<PAGE>
UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 26, 1998
-------------------------
AgriBioTech, Inc.
-------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 1-1935 85-0325742
- --------------------------------------------------------------------------------
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
2700 Sunset Rd., Suite C-25, Las Vegas, Nevada (89120)
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 798-1969
--------------
<PAGE>
EXPLANATORY NOTE
This Amendment No. 1 on Form 8-K/A to the Current Report on Form 8-K ("Form
8-K") for January 26, 1998 of AgriBioTech, Inc., a Nevada corporation ("the
Company") is submitted in order to correct certain clerical errors in previously
filed information in Item 7 of Form 8-K. Therefore, the Company hereby amends
its Form 8-K in accordance with Rule 12b-15 under the Securities Exchange Act of
1934.
<PAGE>
[LETTERHEAD OF PRICE, KOONTZ & DAVIES, P.C.]
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Shareholders
Willamette Seed Co.
We have audited the accompanying balance sheets of Willamette Seed Co. as of
June 30, 1997 and 1996, and the related statements of income, retained earnings,
and cash flows for the years then ended. These financial statements are the
responsibility of the management of Willamette Seed Co. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Willamette Seed Co. as of June
30, 1997 and 1996, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
/s/ Price, Koontz & Davies, P.C.
September 2, 1997
<PAGE>
WILLAMETTE SEED CO.
BALANCE SHEETS
June 30, 1997 and 1996
<TABLE>
<CAPTION>
ASSETS 1997 1996
----------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 5,049 $ 68,499
Accounts and notes receivable 8,435,244 7,862,682
Inventories 5,133,384 4,898,680
Prepaid expenses 158,306 120,497
Prepaid income taxes 57,767 --
Deferred income taxes 221,058 213,827
----------- -----------
TOTAL CURRENT ASSETS 14,010,808 13,164,185
PROPERTY, PLANT, AND EQUIPMENT 3,754,172 3,136,028
OTHER ASSETS
Cash value of life insurance 1,315,776 1,156,335
Protected plant varieties 12,500 25,000
----------- -----------
1,328,276 1,181,335
----------- -----------
$19,093,256 $17,481,548
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft $ 146,004 $ --
Note payable - bank 4,787,000 3,271,000
Notes payable - others 1,435,653 2,210,453
Accounts payable and accrued liabilities 8,985,240 8,736,251
Current portion of long-term debt 177,503 102,948
----------- -----------
TOTAL CURRENT LIABILITIES 15,531,400 14,320,652
LONG-TERM DEBT 1,091,806 909,476
STOCKHOLDERS' EQUITY
Common stock, no par value; 200,000
shares authorized; 198,750 and 197,750
shares outstanding, respectively 485,000 475,000
Retained earnings 1,985,050 1,776,420
----------- -----------
2,470,050 2,251,420
----------- -----------
$19,093,256 $17,481,548
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
WILLAMETTE SEED CO.
STATEMENTS OF INCOME AND RETAINED EARNINGS
Years ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---------- -----------
<S> <C> <C>
SALES $41,813,922 $41,439,169
COST OF SALES 33,965,669 34,266,273
----------- -----------
GROSS PROFIT 7,848,253 7,172,896
EXPENSES
General and administrative expenses 6,783,850 6,192,685
Interest 667,664 480,192
Officers' life insurance 42,151 49,279
----------- -----------
7,493,665 6,722,156
----------- -----------
NET INCOME BEFORE OTHER INCOME 354,588 450,740
OTHER INCOME 13,372 35,465
----------- -----------
NET INCOME BEFORE INCOME TAXES 367,960 486,205
INCOME TAXES 159,330 195,838
----------- -----------
NET INCOME 208,630 290,367
BEGINNING RETAINED EARNINGS 1,776,420 1,486,053
----------- -----------
ENDING RETAINED EARNINGS $ 1,985,050 $ 1,776,420
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
WILLAMETTE SEED CO.
