ST. LOUIS, April 2 /PRNewswire-FirstCall/ -- ($in millions) Second
Second Six Six Quarter Quarter Months Months 2009 2008 2009 2008
Net Sales by Segment Corn seed and traits $2,078 $1,747 $2,706
$2,214 Soybean seed and traits 615 455 827 617 Cotton seed and
traits 33 40 80 82 Vegetable seeds 209 206 366 336 All other crops
seeds and traits 107 97 162 132 TOTAL Seeds and Genomics $3,042
$2,545 $4,141 $3,381 Roundup and other glyphosate-based herbicides
$776 $982 $2,135 $1,990 All other agricultural productivity
products 217 200 408 405 TOTAL Agricultural Productivity $993
$1,182 $2,543 $2,395 TOTAL Net Sales $4,035 $3,727 $6,684 $5,776
Gross Profit $2,521 $2,211 $4,071 $3,250 Operating Expenses $949
$748 $1,751 $1,404 Interest Expense (Income) - Net $8 $(6) $6 $(4)
Other Expense (Income) - Net $32 $(203) $58 $(184) Net Income
$1,092 $1,129 $1,648 $1,385 Diluted (Loss) Earnings per Share $1.97
$2.02 $2.96 $2.48 Items Affecting Comparability - EPS Impact Income
on Discontinued Operations - $(0.02) $(0.02) $(0.03) Acquired
In-Process R&D (Aly Participacoes Ltda.) $0.19 - $0.19 -
Solutia Claim Settlement - $(0.23) - $(0.23) Diluted Earnings per
Share from Ongoing Business (For the definition of ongoing EPS, see
note 1.) $2.16 $1.77 $3.13 $2.22 Effective Tax Rate (Continuing
Operations) 29% 33% 27% 32% Comparison as a Percent of Net Sales:
Second Second Six Six Quarter Quarter Months Months 2009 2008 2009
2008 Gross profit 62% 59% 61% 56% Selling, general and
administrative expenses (SG&A) 13% 14% 16% 17% Research and
development expenses (excluding acquired in-process R&D) 7% 6%
8% 7% Income from continuing operations before income taxes and
minority interest 38% 45% 34% 35% Net Income 27% 30% 25% 24%
Comment from Monsanto Chairman, President and Chief Executive
Officer Hugh Grant: "Through the first half of the year, we've done
what we had committed to do: We've preserved value across the
portfolio, which has allowed us to lift gross profit by 25 percent,
margins by 5 percent, and ongoing earnings by 41 percent. We've
leveraged our SG&A while maintaining an R&D spend that will
allow us to launch two major new products in 2010. That growth,
combined with spending and working capital discipline, is keeping
us on track for more than 20 percent growth in earnings for the
full fiscal year and allowed us to maintain our $1.8 billion
guidance for free cash generation." Operations Update Monsanto
reported record net sales of $4 billion for the second quarter of
fiscal year 2009, which were 8 percent higher than sales in the
same period in fiscal year 2008. Key drivers for the quarter were
increased revenues from the company's U.S. corn and soybean seeds
and traits businesses. The results in the quarter were partially
offset by lower volumes of Roundup agricultural herbicides. Last
year Monsanto saw increased U.S. Roundup volumes in the second
quarter ahead of an anticipated price increase. In 2009, sales have
returned to more historical patterns, which mean the majority of
U.S. branded Roundup volume will move to the third and fourth
quarters. Monsanto saw record sales of $6.7 billion in the first
six months of the company's fiscal year 2009. The year-to-date
sales were 16 percent higher than sales in the same period in
fiscal year 2008. Key contributors to the company's growth included
increased revenues from the company's U.S. corn and soybean seeds
and traits businesses, as well as higher Roundup sales in Brazil in
the first quarter. Monsanto reported net income of $1.1 billion in
the second quarter of fiscal year 2009, down 3 percent from the
same period last year. For the first six months of fiscal year
2009, Monsanto reported net income of $1.6 billion, which was 19
percent higher than net income of $1.4 billion realized in the
first six months of fiscal year 2008. Both periods were affected by
$162 million or $0.19 per share attributable to in-process research
and development (IPR&D) charges related to the company's
acquisition of Aly Participacoes Ltda. (Aly), which operates the
