DLP Delta & Pine

Provides 2007 Earnings Guidance of $1.10 to $1.20 Per Share, After Certain Merger Expenses of $0.26 Per Share SCOTT, Miss., Dec. 27 /PRNewswire-FirstCall/ -- Delta and Pine Land Company (NYSE:DLP) ("D&PL" or the "Company"), a leading commercial breeder, producer and marketer of cotton planting seed, today announced results for its first quarter ended November 30, 2006. Due to the seasonal nature of the seed business, the Company typically incurs losses in its first and fourth fiscal quarters. After charges of $0.06 per diluted share related to expenses incurred in connection with the Company's pending merger with Monsanto, net loss for the 2007 first quarter was $0.26 per diluted share. The Company recorded a 2006 first quarter loss of $0.27, after charges of $0.02 per diluted share related to Pharmacia/Monsanto litigation expenses. Revenues were $14.3 million in the 2007 first quarter, compared to $9.8 million in the year-ago quarter. The revenue increase was attributable to international operations, particularly in South America and China, offset by lower revenues in Australia and South Africa. South America sales volumes benefited primarily from the introduction of transgenic cotton varieties in Brazil as well as an increase in Brazilian cotton acreage. The introduction of hybrids in China contributed to the increased sales volumes at our joint ventures. Sales volumes in Australia continue to be impacted by lower cotton acreage, due to drought-imposed water restrictions and competition. The decrease in South Africa occurred as a result of lower cotton acreage, due to lower cotton lint prices in relation to other crops, as well as dry weather conditions. The net loss in the first quarter of 2007 also resulted from increased operating expenses and costs associated with the Monsanto merger. Tom Jagodinski, President and Chief Executive Officer, said, "We are pleased with the launch of transgenic varieties in Brazil and the introduction of hybrids in China. We are excited about our domestic product offerings for the 2007 growing season, including our top performing varieties as well as our varieties containing Monsanto's second generation traits. Additionally, we continue to dedicate resources to the development of the traits we have licensed from DuPont and Syngenta, which are expected to be launched later this decade and beyond. With respect to the pending merger with Monsanto, our shareholders have approved the transaction; we continue to work with Monsanto on completing the regulatory review process in order to obtain U. S. Department of Justice clearance to complete the merger." 2007 Earnings Outlook For the 2007 fiscal year, D&PL expects to report earnings per diluted share in the range of $1.10 to $1.20, after charges of $0.26 per diluted share related to expenses incurred in connection with its pending merger with Monsanto. In accordance with the Company's historical practice, this earnings guidance is based on the assumption that planted cotton acreage in the U.S. in 2007 will be consistent with that of 2006. The 2007 guidance takes into consideration additional revenues expected from price increases and lower claims under crop loss and replant programs, partially offset by higher production costs per unit. Operating expenses are expected to be lower in 2007, primarily due to a reduction in legal fees incurred in connection with the various arbitration proceedings between D&PL and Monsanto, offset by an increase in compensation-related costs. Earnings are significantly affected by planted cotton acreage in the U.S. Based on current market conditions (primarily commodity prices and the cost of inputs), the Company expects that U.S. cotton plantings could decrease compared to 2006. However, because it is too early to determine the extent and the geographic areas in which planted cotton acreage could be reduced, the Company's earnings guidance is based on the assumption that 2007 cotton acreage will be the same as 2006, as well as on assumptions regarding maintaining our market share and achieving our product/sales mix targets. [For illustrative purposes, for every 500,000 acre decrease in planted cotton acreage in states east of Texas, the Company estimates that its earnings per share could be reduced by $0.12 to $0.14 per diluted share. Presently, industry forecasters estimate that acreage in 2007 could be down as much as ten percent, due to an expected increase in corn and soybean acres.] Once Delta and Pine Land has enough information to make an informed estimate of 2007 acreage, the Company will revise guidance as appropriate. Quarterly Dividend The Company also announced that its Board of Directors has declared a dividend of $0.17 per share for the second quarter of fiscal 2007. The dividend will be paid on March 14, 2007 to shareholders of record on February 28, 2007. Conference Call D&PL will hold a conference call this morning at 10:00 a.m. EST/ 9:00 a.m. CST to review this announcement. The call can be accessed by dialing 800-374-0532 (International, 706-634-0148) and access code 4640377. 