SEC Info - Delta & Pine Land Co - ‘10-Q’ for 5/31/96

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Delta & Pine Land Co – ‘10-Q’ for 5/31/96

As of: Monday, 7/15/96 · For: 5/31/96 · Accession #: 902277-96-6 · File #: 1-14136

  As Of                Filer                Filing    For·On·As Docs:Size

 7/15/96  Delta & Pine Land Co              10-Q        5/31/96    2:38K

Quarterly Report — Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                      19±    75K 
 2: EX-27       Financial Data Schedule (Pre-XBRL)                     1      8K

10-Q — Quarterly Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Exhibits and Reports on Form 8-K Financial Statements (unaudited) Management's Discussion and Analysis of Financial Condition and Results of Operations
1	1st Page - Filing Submission
2	Item 1. Financial Statements (unaudited)
"	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
8	Item 6. Exhibits and Reports on Form 8-K

10-Q 1st “Page” of 10 TOC ↑Top Previous Next ↓Bottom Just 1st
 
FORM 10-Q             
SECURITIES AND EXCHANGE COMMISSION              
Washington, DC  20549             

(x)Quarterly  Report Pursuant to Section 13 or 15(d) of  the                    
Securities Exchange Act of 1934                                                 
For the quarterly period ended May 31, 1996 or                                  
( )Transition Report Pursuant to Section 13 or 15(d) of the                     
Securities Exchange Act of 1934                                                 
For the transition period from      to                                          

Commission File Number: 000-21788             

Exact name of registrant as specified in its charter:   
DELTA AND PINE LAND COMPANY   

  State of Incorporation: Delaware
I.R.S. Employer Identification Number: 62-1040440             

Address of Principal Executive Offices (including zip code)             
One Cotton Row, Scott, Mississippi 38772              

Registrant's telephone number, including area code:             

(601) 742-4000              

Indicate  by  check  mark whether Registrant (1) has filed  all                 
reports required  to be filed by Section 13 or 15(d) of the                     
Securities  Exchange Act  of  1934 during the preceding 12 months               
(or for such shorter period that  the registrant was required to                
file such reports) and (2) has been subject to such filing                      
requirements for the past 90 days.                                              

YES (x)    NO ( )                                                               

APPLICABLE ONLY TO CORPORATE ISSUERS:             

Indicate  the  number  of shares outstanding of  each  of  the                  
issuer's classes of common stock, as of the latest practicable                  
date.                                                                           
Common  Stock,  $0.10 Par Value -- 20,998,130 shares outstanding                
as  of June 25, 1996.                                                           

10-Q 2nd “Page” of 10 TOC 1st Previous Next ↓Bottom Just 2nd
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES                
INDEX                 

PART I.  FINANCIAL INFORMATION                                                  

Item   1. Financial Statements (unaudited)                                      

Consolidated Balance Sheets -- May 31, 1995,                                  
August 31, 1995, and May 31, 1996             

Consolidated Statements of Income -- Three Months Ended May 31,               
1995 and May 31, 1996                                             

Consolidated Statements of Income -- Nine Months Ended May 31,                
1995 and May 31, 1996                                             

Consolidated Statements of Cash Flows -- Nine Months Ended May 31,            
1995 and May 31, 1996                                             

Notes to Consolidated Financial Statements                                    

Item 2.Management's Discussion and Analysis of Financial Condition              
and Results of Operations                                   

PART II.  OTHER INFORMATION                                                     

SIGNATURES                                                                      
</PAGE>                                                                         

10-Q 3rd “Page” of 10 TOC 1st Previous Next ↓Bottom Just 3rd
PART I. FINANCIAL INFORMATION                                                   
Item 1. Financial Statements (Unaudited)                                        

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

  (As          (As
      Restated)    Restated)

                    May 31,   August 31,     May 31,
                   1995        1995         1996
ASSETS                                                                          
CURRENT ASSETS:                                                                 
Cash and cash equivalents        $  5,745   $  8,192     $  5,992               
Receivables                        23,571      5,252       81,129               
Inventories                        18,951     20,168       36,403               
Prepaid expenses                      823      1,159        1,215               
Deferred income taxes                 945      1,525        1,525               

Total current assets         50,035     36,296      126,264         

PROPERTY, PLANT and EQUIPMENT, net 36,734     41,091       50,428               

NOTES RECEIVABLE FROM EMPLOYEES     1,147        833          421               
EXCESS OF COST OVER NET ASSETS OF                                               
BUSINESSES ACQUIRED, net            1,472      1,463        5,988               
INTANGIBLE ASSETS, net              3,173      3,236        3,260               
OTHER ASSETS                        4,208      4,623        4,561               

                   $96,769    $87,542     $190,922

LIABILITIES AND STOCKHOLDERS' EQUITY                                            
CURRENT LIABILITIES:                                                            
Notes payable               $3,052   $    650       $19,437         
Accounts payable             6,281      6,142         9,186         
Accrued expenses            24,025     11,746        58,098         
Income taxes payable        10,013      6,157        10,882         
Total current liabilities   43,371     24,695        97,603         

LONG-TERM DEBT                       810     12,814        16,677               

DEFERRED INCOME TAXES              1,455      2,173         3,726               

COMMITMENTS AND CONTINGENCIES (Note 5)                                          

