Grupo DINA Reports on Shareholders Meeting
2 May 2000
Grupo DINA Reports on Shareholders Meeting and On Fourth Quarter and Full Year Results for 1999
MEXICO CITY, May 2 Consorcio G Grupo DINA, S.A. de C.V.
(NYSE: DIN, DIN.L) today reported on its April 28 shareholders meeting and
updated its results for the fourth quarter and year end closing for 1999.
The results that Grupo DINA presented for the period January - December
1998 are the same as those reported and updated according to the B-15
bulletin. These numbers include DINA Autobuses' results and those of MCII.
Audited figures are presented below:
Net Income (Majority Position)
(Figures in million pesos)
Jan-Dec Jan-Dec Oct-Dec Oct-Dec
1999 1998 1999 1998
Sales 5,918 10,885 431 3,627
Operating Profit (loss) 71 600 (233) 106
Ebitda 306 1,043 253 278
Financial Net Expenses 251 732 136 (13)
Net Profit (loss) 519 (685) (140) (80)
Due to the financial restructuring carried out on June 16th, 1999, Grupo
DINA reduced by 61% its participation in MCII Holdings. The fourth quarter
audited results don't reflect any operation of the above mentioned companies.
Therefore, in order to facilitate the comparison of the fourth quarter and
yearly results, we include some statistical and financial information
recognizing 39.0% of MCII and DINA Autobuses' results.
Net Income (After Restructuring)
(Figures in million pesos)
Jan-Dec Jan-Dec Oct-Dec Oct-Dec
1999 1998 1999 1998
Sales: 1,819 1,790 431 560
Operating Profit (loss) (440) (375) (216) (308)
Ebitda (296) (66) (198) (192)
Financial Net Expenses (28) 656 19 (109)
Net Profit (loss) 516 (688) (158) (112)
Audited figures suffered some modification in comparison with those
presented in the previous fourth quarter results reported last February,
mainly due to data reclassification by the external auditors, Arthur Andersen.
In the definitive report the company included the results that MCII reported
in its 10K SEC filing, a situation that resulted in a positive change in the
net majority income from $501 million pesos in the previous report to
$519 million pesos in the audited 1999 results.
CONSOLIDATED RESULTS
On June 16th, 1999, DINA and its main subsidiary, MCII Holdings (USA) Inc.
(MCII) finished an extensive financial restructuring, that had significant
effects within the company and its financial information.
The financial restructuring included a capital investment by Joseph
Littlejohn and Levy Fund III, by which DINA reduced its equity participation
in MCII from 100% to 39%. This transaction places DINA as a minority
stockholder and therefore no longer holds management control of MCII. As a
result, DINA's financial statements do not consolidate MCII results. Since
June 16th of 1999, MCII and Dina Autobuses' results are included in DINA's
income statement as participation in the results of unconsolidated
subsidiaries.
Not having MCII as a consolidated subsidiary of DINA, has generated
important changes in the financial results of the company, considering that
MCII represented 82% of Grupo DINA's sales and 114% of its operating profit in
1998 figures.
DINA CAMIONES
Throughout 1999, the Mexican heavy-duty trucks and coaches industry
recovered significantly in comparison to 1998. During 1999, 25,261 units were
sold in the domestic market compared with 22,080 units sold in 1998. This
variation represents a growth of 14.4%.
For the first semester of 1999, Grupo DINA experienced limitations in its
working capital and cash flow. This limited unit availability and therefore
sales, a situation that reduced DINA's market share.
As one of the direct results of the financial restructuring, during the
second half of the year DINA recovered its material and economic resources,
enabling the company to resume ordering from its suppliers and meet its own
delivery commitments to its customers. As of December 31, 1999 backlog orders
were 3,585 units that will be assembled with HTQ technology. The new HTQ
technology design has had strong public acceptance and has been an important
factor in initiating the company's domestic market recovery.
As shown in the following chart, Grupo DINA's total sales for the fourth
quarter of 1999 were 680 units, representing an increase of 157 and 86 units
over the second and third quarters, respectively.
The domestic heavy-duty trucks and coaches market experienced an important
recovery during the third and fourth quarters of the year. For the
October-December 1999 period, total units sold were 8,357 compared with the
5,458 units sold over the same period of 1998. This represents a 31% growth
rate.
