NEWS
Delta and Pine Land Company
P.O. Box 157
Scott, Mississippi 38772
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Contact: Investors Media
Tom Jagodinski Stephanie Pillersdorf/Keil Decker
Delta and Pine Land Company Citigate Sard Verbinnen
(662) 742-4518 (212) 687-8080
DELTA AND PINE LAND COMPANY REPORTS
SECOND QUARTER AND SIX-MONTH FINANCIAL RESULTS
SCOTT, MS, March 26, 2003 -- Delta and Pine Land Company (NYSE:DLP)
("D&PL"), a leading commercial breeder, producer and marketer of cotton planting
seed, today announced financial results for the second fiscal quarter and six
months ended February 28, 2003.
Second Quarter and Six-Month Results
Net income for the second quarter was $0.48 per diluted share, excluding legal
expenses of $0.07 related to the Monsanto (NYSE: MON) / Pharmacia (NYSE: PHA)
litigation, compared to last year's second quarter net income of $0.46 per
diluted share, excluding Monsanto/Pharmacia legal expenses of $0.02 per diluted
share. For the second quarter, net income after legal expenses related to the
Monsanto/Pharmacia litigation was $0.41 per diluted share compared to last
year's second quarter net income of $0.44 per diluted share after legal
expenses.
Net sales and licensing fees for the 2003 second quarter decreased to
$107.5 million from $111.9 million in the year-ago quarter. This decrease was
primarily due to an expected shift of sales into the third quarter as a result
of a new inventory management strategy whereby inventory shipments to
distributors are more closely timed to farmer orders. Although second quarter
sales were lower than in the prior year, net income, excluding
Monsanto/Pharmacia legal fees, increased due to higher margins on cottonseed
sales resulting primarily from the introduction of higher priced products.
Net income for the 2003 six-month period was $0.33 per diluted share, excluding
legal expenses related to the Monsanto/Pharmacia litigation and special charges,
compared to net income of $0.35 per diluted share, excluding Monsanto/Pharmacia
litigation expenses, for the same period last year. Net income after
Monsanto/Pharmacia legal expenses and special charges for the 2003 six-month
period was $0.22 per diluted share, a decrease from $0.33 per diluted share
after legal expenses for the comparable prior year period. For the six months
ended February 28, 2003, legal expenses related to the Monsanto/Pharmacia
litigation were $0.10 per diluted share and special charges were $0.01 per
diluted share related to costs associated with closing a Company facility in
Centre, Alabama and a reduction in workforce at a joint venture in China. For
the six months ended February 28, 2002, there were no special charges recorded
and legal expenses related to the Monsanto/Pharmacia litigation was $0.02 per
diluted share. Net sales for the six month period decreased to $113.1 million
from $120.1 million in the comparable prior year period. The Company expected
shifting of some U. S. cottonseed sales from the second quarter to the third
quarter as part of a new inventory management strategy.
Tom Jagodinski, President and Chief Executive Officer, said, "We are pleased our
results for the second quarter were in line with our stated expectations. For
the third quarter, we have an adequate supply of seed and have begun to see an
acceleration of seed shipments. In addition, early indications are that planted
cotton acreage may increase slightly above 2002 acreage."
Stock Repurchase Plan
For the quarter ended February 28, 2003, the Company purchased 171,600 shares of
its common stock at an aggregate purchase price of $3.4 million. The Company has
repurchased 1,265,900 shares at an aggregate price of $22.9 million under its
current $50 million stock buyback plan. The Company will continue to purchase
its shares from time to time depending on market conditions and other factors.
Quarterly Dividend
The Company also announced its Board of Directors had declared a dividend
of $0.06 per share for the third quarter. The dividend, payable to shareholders
of record on May 30, 2003, will be paid on June 13, 2003.
Conference Call
D&PL will hold a conference call with the investment community to review
this announcement on Wednesday, March 26, 2003, at 11 a.m. ET/10 a.m. CT. The
call can be accessed by dialing 888-270-8028 (International, 706-679-0236). Live
audio of the conference call will also be accessible at www.vcall.com. The call
will be available on the website for 90 days, and will also be available by
replay from 3 p.m. ET/2 p.m. CT on Wednesday, March 26 through midnight Tuesday,
April 1 by dialing 800-642-1687 (International, 706-645-9291) and entering
reservation number: 9391806.
