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 ATLANTA, Aug. 3 /PRNewswire/ -- AGCO Corporation (NASDAQ: AGCO) today reported that sales for the second quarter ended June 30, 1993 totaled $152,408,000 as compared to $79,561,000 for the same period in the prior year. The company reported net earnings for the second quarter of $13,563,000, $1.18 per share, compared to earnings of $217,000, $.03 per share, for the same period last year.
 Sales for the six months ended June 30, 1993 were $254,505,000 as compared to $145,033,000 for the same period in the prior year. Net earnings for the six months ended June 30, 1993 were $3,904,000, $.35 per share, including a charge taken in the first quarter for nonrecurring expenses of $14,000,000, $1.52 per share, related to the integration of the Massey Ferguson North American distribution operations. Excluding the nonrecurring charge, net earnings for the six months ended June 30, 1993 were $17,904,000, $1.87 per share, as compared to $849,000, $.14 per share, for the six months ended June 30, 1992. The company reported income from operations for the current quarter of $18,927,000 as compared to $2,587,000 for the second quarter last year.
 Income from operations for the six months ended June 30, 1993, including the nonrecurring charge, was $11,472,000, Income from operations for the six months, excluding the nonrecurring charge, was $25,472,000 as compared to $4,448,000 for the six months ended June 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 Jan. 7, 1993. In addition, net sales for the quarter were affected by the increase in industry demand when compared to the depressed levels of the second quarter of 1992 and a substantial improvement in pricing in the industry. The company's results for the quarter also included earnings of $937,000, $.08 per share, from its 50 percent investment in Agricredit Acceptance Company, an equipment finance business acquired Jan. 26, 1993. Earnings from Agricredit for the six months ended June 30, 1993 totaled $1,634,000. Earnings for the second quarter were also affected by Canadian exchange rate losses resulting from currency fluctuations. Exchange losses of approximately $1,292,000, $.11 per share, related to the company's Canadian operations were recognized in the quarter. For the six months ended June 30, 1993, net Canadian exchange losses totaled $720,000 or $.08 per share.
 Integration of Massey-Ferguson Acquisition is on Schedule
 As a result of the Massey Ferguson acquisition, AGCO has become the exclusive distributor of Massey Ferguson products 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 administration 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 integration of the businesses is scheduled to be completed by the end of the third quarter of 1993. To date, all seven regional parts distribution facilities which were to be eliminated have been closed and those operations consolidated. The consolidation of Massey Ferguson's master warehouse into AGCOs Batavia, Illinois warehouse facility is on schedule and is anticipated to be completed by Sept. 30, 1993. All seven regional sales and administrative offices of Massey Ferguson and the Massey corporate headquarters in Des Moines, Iowa have been closed and the associated operating costs eliminated.
 According to Robert J. Ratliff, president and chief executive officer of AGCO, "The company is pleased with its performance in the second quarter and the added results from the Massey Ferguson and Agricredit acquisitions."
 The integration of the businesses is on schedule and no unanticipated problems have been encountered. We remain confident of our original estimates of the transition timetable and the nonrecurring costs.
 No Slowdown in Overall Demand Because of Midwest Flood
 "AGCO has seen no slowdown in overall demand as a result of the heavy rains and flooding in the Midwest," Mr. Ratliff stated. "Retail demand in all product categories in which AGCO competes remains strong and has resulted in a reduction of inventory levels maintained by the company and its dealers. Inventory levels are well positioned for the balance of the year."
 Secondary Stock Offering
 As previously announced, AGCO has filed a registration statement with the Securities and Exchange Commission for a public secondary offering of 1,500,000 shares of common stock. The common stock is being offered for sale by three equity funds which acquired the stock as part of the original buyout of the company in June 1990. The selling stockholders will receive all the proceeds from the sale of the common stock and will pay all of the expenses incurred in connection with the offering. Mr. Ratliff stated, "The sale of the stock by the equity funds was not completely unexpected, AGCOs relationship with the original buyout group remains excellent and the sale of the common stock will not be dilutive to the company's earnings."
 A registration statement relating to these shares of common stock has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.
 This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
 Robert J. Ratliff Elected as Chairman of the Board
 At a special meeting of the board of directors on Aug. 3, 1993, the board elected Robert J. Ratliff as chairman of the board of AGCO, effective immediately. Mr. Ratliff will also continue as president and chief executive officer of the company. Mr. Ratliff succeeds Mr. Hamilton Robinson, Jr., whose company manages the three equity funds involved in the original buyout of the company. Mr. Robinson has resigned as chairman of the board of AGCO but will remain a director.
