UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of April, 2006.
Group Simec, Inc.
--------------------------------------------------------------------------------
(Translation of Registrant's Name Into English)
Mexico
--------------------------------------------------------------------------------
(Jurisdiction of incorporation or organization)
Av. Lazaro Cardenas 601, Colonia la Nogalera, Guadalajara, Jalisco, Mexico 44440
--------------------------------------------------------------------------------
(Address of principal executive office)
(Indicate by check mark whether the registrant files or will file annual reports
under cover of 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 thereby 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 12g3-2(b): 82-_______________________.)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GRUPO SIMEC, S.A. de C.V. ______________________________
(Registrant)
Date: April 27, 2006. By:
------------------------------
Name: Luis Garcia Limon
Title: Chief Executive Officer
[LOGO] GRUPO
SIMEC
PRESS RELEASE Contact: Jose Flores Flores
Grupo Simec, S.A. de C.V.
Calzada Lazaro Cardenas 601
44440 Guadalajara, Jalisco, Mexico
52 33 1057 5734
GRUPO SIMEC ANNOUNCES RESULTS OF OPERATIONS FOR THE FIRST THREE MONTHS OF 2006
GUADALAJARA, MEXICO, April 25, 2006- Grupo Simec, S.A. de C.V. (AMEX-SIM)
("Simec") announced today its results of operations for the three-month period
ended March 31, 2006. Net sales increased 208% to Ps. 5,612 million in the first
quarter of 2006 compared to Ps. 1,824 million in the same period of 2005, due to
the inclusion of net sales of Ps. 4,067 million generated by the newly acquired
plants of PAV Republic, Inc. ("Republic") in July 2005. Simec recorded net
income of Ps. 442 million in the first three months of 2006 versus net income of
Ps. 332 million in the first three months of 2005.
On July 22, 2005 Simec and its parent company Industrias CH, S.A. de C.V.
("ICH") acquired 100% of the stock of Republic. Simec, ICH's largest subsidiary,
acquired 50.2% of Republic's stock, and ICH purchased the remaining 49.8%. The
cash purchase price of U.S. $229 million was financed by internally generated
funds. At March 31, 2006, Republic repaid in full its outstanding bank debt,
which had maturities through 2009. Republic is the leading producer of special
bar quality (SBQ) steel in the United States and, together with Simec, is the
largest producer of this kind of steel in North America.
Simec sold 680,602 metric tons of basic steel products during the three-month
period ended March 31, 2006 (including 436,999 metric tons sold by the newly
acquired plants of Republic), an increase of 176% as compared to 246,202 metric
tons in the same period of 2005. Exports (including sales by U.S. subsidiaries)
of basic steel products were 467,729 metric tons in the three-month period ended
March 31, 2006 (including 436,999 metric tons sold by the newly acquired plants
of Republic) versus 36,796 metric tons in the same period of 2005. Additionally
Simec sold 1,290 metric tons of billet in the three-month period ended March 31,
2006 as compared to 12,870 metric tons of billet in the same period of 2005.
Prices of finished products (excluding sales by Republic) sold in the
three-month period ended March 31, 2006 decreased 13% in real terms versus the
same period of 2005.
Simec's direct cost of sales increased 303% to Ps. 4,684 million in the
three-month period ended March 31, 2006 (including Ps. 3,671 million relating to
the newly acquired plants of Republic) compared to Ps. 1,161 million in the same
period of 2005. The average cost of raw materials used to produce steel products
(excluding the production of Republic) decreased 9% in real terms in the
three-month period ended March 31, 2006 versus the same period of 2005,
primarily as a result of decreases in the price of scrap and certain other raw
materials.
Indirect manufacturing, selling, general and administrative expenses (including
depreciation) were Ps. 319 million in the three-month period ending March 31,
2006 (including Ps. 148 million relating to the newly acquired plants of
Republic), compared to Ps. 189 million in the same period of 2005.
Simec's operating income increased 28% to Ps. 609 million during the first
quarter 2006 (including Ps. 248 million relating to the newly acquired plants of
Republic) from Ps. 474 million in the first quarter of 2005. Operating income
was 11% (23% excluding the operating income of Republic) of net sales in the
first quarter of 2006 compared to 26% of net sales in the first quarter of 2005.
Simec recorded other income, net, from other financial operations of Ps. 11
million in the three-month period ended March 31, 2006 compared to other income,
net, of Ps. 5 million in the same period of 2005. In addition, Simec recorded a
provision for income tax and employee profit sharing of Ps. 94 million in the
three-month period ended March 31, 2006 versus a provision of Ps. 148 million in
the same period of 2005.
Simec recorded financial expense of Ps. 5 million in the three-month period
ended March 31, 2006 compared to financial income of Ps. 1 million in the same
period of 2005 as a result of (i) net interest income of Ps. 1 million in the
three-month period ended March 31, 2006 compared to Ps. 2 million of net
interest income in the same period of 2005, (ii) an exchange gain of Ps. 1
million in the three-month period ended March 31, 2006 compared to an exchange
gain of Ps. 6 million in the same period of 2005 reflecting a decrease of 1.6%
in the value of the peso versus the dollar in the three-month period ended March
31, 2006 compared to a decrease of 0.3% in the value of the peso versus the
dollar in the same period of 2005 and (iii) a loss from monetary position of Ps.
7 million in the three-month period ended March 31, 2006 compared to a loss from
monetary position of Ps. 7 million in the same period of 2005, reflecting the
domestic inflation rate of 0.9% in the three-month period ended March 31, 2006
compared to the domestic inflation rate of 0.8% in the same period of 2005.
At March 31, 2006 Simec's total consolidated debt consisted of U.S. $302,000 of
8 7/8% medium-term notes ("MTN's") due 1998 (accrued interest at March 31, 2006
was U.S. $316,356 dollars. At December 31, 2005, Simec's total consolidated debt
consisted of approximately $38 million of U.S. dollar-denominated debt.
All figures were prepared in accordance with Mexican generally accepted
accounting principles and are stated in constant Pesos at March 31, 2006.
Simec is a mini-mill steel producer in Mexico and manufactures a broad range of
non-flat structural steel products and its subsidiary Republic is the leading
producer of special bar quality (SBQ) steel in the United States.
###
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
CONSOLIDATED FINANCIAL STATEMENT AT
MARCH 31 OF 2006 AND 2005
(thousands of Mexican pesos)
------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
S
------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
------------------------------------------------------------------------------------------------------------------------
s01 TOTAL ASSETS 15,070,235 100 9,446,402 100
------------------------------------------------------------------------------------------------------------------------
s02 CURRENT ASSETS 7,150,332 47 3,300,372 35
------------------------------------------------------------------------------------------------------------------------
s03 CASH AND SHORT-TERM INVESTMENTS 344,603 2 802,416 8
------------------------------------------------------------------------------------------------------------------------
s04 ACCOUNTS AND NOTES RECEIVABLE (NET) 2,570,961 17 1,244,145 13
------------------------------------------------------------------------------------------------------------------------
s05 OTHER ACCOUNTS AND NOTES RECEIVABLE 353,334 2 31,935 0
------------------------------------------------------------------------------------------------------------------------
s06 INVENTORIES 3,675,837 24 1,144,134 12
------------------------------------------------------------------------------------------------------------------------
s07 OTHER CURRENT ASSETS 205,597 1 77,742 1
------------------------------------------------------------------------------------------------------------------------
s08 LONG-TERM 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s09 ACCOUNTS AND NOTES RECEIVABLE (NET) 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s10 INVESTMENT IN SHARES OF NON-CONSOLIDATED
SUBSIDIARIES AND ASSOCIATES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s11 OTHER INVESTMENTS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s12 PROPERTY, PLANT AND EQUIPMENT (NET) 7,196,338 48 5,911,063 63
------------------------------------------------------------------------------------------------------------------------
s13 LAND AND BUILDINGS 2,381,478 16 2,271,674 24
------------------------------------------------------------------------------------------------------------------------
s14 MACHINERY AND INDUSTRIAL EQUIPMENT 6,577,022 44 5,936,586 63
------------------------------------------------------------------------------------------------------------------------
s15 OTHER EQUIPMENT 170,393 1 157,072 2
------------------------------------------------------------------------------------------------------------------------
s16 ACCUMULATED DEPRECIATION 2,478,230 16 2,480,065 26
------------------------------------------------------------------------------------------------------------------------
s17 CONSTRUCTION IN PROGRESS 545,675 4 25,796 0
------------------------------------------------------------------------------------------------------------------------
s18 OTHER INTANGIBLE ASSETS AND DEFERRED ASSETS (NET) 717,864 5 234,967 2
------------------------------------------------------------------------------------------------------------------------
s19 OTHER ASSETS 5,701 0 0 0
------------------------------------------------------------------------------------------------------------------------
s20 TOTAL LIABILITIES 4,920,161 100 2,339,962 100
------------------------------------------------------------------------------------------------------------------------
s21 CURRENT LIABILITIES 2,955,697 60 922,599 39
------------------------------------------------------------------------------------------------------------------------
s22 SUPPLIERS 1,734,263 35 590,737 25
------------------------------------------------------------------------------------------------------------------------
s23 BANK LOANS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s24 STOCK MARKET LOANS 3,307 0 3,527 0
------------------------------------------------------------------------------------------------------------------------
s25 TAXES PAYABLE 155,203 3 137,407 6
------------------------------------------------------------------------------------------------------------------------
s26 OTHER CURRENT LIABILITIES 1,062,924 22 190,928 8
------------------------------------------------------------------------------------------------------------------------
s27 LONG-TERM LIABILITIES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s28 BANK LOANS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s29 STOCK MARKET LOANS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s30 OTHER LOANS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s31 DEFERRED LIABILITIES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s32 OTHER NON-CURRENT LIABILITIES 1,964,464 40 1,417,363 61
------------------------------------------------------------------------------------------------------------------------
s33 CONSOLIDATED STOCKHOLDERS' EQUITY 10,150,074 100 7,106,440 100
------------------------------------------------------------------------------------------------------------------------
s34 MINORITY INTEREST 2,049,604 20 327 0
------------------------------------------------------------------------------------------------------------------------
s35 MAJORITY INTEREST 8,100,470 80 7,106,113 100
------------------------------------------------------------------------------------------------------------------------
s36 CONTRIBUTED CAPITAL 4,453,402 44 4,325,334 61
------------------------------------------------------------------------------------------------------------------------
S79 CAPITAL STOCK 3,520,255 35 3,415,872 48
------------------------------------------------------------------------------------------------------------------------
s39 PREMIUM ON ISSUANCE OF SHARES 933,147 9 683,603 10
------------------------------------------------------------------------------------------------------------------------
s40 CONTRIBUTIONS FOR FUTURE CAPITAL INCREASES 0 0 225,859 3
------------------------------------------------------------------------------------------------------------------------
s41 EARNED CAPITAL 3,647,068 36 2,780,779 39
------------------------------------------------------------------------------------------------------------------------
s42 RETAINED EARNINGS AND CAPITAL RESERVES 5,026,570 50 3,498,990 49
------------------------------------------------------------------------------------------------------------------------
s44 OTHER ACCUMULATED COMPREHENSIVE RESULT (1,379,502) (14) (718,211) (10)
------------------------------------------------------------------------------------------------------------------------
s80 SHARES REPURCHASED 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
CONSOLIDATED FINANCIAL STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
S
------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
------------------------------------------------------------------------------------------------------------------------
s03 CASH AND SHORT-TERM INVESTMENTS 344,603 100 802,416 100
------------------------------------------------------------------------------------------------------------------------
