Earnings Release - 1Q13

7/27/2019 Earnings Release - 1Q13

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TELECONFERENCESPortuguese

Date: 05/14/13| Hour: 10h00 (Braslia)

Tel.: 11 2188-0155 | Password: DASA

English

Date: 05/14/13 | Hour: 12h00 (Braslia)

Phone: 1(412)317-6776 | Password:DASA

Romeu Crtes DominguesChairman

Dickson Esteves TangerinoCEO

Cynthia May HobbsCFO

Octvio FernandesVP of Operations

Emerson Leandro GasparettoDirector of Imaging

Paulo BokelInvestor Relations [email protected]

Tel.: (011) 4197-5410

Fax: (011) 4197-5516

www.dasa3.com.br

1st QUARTER 2013EARNINGS RESULTS

DASA announces Gross Revenues of

R$640.4 million and Operational cashflow of R$ 43.3 million

DASA ON

Bovespa: DASA3

Quoted price:

R$ 11.46

Average daily trade volume

R$ 29.78 Million on 1Q13

Market value:

R$ 3.6 billion

US$ 1.8 billion

Free Float: 97.2%


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1st QUARTER 2013 RESULTS

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Barueri, March 04th 2013:

Diagnsticos da Amrica S.A. DASA (BOVESPA: DASA3) has announced today the results related to the first quarter of 2013.

The companys operational and financial information are calculated on a consolidated basis and in million of Reais, based on

accounting practices extracted from the Brazilian Corporate Law, except where stated otherwise. The information herein

refers to the Companys performance in the first quarter of the year 2013, compared to the first quarter of the year 2012,

except where stated otherwise.

In this quarter, DASA reached a gross revenue of R$ 640.4 million with a 5.1% growth incomparison to 1Q12. In this 1Q13 results were affected by a high number of holidays. In 1Q12we had 63 working days in 1Q13, we had only 60 working days a decrease of 5%.

The revenue per working days reached R$ 10.7 million in 1Q13, while in 1Q12 was of R$ 9.7million, with a growth of 10.3%.

The outpatient market reached a gross revenue of R$ 471.3 million in 1Q13 with a 4.4% growthwhen compared to 1Q12, which 73.6% of DASAs total gross revenue.

The hospital market revenue reached R$ 61.0 million in the 1Q13, with 12.5% increase, whencompared to 1Q12, equivalent to 9.5% of DASAs total revenue.

The lab-to-lab market ended the quarter with 4,984 customers serviced in the Country. Thegross revenue of this market expanded by 7.5% in the 1Q13, reaching R$ 64.4 million, which

represents 10.1% of DASAs total revenue.

The public market reached revenue of R$ 43.7 million in 1Q13, with 0.3% decrease andreaching 6.8% of the total revenue of DASA.

Revenue per Line of Service (R$ million) - Markets

Financial performance highlights

451.6 471.3

54.2 61.0

59.964.4

43.843.7

1Q12 1Q13

Outpatient Inpatient Lab to Lab Public Sector

7.2%

8.9%

5.1%

7.5%

4.4%73.6%

10.1%

609.5

74.1%

6.8%-0.3%

640.4

9.5%

9.8%12.5%


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Revenue per Line of Service (R$ million) Clinical Analysis X RID

The revenue of the same units (PSC) grew by 3.4% in the 1Q13 as compared to the 1Q12.Adjusted by working days, the growth would be 8.5%.

We ended the quarter with 521 units, of which 66 are hospital units.

In 1Q13, EBITDA amounted R$ 99.0 million, compared to R$ 122.1 million in 1Q12, representing17.0% of net revenue.

CAPEX investments in 1Q13 totaled R$ 42.0 million. These investments were directed to: (i)implementation and development of customer service system, (ii) acquisition, refurbishing andenlarging the existing PSCs and (iii) purchasing of imaging equipment.

