Delta and Pine Land Company Announces Third Quarter and Nine-Month Operating Results

Increased Cotton Acreage and Market Share Drives Record Quarterly Revenues of $287 Million




SCOTT, Miss., July 6  /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 third quarter and nine-month period ended May 31, 2006.

Third Quarter Results

Net income for the 2006 third quarter was $1.28 per diluted share, compared to last year's third quarter net income of $0.91 per diluted share. Third quarter earnings were reduced by charges of $0.02 per diluted share related to Pharmacia/Monsanto litigation expenses and $0.12 per diluted share related to the write-off of acquired in-process research and development ("IPR&D") and related transaction costs from the previously announced acquisition of Syngenta's global cotton seed assets.   The net income reported by the Company for the third quarter represents the second highest net income ever reported for a single quarter, behind only the second quarter of 2000, which included pre-tax income of $71 million from an unusual item.  In the prior year third quarter, Pharmacia/Monsanto litigation expenses were $0.01 per diluted share.  The recently announced strategic licensing agreements for cotton, soybean and other technologies with a DuPont subsidiary, Pioneer Hi-Bred International, Inc. will be accounted for in the fourth quarter.

Revenues of $286.6 million reported for the 2006 third quarter, compared to $203.3 million for prior year quarter, are the highest ever for the Company in a single quarter.  Revenues were impacted by: (1) a significant increase in units sold, due to an increase in cotton acreage and an increase in market share in our key markets in the states east of Texas; (2) higher technology fees per unit; (3) a shift in our sales mix to more premium-priced, stacked- trait varieties; and (4) premium seed treatment revenues, partially offset by higher sales allowances.  International revenues were slightly higher than the prior-year quarter, due to a shift in sales into the third quarter in 2006 in both Mexico and Spain, and higher unit sales in Turkey.  Earnings were also impacted in the third 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 share- based compensation costs.

Nine-Month Results

After charges of $0.05 per diluted share related to Pharmacia/Monsanto litigation expenses and $0.12 related to the aforementioned IPR&D write-off, net income for the 2006 nine-month period was $1.43 per diluted share, compared to net income of $1.28 per diluted share for the same period last year.  Net income in the 2005 nine-month period included a reduction of $0.06 per diluted share for Pharmacia/Monsanto litigation expenses.

Record revenues for the 2006 nine-month period were $411.4 million, compared to $340.6 million in the prior year.  Revenues were impacted by an increase in cotton acreage and the aforementioned market share factors. International sales were lower for the nine month period due to acreage reductions, government regulations and exchange rates in certain markets. 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 share-based compensation costs.

Tom Jagodinski, President and Chief Executive Officer, said, "Our quarter and year-to-date results were strong, resulting largely from the continued penetration and performance of our cotton germplasm and sales of premium seed treatments.  We are continuing to execute our strategy of in-licensing new technologies from multiple partners to offer farmers more technology choices. We are pleased to have completed the acquisition of Syngenta's cotton seed assets in the quarter, as well as our recent strategic licensing agreement with DuPont.  Further, preliminary indications demonstrate an increase in cotton acreage and we have expanded our market share in the high value markets east of Texas."

Share Repurchase Program

From September 1, 2005 through June 30, 2006, D&PL repurchased 808,494 shares at an aggregate purchase price of approximately $19.7 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.

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 1-800-374-0532 (International, 706-634-0148) and access code 1683562.  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 Thursday, July 6, 2006 through midnight EDT/ 11:00 p.m. CDT on Thursday, July 13, 2006 by dialing 800-642-1687 (International, 706-645-9291) and entering the access code 1683562.

