NEWS
Delta and Pine Land Company
P.O. Box 157
Scott, Mississippi 38772
- -------------------------------------------------------------------------------
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 ANNOUNCES FIRST QUARTER
FISCAL 2005 OPERATING RESULTS
o Improved Results Attributed To Stronger International Performance
PROVIDES 2005 EARNINGS GUIDANCE OF $0.94 to $1.06, AFTER CERTAIN
LITIGATION EXPENSES OF $0.13 TO $0.18
-------------------------------------------------
SCOTT, MS, January 4, 2005 -- 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, 2004. Due
to the seasonal nature of the seed business, the Company typically incurs losses
in its first and fourth fiscal quarters.
After charges of $0.03 per diluted share related to Pharmacia/Monsanto
litigation expenses, net loss for the 2005 first quarter was $0.12 per diluted
share, a reduction from last year's first quarter net loss of $0.19 per diluted
share. In the prior year first quarter, Pharmacia/Monsanto litigation expenses
were $0.05 per diluted share.
Revenues were $17.5 million in the 2005 first quarter compared to $13.8
million recorded in the year-ago quarter. The revenue increase was attributable
to international operations, particularly in South America and Australia. Sales
in South America benefited from higher volumes in Argentina and Brazil, as well
as improvements in pricing. The increase in sales in Australia relates to higher
volumes, resulting from expanded cotton plantings and the introduction of new
products. International revenues decreased in China due to an expected shift in
shipments to later in the year as well as an anticipated decline in cotton
plantings. Operating expenses were slightly higher than the 2004 first quarter,
primarily due to increased spending on research and development activities.
Tom Jagodinski, President and Chief Executive Officer, said, "We are
pleased with our first quarter results and the strong growth of our businesses
in Brazil and Australia. We are also optimistic about the outlook for the U.S.
business due to our strong product lineup. Growers responded favorably to the
performance of our new varieties launched in 2004 and we expect to have
increased supplies of those products, as well as new varieties developed for the
Texas High Plains, available in 2005. We are continuing to develop new varieties
containing Monsanto's second-generation traits, Bollgard II(R) and Roundup
Ready(R) Flex. Finally, we are making advancements in both our efforts to
develop products containing Syngenta's VipCot(TM) technology and the development
of new traits through DeltaMax, our joint venture with Pioneer."
2005 Earnings Outlook
For the fiscal year 2005, D&PL expects to report sales in the range of
$335 million to $350 million. After charges of $0.13 to $0.18 related to its
lawsuit against Pharmacia and Monsanto (NYSE: MON), the Company expects to
report earnings per diluted share in the range of $0.94 to $1.06, assuming
planted U.S. cotton area of 13.7 million acres in 2005, seed supplies are
adequate, maintenance of U.S. market share and product sales mix targets are
met. The Company reported earnings of $0.13 per diluted share in fiscal 2004,
after reductions of $0.61 per diluted share related to the write-off of acquired
in-process research and development and $0.18 per diluted share related to
Pharmacia/Monsanto litigation expenses.
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 remain constant with 2004 planting
levels, especially in areas east of Texas. The Company's earnings guidance
reflects this expectation for cotton acreage as well as the other factors noted
above.
Conference Call
D&PL will hold a conference call this morning at 10:00 a.m. ET/ 9:00
a.m. CT to review this announcement. The call can be accessed by dialing
800-374-0532 (International, 706-634-0148) and access code 3143795. 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 11:00 a.m. ET/ 10:00 a.m. CT on Tuesday, January 4, 2005 through midnight
on Tuesday, January 11, 2005 by dialing 800-642-1687 (International,
706-645-9291) and entering the access code 3143795.
