DLP Delta & Pine

Delta and Pine Land Company Reports Second Quarter and Six-Month Financial Results SCOTT, Miss., April 1 /PRNewswire-FirstCall/ -- Delta and Pine Land Company ("D&PL"), a leading commercial breeder, producer and marketer of cotton planting seed, today announced financial results for the second fiscal quarter and six months ended February 29, 2004. Second Quarter and Six-Month Results Net income for the second quarter was $0.24 per diluted share compared to last year's secondquarter net income of $0.41 per diluted share. Net income includes a reduction of $0.06 per diluted share related to Monsanto/Pharmacia litigation expenses incurred during the second quarter, compared to a reduction of $0.07 per diluted share incurredin last year's second quarter. Net sales and licensing fees for the 2004 second quarter was $88.3 million compared to $107.5 million in the prior year quarter. The revenue decrease was primarily due to implementation of an inventory management strategy whereby inventory shipments to distributors are more closely matched to farmer orders, which is expected to shift sales into the third quarter when significant cotton plantings commence. International sales were lower due primarily to sales in China occurring in this year's first quarter versus the second quarter of last year. Operating expenses for the quarter increased due primarily to higher research and development costs and an increase in professional fees. Net income for the 2004 six-month period was $0.06 per diluted share compared to net income of $0.22 per diluted share for the same period last year. Net income included a reduction of $0.10 per diluted share related to Monsanto/Pharmacia litigation expenses during the six-month periodended February 29, 2004, which matches the $0.10 per diluted share reduction recorded in the same period ended February 28, 2003. Prior year net income was affected by expenses related to a facility closing and a workforce reduction that reduced earnings per diluted share by $0.01. Net sales for the 2004 six-month period were $102.1 million as compared to $113.1 million in the prior year period. This was due primarily to an expected shifting of some U.S. cottonseed sales into the third quarter, offset by an increase in soybean sales in response to higher soybean commodity prices in 2004 over 2003. International sales were also higher than last year for the six months ending February 29, 2004, due to increased sales in Australia, Brazil, Mexico and Turkey. Operating expenses increased due primarily to higher research and development costs and an increase in professional fees. Tom Jagodinski, President and Chief Executive Officer, said, "As we enter our third quarter we continue to process andship seed while pursuing growth opportunities, including securing alternative sources of technology and initiating discussions with potential partners in two new international markets. The recent increase in soybean commodity prices coupled with a decline in cotton fiber prices appears to have initiated a shift in farmer planting intentions toward soybeans from cotton. Although this information concerns us, it is still very early in the planting season and too soon to accurately predict 2004 planted cotton acreage." Stock Repurchase Plan For the quarter ended February 29, 2004, the Company purchased 79,000 shares of its common stock at an aggregate purchase price of $2.0 million. The Company has repurchased 1,560,266 shares at an aggregate price of $29.4 million under its current $50 million stock buyback plan. 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, 2004, the USDA issuedits Prospective Plantings Survey for this crop season, which estimated U.S. cotton plantings of 14.4 million acres. On March 29, 2004, Reuters news service released a poll of various cotton industry insiders, which reflected an average of cotton acreage estimates of those individuals polled of 13.5 million acres. The difference in these two reports may be attributable in part to the timing of the respective surveys and other factors. However, both estimates are below the 14.5 million acre estimate used by the Company in developing its earlier earnings estimate. Due to the difficulty in accurately forecasting cotton plantings at present, the Company is not releasing updated earnings guidance at this time. As more information becomes available, we will consider the need to update the previously issued earnings estimate. Quarterly Dividend The Company also announced its Board of Directors had declared a dividend of $0.12 per share for the third quarter. The dividend, payable to shareholders of record on May 31, 2004, will be paid on June 14, 2004. Conference Call D&PL will hold a conference call with the investment community to review this announcement on Thursday, April 1, 2004, at 11:00 a.m. ET/10:00 a.m. CT. The call can be accessed bydialing 888-270-8028 (International, 706-679-0236) and access code 6388689. 