Scott, Mississippi
January 4, 2005
Improved results attributed to stronger international
performance.
Provides 2005 earnings guidance of $0.94 to $1.06, after certain
ligitation expenses of $0.13 to $0.18.
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® and Roundup Ready® Flex.
Finally, we are making advancements in both our efforts to
develop products containing Syngenta’s VipCot™ 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.
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.
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, 2004 |
|
November 30, 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, 2004 |
|
August 31,2004 |
|
November 30, 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, 2004 |
|
November 30, 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 |
|
