Lenders Increase AgriBioTech Inc. Revolving Line of Credit to Accommodate Increased Seasonal Needs
HENDERSON, Nev.--(BUSINESS WIRE)--April 12, 1999--Richard Budd, chairman and chief executive officer, AgriBioTech Inc. (ABT) (Nasdaq/NM:ABTX), Monday announced that the bank syndicate that provides ABT with its revolving line of credit has provided a $10.0 million seasonal increase in the amount of credit available to the company through June 30, 1999.
The bank syndicate that provides ABT with its revolving line of credit includes Bank of America National Trust and Savings Association, Deutsche Financial Services Corp. and Branch Banking & Trust Co.
"This increase provides ABT with adequate working capital to meet our seasonal needs, and we are pleased with the cooperation we have received from the syndicate and the confidence in us that this shows," said Budd.
"We announced early in March that demand for our products and spring shipments appeared to be good. Demand for our products over the past 30 days continues strong, and we need the additional credit to support our inventory and receivables," said Budd.
He added, "This increased demand and the status of our integration plan implementation increases our confidence in achieving pretax break-even performance, excluding our restructuring charge, for the second half of FY 99, as previously announced on March 8, 1999."
The base revolver agreement between ABT and the syndicate runs through June 2001. One of the reasons ABT sought the additional credit is due to its revenue growth during the first half of fiscal year 1999 (FY 99) after the base agreement was signed in June 1998. The company completed nine acquisitions, with annualized net sales, excluding intercompany sales, of approximately $98.6 million since July 1, 1998.
The $10.0 million increase and base $100.0 million facility carry an interest rate of LIBOR (London Inter-Bank Offering Rate) plus 3 percent, or the bank's reference rate plus 1-1/8 percent, at ABT's option. ABT has adequate availability under the borrowing formula to utilize the increase.
Additionally, Budd noted, "With our lenders' help, this additional credit also provides increased flexibility to ABT in addressing our subordinated convertible debt."
AgriBioTech is a fully integrated full-service seed company specializing in the forage and turfgrass seed sector, complete with research and development of proprietary seed varieties, seed- processing plants, and a national and international distribution and sales network. ABT's vision is to lead the turf and forage seed industry in discovering its value potential.
The statements in this news release regarding demand for ABT's products, the status of the company's integration implementation, achievement of pretax break-even performance for the second half of FY 99, and the ability to refinance its subordinated convertible debt are forward-looking statements that involve a number of risks and uncertainties, and they are not a guarantee of future performance. Actual results could differ materially. The risks and uncertainties associated with these statements include but are not limited to: total acres of turfgrass and forage planted, customer purchases, deliveries and payments for ABT products, competitive pricing, weather, effective management of the integration process and cost reductions at ABT, ability of the company to successfully transition to the new IT systems throughout its operations, customer response to the integration, overall financial condition and asset status of ABT, relationships with and perceptions of potential lenders and investors, and other factors as detailed from time to time in the company's Securities and Exchange Commission filings.
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CONTACT:
AgriBioTech Inc., Henderson
Tony Blum, 702/566-2440
702/566-2450 (fax)
www.agribiotech.com |
