Company Advances 11 Projects With Record-Breaking R&D Pipeline
Update ST. LOUIS, Jan. 6, 2010 /PRNewswire-FirstCall/ -- Monsanto
Company (NYSE: MON) has delivered on its financial targets for the
first quarter of 2010, which ended Nov. 30, 2009, and recommitted
to its full-year guidance. With its quarterly earnings results
today the company also announced its annual research and
development pipeline update, showcasing a record-breaking 11 phase
advancements. Early indicators of the seeds and traits business
show the company on track to meet its 2010 financial commitments
and with its operational plan through 2011 and 2012. ($ in
millions) First First --------------- Quarter Quarter 2010 2009
---- ---- Net Sales By Segment Corn seed and traits $569 $628
Soybean seed and traits 201 212 Vegetable seeds 173 157
--------------- --- --- Cotton seed and traits 59 47 All other
crops seeds and traits 29 55 --- --- TOTAL Seeds and Genomics
$1,031 $1,099 Roundup and other glyphosate-based herbicides $509
$1,359 All other agricultural productivity products 157 191 --- ---
TOTAL Agricultural Productivity $666 $1,550 TOTAL Net Sales $1,697
$2,649 --------------- ------ ------ Gross Profit $739 $1,550
------------ --- ------ Operating Expenses $777 $802
------------------ --- --- Interest Expense (Income) - Net $28 $(2)
Other (Income) Expense - Net $(12) $26 Net (Loss) Income
Attributable to Monsanto Company $(19) $556
------------------------------------------ ---- --- Diluted (Loss)
Earnings per Share (See note 1.) $(0.03) $1.00
----------------------------------------------- ------ ----- Items
Affecting Comparability - EPS Impact Restructuring charges 0.02 -
Income on discontinued operations (0.01) (0.02)
--------------------------------- ----- ----- Diluted (Loss)
Earnings per Share from Ongoing Business (For the definition of
ongoing EPS, see note 1.) $(0.02) $0.98
---------------------------------------------- ------ -----
Effective Tax Rate 56% 24% ------------------ --- --- First First
Quarter Quarter 2010 2009 ---- ---- Comparison as a Percent of Net
Sales: ------------------------------------- Gross profit 44% 59%
Selling, general and administrative expenses (SG&A) 29% 21%
Research and development expenses (excluding acquired in-process
R&D) 16% 10% (Loss) income from continuing operations before
income taxes (3)% 27% Net (loss) income (1)% 21% -----------------
--- --- "Our first quarter is a small but important quarter as it
sets the foundation for the year ahead, which we see as a critical
year in propelling us to reach our 2011 and 2012 commitments," said
Hugh Grant, chairman, president and chief executive officer for
Monsanto. "We've delivered on our targets for the quarter and this
year we are confident that we will achieve the milestones necessary
to reach our financial commitment to our shareowners. Today, we
also take a closer look at our R&D pipeline and bring 11 new
technologies that will deliver real value to farmers closer to the
field. With our selling season well underway and the demand we see
for Genuity(TM) SmartStax(TM) corn and Genuity(TM) Roundup Ready 2
Yield® soybeans, we believe it will only get better from here.
These winning products are the platform for many of the
technologies in early phases in our pipeline, and we're closer to
demonstrating what those new technologies can do on the farm."
