DLP Delta & Pine

Reports Record Annual Revenues of $418 million SCOTT, Miss., Oct. 24 /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, 2006. Fourth Quarter Results Net sales were $6.2 million in the 2006 fourth quarter, a decrease from 2005 fourth quarter net sales of $25.5 million. After charges of $0.28 per diluted share related to the write-off of acquired in-process research and development ("IPR&D") and related transaction expenses from the acquisition of technology licenses from DuPont, and $0.15 per diluted share from expenses incurred in connection with the merger agreement with Monsanto, net loss for the 2006 fourth quarter was $0.91 per diluted share, an increase from last year's fourth quarter net loss of $0.24 per diluted share. In the 2005 fourth quarter, net loss increased by $0.01 per diluted share, due to expenses related to the Pharmacia/Monsanto litigation. Excluding the IPR&D charge and merger costs incurred in the fourth quarter, fourth quarter 2006 net loss was higher than the prior year period, primarily due to increased legal and professional fees and costs associated with D&PL's crop loss and replant programs. These programs were adversely impacted by drought conditions in Texas that persisted throughout the growing season. During this period, areas east of Texas were plagued by early season cool weather, followed by drought conditions for the remainder of the growing season. The combination of these weather conditions resulted in unprecedented crop loss and replants for D&PL's farmer customers in the fourth quarter. Annual Operating Results The Company recorded net sales of $417.6 million for the 2006 fiscal year, compared to $366.1 million in the prior year. The 14% increase in sales was primarily driven by increased domestic revenues, due to higher per-unit technology fees, a 7% increase in overall unit sales volume, and a shift in sales to higher-value stacked trait units, partially offset by higher sales incentive payments and payments under D&PL's crop loss and replant programs. The increase in domestic revenues was partially offset by a decrease in international revenues, primarily resulting from acreage reductions, government regulations, competitive products and exchange rates in certain markets. After charges of $0.67 per diluted share ($0.46 from IPR&D charges, $0.15 from merger related costs, and $0.06 from Pharmacia/Monsanto litigation expenses), net income for fiscal 2006 was $0.54 per diluted share, compared to net income of $1.08 per diluted share for fiscal 2005. Fiscal 2005 net income included a reduction of $0.07 per diluted share for expenses related to the Pharmacia/Monsanto litigation. An increase in operating expenses for the 2006 fiscal year versus the 2005 fiscal year, excluding the 2006 fiscal year IPR&D charges, was primarily due to higher legal and professional fees, research and development expenses related to developing products with new technologies, and greater compensation and benefits costs. Tom Jagodinski, President and Chief Executive Officer, said, "Revenues for the 2006 fiscal year represent the highest recorded in our 91 year history. Our 2006 results are indicative of the strong performance of our cotton germplasm throughout the cotton belt. Excluding the nearly $11 million spent on Monsanto related arbitration and legal costs, our core business earnings grew by 18% in a period where domestic cotton acreage only grew by approximately 7%. We are pleased that three of our top performing varieties were planted on approximately 35% of the domestic cotton acreage in 2006, again demonstrating the value of our long-term research and development efforts. Finally, we are optimistic about the pending merger with Monsanto and the value it will create for both our shareholders and our farmer customers." Stock Repurchase Plan During fiscal 2006, the Company purchased approximately 808,000 shares of its common stock at an aggregate purchase price of $19.8 million under the $50 million stock repurchase program initiated in June, 2005. Pursuant to the merger agreement executed with Monsanto, D&PL is precluded from repurchasing its own shares. Quarterly Dividend The Company also announced that its Board of Directors has declared a dividend of $0.17 per share for the first quarter of fiscal 2007. The dividend will be paid on December 14, 2006 to shareholders of record on November 30, 2006. 2007 Earnings Outlook The Company also announced that it will provide earnings guidance for fiscal year 2007 once the harvest is complete and 2007 U.S. cotton planting estimates have been made. Conference Call D&PL will hold a conference call this morning at 9:30 a.m. ET/8:30 a.m. CT to review this announcement. The call can be accessed by dialing 800-374-0532 (International, 706-634-0148) and access code 9048397. 