403.2 432.8

206.4207.7

1Q12 1Q13

RID Clinical Analysis

609.5640.4

7.3%

0.6%

5.1%

Highlights 1Q13 1Q12 %Total Gross Revenue (R$ MM) 640.4 609.5 5.1%

Outpatient Revenue (R$ MM) 471.3 451.6 4.4%Hospitals Revenue (R$ MM) 61.0 54.2 12.5%

Lab-to-lab Gross Revenue 64.4 59.9 7.5%

Public Gross Revenue 43.7 43.8 -0.3%

Working days 60 63 -4.8%

Gross Revenue / Working day 10.7 9.7 10.3%

N Total units 521 520 0.2%

N PSCs 455 442 2.9%

N Hospital units 66 78 -15.4%

EBITDA (R$ MM) 99.1 122.3 -19.0%

Ebitda margin 17.0% 22.0% -4.9 p.pNet income (R$ MM) 23.6 36.4 -35.2%

CAPEX (R$ MM) 42.0 73.0 -42.5%

Same Units Outpatient (%) 3.4% 10.5% -67.1%


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DASA Doctors ministered 35 LECTURES at the So Paulo radiology journey

Participation in the CONGRESS OF INTERNATIONAL SOCIETY OF MAGNETIC RESONANCE - Seattle (USA) -April 2013

The second 100% automated conveyor became operational, at the central laboratory of Duquede Caxias, increasing productivity and further modernizing the facility

Inova on schedule (20% of revenue implanted)

Opened, in March 2013, the third unit of Alta Exclencia Diagnstica in So Paulo

Outpatient Market

The Outpatient market has a revenue of R$ 471.3 million in 1Q13,representing a 4.4% growth as compared to 4Q11.

Revenue per Line of Service (R$ million) Revenue per brand (R$ million)

The RIDs growth was affected by Ultrasound exams, whichrepresent roughly 30% of RDI Revenue. The Ultrasound exams volumewas impacted by limited schedule service caused by the lack ofspecialized doctors. As a result, the service time at the call centerincreased due to greater difficulty in scheduling these tests, which

affects other RDI tests. All image exams need to be schedule.

This quarter, the revenue from clinical analysis grew more than fromimaging. This is due to the impact caused from the call center onimaging operations, the faster growth of new units focused on

Operational highlights

Financial performance

265.1 284.1

186.5187.2

1Q12 1Q13Clinical Analysis RID

60.3%

39.7%

451.6471.3

41.3%

58.7%

0.3%

4.4%

7.2%301.6 318.3

150.0153.0

1Q12 1Q13

Premium and Executive Standard

66.8%

33.2%

451.6471.3

32.5%

67.5%

2.0%

4.4%

5.5%


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Average Requisition Price (R$) and Requisition Volume (million)

This quarter, we will continue the process of optimizing the hospitalbase which led to the cancellation of 7 hospitals this quarter alone.We dont expect further cancellations. This optimization positivelyimpacted the Average Requisition Price.

Lab-to-lab

Gross Operational Revenue B2B (R$ million) Performance B2B (R$ million)

59.964.4

1Q12 1Q13

7.5%

4,8114,984

12,44712,919

1Q12 1Q13# of Laboratories Average Revenue/Laboratory (in R$)

1Q12 x 1Q13

1Q12 2Q12 3Q12 4Q12 1Q13 Var. %Revenue (in R$ milions) 59.9 60.6 64.3 57.9 64.4 7.5%

# of Laboratories 4,811 4,853 4,897 4,903 4,984 3.6%

Average Revenue/Laboratory (in R$) 12,447 12,497 13,121 11,817 12,919 3.8%

# of Requisitions (in Th) 3,483 3,520 3,816 3,366 3,737 7.3%

# of Requisitions/ laboratory 724 725 779 687 750 3.6%

Average Revenue/ requisitions (in R$) 17.2 17.2 16.8 17.2 17.2 0.2%

1.1 1.2 1.1 1.0 1.1

50.9 49.8 52.256.5 56.3

1Q12 2Q12 3Q12 4Q12 1Q13Requisitions Average Requisition Price


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The lab-to-lab market ended the 1Q13 with a gross revenue of R$64.4 million, with a growth of 7.5%, and the equivalent of 10.1% oftotal gross revenue.

The performance of this market reflects the increase in the numberof requisitions per laboratory and the increase of the averagerevenue per lab. The objective of this strategy is to increaseprofitability per laboratory, considering that the logistics costs forthis laboratory are fixed, in the already established routes.

Public SectorGross Operational Revenue (R$ million)

The revenue of the Public market was R$ 43.7 million in this quarter,down 0.3% when compared to 1Q12.

This decrease is mainly due to the cancellation of less profitableagreements.

We finished the quarter with a total of 24 clients, covering a total of588 collection points (83 Hospital Units and 505 of the OutpatientNetwork).

