Good morning, ladies and gentlemen. Welcome to the AGI Growth International 2021 Third Quarter Results Conference Call. [Operator Instructions]. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions]. This call is being recorded on November 11, 2021. I would now like to turn the conference over to Tim Close, President and CEO. Please go ahead.

Good morning. Thank you for joining Jim Rudyk and I to discuss our third quarter results and the outlook for the balance of 2021. As usual, I will make a few remarks on the highlights from the quarter, hand the call over to Jim for a more detailed recap of the quarter, and then open the call for questions. Our third quarter results were highlighted by continued momentum in sales growth, up 11% year-over-year in the quarter and up 13% year-to-date with double-digit growth across the Farm, Commercial and Technology segments. Our consolidated backlog continues to remain strong, up 99% year-over-year at the end of Q3 with additional growth into Q4 on continued strong order intake. Throughout 2021, we have sustained record backlogs representing robust growth across our business segments. With the growth of our business into India, Brazil, EMEA and Food, the components and characteristics of our backlog have changed along with the nature of the underlying businesses. We have seen a step change in the level of our backlogs as well as an increase in the duration of the backlog as we add more project-based work to our overall mix. The substantial growth in the backlog was driven by strong demand and the extended duration provides increased visibility into coming quarters. As expected and communicated, the impact of steel and other input cost increases dampened margins in the quarter. Going forward, we expect the extent of margin pressure to taper as costs stabilize on a relative basis and the full impact of price increases are reflected in our backlogs. As we all know, supply chain challenges have been highly unusual throughout 2021. However, we have significantly mitigated these challenges through a combination of pricing action, supplier expansion, strategic purchasing and contract management. Given the extent of supply chain disruption, the impact contained in our quarter is relatively light and clearer evidence in the significant and effective mitigation work our team has achieved. Kudos to everyone across AGI for stepping up yet again to manage through this latest challenge. Now turning to review our business segments and some additional color on our regional performance. Our Farm segment was again one of the highlights in the quarter. Segment sales were up 11% with strength in the U.S. market and South America as our Brazilian business continues to rapidly scale and grow market share. While the drought conditions in Canada slowed sales growth in the quarter, we note the Farm backlog in Canada is up significantly year-over-year in anticipation of improvement in the next crop cycle complemented by solid demand from Eastern Canada. Global Farm segment backlog was up 202% with robust demand for both our portable and permanent product lines as dealers restock inventories and we gained share in permanent Farm, positioning the segment nicely for a strong fourth quarter and significant momentum heading into 2022. Our Commercial platform sales grew 5% in the quarter, with considerable strength in South America, particularly in Brazil and the APAC region, offset by North America, which was impacted by some temporary supply chain and customer project timing delays. The outlook is positive for the North American Commercial platform. Backlog in the U.S. is up 91%. And while the Canadian backlog was essentially flat year-over-year, we note the significant quoting activity from the first half of the year has begun to materialize the deliveries in Q3 and is expected to continue into Q4 in 2022. To further support growth and project execution in North America going forward, we are consolidating our Commercial platform including parts of our Canadian and U.S. teams into a centralized office based in Chicago. This new structure will enable better coordination through the entire sales cycle, including quoting, manufacturing activity, customer account management and overall order execution across the Commercial platform as well as our permanent Farm business. This center-of-excellence approach will remove cost and time from our project execution and increase overall project quality, leading to continued growth in sales and market share. The Food platform continued to execute and perform well but with particular strength in the U.S. market. Sales in the quarter were up 46% as we deepened our relationship with existing customers, and were successful in adding new strategic customers to this platform. Food backlog is up 153%, with considerable activity in the U.S. supported by some larger orders in animal nutrition and pet food projects. Looking forward, we continue to see strong customer demand for facility expansion, retrofits and upgrade programs to accommodate product volume growth, ingredient and product form changes and new food products. Based on our leading solutions and capabilities in this space, the outlook for further growth in this business is robust. Our Technology segment posted sales growth of 41% in the quarter. While we are pleased with the double-digit growth, we note that the widespread cancellation of farm trade shows significantly impeded our ability to interact directly with customers, which essentially eliminated our primary sales channel in the Technology segment during 2021. Fortunately, we mapped out an expansion to a multichannel sales approach early in the year with significant dealer onboarding completed year-to-date, positioning us for further scale-up moving forward. Looking ahead to the 2022 growing season, we anticipate the resumption of trade show activity, substantial progress in additional channel development across dealers and strategic partners to accelerate our growth rates in 2022 and beyond. We have moved away from reporting retail equivalent sales in the Technology segment. We now have too many moving pieces in this category to extrapolate to a meaningful comparison, which in the past has led to significant confusion. Retail equipment was a useful comparison in the quarters immediately following the temporary suspension of our hardware subscription program. However, we now have software subscriptions, bundled IoT product programs and retail IoT sales all in a mix of different sales programs as well as a newly launched hardware subscription program. Going forward, we will now report actual accounting sales made up of a dynamic combination of subscription, bundled product and retail sales. Fundamentally, this is a simpler, cleaner, and more accurate way to show our results and for readers to track growth for this segment. We are also assessing additional KPIs to provide visibility to core expansion of the Technology platform. Our Brazilian operation continues to gain momentum. In the quarter, sales were up 128% year-over-year in Brazil with strong contributions from both the Commercial and Farm segments. Note that the sales growth numbers are roughly equivalent in local currency. The real was stable in the quarter. With growth continuing to accelerate, Brazil's moved past its inflection point as well on route to becoming a sustained and meaningful contributor to AGI results. Profitability also continues to trend higher, closing the gap to global corporate levels. Total backlogs were up 116% in Brazil, and we expect this growth trajectory to continue with an expectation of another record quarterly result in Q4. We anticipate the strong performance and momentum in Brazil to carry into 2022 on the back of continued market share gains, as shown in high quoting pipelines and substantial backlogs. Our Milltec business in India posted another solid quarter with sales up 7%. We have several levers that will drive continued growth in India including further development of export sales into the broader region, which have begun to grow as a share of backlog, and the introduction of an expanded product portfolio including grain storage and handling equipment, which is now manufactured in India. With backlog up 45%, the outlook for continued growth in India remains firmly positive. Overall, we are pleased to see the execution and significant progress on several key strategic initiatives including the very strong growth in Brazil, significant sales and backlog growth in our Farm segment, our strong Food platform, solid execution on our global Commercial platform and the development of our Technology segment. We have significant momentum heading into what is shaping up to be a record fourth quarter which will carry into 2022. With that, I will now hand the call over to Jim to delve into additional detail.

