Seminis Warns of Greater Loss for 4th Quarter

Vegetable seed marketer Seminis Inc. warned that it expects its fourth-quarter loss to widen from a year earlier, saying unfavorable market conditions shaved sales by about 24%. As a result of lower sales and noncash charges related to excess inventory, the company said it will report a significantly higher loss as compared to last fiscal year. The Oxnard-based company attributed the decrease in sales primarily to unfavorable market conditions in the North American Free Trade Agreement region, non-core sales of divested assets and the weakness of the euro in relation to the dollar. Seminis expects to take a noncash charge of $36 million to $29 million in inventory excess reserves and $7 million in inventory write-offs, primarily related with non-core operations in Europe. As a result of the lower than expected sales and the additional reserves, the company said it will not be in compliance with certain financial covenants under its loan agreement as of Sept. 30. Seminis said it is negotiating with its banks to formally amend and modify the financial covenants for future periods. Shares fell 59 cents to close at 72 cents on Nasdaq.