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 ANNOUNCES FOURTH QUARTER
AND FISCAL YEAR END 2005 FINANCIAL RESULTS
o Reports Record Sales of $366.1 million
o Reports Record Results of Operations
o Announces Quarterly Dividend of $0.15 Per Share
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SCOTT, MS, NOVEMBER 2, 2005 -- 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 quarter and year ended August
31, 2005.
Fourth Quarter Results
Net sales were $25.5 million in the 2005 fourth quarter, a slight increase over
2004 fourth quarter net sales of $24.6 million. After charges of $0.01 per
diluted share related to Pharmacia/Monsanto litigation expenses, net loss for
the 2005 fourth quarter was $0.24 per diluted share, a decrease from last year's
fourth quarter net loss of $0.75 per diluted share. In the 2004 fourth quarter,
net loss was increased by $0.63 per diluted share as a result of the write-off
of acquired in-process research and development ("IPR&D") and related
transaction expenses due to the acquisition of technology licenses from
Syngenta, and $0.02 per diluted share for Pharmacia/Monsanto litigation
expenses.
Annual Operating Results
The Company recorded net sales of $366.1 million for the fiscal 2005 year,
compared to $312.8 million in the prior year. The 17% increase in sales was
primarily driven by higher per-unit technology fees, a shift in sales to
higher-value stacked trait units, and an increase in unit sales. Unit sales of
stacked trait products in the U.S. increased more than 13% over the prior year.
In addition, sales of the Company's top products, DP 555 BG/RR and DP 444 BG/RR,
continued to increase and were the two most widely planted cotton varieties in
the U.S. in 2005 according to the USDA. International revenues also increased,
primarily due to higher unit sales and prices in Australia, Brazil, and Turkey,
and stronger export sales to Greece, Spain, and Mexico. Sales at the Company's
two joint ventures in China declined, principally due to strong competition from
local varieties and reduced cotton plantings.
After charges of $0.07 per diluted share related to Pharmacia/Monsanto
litigation expenses, net income for 2005 increased to $1.08 per diluted share,
compared to net income of $0.13 per diluted share for 2004. For 2004, net income
included a reduction 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 for Pharmacia/Monsanto litigation expenses.
Fiscal year 2005 operating expenses increased over 2004 operating expenses,
excluding the 2004 fiscal year IPR&D charge. This increase was primarily the
result of higher research and development expenses related to developing
products with new technologies, greater compensation and benefits costs, and
higher professional fees.
Tom Jagodinski, President and Chief Executive Officer, said, "Fiscal 2005 was a
strong year for D&PL, and we are pleased to have delivered the highest revenues
and operating results in the Company's 90-year history. We are proud of our
strong product portfolio that again led the U.S. in cottonseed sales, as two
varieties alone captured almost one-third of the acres planted. We are
continuing to develop new products and technologies to bring additional value to
our global farmer customers, and we anticipate releasing a new line-up of
products in 2006 containing Monsanto's second generation traits, Bollgard II(R)
and Roundup Ready(R) Flex. Although the cotton harvest is not yet complete,
early indications are that seed supplies for 2006 will be adequate to meet
expected demand in spite of major areas of the U.S. Cotton Belt recently
weathering the effects of three hurricanes."
Stock Repurchase Plan
During fiscal year 2005, the Company purchased approximately 3.2 million shares
of its common stock at an aggregate purchase price of $85.5 million. Those
repurchases totaled approximately 8% of the Company's issued and outstanding
stock as of the beginning of the 2005 fiscal year. The Company initiated a new
$50 million stock repurchase program in July, 2005. The timing and amount of
repurchases under the program will depend on market conditions, legal
restrictions and other factors.
Quarterly Dividend
The Company also announced that its Board of Directors has declared a dividend
of $0.15 per share for the first quarter of fiscal 2006. The dividend will be
paid on December 14, 2005 to shareholders of record on November 30, 2005.
2006 Earnings Outlook
The Company also announced that it will provide earnings guidance for fiscal
year 2006 later this year, once the harvest is complete and 2006 U.S. cotton
planting estimates have been made.
