6-K 1 kr6k.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, 2004 Commission File Number: 333-7484 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. Mexico ----------------------------------------------------------------------------- (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 .) -------- 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 28, 2004 By: /s/ Carlos Ferreiro Rivas ------------------------------ Name: Carlos Ferreiro Rivas Title: Chief Financial Officer [LOGO - SKY] FOR IMMEDIATE RELEASE INNOVA, S. DE R.L. DE C.V. REPORTS FIRST QUARTER 2004 RESULTS - SUBSCRIBER BASE GROWS TO 886,100 - - NET REVENUES INCREASED 19.1% - - EBITDA INCREASED 42.6% TO PS. 387.1 MM - - EBITDA MARGIN INCREASED TO 35.4% - o The number of gross active SUBSCRIBERS increased 13.6% to 886,100 as of March 31, 2004 from 779,700 in the first quarter of the previous year. o REVENUES for the first quarter of 2004 increased 19.1% to Ps. 1,093.1 million from Ps. 917.6 million for the same period of the prior year. o EBITDA for the first quarter of 2004 increased 42.6% to Ps. 387.1 million from Ps. 271.5 million for the same period of the prior year. o EBITDA MARGIN increased to 35.4% for the first quarter of 2004 from 29.6% for the same period of the prior year. Mexico City, April 27, 2004. 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, 2004. The attached results have been prepared in accordance with Mexican GAAP in constant Mexican pesos in purchasing power as of March 31, 2004. SUBSCRIBER BASE The number of gross active subscribers increased --------------- to 886,100 including 50,200 commercial subscribers, as of March 31, 2004. This represents a 13.6% increase from 779,700, including 41,400 commercial subscribers as of March 31, 2003, or an increase of approximately 106,400 gross active subscribers. We believe the increase in the subscriber base was primarily due to the sustained growth in customer activations in response to our aggressive marketing campaigns, high quality and variety of our programming content, unique exclusive events, and the high quality of our customer service. The increase in subscriber base was partially offset by subscriber cancellations during the last quarter, primarily due to the continuing weakness in the Mexican economy. Nevertheless, we continue to experience a decline in the rate of subscriber cancellations as compared to the previous year. PROGRAMMING CONTENT During the first quarter of 2004, Sky continued ------------------- to enhance its programming content, by adding the following content and exclusive events: o Big Brother VIP3, a 128-day live reality show broadcast, on a pay-TV exclusive basis, 24 hours a day with twenty eight well-known media and entertainment participants; o The pay-TV exclusive broadcast of certain soccer matches of the Mexican 2004 Closing Soccer Tournament; o The pay-TV exclusive broadcast of the America team soccer matches in the "Copa Libertadores" Tournament on a pay-per-view basis; o Launching of "Antena 3", a popular channel broadcast in Spain; o The pay TV broadcast of the US PGA and Champions Golf Tournaments; o The pay TV-exclusive broadcast of certain matches of the Mexican Baseball league; and o The pay TV exclusive broadcast of boxing matches of Morales, Arce and Chavez. PRICE AND PROMOTIONS Innova's current installation fee is Ps. 899. -------------------- However, it is for free for those residential subscribers who agree to pay the monthly programming fee via automatic charge to a credit card, or those residential subscribers who agree to change from other pay-TV providers to Sky, either paying with credit card or cash. We continue our efforts to improve the subscriber base quality by, among other things, encouraging new and current subscribers to pay their monthly programming services through automatic charge to their credit or debit card. FINANCIAL REVIEW ---------------- FINANCIAL HIGHLIGHTS THREE MONTHS ENDED MARCH 31, 2004 AND 2003 STATEMENTS PREPARED UNDER MEXICAN GAAP (UNAUDITED) MILLION OF CONSTANT MEXICAN PESOS AS OF MARCH 31, 2004 THREE MONTHS ENDED MARCH 31, ------------------------------------------------------- 2004 % Margin 2003 % Margin VAR % Net Revenues 1,093 100 918 100 175 19 Cost of Sales 322 29 295 32 27 9 ------ ----- ----- Gross Profit 771 71 623 68 148 24 Selling 236 22 220 24 16 7 Operations 115 11 100 11 15 15 Administrative 33 3 31 3 2 6 ------ ----- ----- Total Expenses 384 35 351 38 33 9 ------ ----- ----- EBITDA (1) 387 35 272 30 115 42 EBIT (2) 196 18 63 7 133 211 (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. 