Results of Operations Net sales decreased $952 million, or 36
percent, in the three-month comparison primarily as a result of
decreased sales of glyphosate-based herbicides, primarily in Brazil
and Europe. Gross profit percentage for the total company decreased
15 percentage points to 44 percent in the first quarter, largely
driven by pricing adjustments for Roundup and other
glyphosate-based herbicides. Operating expenses decreased 3
percent, or $25 million, in the first quarter 2010 compared to the
prior year. In the three-month comparison, selling, general and
administrative (SG&A) expenses decreased 10 percent primarily
because of lower spending for marketing, administrative functions
and incentives. R&D expenses increased 6 percent related to the
increase in the company's investment in its product pipeline as it
manages more projects in advanced pipeline phases. As a percent of
net sales, SG&A expenses were 29 percent and R&D expenses
increased to 16 percent. Net income in the first quarter was a loss
of $0.03 per share, compared with income of $1.00 per share in
first quarter 2009. Cash Flow For the first quarter of fiscal 2010,
net cash required by operating activities was $1.4 billion,
compared to a source of $114 million in the first quarter last
year. Net cash required by investing activities for the first
quarter of fiscal 2010 was $197 million, compared with a source of
$10 million for the year-ago quarter. Net cash provided by
financing activities for the first quarter of 2010 was $113
million, compared to net cash required of $258 million for the
prior year's first quarter. Free cash flow was a use of $1.6
billion for the first quarter of fiscal 2010, compared to a source
of $124 million for the first quarter in fiscal 2009. (For a
reconciliation of free cash flow, see note 1.) The reset of the
Roundup business accounted for roughly 30 percent of this shift,
and some working capital changes that altered the timing of cash
flow in the quarter accounted for approximately half. The working
capital changes are primarily driven by a timing adjustment for
payments from seed licensees, which traditionally had been
collected in the first quarter and are now collected in the fourth
quarter. The remaining balance in fiscal 2009 came from the
proceeds from the divestiture of the dairy business, which was $300
million. Outlook The company affirmed its previously announced cash
flow guidance. The company expects free cash flow for fiscal year
2010 will be in the range of $900 million to $1 billion, including
the after-tax cash effect from a restructuring charge of
approximately $250 million. The company expects net cash provided
by operating activities to be $2 billion to $2.2 billion, and net
cash required by investing activities to be approximately $1.1
billion to $1.2 billion for fiscal year 2010. (For a reconciliation
of free cash flow, see note 1.) The company confirmed full-year
2010 ongoing earnings per share (EPS) guidance is in the range of
$3.10 to $3.30. Full-year 2010 EPS guidance on an as-reported basis
is in the range of $2.85 to $3.11. (For a reconciliation of EPS,
see note 1.) Seeds and Genomics Segment Detail ($ in millions) Net
Sales Gross Profit Seeds and Genomics --------- ------------
------------------ First First First First Quarter Quarter Quarter
Quarter 2010 2009 2010 2009 ---- ---- ---- ---- Corn seed and
traits $569 $628 $304 $403 -------------------- ---- ---- ---- ----
Soybean seed and traits 201 212 139 145 ----------------------- ---
--- --- --- Vegetable seeds 173 157 112 80 --------------- --- ---
--- --- Cotton seed and traits 59 47 33 26 ----------------------
--- --- --- --- All other crops seeds and traits 29 55 9 24
------------------------- --- --- --- --- TOTAL Seeds and Genomics
$1,031 $1,099 $597 $678 ------------------------ ------ ------ ----
---- Earnings (Loss) ($ in millions) Before Interest & Taxes
(EBIT) Seeds and Genomics First First Quarter Quarter 2010 2009
EBIT (For a reconciliation of EBIT, see note 1.) $(57) $65 Unusual
Items Affecting EBIT: Restructuring $(3) None The Seeds and
Genomics segment consists of the company's global seeds and related
traits business, and biotechnology platforms. Sales for Monsanto's
Seeds and Genomics segment in the first quarter of fiscal 2010
decreased 6 percent or $68 million compared to the same period last
year. Corn seed and traits net sales decreased 9 percent or $59
million due in large part to a decrease in planted acres in Brazil
and Argentina as a result of drought, governmental policies and
commodity prices. With the second season still ahead in Brazil,
there may be some rebound in total acres, but all-in planted acres
are expected to be down for the year in both Brazil and Argentina.
This year marks the launch of Genuity SmartStax corn, which is
expected to be on more than 4 million acres. Given the early
orders, the early-adopter uptake for Genuity SmartStax has been
good and the company is on pace to meet the more than 4
million-acre target. Overall, soybean gross profit is down 4