sugarcane breeding and technology companies, CanaVialis S.A. and
Alellyx S.A., based in Brazil. In the second quarter and first-half
of 2008, Monsanto reported a gain of $210 million pre-tax, or $0.23
per share after-tax, as part of the company's settlement of claims
associated with Solutia's emergence from bankruptcy. The company's
selling, general and administrative expenses (SG&A) as a
percent of sales in the quarter and for the first half of fiscal
year 2009 was down by 1 percentage point. Research and development
(R&D) as a percent of sales was up for the quarter and the
first six months because of the high level of regulatory activity
from bringing multiple new products toward launch and the
integration of the De Ruiter vegetable seeds business. Earnings per
share (EPS) for the second quarter was $1.97 on an as-reported
basis, and $2.16 on an ongoing basis. EPS for the first six months
of fiscal year 2009 was $2.96 on an as-reported basis, and $3.13 on
an ongoing basis. (For a reconciliation of EPS to ongoing EPS see
page 1). Cash Flow For the first half of fiscal year 2009, net cash
provided by operating activities was $1.5 billion, compared with
$1.9 billion in the same period of fiscal year 2008. Net cash
required by investing activities was $359 million for the first
half of fiscal year 2009, compared with $404 million for the same
period of fiscal year 2008. As a result, free cash flow was more
than $1.1 billion for the first half of fiscal year 2009, compared
with approximately $1.5 billion for the same period in fiscal year
2008. (For a reconciliation of free cash flow, see note 1.) Free
cash flow in the first half of 2009 reflected an improvement in net
income which was offset by higher level of inventories. Net cash
required by financing activities was $596 million for the first
half of fiscal year 2009, compared with $142 million for the same
period in fiscal year 2008. This reflects an increase in cash
returned to shareowners in the form of higher dividends and share
repurchases. Outlook Monsanto's full-year 2009 EPS is expected to
be in the range of $4.23 to $4.33 on a reported basis and in the
range of $4.40 to $4.50 on an ongoing basis. (For a reconciliation
of ongoing EPS, see note 1). The company expects that its free cash
flow for fiscal year 2009 will be approximately $1.8 billion. The
company expects net cash provided by operating activities to be
about $3 billion, and net cash required by investing activities to
be approximately $1.2 billion for fiscal year 2009. (For a
reconciliation of free cash flow, see note 1.) Seeds and Genomics
Segment Detail --------------------------------- ($in millions) Net
Sales Gross Profit Seeds and Genomics Second Second Six Six Second
Second Six Six Quarter Quarter Months Months Quarter Quarter Months
Months 2009 2008 2009 2008 2009 2008 2009 2008 Corn seed and traits
$2,078 $1,747 $2,706 $2,214 $1,412 $1,173 $1,815 $1,458 Soybean
seed and traits 615 455 827 617 373 269 518 380 Cotton seed and
traits 33 40 80 82 21 33 47 57 Vegetable seeds 209 206 366 336 115
113 195 177 All other crops seeds and traits 107 97 162 132 56 46
80 57 TOTAL Seeds and Genomics $3,042 $2,545 $4,141 $3,381 $1,977
$1,634 $2,655 $2,129 ($in millions) Earnings Before Interest &
Taxes (EBIT) Seeds and Genomics Second Second Six Six Quarter
Quarter Months Months 2009 2008 2009 2008 EBIT (For a
reconciliation of EBIT, see note 1.) $1,212 $1,077 $1,277 $1,057
Unusual Items Affecting EBIT IPR&D resulting from acquisition
of Aly $162 None $162 None 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 $3 billion for the second quarter of fiscal
year 2009, or 20 percent higher than sales in the same period last
year. During the second quarter of fiscal year 2009, the company
realized increased revenue from its branded corn seed and traits
business in the United States as well as from its U.S. soybean seed
and traits business. This strong gain was somewhat offset by fewer
planted acres for corn in Brazil because of drought conditions.