Thanks, Tim, and hello, everyone. For today's earnings call, I'd like to cover 4 topics. First, I'll provide a brief overview of our third quarter financial results. Second, I'll discuss our balance sheet and recent debenture offering, Third, I'll provide an update on the accrual as it relates to the bin incident. And finally, I'll provide an update on our outlook for the fourth quarter and 2021 overall. Our third quarter results continued the momentum from a strong first half of the year. Trade sales of $314 million were up 11% from $282 million year-over-year. Significant strength in our Farm segment, particularly the U.S. and Brazil, was complemented by solid results from the Commercial segment that featured notable strength in South America for our Commercial platform and the U.S. for our Food platform. The Technology segment also contributed to the growth with sales up 41% year-over-year. Adjusted EBITDA of $46.3 million was down 11% from $51.8 million year-over-year. Adjusted EBITDA margins of 14.8% were down approximately 350 basis points from 18.3% year-over-year. As anticipated and previously discussed, steel price and input cost increases had an impact on gross margins, which decreased approximately 350 basis points to 30.2% year-over-year. The steel price and general input cost increases are expected to be most pronounced in the third quarter as orders received in prior quarters were shipped. These orders often had a fixed price and did not fully benefit from all price increases. Going forward, some margin pressure is possible due to the rapidly changing supply chain environment, but we anticipate smaller year-over-year variations relative to our third quarter results. This is attributable to our updated countermeasures, which include a revised approach to catalog prices for the Farm segment and newly updated policies on surcharges, significant variation clauses, open contract windows and other tactics employed in the Commercial segment. The Technology segment posted adjusted EBITDA of $0.3 million in the quarter, the first quarter with approximately breakeven adjusted EBITDA for the Technology segment, a positive sign that this important segment continues to trend in the right direction as we look towards the end of 2021 and the start of 2022. Of note, the adjusted EBITDA reported for the quarter includes a negative $1.2 million impact from the Farmobile transaction. Absent this impact, Technology segment adjusted EBITDA would have been stronger and firmly positive. Overall, our third quarter results continued to display the benefits of our resilient and diversified business model. Moving on to the balance sheet. Subsequent to the quarter, we executed a convertible unsecured subordinated debenture offering with net proceeds of approximately $110 million. The proceeds will be used to redeem the prior issuance of convertible unsecured subordinated debentures due June 2022 with an aggregate principal of approximately $86 million. The difference will be allocated towards pay-down of senior debt and general corporate purposes. The coupon of the newly issued debentures is 5% per annum, 15 basis points higher than the debentures being redeemed. We continue to closely manage our senior debt-to-EBITDA ratio, which remains stable at 2.9x. On a year-over-year basis, this is the same level as Q3 2020. While we have sufficient room against our covenant of 3.25x, we continue to closely monitor our senior credit facility usage. We do not have any bank covenant concerns. Of note, if we were to look at the covenant on a pro forma basis, taking into consideration the recent debenture offering and applying the excess proceeds raised beyond what is required for the redemption to our senior credit facility, the senior leverage ratio would have been approximately 2.7x exiting the quarter. Excluding our $150 million accordion, we have approximately $155 million in available undrawn credit facilities and $49 million of cash on hand. We closely monitor our liquidity position and have several initiatives underway to help optimize our working capital position and note a sequential and year-over-year decrease in our working capital position. While working capital requirements can vary quarter-to-quarter and improvement on this front will be a journey, we are encouraged that our efforts thus far are beginning to surface in our results. In the quarter, we continued to make progress on the remediation work related to the bin incident. Work at the second site, the site unrelated to the bin incident, continued in the quarter and is nearing completion. As of the end of the quarter, we have spent $41 million of the $77.5 million accrual. We expect a small amount of the accrual to be spent in the fourth quarter with the balance expected to be released in line with the resolution of the legal matters related to the site of the bin incident. And finally, a recap of our outlook. Supported by a strong backlog, up 99% year-over-year, we anticipate strong sales as well as adjusted EBITDA growth in Q4 2021, with full year 2021 adjusted EBITDA expected to be at least $170 million, representing very strong growth over 2020. Thank you very much for your time. And with that, we will turn it back to the operator to take questions.