STOCKHOLDERS' EQUITY:                                                           
Convertible preferred stock, par                                            
value $0.10 per share; 2,000,000                                        
shares authorized, 450,000 shares                                       
issued and outstanding             -             -         45           
Common stock, par value $0.10 per                                           
share; 50,000,000 shares                                                  
authorized; 20,849,055,                                                   
20,855,655 and 20,957,431                                                 
shares issued and outstanding    2,085     2,086      2,096               
Capital in excess of par value   12,631    12,626     19,538                
Retained earnings                36,554    32,751     51,027                
Cumulative foreign currency                                                 
translation adjustments        (137)      397        210            
Total stockholders' equity   51,133    47,860     72,916            

                $96,769  $87,542    $190,922

The accompanying notes are an integral part of these balance sheets.            
</PAGE>                                                                         

10-Q 4th “Page” of 10 TOC 1st Previous Next ↓Bottom Just 4th
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES                
CONSOLIDATED STATEMENTS OF INCOME                 
FOR THE THREE MONTHS ENDED                
(in thousands, except per share amounts)                

             (As Restated)
                             May 31,       May 31,
                           1995           1996

NET SALES AND LICENSING FEES                49,189        83,061                
COST OF SALES                               26,245        51,915                

GROSS PROFIT                                22,944        31,146                

OPERATING EXPENSES:                                                             
Research and development                   1,828          2,954               
Selling                                    1,918          2,088               
General and administrative                 4,321          4,681               

                            8,067          9,723

OPERATING INCOME                           14,877         21,423                
INTEREST EXPENSE, net                        (641)          (663)               
OTHER                                          24            105                
INCOME BEFORE INCOME TAXES                 14,260         20,865                
PROVISION FOR INCOME TAXES                  4,984          7,499                

NET INCOME                                  9,276         13,366                
DIVIDENDS ON PREFERRED STOCK                 -               (13)               

NET INCOME APPLICABLE TO COMMON SHARES     $ 9,276      $  13,353               

PRIMARY EARNINGS PER SHARE:                                                     

NET INCOME PER SHARE                       $0.44        $    0.61               
NUMBER OF SHARES USED IN PRIMARY EARNINGS                                       
PER SHARE CALCULATIONS                   21,148          21,996               

FULLY DILUTED EARNINGS PER SHARE:                                               

NET INCOME PER SHARE                       $ -           $   0.59               
NUMBER OF SHARES USED IN FULLY DILUTED                                          
EARNINGS PER SHARE CALCULATIONS              -             22,546               

DIVIDENDS PER SHARE                       $0.02         $   0.03                

The accompanying notes are an integral part of these statements.              
</PAGE>                                                                         

10-Q 5th “Page” of 10 TOC 1st Previous Next ↓Bottom Just 5th
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES        
CONSOLIDATED STATEMENTS OF INCOME         
FOR THE NINE MONTHS ENDED         
(in thousands, except per share amounts)              

(As Restated)   

                  May 31,        May 31,
                  1995            1996

NET SALES AND LICENSING FEES          $ 97,533    $ 151,379                     

COST OF SALES                           51,962        93,026                    

GROSS PROFIT                            45,571        58,353                    

OPERATING EXPENSES:                                                             
Research and development                4,888         6,411                   
Selling                                  4,822        6,262                   
General and administrative              11,055       12,777                   

                     20,765       25,450

OPERATING INCOME                          24,806      32,903                    
INTEREST EXPENSE, net                     (2,021)     (1,601)                   
OTHER                                        238         270                    
INCOME BEFORE INCOME TAXES                23,023      31,572                    
PROVISION FOR INCOME TAXES                 8,699      11,530                    

NET INCOME                                 14,324     20,042                    
DIVIDENDS ON PREFERRED STOCK                  -          (25)                   
NET INCOME APPLICABLE TO COMMON SHARES     $14,324   $20,017                    

PRIMARY EARNINGS PER SHARE:                                                     

NET INCOME PER SHARE                       $ 0.68      $0.92                    
NUMBER OF SHARES USED IN PRIMARY EARNINGS                                       
PER SHARE CALCULATIONS                    20,994     21,774                   
FULLY DILUTED EARNINGS PER SHARE:                                               
NET INCOME PER SHARE                       $  -        $0.91                    
NUMBER OF SHARES USED IN FULLY DILUTED                                          
EARNINGS PER SHARE CALCULATIONS               -       21,906                    
DIVIDENDS PER SHARE                        $0.06       $0.08                    

The accompanying notes are an integral part of these statements.                
</PAGE>                                                                         

10-Q 6th “Page” of 10 TOC 1st Previous Next ↓Bottom Just 6th
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES              
CONSOLIDATED STATEMENTS OF CASH FLOWS           
FOR THE NINE  MONTHS ENDED      
(in thousands)        

                         (As Restated)

                                May 31,    May 31,
                                1995        1996

CASH FLOWS FROM OPERATING ACTIVITIES:                                           
Net income                                      $14,324  $  20,042              
Adjustments to reconcile net  income  to                                        
net cash used in operating activities:                                          
Depreciation and Amortization                     2,221      2,770              
(Increase)  decrease in notes receivable                                        
from employees                                     (119)       412              
Decrease in intangible and other assets.            204        202              
Changes in current assets and liabilities:                                      
Accounts and notes receivable                 (21,701)   (75,878)           
Inventories                                       975    (15,460)           
Prepaid expenses                                  373        (56)           
Accounts payable                                1,918      3,044            
Accrued expenses                               15,429     45,852            
Income taxes payable                            5,989      4,725            
Other, net                                          113        (82)             
Net cash provided by (used in)                                        
operating activities                             19,726    (14,429)             

CASH FLOWS FROM INVESTING ACTIVITIES:                                           
Acquisition of business                          -        (1,035)           
Purchases of property and equipment           (5,614)     (9,783)           
Proceeds from the sale of  property                                         
and equipment                                  113         -            