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)

                                                   May 31,        May 31,
                                                    2006           2005

  NET SALES AND LICENSING FEES                    $286,618       $203,320
  COST OF SALES                                    184,696        129,747
  GROSS PROFIT                                     101,922         73,573

  OPERATING EXPENSES:
    Research and development                         6,631          5,781
    Selling                                          3,793          3,706
    General and administrative                       9,163          6,143
    In-process research and development
     and related transactional costs                 7,042              -
       Total operating expenses                     26,629         15,630

  OPERATING INCOME                                  75,293         57,943

  INTEREST (EXPENSE) INCOME, NET                      (341)           336
  OTHER EXPENSE, NET                                (1,336)          (851)
  EQUITY IN NET LOSS OF AFFILIATE                     (821)          (781)
  MINORITY INTEREST IN LOSS OF SUBSIDIARIES            307            394

  INCOME BEFORE INCOME TAXES                        73,102         57,041
  INCOME TAX EXPENSE                                25,424         20,757

  NET INCOME                                        47,678         36,284
  DIVIDENDS ON PREFERRED STOCK                        (160)          (128)
  NET INCOME APPLICABLE TO COMMON SHARES           $47,518        $36,156

  BASIC EARNINGS PER SHARE                           $1.33          $0.94

  NUMBER OF SHARES USED IN BASIC EARNINGS
   PER SHARE CALCULATIONS                           35,734         38,416

  DILUTED EARNINGS PER SHARE                         $1.28          $0.91

  NUMBER OF SHARES USED IN DILUTED EARNINGS
   PER SHARE CALCULATIONS                           37,123         39,839

  DIVIDENDS PER COMMON SHARE                         $0.15          $0.12



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

                                                   May 31,        May 31,
                                                    2006           2005

  NET SALES AND LICENSING FEES                    $411,422       $340,633
  COST OF SALES                                    265,505        213,343
  GROSS PROFIT                                     145,917        127,290

  OPERATING EXPENSES:
    Research and development                        18,416         15,857
    Selling                                         11,110         10,258
    General and administrative                      22,616         15,587
    In-process research and development and
     related transactional costs                     7,042              -
      Total operating expenses                      59,184         41,702

  OPERATING INCOME                                  86,733         85,588

  INTEREST INCOME, NET                                 864          1,435
  OTHER EXPENSE, NET                                (3,270)        (3,331)
  EQUITY IN NET LOSS OF AFFILIATE                   (2,415)        (2,167)
  MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES       (394)        (1,951)

  INCOME BEFORE INCOME TAXES                        81,518         79,574
  INCOME TAX EXPENSE                                28,616         28,447

  NET INCOME                                        52,902         51,127
  DIVIDENDS ON PREFERRED STOCK                        (480)          (384)
  NET INCOME APPLICABLE TO COMMON SHARES           $52,422        $50,743

  BASIC EARNINGS PER SHARE                           $1.46          $1.32
  NUMBER OF SHARES USED IN BASIC EARNINGS
   PER SHARE CALCULATIONS                           35,832         38,573

  DILUTED EARNINGS PER SHARE                         $1.43          $1.28

  NUMBER OF SHARES USED IN DILUTED EARNINGS
   PER SHARE CALCULATIONS                           37,093         39,928

  DIVIDENDS PER COMMON SHARE                         $0.45          $0.36



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

                                  May 31,        August 31,     May 31,
                                   2006            2005           2005
  ASSETS
  CURRENT ASSETS:
  Cash and cash equivalents      $141,018         $93,075      $111,287
  Receivables, net                315,254         228,800       258,087
  Inventories                      32,784          26,625        29,099
  Prepaid expenses                    816           1,874         1,024
  Deferred income taxes            10,792           6,305         5,230
      Total current assets        500,664         356,679       404,727

  PROPERTY, PLANT AND EQUIPMENT,
   NET                             59,778          60,158        61,255
  EXCESS OF COST OVER NET ASSETS
   OF BUSINESSES ACQUIRED           4,183           4,183         4,183
  INTANGIBLES, NET                  8,170           5,960         5,797
  OTHER ASSETS                      1,268           1,446         1,492
  DEFERRED INCOME TAXES            10,574          10,758         7,603
  TOTAL ASSETS                   $584,637        $439,184      $485,057