s46 CASH 304,092 88 151,132 19
------------------------------------------------------------------------------------------------------------------------
s47 SHORT-TERM INVESTMENTS 40,511 12 651,284 81
------------------------------------------------------------------------------------------------------------------------
s07 OTHER CURRENT ASSETS 205,597 100 77,742 100
------------------------------------------------------------------------------------------------------------------------
s81 DERIVATIVE FINANCIAL INSTRUMENTS 18,293 9 18,917 24
------------------------------------------------------------------------------------------------------------------------
s82 DISCONTINUED OPERATIONS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s83 OTHER 187,304 91 58,825 76
------------------------------------------------------------------------------------------------------------------------
s18 OTHER INTANGIBLE ASSETS AND DEFERRED ASSETS (NET) 717,864 100 234,967 100
------------------------------------------------------------------------------------------------------------------------
s48 DEFERRED EXPENSES 477,876 67 232,942 99
------------------------------------------------------------------------------------------------------------------------
s49 GOODWILL 166,988 23 0 0
------------------------------------------------------------------------------------------------------------------------
s50 DEFERRED TAXES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s51 OTHER 73,200 10 2,025 1
------------------------------------------------------------------------------------------------------------------------
s19 OTHER ASSETS 5,701 100 0 0
------------------------------------------------------------------------------------------------------------------------
s84 INTANGIBLE ASSET FROM LABOR OBLIGATIONS 3,335 58 0 0
------------------------------------------------------------------------------------------------------------------------
s85 DERIVATIVE FINANCIAL INSTRUMENTS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s50 DEFERRED TAXEX 2,366 42 0 0
------------------------------------------------------------------------------------------------------------------------
s86 DISCONTINUED OPERATIONS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s87 OTHER 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s21 CURRENT LIABILITIES 2,955,697 100 922,599 100
------------------------------------------------------------------------------------------------------------------------
s52 FOREIGN CURRENCY LIABILITIES 1,674,917 57 237,533 26
------------------------------------------------------------------------------------------------------------------------
s53 MEXICAN PESOS LIABILITIES 1,280,780 43 685,066 74
------------------------------------------------------------------------------------------------------------------------
s26 OTHER CURRENT LIABILITIES 1,062,924 100 190,928 100
------------------------------------------------------------------------------------------------------------------------
s88 DERIVATIVE FINANCIAL INSTRUMENTS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s89 INTEREST LIABILITIES 3,464 0 0 0
------------------------------------------------------------------------------------------------------------------------
s68 PROVISIONS 371,930 35 0 0
------------------------------------------------------------------------------------------------------------------------
s90 DISCONTINUED OPERATIONS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s58 OTHER CURRENT LIABILITIES 687,530 65 190,928 100
------------------------------------------------------------------------------------------------------------------------
s27 LONG-TERM LIABILITIES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s59 FOREIGN CURRENCY LIABILITIES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s60 MEXICAN PESOS LIABILITIES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s31 DEFERRED LIABILITIES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s65 NEGATIVE GOODWILL 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s67 OTHER 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s32 OTHER NON CURRENT LIABILITIES 1,964,464 100 1,417,363 100
------------------------------------------------------------------------------------------------------------------------
s66 DEFERRED TAXES 1,843,044 94 1,394,442 98
------------------------------------------------------------------------------------------------------------------------
s91 OTHER LIABILITIES IN RESPECT OF SOCIAL INSURANCE 12,388 1 22,921 2
------------------------------------------------------------------------------------------------------------------------
s92 DISCONTINUED OPERATIONS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s69 OTHER LIABILITIES 109,032 6 0 0
------------------------------------------------------------------------------------------------------------------------
s79 CAPITAL STOCK 3,520,255 100 3,415,872 100
------------------------------------------------------------------------------------------------------------------------
s37 CAPITAL STOCK (NOMINAL) 2,048,257 58 1,948,155 57
------------------------------------------------------------------------------------------------------------------------
s69 RESTATEMENT OF CAPITAL STOCK 1,471,998 42 1,467,717 43
------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
CONSOLIDATED FINANCIAL STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
S
------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
------------------------------------------------------------------------------------------------------------------------
s42 RETAINED EARNINGS AND CAPITAL RESERVES 5,026,570 100 3,498,990 100
------------------------------------------------------------------------------------------------------------------------
s93 LEGAL RESERVE 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s43 RESERVE FOR REPURCHASE OF SHARES 87,784 2 87,784 3
------------------------------------------------------------------------------------------------------------------------
s94 OTHER RESERVES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s95 RETAINED EARNINGS 4,496,845 89 3,079,367 88
------------------------------------------------------------------------------------------------------------------------
s45 NET INCOME FOR THE YEAR 441,941 9 331,839 9
------------------------------------------------------------------------------------------------------------------------
s44 OTHER ACCUMULATED COMPREHENSIVE RESULT (1,379,502) 100 (718,211) 100
------------------------------------------------------------------------------------------------------------------------
s70 ACCUMULATED MONETARY RESULT 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s71 RESULT FROM HOLDING NON-MONETARY ASSETS (484,485) 35 176,806 (25)
------------------------------------------------------------------------------------------------------------------------
s96 CUMULATIVE RESULT FROM FOREIGN CURRENCY TRANSLATION
------------------------------------------------------------------------------------------------------------------------
s97 CUMULATIVE RESULT FROM DERIVATIVE FINANCIAL INSTRUMENTS 12,774 (1) 12,774 (2)
------------------------------------------------------------------------------------------------------------------------
s98 CUMULATIVE EFFECT OF DEFERRED INCOME TAXES (907,791) 66 (907,791) 126
------------------------------------------------------------------------------------------------------------------------
s99 LABOR OBLIGATION ADJUSTMENT 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s100 OTHER 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
BALANCE SHEETS
OTHER CONCEPTS
(thousands of Mexican pesos)
-----------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
S
-----------------------------------------------------------------------------------------------------
AMOUNT AMOUNT
-----------------------------------------------------------------------------------------------------
S72 WORKING CAPITAL 4,194,635 2,377,773
-----------------------------------------------------------------------------------------------------
S73 PENSIONS FUND AND SENIORITY PREMIUMS 0 0
-----------------------------------------------------------------------------------------------------
S74 EXECUTIVES (*) 59 44
-----------------------------------------------------------------------------------------------------
S75 EMPLOYERS (*) 1,165 768
-----------------------------------------------------------------------------------------------------
S76 WORKERS (*) 3,248 1,181
-----------------------------------------------------------------------------------------------------
S77 COMMON SHARES (*) 140,404,902 133,542,984
-----------------------------------------------------------------------------------------------------
S78 REPURCHASED SHARES (*) 0 0
-----------------------------------------------------------------------------------------------------
S101 RESTRICTED CASH 0 0
-----------------------------------------------------------------------------------------------------
S102 NET DEBT OF NON CONSOLIDATED COMPANIES 0 0
-----------------------------------------------------------------------------------------------------
(*) THESE ITEMS SHOULD BE EXPRESSED IN UNITS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
STATEMENTS OF INCOME
FROM JANUARY 1 TO MARCH 31 OF 2006 AND 2005
(thousands of Mexican pesos)
------------------------------------------------------------------------------------------------------------------------
REF CATEGORIES CURRENT YEAR PREVIOUS YEAR
R
------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
------------------------------------------------------------------------------------------------------------------------
r01 NET SALES 5,611,939 100 1,824,077 100
------------------------------------------------------------------------------------------------------------------------
r02 COST OF SALES 4,683,906 83 1,160,976 64
------------------------------------------------------------------------------------------------------------------------
r03 GROSS PROFIT 928,033 17 663,101 36
------------------------------------------------------------------------------------------------------------------------
r04 OPERATING EXPENSES 319,519 6 188,728 10
------------------------------------------------------------------------------------------------------------------------
r05 OPERATING INCOME 608,514 11 474,373 26
------------------------------------------------------------------------------------------------------------------------
r06 INTEGRAL FINANCING COST 4,631 0 (513) 0
------------------------------------------------------------------------------------------------------------------------
r07 INCOME AFTER INTEGRAL FINANCING COST 603,883 11 474,886 26
------------------------------------------------------------------------------------------------------------------------
r08 OTHER EXPENSE AND INCOME (NET) (11,639) 0 (5,100) 0
------------------------------------------------------------------------------------------------------------------------
r44 SPECIAL ITEMS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
r09 INCOME BEFORE INCOME TAXES AND EMPLOYEES' PROFIT SHARING 615,522 11 479,986 26
------------------------------------------------------------------------------------------------------------------------
r10 PROVISIONS FOR INCOME TAXES AND EMPLOYEES' PROFIT SHARING 94,360 2 148,147 8
------------------------------------------------------------------------------------------------------------------------
r11 NET INCOME AFTER TAXES AND EMPLOYEES' PROFIT SHARING 521,162 9 331,839 18
------------------------------------------------------------------------------------------------------------------------
r12 EQUITY IN NET INCOME OF NON-CONSOLIDATED SUBSIDIARIES AND
ASSOCIATES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
r13 CONSOLIDATED NET INCOME FROM CONTINUING OPERATIONS 521,162 9 331,839 18
------------------------------------------------------------------------------------------------------------------------
r14 INCOME FROM DISCONTINUED OPERATIONS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
r15 CONSOLIDATED NET INCOME BEFORE EXTRAORDINARY ITEMS 521,162 9 331,839 18
------------------------------------------------------------------------------------------------------------------------
r16 EXTRAORDINARY ITEMS, NET EXPENSES (INCOME) 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
r17 CUMULATIVE EFFECT FROM ACCOUNTING CHANGE, NET 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
r18 NET CONSOLIDATED INCOME 521,162 9 331,839 18
------------------------------------------------------------------------------------------------------------------------
r19 NET INCOME OF MINORITY INTEREST 79,221 1 0 0
------------------------------------------------------------------------------------------------------------------------
r20 NET INCOME OF MAJORITY INTEREST 441,941 8 331,839 18
------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
STATEMENTS OF INCOME
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
R
------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
------------------------------------------------------------------------------------------------------------------------
r01 NET SALES 5,611,939 100 1,824,077 100
------------------------------------------------------------------------------------------------------------------------
r21 DOMESTIC 1,348,524 24 1,584,051 87
------------------------------------------------------------------------------------------------------------------------
r22 FOREIGN 4,263,415 76 240,026 13
------------------------------------------------------------------------------------------------------------------------
r23 TRANSLATED INTO DOLLARS (***) 389,220 20,667
------------------------------------------------------------------------------------------------------------------------