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 Tuesday, October 24, 2006, through midnight ET/11:00 p.m. CT on Tuesday, October 31, 2006, by dialing 800-642-1687 (International, 706-645-9291) and entering the access code 9048397. 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. In connection with Monsanto Company's ("Monsanto") proposed acquisition of Delta and Pine Land Company ("D&PL") pursuant to the terms of an Agreement and Plan of Merger by and among D&PL, Monsanto, and a wholly-owned subsidiary of Monsanto, D&PL has filed a preliminary proxy statement with the Securities and Exchange Commission (the "SEC"). Investors are urged to read the preliminary proxy statement (including all amendments and supplements to it) because it contains important information. Investors may obtain free copies of the preliminary proxy statement when it becomes available, as well as other filings containing information about D&PL, without charge, at the SEC's Internet site (http://www.sec.gov/). These documents may also be obtained for free from D&PL's Investor Relations web site (http://www.deltaandpine.com/) or by directing a request to D&PL at: Delta and Pine Land Company, Corporate Offices, P.O. Box 157, Scott, MS 38772. D&PL and its respective directors and executive officers and other members of management and employees are potential participants in the solicitation of proxies from D&PL's stockholders in respect of the proposed transaction. Information regarding D&PL's directors and executive officers is available in D&PL's proxy statement for its 2006 annual meeting of stockholders, filed with the SEC on November 29, 2005. Additional information regarding the interests of such potential participants in the proposed transaction will be included in the proxy statement to be filed with the SEC in connection with the proposed transaction. This written communication contains forward-looking statements that involve risks and uncertainties concerning Monsanto's proposed acquisition of D&PL, D&PL's expected financial performance, as well as D&PL's strategic and operational plans. Actual events or results may differ materially from those described in this written communication due to a number of risks and uncertainties. The potential risks and uncertainties include, among others, the possibility that the transaction will not close or that the closing may be delayed; the reaction of customers of Monsanto and D&PL to the transaction; Monsanto's ability to successfully integrate D&PL's operations and employees; and general economic conditions. In addition, please refer to the documents that Monsanto and D&PL file with the SEC on Forms 10-K, 10-Q and 8-K. The filings by each of Monsanto and D&PL identify and address other important factors that could cause their respective financial and operational results to differ materially from those contained in the forward-looking statements set forth in this written communication. Monsanto and D&PL are under no duty to update any of the forward-looking statements after the date of this press release to conform to actual results. 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, 2006 2005 NET SALES AND LICENSING FEES $ 6,212 $ 25,452 COST OF SALES 10,136 20,721 GROSS (LOSS) PROFIT (3,924) 4,731 OPERATING EXPENSES: Research and development 6,548 7,158 Selling 3,073 3,273 General and administrative 10,497 8,173 In-process research and development and related transactional costs 20,543 - Total operating expenses 40,661 18,604 OPERATING LOSS (44,585) (13,873) INTEREST INCOME, NET 1,303 759 OTHER EXPENSE, NET (7,838) (979) EQUITY IN NET LOSS OF AFFILIATE (674) (620) MINORITY INTEREST IN LOSS OF SUBSIDIARIES 244 342 LOSS BEFORE INCOME TAXES (51,550) (14,371) INCOME TAX BENEFIT (18,867) (5,801) NET LOSS (32,683) (8,570) DIVIDENDS ON PREFERRED STOCK (160) (160) NET LOSS APPLICABLE TO COMMON SHARES $ (32,843) $ (8,730) BASIC AND DILUTED LOSS PER SHARE $ (0.91) $ (0.24) NUMBER OF SHARES USED IN BASIC AND DILUTED LOSS PER SHARE CALCULATIONS 36,202 36,133 DIVIDENDS PER COMMON SHARE $ 0.15 $ 0.15 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, 2006 2005 NET SALES AND LICENSING FEES $ 417,633 $ 366,085 COST OF SALES 275,641 234,064 GROSS PROFIT 141,992 132,021 OPERATING EXPENSES: Research and development 24,965 23,015 Selling 14,182 13,531 General and administrative 33,112 23,760 In-process research and development and related transactional costs 27,585 - Total operating expenses 99,844 60,306 OPERATING INCOME 42,148 71,715 INTEREST INCOME, NET 2,167 2,194 OTHER EXPENSE, NET (11,108) (4,310) EQUITY IN NET LOSS OF AFFILIATE (3,089) (2,787) MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (150) (1,609) INCOME BEFORE INCOME TAXES 29,968 65,203 INCOME TAX EXPENSE 9,749 22,646 NET INCOME 