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 Earnings are $16.2 Million vs. $3.4 Million;
 Sales are $170.1 Million vs. $84.2 Million
 for the Quarter
 Massey Ferguson Acquisition, Firming of Retail Prices
 Contribute to Increased Sales
 ATLANTA, Nov. 4 /PRNewswire/ -- AGCO Corporation (NASDAQ: AGCO) today reported that sales for the third quarter ended September 30, 1993 totaled $170,077,000 as compared to $84,207,000 for the same period in the prior year.
 The company reported net earnings for the third quarter of $16,206,000, $1.15 per share on 14.1 million fully diluted shares outstanding, compared to earnings of $3,444,000, $.39 per share on 8.9 million fully diluted shares outstanding, for the same period last year.
 Sales for the nine months ended September 30, 1993, were $424,582,000 as compared to $229,240,000 for the same period in the prior year. Net earnings for the nine months ended September 30, 1993 were $20,110,000, $1.73 per share, including a charge taken in the first quarter for nonrecurring expenses of $14 million, $1.21 per share, related to the integration of the Massey Ferguson North American distribution operation. Excluding the nonrecurring charge, net earnings for the nine months ended September 30, 1993, were $34,110,000, $2.94 per share, as compared to $4,293,000, $.61 per share, for the nine months ended September 30, 1992.
 The company reported income from operations for the current quarter of $19,870,000 as compared to $5,397,000 for the third quarter last year.
 Income from operations for the nine months ended September 30, 1993, including the nonrecurring charge, was $31,342,000. Income from operations for the nine months, excluding the nonrecurring charge, was $45,342,000 as compared to $9,845,000 for the nine months ended September 30, 1992.
 The increase in sales, operating income and net earnings is primarily a result of the acquisition of the North American distribution business of Massey Ferguson which was completed on January, 7, 1993. In addition, net sales for the quarter were affected by the increase in industry demand when compared to the third quarter of 1992 and a substantial improvement in pricing in the industry.
 "Operating income has been significantly impacted by the rationalization of operating expenses in conjunction with the Massey Ferguson acquisition," according to Robert J. Ratliff, AGCO's chairman and chief executive officer. "In addition, a lowering of inventory levels industry-wide has led to a firming of pricing at the retail level."
 AGCO's operating expense ratios for the quarter and nine months ended September 30, 1993, were 9.9 percent and 10.4 percent, respectively, as compared to 12.6 percent and 14.7 percent, respectively, for the same periods in the prior year.
 The company's results for the quarter also included earnings of $1,087,000, $.08 per share, from its 50 percent investment in Agricredit Acceptance Company, an equipment finance business acquired January 26, 1993. Earnings from Agricredit for the nine months ended September 30, 1993 totaled $2,721,000. Earnings for the third quarter were also affected by Canadian exchange rate losses resulting from currency fluctuations. Exchange losses of approximately $2,448,000, $.17 per share, related to the company's Canadian operations were recognized in the quarter. For the nine months ended September 30, 1993, net Canadian exchange losses totaled $3,168,000 or $.27 per share.
 As a result of the Massey Ferguson acquisition, AGCO has become the exclusive distributor of Massey Ferguson product in North America. The nonrecurring charge recorded in the first quarter includes costs associated with operating duplicate parts distribution facilities, operating Massey Ferguson's regional administrative and sales offices prior to their closing, the cost of certain data processing services provided by Massey Ferguson during the transition period and other acquisition related items.
 The company reported that the integration of the businesses was fully completed during the third quarter, slightly ahead of schedule. The integration of the businesses was completed within original cost estimates. In addition, original estimates of annual cost savings from the rationalization of operating expenses have also been exceeded. The company originally expected annual cost savings of approximately $14 million resulting from the elimination of duplicate facilities and functions. The company currently estimates such annual savings to be approximately $18 million to $20 million.
