Delta and Pine Land Company Announces Second Quarter and Six-Month Operating Results

Raises 2006 Earnings Guidance to $1.15 to $1.25 Per Share, After Expected Litigation Expenses of $0.10 Per Share




SCOTT, Miss., April 4  /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 the second quarter and six-month period ended February 28, 2006.

Second Quarter Results

Net income for the 2006 second quarter was $0.40 per diluted share, compared to last year's second quarter net income of $0.48 per diluted share. Second quarter earnings include charges of $0.01 per diluted share related to Pharmacia/Monsanto litigation expenses and a benefit of $0.01 per diluted share related to the reversal of the cumulative effect of a change in accounting that was recorded in the first quarter related to stock-based compensation expense.  In the prior year second quarter, Pharmacia/Monsanto litigation expenses were $0.02 per diluted share.

Revenues were $115.0 million in the 2006 second quarter, compared to $119.9 million recorded in the year-ago quarter.  The revenue decrease was primarily attributable to a shift in domestic shipments from the second quarter to the third quarter, offset by increased prices of both seed and technology.  Additionally, sales were impacted by higher sales allowances and lower international sales units.  Consistent with the U.S., sales volumes in Mexico and Greece were lower primarily due to a shift in product shipments from the second quarter to the third quarter.  Earnings were also impacted in the second quarter of 2006 by increased spending on research and development activities related to new technologies, higher professional fees related to litigation (other than the Pharmacia/Monsanto lawsuit), and stock-based compensation costs.

Six Month Results

After charges of $0.03 per diluted share related to Pharmacia/Monsanto litigation expenses, net income for the 2006 six-month period was $0.14 per diluted share, compared to net income of $0.37 per diluted share for the same period last year.  Net income included a reduction of $0.05 per diluted share for Pharmacia/Monsanto litigation expenses in the 2005 six-month period.

Revenues for the 2006 six-month period were $124.8 million, compared to $137.3 million in the prior year.  Revenues were impacted by a shift in domestic product shipments from the second quarter to the third quarter, offset by increased prices of both seed and technology, higher sales allowances and lower international sales. Sales volumes in South America were impacted by a reduction in the cotton acreage planted in Brazil, which occurred in the first quarter.  Sales volumes in Mexico and Greece were lower versus the prior year period, primarily due to a shift in sales from the second quarter to the third quarter.  Earnings were also impacted by increased spending on research and development activities related to new technologies, higher professional fees related to litigation (other than the Pharmacia/Monsanto lawsuit), and stock-based compensation costs.

Tom Jagodinski, President and Chief Executive Officer, said, "While our second quarter and six-month results are lower than the prior year periods, we continue to be confident in our business outlook.  Our business is strong, and, based on an expected increase in cotton acreage, we are raising our 2006 guidance.  We believe we have an adequate supply of seed for our key products to meet expected demand.  Further, we continue to rapidly develop new elite varieties with new technologies from Monsanto, Syngenta and DuPont and are pleased with the progress to date."

Share Repurchase Program

From September 1, 2005 through March 31, 2006, D&PL repurchased 650,000 shares at an aggregate purchase price of approximately $15 million under the June 30, 2005, share repurchase program. The Company expects to continue repurchasing shares under this plan over time and through a variety of methods, which generally will include open market purchases.  The timing and amount of repurchases under this program will depend on market conditions, legal restrictions and other factors.

Increased 2006 Earnings Guidance

For the fiscal year 2006, D&PL is raising its earnings guidance to $1.15 to $1.25 per diluted share, after charges of $0.10 per diluted share related to its lawsuit against Pharmacia and Monsanto and has issued third quarter guidance of $1.28 to $1.38 per diluted share. Previously, D&PL expected to report 2006 earnings per diluted share in the range of $1.10 to $1.20, after charges of $0.10 per diluted share related to its lawsuit against Pharmacia and Monsanto. The 2006 guidance takes into consideration additional revenues expected to be derived from higher technology fees from Monsanto's new traits and seed mix changes, partially offset by additional costs related to product development and the launch of new technologies, expenses related to stock-based compensation and sales and marketing expenses.

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 now expects cotton plantings in the U.S. to increase over 2005 plantings of 14.2 million acres by 3%, based on various industry estimates.  The Company's updated earnings guidance is based on increased cotton acreage as well as assumptions regarding the maintenance of our market share and product/sales mix targets being met.  The USDA issued its Planting Intentions report on March 31, 2006 and has estimated 2006 cotton acreage of 14.6 million acres, a 3% increase, or 439,000 acres, over the prior year.