[Operator Instructions]. Your first question comes from David Newman with Desjardins.

On the backlog being up 99%, which is phenomenal and it looks like it's still continuing to increase, how much is volume-related growth versus inflation to cover up the underlying steel inflation? I just want to get a sense of the volume momentum that you're seeing in terms of -- without the price component in it.

Yes, David, it's Jim here. Thanks for the question. Yes, so good opening topic on our backlog, which we continue to see very strong and growing demand for our products everywhere around the world and in all our segments. There is a component of it that's definitely related to pricing. However, what's very encouraging is there is a significant increase in demand in terms of volume and product. And it depends on which segment you're in, will have different influences of price versus quantity because that really depends on how much of the components are with steel. So it's a product that has a higher steel component, but has a higher pricing influence versus products that have less of an influence. But overall, what's great about our backlog and our growth is that a lot of it is volume related as well, not just price.

Excellent. Okay. And then just on the margin front, looking -- have you covered the nut now in terms of the -- and I do see it is kind of starting to roll over a little bit here in the steel cost. Have you covered the nut? And what do you think the path forward is in terms of normalizing the margins by quarter?

Yes, a good question. I think that as we've pointed out in the past, as we -- because of our -- the way our business works, where we take orders well in advance and we can have good visibility, we knew that Q2 and Q3 would be more difficult from a margin perspective. But as we look going forward, starting in Q4, we see a year-over-year margin stabilization or enhancement. The mix may influence a little bit, but generally, we're past the pain from the steel impact, and now we just typically deal with typical supply chain challenges. Obviously, costs are changing everywhere around the world, which we manage just as a regular basis, but the impact from the steel is now behind us.