Net cash used in investing activities           (5,501)    (10,818)             

CASH FLOWS FROM FINANCING ACTIVITIES:                                           

Payments of short-term debt                     (28,731)   (21,698)             
Payment of long-term debt                       (15,000)        -               
Dividends paid                                   (1,158)    (1,684)             
Proceeds from long-term debt                      3,109      3,863              
Proceeds from short-term                         30,788     40,485              
Proceeds  from exercise  of   stock                                             
options and tax benefit                                                         
of stock option exercises                             -      2,081              
Other                                              60         -                 

Net cash (used in) provided  by financing                                       
activities                                    (10,932)      23,047              

NET  INCREASE (DECREASE) IN CASH AND                                            
CASH EQUIVALENTS                                3,293       (2,200)             
CASH  AND CASH EQUIVALENTS, as of                                               
August 31                                       2,452        8,192              

CASH AND CASH EQUIVALENTS, as of May 31        $ 5,745  $    5,992              

SUPPLEMENTAL  DISCLOSURES OF  CASH  FLOW                                        
INFORMATION:                                                                    
Cash  paid  during the nine  months                                             
for:                                                                            

Interest                                  $ 1,800  $    1,600                   
Income taxes                              $ 2,600  $    6,400                   

The accompanying notes are an integral part of these statements.                
</PAGE>                                                                         

10-Q 7th “Page” of 10 TOC 1st Previous Next ↓Bottom Just 7th
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES                
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                
(Amounts in thousands, except percentages and share amounts)                

1.  BASIS OF PRESENTATION                                                       

The  accompanying unaudited financial statements have been                      
prepared  in accordance with the generally accepted accounting                  
principles for interim financial  information and Article 10 of                 
Regulation  S-X.   Accordingly, they  do  not  include all of the               
information and footnotes required  by generally   accepted                     
accounting  principles  for  complete   financial statements.   In              
the opinion of management, all adjustments  (consisting of   normal             
recurring  accruals)  considered  necessary  for  the  fair                     
presentation  of  the  consolidated  financial  statements   have               
been included.  Due to the seasonal nature of Delta and Pine Land               
Company and subsidiaries'  (the "Company") business, the results of             
operations  for the three or nine month periods ended May 31, 1995              
and May 31, 1996, are not  necessarily indicative of the results to             
be expected for  the  full year.   For  further  information                    
reference  should  be  made  to the consolidated financial                      
statements and footnotes thereto included in  the Company's Annual              
Report to Stockholders on Form 10-K for the fiscal year ended                   
August 31, 1995.                                                                

In  October,  1995, the Board of Directors authorized a 4  for  3               
stock split  effected  in the form of a dividend, with no change                
in  the  par value per share, distributed on December 15, 1995 to               
the stockholders of record  on  December  1, 1995.  In March 1996,              
the  Board  of  Directors authorized  a  3  for  2  stock split for             
common  and  preferred  shares outstanding to be effected in the                
form of a dividend, with no change  in par  value  per share,                   
distributed on April 15, 1996 to stockholders  of record on March               
29, 1996.  Both stock splits have been reflected in  the                        
accompanying financial statements.                                              

The reported results for 1995 (as restated) and 1996 include the                
results of operations of Arizona Processing, Inc., Ellis Brothers               
Seed, Inc. and Mississippi  Seed,  Inc.  (the "Sure Grow                        
Companies"),  with  which  the Company merged in May 1996 in a                  
pooling-of-interests transaction.                                               

2.  RECENT ACCOUNTING PRONOUNCEMENTS                                            

Statement   of   Financial  Accounting  Standards  ("SFAS")   No.               
116, "Accounting  for  Contributions Received  and  Contributions               
Made",  is effective for fiscal years beginning after December 15,              
1994.   Although the  Company periodically makes contributions to               
universities and  other non-profit   organizations,   the                       
Company's   consolidated   financial statements are not                         
significantly affected by this statement.                                       

SFAS  No.  114,  "Accounting by Creditors for  Impairment  of  a                
Loan", requires the recognition of an impairment of a loan by a                 
creditor.  SFAS No. 118 subsequently amended SFAS No. 114.  The                 
Company was not affected by either of these statements.                         

SFAS  No.  121, "Accounting for the Impairment of Long-Lived Assets             
and Long-Lived  Assets to be Disposed Of", was issued effective                 
for  fiscal years  beginning after December 15, 1995.  The Company              
was not  affected by this statement.                                            

SFAS  No.  123,  "Accounting for Stock-Based Compensation",  was                
issued effective for fiscal years beginning December 15, 1995.  The             
Company has not  yet implemented this statement, nor has it decided             
which method  to use.   However, the Company does not think the                 
effects of this statement will  be  material  to  the Company's                 
consolidated financial  statements taken as a whole.                            