20,219 42,557 DIVIDENDS ON PREFERRED STOCK (640) (544) NET INCOME APPLICABLE TO COMMON SHARES $ 19,579 $ 42,013 BASIC EARNINGS PER SHARE $ 0.55 $ 1.11 NUMBER OF SHARES USED IN BASIC EARNINGS PER SHARE CALCULATIONS 35,907 37,958 DILUTED EARNINGS PER SHARE $ 0.54 $ 1.08 NUMBER OF SHARES USED IN DILUTED EARNINGS PER SHARE CALCULATIONS 37,209 39,370 DIVIDENDS PER COMMON SHARE $ 0.60 $ 0.51 DELTA AND PINE LAND COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) (Unaudited) August 31, August 31, 2006 2005 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 69,691 $ 93,075 Marketable securities 27,600 - Receivables, net 270,354 228,800 Inventories 31,600 26,625 Prepaid expenses 2,173 1,874 Deferred income taxes 7,849 6,305 Total current assets 409,267 356,679 PROPERTY, PLANT AND EQUIPMENT, NET 61,066 60,158 EXCESS OF COST OVER NET ASSETS OF BUSINESSES ACQUIRED 4,183 4,183 INTANGIBLES, NET 8,276 5,960 OTHER ASSETS 1,079 1,446 DEFERRED INCOME TAXES 22,383 10,758 TOTAL ASSETS $ 506,254 $ 439,184 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES : Notes payable and current maturities of long-term debt $ 6,428 $ 10,078 Accounts payable 28,866 18,218 Accrued expenses 275,643 221,824 Income taxes payable 14,179 12,893 Total current liabilities 325,116 263,013 LONG-TERM DEBT 1,455 7,271 MINORITY INTEREST IN SUBSIDIARIES 5,027 4,877 COMMITMENTS AND CONTINGENCIES 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 and 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 Common stock, par value $0.10 per share; 100,000,000 shares authorized; 42,053,167 and 40,928,929 shares issued; 36,415,567 and 36,099,823 shares outstanding 4,205 4,093 Capital in excess of par value 112,099 81,640 Retained earnings 197,750 199,742 Accumulated other comprehensive loss (2,489) (4,305) Treasury stock, at cost; 5,637,600 and 4,829,106 shares (137,016) (117,254) TOTAL STOCKHOLDERS' EQUITY 174,656 164,023 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 506,254 $ 439,184 DELTA AND PINE LAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE TWELVE MONTHS ENDED (in thousands) (Unaudited) August 31, August 31, 2006 2005 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 20,219 $ 42,557 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 9,392 8,661 Loss on sale of assets 63 115 In-process research and development and related charges 27,585 - Excess tax benefits from stock-based compensation arrangements (3,114) - Equity in net loss of affiliate 3,089 2,787 Foreign exchange loss (gain) 267 (101) Accretion of debt discount 453 777 Minority interest in earnings of subsidiaries 150 1,609 Stock-based compensation expense 3,255 508 Change in deferred income taxes (13,162) 2,043 Changes in assets and liabilities: Receivables (41,497) (43,370) Inventories (5,050) 4,183 Prepaid expenses (306) 43 Intangibles and other assets (176) (540) Accounts payable 10,455 (6,068) Accrued expenses 55,480 31,796 Income taxes 4,505 4,027 Net cash provided by operating activities 71,608 49,027 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of marketable securities (41,600) - Sales of marketable securities 14,000 50,000 Purchases of property and equipment (9,691) (6,669) Sale of investments and property 97 451 Acquisition of Vikki's Agrotech Limited (2,620) - In-process research and development and related charges (27,585) - Investment in affiliate (3,125) (2,980) Net cash (used in) provided by investing activities (70,524) 40,802 CASH FLOWS FROM FINANCING ACTIVITIES: Payments of short-term debt (55,399) (5,800) Proceeds from short-term debt 45,474 247 Dividends paid (22,211) (19,623) Minority interest in dividends paid by subsidiary - (1,318) Payments to acquire treasury stock (19,762) (85,535) Proceeds from exercise of stock options 24,041 14,103 Excess tax benefits from stock-based compensation arrangements 3,114 - Net cash used in financing activities (24,743) (97,926) EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES 275 1,585 NET DECREASE IN CASH AND CASH EQUIVALENTS (23,384) (6,512) CASH AND CASH EQUIVALENTS, beginning of year 93,075 99,587 CASH AND CASH EQUIVALENTS, end of year $ 69,691 $ 93,075 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the twelve months for: Interest, net of capitalized interest $ 244 $ - Income taxes paid $ 18,088 $ 13,804 Noncash operating activities: Deferred taxes resulting from change in minimum pension liability $ (1,030) $ 1,276 Noncash financing activities: Tax benefit of stock option exercises $ 4,245 $ 2,856 DATASOURCE: Delta and Pine Land Company CONTACT: Investors, Tom Jagodinski, Delta and Pine Land Company, +1-662-742-4518; or Media, Jonathan Gasthalter, or Cassandra Bujarski, Citigate Sard Verbinnen, +1-212-687-8080 Web site: http://www.deltaandpine.com/

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