Monsanto sees increased use of its corn seeds and traits globally,
company expects seventh consecutive year of branded corn market
share gains in U.S. ST. LOUIS, June 25 /PRNewswire-FirstCall/ --
Third Third Nine Nine ($ in millions) Quarter Quarter Months Months
2008 2007 2008 2007 Net Sales by Segment Corn seed and traits $975
$891 $3,189 $2,443 Soybean seed and traits 447 325 1,064 868 Cotton
seed and traits 279 212 361 260 Vegetable and fruit seed 185 170
521 444 All other crops seeds and traits 161 114 293 207 TOTAL
Seeds and Genomics $2,047 $1,712 $5,428 $4,222 Roundup and other
glyphosate-based herbicides $1,168 $757 $3,158 $1,936 All other
agricultural productivity products 373 373 880 832 TOTAL
Agricultural Productivity $1,541 $1,130 $4,038 $2,768 TOTAL Net
Sales $3,588 $2,842 $9,466 $6,990 Gross Profit $1,969 $1,503 $5,253
$3,633 Operating Expenses $875 $684 $2,292 $1,860 Interest (Income)
Expense - Net $(3) $1 $(6) $7 Other (Income) Expense - Net $(5) $12
$(189) $32 Net Income $811 $570 $2,196 $1,203 Diluted Earnings per
Share (See note 1.) $1.45 $1.03 $3.93 $2.17 Items Affecting
Comparability - EPS Impact (Income) Loss on Discontinued Operations
-- $(0.01) -- $0.01 Solutia Claim Settlement (after tax) -- --
$(0.23) -- Diluted Earnings per Share from Ongoing Business (For
the definition of ongoing EPS, see note 1.) $1.45 $1.02 $3.70 $2.18
Effective Tax Rate 26% 29% 30% 30% Third Third Nine Nine Comparison
as a Percent of Net Sales: Quarter Quarter Months Months 2008 2007
2008 2007 Gross profit 55% 53% 55% 52% Selling, general and
administrative expenses (SG&A) 17% 17% 17% 19% Research and
development expenses (excluding acquired in-process R&D) 7% 7%
7% 8% Income before income taxes and minority interest 31% 28% 33%
25% Net income 23% 20% 23% 17% Comment from Monsanto Chairman,
President and Chief Executive Officer Hugh Grant: "Backed by
continued growing demand for our products, the first nine months of
our fiscal year has been remarkable and we're now increasing our
full-year guidance. This strong growth sets up a solid foundation
for our business and to reach our target of more than doubling
gross profit in 2012. Because we're both discovering and delivering
innovative tools that can help increase productivity on farm, we
offer an attractive solution to the farmer and their mission of
meeting our world's growing food, feed and fuel needs. While others
are asking should it be food OR feed OR fuel, we believe the answer
is AND, and we have the solutions in hand to be a significant part
of that answer." Operations Update Monsanto reported record net
sales of $3.6 billion for the third quarter of fiscal year 2008,
which were 26 percent higher than sales in the same period in
fiscal year 2007. Results in the quarter reflected increased
revenues from the company's Roundup agricultural herbicides
globally, increased soybean seed and traits revenues in the United
States, increased corn seed and trait revenues in the United
States, higher corn seed revenues in Europe-Africa, and higher
cotton seed and trait revenue in the United States. Net sales in
the company's first nine months of fiscal year 2008 resulted in
year-to-date sales of $9.5 billion, which were 35 percent higher
compared with sales in the same period last year. Key contributors
to the company's growth included increased sales of Roundup and
other glyphosate-based herbicides globally, higher worldwide corn
seed and traits revenues as well as increased soybean seed and
traits revenues and cotton seed and traits revenues in the United
States. Monsanto's net income for the third quarter of fiscal year
2008 was $811 million or 42 percent higher than net income in the
same period last year. For the first nine months of fiscal year
2008, net income was 83 percent higher than net income in the same
period last year. Earnings per share (EPS) for the third quarter of
fiscal year 2008 were $1.45 both on an as-reported basis and an
ongoing basis. EPS for the first nine months of fiscal year 2008
were $3.93 on an as-reported basis, and $3.70 on an ongoing basis.
EPS results for the first three quarters were affected favorably by
$0.23 per share after tax from the settlement of Monsanto's claims
in conjunction with Solutia's emergence from bankruptcy. (For a
reconciliation of ongoing EPS, see page 1.) Cash Flow For the first
nine months of fiscal year 2008, net cash provided by operating
activities was $1.3 billion, compared with $89 million in the same
period in 2007. Net cash required by investing activities was $650
million for the first nine months of 2008, compared with net cash
required of $410 million for the same period last year. As a
result, free cash flow was a source of $675 million for the first
nine months of fiscal year 2008, compared with a use of $321
million in the same period in fiscal year 2007. (For a
reconciliation of free cash flow, see note 1.) Improved earnings,
higher collections from accounts receivable and customer
prepayments and the settlement of the Solutia-related claim
contributed to the increase in free cash flow in the first nine
months of 2008. Net cash provided by financing activities was $93
million for the first nine months of 2008, compared with net cash
required of $204 million for the same period last year. Outlook
Monsanto's fourth quarter is largely influenced by its global
cotton business and U.S. Roundup agricultural herbicides business.
