BIONOVA HOLDING ANNOUNCES 2000 FIRST QUARTER RESULTS

BIONOVA HOLDING ANNOUNCES 2000 FIRST QUARTER RESULTS,

RECENT DEVELOPMENTS ON FINANCING, AND

PLANS TO RESTRUCTURE THE BUSINESS

Oakland, California—May 2, 2000—Bionova Holding Corporation (AMEX: BVA) announced today its first quarter financial results and made a set of announcements relating to its financial position and business restructuring.

For the quarter ended March 31, 2000, Bionova Holding reported a net loss of $9.7 million, or $0.41 per share, as compared with a loss of $4.9 million, or $0.21 per share in 1999. The Company stated that the primary reasons for the large increase in the year-on-year loss were (1) a $2.2 million decline in gross margin due to a 10% decline in average fresh produce prices associated with the Company’s mix of products, a write down of inventories and receivables arising from these price declines, and a decline in the revenues of the technology business, and (2) an increase in net interest expense (interest income less interest expense) of $2.4 million due to increased loan balances and the higher interest rates the Company incurred following the long-term financing arrangement concluded in the first quarter of last year.

The decline in the Company’s revenues from $58.3 million in the first quarter of 1999 to $57.3 million in the first quarter of 2000 was primarily attributable to the decline in fresh produce prices.

Long-term Debt and Cash Availability

The Company stated that the entire amount of its $100 million of Senior Guaranteed Floating Rate Notes, due March 2002, was retired on April 13, 2000. Financing for this early retirement of the notes was provided by Savia, S.A. de C.V., the ultimate parent company of Bionova Holding. Savia agreed to provide this $100 million of financing on terms no less favorable than the terms of the Floating Rate Notes.   Savia also agreed that Bionova Holding may defer all interest payments until the final maturity date of March 23, 2002, and that Bionova Holding will not be required to maintain any funds in an interest reserve account. This interest deferral and the immediate availability of the $6.5 million that had been held in a restricted, interest reserve account associated with the Floating Rate Notes has benefited Bionova Holding’s current cash position. Bionova Holding will record a $2 million charge in the second quarter of 2000 to recognize the remaining balance of up front fees paid for the Floating Rate Note facility that had not previously been amortized.

Rights Offering

During the week of May 1 Bionova Holding will file with the SEC an amendment to the registration statement relating to its shareholder rights offering and will then await approval from the SEC to make this registration statement effective. Bionova Holding’s Board of Directors recently approved an extension of the expiration date for these rights to December 29, 2000.

Business Restructuring

At the Company’s Board of Directors Meeting on May 1, 2000, the Board determined that it would be in the best interests of shareholders to restructure the company and focus on some new technology initiatives currently under development. The Board expressed its belief that while the realization of the technology opportunities may take a number of years before the Company generates a profit, they offer the best potential returns for the Company and its shareholders. The Board also concluded that the Company’s fresh produce agricultural and distribution operations are not a critical vehicle to generate and deliver the value from its core technology to customers and consumers. Therefore, Company management was directed to aggressively develop and pursue alternatives for the fresh produce business, including the possible divestiture of parts or all of this business segment. To this end the Company recently engaged the services of PricewaterhouseCoopers’ Financial Advisory Services Group to assist in the execution of its restructuring plan.

Savia has indicated that it may be interested in acquiring the fresh produce business from Bionova Holding and in re-capitalizing a portion of the Company’s debt. To assist in these negotiations the Board of Directors formed a Special Committee of independent directors to review proposals and oversee the negotiations with Savia and other prospective buyers. This Special Committee is in the process of retaining an investment banker and legal counsel to support it in these activities.

Management Appointment

The Board has appointed Mr. Eugenio Najera to serve as the interim head of the Company’s fresh produce business through the forthcoming re-structuring period. Mr. Najera currently is a director of Bionova Holding and brings with him over 25 years of experience as a senior executive of consumer products and agricultural businesses in Mexico. Mr. Jorge Fenyvesi, Executive Vice President for Technology, will continue to be in charge of the Company’s technology operation and will focus his efforts on emerging technology initiatives.

Bionova Holding Corporation is a leading biotechnology company focused on using its proprietary genetic engineering and plant science technologies to develop and improve the quality and agronomic traits of fruits and vegetables. Through its fresh produce growers and distribution companies, Bionova Holding is known for its premium Master’s Touchâ and FreshWorld Farmsâ brands. Bionova Holding and its subsidiaries have strategic alliances and licensing agreements with some of the world’s leading agricultural companies, with its affiliates, including Seminis Vegetable Seeds, Inc., with value-added producers and marketers, and with biotechnology research groups. Bionova Holding Corporation is majority owned by Mexico’s SAVIA, S.A. de C.V. (NYSE: VAI), whose subsidiaries include the world’s biggest vegetable seed company.

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, public acceptance of genetically-engineered products, commercial success of new products, proprietary protection of and advances in technology, possible need for additional financing, as well as the ability of the Company to successfully integrate recent acquisitions and its management information systems and controls.   Further information on the factors that could affect the Company’s financial results is contained in the Company’s Form 10-K for the year ended December 31, 1999 which has been filed with the Securities and Exchange Commission.

BIONOVA HOLDING CORPORATION

UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME AND LOSS

Thousands of U.S. Dollars

(except per share amounts)

Three Months Ended

March 31,

         2000          1999
Total revenues ……………………………………… $     57,254) $     58,348)
Cost of sales ……………………………………….. 54,710) 53,592)
Selling and administrative expenses ………………. 6,301) 6,056)
Research and development expenses ……………… 1,538) 1,507)
Amortization of goodwill, patents and trademarks … 851) 804)
63,400) 61,959)
Operating income (loss) …………………………… (6,146) (3,611)
Interest expense ……………………………………. ( 4,560) ( 2,292)
Interest income …………………………………….. 584) 702)
Exchange gain (loss), net ………………………….. 59) 137)
Other non-operating income ………………………. (8) –))
(3,925) (1,453)
Income (loss) before income tax …………………… (10,071) (5,064)
Income tax benefit (expense) ……………………… (112) (169)
Net income (loss) before minority interest ………… (10,183) ( 5,233)
Minority interest in net loss (income) of subsidiaries 503) 316)
Net income (loss) ………………………………….. ( 9,680) ( 4,917)
Other comprehensive income (expense) net of tax:
   Foreign currency translation adjustments……….. 7) ( 4)
Comprehensive income (loss)………….…………… $     ( 9,673) $     ( 4,921)
Net income (loss) per share – basic and diluted….… $       ( 0.41) $     ( 0.21)
Weighted average number of common shares outstanding …………………………………………  

23,588,031

 

23,588,031

This schedule contains financial data extracted from the Company’s financial statements at and for the three month period ended March 31, 2000, which will be included in the Company’s Form 10-Q quarterly report for such period, which will be filed on or before May 14, 2000 and is qualified in its entirety by reference to such financial statements.