Taxes on Services

In the 1Q13, R$ 35.9 million were recorded as taxes collected over

the services provided, which stands for 5.6% of the gross revenue, in

relation to the 5.9% ratio of taxes recorded in the 1Q12 (R$ 36.1

million).

43.8 43.7

1Q12 1Q13

-0.3%


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Discounts and Deductions

The discounts have reached a level of R$ 23.0 million in the quarter,

accounting for 3.6% of the gross revenue, with 2.7% (R$ 16.7 million)

in 1Q12.

Net Operating Revenue

The net operating revenue reached R$ 581.6 million in 1Q13, which

means an increase of 4.5% compared with 1Q12.

Cost of Services

The cost of services includes expenses related to the operation of

the PSCs, cost of clinical analysis production and RID.

PSCs costs are divided into fixed personnel, general and public

services, rents and facility maintenance; and variable - materials

used in the collection and production of clinical tests and RID, which

may vary according to the volume of requisitions processed. Costs

related to the processing of clinical tests include reagents, personnel

and the operating costs of the central laboratories. RID processing

costs consist of expenditures with equipment maintenance, expenses

with test report centers and the hiring of specialized medical clinics

to issue reports on these tests.

The changes on the line of personnel, materials, services and

utilities and general expenditures are due to the characteristics of

each brand and to the difference between their costs structure. The

main difference is in the attendance, where the B2C market has

collection units and all costs related to this operation, showing itsmain costs as personnel and services and occupancy costs. At the

B2B market its main cost is material, as it does not have collection

unit, but only the processing of tests.


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1) Personnel costs was stable on 19.1%, compared to 1Q12.

2) Despite the fact that the dollar appreciated against the BrazilianReal, and the increase in the number of medical exams mainly in

Hospital and Lab-to-lab, where the percentage of material cost in

final price is considerably higher than in outpatient market, the costs

in materials have decreased compared to the growth of revenue in

1Q13. This decrease resulted from negotiation with suppliers and

higher productivity at central labs.

3) Services and utilities showed an increase compared to 1Q12. This

includes units occupancy costs, medical imaging appraisal reportcosts, data links and other occupancy related expenses. Compared to

1Q12, the results were affected by increases in medical services

contracts, occupancy expenses price increases have been higher

than inflation, data link, to provide system redundancy and

contingency, and equipment maintenance costs.

4) Services and utilities showed an increase compared to 1Q12. This

includes units occupancy costs, medical imaging appraisal report

costs, data links and other occupancy related expenses. Compared to1Q12, the results were affected by increases in medical services

Cost of Services Cash 1Q13 versus 4Q12 versus 1Q12

1Q13 4Q12 1Q12 1Q13 4Q12 1Q12 1Q13 x

4Q12 %

1Q13 x

1Q12 %

Personnel 111.2 119.7 106.6 19.1% 21.9% 19.1% -7.1% 4.3%

Materials 100.5 95.7 98.1 17.3% 17.5% 17.6% 5.0% 2.5%

Services and Utilities 156.9 163.7 130.9 27.0% 29.9% 23.5% -4.2% 19.9%

General 6.2 7.4 5.1 1.1% 1.3% 0.9% -16.0% 20.8%

Cost of Services Cash 374.8 386.5 340.7 64.4% 70.6% 61.2% -3.0% 10.0%

Depreciation and amortization 27.8 27.8 19.6 4.8% 5.1% 3.5% 0.0% 42.2%

Cost of Services 402.6 414.3 360.2 69.2% 75.7% 64.7% -2.8% 11.8%

In R$ Million % of Net Revenues


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contracts, occupancy expenses price increases have been higher

than inflation, data link, to provide system redundancy and

contingency, and equipment maintenance costs.

5) The general expenses was stable in comparison with 1Q12. In this line,

the expenses with fees, insurances and expenses with representations

are accounted for.

Cash Gross Profit

In the 1Q13, the cash gross profit was R$ 206.8 million, a 4.3%

decrease in relation to 1Q12, and the cash gross margin of the period

reached 35.6%, compared to 38.8% in 1Q12.

Cash Operating Expenses

Below, the main variations in the cash operating expenses lines as a

portion of the net revenue, in relation to the previous year, are

described:

* Since 1Q12, the PDA is being considered under the "discounts" the income statement

Administrative and general expenses had an increase, compared to

1Q12, caused by increase in the call center structure and

receivables, greater focus on service quality and improvement onbilling process.

