AgriBioTech, Inc. today announced fiscal 1999 (FY1999) third quarter results for the period ended March 31, 1999. The Company had a net loss of $2.3 million for the quarter. The loss was primarily due to two things: special charges related to the integration of acquired companies associated with building ABT into a new, large company in an historically fragmented seed sector; and, second, continued high levels of operating expenses and duplicative overhead, prior to integration.

"The third quarter results released today highlight and reinforce what we have been telling investors, analysts and our lenders ever since the new management team at ABT assumed control of the Company March 1, 1999," said Richard Budd, new Chairman and Chief Executive Officer (CEO) of ABT. "ABT’s long-term business plan is sound. Revenues and gross profits are on target with new management expectations. Expenses are the problem. To be successful at integrating the companies and building ABT into a major new player in the seed industry, we need to reduce and control expenses to levels appropriate for the new organization. Second, in order to be successful, we need to improve our capital structure. We’re doing both and expect to resolve
both issues favorably in the next few weeks."

"We are now 10 weeks into the process of reducing expenses to an appropriate level that supports our integration plan and will make it successful," added Budd. "This started in early March when we announced we would remove at least $14 million in annual operating expenses from the business by the end of our fiscal year (June 30, 1999). Within in the past month we have
identified the specific reductions that we believe will result in the $14 million savings. It is part of our plan to integrate our 34 acquisitions into a single, large, customer-driven company. We are implementing that plan right now. When we finish this work, we believe ABT will be both successfully organized into a new single business operation, and profitable in fiscal year 2000 (FY2000)."

"Once profitable, we intend to help lead in transforming the forage and turfgrass seed sector into a higher margin, R&D based business," said Budd. "We are confident a successful integration will result in a strong, profitable company that will allow us to carry out our long-term strategy to bring
improved, higher-margin products to this part of the seed business, and make money in the process."

Randy Ingram, Co-President and Chief Financial Officer (CFO) of ABT added, "During the third quarter ABT incurred approximately $2.0 million of special charges. Special charges include restructuring and other non-recurring or infrequent integration related expenses such as severance costs, travel costs for plan development and implementation, facility closing costs, consulting and
legal fees, and other related costs. The large majority of the non-recurring restructuring and special charges related to the integration will be recorded in the fourth quarter of FY1999."

Company management said last year that ABT would have a loss for FY1999 due to the costs associated with implementing ABT’s long-term business plan of integrating the Company’s acquisitions into a single business entity (ABT). "We continue to forecast a loss for the current fiscal year," said Ingram, "but believe that FY1999 will not be indicative of future financial performance of the Company. We are in the final stages of transition from a mergers and acquisitions driven growth company to an integrated, operations driven, and, what we expect to be, profitable company."

An important part of the reason ABT management believes it can successfully execute the Company’s long-term business plan is demand for ABT’s proprietary forage and turfgrass seed products. Through the spring of 1999, the Company has experienced strong demand for its proprietary products. At March 31, 1999, many of the Company’s important, leading, proprietary forage and turfgrass seed varieties were virtually sold out. There has been strong demand during the winter and spring for many of the Company’s leading proprietary varieties, including: Rebel III and Falcon II tall fescues, Pennant, Pennant II, Excel, Prelude III and Yorktown III perennial ryegrasses, Rio and Stampede ryegrasses, ABT 350, and WL711WF alfalfas, and BMR100 forage sorghum.

Details on the Company’s third quarter FY1999 earnings and results follow.

For the third quarter FY1999, ABT reported a net loss attributable to common stock, including special, non-recurring charges related to the integration of acquired companies, of $2.3 million or $0.05 per share (basic and diluted) on net sales of $106.4 million. In the third quarter of fiscal 1998 (FY1998), the Company recorded net earnings attributable to common stock of $4.9 million,
or $0.15 per share (basic) and $0.13 per share (diluted) on net sales of $75.9 million. The Company also announced third quarter FY1999 EBITDA (earnings before interest expense, income taxes, depreciation, amortization and special charges) for the period of $5.4 million compared to EBITDA of $5.3 million for the third quarter in FY1998. EBITDA is a cash-based measure of operating profitability.

Net loss attributable to common stock for the first nine months of FY1999 was $12.2 million or $0.31 per share (basic and diluted) on net sales of $272.0 million. This compares to net earnings attributable to common stock of $4.2 million or $0.15 per share (basic) and $0.13 (diluted) on net sales of $139.7 for the same period last year. EBITDA, excluding special charges, for the first nine months of FY1999 was $6.2 million compared to $7.1 million for the same period last year.

Since April 1, 1998, the Company has made 11 acquisitions that had a total of approximately $144.8 million in pro forma sales, excluding inter-company sales, for the twelve month period ended June 30, 1998. Therefore, results for the three and nine-month periods ending March 31, 1999 are not comparable to the prior year since ABT size and composition is considerably different today.

Selected financial information for the Company’s third quarter and nine months for FY1999 and earlier periods is as follows:

AGRIBIOTECH, INC. AND SUBSIDIARIES
(In thousands, except net earnings (loss) per common share)

As previously announced, new ABT management believes the Company can break even on the pre-tax profit line, excluding non-recurring restructuring and special charges associated with the integration, for the second half of FY1999. Also, as previously announced, the Company intends to pay off the subordinated convertible debentures sold in late December 1998 and early
January 1999 ("sub-debt") in full with cash to prevent a resetting of the amount of shares into which this debt can be converted ("reset of the debt"). Early redemption of the sub-debt will be recorded as an extraordinary charge in the Company’s financials.

AgriBioTech, Inc. 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 Company has essentially completed the first phase of its business strategy through an acquisition program that enabled ABT to accumulate the critical mass it believes is necessary to help lead the transformation of the forage and turfgrass seed sector of the seed industry. ABT is now beginning the process of integrating the acquired businesses, which have generally been
operating as they were prior to being acquired, into a single, customer-driven business entity centered around the ABT name and logo. In the integration process, the Company’s objectives include raising margins and reducing expenses.

Interested parties may listen to an audiotape of a Company hosted conference call today regarding results. A replay of the conference call will be available at approximately 7:30 p.m. today (EDT), or 4:30 p.m. PDT, by calling 1 800 475-6701, access code 449528.

The statements in this press release regarding future profitability, demand for ABT’s proprietary products, the status of the Company’s integration implementation, expense management and control, inventory management, future proprietary products and improvement of capital structure 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: management’s ability to control costs, total acres of turfgrass and forage planted, customer purchases, deliveries and payments for ABT products, competitive pricing, weather, effective management of the integration process, 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, ability to obtain additional capital and other factors as detailed from time to time in the Company’s SEC filings.

Company news release
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