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 for replay from 12:00 p.m. ET/11:00a.m. CT on Thursday, April 1 through midnight Thursday, April 8 by dialing 800-642-1687 (International, 706-645-9291) and entering reservation number: 6388689. About Delta and Pine Land Company Delta and Pine Land Company isa 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 website 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, weatherand 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 to 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 29, February 28, 2004 2003 NET SALES AND LICENSING FEES $88,276 $107,537 COST OF SALES 56,112 65,695 GROSS PROFIT 32,164 41,842 OPERATING EXPENSES: Research and development 4,997 4,327 Selling 3,209 2,802 General and administrative 4,517 4,330 12,723 11,459 OPERATING INCOME 19,441 30,383 INTEREST INCOME, NET 326 194 OTHER EXPENSE (3,527) (4,357) EQUITY IN NET LOSS OF AFFILIATE (1,319) (481) MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (416) (861) INCOME BEFORE INCOME TAXES 14,505 24,878 INCOME TAX EXPENSE 5,062 8,746 NET INCOME 9,443 16,132 DIVIDENDS ON PREFERRED STOCK (128) (64) NET INCOME APPLICABLE TO COMMON SHARES $9,315 $16,068 BASIC NET EARNINGS PER SHARE $0.24 $0.42 NUMBER OF SHARES USED IN BASIC EARNINGS PER SHARE CALCULATIONS 38,138 38,124 DILUTED NET EARNINGS PER SHARE $0.24 $0.41 NUMBER OF SHARES USED IN DILUTED EARNINGS PER SHARE CALCULATIONS 39,768 39,556 DIVIDENDS PER COMMON SHARE $0.12 $0.06 DELTA AND PINE LAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED (in thousands, except per share amounts) (Unaudited) February 29, February 28, 2004 2003 NET SALES AND LICENSING FEES $102,121 $113,136 COST OF SALES 64,148 69,983 GROSS PROFIT 37,973 43,153 OPERATING EXPENSES: Research and development 9,133 7,884 Selling 5,951 5,221 General and administrative 8,898 7,897 Special charges -- 500 23,982 21,502 OPERATING INCOME 13,991 21,651 INTEREST INCOME, NET 699 582 OTHER EXPENSE (6,699) (6,484) EQUITY IN NET LOSS OF AFFILIATE (1,734) (941) MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (2,405) (1,318) INCOME BEFORE INCOME TAXES 3,852 13,490 INCOME TAX EXPENSE 1,387 4,789 NET INCOME 2,465 8,701 DIVIDENDS ON PREFERRED STOCK (235) (117) NET INCOME APPLICABLE TO COMMON SHARES $2,230 $8,584 BASIC NET EARNINGS PER SHARE $0.06 $0.23 NUMBER OF SHARES USED IN BASIC EARNINGS PER SHARE CALCULATIONS 38,118 38,150 DILUTED NET EARNINGS PER SHARE $0.06 $0.22 NUMBER OF SHARES USED IN DILUTED EARNINGS PER SHARE CALCULATIONS 39,711 39,551 DIVIDENDS PER COMMON SHARE $0.22 $0.11 DELTA AND PINE LAND COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) (Unaudited) February 29, August 31, February 28, 2004 2003 2003 ASSETS CURRENT ASSETS: Cash and cash equivalents $91,617 $143,285 $60,316 Receivables, net 99,773 166,952 128,152 Inventories 61,333 32,231 54,914 Prepaid expenses 1,687 2,116 1,365 Deferred income taxes 8,230 10,677 11,219 Total current assets 262,640 355,261 255,966 PROPERTY, PLANT AND EQUIPMENT, NET 62,914 64,441 62,476 EXCESS OF COST OVER NET ASSETS OF BUSINESSES ACQUIRED 4,183 4,183 4,187 INTANGIBLES, net 5,382 5,470 4,993 INVESTMENT IN AFFILIATE -- 328 354 OTHER ASSETS 1,735 1,869 2,025 TOTAL ASSETS $336,854 $431,552 $330,001 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable $248 $40 $173 Accounts payable 16,130 17,966 7,786 Accrued expenses 90,674 176,150 97,691 Income taxes payable 6,078 9,894 12,351 Total current liabilities 113,130 204,050 118,001 LONG-TERM DEBT 1,581 1,557 1,973 DEFERRED INCOME TAXES4,304 5,220 3,129 MINORITY INTEREST IN SUBSIDIARIES 5,600 3,618 3,832 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; 39,811,148, 39,525,116 and 39,391,105 shares issued; 38,250,882, 38,107,850 and 38,030,939 shares outstanding 3,982 3,953 3,939 Capital in excess of par value 59,114 54,850 52,662 Retained earnings 183,440 189,610 176,774 Accumulated other comprehensive loss (4,981) (5,442) (5,689) Treasury stock, at cost; 1,560,266, 1,417,266 and 1,360,166 shares (29,423) (25,971) (24,727) TOTAL STOCKHOLDERS' EQUITY 212,239 217,107 203,066 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $336,854 $431,552 $330,001 DELTA AND PINE LAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTSOF CASH FLOWS FOR THE SIX MONTHS ENDED (in thousands) (Unaudited) February 29, February 28, 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $2,465 $8,701 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 4,042 3,755 Loss (gain) on sale of assets 49 (11) Equity in net loss of affiliate 1,734 941 Foreign exchange gain (131) (92) Minority interest in earnings of subsidiaries 2,405 1,318 Change in deferred taxes 1,510 -- Changes in assets and liabilities: Receivables 67,300 18,385 Inventories (29,223) (14,971) Prepaid expenses 417 1,268 Intangibles and other assets 120 (295) Accounts payable (1,988) (8,702) Accrued expenses (85,457) (46,143) Income taxes (2,266) 230 Net cash used in operating activities (39,023) (35,616) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (2,244) (2,358) Sale of investments and property 47 33 Investment in affiliate (1,140) (600) Net cash used in investing activities (3,337) (2,925) CASH FLOWS FROM FINANCING ACTIVITIES: Payments of short-term debt (40) (1,887) Dividends paid (8,635) (4,308) Proceeds from short-term debt 245 410 Minority interest in dividends paid by subsidiary (424) -- Payments to acquire treasury stock (3,452) (4,891) Proceeds from exercise of stock options 2,670 815 Net cash used in financing activities (9,636) (9,861) EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES 328 (373) NET DECREASE IN CASH AND CASH EQUIVALENTS (51,668) (48,775) CASH AND CASH EQUIVALENTS, August 31 143,285 109,091 CASH AND CASH EQUIVALENTS, February 29 and February 28 $91,617 $60,316 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the six months for: Interest, net of capitalized interest $10 $20 Income taxes $1,800 $4,800 Noncash financing activities: Tax benefit of stock option exercises $1,600 $300 DATASOURCE: Delta and Pine Land Company CONTACT: Investors, Tom Jagodinski, Delta and Pine Land Company, +1-662-742-4518; or Media, Stephanie Pillersdorf, or Keil Decker, both of Citigate Sard Verbinnen, +1-212-687-8080, for Delta and Pine Land Company Web site: http://www.deltaandpine.com/

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