Savia Reports Results for Second Quarter of 2003.Business Editors MONTERREY Monterrey (mōntārā`), city (1990 pop. 1,068,996), capital of Nuevo León state, NE Mexico, the third largest city of Mexico. Located c.150 mi (240 km) S of Laredo, Tex. , Mexico--(BUSINESS WIRE)--July 28, 2003 -- Savia Savia or SAVIA can refer to:
LLC - Logical Link Control entered into definitive agreements to acquire Seminis Seminis is the largest developer, grower and marketer of fruit and vegetable seeds in the world. Seminis' hybrids claim to improve nutrition, boost crop yields, limit spoilage and reduce the need for chemicals. Their retail line includes over 3,500 seed varieties. . The overall transaction has a total enterprise value in excess of 650 million dollars. REPORTED RESULTS Savia S.A. de C.V. (BMV BMV Bolsa Mexicana de Valores BMV Bureau of Motor Vehicles BMV Bundesministerium für Verkehr (German: Federal Ministry of Transport) BMV Below Market Value BMV Brome Mosaic Virus BMV Bedside Medication Verification :SAVIA) (NYSE NYSE See: New York Stock Exchange :VAI VAI Voest-Alpine Industrieanlagenbau (Austrian company) VAI Video As Input VAI Voluntary Action Indicated (US FDA) VAI Volleyball Association of Ireland VAI Video Assisted Instruction ) announced today its results for the second quarter of 2003.
Main Business Indicators
Million of dollars of June 2003
Apr-Jun 2003 Apr-Jun 2002 Variation
------------ ------------ -----------
Sales 154 167 (7%)
Gross Profit 77 76 1%
Gross Profit 50% 46%
Operating Expenses 73 71 (3%)
Operating Income 4 5 (20%)
EBIT DA 9 11 (12%)
Consolidated Net Income (7) 15 (150%)
Majority Net Income (7) 11 (162%)
SECOND QUARTER CONSOLIDATED RESULTS 2003 Consolidated Net Sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight Consolidated net sales were 154 million dollars, a decrease of 7% compared to the same period last year. This reduction is primarily due to a decrease in the operations of Bionova at Culiacan, Sinaloa Sinaloa (sēnälō`ä), state (1990 pop. 2,204,054), 22,582 sq mi (58,487 sq km), W Mexico, on the Gulf of California and the Pacific Ocean. Culiacán is the capital. . Of the reported sales, 45% were denominated in dollars, 23% in euros, 17% in mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum pesos and 15% in other currencies. Consolidated Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. Consolidated operating income was 4 million dollars, a reduction of 20% compared to the same period last year. The reduction was mainly a result of the decrease in sales above mentioned as well as an increase in Seminis' operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. caused mainly by reserves for severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when payments. The operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. was 9 million dollars, 12% less than the figure reported on the second quarter 2002. Consolidated Net Income Majority net loss was 7 million dollars, which represents a variation of 19 million dollars in comparison to the majority net income of 11 million reported on the second quarter 2002. Consolidated net loss was 7 million dollars, a decrease of 150% compared to the consolidated net income reached in the same period last year. This variation is mainly due to a negative impact in the exchange income. SECOND QUARTER RESULTS 2003 FOR THE MAIN SUBSIDIARIES Seminis Seminis reported total sales of 113 million dollars, an increase of 4% compared to the sales reached in the same period last year. Its operating gross profit was 71 million dollars, which represents 63% of net sales. The operating income was 12 million dollars, an increase of 1 million dollars compared to the figure reported in the second quarter 2002. The operating cash flow reached 15 million dollars, an 8% of improvement over the reported in the same period last year. Bionova Total sales of Bionova were 34 million dollars, a reduction of 24% compared to the same period last year. This reduction is mainly due to a decrease in the operations at Culiacan, Sinaloa. Operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. was 1 million dollars; this represents a recovery of 87% compared to the reported loss in the second quarter 2002. CONSOLIDATED RESULTS FOR THE FIRST SEMESTER se·mes·ter n. One of two divisions of 15 to 18 weeks each of an academic year. [German, from Latin (cursus) s 2003 Consolidated Net Sales The consolidated net sales were 352 million dollars, a decrease of 8% in comparison to the same period last year. This reduction was principally a result of the decrease in the operations of Bionova at Culiacan, Sinaloa. Of the reported sales, 44% were denominated in dollars, 26% in euros, 14% in mexican pesos and 16% in other currencies. Consolidated Operating Income Consolidated operating income reached 43 million dollars, a figure slightly below to that reported in the first semester 2002. The operating cash flow was 53 million dollars, which represents 15% of net sales. Consolidated Net Income During the reported period, consolidated net income was 15 