DLP Delta & Pine

* Reports Record Sales of $366.1 million SCOTT, Miss., Nov. 2 /PRNewswire-FirstCall/ -- 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 quarter and year ended August 31, 2005. Fourth Quarter Results Net sales were $25.5 million in the 2005 fourth quarter, a slight increase over 2004 fourth quarter net sales of $24.6 million. After charges of $0.01 per diluted share related to Pharmacia/Monsanto litigation expenses, net loss for the 2005 fourth quarter was $0.24 per diluted share, a decrease from last year's fourth quarter net loss of $0.75 per diluted share. In the 2004 fourth quarter, net loss was increased by $0.63 per diluted share as a result of the write-off of acquired in-process research and development ("IPR&D") and related transaction expenses due to the acquisition of technology licenses from Syngenta, and $0.02 per diluted share for Pharmacia/Monsanto litigation expenses. Annual Operating Results The Company recorded net sales of $366.1 million for the fiscal 2005 year, compared to $312.8 million in the prior year. The 17% increase in sales was primarily driven by higher per-unit technology fees, a shift in sales to higher-value stacked trait units, and an increase in unit sales. Unit sales of stacked trait products in the U.S. increased more than 13% over the prior year. In addition, sales of the Company's top products, DP 555 BG/RR and DP 444 BG/RR, continued to increase and were the two most widely planted cotton varieties in the U.S. in 2005 according to the USDA. International revenues also increased, primarily due to higher unit sales and prices in Australia, Brazil, and Turkey, and 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. After charges of $0.07 per diluted share related to Pharmacia/Monsanto litigation expenses, net income for 2005 increased to $1.08 per diluted share, compared to net income of $0.13 per diluted share for 2004. For 2004, net income included a reduction 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 for Pharmacia/Monsanto litigation expenses. Fiscal year 2005 operating expenses increased over 2004 operating expenses, excluding the 2004 fiscal year IPR&D charge. This increase was primarily the result of higher research and development expenses related to developing products with new technologies, greater compensation and benefits costs, and higher professional fees. Tom Jagodinski, President and Chief Executive Officer, said, "Fiscal 2005 was a strong year for D&PL, and we are pleased to have delivered the highest revenues and operating results in the Company's 90-year history. We are proud of our strong product portfolio that again led the U.S. in cottonseed sales, as two varieties alone captured almost one-third of the acres planted. We are continuing to develop new products and technologies to bring additional value to our global farmer customers, and we anticipate releasing a new line-up of products in 2006 containing Monsanto's second generation traits, Bollgard II(R) and Roundup Ready(R) Flex. Although the cotton harvest is not yet complete, early indications are that seed supplies for 2006 will be adequate to meet expected demand in spite of major areas of the U.S. Cotton Belt recently weathering the effects of three hurricanes." Stock Repurchase Plan During fiscal year 2005, the Company purchased approximately 3.2 million shares of its common stock at an aggregate purchase price of $85.5 million. Those repurchases totaled approximately 8% of the Company's issued and outstanding stock as of the beginning of the 2005 fiscal year. The Company initiated a new $50 million stock repurchase program in July, 2005. The timing and amount of repurchases under the program will depend on market conditions, legal restrictions and other factors. Quarterly Dividend The Company also announced that its Board of Directors has declared a dividend of $0.15 per share for the first quarter of fiscal 2006. The dividend will be paid on December 14, 2005 to shareholders of record on November 30, 2005. 2006 Earnings Outlook The Company also announced that it will provide earnings guidance for fiscal year 2006 later this year, once the harvest is complete and 2006 U.S. cotton planting estimates have been made. 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 1525332. 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 noon ET/11:00 a.m. CT on Wednesday, November 2, 2005, through midnight ET/11:00 p.m. CT on Wednesday, November 9, 2005, by dialing 800-642-1687 (International, 706-645-9291) and entering the access code 1525332. 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) August 31, August 31, 2005 2004 -------- -------- NET SALES AND LICENSING FEES $25,452 $24,636 COST OF SALES 20,721 18,156 -------- -------- GROSS PROFIT 4,731 6,480 OPERATING EXPENSES: -------- -------- Research and development 7,158 4,838 Selling 3,273 2,512 General and administrative 8,173 5,746 In-process research and development and related transaction costs - 38,532 -------- -------- 18,604 51,628 -------- -------- OPERATING LOSS (13,873) (45,148) INTEREST INCOME, NET 759 561 OTHER EXPENSE, NET (979) (545) EQUITY IN NET LOSS OF AFFILIATE (620) (784) MINORITY INTEREST IN LOSS OF SUBSIDIARIES 342 77 -------- -------- LOSS BEFORE INCOME TAXES (14,371) (45,839) INCOME TAX BENEFIT (5,801) (17,261) -------- -------- NET LOSS (8,570) (28,578) DIVIDENDS ON PREFERRED STOCK (160) (128) -------- -------- NET LOSS APPLICABLE TO COMMON SHARES $(8,730) $(28,706) ======== ======== BASIC AND DILUTED NET LOSS PER SHARE: $(0.24) $(0.75) ======== ======== NUMBER OF SHARES USED IN BASIC AND DILUTED NET LOSS PER SHARE CALCULATIONS 36,133 38,451 ======== ======== DIVIDENDS PER COMMON SHARE $0.15 $0.12 ======== ======== 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, August 31, 2005 2004 -------- -------- NET SALES AND LICENSING FEES $366,085 $312,765 COST OF SALES 234,064 203,757 -------- -------- GROSS PROFIT 132,021 109,008 OPERATING EXPENSES: Research and development 23,015 18,436 Selling 13,531 11,693 General and administrative 23,760 18,787 In-process research and development and related transaction costs - 38,532 -------- -------- 60,306 87,448 -------- -------- OPERATING INCOME 71,715 21,560 INTEREST INCOME, NET 2,194 1,522 OTHER EXPENSE, NET (4,310) (10,518) EQUITY IN NET LOSS OF AFFILIATE (2,787) (3,551) MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (1,609) (2,303) -------- -------- INCOME BEFORE INCOME TAXES 65,203 6,710 INCOME TAX EXPENSE 22,646 1,394 -------- -------- NET INCOME 42,557 5,316 DIVIDENDS ON PREFERRED STOCK (544) (491) -------- -------- NET INCOME APPLICABLE TO COMMON SHARES $42,013 $4,825 ======== ======== BASIC EARNINGS PER SHARE $1.11 $0.13 ======== ======== NUMBER OF SHARES USED IN BASIC EARNINGS PER SHARE CALCULATIONS 37,958 38,250 ======== ======== DILUTED EARNINGS PER SHARE $1.08 $0.13 ======== ======== NUMBER OF SHARES USED IN DILUTED EARNINGS PER SHARE CALCULATIONS 39,370 39,670 ======== ======== DIVIDENDS PER COMMON SHARE $0.51 $0.46 ======== ======== DELTA AND PINE LAND COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) (Unaudited) August 31, August 31, 2005 2004 ASSETS -------- -------- CURRENT ASSETS: Cash and cash equivalents $93,075 $149,587 Receivables, net 228,800 184,759 Inventories 26,625 30,151 Prepaid expenses 1,874 1,923 Deferred income taxes 6,305 9,055 -------- -------- Total current assets 356,679 375,475 -------- -------- PROPERTY, PLANT and EQUIPMENT, net 60,158 61,988 EXCESS OF COST OVER NET ASSETS OF BUSINESS ACQUIRED 4,183 4,183 INTANGIBLES, net 5,960 5,471 OTHER ASSETS 1,446 1,594 DEFERRED INCOME TAXES 10,758 8,312 -------- -------- TOTAL ASSETS $439,184 $457,023 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $10,078 $5,639 Accounts payable 18,218 23,784 Accrued expenses 221,824 187,890 Income taxes payable 12,893 8,912 -------- -------- Total current liabilities 263,013 226,225 -------- -------- LONG-TERM DEBT 7,271 16,486 -------- -------- MINORITY INTEREST IN SUBSIDIARIES 4,877 4,586 -------- -------- 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 $0.10 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; 40,928,929 and 40,162,820 shares issued; 36,099,823 and 38,495,354 shares outstanding 4,093 4,016 Capital in excess of par value 81,640 64,250 Retained earnings 199,742 176,808 Accumulated other comprehensive loss (4,305) (3,736) Treasury Stock, at cost; 4,829,106 and 1,667,466 shares (117,254) (31,719) -------- -------- TOTAL STOCKHOLDERS' EQUITY 164,023 209,726 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $439,184 $457,023 ======== ======== DELTA AND PINE LAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE TWELVE MONTHS ENDED (in thousands) (Unaudited) August 31, August 31, 2005 2004 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $42,557 $5,316 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,661 8,364 Loss on sale of assets 115 189 Noncash component of in-process research & development - 22,125 Equity in net loss of affiliate 2,787 3,551 Foreign exchange (gain) loss (101) 124 Accretion of debt discount 777 - Minority interest in earnings of subsidiaries 1,609 2,303 Compensation expense of restricted stock 508 - Change in deferred taxes 318 (12,294) Changes in assets and liabilities: Receivables (43,370) (17,693) Inventories 4,183 1,921 Prepaid expenses 43 178 Intangibles and other assets (540) (95) Accounts payable (6,068) 5,571 Accrued expenses 31,796 12,438 Income taxes 5,752 3,788 Net cash provided by -------- -------- operating activities 49,027 35,786 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (6,669) (6,049) Sale of investments and property 451 161 Investment in affiliate (2,980) (2,630) -------- -------- Net cash used in investing activities (9,198) (8,518) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Payments of short-term debt (5,800) (277) Payments of long-term debt - (1,607) Dividends paid (19,623) (18,118) Proceeds from short-term debt 247 245 Minority interest in dividends paid by subsidiary (1,318) (1,336) Payments to acquire treasury stock (85,535) (5,748) Proceeds from exercise of stock options 14,103 6,004 -------- -------- Net cash used in financing activities (97,926) (20,837) -------- -------- EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES 1,585 (129) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (56,512) 6,302 CASH AND CASH EQUIVALENTS, beginning of year 149,587 143,285 -------- -------- CASH AND CASH EQUIVALENTS, end of year $93,075 $149,587 ======== ======== SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the twelve months for: Interest, net of capitalized interest $- $10 Income taxes $13,804 $8,904 Noncash operating activities: Deferred taxes resulting from change in minimum pension liability $1,276 $339 Noncash financing activities: Tax benefit of stock option exercises $2,856 $3,459 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/

Copyright