Revenues Substantially the Same When Compared to Same Quarter FY 2000; Diluted Earnings Decrease From $0.04 to $(0.03) Loss
Rica Foods, Inc. (Amex: RCF) announced Friday (25 May) the results of operations for its second fiscal quarter of 2001. EPS amounted to ($0.03) diluted loss per share for the three months ended March 31, 2001, when compared to a $0.04 diluted earnings per share during the comparative period for fiscal 2000. However, revenues were substantially the same for the second quarter of fiscal 2001, resulting in $31,342,800, a 3.41% increase when compared to the same quarter of fiscal 2000. RICA is the parent company of Costa Rica’s largest poultry producers Corporacion Pipasa, S.A. (“Pipasa”) and Corporacion As de Oros, S.A. (“As de Oros”), covering approximately 70% of the Costa Rican market. For the six months ended March 31, 2001, the Company’s operations resulted in an $0.08 diluted earnings per share, compared to a $0.25 diluted earnings per share during the comparative period for fiscal 2000. Net sales for the six months ended March 31, 2001 resulted in $64,621,388, a 1.89% increase when compared to the same period of fiscal 2000.
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Results of operations for the six months ended March 31, 2001, were negatively impacted by adverse economic factors that have affected Costa Rica, as well as North and Central America. According to information issued by the Central Bank of Costa Rica (“BCCR”), commodity exports for Costa Rica for the six months ended March 31, 2001 decreased by 23.73% when compared to the six months ended March 31, 2000. This decrease was mainly due to the economic slow-down in the United States, which according to information issued by the BCCR, purchased 52.5% of total exported commodities during fiscal year 2000. According to information issued by the Ministry of Foreign Commerce of Costa Rica, other external factors that have negatively impacted the Costa Rican economy include increases in the international price of oil and a 33.17% decrease in international investments during fiscal 2000, which has continued through fiscal year 2001. However, the Costa Rican economy has recently experienced positive factors such as a devaluation rate of only 3.22% for the six months ended March 31, 2001, which has been the lowest since March 1994, according to information issued by the BCCR, while variations in the inflation rate during the same period have been within normal parameters.
The decrease in the Costa Rican consumer’s purchasing power affected the overall demand for goods and services in Costa Rica, including the demand for the Company’s products. In response, the Company has temporarily lowered the sale price of certain products, increased volume discounts, and shifted its product mix to include more lower-priced products which, in the aggregate, have contributed to lower sales revenue than were budgeted for the Company. Because of the present economic outlook in Costa Rica, Management expects these trends to continue in the near future.
For the three months ended March 31, 2001 and 2000, operating expenses represented a 27.43% and 27.57% of total net sales, respectively. For the six months ended March 31, 2001 and 2000, operating expenses represented a 26.94% and 25.71% of total net sales, respectively. For the three and six months ended March 31, 2001, the Company interest and exchange rate loss increased, when compared to the same periods for fiscal 2000, due to increase in debt. During the six months ended March 31, 2001, the Company invested $7.13 million in assets, mainly in the production area. During the rest of the fiscal year 2001, the Company plans to restructure its short-term debt to long-term debt, and also use proceeds of the planned placement of debt to cancel short-term debt.
