AG SERVICES OF AMERICA, INC
EXHIBIT 99.1
FOURTH QUARTER AND YEAR
END RESULTS PRESS RELEASE
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Contact: Brad Schlotfeldt
Ag Services of America, Inc. 2302 West 1st Street
Phone (319) 277-0261 Thunder Ridge Court
Fax (319) 277-0144 Cedar Falls, IA 50613
Email [email protected] NYSE: ASV
NEWS RELEASE
Twelfth Consecutive Year of Record Revenue and Eanrings
For Ag Services of America
Cedar Falls, IA, March 29, 2000 - Ag Services of America, Inc.
(NYSE: ASV) today announced record net revenue and earnings for fiscal
2000 through expansion into new geographic regions and further
penetration in existing market areas. Net revenues increased 31% to
$294.5 million for fiscal 2000 as compared to $223.8 million in fiscal
1999. Net income from continuing operations reached record levels
increasing 20% to $8.1 million, or $1.48 per diluted share, compared to
$6.7 million, or $1.24 per diluted share a year ago.
Management's decision to close the retail service centers in
Northwestern Illinois resulted in a one time charge of $0.05 per share
on a diluted basis in the fourth quarter of fiscal 2000. The closure
of these retail facilities resulted in a loss from discontinued
operations of $469,000, or $0.08 per diluted share for fiscal 2000,
compared to $245,000, or $0.04 per diluted share for fiscal 1999. The
inability to maintain a profitable customer base, increasing
competition, and the option to forego the purchase of the facilities
led management to cease these operations. Giving effect to the loss on
discontinued operations, fiscal 2000 earnings were $7.6 million, or
$1.40 per diluted share, which was an increase of 17% from $6.5
million, or $1.20 per diluted share a year ago.
Fourth quarter net revenue increased 22.3% to $ 46.2 million in fiscal
2000 compared to $ 37.8 million for the fourth quarter one year ago.
Net income from continuing operations for the fourth quarter of fiscal
2000 increased 11.4% to $538,536, $0.10 per diluted share, compared to
$483,560 or $0.09 per diluted share, for the same period last year.
Given the loss on discontinued operations from the retail facilities in
Illinois, fourth quarter diluted earnings per share were $0.03 for
fiscal 2000 compared to $0.07 for one year ago.
We are pleased to report record net revenues and earnings for the
twelfth consecutive year, stated Brad Schlotfeldt, Vice-President
Finance. Fiscal 2000 was an extremely challenging and rewarding year
in which the company accomplished many of our internal goals by
increasing our customer base by 24%, expanding our geographic presence,
increasing our asset backed securitization program 34% to $275 million
and releasing PowerFarm.com, a fully functional one-stop-shop for
agricultural e-commerce and information.
PowerFarm.com was initiated to capitalize on the Company's business
model developed over the last 15 years. PowerFarm.com business model
includes the support of national agricultural seed and crop protection
companies, internal agronomic professionals and input financing.
Companies supporting PowerFarm today include American Cyanamid, Asgrow,
Bayer, Garst, Gutwein, Monsanto, Novartis, Stine, Valent, Wilson and
Zeneca.
PowerFarm's impact on fiscal year earnings resulted in a decline of
approximately $0.02 per share on a diluted basis. PowerFarm's results
included expenses related to infrastructure and web site development
and the ongoing operations of PowerFarm.
Looking forward to fiscal 2001, applications and approvals are
currently below management's expectations due to increased competition
from banks. The application process, however, is not complete and
management expects fiscal 2001 results to be on the low end of targeted
growth objectives of 20% to 25% for both revenue and earnings before
giving any consideration for PowerFarm.com.
The Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements. 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 program; and the risks described from time to time
in the Company's SEC reports.
Ag Services of America, Inc., which operates Powerfarm.com, is based in
Cedar Falls, Iowa, and is a competitive supplier of input financing and
agricultural inputs, including seed, chemicals, fertilizer and cash
advances to primarily corn and soybean growers in the U.S. ASV's
one-stop shopping business model includes competitive and flexible
financing packages through its AgriFlex Credit program combined with
the most comprehensive offering of agricultural inputs from national
sources such as American Cyanamid, Asgrow, Bayer, Dekalb, Dow Chemical,
DuPont, Garst, Monsanto, Novartis, Pioneer Hi-Bred, and Zeneca. ASV
finances AgriFlex Credit with a $275 million securitization program
that is structured and guaranteed by MBIA Insurance Corporation. ASV
protects its receivables by requiring multi-peril crop insurance, the
first lien on the crop, assignment of all government payments and
additional collateral (preferably land) if necessary. The Company also
provides ancillary services such as crop insurance, crop scouting and
grain marketing.
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(Unaudited) (Unaudited)
Three Months Ended Year Ended
-------------------------- --------------------------
February 29, February 28, February 29, February 28,
2000 1999 2000 1999
----------- ------------ ------------ ------------
(In thousands except per share amounts)
<S> <C> <C> <C> <C>
Net revenue:
Farm inputs $41,473 $34,527 $269,403 $204,133
Financing 4,737 3,265 25,067 19,680
--------- --------- --------- ---------
Net revenue $46,210 $37,792 $294,470 $223,813
--------- --------- --------- ---------
Cost of revenue:
Farm inputs $39,216 $32,402 $253,474 $191,648
Financing 2,335 1,505 12,062 9,309
Provision for doubtful notes 869 701 5,421 4,021
--------- --------- --------- ---------
Net cost of revenue $42,420 $34,610 $270,957 $204,978
--------- --------- --------- ---------
Gross profit:
Farm inputs $2,257 $2,125 $15,929 $12,485
Financing 2,402 1,760 13,005 10,371
Provision for doubtful notes (869) (701) (5,421) (4,021)
--------- --------- --------- ---------
Gross margin $3,790 $3,184 $23,513 $18,835
--------- --------- --------- ---------
Operating expenses 2,896 2,424 10,556 8,374
--------- --------- --------- ---------
Income from contuining operations
before income taxes $894 $760 $12,957 $10,461
Income taxes 356 276 4,877 3,722
--------- --------- --------- ---------
Income from continuing operations $538 $484 $8,080 $6,739
Discontinued operations (347) (103) (469) (246)
--------- --------- --------- ---------
Net income $191 $381 $7,611 $6,493
========= ========= ========= =========
Earnings per share - Basic:
Income from continuing operations $0.10 $0.09 $1.54 $1.29
Discontinued operations ($0.07) ($0.02) ($0.09) ($0.04)
--------- --------- --------- ---------
Net Income $0.03 $0.07 $1.45 $1.25
========= ========= ========= =========
Earnings per share - Diluted:
Income from continuing operations $0.10 $0.09 $1.48 $1.24
Discontinued operations ($0.07) ($0.02) ($0.08) ($0.04)
--------- --------- --------- ---------
Net Income $0.03 $0.07 $1.40 $1.20
========= ========= ========= =========
Weighted average shares:
Basic 5,240,865 5,211,271 5,232,895 5,203,976
Diluted 5,471,394 5,422,499 5,453,478 5,430,781
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