Okay. And supply chain has obviously been a big issue as well with a number of industries. It's been horrendous in the few that I cover, and you flagged it as well. But what is the ability to convert the backlog in your revenue? And I know you have longer-duration, project-based contracts now, but any sense on backlog turnover and how you'd frame the current state of supply chains?

Yes, great point. We're in a very good shape from a backlog and conversion perspective. We have all third-party components and steel on hand for that conversion, for that backlog. So you're right, it remains challenging, but we're very well placed for that conversion.

Okay. And then last one for me, just in terms of your guidance overall, guys. I think you had sort of flagged 4Q to be better than 3Q. Does that still stand in terms of as you monetize the backlog?

Yes, that's right.

Yes. So we've got, again, that backlog number, it's significant. We've got visibility -- very good visibility to Q4. And that backlog now is extending well into the first half of 2022. And so we're feeling very good.

Okay. Last one for me, and then I'll hand over the line. Just Chicago, you mentioned something, Tim, I just -- just maybe just recap what you're doing in Chicago.

Yes, we're bringing together our sales execution, product management and our customer service teams into Chicago. So in order to really get better coordination across our entire sales cycle and from quoting upfront, involvement with the customer in the design process, all the way through our configuration internally at the different components from different manufacturing facilities through to execution on the -- on those projects. And so that's really a big impact on our Commercial North America and our permanent Farm systems execution across North America.

So it's Farm North America? Or Farm and Commercial North America?

Yes, so it's all -- it's -- the biggest impact is on our project work. So it's Farm permanent and Commercial. Commercials are always sort of engineered to order, configured projects. And so not -- another way of saying it, not directly Farm portable but really focused on Farm permanent systems and Commercial.

Yes, the bigger projects.

Got it. And is there any onetime costs? Or what are the actual cost savings that you might get out of this?

Yes. We'll see a little bit of a swell in cost in 2022. And then -- but we do expect to see significant synergies both in quality of execution, flowing into sales increases, share gains and then, ultimately, some cost synergies as well.

Next question comes from Steve Hansen with Raymond James.

Tim, I think we all understand that Brazil has been a big growth opportunity for you for some time now. But the results in the backlog and, I think maybe more importantly, your comments today suggest that that's starting to inflect even better. Do you want to maybe just give us a sense for what's changing there from your footprint on the ground, maybe just trying to separate the company strategy components from just the macro to some degree, if you can, and just to understand how you're gaining share there?

Yes, a great question. Thanks for highlighting Brazil. I mean it's really -- really happy and pleased with our position in our growth over the last couple of years, in particular, as we come out of the sort of start-up years. Just substantial share growth in Brazil. So that business is growing tremendously, successful across both parts of the Farm and Commercial parts of the business. And it's a wonderful market to be in. And of course, we've got a fantastic position from a production perspective, from a product portfolio perspective. And now all the hard yards that our team have done over the last few years to build that foundation are paying off, and we're seeing rapid gain in sales, as you're seeing here. More to come as we go into Q4, a record Q4 expected and then into 2022 and going forward. And quite frankly, it's just a very active environment and quoting, so the backlog will continue to build. The sales growth will continue. And we're really happy with our success here in Brazil.

Okay. Very helpful. And then just curious about the Technology platform here. You've made some good strides. This accounting shift I think I understand. But I'm just trying to understand what the progress going forward is maybe based on, it sounds like it's really just now building out the platform that you -- or sorry, selling the platform you've already developed. Is it just really now a distribution and sales strategy? Or is there additional products and services that we built on top of that as well?