Conference Call
D&PL will hold a conference call this morning at 11:00 a.m. ET/10:00 a.m. CT to
review this announcement. The call can be accessed by dialing 800-374-0532
(International, 706-634-0148) and access code 1525332. 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
noon ET/11:00 a.m. CT on Wednesday, November 2, 2005, through midnight ET/11:00
p.m. CT on Wednesday, November 9, 2005, by dialing 800-642-1687 (International,
706-645-9291) and entering the access code 1525332.
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)
August 31, August 31,
2005 2004
----------------------- -----------------
NET SALES AND LICENSING FEES $ 25,452 $ 24,636
COST OF SALES 20,721 18,156
----------------------- -----------------
GROSS PROFIT 4,731 6,480
----------------------- -----------------
OPERATING EXPENSES:
Research and development 7,158 4,838
Selling 3,273 2,512
General and administrative 8,173 5,746
In-process research and development and related transaction costs - 38,532
----------------------- -----------------
18,604 51,628
======================= =================
OPERATING LOSS (13,873) (45,148)
INTEREST INCOME, NET 759 561
OTHER EXPENSE, NET (979) (545)
EQUITY IN NET LOSS OF AFFILIATE (620) (784)
MINORITY INTEREST IN LOSS OF SUBSIDIARIES 342 77
----------------------- -----------------
LOSS BEFORE INCOME TAXES (14,371) (45,839)
INCOME TAX BENEFIT (5,801) (17,261)
----------------------- -----------------
NET LOSS (8,570) (28,578)
DIVIDENDS ON PREFERRED STOCK (160) (128)
----------------------- -----------------
NET LOSS APPLICABLE TO COMMON SHARES $ (8,730) $ (28,706)
======================= =================
BASIC AND DILUTED NET LOSS PER SHARE: $ (0.24) $ (0.75)
======================= =================
NUMBER OF SHARES USED IN BASIC AND DILUTED NET LOSS
PER SHARE CALCULATIONS 36,133 38,451
======================= =================
DIVIDENDS PER COMMON SHARE $ 0.15 $ 0.12
======================= =================
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,
2005 2004
--------------------- ------------------------
NET SALES AND LICENSING FEES $ 366,085 $ 312,765
COST OF SALES 234,064 203,757
--------------------- ------------------------
GROSS PROFIT 132,021 109,008
OPERATING EXPENSES:
Research and development 23,015 18,436
Selling 13,531 11,693
General and administrative 23,760 18,787
In-process research and development and related transaction costs - 38,532
---------------------- -----------------------
60,306 87,448
---------------------- -----------------------
OPERATING INCOME 71,715 21,560
INTEREST INCOME, NET 2,194 1,522
OTHER EXPENSE,NET (4,310) (10,518)
EQUITY IN NET LOSS OF AFFILIATE (2,787) (3,551)
MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (1,609) (2,303)
---------------------- -----------------------
INCOME BEFORE INCOME TAXES 65,203 6,710
INCOME TAX EXPENSE 22,646 1,394
---------------------- -----------------------
NET INCOME 42,557 5,316
DIVIDENDS ON PREFERRED STOCK (544) (491)
---------------------- -----------------------
NET INCOME APPLICABLE TO COMMON SHARES $ 42,013 $ 4,825
====================== =======================
BASIC EARNINGS PER SHARE $ 1.11 $ 0.13
====================== =======================
NUMBER OF SHARES USED IN BASIC EARNINGS
PER SHARE CALCULATIONS 37,958 38,250
====================== =======================
DILUTED EARNINGS PER SHARE $ 1.08 $ 0.13
====================== =======================
NUMBER OF SHARES USED IN DILUTED EARNINGS
PER SHARE CALCULATIONS 39,370 39,670
====================== =======================
DIVIDENDS PER COMMON SHARE $ 0.51 $ 0.46
====================== =======================
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(Unaudited)
August 31, August 31,
2005 2004
-------------------------- ------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 93,075 $ 149,587
Receivables, net 228,800 184,759
Inventories 26,625 30,151
Prepaid expenses 1,874 1,923
Deferred income taxes 6,305 9,055
-------------------------- ------------------
