Scott, Mississippi
July 7, 2005
-
Increases Fiscal 2005 Earnings Guidance
To $1.02-$1.11 Per Share, After Certain Litigation
Expenses of $0.08 to $0.10 Per Share
-
Increases Quarterly Dividend 25% To $0.15
Per Share
-
Announces $50 Million Stock Repurchase
Plan
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 its third quarter and nine months
ended May 31, 2005.
Third
Quarter and Nine-Month Results
After
charges of $0.01 per diluted share related to
Pharmacia/Monsanto litigation expenses, net earnings for the
2005 third quarter were $0.91 per diluted share, an increase
from last year’s comparable third quarter net earnings of
$0.79 per diluted share. In the prior year third quarter,
net earnings were reduced by $0.05 per diluted share for
Pharmacia/Monsanto litigation expenses.
Revenues
were $203.3 million in the current year third quarter,
compared to $185.6 million recorded in the year-ago
quarter. The revenue increase was primarily due to higher
sales of premium priced stacked trait varieties and higher
trait prices in the domestic segment. Operating expenses
increased, largely due to higher research expenses, legal
fees and Sarbanes-Oxley compliance costs.
After
charges of $0.06 per diluted share related to
Pharmacia/Monsanto litigation expenses, net income for the
2005 nine-month period increased more than 50% to $1.28 per
diluted share, compared to net income of $0.85 per diluted
share for the same period last year. In the 2004 nine-month
period, net income included a reduction of $0.16 per diluted
share for Pharmacia/Monsanto litigation expenses.
Revenues
for the 2005 nine-month period increased 18% to $340.6
million, compared to $288.1 million in the prior year
period. The revenue increase was primarily the result of
higher unit sales of premium priced stacked trait picker
varieties, as well as increases in trait fee prices.
International revenues also increased, primarily due to
higher unit sales and prices 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, principally due to strong competition from local
varieties and reduced cotton plantings. Operating expenses
increased, largely as a result of higher research and
development expenses related to developing products with new
technologies, compensation costs, legal fees and
Sarbanes-Oxley compliance costs.
Tom
Jagodinski, President and Chief Executive Officer, said,
“We are pleased with grower acceptance of our newer stacked
trait cotton varieties and expect DP555 BG/RR and DP444
BG/RR to be the top two selling varieties planted in the
U.S. this year. We also have substantial seed production of
new products containing Monsanto’s second-generation traits,
Bollgard IIâ and Roundup Readyâ Flex, in anticipation of
next year’s launch of these varieties. Further, we are
continuing to take steps to enhance value by returning cash
to our shareholders, including the significant dividend
increase and additional share repurchase authorization.”
Stock
Repurchase Plan
D&PL also
announced that its Board of Directors has authorized a new
share repurchase program to buy up to an additional $50
million of the Company's common stock. The Company
anticipates that repurchases will be implemented over time
through a variety of methods, which generally will include
open market purchases. The timing and amount of
repurchases under the program will depend on market
conditions, legal restrictions and other factors.
As of June
30, 2005, the Company had purchased approximately 3.1
million shares of its common stock at an aggregate purchase
price of $82.6 million in the current fiscal year. Current
year repurchases totaled approximately 8% of the Company’s
issued and outstanding stock as of the beginning of the
fiscal year.
Quarterly
Dividend
The
Company also announced that its Board of Directors has
declared a dividend of $0.15 per share for the fourth
quarter, an increase of 25% over the third quarter
dividend. The dividend will be paid on September 14, 2005
to shareholders of record on August 31, 2005.
2005
Earnings Outlook
For the
fiscal year 2005, D&PL now expects to report sales in the
range of $340 million to $360 million, based on U.S. cotton
plantings remaining constant with 2004 levels. The Company
is revising its earlier diluted earnings per share guidance
to reflect an anticipated reduction in legal fees related to
its lawsuit against Pharmacia and Monsanto, which previously
were estimated to be $0.13 to $0.18 per diluted share. The
Company now believes the Pharmacia/Monsanto legal expenses
will be between $0.08 and $0.10 per diluted share.
Accordingly, the Company now expects to report earnings per
diluted share in the range of $1.02 to $1.11. The earlier
guidance provided related to core business earnings remains
unchanged. These earnings estimates include forecasts of
fourth quarter domestic and international sales, slightly
higher technology fee rebates under crop loss and replant
programs than was experienced in 2004, and other assumptions
regarding fourth quarter results. Crop loss and replant
program rebates and other grower and channel marketing
programs are finalized in the fourth quarter.
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.
