Scott, Mississippi
April 1, 2005
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 second quarter and six months ended February 28,
2005.
Second Quarter
and Six-Month Results
After charges
of $0.02 per diluted share related to Pharmacia/Monsanto
litigation expenses, net earnings for the 2005 second quarter
were $0.48 per diluted share, an increase from last year’s
comparable second quarter net earnings of $0.24 per diluted
share. In the prior year second quarter, net earnings were
reduced by $0.06 per diluted share for Pharmacia/Monsanto
litigation expenses.
Revenues were
$119.9 million in the current year second quarter, compared to
$89.2 million recorded in the year-ago quarter. The revenue
increase was primarily due to an anticipated shift of domestic
cottonseed sales into the second quarter from the third
quarter. Price increases on seed and traits in the domestic
segment also contributed to increased revenue. Higher export
sales to
Greece
and Mexico during the current-year quarter were partially offset
by lower sales at our Chinese joint ventures in the
international segment. Operating expenses increased, primarily
due to higher research and development and insurance costs.
After charges
of $0.05 per diluted share related to Pharmacia/Monsanto
litigation expenses, net income for the 2005 six-month period
was $0.37 per diluted share, compared to net income of $0.06 per
diluted share for the same period last year. In the 2004
six-month period, net income included a reduction of $0.10 per
diluted share for Pharmacia/Monsanto litigation expenses.
Revenues for the 2005 six-month period were $137.3 million,
compared to $103.0 million in the prior year period. The
revenue increase occurred primarily in the domestic segment.
International revenues also increased, resulting from higher
sales in Australia and Brazil, coupled with stronger export
sales to
Greece,
Spain and Mexico. Sales at the Company’s two joint ventures in
China
declined, due to stronger competition from local varieties.
Operating expenses increased, primarily due to higher research
and development and advertising expenses.
Tom
Jagodinski, President and Chief Executive Officer, said, “We
are pleased with the strong early season sales of our products
that were recently launched in the
U.S.
In addition, we have ample supplies of our most popular
varieties available for the U.S. market. Our international
profitability also has improved, due in large part to increased
acreage and market share in certain key markets, such as
Australia, Brazil and Mexico.”
Stock
Repurchase Plan
As of March
31, 2005, the Company has purchased 672,600 shares of its common
stock at an aggregate purchase price of $17.8 million in the
current fiscal year. The Company will continue to purchase its
shares from time to time depending on market conditions and
other factors.
U.S.
Cotton Acreage Estimates
On
March 31, 2005, the USDA issued its Prospective Plantings Survey
for this crop season, which estimated U.S. cotton plantings of
13.8 million acres. The USDA estimates reflect an increase of
approximately 1% over 2004 cotton plantings of 13.7 million
acres. The Company’s 2005 earnings guidance was developed using
U.S. cotton plantings of 13.7 million acres, or unchanged from
the prior year. It is too early in the season to accurately
forecast cotton plantings at present and the Company is
reiterating its previously issued earnings guidance. As more
information becomes available, the Company will consider the
need to update the previously issued earnings estimate.
Quarterly
Dividend
The Company
also announced its Board of Directors has declared a dividend of
$0.12 per share for the third quarter. The dividend will be