The company historically records a loss in the fourth quarter.
Monsanto now expects that its full-year 2008 EPS will be
approximately $3.63 on a reported basis and approximately $3.40 on
an ongoing basis. (For a reconciliation of ongoing EPS, see page
1). Monsanto's full-year 2008 EPS guidance on a reported basis does
not include an estimate for the in-process, research and
development charge associated with the company's fourth quarter
acquisitions. The company now expects that its free cash flow for
fiscal year 2008 will be $550 million. The company expects net cash
provided by operating activities to be in the range of $2.6
billion, and net cash required by investing activities to be
approximately $2.05 billion for fiscal year 2008. (For a
reconciliation of free cash flow, see note 1.) This revised free
cash flow guidance reflects the recently-completed acquisition of
De Ruiter Seeds as well as the recently-announced acquisition of
Marmot, S.A., which operates Semillas Cristiani Burkard (SCB), a
privately-held seed company headquartered in Guatemala City,
Guatemala. Preliminary Trait Acreage Report As part of today's
announcement, Monsanto also published a preliminary report on the
company's biotech trait acreage for fiscal year 2008. This report
is available on Monsanto's web site at http://www.monsanto.com/.
Seeds and Genomics Segment Detail ($ in millions) Net Sales Gross
Profit Third Third Nine Nine Third Third Nine Nine Seeds and
Quarter Quarter Months Months Quarter Quarter Months Months
Genomics 2008 2007 2008 2007 2008 2007 2008 2007 Corn seed and
traits $975 $891 $3,189 $2,443 $565 $530 $2,023 $1,543 Soybean seed
and traits 447 325 1,064 868 269 203 649 581 Cotton seed and traits
279 212 361 260 195 179 252 222 Vegetable and fruit seed 185 170
521 444 93 72 270 210 All other crops seeds and traits 161 114 293
207 97 62 154 99 TOTAL Seeds and Genomics $2,047 $1,712 $5,428
$4,222 $1,219 $1,046 $3,348 $2,655 ($ in millions) Earnings Before
Interest & Taxes (EBIT) Third Third Nine Nine Seeds and
Genomics Quarter Quarter Months Months 2008 2007 2008 2007 EBIT
(For a reconciliation of EBIT, see note 1.) $586 $557 $1,643 $1,302
Unusual Items Affecting EBIT Income (Loss) on discontinued
operation None $8 None $(5) The Seeds and Genomics segment consists
of the company's global seeds and related traits business, and
genetic technology platforms. Sales for Monsanto's Seeds and
Genomics segment were $2 billion for the third quarter of fiscal
year 2008, or 20 percent higher than sales in the same period last
year. During the third quarter of fiscal year 2008, the company
realized increased soybean seed and traits revenues in the United
States, increased corn seed and trait revenues in the United
States, higher corn seed revenues in Europe-Africa and increased
U.S. cotton seed and trait revenues. Monsanto expects that strong
customer demand for its branded corn seed products contributed to a
seventh consecutive year of market share gains in the U.S. corn
seed market. In the United States, Monsanto's DEKALB brand could
realize 2 to 3 percentage points in share growth and 1 to 2
percentage points in its American Seeds Inc. brands, pending final
returns. In Argentina, Monsanto's brand increased 5 percentage
points while its brands held share flat in Brazil, as the company
had anticipated. Sales for the segment were also higher for the
first nine months of the 2008 fiscal year compared with sales in
the same period last year. Sales for the first nine months were
$5.4 billion, or 29 percent higher than sales in fiscal year 2007.
