Ag Services Announces Third Quarter Results.Business Editors CEDAR FALLS Cedar Falls, city (1990 pop. 34,298), Black Hawk co., N Iowa, on the Cedar River; inc. 1854. It developed as a milling center in the late 19th-century after the coming of the railroad; its name is derived from the cedar tree. , Iowa--(BUSINESS WIRE)--Dec. 19, 2001 Ag Services of America, Inc. (NYSE NYSE See: New York Stock Exchange :ASV ASV abbr. Bible American Standard Version ASV n abbr (= American Standard Version) → traduction de la Bible ASV n abbr (Bible) (= ) today announced that net revenues for the three months ended November 30, 2001 increased 6% to $25.1 million compared to $23.6 million one year ago. Net earnings for the quarter increased 30% to $1.3 million, or $0.24 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared to $1.0 million, or $0.18 per diluted share for the same period last year. Net revenues for the nine months ended November 30, 2001 increased 6% to $299.6 million from $283.0 million one year ago. Net income for the first nine months of Fiscal 2002 was $5.2 million, or $0.94 per diluted share, compared to $6.9 million, or $1.24 per diluted share for the first nine months of Fiscal 2001. "We are very pleased with our third quarter results," stated Brad Schlotfeldt, Executive Vice President. "Although hampered by reduced interest rates, our third quarter earnings increased 30% over last year as a result of increased volume under our crop insurance program. As we previously stated at the end of our second quarter, year-to-date Fiscal 2002 results have been impacted significantly by changes in crops planted by our customers and reduced interest rates. The delay in crop planting this spring throughout much of our primary market area caused many customers to switch crop plans and to leave a portion of acres unplanted which decreased a portion of our seed, chemical and fertilizer fertilizer, organic or inorganic material containing one or more of the nutrients—mainly nitrogen, phosphorus, and potassium, and other essential elements required for plant growth. sales. Also attributing to lower earnings for the first nine months of Fiscal 2002 was the decline in the prime lending rate The lowest rate of interest that a financial institution, such as a bank, charges its best customers, usually large corporations, for short-term unsecured loans. The prime lending rate is an economic indicator and is often used as a measuring point for adjusting interest which significantly reduced earnings on our invested capital and negatively affected an interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. agreement associated with our $30 million term note." In the first nine months of Fiscal 2002, revenues attributable to Powerfarm increased substantially to $3.6 million as compared to $0.8 million for the same period last year. The impact on earnings per share for the first nine months of Fiscal 2002 was a loss of $0.08 per diluted share compared to a loss of $0.12 per diluted share one year ago. Looking forward, the Company anticipates fourth quarter earnings per share on a diluted basis to range from $0.11 to $0.13. Currently the Company is beginning its marketing campaign for the 2002 crop year producers. The Company's focus is to increase penetration in Midwest corn and soybean soybean, soya bean, or soy pea, leguminous plant (Glycine max, G. soja, or Soja max) of the family Leguminosae (pulse family), native to tropical and warm temperate regions of Asia, where it has been producers through direct mail, print media and a dedicated sales force. Although very early in the approval season, the Company anticipates customer credit growth in the range of 15-20% for the next year. Given this assumed customer growth and projected reduced interest rate environment, the Company forecasts earnings per share growth for Fiscal 2003 to also approximate 15-20%. Ag Services of America, Inc., which operates Powerfarm.com, is based in Cedar Falls, Iowa Cedar Falls is a city in Black Hawk County, Iowa, United States, and it is home to one of Iowa's three public universities, the University of Northern Iowa. The population was 36,145 at the 2000 census. , and is a leading supplier of input financing and agricultural inputs, including seed, chemicals, fertilizer and cash advances to primarily corn and soybean growers in the U.S. The Company's one-stop shopping business model includes competitive and flexible financing packages through its AgriFlex Credit(R) program combined with the most comprehensive offering of agricultural inputs from national sources such as Asgrow, Aventis, BASF BASF Bar Association of San Francisco (since 1872; San Francisco, California) BASF Badische Anilin und Soda Fabrik (German chemical products company) BASF Builders Association of South Florida , Dekalb, Dow AgroSciences Dow AgroSciences LLC is a wholly owned subsidiary of the Dow Chemical Company specializing in not only agricultural chemicals such as pesticides, but also seeds and biotechnology solutions. The company is based in Indianapolis, Indiana, in the United States. , DuPont, Garst, Monsanto and Pioneer Hi-Bred Pioneer Hi-Bred is one of the largest U.S. companies which produces hybrid seeds for agriculture. History In 1926, farm journal editor and future U.S. Vice President Henry A. Wallace, along with a group of Des Moines, Iowa businessmen, started the "Hi-Bred Corn Company". . The Company also provides ancillary Subordinate; aiding. A legal proceeding that is not the primary dispute but which aids the judgment rendered in or the outcome of the main action. A descriptive term that denotes a legal claim, the existence of which is dependent upon or reasonably linked to a main claim. services such as crop insurance and grain marketing. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " for forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . This release contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The factors that could cause actual results to differ materially, include the following: general economic conditions within the agricultural industry; competitive factors and pricing pressures; changes in product mix; changes in the seasonality of demand patterns; changes in weather conditions; changes in agricultural regulations; unknown risks; the amount and availability under its asset backed securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. program; and the risks described from time to time in the Company's SEC reports. AgriFlex Credit, Powerfarm.com and Powerfarm Credit are registered trademarks of Ag Services of America, Inc. All other trademarks or product names are the property of their respective owners. For more information visit www.agservices.com or www.powerfarm.com.
(Unaudited) (Unaudited)
Three Months Ended Nine Months Ended
---------------------- ----------------------
Nov. 30, Nov. 30, Nov. 30, Nov. 30,
2001 2000 2001 2000
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Net revenues:
Farm inputs $ 17,655 $ 14,314 $ 277,156 $ 256,930
Financing 7,448 9,311 22,417 26,027
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Net revenues $ 25,103 $ 23,625 $ 299,573 $ 282,957
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Cost of revenues:
Farm inputs $ 15,816 $ 12,951 $ 264,497 $ 243,805
Financing 3,741 5,532 11,648 13,862
Provision for
doubtful notes 483 433 5,435 5,017
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Net cost of
revenues $ 20,040 $ 18,916 $ 281,580 $ 262,684
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Gross Profit:
Farm inputs $ 1,839 $ 1,363 $ 12,659 $ 13,125
Financing 3,707 3,779 10,769 12,165
Provision for
doubtful notes (483) (433) (5,435) (5,017)
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Gross margin $ 5,063 $ 4,709 $ 17,993 $ 20,273
Operating expenses 3,078 3,060 9,601 9,251
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Income before income
taxes $ 1,985 $ 1,649 $ 8,392 $ 11,022
Federal and state
income taxes 688 651 3,237 4,166
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Net income $ 1,297 $ 998 $ 5,155 $ 6,856
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Earnings per share
Basic $ 0.24 $ 0.19 $ 0.95 $ 1.30
Diluted $ 0.24 $ 0.18 $ 0.94 $ 1.24
Weighted average
shares:
Basic 5,458,490 5,272,486 5,398,336 5,268,478
Diluted 5,487,455 5,476,003 5,487,956 5,507,530
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