Server: Netscape-Enterprise/2.01 Date: Mon, 29 Dec 1997 18:08:55 GMT Content-type: text/html Ag Services News Release for 09/25/1996

NEWS RELEASE

September 25, 1996

NASDAQ: AGSV

Contact: Brad Schlotfeldt
Phone No. (319) 277-0261
or (800) 395-8505
Fax No. (319) 277-0144
http://www.agservices.com



AG SERVICES OF AMERICA, INC. ANNOUNCES
SECOND QUARTER AND SIX MONTH RESULTS

For the three months ended August 31, 1996, the Company reported record net revenues and earnings. Net revenues increased to $49.6 million compared with $39.4 million for the three months ended August 31, 1995. Net income for the three months ended August 31, 1996 was $1,634,997 or $0.39 per share ($0.31 per share fully diluted) compared with $1,358,599 or $0.37 per share ($0.30 per share fully diluted) for the same period last year.

For the six months ended August 31, 1996, the Company also reported record net revenues and earnings. Net revenues increased to $115.8 million compared with $88.4 million for the same period a year ago. Net income for the six months ended August 31, 1996 was $3,207,713 or $0.79 per share ($0.63 per share fully diluted) compared with $2,506,754 or $0.68 per share ($0.55 per share fully diluted) for the same period last year.

The Company's management is pleased with the results for the quarter and six months ended August 31, 1996. The growth rate in the Company's earnings per share was less than the growth rate in net revenues due to the Company's planned marketing changes for the 1996 crop year. The Company focused its marketing efforts primarily in the corn belt and panhandle of Texas where the Company has had substantially more favorable collection experience than in the southern cotton producing regions. The effect of this geographic realignment was noticeable in the second quarter as product mix changes from the highly chemical dependent southern cotton regions to the highly irrigation dependent western corn belt and Texas panhandle regions resulted in lower overall product margins. The Company is currently in the process of completing farm visits with customers to survey crops. Crops appear adequate for a successful harvest and collection season. Furthermore, the Company currently anticipates that the earnings results for the final six months of fiscal 1997 will more closely approximate or exceed our revenue growth rate due to operating efficiency gains over a year ago.

SAFE HARBOR PROVISION

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; and the risks described from time to time in the Company's SEC reports.

Ag Services of America, Inc. supplies farm inputs including seed, fertilizer, agricultural chemicals, crop insurance, and cash advances for land rent, fuel, and irrigation to farmers primarily in the central United States.

 
                                          (Unaudited)                   (Unaudited)
                                      Three Months Ended              Six Months Ended
                                   August 31,     August 31,     August 31,     August 31,
                                      1996           1995           1996           1995
                                        (In thousands except per share amounts)

Net revenues                       $49,631        $39,436       $115,838        $88,389
Income before income taxes          $2,552         $2,127         $5,008         $3,926
Net income                          $1,635         $1,359         $3,208         $2,507

Earnings per share:
  Primary                            $0.39          $0.37          $0.79          $0.68
  Fully diluted                      $0.31          $0.30          $0.63          $0.55
Weighted average shares:
  Primary                            4,222          3,656          4,036          3,665
  Fully diluted                      5,337          5,169          5,337          5,170


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