DLP Delta & Pine

Delta and Pine Land Company Announces Second Quarter and Six-Month Operating Results SCOTT, Miss., April 1 /PRNewswire-FirstCall/ -- 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. Conference Call D&PL will hold a conference call this morning at 11:00 a.m. ET/ 10:00 a.m. CT to review this announcement. The call can be accessed by dialing 800-374-0532 (International, 706-634-0148) and access code 5076009. Live audio of the conference call will also be accessible at http://www.vcall.com/ . The call will be available on the website for 90 days, and will also be available by replay from 2:00 p.m. ET/ 1:00 p.m. CT on Friday, April 1, 2005 through midnight on Friday, April 8, 2005 by dialing 800-642-1687 (International, 706-645-9291) and entering the access code 5076009. 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. For more information, please refer to the Company's Web site at http://www.deltaandpine.com/. Certain matters discussed in this release are "forward-looking statements," including statements about the Company's future plans, goals and other events, which have not yet occurred. These statements are intended to qualify for the safe harbors from liability provided by the Private Securities Litigation Reform Act of 1995. They can generally be identified because the context of such statements will include words such as "believes," "anticipates," "expects" or words of similar import. It is the nature of agricultural seed businesses that supply, demand and their timing are affected by many variables, including commodity prices, weather and government policy. Due to the seasonal nature of the seed business, the Company typically incurs losses in its first and fourth quarters. Additional risks and uncertainties with respect of the Company's business and forward looking statements are set forth in the Company's latest filings with the Securities and Exchange Commission. 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, February 29, 2005 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, February 29, 2005 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, August 31, February 29, 2005 2004 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 DEFERRED 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, February 29, 2005 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 DATASOURCE: Delta and Pine Land Company CONTACT: Investors: Tom Jagodinski of Delta and Pine Land Company, +1-662-742-4518; or Media: Jonathan Gasthalter or Amy Cohen, both of Citigate Sard Verbinnen, +1-212-687-8080 Web site: http://www.deltaandpine.com/

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