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 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,
2004 2003
----------------- ------------------
NET SALES AND LICENSING FEES $ 17,454 $ 13,845
COST OF SALES 8,421 8,036
----------------- ------------------
GROSS PROFIT 9,033 5,809
----------------- ------------------
OPERATING EXPENSES:
Research and development 4,430 4,136
Selling 3,066 2,742
General and administrative 4,539 4,741
----------------- ------------------
12,035 11,619
----------------- ------------------
OPERATING LOSS (3,002) (5,810)
INTEREST INCOME, NET 458 373
OTHER EXPENSE, NET (1,507) (2,812)
EQUITY IN NET LOSS OF AFFILIATE (738) (415)
MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (2,336) (1,989)
----------------- ------------------
LOSS BEFORE INCOME TAXES (7,125) (10,653)
INCOME TAX BENEFIT (2,808) (3,675)
----------------- ------------------
NET LOSS (4,317) (6,978)
DIVIDENDS ON PREFERRED STOCK (128) (107)
----------------- ------------------
NET LOSS APPLICABLE TO COMMON SHARES $ (4,445) $ (7,085)
================= ==================
BASIC AND DILUTED NET LOSS PER SHARE $ (0.12) $ (0.19)
================= ==================
NUMBER OF SHARES USED IN BASIC AND DILUTED NET LOSS
PER SHARE CALCULATIONS 38,544 38,099
================= ==================
DIVIDENDS PER COMMON SHARE $ 0.12 $ 0.10
================= ==================
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,
2004 2004 2003
------------------ ----------------- -----------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 121,222 $ 149,587 $ 119,515
Receivables, net 15,332 184,759 11,222
Inventories 62,039 30,151 61,463
Prepaid expenses 1,547 1,923 1,618
Deferred income taxes 6,598 9,055 10,677
------------------ ----------------- -----------------
Total current assets 206,738 375,475 204,495
PROPERTY, PLANT AND EQUIPMENT, NET 62,299 61,988 63,220
EXCESS OF COST OVER NET ASSETS OF
BUSINESSES ACQUIRED 4,183 4,183 4,183
INTANGIBLES, net 5,489 5,471 5,451
INVESTMENT IN AFFILIATE - - 413
OTHER ASSETS 1,608 1,594 1,778
DEFFERED INCOME TAXES 7,600 8,312 -
------------------ ----------------- -----------------
TOTAL ASSETS $ 287,917 $ 457,023 $ 279,540
================== ================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES :
Notes payable $ 11,318 $ 5,639 $ 248
Accounts payable 22,955 23,784 20,338
Accrued expenses 29,735 187,890 34,516
Income taxes payable 2,377 8,912 6,069
------------------ ----------------- -----------------
Total current liabilities 66,385 226,225 61,171
------------------ ----------------- -----------------
LONG-TERM DEBT 11,001 16,486 1,598
------------------ ----------------- -----------------
DEFERRED INCOME TAXES - - 5,240
------------------ ----------------- -----------------
MINORITY INTEREST IN SUBSIDIARIES 6,563 4,586 5,183
------------------ ----------------- -----------------
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;
40,247,696, 40,162,820 and 39,569,060 shares issued;
38,580,230, 38,495,354 and 38,087,794 shares outstanding 4,025 4,016 3,957
Capital in excess of par value 66,127 64,250 55,596
Retained earnings 167,734 176,808 178,717
Accumulated other comprehensive loss (2,306) (3,736) (4,565)
Treasury stock, at cost; 1,667,466, 1,667,466 and 1,481,266 shares (31,719) (31,719) (27,464)
------------------ ----------------- -----------------
TOTAL STOCKHOLDERS' EQUITY 203,968 209,726 206,348
------------------ ----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 287,917 $ 457,023 $ 279,540
================== ================= =================
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
(in thousands)
(Unaudited)
November 30, November 30,
2004 2003
------------------ -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,317) $ (6,978)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 2,226 2,018
(Gain) loss on sale of assets (10) 11
Equity in net loss of affiliate 738 415
Foreign exchange gain (106) (78)
Accretion of debt discount 194 -
Minority interest in earnings of subsidiaries 2,336 1,989
Change in deferred taxes 3,209 -
Changes in assets and liabilities:
Receivables 169,892 155,755
Inventories (31,778) (28,740)
Prepaid expenses 371 611
Intangibles and other assets (254) 41
Accounts payable (1,194) 2,253
Accrued expenses (158,203) (141,479)
Income taxes (6,397) (3,683)
------------------ -----------------
Net cash used in operating activities (23,293) (17,865)
------------------ -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,781) (699)
Sale of investments and property 12 39
Investment in affiliate (800) (500)
------------------ -----------------
Net cash used in investing activities (2,569) (1,160)
------------------ -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of short-term debt - (36)
Dividends paid (4,757) (3,915)
Proceeds from short-term debt - 245
Minority interest in dividends paid by subsidiary (359) (424)
Payments to acquire treasury stock - (1,493)
Proceeds from exercise of stock options 1,675 571
------------------ -----------------
Net cash used in financing activities (3,441) (5,052)
------------------ -----------------
EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES 938 307
NET DECREASE IN CASH AND CASH EQUIVALENTS (28,365) (23,770)
CASH AND CASH EQUIVALENTS, August 31 149,587 143,285
------------------ -----------------
CASH AND CASH EQUIVALENTS, November 30 $ 121,222 $ 119,515
================== =================
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the three months for:
Interest, net of capitalized interest $ - $ 5
Income taxes paid/(refunded) $ (128) $ 9
Noncash financing activities:
Tax benefit of stock option exercises $ 211 $ 179