Breakdown of Cash Operating Expenses 1Q13 versus 4Q12 versus 1Q12

1Q13 4Q12 1Q12 1Q13 4Q12 1Q12 1Q13 x

4Q12 %

1Q13 x

1Q12 %

General and Administrative 101.8 109.2 93.8 17.5% 20.0% 16.8% -6.8% 8.6%Profit Sharing Program 7.6 - 0.5 1.3% 0.0% 0.1% 0.0% 1397.8%

Other Operating Revenues/ Expenses (1.7) (21.8) (0.6) -0.3% -4.0% -0.1% -92.3% 192.7%

Cash Operating Expenses 107.7 87.4 93.7 18.5% 16.0% 16.8% 23.3% 15.0%

Depreciation and Amortization 14.0 24.1 12.7 2.4% 4.4% 2.3% -42.1% 10.4%

Operating Expenses 121.7 111.5 106.4 20.9% 20.4% 19.1% 9.1% 14.4%

In R$ Million % of Net Revenues


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This quarter has R$ 7.6 million in provisions of Profit Sharing

Program.

Depreciation and Amortization

The expenses with depreciation and amortization summed up to R$

41.8 million, or 7.2% of the net revenue in the quarter, against R$

32.2 million (5.8% of the net revenue) in 1Q12.

Goodwill to be compensated in next years (Thousand R$)

We emphasized that we continue to benefit from the tax crediteffect in the amortization of the capital in excess of the

incorporated companies, as per the table below:

Year Goodwill

2013 215.0

2014 277.3

2015 205.7

2016 199.6

2017 196.4

2018 189.6

2019 158.0

Total 1,441.6

EBITDA

122.3

99.1

22.0%17.0%

1Q12 1Q13

-19.0%


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In 4Q12, we began to amortize Cytolabs and Dasa Brasil

Participaess (Previlab) goodwill, due to the incorporation of

Cytolab by Dasa, on November 30th, 2012, and the incorporation of

Dasa Brasil Participaes by Previlab, on December 31st, 2012.

R$ (Millions) 1Q13 1Q12

Net Financial Expenses (21,0) (32,4)

Investment Income 3,2 5,3

Debentures/Promissory Notes Expenses (18,4) (25,4)

Other loans and financing expenses (4,0) (4,1)

Other (1,8) (8,2)

Net Financial Expenses

The breakdown of net financial expenses is:

Investment Income: Refers to the interest received from cashinvestments.

Debentures / Promissory Notes Expenses: Refers to the costs of

interests in promissory notes and debentures issued, including the

transaction costs.

Other Financing Expenses: Foreign bonds interest expenses,

interest from leasing contracts in foreign and/or national currency,

working capital and other financing expenses.

Others: The values of this line include bank expenses, expenses with

credit card charges, notarial expenses, financial discounts granted to

clients, updating of contingencies, financial operations tax (Imposto

de Operaes Financeiras IOF) and income tax paid on the transfer

of interest abroad, as well others expenses not related to borrow

interests and others financing.


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Income Tax and Social Security Contribution

The total income tax and social contribution presented in the 1Q13 a

balance of R$ 12.7 million, compared to R$ 21.3 million.

Net Profit

In the 1Q13, the net profit was R$ 23.6 million, as compared to R$

36.4 million in the previous year.

Cash tax

We shall continue to make the most of the goodwill on previous

acquisitions and, as from November 2011, the goodwill of the

incorporation of MD1. The value of Cash tax was R$ 7.3 million.

* Withholding tax (current): Originally from financial income and withholding of gross revenue

35.1%

24.6%

34.0%

1.1%

-23.5%

13.0%

Income Tax Rate permanentsadjustements intax books

Income Taxes(FinancialStatements)

TaxLoss/GoodwillCompensation

Other Withholding tax(current)/Income taxes

cash*

1Q13


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Net income considering effective tax rate

Of the net profit, we have adjusted the exchange rate effects andDeferred Income Tax/Capital in excess, totaling Cash Earnings ofR$ 27.2 million.

