Scott, Mississippi
October 26, 2004
·
Reports Record Sales of $314.9 Million
·
Results Affected by Previously Announced
Technology Acquisition
·
Announces Quarterly Dividend of $0.12 Per
Share
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 fiscal
quarter and year ended August 31, 2004.
Fourth
Quarter Results
Net sales
in the fiscal 2004 fourth quarter were $27.6 million,
compared to $2.4 million in the fiscal 2003 fourth quarter.
Current year fourth quarter sales benefited from late season
cotton and soybean shipments as well as lower technology fee
rebates from crop destruct and replant claims than in the
prior year quarter. Fiscal 2004 fourth quarter earnings
were reduced due to a charge related to the acquisition of
licenses from Syngenta, which was announced in August,
2004. After charges of $0.63 per diluted share related to
the write-off of acquired in-process research and
development (“IPR&D”) and related transaction expenses and
$0.02 per diluted share related to Pharmacia/Monsanto
litigation expenses, net loss for the 2004 fourth quarter
was $0.75 per diluted share, compared to last year’s fourth
quarter net loss of $0.25 per diluted share. In the prior
year fourth quarter, Pharmacia/Monsanto litigation expenses
were $0.07 per diluted share.
Annual
Operating Results
Net sales
for the fiscal 2004 year reached the highest level in the
Company’s history and were $314.9 million, compared to
$284.5 million in the prior year. The increase in sales was
primarily due to increased licensing fees from cottonseed
sales, resulting in part from higher sales of stacked gene
products, as well as lower technology fee rebates in 2004
for crop loss and replant claims. In addition, total
international revenues increased approximately 30% over
prior year due to stronger sales in Australia, Brazil, South
Africa, Mexico and Colombia. Soybean seed sales were also
significantly higher during the 2004 fiscal year. Operating
expenses, other than those related to the write-off of the
acquired IPR&D, increased during the 2004 fiscal year due to
higher research and development costs and an increase in
professional services fees.
After
charges 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 related to Pharmacia/Monsanto
litigation expenses, net income for the year ended August
31, 2004 was $0.13 per diluted share, compared to $0.70 per
diluted share in the prior year. In fiscal 2003, expenses
associated with the Pharmacia/Monsanto litigation were $0.21
per diluted share. Prior year net income was also impacted
by expenses related to two U.S. facility closings and
workforce reductions at two foreign locations that reduced
earnings per diluted share by $0.02.
Tom
Jagodinski, President and CEO said, “We are pleased that
many of our newer products continued to win wide acceptance
by our farmer customers, and are optimistic about our
product pipeline, which is the best we have had in years.
In addition, we remain focused on new trait development and
are incorporating those new traits into our most elite
material. Some of the new varieties in the research pipeline
outperform the best performing varieties sold today. Unlike
2004, when seed supply constrained sales of some key
products, we expect to have ample seed of the most popular
new varieties for sale in 2005.”
Quarterly
Dividend
The
Company announced its Board of Directors had declared a
dividend of $0.12 per share for the first quarter of fiscal
2005. The dividend, payable to shareholders of record on
November 30, 2004, will be paid on December 14, 2004.
Stock
Repurchase Plan
For the
year ended August 31, 2004, the Company purchased 250,200
shares of its common stock at an aggregate purchase price of
$5.7 million. The Company will continue to purchase its
shares from time to time depending on market conditions and
other factors.
2005
Earnings Outlook
The
Company also announced that it will provide earnings
guidance for fiscal year 2005 later this year, once the
harvest is complete and 2005 U.S. cotton planting estimates
have been made.