About Delta and Pine Land Company
Delta and Pine Land Company is a leading commercial breeder, producer and
marketer of cotton planting seed. Headquartered in Scott, Mississippi, with
multiple offices in eight states and facilities in several foreign countries,
D&PL also breeds, produces and markets soybean planting seed in the U.S. For
more information, please refer to the Company's website at www.deltaandpine.com.
# # #
Certain matters discussed in this release are "forward-looking statements,"
including statements about the Company's future plans, goals and other events
which have not yet occurred. These statements are intended to qualify for the
safe harbors from liability provided by the Private Securities Litigation Reform
Act of 1995. They can generally be identified because the context of such
statements will include words such as "believes," "anticipates," "expects" or
words of similar import. It is the nature of agricultural seed businesses that
supply, demand and their timing are affected by many variables, including
commodity prices, weather and government policy. Due to the seasonal nature of
the seed business, the Company typically incurs losses in its first and fourth
quarters. Additional risks and uncertainties with respect to the Company's
business and forward looking statements are set forth in the Company's latest
filings with the Securities and Exchange Commission.
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
(in thousands, except per share amounts)
(Unaudited)
February 28, February 28,
2002 2003
--------------- ---------------
NET SALES AND LICENSING FEES $ 111,867 $ 107,537
COST OF SALES 71,745 65,376
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GROSS PROFIT 40,122 42,161
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OPERATING EXPENSES:
Research and development 4,560 4,646
Selling 2,934 2,802
General and administrative 3,354 4,330
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10,848 11,778
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Special Charges - -
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OPERATING INCOME 29,274 30,383
INTEREST INCOME, net 477 194
OTHER EXPENSE (3,129) (4,357)
EQUITY IN NET LOSS OF AFFILIATE - (481)
MINORITY INTEREST IN LOSS / (EARNINGS) OF SUBSIDIARIES 936 (861)
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INCOME BEFORE INCOME TAXES 27,558 24,878
INCOME TAX PROVISION 9,784 8,746
--------------- ---------------
NET INCOME 17,774 16,132
DIVIDENDS ON PREFERRED STOCK (53) (64)
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NET INCOME APPLICABLE TO COMMON SHARES $ 17,721 $ 16,068
--------------- ---------------
BASIC EARNINGS PER SHARE $ 0.46 $ 0.42
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DILUTED EARNINGS PER SHARE $ 0.44 $ 0.41
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NUMBER OF SHARES USED IN BASIC EARNINGS
PER SHARE CALCULATIONS 38,454 38,124
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NUMBER OF SHARES USED IN DILUTED EARNINGS
PER SHARE CALCULATIONS 39,991 39,556
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DIVIDENDS PER COMMON SHARE $ 0.05 $ 0.06
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DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED
(in thousands, except per share amounts)
(Unaudited)
February 28, February 28,
2002 2003
--------------- ---------------
NET SALES AND LICENSING FEES $ 120,120 $ 113,136
COST OF SALES 77,194 69,215
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GROSS PROFIT 42,926 43,921
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OPERATING EXPENSES:
Research and development 8,642 8,652
Selling 5,468 5,221
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General and administrative 6,626 7,897
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20,736 21,770
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Special Charges - (500)
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OPERATING INCOME 22,190 21,651
INTEREST INCOME, net 1,158 582
OTHER EXPENSE (3,215) (6,484)
EQUITY IN NET LOSS OF AFFILIATE - (941)
MINORITY INTEREST IN LOSS / (EARNINGS) OF SUBSIDIARIES 472 (1,318)
--------------- ---------------
INCOME BEFORE INCOME TAXES 20,605 13,490
INCOME TAX PROVISION 7,316 4,789
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NET INCOME 13,289 8,701
DIVIDENDS ON PREFERRED STOCK (106) (117)
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NET INCOME APPLICABLE TO COMMON SHARES $ 13,183 $ 8,584
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NET INCOME APPLICABLE TO COMMON SHARES BEFORE SPECIAL CHARGES $ 13,183 $ 8,906
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BASIC EARNINGS PER SHARE:
NET INCOME BEFORE SPECIAL CHARGES $ 0.34 $ 0.24
SPECIAL CHARGES, net of tax - (0.01)
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NET INCOME $ 0.34 $ 0.23
DILUTED EARNINGS PER SHARE:
NET INCOME BEFORE SPECIAL CHARGES $ 0.33 $ 0.23
SPECIAL CHARGES, net of tax - (0.01)
--------------- ---------------
NET INCOME $ 0.33 $ 0.22
