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AGCO CORPORATION REPORTS THIRD QUARTER EARNINGS AND DIVIDEND

 AGCO CORPORATION REPORTS THIRD QUARTER EARNINGS AND DIVIDEND
 ATLANTA, Nov. 9 /PRNewswire/ -- AGCO Corporation (NASDAQ: AGCO) today reported net earnings for the third quarter ended Sept. 30 of $3,444,000 ($.39 per share) compared to earnings of $6,267,000 ($1.50 per share) for the same period last year.
 Net earnings for the nine months ended Sept. 30 were $4,293,000 ($.61 per share) as compared to $8,684,000 ($2.05 per share) for the nine months ended Sept. 30, 1991. Operating income was $5.4 million for the current quarter and $9.8 million for the nine months ended Sept. 30, as compared to $8.0 million for the third quarter last year and $12.8 million for the nine months ended Sept. 30, 1991.
 AGCO became a publicly traded company through an initial public offering on April 16, 1992. In addition, AGCO completed a debt refinancing in March 1992 whereby the company replaced its primary source of funding with a $220 million revolving credit facility. The debt refinancing has significantly reduced the company's cost of borrowings. Had the company completed the initial public offering and the debt refinancing as of Jan. 1, 1992, net earnings on a pro forma basis (giving effect to application of the net proceeds from the offering to reduce debt) would have been $5,369,000 ($.60 per share) for the nine months ended Sept. 30, based on 8,916,000 shares currently outstanding.
 Industry retail sales compiled by Equipment Manufacturers Institute ("EMI") indicate third quarter industry results in the 40-100 horsepower tractor segment improved 8 percent for the quarter, while AGCO units were down 12 percent. AGCO's retail sales in the third quarter of 1991 included an unusually large number of mid-range tractors sourced from the company's previous parent which were sold prior to the shift to another manufacturer of more competitive mid-range tractors as its primary source of supply. For the nine months ended September industry retail sales in this category declined 3 percent from the prior year while AGCO sales were down 4 percent. Market share for the quarter and year-to-date remained at approximately 2-3 percent. Industry sales in the 100+ horsepower segment declined 15 percent for the quarter, while AGCO unit sales were down 19 percent. On a year-to-date basis, industry sales have declined almost 25 percent while AGCO sales are down 5 percent. Market share for the quarter remained at approximately 5 percent when compared to the same period in the prior year. On a year-to-date basis market share in this category has increased from 4 percent to 5 percent. The company attributes better than industry performance in the higher horsepower category for the year to a reduction in the significant discounting on the part of certain of the company's competitors.
 Retail sales of AGCO combines increased approximately 11 percent for the third quarter, in line with industry demand. On a year-to-date basis, industry combine sales are down 28 percent while AGCO sales are up almost 17 percent. Market share for the quarter remained at 7 percent and on a year-to-date basis has increased from 4 percent to 7 percent. The increase in company sales of combines is attributed to increased acceptance of new products introduced in the second half of 1991.
 Industry retail sales of hay and forage equipment represented by several products were estimated by EMI to be up approximately 8 percent for the quarter with AGCO retail sales up almost 54 percent. For the nine months ended September, AGCO retail sales of hay and forage equipment are down 4-6 percent, in line with the industry. Market share for the quarter increased from 11 percent to 16 percent and on a year- to-date basis has remained at approximately 13 percent. The increase in company sales of hay and forage equipment is primarily due to a reduction in discounting on the part of certain competitors and increased sales from new dealers.
 As a result of the late harvest in the company's primary markets, the sale of higher margin replacement parts for the third quarter were 6 percent below the same quarter in the prior year. Replacement parts sales comprised approximately 36 percent of total sales in the current quarter compared to 40 percent for the quarter ended Sept. 30, 1991. The reduction had the effect of reducing overall profit margins for the quarter. Profit margins were also negatively affected by higher costs, including certain start-up costs, associated with the manufacturing of the company's higher horsepower tractors. The company's higher horsepower tractors were sourced from Allied Products Corporation prior to the acquisition of the White Tractor division from Allied in 1991 and production of these tractors in the company's Independence, Mo., facility began in the first quarter of 1992. In addition, increased discounts to move certain products and to meet competition had a negative effect on margins for the quarter.