I think you've got it directionally right there. So 2021 was a lot about bringing together different parts of that business and then optimizing product and production. And then now, it is largely focusing on optimizing our distribution channels. So a lot of work done in that, in the year. In fact, I think I noted in my comments that -- and just to put a finer point on it, prior to 2021, we sold that product line almost entirely through a direct sales team. And that was largely based on interaction with farmers at trade shows. And we -- that channel largely disappeared in 2020, but we were able to still have substantial sales and growth with our current customers at that point in 2020. But by the time we get to 2021, those -- sort of that expansion within current customers starts to wane. And had we not really pivoted to multichannel, we would have had substantial challenge in 2021. We did a lot of that work and so able to keep the momentum going, the growth going in the business with the sort of nascent channel, additional channels that we built throughout 2021. So then going forward, we'll see our traditional channel come back and then substantial expansion of the ones we built this year and expect that to carry into pretty substantial growth of -- or continued growth of that platform going forward. So I think you kind of nailed it directionally, optimize that foundation across team, product and foundation. So still more work to do in product development. As you know, in the technology space, there's lots more that we have in the development pipeline, but a lot of that now just organic development expansion of the platform and product and offering.

Okay. Great. And then just lastly, just wanted to clarify on the bin incident issue. How does the completion of the second site, the non-active site that is, how does that change the process going forward or just what we're going to see from our side going forward? Does it change your position from the legal standing at all by remediating the one site and proving out that you've got a solution? Or is that irrelevant to the process?

Well, yes, I mean, sure, it's relevant. But no, we're -- what we're pleased with now getting, back that remediation completed, that site is commissioned and now is going through a settlement period, but has been some -- that commissioning work has been completed. So certainly, yes, net-net positive on -- given the circumstances. And that doesn't change our legal position. It certainly supports our -- the position we're in and the position we've communicated.

Your next question comes from Jacob Bout with CIBC.

I wanted to go back to the EBITDA margins, down, I think, 350 basis points year-on-year. Do you think you can get back to historic margins given wage pressure and inflation? And with this center of excellence, do you think longer term, you could actually move past historic margins?

Short answer is yes. We fully expect you to bring margins back to historical levels. And you've seen our ability to pass through some pretty dramatic price increases across inputs. And we see that -- as Jim said and I noted, we're seeing that already in Q4, and then it will come through in 2022 as well. So yes, we're very bullish on those margin rebounds after we get through this real supply chain-related disruption.

Okay. And then on the Technology side, interested what is the mix rate now for bundled versus subscription sales. And are you offering that first year free for the subscription sales?

Yes. No, we don't offer -- no, there's no broad first-year-free program at all. Everything is -- and it's quite a dynamic mix, Jacob. As we introduce different programs, we have strategic relationships with grain buyers that are interested in digital connectivity to their growers. And so they are sponsoring those programs to their growers. And so that mix is very dynamic between subscription, software subscription, hardware subscription, retail IoT sale, direct retail IoT sale through a dealer. And then the strategic programs are sponsored by grain buyers. And so that's -- I understand that's quite a lot, but that's the reality of this business and the distribution and the end markets that we are affecting and developing. And so that's -- the rationale for the change in presentation and then the rationale for how we'll handle it going forward is based on that changing landscape. So we will introduce additional KPIs that talk about expansion -- core expansion of digital and connected devices, for instance, or other metrics that will give some additional color to the growth of the platform.

Okay. And last question here is just on backlog and really just wanted to square this up with how we should be thinking about revenue growth. I know you talked a bit about duration. How has the duration of your backlog changed? Is everything that you mentioned in backlog, hard or soft backlog, and so basically firm orders are indications? And if it's hard backlog that you're reporting, what are the indications right now? Or how would you frame the soft backlog?

Yes. So our backlog is -- continues to be absolute sales. So nothing goes in the backlog. It isn't a closed sale. And the -- so as the dynamics of our business have changed, so too has the mix and makeup of that backlog. And so as we go into India, into Brazil, into EMEA growth, our Food platform growth, our Technology growth, that changes the mix and dynamics of that backlog. But the net result of that is we have seen a step change, a dramatic step change in our amount of backlogs, giving us visibility out into further quarters. And then more and more of our project-based work in terms of mix, and so that's a longer-dated backlog in sales. So we would close something with a customer today that we would be working on through design issues, finalization and then execution, production. And the execution, which is also impacted by their -- the project civil work site and preparation of the site, which is longer dated. So that leads to a longer duration for that backlog. So then as a comparable, that's -- you fundamentally have a different mix of that backlog. So as we move into 2022, getting -- looking back and it will be a more equivalent year-over-year comparison as the mix starts to settle in.

