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 REPORTS
SECOND QUARTER AND SIX-MONTH FINANCIAL RESULTS
SCOTT, MS, April 1, 2004 -- 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 29, 2004.
Second Quarter and Six-Month Results
Net income for the second quarter was $0.24 per diluted share compared to
last year's second quarter net income of $0.41 per diluted share. Net income
includes a reduction of $0.06 per diluted share related to Monsanto/ Pharmacia
litigation expenses incurred during the second quarter, compared to a reduction
of $0.07 per diluted share incurred in last year's second quarter.
Net sales and licensing fees for the 2004 second quarter was $88.3 million
compared to $107.5 million in the prior year quarter. The revenue decrease was
primarily due to implementation of an inventory management strategy whereby
inventory shipments to distributors are more closely matched to farmer orders,
which is expected to shift sales into the third quarter when significant cotton
plantings commence. International sales were lower due primarily to sales in
China occurring in this year's first quarter versus the second quarter of last
year. Operating expenses for the quarter increased due primarily to higher
research and development costs and an increase in professional fees.
Net income for the 2004 six-month period was $0.06 per diluted share
compared to net income of $0.22 per diluted share for the same period last year.
Net income included a reduction of $0.10 per diluted share related to
Monsanto/Pharmacia litigation expenses during the six-month period ended
February 29, 2004, which matches the $0.10 per diluted share reduction recorded
in the same period ended February 28, 2003. Prior year net income was affected
by expenses related to a facility closing and a workforce reduction that reduced
earnings per diluted share by $0.01. Net sales for the 2004 six-month period
were $102.1 million as compared to $113.1 million in the prior year period. This
was due primarily to an expected shifting of some U.S. cottonseed sales into the
third quarter, offset by an increase in soybean sales in response to higher
soybean commodity prices in 2004 over 2003. International sales were also higher
than last year for the six months ending February 29, 2004, due to increased
sales in Australia, Brazil, Mexico and Turkey. Operating expenses increased due
primarily to higher research and development costs and an increase in
professional fees.
Tom Jagodinski, President and Chief Executive Officer, said, "As we enter
our third quarter we continue to process and ship seed while pursuing growth
opportunities, including securing alternative sources of technology and
initiating discussions with potential partners in two new international markets.
The recent increase in soybean commodity prices coupled with a decline in cotton
fiber prices appears to have initiated a shift in farmer planting intentions
toward soybeans from cotton. Although this information concerns us, it is still
very early in the planting season and too soon to accurately predict 2004
planted cotton acreage."
Stock Repurchase Plan
For the quarter ended February 29, 2004, the Company purchased 79,000
shares of its common stock at an aggregate purchase price of $2.0 million. The
Company has repurchased 1,560,266 shares at an aggregate price of $29.4 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.
U.S. Cotton Acreage Estimates
On March 31, 2004, the USDA issued its Prospective Plantings Survey for
this crop season, which estimated U.S. cotton plantings of 14.4 million acres.
On March 29, 2004, Reuters news service released a poll of various cotton
industry insiders, which reflected an average of cotton acreage estimates of
those individuals polled of 13.5 million acres. The difference in these two
reports may be attributable in part to the timing of the respective surveys and
other factors. However, both estimates are below the 14.5 million acre estimate
used by the Company in developing its earlier earnings estimate. Due to the
difficulty in accurately forecasting cotton plantings at present, the Company is
not releasing updated earnings guidance at this time. As more information
becomes available, we will consider the need to update the previously issued
earnings estimate.
Quarterly Dividend
The Company also announced its Board of Directors had declared a dividend
of $0.12 per share for the third quarter. The dividend, payable to shareholders
of record on May 31, 2004, will be paid on June 14, 2004.
Conference Call
D&PL will hold a conference call with the investment community to review
this announcement on Thursday, April 1, 2004, at 11:00 a.m. ET/10:00 a.m. CT.