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)
|
|
August 31, 2004 |
|
August 31, 2003 |
|
|
|
|
|
|
NET SALES AND LICENSING FEES |
$ 27,631 |
|
$ 2,415 |
|
COST OF SALES |
21,151 |
|
2,742 |
|
GROSS PROFIT (LOSS) |
6,480 |
|
(327) |
|
OPERATING EXPENSES: |
|
|
|
|
Research and development |
4,838 |
|
4,633 |
|
Selling |
2,512 |
|
2,736 |
|
General and administrative |
5,746 |
|
3,263 |
|
In-process research and development
and related transaction costs |
38,532 |
|
- |
|
|
51,628 |
|
10,632 |
|
OPERATING LOSS |
(45,148) |
|
(10,959) |
|
|
|
|
|
|
INTEREST INCOME, NET |
561 |
|
358 |
|
OTHER EXPENSE, NET |
(545) |
|
(3,680) |
|
EQUITY IN NET LOSS OF AFFILIATE |
(784) |
|
(485) |
|
MINORITY INTEREST IN LOSS (EARNINGS) OF
SUBSIDIARIES |
77 |
|
(308) |
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES
|
(45,839) |
|
(15,074) |
|
INCOME TAX BENEFIT |
(17,261) |
|
(5,713) |
|
|
|
|
|
|
NET LOSS |
(28,578) |
|
(9,361) |
|
|
|
|
|
|
DIVIDENDS ON PREFERRED STOCK |
(128) |
|
(107) |
|
NET LOSS APPLICABLE TO COMMON SHARES |
$ (28,706) |
|
$ (9,468) |
|
|
|
|
|
|
BASIC AND DILUTED NET LOSS PER SHARE |
$ (0.75) |
|
$ (0.25) |
|
|
|
|
|
|
NUMBER OF SHARES USED IN BASIC AND
DILUTED NET LOSS |
|
|
|
|
PER SHARE CALCULATIONS
|
38,451 |
|
38,103 |
|
|
|
|
|
|
|
|
|
|
|
DIVIDENDS PER COMMON SHARE |
$ 0.12 |
|
$ 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, 2004 |
|
August 31, 2003 |
|
|
|
|
|
|
NET SALES AND LICENSING FEES |
$ 314,871 |
|
$ 284,487 |
|
COST OF SALES |
205,863 |
|
183,820 |
|
GROSS PROFIT |
109,008 |
|
100,667 |
|
OPERATING EXPENSES: |
|
|
|
|
Research and development |
18,436 |
|
16,669 |
|
Selling |
11,693 |
|
10,971 |
|
General and administrative |
18,787 |
|
15,358 |
|
Special charges |
- |
|
962 |
|
In-process research and development
and related transaction costs |
38,532 |
|
- |
|
|
87,448 |
|
43,960 |
|
OPERATING INCOME |
21,560 |
|
56,707 |
|
|
|
|
|
|
INTEREST INCOME, NET |
1,522 |
|
1,100 |
|
OTHER EXPENSE, NET |
(10,518) |
|
(12,178) |
|
EQUITY IN NET LOSS OF AFFILIATE |
(3,551) |
|
(1,977) |
|
MINORITY INTEREST IN EARNINGS OF
SUBSIDIARIES |
(2,303) |
|
(1,104) |
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES
|
6,710 |
|
42,548 |
|
INCOME TAX EXPENSE |
1,394 |
|
14,743 |
|
|
|
|
|
|
NET INCOME |
5,316 |
|
27,805 |
|
|
|
|
|
|
DIVIDENDS ON PREFERRED STOCK |
(491) |
|
(288) |
|
NET INCOME APPLICABLE TO COMMON SHARES |
$ 4,825 |
|
$ 27,517 |
|
|
|
|
|
|
BASIC NET EARNINGS PER SHARE |
$ 0.13 |
|
$ 0.72 |
|
|
|
|
|
|
NUMBER OF SHARES USED IN BASIC EARNINGS |
|
|
|
|
PER SHARE CALCULATIONS
|
38,250 |
|
38,113 |
|
|
|
|
|
|
DILUTED NET EARNINGS PER SHARE |
$ 0.13 |
|
$ 0.70 |
|
|
|
|
|
|
NUMBER OF SHARES USED IN DILUTED EARNINGS |
|
|
|
|
PER SHARE CALCULATIONS
|
39,670 |
|
39,594 |
|
|
|
|
|
|
DIVIDENDS PER COMMON SHARE |
$ 0.46 |
|
$ 0.27 |
DELTA
AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands,
except share and per share amounts)
(Unaudited)
|
|
August 31, 2004 |
|
August 31, 2003 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
Cash
and cash equivalents |
$ 149,587 |
|
$ 143,285 |
|
Receivables, net |
184,759 |
|
166,952 |
|
Inventories |
30,151 |
|
32,231 |
|
Prepaid expenses |
1,923 |
|
2,116 |
|
Deferred income taxes |
9,055 |
|
10,677 |
|
Total
current assets |
375,475 |
|
355,261 |
|
PROPERTY, PLANT AND EQUIPMENT, NET |
61,988 |
|
64,441 |
|
EXCESS
OF COST OVER NET ASSETS OF |
|
|
|
|
BUSINESSES ACQUIRED |
4,183 |
|
4,183 |
|
INTANGIBLES, net |
5,471 |
|
5,470 |
|
INVESTMENT IN AFFILIATE |
- |
|
328 |
|
OTHER
ASSETS |
1,594 |
|
1,869 |
|
DEFFERED INCOME TAXES |
