ST. LOUIS, June 24, 2009 /PRNewswire-FirstCall/ -- ($in millions)
Third Third Nine Nine Quarter Quarter Months Months 2009 2008 2009
2008 Net Sales by Segment Corn seed and traits $1,020 $975 $3,726
$3,189 Soybean seed and traits 540 447 1,367 1,064 Cotton seed and
traits 333 279 413 361 Vegetable seeds 206 185 572 521 All other
crops seeds and traits 149 161 311 293 TOTAL Seeds and Genomics
$2,248 $2,047 $6,389 $5,428 Roundup and other glyphosate-based
herbicides $614 $1,168 $2,749 $3,158 All other agricultural
productivity products 299 323 707 728 TOTAL Agricultural
Productivity $913 $1,491 $3,456 $3,886 TOTAL Net Sales $3,161
$3,538 $9,845 $9,314 Gross Profit $1,834 $1,967 $5,905 $5,217
Operating Expenses $799 $866 $2,550 $2,270 Interest Expense
(Income) - Net $18 $(4) $24 $(8) Other Expense (Income) - Net $4
$(5) $62 $(189) Net Income $694 $811 $2,342 $2,196 Diluted Earnings
per Share (See note 1.) $1.25 $1.45 $4.21 $3.93 Items Affecting
Comparability - EPS Impact Loss (Income) on Discontinued Operations
-- $0.01 $(0.02) $(0.02) Solutia Claim Settlement (after tax) -- --
-- $(0.23) Acquired In Process R&D (Aly Participacoes Ltda.) --
-- $0.19 -- Diluted Earnings per Share from Ongoing Business (For
the definition of ongoing EPS, see note 1.) $1.25 $1.46 $4.38 $3.68
Effective Tax Rate 30% 26% 28% 30% Comparison as a Percent of Net
Sales: Third Third Nine Nine Quarter Quarter Months Months 2009
2008 2009 2008 Gross profit 58% 56% 60% 56% Selling, general and
administrative expenses (SG&A) 16% 17% 16% 17% Research and
development expenses (excluding acquired in-process R&D) 9% 7%
8% 7% Income before income taxes and minority interest 32% 31% 33%
34% Net income 22% 23% 24% 24% Comment from Monsanto Chairman,
President and Chief Executive Officer Hugh Grant: "Our 2009 fiscal
year represents a milestone for our business as our seeds and
traits business alone will deliver more gross profit than all of
Monsanto did in 2007, a remarkable achievement in just two short
years. Backed by continued strong farmer demand for our
higher-yielding seed products and new pipeline technologies on the
way, we remain committed to doubling gross profit for the entire
company from the 2007 base of $4.2 billion to roughly $8.6-to-8.8
billion in 2012." Operations Update Monsanto reported net sales of
$3.2 billion for the third quarter of fiscal year 2009, which are
11 percent lower than sales in the same period in fiscal year 2008.
Results in the quarter reflected decreased revenues from the
company's Roundup and other glyphosate-based agricultural
herbicides globally, partially offset by increased revenues from
seed and trait products sold through the company's U.S. soybean,
cotton, corn and vegetable businesses. SG&A as a percent of net
sales was just under 16 percent for the quarter, down 1 percentage
point from the same period in fiscal year 2008. SG&A expenses
were more than $100 million lower during the quarter. Net sales in
the first nine months of the company's 2009 fiscal year were $9.8
billion, which were 6 percent higher compared with sales in the
same period last year. Results were primarily driven by increased
revenues associated with the company's U.S. corn and soybean seed
and traits businesses. These results were partially offset by lower
global sales of Roundup and other glyphosate-based agricultural
herbicides in the period. Monsanto's net income for the third
quarter of fiscal year 2009 was $694 million or 14 percent lower
than net income in the same period last year. For the first nine
months of fiscal year 2009, net income was 7 percent higher than
net income in the same period last year. Earnings per share (EPS)
for the third quarter of fiscal year 2009 was $1.25 both on an
as-reported basis and an ongoing basis. EPS was $4.21 on an
as-reported basis and $4.38 on an ongoing basis for the first nine
months of fiscal year 2009. (For a reconciliation of ongoing EPS,
see page 1.) Cash Flow For the first nine months of fiscal year
2009, net cash provided by operating activities was $436 million,
compared with $1.3 billion in the same period in 2008. Net cash
required by investing activities was $588 million for the first
nine months of 2009, compared with net cash required of $650
million for the same period last year. As a result, free cash flow
was a use of $152 million for the first nine months of fiscal year
2009, compared with a source of $675 million in the same period in
fiscal year 2008. (For a reconciliation of free cash flow, see note
1.) Net cash required by financing activities was $768 million for
the first nine months of 2009, compared with net cash provided of
$93 million for the same period last year. Outlook Monsanto's
fourth quarter is largely influenced by its global cotton business
and U.S. Roundup and other glyphosate-based agricultural herbicides
business. Monsanto continues to expect that its full-year 2009
ongoing EPS will be at the low end of its previously-announced
range of $4.40 to $4.50. (For a reconciliation of ongoing EPS
guidance, see note 1). The company is now projecting its free cash
flow will be approximately $1.4 billion for the year. The company
expects net cash provided by operating activities to be in the
range of $2.3 billion, and net cash required by investing
activities to be approximately $950 million for fiscal year 2009.