And then maybe just how does it translate to your backlog into months of work?

Yes, that's the duration comment. So the months of work in our backlog is longer -- much longer today than it has been in the past. So we're seeing it -- it changes a little bit in terms of which part. Food, for instance, is very long, going out through 2022. And then overall, probably, Jim, another 2 months in sort of visibility on top of where we would have been in the past, which was kind of around 3 months visibility.

So we're now getting sort of 4, 5 months visibility in duration.

Your next question comes from Andrew Wong with RBC.

Could you talk about if you're seeing any kind of labor cost pressures? We talked a lot about steel, but obviously, we're seeing a lot of headlines around labor pressures. And can you also remind us how much of your business is staffed by unionized labor? And if there are any of those kind of contract negotiations that might come up?

Yes, very topical. There's certainly wage for -- labor wage pressure in most markets. There's -- but I guess I'd say it's manageable, where we actually had been increasing some of our wage lately across the board anyway as we look to attract and retaining top talent and fundamentally address churn within some of our plants, which is more expensive, in fact. So as we look to address those things, we've been raising and bringing up our overall comp measures and targets anyway. But we are -- while it's challenging, it can be more challenging, it's still manageable across all of our markets.

Then unions?

Yes. And then union, we only have two. And as a percentage of our [indiscernible] is small. And no, we're not active in the -- there's no meaningful negotiations from Verizon.

Okay. That's great. That's good color. And then just, Jim, in your prepared remarks, you talked about working capital improvements. Can you talk about just some of the specific actions that have been taken and just where we should think about that going directionally? And if you can help quantify anything around that, that would be great.

Yes. So our focus on -- so our working capital year-over-year improved almost $10 million, which is phenomenal in this environment with the costs increasing so much particularly for a big component of our inventory in steel. And so the way we've been tackling it is twofold. The priorities have been on accounts receivable management and also inventory in terms of levels needed. And so as I dive into each of those, accounts receivable has been a function of 2 things really, making sure that, as all companies do, managed in terms of collectability, making sure customers don't go past due dates. And so we've made very dramatic improvements in terms of older accounts receivable, past due receivables. But the second part of that, the more important part of it is really in terms of the terms upfront and working with our teams across the world to make sure that we're properly bedding what is required from a terms perspective, being responsible with customers who need terms but also making sure we're not just being free for all and giving up terms where we don't need to. And we've seen a huge impact on there. On the inventory side, there's a number of things that we've been working on this year to try to offset the requirement to have higher dollar value of inventory, and that's really a function of steel going up. So our inventory levels are up versus prior year, but we've done a great job managing the amount of quantity we need to be able to mitigate that increased need of inventory as best as we can.

Your next question comes from Tim Monachello with ATB Capital.

Just wanted to quickly touch on the backlog progression. Obviously, very strong year-over-year progression, but we're -- the comp in 2020 would have been sort of the middle of COVID. So I'm curious on a quarter-over-quarter progression, if you could put some bounds on how you're seeing that progress.

The backlog last year, the comp was actually quite strong. It would have been as strong as in the prior year, in '19. So there wasn't -- that growth is really substantial growth on a nominal basis and as a comparable.

Okay. So are you still seeing sort of record backlogs? Or has that tick down since Q2 levels?

No, no, we're...

It continues to be at record levels. Order intake is strong. Pipeline is strong across the board.

Okay. That's helpful. In terms of the IoT hardware subscription program, and you've touched on this a few times on the call already, but I just wanted to clarify. For hardware sales that are under a subscription program, would that also include the non-IoT hardware? Like, let's say, you had a bin manager on a bin you sold, would the bin also be on a subscription basis?

No, no, it's just the technology components.

Okay. In the MD&A, you mentioned a couple of risks around COVID in India and Brazil. I was wondering if you could just touch on those a little bit.

