1
NEWS
Delta and Pine Land Company
P.O. Box 157
Scott, Mississippi 38772
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Contact: Investors Media
Tom Jagodinski Jonathan Gasthalter/Amy Cohen
Delta and Pine Land Company Citigate Sard Verbinnen
(662) 742-4518 (212) 687-8080
DELTA AND PINE LAND COMPANY REPORTS
FOURTH QUARTER AND FISCAL YEAR END 2004 FINANCIAL RESULTS
o Reports Record Sales of $314.9 Million
o Results Affected by Previously Announced Technology Acquisition
o Announces Quarterly Dividend of $0.12 Per Share
SCOTT, MS, October 26, 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 fourth fiscal quarter and year
ended August 31, 2004.
Fourth Quarter Results
Net sales in the fiscal 2004 fourth quarter were $27.6 million, compared
to $2.4 million in the fiscal 2003 fourth quarter. Current year fourth quarter
sales benefited from late season cotton and soybean shipments as well as lower
technology fee rebates from crop destruct and replant claims than in the prior
year quarter. Fiscal 2004 fourth quarter earnings were reduced due to a charge
related to the acquisition of licenses from Syngenta, which was announced in
August, 2004. After charges of $0.63 per diluted share related to the write-off
of acquired in-process research and development ("IPR&D") and related
transaction expenses and $0.02 per diluted share related to Pharmacia/Monsanto
litigation expenses, net loss for the 2004 fourth quarter was $0.75 per diluted
share, compared to last year's fourth quarter net loss of $0.25 per diluted
share. In the prior year fourth quarter, Pharmacia/Monsanto litigation expenses
were $0.07 per diluted share.
Annual Operating Results
Net sales for the fiscal 2004 year reached the highest level in the
Company's history and were $314.9 million, compared to $284.5 million in the
prior year. The increase in sales was primarily due to increased licensing fees
from cottonseed sales, resulting in part from higher sales of stacked gene
products, as well as lower technology fee rebates in 2004 for crop loss and
replant claims. In addition, total international revenues increased
approximately 30% over prior year due to stronger sales in Australia, Brazil,
South Africa, Mexico and Colombia. Soybean seed sales were also significantly
higher during the 2004 fiscal year. Operating expenses, other than those related
to the write-off of the acquired IPR&D, increased during the 2004 fiscal year
due to higher research and development costs and an increase in professional
services fees.
After charges of $0.61 per diluted share related to the write-off of
acquired IPR&D and related Syngenta transaction expenses and $0.18 per diluted
share related to Pharmacia/Monsanto litigation expenses, net income for the year
ended August 31, 2004 was $0.13 per diluted share, compared to $0.70 per diluted
share in the prior year. In fiscal 2003, expenses associated with the
Pharmacia/Monsanto litigation were $0.21 per diluted share. Prior year net
income was also impacted by expenses related to two U.S. facility closings and
workforce reductions at two foreign locations that reduced earnings per diluted
share by $0.02.
Tom Jagodinski, President and CEO said, "We are pleased that many of our
newer products continued to win wide acceptance by our farmer customers, and are
optimistic about our product pipeline, which is the best we have had in years.
In addition, we remain focused on new trait development and are incorporating
those new traits into our most elite material. Some of the new varieties in the
research pipeline outperform the best performing varieties sold today. Unlike
2004, when seed supply constrained sales of some key products, we expect to have
ample seed of the most popular new varieties for sale in 2005."
Quarterly Dividend
The Company announced its Board of Directors had declared a dividend of
$0.12 per share for the first quarter of fiscal 2005. The dividend, payable to
shareholders of record on November 30, 2004, will be paid on December 14, 2004.
Stock Repurchase Plan
For the year ended August 31, 2004, the Company purchased 250,200 shares
of its common stock at an aggregate purchase price of $5.7 million. The Company
will continue to purchase its shares from time to time depending on market
conditions and other factors.
2005 Earnings Outlook
The Company also announced that it will provide earnings guidance for
fiscal year 2005 later this year, once the harvest is complete and 2005 U.S.
cotton planting estimates have been made.
