Q1 Financial Report - 2011

Funds from operations can be reconciled to cash provided by operating activities as follows:
(thousands of dollars)
Three months ended
March 31
2011 2010
Cash provided by operating activities $(24) $(3,638)
Change in non-cash working capital 6,329 12,931
Settlement of SAIP option 1,998 0
Maintenance capital expenditures (643) (1,077)
Gain on sale of assets 18 20
Funds from operations (1) $7,678 $8,236
Shares outstanding (2) 12,498,022 13,100,572
Dividends declared per share $0.60 $0.51
Funds from operations per share (1) $0.61 $0.63
Payout ratio (1) 98% 81%
(1) See “Non-IFRS Measures”.
(2) Fully diluted weighted average, excluding the potential dilution of the convertible debentures as
the calculation includes the interest expense related to the convertible debentures.
Dividends in a fiscal year are typically funded entirely through cash from operations, although
due to seasonality dividends may be funded on a short-term basis by the Company’s operating
lines. Dividends in the first quarter of 2011 were funded through cash on hand and cash from
operations and the Company expects dividends in the remainder of 2011 will be funded through
cash on hand and cash from operations.
Ag Growth’s Board of Directors reviews financial performance and other factors when assessing
dividend levels. An adjustment to dividend levels may be made at such time as the Board
determines an adjustment to be in the best interest of the Company and its shareholders. The
Company increased its dividend from $2.04 per annum to $2.40 per annum in November 2010.
OUTLOOK
The primary demand drivers for portable grain handling equipment are volume of grains grown,
storage practices and commodity prices, and management believes these factors will continue to
be supportive of high levels of demand in 2011. U.S. farmers in 2011 planted approximately 90
million acres of corn (2010 – 87.9 million). The high number of acres planted, favourable U.S.
crop conditions in most areas and higher than historical commodity prices bodes well for demand
for portable grain handling equipment.
Crop production in western Canada in 2010 was negatively impacted by unusually high moisture
which led to higher than typical inventory carryover levels at the dealer level. As a result, sales of
portable grain handling and storage equipment in western Canada decreased 5% in the first
quarter of 2011 compared to the prior year. Although a late spring and excessive moisture in
certain areas have resulted in planting delays, management currently anticipates sales levels in
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