Delta and Pine Land Company Announces Fourth Quarter and Fiscal Year End 2006 Financial Results

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,

[phone]; or Media, Jonathan Gasthalter, or Cassandra Bujarski,

Citigate Sard Verbinnen, [phone]



Web site:  http://www.deltaandpine.com/ 

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