Ag Services of America Announces First 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)--July 3, 2003 Ag Services of America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. , 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) (= ) announced today that net revenues for the first quarter of the Company's 2004 fiscal year were $48.2 million as compared to $75.2 million for the same period one year ago. The Company's net loss for the first quarter of Fiscal 2004 was $0.3 million, or $0.06 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 net income of $2.2 million, or $0.39 per diluted share, for the same period last year. Net revenues for the first quarter decreased as a result of the smaller credit facility available to the Company for 2003 customer loan commitments. The 2003 credit facility will limit the Company to approximately $255 million in customer loan commitments, compared to approximately $465 million in customer loan commitments last year. The first quarter loss of $0.3 million was caused largely by the reduction in net revenues. In addition, higher than expected costs of approximately $1.2 million were incurred in securing the 2003 credit facility and an unexpected provision of $1.5 million was made to the Company's allowance for doubtful notes, all of which contributed to the first quarter loss. The adjustment to the allowance for doubtful notes was related specifically to the Company's western region, where the agricultural industry has been impacted economically by low commodity prices and declining real estate values. The Company's strategy has been to reduce its volume in this market. Last year this market represented approximately 20% of the total credit extended by the Company, but it has been reduced to less than 10% for the current crop year. Net margins on farm inputs for the quarter remained stable compared to the same period last year. The benefit of the cost cutting measures taken earlier in the year, including a nearly 30% reduction in staff, will not be realized by the Company until the second quarter of Fiscal 2004. Definitive proxy statements Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. have been mailed to shareholders for approval of the Company's previously announced transaction with ASP/ASA, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , an indirect subsidiary of American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Securities Capital Partners, L.P (ASCP ASCP American Society of Clinical Pathologists. ). The Company will seek final approval for the transaction at its annual shareholder meeting which is scheduled for 9 a.m. Central Standard Time on Monday Monday: see week. , July July: see month. 14th, 2003 at the Company's headquarters 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. . No assurance can be made that the transaction will be approved and/or completed. ASCP is the private-equity investment arm of American Securities, a family office founded in 1947 by the late William Rosenwald, to manage his share of his family's Sears Roebuck fortune. ASCP manages more than $1 billion of committed capital in private equity and is currently investing its third private-equity investment fund with outside investors, which has $650 million of capital committed. Ag Services of America, Inc. is based in Cedar Falls, Iowa, and is a leading supplier of crop input financing and agricultural inputs, including seed, chemicals and fertilizers to primarily 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 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 a comprehensive offering of agricultural inputs from national sources such as Asgrow, 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, Syngenta 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 administers additional financing programs for various suppliers, manufacturers and distributors in the agricultural industry and 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 seasonality of demand patterns; changes in weather conditions; changes in agricultural regulations; unexpected changes in collateral values; unknown risks; timing and/or probability of consummating the ASCP transaction; ability to obtain long term financing; an unexpected shareholder vote to disapprove dis·ap·prove v. dis·ap·proved, dis·ap·prov·ing, dis·ap·proves v.tr. 1. To have an unfavorable opinion of; condemn. 2. To refuse to approve; reject. v.intr. the contemplated securities purchase agreement; an unexpected withdrawal by ASCP of the investment offered; and the risks described from time to time in the Company's SEC reports. AgriFlex Credit is a registered trademark 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.american-securities.com.
(All amounts presented in thousands, except per share amounts)
Unaudited
Three months ended
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May 31, 2003 May 31, 2002
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Net revenue:
Farm inputs $41,392 $65,800
Financing income 5,398 6,316
Customer fees 1,169 2,485
Other 208 644
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Net revenue $48,167 $75,245
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Cost of revenue:
Farm inputs $38,242 $60,636
Financing expense 3,731 3,382
Provision for doubtful notes 3,514 4,077
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Net cost of revenue $45,487 $68,095
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Gross Profit:
Farm inputs $3,150 $5,164
Financing 1,667 2,934
Customer fees 1,169 2,485
Other 208 644
Provision for doubtful notes (3,514) (4,077)
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Gross margin $2,680 $7,150
Operating expenses 3,177 3,643
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Income (loss) before income taxes ($497) $3,507
Income taxes ($188) 1,350
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Net income (loss) ($309) $2,157
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Earnings per share
Basic ($0.06) $0.39
Diluted ($0.06) $0.39
Weighted average shares:
Basic 5,479,514 5,473,288
Diluted 5,479,514 5,513,826
Income Statement Information
(Unaudited): 5/31/03 5/31/02
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Net revenue
Seeds $15,555 37.6% $22,772 34.6%
Chemicals 11,395 27.5% 19,212 29.2%
Fertilizers 14,442 34.9% 23,816 36.2%
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Farm inputs $41,392 100.0% $65,800 100.0%
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Balance Sheet Information (Unaudited): 5/31/03 5/31/02
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Notes receivables, net $322,245 $423,000
All other assets 20,085 18,222
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Total assets $342,330 $441,222
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Liabilities $264,776 $367,324
Equity 77,554 73,898
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Total liabilities and equity $342,330 $441,222
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