percent compared with last year, with relatively flat margins, due
to a timing effect. Delays in harvesting last year's soybean crop
have put the company's seed shipments slightly behind, with this
volume expected to shift into the second quarter. The company
previously increased its acre targets for Genuity Roundup Ready 2
Yield to 8 million to 10 million acres, and sales to date are on
pace to meet that target. The vegetable business performed well,
with sales growing $16 million or 10 percent, driven in part by
better product availability. Agricultural Productivity Segment
Detail ($ in millions) Net Sales Gross Profit Agricultural
Productivity First First First First Quarter Quarter Quarter
Quarter 2010 2009 2010 2009 Roundup and other glyphosate-based
herbicides $509 $1,359 $87 $804 All other agricultural 157 191 55
68 productivity products TOTAL Agricultural Productivity $666
$1,550 $142 $872 ($ in millions) Earnings Before Interest &
Taxes (EBIT) Agricultural Productivity First First Quarter Quarter
2010 2009 EBIT (For a reconciliation of EBIT, see note 1.) $34 $673
Unusual Items Affecting EBIT: EBIT from Discontinued Operations 5
$18 Restructuring $(11) None The Agricultural Productivity segment
consists of the crop protection products and lawn-and-garden
herbicide products. Sales in the first quarter of fiscal 2010 for
Monsanto's Agricultural Productivity segment declined 57 percent or
$884 million compared with the same period last year. Addressing
the global supply-demand imbalance, the company continues to
execute on its plan by resetting branded prices to bring premiums
more in line with historical norms, increasing overall volumes and
optimizing its low-cost production advantage. Webcast Information
In conjunction with this announcement, Monsanto will hold a
conference call at 8:30 a.m. central time (9:30 a.m. eastern time)
today. The call will focus on these results, future expectations
and an update of projects within the company's R&D pipeline,
including the record-breaking 11 phase advancements. The call also
may include a discussion of Monsanto's strategic initiatives,
product performance and other matters related to the company's
business. Presentation slides and a simultaneous audio webcast of
the conference call may be accessed by visiting the company's web
site at http://www.monsanto.com/ and clicking on "Investor
Information." Visitors may need to download Windows Media
Player(TM) prior to listening to the webcast. Following the live
broadcast, a replay of the webcast will be available on the
Monsanto Web site for three weeks. About Monsanto Company Monsanto
Company is a leading global provider of technology-based solutions
and agricultural products that improve farm productivity and food
quality. Monsanto remains focused on enabling both small-holder and
large-scale farmers to produce more from their land while
conserving more of our world's natural resources such as water and
energy. To learn more about our business and our commitments,
please visit: http://www.monsanto.com/ . Follow our business on
Twitter at http://www.twitter.com/MonsantoCo on Facebook at
http://www.facebook.com/MonsantoCo, or subscribe to our News
Release RSS Feed . Cautionary Statements Regarding Forward-Looking
Information: Certain statements contained in this release are
"forward-looking statements," such as statements concerning the
company's anticipated financial results, current and future product
performance, regulatory approvals, business and financial plans and
other non-historical facts. These statements are based on current
expectations and currently available information. However, since
these statements are based on factors that involve risks and
uncertainties, the company's actual performance and results may
differ materially from those described or implied by such
forward-looking statements. Factors that could cause or contribute
to such differences include, among others: continued competition in
seeds, traits and agricultural chemicals; the company's exposure to
various contingencies, including those related to intellectual
property protection, regulatory compliance and the speed with which
approvals are received, and public acceptance of biotechnology
products; the success of the company's research and development
activities; the outcomes of major lawsuits; developments related to
foreign currencies and economies; successful operation of recent
acquisitions; fluctuations in commodity prices; compliance with
regulations affecting our manufacturing; the accuracy of the
company's estimates related to distribution inventory levels; the
company's ability to fund its short-term financing needs and to
obtain payment for the products that it sells; the effect of
weather conditions, natural disasters and accidents on the
agriculture business or the company's facilities; and other risks
and factors detailed in the company's most recent Form 10-K Report
to the SEC. Undue reliance should not be placed on these
forward-looking statements, which are current only as of the date