(For a reconciliation of free cash flow, see note 1.) Monsanto
Outlines New Strategic Actions: Monsanto is creating a separate
division for its Roundup and other herbicides business which is
expected to enable the company to better align spending and working
capital needs. This action is designed to enable Monsanto to
stabilize the business and allow it to deliver optimal gross profit
and a sustainable level of operating cash in the coming seasons. In
addition to the new division, Monsanto announced a planned
restructuring that will include a reduction of approximately 900
employees across the entire company. The reduction will vary from
country to country and will be less than four percent of the
company's global workforce. The company anticipates the actions
will require a one-time restructuring charge estimated at
approximately $350 million to $400 million, or $0.41 to $0.47 per
share to the company's fourth-quarter EPS in fiscal year 2009. The
company expects to complete its restructuring in fiscal year 2010.
Comment from Hugh Grant: "Over the last six years, Monsanto's
business has undergone a dramatic transition from a company
historically built on chemical innovations to one focused on
delivering enhanced seed offerings that help farmers get more out
of each acre of farmland while reducing the footprint of the inputs
used on that land. The actions announced today will allow our
company to better navigate in today's changing business environment
and keep the company on a clear path for growth. "We believe these
steps are in the best interests of our shareowners, our customers
and our employees. This is designed to bring more clarity and
predictability to our Roundup business and greater focus to our
growing seeds and traits business." Seeds and Genomics Segment
Detail ($in millions) Net Sales Gross Profit Seeds Third Third Nine
Nine Third Third Nine Nine and Quarter Quarter Months Months
Quarter Quarter Months Months Genomics 2009 2008 2009 2008 2009
2008 2009 2008 Corn seed and traits $1,020 $975 $3,726 $3,189 $630
$565 $2,445 $2,023 Soybean seed and traits 540 447 1,367 1,064 338
269 856 649 Cotton seed and traits 333 279 413 361 249 195 296 252
Vegetable seeds 206 185 572 521 113 93 308 270 All other crops
seeds and traits 149 161 311 293 97 97 177 154 TOTAL Seeds and
Genomics $2,248 $2,047 $6,389 $5,428 $1,427 $1,219 $4,082 $3,348
($in millions) Earnings Before Interest & Taxes (EBIT) Third
Third Nine Nine Quarter Quarter Months Months Seeds and Genomics
2009 2008 2009 2008 EBIT (For a reconciliation of EBIT, see note
1.) $804 $586 $2,081 $1,643 Unusual Items Affecting EBIT IPR&D
resulting from acquisition of Aly None 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 $2.2 billion for the
third quarter of fiscal year 2009, or 10 percent higher than sales
in the same period last year. During the third quarter of fiscal
year 2009, the company realized increased revenues from seed and
trait products sold through the company's U.S. soybean and corn
businesses, as well as through its global vegetable seed business.
The company also realized increased revenues from its India and
U.S. cotton seed and trait business. In the United States, Monsanto
estimates that some 16,000-plus farmers are using the Genuity brand
Roundup Ready 2 Yield trait on approximately 1.4 million to 1.5
million acres this season. Monsanto believes that customer demand
for its branded corn seed products has contributed to an eighth
consecutive year of share gains in U.S. corn seed sales. In the
United States, Monsanto's DEKALB brand could realize up to 1
percentage point in share growth and its American Seeds brands
could realize up to 1 percentage point, pending final returns. In
Brazil and Argentina, Monsanto's brands increased slightly more
than 1 percentage point and 3 percentage points, respectively.
