-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MYM2jkIXG70IovZRmcJ9WZ7WCRQpHNJYVFTU/zTvP2RdUXBIy52b8NmL73DU6peL ybQuYAIH8nUo1tRIWS2GJQ== 0000895345-03-000269.txt : 20030429 0000895345-03-000269.hdr.sgml : 20030429 20030429141946 ACCESSION NUMBER: 0000895345-03-000269 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030429 FILED AS OF DATE: 20030429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INNOVA S DE RL CENTRAL INDEX KEY: 0001044884 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-07484 FILM NUMBER: 03668995 BUSINESS ADDRESS: STREET 1: INSURGENTES SUR 694 STREET 2: PISO 8 COL DEL VALLE 03100 CITY: MEXICO STATE: O5 BUSINESS PHONE: 5254484000 6-K 1 av6k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULES 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of April 2003 INNOVA, S. de R.L. de C.V. ------------------------------------------------------ (Translation of registrant's name into English) Insurgentes Sur 694 Piso 8, Col. Del Valle 03100 Mexico, D.F. --------------------------------------------------------------------- (Address of principal executive offices) (Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.) Form 20-F |X| Form 40-F |_| (Indicate by check mark whether the registrant by furnishing the information contained in this Form is also furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.) Yes | | No |X| (If "Yes" is marked indicate below the file number assigned to the registrant in connection with Rule 12g-3-2(b): 82 .) ----- 1 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INNOVA, S. de R.L. de C.V. --------------------------------- (Registrant) Dated: April 29, 2003 By /s/ Carlos Ferreiro Rivas ------------------------------- Name: Carlos Ferreiro Rivas Title: Chief Financial Officer 2 EX-99 3 press.txt EXHIBIT 99.1 [LOGO - SKY} FOR IMMEDIATE RELEASE - --------------------- INNOVA, S. DE R.L. DE C.V. REPORTS FIRST QUARTER 2003 RESULTS - SUBSCRIBER BASE GROWS TO 779,700 - - EBITDA INCREASED 20.4% TO PS. 260 MM- - EBITDA MARGIN INCREASED 17.9% TO 29.6% - - SHAREHOLDER FUNDING WAS NOT REQUIRED DURING THE LAST FOUR QUARTERS - o The number of gross active SUBSCRIBERS increased 11.2% to 779,700 as of March 31, 2003 as compared to the first quarter of the previous year. o REVENUES increased 2.1% due to the increase in our subscriber base. o EBITDA for the first quarter of 2003 increased 20.4% to Ps. 260.5 million from Ps. 216.3 million for the same period of the prior year. As a result, EBITDA margin increased 17.9% from 25.1% to 29.6%. o EBIT for the first quarter of 2003 improved Ps. 91.3 million to a positive Ps. 60.1 million from Ps. (31.2) million for the same period of the prior year. As a result, EBIT margin substantially increased from a negative 3.6% to a positive 6.8%. o Sky did not require additional FUNDING from its shareholders during the last four quarters. o Sky continues to offer the highest quality CONTENT in the Mexican pay TV industry. Mexico City, April 28, 2003. INNOVA, S. DE R.L. DE C.V., the provider of direct-to-home (DTH) satellite television services under the SKY brand name and the pay-TV market leader in Mexico as measured by the number of subscribers, announced its unaudited consolidated results for the first quarter ended March 31, 2003. The attached results have been prepared in accordance with Mexican GAAP and restated to constant Mexican pesos as of March 31, 2003. SUBSCRIBER BASE The number of gross active subscribers increased to - --------------- 779,700 as of March 31, 2003; this represents an 11.2% increase from 701,300 as of March 31, 2002 or approximately 78,400 gross active subscribers. We believe the increase in the subscriber base was primarily due to: 1. An increase in customer activations in response to the high quality of our programming content, special programming and aggressive marketing campaigns and, 2. Our decision to recognize commercial subscribers (non residential subscribers such as hotels, bars, restaurants and other businesses) in our gross active subscriber base. As of March 31, 2003 we had approximately 41,400 commercial subscribers, as compared to approximately 25,400 as of March 31, 2002 which were not previously included as part of our subscriber base. In the past, we were not focused on commercial subscribers; however as the number of commercial subscribers has grown we believe it has become a relevant number in our subscriber base, and therefore we have decided to include during this quarter and going forward, all of our non-residential subscribers as part of the total subscriber base. We believe the main factor causing subscriber cancellations during this quarter, as with last quarter, was the continuing weakness in the Mexican economy. Nevertheless, we experienced a decrease in the rate of subscriber cancellations as compared to previous quarters. 