UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 3, 2003
Ag Services of America, Inc
(Exact name of registrant as specified in its charter)
Iowa
(State or other jurisdiction of incorporation)
000-19320 42-1264455
(Commission File Number) (IRS Employer Identification Number)
1309 Technology Parkway, Cedar Falls, IA 50613
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (319) 277-0261
Item 9. Regulation FD Disclosure
This Form 8-K is being furnished to, but not filed with, the Securities
and Exchange Commission("SEC") to report information pursuant to Item 12 -
Results of Operations and Financial Condition in accordace with the interim
guidance provided by the SEC pursuant to SEC Release No. 33-8216.
Ag Services of America Announces First Quarter Results
Cedar Falls, Iowa, July 3, 2003/Business Wire: Ag Services of America, Inc.
(NYSE:ASV) announced today that net revenues for the first quarter of the
Company's 2004 fiscal year were $48.2 million as compared to $75.2 million
for the same period one year ago. The Company's net loss for the first
quarter of Fiscal 2004 was $0.3 million, or $0.06 per diluted share,
compared to net income of $2.2 million, or $0.39 per diluted share, for
the same period last year.
Net revenues for the first quarter decreased as a result of the smaller
credit facility available to the Company for 2003 customer loan commitments.
The 2003 credit facility will limit the Company to approximately
$255 million in customer loan commitments, compared to approximately
$465 million in customer loan commitments last year. The first quarter
loss of $0.3 million was caused largely by the reduction in net revenues.
In addition, higher than expected costs of approximately $1.2 million
were incurred in securing the 2003 credit facility and an unexpected
provision of $1.5 million was made to the Company's allowance for doubtful
notes, all of which contributed to the first quarter loss. The adjustment
to the allowance for doubtful notes was related specifically to the
Company's western region, where the agricultural industry has been
impacted economically by low commodity prices and declining real estate
values. The Company's strategy has been to reduce its volume in this
market. Last year this market represented approximately 20% of the
total credit extended by the Company, but it has been reduced to less
than 10% for the current crop year.
Net margins on farm inputs for the quarter remained stable compared to
the same period last year. The benefit of the cost cutting measures
taken earlier in the year, including a nearly 30% reduction in staff,
will not be realized by the Company until the second quarter of Fiscal 2004.
Definitive proxy statements have been mailed to shareholders for approval
of the Company's previously announced transaction with ASP/ASA, LLC, an
indirect subsidiary of American Securities Capital Partners, L.P (ASCP).
The Company will seek final approval for the transaction at its annual
shareholder meeting which is scheduled for 9 a.m. Central Standard Time
on Monday, July 14th, 2003 at the Company's headquarters in Cedar Falls,
Iowa. No assurance can be made that the transaction will be approved
and/or completed.
ASCP is the private-equity investment arm of American Securities, a family
office founded in 1947 by the late William Rosenwald, to manage his share
of his family's Sears Roebuck fortune. ASCP manages more than $1 billion
of committed capital in private equity and is currently investing its third
private-equity investment fund with outside investors, which has $650 million
of capital committed.
Ag Services of America, Inc. is based in Cedar Falls, Iowa, and is a leading
supplier of crop input financing and agricultural inputs, including seed,
chemicals and fertilizers to primarily corn and soybean growers in the U.S.
The Company's one-stop shopping business model includes competitive and
flexible financing packages through its AgriFlex Credit(r) program combined
with a comprehensive offering of agricultural inputs from national sources
such as Asgrow, BASF, Dekalb, Dow AgroSciences, DuPont, Garst, Monsanto,
Syngenta and Pioneer Hi-Bred. The Company also administers additional
financing programs for various suppliers, manufacturers and distributors
in the agricultural industry and provides ancillary services such as crop
insurance and grain marketing.
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 seasonality of demand patterns; changes in
weather conditions; changes in agricultural regulations; unexpected
changes in collateral values; unknown risks; timing and/or probability of
consummating the ASCP transaction; ability to obtain long term financing;
an unexpected shareholder vote to disapprove the contemplated securities
purchase agreement; an unexpected withdrawal by ASCP of the investment
offered; and the risks described from time to time in the Company's SEC
reports.
AgriFlex Credit is a registered trademark of Ag Services of America, Inc.
All other trademarks or product names are the property of their respective
owners.
For more information visit www.agservices.com or www.american-securities.com.
(All amounts in thousands, except per share amounts)
Unaudited
Three months ended
May 31, 2003 May 31, 2002
------------ ------------
Net revenues:
Farm inputs $41,392 $65,800
Financing income 5,398 6,316
Customer fees 1,169 2,485
Other 208 644
------------ ------------
Net revenue $48,167 $75,245
------------ ------------
Cost of revenue:
Farm inputs $38,242 $60,636
Financing expense 3,731 3,382
Provision for doubtful notes 3,514 4,077
------------ ------------
Net cost of revenue $45,487 $68,095
------------ ------------
Gross Profit:
Farm inputs $3,150 $5,164
Financing 1,667 2,934
Customer fees 1,169 2,485
Other 208 644
Provision for doubtful notes (3,514) (4,077)
----------- ------------
Gross margin $2,680 $7,150
Operating expenses 3,177 3,643
------------ ------------
Income (loss) before income taxes ($497) $3,507
Income taxes ($188) 1,350
------------ ------------
Net income (loss) ($309) $2,157
============ ============
Earnings per share:
Basic ($0.06) $0.39
Diluted ($0.06) $0.39
Weighted average shares:
Basic 5,479,514 5,473,288
Diluted 5,479,514 5,513,826
Income Statement Information (Unaudited): May 31, 2003 May 31, 2002
--------------- ---------------
Net Revenue
Seeds $15,555 37.6% $22,772 34.6%
Chemicals 11,395 27.5% 19,212 29.2%
Fertilizers 14,442 34.9% 23,816 36.2%
------- ------ ------- ------
Farm Inputs $41,392 100.0% $65,800 100.0%
======= ====== ======= ======
Balance Sheet Information (Unaudited): May 31, 2003 May 31, 2002
--------------- ---------------
Notes receivables, net $322,245 $423,000
All other assets 20,085 18,222
--------------- ---------------
Total assets $342,330 $441,222
=============== ===============
Liabilities $264,776 $367,324
Equity 77,554 73,898
--------------- ---------------
Total liabilities and equity $342,330 $441,222
=============== ===============
Signatures
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 hereunto duly authorized.
Ag Services of America, Inc.
---------------------------
(Registrant)
Date: July 7, 2003 /s/ John T. Roth
--------------------------
John T. Roth
Vice President Finance