* Adjusted by the rate of 34% of Income Tax/ Social Contribution

DASA net debt totaled R$ 849.3 million in 1Q13. About 88.0% of

DASAs total gross indebtedness is long term and 7.1% are

denominated in foreign currency. The debt in foreign currency is

mainly formed by the equipment financing and International Notes.

The national currency debts are largely related to the debentures,

CCBs and Leasings.

Breakdown of net indebtedness

Indebtedness

R$ Millions 1Q13 1Q12

Short Term (132.6) (230.1)Domestic Currency (118.7) (211.8)

Foreing Currency (14.0) (18.3)

Long Term (976.3) (794.0)

Domestic Currency (911.1) (724.7)

Foreign Currency (65.2) (69.3)

Total ST + LT (1,108.9) (1,024.1)

Cash and Cash equivalent 259.6 178.7

Domestic c urrency 228.3 148.2

Foreing currency 31.3 30.5

Net Debt (849.3) (845.5)

R$ Million1Q12 2Q12 3Q12 4Q12 2012 1Q13

(=) Net Profit 36.4 23.1 26.8 (1.6) 84.7 23.6Fx variances/ MTM* 0.2 0.9 0.2 0.4 1.7 (0.1)

( + / - ) Deferred Income Tax + Goodwill 11.5 5.1 4.8 (11.6) 9.8 3.8

(=) Net income considering effective tax rate 48.1 29.2 31.7 (12.9) 96.2 27.2


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Includes the balanced sheet items: loans and financing, debentures and financial instruments.As of 4Q12, we introduced the net debt calculation methodology, compatible to the one used by the fiduciary

agent.

Cash Flow Analysis (R$ million)

We have detailed under this section the main variations in the cash

flow statement.

Management Cash Flow (R$ Million) 1Q13

Accounting EBITDA 99.1Operacional working capital (48.7)

Other working capital accounts 21.2

Financial expenses (21.0)

Income tax (7.3)

Operational cash flow 43.3

Capex (42.0)

Free Cash Flow 1.3

This quarter, our Capex is in line with the cash flow, as planned.

The investments in CAPEX in 1Q13 totaled R$ 42.0 million, 42.5% lower

than the same period in 2011.The investments were directed mostly to:

(i) development and deployment of production systems and services and

renovation of technology, (ii) the acquisition, renovation and expansion

of existing units and (iii) purchase of imaging equipment.

CAPEX (R$ millions) CAPEX Breakdown1Q13

Investments

149.0

93.1113.4

192.5

234.0

73.0

42.0

2008 2009 2010 2011 2012 1Q12 1Q13

Information

Technology

R$ 20.7 MM

49%

Opening and

Expansion of

PSCs

R$ 16.6MM

40%

Equipment

R$ 4.5 MM

11%


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Below is summarized the investments made in expansion and

refurbishing of PSCs, besides new PSCs.

DASA shares closed 2013 at R$ 11.69, accumulating a decrease of

11.4% in the year, versus 5.1% decrease of the Ibovespa. Over 2012,

DASA shares were transacted on 100% of Bovespas trading sessions,

summing up to a financial volume of R$ 1.76 billion (daily traded

average of R$ 29.78 million).

Performance in stock exchange (DASA ON versus IBOVESPA)

Investments

Capital market

Dec-0

4

Mar-0

5

Jun-0

5

Sep-0

5

Dec-0

5

Mar-0

6

Jun-0

6

Sep-0

6

Dec-0

6

Mar-0

7

Jun-0

7

Sep-0

7

Dec-0

7

Mar-0

8

Jun-0

8

Sep-0

8

Dec-0

8

Mar-0

9

Jun-0

9

Sep-0

9

Dec-0

9

Mar-1

0

Jun-1

0

Sep-1

0

Dec-1

0

Mar-1

1

Jun-1

1

Sep-1

1

Dec-1

1

Mar-1

2

Jun-1

2

Sep-1

2

Dec-1

2

Mar-1

3

VOLUME (R$) DASA3 IBOVESPA

2011 2012 1Q13

Opening of PSCs 9 22 6

Standard 7 21 5Mega 2 1 1

Refurbishing/expansion of PSCs 45 30 17

Tomography installation 10 7 -

MRI installation 5 10 2

Total equipment 15 17 2

Ongoing Refurbishing - 2 13

Completed Refurbishing 30 11 2

Other refurbishing 30 13 15


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Close R$ (03/28/2013) 11.69

1T13 High (R$ per Share) 14.44

1T13 Low (R$ per Share) 11.25

% Chg. In 1T13 -11.4%

Market Cap (R$ MM) 3,645.0

Market Cap (US$ MM) 1,810.5

Free Float 97.21%

Outstanding Shares 311,803,015

Bovespa - DASA ON

Trading Volume (R$ Thousand/day) Number of trades /day

Board of Directors Election

On December 7th, 2013, Ms. Cynthia May Hobbs Pinho was elected Vice

President and CFO. The name of the position currently ascribed to Mr.