Key contributors to the company's growth through the first nine
months included higher worldwide corn seed and traits revenues,
increased soybean seed and traits revenues in the United States as
well as higher U.S. cotton seed and traits revenue. Agricultural
Productivity Segment Detail ($ in millions) Net Sales Gross Profit
Third Third Nine Nine Third Third Nine Nine Agricultural Quarter
Quarter Months Months Quarter Quarter Months Months Productivity
2008 2007 2008 2007 2008 2007 2008 2007 Roundup and other
glyphosate- based herbicides $1,168 $757 $3,158 $1,936 $594 $286
$1,559 $635 All other agricultural productivity products 373 373
880 832 156 171 346 343 TOTAL Agricultural Productivity $1,541
$1,130 $4,038 $2,768 $750 $457 $1,905 $978 ($ in millions) Earnings
Before Interest & Taxes (EBIT) Third Third Nine Nine
Agricultural Productivity Quarter Quarter Months Months 2008 2007
2008 2007 EBIT (For a reconciliation of EBIT, see note 1.) $502
$242 $1,488 $423 Unusual Items Affecting EBIT Solutia Claim
Settlement None None $210 None The Agricultural Productivity
segment consists primarily of crop protection products, the
lawn-and-garden herbicide business, and the company's animal
agricultural business. Sales for Monsanto's Agricultural
Productivity segment were $1.5 billion for the third quarter of
fiscal year 2008, or 36 percent higher compared with sales in the
same period last year. Results in the quarter benefited from
increased average net selling prices for the company's Roundup
agricultural herbicides globally. Sales for the segment were higher
for the first three quarters of the 2008 fiscal year compared with
sales in the same period last year. Segment sales through the first
nine months were $4 billion or 46 percent higher than sales in the
same period in fiscal year 2007. Results through the first three
quarters benefited from higher average net selling prices of
Roundup and other glyphosate-based herbicides globally. 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 and future
expectations. The call may also 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/investors/. 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. For more information on
Monsanto, see http://www.monsanto.com/. 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 reports on Forms 10-Q and 10-K. 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: DEKALB and Roundup 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. Monsanto Company
Selected Financial Information (Dollars in millions, except per
share amounts) Unaudited Statements of Consolidated Operations
Three Months Three Months Nine Months Nine Months Ended Ended Ended
Ended May 31, 2008 May 31, 2007 May 31, 2008 May 31, 2007 Net Sales
$3,588 $2,842 $9,466 $6,990 Cost of Goods Sold 1,619 1,339 4,213
3,357 Gross Profit 1,969 1,503 5,253 3,633 Operating Expenses:
Selling, General and Administrative Expenses 622 487 1,617 1,299
Research and Development Expenses 251 190 672 554 Acquired
In-Process Research and Development 2 7 3 7 Total Operating
Expenses 875 684 2,292 1,860 Income From Operations 1,094 819 2,961
1,773 Interest Expense 31 29 99 96 Interest Income (34) (28) (105)
(89) Solutia-Related Expenses (Income) - 4 (187) 23 Other (Income)
Expense - Net (5) 8 (2) 9 Income Before Income Taxes and Minority
Interest 1,102 806 3,156 1,734 Income Tax Provision 285 231 947 521
Minority Interest Expense 6 10 13 7 Income From Continuing
Operations $811 $565 $2,196 $1,206 Discontinued Operations: Income
(Loss) from Operations of Discontinued Businesses - 8 - (5) Income
Tax Expense (Benefit) - 3 - (2) Income (Loss) on Discontinued
Operations - 5 - (3) Net Income $811 $570 $2,196 $1,203 EBIT (see
note 1) $1,088 $799 $3,131 $1,725 Basic Earnings (Loss) per Share
Income from Continuing Operations $1.48 $1.04 $4.01 $2.22 Income
(Loss) on Discontinued Operations - $0.01 - $(0.01) Net Income
$1.48 $1.05 $4.01 $2.21 Diluted Earnings (Loss) per Share Income
from Continuing Operations $1.45 $1.02 $3.93 $2.18 Income (Loss) on
Discontinued Operations - $0.01 - $(0.01) Net Income $1.45 $1.03
$3.93 $2.17 Weighted Average Shares Outstanding: Basic 549.0 544.4
547.6 543.7 Diluted 560.0 555.2 558.9 554.4 Monsanto Company
Selected Financial Information (Dollars in millions) Unaudited
Condensed Statements of Consolidated Financial Position As of As of
May 31, 2008 Aug. 31, 2007 Assets Current Assets: Cash and Cash
Equivalents $1,714 $866 Trade Receivables - Net of Allowances of
$253 and $217, Respectively 3,258 1,499 Miscellaneous Receivables
468 407 Deferred Tax Assets 340 449 Inventories 2,206 1,719 Other
Current Assets 141 144 Total Current Assets 8,127 5,084 Property,
Plant and Equipment - Net of Accumulated Depreciation of $3,625 and
$3,260, Respectively 2,962 2,656 Goodwill 2,769 2,625 Other