Monsanto's results also reflect a pre-tax charge of $42 million
that the company incurred against its ongoing earnings. The charge
relates to Monsanto's commitment to compensate a small number of
farmers who experienced variable pollination and yield with three
white corn hybrids in South Africa. Growth in the quarter was also
driven by the continued strong adoption of its higher-margin
triple-stack corn technology in its U.S. corn seed brands. Monsanto
estimates that its triple-stack corn technology could be grown on
33 million acres or 10 percent more acres in 2009 than the previous
season despite an anticipated overall decline in acres planted to
corn in the United States. Monsanto now estimates that its
portfolio mix of the higher-margin triple-stack technology in its
U.S. corn seed brands will be 70 percent. Sales for the segment
were also higher for the first six months of the 2009 fiscal year
compared with sales in the same period last year. First-half
segment sales were $4.1 billion, or 22 percent higher than
first-half segment sales in fiscal year 2008. The key drivers for
growth in the second quarter were also the primary contributors to
growth in the first-half of the fiscal year. Gross profit for the
segment was also higher for the first six months of the 2009 fiscal
year compared with the same period last year. Gross margins
increased 1 percentage point in the period-over-period comparison
to 64 percent. This increase was primarily driven by increased
prices in U.S. corn and soybeans and a demand shift to higher
margin triple-trait corn products. Monsanto noted that it expects
farmers to plant approximately 1.5 million acres of Genuity Roundup
Ready 2 Yield soybeans across the Midwest this spring. The company
now expects that Genuity Roundup Ready 2 Yield will be available on
7 million to 8 million acres for the product's full-scale launch in
2010, or expanded from its initial estimate of 5 million to 6
million acres. Agricultural Productivity Segment Detail
---------------------------------------- ($in millions) Net Sales
Gross Profit Second Second Six Six Second Second Six Six
Agricultural Quarter Quarter Months Months Quarter Quarter Months
Months Productivity 2009 2008 2009 2008 2009 2008 2009 2008 Roundup
and other glyphosate- based herbicides $776 $982 $2,135 $1,990 $437
$478 $1,241 $965 All other agricultural productivity products 217
200 408 405 107 99 175 156 TOTAL Agricultural Productivity $993
$1,182 $2,543 $2,395 $544 $577 $1,416 $1,121 ($in millions)
Earnings Before Interest & Taxes (EBIT) Second Second Six Six
Agricultural Productivity Quarter Quarter Months Months 2009 2008
2009 2008 EBIT (For a reconciliation of EBIT, see note 1.) $326
$601 $999 $985 Unusual Items Affecting EBIT Solutia Claim
Settlement None $210 None $210 EBIT from Discontinued Operations $1
$11 $19 $20 The Agricultural Productivity segment consists of the
crop protection products and lawn-and-garden herbicide products.
Sales for Monsanto's Agricultural Productivity segment were $993
million for the second quarter of fiscal year 2009, or 16 percent
lower compared with sales in the same period last year. Lower
volumes of Roundup and other glyphosate-based herbicides
contributed to the results in the quarter. This was largely a
timing effect, as our customers' shipments were ahead of a
pre-announced price increase in mid-February last year. In 2009,
U.S. orders have returned to previous selling patterns with sales
shifting back to third and fourth quarters when farmers use Roundup
over the top of Roundup Ready acres. Additionally, results in the
quarter were also affected by lower branded volumes of glyphosate
due to the drought conditions in Latin America. First-half segment
sales were $2.5 billion or 6 percent higher than first-half segment
sales in fiscal year 2008. Improved pricing of Roundup and other
glyphosate-based herbicides globally and higher sales in Brazil
were key drivers for growth in the first half of the fiscal year.
These results were slightly offset by lower volumes of U.S. branded
Roundup herbicides as a result of shipments returning to historical
patterns this year. Gross profit for the segment in the first six
months was $1.4 billion or 26 percent higher than gross profit
realized in the same period last year. The increase in the period
related primarily to higher pricing of branded Roundup herbicides
and sales in Brazil partially offset by timing of sales in the
United States. 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/ 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/. 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, Genuity, Roundup Ready 2 Yield, 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. Media: Lee Quarles (314-694-2330) Danielle Stuart
(314-694-2478) Monsanto Company Selected Financial Information
(Dollars in millions, except per share amounts) Unaudited
Statements of Consolidated Three Three Six Six Operations Months
Months Months Months Ended Ended Ended Ended Feb. 28, Feb. 29, Feb.