of this release. The company disclaims any current intention or
obligation to update any forward-looking statements or any of the
factors that may affect actual results. Notes to editors: Genuity,
YieldGard, Roundup, Roundup Ready 2 Yield and SmartStax are
trademarks of Monsanto Company and its wholly-owned subsidiaries.
References to Roundup herbicides in this release mean
Roundup-branded herbicides, excluding lawn-and-garden herbicide
products. Contact Media: Kelli Powers (314-694-4003) Analysts:
Bryan Hurley (314-694-8148) Monsanto Company Selected Financial
Information (Dollars in millions, except per share amounts)
Unaudited Statements of Consolidated Operations Three Months Ended
------------------------------------- ------------------ Nov. 30,
-------- 2009 2008 ---- ---- Net Sales $1,697 $2,649 Cost of Goods
Sold 958 1,099 --- ----- Gross Profit 739 1,550 Operating Expenses:
Selling, General and Administrative Expenses 496 550 Research and
Development Expenses 267 252 Restructuring Charges, Net 14 - ---
--- Total Operating Expenses 777 802 (Loss) Income From Operations
(38) 748 Interest Expense 39 23 Interest Income (11) (25) Other
(Income) Expense, Net (12) 26 --- --- (Loss) Income from Continuing
Operations Before Income Taxes (54) 724 Income Tax (Benefit)
Provision (30) 176 --- --- (Loss) Income from Continuing Operations
Including Portion Attributable to Noncontrolling Interest $(24)
$548 ---- ---- Discontinued Operations: Income from Operations of
Discontinued Businesses 5 18 Income Tax Provision - 8 --- ---
Income on Discontinued Operations 5 10 --- --- Net (Loss) Income
$(19) $558 ==== ==== Less: Net Income Attributable to
Noncontrolling Interest - 2 --- --- Net (Loss) Income Attributable
to Monsanto Company $(19) $556 ==== ==== EBIT (see note 1) $(23)
$738 ==== ==== Basic Earnings (Loss) per Share: (Loss) Income from
Continuing Operations $(0.04) $0.99 Income on Discontinued
Operations 0.01 0.02 ---- ---- Net (Loss) Income $(0.03) $1.01
====== ===== Diluted Earnings (Loss) per Share: (Loss) Income from
Continuing Operations $(0.04) $0.98 Income on Discontinued
Operations 0.01 0.02 ---- ---- Net (Loss) Income $(0.03) $1.00
====== ===== Weighted Average Shares Outstanding: Basic 545.6 548.8
Diluted 545.6 557.6 ----- ----- Monsanto Company Selected Financial
Information (Dollars in millions) Unaudited Condensed Statements of
Consolidated Financial Position
------------------------------------ As of As of Nov. 30, Aug. 31,
2009 2009 -------- -------- Assets Current Assets: Cash and Cash
Equivalents $471 $1,956 Trade Receivables, Net 2,012 1,556
Miscellaneous Receivables 716 654 Deferred Tax Assets 574 662
Inventory, Net 3,560 2,934 Other Current Assets 98 121 --- ---
Total Current Assets 7,431 7,883 Property, Plant and Equipment, Net
3,720 3,609 Goodwill 3,272 3,218 Other Intangible Assets, Net 1,370
1,371 Noncurrent Deferred Tax Assets 804 743 Long-Term Receivables,
Net 488 557 Other Assets 521 496 --- --- Total Assets $17,606
$17,877 ======= ======= Liabilities and Shareowners' Equity Current
Liabilities: Short-Term Debt, Including Current Portion of
Long-Term Debt $281 $79 Accounts Payable 765 676 Income Taxes
Payable 52 79 Accrued Compensation and Benefits 223 263 Accrued
Marketing Programs 367 934 Deferred Revenues 368 219 Grower
Production Accruals 386 139 Dividends Payable - 145 Customer
Payable - 307 Restructuring Reserves 221 286 Miscellaneous
Short-Term Accruals 691 629 --- --- Total Current Liabilities 3,354
3,756 Long-Term Debt 1,724 1,724 Postretirement Liabilities 729 793
Long-Term Deferred Revenue 466 488 Noncurrent Deferred Tax
Liabilities 159 153 Long-Term Portion of Environmental and
Litigation Reserves 203 197 Other Liabilities 628 641 Monsanto
Shareowners' Equity 10,286 10,056 Noncontrolling Interest 57 69 ---
--- Total Shareowners' Equity 10,343 10,125 ====== ====== Total
Liabilities and Shareowners' Equity $17,606 $17,877 ======= =======
Debt to Capital Ratio: 16% 15% Monsanto Company Selected Financial
Information (Dollars in millions) Unaudited Statements of
Consolidated Cash Flows ------------------------------------- Three
Months Ended Nov. 30, -------- 2009 2008 ---- ---- Operating
Activities: Net (Loss) Income $(19) $558 Adjustments to Reconcile
Cash Provided by Operating Activities: Items That Did Not Require
(Provide) Cash: Depreciation and Amortization 144 135 Bad-Debt
Expense 14 36 Stock-Based Compensation Expense 24 26 Excess Tax
Benefits from Stock-Based Compensation (13) (5) Deferred Income
Taxes (58) 52 Restructuring Charges, Net 14 - Equity Affiliate
Income, Net (14) (6) Net Gain on Sales of a Business or Other
Assets (1) (6) Other Items 2 5 Changes in Assets and Liabilities
That Provided (Required) Cash, Net of Acquisitions: Trade
Receivables, Net (343) 165 Inventory, Net (539) (832) Deferred
Revenues 126 (238) Accounts Payable and Other Accrued Liabilities
(573) 195 Restructuring Cash Payments (79) - Pension Contributions
(78) (15) Net Investment Hedge Settlement (4) 18 Other Items (17)