DELTA AND
PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
(in thousands, except per share amounts)
(Unaudited)
|
|
May 31, 2005 |
|
May 31, 2004 |
|
|
|
|
|
|
NET SALES AND LICENSING FEES |
$ 203,320 |
|
$
185,649 |
|
COST OF SALES |
129,747 |
|
121,094 |
|
GROSS PROFIT |
73,573 |
|
64,555 |
|
OPERATING EXPENSES: |
|
|
|
|
Research and development |
5,781 |
|
4,465 |
|
Selling |
3,706 |
|
3,230 |
|
General and administrative |
6,143 |
|
3,767 |
|
|
15,630 |
|
11,462 |
|
OPERATING INCOME |
57,943 |
|
53,093 |
|
|
|
|
|
|
INTEREST INCOME, NET |
336 |
|
262 |
|
OTHER EXPENSE |
(851) |
|
(3,650) |
|
EQUITY IN NET LOSS OF AFFILIATE |
(781) |
|
(1,033) |
|
MINORITY INTEREST IN LOSS OF SUBSIDIARIES |
394 |
|
25 |
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES
|
57,041 |
|
48,697 |
|
INCOME TAX EXPENSE |
20,757 |
|
17,268 |
|
|
|
|
|
|
NET INCOME |
36,284 |
|
31,429 |
|
|
|
|
|
|
DIVIDENDS ON PREFERRED STOCK |
(128) |
|
(128) |
|
NET INCOME APPLICABLE TO COMMON SHARES |
$ 36,156 |
|
$ 31,301 |
|
|
|
|
|
|
BASIC NET EARNINGS PER SHARE |
$ 0.94 |
|
$ 0.82 |
|
|
|
|
|
|
NUMBER OF SHARES USED IN BASIC EARNINGS |
|
|
|
|
PER SHARE CALCULATIONS
|
38,416 |
|
38,311 |
|
|
|
|
|
|
DILUTED NET EARNINGS PER SHARE |
$ 0.91 |
|
$ 0.79 |
|
|
|
|
|
|
NUMBER OF SHARES USED IN DILUTED EARNINGS |
|
|
|
|
PER SHARE CALCULATIONS
|
39,839 |
|
39,799 |
|
|
|
|
|
|
DIVIDENDS PER COMMON SHARE |
$ 0.12 |
|
$ 0.12 |
DELTA
AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED
(in thousands, except per share amounts)
(Unaudited)
|
|
May 31, 2005 |
|
May 31, 2004 |
|
|
|
|
|
|
NET SALES AND LICENSING FEES |
$ 340,633 |
|
$ 288,129 |
|
COST OF SALES |
213,343 |
|
185,601 |
|
GROSS PROFIT |
127,290 |
|
102,528 |
|
OPERATING EXPENSES: |
|
|
|
|
Research and development |
15,857 |
|
13,598 |
|
Selling |
10,258 |
|
9,181 |
|
General and administrative |
15,587 |
|
13,041 |
|
|
41,702 |
|
35,820 |
|
OPERATING INCOME |
85,588 |
|
66,708 |
|
|
|
|
|
|
INTEREST INCOME, NET |
1,435 |
|
961 |
|
OTHER EXPENSE |
(3,331) |
|
(9,973) |
|
EQUITY IN NET LOSS OF AFFILIATE |
(2,167) |
|
(2,767) |
|
MINORITY INTEREST IN EARNINGS OF
SUBSIDIARIES |
(1,951) |
|
(2,380) |
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES
|
79,574 |
|
52,549 |
|
INCOME TAX EXPENSE |
28,447 |
|
18,655 |
|
|
|
|
|
|
NET INCOME |
51,127 |
|
33,894 |
|
|
|
|
|
|
DIVIDENDS ON PREFERRED STOCK |
(384) |
|
(363) |
|
NET INCOME APPLICABLE TO COMMON SHARES |
$ 50,743 |
|
$ 33,531 |
|
|
|
|
|
|
BASIC NET EARNINGS PER SHARE |
$ 1.32 |
|
$ 0.88 |
|
|
|
|
|
|
NUMBER OF SHARES USED IN BASIC EARNINGS |
|
|
|
|
PER SHARE CALCULATIONS
|
38,573 |
|
38,183 |
|
|
|
|
|
|
DILUTED NET EARNINGS PER SHARE |
$ 1.28 |
|
$ 0.85 |
|
|
|
|
|
|
NUMBER OF SHARES USED IN DILUTED EARNINGS |
|
|
|
|
PER SHARE CALCULATIONS
|
39,928 |
|
39,685 |
|
|
|
|
|
|
DIVIDENDS PER COMMON SHARE |
$ 0.36 |
|
$ 0.34 |
DELTA
AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share
amounts)
(Unaudited)
|
|
May 31, 2005 |
|
August 31, 2004 |
|
May 31, 2004 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash
and cash equivalents |
$ 111,287 |
|
$ 149,587 |
|
$ 148,651 |
|
Receivables, net |
258,087 |
|
184,759 |
|
229,759 |
|
Inventories |
29,099 |
|
30,151 |
|
26,780 |
|
Prepaid expenses |
1,024 |
|
1,923 |
|
807 |
|
Deferred income taxes |
5,230 |
|
9,055 |
|
10,755 |
|
Total
current assets |
404,727 |
|
375,475 |
|
416,752 |
|
PROPERTY, PLANT AND EQUIPMENT, NET |
61,255 |
|
61,988 |
|
61,205 |
|
EXCESS
OF COST OVER NET ASSETS OF |
|
|
|
|
|
|
BUSINESSES ACQUIRED |
4,183 |
|
4,183 |
|
4,183 |
|
INTANGIBLES, NET |
5,797 |
|
5,471 |
|
5,350 |
|
OTHER
ASSETS |
1,492 |
|
1,594 |
|
1,660 |
|
DEFERRED INCOME TAXES |
7,603 |
|
8,312 |
|
- |
|
TOTAL
ASSETS |
$ 485,057 |
|
$ 457,023 |
|
$ 489,150 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
CURRENT LIABILITIES : |
|
|
|
|
|
|
Notes payable |
$ 11,491 |
|
$ 5,639 |
|
$ - |
|
Accounts payable |
11,820 |
|
23,784 |
|
8,885 |
|
Accrued expenses |
242,960 |
|
187,890 |
|
209,432 |
|
Income
taxes payable |
19,995 |
|
8,912 |
|
20,789 |
|
Total current liabilities |
286,266 |
|
226,225 |
|
239,106 |
|
LONG-TERM DEBT |
11,217 |
|
16,486 |
|
- |
|
DEFERRED INCOME TAXES |
- |
|
- |
|
4,183 |
|
MINORITY INTEREST IN SUBSIDIARIES |
5,219 |
|
4,586 |
|
4,662 |
|
|
|
|
|
|
|
|
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;
40,857,834, 40,162,820 and 40,001,984 shares
issued;
36,138,728, 38,495,354 and 38,441,718 shares
outstanding |
4,086 |
|
4,016 |
|
4,000 |
|
Capital in excess of par value |
79,941 |
|
64,250 |
|
61,700 |
|
Retained earnings |
213,891 |
|
176,808 |
|
210,129 |
|
Accumulated other comprehensive loss |
(1,390) |
|
(3,736) |
|
(5,314) |
|
Treasury stock, at cost; 4,719,106, 1,667,466 and
1,560,266 shares |
(114,280) |
|
(31,719) |
|
(29,423) |
|
TOTAL
STOCKHOLDERS’ EQUITY |
182,355 |
|
209,726 |
|
241,199 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY |
$ 485,057 |
|
$ 457,023 |
|
$ 489,150 |
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
(in thousands)
(Unaudited)
|
|
May 31, 2005 |
|
May 31, 2004 |
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net income |
$ 51,127 |
|
$ 33,894 |
|
Adjustments to reconcile net income to
net cash provided |
|
|
|
|
by operating activities: |
|
|
|
|
Depreciation and amortization |
6,461 |
|
6,228 |
|
(Gain)
loss on sale of assets |
(309) |
|
220 |
|
Equity
in net loss of affiliate |
2,167 |
|
2,767 |
|
Foreign exchange (gain) loss |
(95) |
|
125 |
|
Accretion of debt discount |
583 |
|
- |
|
Minority interest in earnings of subsidiaries |
1,951 |
|
2,380 |
|
Compensation expense of restricted stock |
67 |
|
- |
|
Change
in deferred taxes |
4,574 |
|
(1,168) |
|
Changes in assets and liabilities: |
|
|
|
|
Receivables |
(72,774) |
|
(62,786) |
|
Inventories |
1,595 |
|
5,612 |
|
Prepaid expenses |
897 |
|
1,294 |
|
Intangibles and other assets |
(382) |
|
41 |
|
Accounts payable |
(12,351) |
|
(9,195) |
|
Accrued expenses |
54,853 |
|
33,063 |
|
Income
taxes |
13,494 |
|
13,652 |
|
Net cash provided by
operating activities |
51,858 |
|
26,127 |
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Purchases of property and equipment |
(5,129) |
|
(3,101) |
|
Sale of investments and property |
433 |
|
64 |
|
Investment in affiliate |
(2,230) |
|
(1,880) |
|
Net cash used in investing
activities |
(6,926) |
|
(4,917) |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Payments of short-term debt |
- |
|
(277) |
|
Payments of long-term debt |
- |
|
(1,607) |
|
Dividends paid |
(14,044) |
|
(13,375) |
|
Proceeds from short-term debt |
- |
|
245 |
|
Minority interest in dividends paid by
subsidiary |
(1,318) |
|
(1,336) |
|
Payments to acquire treasury stock |
(82,561) |
|
(3,452) |
|
Proceeds from exercise of stock options |
13,176 |
|
4,097 |
|
Net cash used in financing
activities |
(84,747) |
|
(15,705) |
|
|
|
|
|
|
EFFECTS OF FOREIGN CURRENCY EXCHANGE
RATES |
1,515 |
|
(139) |
|
|
|
|
|
|
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS |
(38,300) |
|
5,366 |
|
CASH AND CASH EQUIVALENTS, August 31 |
149,587 |
|
143,285 |
|
CASH AND CASH EQUIVALENTS, May 31 |
$ 111,287 |
|
$ 148,651 |
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
Cash paid during the nine months for: |
|
|
|
|
Interest, net of capitalized
interest |
$ - |
|
$ 10 |
|
Income taxes paid |
$ 9,261 |
|
$ 5,590 |
|
|
|
|
|
|
Noncash financing activities: |
|
|
|
|
Tax benefit of stock option
exercises |
$ 2,518 |
|
$ 2,799 |
|