r06 INTEGRAL FINANCING COST 4,631 100 (513) 100
------------------------------------------------------------------------------------------------------------------------
r24 INTEREST EXPENSE 3,017 65 2,095 (408)
------------------------------------------------------------------------------------------------------------------------
r42 LOSS (GAIN) ON RESTATEMENT OF UDI'S 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
r45 OTHER FINANCE COSTS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
r26 INTEREST INCOME 3,998 86 4,140 (807)
------------------------------------------------------------------------------------------------------------------------
r46 OTHER FINANCIAL INCOME 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
r25 FOREIGN EXCHANGE LOSS (GAIN) (NET) (1,759) (38) (6,126) 1,194
------------------------------------------------------------------------------------------------------------------------
r28 RESULT FROM MONETARY POSITION 7,371 159 7,658 (1,493)
------------------------------------------------------------------------------------------------------------------------
r10 PROVISIONS FOR INCOME TAXES AND EMPLOYEES' PROFIT SHARING 94,360 100 148,147 100
------------------------------------------------------------------------------------------------------------------------
r32 INCOME TAX 116,344 123 192,252 130
------------------------------------------------------------------------------------------------------------------------
r33 DEFERRED INCOME TAX (21,984) (23) (44,105) (30)
------------------------------------------------------------------------------------------------------------------------
r34 EMPLOYEES' PROFIT SHARING EXPENSES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
r35 DEFERRED EMPLOYEES' PROFIT SHARING 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
(***) THOUSANDS OF DOLLARS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
STATEMENTS OF INCOME
OTHER CONCEPTS
(thousands of Mexican pesos)
-----------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
R
-----------------------------------------------------------------------------------------------
AMOUNT AMOUNT
-----------------------------------------------------------------------------------------------
r36 TOTAL SALES 5,800,749 1,945,316
-----------------------------------------------------------------------------------------------
r37 TAX RESULT FOR THE YEAR 0 0
-----------------------------------------------------------------------------------------------
r38 NET SALES (**) 16,984,967 6,717,349
-----------------------------------------------------------------------------------------------
r39 OPERATION INCOME (**) 1,776,944 2,129,087
-----------------------------------------------------------------------------------------------
r40 NET INCOME OF MAJORITY INTEREST (**) 1,342,373 1,430,851
-----------------------------------------------------------------------------------------------
r41 NET CONSOLIDATED INCOME (**) 1,234,276 1,430,851
-----------------------------------------------------------------------------------------------
r47 OPERATIVE DEPRECIATION AND AMORTIZATION 109,170 66,022
-----------------------------------------------------------------------------------------------
(**) RESTATED INFORMATION FOR THE LAST TWELVE MONTHS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
QUARTERLY STATEMENTS OF INCOME
FROM JANUARY 1 TO MARCH 31 OF 2006 AND 2005
(thousands of Mexican pesos)
------------------------------------------------------------------------------------------------------------------------
REF CATEGORIES CURRENT YEAR PREVIOUS YEAR
R
------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
------------------------------------------------------------------------------------------------------------------------
rt01 NET SALES 5,611,939 100 1,824,077 100
------------------------------------------------------------------------------------------------------------------------
rt02 COST OF SALES 4,683,906 83 1,160,976 64
------------------------------------------------------------------------------------------------------------------------
rt03 GROSS PROFIT 928,033 17 663,101 36
------------------------------------------------------------------------------------------------------------------------
rt04 OPERATING EXPENSES 319,519 6 188,728 10
------------------------------------------------------------------------------------------------------------------------
rt05 OPERATING INCOME 608,514 11 474,373 26
------------------------------------------------------------------------------------------------------------------------
rt06 INTEGRAL FINANCING COST 4,631 0 (513) 0
------------------------------------------------------------------------------------------------------------------------
rt07 INCOME AFTER INTEGRAL FINANCING COST 603,883 11 474,886 26
------------------------------------------------------------------------------------------------------------------------
rt08 OTHER EXPENSE AND INCOME (NET) (11,639) 0 (5,100) 0
------------------------------------------------------------------------------------------------------------------------
rt44 SPECIAL ITEMS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
rt09 INCOME BEFORE INCOME TAXES AND EMPLOYEES' PROFIT SHARING 615,522 11 479,986 26
------------------------------------------------------------------------------------------------------------------------
rt10 PROVISIONS FOR INCOME TAXES AND EMPLOYEES' PROFIT SHARING 94,360 2 148,147 8
------------------------------------------------------------------------------------------------------------------------
rt11 NET INCOME AFTER TAXES AND EMPLOYEES' PROFIT SHARING 521,162 9 331,839 18
------------------------------------------------------------------------------------------------------------------------
rt12 EQUITY IN NET INCOME OF NON-CONSOLIDATED SUBSIDIARIES AND
ASSOCIATES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
rt13 CONSOLIDATED NET INCOME FROM CONTINUING OPERATIONS 521,162 9 331,839 18
------------------------------------------------------------------------------------------------------------------------
rt14 INCOME FROM DISCONTINUED OPERATIONS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
rt15 CONSOLIDATED NET INCOME BEFORE EXTRAORDINARY ITEMS 521,162 9 331,839 18
------------------------------------------------------------------------------------------------------------------------
rt16 EXTRAORDINARY ITEMS, NET EXPENSES (INCOME) 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
rt17 CUMULATIVE EFFECT FROM ACCOUNTING CHANGE, NET 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
rt18 NET CONSOLIDATED INCOME 521,162 9 331,839 18
------------------------------------------------------------------------------------------------------------------------
rt19 NET INCOME OF MINORITY INTEREST 79,221 1 0 0
------------------------------------------------------------------------------------------------------------------------
rt20 NET INCOME OF MAJORITY INTEREST 441,941 8 331,839 18
------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
QUARTERLY STATEMENTS OF INCOME
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
-------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
R
-------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
-------------------------------------------------------------------------------------------------------------------------
rt01 NET SALES 5,611,939 100 1,824,077 100
-------------------------------------------------------------------------------------------------------------------------
rt21 DOMESTIC 1,348,524 24 1,584,051 87
-------------------------------------------------------------------------------------------------------------------------
rt22 FOREIGN 4,263,415 76 240,026 13
-------------------------------------------------------------------------------------------------------------------------
rt23 TRANSLATED INTO DOLLARS (***) 389,220 20,667
-------------------------------------------------------------------------------------------------------------------------
rt06 INTEGRAL FINANCING COST 4,631 100 (513) 100
-------------------------------------------------------------------------------------------------------------------------
rt24 INTEREST EXPENSE 3,017 65 2,095 (408)
-------------------------------------------------------------------------------------------------------------------------
rt42 LOSS (GAIN) ON RESTATEMENT OF UDI'S 0 0 0 0
-------------------------------------------------------------------------------------------------------------------------
rt45 OTHER FINANCE COSTS 0 0 0 0
-------------------------------------------------------------------------------------------------------------------------
rt26 INTEREST INCOME 3,998 86 4,140 (807)
-------------------------------------------------------------------------------------------------------------------------
rt46 OTHER FINANCIAL INCOME 0 0 0 0
-------------------------------------------------------------------------------------------------------------------------
rt25 FOREIGN EXCHANGE LOSS (GAIN) (NET) (1,759) (38) (6,126) 1,194
-------------------------------------------------------------------------------------------------------------------------
rt28 RESULT FROM MONETARY POSITION 7,371 159 7,658 (1,493)
-------------------------------------------------------------------------------------------------------------------------
rt10 PROVISIONS FOR INCOME TAXES AND EMPLOYEES' PROFIT SHARING 94,360 100 148,147 100
-------------------------------------------------------------------------------------------------------------------------
rt32 INCOME TAX 116,344 123 192,252 130
-------------------------------------------------------------------------------------------------------------------------
rt33 DEFERRED INCOME TAX (21,984) (23) (44,105) (30)
-------------------------------------------------------------------------------------------------------------------------
rt34 EMPLOYEES' PROFIT SHARING EXPENSES 0 0 0 0
-------------------------------------------------------------------------------------------------------------------------
rt35 DEFERRED EMPLOYEES' PROFIT SHARING 0 0 0 0
-------------------------------------------------------------------------------------------------------------------------
(***) THOUSANDS OF DOLLARS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
QUARTERLY STATEMENTS OF INCOME
OTHER CONCEPTS
(thousands of Mexican pesos)
------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
R
------------------------------------------------------------------------------------------------------------------
C AMOUNT AMOUNT
------------------------------------------------------------------------------------------------------------------
rt47 OPERATIVE DEPRECIATION AND AMORTIZATION 109,170 66,022
------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
STATEMENTS OF CHANGES IN FINANCIAL POSITION
FROM JANUARY 1 TO MARCH 31 OF 2006 AND 2005
(thousands of pesos)
----------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
C
----------------------------------------------------------------------------------------------------------
AMOUNT AMOUNT
----------------------------------------------------------------------------------------------------------
c01 CONSOLIDATED NET INCOME 521,162 331,839
----------------------------------------------------------------------------------------------------------
c02 + (-) ITEMS ADDED TO INCOME WHICH DO NOT REQUIRE CASH 87,186 21,917
----------------------------------------------------------------------------------------------------------
c03 RESOURCES FROM NET INCOME FOR THE YEAR 608,348 353,756
----------------------------------------------------------------------------------------------------------
c04 RESOURCES PROVIDED OR USES IN OPERATION 211,933 (49,179)
----------------------------------------------------------------------------------------------------------
c05 RESOURCES PROVIDED BY (USED FOR) IN OPERATING ACTIVITIES 820,281 304,577
----------------------------------------------------------------------------------------------------------
c06 RESOURCES PROVIDED BY (USED FOR) EXTERNAL FINANCING
ACTIVITIES (252,999) (19)
----------------------------------------------------------------------------------------------------------
c07 RESOURCES PROVIDED BY (USED FOR) INTERNAL FINANCING
ACTIVITIES 122,438 0
----------------------------------------------------------------------------------------------------------
c08 RESOURCES PROVIDED BY (USED FOR) INTERNAL FINANCING
ACTIVITIES (130,561) (19)
----------------------------------------------------------------------------------------------------------
c09 RESOURCES PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES (554,991) (30,378)
----------------------------------------------------------------------------------------------------------
c10 NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS 134,729 274,180
----------------------------------------------------------------------------------------------------------
c11 CASH AND SHORT-TERM INVESTMENTS AT THE BEGINNING OF PERIOD 209,874 528,236
----------------------------------------------------------------------------------------------------------
c12 CASH AND SHORT TERM INVESTMENTS AT THE END OF PERIOD 344,603 802,416
----------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
STATEMENTS OF CHANGES IN FINANCIAL POSITION
BREAKDOWN OF MAIN CONCEPTS
(thousands of pesos)
--------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
C
--------------------------------------------------------------------------------------------------------
AMOUNT AMOUNT
--------------------------------------------------------------------------------------------------------
c02 + (-) ITEMS ADDED TO INCOME WHICH DO NOT REQUIRE CASH 87,186 21,917