Intangible Assets - Net 1,375 1,415 Noncurrent Deferred Tax Assets
816 730 Long-Term Receivables - Net of Allowances of $172 and $131,
Respectively 653 79 Other Assets 590 394 Total Assets $17,292
$12,983 Liabilities and Shareowners' Equity Current Liabilities:
Short-Term Debt, Including Current Portion of Long-Term Debt $10
$270 Accounts Payable 788 649 Income Taxes Payable 134 150 Accrued
Compensation and Benefits 368 349 Accrued Marketing Programs 720
517 Deferred Revenues 369 260 Grower Production Accruals 120 86
Dividends Payable - 96 Miscellaneous Short-Term Accruals 779 698
Total Current Liabilities 3,288 3,075 Long-Term Debt 1,703 1,150
Postretirement Liabilities 505 542 Long-Term Portion of
Environmental and Related Litigation Reserve 150 135 Long-Term
Deferred Revenue 588 - Other Liabilities 847 578 Shareowners'
Equity 10,211 7,503 Total Liabilities and Shareowners' Equity
$17,292 $12,983 Debt to Capital Ratio: 14% 16% Monsanto Company
Selected Financial Information (Dollars in millions) Unaudited
Statements of Consolidated Cash Flows Nine Months Nine Months Ended
Ended May 31, 2008 May 31, 2007 Operating Activities: Net Income
$2,196 $1,203 Adjustments to Reconcile Cash Provided by Operations:
Items That Did Not Require (Provide) Cash: Depreciation and
Amortization Expense 423 386 Bad-Debt Expense 52 29 Receipt of
Securities from Solutia Settlement (38) - Stock-Based Compensation
Expense 64 54 Excess Tax Benefits from Stock-Based Compensation
(161) (49) Deferred Income Taxes 126 (10) Equity Affiliate Expense
- Net 2 30 Acquired In-Process Research and Development 3 7 Other
Items (10) (1) Changes in Assets and Liabilities That Provided
(Required) Cash, Net of Acquisitions: Trade Receivables (1,490)
(1,969) Inventories (387) 91 Deferred Revenues (1) (45) Accounts
Payable and Other Accrued Liabilities 746 466 Net Investment Hedge
Settlement (97) (4) Other Items (103) (99) Net Cash Provided by
Operating Activities 1,325 89 Cash Flows Provided (Required) by
Investing Activities: Maturities of Short-Term Investments 59 22
Capital Expenditures (530) (297) Acquisitions of Businesses, Net of
Cash Acquired (113) (125) Purchases of Long-Term Equity Securities
(78) - Technology and Other Investments (39) (35) Other Investments
and Property Disposal Proceeds 51 25 Net Cash Required by Investing
Activities (650) (410) Cash Flows Provided (Required) by Financing
Activities: Net Change in Financing With Less Than 90-Day
Maturities (28) 265 Short-Term Debt Reductions (9) (8) Long-Term
Debt Proceeds 548 4 Long-Term Debt Reductions (238) (277) Payments
on Other Financing (3) (4) Debt Issuance Costs (5) - Treasury Stock
Purchases (145) (101) Stock Option Exercises 100 59 Excess Tax
Benefits From Stock-Based Compensation 161 49 Dividend Payments
(288) (191) Net Cash Provided (Required) by Financing Activities 93
(204) Effect of Exchange Rate Changes on Cash and Cash Equivalents
80 59 Net Increase (Decrease) in Cash and Cash Equivalents 848
(466) Cash and Cash Equivalents at Beginning of Period 866 1,460
Cash and Cash Equivalents at End of Period $1,714 $994 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
Nine Months Ended May 31, May 31, 2008 2007 2008 2007 EBIT - Seeds
and Genomics Segment $586 $557 $1,643 $1,302 EBIT - Agricultural
Productivity Segment 502 242 1,488 423 EBIT- Total 1,088 799 3,131
1,725 Interest (Income) Expense - Net (3) 1 (6) 7 Income Tax
Provision(A) 280 228 941 515 Net Income $811 $570 $2,196 $1,203 (A)
Includes the income tax provision on minority interest income.
Reconciliation of EPS to Ongoing EPS: Ongoing EPS is calculated
excluding certain after-tax items which Monsanto does not consider
part of ongoing operations. The reconciliation of EPS to Ongoing
EPS for the third quarter and nine months ended May 31, 2008 and
May 31, 2007, is included on page 1 of this release. 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 2008 free cash flow
guidance, 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 Nine Months Ended 2008 May 31, Guidance
2008 2007 Net Cash Provided by Operating Activities $2,600 $1,325
$89 Net Cash Required by Investing Activities (2,050) (650) (410)
Free Cash Flow $550 675 (321) Net Cash Provided (Required) by
Financing Activities N/A 93 (204) Effect of Exchange Rate Changes
on Cash and Cash Equivalents N/A 80 59 Net Increase in Cash and
Cash Equivalents N/A 848 (466) Cash and Cash Equivalents at
Beginning of Period N/A 866 1,460 Cash and Cash Equivalents at End
of Period N/A $1,714 $994 DATASOURCE: Monsanto Company CONTACT:
Media, Lee Quarles, +1-314-694-2330, or Analysts, Scarlett Lee
Foster, +1-314-694-8148, both of Monsanto Company Web site:
http://www.monsanto.com/ Company News On-Call:
http://www.prnewswire.com/comp/114341.html
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