Tuesday December 16, 10:01 am Eastern Time
Company Press Release
Ag-Bag International Limited Announces 4th Quarter Developments
WARRENTON, Ore.--BUSINESS WIRE)--Dec. 16, 1997--Ag-Bag International Limited (Warrenton, Oregon) announced today that the Board of Directors recently approved a strategic realignment of the Company through the sale and revaluation of certain noncore, nonperforming Company assets.
This restructuring program is expected to be completed by the end of 1997. The Company estimates it will take an after tax charge to earnings of approximately $4.5-$5.0 million related to this restructuring during the 4th quarter of 1997. The restructuring program will not require any cash outlay and is anticipated to generate around $1 million in immediate tax benefits.
The planned restructuring program involves the sale of the Company's United Kingdom subsidiary. The buyer will become the exclusive dealer of Ag-Bag Products in the United Kingdom. This sale will result in a loss from discontinued operations of approximately $1.5 million during the fourth quarter.
In addition to the sale of the Company's U.K. subsidiary, certain noncore, nonperforming assets will be revalued. The Company plans to revalue its long-term inventory and certain intangible assets to fair market value. The revaluation will allow the Company to move forward without providing large, annual non-cash obsolescence reserves (totaling approximately $650,000 in 1997). The revaluation is expected to result in an after tax charge to earnings of approximately $3.0-$3.5 million during the fourth quarter.
Larry Inman, Chairman, CEO and President of the Company stated ''the fourth quarter marks a turning point for Ag-Bag International Limited. We are taking some very aggressive steps designed to promote sales growth and profitability as we move forward. While these efforts impact our fourth quarter, we are confident that these strategic moves will position the Company properly for the future.'' Inman went onto say, ''The steps we're taking are designed to strengthen our competitiveness, increase profitability and allow the Company to focus more on its Composting Division. We are clearly focused on one objective here at Ag-Bag: to build value for our shareholders.''
Ag-Bag International Limited is a northwest company headquartered in Warrenton, Oregon with a second major facility located in Blair, Nebraska. The Company, through its international operations, manufactures and sells to the agricultural industry its farm feed management systems for the high moisture storage of silage and grains. Recently, operations were expanded to provide services within the area of composting.
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Contact:
Ag-Bag International Limited
Mike Wallis, 503/861-1644
or
A.B. KORELIN & ASSOCIATES, INC.
Al Korelin or Mike Hartfield, 360/696-0990
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More Quotes and News: AG Bag International Ltd (Nasdaq:AGBG - news)
Related News Categories: food/beverage, paper/forrest
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