STATEMENTS OF CASH FLOWS
Years ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 208,630 $ 290,367
Adjustments to reconcile net income
to cash flows:
Depreciation and amortization 767,291 617,114
(Increase) decrease in net receivables (572,562) (624,572)
(Increase) decrease in inventories (234,704) (401,479)
(Increase) decrease in prepaid expenses (37,809) (7,376)
(Increase) decrease in prepaid income taxes (57,767) --
(Increase) decrease in deferred income taxes (7,231) (30,231)
Increase (decrease) in note payable - bank 1,516,000 (438,000)
Increase (decrease) in note payable - other (774,800) 153,100
Increase (decrease) in accounts payable 248,989 2,227,501
Increase (decrease) in accrued income taxes -- (66,841)
Increase (decrease) in current portion of long-term debt 74,555 8,577
(Increase) decrease in life insurance (159,441) (147,352)
----------- -----------
NET CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES 971,151 1,580,808
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures - net (1,372,935) (1,530,318)
----------- -----------
NET CASH FLOWS (USED) BY
INVESTING ACTIVITIES (1,372,935) (1,530,318)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 369,576 --
Repayment of long-term debt (187,246) (101,558)
Issuance of common shares 10,000 125,000
----------- -----------
NET CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES 192,330 23,442
----------- -----------
NET INCREASE (DECREASE) IN CASH (209,454) 73,932
CASH (OVERDRAFT) AT BEGINNING OF YEAR 68,499 (5,433)
----------- -----------
CASH (OVERDRAFT) AT END OF YEAR $ (140,955) $ 68,499
=========== ===========
SUPPLEMENTAL DISCLOSURES
Interest paid $ 629,117 $ 478,550
Income taxes paid 192,727 308,841
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
WILLAMETTE SEED CO.
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 and 1996
THE COMPANY
The Company operates an agribusiness at various locations in the Willamette
Valley of Oregon. The Company's primary products are fertilizers, chemicals,
and various grass seeds which are sold to customers throughout the United
States, but primarily to customers in the Willamette Valley of Oregon. The
Company's continuing business is heavily dependent upon the agribusiness
economic sector.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements present, on an accrual basis, the operating results
and the financial position of Willamette Seed Co.
CASH
The Company invests excess cash balances in a money market fund via Key Bank
of Oregon's cash management program.
ALLOWANCE FOR DOUBTFUL ACCOUNTS
The Company uses the reserve method to provide for doubtful accounts.
INVENTORIES
Inventories are stated at the lower of cost or market, generally on an
identified cost basis for grass seed and the first in, first out cost flow
assumption for valuing fertilizers and chemicals.
PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment is stated at cost, less accumulated
depreciation. Expenditures for improvements which significantly increase asset
values or extend useful lives are capitalized. Expenditures for maintenance
and repairs are expensed as incurred. Depreciation for financial purposes is
computed using various methods, primarily declining balance methods for
personal property and the straight line method for real property. Estimated
lives generally range from 15 to 39 years for buildings and 5 to 10 years for
machinery and equipment. Depreciation for tax purposes is the same.
INTANGIBLE ASSETS
Protected plant varieties are being amortized over their estimated useful
lives of ten years.
<PAGE>
CONCENTRATIONS OF CREDIT RISK AND FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments that are exposed to concentration of
credit risk consist primarily of its cash and cash equivalents and trade
receivables.
The trade receivables balances reflect the Company's source of revenue from
their nationwide grass seed customer base and their local chemical and
fertilizer customer base. The local chemical and fertilizer customer base
credit risk is minimized by filing crop liens on problem accounts.
The Company's financial instruments consist primarily of cash and cash
equivalents, trade receivables, trade payables, and notes payable. The book
values of these accounts are considered to be representative of their
respective fair values.
ADVERTISING EXPENDITURES
Advertising expenditures are expensed as incurred.
ENVIRONMENTAL EXPENDITURES
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations, and which do not contribute to current or future
revenue generation, are expensed. Liabilities are recorded when environmental
assessments are made or remedial efforts are probable and the costs can be
reasonably estimated.
RESEARCH AND DEVELOPMENT
Research and development costs are expensed as incurred.
INCOME TAXES
Income taxes are computed on the basis of financial statement income.
Differences between financial and tax reporting in the timing of recognition
of income, expenses, and tax credits give rise to deferred taxes. The Company
accounts for tax credits on the flow-through method, whereby the provision for
income taxes is reduced to reflect credits when realized.
