seven weeks.

Yes. I do. I think there’s an opportunity for us to revisit our approach at delevering. I think we've got opportunities now. We've got a couple of factors, very confident with our results and going forward. So, strong results. We’ve got - of course we did the reduction in our dividend, and growth CapEx requirements will be lower in the upcoming short-term anyway. And the other thing too that's important, I think, is our strategy, our five, six, seven strategy, has allowed us to diversify, not just across different product lines, but also in different geographies. And that has given us a lot more predictability and stability in our results. And with those factors there, I think there's an opportunity for us to make a meaningful improvement in our leverage rate. And so to delever over the coming a year. I think that's what you'll see. From a working capital perspective, it's a interesting business where you've got - certainly, you have some seasonality perspectives to deal with. You've got dealers in North America to deal with, with different terms. And then the commercial business itself has interest in payment structures, depending on where you're operating around the world. But that said, I do think there's an opportunity to focus in more on our management of the AR inventory. We continue to manage our payables well, but I see an opportunity to reduce our working capital needs going forward as well.

Great. Thanks for the color guys.

Thank you. And at this time, Mr. Close, we have no further questions. Please proceed.

Okay. We'll end the call there. Thank you for the time this morning, and look forward to speaking to you more over the coming quarter. Thank you.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines.