Seminis, Inc. today reported results for the three months ended March 31, 2000. Net sales for the quarter were $186.6 million, 5.5% lower than the $197.5 million registered during the same period in fiscal 1999. The company reported net income available for common stockholders of $17.8 million for this quarter, or $0.30 per share compared to net income available for common stockholders of $20.9 million in the same period of 1999, or $0.54 per share. Diluted weighted average shares outstanding were 59,824 thousand and 38,664 thousand during the 2000 and 1999 periods, respectively.

"The sales for the second quarter were negatively impacted by $8.2 million in the European
operations which resulted from the weaker Euro. Unfavorable climatic conditions around the globe
continued to affect Seminis' operations, although we believe we continue to gain market share. The second quarter is usually the best for Seminis in terms of sales due to the plantings during the early spring in the northern hemisphere, thus we expect a marginal growth in sales for the rest of this year,'' said President and Chief Operating Officer Alejandro Rodriguez-Graue. "Sales to the Far East and South America, which represent close to 20% of seed sales, were the only markets to post growth compared to the second quarter of 1999,'' he added.

"Fresh and processed vegetables markets continue to be depressed and resulted in reductions in
planted acres, impacting seed sales. Processor consolidation in both Europe and North America as well as the over supply of canned and frozen products reduced demand by as much as 20% for our key products in this market segment,'' said Alejandro Rodriguez-Graue. 

Net Seed Sales
Constant Dollars in Millions

-- North America operations recorded net seed sales of $56.6 million during the second quarter, 4.0% lower than the $59.0 million for the same period in 1999. Markets for fresh and processed vegetables
continue to be depressed; resulting in reduced planted acres particularly in tomato, onion, lettuce, broccoli and cauliflower. Overstocking of canned and frozen vegetables continues to affect demand
for beans, peas, processed tomatoes and sweet corn. Depressed markets in North America have also resulted in slower payments from growers to seed dealers, who are reducing inventory levels to control working capital, thus impacting Seminis' collection of accounts receivable.

-- South America net seed sales grew 36.4% from $8.7 million in the second quarter in fiscal 1999 to $11.9 million in the same period in fiscal 2000. With the exception of Ecuador, the strength of most South American currencies also supported higher prices in US dollar terms during this quarter. In the case of Brazil sales volume increased as compared to the second fiscal quarter in 1999 due to the strengthening of the real after the devaluation last year. In Chile climatic conditions are expected to be more favorable as compared to last year when there was a drought. Notwithstanding the positive South American results, the flooding in Venezuela during this quarter has brought the economy to a standstill in this important agricultural region. Political unrest in Ecuador has resulted in lower than normal sales.

-- Europe and the Middle East reported net seed sales of $74.7 million, a decrease of 10.5% from $83.4 million in the second quarter of fiscal 1999. Storms in France during the first fiscal quarter of 2000
disrupted sales of products during January and prolonged droughts reduced plantings of processing tomatoes in Italy, Hungary, Greece and Israel and for all species in the Middle East and North Africa. As in the North American region, overstock of processing crops have resulted in reduced sales of beans, peas, sweet corn and processed tomatoes. Currency and economic issues in eastern European countries continue to depress sales in the region.

-- Far East net seed sales increased 8.3% from $23.7 million for the same quarter last year to $25.7 million. Sales in Indonesia continue to be impacted by economic and political issues. Given the recent recovery of the South Korean economy, sales are recovering strongly, especially our Hungnong brand. However, the prolonged effect of the Asian monetary crisis continues to result in reduced planting and seed stocking, particularly in South East Asia.

"The results of Seminis were lower than expected given the impact of currency effects as well as
lower sales volume and non-controllable climatic factors,'' said Chairman and Chief Executive
Officer Alfonso Romo Garza. "We are currently involved in improving efficiencies in our research,
production and marketing operations across the company, which coupled with potential synergies
should improve the profitability of the company going forward,'' said Alfonso Romo Garza.

"Since February 2000 we have our logistics system in place to better predict, manage and control
our seed inventory levels. The implementation of SAP is on track, and we are finishing a
rationalization process in operations that should be reflected in cost reductions and cash flow
improvements. We recognize that the globalization process has been difficult, and we are taking
action by reinforcing our personnel and management across the company and investing in
management systems. We are building the foundation for solid growth in the future,'' added Alfonso
Romo Garza.

Operations

Net sales decreased 5.5% to $186.6 million for the quarter ended March 31, 2000, from $197.5 million for the same period in 1999, affected by lower sales volume and the effect of currency translations. The Euro weakened further during the second quarter of fiscal year 2000 and was weaker overall compared to the second quarter of fiscal year 1999. In constant dollars, sales decreased 1.9% to $191.7 million for the second quarter of fiscal year 2000 from $195.5 million for the second quarter of fiscal year 1999.