ACCOUNTS AND NOTES RECEIVABLE
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Accounts receivable $8,685,244 $8,091,787
Notes receivable -- 20,895
---------- ----------
8,685,244 8,112,682
Less allowance for doubtful accounts 250,000 250,000
---------- ----------
$8,435,244 $7,862,682
========== ==========
</TABLE>
<PAGE>
PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment consists of:
<TABLE>
<CAPTION>
1997 1996 Life in years
------------ ----------- --------------
<S> <C> <C> <C>
Land $ 364,183 $ 364,183 --
Buildings and improvements 2,704,575 2,466,962 15-39
Leasehold improvements 90,666 90,666 7
Machinery and equipment 5,338,122 4,202,800 5-10
---------- ----------
8,497,546 7,124,611
Accumulated depreciation 4,743,374 3,988,583
---------- ----------
$3,754,172 $3,136,028
========== ==========
</TABLE>
NOTE PAYABLE - BANK
The note payable - bank is a nondisclosable line of credit loan which is
renewed each November 1. This note has an $8,000,000 limit and carries
interest at the bank's announced prime rate. This note contains an option to
fix amounts at LIBOR/BA plus 2.50% for a period of 30, 60, or 90 days. No
prepayment is allowed during these selected periods. At June 30, 1997,
$2,000,000 was at LIBOR/BA plus 2.50%. The note payable - bank is secured by
most of the Company assets, as well as the personal guarantees of the
shareholders.
NOTES PAYABLE - OTHERS
Notes payable - others are primarily demand notes to the shareholders with the
annual interest rate at .25% less than the current bank rate.
<TABLE>
<CAPTION>
LONG-TERM DEBT
1997 1996
-------- --------
<S> <C> <C>
Notes payable to the shareholders are demand notes with
interest stated at .25% less than the current bank rate
with interest payable at least annually. It is the intent of
the stockholders to not demand payment in the near future. $153,249 $153,249
8.85%, adjustable October 5, 1999, note payable to Key
Bank of Oregon, payable in monthly payments of $14,573
until October 5, 2002 at which time the entire unpaid
principal balance shall become due. This note is secured
by the machinery and equipment of the Company as well
as the personal guarantees of the shareholders. 757,296 859,175
Lease purchase agreement with Hyster Sales Company,
payable in 36 monthly payments of $641. This lease was
capitalized per Statement of Financial Accounting Standards
No. 13. Interest is 7.993% 18,420 --
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Lease purchase agreement with Keycorp Leasing Ltd., payable
in 60 monthly payments of $7,278. This lease was capitalized per
Statement of Financial Accounting Standards No. 13. Interest
is 9.120%. This lease is secured by machinery and equipment
of the Company $ 340,344 $ --
---------- ----------
1,269,309 1,012,424
Less current portion 177,503 102,948
---------- ----------
$1,091,806 $ 909,476
========== ==========
</TABLE>
The aggregate maturities of long-term debt for the five years after June 30,
1997 are $193,971, $209,384, $223,455, $229,667, and $82,080, respectively.
COMMON STOCK
During fiscal 1997, 1,000 shares of common stock were issued to existing
shareholders at $10 a share. During fiscal 1996, an additional 10,500 shares
of common stock were issued to an existing shareholder at $10 a share. Two
thousand shares were also issued to new shareholders at $10 a share during
fiscal 1996.
STOCK OPTIONS
The Company adopted an incentive stock option plan in 1986 for a key employee.
Under the terms of this plan, a total of 22,500 common shares were reserved
for future issuance. Options granted under this plan are at 100% of their fair
market value of the shares on the day of grant. The options expire ten years
after the date of grant. The Company makes no book entry until such time as
the stock options are exercised.
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Granted 22,500 22,500
Expired -0- -0-
Exercised 22,500 22,500
Outstanding at year end -0- -0-
Average option price per share $ 10 $ 10
</TABLE>
INCOME TAXES
The provision for income taxes consists of:
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Federal income tax $140,869 $205,597
Oregon excise tax 25,692 20,472
-------- --------
166,561 226,069
Deferred income taxes (7,231) (30,231)
-------- --------
Total income taxes $159,330 $195,838
======== ========
</TABLE>
<PAGE>
A deferred income tax charge is reflected on the balance sheet due to the
capitalization of certain inventory costs for income tax purposes, as required
by the Tax Reform Act of 1986. These additional costs are not included in
inventories for financial statement purposes. The allowance for doubtful
accounts is used for financial statement purposes but not for income tax
purposes, resulting in an additional deferred income tax charge.
