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, 2003. Due to the seasonal nature of the seed business, the
Company typically incurs losses in its first and fourth fiscal quarters.
First quarter net loss declined to $0.14 per diluted share compared to
last year's first quarter net loss of $0.16, before legal expenses related to
the D&PL versus Monsanto/Pharmacia litigation of $0.05 in 2004 ($0.03 in 2003)
and special charges. There were no special charges in the first quarter of
2004 while special charges in the prior year period were $0.01 per diluted
share. Net loss per diluted share after such legal expenses and special
charges was $0.19 per share for the first quarter of fiscal 2004 compared to
$0.20 per share in the prior year period.
Revenues were $13.8 million in the 2004 first quarter compared to
$5.6 million recorded in the same period last year. The revenue increase was
attributable to international operations, particularly in South America, China
and Australia. Sales in South America benefited from higher volumes in
Argentina and Brazil, as well as improvements in pricing and foreign exchange.
The increases in sales in China and Australia relate to changes in the timing
of shipments to customers based on their orders. Operating expenses increased
due primarily to higher insurance, pension and payroll related costs.
Tom Jagodinski, President and Chief Executive Officer, said, "We are
pleased with our first quarter results, which is historically a slow quarter,
and are encouraged by early indications that cotton plantings in the U.S. and
other key markets may increase well above 2003 levels. Growers' favorable
reactions to our products launched in 2003 and to those we plan to launch in
2004, along with strong recent commodity prices, we believe, position us well
for 2004."
The following table reconciles net loss before unusual items to net loss at November 30.
Three Months
2003 2002
Diluted EPS:
Net loss before legal expenses related to
the Monsanto/Pharmacia litigation and
special charges (a non-GAAP measure) $(0.14) $(0.16)
Monsanto litigation expenses (0.05) (0.03)
Special charges -- (0.01)
Net loss (a GAAP measure) $(0.19) $(0.20)
Stock Repurchase Plan
During the first four months of fiscal year 2004, the Company purchased
104,000 shares of its common stock at an aggregate purchase price of
$2.5 million. As of December 31, 2003, the Company has repurchased
1,407,000 shares at an aggregate price of $26.3 million since adoption of its
current $50 million stock repurchase plan. The Company will continue to
purchase its shares from time to time depending on market conditions and other
factors.
2004 Earnings Outlook
For the fiscal year 2004, the Company expects to report sales in the range
of $315 million to $330 million. Earnings per diluted share, excluding
Monsanto/Pharmacia litigation expenses and special charges (a non-GAAP
measure), are expected to range from $1.05 to $1.12, assuming planted U.S.
cotton area of 14.5 million acres in 2004, seed supplies are adequate and
maintenance of U.S. market share and product sales mix. The Company expects
to incur expenses ranging from $10 to $14 million, or $0.16 to $0.23 per
diluted share, related to the lawsuit against Pharmacia and Monsanto. Diluted
earnings per share after Monsanto legal expenses (a GAAP measure) is expected
to range from $0.82 to $0.96 per share.
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 increase over 2003 planting levels, especially
in areas east of Texas. The Company's earnings guidance reflects this
anticipated increase in cotton acreage as well as the other factors noted
above.