million dollars, a reduction of 57% related to the first semester last year. Majority net income decreased a 75% reaching 5 million dollars compared to 21 million dollars reported on the same period last year. This reduction is mainly the result of the negative impact of the exchange income and deferred taxes. FIRST SEMESTER 2003 RESULTS FOR THE MAIN SUBSIDIARIES Seminis During first semester 2003, Seminis reached total sales of 273 million dollars, an increase of 7 million dollars related to the same period last year. Operating gross profit was 172 million dollars, which represents a 63% of net sales. The operating income was 53 million dollars, a similar level to that reported in the same period last year. The operating cash flow totaled 60 million dollars. Bionova Bionova reported total sales of 61 million dollars, a decrease of 33% in comparison to the same period last year. This is a result of the reduction in the operations at Culiacan, Sinaloa. The operating net loss had a recovery of 39% related to the loss reported the first semester 2002. This recovery is mainly a result of a reduction in the operating expenses. RELEVANT EVENTS Savia and Fox Paine & Company entered into definitive agreements to acquire Seminis. Seminis announced on June 2nd, 2003 that it has entered into a definitive merger agreement with entities related to Savia, S.A. de C.V. pursuant to which certain Savia related parties will acquire all of the outstanding shares of Seminis, the world's largest developer, producer and marketer of fruit and vegetable seeds. Public holders of approximately 15.8 million Seminis shares will receive $3.78 per share in the merger. Immediately following the merger, certain Savia related parties will sell to certain investment funds Noun 1. investment funds - money that is invested with an expectation of profit investment assets - anything of material value or usefulness that is owned by a person or company managed by Fox Paine & Company, LLC, a San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden based private equity firm, a number of the Seminis shares they will then own, representing approximately 75% of the Seminis common shares, following completion of the transactions, for $3.40 per share in cash. Certain entities affiliated with Alfonso Romo Garza, Seminis' and Savia's Chairman and Chief Executive Officer, will receive co-investment rights to purchase, subject to certain conditions, up to 34% of Seminis following the merger. Stockholders of Seminis representing in excess of 85% of the currently outstanding voting power of Seminis have entered into agreements to vote in favor of upon the side of; favorable to; for the advantage of. See also: favor the merger. Savia shareholders provided their approval at a shareholder meeting held on April 30, 2003. The overall transaction has a total enterprise value in excess of $650 million. The $3.78 per share price to Seminis' public stockholders represents a premium of 51% based on Seminis' closing price of $2.51 on December 13, 2002, the last closing price prior to the public announcement of the Savia letter of intent with Fox Paine regarding the overall transaction. The Seminis Board of Directors approved the merger agreement after receiving the unanimous recommendation of a special committee of independent directors, which was formed following the announcement of the December 13, 2002 letter of intent between Savia and Fox Paine. As part of the transaction, immediately prior to the consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the merger, Savia will exchange its Seminis Class C preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. for approximately 37.7 million shares of Seminis common stock, after which, the total number of outstanding Seminis common shares will be approximately 101.7 million. Savia expects to distribute approximately $0.53 per share to its shareholders from the proceeds of its sale of Seminis shares to Fox Paine. In addition, a portion of the proceeds will be used by Savia to settle and repay all of its currently outstanding indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. . Existing management will continue to run the Company, with Mr. Romo serving as Chairman and Chief Executive Officer and Dexter dexter /dex·ter/ (deks´ter) [L.] right; on the right side. dex·ter adj. Of or located on the right side. Paine, President of Fox Paine, serving as Vice Chairman of Seminis. The transaction is expected to be completed during the third quarter for the present year and is subject to certain conditions including the approval of the Seminis' shareholders, the availability of financing and certain regulatory approvals. Savia obtains waivers to Syndicated Loan Syndicated Loan A very large loan in which a group of banks work together to provide funds for one borrower. There is usually one lead bank that takes a small percentage of the loan and syndicates the rest to other banks. Notes: Also known as a "syndicated bank facility. Agreement. On May 20, 2003 Savia reached an agreement related to the