 Quarterly Dividends Approved
 The company also announced that its board of directors approved a quarterly dividend on AGCOs common stock of $.01 per share. The dividend is payable September 1, 1993 to holders of record Aug. 12, 1993. In addition, the Board of Directors also approved a quarterly dividend of approximately $.46 per depositary share related to its Convertible Exchangeable Preferred Stock. The dividend is payable Sept. 1, 1993 to holders of record August 12, 1993. This represents the first dividend on the depositary shares which were issued May 19, 1993.
 AGCO Corporation is a major distributor and manufacturer of agricultural equipment and related replacement parts in the United States and Canada. AGCO offers a full product line, which includes tractors, combines, hay tools, forage equipment and implements. AGCOs products are distributed under the brand names AGCO Allis, Hesston(R), White, GLEANER(R), Massey Ferguson and SAME. AGCO is headquartered in Norcross, GA.
 Second Quarter Results
 Consolidated Statements of Operations
 (Unaudited and in thousands, except per share data)
 Periods Ended Three Months Six Months
 June 30, 1993 1992 1993 1992
 Net sales $152,408 $79,561 $254,505 $145,033
 Cost of sales 120,415 65,070 201,953 117,534
 ------- ------- ------- -------
 Gross profit 31,993 14,491 52,552 27,499
 Selling, general and
 administrative expenses 11,235 10,310 23,487 19,958
 Engineering expenses 1,831 1,594 3,593 3,093
 Nonrecurring acquisition
 related expenses -- -- 14,000 --
 ------ ----- ------ -----
 Income from operations 18,927 2,587 11,472 4,448
 ------ ------ ------ -----
 Interest expense (4,908) (3,813) (9,730) (6,100)
 Interest income 1,148 839 2,255 1,247
 Equity earnings in
 unconsolidated affiliate 937 -- 1,634 --
 Other income (expense),
 net (2,541) 604 (1,727) 1,254
 ------- --- ------- -----
 (5,364) (2,370) (7,568) (3,599)
 ------- ------- ------- -------
 Income before income
 taxes 13,563 217 3,904 849
 Provision for income
 taxes (a) -- -- -- --
 ------ --- ----- ---
 Net income 13,563 217 3,904 849
 Preferred stock dividends 715 -- 715 --
 Net income available to
 common stockholders $12,848 $217 $3,189 $849
 ------- ---- ------ ----
 Net income per common
 share: (b)
 Primary $ 1.40 $ 0.03 $ 0.35 $ 0.14
 ---- ---- ---- ----
 Fully diluted $ 1.18 $ 0.03 $ 0.35 $ 0.14
 ---- ---- ---- ----
 Weighted average number
 of common and equivalent
 shares outstanding:
 Primary 9,150 7,978 9,034 5,999
 ----- ----- ----- -----
 Fully diluted 11,472 7,978 9,184 5,999
 ------ ----- ----- -----
 (a) These was no tax provision for the three months and the six months ended June 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 $1.87 for the six months ended June 30, 1993. Pro forma earnings per common share would have been $0.18 and $0.52 for the three months and the six months ended June 30, 1992 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.
 Second Quarter Results
 Condensed Consolidated Balance Sheets
 (in thousands)
 Periods Ended June 30, 1993 December 31, 1992
 Current Assets:
 Cash and marketable securities $8,492 $9,027
 Accounts and notes receivable, net 288,282 183,951
 Inventories, net 169,379 96,850
 Other current assets 5,528 2,714
 ----- -----
 Total current assets 471,681 292,542
 Property, plant and equipment, net 16,369 11,516
 Investments in unconsolidated
 affiliates 33,604 13,000
 Other assets 4,128 3,655
 ----- -----
 Total assets $525,782 $320,713
 -------- --------
 Liabilities and Stockholders' Equity
 Current liabilities $123,539 $66,961
 Long-term debt 185,079 121,047
 Noncurrent liabilities 30,376 28,704
 ------ ------
 Total liabilities 338,994 216,712
 Excess of assets acquired
 over purchase price, net 2,387 10,329
 Stockholders' equity 184,401 93,672
 ------- ------
 Total liabilities and
 stockholders' equity $525,782 $320,713
 -------- --------
 -0- 8/3/93
 /CONTACT: Allen W. Ritchie of AGCO Corporation, 404-246-6110/
 (AGCO) CO: AGCO Corporation ST: Georgia IN: AGR SU: ERN

TS-LD -- NY006 -- 9063 08/03/93 16:40 EDT
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Publication:PR Newswire
Date:Aug 3, 1993

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