PENSION PLAN
The Company has a qualified employee profit sharing pension plan.
Contributions to the plan are voluntary as determined annually by the board of
directors, but may not exceed 15% of the annual compensation of covered
employees. Contributions of $290,148 and $350,000, respectively, were made for
the years ended June 30, 1997 and 1996. The Company also maintains a qualified
401(k) plan for its employees. The electing employees may defer up to 10% of
their earnings during any one year period. The Company does not match any of
these deferrals.
LEASES
The Company has various land leases from Southern Pacific Railroad and
Burlington Northern Railroad. These leases are renewable annually at the
option of the lessor.
CONTINGENCIES
The Company is a party to various contingencies, generally incidental to its
business. Although the ultimate disposition of these contingencies cannot be
predicted with certainty, it is the present opinion of the Company's
management that the outcome of any claim which is pending or threatened will
not have a material adverse effect on the financial condition of Willamette
Seed Co.
In accordance with the Company's accounting policy described in Summary of
Significant Accounting Policies, liabilities are recorded for environmental
matters generally on the completion of feasibility studies or the settlement
of claims, but in no event later than the Company's commitment to a plan of
action. Although the Company does not currently possess sufficient information
to reasonably estimate the amounts of the liabilities to be recorded upon
future completion of studies, they may be significant to the results of
operations, but management does not expect that they will have a material
adverse effect on the financial position of the Company.
RELATED PARTY TRANSACTIONS
The Company leased its experimental farm property from a shareholder under a
lease which expires on December 31, 2009. The cash rent paid, and to be paid
is $12,320 per year for the land plus 1% per month of the present value of the
improvements upon the land.
One of the Company's shareholders is a grass seed farmer who sells seed
through and purchases chemicals and fertilizers from Willamette Seed Co. Seed
transactions amounted to $3,217,710, and chemical and fertilizer transactions
amounted to $1,054,359 for fiscal 1997. For 1996, seed transactions amounted
to $3,570,189, and chemical and fertilizer transactions amounted to
$1,006,270.
<PAGE>
WILLAMETTE SEED CO.
BALANCE SHEET
December 31, 1997
(Unaudited)
<TABLE>
<S> <C>
ASSETS
Currents Assets
Cash $ 564,248
Accounts and notes receivable 1,679,016
Inventories 7,636,612
Prepaid expenses 69,304
Deferred income taxes 221,058
-----------
Total current assets 10,170,238
Property, Plant, and Equipment 4,380,163
Other Assets
Cash value of life insurance 1,411,274
Protected plant varieties 12,500
-----------
1,423,774
-----------
$15,974,175
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Note Payable - bank $ 3,107,000
Notes payable - others 1,376,753
Accounts payable and accrued liabilities 7,332,250
Accrued income taxes 61,567
Current portion of long-term debt 149,888
-----------
Total current liabilities 12,027,458
Long-Term Debt
Notes and contracts payable 1,056,982
Notes payable - stockholders' 153,249
-----------
1,210,231
Stockholders' Equity
Common stock, no par value; 200,000 shares
authorized; 199,750 shares outstanding 495,000
Retained earnings 2,241,486
-----------
Total stockholders' equity 2,736,486
-----------
$15,974,175
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
WILLAMETTE SEED CO.
STATEMENT OF INCOME AND RETAINED EARNINGS
Six months ended December 31, 1997 and 1996
(Unaudited)
Six months ended
December 31,
------------------------
1997 1996
----------- ----------
SALES $17,662,735 17,784,665
COST OF SALES 13,980,373 14,438,698
----------- ----------
GROSS PROFIT 3,682,362 3,345,967
OPERATING EXPENSES 3,278,362 3,025,792
----------- ----------
NET INCOME BEFORE INCOME TAXES 404,000 320,175
INCOME TAX EXPENSE 147,567 122,806
----------- ----------
NET INCOME 256,433 197,369
BEGINNING RETAINED EARNINGS 1,985,053 1,776,420
----------- ----------
ENDING RETAINED EARNINGS $ 2,241,486 1,973,789
=========== ==========
See accompanying notes to financial statements.
<PAGE>
WILLAMETTE SEED CO.
STATEMENT OF CASH FLOWS
Six months ended December 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION> Six months ended
December 31,
-------------------------
1997 1996
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 256,433 197,368
Adjustments to reconcile net income
to cash flows:
Depreciation and amortization 356,670 377,000
(Increase) decrease in net receivables 6,756,228 7,023,455
(Increase) decrease in inventories (2,503,228) (4,126,837)
(Increase) decrease in prepaid expense 89,002 46,580
(Increase) decrease in prepaid income taxes 57,767 (1,349)
Increase (decrease) in note payable - bank (1,680,000) (429,000)
Increase (decrease) in note payable - other (58,900) (713,000)
Increase (decrease) in accounts payable (1,652,990) 268,574
Increase (decrease) in accrued income taxes 61,567 --
Increase (decrease) in current portion of long-term debt (27,615) 3,609
(Increase) decrease in life insurance (95,498) (103,967)
---------- ---------
NET CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES 1,559,436 2,542,433
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures - net (982,658) (592,170)
---------- ---------
NET CASH FLOWS (USED) BY
INVESTING ACTIVITIES (982,658) (592,170)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 208,692 --
Repayment of long-term debt (90,267) (53,305)
Issuance of common shares 10,000 --
---------- ---------
NET CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES 128,425 (53,305)
---------- ---------
NET INCREASE IN CASH 705,203 1,896,958
CASH (OVERDRAFT) AT BEGINNING OF PERIOD (140,955) 68,499
---------- ---------
CASH AT END OF PERIOD $ 564,248 1,965,457
========== =========
SUPPLEMENTAL DISCLOSURES
Interest paid 350,398 262,978
Income taxes paid 26,869 92,727
</TABLE>
See accompanying notes to financial statements.
<PAGE>
WILLAMETTE SEED CO.
Notes to Financial Statements
December 31, 1997 and 1996
(Unaudited)
(1) Presentation of Unaudited Financial Statements
----------------------------------------------
The unaudited financial statements have been prepared in accordance with
the rules of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations and retained earnings and cash
flows, in conformity with generally accepted accounting principles. The
information furnished, in the opinion of management reflects all
adjustments (consisting primarily of normal recurring accruals) necessary
to present fairly the financial position, results of operations and cash
flows for the six-month periods ended December 31, 1997 and 1996. The
Company's business is subject to wide seasonal fluctuations and, therefore,
the results of operations are not necessarily indicative of results which
may be expected for any other interim period or for the year as a whole.
(2) Subsequent Event
----------------
On January 26, 1998, the Company entered into a letter of intent with
AgriBioTech, Inc. ("ABT"), in which, ABT will acquire all of the capital
stock of the Company for a purchase price of $14,000,000. The transaction
is to be effective as of March 1, 1998. The Company will become a wholly
owned subsidiary of ABT. The transaction will be recorded using the
purchase method of accounting.
<PAGE>
AGRIBIOTECH, INC.
Pro Forma Combined Financial Information
(Unaudited)
The following pro forma combined summary of operations combines the results of
operations of AgriBioTech, Inc. ("ABT"), W-L Research, Inc. and Germain's, Inc.
(collectively "WL/Germain's"), E.F. Burlingham & Sons and Subsidiary
("Burlingham"), Olsen Fennell Seeds, Inc. ("Olsen Fennell"), Lofts Seed, Inc.
and Budd Seed, Inc. (collectively "Lofts"), Seed Corporation of America and
Green Seed Company Limited Partnership (collectively "SeedCo"), and Willamette
Seed Co. ("Willamette") as if all acquisitions occurred at the beginning of the
periods presented. The pro forma combined summary of operations reflects known
changes resulting from the acquisitions but does not reflect impacts of any
changes in operations, anticipated efficiencies and synergies from
consolidation.
The pro forma combined summary balance sheet reflects ABT's consolidated balance
sheet as of December 31, 1997 combined with the balance sheets of Lofts, SeedCo,
and Willamette as of December 31, 1997.
The business of these entities is subject to wide seasonal fluctuations and,
therefore, the results of operations for periods less than twelve months may not
be indicative of annual results. The pro forma adjustments are based on
preliminary estimates, available information, and certain assumptions that
management deems appropriate and may be revised as additional information
becomes available. The pro forma combined financial information does not
purport to represent what ABT's financial position or results of operations
would actually have been if such transactions had in fact occurred on those
dates and are not necessarily representative of ABT's financial position or
results of operation for any future period. The pro forma combined financial
information should be read in conjunction with the historical financial
statements of ABT, WL/Germain's, Burlingham, Olsen Fennell, Lofts, SeedCo, and
Willamette included herein or previously filed with the Securities and Exchange
Commission.
<PAGE>
AGRIBIOTECH, INC.
PRO FORMA COMBINED SUMMARY BALANCE SHEET
DECEMBER 31, 1997
(Unaudited)
<TABLE>
<CAPTION> Pro forma
ABT (G) Lofts (G) SeedCo(G) Williamette(G) Adjustments combined
------------ ----------- ------------ ------------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 8,235,871 144,197 9,906 564,248 (8,000,000) (I) 954,222
Accounts receivable 14,241,620 4,931,275 1,885,750 1,679,016 200,000 (I) 22,245,857
(691,804) (H)
Inventories 34,167,138 14,991,981 6,186,885 7,636,612 442,844 (I) 63,425,460
Other 774,289 231,119 729,169 290,362 214,507 (I) 2,239,446
------------- ---------- --------- ---------- ---------- -----------
Total current assets 57,418,918 20,298,572 8,811,710 10,170,238 (7,834,453) 88,864,985
Property, plant and
equipment, net 21,713,245 332,749 230,903 4,380,163 13,260,774 (I) 39,907,834
Intangible assets, net of
accumulated amortization 26,018,264 - (2,005,037) 12,500 46,205,609 (I) 70,231,336
Investment in associated
entity, at equity 1,064,616 - - - - 1,064,616
Other 139,498 601,976 59,840 1,411,274 - 2,212,588
------------- ---------- --------- ---------- ---------- -----------
Total Assets $ 106,354,541 21,223,297 7,097,416 15,974,175 51,631,930 202,281,359
============= ========== ========= ========== ========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Short-term debt - 8,512,490 5,576,653 4,483,753 34,220,983 (I) 53,793,879
Current installments of
long-term obligations 1,565,952 - 393,147 149,888 - 2,108,987
Accounts payable 14,597,325 2,272,273 1,582,252 7,332,250 (691,804) (H) 25,092,296
Accrued liabilities 1,701,685 1,131,414 - 61,567 733,000 (I) 3,627,666
Amount due in connection
with acquisition 1,600,000 - - 1,600,000
------------ ---------- ---------- ---------- ----------- -----------
Total current liabilities 19,464,962 11,916,177 7,552,052 12,027,458 34,262,179 85,222,828
Long-term obligations, excluding
current installments 5,274,206 6,347,248 350,866 1,210,231 2,152,607 (I) 15,335,158
Deferred income taxes 1,018,369 - - - 3,108,000 (I) 4,126,369
------------ ---------- --------- ---------- ---------- -----------
Total liabilities 25,757,537 18,263,425 7,902,918 13,237,689 39,522,786 104,684,355
------------ ---------- --------- ---------- ---------- -----------
Stockholders' equity:
Preferred stock 1 - - - - 1
Common stock 28,822 992,506 50,500 495,000 (1,538,006)(I) 30,822
2,000
Capital in excess of par value 93,601,742 - - - - (I) 110,599,742
16,998,000 (I)
Accumulated (deficit) (13,033,561) 1,967,366 (856,002) 2,241,486 (3,352,850)(I) (13,033,561)
------------ ---------- --------- ---------- ---------- -----------
Total stockholders'
equity 80,597,004 2,959,872 (805,502) 2,736,486 12,109,144 97,597,004
------------ ---------- --------- ---------- ---------- -----------
Total liabilities and
stockholders' equity $106,354,541 21,223,297 7,097,416 15,974,175 51,631,930 202,281,359
============ ========== ========= ========== ========== ===========
</TABLE>
See accompanying notes to pro forma combined financial information.
<PAGE>
AGRIBIOTECH, INC.