Following are the balance sheet as of March 31, 2000 and 2001, and results of operations for the six months ended March 31, 2000 and 2001:
RICA FOODS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
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By GlobalData March 31, September 30,
Assets 2001 2000
—— ———— ————
(Unaudited)
———–
Current assets:
Cash and cash equivalents $3,414,125 $4,256,636
Short-term investments 182,451 86,557
Notes and accounts receivable 11,161,527 11,187,031
Due from related parties 43,958 39,618
Inventories 14,008,089 14,307,768
Prepaid expenses 902,867 557,519
———— ————
Total current assets 29,713,017 30,435,129
Property, plant and equipment 47,996,003 45,425,881
Long-term receivables-trade 760,982 640,222
Long-term investments 4,781,066 3,965,385
Other assets 4,699,540 4,010,364
Cost in excess of net assets of
acquired business 2,579,857 3,705,392
———— ————
Total assets $ 90,530,465 $ 88,182,373
============ ============
Liabilities and Stockholders’ Equity
————————————
Current liabilities:
Accounts payable $ 16,882,157 $ 16,161,076
Accrued expenses 3,454,264 3,862,659
Notes payable 18,137,438 12,878,147
Current portion of long-term debt 6,179,568 5,680,190
Due to stockholders 74,434 76,657
———— ————
Total current liabilities 44,727,861 38,658,729
Long-term debt, net of current portion 20,012,421 21,820,905
Due to stockholders 15,897 16,409
Deferred income tax liability 2,154,872 2,899,511
———— ————
Total liabilities 66,911,051 63,395,554
Minority interest 1,336,445 1,336,445
Stockholders’ equity:
Common stock 12,855 12,855
Preferred stock 2,216,072 2,216,072
Additional paid-in capital 25,760,950 25,760,950
Accumulated other comprehensive loss (8,931,638) (8,758,737)
Retained earnings 10,419,633 9,388,127
———— ————
29,477,872 28,619,267
Less:
Due from stockholders (6,926,509) (4,900,499)
Treasury stock, at cost (268,394) (268,394)
———— ————
Total stockholders’ equity 22,282,969 23,450,374
———— ————
Total liabilities and
stockholders’ equity $ 90,530,465 $ 88,182,373
============ ============
The accompanying notes to unaudited consolidated financial statements are
an integral part of these balance sheets.
RICA FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Loss)
Three months ended Six months ended
—————– ——————
March 31, March 31,
——— ———
2001 2000 2001 2000
—- —- —- —-
Sales $31,342,800 $30,309,985 $64,621,388 $63,426,497
Cost of sales 21,622,910 20,427,549 42,933,576 41,554,015
———– ———– ———– ———–
Gross profit 9,719,890 9,882,436 21,687,812 21,872,482
Operating expenses:
Selling 4,834,839 4,678,825 9,614,985 9,295,025
General and
administrative 3,633,777 3,412,417 7,402,876 6,592,003
Amortization of
cost in excess
of net assets
of acquired
business 127,621 266,147 393,768 421,533
———– ———– ———– ———–
8,596,237 8,357,389 17,411,629 16,308,561
Income from
operations 1,123,653 1,525,047 4,276,183 5,563,921
Other expenses
(income):
Interest expense 1,302,023 963,674 2,402,039 1,897,339
Interest income (276,585) (168,038) (546,773) (346,499)
Foreign exchange
losses, net 628,056 322,516 1,209,505 695,075
Miscellaneous,
net (14,341) (195,065) (45,058) (401,282)
———– ———– ———– ———–
1,639,153 923,087 3,019,713 1,844,633
———– ———– ———– ———–
Income (loss)
before
provision for
income taxes
and minority
interest (515,500) 601,960 1,256,470 3,719,288
Provision for
income taxes (173,826) 12,771 107,929 406,168
———– ———– ———– ———–
Income (loss)
before minority
interest (341,674) 589,189 1,148,541 3,313,120
Minority interest 17,153 22,066 37,620 529,433
———– ———– ———– ———–
Net income (loss) (358,827) 567,123 1,110,921 2,783,687
Preferred stock
dividends 36,866 34,719 79,416 94,744
———– ———– ———– ———–
Net income (loss)
applicable to
common
stockholders $(395,693) $532,404 $ 1,031,505 $ 2,688,943
=========== ============ =========== ===========
Earnings (loss)
per share:
Basic $(0.03) $0.04 $0.08 $0.25
=========== ============ =========== ===========
Diluted $(0.03) $0.04 $0.08 $0.25
=========== ============ =========== ===========
Weighted average
number of common
shares
outstanding:
Basic 12,854,321 12,800,297 12,854,321 10,966,660
=========== ============ =========== ===========
Diluted 12,854,321 12,804,993 12,854,321 10,970,738
=========== ============ =========== ===========
The accompanying notes to un-audited consolidated financial statements are
an integral part of these statements.
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties or other factors which may cause actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For more complete information concerning factors that could affect the Company’s results, reference is made to the Company’s registration statements, reports, or other documents filed with the Securities and Exchange Commission. For more information contact Rica Foods at (305) 477-1408, or email to mmarenco@ricafoods.com and rpiedra@ricafoods.com.