Mike, well, I think probably blanket statements around COVID are -- continue to -- or there could be surprises from COVID. But that environment is stable across our business. And certainly in India and Brazil and elsewhere, we're -- our teams are 100% vaccinated in both of those locations. And look, it's not back to normal by any means, but restrictions lifting and we've operated really effectively throughout this crisis, and we continue to, so there's nothing notable or different. I'd say stable to improving is a good way to characterize it.

Okay. That's helpful. And then last one for me. Subsequent to the quarter, closed a couple of plants in the Commercial segment. Can you speak to which plant those were and what the rationale was there and what you're expecting from a cost savings perspective or what you're hoping to accomplish with those closures?

Yes. So part of what we talked about doing, we've made a number of acquisitions in the past several years. And one of the opportunities we have is to revisit our needs for the number of facilities we have everywhere. And is there opportunities to consolidate production from one location to another. And so what we talked about in -- what we announced is there's an opportunity over in Europe to relocate facility there to another facility in Europe that has capacity and benefit from some of those synergies.

Okay. So not related to the sort of reorg on the sales side in Chicago, the European?

No, no, this is -- yes, I mean, remember, we've got over 30 facilities around the globe. And for the most part, all of our acquisitions have been kind of left stand-alone. And as we work through the opportunity to look at how to streamline processes, improve things, you see that with Chicago, happening in North America. We also have opportunities from a facility perspective. And so those will be factors that will help drive continued improvements in our overall margins.

Got it. So as you've kind of come out of this big acquisition growth phase over the last few years and sort of stabilize your free cash flow harvest, deleveraging phase and you're looking for efficiencies across your platform globally, what stage or what inning would you say you're in, in terms of scrubbing the portfolio?

Sorry, I missed the last part of that. In terms of what?

What inning we're in, if you had a baseball analogy.

Yes. Just -- what inning we're in, in terms of trying to find efficiencies across the platform, in terms of closing facilities and reorganizing sales teams and things of that nature.

In terms of reorg. Well, look, I'd say we -- I'd answer it in a couple of ways but we're in early innings in terms of our growth. But in terms of efficiencies, I mean there's -- it's very early days, too. We're still getting a baseline foundation built for selling across our platform, for collaborating across the different groups, whether it be Food or even India, rice equipment, for instance, exporting out of India or into other regions, are actually manufactured in another region. So quite a few innings ahead of us and a lot of opportunity to continue to leverage and -- but whether it's efficiency, productivities or just collaboration and bringing along margin improvement by entering new markets and bringing our products across the whole platform, we're early days. We're very -- team's very excited about the opportunities across the board.

Your next question comes from Matthew Weekes with IA Capital Markets.

I'm not sure if this was mentioned in the prepared remarks and all, but I was just wondering if you could provide a little color in terms of the backlog increases internationally and how that separates between Brazil and the MDA and the APAC region and the EMA in terms of both Farm and Commercial.

Yes, we had a few numbers there. We could highlight those. Maybe, Jim, you can jump in on those. But the -- I mean the international backlogs are up substantially. And I'd say just got -- it's really contribution in net new parts of our business. And so as you think about that, it's not a cycle, a season or a blip. It's really net new businesses contributing now to our global platform.

Yes. And then, Matt, you just -- as you dive into the numbers, you'll see in the MD&A that the table provided, it kind of breaks out the 99% year-on-year overall backlog growth by our operating segment and then also by region around the world. And if you look at that table, you'll see that everywhere around the world is showing quite substantial growth. The only one that's flat is our Commercial platform in Canada, which is a smaller component of the overall business. But still, other than that, everyone else has very, very strong growth year-on-year. And internationally, we've further broken that down into the various international regions we operate in. So you could get a good context of just the overall strength and demand we're seeing around the globe.

Okay. Appreciate the color on that. And then one last question for me. I'm just wondering if you can comment on sort of how you're seeing the sales pipeline and things progressed in terms of developing the Farm platform in the APAC region.