Conference Call

D&PL will hold a conference call this morning at 11:00 a.m. EDT/10:00 a.m. CDT to review this announcement.  The call can be accessed by dialing 800-374-0532 (International, 706-634-0148) and access code 7109872.  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 EDT/11:00 a.m. CDT on Tuesday, April 4, 2006 through midnight EDT/11:00 p.m. CDT on Tuesday, April 11, 2006 by dialing 800-642-1687 (International, 706-645-9291) and entering the access code 7109872.

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)

                                                  February 28, February 28,
                                                        2006        2005

  NET SALES AND LICENSING FEES                       $114,977     $119,859
  COST OF SALES                                        74,145       75,175
  GROSS PROFIT                                         40,832       44,684
  OPERATING EXPENSES:
     Research and development                           6,182        5,646
     Selling                                            3,917        3,486
     General and administrative                         7,333        4,905
                                                       17,432       14,037
  OPERATING INCOME                                     23,400       30,647

  INTEREST INCOME, NET                                    177          641
  OTHER EXPENSE, NET                                     (730)        (973)
  EQUITY IN NET LOSS OF AFFILIATE                        (780)        (648)
  MINORITY INTEREST IN LOSS (EARNINGS) OF SUBSIDIARIES    131           (9)

  INCOME BEFORE INCOME TAXES                           22,198       29,658
  INCOME TAX EXPENSE                                   (7,680)     (10,498)

  INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING
   CHANGE                                              14,518       19,160

  CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX      358           --

  NET INCOME                                           14,876       19,160

  DIVIDENDS ON PREFERRED STOCK                           (160)        (128)
  NET INCOME APPLICABLE TO COMMON SHARES              $14,716      $19,032

  BASIC EARNINGS PER SHARE, BEFORE CUMULATIVE
       EFFECT OF ACCOUNTING CHANGE                      $0.41        $0.49

  CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX    $0.01          $--

  BASIC EARNINGS PER SHARE                              $0.42        $0.49

  NUMBER OF SHARES USED IN BASIC EARNINGS
      PER SHARE CALCULATIONS                           35,688       38,763

  DILUTED EARNINGS PER SHARE, BEFORE CUMULATIVE
       EFFECT OF ACCOUNTING CHANGE                      $0.39        $0.48

  CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX    $0.01          $--

  DILUTED EARNINGS PER SHARE                            $0.40        $0.48

  NUMBER OF SHARES USED IN DILUTED EARNINGS
       PER SHARE CALCULATIONS                          36,914       40,276

  DIVIDENDS PER COMMON SHARE                            $0.15        $0.12



               DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                         FOR THE SIX MONTHS ENDED
                 (in thousands, except per share amounts)
                               (Unaudited)

                                                  February 28, February 28,
                                                       2006        2005

  NET SALES AND LICENSING FEES                       $124,803     $137,313
  COST OF SALES                                        80,809       83,596
  GROSS PROFIT                                         43,994       53,717
  OPERATING EXPENSES:
     Research and development                          11,786       10,076
     Selling                                            7,316        6,552
     General and administrative                        13,452        9,444
                                                       32,554       26,072
  OPERATING INCOME                                     11,440       27,645

  INTEREST INCOME, NET                                  1,205        1,099
  OTHER EXPENSE, NET                                   (1,933)      (2,480)
  EQUITY IN NET LOSS OF AFFILIATE                      (1,594)      (1,386)
  MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES          (701)      (2,345)

  INCOME BEFORE INCOME TAXES                            8,417       22,533
  INCOME TAX EXPENSE                                   (3,192)      (7,690)

  NET INCOME                                            5,225       14,843

  DIVIDENDS ON PREFERRED STOCK                           (320)        (256)
  NET INCOME APPLICABLE TO COMMON SHARES               $4,905      $14,587

  BASIC EARNINGS PER SHARE                              $0.14        $0.38

  NUMBER OF SHARES USED IN BASIC EARNINGS
      PER SHARE CALCULATIONS                           35,882       38,653

  DILUTED EARNINGS PER SHARE                            $0.14        $0.37

  NUMBER OF SHARES USED IN DILUTED EARNINGS
      PER SHARE CALCULATIONS                           37,145       40,124


  DIVIDENDS PER COMMON SHARE                            $0.30        $0.24



               DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
            (in thousands, except share and per share amounts)
                               (Unaudited)