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. where
it sells cotton seed. For more information, please refer to the Company's Web
site at http://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)
November 30, November 30,
2003 2002
NET SALES AND LICENSING FEES $13,845 $5,599
COST OF SALES 8,036 4,288
GROSS PROFIT 5,809 1,311
OPERATING EXPENSES:
Research and development 4,136 3,557
Selling 2,742 2,419
General and administrative 4,381 3,567
11,259 9,543
SPECIAL CHARGES -- (500)
OPERATING LOSS (5,450) (8,732)
INTEREST INCOME, NET 373 388
OTHER EXPENSE (3,172) (2,127)
EQUITY IN NET LOSS OF AFFILIATE (415) (460)
MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (1,989) (457)
LOSS BEFORE INCOME TAXES (10,653) (11,388)
INCOME TAX BENEFIT 3,675 3,957
NET LOSS (6,978) (7,431)
DIVIDENDS ON PREFERRED STOCK (107) (53)
NET LOSS APPLICABLE TO COMMON SHARES $(7,085) $(7,484)
BASIC AND DILUTED NET LOSS PER SHARE $(0.19) $(0.20)
NUMBER OF SHARES USED IN BASIC AND DILUTED
NET LOSS PER SHARE CALCULATIONS 38,099 38,176
DIVIDENDS PER COMMON SHARE $0.10 $0.05
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,
2003 2003 2002
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $119,515 $143,285 $95,611
Receivables, net 11,222 166,952 11,337
Inventories 61,463 32,231 61,695
Prepaid expenses 1,618 2,116 1,575
Deferred income taxes 10,677 10,677 11,214
Total current assets 204,495 355,261 181,432
PROPERTY, PLANT AND EQUIPMENT, NET 63,220 64,441 62,693
EXCESS OF COST OVER NET ASSETS OF
BUSINESSES ACQUIRED, net 4,183 4,183 4,187
INTANGIBLES, net 5,451 5,470 3,913
INVESTMENT IN AFFILIATE 413 328 635
OTHER ASSETS 1,778 1,869 2,358
TOTAL ASSETS $279,540 $431,552 $255,218
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $248 $40 $1,805
Accounts payable 20,338 17,966 16,775
Accrued expenses 34,516 176,150 30,285
Income taxes payable 6,069 9,894 6,887
Total current liabilities 61,171 204,050 55,752
LONG-TERM DEBT 1,598 1,557 1,225
DEFERRED INCOME TAXES 5,240 5,220 3,125
MINORITY INTEREST IN SUBSIDIARIES 5,183 3,618 2,971
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;
39,569,060, 39,525,116 and
39,367,005 shares issued;
38,087,794, 38,107,850 and
38,178,439 shares outstanding 3,957 3,953 3,937
Capital in excess of par value 55,596 54,850 52,229
Retained earnings 178,717 189,610 162,988
Accumulated other comprehensive loss (4,565) (5,442) (5,761)
Treasury stock, at cost; 1,481,266,
1,417,266 and 1,188,566 shares (27,464) (25,971) (21,355)
TOTAL STOCKHOLDERS' EQUITY 206,348 217,107 192,145
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $279,540 $431,552 $255,218
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
(in thousands)
(Unaudited)
November 30, November 30,
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(6,978) $(7,431)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 2,018 1,735
Noncash items associated with special
charges and disposition of assets 11 --
Equity in net loss of affiliate 415 460
Foreign exchange (gain) loss (78) 54
Minority interest in earnings
of subsidiaries 1,989 457
Changes in assets and liabilities:
Receivables 155,755 134,478
Inventories (28,740) (21,532)
Prepaid expenses 611 686
Intangibles and other assets 41 84
Accounts payable 2,253 289
Accrued expenses (141,479) (113,334)
Income taxes (3,683) (5,232)
Net cash used in operating activities (17,865) (9,286)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (699) (1,078)
Sale of investments and property 39 11
Investment in affiliate (500) (400)
Net cash used in investing activities (1,160) (1,467)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of short-term debt (36) (334)
Dividends paid (3,915) (1,962)
Proceeds from long-term debt -- 106
Proceeds from short-term debt 245 450
Minority interest in dividends
paid by subsidiary (424) --
Payments to acquire treasury stock (1,493) (1,519)
Proceeds from exercise of stock options 571 415
Net cash used in financing activities (5,052) (2,844)
EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES 307 117
NET DECREASE IN CASH AND CASH EQUIVALENTS (23,770) (13,480)
CASH AND CASH EQUIVALENTS, August 31 143,285 109,091
CASH AND CASH EQUIVALENTS, November 30 $119,515 $95,611
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the three months for:
Interest, net of capitalized interest $5 $20
Income taxes $9 $950
Noncash financing activities:
Tax benefit of stock option exercises $200 $300
