SECURITIES AND EXCHANGE COMMISSION

(MARK ONE)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 26, 2004

OR

[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _____________ TO _______________

COMMISSION FILE NUMBER 000-26519

SEMINIS, INC.

(805) 647-1572
(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

NOT APPLICABLE
(FORMER NAME, ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT)

Indicate, by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES [  ] NO [X]

Indicate, by check mark whether the Registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act). YES [  ] NO [X]

SEMINIS, INC.

FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 26, 2004

TABLE OF CONTENTS

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

SEMINIS, INC.

The accompanying notes are an integral part of these consolidated financial statements.

3

SEMINIS, INC.

Consolidated Statements of Operations

The accompanying notes are an integral part of these consolidated financial statements.

4

SEMINIS, INC.

The accompanying notes are an integral part of these consolidated financial statements.

5

SEMINIS, INC.

The accompanying notes are an integral part of these consolidated financial statements.

6

SEMINIS, INC.

Note 1 — Summary of Significant Accounting Policies

Description of Business

Seminis, Inc. (the “Company”, “we”) is the leading worldwide developer, producer and marketer of vegetable and fruit seeds. As a result of the acquisition transactions described in Note 2, which were completed on September 29, 2003, Fox Paine & Company, LLC, together with its affiliates and co-investors (collectively, “Fox Paine”), became the Company’s majority shareholder.

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Company and its majority controlled and owned subsidiaries. Investments in unconsolidated entities, representing ownership interests between 20% and 50%, are accounted for using the equity method of accounting. All material intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to prior years’ financial statements to conform to the current presentation.

As a result of the acquisition transactions described in Note 3, which were completed on September 29, 2003, the Company has presented its results of operations, changes in stockholders’ equity and cash flows on a predecessor/successor basis. Periods prior to September 29, 2003 are predecessor periods, while others are successor periods.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the fiscal period, including estimates and assumptions related to customer discounts and allowances. Actual results could differ from those estimates.

The unaudited consolidated financial statements included herein reflect all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of the results of operations for the interim periods covered and the financial condition of the Company at the date of the interim balance sheet. The Company’s business is subject to seasonal fluctuation and, therefore, the results of operations for periods less than one year are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year as a whole.

Supplementary Cash Flow Information

Recent Accounting Pronouncements

In March 2004, the consensus of Emerging Issues Task Force (EITF) Issue No. 03-06, “Participating Securities and the Two-Class Method under FASB Statement 128,” was published. EITF Issue No. 03-06 addresses the computations of earnings per share by companies that have issued securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the company. Further guidance on the application and allocations of the two-class method of calculating earnings per share is also included. The provisions of EITF Issue No. 03-06 will be effective for reporting periods beginning after March 31, 2004. The adoption of this guidance will not impact the Company’s financial results of operations and financial position.

In December 2003, the FASB reissued SFAS No. 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits, an amendment of FASB Statements No. 87, 88, and 106.” This Statement revises employers’ disclosures about pension plans and other postretirement benefit plans. It does not change the measurement or recognition of those plans required by SFAS No. 87, “Employers’ Accounting for Pensions,” SFAS No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits,” and SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions.” This Statement retains the disclosure requirements contained in the original SFAS No. 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits.” The revised Statement also requires additional disclosures about the assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension plans and other defined benefit postretirement plans. The provisions of the

7

original SFAS No. 132 will remain in effect until the provisions of this Statement are adopted. Certain new provisions are effective for financial statements with fiscal years ending after December 15, 2003, while other provisions are effective for fiscal years ending after June 15, 2004. The interim period disclosures are effective for interim periods beginning after December 15, 2003. See Note 8 “Pensions and Other Postretirement Benefits,” for disclosures required under the revised SFAS No. 132.

In December 2003, the Financial Accounting Standards Board (FASB) reissued Interpretation No. 46, “Consolidation of Variable Interest Entities – an Interpretation of ARB No. 51.” The Interpretation clarifies the application of Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” to certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity risk for the entity to finance its activities without additional subordinated financial support. The provisions of this Interpretation are effective for the Company for interim periods ending after March 15, 2004. The adoption of this Interpretation has not had a significant impact on the Company’s financial results of operations and financial position.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. This Statement requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). The provisions of this Statement are effective for financial instruments entered into or modified after May 31, 2003, and otherwise are effective at the beginning of the first interim period beginning after June 15, 2003. The Company adopted this Statement as of June 28, 2003 and has classified its newly issued paid in kind preferred stock (“PIK Preferred Stock”) as a liability.

In April 2003, the FASB issued SFAS No. 149, “Amendment to Statement 133 on Derivative Instruments and Hedging Activities.” This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) used for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” The provisions of this Statement are effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of this Statement did not have a significant impact on the Company’s financial condition or results of operations.

In January 2003, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment of FASB Statement No. 123.” SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. It also requires disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. SFAS No. 148 is effective for annual and interim periods beginning after December 15, 2002. The Company has adopted FASB Statement No. 123 under the provisions of SFAS No. 148 on October 1, 2003.