Total current assets 356,679 375,475
-------------------------- ------------------
PROPERTY, PLANT and EQUIPMENT, net 60,158 61,988
EXCESS OF COST OVER NET ASSETS OF
BUSINESS ACQUIRED 4,183 4,183
INTANGIBLES, net 5,960 5,471
OTHER ASSETS 1,446 1,594
DEFERRED INCOME TAXES 10,758 8,312
-------------------------- ------------------
TOTAL ASSETS $ 439,184 $ 457,023
========================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 10,078 $ 5,639
Accounts payable 18,218 23,784
Accrued expenses 221,824 187,890
Income taxes payable 12,893 8,912
-------------------------- ------------------
Total current liabilities 263,013 226,225
-------------------------- ------------------
LONG-TERM DEBT, less current maturities 7,271 16,486
-------------------------- ------------------
MINORITY INTEREST IN SUBSIDIARIES 4,877 4,586
-------------------------- ------------------
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;
1,066,667 shares authorized, issued, and outstanding 107 107
Common stock, par value $0.10 per share; 100,000,000 shares authorized;
40,928,929 and 40,162,820 shares issued;
36,099,823 and 38,495,354 shares outstanding 4,093 4,016
Capital in excess of par value 81,640 64,250
Retained earnings 199,742 176,808
Accumulated other comprehensive loss (4,305) (3,736)
Treasury Stock, at cost; 4,829,106 and 1,667,466 shares (117,254) (31,719)
-------------------------- ------------------
TOTAL STOCKHOLDERS' EQUITY 164,023 209,726
-------------------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 439,184 $ 457,023
========================== ==================
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED
(in thousands)
(Unaudited)
August 31, August 31,
2005 2004
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 42,557 $ 5,316
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 8,661 8,364
Loss on sale of assets 115 189
Noncash component of in-process research & development - 22,125
Equity in net loss of affiliate 2,787 3,551
Foreign exchange (gain) loss (101) 124
Accretion of debt discount 777 -
Minority interest in earnings of subsidiaries 1,609 2,303
Compensation expense of restricted stock 508 -
Change in deferred taxes 318 (12,294)
Changes in assets and liabilities:
Receivables (43,370) (17,693)
Inventories 4,183 1,921
Prepaid expenses 43 178
Intangibles and other assets (540) (95)
Accounts payable (6,068) 5,571
Accrued expenses 31,796 12,438
Income taxes 5,752 3,788
------------------- --------------------
Net cash provided by operating activities 49,027 35,786
------------------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (6,669) (6,049)
Sale of investments and property 451 161
Investment in affiliate (2,980) (2,630)
------------------- --------------------
Net cash used in investing activities (9,198) (8,518)
------------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of short-term debt (5,800) (277)
Payments of long-term debt - (1,607)
Dividends paid (19,623) (18,118)
Proceeds from short-term debt 247 245
Minority interest in dividends paid by subsidiary (1,318) (1,336)
Payments to acquire treasury stock (85,535) (5,748)
Proceeds from exercise of stock options 14,103 6,004
------------------- --------------------
Net cash used in financing activities (97,926) (20,837)
------------------- --------------------
EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES ON CASH 1,585 (129)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (56,512) 6,302
CASH AND CASH EQUIVALENTS, beginning of year 149,587 143,285
------------------- --------------------
CASH AND CASH EQUIVALENTS, end of year $ 93,075 $ 149,587
=================== ====================
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the twelve months for:
Interest, net of capitalized interest $ - $ 10
Income taxes $ 13,804 $ 8,904
Noncash operating activities:
Deferred taxes resulting from change in minimum pension liability $ 1,276 $ 339
Noncash financing activities:
Tax benefit of stock option exercises $ 2,856 $ 3,459