The senior executive team at AgriBioTech, Inc. ("ABT" or the "Company") (NASDAQ: ABTX) met with sell-side analysts that cover ABT this week to review and update them on the Company’s business and business plan, to announce it has received proposals for and is working on completing new, long-term debt financing that is expected to provide the Company with the working capital it needs to carry out its long-term business plan, and presented data that supports the Company’s expectations of profitability in fiscal year 2000 (FY2000).

Richard Budd, ABT Chairman and Chief Executive Officer (CEO) did not attend the meeting due to a death in his immediate family. All remaining ABT executive officers attended the meeting, however.

In reviewing ABT’s business and business plan, Company executives outlined the key accomplishments at ABT since the March 1999 management change. The Company’s management told analysts that it has focused its efforts during the past five months on meeting the financing and integration challenges associated with the Company’s dramatic growth from 1995 to 1999.

"We have made tremendous progress in these two critical areas," said Randy Ingram, Executive Vice President, Chief Financial Officer (CFO), "and we believe we now have attractive options for the needed financing tools to support ABT’s long-term business plan." ABT expects to finalize one of these options within sixty days. Combined with profitable operations, new long-term debt financing will solve the Company’s financing needs because it will allow ABT to replace short-term debt that was used to acquire some companies during the previous acquisition program with long-term debt.

The Company’s long-term business plan is to use the large, vertically-integrated forage and turfgrass seed platform its has built to develop and market value-added, superior performing, high margin proprietary seeds in a sector of the seed industry that had, prior to ABT, been highly fragmented and lacked aggressive and sustained investment in research and development (R&D) of new varieties.

Company executives noted and highlighted the following accomplishments since the management change at ABT last winter.

• A restructuring ("integration") of the Company’s 34 acquired businesses into one organization has created a consolidated, single ABT national business organized by and focussed on the needs of its different classes of customers 
• The Company is on track to achieve $14.0 million in annualized expense savings due to the restructuring plan; the large majority of these reduced expenses have already been realized 
• As a result of the restructuring and a large number of R&D and biotechnology agreements successfully entered into during 1998 and 1999, the Company now has a leading forage and turfgrass R&D program, including its own molecular biology and transformation laboratory.
• ABT will be among the first, major national seed brands to sell proprietary, high-margin forage seeds on the Internet; this new, complementary source of distribution will allow ABT to take advantage of the possibilities presented by the evolving "e-commerce" channel in agriculture.
• Converted the entire organization to a new, Oracle® based, company-wide Enterprise Resources Planning (ERP) management information system.
• ABT has strengthened the Company’s balance sheet by redeeming early subordinated convertible debt sold by previous management, and issuing over $30 million in new equity in the Company

"As a result of all these things, and given current revenue and gross margin expectations, we believe that ABT will be profitable in FY2000," said Ingram. "We still have challenges, including fully implementing and achieving all the benefits of the new Oracle management information system. However, with the expected resolution of our financing needs, we are confident we will achieve our long-term goals."

The other short-term challenge for ABT addressed by Company management included short-term liquidity. As regards liquidity, management outlined the reasons for the short-term challenge including the delay in receipts of cash from its customers. ABT’s receivables are approximately two and one half times its payables. ABT is addressing the accounts receivable issue in a number of ways and strengthening its position. The Company is paying vendors and growers daily. Management also noted that during this period of short-term liquidity challenges ABT has reduced its short-term debt (the amount borrowed on its revolving line of credit) from approximately $100.0 million to roughly $57.0 million since June 1, 1999.

Finally, Company management outlined for analysts the reasons ABT
believes it will be successful in realizing its long-term business objectives.

• ABT is the market share leader in the U.S. in forage and turfgrass seed and has and intends to build a bigger market presence internationally; in the U.S., ABT leads the number two players in forage and turfgrass in market share and industry influence by a wide margin, with more than twice their market shares.
• ABT has the largest sales organization and distribution network in the forage and turfgrass seed industry.
• ABT has some of the strongest brand names in the industry, and the Company is investing in them to further strengthen their equity in the marketplace.
• ABT has the leading, and growing, mass merchant turfgrass seed business; ABT's major retailer customers include Home Depot and Lowes.
• ABT has a leading conventional R&D programs in forage and turfgrass seed, complemented by a leading biotechnology program  ABT has introduced new, industry-leading forage and turfgrass seed products in the past year and will continue do so in FY2000 and beyond, with higher margins than traditionally seen in the forage and
  turfgrass seed industry.
• ABT has research and development agreements and/or alliances with industry leaders in both conventional breeding and biotechnology:
  • FFR Cooperative (the leading source of forage grass germplasm in the U.S. and a large distributor of forage seed products);
  • Forage Genetics (a unit of Research Seeds, Inc., owned by Cenex/Land ‘O Lakes) license for access to Roundup Ready® alfalfa varieties;
  • Garst Seed Company, for a license to "whiskers" transformation technology ;
  • Kimeragen, Inc. for an equity stake and a license to technology to introduce site-specific genetic modifications ( "precise genetic surgery");
  • Worldwide, exclusive rights to biotechnology for certain forage and turfgrass species and an equity stake in the former Global Agro, Inc.

In commenting on the Company’s position, Richard Budd said, "For the past five and a half months we have focused on the challenges associated with completing the integration and achieving profitability, and we have quietly and without fanfare gone about doing that. Now we are entering a new phase at the Company where we intend to aggressively defend and build our market share leadership. To do that, we are going to do all we can to make sure that shareholders, prospective shareholders, employees and customers know what ABT is all about and where we are headed."

AgriBioTech, Inc. is a vertically 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.

"Roundup Ready" is a trademark of the Monsanto Company.

Company news release
N2052