                                       February 28,  August 31, February 28,
                                            2006        2005        2005
  ASSETS
  CURRENT ASSETS:
  Cash and cash equivalents                $13,420     $93,075    $110,632
  Receivables, net                         138,193     228,800     139,330
  Inventories                               69,389      26,625      56,861
  Prepaid expenses                           1,657       1,874       2,038
  Deferred income taxes                      6,047       6,305       6,725
      Total current assets                 228,706     356,679     315,586
  PROPERTY, PLANT AND EQUIPMENT, NET        61,507      60,158      62,005
  EXCESS OF COST OVER NET ASSETS OF
        BUSINESSES ACQUIRED                  4,183       4,183       4,183
  INTANGIBLES, net                           8,459       5,960       5,757
  OTHER ASSETS                               1,214       1,446       1,545
  DEFERRED INCOME TAXES                     11,238      10,758       9,685
  TOTAL ASSETS                            $315,307    $439,184    $398,761

  LIABILITIES AND STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES:
  Notes payable and current maturities of
   long-term debt                           $8,448     $10,078     $11,405
  Accounts payable                          21,776      18,218      19,466
  Accrued expenses                         120,814     221,824     108,508
  Income taxes payable                       8,872      12,893      10,712
       Total current liabilities           159,910     263,013     150,091
  LONG-TERM DEBT                             3,471       7,271      11,109
  MINORITY INTEREST IN SUBSIDIARIES          5,577       4,877       6,572

  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, 456,989, 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;
   40,965,695, 40,928,929 and
   40,788,040 shares issued;
   35,495,589, 36,099,823 and
   39,120,574 shares outstanding             4,097       4,093       4,079
  Capital in excess of par value            83,989      81,640      78,340
  Retained earnings                        193,933     199,742     182,071
  Accumulated other comprehensive loss      (3,440)     (4,305)     (1,889)
  Treasury stock, at cost; 5,470,106,
   4,829,106 and 1,667,466 shares         (132,337)   (117,254)    (31,719)
  TOTAL STOCKHOLDERS' EQUITY               146,349     164,023     230,989
  TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                                 $315,307    $439,184    $398,761



               DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                         FOR THE SIX MONTHS ENDED
                              (in thousands)
                               (Unaudited)

                                                   February 28, February 28,
                                                       2006          2005

  CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Income                                       $5,225       $14,843
     Adjustments to reconcile net income to net
      cash used in operating activities:
        Depreciation and amortization                  4,358         4,265
        Loss (gain) on sale of assets                     59          (323)
        Equity in net loss of affiliate                1,594         1,386
        Foreign exchange loss (gain)                      33          (219)
        Accretion of debt discount                       227           389
        Minority interest in earnings of subsidiaries    701         2,345
        Stock-based compensation expense               1,641            --
        Change in deferred income taxes                 (229)          974
        Changes in assets and liabilities:
          Receivables                                 90,695        45,851
          Inventories                                (42,340)      (26,260)
          Prepaid expenses                               226          (118)
          Intangibles and other assets                   (52)         (370)
          Accounts payable                             3,374        (4,591)
          Accrued expenses                          (101,331)      (79,431)
          Income taxes                                (4,070)        3,987
                Net cash used in operating
                 activities                          (39,889)      (37,272)

  CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment               (5,336)       (3,561)
    Sale of investments and property                      23           388
    Acquisition of Vikki's Agrotech Pvt. Ltd.         (2,620)           --
    Investment in affiliate                           (1,525)       (1,550)
                Net cash used in investing
                 activities                           (9,458)       (4,723)

  CASH FLOWS FROM FINANCING ACTIVITIES:
    Payments of short-term debt                       (5,925)           --
    Dividends paid                                   (11,034)       (9,580)
    Proceeds from short-term debt                        266
    Minority interest in dividends paid by subsidiary     --          (359)
    Payments to acquire treasury stock               (15,083)           --
    Proceeds from exercise of stock options              712        11,855
                Net cash (used in) provided by
                 financing activities                (31,064)        1,916

  EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES             756         1,124

  NET DECREASE IN CASH AND CASH EQUIVALENTS          (79,655)      (38,955)
  CASH AND CASH EQUIVALENTS, August 31                93,075       149,587
  CASH AND CASH EQUIVALENTS, February 28             $13,420      $110,632

  SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid during the six months for:
        Interest, net of capitalized interest            $--           $--
        Income taxes paid                             $6,859        $1,645

     Non-cash financing activities:
        Tax benefit of stock option exercises           $708        $2,298


DATASOURCE: Delta and Pine Land Company



CONTACT:  Investors: Tom Jagodinski of Delta and Pine Land Company,

[phone]; or Media: Jonathan Gasthalter, or Cassandra Bujarski, both of

Citigate Sard Verbinnen, [phone]



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

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