3.  INVENTORIES                                                                 

Inventories consisted of the following (in thousands):                          

         May 31,    August 31,   May 31,
        1995      1995        1996

(As         (As     
Restated)  Restated)  

Finished goods              $  14,890 $  17,534  $   22,295                     
Raw materials                   4,980     3,975      15,418                     
Growing crops                     251       731         293                     
Supplies and other                794       750         955                     
          20,915    22,290      38,961
Less reserves                 (1,964)   (2,822)     (2,558)                     
       $  18,951 $  20,168  $   36,403

Substantially all finished goods and raw material inventory is                  
valued at the  lower  of  average cost or market.  Growing crops                
are  recorded  at cost.                                                         

4.  PROPERTY, PLANT AND EQUIPMENT                                               

Property, plant and equipment consisted of the following (in                    
thousands):                                                                     

            May 31,   August 31,   May 31,
           1995      1995         1996

(As        (As  
 Restated)   Restated)

Land and improvements          $  3,287  $  3,349    $ 3,687                    
Buildings and improvements       16,474    16,943     22,081                    
Machinery and equipment          22,463    23,056     28,866                    
Germplasm,   breeder   and                                                      
foundation seed                 8,000     8,000      9,500                  
Construction in progress          2,675     6,494      5,485                    
             52,899    57,842     69,619
Less accumulated                                                                
depreciation                    (16,165)  (16,751)   (19,191)                   

          $   36,734  $ 41,091  $ 50,428

5.  CONTINGENCIES                                                               

A  corporation  owned  by  the  son of the Company's  former                    
Guatemalan distributor  sued  in  1989  asserting  that  the                    
Company  violated  an agreement with it by granting to another                  
entity an exclusive license  in certain  areas of Central America               
and southern Mexico.  The  suit  seeks damages  of  5,300,000                   
quetzales  (approximately  $900,000  at  current exchange   rates)              
and  an  injunction  preventing  the   Company   from distributing              
seed  through  any other licensee  in  that  region.   The                      
Guatemalan court, where this action is proceeding, has twice                    
declined to approve  the  injunction sought. Management believes                
the assertions  are without  merit.   The  Company continues  to                
offer  seed  for  sale  in Guatemala.                                           

The  Company is involved in various other claims arising in  the                
normal course  of  business.  Management believes all such matters              
are  without merit  and will be resolved without any material                   
effect on the Company's financial position or its results of                    
operations.                                                                     
</PAGE>                                                                         

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL              
CONDITION AND RESULTS OF OPERATIONS             

OVERVIEW                                                                        

Since  1915,  D&PL  has  bred, produced and/or  marketed  upland                
picker varieties  of cotton planting seed for cotton varieties that             
are  grown primarily  east  of  Texas and in Arizona.  In the                   
1980's,  D&PL  added soybean  and  hybrid  sorghum  seed to its                 
product  line  and  commenced distributing  corn hybrids acquired               
from others.  In 1995,  the  Company sold  its corn and sorghum                 
business to Mycogen.  As a part of this sale, Mycogen  and D&PL                 
entered into a joint marketing agreement whereby  both companies                
will sell D&PL's remaining corn and sorghum varieties  through                  
1997.  The two parties will exchange certain operating facilities               
in the future   upon   the  satisfactory  completion  of                        
environmental site assessments and remediation procedures as                    
necessary.                                                                      

In   May,  1996,  D&PL  acquired  Ellis  Brothers  Seed,  Inc.,                 
Arizona Processing, Inc. and Mississippi Seed, Inc. ( the "Sure                 
Grow Companies") in  a  stock  transaction  valued at approximately             
$70  million. D&PL exchanged  1.5  million shares of its common                 
stock for  all  outstanding shares  of  the  three companies.  The              
merger was  accounted  for  as  a pooling of interests. The                     
acquired companies will continue their current operations marketing             
cotton seed under their existing brand, Sure  Grow. The  Sure Grow              
breeding program will have immediate access to Monsanto's Bollgard              
and  Roundup  Ready technologies.  The accompanying  financial                  
statements  have been restated to include the results of                        
operations of the acquired companies as if the merger had occurred              
at the beginning of the  earliest period presented.  The acquired               
companies are on a  fiscal year  ending June 30.  The quarterly and             
year to date results as of  and for  the third quarter ended March              
31, 1996 for these three subsidiaries are consolidated with the                 
Company's results as of and for the comparable period ended May 31,             
1996.                                                                           

Since  the  1940's, the Paymaster (Registered) and Lankart                      
(Registered) upland  stripper  cotton  seed varieties have  been                
developed  for  and marketed primarily in the Texas High Plains.                
In 1994, D&PL acquired the Paymaster  and  Lankart  varieties, all              
related  cotton  planting  seed inventories,  germplasm, breeding               
stocks, trademarks,  trade  names  and other  assets, for                       
approximately $14.0 million.  Although the  Paymaster varieties are             
planted on approximately 80% of the estimated 4.0  to  5.0 million              
cotton acres planted  in the Texas High Plains,  only  a  small                 
portion  of that seed is actually sold by Paymaster.  Farmer-saved              
seed and  seed from other sources accounted for up to 85% of the                
seed  needed to  plant the acreage in this market area. The seed                
needed to plant  the remaining  acreage  is  sold by Paymaster and              
its  12  sales  associates through  a  certified seed program.                  
Under this program, Paymaster  sold parent  seed to its contract                
growers who planted, produced and harvested the  progeny of the                 
parent seed, which Paymaster then purchased from the growers.                   
The progeny of the parent seed was then sold by Paymaster to                    
the  sales associates who in turn delinted, conditioned, bagged and             
sold it  to others as certified seed.  The sales associates pay a               
royalty to Paymaster  on  certified  seed  sales.  The  Company                 
has  informed  its associates that, beginning in fiscal 1997,                   
unconditioned seed  will be supplied by Paymaster to contractors                
who will delint, condition and  bag the  seed  for a tolling fee.               
The seed will then be  sold  directly by Paymaster  through                     
distributors and dealers.  Current  associates  will have  the                  
option  to participate as contract delinters  for  Paymaster,                   
subject to meeting specified quality standards.                                 

