AGRI-NUTRITION GROUP ANNOUNCES MAJOR ACQUISITION AND THIRD QUARTER RESULTS; Corporate Restructuring Reduces Costs and Facilitates Transition to Operating Company.

MARYLAND HEIGHTS, Mo.--(BUSINESS WIRE)--Aug. 29, 1996-- Agri-Nutrition Group Limited (Nasdaq/NM:AGNU) today announced that it had entered into a letter of intent to acquire Anthony Products Company, a private company specializing in the development and manufacturing of pharmaceutical animal health products. Anthony Products Company is headquartered in Arcadia, California, and has operations in El Monte, Irwindale and Arcadia, California. Terms of the transaction were not disclosed. The acquisition, which is subject to completion of due diligence and a definitive agreement, is expected to be completed by November 15, 1996.

The Company also announced financial results for the quarter and nine months ended July 31, 1996, along with a major organizational restructuring which, in conjunction with the Anthony Products Company acquisition, will transition Agri-Nutrition from an acquisition vehicle to an integrated operating company. The restructuring is expected to reduce corporate costs by approximately $600,000 annually. The Company also announced the completion (effective May 1996) of its acquisition of worldwide patents, active ingredients inventory, registrations and rights to Bromethalin from Purina Mills, Inc. for $800,000, plus additional purchase price based on subsequent shipments of Bromethalin over a five-year period. Bromethalin is a highly effective and proprietary rodenticide serving agriculture and Pest Control Operator (PCO) markets.

Major Acquisition

Anthony Products Company, which was incorporated in 1974, specializes in the development and manufacturing of pharmaceutical animal health products in its newly modernized facilities. Priority product focus is on injectable pharmaceuticals such as penicillin, phenylbutazone, oxytetracycline, and lidocaine used to keep livestock and companion animals healthy and to prevent and treat disease. Anthony also manufactures tablet, ointment, and powder pharmaceuticals. Product sales are private label to major ethical and OTC (over-the-counter) distributors. Agri-Nutrition Group anticipates an orderly merger, with President James Viscio and his experienced management team and employees remaining in place at Anthony Products Company and leading the organization in achieving their future growth objectives.

W. M. Jones, Jr., chairman and chief executive officer of Agri-Nutrition Group Limited, said, "We are very pleased to have signed this letter of intent to enter into this major transaction for Agri-Nutrition. The injectable pharmaceutical business truly rounds out our product offering which currently includes a wide variety of health, grooming, and nutritional products for the pet and animal health industry. Completion of the acquisition of Anthony Products Company will be a major event for Agri-Nutrition Group Limited. Anthony Products Company's financial impact is expected to be significant both as to sales and profitability. Furthermore, the transaction will successfully complete the initial acquisition phase of our strategy, concluding the development of a core set of companies well positioned to take advantage of the opportunities in our industry. With this acquisition, Agri-Nutrition Group Limited will move from an acquisition-oriented company to an operating concern focused on achieving its full potential in the growing pet and animal health sector through internal growth and selective strategic acquisitions and alliances."

Third Quarter and Nine Months Financial Results

For the quarter ended July 31, 1996, net sales were $8.7 million, a 15.9% increase over net sales of $7.5 million for the quarter ended July 31, 1995. Higher margin specialty product sales increased by 25.5% to $7.4 million, or 85% of total sales for the third quarter of 1996, versus $5.9 million, or 78.5% of total sales in the same quarter of last year. Gross profit for the quarter ended July 31, 1996, was $2.0 million, a 42.9% increase over the prior year's $1.4 million. These increases in 1996 are primarily due to the acquisitions of St. JON Laboratories in August 1995 and Bromethalin effective May 1996. Company operating income was $116,000 versus $114,000 last year. Net loss for the third quarter of 1996 was $9,000 compared with net income of $150,000 for the year-earlier period reflecting the impact of higher net interest costs attributable to the financing of the acquisition of St. JON.

For the nine months ended July 31, 1996, net sales were $26.3 million, a 34.0% increase over net sales of $19.6 million for the year-earlier period. Higher margin specialty product sales increased by 53.8% to $21.0 million, or 80% of total sales for the third quarter of 1996, versus $13.6 million, or 69.4% of total sales in the same period last year. Gross profit for the nine months ended July 31, 1996, was $5.6 million, a 107.1% increase over the prior year's $2.7 million. Company operating income was $38,000 versus last year's loss of $160,000. These increases in 1996 are primarily due to the acquisitions of St. JON Laboratories in August 1995 and Bromethalin effective May 1996. Net loss for the nine months ended July 31, 1996, was $154,000 compared with net income of $158,000 for the year-earlier period reflecting higher net interest costs attributable to the financing of the acquisitions of St. JON and Zema.

In commenting on the financial results for the third quarter, Mr. Jones said, "We made considerable progress in reducing our corporate costs. In addition, two of our subsidiaries performed quite well. These positive developments were not enough to offset the third quarter performance of Zema Corporation, which is a manufacturer and supplier of high quality pet health care and grooming products. As was the case throughout the industry for flea and tick products sold over the counter, Zema sales were negatively impacted by lower incidence of infestation than normal and by the introduction of highly promoted new products distributed exclusively through veterinaries. Furthermore, Zema's sales suffered from the decision of one of its principal customers to severely reduce product offerings in all categories including companion animals. However, Zema was successful in the planned introduction of several new product lines developed in association with other Agri-Nutrition Group companies. We continue to have confidence in Zema and its product lines and are focusing considerable resources on returning Zema to its position as a strong contributor to Agri-Nutrition's earnings."