28, Feb. 29, 2009 2008 2009 2008 Net Sales $4,035 $3,727 $6,684
$5,776 Cost of Goods Sold 1,514 1,516 2,613 2,526 Gross Profit
2,521 2,211 4,071 3,250 Operating Expenses: Selling, General and
Administrative Expenses 522 529 1,072 985 Research and Development
Expenses 265 219 517 418 Acquired In-Process Research and
Development 162 - 162 1 Total Operating Expenses 949 748 1,751
1,404 Income From Operations 1,572 1,463 2,320 1,846 Interest
Expense 26 32 49 66 Interest Income (18) (38) (43) (70)
Solutia-Related Income - (204) - (187) Other Expense - Net 32 1 58
3 Income From Continuing Operations Before Income Taxes and
Minority Interest 1,532 1,672 2,256 2,034 Income Tax Provision 440
552 616 657 Minority Interest Expense (Income) 1 (1) 3 6 Income
From Continuing Operations 1,091 1,121 1,637 1,371 Discontinued
Operations: Income From Operations of Discontinued Businesses 1 11
19 19 Income Tax Provision - 3 8 5 Income on Discontinued
Operations 1 8 11 14 Net Income $1,092 $1,129 $1,648 $1,385 EBIT
(See note 1) $1,538 $1,678 $2,276 $2,042 Basic Earnings per Share:
Income From Continuing Operations $2.00 $2.05 $2.99 $2.51 Income on
Discontinued Operations - 0.01 0.02 0.02 Net Income $2.00 $2.06
$3.01 $2.53 Diluted Earnings per Share: Income From Continuing
Operations $1.97 $2.00 $2.94 $2.45 Income on Discontinued
Operations - 0.02 0.02 0.03 Net Income $1.97 $2.02 $2.96 $2.48
Weighted Average Shares Outstanding: Basic 546.6 547.8 547.3 547.0
Diluted 555.2 559.2 556.3 558.5 Monsanto Company Selected Financial
Information (Dollars in millions) Unaudited Condensed Statements of
Consolidated Financial Position As of As of Feb. 28, 2009 Aug. 31,
2008 Assets Current Assets: Cash and Cash Equivalents $2,004 $1,613
Trade Receivables, Net 2,171 2,067 Miscellaneous Receivables 616
742 Deferred Tax Assets 411 338 Inventory, Net 3,112 2,453 Assets
of Discontinued Operations - 153 Other Current Assets 156 243 Total
Current Assets 8,470 7,609 Property, Plant and Equipment, Net 3,202
3,323 Goodwill 3,035 3,132 Other Intangible Assets, Net 1,411 1,531
Noncurrent Deferred Tax Assets 818 1,000 Long-Term Receivables 544
636 Noncurrent Assets of Discontinued Operations - 236 Other Assets
513 524 Total Assets $17,993 $17,991 Liabilities and Shareowners'
Equity Current Liabilities: Short-Term Debt, Including Current
Portion of Long-Term Debt $110 $24 Accounts Payable 761 1,090
Income Taxes Payable 540 161 Accrued Compensation and Benefits 254
441 Accrued Marketing Programs 819 754 Deferred Revenues 1,022 867
Grower Production Accruals 308 172 Dividends Payable 145 132
Liabilities of Discontinued Operations 6 26 Miscellaneous
Short-Term Accruals 686 772 Total Current Liabilities 4,651 4,439
Long-Term Debt 1,704 1,792 Postretirement Liabilities 562 590
Long-Term Deferred Revenue 518 566 Noncurrent Deferred Tax
Liabilities 139 204 Long-Term Portion of Environmental and
Litigation Reserve 215 226 Noncurrent Liabilities of Discontinued
Operations - 52 Other Liabilities 600 748 Shareowners' Equity 9,604
9,374 Total Liabilities and Shareowners' Equity $17,993 $17,991
Debt to Capital Ratio: 16% 16% Monsanto Company Selected Financial
Information (Dollars in millions) Unaudited Statements of
Consolidated Cash Flows Six Months Ended Six Months Ended Feb. 28,
2009 Feb. 29, 2008 Operating Activities: Net Income $1,648 $1,385
Adjustments to Reconcile Cash Provided by Operating Activities:
Items That Did Not Require (Provide) Cash: Depreciation and
Amortization 270 281 Bad-Debt Expense 49 38 Receipt of Securities
from Solutia Settlement - (38) Stock-Based Compensation Expense 55
41 Excess Tax Benefits from Stock-Based Compensation (12) (118)
