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AGCO CORPORATION FOURTH QUARTER EARNINGS AND DIVIDEND

 ATLANTA, Feb. 16 /PRNewswire/ -- AGCO Corporation (NASDAQ: AGCO) today reported net earnings for the fourth quarter ended Dec. 31, 1992 of $1,749,000 ($.20 per share) compared to earnings of $21,000 ($.01 per share) for the same period last year. Net earnings for the year ended Dec. 31, 1992 were $6,042,000 ($.81 per share) as compared to $8,705,000 ($2.07 per share ) for the year ended Dec. 31, 1991. Operating income was $4.3 million for the current quarter and $14.1 million for the year ended Dec. 31, 1992 as compared to $3.4 million for the fourth quarter last year and $16.2 million for the year ended Dec. 31, 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 $7,118,000 ($.80 per share) for the year ended Dec. 31, 1992 based on 8,916,000 shares currently outstanding.
 Industry retail sales compiled by Equipment Manufacturers Institute (EMI) indicate fourth quarter industry results in the 40-100 horsepower tractor segment improved 20 percent for the quarter, while AGCO units were up 29 percent. For the year ended December, industry retail sales in this category increased 2 percent from the prior year while AGCO sales were up 5 percent. Market share for the quarter and the full year remained at approximately 3 percent. Industry sales in the 100 plus horsepower segment declined 2 percent for the quarter, while AGCO unit sales were up 62 percent. For the year ended December, industry sales declined 19 percent while AGCO sales were up 16 percent. Market share for the quarter increased from 4 percent to 7 percent when compared to the same period in the prior year. Market share in this category for the full year has increased from 4 percent to 6 percent. The company attributes its strong fourth quarter and better than industry performance for the full year to competitive retail finance programs introduced for the fourth quarter of 1992, increased sales from new dealers and the reduction in the significant discounting on the part of certain of the company's competitors.
 Retail sales of AGCO combines continued to outperform the industry increasing approximately 65 percent in the fourth quarter when compared to the prior year. Industry retail sales were up approximately 12 percent for the period. For the year ended December, industry combine sales were down 16 percent while AGCO sales were up almost 36 percent. Market share for the quarter increased from 6 percent to 9 percent and for the year increased from 5 percent to 8 percent. The increase in company sales of combines is attributed to increased acceptance of new products introduced in the second half of 1991, competitive retail finance programs introduced for the fourth quarter of 1992 and the increased sales from new dealers.
 Industry retail sales of hay and forage equipment represented by several products were estimated by EMI to be up approximately 25 percent for the quarter with AGCO retail sales up over 100 percent. For the year ended December, AGCO retail sales of hay and forage equipment were up almost 10 percent while the industry was down approximately 2 percent. market share for the quarter increased from approximately 11 percent to 19 percent and on a year-to-date basis has increased to approximately 14 percent. The increase in company sales of hay and forage equipment is primarily due to increased sales from new dealers and a reduction in discounting on the part of certain competitors.
 As a result of the late harvest in the company's primary markets, the sale of higher margin replacement parts for the fourth quarter were 27 percent above the same quarter in the prior year. Replacement parts sales comprised approximately 38 percent of total sales in the current quarter compared to 35 percent for the quarter ended Dec. 31, 1991. The increase had a positive effect on profit margins for the quarter. However, overall profit margins were negatively affected by the impact of competitive retail finance programs and higher costs, including the cost of post employment benefits for its manufacturing employees and 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 and the year were also affected by Canadian exchange rate losses resulting from currency fluctuations. Exchange losses of approximately $1,410,000 ($.16 per share) related to the company's Canadian operations were recognized in the quarter. Exchange losses for the year totaled approximately $2,610,000 ($.35 per share).