In  1994,  D&PL  acquired from the Supima Association  bulk  and                
bagged inventory,  the  right  to use the Supima (Registered)                   
trade  name  and trademark  and  the right to distribute Pima extra             
long  staple  (fiberlength) varieties.  D&PL also entered into a                
research agreement with its university collaborator that allows                 
D&PL the right of first refusal  for any  Pima  varieties developed             
under this program.  Pima  seed  will be produced, conditioned and              
marketed directly by D&PL.                                                      

In  October,  1995,  the United States Environmental  Protection                
Agency ("EPA")  completed its review process of the Bollgard                    
(Trademark)  gene technology,  thus clearing the way for Monsanto               
and D&PL to license  the technology  and sell cotton planting seed              
containing the Bollgard  gene. In the second quarter of 1996, D&PL              
commenced commercial sales of NuCOTN varieties, which contain the               
Bollgard gene, in accordance with the terms of the D&PL/Monsanto                
collaborative biotechnology licensing agreements.                               

Since 1987, D&PL has conducted research using its technology along              
with that  provided by DuPont to develop cotton and soybean plants              
that  are tolerant  to  certain DuPont ALS (Registered)                         
herbicides.  Such  plants would  enable farmers to apply these                  
herbicides for weed control without adversely affecting the                     
agronomics of the cotton or soybean plants. In 1994, D&PL and                   
DuPont signed a commercialization agreement whereby  D&PL commenced             
producing  quantities of seed  of  herbicide-tolerant  cotton                   
varieties  sufficient for their planned commercial introduction.                
Since soybean  seed  containing  the  ALS  herbicide-tolerant                   
trait  was  not genetically  engineered, sale of this seed will not             
require  government approval, although the herbicide to which they              
express tolerance must be EPA  approved.   In February, 1996,                   
DuPont and D&PL mutually  terminated the   cotton                               
commercialization  agreement.   The  termination  of  this                      
agreement  did  not materially impact the Company's current results             
of operations  and  management does not believe it will  materially             
impact future operations.                                                       

D&PL  is  also  developing  transgenic  cotton  and  transgenic                 
soybean varieties  that are tolerant to Roundup, a herbicide sold               
by  Monsanto. In  1996,  such Roundup Ready plants were approved by             
the Food and  Drug Administration, the USDA, and the EPA.   D&PL                
and Monsanto are currently negotiating  a commercialization                     
agreement for transgenic soybean  seed. In   1996,   D&PL   and                 
Monsanto  entered   a   Roundup   Ready gene commercialization                  
agreement for cotton.                                                           

The  Company and Monsanto formed D&M International LLC (D&M) in                 
1995,  a venture  through  which  they plan to introduce,  in                   
combination,  both D&PL's  cotton  seed delinting technology and                
Monsanto's  Bollgard  gene technology.   D&M and certain Singapore              
investors formed D&PL China  Pte Ltd  ("D&PL China") which is                   
continuing the efforts started by  D&PL in 1993 to form up to five              
joint ventures in the People's Republic of China ("China"),  one                
of  the  world's  largest  cotton-producing  countries. Currently,              
the Company (through D&M or D&PL China) is negotiating  with three              
parties to form joint ventures  to test, produce, condition, treat              
and  distribute  high-quality  cotton planting  seed  in  China.                
While initial  negotiations have been progressing,  no joint                    
venture operating agreements have been finalized in China.                      

In  1995, D&PL formed a branch in South Africa to take advantage of             
the Southern  Hemisphere  growing season to accelerate  seed                    
production of cotton  varieties containing the Bollgard and Roundup             
Ready  (Trademark) genes.  The growing season there occurs during               
the Northern Hemisphere's winter  season.   In  addition, the South             
African branch  will  work to develop the cotton seed market in Sub-            
Saharan Africa.                                                                 

In  South  America, D&PL continues its long-term strategy  of                   
producing cotton varieties that compliment Southern Hemisphere                  
growing conditions. In  addition, the Company is continuing its                 
development of  markets  for the  major cotton producing regions on             
this continent.   D&PL Argentina, Inc.  was  formed in 1996 to                  
accelerate seed production of the Company's new varieties and to                
further develop the South American market.                                      

Revenues from domestic seed sales are generally recognized when                 
seed is shipped.  Revenues from Bollgard licensing fees are                     
recognized based on the number of acres estimated to be planted                 
with such seed when the seed is  shipped.   International revenues              
are recognized upon the  later of when seed is shipped or when                  
letters of credit are cleared.  All of  the Company's domestic seed             
products are subject to return or credit,  which vary  from year to             
year. Generally, international sales are not  subject to  return.               
The annual level of returns and, ultimately, net sales  are                     
influenced by various factors, principally weather conditions                   
occurring in  the  spring  planting season during the Company's                 
third  and  fourth quarters.   The Company provides for estimated               
returns as  sales  occur. To  the  extent  actual  returns and                  
actual acreage  planted  with  seed containing the Bollgard gene                
differ from estimates, adjustments  to  the Company's  operating                
results are recorded when such  differences  become known.   All                
significant returns occur or are accounted for  by  fiscal year                 
end.                                                                            

Domestic  demand  for  D&PL's  seed will  continue  to  be affected             
by government programs and, most importantly, by weather.  Demand               
for  seed is  also influenced by commodity prices and the demand                
for a crop's end uses  such  as  textiles,  animal  feed,  food                 
and  raw  materials  for industrial use.  These factors along with              
weather influence the cost and availability  of  seed  for                      
subsequent seasons.   Weather  impacts  crop yields,  commodity                 
prices and the planting decisions that  farmers  make regarding                 
both  original  planting  commitments  and,  when  necessary,                   
replanting levels.                                                              