Figures in Units
1Q98 2Q98 3Q98 4Q98 Total 1998
Domestic
trucks 275 347 276 393 1291
Market Share % 6.9 7.6 5.9 9.0 7.4
Domestic
passengers 205 340 245 233 1023
Market Share % 18.7 32.8 18.8 21.5 22.6
Export sales 335 522 211 98 1166
Total 815 1209 732 724 3480
Backlog Orders 3420 3000 2980 1660 1660
Figures in Units
1Q99 2Q99 3Q99 4Q99 Total 1999
Domestic
trucks 228 296 416 227 1167
Market Share % 6.6 6.7 7.4 3.9 6.1
Domestic
passengers 169 128 152 222 671
Market Share % 18.0 12.2 10.1 8.8 11.1
Export sales 92 99 26 231 448
Total 489 523 594 680 2286
Backlog Orders 1522 1151 1409 3585 3585
On October 29, 1999, one year after the launch of the HTQ technology,
Grupo DINA started export sales of its Class 6 and 7 heavy-duty trucks to the
North American market. DINA signed a 10-year contract with WESTERN STAR
TRUCKS, a widely recognized Class 8 heavy vehicle Canadian designer and
manufacturer.
This is one of the most important alliances Grupo DINA has ever signed.
The original order represents 9,000 units -- to be delivered throughout the
next three years. These units are to be sold in the US, Canada and Australia,
with the support of Western Star's distribution network.
The contract with Western Star Trucks was made possible due to HTQ
successful compliance of all U.S. Department of Transportation standards for
engineering, safety and environmental protection.
Since October 1999, Grupo DINA implemented the new comprehensive SITE LINE
system (SYMEX) throughout all its manufacturing plants. SYMEX is the most
advanced system for optimization of all production, purchases, engineering,
inventory control, finance and sale processes. With SYMEX, DINA guaranteed
the adequate transition of its computerized control system for the year 2000.
Grupo DINA now maintains a presence in different countries around the
world. In the American continent it has plants in Mexico and Argentina where
HTQ technology is used to manufacture heavy-duty trucks and urban buses.
DINA has an important distribution network. In Mexico 38 dealers carry
the DINA line, five of which were opened during 1999. In the rest of the
world the company has a presence in 15 countries: 14 dealers in Chile; 3 in
Ecuador; 5 in Bolivia; 8 in Colombia; 5 in Costa Rica; 3 in El Salvador; 4 in
Guatemala; 3 in Honduras; 4 in Peru; 2 in Panama; 3 in Nicaragua and 4 in The
Dominican Republic; as well as a large presence in the United States and
Canada through the alliance made with Western Star Trucks, which also
participates in the Australian market.
SALE OF INTEREST IN ARRENDADORA FINANCIERA
According to Mexican financial laws, no single entity can have equity
interest over 10% in a Financial Leasing Company. The total amount of DINA's
holdings in Arrendadora Financiera Dina, S.A. de C.V. was sold during 1999.
In order to guarantee the full payment of those shares, and release Grupo DINA
of any future obligation of re-acquisition, a trust was incorporated. The
payment of this operation was resolved by creating a deferred long- term note,
with a payment schedule as follows: 25% in 2004; 25% in 2007; and the
remaining 50% in 2009, while interest will be paid at an interest rate equal
to the CETE rate. The company obtained government authorization for this
operation. The Audited Consolidated Financial Statements of Grupo DINA, fully
describe this operation in note 8.
INTERNACIONAL DINA
During the year of 1999 International DINA, sold a total of 424 units; 92
of which were sold in the last quarter. In comparison to the previous year,
the differences are of 47 and (10) units respectively.
In March 1999 DINA launched its HTQ heavy-duty trucks in the Argentine
market. An important number of Government authorities, business
representatives, media and public attended the main event in which DINA
showcased its HTQ high quality and technologically advanced trucks.
MEXICANA DE MANUFACTURAS ESPECIALES
In order to support a more vertical integration of the company and ensure
the supply of metal-mechanical parts for the manufacture of trucks and
coaches, as well as the production of chassis units of urban and suburban
buses, DINA incorporated Mexicana de Manufacturas Especiales S.A. de C.V.
(MMV). This company has five plants in an industrial complex of 48,480 sq. m.
located in Zapopan, Jalisco.
Nowadays, MME is a strategic supplier of metal-mechanical parts for DINA
Camiones, DINA Autobuses and MCII. During most of 1999 MME observed a
pre-operative stage within its manufacturing facilities and it sales accounted
53 million pesos in the fourth quarter.
SHAREHOLDERS MEETING
The annual shareholders ordinary and extraordinary meetings took place in
accordance with Mexican laws and DINA's corporate bylaws on April 28, 2000.
Among the operational and administrative issues approved during the meetings,
the following outstanding points of the agenda were agreed:
-- The application of the 1999 net profit generated as retained earnings,
adding to the company's previous retained earnings account. Therefore,
no dividend payment to shareholders for the year 1999 was approved.