paid on June 14, 2005 to shareholders of record on May 31, 2005.
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)
|
|
February 28, 2005 |
|
February 29, 2004 |
|
|
|
|
|
|
NET SALES AND LICENSING FEES |
$ 119,859 |
|
$ 89,172 |
|
COST OF SALES |
75,175 |
|
57,008 |
|
GROSS PROFIT |
44,684 |
|
32,164 |
|
OPERATING EXPENSES: |
|
|
|
|
Research and development |
5,646 |
|
4,997 |
|
Selling |
3,486 |
|
3,209 |
|
General and administrative |
4,905 |
|
4,533 |
|
|
14,037 |
|
12,739 |
|
OPERATING INCOME |
30,647 |
|
19,425 |
|
|
|
|
|
|
INTEREST INCOME, NET |
641 |
|
326 |
|
OTHER EXPENSE |
(973) |
|
(3,511) |
|
EQUITY IN NET LOSS OF AFFILIATE |
(648) |
|
(1,319) |
|
MINORITY INTEREST IN EARNINGS OF
SUBSIDIARIES |
(9) |
|
(416) |
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES
|
29,658 |
|
14,505 |
|
INCOME TAX EXPENSE |
10,498 |
|
5,062 |
|
|
|
|
|
|
NET INCOME |
19,160 |
|
9,443 |
|
|
|
|
|
|
DIVIDENDS ON PREFERRED STOCK |
(128) |
|
(128) |
|
NET INCOME APPLICABLE TO COMMON SHARES |
$ 19,032 |
|
$ 9,315 |
|
|
|
|
|
|
BASIC NET EARNINGS PER SHARE |
$ 0.49 |
|
$ 0.24 |
|
|
|
|
|
|
NUMBER OF SHARES USED IN BASIC EARNINGS |
|
|
|
|
PER SHARE CALCULATIONS
|
38,763 |
|
38,138 |
|
|
|
|
|
|
DILUTED NET EARNINGS PER SHARE |
$ 0.48 |
|
$ 0.24 |
|
|
|
|
|
|
NUMBER OF SHARES USED IN DILUTED EARNINGS |
|
|
|
|
PER SHARE CALCULATIONS
|
40,276 |
|
39,768 |
|
|
|
|
|
|
DIVIDENDS PER COMMON SHARE |
$ 0.12 |
|
$ 0.12 |
DELTA AND
PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED
(in thousands, except per share amounts)
(Unaudited)
|
|
February 28, 2005 |
|
February 29, 2004 |
|
|
|
|
|
|
NET SALES AND LICENSING FEES |
$ 137,313 |
|
$ 103,017 |
|
COST OF SALES |
83,596 |
|
65,044 |
|
GROSS PROFIT |
53,717 |
|
37,973 |
|
OPERATING EXPENSES: |
|
|
|
|
Research and development |
10,076 |
|
9,133 |
|
Selling |
6,552 |
|
5,951 |
|
General and administrative |
9,444 |
|
9,274 |
|
|
26,072 |
|
24,358 |
|
OPERATING INCOME |
27,645 |
|
13,615 |
|
|
|
|
|
|
INTEREST INCOME, NET |
1,099 |
|
699 |
|
OTHER EXPENSE |
(2,480) |
|
(6,323) |
|
EQUITY IN NET LOSS OF AFFILIATE |
(1,386) |
|
(1,734) |
|
MINORITY INTEREST IN EARNINGS OF
SUBSIDIARIES |
(2,345) |
|
(2,405) |
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES
|
22,533 |
|
3,852 |
|
INCOME TAX EXPENSE |
7,690 |
|
1,387 |
|
|
|
|
|
|
NET INCOME |
14,843 |
|
2,465 |
|
|
|
|
|
|
DIVIDENDS ON PREFERRED STOCK |
(256) |
|
(235) |
|
NET INCOME APPLICABLE TO COMMON SHARES |
$ 14,587 |
|
$ 2,230 |
|
|
|
|
|
|
BASIC NET EARNINGS PER SHARE |
$ 0.38 |
|
$ 0.06 |
|
|
|
|
|
|
NUMBER OF SHARES USED IN BASIC EARNINGS |
|
|
|
|
PER SHARE CALCULATIONS
|
38,653 |
|
38,118 |
|
|
|
|
|
|
DILUTED NET EARNINGS PER SHARE |
$ 0.37 |
|
$ 0.06 |
|
|
|
|
|
|
NUMBER OF SHARES USED IN DILUTED EARNINGS |
|
|
|
|
PER SHARE CALCULATIONS
|
40,124 |
|
39,711 |
|
|
|
|
|
|
DIVIDENDS PER COMMON SHARE |
$ 0.24 |
|
$ 0.22 |
DELTA AND
PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share
amounts)
(Unaudited)
|
|
February 28, 2005 |
|
August 31,2004 |
|
February 29, 2004 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash
and cash equivalents |
$ 110,632 |
|
$ 149,587 |
|
$ 91,617 |
|
Receivables, net |
139,330 |
|
184,759 |
|
99,773 |
|
Inventories |
56,861 |
|
30,151 |
|
58,081 |
|
Prepaid expenses |
2,038 |
|
1,923 |
|
1,687 |
|
Deferred income taxes |
6,725 |
|
9,055 |
|
8,230 |
|
Total
current assets |
315,586 |
|
375,475 |
|
259,388 |
|
PROPERTY, PLANT AND EQUIPMENT, NET |
62,005 |
|
61,988 |
|
62,914 |
|
EXCESS
OF COST OVER NET ASSETS OF |
|
|
|
|
|
|
BUSINESSES ACQUIRED |
4,183 |
|
4,183 |
|
4,183 |
|
INTANGIBLES, NET |
5,757 |
|
5,471 |
|
5,382 |
|
OTHER
ASSETS |
1,545 |
|
1,594 |
|
1,735 |
|