Further  growth  in  profitability will depend  on  weather                     
conditions, government  policies in all countries where the Company             
sells  products, commodity  prices,  the  Company's  ability  to                
successfully  open  new international  markets, the Company's                   
ability to  successfully  continue the development of the Texas                 
High Plains market, Monsanto's and DuPont's ability   to   obtain               
timely government approval for additional biotechnology products on             
which they and the Company are working and the Company's  ability               
to produce sufficient commercial quantities  of  high quality                   
planting seed of these products.  Any delay in or inability  to                 
capitalize  on these projects may affect future profitability.                  
Due  to the  varying  levels  of  agricultural and  social                      
development  of  the international  markets  in which D&PL operates             
and  because  of  factors within  the  particular international                 
markets targeted by  the  Company, international  profitability and             
growth may  take  longer  and  be  less stable than domestic                    
profitability has been in the past.                                             

RESULTS OF OPERATIONS                                                           

The following sets forth selected financial operating data of the               
Company (in thousands):                                                         

      For the Three Months Ended   For the Nine Months Ended
              May 31,     May 31,        May 31,     May 31,
            1995         1996           1995        1996
(As Restated)                (As Restated)
Operating results -                                                             
Net sales and                                                                   
licensing fees      $ 49,189       $83,061      $ 97,533    $ 151,379       
Gross profit            22,944        31,146        45,571       58,353         
Operating expenses:                                                             
Research and                                                                
development          1,828         2,954         4,888        6,411     
Selling                1,918         2,088         4,822        6,262       
General and                                                                 
administrative       4,321         4,681        11,055       12,777     
Operating income        14,877        21,423        24,806       32,903         
Income before income                                                            
taxes                   14,260        20,865        23,023       31,572         
Net income              9,276         13,366        14,324       20,042         

The following sets forth selected balance sheet data of the Company             
as of the following periods (in thousands):                                     

       May 31,     August 31,      May 31,
     1995         1995          1996
(As Restated) (As Restated)         

Balance sheet summary-                                                          

Current assets            $ 50,035    $ 36,296    $ 126,264                     
Current liabilities         43,371      24,695       97,603                     
Working capital              6,664      11,601       28,661                     
Property, plant and         36,734      41,091       50,428                     
equipment, net                                                                  
Total assets                96,769      87,542      190,922                     
Outstanding                  3,862      13,464       36,114                     
borrowings                                                                      
Stockholders' equity        51,133      47,860       72,916                     

Three months ended May 31, 1996, compared to three months ended May             
31, 1995:                                                                       

Net  sales  and licensing fees increased approximately $33.9                    
million  to $83.1  million  from  $49.2  million.  The increase  in             
net  sales  and licensing  fees  is  the result of the introduction             
of  transgenic  seed products  as  well  as  increased export seed              
shipments  to  Mexico  and Greece. In addition, D&PL recognized                 
revenues of $2.5 million related to fees  from  Monsanto  during                
the  third  quarter  relating  to  certain transgenic  seed                     
commercialization agreements.  Gross margins  decreased during  the             
period  primarily related to the costs  of  the  transgenic                     
technology  associated with NuCOTN and higher raw material (fuzzy               
seed) costs.    D&PL  records  the transgenic licensing fees  net               
of  certain returns and allowances.  D&PL records fees paid to                  
Monsanto for Bollgard technology fees in cost of sales.                         

Operating expenses increased from $8.1 million in the third quarter             
of 1995 to $9.7 million in 1996.  This expected increase is                     
attributable to increases in product development and promotional                
costs related to NuCOTN sales as well as costs incurred for certain             
acquisitions.                                                                   

Nine months ended May 31, 1996, compared to nine months ended May               
31, 1995:                                                                       

Net  sales  and licensing fees increased approximately $53.9                    
million  to $151.4  million  from  $97.5 million.  The increase  in             
net  sales  and licensing  fees  is  the  result  of  the                       
commercial  introduction   of transgenic  seed products as well as              
increased export seed shipments  to Mexico  and  Greece.   In                   
addition, D&PL recognized  revenues  of  $2.5 million   from                    
Monsanto relating   to   certain   transgenic    seed                           
commercialization agreements.  Gross margins decreased during the               
period primarily  related to the costs of the transgenic technology             
associated with NuCOTN and higher raw material (fuzzy seed) costs.              
D&PL records the transgenic  licensing fees net of certain returns              
and allowances.   D&PL records  fees paid to Monsanto for Bollgard              
technology fees in  cost  of sales.                                             

Operating expenses increased from $20.8 million in 1995 to $25.4                
million in 1996.  This expected increase is attributable to                     
increases in product development  and  promotional costs as well                
as  expenses  incurred  for certain acquisitions.                               

Interest  expense  decreased by 20% to $1.6 million from  $2.0                  
million, attributable to higher outstanding borrowings, more than               
offset by lower average interest rates and an increase in                       
capitalized interest.                                                           

LIQUIDITY AND CAPITAL RESOURCES                                                 

The seasonal nature of the Company's business significantly impacts             
cash flow  and  working  capital requirements.  The Company                     
maintains  credit facilities,  uses  early  payments  by  customers             
and  uses  cash  from operations  to fund working capital needs.                
For more than 15 years  D&PL has  borrowed  on  a short-term basis              
to meet seasonal  working  capital needs.                                       