Conference Call
D&PL will hold a conference call with the investment community to review
this announcement on Tuesday, October 26, 2004, at 2:00 p.m. ET/ 1:00 p.m. CT.
The call can be accessed by dialing 800-374-0532 (International, 706-634-0148),
passcode: 1709844. 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 3:00 p.m. ET/ 2:00 p.m. CT on Tuesday, October
26, through midnight on Tuesday, November 2, 2004, by dialing 800-642-1687
(International, 706-645-9291) and entering the pass code: 1709844.
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)
August 31, August 31,
2004 2003
----------------- ------------------
NET SALES AND LICENSING FEES $ 27,631 $ 2,415
COST OF SALES 21,151 2,742
----------------- ------------------
GROSS PROFIT (LOSS) 6,480 (327)
----------------- ------------------
OPERATING EXPENSES:
Research and development 4,838 4,633
Selling 2,512 2,736
General and administrative 5,746 3,263
In-process research and development and related transaction costs 38,532 -
----------------- ------------------
51,628 10,632
----------------- ------------------
OPERATING LOSS (45,148) (10,959)
INTEREST INCOME, NET 561 358
OTHER EXPENSE, NET (545) (3,680)
EQUITY IN NET LOSS OF AFFILIATE (784) (485)
MINORITY INTEREST IN LOSS (EARNINGS) OF SUBSIDIARIES 77 (308)
----------------- ------------------
LOSS BEFORE INCOME TAXES (45,839) (15,074)
INCOME TAX BENEFIT (17,261) (5,713)
----------------- ------------------
NET LOSS (28,578) (9,361)
DIVIDENDS ON PREFERRED STOCK (128) (107)
----------------- ------------------
NET LOSS APPLICABLE TO COMMON SHARES $ (28,706) $ (9,468)
================= ==================
BASIC AND DILUTED NET LOSS PER SHARE $ (0.75) $ (0.25)
================= ==================
NUMBER OF SHARES USED IN BASIC AND DILUTED NET LOSS
PER SHARE CALCULATIONS 38,451 38,103
================= ==================
DIVIDENDS PER COMMON SHARE $ 0.12 $ 0.10
================= ==================
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE TWELVE MONTHS ENDED
(in thousands, except per share amounts)
(Unaudited)
August 31, August 31
2004 2003
----------------- ------------------
NET SALES AND LICENSING FEES $ 314,871 $ 284,487
COST OF SALES 205,863 183,820
----------------- ------------------
GROSS PROFIT 109,008 100,667
----------------- ------------------
OPERATING EXPENSES:
Research and development 18,436 16,669
Selling 11,693 10,971
General and administrative 18,787 15,358
Special charges - 962
In-process research and development and related transaction costs 38,532 -
----------------- ------------------
87,448 43,960
----------------- ------------------
OPERATING INCOME 21,560 56,707
INTEREST INCOME, NET 1,522 1,100
OTHER EXPENSE, NET (10,518) (12,178)
EQUITY IN NET LOSS OF AFFILIATE (3,551) (1,977)
MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (2,303) (1,104)
----------------- ------------------
INCOME BEFORE INCOME TAXES 6,710 42,548
INCOME TAX EXPENSE 1,394 14,743
----------------- ------------------
NET INCOME 5,316 27,805
DIVIDENDS ON PREFERRED STOCK (491) (288)
----------------- ------------------
NET INCOME APPLICABLE TO COMMON SHARES $ 4,825 $ 27,517
================= ==================
BASIC NET EARNINGS PER SHARE $ 0.13 $ 0.72
================= ==================
NUMBER OF SHARES USED IN BASIC EARNINGS
PER SHARE CALCULATIONS 38,250 38,113
================= ==================
DILUTED NET EARNINGS PER SHARE $ 0.13 $ 0.70
================= ==================
NUMBER OF SHARES USED IN DILUTED EARNINGS
PER SHARE CALCULATIONS 39,670 39,594
================= ==================
DIVIDENDS PER COMMON SHARE $ 0.46 $ 0.27
================= ==================
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(Unaudited)
August 31, August 31,
2004 2003
------------------ -----------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 149,587 $ 143,285