PRO FORMA COMBINED SUMMARY OF OPERATIONS
SIX-MONTH PERIOD ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ABT (B) Lofts (B) SeedCo (B) Willamette (B) Adjustments
------------- ----------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Net sales $ 63,814,861 39,022,000 16,401,233 17,662,735 (3,999,677) (F)
Cost of sales 51,586,043 28,063,000 12,693,089 13,980,373 (3,999,677) (F)
26,152 (K)
------------- ----------- ----------- ------------ ----------
Gross profit 12,228,818 10,959,000 3,708,144 3,682,362 (26,152)
Operating expenses 12,678,943 10,318,757 4,048,483 3,278,362 1,275,992 (C)
(1,311,451) (J)
(709,000) (L)
------------- ----------- ----------- ------------ ----------
Income (loss) from operations (450,125) 640,243 (340,339) 404,000 718,307
Other income (expense) (158,355) (679,000) 295,005 - (1,832,753) (D)
------------- ----------- ----------- ------------ ----------
Net earnings (loss) (608,480) (38,757) (45,334) 404,000 (1,114,446)
=========== =========== ============ ==========
Discount and imputed dividends on
preferred stock 53,436
-------------
Net earnings (loss)
attibutable to common stock $ (661,916)
=============
Shares of common stock used in
computing earnings (loss) per share:
Basic 25,905,412 2,000,000 (E)
Diluted 25,905,412 2,000,000 (E)
============= ==========
Net earnings (loss) per common
share:
Basic $ (0.03)
Diluted (0.03)
=============
</TABLE>
<TABLE>
<CAPTION>
Pro forma
combined
-----------
<S> <C>
Net sales 132,901,152
Cost of sales 102,348,980
-----------
Gross profit 30,552,172
Operating expenses 29,580,086
-----------
Income (loss) from operations 972,086
Other income (expense) (2,375,103)
-----------
Net earnings (loss) (1,403,017)
Discount and imputed dividends on
preferred stock 53,436
-----------
Net earnings (loss)
attibutable to common stock (1,456,453)
===========
Shares of common stock used in
computing earnings (loss) per share:
Basic 27,905,412
Diluted 27,905,412
==========
Net earnings (loss) per
common share:
Basic (0.05)
Diluted (0.05)
===========
</TABLE>
See accompanying notes to pro forma combined financial information.
<PAGE>
AgriBioTech, Inc.
Pro Forma Combined Summary of Operations
Year ended June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Olsen
ABT (A) WL/Germain's (A) Burlingham (A) Fennell (A) Lofts (A) SeedCo (A)
----------- ---------------- -------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net sales $65,904,058 2,671,772 31,040,752 28,566,907 74,696,000 39,130,541
Cost of sales 49,527,150 1,816,236 25,439,688 25,214,881 53,802,000 31,108,155
----------- --------- ---------- ---------- ---------- ----------
Gross profit 16,376,908 855,536 5,601,064 3,352,026 20,894,000 8,022,386
Operating expenses 17,971,813 1,014,557 3,383,987 3,444,793 16,291,530 7,813,290
----------- --------- ---------- ---------- ---------- ----------
Income (loss) from operations (1,594,905) (159,021) 2,217,077 (92,767) 4,602,470 209,096
Other income (expense) (1,118,860) 57,075 (7,314) (24,940) (1,514,000) (150,603)
----------- --------- ---------- ---------- ---------- ----------
Net earnings (loss) (2,713,765) (101,946) 2,209,763 (117,707) 3,088,470 58,493
========= ========== ========== ========== ==========
Discount and imputed dividends
on preferred stock 3,233,426
-----------
Net earnings (loss) attributable
to common stock $(5,947,191)
===========
Shares of common stock used in
computing earnings (loss) per
share:
Basic 15,549,184
Diluted 15,549,184
===========
Net earnings (loss) per common
share:
Basic $ (0.38)
Diluted (0.38)
===========
</TABLE>
<TABLE>
<CAPTION>
Pro forma
Willamette (A) Adjustments combined
-------------- ------------ ------------
<S> <C> <C> <C>
Net sales 41,813,922 (6,406,563) (F) 277,417,389
Cost of sales 33,965,669 (6,406,563) (F) 214,054,215
(413,001) (K)
---------- ----------- -----------
Gross profit 7,848,253 413,001 63,363,174
Operating expenses 7,493,665 3,022,694 (C) 57,445,341
(2,956,988) (J)
(34,000) (L)
---------- ----------- -----------
Income (loss) from operations 354,588 381,295 5,917,833
Other income (expense) 13,372 (4,832,423) (D) (7,577,693)
---------- ----------- -----------
Net earnings (loss) 367,960 (4,451,128) (1,659,860)
========== ===========
Discount and imputed dividends
on preferred stock 3,233,426
-----------
Net earnings (loss) attributable
to common stock (4,893,286)
===========
Shares of common stock used in
computing earnings (loss) per
share:
Basic 2,942,593 (E) 18,491,777
Diluted 2,942,593 (E) 18,491,777
=========== ===========
Net earnings (loss) per common
share:
Basic (0.26)
Diluted (0.26)
===========
</TABLE>
See accompanying notes to pro forma combined financial information.