The call can be accessed by dialing 888-270-8028 (International, 706-679-0236)
and access code 6388689. 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 for replay from 12:00 p.m. ET/11:00a.m. CT on
Thursday, April1 through midnight Thursday, April 8 by dialing 800-642-1687
(International, 706-645-9291) and entering reservation number: 6388689.
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 29, February 28,
2004 2003
----------------- ------------------
NET SALES AND LICENSING FEES $ 88,276 $ 107,537
COST OF SALES 56,112 65,695
----------------- ------------------
GROSS PROFIT 32,164 41,842
----------------- ------------------
OPERATING EXPENSES:
Research and development 4,997 4,327
Selling 3,209 2,802
General and administrative 4,517 4,330
----------------- ------------------
12,723 11,459
----------------- ------------------
OPERATING INCOME 19,441 30,383
INTEREST INCOME, NET 326 194
OTHER EXPENSE (3,527) (4,357)
EQUITY IN NET LOSS OF AFFILIATE (1,319) (481)
MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (416) (861)
----------------- ------------------
INCOME BEFORE INCOME TAXES 14,505 24,878
INCOME TAX EXPENSE 5,062 8,746
----------------- ------------------
NET INCOME 9,443 16,132
DIVIDENDS ON PREFERRED STOCK (128) (64)
----------------- ------------------
NET INCOME APPLICABLE TO COMMON SHARES $ 9,315 $ 16,068
================= ==================
BASIC NET EARNINGS PER SHARE $ 0.24 $ 0.42
================= ==================
NUMBER OF SHARES USED IN BASIC EARNINGS
PER SHARE CALCULATIONS 38,138 38,124
================= ==================
DILUTED NET EARNINGS PER SHARE $ 0.24 $ 0.41
================= ==================
NUMBER OF SHARES USED IN DILUTED EARNINGS
PER SHARE CALCULATIONS 39,768 39,556
================= ==================
DIVIDENDS PER COMMON SHARE $ 0.12 $ 0.06
================= ==================
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED
(in thousands, except per share amounts)
(Unaudited)
February 29, February 28,
2004 2003
----------------- ------------------
NET SALES AND LICENSING FEES $ 102,121 $ 113,136
COST OF SALES 64,148 69,983
----------------- ------------------
GROSS PROFIT 37,973 43,153
----------------- ------------------
OPERATING EXPENSES:
Research and development 9,133 7,884
Selling 5,951 5,221
General and administrative 8,898 7,897
Special charges - 500
----------------- ------------------
23,982 21,502
----------------- ------------------
OPERATING INCOME 13,991 21,651
INTEREST INCOME, NET 699 582
OTHER EXPENSE (6,699) (6,484)
EQUITY IN NET LOSS OF AFFILIATE (1,734) (941)
MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (2,405) (1,318)
----------------- ------------------
INCOME BEFORE INCOME TAXES 3,852 13,490
INCOME TAX EXPENSE 1,387 4,789
----------------- ------------------
NET INCOME 2,465 8,701
DIVIDENDS ON PREFERRED STOCK (235) (117)
----------------- ------------------
NET INCOME APPLICABLE TO COMMON SHARES $ 2,230 $ 8,584
================= ==================
BASIC NET EARNINGS PER SHARE $ 0.06 $ 0.23
================= ==================
NUMBER OF SHARES USED IN BASIC EARNINGS
PER SHARE CALCULATIONS 38,118 38,150
================= ==================
DILUTED NET EARNINGS PER SHARE $ 0.06 $ 0.22
================= ==================
NUMBER OF SHARES USED IN DILUTED EARNINGS
PER SHARE CALCULATIONS 39,711 39,551
================= ==================
DIVIDENDS PER COMMON SHARE $ 0.22 $ 0.11
================= ==================
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(Unaudited)
February 29, August 31, February 28,
2004 2003 2003
------------------ ----------------- -----------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 91,617 $ 143,285 $ 60,316
Receivables, net 99,773 166,952 128,152
Inventories 61,333 32,231 54,914
Prepaid expenses 1,687 2,116 1,365
Deferred income taxes 8,230 10,677 11,219
------------------ ----------------- -----------------