Syndicated Loan Agreement by which the maturity date was extended until September Until September is a 1984 romantic drama set in France. It stars Karen Allen as an American tourist in Paris who falls in love with a married Frenchman (Thierry Lhermitte). External links 30, 2003 and obtained waivers to some financial covenants included in such agreement. Savia (www.savia.com.mx) participates in industries that offer high growth potential in Mexico and internationally. Its principal subsidiaries include Seminis, a global leader in the production and marketing of fruit and vegetable seeds, Bionova, a company focused on the production, distribution and commercialization of fruits and vegetables and Desarrollo Inmobiliario Omega, a company dedicated to the development of real estate in Northern Mexico. Fox Paine & Company, LLC (www.foxpaine.com) manages investment funds in excess of US$1.5 billion, providing equity capital for corporate acquisitions, company expansion and growth programs and management buyouts Management buyout (MBO) Leveraged buyout whereby the acquiring group is led by the firm's management. management buyout See going private. . The Fox Paine funds are managed on behalf of over 50 leading international financial institutions, including major governmental and corporate pension systems, Fortune 100 companies, major life and property & casualty insurance and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. companies, money center and super regional commercial banks, investment banking firms, and university endowments. Fox Paine was founded in 1997 by Saul A. Fox, a former general partner of Kohlberg Kravis Roberts Kohlberg Kravis Roberts & Co (commonly referred to as KKR) is a New York City-based private equity firm that focuses primarily on late-stage leveraged buyouts. It was founded in 1976 by Jerome Kohlberg, Jr., and cousins Henry Kravis and George R. & Co., and W. Dexter Paine, III, a former general partner of Kohlberg & Co. Savia's financial statements are prepared in compliance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in Mexico. For the consolidation of domestic subsidiaries, Savia follows the guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. set forth in bulletin B-10 and for foreign companies follows the guidelines set forth in bulletin B-15. Seminis and Bionova report following the generally accepted accounting principles of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) that differ from the generally accepted accounting principles of Mexico. These results are adjusted to reflect the above-mentioned guidelines. In addition, Seminis reports its fiscal year the first quarter of October through the last of September. Savia reports its fiscal year on a calendar basis, including in its consolidated results the operations of Seminis according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. calendar year.
Savia S.A. de C.V and Subsidiaries
Statement of Consolidated Results
Results for the quarter April to June 2003
Million of Mexican Pesos and Dollars, except per
share and per ADR data
As of June 30, 2003 Purchasing Power
Apr-Jun '03 Apr-Jun '02
Pesos Dollars Pesos Dollars
Net Sales 1,609 154 1,736 167
Cost of Sales 804 77 942 90
Gross Profit 805 77 793 76
Operating Expenses 760 73 737 71
Operating Income 45 4 56 5
EBIT DA 99 9 112 11
Comprehensive Financing Income
Financial Expenses (75) (7) (92) (9)
Financial Income 15 1 33 3
Exchange Income (loss) (30) (3) 213 20
Monetary Result (11) (1) 11 1
Other Expenses (14) (1) (72) (7)
Income before Tax and Profit Sharing (70) (7) 150 14
Provision for Income Tax and Profit
Sharing 8 1 (7) (1)
Net Income before Discontinued
Operations (78) (7) 157 15
Discontinued Operations 0 0 0 0
Extraordinary Items 0 0 0 0
Net Income (78) (7) 157 15
Net Majority Income (74) (7) 119 11
Average Shares Outstanding (million
dollars) 471 462
Net Income per Share (pesos) (.16) .26
Net Income per ADR (dollars) (.06) .10
Savia S.A. de C.V and Subsidiaries
Statement of Consolidated Results
Results for the semester January to June 2003
Million of Mexican Pesos and Dollars, except per share
and per ADR data
As of June 30, 2003 Purchasing Power
Jan-Jun '03 Jan-Jun '02
Pesos Dollars Pesos Dollars
Net Sales 3,666 352 3,965 381
Cost of Sales 1,741 167 2,050 197
Gross Profit 1,925 185 1,915 184
Operating Expenses 1,474 142 1,462 140
Operating Income 451 43 454 44
EBIT DA 555 53 570 55
Comprehensive Financing Income
Financial Expenses (185) (18) (185) (18)
Financial Income 29 3 58 6
Exchange Income (loss) 3 0 147 14
Monetary Result 60 6 50 5
Other Expenses (53) (5) (104) (10)
Income before Tax and Profit Sharing 304 29 420 40
Provision for Income Tax and Profit
Sharing 145 14 52 5
Net Income before Discontinued
Operations 159 15 368 35
Discontinued Operations 0 0 0 0
Extraordinary Items 0 0 0 0
Net Income 159 15 368 35
Net Majority Income 55 5 223 21
Average Shares Outstanding (million
dollars) 469 462
Net Income per Share (pesos) .12 .48
Net Income per ADR (dollars) .04 .18
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