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® 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.