Receivables, net 184,759 166,952
Inventories 30,151 32,231
Prepaid expenses 1,923 2,116
Deferred income taxes 9,055 10,677
------------------ -----------------
Total current assets 375,475 355,261
PROPERTY, PLANT AND EQUIPMENT, NET 61,988 64,441
EXCESS OF COST OVER NET ASSETS OF
BUSINESSES ACQUIRED 4,183 4,183
INTANGIBLES, net 5,471 5,470
INVESTMENT IN AFFILIATE - 328
OTHER ASSETS 1,594 1,869
DEFFERED INCOME TAXES 8,312 -
------------------ -----------------
TOTAL ASSETS $ 457,023 $ 431,552
================== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES :
Notes payable $ 5,639 $ 40
Accounts payable 23,784 17,966
Accrued expenses 187,890 176,150
Income taxes payable 8,912 9,894
------------------ -----------------
Total current liabilities 226,225 204,050
------------------ -----------------
LONG-TERM DEBT 16,486 1,557
------------------ -----------------
DEFERRED INCOME TAXES - 5,220
------------------ -----------------
MINORITY INTEREST IN SUBSIDIARIES 4,586 3,618
------------------ -----------------
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
Common stock, par value $0.10 per share; 100,000,000 shares authorized;
40,162,820 and 39,525,116 shares issued;
38,495,354 and 38,107,850 shares outstanding 4,016 3,953
Capital in excess of par value 64,250 54,850
Retained earnings 176,808 189,610
Accumulated other comprehensive loss (3,736) (5,442)
Treasury stock, at cost; 1,667,466 and 1,417,266 shares (31,719) (25,971)
------------------ -----------------
TOTAL STOCKHOLDERS' EQUITY 209,726 217,107
------------------ -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 457,023 $ 431,552
================== =================
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED
(in thousands)
(Unaudited)
August 31, August 31,
2004 2003
------------------ -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,316 $ 27,805
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 8,364 7,759
Loss (gain) on sale of assets 189 (34)
Noncash component of in-process research and development 22,125 -
Equity in net loss of affiliate 3,551 1,977
Foreign exchange loss (gain) 124 (748)
Minority interest in earnings of subsidiaries 2,303 1,104
Change in deferred taxes (12,294) 3,315
Changes in assets and liabilities:
Receivables (17,693) (20,804)
Inventories 1,921 7,849
Prepaid expenses 178 144
Intangibles and other assets (95) (133)
Accounts payable 5,571 2,241
Accrued expenses 12,438 30,114
Income taxes 3,788 (1,557)
------------------ -----------------
Net cash provided by operating activities 35,786 59,032
------------------ -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (6,049) (8,298)
Sale of investments and property 161 79
Investment in affiliate (2,630) (1,610)
------------------ -----------------
Net cash used in investing activities (8,518) (9,829)
------------------ -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of short-term debt (277) (2,109)
Payments of long-term debt (1,607) -
Dividends paid (18,118) (10,576)
Proceeds from short-term debt 245 467
Minority interest in dividends paid by subsidiary (1,336) -
Payments to acquire treasury stock (5,748) (6,135)
Proceeds from exercise of stock options 6,004 2,484
------------------ -----------------
Net cash used in financing activities (20,837) (15,869)
------------------ -----------------
EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES (129) 860
NET INCREASE IN CASH AND CASH EQUIVALENTS 6,302 34,194
CASH AND CASH EQUIVALENTS, beginning of year 143,285 109,091
------------------ -----------------
CASH AND CASH EQUIVALENTS, end of year $ 149,587 $ 143,285
================== =================
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the twelve months for:
Interest, net of capitalized interest $ 10 $ 60
Income taxes $ 8,900 $ 13,400
Noncash financing activities:
Tax benefit of stock option exercises $ 3,500 $ 800