Lower sales led to a reduction of 8.8% in gross profit to $111.9 million for the three months ended March 31, 2000, compared to $122.7 million for the same period in 1999. Gross margin was 59.9% for the three months ended March 31, 2000 compared to 62.1% for the three months ended March 31, 1999. The decrease in the gross margin was due to both a change in the North American product mix that included increased sales of lower margin seeds and an overall decrease in higher margin sales in Europe and the Middle East. Higher inventory provisions due to low quality seeds also affected gross profit. Without the referred inventory write-off the gross margin would have been 62.4% for the second quarter in fiscal 2000.

For the three months ended March 31, 2000, research and development expenses decreased 20.9% to $13.5 million from $17.0 million for the same period last year. This decrease was primarily due to a $2.1 million charge related to Seminis' research incentive program taken in the second quarter of fiscal 1999 compared to a charge of approximately $1.0 million taken in the same period in fiscal 2000 for the final installment of the program. The incentive program, which began in the second quarter of fiscal year 1999, is part of Seminis' continuing efforts to attract and retain industry leading breeders and research personnel. The decrease in research and development expense is also due to the impact of the weaker Euro during the second quarter of fiscal 2000 compared to the same period in 1999 as the company has significant research and development activities in the Netherlands, France, Spain and Italy. In addition, research and development expenses are cyclical depending on the timing of the planting seasons.

Selling, general and administrative expenses increased 3.7% to $52.0 million for the three months ended March 31, 2000 from $50.1 million for the three months ended March 31, 1999. The increase is due to approximately $0.6 million in non-recurring expenses, related to a restructuring charge for severance costs associated with the reorganization of the company's North American operations, and approximately $1.0 million in expenses related to programs to maximize the efficiency of Seminis' product pipeline.

Amortization of intangible assets increased 9.2% to $7.6 million for the three months ended March 31, 2000 from $6.9 million for the three months ended March 31, 1999. This increase was primarily due to the amortization of goodwill and intangible assets associated to the acquisition of an additional 25% of Hungnong in August 1999. In addition, the Korean Won strengthened during the three months ended March 31, 2000 compared to the same period last year, resulting in additional amortization. Seminis also recorded amortization resulting from the purchase of seedless watermelon germplasm from Barham Seeds, Inc. in July 1999.

Net interest expense decreased 45.6% to $7.1 million for the three months ended March 31, 2000 from $13.0 million for the second quarter of fiscal 1999. Both the 1999 refinancing of Seminis' credit agreements and the repayment of debt resulted in a lower average debt balance for the three months ended March 31, 2000 compared to the three months ended March 31, 1999.

Seminis had other non-operating expense, net, of $2.8 million for the three months ended March 31, 2000 as compared to other non-operating expense, net, of $2.3 million for the three months ended March 31, 1999. Other non- operating expense, net for the second quarter of fiscal year 2000 includes a foreign currency loss of $3.3 million and other income of $0.5 million primarily related to the sale of fixed assets. The foreign currency loss is primarily due to a loss recorded by SVS Holland on its U.S. dollar denominated loan. Other non-operating expense, net, for the second quarter of fiscal 1999 includes a foreign currency loss of $0.7 million primarily related to the Hungnong intercompany loan, a minority interest provision of $1.2 million primarily related to the 25% minority interest in Hungnong and other expenses of 0.4 million.

Income tax expense decreased 12.3% to $9.5 million for the three months ended March 31, 2000 from $10.8 million for the three months ended March 31, 1999 as a result of lower consolidated pre-tax income.

Seminis' total indebtedness as of March 31, 2000 was $388.3 million consists of borrowings of $328.4 million under the current syndicate credit facility, $16.3 million by the South Korean subsidiaries and $43.6 million by other foreign subsidiaries.

In May 2000, Seminis and the Lenders under the Syndicate Credit Agreement entered into an agreement to waive a financial ratio covenant as of March 31, 2000. The Company is currently in
negotiations with the Lenders to reach a permanent agreement. 

Seminis is the largest developer, producer and marketer of vegetable seeds in the world. Seminis produces more than 60 species and 8,000 distinct varieties of vegetable and fruit seeds. 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 120 countries with 70 research stations in 19 countries and production sites in 32 countries. Seminis is a majority owned subsidiary of Savia, a Mexico-based conglomerate with leadership positions in financial services, packaging and fresh foods

Company news release
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