D&PL purchases seed from contract growers in its first and second               
fiscal quarters. Seed conditioning, treating and packaging commence             
late  in the  first fiscal quarter and continue through the third               
fiscal quarter. Seasonal  borrowings normally commence in the first             
fiscal  quarter  and peak in the third fiscal quarter.  Loan                    
repayments normally begin in the middle of the third fiscal quarter             
and are typically completed early  in the  fourth fiscal quarter.               
D&PL also offers distributors, dealers  and farmers financial                   
incentives to make early payments.  To the extent D&PL attracts                 
early payments from customers, bank borrowings under the credit                 
facility are reduced.                                                           

In January 1996, the Company and a financial institution entered                
into  a new  agreement  that replaced the existing facility.  The               
new  facility provided  for  unsecured borrowings consisting of a               
base  commitment  of $15.0  million  and  a  seasonal  commitment               
of  $45.0  million, plus additional  availability of $15.0 million              
at the  Company's  discretion. In June 1996, the base commitment                
was increased to $30.0 million and the seasonal  commitment                     
reduced  to  $30.0  million  to  accommodate   the anticipated                  
changes in borrowings related to the acquisition of the Sure Grow               
Companies.  The base commitment is a long-term loan  that  may  be              
borrowed  upon  at any time and is due January  1, 1999.   The                  
seasonal commitment  is  a  working capital loan that  may  be                  
drawn  upon  from September  1 through June 30 of each fiscal year              
and expires January  1, 1999.    Commencing in January 1997 and in              
each January thereafter, both facilities  are renewable for another             
three year term.  Each  commitment offers variable and fixed                    
interest rate options and requires the Company to pay facility fees             
and to comply with certain financial covenants.                                 

As a result of the merger with the Sure Grow Companies, D&PL                    
assumed the liabilities  of  the  acquired  companies of  which                 
approximately  $8.1 million  related to lines of credit with                    
several financial  institutions with  interest  based on the                    
institutions' prime rates.   The  remaining debt  assumed                       
primarily  consists  of  several  installment  notes  for purchases             
of  equipment payable to various financial  institutions  and                   
finance companies.                                                              

Current  assets  and  liabilities, including bank borrowings,                   
fluctuate throughout  the  year  due  to the seasonal nature  of                
the  agriculture industry.  Inventory  levels depend, in part, on               
timing  of  bulk  seed receipts,  conditioning and shipping and the             
related cost of  bulk  seed and  conditioning.  Inventory levels                
have increased as compared with the third  quarter  of 1995 due to              
the introduction of the  transgenic  seed products. Specifically,               
D&PL,  during  the  1995  growing   season, contracted  with  its               
growers to produce enough non-transgenic  seed  to meet sales                   
projections for the 1996 season in the event that the EPA did not               
approve  the sales of seed containing the Bollgard gene technology.             
The  EPA ultimately approved such technology in October, 1995,                  
which was beyond  the date that D&PL could reduce its purchase                  
contracts for  nontransgenic  seed.   In addition, the reduction in             
planted  cotton  acres from  16.6  in 1995 around 14.0 in 1996                  
further contributed to increased inventory levels since D&PL sold               
fewer units in the 1996 season.                                                 

Capital   expenditures   through  the  third  quarter   of   1996               
were approximately $9.8 million as the Company continues to                     
facilitate growth in  its  traditional  and  transgenic seed                    
products.    This  investment strategy  included the commencement               
in 1995 of a special  $13.0  million upgrade of its bulk seed                   
stabilization, storage, handling and processing facilities  at                  
three of its cotton seed plants.  In addition,  a  cotton seed                  
processing  plant acquired in the Paymaster acquisition  has  been              
technologically upgraded.  Such expenditures will be funded from                
cash on hand  and  borrowings  under the Company's credit facility.             
Management believes  that capital expenditures will be                          
approximately $15.0  million in  1996  and $10.0 to $12.0 million               
in 1997, excluding expected capital expenditures  for foreign joint             
ventures which will be  funded  by  cash from  operations,                      
borrowings or investments from joint venture partners, as                       
necessary.                                                                      

In the third quarter of fiscal 1996, the Board of Directors                     
authorized a quarterly  dividend  of  $0.03 per share, paid  June               
14,  1996  to  the stockholders of record on June 1, 1996, which                
represented an increase in the  dividend  rate  due to the new                  
number of shares  outstanding  as  a result of the stock splits                 
previously described.                                                           

Cash  provided  from operations and borrowings under the loan                   
agreement should be sufficient to meet the Company's 1996 and 1997              
working capital needs.                                                          

10-Q 8th “Page” of 10 TOC 1st Previous Next ↓Bottom Just 8th
PART II.   OTHER INFORMATION                                                    

Item 6.  Exhibits and Reports on Form 8-K                                       

(a) Exhibits.                                                                   

11.01 Computation of Earnings Per Share                             

(b) Reports on Form 8-K.                                                        

On June 4, 1996, the Company filed Form 8-K dated May 20, 1996,                 
regarding the acquisition of  Arizona Processing, Inc., Ellis                   
Brothers Seed, Inc. and Mississippi Seed, Inc. (the "Sure Grow                  
Companies").  Item 2, Acquisition or Disposition of Assets, and                 
Item 7, Financial Statements and Exhibits, were included in the                 
report.                                                                         
</PAGE>                                                                         

SIGNATURES              

Pursuant  to the requirements of the Securities and Exchange  Act               
of  1934, the registrant has duly caused this report to be signed               
on its behalf by the undersigned thereunto duly authorized.                     