  LIABILITIES AND STOCKHOLDERS'
   EQUITY CURRENT LIABILITIES:
  Notes payable and current
   maturities of long-term
   debt                            $8,064         $10,078       $11,491
  Accounts payable                  9,194          18,218        11,820
  Accrued expenses                329,114         221,824       242,960
  Income taxes payable             31,168          12,893        19,995
  Total current liabilities       377,540         263,013       286,266
  LONG-TERM DEBT                    3,578           7,271        11,217
  MINORITY INTEREST IN
   SUBSIDIARIES                     5,271           4,877         5,219
  COMMITMENTS AND CONTINGENCIES
  (Note 10)

  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,
   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           107
  Common stock, par value
   $0.10 per share; 100,000,000
   shares authorized; 41,521,498,
   40,928,929 and 40,857,834
   shares issued; 35,970,798,
   36,099,823 and 36,138,728
   shares outstanding               4,152           4,093         4,086
  Capital in excess of par value   97,041          81,640        79,941
  Retained earnings               236,055         199,742       213,891
  Accumulated other
   comprehensive loss              (4,520)         (4,305)       (1,390)
  Treasury stock, at cost;
   5,550,700, 4,829,106 and
   4,719,106 shares              (134,587)       (117,254)     (114,280)
  TOTAL STOCKHOLDERS' EQUITY      198,248         164,023       182,355
  TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY          $584,637        $439,184      $485,057



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

                                                    May 31,       May 31,
                                                     2006          2005

  CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                      $52,902       $51,127
   Adjustments to reconcile net income to
    net cash provided by operating activities:
    Depreciation and amortization                    7,027         6,461
    Loss (gain) on sale of assets                       54          (309)
    In-process research and development and
     related charges                                 7,042             -
    Excess tax benefits from stock-based
     compensation arrangements                      (1,285)            -
    Equity in net loss of affiliate                  2,415         2,167
    Foreign exchange loss (gain)                       374           (95)
    Accretion of debt discount                         340           583
    Minority interest in earnings of subsidiaries      394         1,951
    Stock-based compensation expense                 2,493            67
    Change in deferred income taxes                 (4,301)        4,574
    Changes in assets and liabilities:
      Receivables                                  (86,467)      (72,774)
      Inventories                                   (5,978)        1,595
      Prepaid expenses                               1,020           897
      Intangibles and other assets                      50          (382)
      Accounts payable                              (9,424)      (12,351)
      Accrued expenses                             107,056        54,853
      Income taxes payable                          18,248        13,494
    Net cash provided by operating activities       91,960        51,858

  CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment              (6,246)       (5,129)
   Sale of investments and property                     72           433
   Acquisition of business and in-process
    research and development                        (9,662)            -
   Investment in affiliate                          (2,325)       (2,230)
    Net cash used in investing activities          (18,161)       (6,926)

  CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments of short-term debt                     (51,049)            -
   Dividends paid                                  (16,589)      (14,044)
   Proceeds from short-term debt                    45,000             -
   Minority interest in dividends paid by
    subsidiary                                           -        (1,318)
   Payments to acquire treasury stock              (17,333)      (82,561)
   Proceeds from exercise of stock options          12,968        13,176
   Excess tax benefits from stock-based
    compensation arrangements                        1,285             -
    Net cash used in financing activities          (25,718)      (84,747)

  EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES          (138)        1,515

  NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS                                      47,943       (38,300)
  CASH AND CASH EQUIVALENTS, August 31              93,075       149,587
  CASH AND CASH EQUIVALENTS, May 31               $141,018      $111,287

  SUPPLEMENTAL CASH FLOW INFORMATION:
   Cash paid during the nine months for:
    Interest, net of capitalized interest             $238            $-
    Income taxes paid                              $12,381        $9,261

  Noncash financing activities:
  Tax benefit of equity awards                      $2,067        $2,518


DATASOURCE: Delta and Pine Land Company



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

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

Citigate Sard Verbinnen, [phone]



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

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