-- At its March 28, 2000 Board meeting, MCII Holdings (USA) Inc. approved
an increase in its paid-in capital in the amount of US$81.9 million, of
which Grupo DINA should pay US$31.9 million. Based on the current
financial situation of the company, DINA's shareholders agreed to hold
the payment for this capitalization until September 28, 2000, date in
which DINA's right of first refusal would expire.
-- In accordance with New York Stock Exchange (NYSE) criteria, the price
of the titles listed cannot be below one dollar for more than a six-
month period. Grupo DINA's ADR price for the last 15 months has been
below the required level. At the annual meeting shareholders approved a
change in the ADR ratio, so that instead of representing 4 shares per
ADR, it will be equivalent to 40 shares per ADR. The effective date of
this change will be announced formally by the NYSE in May. The above
change will not modify the number of outstanding shares of the company
or its market capitalization.
CONSORCIO G GRUPO DINA, S.A. DE C.V. AND SUBSIDIARIES
Consolidated Condensed Statements of Income for twelve months 1999 and 1998
Expressed in terms of the purchasing power of the Mexican Pesos as of
December 31, 1999
(Thousands of Mexican peso except per share and share amounts)
(Audited figures under Mexican GAAP)
Twelve Months Ended
Dec/31/1999 Dec/31/1998 Dec/31/1999
$Ps $Ps USCy
Net sales 5,917,999 10,885,470 623,039
Absorption costing
of goods sold 4,787,144 8,889,626 503,984
Marginal utility 1,130,855 1,995,844 119,055
Especial items 0 0 0
Gross profit 1,130,855 1,995,844 119,055
Operating expenses 1,059,428 1,396,061 111,535
Especial items 0 0 0
Operating income 71,427 599,783 7,520
Integral cost of financing
Interest expenses, net 639,871 746,506 67,365
Exchange rate (Gain) loss (107,989) 532,178 (11,369)
(Gain) loss on monetary
position (280,796) (546,873) (29,562)
Total integral cost
(benefit) of financing 251,086 731,811 26,434
Cost of idle plant 29,164 35,549 3,070
Other (income)
expenses, net (970,849) (22,706) (102,210)
Income before the
following provisions: 762,026 (144,871) 80,225
Income tax 228,432 475,073 24,049
Asset tax 20,950 41,156 2,206
Employees' profit sharing 608 0 64
Extraordinary items 0 0 0
Total provisions 249,990 516,229 26,319
Interest in subsidiaries 4,157 (26,897) 438
Net income (loss) 516,193 (687,997) 54,344
Net income (loss)
of majority interest 518,684 (684,520) 54,606
Net income (loss)
of minority interest (2,491) (3,477) (262)
EARNINGS PER SHARE
Net income (loss) per
ordinary share 2.0005 (2.6664) 0.2106
Net income (loss) per
share of majority interest 2.0102 (2.6529) 0.2116
Net income (loss) per
share of minority interest (0.0097) (0.0135) (0.0010)
Weighted ave. shares
outstanding (mm) (1) 258,026,136 258,026,136 258,026,136
(1) Four extraordinary shares are equivalent to one ADS
CONSORCIO G GRUPO DINA, S.A. DE C.V. AND SUBSIDIARIES
Consolidated Condensed Statements of Income for Three months 1999 and 1998
Expressed in terms of the purchasing power of the Mexican Pesos as of December
31,1999
(Thousands of Mexican peso except per share and share amounts)
(Audited figures under Mexican GAAP)
Three Months Ended
Oct-Dec/99 Oct-Dec/98 Oct-Dec/99
$Ps $Ps USCy
Net sales 431,038 3,627,094 45,379
Absorption costing
of goods sold 381,449 3,093,942 40,158
Marginal utility 49,589 533,153 5,221
Especial items 0 0 0
Gross profit 49,589 533,153 5,221
Operating expenses 282,422 427,062 29,733
Especial items 59 0 6
Operating income (232,892) 106,090 (24,519)
Integral cost of financing
Interest expenses, net 136,922 178,111 14,415
Exchange rate (Gain) loss 2,639 44,628 278
(Gain) loss on monetary
position (3,865) (235,490) (407)
Total integral cost
(benefit) of financing 135,696 (12,751) 14,286
Cost of idle plant (1,622) (25,194) (171)
Other (income) expenses, net (288,223) 36,604 (30,344)
Income before the
following provisions: (78,743) 107,431 (8,290)
Income tax 50,821 206,258 5,350
Asset tax 36,749 (21,170) 3,869
Employees' profit sharing 608 0 64
Extraordinary items 0 0 0
Total provisions 88,178 185,088 9,283
Interest in subsidiaries 26,813 (2,168) 2,823
Net income (loss) (140,108) (79,825) (14,750)
Net income (loss) of
majority interest (140,318) (79,961) (14,772)
Net income (loss) of
minority interest 210 136 22
EARNINGS PER SHARE
Net income (loss) per
ordinary share (0.5430) (0.3094) (0.0572)
Net income (loss) per
share of majority interest (0.5438) (0.3099) (0.0573)
Net income (loss) per
share of minority interest 0.0008 0.0005 0.0001
Weighted ave.