Deferred Income Taxes 2 156 Equity Affiliate (Income) Expense, Net
(9) 3 Acquired In-Process Research and Development 162 1 Gain on
Sale of a Business (6) - Other Items (4) (52) Changes in Assets and
Liabilities that Provided (Required) Cash, Net of Acquisitions:
Trade Receivables, Net (244) (505) Inventory, Net (972) (439)
Deferred Revenues 158 603 Accounts Payable and Other Accrued
Liabilities 402 673 Net Investment Hedge Settlement 27 (64) Other
Items (31) (88) Net Cash Provided by Operating Activities 1,495
1,877 Cash Flows Provided (Required) by Investing Activities:
Maturities of Short-Term Investments 102 59 Capital Expenditures
(461) (314) Acquisitions of Businesses, Net of Cash Acquired (273)
(103) Purchases of Long-Term Equity Securities (7) (78) Technology
and Other Investments (26) (16) Proceeds from Divestiture of a
Business 300 - Other Investments and Property Disposal Proceeds 6
48 Net Cash Required by Investing Activities (359) (404) Cash Flows
Provided (Required) by Financing Activities: Net Change in
Financing With Less Than 90-Day Maturities (73) (19) Short-Term
Debt Reductions - (9) Short-Term Debt Proceeds 55 - Long-Term Debt
Reductions (69) - Payments on Other Financing - (1) Treasury Stock
Purchases (274) (121) Stock Option Exercises 17 82 Excess Tax
Benefits from Stock-Based Compensation 12 118 Dividend Payments
(264) (192) Net Cash Required by Financing Activities (596) (142)
Effect of Exchange Rate Changes on Cash and Cash Equivalents (149)
88 Net Increase in Cash and Cash Equivalents 391 1,419 Cash and
Cash Equivalents at Beginning of Period 1,613 866 Cash and Cash
Equivalents at End of Period $2,004 $2,285 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 Six Months
Ended Feb. 28, Feb. 29, Feb. 28, Feb. 29, 2009 2008 2009 2008 EBIT
- Seeds and Genomics Segment $1,212 $1,077 $1,277 $1,057 EBIT -
Agricultural Productivity Segment 326 601 999 985 EBIT- Total 1,538
1,678 2,276 2,042 Interest Expense (Income) - Net 8 (6) 6 (4)
Income Tax Provision (A) 438 555 622 661 Net Income $1,092 $1,129
$1,648 $1,385 (A) Includes the income tax provision from continuing
operations, the income tax benefit (provision) on minority
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. The reconciliation of EPS to ongoing
EPS for the second quarter and six months ended Feb. 28, 2009 and
Feb. 29, 2008 is included on page 1 of this release. Fiscal Year
2009 Fiscal Year Guidance 2008 Diluted Earnings (Loss) per Share
$4.23-$4.33 $3.62 Solutia Claim Settlement - ($0.23) Loss (Income)
on Discontinued Operations ($0.02) ($0.04) In-Process R & D
Write-Off Related to the De Ruiter Acquisition - $0.29 In-Process R
& D Write-Off Related to the Aly $0.19 - Diluted Earnings
(Loss) per Share from Ongoing Business $4.40-$4.50 $3.64
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
2009 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 Six Months
Ended 2009 Feb. 28, Feb. 29, Guidance 2009 2008 Net Cash Provided
by Operating Activities $3,000 $1,495 $1,877 Net Cash Required by
Investing Activities (1,200) (359) (404) Free Cash Flow $1,800
$1,136 $1,473 Net Cash Required by Financing Activities N/A (596)
(142) Effect of Exchange Rate Changes on Cash and Cash Equivalents
N/A (149) 88 Net Increase in Cash and Cash Equivalents N/A $391
$1,419 Cash and Cash Equivalents at Beginning of Period N/A $1,613
$866 Cash and Cash Equivalents at End of Period N/A $2,004 $2,285
DATASOURCE: Monsanto Company CONTACT: Lee Quarles, +1-314-694-2330,
or Danielle Stuart, +1-314-694-2478, both of Monsanto Company Web
Site: http://www.monsanto.com/
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