--------------------------------------------------------------------------------------------------------
c13 DEPRECIATION AND AMORTIZATION FOR THE YEAR 109,170 66,022
--------------------------------------------------------------------------------------------------------
c41 + (-) OTHER ITEMS (21,984) (44,105)
--------------------------------------------------------------------------------------------------------
c04 RESOURCES PROVIDED OR USED IN OPERATION 211,933 (49,179)
--------------------------------------------------------------------------------------------------------
c18 + (-) DECREASE (INCREASE) IN ACCOUNT RECEIVABLES (170,217) (179,661)
--------------------------------------------------------------------------------------------------------
c19 + (-) DECREASE (INCREASE) IN INVENTORIES (64,730) 29,130
--------------------------------------------------------------------------------------------------------
c20 + (-) DECREASE (INCREASE) IN OTHER ACCOUNT RECEIVABLES 110,368 170,635
--------------------------------------------------------------------------------------------------------
c21 + (-) DECREASE (INCREASE) IN SUPPLIERS 330,338 (172,131)
--------------------------------------------------------------------------------------------------------
c22 + (-) DECREASE (INCREASE) IN OTHER LIABILITIES 6,174 (102,848)
--------------------------------------------------------------------------------------------------------
c06 RESOURCES PROVIDED BY (USED FOR) EXTERNAL FINANCING
ACTIVITIES (252,999) (19)
--------------------------------------------------------------------------------------------------------
c23 + BANK FINANCING 0 (19)
--------------------------------------------------------------------------------------------------------
c24 + STOCK MARKET FINANCING 0 0
--------------------------------------------------------------------------------------------------------
c25 + DIVIDEND RECEIVED 0 0
--------------------------------------------------------------------------------------------------------
c26 OTHER FINANCING 157,178 0
--------------------------------------------------------------------------------------------------------
c27 BANK FINANCING AMORTIZATION (410,177) 0
--------------------------------------------------------------------------------------------------------
c28 (-) STOCK MARKET FINANCING AMORTIZATION 0 0
--------------------------------------------------------------------------------------------------------
c29 (-) OTHER FINANCING AMORTIZATION 0 0
--------------------------------------------------------------------------------------------------------
c42 + (-) OTHER ITEMS 0 0
--------------------------------------------------------------------------------------------------------
c07 RESOURCES PROVIDED BY (USED FOR) INTERNAL FINANCING
ACTIVITIES 122,438 0
--------------------------------------------------------------------------------------------------------
c30 + (-) INCREASE (DECREASE) IN CAPITAL STOCK 36,156 0
--------------------------------------------------------------------------------------------------------
c31 (-) DIVIDENDS PAID 0 0
--------------------------------------------------------------------------------------------------------
c32 + PREMIUM ON ISSUANCE OF SHARES 86,282 0
--------------------------------------------------------------------------------------------------------
c33 + CONTRIBUTION FOR FUTURE CAPITAL INCREASES 0 0
--------------------------------------------------------------------------------------------------------
c43 + (-) OTHER ITEMS 0 0
--------------------------------------------------------------------------------------------------------
c09 RESOURCES PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES (554,991) (30,378)
--------------------------------------------------------------------------------------------------------
c34 + (-) INCREASE (DECREASE) IN PERMANENT STOCK INVESTMENTS 0 0
--------------------------------------------------------------------------------------------------------
c35 (-) ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT (108,144) (3,255)
--------------------------------------------------------------------------------------------------------
c36 (-) INCREASE IN CONSTRUCTION PROGRESS 0 0
--------------------------------------------------------------------------------------------------------
c37 + SALE OF OTHER PERMANENT INVESTMENTS 0 0
--------------------------------------------------------------------------------------------------------
c38 + SALE OF TANGIBLE FIXED ASSETS 0 0
--------------------------------------------------------------------------------------------------------
c39 + (-) OTHER ITEMS (446,847) (27,123)
--------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
RATIOS
CONSOLIDATED
---------------------------------------------------------------------------------------------------------------------
REF CATEGORIES QUARTER OF PRESENT QUARTER OF PREVIOUS
P FINANCIAL YEAR FINANCIAL YEAR
---------------------------------------------------------------------------------------------------------------------
YIELD
---------------------------------------------------------------------------------------------------------------------
p01 NET INCOME TO NET SALES 9.28% 18.19%
---------------------------------------------------------------------------------------------------------------------
p02 NET INCOME TO STOCKHOLDERS' EQUITY (**) 16.57% 20.13%
---------------------------------------------------------------------------------------------------------------------
p03 NET INCOME TO TOTAL ASSETS (**) 8.19% 15.14%
---------------------------------------------------------------------------------------------------------------------
p04 CASH DIVIDENDS TO PREVIOUS YEAR NET INCOME 0.00% 0.00%
---------------------------------------------------------------------------------------------------------------------
p05 INCOME DUE TO MONETARY POSITION TO NET INCOME (1.41)% (2.30)%
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
ACTIVITY
---------------------------------------------------------------------------------------------------------------------
p06 NET SALES TO NET ASSETS (**) 1.12 times 0.71 times
---------------------------------------------------------------------------------------------------------------------
p07 NET SALES TO FIXED ASSETS (**) 2.36 times 1.13 times
---------------------------------------------------------------------------------------------------------------------
p08 INVENTORIES TURNOVER (**) 3.82 times 3.39 times
---------------------------------------------------------------------------------------------------------------------
p09 ACCOUNTS RECEIVABLE IN DAYS OF SALES 35.85 days 53.37 days
---------------------------------------------------------------------------------------------------------------------
p10 PAID INTEREST TO TOTAL LIABILITIES WITH COST (**) 1,098.67% 220.46%
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
LEVERAGE
---------------------------------------------------------------------------------------------------------------------
p11 TOTAL LIABILITIES TO TOTAL ASSETS 32.64% 24.77%
---------------------------------------------------------------------------------------------------------------------
p12 TOTAL LIABILITIES TO STOCKHOLDERS' EQUITY 0.48 times 0.32 times
---------------------------------------------------------------------------------------------------------------------
p13 FOREIGN CURRENCY LIABILITIES TO TOTAL LIABILITIES 34.04% 10.15%
---------------------------------------------------------------------------------------------------------------------
p14 LONG-TERM LIABILITIES TO FIXED ASSETS 0.00% 0.00%
---------------------------------------------------------------------------------------------------------------------
p15 OPERATING INCOME TO INTEREST PAID 201.69 times 226.43 times
---------------------------------------------------------------------------------------------------------------------
p16 NET SALES TO TOTAL LIABILITIES (**) 3.45 times 2.87 times
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
LIQUIDITY
---------------------------------------------------------------------------------------------------------------------
p17 CURRENT ASSETS TO CURRENT LIABILITIES 2.41 times 3.57 times
---------------------------------------------------------------------------------------------------------------------
p18 CURRENT ASSETS LESS INVENTORY TO CURRENT LIABILITIES 1.17 times 2.33 times
---------------------------------------------------------------------------------------------------------------------
p19 CURRENT ASSETS TO TOTAL LIABILITIES 1.45 times 1.41 times
---------------------------------------------------------------------------------------------------------------------
p20 AVAILABLE ASSETS TO CURRENT LIABILITIES 11.65% 86.97%
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
CASH FLOW
---------------------------------------------------------------------------------------------------------------------
p21 RESOURCES FROM NET INCOME TO NET SALES 10.84% 19.39%
---------------------------------------------------------------------------------------------------------------------
p22 RESOURCES FROM CHANGES IN WORKING CAPITAL TO NET SALES 4.79% (2.69)%
---------------------------------------------------------------------------------------------------------------------
p23 RESOURCES GENERATED (USED) IN OPERATING TO INTEREST PAID 290.81 times 145.38 times
---------------------------------------------------------------------------------------------------------------------
p24 EXTERNAL FINANCING TO RESOURCES PROVIDED BY (USED FOR)
FINANCING 193.77% 100.00%
---------------------------------------------------------------------------------------------------------------------
p25 INTERNAL FINANCING TO RESOURCES PROVIDED (USED FOR) FINANCING (93.77)% 0.00%
---------------------------------------------------------------------------------------------------------------------
p26 RESOURCES PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES 17.55% 10.71%
---------------------------------------------------------------------------------------------------------------------
(**) IN THESE RATIOS FOR THE DATA TAKE INTO CONSIDERATION THE LAST TWELVE MONTHS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
DATE PER SHARE
CONSOLIDATED
---------------------------------------------------------------------------------------------------------------------
REF CATEGORIES QUARTER OF PRESENT QUARTER OF PREVIOUS
D FINANCIAL YEAR FINANCIAL YEAR
---------------------------------------------------------------------------------------------------------------------
d01 BASIC PROFIT PER ORDINARY SHARE (**) $ 8.95 $ 10.73
---------------------------------------------------------------------------------------------------------------------
d02 BASIC PROFIT PER PREFERED SHARE (**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------
d03 DILUTED PROFIT PER ORDINARY SHARE (**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------
d04 CONTINUING OPERATING PROFIT PER COMMON SHARE (**) $ 8.95 $ 10.73
---------------------------------------------------------------------------------------------------------------------
d05 EFFECT OF DISCONTINUED OPERATIONS ON CONTINUING OPERATING
PROFIT PER SHARE (**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------
d06 EFFECT OF EXTRAORDINARY PROFIT AND LOSS ON CONTINUING
OPERATING PROFIT PER SHARE (**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------
d07 EFFECT BY CHANGES IN ACCOUNTING POLICIES ON CONTINUING
OPERATING PROFIT PER SHARE (**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------
d08 CARRYING VALUE PER SHARE $ 57.69 $ 53.21
---------------------------------------------------------------------------------------------------------------------
d09 CASH DIVIDEND ACCUMULATED PER SHARE $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------
d10 DIVIDEND IN SHARES PER SHARE 0.00 shares 0.00 shares
---------------------------------------------------------------------------------------------------------------------
d11 MARKET PRICE TO CARRYING VALUE 1.33 times 1.00 times
---------------------------------------------------------------------------------------------------------------------
d12 MARKET PRICE TO BASIC PROFIT PER ORDINARY SHARE 8.58 times 4.97 times
---------------------------------------------------------------------------------------------------------------------
d13 MARKET PRICE TO BASIC PROFIT PER PREFERENTE SHARE (**) 0.00 times 0.00 times
---------------------------------------------------------------------------------------------------------------------
(**) TO CALCULATE THE DATE PER SHARE USE THE NET INCOME FOR THE LAST TWELVE
MONTHS.
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
FINANCIAL STATEMENT NOTES
CONSOLIDATED
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
On July 22, 2005 Simec and its parent company ICH have acquired 100% of the
Stock of PAV Republic, Inc. ("Republic"). Simec, ICH's largest subsidiary, has
acquired 50.2% of Republic's stock, and ICH purchased the remaining 49.8%. The
cash purchase price of USD $229 million was financed by internally generated
funds. Republic is the leading producer of special bar quality (SBQ) steel in
the United States and, together with Simec, will become the largest producer of
this kind of steel in North America. Simec began to operate the plants of
Republic on July 22, 2005 and, as a result the operation is reflected in Simec's
financial results as of such date.
According with the established in the articles 35 and 81 of the dispositions of
general character applicable to the registrants and other participants of the
market of values in Mexico, next consolidated earning statements from January 1
to March 31, appear pro forma of Simec by the period 2005, in order to be
comparable and the consolidated balance sheet appear Pro Forma of Simec at March
31, 2005 in order to be comparable against March 31, 2006.
