REGINA, SASKATCHEWAN, August 10, 2026 – AGT Food and Ingredients Inc. (TSX:AGTF) ("AGT" or the "Company") announces its financial results for the three and six months ended June 30, 2026.
Quarter Highlights
Adjusted Free Cash Flow $23.4 million
Adjusted Free Cash Flow conversion 52.0%
Adjusted EBITDA $45.1 million
Adjusted Net Earnings $8.2 million
Net Earnings of $9.6 million or per diluted share $0.14
Adjusted Net Debt to Adjusted EBITDA 0.49x
Quarterly Common Share Dividend of $0.05 declared
Overview
AGT Food and Ingredients Inc. reported solid second quarter 2026 results highlighted by continued growth in its Packaged Foods and Ingredients ("PFI") segment and improved free cash flow generation leveraging its strengthened balance sheet following the Company's Initial Public Offering ("IPO") and Fairfax Private Placement. Adjusted EBITDA was $45.1 million, consistent with the prior year, while Adjusted Free Cash Flow increased 39% to $23.4 million. Growth in Turkish pasta, packaged foods and "Better for You" pasta in the U.S. in Q2 2026 was strong in the PFI segment – revenue up 18% to $207 million and Adjusted EBITDA up 42% to $27 million compared to the prior year. This was primarily offset by lower Value Added Processing ("VAP") results due to higher shipping costs and delays resulting from the ongoing geopolitical challenges in the Middle East affecting global logistics. Food security programs have a strong order book for the back half of 2026 and margins are expected to be consistent with 2025.
"We are thrilled with another quarter of resilient and consistent operating performance in a time of continuing challenges in the global landscape," said Murad Al-Katib, Chief Executive Officer. "Our focus on bringing high quality and affordable staple foods is showing good results with strong order books in our branded, private label and B2B food ingredients, and for the first time our Packaged Foods and Ingredients segment was the Company's largest contributor to Adjusted EBITDA on a year-to-date basis. This remains our focus: improving our free cash flow by improving sales and enhancing the returns being generated from investments we have made in recent years in pasta in Türkiye and the "Better For You" segment in the U.S. Our capital expansion projects, including India set to begin commissioning in late 2026, are progressing on schedule and on budget and our balance sheet remains strong. We remain optimistic about the second half of 2026 even with continuing challenges in global geopolitical conditions. Let's not forget that food security, nutrition and affordability are high on the minds of consumers and governments around the world. AGT is uniquely positioned to continue to capitalize on these opportunities in both food security sales and packaged food sales in the coming quarters."
The table below highlights the key metrics utilized by management to operate the business.
Second Quarter Financial Summary
Second Quarter Highlights
Adjusted Free Cash Flow was $23.4 million, representing an Adjusted Free Cash Flow Conversion rate of 52.0% (2025 – 37.9%), compared to $16.9 million in the prior year period. The improvement reflected good operating performance together with lower financing costs following debt repayment from the IPO and Fairfax Private Placement in Q1 2026.
Adjusted EBITDA was $45.1 million in the second quarter of 2026, consistent with the prior year. Growth in higher-margin PFI products, including pasta, packaged foods and "Better for You" pasta and snacks resulted in improved gross profits. This was offset by higher expenses and delayed shipments due to the Middle East War in the VAP segment.
Adjusted Net Earnings were $8.2 million, or $0.12 per diluted share, compared to $7.5 million, or $0.18 per diluted share, in the second quarter of 2025. The increase year-over-year was due to strong operating performance combined with reduced interest expense in the current year. Net earnings includes $15.3 million in adjustments from favourable tax changes in Türkiye and tax planning which will reduce future cash taxes payable by the Company.
Gross profit including net monetary gain was $81.7 million, up from $64.6 million in the prior year, including approximately $9.7 million of positive impacts related to hyperinflation accounting (2025 - $0.5 million expense), and the margin expansion in PFI form higher-margin pasta and packaged food products in Türkiye and the U.S. and strong Distribution results, partly offset by impacts from the Middle East conflict in the VAP segment. Adjusted Gross Profit increased to $72.0 million from $65.1 million.