Carlos Elder Maciel de Aquino was changed from Director (without any

specific designation) to Accounting and Infrastructure Director.

CADE approval Cytolab

The Administrative Council of Economic Defense (CADE) approved in its

16th Ordinary Ruling Session, on February 20th, 2013, the referred

object in Ato de Concentrao [Merger Operation Act] n08012.007540/2011-58, concerning the acquisition of Cytolab

Bovespa information

Highlights of the quarter

18,594

25,864

30,721 29,779

2010 2011 2012 1Q13

-3.1%

1,294

2,889

5,0015,245

2010 2011 2012 1Q13

4.9%


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Laboratrio de Anatomia Patolgica, Citopatologia Diagnstica e

Anlises Clnicas Ltda. ("Cytolab"), provided a change is made in the

geographical coverage under the clause that established the non-

competition policy with sales people. The Company will do all that is

necessary to comply with such provision, within the time limit

determined by CADE.

Election of the Board of Directors

In the AGM held on April 22 of 2013, after consideration of the matter by

the shareholders present, the slate of candidates presented by the Board

on April 4 of 2013 was approved, in accordance with the voting system

established in paragraph 5 of Article 17 of the Corporations bylaws, and

consequently the members of the Board of Directors were elected,

namely:

(a) Romeu Crtes Domingues, as president of the Board of Directors;

(b) Oscar de Paula Bernardes Neto, as Vice-President of the Board of

Directors; (c) Dickson Esteves Tangerino, as member of the Board of

Directors; (d) Carlos Fernando Costa, as member of the Board of

Directors; (e) Maurcio Bittencourt Almeida Magalhes, as member of

the Board of Directors.

In compliance with the provisions of paragraph two of Article 17 of the

Companys bylaws and the Listing Rules of the New BM&FBovespa

Market, it is hereby recorded that board members Oscar de Paula

Bernardes Neto, Carlos Fernando Costa and Maurcio BittencourtAlmeida Magalhes, are considered independent board members

according to the definition in the New Markets Listing Rules.

Statutory Audit Committee (CAE)

In the EGM of April 22, 2013, the Statutory Audit Committee (CAE)

was approved, pursuant to CVM Guidance 308/99 and CVM Guidance

509/2011. In an Board Meeting held on April 22, the Board chose to

elect, as members of the CAE, for a 10 (ten) year mandate: Mr.

Raimundo Loureno Maria Christians; (ii) Mr. Maurcio Bittencourt

Highlights of the subsequent quarter


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Almeida Magalhes, (iii) Mr. Raphael Nascimento Diederichsen; and (iv)

Mrs. Manuela Cristina Lemos Maral.

Re-election of the current Corporate Administration Board

In the Board Meeting held on April 22, the Board of Directors chose,without reservations, to re-elect the current Corporate AdministrationBoard, with a unified mandate until the Common General Assembly toapprove the accounts for the fiscal year ending on December 31 of 2015,with the following composition: (a) President Director: Mr. Dickson

Esteves Tangerino; (b) Vice-President Director of Operations: OctvioFernandes da Silva Filho; (c) Vice-President Director of Business: AntonioCarlos Gaeta; (d) Director of Investor Relations: Mr. Paulo Bokel Catta-Preta; (e) Vice-President Director and Financial Director: Mrs. CynthiaMay Hobbs Pinho; (f) Personnel Director: Mr. Marcelo Rucker; (g)Accounting and Infrastructure Director: Mr. Carlos Elder Maciel deAquino; (h) Director of Radiology and Graphics Methods: Mr. EmersonLeandro Gasparetto; (i) Legal Director: Lilian Cristina Pacheco Lira.