8,312 |
|
- |
|
TOTAL
ASSETS |
$ 457,023 |
|
$ 431,552 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
CURRENT LIABILITIES : |
|
|
|
|
Notes payable |
$ 5,639 |
|
$ 40 |
|
Accounts payable |
23,784 |
|
17,966 |
|
Accrued expenses |
187,890 |
|
176,150 |
|
Income
taxes payable |
8,912 |
|
9,894 |
|
Total current liabilities |
226,225 |
|
204,050 |
|
LONG-TERM DEBT |
16,486 |
|
1,557 |
|
DEFERRED INCOME TAXES |
- |
|
5,220 |
|
MINORITY INTEREST IN SUBSIDIARIES |
4,586 |
|
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.l0 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;
40,162,820 and 39,525,116 shares issued;
38,495,354 and 38,107,850 shares outstanding |
4,016 |
|
3,953 |
|
Capital in excess of par value |
64,250 |
|
54,850 |
|
Retained earnings |
176,808 |
|
189,610 |
|
Accumulated other comprehensive loss |
(3,736) |
|
(5,442) |
|
Treasury stock, at cost; 1,667,466 and 1,417,266 shares |
(31,719) |
|
(25,971) |
|
TOTAL
STOCKHOLDERS’ EQUITY |
209,726 |
|
217,107 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY |
$ 457,023 |
|
$ 431,552 |
DELTA AND
PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED
(in thousands)
(Unaudited)
|
|
August 31,
2004 |
|
August 31,
2003 |
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net income |
$ 5,316 |
|
$ 27,805 |
|
Adjustments to reconcile net income to
net cash provided |
|
|
|
|
by operating activities: |
|
|
|
|
Depreciation and amortization |
8,364 |
|
7,759 |
|
Loss
(gain) on sale of assets |
189 |
|
(34) |
|
Noncash component of in-process research and development |
22,125 |
|
- |
|
Equity
in net loss of affiliate |
3,551 |
|
1,977 |
|
Foreign exchange loss (gain) |
124 |
|
(748) |
|
Minority interest in earnings of subsidiaries |
2,303 |
|
1,104 |
|
Change
in deferred taxes |
(12,294) |
|
3,315 |
|
Changes in assets and liabilities: |
|
|
|
|
Receivables |
(17,693) |
|
(20,804) |
|
Inventories |
1,921 |
|
7,849 |
|
Prepaid expenses |
178 |
|
144 |
|
Intangibles and other assets |
(95) |
|
(133) |
|
Accounts payable |
5,571 |
|
2,241 |
|
Accrued expenses |
12,438 |
|
30,114 |
|
Income
taxes |
3,788 |
|
(1,557) |
|
Net cash provided by
operating activities |
35,786 |
|
59,032 |
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Purchases of property and equipment |
(6,049) |
|
(8,298) |
|
Sale of investments and property |
161 |
|
79 |
|
Investment in affiliate |
(2,630) |
|
(1,610) |
|
Net cash used in investing
activities |
(8,518) |
|
(9,829) |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Payments of short-term debt |
(277) |
|
(2,109) |
|
Payments of long-term debt |
(1,607) |
|
- |
|
Dividends paid |
(18,118) |
|
(10,576) |
|
Proceeds from short-term debt |
245 |
|
467 |
|
Minority interest in dividends paid by
subsidiary |
(1,336) |
|
- |
|
Payments to acquire treasury stock |
(5,748) |
|
(6,135) |
|
Proceeds from exercise of stock options |
6,004 |
|
2,484 |
|
Net cash used in financing
activities |
(20,837) |
|
(15,869) |
|
|
|
|
|
|
EFFECTS OF FOREIGN CURRENCY EXCHANGE
RATES |
(129) |
|
860 |
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS |
6,302 |
|
34,194 |
|
CASH AND CASH EQUIVALENTS, beginning of
year |
143,285 |
|
109,091 |
|
CASH AND CASH EQUIVALENTS, end of year |
$ 149,587 |
|
$ 143,285 |
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
Cash paid during the twelve months
for: |
|
|
|
|
Interest, net of capitalized
interest |
$ 10 |
|
$ 60 |
|
Income taxes |
$ 8,900 |
|
$ 13,400 |
|
|
|
|
|
|
Noncash financing activities: |
|
|
|
|
Tax benefit of stock option
exercises |
$ 3,500 |
|
$ 800 |
|