Adjusted Net Debt to Adjusted EBITDA Ratio was 0.49x for the twelve months ended June 30, 2026, an improvement from 0.54x at March 31, 2026 and 3.35x at December 31, 2025, primarily reflecting debt repayments following the IPO and Fairfax Private Placement.
Revenues were $634.2 million, up 2% from $623.6 million in the prior year, driven by higher shipment volumes and a more favourable product mix in the PFI segment, partly offset by lower global commodity pricing.
Dividend: The Company declared its second quarterly cash dividend for Q3 2026 of $0.05 per common Share, payable on October 15, 2026 to shareholders of record as of the close of business on September 30, 2026.
NCIB: AGT's normal course issuer bid ("NCIB") was approved by the TSX and will allow AGT to repurchase up to approximately 3 million shares on an opportunistic basis. During the quarter, AGT purchased and cancelled 28,500 common shares at a weighted average price of $17.31 per share for a total consideration of $0.5 million.
This press release contains certain measures and ratios, such as Adjusted EBITDA, Adjusted Gross Profit, Adjusted Free Cash Flow, Adjusted Net Earnings, Adjusted Net Earnings per diluted common share, Adjusted Free Cash Flow conversion and Adjusted Net Debt to Adjusted EBITDA Ratio that do not have any standardized meanings as prescribed by GAAP and, therefore, are considered non-GAAP measures. The method of calculating these measures may differ from other entities and accordingly, may not be comparable to measures used by other entities. For further details, see the sections titled "Non-GAAP Financial Measures" in this release and in the Company's MD&A for the three and six months ended June 30, 2026.
Non-GAAP Measures
(a) Adjusted Gross Profit is used to evaluate operating performance. It is calculated by adjusting for the non-cash impacts of hyperinflation accounting and revaluation depreciation from gross profit including net monetary gain. The most comparable IFRS Accounting Standards financial measure for Adjusted Gross Profit is gross profit including net monetary gain. Management uses Adjusted Gross Profit to measure the underlying operating performance of the business, excluding the effects of inflation-related accounting adjustments, to provide a clearer view of the Issuer's operating results.
(b) Adjusted EBITDA is used to evaluate performance and profitability of segments, ability to create value and ability to generate liquidity through operating cash flow to fund future working capital needs, service outstanding debt and fund future capital expenditures. Adjusted EBITDA is calculated by taking net (loss) earnings and adding or subtracting depreciation and amortization, finance expense, income taxes, unrealized foreign exchange loss (gain), share-based payment arrangements, unusual items and the impact of hyperinflation. Adjusted EBITDA for a trailing twelve-month period is calculated by deriving the last twelve months of Adjusted EBITDA calculated in the manner identified above. The most comparable IFRS Accounting Standards financial measure to Adjusted EBITDA is net (loss) earnings.
(c) Free Cash Flow is used to evaluate the ability to generate liquidity to fund future working capital needs, capital expenditures, pay dividends, repay supply chain arrangements and repurchase shares as appropriate. Free Cash Flow is calculated by taking net (loss) earnings and adding or subtracting non-cash items including the impacts of hyperinflation, interest paid on the Sponsor Notes, cash taxes paid and maintenance capital expenditures. The most comparable IFRS Accounting Standards financial measure is net (loss) earnings. Adjusted Free Cash Flow is calculated by taking Free Cash Flow and adding back interest on debt repaid in connection with the IPO and Fairfax Private Placement in Q1 2026, non-recurring draws by Fibreco on AGT's letter of credit that occurred in 2025 and other unusual items. The most comparable IFRS Accounting Standards financial measure is net (loss) earnings.
(d) Adjusted Net Earnings is calculated by taking net (loss) earnings and adding or subtracting share-based payment arrangements expense, accretion interest expense on the Sponsor Notes, interest expense on debt repaid in connection with the IPO and Fairfax Private Placement in Q1 2026, unrealized foreign exchange (gain) loss and other unusual items. The most comparable IFRS Accounting Standards financial measure is net (loss) earnings.