shares outstanding
(mm) (1) 258,026,136 258,026,136 258,026,136
(1) Four extraordinary shares are equivalent to one ADS
CONSORCIO G GRUPO DINA, S.A. DE C.V. AND SUBSIDIARIES
Consolidated Balance Sheets as of December 31, 1999 and 1998
Expressed in terms of the purchasing power of the Mexican Pesos as of
December 31,1999
(Thousands of Mexican pesos)
(Audited figures under Mexican GAAP)
Dec/31/1999 Dec/31/1998 Dec/31/1999
$Ps $Ps US $
ASSETS
Current assets:
Cash and cash equivalents 153,720 285,633 16,183
Note receivable account
Trade receivables 297,411 1,303,770 31,311
Notes and accounts receivable 215,091 349,629 22,644
512,502 1,653,399 53,956
Inventories
Finish goods 155,115 1,880,416 16,330
Goods in transit 90,623 170,890 9,541
Work in process 144,878 743,682 15,253
Raw materials in process 321,510 713,119 33,848
Inventory restatement 40,800 0 4,295
Obsolescence Reserve (56,073) (315,171) (5,903)
696,853 3,192,935 73,364
Prepaid expenses 38,019 184,953 4,003
Total current assets: 1,401,094 5,316,921 147,505
Investment in
financial entities 623,789 234,564 65,672
Long term note
receivable account 271,494 377,984 28,583
Temporary investment AF Dina 0 223,889 0
Property, plant and equipment 910,501 2,348,458 95,856
Other assets 685,231 2,579,121 72,140
Total assets 3,892,109 11,080,938 409,756
CONSORCIO G GRUPO DINA, S.A. DE C.V. AND SUBSIDIARIES
Consolidated Balance Sheets as of December 31, 1999 and 1998
Expressed in terms of the purchasing power of the Mexican Pesos as of
December 31,1999
(Thousands of Mexican pesos)
(Audited figures under Mexican GAAP)
Dec/31/1999 Dec/31/1998 Dec/31/1999
$Ps $Ps US $
LIABILITIES
Short term liabilities:
Notes and interests payable 12,256 2,011,415 1,290
Suppliers 338,240 1,080,287 35,609
Payable account Sutaur 0 0 0
Other payables and
accrued expenses 192,439 1,563,850 20,260
542,935 4,655,552 57,159
Long term liabilities:
Notes and accounts payable 1,532,993 4,896,634 161,391
Accrual for seniority premiums 61,915 159,739 6,518
Other notes payable 8,037 220,528 846
1,602,945 5,276,901 168,756
Total liabilities 2,145,880 9,932,453 225,915
STOCKHOLDERS' EQUITY
Majority interest-
Capital stock 160,791 160,791 16,928
Legal reserve 21,166 21,166 2,228
Reserve for repurchase
of shares 65,000 65,000 6,843
Premium on sale
of capital stock 870,561 870,566 91,652
Accumulated earnings (824,268) (349,272) (86,778)
Current net income 518,684 (684,521) 54,606
Restated equity 923,960 1,062,969 97,273
1,735,894 1,146,699 182,753
Minority interest- 10,335 1,786 1,088
Total stockholders' equity 1,746,229 1,148,485 183,841
Total liabilities
and stockholders' equity 3,892,109 11,080,938 409,756
The Private Securities Litigation Reform Act ("the Act") provides a
"Safe Harbor" for forward-looking statements to encourage companies to provide
prospective investors with onformation, to the extent as such statements are
identified as forward-looking and are accompanied by meaningful cautionary
statements identifying important factors which could cause results to be
materially different to those discussed in the statement. DINA would like to
take advantage of the provision of the Act.
In discussing the future prospects of the Company, management has
identified factors including, but not restricted to, the following:
-- The underlying performance of the economy, most importantly the
interest rate. Conditions in Mexico and Argentina, among the company's
primary markets, have been characterized by significant volatility in
recent years, including significant depreciation of the peso.
-- The successful implementation of the company's restructuring program
-- Competition in respective markets.