2 PROGRAMMING During the first quarter of 2003, Sky continued to CONTENT enhance its programming content, by adding the - ------- following offerings: o The pay TV-exclusive broadcast of certain soccer matches of the Mexican 2003 Closing Soccer Tournament; o The pay TV-exclusive broadcast of certain soccer matches of the "Copa Libertadores" Soccer Tournament; o Exclusive pay TV transmission of the 2002-2003 Mexican bullfight season; o The launching of "W Radio" channel, a news and entertainment radio programs channel on a pay TV-exclusive basis, conducted by well-known Mexican journalists; o Big Brother II, a 24-hour-a-day live reality show (on a pay TV-exclusive basis); o Boxing matches and special events such as the 2003 Brazilian Carnival; o Exclusive transmission of the Ultimate Fighting Championship; o LPGA, US PGA and US Senior PGA Golf Tournaments; and o Exclusive pay TV live transmission of certain matches of the Mexican Baseball league. PRICE AND Innova's current installation fee is Ps. 1,099. However, PROMOTIONS subscribers who agree to pay the monthly programming - ---------- fee via direct debit to a credit card, pay only Ps. 99. We continue to improve our subscriber base quality, by among other things, encouraging new and current subscribers to pay their monthly programming services through direct debit to a credit card. 3 FINANCIAL REVIEW - ---------------- FINANCIAL HIGHLIGHTS THREE MONTHS ENDED MARCH 31, 2003 AND 2002 MILLION OF CONSTANT MEXICAN PESOS AS OF MARCH 31, 2003 THREE MONTHS ENDED MARCH 31, ------------------------------------------- 2003 % Margin 2002 % Margin VAR % Net Revenues 880 100 863 100 17 2 Cost of Sales 283 32 271 31 12 4 ----- ----- ----- Gross Profit 597 68 592 69 5 1 Selling 211 24 236 27 (25) (11) Operations 96 11 111 13 (15) (14) Administrative 30 3 29 3 1 3 ----- ----- ----- Total Expenses 337 38 376 44 (39) (10) ----- ----- ----- EBITDA (1) 260 30 216 25 44 20 EBIT (2) 60 7 (31) (4) 91 n/a (1) EBITDA is defined as operating income before depreciation and amortization. (2) EBIT is defined as operating income before integral cost of financing and taxes. NET REVENUES Net revenues of Ps. 880.4 million for the three months ended March 31, 2003, increased by Ps. 17.8 million or 2.1% as compared to the same period of the prior year, mainly due to the sustained growth of our subscriber base. We have not increased prices during 2003, as we did last year. COST OF SERVICES AND SALES Cost of services and sales increased by Ps. 12.4 million or 4.6% to Ps. 283.4 million for the three months ended March 31, 2003. This increase was primarily due to higher subscriber activations and related costs, as well as higher costs directly affected by the devaluation of the peso versus the US dollar. OPERATING EXPENSES Total expenses of Ps. 336.5 million for the three months ended March 31, 2003, decreased by Ps. 38.8 million or 10.3% as compared to the same period of the prior year, mainly due to lower free special events and lower personnel cost. 4 EBITDA EBITDA of Ps. 260.5 million for the three months ended March 31, 2003, improved by Ps. 44.2 million or 20.4%, as compared to the same period of 2002, mainly due to higher revenues and lower expenses, partially offset by higher cost of services and sales as described above. In the first quarter of 2003, EBITDA margin increased 17.9% from 25.1% to 29.6% as compared to the first quarter of 2002. EBIT OPERATING INCOME EBIT improved by Ps. 91.3 million to a positive Ps. 60.1 million in the three months ended March 31, 2003, as compared to a negative Ps. (31.2) million during the same period of 2002. As a result, EBIT margin increased to 6.8% in the first quarter of 2003 from a negative 3.6% in the first quarter of 2002. NET LOSS Innova