Corporate Restructuring

The Company announced that, effective October 31, 1996, Mr. Jones, currently chairman of the board, president and chief executive officer of Agri-Nutrition, will resign his positions as president and chief executive officer of the Company while continuing as chairman of the board. Mr. Bruce G. Baker, currently deputy chief executive officer, will assume the position of president and chief executive officer. In addition, effective August 23, 1996, George W. Daignault resigned as chief financial officer of the Company, but will continue to be employed by the Company on special projects. Robert J. Elfanbaum, formerly corporate controller, has replaced Mr. Daignault as chief financial officer. In connection with this restructuring, the Company will incur a one-time charge, net of tax, of approximately $150,000 in the fourth quarter of fiscal 1996.

Mr. Jones said, "It has always been our strategic mission to make the transition from an acquisition vehicle to an operating company. Now that we are realizing that objective, we believe that such an organizational restructuring is appropriate. This realignment at the executive level of the Company should not be unexpected since we have indicated to the investment community in the past that such actions would be taken when the Company achieved a certain critical mass. With this acquisition of Anthony Products Company, we believe we have reached that point. It is important to note that we expect this reorganization to reduce corporate costs by approximately $600,000 annually. I intend to remain active in the company as chairman of the board, and, as we operate this company to improved financial status, we will continue to evaluate acquisitions that we see as complementary to our operating company."

In closing, Mr. Jones said, "The Anthony Products Company transaction and the associated restructuring of Agri-Nutrition should be viewed as the completion of the first stage of our stated growth strategy which we discussed in connection with our public offering in 1994. Now that we have the nucleus of a strong operating company with experienced management, we believe that we are very well positioned for internal growth and operational success in a very exciting and growing industry."

Agri-Nutrition Group Limited was founded in 1993 to acquire and operate businesses in the domestic and international food, agriculture and pet industries. The Company has acquired and now operates three companies; PM Resources, Inc., Zema Corporation and St. JON Laboratories, Inc., which companies produce or market a wide variety of nutritional, health and grooming products for the pet and animal health industry. -0-

                     AGRI-NUTRITION GROUP LIMITED
                    UNAUDITED FINANCIAL HIGHLIGHTS
        (amounts in thousands except share and per share data)

                             Three Months Ended    Nine Months Ended
                                   July 31,             July 31,
                               1996       1995      1996       1995
Net sales                   $  8,725   $  7,525   $ 26,320   $ 19,645
Gross profit                   2,048      1,433      5,600      2,704
Operating income before
 corporate expenses              538        642      1,413      1,315
Total operating income (loss)    116        114         38       (160)
Net income (loss)                 (9)       150       (154)       158
Net income (loss) per share        -        .02       (.02)       .02
Weighted average shares
 outstanding               8,402,845  8,990,482  8,401,848  8,989,829

                        Agri-Nutrition Group Limited
                        Consolidated Balance Sheet

                                              July 31,    October 31,
                                                1996         1995
                                             (Unaudited)   (Audited)
Assets
Current assets:
  Cash and cash equivalents                  $ 2,123,816  $ 2,330,685
  Short-term investments                                    1,191,379
  Accounts receivable                          3,995,699    3,451,011
  Inventories                                  5,828,636    4,201,315
  Prepaid expenses and other                     855,087      775,614
   Current assets subtotal                    12,803,238   11,950,004
Property, plant and equipment, net             4,849,101    4,826,970
Goodwill                                       7,101,003    6,177,068
Other assets                                     455,540      519,061
Total Assets                                 $25,208,882  $23,473,103
Liabilities and Shareholders' Equity
Current liabilities:
  Current portion of long-term
debt and notes payable                       $   486,473  $   252,692
Accounts payable                               1,873,961    2,688,927
  Accrued expenses                               678,944    1,199,952
   Current liabilities subtotal                3,039,378    4,141,571
Long-term debt and notes payable               7,906,158    4,914,614
Shareholders' equity:
  Common stock ($.01 par value; 20,000,000 shares
   authorized; 8,409,342 and 8,401,344 shares issued
   in 1996 and 1995, respectively)                84,093       84,013
  Additional paid-in capital                  14,784,571   14,734,656
  Accumulated deficit                           (555,332)    (401,751)
                                              14,313,332   14,416,918
Cost of common stock held in Treasury
  (25,650 and 0 shares in 1996
and 1995, respectively)                          (49,986)
                                              -----------  -----------
                                              14,263,346   14,416,918

Total Liabilities and Shareholders' Equity   $25,208,882  $23,473,103

                     Agri-Nutrition Group Limited
                 Consolidated Statement of Operations
                             (Unaudited)

                        For the three months     For the nine months
                           ended July 31,           ended July 31,
                          1996        1995         1996        1995

Net sales             $8,724,603  $7,524,768  $26,319,619  $19,644,727
Cost of sales          6,676,840   6,091,619   20,719,240   16,940,239
Gross profit           2,047,763   1,433,149    5,600,379    2,704,488
Selling, general
 and administrative
 expenses              1,931,572   1,319,299    5,562,514    2,864,814
Operating income (loss)  116,191     113,850       37,865     (160,326)
Interest expense        (152,596)    (79,091)    (413,101)    (221,127)
Other income              26,931     115,014      133,655      463,567
Income (loss) before
 income tax benefit       (9,474)    149,773     (241,581)      82,114
Income tax benefit             0           0       88,000       76,000
Net income (loss)     $   (9,474) $  149,773  $  (153,581) $   158,114
Net income (loss) per
 common and common
 equivalent share     $       --  $      .02  $      (.02) $       .02
Weighted average
 common and common
 equivalent shares
 outstanding           8,402,845   8,990,482    8,401,848    8,989,829

CONTACT: Agri-Nutrition Group Limited, Maryland Heights

Robert J. Elfanbaum, 314/298-7330