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 11:00 a.m. EST/ 10:00 a.m. CST on Wednesday, December 27, 2006 through midnight EST/ 11:00 p.m. CST on Wednesday, January 3, 2007 by dialing 800-642-1687 (International, 706-645-9291) and entering the access code 4640377. 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) November 30, November 30, 2006 2005 NET SALES AND LICENSING FEES $14,255 $9,825 COST OF SALES 8,735 6,663 GROSS PROFIT 5,520 3,162 OPERATING EXPENSES: Research and development 6,158 5,641 Selling 3,765 3,406 General and administrative 6,054 6,227 15,977 15,274 OPERATING LOSS (10,457) (12,112) INTEREST INCOME, NET 1,570 1,028 OTHER EXPENSE, NET (4,419) (1,203) EQUITY IN NET LOSS OF AFFILIATE (541) (814) MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (1,672) (832) LOSS BEFORE INCOME TAXES (15,519) (13,933) INCOME TAX BENEFIT (6,161) (4,488) NET LOSS (9,358) (9,445) DIVIDENDS ON PREFERRED STOCK (181) (160) NET LOSS APPLICABLE TO COMMON SHARES $(9,539) $(9,605) BASIC AND DILUTED NET LOSS PER SHARE $(0.26) $(0.27) NUMBER OF SHARES USED IN BASIC AND DILUTED NET LOSS PER SHARE CALCULATIONS 36,451 36,074 DIVIDENDS PER COMMON SHARE $0.17 $0.15 DELTA AND PINE LAND COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) (Unaudited) November 30, August 31, November 30, 2006 2006 2005 ASSETS CURRENT ASSETS: Cash and cash equivalents $65,453 $69,691 $61,148 Marketable securities - 27,600 - Receivables, net 13,319 270,354 13,596 Inventories 64,092 31,600 66,222 Prepaid expenses 1,432 2,173 1,503 Deferred income taxes 7,902 7,849 6,372 Total current assets 152,198 409,267 148,841 PROPERTY, PLANT AND EQUIPMENT, NET 60,544 61,066 60,409 EXCESS OF COST OVER NET ASSETS OF BUSINESSES ACQUIRED 4,183 4,183 4,183 INTANGIBLES, net 8,309 8,276 5,999 OTHER ASSETS 1,094 1,079 1,562 DEFFERED INCOME TAXES 21,801 22,383 10,366 TOTAL ASSETS $248,129 $506,254 $231,360 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES : Notes payable $3,320 $6,428 $8,300 Accounts payable 21,409 28,866 25,767 Accrued expenses 50,350 275,643 39,135 Income taxes payable 4,953 14,179 3,898 Total current liabilities 80,032 325,116 77,100 LONG-TERM DEBT - 1,455 3,363 MINORITY INTEREST IN SUBSIDIARIES 6,233 5,027 5,709 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; 501,989, 501,989, 501,989 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; 42,110,900, 42,053,167 and 40,944,440 shares issued; 36,473,176, 36,415,567 and 35,900,334 shares outstanding 4,211 4,205 4,094 Capital in excess of par value 114,380 112,099 82,694 Retained earnings 182,010 197,750 184,748 Accumulated other comprehensive loss (1,823) (2,489) (4,060) Treasury stock, at cost; 5,637,724, 5,637,600 and 5,044,106 shares (137,021) (137,016) (122,395) TOTAL STOCKHOLDERS' EQUITY 161,864 174,656 145,188 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $248,129 $506,254 $231,360 DELTA AND PINE LAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED (in thousands) (Unaudited) November 30, November 30, 2006 2005 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (9,358) $ (9,445) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,455 2,155 (Gain) loss on sale of assets (20) 28 Excess tax benefits from stock-based compensation arrangements (367) - Equity in net loss of affiliate 541 814 Foreign exchange gain (24) (183) Accretion of debt discount 36 113 Minority interest in earnings of subsidiaries 1,672 832 Stock-based compensation expense 677 812 Change in deferred income taxes 536 320 Changes in assets and liabilities: Receivables 257,004 215,141 Inventories (31,998) (39,469) Prepaid expenses 742 373 Intangibles and other assets (123) (242) Accounts payable (7,510) 7,410 Accrued expenses (225,237) (182,843) Income taxes (9,222) (8,990) Net cash used in operating activities (20,196) (13,174) CASH FLOWS FROM INVESTING ACTIVITIES: Sales of marketable securities 27,600 - Purchases of property and equipment (1,625) (2,350) Sale of investments and property 45 23 Investment in affiliate (600) (700) Net cash provided by investing activities 25,420 (3,027) CASH FLOWS FROM FINANCING ACTIVITIES: Payments of short-term debt (4,604) (5,800) Dividends paid (6,849) (5,549) Payments to acquire treasury stock - (5,141) Cash settlement of employee stock awards (5) - Proceeds from exercise of stock options 1,611 231 Excess tax benefits from stock-based compensation arrangements 367 - Net cash used in financing activities (9,480) (16,259) EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES 18 533 NET DECREASE IN CASH AND CASH EQUIVALENTS (4,238) (31,927) CASH AND CASH EQUIVALENTS, August 31 69,691 93,075 CASH AND CASH EQUIVALENTS, November 30 $65,453 $61,148 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the three months for: Income taxes $2,322 $3,437 DATASOURCE: Delta and Pine Land Company CONTACT: Investors: Tom Jagodinski of Delta and Pine Land Company, +1-662-742-4518; Media: Jonathan Gasthalter, or Cassandra Bujarski, both of Citigate Sard Verbinnen, +1-212-687-8080, for Delta and Pine Land Web site: http://www.deltaandpine.com/ http://www.vcall.com/

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