Scott, Mississippi
October 28
Delta and Pine
Land Company (NYSE: DLP), 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,
2003.
Annual
Operating Results
Net income
for the year ended August 31, 2003, was $0.93 per diluted share
compared to $0.84 in the prior year, before legal expenses
related to the D&PL versus Monsanto/Pharmacia litigation of
$0.21 in 2003 ($0.08 in 2002), and special charges in 2003 of
$0.02 per diluted share related to two U.S. location shut downs
and workforce reductions at two foreign locations. Diluted
earnings per share after such expenses and special charges were
$0.70 for the year ended August 31, 2003, compared to $0.76 in
the prior year. Net sales for the year increased to $281.3
million from $257.8 million in the comparable prior period. This
increase was primarily the result of higher sales of stacked
gene cottonseed products and higher soybean sales in the U.S.
market. Lower international sales and poor weather in the U.S.
and Australia negatively affected our 2003 results. The August
2003 USDA acreage report stated that there were approximately
400,000 fewer acres planted with cotton east of Texas in 2003
than in 2002. Operating expenses increased due to higher pension
and payroll related costs.
Fourth
Quarter Results
Fourth
quarter net loss was $0.18 per diluted share versus last year's
fourth quarter net loss of $0.17, before legal expenses related
to the D&PL versus Monsanto/Pharmacia litigation of $0.07 in
2003 ($0.04 in 2002). Diluted loss per share after such expenses
was $0.25 per share for the current year fourth quarter compared
to $0.21 per share in the prior year. Net sales in the fiscal
2003 fourth quarter were a negative $0.8 million due to a
reduction in revenue from crop loss and replant claims made
during the fourth quarter in excess of domestic and
international sales. Net sales for the fiscal 2002 fourth
quarter were $2.3 million.
Tom
Jagodinski, President and CEO said, "Although weather adversely
affected not only planted acreage, but also acres ultimately
harvested, we were pleased that we had a better year in 2003
than 2002. The successful launch of new products (although
somewhat muted by spring rains), a shift by farmers to stacked
gene varieties, and increased sales of soybeans all contributed
to the 2003 results. We are well positioned for 2004 with the
recent increase in cotton fiber prices to levels not seen in
years and our strong product pipeline, which will include the
launch of at least two new products in 2004 plus additional
supplies of two popular varieties launched this year."
The
following table reconciles net income before unusual items to
net income at August 31.
Stock Repurchase Plan
For the year ended August 31, 2003, the Company announced it had purchased
310,100 shares of its common stock at an aggregate purchase price of
$6.1 million. As of August 31, 2003, D&PL has repurchased a total of
1,303,000 shares at an aggregate price of $23.8 million since adoption of 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.
Quarterly Dividend
The Company also announced its Board of Directors had declared a dividend
of $0.10 per share for the first quarter of fiscal 2004. The dividend,
payable to shareholders of record on November 28, 2003, will be paid on
December 12, 2003. 2004 Earnings Outlook
The Company also announced it will provide earnings guidance for fiscal
year 2004 later this year, once its seed production acres in Texas, Arizona,
and California have been harvested and the seed supply outlook becomes
clearer. Conference Call
D&PL will hold a conference call with the investment community to review
this announcement on Tuesday, October 28, 2003, 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), pass code: 3307787. 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 12:00 p.m. ET/ 11:00 a.m. CT
on Tuesday, October 28th through 3:00 p.m. ET/2:00 p.m. CT on Monday, November
3, 2003, by dialing 800-642-1687 (International, 706-645-9291) and entering
the pass code: 3307787. 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. 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,
2002 2003
NET SALES AND LICENSING FEES $2,301 $(796)
COST OF SALES 1,728 (779)
GROSS PROFIT 573 (17)
OPERATING EXPENSES:
Research and development 4,684 4,943
Selling 2,423 2,736
General and administrative 3,543 3,645
10,650 11,324
Special Charges - -
OPERATING LOSS (10,077) (11,341)
INTEREST INCOME, net 151 358
OTHER EXPENSE (2,863) (3,298)
EQUITY IN NET LOSS OF AFFILIATE (305) (485)
MINORITY INTEREST IN LOSS /
(EARNINGS) OF SUBSIDIARIES 663 (308)
LOSS BEFORE INCOME TAXES (12,431) (15,074)
INCOME TAX BENEFIT (4,416) (5,713)
NET LOSS (8,015) (9,361)
DIVIDENDS ON PREFERRED STOCK (54) (107)
NET LOSS APPLICABLE TO COMMON SHARES $(8,069) $(9,468)
BASIC AND DILUTED NET LOSS PER SHARE $(0.21) $(0.25)