CONSOLIDATED EARNING STATEMENT
(Thousands of Pesos)
FROM JANUARY 1 TO MARCH 31 OF 2006
-----------------------------------------------------------------------------------------------
Consolidated
Simec without Simec
Republic Republic Earning Statement
-----------------------------------------------------------------------------------------------
Steel Sales (Metric Tons) 243,603 436,999 680,602
-----------------------------------------------------------------------------------------------
Net Sales 1,545,177 4,066,762 5,611,939
-----------------------------------------------------------------------------------------------
Cost of Sales 1,012,994 3,670,912 4,683,906
-----------------------------------------------------------------------------------------------
Gross Income 532,183 395,850 928,033
-----------------------------------------------------------------------------------------------
Operating Expenses 171,460 148,059 319,519
-----------------------------------------------------------------------------------------------
Operating Income 360,723 247,791 608,514
-----------------------------------------------------------------------------------------------
Total Financing Cost 2,403 2,228 4,631
-----------------------------------------------------------------------------------------------
Other Financial Operations (3,026) (8,613) (11,639)
-----------------------------------------------------------------------------------------------
Income Taxes (956) 95,316 94,360
-----------------------------------------------------------------------------------------------
Net Income Before Minority Interest 362,302 158,860 521,162
-----------------------------------------------------------------------------------------------
Minority Interest 0 79,221 79,221
-----------------------------------------------------------------------------------------------
Net Income 362,302 79,639 441,941
-----------------------------------------------------------------------------------------------
CONSOLIDATED PRO FORMA EARNING STATEMENT
(Thousands of Pesos)
FROM JANUARY 1 TO MARCH 31 OF 2005
-----------------------------------------------------------------------------------------------
Consolidated
Simec without Simec
Republic Republic Earning Statement
-----------------------------------------------------------------------------------------------
Steel Sales (Metric Tons) 246,202 445,163 691,365
-----------------------------------------------------------------------------------------------
Net Sales 1,824,077 4,500,768 6,324,845
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Consolidated
Simec without Simec
Republic Republic Earning Statement
-----------------------------------------------------------------------------------------------
Cost of Sales 1,160,976 3,839,199 5,000,175
-----------------------------------------------------------------------------------------------
Gross Income 663,101 661,569 1,324,670
-----------------------------------------------------------------------------------------------
Operating Expenses 188,728 158,248 346,976
-----------------------------------------------------------------------------------------------
Operating Income 474,373 503,321 977,694
-----------------------------------------------------------------------------------------------
Total Financing Cost (513) 46,656 46,143
-----------------------------------------------------------------------------------------------
Other Financial Operations (5,100) (3,766) (8,866)
-----------------------------------------------------------------------------------------------
Income Taxes 148,147 174,964 323,111
-----------------------------------------------------------------------------------------------
Net Income Before Minority Interest 331,839 285,467 617,306
-----------------------------------------------------------------------------------------------
Minority Interest 0 142,105 142,105
-----------------------------------------------------------------------------------------------
Net Income 331,839 143,362 475,201
-----------------------------------------------------------------------------------------------
The earnings statement Pro forma for the period January 1 to March 31 2005,
includes the information of Republic corresponded to the previous owners.
CONSOLIDATED BALANCE SHEET
(Thousands of Pesos)
AT MARCH 31
---------------------------------------------------------------------------------------------------------------
2006 Pro-forma 2005
---------------------------------------------------------------------------------------------------------------
Consolidated Simec Consolidated
Simec Balance without Adjustments Simec Balance
Sheet Republic Republic Sheet
---------------------------------------------------------------------------------------------------------------
Current assets 7,150,332 3,300,372 4,136,305 7,436,677
---------------------------------------------------------------------------------------------------------------
Property, Plant and Equipment 7,196,338 5,911,063 357,103 6,268,166
---------------------------------------------------------------------------------------------------------------
Other Intangible Assets and Deferred
Assets 723,565 234,967 160,607 395,574
---------------------------------------------------------------------------------------------------------------
Total Assets 15,070,235 9,446,402 4,654,015 14,100,417
---------------------------------------------------------------------------------------------------------------
Current Liabilities 2,955,697 922,599 1,260,714 2,183,313
---------------------------------------------------------------------------------------------------------------
Other non Current Liabilities 1,964,464 1,417,363 2,058,624 3,475,987
---------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 10,150,074 7,106,440 1,334,677 8,441,117
---------------------------------------------------------------------------------------------------------------
The Plants of Republic already are integrated in the consolidated balance sheet
at March 31 of 2006 and the consolidated balance sheet Pro forma includes the
adjustments of Republic at March 31, 2005.
s79 Stockholders' Equity:
Effects of inflation - The effects of inflation on stockholders' equity at March
31, 2006 are as follows:
Historical Restated
Cost Amount Total
Capital stock Ps. 2,048,257 Ps. 1,471,998 Ps. 3,520,255
Additional paid-in capital 788,394 144,753 933,147
Premium on Issuance of Shares 20,000 67,784 87,784
Retained earnings 3,864,180 632,665 4,496,845
Effect deferred income tax
Bulletin D-4 (662,340) (245,451) (907,791)
s39 Premium on Issuance of Shares made in March 29, 2001, April 29, 2005 and
February 13, 2006.
s66 In 1999, the Mexican Institute of Public Accountants issued Bulletin D-4,
"Accounting for Income and Asset Taxes and Employee Profit Sharing", which is
effective for all fiscal years beginning January 1, 2000. Bulletin
D-4 establishes financial accounting and reporting standards for the effects of
asset tax, income tax and employee profit sharing that result from enterprise
activities during the current and preceding years. Simec's long-term liabilities
resulted of the adoption of this Bulletin was Ps. 1,843,044 at March 31, 2006
compared to Ps. 1,394,442 at March 31, 2005. The effect on Simec's consolidated
statement of income in the first quarter of 2006, was an decrease of Ps. 21,984
in the provision for income tax and employee profit sharing compared to a
decrease of Ps. 44,105 in the same period of 2005. These provisions do not
affect the cash flow of Simec.
c02 Consolidated Statements of Changes in Financial Position
The net loss in money exchange and net profit in liabilities actualization are
as follows:
March 31, 2006 March 31, 2005
Net loss (profit) in money exchange Ps. 52 Ps. 9
Net loss (profit) in liabilities actualization (3,566) (28)
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
DIRECTOR REPORT
ANNEX 1 CONSOLIDATED
INFORMATION CONCERNING LIQUIDITY AND CAPITAL RESOURCES AND DEBT
OBLIGATIONS WITH BANKS AND COMMERCIAL CREDITORS
Liquidity and Capital Resources
At March 31, 2006 Simec's total consolidated debt consisted of U.S. $302,000 of
8 7/8% medium-term notes ("MTN's") due 1998 (accrued interest at March 31, 2006
was U.S. $316,356 dollars. At December 31, 2005, Simec's total consolidated debt
consisted of U.S. $38 million (Ps. 410 million), of which $33.4 million was debt
held by GE Capital, $4.3 million dollars held by the Ohio Department of
Development Loan, and U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due
1998 (accrued interest at December 31, 2005 was U.S. 309,311 dollars).
On July 22, 2005 Simec and its parent company ICH acquired 100% of the stock of
PAV Republic, Inc. ("Republic"). Simec, ICH's largest subsidiary, acquired 50.2%
of Republic's stock, and ICH purchased the remaining 49.8%. The cash purchase
price of U.S. $229 million was financed by internally generated funds. At March
31, 2006, Republic repaid in full its outstanding bank debt, which had
maturities through 2009. Republic is the leading producer of special bar quality
(SBQ) steel in the United States and, together with Simec, will become the
largest producer of this kind of steel in North America.
Net resources provided by operations were Ps. 820 million in the three-month
period ended March 31, 2006 versus Ps. 305 million of net resources provided by
operations in the same period of 2005. Net resources used by financing
activities were Ps. 131 million in the three-month period ended March 31, 2006
(which amount includes the capital contribution from ICH to Republic of Ps. 141
million, the prepayment of Ps. 410 million (U.S. $37.7 million) of Republic's
bank debt and a capital contribution of certain minority shareholders of Simec
of Ps. 122 million) versus Ps. 0 million of net resources provided by financing
activities in the same period of 2005. Net resources used in investing
activities (to acquire property, plant and equipment and other non-current
assets) were Ps. 555 million in the three-month period ended March 31, 2006
versus net resources used in investing activities of Ps. 30 million in the same
period of 2005.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Three-Month Period Ended March 31, 2006 compared to Three-Month Period Ended
March 31, 2005
Net Sales
Net sales of Simec increased 208% to Ps. 5,612 million in the three-month period
ended March 31, 2006 (including the net sales generated by the newly acquired
plants of Republic of Ps. 4,067 million), compared to Ps. 1,824 million in the
same period of 2005. Sales in metric tons of basic steel products increased 176%
to 680,602 metric tons in the three-month period ended March 31, 2006 (including
436,999 metric tons generated by the newly acquired plants of Republic) compared
to 246,202 metric tons in the same period of 2005. Exports (including sales by
U.S. subsidiaries) of basic steel products increased 1,171% to 467,729 metric
tons in the
three-month period ended March 31, 2006 (including 436,999 metric tons generated
by the newly acquired plants of Republic) versus 36,796 metric tons in the same
period of 2005. Additionally, Simec sold 1,290 metric tons of billet in the
three-month period ended March 31, 2006, compared to 12,870 tons of billet in
the same period of 2005. The average price of steel products (excluding the
sales of Republic) decreased 13% in real terms in the three-month period ended
March 31, 2006 versus the same period of 2005.
Direct Cost of Sales
Simec's direct cost of sales increased 303% to Ps. 4,684 million in the
three-month period ended March 31, 2006 (including Ps. 3,671 million relating to
the newly acquired plants of Republic) compared to Ps. 1,161 million in the same
period of 2005. Direct cost of sales as a percentage of net sales was 83% (66%
excluding the cost of sales of Republic) in the three-month period ended March
31, 2006 compared to 64% in the same period of 2005. The average cost of raw
materials used to produce steel products (excluding the production of Republic)
decreased 9% in real terms in the three-month period ended March 31, 2006 versus
the same period of 2005, primarily as a result of decreases in the price of
scrap and certain other raw materials.
Marginal Profit
Simec's marginal profit increased 40% to Ps. 928 million in the three-month
period ended March 31, 2006 (including Ps. 396 million relating to the newly
acquired plants of Republic) compared to Ps. 663 million in the same period of
2005. As a percentage of net sales, marginal profit was 11% (34% excluding the
marginal profit of Republic) in the three-month period ended March 31, 2006
compared to 36% in the same period of 2005.
Indirect Manufacturing, Selling, General and Administrative Expenses
Indirect manufacturing, selling, general, and administrative expenses (which
include depreciation and amortization) increased 69% to Ps. 319 million in the
three-month period ended March 31, 2006 (including Ps. 148 million relating to
the newly acquired plants of Republic) from Ps. 189 million in the same period
of 2005; Simec recorded an increase of Ps. 43 million in depreciation and
amortization expense, which in the three-month period ended March 31, 2006 was
Ps. 109 million (including Ps. 45 million relating to the newly acquired plants
of Republic) compared to Ps. 66 million in the same period of 2005.