 Earnings for the quarter were also affected by Canadian exchange rate losses resulting from currency fluctuations. Exchange losses of approximately $900,000 ($.10 per share) related to the company's Canadian operations were recognized in the quarter. Exchange losses for the nine months ended September totaled approximately $1,200,000 ($.13 per share).
 Despite the lingering uncertainties in the industry, the company was pleased to see improvement in retail demand in the third quarter evidenced by an increase in AGCO's total retail sales for the quarter of approximately 12 percent. The company is continuing its progress in reducing inventory levels through reduced purchases from OEM suppliers and competitive yet profitable marketing programs. Farm fundamentals remain relatively strong and the company has experienced continued progress is signing crossover contracts. No significant changes to production schedules are anticipated for the balance of the year.
 The company also announced that its board of directors approved a quarterly dividend on the company's common stock of $.01 per share. The dividend is payable Dec. 15 to holders of record Nov. 24.
 AGCO CORPORATION
 Third Quarter Results
 (Unaudited and in thousands)
 Consolidated Statements of Operations
 3 mos. ended 9 mos. ended
 9/30/92(a)9/30/91 9/30/92(a)9/30/91
 Net sales $84,207 $85,295 $229,240 $203,385
 Cost of sales 68,232 64,306 185,766 157,739
 Gross profit 15,975 20,989 43,474 45,646
 Selling, general and
 administrative expenses 8,373 11,174 28,331 29,147
 Engineering expenses 2,205 1,805 5,298 3,670
 Income from operations 5,397 8,010 9,845 12,829
 Interest expense (3,004) (1,383) (8,737) (3,140)
 Interest income 1,019 1,189 2,266 4,044
 Other income (expense), net 32 (1,549) 919 (5,049)
 Total (1,953) (1,743) (5,552) (4,145)
 Income before income taxes 3,444 6,267 4,293 8,684
 Provision for income taxes(b) --- --- --- ---
 Net income $ 3,444 $ 6,267 $ 4,293 $ 8,684
 Net income per common share $ 0.39 $ 1.50 $ 0.61 $ 2.05
 Wtd. avg. number of common and
 equivalent shares outst. 8,916 4,182 7,036 4,228
 (a) If the initial public offering and the debt refinancing had occurred at the beginning of 1992, pro forma earnings per common share would have been $0.39 and $0.60 for the three months and the nine months ended Sept. 30, 1992, respectively.
 (b) There was no tax provision for the three months and the nine months ended Sept. 30, 1992 or 1991, due to the tax benefits realized as a result of the tax basis of assets acquired in the Deutz-Allis, Hesston and White Tractor Acquisitions being in excess of their basis for financial reporting purposes.
 Condensed Consolidated Balance Sheets
 (Unaudited and in thousands)
 Sept. 30, 1992 Dec. 31, 1991
 ASSETS
 Current assets:
 Cash and marketable securities $ 7,963 $ 18,577
 Accounts and notes receivable, net 194,705 16,516
 Inventories, net 115,769 130,309
 Other current assets 3,981 4,983
 Total current assets 322,418 170,385
 Property, plant and equipment, net 9,676 8,781
 Other assets 16,636 15,496
 Total assets $348,730 $194,662
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities $ 67,786 $ 75,873
 Long-term debt 150,144 41,135
 Noncurrent liabilities 28,237 32,580
 Total liabilities 246,167 149,588
 Excess of assets acquired over
 purchase price, net 10,677 19,028
 Stockholders' equity 91,886 26,046
 Total liabilities and stockholders'
 equity $348,730 $194,662
 -0- 11/9/92
 /CONTACT: Allen W. Ritchie, vice president and chief financial officer of AGCO, 404-246-6110/
 (AGCO) CO: AGCO Corporation ST: Georgia IN: SU: ERN DIV


EA-BR -- AT007 -- 8868 11/09/92 16:06 EST
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Date:Nov 9, 1992
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