<PAGE>
AGRIBIOTECH, INC.
Notes to Pro Forma Combined Financial Information
(Unaudited)
(A) The year ended June 30, 1997 for ABT includes the operations of WL/Germain's
for the period from September 1, 1996 through June 30, 1997, the operations
of Burlingham for the period from April 1, 1997 through June 30, 1997, and
the operations of Olsen Fennell for the period from June 1, 1997 through
June 30, 1997. The amounts under the WL/Germain's column are for the two-
month period ended August 31, 1996. The amounts under the Burlingham column
are for the nine-month period ended March 31, 1997. The amounts under the
Olsen Fennell column are for the eleven-month period ended May 31, 1997. The
amounts under the Lofts, SeedCo, and Willamette columns are for the twelve-
month period ended June 30, 1997. Income taxes for individual companies are
not presented as they would be offset by consolidated net operating loss
carryforwards.
(B) The six-month period ended December 31, 1997 for ABT includes the operations
of WL/Germain's, Burlingham, and Olsen Fennell for the entire period. The
amounts under the Lofts, SeedCo, and Willamette columns are for the six-
month period ended December 31, 1997. Income taxes for individual companies
are not presented as they would be offset by consolidated net operating loss
carryforwards.
(C) To reflect depreciation of property, plant and equipment and amortization of
intangible assets based on market value adjustments in connection with
applying purchase accounting. Intangible assets resulting from the
application of purchase accounting and amortization periods include
goodwill of $44.8 million (10 to 40 years, with a weighted average of 34.4
years) and covenants not to compete of $1.4 million (7 to 8 years).
(D) To reflect reduction of interest income earned and additional interest
expense for the cash purchase price of the acquisitions. The pro forma
amounts assume that the Company would use $8 million of its cash balance at
December 31, 1997 for payments required to be made in the acquisitions and
the remainder of payments would be obtained through the Company's existing
or similar short-term credit facilities. Interest expense was computed using
an interest rate of 8.5%.
(E) To reflect shares of ABT common stock issued in connection with the
acquisitions as if they had been outstanding for the entire period.
(F) To eliminate intercompany sales.
<PAGE>
(G) The consolidated balance sheet of ABT as of December 31, 1997 includes the
accounts of WL/Germain's, Burlingham, and Olsen Fennell. The amounts under
the Lofts, SeedCo, and Willamette columns reflect their accounts as of
December 31, 1997.
(H) To eliminate intercompany balances.
(I) To reflect the application of purchase accounting to the Lofts, SeedCo, and
Willamette acquisitions. The total purchase price of $58.2 million is
anticipated to be paid through the issuance of approximately 2,000,000
shares of the Company's common stock valued at approximately $17.0 million
and cash of approximately $41.2 million.
(J) Prospective reductions in compensation of former owners of acquired
entities, employee benefits, management fees, and property rent resulting
from employment agreements, property purchased directly from former owners
and other contractual arrangements entered into in connection with
acquisitions.
(K) Impacts of using the first-in, first-out method of accounting for inventory
accounted for using the last-in, first-out method prior to acquisition.
(L) Amounts associated with items not acquired in acquisition. Also includes
acquisition costs expensed by acquired entities that are not applicable to
ongoing operations.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AgriBioTech, Inc.
(Registrant)
/s/ Henry A. Ingalls
--------------------
Henry A. Ingalls
Date: March 27, 1998
