Seminis, Inc. (Nasdaq: SMNS), the world's largest developer, producer and
marketer of vegetable and fruit seeds, yesterday reported final results for
the three-month and six-month periods ended March 28, 2003. The company
released preliminary second quarter results late last month due to filing
requirements of its majority shareholder, Savia S.A. de C.V.
Results for the three-month period ended March 28, 2003
As previously announced, net sales for the three months ended March 28,
2003 were $159.0 million compared to $152.3 million for the same period last
year. This represents an increase of 4.4% from the same period last year. The
increase was primarily due to increased sales in Europe, the Middle East and
Africa as a result of favorable exchange rate fluctuations in the region.
Gross profit increased to $101.0 million or 63.5% of sales compared to
$95.9 million or 62.9% for the same period last year. This increase was
primarily due to the successful implementation of new pricing strategies and
product mix optimization.
Operating expenses in the reported period increased by $5.2 million to
$63.6 million, compared to $58.4 million for the same period last year, an
increase of 8.9%. This increase was primarily due to an employee severance
accrual as well as increases in legal and administrative fees related to the
transaction proposed by Savia S.A. de C.V. and Fox Paine & Company, LLC in
December 2002.
Operating income for the period was $39.0 million compared to
$41.8 million for the same period last year, a decrease of $2.9 million or
6.8%. This change differs from the 3.1% or $1.2 million dollar increase
highlighted in the preliminary results published April 30, 2003 due to a
reclassification of a gain related to the divestiture of a non-core business
in fiscal year 2002 that was previously classified as non-operating income.
Net income for the period was $24.0 million compared to $25.7 million
during the same quarter last year. Net income available for common
shareholders was $19.4 million or $0.30 per share compared to $21.0 million or
$0.34 per share during the same period last year.
The total outstanding syndicated bank debt as of March 28, 2003 was
$223.3 million compared to $258.7 million as of March 29, 2002, a reduction of
$35.4 million or 11.1%.
Seminis Chairman and Chief Executive Officer Mr. Alfonso Romo commented:
"These results are a testament to the strong fundamentals of the Seminis
business model and the financial soundness of the company. We continue to
improve our cash flow generation capabilities while at the same time reducing
our bank debt. In fact, we continue to earn the confidence of our creditors by
meeting and exceeding our financial covenants. Our team has a clear sense of
direction, and we have focused our attention on growing the business."
Results for the six-month period ending March 28, 2003
Total sales for the six months ended March 28, 2003 increased 3.1% to
$239.6 million from $232.4 million during the same period last year. Net seed
sales reached $230.8 million during the six-month period, an increase of 4.0%
compared to $221.9 million for the same period of last year. The increase was
primarily due to favorable currency fluctuations.
Gross profit for the period increased to 63.2%, from 62.7% for the same
period last year, partly due to the previously stated new pricing strategies
and improved product mix.
Total operating expenses for the period increased by 2.8% to
$121.6 million, from $118.3 million for the same period last year, primarily
due to the previously mentioned increase in operating expenses during the
three-month period ended March 28, 2003.
Operating income for the period decreased to $30.9 million, down 5.3% from
$32.6 million for the same period last year.
Net income available to common shareholders for the period was
$3.1 million or $0.05 per share compared with a net loss available to common
shareholders of $2.9 million, or $0.05 per share for the same period year. The
increase in net income available to shareholders was primarily due to an
overall increase in profitability as well as favorable currency.
Total outstanding syndicated bank debt was reduced by $6.4 million during
the six months ended March 28, 2003.
Mr. Romo said: "With a stronger balance sheet, we can continue to extend
our reach into new markets, such as Asia, and further consolidate our
leadership position in Europe and North America. Our R&D organization
continues to drive innovations in our industry, offering new opportunities for
Seminis and the food industry as well as healthier, more nutritious, and more
convenient products for consumers."
About Seminis
Seminis, Inc. is the largest developer, producer and marketer of vegetable
and fruit seeds in the world. The company uses seeds as the delivery vehicle
for innovative agricultural technology. Its products are designed to reduce
the need for agricultural chemicals, increase crop yield, reduce spoilage,
offer longer shelf life, create better tasting foods and foods with better
nutritional content. Seminis has established a worldwide presence and global
distribution network that spans 150 countries and territories.