Special Installment Program of the State of So Paulo

The Decree of the State of So Paulo No. 58.811/12 created a specialprogram that established the exclusion, for cash payment, of 75% of fines

and 60% of the interests related to ICMS tax debts, there may be a further

reduction of 45% on fines in case of debts sued and not enrolled in

outstanding debt, and a reduction in lawyers fees to 5% in case of debits.

Given these favorable conditions, the Company opted to take the

benefits of the Decree, adhering to the program, between 6 and May 10,

to repay their debts have not sued, rated by the attorney representing

DASA in the proceeding as probable, and objects that are injunction No.0046827-27.2011.8.26.0053, to thereby eliminate tax contingencies

related to ICMS levied on imports and recorded in accounts provision for

judicial deposit (see financial statement note n 21).

For these debts, totaling R$ 38,213 (now with the benefits of Decree),

the Company adhered to the form of cash payment.


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Income statement

R$ million 1Q13 1Q12 %

Gross Operating Revenues 640.4 609.5 5.1%

Deductions (58.8) (52.9) 11.3%

Sales Taxes (35.9) (36.1) -0.7%

Discounts (23.0) (16.7) 37.3%

Net Operating Revenues 581.6 556.7 4.5%

Cost of Services Rendered (402.6) (360.2) 11.8%

Personnel (111.2) (106.6) 4.3%

Materials (100.5) (98.1) 2.5%

Services and Utilities (156.9) (130.9) 19.9%

General (6.2) (5.1) 20.8%

Depreciation and amortization (27.8) (19.6) 42.2%

Gross Profit 179.0 196.5 -8.9%

Operating Expenses (121.7) (106.4) 14.4%

General and Administrative (101.8) (93.8) 8.6%

Profit Sharing Program (7.6) (0.5) 1397.8%

Other Operating Revenues/ Expenses 1.7 0.6 192.7%

Depreciation and Amortization (14.0) (12.7) 10.4%

Net Financial Expenses (21.0) (32.4) -35.3%

Operating Earnings 36.3 57.7 -37.1%

Net Loss Before Income Tax and Soci 36.3 57.7 -37.1%

Income Tax and Social Contribution (12.7) (21.3) -40.2%Net Income (Loss) 23.6 36.4 -35.2%


21/24


21/24

Consolidated balance sheet

alance Sheet - R$ thousands 1Q13 4Q12 1Q12 1Q13 4Q12 1Q12

Total Assets 4,313,601 4,272,175 4,197,762 Total equity and liabilities 4,313,601 4,272,175 4,197,762

urrent 1,039,112 993,438 888,999 Current liabilities 425,800 400,966 472,545

ash and cash equivalents 228,319 228,519 104,059 Current liabilities 80,909 84,429 67,165

arketable securities 31,296 31,953 31,026 Accounts payable to suppliers 38,794 44,520 208,974

ccounts receivable 552,888 498,455 512,426 Loans and financing 28,417 30,335 33,750

nventories 53,111 61,442 62,639 Taxes and contributions payable 93,292 81,191 94,181

ecoverable taxes 144,633 138,462 137,229 Salaries, social security charges & vacations payabl 6,349 4,820 7,501

repaid expenses 1,152 979 1,995 Installment payment of taxes 1,618 1,598 1,521

ther current assets 27,713 33,628 39,625 Accounts payable from acquisition of subsidiaries 92,917 74,485 10,452

Debentures 20,235 20,235 2

oncurrent assets 3,274,489 3,278,737 3,308,763 Dividends and interes t on s hareholders equity 936 763 676

ong-term receivables 212,802 214,305 233,613 Derivative financial instruments 62,333 58,590 48,323

arketable securities 57,859 57,635 84,127

eferred tax assets 55,771 57,002 48,385 Noncurrent liabilities 1,256,954 1,264,017 1,124,601

ther credits 2,631 3,412 9,644 Long-Term Liabilities 1,256,954 1,264,017 1,124,601

repaid expenses 806 982 1,188 Loans and financing 91,002 102,877 120,435

udicial deposits 95,735 95,274 90,269 Installment payment of taxes 25,889 28,010 38,430

nvestments 873 516 224 Deferred tax liabilities 49,702 47,130 45,386

roperty and Equipment 710,932 716,474 719,173 Provision for contingencies 134,190 132,251 127,530

ntangible assets 2,349,882 2,347,442 2,355,753 Accounts payable from acquisition of subsidiaries 66,887 67,834 72,010

