NEWS Delta and Pine Land Company P.O. Box 157 Scott, Mississippi 38772 - ------------------------------------------------------------------------------- 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 ANNOUNCES FIRST QUARTER FISCAL 2004 OPERATING RESULTS PROVIDES 2004 EARNINGS GUIDANCE OF $1.05 to $1.12 EXCLUDING CERTAIN LITIGATION EXPENSES ------------------------------------------------- SCOTT, MS, January 6, 2004 -- Delta and Pine Land Company (NYSE:DLP) ("D&PL"), a leading commercial breeder, producer and marketer of cotton planting seed, today announced results for its first quarter ended November 30, 2003. Due to the seasonal nature of the seed business, the Company typically incurs losses in its first and fourth fiscal quarters. First quarter net loss declined to $0.14 per diluted share compared to last year's first quarter net loss of $0.16, before legal expenses related to the D&PL versus Monsanto/Pharmacia litigation of $0.05 in 2004 ($0.03 in 2003) and special charges. There were no special charges in the first quarter of 2004 while special charges in the prior year period were $0.01 per diluted share. Net loss per diluted share after such legal expenses and special charges was $0.19 per share for the first quarter of fiscal 2004 compared to $0.20 per share in the prior year period. Revenues were $13.8 million in the 2004 first quarter compared to $5.6 million recorded in the same period last year. The revenue increase was attributable to international operations, particularly in South America, China and Australia. Sales in South America benefited from higher volumes in Argentina and Brazil, as well as improvements in pricing and foreign exchange. The increases in sales in China and Australia relate to changes in the timing of shipments to customers based on their orders. Operating expenses increased due primarily to higher insurance, pension and payroll related costs. Tom Jagodinski, President and Chief Executive Officer, said, "We are pleased with our first quarter results, which is historically a slow quarter, and are encouraged by early indications that cotton plantings in the U.S. and other key markets may increase well above 2003 levels. Growers' favorable reactions to our products launched in 2003 and to those we plan to launch in 2004, along with strong recent commodity prices, we believe, position us well for 2004." The following table reconciles net loss before unusual items to net loss at November 30. Three Months ----------------------------------- 2003 2002 --------------- ---------------- Diluted EPS: Net loss before legal expenses related to the Monsanto/Pharmacia litigation and special charges (a non-GAAP measure) $ (0.14) $ (0.16) Monsanto litigation expenses (0.05) (0.03) Special charges - (0.01) --------------- ---------------- Net loss (a GAAP measure) $ (0.19) $ (0.20) =============== ================ Stock Repurchase Plan During the first four months of fiscal year 2004, the Company purchased 104,000 shares of its common stock at an aggregate purchase price of $2.5 million. As of December 31, 2003, the Company has repurchased 1,407,000 shares at an aggregate price of $26.3 million since adoption of its current $50 million stock repurchase plan. The Company will continue to purchase its shares from time to time depending on market conditions and other factors. 2004 Earnings Outlook For the fiscal year 2004, the Company expects to report sales in the range of $315 million to $330 million. Earnings per diluted share, excluding Monsanto/Pharmacia litigation expenses and special charges (a non-GAAP measure), are expected to range from $1.05 to $1.12, assuming planted U.S. cotton area of 14.5 million acres in 2004, seed supplies are adequate and maintenance of U.S. market share and product sales mix. The Company expects to incur expenses ranging from $10 to $14 million, or $0.16 to $0.23 per diluted share, related to the lawsuit against Pharmacia and Monsanto (NYSE: MON). Diluted earnings per share after Monsanto legal expenses (a GAAP measure) is expected to range from $0.82 to $0.96 per share. Earnings are significantly affected by planted acreage in the U.S. Based on current market conditions (primarily commodity prices), the Company expects cotton plantings in the U.S. to increase over 2003 planting levels, especially in areas east of Texas. The Company's earnings guidance reflects this anticipated increase in cotton acreage as well as the other factors noted above. Conference Call D&PL will hold a conference call to review this announcement on Tuesday, January 6th, 2004, at 3 p.m. ET/2 p.m. CT. The call can be accessed by dialing 800-374-0420 (International, 706-634-1176) and access code 4785654. 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 4 p.m. ET/3 p.m. CT on Tuesday, January 6th through Tuesday, January 13th by dialing 800-642-1687 (International, 706-645-9291) and entering reservation number 4785654. 