 The company was pleased to see the substantial improvement in retail demand in the fourth quarter. The improvement in industry demand, together with the impact of competitive yet profitable marketing programs and reduced purchases from OEM suppliers, have significantly reduced inventory levels and leave the company well positioned going into 1993.
 As previously announced, AGCO completed the acquisition of the North American distribution operation of Massey Ferguson and formed a joint venture with Varity Corporation (NYSE: VAT) which acquired the net assets of Agricredit Acceptance Corporation, a diversified equipment finance company. Pro forma financial information for the year ended Dec. 31, 1992 is not yet available.
 Bob Ratliff, president and CEO, stated that "integration of the two businesses is well under way. The rationalization and integration process should be virtually complete in the third quarter of 1993. So far, the transition has gone smoothly and the reaction from the dealer organizations has been very positive."
 Ratliff also indicated that "farm fundamentals remain relatively strong and January 1993 industry retail volumes continued the positive trend experienced in the fourth quarter of 1992. AGCO, including the newly added Massey Ferguson line, continued to outperform the industry in combine, higher horsepower tractor and hay equipment categories. Retail sales of tractors in the 40-100 hp category were in line with the industry. It is important to note that AGCO, with the addition of Massey Ferguson, has increased its market share in the 40-100 hp category from approximately 3 percent to approximately 14 percent. AGCO also now has market share of approximately 7-8 percent in the under 40 hp category, a market in which it previously did not compete. The opportunities afforded by the Massey Ferguson acquisition are substantial."
 The company also announced that its board of directors approved a quarterly dividend on the company's commons stock of $.01 per share. the dividend is payable March 26, 1993 to holders of record March 1, 1993.
 AGCO CORPORATION
 Consolidated Statement of Operations
 Fourth Quarter Results
 (unaudited and in thousands)
 Periods ended Three months Year
 Dec. 31, 1992(A) 1991 1992(A) 1991
 Net sales $85,302 $71,150 $314,542 $274,535
 Cost of sales 70,709 54,486 256,475 212,225
 Gross profit 14,593 16,664 58,067 62,310
 S,G&A Expenses 8,672 11,210 37,003 40,357
 Engineering expenses 1,626 2,082 6,924 5,752
 Inc. from operations 4,295 3,372 14,140 16,201
 Interest expenses (2,738) (1,634) (11,475) (4,774)
 Interest income 856 944 3,122 4,988
 Other income
 (expense), net (664) (2,661) 255 (7,710)
 Total (2,546) (3,351) (8,098) (7,496)
 Inc. bef. inc. taxes 1,749 21 6,042 8,705
 Provision for income
 taxes (B) -- -- -- --
 Net income $1,749 $21 $6,042 $8,705
 Net inc. per common
 share $0.20 $0.01 $0.81 $2.07
 Wtd. avg. no. of common
 & equiv. shares
 outstanding 8,916 4,181 7,505 4,208
 (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 $0.20 and $0.80 for the three months and the year ended Dec. 31, 1992, respectively.
 (B) -- There was no tax provision for the three months and the years ended Dec. 31, 1992 or 1991 due to the tax benefits realized as a result of the tax basis of assets acquired in the Deutz-Alis, Hesston and White Tractor Acquisitions being in excess of their basis for financial reporting purposes.
 AGCO CORPORATION
 Condensed Consolidated Balance Sheets
 Fourth Quarter Results
 (Unaudited and in the thousands)
 Dec. 31, 1992 1991
 Assets
 Current assets:
 Cash and marketable securities $ 9,027 $18,577
 Accounts and notes receivable, net 183,951 16,516
 Inventories, net 96,850 130,309
 Other current assets 2,714 4,983
 Total current assets 292,542 170,385
 Property, plant and equipment, net 11,516 8,781
 Other assets 16,655 15,496
 Total assets 320,713 194,662
 Liabilities and Stockholders Equity
 Current liabilities 66,961 75,873
 Long-term debt 121,047 41,135
 Noncurrent liabilities 28,704 32,580
 Total liabilities 216,712 149,588
 Excess of assets acquired over
 purchase price, net 10,329 19,028
 Stockholders' equity 93,672 26,046
 Total liabilities and stockholders'
 equity 320,713 194,662
 -0- 2/16/93
 /CONTACT: Allen W. Ritchie, senior vice president & CFO of AGCO, 404-246-6110/
 (AGCO)


CO: AGCO Corporation ST: Georgia IN: SU: ERN

TS-LR -- NY025 -- 6776 02/16/93 09:53 EST
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Date:Feb 16, 1993
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