Operating Income
Simec's operating income increased 28% to Ps. 609 million in the three-month
period ended March 31, 2006 (including Ps. 248 million relating to the newly
acquired plants of Republic) compared to Ps. 474 million in the same period of
2005. Operating income was 11% (23% excluding the operating income of Republic)
of net sales in the three-month period ended March 31, 2006 and 26% of net sales
in the same period of 2005.
Financial Income (Expense)
Simec recorded financial expense of Ps. 5 million in the three-month period
ended March 31, 2006 compared to financial income of Ps. 1 million in the same
period of 2005. Simec recorded an exchange gain of approximately Ps. 1 million
in the three-month period ended March 31, 2006 compared to an exchange gain of
Ps. 6 million in the same period of 2005, reflecting a 1.6% decrease in the
value of the peso versus the dollar in the three-month period ended March 31,
2006 compared to a 0.3% decrease in the value of the peso versus the dollar in
the same period of 2005. Net interest income was Ps. 1 million in the
three-month period ended March 31, 2006 versus net interest income of Ps. 2
million in the same period of 2005. Simec recorded a loss from monetary position
of Ps. 7 million in the three-month period ended March 31, 2006 compared to a
loss from monetary position of Ps. 7 million in the same period of 2005,
reflecting the domestic inflation rate of 0.9% in the three-month period ended
March 31, 2006 as compared to 0.8% in the same period of 2005.
Other Income (Expense), Net
Simec recorded other income, net, of Ps. 11 million in the three-month period
ended March 31, 2006 compared to other income, net, of Ps. 5 million in the same
period of 2005.
Income Tax and Employee Profit Sharing
Simec recorded a provision of Ps. 94 million for income tax and employee profit
sharing in the three-month period ended March 31, 2006 (including a decrease in
the provision of Ps. 22 million with respect to deferred income tax) compared to
a provision of Ps. 148 million in the same period of 2005 (including a decrease
in the provision of Ps. 44 million with respect to deferred income tax).
Net Income Before Minority Interest
Simec recorded net income before minority interest of Ps. 521 million in the
three-month period ended March 31, 2006 compared to net income before minority
interest of Ps. 332 million in the same period of 2005.
Minority Interest
Simec recorded minority interest of Ps. 79 million in the three-month period
ended March 31, 2006 versus no minority interest recorded in the same period of
2005. The minority interest reflects the 49.8% interest in Republic held by ICH.
Net Income
As a result of the foregoing Simec recorded net income of Ps. 442 million in the
three-month period of 2006 compared to net income of Ps. 332 million in the same
period of 2005.
Pronouncements Applicable to Mexican GAAP
In 1999, the Mexican Institute of Public Accountants issued Bulletin D-4,
"Accounting for Income and Asset Taxes and Employee Profit Sharing", which is
effective for all fiscal years beginning January 1, 2000. Bulletin D-4
establishes financial accounting and reporting standards for the effects of
asset tax, income tax and employee profit sharing that result from enterprise
activities during the current and preceding years. Simec's long-term liability
resulting from the adoption of this Bulletin was Ps. 914 million at March 31,
2006 compared to Ps. 1,394 million at March 31, 2005. The effect on Simec's
consolidated statement of income in the three-month period ended March 31, 2006
was a decrease of Ps. 22 million in the provision for income tax and employee
profit sharing compared to a decrease in the provision of Ps. 44 million in the
same period of 2005. These provisions do not affect the cash flow of Simec.
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
FINANCIAL STATEMENT NOTES
ANNEX 2 CONSOLIDATED
(1) Operations preparation bases and summary of significant accounting policies:
Grupo Simec, S.A. de C.V. and its Subsidiaries ("the Company") are subsidiaries
of Industrias CH, S.A. de C.V. ("ICH"), and their main activities consist of the
manufacturing and sale of steel products primarily destined for the construction
sector of Mexico and other countries.
Significant accounting policies and practices followed by the Companies which
affect the principal captions of the financial statements are described below:
a. Financial statement presentation - The consolidated financial statements have
been prepared in accordance with principles generally accepted in Mexico, which
include the recognition of the effects of inflation on the financial information
and the presentation in constant Mexican pesos.
b. Principles of Consolidation - As part of the financial debt restructuring
agreement into during 1997, Compania Siderurgica de Guadalajara, S.A. de C.V.
("CSG") assumed all of the debt of the Company in return for an equity interest
in its subsidiaries. As a result of the above, the Company is the principal
shareholder of CSG, and CSG is the principal shareholder of the other
subsidiaries that Grupo Simec, S.A. de C.V. ("Simec") controlled before the
restructuring.
The main subsidiaries of CSG are the following:
o Compania Siderurgica de California, S.A. de C.V.
o Industrias del Acero y del Alambre, S.A. de C.V.
o Pacific Steel Inc.
o SimRep Corporation and PAV Republic and Subsidiaries
All significant intercompany balances and transactions have been eliminated in
consolidation.
c. Cash and cash equivalents - The Company considers short-term investments with
original maturities not greater than three months to be cash equivalent. Cash
equivalents includes temporary investments and Mexican Government Treasury
Bonds, and are stated at market value, which approximates cost plus earned
interest. Any increase in market value is credited to operations for the period.
d. Inventories - The inventories are originally stated at average cost and
subsequently adjusted to replacement value at the balance sheet date. The
replacement values do not exceed market and are determined as follows:
Billet finished goods and work in process - At the latest production cost for
the month.
Raw materials - According to purchase prices prevailing in the market at the
balance sheet date.
Materials, supplies and rollers - At historical cost, restated by applying the
steel industry inflation index.
The Company presents as non-current inventories the rollers and spare parts,
which according to historical data and production trends will not be used within
a one-year period.
e.- Derivative financial instruments-- The Company is using derivative financial
instruments for hedging risks associated with natural gas prices and conducted
studies on historical consumption, future requirements and commitments; thus it
avoided exposure to risks other than the normal operating risks. Management of
the Company examines its financial risks by continually analyzing price, credit
and liquidity risks.
The Company uses futures contracts for hedging risks from fluctuations in
natural gas prices, which are based on demand and supply at the principal
international markets.
As applicable, the Company recognized the fair value of instruments either as
liabilities or assets. Such fair value and thus, the value of these assets or
liabilities were restated at each month's-end. The Company opted for the early
adoption of Bulletin C-10 "Derivative Financial Instruments and Hedging";
therefore, at December 31, 2003 the fair value of natural gas in force during
2004, 2005 and 2006 and which effective portions will not be offset against the
asset risks until consumed, were recognized within the comprehensive income
account in stockholders' equity.
f. Property, plant and equipment - Property, plant and equipment of domestic
origin are restated by using factors derived from The National Consumer Price
Index ("NCPI") from the date of their acquisition, and imported machinery and
equipment are restated by applying devaluation and inflation factors of the
country of origin. Depreciation recorded in the consolidated statement of income
(loss) is computed based upon the estimated useful life and the restated cost of
each asset. In addition, Financial expense incurred during the construction
period is capitalized as construction in progress. The capitalized amounts are
restated using a factor derived from the NCPI cumulative from the date of
capitalization through period-end and are amortized over the average
depreciation period of the corresponding assets. The estimated useful lives of
assets as of March 31, 2006 are as follows:
Years
-----
Buildings................................................... 15 to 50
Machinery and equipment .................................... 10 to 40
Buildings and improvements (Republic)....................... 10 to 25
Land improvements (Republic)................................ 5 to 25
Machinary and equipment (Republic).......................... 5 to 20
g. Other assets - Organization and pre-operating expenses are capitalized and
restated using a factor derived from the NCPI cumulative from the date of
generation through period-end, and their amortization is calculated by the
straight-line method over a period of 20 years.
h. Seniority premiums and severance payments - According to Federal Labor Law,
employees are entitled to seniority premiums after fifteen years or more of
services. These premiums are recognized as expenses in the years in which the
services are rendered, using actuarial calculations based on the projected unit
credit method, and since 1996 by applying real interest and salary increases.
Any other payments to which employees may be entitled in case of separation,
disability or death, are charged to operations in the period in which they
become payable.
i. Pension plan - Until 1995, the Company provided pension benefits for all
personnel with a minimum of 10 years of service and 35 years of age. The Company
had established an irrevocable trust for its contributions, which were based on
actuarial calculations. In December 1995, the board of directors of the Company,
in
agreement with the trade union, discontinued these benefits and related
contributions to the trust fund. This decision was made because of the new
Mexican pension fund system, Administradoras de Fondos para el Retiro, which
establishes similar benefits for the employees. The balance of the trust fund
will be applied to the retirement benefits of qualifying employees until the
fund is exhausted due to the irrevocable status of the fund.
The Company does not have any contractual obligation regarding the payment of
pensions of retirements.
j. Cost of sales - Cost of sales related to sales of inventory items is recorded
at standard cost, which approximates the replacement cost at the date of sale.
k. Income tax and employee profit sharing - In 1999, the Mexican Institute of
Public Accountants issued Bulletin D-4, "Accounting for Income and Asset Taxes
and Employee Profit Sharing", which is effective for all fiscal years beginning
January 1, 2000. Bulletin D-4 establishes financial accounting and reporting
standards for the effects of asset tax, income tax and employee profit sharing
that result from enterprise activities during the current and preceding years.
The Company and its subsidiaries are included in the consolidated tax returns of
the company's parent.
l. Foreign currency transactions and exchange differences - All transactions in
foreign currency are recorded at the exchange rates prevailing on the date of
their execution or liquidation. Foreign currency denominated assets and
liabilities are translated at the exchange rates prevailing at the balance sheet
date. Any exchange differences incurred with regard to assets or liabilities
denominated in foreign currency are charged to operations of the period and are
included in financial income (expense) in the accompanying consolidated
statements of income (loss).
The financial statements of foreign subsidiaries are translated into Mexican
pesos in conformity with Bulletin B-15 "Transactions in Foreign Currency and
Translation of Financial Statements of Foreign Operations".
Pacific Steel and Undershaft investments are considered to be "integrated
foreign operations", as defined in Bulletin B-15, and accordingly such financial
statements were translated as follows:
- Monetary items at the exchange rate at the balance sheet date.
- Non-monetary items and stockholders' equity at the exchange rate
prevailing at the date the transactions occurred.
- Income and expense items at an appropriate average exchange rate.
- The resulting foreign currency translation differences are included in the
financial income (expense) in the statement of income (loss).
- All resulting Mexican peso amounts are restated for the effects of
inflation in accordance with the dispositions of Bulletin B-10 using the
NCPI, where such effects are considered significant.
SimRep and subsidiaries are considered to be "foreign operations", as defined in
Bulletin B-15, and accordingly such financial statements were translated as
follows:
- Monetary and non-monetary items at the exchange rate at the balance sheet
date.
- Income and expense items at the exchange rate at the balance sheet date.
- The resulting foreign currency translation differences are included in the
stockholders' equity.