Total current assets 262,640 355,261 255,966
PROPERTY, PLANT AND EQUIPMENT, NET 62,914 64,441 62,476
EXCESS OF COST OVER NET ASSETS OF
BUSINESSES ACQUIRED 4,183 4,183 4,187
INTANGIBLES, net 5,382 5,470 4,993
INVESTMENT IN AFFILIATE - 328 354
OTHER ASSETS 1,735 1,869 2,025
------------------ ----------------- -----------------
TOTAL ASSETS $ 336,854 $ 431,552 $ 330,001
================== ================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES :
Notes payable $ 248 $ 40 $ 173
Accounts payable 16,130 17,966 7,786
Accrued expenses 90,674 176,150 97,691
Income taxes payable 6,078 9,894 12,351
------------------ ----------------- -----------------
Total current liabilities 113,130 204,050 118,001
------------------ ----------------- -----------------
LONG-TERM DEBT 1,581 1,557 1,973
------------------ ----------------- -----------------
DEFERRED INCOME TAXES 4,304 5,220 3,129
------------------ ----------------- -----------------
MINORITY INTEREST IN SUBSIDIARIES 5,600 3,618 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.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;
39,811,148, 39,525,116 and 39,391,105 shares issued;
38,250,882, 38,107,850 and 38,030,939 shares outstanding 3,982 3,953 3,939
Capital in excess of par value 59,114 54,850 52,662
Retained earnings 183,440 189,610 176,774
Accumulated other comprehensive loss (4,981) (5,442) (5,689)
Treasury stock, at cost; 1,560,266, 1,417,266 and 1,360,166 shares (29,423) (25,971) (24,727)
------------------ ----------------- -----------------
TOTAL STOCKHOLDERS' EQUITY 212,239 217,107 203,066
------------------ ----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 336,854 $ 431,552 $ 330,001
================== ================= =================
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
(in thousands)
(Unaudited)
February 29, February 28,
2004 2003
------------------ -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,465 $ 8,701
Adjustments to reconcile net income to net cash used
in operating activities:
Depreciation and amortization 4,042 3,755
Loss (gain) on sale of assets 49 (11)
Equity in net loss of affiliate 1,734 941
Foreign exchange gain (131) (92)
Minority interest in earnings of subsidiaries 2,405 1,318
Change in deferred taxes 1,510 -
Changes in assets and liabilities:
Receivables 67,300 18,385
Inventories (29,223) (14,971)
Prepaid expenses 417 1,268
Intangibles and other assets 120 (295)
Accounts payable (1,988) (8,702)
Accrued expenses (85,457) (46,143)
Income taxes (2,266) 230
------------------ -----------------
Net cash used in operating activities (39,023) (35,616)
------------------ -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (2,244) (2,358)
Sale of investments and property 47 33
Investment in affiliate (1,140) (600)
------------------ -----------------
Net cash used in investing activities (3,337) (2,925)
------------------ -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of short-term debt (40) (1,887)
Dividends paid (8,635) (4,308)
Proceeds from short-term debt 245 410
Minority interest in dividends paid by subsidiary (424) -
Payments to acquire treasury stock (3,452) (4,891)
Proceeds from exercise of stock options 2,670 815
------------------ -----------------
Net cash used in financing activities (9,636) (9,861)
------------------ -----------------
EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES 328 (373)
NET DECREASE IN CASH AND CASH EQUIVALENTS (51,668) (48,775)
CASH AND CASH EQUIVALENTS, August 31 143,285 109,091
------------------ -----------------
CASH AND CASH EQUIVALENTS, February 29 and February 28 $ 91,617 $ 60,316
================== =================
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the six months for:
Interest, net of capitalized interest $ 10 $ 20
Income taxes $ 1,800 $ 4,800
Noncash financing activities:
Tax benefit of stock option exercises $ 1,600 $ 300