(e) Adjusted Net Debt is used to evaluate existing borrowings and amounts available to fund future working capital needs and fund future capital expenditures. Adjusted Net Debt is calculated by taking the sum of bank indebtedness plus current and long-term debt and lease liabilities less Sponsor Notes payable and cash.
Non-GAAP Ratios
(a) Adjusted Free Cash Flow Conversion is used to evaluate the ongoing ability to generate liquidity to fund future working capital needs, service outstanding debt, fund future capital expenditures and pay dividends. Adjusted Free Cash Flow Conversion is calculated by dividing Adjusted Free Cash Flow by Adjusted EBITDA.
(b) Adjusted Net Debt to Adjusted EBITDA Ratio is used to evaluate existing borrowings and amounts available to fund future working capital needs and fund future capital expenditures. Adjusted Net Debt to Adjusted EBITDA Ratio is calculated by dividing Adjusted Net Debt by the trailing twelve months Adjusted EBITDA.
The following provides a reconciliation of non-GAAP measures and non-GAAP ratios presented throughout the press release to the nearest measure under GAAP:
Reconciliation of Net Loss to Adjusted Free Cash Flow
Note: Figures may not add due to rounding.
1 Share-based payment arrangements expense related to the IPO was recorded in the first quarter of 2026.
2 Includes accretion interest on Sponsor Notes recorded in the first quarter of 2026.
3 Sponsor Note interest has historically been excluded as this payment is deemed a distribution to the Sponsor similar to a dividend. During 2026, the Sponsor Notes were settled at the time of the IPO and the 2026 amount represents the amount paid during the first quarter prior to settlement.
4 Hyperinflation and revaluation depreciation adjustment increased when compared to the prior year primarily due to the tax rate change in Türkiye in June 2026 that reduced the average rate from 25.0% to an estimated effective tax rate for 2027 and forward of approximately 17.5% impacting AGT's deferred tax balances related to hyperinflation. Additionally, the hyperinflation and revaluation depreciation impact on property, plant and equipment resulting from inflation being applied to capital additions in recent years partly offset by a reduced impact on inventory in the current year. The impact on Free Cash Flow differs from the impact on adjusted EBITDA as the impacts from certain non-cash items are excluded from Free Cash Flow and not from adjusted EBITDA.
5 Maintenance capital expenditures exclude capital expenditures of a non-recurring nature.
6 Includes gain and loss on disposal of property, plant and equipment excluding Mobil sale that occurred in the first quarter of 2025, bad debt expense and other items.
7 These represent charges related to legal proceedings with Fibreco in 2025.
Reconciliation of Net Loss to Adjusted EBITDA
Note: Figures may not add due to rounding.
1 Additional share-based payment arrangements were recorded during the first quarter of 2026 related to execution of the public offering.
Reconciliation of Net Earnings (Loss) to Adjusted Net Earnings
1 The hyperinflation and revaluation depreciation impact includes the hyperinflation on net income as shown in the section "Financial Reporting in Hyperinflationary Economies" adjusted for hyperinflation on unrealized foreign exchange gains and losses which is excluded from this metric. Other items in the prior year include the removal of the gain on sale of AGT's rail assets that closed in January 2025, the Fibreco draws on AGT's letter of credit in the second quarter of 2025 and the removal of the impact of non-recurring tax adjustments such as the Turkish tax rate change that occurred in June 2026.
2 Includes both interest on repaid Syndicated Credit Facilities and settled Sponsor Notes.
Calculation of Adjusted Gross Profit
Calculation of Adjusted Net Debt
1 Long-term debt and Adjusted Net Debt at December 31, 2025 exclude the Sponsor Notes payable in the amount of $320,815 as the Sponsor Notes were due to the controlling shareholder with interest only payments. The Sponsor notes were settled at the time of the IPO and no balances are outstanding at March 31, 2026.