Safe Harbor Statement: All statements in this press release other than
statements of historical facts are "forward-looking" statements, including
without limitation statements regarding the company's financial position,
business strategy, plans, and objectives of management and industry
conditions. Although the company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to be correct. The following factors, among
others, may affect the company's actual results and could cause such results
to differ materially from those expressed in any forward-looking statements
made by or on behalf of the company: competitive factors, agribusiness risks,
governmental and economic risks associated with foreign operations, commercial
success of new products, proprietary protection of and advances in technology,
possible need for additional financing. Further information on the factors
that could affect the company's financial results is contained in the
company's latest 10-K filed with the Securities and Exchange Commission.
SEMINIS, INC.
Consolidated Balance Sheets
(In thousands)
As of As of
March 28, Sept. 30,
2003 2002
(Unaudited)
ASSETS:
Current assets
Cash and cash equivalents $34,901 $36,805
Accounts receivable, net 178,788 140,315
Inventories 271,174 272,527
Prepaid expenses and other current
assets 4,876 2,427
Total current assets 489,739 452,074
Property, plant and equipment, net 161,547 168,729
Goodwill, net 97,578 98,931
Intangible assets, net 56,520 61,872
Other assets 22,884 18,391
$828,268 $799,997
LIABILITIES, MANDATORILY REDEEMABLE
STOCK AND STOCKHOLDERS' EQUITY:
Current liabilities
Short-term borrowings $40,990 $28,532
Current maturities of long-term
debt 226,720 21,709
Accounts payable 31,375 38,179
Accrued liabilities 108,667 98,624
Total current liabilities 407,752 187,044
Long-term debt 15,379 228,293
Deferred income taxes 16,503 15,753
Minority interest in subsidiaries 1,436 1,902
Total liabilities 441,070 432,992
Commitments and contingencies
Total mandatorily redeemable stock 30,500 29,500
Total stockholders' equity 356,698 337,505
$828,268 $799,997
SEMINIS, INC.
Consolidated Statements of Operations
(In thousands, except per share data)
For the three months For the six months
ended ended
Mar 28, Mar 29, Mar 28, Mar 29,
2003 2002 2003 2002
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $159,001 $152,309 $239,617 $232,388
Cost of goods sold 58,008 56,458 88,241 86,744
Gross profit 100,993 95,851 151,376 145,644
Research and development
expenses 10,953 9,611 22,378 21,510
Selling, general and
administrative expenses 48,637 44,621 91,337 88,528
Amortization of
intangible assets 3,966 4,144 7,893 8,302
Total operating expenses 63,556 58,376 121,608 118,340
Gain on sale of assets 1,537 4,359 1,091 5,275
Income from operations 38,974 41,834 30,859 32,579
Other expense
Interest expense, net (8,445) (6,932) (14,935) (14,102)
Other, net 529 (3,066) 476 (4,652)
Total non-operating
expense (7,916) (9,998) (14,459) (18,754)
Income before income taxes 31,058 31,836 16,400 13,825
Income tax expense (7,018) (6,182) (4,140) (7,482)
Net income 24,040 25,654 12,260 6,343
Preferred stock dividends (4,661) (3,497) (9,184) (6,927)
Additional capital
Contribution dividends -- (1,164) -- (2,303)
Net income (loss) available
For common stockholders $19,379 $20,993 $3,076 $(2,887)
Net income (loss) available
For common stockholders
per common share:
Basic $0.30 $0.34 $0.05 $(0.05)
Diluted $0.29 $0.33 $0.05 $(0.05)
Seminis Inc.
Net Seed Sales
Currency stated at Actual Exchange rates
(In US Million $)
Second Quarter Ended Six Months Ended
FY '03 FY '02 % Change FY '03 FY '02 % Change
North America $53.0 $53.3 -0.5% $84.9 $85.7 -0.9%
Europe & Middle East 74.2 63.7 16.5% 106.5 90.1 18.2%
Far East 17.7 21.0 -16.0% 26.8 31.5 -15.0%
South America 8.3 8.8 -5.8% 12.6 14.5 -13.5%
Total Seed Sales $153.3 $146.9 4.4% $230.8 $221.9 4.0%