reported a net loss of Ps. 372.7 million for the three months ended March 31, 2003, as compared to a net loss of Ps. 27.1 million in the same period of 2002. The increase in net loss during this first quarter of 2003 as compared to the same period of prior year was primarily due to the foreign exchange loss of Ps. 309.8 million as compared to a foreign exchange gain of Ps. 146.3 million during the first quarter of 2002; as well as the higher interest expense incurred by the Company. The Company's foreign exchange losses during 2003 were primarily due to the depreciation of the Mexican peso against the U.S. dollar of approximately 3.1% at the end of the first quarter of 2003 and 19.6% during the last twelve months. Additional devaluations of the peso will likely affect our liquidity and results of operations, considering our substantial U.S. dollar-denominated indebtedness, operating costs and expenses, while our revenues are primarily peso-denominated. Any decrease in the value of the peso against the U.S. dollar could cause us to incur foreign exchange losses, which will reduce our net income. 5 FUNDING FROM Innova did not require additional funding from its - ------------ shareholders during the first quarter of 2003, SHAREHOLDERS including for the payment of the April 1st, 2003 - ------------ interest coupon. This was mainly due to strong cash flow from collections and the current balance of cash resources available. This is the first time that we have not required funds from our shareholders for a period of four straight quarters. From the Company's inception through March 31, 2003, Innova's shareholders have contributed an aggregate of US$458.9 million to Innova, including US$149.0 million in equity and US$309.9 million in long-term loans. Shareholder's loans accrue interest at a fixed rate of 9% per annum (plus any applicable withholding taxes) and mature in 10 years from the date on which the funds were received. RECENT On March 19, 2003, the court issued a resolution - ------ against article 5 of the Mexican Asset Tax Law, which DEVELOPMENTS does not enable taxpayers to deduct debts payable to - ------------ nonresidents from the taxable asset's value. Since the ASSET TAX declaratory judgment was favorable to us, to the extent RESOLUTION that the Asset Tax Law is not amended, we will be able to deduct debts payable to nonresidents from the asset tax basis. We are analyzing the alternatives to recover from the Mexican tax authorities the amount of taxes unduly paid for the tax years 2001 and 2002, as well as for January and February of 2003. 6 Innova, S. de R.L. de C.V., is a joint venture indirectly owned by Grupo Televisa, S.A., a Mexican corporation ("Televisa"), The News Corporation Limited, a South Australia corporation ("News Corporation"), and Liberty Media International Inc., a Delaware corporation ("Liberty Media"), (formerly known as Tele-Communications International, Inc.). Grupo Televisa S.A., is the largest media company in the Spanish-speaking world, and a major player in the international entertainment business. It has interests in television production and broadcasting, programming for pay television, international distribution of television programming, direct-to-home satellite services, publishing and publishing distribution, cable television, radio production and broadcasting, professional sports and show business promotions, paging services, feature film production and distribution, dubbing, and the operation of a horizontal Internet portal. Grupo Televisa also has an unconsolidated equity stake in Univision, the leading Spanish-language television company in the United States. News Corporation is a diversified international communications company with operations in the United States, Canada, continental Europe, the United Kingdom, Australia, Latin America and the Pacific Basin that include the production of motion pictures and television programming; television, satellite and cable broadcasting; the publication of newspapers, magazines and books; the production and distribution of promotional and advertising products and services; the development of digital broadcasting; the development of conditional access and subscriber management systems; and the creation and distribution of on-line programming. Liberty Media