1,093.1 million for the three months ended March 31, 2004, increased by Ps. 175.5 million or 19.1% as compared to the same period of the prior year, primarily due to the growth of our subscriber base, the elimination of the 10% excise tax on telecommunications services and additional pay-per-view revenues of special events. COST OF SERVICES AND SALES Cost of services and sales increased by Ps. 26.6 million or 9.0% to Ps. 322.0 million for the three months ended March 31, 2004 as compared to the same period of the prior year. This increase was primarily due to higher programming costs associated with our larger subscriber base. OPERATING EXPENSES Total expenses of Ps. 384.0 million for the three months ended March 31, 2004, increased by Ps. 33.2 million or 9.5% as compared to the same period of the prior year, primarily due to higher call center cost, IRD repairs, commission and promotion expenses and free special events. EBITDA EBITDA of Ps. 387.1 million for the three months ended March 31, 2004, improved by Ps. 115.7 million or 42.6%, as compared to the same period of 2003, primarily due to higher revenues, partially offset by higher cost of services and sales and operating expenses, as described above. As a result, EBITDA margin increased from 29.6% for the first quarter of 2003 to 35.4% for the first quarter of 2004. EBIT OPERATING INCOME EBIT improved by Ps. 133.6 million or 213.4% to Ps. 196.3 million in the three months ended March 31, 2004, as compared to Ps. 62.6 million during the same period of 2003. As a result, EBIT margin increased to 18.0% in the first quarter of 2004 as compared to 6.8% in the first quarter of 2003. NET INCOME (LOSS) Innova reported a net income of Ps. 147.0 million for the three months ended March 31, 2004, as compared to a net loss of Ps. (388.5) million in the same period of 2003. Our improved results were primarily due to the decrease of our interest expenses from Ps. 280.2 million in the first quarter of 2003 to Ps.189.2 million in the first quarter of 2004; as well as the improved foreign exchange result, from a net loss of Ps. (322.9) million in the first quarter of 2003 to a net gain of Ps. 42.4 million in this first quarter of 2004. The peso appreciation of 0.5% versus the U.S. dollar during this first quarter of 2004 as compared to a 3.5% peso devaluation versus the U.S. dollar during the first quarter of 2003, helped us to improve our results. Nevertheless, future devaluations of the peso will likely affect our liquidity and results of operations, considering our 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 would reduce our net income. 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, an Australian Corporation ("News Corporation"), and Liberty Media International Inc., a Delaware corporation ("Liberty Media"), (formerly known as Tele-Communications International, Inc.). For more information, please visit www.sky.com.mx. -------------- 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, feature film production and distribution, 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. For more information, please visit www.televisa.com. NEWS CORPORATION, is a diversified international media and entertainment company with operations in seven industry segments: filmed entertainment; television; cable network programming; magazines and inserts; newspapers; book publishing; and other. The activities of News Corporation are conducted principally in the United States, the United Kingdom, Australia, Asia and the Pacific Basin. For more information, please visit www.newscorp.com. 