NUMBER OF SHARES USED IN BASIC AND DILUTED
PER SHARE CALCULATIONS 38,267 38,103
DIVIDENDS PER COMMON SHARE $0.05 $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,
2002 2003
NET SALES AND LICENSING FEES $257,807 $281,276
COST OF SALES 165,258 178,983
GROSS PROFIT 92,549 102,293
OPERATING EXPENSES:
Research and development 18,122 18,295
Selling 10,591 10,971
General and administrative 14,006 15,424
42,719 44,690
Special Charges - (962)
OPERATING INCOME 49,830 56,641
INTEREST INCOME, net 1,247 1,100
OTHER EXPENSE (6,468) (12,112)
EQUITY IN NET LOSS OF AFFILIATE (305) (1,977)
MINORITY INTEREST IN LOSS /
(EARNINGS) OF SUBSIDIARIES 2,729 (1,104)
INCOME BEFORE INCOME TAXES 47,033 42,548
INCOME TAX PROVISION 16,694 14,743
NET INCOME 30,339 27,805
DIVIDENDS ON PREFERRED STOCK (213) (288)
NET INCOME APPLICABLE TO COMMON
SHARES $30,126 $27,517
NET INCOME APPLICABLE TO COMMON
SHARES BEFORE SPECIAL CHARGES $30,126 $28,146
BASIC EARNINGS PER SHARE:
NET INCOME BEFORE SPECIAL CHARGES $0.79 $0.74
SPECIAL CHARGES, net of tax - (0.02)
NET INCOME $0.79 $0.72
DILUTED EARNINGS PER SHARE:
NET INCOME BEFORE SPECIAL CHARGES $0.76 $0.72
SPECIAL CHARGES, net of tax - (0.02)
NET INCOME $0.76 $0.70
NUMBER OF SHARES USED IN BASIC
EARNINGS
PER SHARE CALCULATIONS 38,362 38,113
NUMBER OF SHARES USED IN DILUTED
EARNINGS
PER SHARE CALCULATIONS 39,781 39,594
DIVIDENDS PER COMMON SHARE $0.20 $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,
2002 2003
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $109,091 $143,285
Receivables, net 145,876 166,952
Inventories 40,021 32,231
Prepaid expenses 2,266 2,116
Deferred income taxes 11,214 10,677
Total current assets 308,468 355,261
PROPERTY, PLANT and EQUIPMENT, net 63,401 64,441
EXCESS OF COST OVER NET ASSETS OF
BUSINESS ACQUIRED, net 4,187 4,183
INTANGIBLES, net 4,032 5,470
INVESTMENT IN AFFILIATE 695 328
OTHER ASSETS 2,359 1,869
Total non-current assets 74,674 76,291
$383,142 $431,552
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $1,763 $40
Accounts payable 16,447 17,966
Accrued expenses 143,533 176,150
Income taxes payable 12,381 9,894
Total current liabilities 174,124 204,050
LONG-TERM DEBT, less current
maturities 1,176 1,557
DEFERRED INCOME TAXES 3,121 5,220
MINORITY INTEREST IN SUBSIDIARIES 2,514 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 $0.10 per share;
1,066,666 shares
authorized, issued,
and outstanding 107 107
Common stock, par value $0.10
per share;
100,000,000 shares
authorized; 39,311,571
and 39,525,116
shares issued;
38,204,405 and
38,107,850 shares
outstanding 3,931 3,953
Capital in excess of par value 51,563 54,850
Retained earnings 172,381 189,610
Accumulated other comprehensive
loss (5,939) (5,442)
Treasury Stock at cost,
1,107,166 and 1,417,266 shares (19,836) (25,971)
Total stockholders' equity 202,207 217,107
$383,142 $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,
2002 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $30,339 $27,805
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 6,815 7,759
Noncash items associated with
special charges and disposition
of assets 910 (34)
Equity in net loss of affiliate 305 1,977
Minority interest in net (loss)
/ income of subsidiaries (2,729) 1,104
Change in deferred income taxes (3,061) 3,315
Changes in assets and
liabilities:
Receivables 31,198 (20,804)
Inventories (4,048) 7,849
Prepaid expenses (21) 144
Intangibles and other
assets (115) (133)
Accounts payable 1,616 1,473
Accrued expenses (34,443) 30,114
Income taxes payable (2,956) (1,557)
Net cash provided by
operating activities 23,810 59,012
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and
equipment (8,384) (8,298)
Sale of investments and property 411 79
Investment in affiliate (1,000) (1,610)
Purchase of minority interest in
subsidiary (4,838) -
Net cash used in investing
activities (13,811) (9,829)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of short-term debt (3,173) (2,109)
Payments of long-term debt (73) -
Dividends paid (7,881) (10,576)
Proceeds from long-term debt 978 -
Proceeds from short-term debt 3,044 467
Payments to acquire treasury
stock (9,960) (6,135)
Minority interest in dividends
by subsidiaries (446) -
Proceeds from exercise of stock
options 2,527 2,484
Net cash used in financing
activities (14,984) (15,869)
EFFECTS OF FOREIGN CURRENCY EXCHANGE
RATES 73 880
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (4,912) 34,194
CASH AND CASH EQUIVALENTS, beginning
of year 114,003 109,091
CASH AND CASH EQUIVALENTS, end of
year $109,091 $143,285
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for:
Interest, net of capitalized
interest $900 $60
Income taxes $21,100 $13,400
Noncash financing activities:
Tax benefit of stock option
exercises $700 $800
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