                 DELTA AND PINE LAND COMPANY

Date: July 15, 1996                /s/ Roger D. Malkin                          
               Roger D. Malkin, Chairman
and Chief Executive Officer                                                     

Date: July 15, 1996                 /s/ W. Thomas Jagodinski                    
                  W. Thomas Jagodinski, Vice
               President - Finance and
Treasurer                                                                       

10-Q 9th “Page” of 10 TOC 1st Previous Next ↓Bottom Just 9th
EXHIBIT 11.01   
COMPUTATION OF EARNINGS PER SHARE   
(IN THOUSANDS, EXCEPT PER SHARE DATA)         
FOR THE THREE MONTHS ENDED              

     (As Restated)

                    May 31,    May 31,
                   1995       1996

PRIMARY EARNINGS PER SHARE:                                                     

NUMBER OF SHARES OF COMMON STOCK                                                
OUTSTANDING AT THE BEGINNING OF                                             
PERIOD                                  20,849     20,864                   

WEIGHTED AVERAGE NUMBER OF SHARES                                               
OF COMMON STOCK ISSUED DURING THE                                           
PERIOD                                       -         55                   

WEIGHTED AVERAGE NUMBER OF SHARES                                               
ATTRIBUTED TO OPTIONS                       299      1,077                  

WEIGHTED AVERAGE NUMBER OF SHARES                                               
OF COMMON STOCK OUTSTANDING                                                 
DURING THE PERIOD FOR COMPUTATION                                           
OF PRIMARY EARNINGS PER SHARE             21,148     21,996                 

FULLY DILUTED EARNINGS PER SHARE:                                               

NUMBER OF SHARES OF COMMON STOCK                                                
OUTSTANDING AT THE BEGINNING OF                                             
PERIOD                                         -     20,864                 

WEIGHTED AVERAGE NUMBER OF SHARES                                               
OF COMMON STOCK ISSUED DURING THE                                           
PERIOD                                         -         55                 

WEIGHTED AVERAGE NUMBER OF CONVERTIBLE                                          
PREFERRED STOCK OUTSTANDING DURING                                          
THE PERIOD                                      -        450                

WEIGHTED AVERAGE NUMBER OF SHARES                                               
ATTRIBUTED TO OPTIONS                           -      1,177                

WEIGHTED AVERAGE NUMBER OF SHARES                                               
OF COMMON STOCK OUTSTANDING                                                 
DURING THE PERIOD FOR COMPUTATION                                           
OF FULLY DILUTED EARNINGS PER SHARE             -     22,546                

NET INCOME APPLICABLE TO COMMON SHARES   $    9,276 $   13,353                  

NET INCOME PER COMMON SHARE:                                                    

PRIMARY                            $     0.44 $     0.61              
FULLY DILUTED                      $        - $     0.59              

</PAGE>                                                                         

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EXHIBIT 11.01               
COMPUTATION OF EARNINGS PER SHARE               
(IN THOUSANDS, EXCEPT PER SHARE DATA)               
FOR THE NINE MONTHS ENDED                       

             (As Restated)

                         May 31,     May 31,
                          1995        1996

PRIMARY EARNINGS PER SHARE:                                                     

NUMBER OF SHARES OF COMMON STOCK                                                
OUTSTANDING AT THE                                                              
BEGINNING OF PERIOD                           20,849     20,856                 

WEIGHTED AVERAGE NUMBER OF                                                      
SHARES OF COMMON STOCK ISSUED                                                   
DURING THE PERIOD                                  -         25                 

WEIGHTED AVERAGE NUMBER OF                                                      
SHARES ATTRIBUTED TO OPTIONS                                                    
WEIGHTED AVERAGE NUMBER OF                                                      
SHARES OF COMMON STOCK                                                          
OUTSTANDING DURING THE PERIOD FOR                                               
COMPUTATION OF PRIMARY EARNINGS PER           20,994     21,774                 
SHARE                                                                           

FULLY DILUTED EARNINGS PER                                                      
SHARE:                                                                          

NUMBER OF SHARES OF COMMON                                                      
STOCK OUTSTANDING AT THE                                                        
BEGINNING OF PERIOD                                -     20,856                 

WEIGHTED AVERAGE NUMBER OF                                                      
SHARES OF COMMON STOCK ISSUED                                                   
DURING THE PERIOD WEIGHTED                                                      
AVERAGE NUMBER OF CONVERTIBLE                                                   
PREFERRED STOCK ISSUED                                                          
DURING THE PERIOD                                -          203                 

WEIGHTED AVERAGE NUMBER OF                                                      
SHARES ATTRIBUTED TO OPTIONS                      -         822                 

WEIGHTED AVERAGE NUMBER OF                                                      
SHARES OF COMMON STOCK                                                          
OUTSTANDING DURING THE PERIOD FOR                                               
COMPUTATION OF FULLY DILUTED EARNINGS               -     21,906                
PER SHARE                                                                       

NET INCOME APPLICABLE TO COMMON           $   14,324 $    20,017                
SHARES                                                                          

NET INCOME PER COMMON SHARE:                                                    

PRIMARY                          $     0.68 $       0.92              
FULLY DILUTED                    $       -  $       0.91              

</PAGE>

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10-Q’ Filing	Date	First	Last	Other Filings

	1/1/99	7
Filed on:	7/15/96	8
	6/25/96	1
	6/14/96	7
	6/4/96	8		8-K
	6/1/96	7
For Period End:	5/31/96	1	7	10-Q/A
	5/20/96	8		8-K, 8-K/A
	4/15/96	7
	3/31/96	7
	3/29/96	7
	12/15/95	7
	12/1/95	7
	8/31/95	2	7
	5/31/95	2	7
	12/15/94	7
				List all Filings

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Delta & Pine Land Co – ‘10-Q’ for 5/31/96

As of: Monday, 7/15/96 · For: 5/31/96 · Accession #: 902277-96-6 · File #: 1-14136

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