DEFFERED INCOME TAXES |
9,685 |
|
8,312 |
|
- |
|
TOTAL
ASSETS |
$ 398,761 |
|
$ 457,023 |
|
$ 333,602 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
CURRENT LIABILITIES : |
|
|
|
|
|
|
Notes payable |
$ 11,405 |
|
$ 5,639 |
|
$ 248 |
|
Accounts payable |
19,466 |
|
23,784 |
|
12,878 |
|
Accrued expenses |
108,508 |
|
187,890 |
|
90,674 |
|
Income
taxes payable |
10,712 |
|
8,912 |
|
6,078 |
|
Total current liabilities |
150,091 |
|
226,225 |
|
109,878 |
|
LONG-TERM DEBT |
11,109 |
|
16,486 |
|
1,581 |
|
DEFERRED INCOME TAXES |
- |
|
- |
|
4,304 |
|
MINORITY INTEREST IN SUBSIDIARIES |
6,572 |
|
4,586 |
|
5,600 |
|
|
|
|
|
|
|
|
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;
40,788,040, 40,162,820 and 39,811,148 shares
issued;
39,120,574, 38,495,354 and 38,250,882 shares
outstanding |
4,079 |
|
4,016 |
|
3,982 |
|
Capital in excess of par value |
78,340 |
|
64,250 |
|
59,114 |
|
Retained earnings |
182,071 |
|
176,808 |
|
183,440 |
|
Accumulated other comprehensive loss |
(1,889) |
|
(3,736) |
|
(4,981) |
|
Treasury stock, at cost; 1,667,466, 1,667,466 and
1,560,266 shares |
(31,719) |
|
(31,719) |
|
(29,423) |
|
TOTAL
STOCKHOLDERS’ EQUITY |
230,989 |
|
209,726 |
|
212,239 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY |
$ 398,761 |
|
$ 457,023 |
|
$ 333,602 |
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
(in thousands)
(Unaudited)
|
|
February 28, 2005 |
|
February 29, 2004 |
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net income |
$ 14,843 |
|
$ 2,465 |
|
Adjustments to reconcile net income to
net cash used |
|
|
|
|
in operating activities: |
|
|
|
|
Depreciation and amortization |
4,265 |
|
4,042 |
|
(Gain)
loss on sale of assets |
(323) |
|
49 |
|
Equity
in net loss of affiliate |
1,386 |
|
1,734 |
|
Foreign exchange gain |
(219) |
|
(131) |
|
Accretion of debt discount |
389 |
|
- |
|
Minority interest in earnings of subsidiaries |
2,345 |
|
2,405 |
|
Change
in deferred taxes |
974 |
|
1,510 |
|
Changes in assets and liabilities: |
|
|
|
|
Receivables |
45,851 |
|
67,300 |
|
Inventories |
(26,260) |
|
(25,971) |
|
Prepaid expenses |
(118) |
|
417 |
|
Intangibles and other assets |
(370) |
|
120 |
|
Accounts payable |
(4,591) |
|
(5,240) |
|
Accrued expenses |
(79,431) |
|
(85,457) |
|
Income
taxes |
3,987 |
|
(2,266) |
|
Net cash used in operating
activities |
(37,272) |
|
(39,023) |
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Purchases of property and equipment |
(3,561) |
|
(2,244) |
|
Sale of investments and property |
388 |
|
47 |
|
Investment in affiliate |
(1,550) |
|
(1,140) |
|
Net cash used in investing
activities |
(4,723) |
|
(3,337) |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Payments of short-term debt |
- |
|
(40) |
|
Dividends paid |
(9,580) |
|
(8,635) |
|
Proceeds from short-term debt |
- |
|
245 |
|
Minority interest in dividends paid by
subsidiary |
(359) |
|
(424) |
|
Payments to acquire treasury stock |
- |
|
(3,452) |
|
Proceeds from exercise of stock options |
11,855 |
|
2,670 |
|
Net cash provided by (used
in) financing activities |
1,916 |
|
(9,636) |
|
|
|
|
|
|
EFFECTS OF FOREIGN CURRENCY EXCHANGE
RATES |
1,124 |
|
328 |
|
|
|
|
|
|
NET DECREASE IN CASH AND CASH EQUIVALENTS |
(38,955) |
|
(51,668) |
|
CASH AND CASH EQUIVALENTS, August 31 |
149,587 |
|
143,285 |
|
CASH AND CASH EQUIVALENTS, February 28
and February 29 |
$
110,632 |
|
$ 91,617 |
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
Cash paid during the six months for: |
|
|
|
|
Interest, net of capitalized
interest |
$ - |
|
$ 10 |
|
Income taxes paid |
$ 1,645 |
|
$ 1,810 |
|
|
|
|
|
|
Noncash financing activities: |
|
|
|
|
Tax benefit of stock option
exercises |
$ 2,298 |
|
$ 1,623 |
|