 Mr. Ratliff indicated that "the Massey Ferguson and Agricredit acquisitions have continued to make substantial contributions to earnings. In addition, the company continues to experience good retail demand in all product categories in which the company competes. This level of retail activity, together with a close monitoring of purchases from suppliers and production at our manufacturing facilities, has resulted in the company's inventory levels being at or near optimal levels."
 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 December 1, 1993 to holders of record November 12, 1993. In addition, the board of directors also approved a quarterly dividend of approximately $.41 per depositary share related to its Convertible Exchangeable Preferred Stock. The dividend is payable December 1, 1993 to holders of record November 12, 1993.
 AGCO is a major distributor and manufacturer of agricultural equipment and related replacement parts in the United States and Canada, offering a full product line, which includes tractors, combines, hay tools, forage equipment and implements. The company's products are distributed under the brand names AGCO Allis, Massey Ferguson, Hesston(R), White, GLEANER(R), and SAME.
 Third Quarter Results
 (Unaudited and in thousands, except per share data)
 Consolidated Statements of Operations
 3 mos. ended 9 mos. ended
 9/30/93 9/30/92 9/30/93 9/30/92
 Net sales $170,077 $ 84,207 $424,582 $229,240
 Cost of sales 133,303 68,232 335,256 185,766
 Gross profit 36,774 15,975 89,326 43,474
 Selling, general and
 administrative expenses 14,905 8,373 38,392 28,331
 Engineering expenses 1,999 2,205 5,592 5,298
 Nonrecurring acquisition
 related expenses --- --- 14,000 ---
 Income from operations 19,870 5,397 31,342 9,845
 Interest expense (3,744) (3,279) (13,474) (9,379)
 Interest income 1,029 1,019 3,284 2,266
 Equity earnings in unconsol.
 affiliate 1,087 --- 2,721 ---
 Other income (expense), net (2,036) 307 (3,763) 1,561
 Total (3,664) (1,953) (11,232) (5,552)
 Income before income taxes 16,206 3,444 20,110 4,293
 Provision for income taxes(a) --- --- --- ---
 Net income 16,206 3,444 20,110 4,293
 Preferred stock dividends 1,495 --- 2,210 ---
 Net income available to
 common stockholders $ 14,711 $ 3,444 $ 17,900 $ 4,293
 Net income per common share(b):
 Primary $ 1.60 $ 0.39 $ 1.97 $ 0.61
 Fully diluted $ 1.15 $ 0.39 $ 1.73 $ 0.61
 Wtd. avg. number of common and
 equivalent shares outstanding:
 Primary 9,202 8,916 9,089 7,036
 Fully diluted 14,060 8,916 11,609 7,036
 (a) There was no tax provision for the three months and the nine months ended Sept. 30, 1993 or 1992, due to the utilization of deferred tax benefits resulting from the tax bases of assets acquired in the Deutz-Allis acquisition being in excess of their bases for financial reporting purposes.
 (b) Fully diluted earnings per common share, excluding nonrecurring acquisition expenses of $14.0 million, was $2.94 for the nine months ended Sept. 30, 1993. Pro forma earnings per common share would have been $0.67 and $1.30 for the three months and the nine months ended Sept. 30, 1992, respectively, if the following had occurred at the beginning of 1992: (i) the Massey Ferguson acquisition and the financing thereof, (ii) the investment in the Agricredit Joint Venture and the financing thereof, (iii) the initial public offering, (iv) the debt refinancing, and (v) the Preferred Stock Offering.
 Condensed Consolidated Balance Sheets
 Sept. 30, 1993 Dec. 31, 1992
 ASSETS (Unaudited)
 Current assets:
 Cash and marketable securities $ 6,173 $ 9,027
 Accounts and notes receivable, net 279,770 183,951
 Inventories, net 157,177 96,850
 Other current assets 5,067 2,714
 Total current assets 448,187 292,542
 Property, plant and equipment, net 17,011 11,516
 Investments in unconsol. affiliates 34,691 13,000
 Other assets 7,793 3,655
 Total assets $507,682 $320,713
 Current liabilities $120,488 $ 66,961
 Long-term debt 155,082 121,047
 Noncurrent liabilities 30,410 28,704
 Total liabilities 305,980 216,712
 Excess of assets acquired over
 purchase price, net 2,229 10,329
 Stockholders' equity 199,473 93,672
 Total liabilities and stockholders'
 equity $507,682 $320,713
 -0- 11/4/93
 /CONTACT: Allen W. Ritchie, senior vice president and chief financial officer, AGCO, 404-246-6110/

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

BR-BN -- AT002 -- 0507 11/04/93 08:34 EST
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Publication:PR Newswire
Date:Nov 4, 1993

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