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To: BuzzVA who wrote (7555)	2/19/1999 12:07:00 PM
From: Sir Auric Goldfinger	Respond to of 8359

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To: BuzzVA who wrote (7555)	2/19/1999 3:20:00 PM
From: W Shakespeare	Respond to of 8359

The 10-K is now available. Regarding restructuring: To accomplish the Company's business strategy, it has been necessary to build a centralized, upgraded, operational infrastructure ahead of revenue growth and restructuring driven cost savings. The Company is in the process of centralizing and improving its accounting and data processing functions and implementing a company-wide enterprise resource planning system ("ERP") to meet all of its information systems requirements. This necessitates that personnel and other resources be added at the central location prior to the time corresponding resources are eliminated at other locations, resulting in duplication of costs during the time both existing systems are being operated and the new system is being implemented. For example, prior to deciding to centralize the accounting function, the Company had approximately 60 full-time equivalent employees in its various operations performing accounting functions. During the centralization process, the Company will add 10 to 15 employees, but after centralization, the Company believes the accounting function will only require about 30 employees. In addition, many businesses acquired since October 1, 1997, have been primarily distribution oriented. Distribution companies generally have higher levels of operating expenses, and higher gross margins than production oriented companies. The Company is nearing the completion of formulating a plan to integrate the acquired companies that includes the evaluation of the business processes of each operation and location to determine their relative importance to the Company's overall strategic plan. Such evaluation for each operation encompasses, among other things, staffing levels, product mix and focus, locale in relation to customer base, and levels and nature of assets utilized. In connection with the anticipated integration of the acquired companies, the Company previously announced it expects to record a non- recurring charge of between $5 and $15 million during Fiscal 1999 consisting primarily of severance and other personnel related costs and costs associated with consolidation of facilities. The Company expects to vigorously implement its anticipated integration plan resulting in a restructuring charge that will be at the high end of this range, and possibly above it. Regarding the revolving debt: The Company has a $100 million revolving credit facility with Bank America Business Credit ("BABC") and other lenders expiring in June 2001, under which borrowings were $69.8 million at December 31, 1998, including a $15 million overadvance facility (the "BABC Bridge"). In addition, at December 31, 1998 the Company had a $15 million bridge loan from Deutsche Bank AG (the "Deutsche Bridge"). The BABC Bridge and the Deutsche Bridge were repaid subsequent to December 31, 1998. At February 10, 1999, the Company had borrowed $83 million under the revolving line of credit and $7 million was available to be borrowed. At December 31, 1998, the Company was not in compliance with the debt service coverage covenant under the revolving credit agreement. The lenders have waived compliance with this requirement. The Company is working with the lenders to amend such covenant to be reflective of its current operating configuration in a manner that should lessen the likelihood of the need for similar waivers in the future. However, there is no assurance such amendment will be obtained.

To: BuzzVA who wrote (7555)	2/19/1999 3:24:00 PM
From: W Shakespeare	Respond to of 8359

The 10-K regarding worldwide crop conditions: In addition, in 1998, total sales were negatively impacted because international and wholesale turfgrass seed sales were below expectations due to weak demand from the "Pacific Rim" countries, weak demand in Europe and large inventory positions with U.S. dealers. The countries of the Pacific Rim continue to be affected by weak economies, the strong U.S. dollar and tightening credit. This situation has resulted in a significant reduction in sales to customers in these countries. The demand in Europe was negatively impacted by higher than normal fall moisture patterns, which resulted in higher than normal seed production yields. Because of this situation, European companies have become net exporters of turfgrass seed products instead of importers. They have also begun to ship less expensive seed into the U.S. market, which is having a negative impact on prices. The excess European inventories have reduced both the amount of product sold into the European market, and the price for which it was sold. The U.S. wholesale dealers carried large inventories from the 1998 spring selling season into the fall 1998 selling season. This situation was the result of the "El Nino" induced wet 1998 spring, which caused substantially reduced spring sales to the consumer. The reduced sales left wholesale dealers with large inventories that they carried over to fulfill the fall selling season demand. Forage seed sales were impacted by the continuing industry wide shortage of non-dormant alfalfa, which constitutes the vast majority of alfalfa sold during the fall season, an industry wide shortage of annual rye grass and high European forage inventories. The alfalfa and annual ryegrass seed shortages have resulted in lost customer sales because the seed was not available to sell and the seed that was available was at a price that was, for some customers, prohibitive. The worldwide supply of turfgrass and forage seed, except for non-dormant alfalfa and annual ryegrass, is in excess of demand. This oversupply situation was caused by the "El Nino" wet spring weather pattern which allowed U.S., Canadian and European seed growers to experience unusually large harvests during the last crop year. The industry is following a trend towards consolidation in the U.S. and in Europe. Smaller independent companies facing this trend have responded with aggressive pricing programs to move their excess inventories and retain their market share. These conditions are expected to continue to cause downward pressure on prices and margins through the current crop year.