26 ----------- --- --- Net Cash (Required) Provided by Operating
Activities (1,414) 114 ------------------------------- ------ ---
Cash Flows (Required) Provided by Investing Activities: Capital
Expenditures (192) (264) Acquisitions of Businesses, Net of Cash
Acquired (20) (2) Purchases of Long-Term Equity Securities (2) (7)
Technology and Other Investments (9) (18) Proceeds From Divestiture
of a Business - 300 Other Investments and Property Disposal
Proceeds 26 1 --------------------------------------- --- --- Net
Cash (Required) Provided by Investing Activities (197) 10
------------------------------- ---- --- Cash Flows Provided
(Required) by Financing Activities: Net Change in Financing With
Less Than 90-Day Maturities 299 (90) Short-Term Debt Proceeds 25 31
Short-Term Debt Reductions (29) - Long-Term Debt Reductions (1) (4)
Payments on Other Financing (1) - Treasury Stock Purchases (64)
(75) Stock Option Exercises 16 7 Excess Tax Benefits from
Stock-Based Compensation 13 5 Dividend Payments (145) (132)
----------------- ---- ---- Net Cash Provided (Required) by
Financing Activities 113 (258) ------------------------------- ---
---- Effect of Exchange Rate Changes on Cash and Cash Equivalents
13 (137) --------------------------------------- --- ---- Net
Decrease in Cash and Cash Equivalents (1,485) (271) Cash and Cash
Equivalents at Beginning of Period 1,956 1,613
-------------------------------------- ----- ----- Cash and Cash
Equivalents at End of Period $471 $1,342
------------------------------------------ ==== ====== Monsanto
Company Selected Financial Information (Dollars in millions)
Unaudited 1. EBIT, Ongoing EPS and Free Cash Flow: The
presentations of EBIT, ongoing EPS and free cash flow are not
intended to replace net income (loss), cash flows, financial
position or comprehensive income (loss), and they are not measures
of financial performance as determined in accordance with generally
accepted accounting principles (GAAP) in the United States. The
following tables reconcile EBIT, ongoing EPS and free cash flow to
the respective most directly comparable financial measure
calculated in accordance with GAAP. Reconciliation of EBIT to Net
Income (Loss): EBIT is defined as earnings (loss) before interest
and taxes. Earnings (loss) is intended to mean net income (loss) as
presented in the Statements of Consolidated Operations under GAAP.
The following table reconciles EBIT to the most directly comparable
financial measure, which is net income (loss). Three Months Ended
Nov. 30, -------- 2009 2008 ---- ---- EBIT - Seeds and Genomics
Segment $(57) $65 EBIT - Agricultural Productivity Segment 34 673
--- --- EBIT- Total (23) 738 Interest Expense (Income), Net 28 (2)
Income Tax (Benefit) Provision(A) (32) 184 --- --- Net (Loss)
Income Attributable to Monsanto Company $(19) $556
------------------------------------------ ==== ==== (A) Includes
the income tax benefit from continuing operations, the income tax
provision (benefit) on noncontrolling interest, and the income tax
provision on discontinued operations. Reconciliation of EPS to
Ongoing EPS: Ongoing EPS is calculated excluding certain after-tax
items which Monsanto does not consider part of ongoing operations.
Fiscal Year Three months 2010 ended Guidance Nov. 30, 2009 --------
------------- Diluted (Loss) Earnings per Share $2.85-$3.11 $(0.03)
Restructuring Charges $0.19-$0.25 $0.02 Income on Discontinued
Operations - $(0.01) --- ------ Diluted (Loss) Earnings per Share
from Ongoing Business $3.10-$3.30 $(0.02)
-------------------------------------- ----------- ------
Reconciliation of Free Cash Flow: Free cash flow represents the
total of cash flows from operating activities and investing
activities, as reflected in the Statements of Consolidated Cash
Flows presented in this release. With respect to the fiscal year
2010 free cash flow target, Monsanto does not include any estimates
or projections of Net Cash Provided (Required) by Financing
Activities because in order to prepare any such estimate or
projection, Monsanto would need to rely on market factors and
conditions that are outside of its control. Fiscal Year Three
Months Ended 2010 Nov. 30, Guidance 2009 2008 -------- ---- ----
Net Cash (Required) Provided by Operating Activities $2,000-2,200
$(1,414) $114 Net Cash (Required) Provided by Investing Activities
(1,100)-(1,200) (197) 10 --------------- ---- --- Free Cash Flow
$900-1,000 (1,611) 124 Net Cash Provided (Required) by Financing
Activities N/A 113 (258) Effect of Exchange Rate Changes on Cash
and Cash Equivalents N/A 13 (137) --- --- ---- Net Decrease in Cash
and Cash Equivalents N/A (1,485) (271) Cash and Cash Equivalents at
Beginning of Period N/A 1,956 1,613 --- ----- ----- Cash and Cash
Equivalents at End of Period N/A $471 $1,342
---------------------------- === ==== ====== DATASOURCE: Monsanto
Company CONTACT: Media, Kelli Powers, +1-314-694-4003, or Analysts,
Bryan Hurley, +1-314-694-8148, both of Monsanto Company Web Site:
http://www.monsanto.com/
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