- All resulting Mexican peso amounts are restated for the effects of
inflation in accordance with the dispositions of Bulletin B-10 using the
NCPI, where such effects are considered significant.
m. Geographic concentration of credit risk - The Company sells its products
primarily to distributors for the construction industry with no specific
geographic concentration. Additionally, no single customer accounted for a
significant amount of the Company's sales, and there were no significant
accounts receivable from a single customer or affiliate at March 31, 2006 and
2005. The Company performs evaluations of its customers' credit histories and
establishes and allowance for doubtful accounts based upon the credit risk of
specific customers and historical trends.
n. Other income (expenses) - Other income (expenses) shown in the consolidated
statements of operations primarily includes other financial operations.
o. Gain on monetary position - The gain on monetary position in the consolidated
statements of income (loss) is determined by applying to net monetary assets or
liabilities at the beginning of each month the factor of inflation derived from
the NCPI and is restated at period-end with the corresponding factor.
p. Restatement of capital stock and retained earnings (losses) - This is
determined by multiplying capital stock contributions and retained earnings
(losses) by factors derived from the NCPI, which measure the cumulative
inflation from the date when capital stock contributions were made and earnings
(losses) were generated, through the latest period-end.
q. Effect of restatement of stockholders' equity - The effect resulting from
restating stockholders' equity includes the accumulated effect from holding
non-monetary assets, which represents the change in the specific price level of
those assets compared to the change in the NCPI.
(2) Financial Debt:
At March 31, 2006 Simec's total consolidated debt consisted of U.S. $302,000 of
8 7/8% medium-term notes ("MTN's") due 1998 (accrued interest at March 31, 2006
was U.S. $316,356 dollars. At December 31, 2005, Simec's total consolidated debt
consisted of U.S. $38 million (Ps. 410 million), of which $33.4 million was debt
held by GE Capital, $4.3 million dollars held by the Ohio Department of
Development Loan, and U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due
1998 (accrued interest at December 31, 2005 was U.S. 309,311 dollars).
(3) Commitments and contingent liabilities:
a. Pacific Steel, Inc. (a wholly-owned subsidiary located in the U.S.A.) has
been named in various claims and suits relating to the generation, storage,
transport, disposal and cleanup of materials classified as hazardous waste. The
Company has accrued approximately Ps. 14,687 (U.S. $1,341,141) at March 31,
2006, (included in accrued liabilities) relating to these actions; the reduction
of this reserve from previous levels reflects clean-up activities undertaken by
Simec. Management believes the ultimate liability with respect to this matter
will not exceed the amounts that have been accrued.
b. The Company is subject to various other legal proceeding and claims, which
have arisen, in the ordinary course of its business. It is the opinion of
management that their ultimate resolution will not have a material adverse
effect on the Company's consolidated financial position or consolidated results
of operations.
c. Compania Siderurgica de Guadalajara, S.A. de C.V. has entered into a gas and
liquid oxygen purchase agreement with Praxair de Mexico, S.A. de C.V., under
which it is committed to acquire monthly over a fifteen-year period beginning
January 1, 1989, a certain amount of product. At present required purchases
amount to Ps. 1,436 per month.
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
RELATIONS OF SHARES INVESTMENTS
ANNEX 3 CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------------------------
COMPANY NAME MAIN ACTIVITIES NUMBER OF OWNERSHIP
SHARES
-----------------------------------------------------------------------------------------------------------------------------------
SUBSIDIARIES
-----------------------------------------------------------------------------------------------------------------------------------
CIA SIDERURGICA DE
GUADALAJARA Sub-Holding 99.99
-----------------------------------------------------------------------------------------------------------------------------------
ADMINISTRADORA DE CARTERA DE
OCCIDENTE Administracion de Cartera 99.99
-----------------------------------------------------------------------------------------------------------------------------------
SIMEC INTERNATIONAL Production and sales of steel products 99.99
-----------------------------------------------------------------------------------------------------------------------------------
Arrendadora Simec Production and sales of steel products 100.00
-----------------------------------------------------------------------------------------------------------------------------------
Controladora Simec Sub-Holding 100.00
-----------------------------------------------------------------------------------------------------------------------------------
Pacific Steel Scrap purchase 100.00
-----------------------------------------------------------------------------------------------------------------------------------
Cia. Siderurgica del Pacifico Arrendadora de Inmuebles 99.99
-----------------------------------------------------------------------------------------------------------------------------------
Coordinadora de Servicios Siderurgicos de Calidad Administrative services 100.00
-----------------------------------------------------------------------------------------------------------------------------------
Administradora de Servicios de la Industria Siderurgica Administrative services 99.99
-----------------------------------------------------------------------------------------------------------------------------------
Industrias del Acero y del Alambre Sales of steel products 99.99
-----------------------------------------------------------------------------------------------------------------------------------
Procesadora Mexicali Scrap purchase 99.99
-----------------------------------------------------------------------------------------------------------------------------------
Servicios Simec Administrative services 100.00
-----------------------------------------------------------------------------------------------------------------------------------
Sistemas de Transporte de Baja California 100.00
Operadora de Metales Administrative services 100.00
-----------------------------------------------------------------------------------------------------------------------------------
Operadora de Servicios Siderurgicos de Tlaxcala Administrative services 100.00
-----------------------------------------------------------------------------------------------------------------------------------
Administradora de Servicios Siderurgicos de Tlaxcala Administrative services 100.00
-----------------------------------------------------------------------------------------------------------------------------------
Operadora de Servicios de la Industria Siderurgica Administrative services 100.00
-----------------------------------------------------------------------------------------------------------------------------------
SimRep Sub-Holding 100.00
-----------------------------------------------------------------------------------------------------------------------------------
PAV Republic Production and sales of steel products 100.00
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN SUBSIDIARIES
-----------------------------------------------------------------------------------------------------------------------------------
ASSOCIATEDS 0 0.00
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN ASSOCIATEDS 0.00
-----------------------------------------------------------------------------------------------------------------------------------
OTHER PERMANENT INVESTMENTS 0.00
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
NOTES
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
CREDITS BREAK DOWN
(THOUSANDS OF MEXICAN PESOS)
ANNEX 5 CONSOLIDATED
------------------------------------------------------------------------------------------------------------------------------------
Amortization of Credits in Foreign Currency
Denominated In With National Entities (Thousands of Pesos)
Pesos Time Interval
------------------------------------------------------------------------------------------------------------------------------------
Credit More Until
Type / Amortization Rate of Until Than Current Until Until Until Until 5 Years
Institution Date Interest 1 Year 1 Year Year 1 Year 2 Years 3 Years 4 Years or more
------------------------------------------------------------------------------------------------------------------------------------
BANKS
------------------------------------------------------------------------------------------------------------------------------------
WITH WARRANTY
------------------------------------------------------------------------------------------------------------------------------------
TOTAL BANKS 0 0 0 0 0 0 0 0
------------------------------------------------------------------------------------------------------------------------------------
LISTED IN THE MEXICAN
STOCK EXCHANGE
------------------------------------------------------------------------------------------------------------------------------------
UNSECURED DEBT
------------------------------------------------------------------------------------------------------------------------------------
MEDIUM TERM NOTES 15/12/1998 9.33 0 0 0 0 0 0 0 0
------------------------------------------------------------------------------------------------------------------------------------
TOTAL STOCK EXCHANGE 0 0 0 0 0 0 0 0
------------------------------------------------------------------------------------------------------------------------------------
SUPPLIERS
------------------------------------------------------------------------------------------------------------------------------------
VARIOUS 640,732 0 0 0 0 0 0 0
------------------------------------------------------------------------------------------------------------------------------------
TOTAL SUPPLIERS 640,732 0 0 0 0 0 0 0
------------------------------------------------------------------------------------------------------------------------------------
OTHER CURRENT LIABILITIES
AND OTHER CREDITS
------------------------------------------------------------------------------------------------------------------------------------
VARIOUS 512,663 0 0 0 0 0 0 0
------------------------------------------------------------------------------------------------------------------------------------
OTHER CURRENT LIABILITIES 512,663 0 0 0 0 0 0 0
AND OTHER CREDITS
------------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,153,395 0 0 0 0 0 0 0
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Amortization of Credits in Foreign Currency With Foreign Entities
(Thousands of Pesos)
Time Interval
--------------------------------------------------------------------------------------------------
Credit Until
Type / Current Until Until Until Until 5 Years
Institution Year 1 Year 2 Years 3 Years 4 Years or more
--------------------------------------------------------------------------------------------------
BANKS
WITH WARRANTY
--------------------------------------------------------------------------------------------------
TOTAL BANKS 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------
LISTED IN THE MEXICAN
STOCK EXCHANGE
--------------------------------------------------------------------------------------------------
UNSECURED DEBT
--------------------------------------------------------------------------------------------------
MEDIUM TERM NOTES 3,307 0 0 0 0
--------------------------------------------------------------------------------------------------
TOTAL STOCK EXCHANGE 3,307 0 0 0 0 0
--------------------------------------------------------------------------------------------------
SUPPLIERS
--------------------------------------------------------------------------------------------------
VARIOUS 0 1,093,531 0 0 0 0
--------------------------------------------------------------------------------------------------
TOTAL SUPPLIERS 0 1,093,531 0 0 0 0
--------------------------------------------------------------------------------------------------
OTHER CURRENT LIABILITIES
AND OTHER CREDITS
--------------------------------------------------------------------------------------------------
VARIOUS 0 174,867 0 0 0 0
--------------------------------------------------------------------------------------------------
OTHER CURRENT LIABILITIES 0 174,867 0 0 0 0
AND OTHER CREDITS
--------------------------------------------------------------------------------------------------
TOTAL 3,307 1,268,398 0 0 0 0
--------------------------------------------------------------------------------------------------
NOTES:
1.- The exchange rate of the peso to the U.S. Dollar at March 31, 2006
was Ps. 10.9510
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER:1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
MONETARY FOREIGN CURRENCY POSITION
(Thousands of Mexican Pesos)
ANNEX 6 CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------------------
DOLLARS OTHER CURRENCIES TOTAL
-----------------------------------------------------------------------------------------------------------------------------
FOREIGN CURRENCY POSITION THOUSANDS OF THOUSANDS OF THOUSANDS OF THOUSANDS OF THOUSANDS OF
DOLLARS PESOS DOLLARS PESOS PESOS
-----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 215,323 2,357,994 0 0 2,357,994
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
LIABILITIES POSITION 152,674 1,671,950 271 2,967 1,674,917
-----------------------------------------------------------------------------------------------------------------------------
SHORT TERM LIABILITIES POSITION 152,674 1,671,950 271 2,967 1,674,917
-----------------------------------------------------------------------------------------------------------------------------
LONG TERM LIABILITIES POSITION 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
NET BALANCE 62,649 686,044 (271) (2,967) 683,077
-----------------------------------------------------------------------------------------------------------------------------
NOTES
THE EXCHANGE RATE OF THE PESO TO THE U.S. DOLLAR AT MARCH 31, 2006 WAS PS.