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. where it sells cotton seed. For more information, please refer to the Company's Web site at http://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 of 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) November 30, November 30, 2003 2002 ----------------- ------------------ NET SALES AND LICENSING FEES $ 13,845 $ 5,599 COST OF SALES 8,036 4,288 ----------------- ------------------ GROSS PROFIT 5,809 1,311 ----------------- ------------------ OPERATING EXPENSES: Research and development 4,136 3,557 Selling 2,742 2,419 General and administrative 4,381 3,567 ----------------- ------------------ 11,259 9,543 SPECIAL CHARGES - (500) ----------------- ------------------ OPERATING LOSS (5,450) (8,732) INTEREST INCOME, NET 373 388 OTHER EXPENSE (3,172) (2,127) EQUITY IN NET LOSS OF AFFILIATE (415) (460) MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (1,989) (457) ----------------- ------------------ LOSS BEFORE INCOME TAXES (10,653) (11,388) INCOME TAX BENEFIT 3,675 3,957 ----------------- ------------------ NET LOSS (6,978) (7,431) DIVIDENDS ON PREFERRED STOCK (107) (53) ----------------- ------------------ NET LOSS APPLICABLE TO COMMON SHARES $ (7,085) $ (7,484) ================= ================== BASIC AND DILUTED NET LOSS PER SHARE $ (0.19) $ (0.20) ================= ================== NUMBER OF SHARES USED IN BASIC AND DILUTED NET LOSS PER SHARE CALCULATIONS 38,099 38,176 ================= ================== DIVIDENDS PER COMMON SHARE $ 0.10 $ 0.05 ================= ================== DELTA AND PINE LAND COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) (Unaudited) November 30, August 31, November 30, 2003 2003 2002 ------------------ ----------------- ----------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 119,515 $ 143,285 $ 95,611 Receivables, net 11,222 166,952 11,337 Inventories 61,463 32,231 61,695 Prepaid expenses 1,618 2,116 1,575 Deferred income taxes 10,677 10,677 11,214 ------------------ ----------------- ----------------- Total current assets 204,495 355,261 181,432 PROPERTY, PLANT AND EQUIPMENT, NET 63,220 64,441 62,693 EXCESS OF COST OVER NET ASSETS OF BUSINESSES ACQUIRED, net 4,183 4,183 4,187 INTANGIBLES, net 5,451 5,470 3,913 INVESTMENT IN AFFILIATE 413 328 635 OTHER ASSETS 1,778 1,869 2,358 ------------------ ----------------- ----------------- TOTAL ASSETS $ 279,540 $ 431,552 $ 255,218 ================== ================= ================= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES : Notes payable $ 248 $ 40 $ 1,805 Accounts payable 20,338 17,966 16,775 Accrued expenses 34,516 176,150 30,285 Income taxes payable 6,069 9,894 6,887 ------------------ ----------------- ----------------- Total current liabilities 61,171 204,050 55,752 ------------------ ----------------- ----------------- LONG-TERM DEBT 1,598 1,557 1,225 ------------------ ----------------- ----------------- DEFERRED INCOME TAXES 5,240 5,220 3,125 ------------------ ----------------- ----------------- MINORITY INTEREST IN SUBSIDIARIES 5,183 3,618 2,971 ------------------ ----------------- ----------------- 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.l0 per share; 1,066,667 shares authorized, issued and outstanding 107 107 107 Common stock, par value $0.10 per share; 100,000,000 shares authorized; 39,569,060, 39,525,116 and 39,367,005 shares issued; 38,087,794, 38,107,850 and 38,178,439 shares outstanding 3,957 3,953 3,937 Capital in excess of par value 55,596 54,850 52,229 Retained earnings 178,717 189,610 162,988 Accumulated other comprehensive loss (4,565) (5,442) (5,761) Treasury stock, at cost; 1,481,266, 1,417,266 and 1,188,566 shares (27,464) (25,971) (21,355) ------------------ ----------------- ----------------- TOTAL STOCKHOLDERS' EQUITY 206,348 217,107 192,145 ------------------ ----------------- ----------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 279,540 $ 431,552 $ 255,218 ================== ================= ================= DELTA AND PINE LAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED (in thousands) (Unaudited) November 30, November 30, 2003 2002 ------------------ ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (6,978) $ (7,431) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,018 1,735 Noncash items associated with special charges and disposition of assets 11 - Equity in net loss of affiliate 415 460 Foreign exchange (gain) loss (78) 54 Minority interest in earnings of subsidiaries 1,989 457 Changes in assets and liabilities: Receivables 155,755 134,478 Inventories (28,740) (21,532) Prepaid expenses 611 686 Intangibles and other assets 41 84 Accounts payable 2,253 289 Accrued expenses (141,479) (113,334) Income taxes (3,683) (5,232) ------------------ ----------------- Net cash used in operating activities (17,865) (9,286) ------------------ ----------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (699) (1,078) Sale of investments and property 39 11 Investment in affiliate (500) (400) ------------------ ----------------- Net cash used in investing activities (1,160) (1,467) ------------------ ----------------- CASH FLOWS FROM FINANCING ACTIVITIES: Payments of short-term debt (36) (334) Dividends paid (3,915) (1,962) Proceeds from long-term debt - 106 Proceeds from short-term debt 245 450 Minority interest in dividends paid by subsidiary (424) - Payments to acquire treasury stock (1,493) (1,519) Proceeds from exercise of stock options 571 415 ------------------ ----------------- Net cash used in financing activities (5,052) (2,844) ------------------ ----------------- EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES 307 117 NET DECREASE IN CASH AND CASH EQUIVALENTS (23,770) (13,480) CASH AND CASH EQUIVALENTS, August 31 143,285 109,091 ------------------ ----------------- CASH AND CASH EQUIVALENTS, November 30 $ 119,515 $ 95,611 ================== ================= SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the three months for: Interest, net of capitalized interest $ 5 $ 20 Income taxes $ 9 $ 950 Noncash financing activities: Tax benefit of stock option exercises $ 200 $ 300