Debentures 884,812 884,499 696,886

Related parties - - 22,223

Financial instruments derivatives 447 470 754

Others 4,025 946 947

Total equity 2,630,847 2,607,192 2,600,616

Capital 2,234,135 2,234,135 2,234,135

Capital Reserves 65,427 65,427 65,427

Profit reserves 323,091 237,741 257,660

Equity evaluation adjustment 1,414 1,571 1,885

Retained Earnings 23,522 85,192 59,651

Stock option plan 1,456 1,361 1,079

Treasury stock (18,617) (18,617) (18,617)

Non-controlling interests 419 382 (604)


22/24


23/24


23/24

Statement of added value

DescriptionQuarterly current

3/1/13 to 3/31/13

Quarter of the

preceding year

01/01/12 to 03/31/12

Accumulated de

01/01/2012 to

12/31/2012

Accumulated de

01/01/2011 to

12/31/2011

Revenue 640,793 610,102 2,514,257 2,310,042

Sales of goods, products and services 640,412 609,544 2,489,994 2,390,134

(Reversal of) allow ance for doubtful accounts (15) (16) (201) (109,601)

Other revenue 396 574 24,464 29,509

Inputs acquired from third parties 302,803 269,720 1,190,719 (955,078)

Inputs used - - - -

Cost of products, goods and services sold - 64,795 335,959 (395,066)

Materials, energy, third-party services and other 223,056 204,925 854,760 (560,012)

Others 79,747 - - -

Gross value added 337,990 340,382 1,323,538 1,354,964

Retentions 41,810 (32,258) (152,580) (125,764)

Depreciation, amortization and depletion 41,810 (32,258) (152,580) (125,764)

Net value added produced 379,800 308,124 1,170,958 1,229,200

Transferred value added received 8,053 16,527 50,927 95,542Financial income 8,053 16,527 50,927 95,542

Total value added to be distributed 387,853 324,651 1,221,885 1,324,742

Distribution of value added 304,233 361,065 1,221,885 1,324,742

Personnel 143,549 129,381 556,594 501,438

Taxes, fees and contributions 79,277 84,456 304,343 311,289

Debt remuneration 57,847 74,400 276,220 366,760

IOC and dividends - 36,414 - 38,143

Non-controlling interest 38 44 (464) (200)

Retained profits 23,522 36,370 85,192 107,312


24/24


Statement of changes in shareholders equity

01/01/2013 a 03/31/2013

Opening balances 2,234,135 48,171 322,933 0 1,571 2,606,810 382 2,607,192

Adjusted opening balances 2,234,135 48,171 322,933 0 1,571 2,606,810 382 2,607,192

Shareholders capital transaction 0 96 0 0 0 96 0 96

Recognized options granted 0 96 0 0 0 96 0 96

Total comprehensi ve income 0 0 0 23,522 0 23,522 37 23,559Net income for the period 0 0 0 23,522 0 23,522 37 23,559

Internal Changes in Equity 0 0 157 0 -157 0 0 0

Closing bala nces 2,234,135 48,267 323,090 23,522 1,414 2,630,428 419 2,630,847

01/01/2012 a 03/31/2012

Opening balances 2,234,135 46,810 259,204 0 2,199 2,542,348 -328 2,542,020

Adjusted opening balances 2,234,135 46,810 259,204 0 2,199 2,542,348 -328 2,542,020

Total comprehensi ve income 0 0 0 36,370 0 36,370 -54 36,316

Net income for the period 0 0 0 36,370 0 36,370 44 36,414

Other comprehensi ve inc ome 0 0 0 0 0 0 -98 -98

Non-controlling interest 0 0 0 0 0 0 -98 -98

Closing bala nces 2,234,135 46,810 259,204 36,370 2,199 2,578,718 -382 2,578,336

Patrimnio

lquido

Participao

dos no

controladores

Patrimnio

lquido

consolidado

EquityNon-controlling

interest

Consolidated

equityDescription Paid-In Capital

Capital Reserve Granted

options and treasury

shares

Outros

resultados

abrangentes

Other

comprehensive

income

Retained

earnings

accumulated

losses

DescriptionCapital social

integralizado

Reservas de capital,

opes outorgadas e

aes em tesouraria

Lucros ou

prejuzos

acumulados

Profit reserves

Resevas de

Lucros

Documents

Earnings Release - 1Q13