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. For more information, please visit www.libertymedia.com. This press release contains forward-looking statements regarding Innova's results and prospects. Actual results could differ materially from these statements. The forward-looking statements in this press release, including, but not limited to, statements regarding our subscriber base and the impact of changes to foreign currency exchange rates 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. Contacts: 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 -------------------- JUAN CARLOS MUNOZ Investor Relations Innova, S. de R.L. de C.V. (5255) 5448-4000 ext.6658 jmunoz@sky.com.mx INNOVA, S. DE R.L. DE C.V. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003 STATEMENTS PREPARED UNDER MEXICAN GAAP (THOUSANDS OF MEXICAN PESOS IN PURCHASING POWER AS OF MARCH 31, 2004) THREE MONTHS ENDED MARCH 31, 2004 2003 ------------ ------------ NET REVENUES PS. 1,093,077 PS. 917,642 COST OF SERVICES AND SALES 322,021 295,387 ------------ ------------ GROSS PROFIT 771,056 622,255 ------------ ------------ OPERATING EXPENSES: Selling 235,599 219,523 Operations 115,518 100,041 Administrative 32,884 31,195 ------------ ------------ 384,001 350,759 ------------ ------------ EBITDA 387,055 271,496 DEPRECIATION AND AMORTIZATION 190,800 208,866 ------------ ------------ OPERATING INCOME - EBIT 196,255 62,630 ------------ ------------ INTEGRAL COST OF FINANCING: Interest expense 189,209 280,177 Interest income (3,532) (8,224) Foreign exchange loss - net (42,386) 322,942 Gain from monetary position (95,428) (127,724) ------------ ------------ 47,863 467,171 ------------ ------------ Special Items & other expense - net 1,216 4,757 ------------ ------------ INCOME (LOSS) BEFORE TAXES 147,176 (409,298) Provision for (benefit from) income and assets tax 49 (20,840) Minority interest (173) - ------------ ------------ NET INCOME (LOSS) PS. 146,954 PS. (388,458) ============ ============ INNOVA, S. DE R.L. DE C.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2004 AND 2003 (UNAUDITED) Statements prepared under Mexican GAAP (Thousands of Mexican Pesos in purchasing power as of March 31, 2004)

~~THREE~~2004 ~~MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,~~ 2003 ~~2002 2003 2002~~ ----~~--------~~ ----~~--------~~ ~~------------~~ASSETS ~~--------------~~Cash ~~NET~~and ~~REVENUES~~cash equivalents PS. ~~931~~441,~~850~~626 PS. ~~884~~535,~~752~~954 ~~PS.~~Trade 2accounts receivable 157,~~775~~435 146,~~005~~338 ~~PS.~~Value added tax credit 2,~~659~~035 1,~~798~~603 ~~COST~~Spare OFparts ~~SERVICES~~10,242 ~~AND~~13,435 ~~SALES~~Prepaid ~~280,749~~expenses ~~256,852~~and ~~857~~other 164,~~163~~139 ~~816~~153,~~607~~111 ------------ ------------ -~~-----------~~ ~~--------------~~TOTAL ~~GROSS~~CURRENT ~~PROFIT~~ASSETS ~~651~~775,~~101~~477 ~~627~~850,~~900~~441 PROPERTY AND EQUIPMENT - NET 1,~~917~~359,~~842~~584 1,~~843~~545,~~191~~749 PAS - 9 SATELLITE-NET 1,232,148 1,326,209 OTHER NON-~~---------~~CURRENT ASSETS -~~-----------~~ NET 65,700 94,468 ------------ -------------- ~~OPERATING~~TOTAL ~~EXPENSES:~~ASSETS ~~Selling~~PS. ~~199~~3,~~150 188~~432,~~996~~909 ~~633,009~~PS. ~~653~~3,~~189~~816,867 ~~Operations~~============ ~~130,109~~============= ~~137,316~~LIABILITIES ~~342,426~~Trade ~~387,232~~accounts ~~Administrative~~payable ~~28,264~~and ~~36,586~~accruals ~~85,282~~PS. 95414,~~347~~035 ~~------------~~PS. ~~------------~~468,839 ~~------------~~PanAmSat Pas-~~-------------~~9 ~~357~~65,~~523~~066 ~~362~~51,~~898~~114 ~~1,060,717~~Due ~~1,135,768~~to ~~------------~~affiliated ~~------------~~companies ~~------------~~and ~~--------------~~other ~~EBITDA~~related ~~293~~parties 384,~~578~~385 ~~265~~356,~~002~~851 ~~857~~Accrued interest 28,~~125~~019 ~~707~~271,~~423~~603 ~~DEPRECIATION~~Accrued ~~AND~~taxes ~~AMORTIZATION 201~~143,~~607~~216 ~~220~~178,~~509~~999 ~~600,464~~Deferred ~~718,714~~income - Pre-~~----------~~billed and pre-~~-----------~~collected services 140,462 128,965 ------------ -------------- ~~OPERATING~~TOTAL ~~INCOME~~CURRENT ~~(LOSS)~~LIABILITIES ~~-EBIT 91~~1,~~971 44~~175,~~493~~183 ~~256~~1,~~661 (11~~456,~~291)~~371 ------------ ------------ -~~-----------~~ ~~--------------~~Senior ~~INTEGRAL~~Exchange ~~COST~~Notes OFdue ~~FINANCING:~~2013 ~~Interest expense 231~~3,~~394 262~~352,~~138~~200 ~~759,090~~- ~~745,527~~Senior ~~Interest~~Exchange ~~income~~Notes ~~(2,577)~~due ~~(3,852)~~2007 ~~(12~~983,~~733)~~312 (84,~~534)~~218,218 ~~Foreign~~Long-term ~~exchange~~loans ~~loss~~from Stockholders - ~~net 483~~3,~~100 250~~485,~~664~~934 ~~469,828~~Long-term ~~979,955~~interest ~~Gain~~on ~~from~~Stockholders ~~monetary~~loans ~~position~~- ~~(103~~817,~~976)~~590 ~~(152,630)~~Seniority ~~(211~~premiums 1,~~186)~~791 ~~(355~~1,~~376)~~398 ~~------------~~PanAmSat Pas-~~-----------~~9 ~~------------ -------------- 607,941 356,320~~ 1,~~004~~381,~~999~~519 1,~~361~~463,~~572~~547 ------------ ------------ -~~-----------~~ ~~--------------~~TOTAL ~~Special Items & other expense~~ NON-CURRENT ~~net~~LIABILITIES ~~(40~~5,~~423) 7~~718,~~572~~822 ~~(36~~9,~~406) 28~~986,~~661~~687 ------------ ------------- TOTAL LIABILITIES 6,894,005 11,443,058 ------------ -------------- ~~LOSS~~STOCKHOLDERS' ~~BEFORE~~DEFICIT ~~TAXES~~Capital ~~(475~~stock 6,~~547)~~423,975 ~~(319~~2,~~399)~~018,382 Accumulated loss (~~711~~10,~~932~~087,778) (19,~~401~~271,~~524~~035) Income ~~and~~(loss) ~~assets~~for ~~taxes~~the ~~(benefit)~~three-month ~~provision~~period ~~(89~~146,~~187)~~954 ~~21,324~~ (~~117~~388,~~065~~458) ~~55,057~~Excess ~~Minority~~from ~~interest~~restatement-Inflationary ~~(780)~~effects -on ~~(780)~~Balance -Sheet ~~------------~~55,753 ~~------------~~14,920 ------------ -------------- ~~NET~~TOTAL ~~LOSS~~STOCKHOLDERS' ~~PS.~~DEFICIT (~~385~~3,~~580) PS. (340~~461,~~723~~096) ~~PS.~~ (~~594~~7,~~087) PS. (1~~626,~~456,581~~191) ------------ ------------ -~~-----------~~ ~~--------------~~TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT Ps. 3,432,909 Ps. 3,816,867 ============ =============

2003 2002 ------------- ------------ ASSETS Cash and cash equivalents Ps. 3,698,488 Ps. 176,290 Trade accounts receivable 127,294 420,961 Value added tax credit 1,860 33,026 Spare parts 12,669 8,284 Prepaid expenses and other 65,199 90,173 ------------- ------------ TOTAL CURRENT ASSETS 3,905,510 728,734 PROPERTY AND EQUIPMENT - NET 1,372,415 1,693,679 PAS -9 SATELLITE-NET 1,255,667 1,284,208 OTHER NON-CURRENT ASSETS - NET 114,299 123,513 ------------- ------------ TOTAL ASSETS Ps. 6,647,891 Ps. 3,830,134 ============= ============ LIABILITIES Senior Exchange Notes due 2007 (call - Oct 20th, 2003) Ps. 3,159,296 Ps. - Trade accounts payable and accruals 406,337 381,094 PanAmSat Pas-9 60,533 48,332 Due to affiliated companies and other related parties 435,609 312,508 Accrued interest 9,460 253,565 Accrued taxes 67,807 156,473 Deferred income - Pre-billed and pre-collected services 135,897 112,057 ------------- ------------ TOTAL CURRENT LIABILITIES 4,274,939 1,264,029 ------------- ------------ Senior Exchange Notes due 2013 3,302,400 - Senior Exchange Notes due 2007 968,704 3,988,635 Long-term loans from Stockholders - 3,296,208 Long-term interest on Stockholders loans - 617,004 Seniority premiums 1,653 789 PanAmSat Pas-9 1,393,964 1,405,159 ------------- ------------ TOTAL NON-CURRENT LIABILITIES 5,666,721 9,307,795 ------------- ------------ TOTAL LIABILITIES 9,941,660 10,571,824 STOCKHOLDERS' DEFICIT Capital stock 6,224,421 1,956,242 Accumulated loss (8,985,478) (7,177,442) Loss for the nine-month period (594,087) (1,456,581) Excess from restatement-Inflationary effects on Balance Sheet 61,375 (63,909) ------------- ------------ TOTAL STOCKHOLDERS' DEFICIT (3,293,769) (6,741,690) ------------- ------------ TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT Ps. 6,647,891 Ps. 3,830,134

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