NUMBER OF SHARES USED IN BASIC EARNINGS
PER SHARE CALCULATIONS 38,420 38,150
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NUMBER OF SHARES USED IN DILUTED EARNINGS
PER SHARE CALCULATIONS 39,871 39,551
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DIVIDENDS PER COMMON SHARE $ 0.10 $ 0.11
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DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(Unaudited)
February 28, August 31, February 28,
2002 2002 2003
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 57,613 $ 109,091 $ 60,316
Receivables, net 141,038 145,876 128,152
Inventories 67,991 40,021 54,914
Prepaid expenses 1,438 2,266 1,365
Deferred income taxes 8,456 11,214 11,219
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Total current assets 276,536 308,468 255,966
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PROPERTY, PLANT and EQUIPMENT, net 60,436 63,401 62,476
EXCESS OF COST OVER NET ASSETS OF
BUSINESS ACQUIRED, net 4,184 4,187 4,187
INTANGIBLES, net 4,225 4,032 4,993
INVESTMENT IN AFFILIATE - 695 354
OTHER ASSETS 2,316 2,359 2,025
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Total non-current assets 71,161 74,674 74,035
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$ 347,697 $ 383,142 $ 330,001
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 96 $ 1,763 $ 173
Accounts payable 18,565 16,447 7,786
Accrued expenses 108,862 143,533 97,691
Income taxes payable 11,079 12,381 12,351
-------------- ------------ --------------
Total current liabilities 138,602 174,124 118,001
-------------- ------------ --------------
LONG-TERM DEBT, less current maturities 1,624 1,176 1,973
-------------- ------------ --------------
DEFERRED INCOME TAXES 4,732 3,121 3,129
-------------- ------------ --------------
MINORITY INTEREST IN SUBSIDIARIES 7,058 2,514 3,832
-------------- ------------ --------------
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.10 per share; 2,000,000 shares authorized:
Series A Junior Participating Preferred, par value $0.10 per share;
456,989 shares authorized; no shares issued or outstanding - - -
Series M Convertible Non-Voting Preferred, par value $0.10 per share;
1,066,666 shares authorized, issued, and outstanding 107 107 107
Common stock, par value $0.10 per share;
100,000,000 shares authorized; 39,252,099; 39,311,571 and 39,391,105
shares issued; 38,476,333; 38,204,405 and 38,030,939 shares outstanding 3,925 3,931 3,939
Capital in excess of par value 50,776 51,563 52,662
Retained earnings 159,265 172,381 176,774
Accumulated other comprehensive loss (4,660) (5,939) (5,689)
Treasury Stock at cost, 775,766; 1,107,166 and 1,360,166 shares (13,732) (19,836) (24,727)
-------------- ------------ --------------
Total stockholders' equity 195,681 202,207 203,066
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$ 347,697 $ 383,142 $ 330,001
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DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
(in thousands)
(Unaudited)
February 28, February 28,
2002 2003
--------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 13,289 $ 8,701
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization 3,364 3,755
Noncash items associated with special charges and disposition of assets 23 (11)
Equity in net loss of affiliate - 941
Minority interest in net (loss) / income of subsidiaries (472) 1,318
Change in deferred income taxes 244 -
Changes in assets and liabilities:
Receivables 35,139 18,385
Inventories (31,552) (14,971)
Prepaid expenses 700 1,268
Intangibles and other assets (115) (295)
Accounts payable 3,286 (8,702)
Accrued expenses (66,223) (46,143)
Income taxes payable (4,547) 230
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Net cash used in operating activities (46,864) (35,524)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (3,435) (2,358)
Sale of investments and property 22 33
Investment in affiliate - (600)
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Net cash used in investing activities (3,413) (2,925)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of short-term debt (2,951) (1,887)
Payments of long-term debt (103) -
Dividends paid (3,947) (4,308)
Proceeds from long-term debt 620 -
Proceeds from short-term debt 1,263 410
Payments to acquire treasury stock (3,856) (4,891)
Proceeds from exercise of stock options 1,962 815
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Net cash used in financing activities (7,012) (9,861)
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EFFECTS OF FOREIGN CURRENCY EXHANGE RATES 899 (465)
NET DECREASE IN CASH AND CASH EQUIVALENTS (56,390) (48,775)
CASH AND CASH EQUIVALENTS, August 31 114,003 109,091
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CASH AND CASH EQUIVALENTS, February 28 $ 57,613 $ 60,316
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the six months for:
Interest, net of capitalized interest $ 100 $ 20
Income taxes $ 13,000 $ 4,800
Noncash financing activities:
Tax benefit of stock option exercises $ 400 $ 300