10.9510
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER:1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
RESULT FROM MONETARY POSITION
(Thousands of Mexican Pesos)
ANNEX 7 CONSOLIDATED
----------------------------------------------------------------------------------------------------------
ASSET (LIABILITY)
MONETARY MONETARY MONETARY MONTHLY MONTHLY (PROFIT)
MONTH ASSETS LIABILITIES POSITION INFLATION AND LOSS
----------------------------------------------------------------------------------------------------------
JANUARY 3,592,759 2,795,634 797,125 0.59 4,674
----------------------------------------------------------------------------------------------------------
FEBRUARY 3,251,893 2,319,744 932,149 0.15 1,426
----------------------------------------------------------------------------------------------------------
MARCH 3,353,813 2,352,537 1,001,276 0.13 1,256
----------------------------------------------------------------------------------------------------------
ACTUALIZATION 15
----------------------------------------------------------------------------------------------------------
CAPITALIZATION 0
----------------------------------------------------------------------------------------------------------
FOREIGN CORPORATION 0
----------------------------------------------------------------------------------------------------------
OTHER 0
----------------------------------------------------------------------------------------------------------
TOTAL 7,371
----------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER:1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
DEBT INSTRUMENTS
ANNEX 8 CONSOLIDATED
FINANCIAL LIMITED BASED IN ISSUED DEED AND/OR TITLE
MEDIUM TERM NOTES
A) Current assets to current liabilities must be 1.0 times or more.
B) Total liabilities to total assets do not be more than 0.60.
C) Operating income plus items added to income which do not require
using cash must be 2.0 times or more.
This notes was offered in the international market.
ACTUAL SITUATION OF FINANCIAL LIMITED
MEDIUM TERM NOTES
A) Accomplished the actual situation is 2.42 times.
B) Accomplished the actual situation is 0.33
C) Accomplished the actual situation is 237.88
As of March 31, 2006, the remaining balance of the MTNs not exchanged
amounts to Ps. 3,307 ($302,000 dollars).
C.P. Jose Flores Flores
Chief Financial Officer
BONDS AND/OR MEDIUM TERM NOTES CERTIFICATE
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER:1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
PLANTS, COMMERCE CENTERS OR DISTRIBUTION CENTERS
ANNEX 9 CONSOLIDATED
----------------------------------------------------------------------------------------------------------------------------
PLANT OR CENTER ECONOMIC ACTIVITY PLANT CAPACITY UTILIZATION (%)
----------------------------------------------------------------------------------------------------------------------------
GUADALAJARA MINI MILL PRODUCTION AND SALES OF STEEL PRODUCTS 480 96
----------------------------------------------------------------------------------------------------------------------------
MEXICALI MINI MILL PRODUCTION AND SALES OF STEEL PRODUCTS 250 79
----------------------------------------------------------------------------------------------------------------------------
INDUSTRIAS DEL ACERO Y DEL ALAMBRE SALE OF STEEL PRODUCTS 0 0
----------------------------------------------------------------------------------------------------------------------------
APIZACO AND CHOLULA PLANTS PRODUCTION AND SALES OF STEEL PRODUCTS 460 90
----------------------------------------------------------------------------------------------------------------------------
CANTON CASTER FACILITY PRODUCTION OF BILLET 874 96
----------------------------------------------------------------------------------------------------------------------------
LORAIN CASTER FACILITY PRODUCTION OF BILLET 1,380 99
----------------------------------------------------------------------------------------------------------------------------
LORAIN HOT-ROLLING MILL PRODUCTION AND SALES OF STEEL PRODUCTS 816 96
----------------------------------------------------------------------------------------------------------------------------
LACKAWANNA HOT-ROLLING MILL PRODUCTION AND SALES OF STEEL PRODUCTS 600 97
----------------------------------------------------------------------------------------------------------------------------
MASSILLON COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS 120 96
----------------------------------------------------------------------------------------------------------------------------
GARY COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS 76 62
----------------------------------------------------------------------------------------------------------------------------
ONTARIO COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS 59 71
----------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER:1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
MAIN RAW MATERIALS
ANNEX 10 CONSOLIDATED
------------------------------------------------------------------------------------------------------------
DOMESTIC COST
DOMESTIC MAIN SUPPLIERS FOREIGN MAIN SUPPLIERS SUBSTITUTION PRODUCTION (%)
------------------------------------------------------------------------------------------------------------
SCRAP VARIOUS SCRAP VARIOUS YES 35.64
------------------------------------------------------------------------------------------------------------
ELECTRICITY C.F.E NO 6.41
------------------------------------------------------------------------------------------------------------
FERROALLOYS MINERA AUTLAN FERROALLOYS GFM TRADING YES 12.50
------------------------------------------------------------------------------------------------------------
ELECTRODES UCAR CARBON MEXICANA ELECTRODES SGL CARBON GROUP YES 8.61
------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
SELLS DISTRIBUTION BY PRODUCT
ANNEX 11 CONSOLIDATED
DOMESTIC SELLS
--------------------------------------------------------------------------------
MAIN PRODUCTS NET SALES MAIN DESTINATION
--------------------------------------------------------------------------------
VOLUME AMOUNT TRADEMARKS COSTUMERS
--------------------------------------------------------------------------------
STRUCTURAL PROFILES 44 285,794
--------------------------------------------------------------------------------
COMMERCIAL PROFILES 35 204,527
--------------------------------------------------------------------------------
REBAR 41 243,179
--------------------------------------------------------------------------------
FLAT BAR 41 251,878
--------------------------------------------------------------------------------
STEEL BARS 52 361,065
--------------------------------------------------------------------------------
OTHER 0 1,935
--------------------------------------------------------------------------------
BILLET 0 146
--------------------------------------------------------------------------------
HOT-ROLLED BARS
--------------------------------------------------------------------------------
COLD-FINISHED BARS
--------------------------------------------------------------------------------
SEMI-FINISHED SEAMLESS TUBE ROUNDS
--------------------------------------------------------------------------------
OTHER SEMI-FINISHED TRADE PRODUCTS
--------------------------------------------------------------------------------
T O T A L 4,263,415
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FOREIGN SALES 4,263,415
--------------------------------------------------------------------------------
TOTAL 5,611,939
--------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
SELLS DISTRIBUTION BY PRODUCT
ANNEX 11 CONSOLIDATED
FOREIGN SELLS
--------------------------------------------------------------------------------
MAIN PRODUCTS NET SELLS MAIN
--------------------------------------------------------------------------------
VOLUME AMOUNT TRADEMARKS COSTUMERS
--------------------------------------------------------------------------------
EXPORTS
--------------------------------------------------------------------------------
STRUCTURAL PROFILES 9 55,163
--------------------------------------------------------------------------------
COMMERCIAL PROFILES 4 24,578
--------------------------------------------------------------------------------
REBAR 7 39,891
--------------------------------------------------------------------------------
STEEL BARS 7 51,513
--------------------------------------------------------------------------------
FLAT BAR 2 12,973
--------------------------------------------------------------------------------
BILLET 1 7,235
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FOREIGN SUBSIDIARIES
--------------------------------------------------------------------------------
HOT-ROLLED BARS 258 2,562,400
--------------------------------------------------------------------------------
COLD-FINISHED BARS 38 523,574
--------------------------------------------------------------------------------
SEMI-FINISHED SEAMLESS TUBE ROUNDS 114 750,707
--------------------------------------------------------------------------------
OTHER SEMI-FINISHED TRADE PRODUCTS 27 235,381
--------------------------------------------------------------------------------
T O T A L 4,263,415
--------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
CONSOLIDATED
INTEGRATION OF THE PAID SOCIAL CAPITAL STOCK
CHARACTERISTICS OF THE SHARES
----------------------------------------------------------------------------------------------------------
SERIES NOMINAL VALID NUMBER OF SHARES CAPITAL STOCK
VALUE CUPON (Thousands of Pesos)
----------------------------------------------------------------------------------------------------------
FIXED VARIABLE FREE
PORTION PORTION MEXICAN SUBSCRIPTION FIXED VARIABLE
----------------------------------------------------------------------------------------------------------
B 30,283,350 110,121,552 0 140,404,902 441,786 1,606,471
----------------------------------------------------------------------------------------------------------
TOTAL 30,283,350 110,121,552 0 140,404,902 441,786 1,606,471
----------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL NUMBER OF SHARES REPRESENTING THE PAID-IN CAPITAL STOCK ON THE DATE OF
SENDING THE INFORMATION: 140,404,902
--------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
CONSTRUCTION IN PROGRESS
ANNEX 13 CONSOLIDATED
THE PROYECTS IN PROGRESS AT MARCH 31, 2006, ARE:
PROYECTS IN PROGRESS TOTAL INVESTMENT
CASTER PROJECT IN CANTON AND
OTHER PROJECTS IN 447,525
REPUBLIC
MEXICALI 40,363
VARIOUS PROJECTS IN TLAXCALA 34,757
VARIOUS PROJECTS IN GUADALAJARA AND
MEXICALI 23,030
TOTAL INVESTMENT AT
MARCH 31, 2006 545,675
=======
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
INFORMATION RELATED TO BULLETIN B-15
(FOREIGN CURRENCY TRANSLATION)
ANNEX 14 CONSOLIDATED
Foreign currency transactions and exchange differences - All transactions in
foreign currency are recorded at the exchange rates prevailing on the date of
their execution or liquidation. Foreign currency denominated assets and
liabilities are translated at the exchange rates prevailing at the balance sheet
date. Any exchange differences incurred with regard to assets or liabilities
denominated in foreign currency are charged to operations of the period and are
included in financial income (expense) in the accompanying consolidated
statements of income (loss).
The financial statements of foreign subsidiaries are translated into Mexican
pesos in conformity with Bulletin B-15 "Transactions in Foreign Currency and
Translation of Financial Statements of Foreign Operations".
Pacific Steel and Undershaft investments are considered to be "integrated
foreign operations", as defined in Bulletin B-15, and accordingly such financial
statements were translated as follows:
- Monetary items at the exchange rate at the balance sheet date.
- Non-monetary items and stockholders' equity at the exchange rate
prevailing at the date the transactions occurred.
- Income and expense items at an appropriate average exchange rate.
- The resulting foreign currency translation differences are included in the
financial income (expense) in the statement of income (loss).
- All resulting Mexican peso amounts are restated for the effects of
inflation in accordance with the dispositions of Bulletin B-10 using the
NCPI, where such effects are considered significant.
SimRep and subsidiaries are considered to be "foreign operations", as defined in
Bulletin B-15, and accordingly such financial statements were translated as
follows:
- Monetary and non-monetary items at the exchange rate at the balance sheet
date.
- Income and expense items at the exchange rate at the balance sheet date.
- The resulting foreign currency translation differences are included in the
stockholders' equity.
- All resulting Mexican peso amounts are restated for the effects of
inflation in accordance with the dispositions of Bulletin B-10 using the
NCPI, where such effects are considered significant.
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
CONSOLIDATED
DECLARATION OF THE COMPANY OFFICIALS RESPONSIBLE
FOR THE INFORMATION CONTAINED IN THIS REPORT.
LUIS GARCIA LIMON AND JOSE FLORES FLORES CERTIFY THAT BASED ON OUR KNOWLEDGE,
THIS REPORT DOES NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO
STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE HEREIN, IN LIGHT OF
THE CIRCUMSTANCES UNDER WHICH SUCH STATEMENTS WERE MADE, NOT MISLEADING WITH
RESPECT TO THE PERIOD COVERED BY THIS FIRST QUARTER REPORT.
ING LUIS GARCIA LIMON C.P. JOSE FLORES FLORES
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
GUADALAJARA, JAL, AT APRIL 25 OF 2006