Farm in APAC. Okay. So I mean the majority of our platform in APAC is focused on Commercial. And a lot of the investment there is -- that's fundamentally where the dollars are going. Farms are smaller and a lot of consumption there without a lot of production. So our focus predominantly in APAC is Commercial. Now inclusive of Australia, in the broader region areas, Australia, we see strong growth in Farm and strong backlogs in Farm and continue to see opportunity to expand our platform in Australia.

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

Just one quick follow-up. I'm just curious, Tim, one of your larger competitors in South America has started to roll out their technology platform with a third degree of earnest. And I'm just curious, I know your focus is North America. But just given that they're starting to be a competing presence down south on the technology side, do you have any ambitions to start pushing the technology stack into Latin America or Brazil in particular?

Yes, absolutely. We'll be rolling out, launching our digital products in Brazil in 2022 in a material way. So lots of work on the -- across the team in terms of preparation for that and expect to be in market and leading in that market very soon.

Okay. Helpful. And then just actually one last one. Just I think you referenced some strategic partnerships that you've been nurturing or developing on the Food side in particular in the U.S. I know that's still a smaller segment, but it's growing pretty quickly. So I'm just trying to understand exactly what that means. Just like large strategic customers that you've been trying to develop greater penetration with. I'm just trying to see what strategic partner means, I guess.

Yes. So these are food buyers, either and largely the food processors that are buying direct or have -- looking for digital connectivity to their supply chain, so for a variety of reasons, either for basic supply chain management. So you want to know what, where the product you want to buy, where it is or what went where -- in the case when they have the incorrect contractual relationship with the grower, they want to know exactly how it's grown and what happens with the harvests, and the online digital connectivity and managing through their supply chain. And so they will sponsor the program. So they're encouraging through premiums, through direct payments to those growers. They're sponsoring the use of our bottom lines. So the farmer uses it, they get paid by the grain buyer. And so that's -- when you look at traceability and supply chain management, there's most -- a key priority for most food processors or branded from buyers and traders. Each of them slightly different in what they're looking for, whether it be through seed genetics or growing divisions or growing application and/or post-harvest conditioning and stats and all that brand. And then more of just being deployed, where it is and how ready is it for them to receive. So that's just sort of like a core supply chain digitization that we offer and we're expanding. And then the grain buyers now really gravitating to look for and harness that data.

Your next question comes from Michael Robertson with National Bank.

Tim and Jim, just had a couple of follow-ups to some things you touched on earlier. Good to see you managing the inflationary pressure as well. I was just wondering if you had any concerns regarding availability or like sourcing any component parts to some of your product offerings. It's pretty topical right now given the supply chain disruptions.

Yes. So we are able to get our hands on all the components and inputs that we need. It -- we're often taking longer or buying more to have on inventory, to account for logistical challenges or delays, expected delays or real delays. So that's a little bit different across basically every component, as you can imagine but -- and requiring more work than it would have -- it has done in the past. But we do have all inputs on hand for our backlog. And where there's some more severe, acute challenges or chips for some of our IoT products, and that's taking chips in particular, as you probably -- you read about across the board, is a significant challenge that would have some impact on production numbers but -- in the near term but relatively, a very small part of our product mix and sales overall, but one that is rather acute.

Got it. Got it. The chips would have been sort of my key concern there. So that's good to hear. Just last question from me. Are you still working with the third-party consultants sort of reorienting and building out the SureTrack sales channels? Or has that process largely wrapped up at this point?

Yes. So we did work with a third party to help us in a couple of areas in our digital space, mostly from -- as Tim has talked about in terms of our go-to-market approach and our distribution approaches. And in addition to that, they've been working with us and helping us refine some of our product manufacturing in that space, in the technology space. And a lot of that work -- I should say, almost all of it is complete now. And it's now really just us working and transitioning a lot of the great learnings we've had and executing on it. And you're starting -- you're seeing those results through the quarter, and you'll continue to see us get better at that enhanced go-to-market approach. So yes, so it's done. We're done with them.

There are no further questions at this time. Please proceed.

Okay. Well, we'll wrap it up there. Thanks for your time this morning, and we look forward to talking going forward. Take care.

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