International owns and operates broadband cable television and telephony distribution networks and is a provider of diversified programming services in Europe, Latin America and Asia. This press release contains forward-looking statements regarding the Company's results and prospects. Actual results could differ materially from these statements. The forward-looking statements in this press release should be read in conjunction with the factors described in "Item 3. Risk Factors" in the Company's Annual Report on Form 20-F, which among others, could cause actual results to differ materially from those contained in any oral statements made by authorized officers of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Contact: CARLOS FERREIRO Chief Financial Officer Innova, S. de R.L. de C.V. Insurgentes Sur No.694 Col. del Valle Mexico City, 03100 (5255) 5448-4131 cferreiro@sky.com.mx - -------------------- 7 INNOVA, S. DE R.L. DE C.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002 STATEMENTS PREPARED UNDER MEXICAN GAAP (THOUSANDS OF MEXICAN PESOS IN PURCHASING POWER AS OF MARCH 31, 2003) THREE MONTHS ENDED MARCH 31, 2003 2002 -------------- ----------- NET REVENUES PS. 880,395 PS. 862,614 COST OF SERVICES AND SALES 283,397 271,013 -------------- ----------- GROSS PROFIT 596,998 591,601 -------------- ----------- OPERATING EXPENSES: Selling 210,613 235,997 Operations 95,980 110,940 Administrative 29,929 28,386 -------------- ----------- 336,522 375,323 -------------- ----------- EBITDA 260,476 216,278 DEPRECIATION AND AMORTIZATION 200,388 247,492 -------------- ----------- OPERATING INCOME (LOSS) - EBIT 60,088 (31,214) -------------- ----------- INTEGRAL COST OF FINANCING: Interest expense 268,805 227,995 Interest income (7,890) (2,110) Foreign exchange loss (gain) - net 309,834 (146,300) Gain from monetary position (122,540) (108,016) -------------- ----------- 448,209 (28,431) -------------- ----------- Special Items & other expense - net 4,564 12,170 -------------- ----------- LOSS BEFORE TAXES (392,685) (14,953) Income tax and Asset tax (benefit) provision (19,995) 12,108 -------------- ----------- NET LOSS PS. (372,690) PS. (27,061) ============== =========== 8 INNOVA, S. DE R.L. DE C.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2003 AND 2002 (UNAUDITED) STATEMENTS PREPARED UNDER MEXICAN GAAP (THOUSANDS OF MEXICAN PESOS IN PURCHASING POWER AS OF MARCH 31, 2003) ASSETS MARCH 03 MARCH 02 --------------- --------------- Cash and cash equivalents Ps. 514,200 Ps. 52,906 Trade accounts receivable 140,398 182,492 Value added tax credit 1,538 1,437 Spare parts 12,890 8,213 Prepaid expenses and other 146,896 139,631 --------------- --------------- TOTAL CURRENT ASSETS 815,922 384,679 PROPERTY AND EQUIPMENT - NET 1,483,007 1,836,699 PAS - 9 SATELLITE-NET 1,272,378 1,174,537 OTHER NON-CURRENT ASSETS - NET 90,633 181,406 --------------- --------------- TOTAL ASSETS PS. 3,661,940 PS. 3,577,321 =============== =============== LIABILITIES Trade accounts payable and accruals Ps. 449,809 Ps. 367,712 PanAmSat Pas-9 49,039 44,508 Due to affiliated companies and other related parties 342,366 212,307 Accrued interest 260,579 11,839 Accrued taxes 171,733 70,524 Deferred income - Pre-billed and pre-collected services 123,730 110,328 --------------- --------------- TOTAL CURRENT LIABILITIES 1,397,256 817,217 --------------- --------------- Senior Exchange Notes due 2007 4,047,000 3,569,334 Long-term loans from Stockholders 3,344,440 2,949,695 Long-term interest on Stockholders loans 784,404 404,637 Seniority premiums 1,341 505 PanAmSat Pas-9 1,404,141 1,277,805 --------------- --------------- TOTAL NON-CURRENT LIABILITIES 9,581,326 8,201,976 --------------- --------------- TOTAL LIABILITIES 10,978,582 9,019,194 --------------- --------------- STOCKHOLDERS' DEFICIT Capital stock 1,936,456 1,936,456 Accumulated loss (8,894,723) (7,099,117) Loss for the three-month period (372,690) (27,061) Excess from restatement - Inflationary effects on Balance Sheet 14,315 (252,151) --------------- --------------- TOTAL STOCKHOLDERS' DEFICIT (7,316,642) (5,441,873) --------------- --------------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT PS. 3,661,940 PS. 3,577,321 =============== ===============
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