Note 2 — Liquidity

In connection with the acquisition transactions, the Company became a privately held company, acquired all of its publicly held shares of Class A common stock, Class B common stock, and shares of Class B and Class C Redeemable Preferred Stocks, repaid the $216.6 million of principal outstanding under its senior credit facility, and the $11.6 million of a mortgage on its Oxnard real property. In order to fund these transactions and other related expenses, Fox Paine purchased shares of the Company’s common stock for a purchase price of $163.2 million, the Company issued $190.0 million of ten year, 10 1/4% senior subordinated notes, established a senior secured credit facility that consisted of a $190.0 million term loan and a $60.0 million revolving loan (none of which was outstanding at March 26, 2004 and September 30, 2003, respectively), borrowed $17.0 million under a new mortgage note, and issued paid-in-kind mandatorily redeemable preferred stock (see Note 11-PIK Preferred Stock) along with warrants to purchase 3.9 million shares of common stock for combined proceeds of $50.0 million.

Upon completion of the acquisition transactions, the Company had total indebtedness of $421.3 million as of September 30, 2003 compared to $252.5 million before the transactions.

On January 23, 2004, the Company issued additional $140.0 million of its 10 1/4% senior subordinated notes, at a premium of $12.6 million. These notes have identical terms and conditions as the $190.0 million of senior subordinated notes issued as part of the acquisition transactions on September 29, 2003. The net proceeds from the additional notes, after deducting underwriting discounts and other expenses, were approximately $145.6 million. These net proceeds from the offering were used to repay $100.0 million and $15.0 million of the borrowings under the term loan portion and revolver portion, respectively, of Company’s senior secured credit facility and for general corporate purposes.

Concurrently with the offering of the additional notes, the Company amended the senior secured credit facility. The amended senior secured facility decreased the term loan from $190.0 million to $90.0 million, increased the revolving credit facility from $60.0 million to $75.0 million, amended pricing terms on both the term loan and revolver portion of the credit facility, and amended certain financial covenants.

8

The Company’s total indebtedness as of March 26, 2004 was $477.9 million, of which $89.5 million were borrowings under Company’s term loan, $342.4 million were borrowings under our senior 10 1/4% subordinated notes (amount including $12.4 million of remaining premium balance, which will be amortized over the life of the loan and reduces interest expense), $17.4 million, $4.6 million, $1.2 million, $0.5 million and $22.3 million were borrowings by its United States, Italian, Spanish, French and South Korean subsidiaries, respectively. The Company also has $42.8 million of preferred shares subject to mandatory redemption, see Note 11 for further description of the preferred shares. In addition, as of March 26, 2004, the Company has cash and cash equivalents of $78.2 million

Going forward, the Company’s principal source of liquidity will be cash flow generated from operations, borrowings under its senior secured credit facility and additional capital infusion. The Company’s principal uses of cash will be to meet debt service requirements, finance capital expenditures and provide working capital. Based on the current level of operations, management believes that remaining cash on hand, cash flow from operations and available borrowings under its revolving credit portion of the senior secured credit facility will enable the Company to meet its working capital, capital expenditure, debt service and other funding requirements for at least the next 12 months.

Note 3 — Description of the Accounting Effects of the Acquisition Transactions

Overview

On May 30, 2003, the Company and certain other parties entered into a number of agreements pursuant to which a newly incorporated entity was formed to effect the acquisition transactions whereby the Company became a privately held company and Fox Paine acquired 75.1% of the outstanding common stock of the Company. On September 29, 2003, the acquisition transactions, described in Note 2, were completed.

The acquisition transactions are accounted for under the purchase method of accounting. In accordance with applicable accounting guidelines, the purchase price paid by Fox Paine for Seminis’ common stock plus related purchase accounting adjustments are “pushed down” and recorded in Seminis’ financial statements.

The acquisition transactions resulted, for purposes of reporting the results of operations and cash flows in our financial statements, in a predecessor entity and a successor entity. The 75.1% of deemed assets acquired and liabilities assumed in connection with the acquisition transactions were originally recorded at their estimated fair market values based on an independent appraisal and 24.9% of its historical basis was carried over, however, these values were in excess of the purchase price paid by Fox Paine. Accordingly, the negative goodwill totaling $433.4 million was allocated against the value of non-current assets on a proportionate basis. The following summarizes the fair values, subsequent adjustments and on-going carrying values of the net assets acquired:

The increase in inventory value of $73.2 million, reflecting the fair market value adjustment, is being expensed as the inventory is sold, which is expected to be over a 16 month period from September 29, 2003, the date of acquisition. Finally, the intangible assets is being amortized on a straight-line basis over periods between five and forty years, and in-process research and development was immediately expensed in the results of the successor entity for the one-day period ended September 30, 2003.

Note 4 — Inventories

Inventories consist of the following:

9

Inventories are presented net of reserves of $82,047 and $79,531 at March 26, 2004 and September 30, 2003, respectively. As described in Note 3, as part of the acquisition transactions, inventories were stepped-up by $73.2 million. In the current period, $28.5 million of the step-up was amortized and charged to cost of sales. This non-cash adjustment will continue as the inventory is expected to be sold over the next 10 months.

Note 5 — Intangible Assets

Intangible assets at March 26, 2004 and September 30, 2003 consist of the following:

Aggregate amortization expense was $3.9 million and $7.9 million for the six months ended March 26, 2004 and March 28, 2003, respectively. Estimated amortization expense for the next five years is estimated at $7.7 million each year.

Note 6 — Accrued Liabilities

Accrued liabilities consist of the following at March 26, 2004 and September 30, 2003:

Note 7 — Long-Term Debt

Long-term debt consists of the following at March 26, 2004 and September 30, 2003: