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Scott, Mississippi
June 26, 2001
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 third quarter and nine months ended May 31,
2001. The Company also announced its strategic plans centered on
growing D&PL's existing franchise through several key
initiatives that it believes will further enhance shareholder
value.
Third Quarter and Nine-Month Results
Third quarter 2001 net income was $0.56 per diluted share
compared to last year's third quarter net income of $0.89 per
diluted share. Net sales for the 2001 third quarter were $139.3
million compared to $177.4 million in the year-ago quarter.
Results for the 2001 third quarter were negatively affected by a
combination of declining cotton prices and adverse weather
during spring planting that significantly reduced planted cotton
acreage below early season estimates by industry experts, as
well as by weak soybean prices. In addition, customers purchased
seed earlier in the season than expected, which shifted some
sales and earnings into the 2001 second quarter and had the
effect of reducing sales and earnings in the 2001 third quarter.
According to updated USDA estimates, the actual current cotton
acreage planted is virtually unchanged from the previous year at
approximately 15.6 million acres compared to early season
industry estimates that ranged as high as 17.0 million acres.
Three storms in late May and early June in the Texas High Plains
are estimated to have destroyed nearly 400,000 acres of
transgenic cotton plantings for which neither D&PL nor its
technology provider may collect technology fees due to the terms
of certain marketing programs. Although the Company has not yet
had sufficient time to quantify the full financial effect of
those storms, D&PL has increased its reserves in its 2001 third
quarter financial statements to provide for the estimated
impact.
Soybean prices also remained extremely weak during the third
quarter due to deep price-cutting by D&PL competitors. As a
result, D&PL's 2001 third quarter soybean sales are expected to
fall below levels originally projected for the year, thus
lowering annual EPS approximately $0.10.
"While we recognize that there were extenuating circumstances
beyond our control which negatively impacted our third quarter
financial results, we are clearly disappointed with these
results and are sharply focused on taking steps to improve our
financial performance," said F. Murray Robinson, Chief Executive
Officer, Delta and Pine Land Company.
Net income for the 2001 nine-month period was $1.04 per diluted
share, an increase from $0.99 per diluted share for the
comparable prior year period. Net sales for the 2001 period
increased 4.5% to $299.2 million from $286.1 million in the
comparable prior year period. Nine month net income in 2000,
including unusual items, was $2.09 per diluted share, reflecting
receipt of $81 million from Monsanto net of related expenses.
There were no such unusual items in 2001.
Earnings Outlook
Given third quarter results and continuing adverse weather
conditions and resulting softness in the cotton market as well
as weak soybean demand, the Company now expects to report net
sales for full-year 2001 in the range of $300 million to $310
million and EPS in the range of $0.83 to $0.93.
Strategic Outlook
As part of its strategic plan to enhance shareholder value, D&PL
will focus on several key initiatives, including leveraging the
Company's position as the delivery system of choice to benefit
from new competitive technologies as the market places greater
value on the delivery of the technology rather than the
technology itself. In recent months, D&PL has held discussions
with several companies regarding potentially mutually beneficial
working relationships that could lead to market access for those
companies' technologies as well as provide D&PL with additional
revenue opportunities. In addition, the Company will focus on
advancing and expanding the products and technologies for which
it holds licenses, such as the Control of Plant Gene Expression
and Pollen Transformation System (both jointly owned with USDA),
through additional strategic alliances with leading agricultural
companies.
D&PL will also aggressively focus on international markets,
which present the greatest opportunity for the Company to
increase the percentage of acres planted with transgenic seed.
D&PL will seek to expand the number of countries in which it
operates, including adding several major international markets
and will augment its management team as well as infrastructure
investments to enable this expansion. At the same time, the
company is seeking potential niche technology acquisitions to
broaden its business base and create new revenue and profit
opportunities.
Commenting on the strategic plan, Robinson said: "We have
developed an operating plan designed to take advantage of our
core strengths to improve returns for our shareholders. By
leveraging our existing technologies and enviable position as
the technology delivery system of choice to create new strategic
alliances, as well as increasing our international presence and
seeking complementary acquisition opportunities, we believe we
will be able to enhance our revenue and earnings growth over the
next several years. Going forward, our main objective is to
offer the best technology or combination of technologies
available to our domestic and international customers regardless
of whether that technology is ours or that of other providers."
Delta and Pine Land Company is a commercial breeder, producer
and marketer of cotton planting seed. Headquartered in Scott,
Mississippi, with offices in eight states and facilities in
several foreign countries, DLP also breeds, produces and markets
soybean planting seed.
Company news release
N3613 |
