Oxnard, California
December 29, 2000

Seminis, Inc. (Nasdaq: SMNS) today reported results for the fourth quarter and the year ended September 30, 2000. 

Net sales for the fourth quarter were $92.3 million, a 25.3 percent decline from the $123.6 million for the same period in fiscal 1999. The Company reported a net loss for the quarter of $64.8 million, or $1.08 per share, compared with net income of $1.3 million, or $0.02 per share, for the same period of 1999. The results for the quarter reflected the trends that have influenced Seminis' performance throughout the year and include the cost of internal restructuring and consolidation,
divestitures of non-core businesses as well as the Euro devaluation, inventory adjustments and lower sales. 

Net seed sales for the period dropped by $25.5 million, or 23 percent, to $85.2 million. The largest decline occurred in the NAFTA area, with sales down by $13.6 million. Sales in Europe dropped $10.2 million due to the depreciation of the Euro against the Dollar and the divestiture of non-core companies. Sales in South America dropped $2.9 million. The Far East reported a sales increase of 8 percent. 

Gross profit for the period, before non-cash charges, was $56 million, or 60.7 percent of net sales compared with $75.4 million, or 61 percent of net sales, for the fourth quarter of 1999. Non-cash charges of $35.6 million relate to $29 million in excess inventory reserves and $6.6 million in inventory write-offs primarily related to divestiture of non-core operations in Europe. Gross profit for the quarter after these charges was $20.4 million. 

The operating loss of $61.9 million for the fourth quarter compared with operating income of $9.4 million in the same period last year. 

Eugenio Najera, newly appointed President and COO of the Company, said: "From my arrival in August 2000 to date, we have accomplished a great deal in our efforts to redirect the Company toward profitability. We have implemented a number of initiatives to reduce costs and increase operating efficiencies through greater control of operating expenditures, research and development costs and effective working capital management." 

Fiscal Year Ended September 30, 2000 

Net sales for the year ended September 30, 2000, decreased by 10.6 percent to $474.4 million, from $530.6 million for fiscal 1999, reflecting the divestiture of non-core assets, the weakness in the Euro and a drop in seed sales, mainly in Nafta. Excluding the impact of lost sales from divestitures and foreign exchange losses, sales for the year were $502.9 million, or 5 percent lower than for fiscal year 1999. 

During the year the Company sold two non-core businesses that had accounted for $9.6 million in revenues, while the Euro depreciated by 21 percent against the U.S. dollar, accounting for a drop of $18.9 million. These issues accounted for 17 and 34 percent of the total decline in Seminis sales, respectively. 

Net seed sales declined 9.5 percent or $44.8 million, to $424.7 million despite an increase of $9.4 million, or 14.3 percent, in Asia. The largest decline of 15 percent, or $26.9 million, was in the NAFTA area as farmers reduced cultivated acreage in response to certain depressed fresh produce prices and dealers and distributors continued to reduce overall inventory levels. In constant terms (i.e., applying FY99 exchange rate to FY00 sales), European sales represented $183 million compared to $188 million in fiscal year 1999, which shows the company's constant performance in that market. However, accounting for exchange rate losses, fiscal year 2000 sales in Europe were $161 million, representing a 14 percent decrease. Sales in South America declined by $0.6 million, or 1.6 percent. 

Gross profit before non-cash charges was $291.3 million, or 61.4 percent, of net sales, compared with $328.3 million, or 61.9 percent of net sales, for fiscal 1999. After non-cash charges of $54 million for inventory write-offs and reserves and the loss of sales from divestitures of non-core assets, gross margins for the year dropped to 50 percent. $25 million of the inventory write-offs came from obsolete and poor quality seed. The remaining $29 million corresponds to an inventory reserve taken for low-rotation products. 

The operating loss was $74.1 million, compared with operating income of $45.0 million in fiscal 1999. In addition to the non-cash inventory reserves and write-offs, results were affected by costs related to Seminis' continued implementation of its Global Restructuring Plan to streamline operations. Operating Expenses increased by $28 million, reflecting a $14 million severance reserve, $3.1 million costs from consolidation and relocation of production and processing facilities to the new Oxnard, CA, facility, a $2 million investment in information systems to maximize the efficiency of Seminis' product pipeline, $6.4 million write-down of intangible assets associated with the Company's investment in LSL Plantscience, and $2.6 million related to amortization increases mostly due to the acquisition of minority interests in one of the Korean subsidiaries. Excluding costs related to restructuring, inventory adjustments, and write-downs, Seminis' operating income was $5.4 million. 

Commenting on the outlook for the Company, Mr. Najera noted: "We recognize there is work to do as we pursue our strategy to restructure and consolidate Seminis' worldwide operations. We are faced with a lengthy and costly process as we continue to consolidate past acquisitions to create a unified, operating company." 

"But," he continued, "we are also very enthusiastic about the future. The Company's undisputed global leadership in the vegetable seed industry offers tremendous opportunities to create value and growth. Its intrinsic profitability with more than 60 percent gross margins poses a unique cash generating opportunity. As we move ahead, our goal, in conjunction with our banks, is to manage the Company to assure strong cash flow and increasing shareholder value." 

As of September 30, 2000, the Company was not in compliance with certain financial covenants under its $350 million loan agreement. The Company requested and obtained a waiver through December 31, 2000, and is negotiating to extend it through March 31, 2001, and to formally amend and modify the financial covenants. 

About Seminis 

Seminis (Nasdaq: SMNS) is the largest developer, producer and marketer of vegetable 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 120 countries. Seminis is a majority owned subsidiary of Savia (NYSE: VAI), a Mexico-based conglomerate with leadership positions in financial services, packaging and fresh foods.  

Company news release
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