Sales for the segment were also higher for the first nine months of
the 2009 fiscal year compared with sales in the same period last
year. Sales for the first nine months were $6.4 billion, or 18
percent higher than sales in fiscal year 2008. Key contributors to
the company's growth through the first nine months included higher
total corn seed and traits revenues, increased soybean seed and
traits revenues in the United States, as well as higher India and
U.S. cotton seed and traits revenue. Preliminary Trait Acreage
Report As part of today's announcement, Monsanto also published a
preliminary report on the company's biotech trait acreage for
fiscal year 2009. This report is available on Monsanto's web site
at http://www.monsanto.com/. Agricultural Productivity Segment
Detail ($in millions) Net Sales Gross Profit Agricultural
Productivity Third Third Nine Nine Third Third Nine Nine Quarter
Quarter Months Months Quarter Quarter Months Months 2009 2008 2009
2008 2009 2008 2009 2008 Roundup and other glyphosate- based
herbicides $614 $1,168 $2,749 $3,158 $273 $594 $1,514 $1,559 All
other agricultural productivity products 299 323 707 728 134 154
309 310 TOTAL Agricultural Productivity $913 $1,491 $3,456 $3,886
$407 $748 $1,823 $1,869 ($in millions) Earnings Before Interest
& Taxes (EBIT) Agricultural Productivity Third Third Nine Nine
Quarter Quarter Months Months 2009 2008 2009 2008 EBIT (For a
reconciliation of EBIT, see note 1.) $211 $501 $1,210 $1,486
Unusual Items Affecting EBIT Solutia Claim Settlement None None
None $210 (Loss) Income from Discontinued Operations None $(6) $19
$14 The Agricultural Productivity segment consists primarily of
crop protection products and the lawn-and-garden herbicide
business. Sales for Monsanto's Agricultural Productivity segment
were $913 million for the third quarter of fiscal year 2009, or 39
percent lower compared with sales in the same period last year.
Results in the quarter were impacted by increased pressure from
generic glyphosate and other branded competitors who continue to
aggressively move larger-than-expected volumes of lower-priced
material into the marketplace and to a lesser extent by cold, wet
weather in parts of the U.S. Corn Belt. Sales for the first nine
months of the 2009 fiscal year declined compared with sales in the
same period last year. Segment sales through the first nine months
were $3.5 billion or 11 percent lower than sales in the same period
in fiscal year 2008. Results through the first nine months reflect
lower sales of Roundup and other glyphosate-based agricultural
herbicides in all world areas except Brazil and Canada. 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. 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 and Roundup are registered trademarks and
Genuity and Roundup Ready 2 Yield are trademarks of Monsanto
Company and its wholly owned subsidiaries. Contact Media: Lee
Quarles (314-694-2330) Monsanto Company Selected Financial
Information (Dollars in millions, except per share amounts)
Unaudited Statements of Consolidated Operations Three Three Nine
Nine Months Months Months Months Ended Ended Ended Ended May 31,
May 31, May 31, May 31, 2009 2008 2009 2008 Net Sales $3,161 $3,538
$9,845 $9,314 Cost of Goods Sold 1,327 1,571 3,940 4,097 Gross
Profit 1,834 1,967 5,905 5,217 Operating Expenses: Selling, General
and Administrative Expenses 504 616 1,576 1,601 Research and
Development Expenses 295 248 812 666 Acquired In-Process Research
and Development - 2 162 3 Total Operating Expenses 799 866 2,550
2,270 Income From Operations 1,035 1,101 3,355 2,947 Interest
Expense 32 31 81 97 Interest Income (14) (35) (57) (105)
Solutia-Related Income - - - (187) Other Expense (Income) - Net 4
(5) 62 (2) Income From Continuing Operations Before Income Taxes
and Minority Interest 1,013 1,110 3,269 3,144 Income Tax Provision
308 288 924 945 Minority Interest Expense 11 7 14 13 Income From
Continuing Operations 694 815 2,331 2,186 Discontinued Operations:
(Loss) Income From Operations of Discontinued Businesses - (7) 19
12 Income Tax (Benefit) Provision - (3) 8 2 (Loss) Income on
Discontinued Operations - (4) 11 10 Net Income $694 $811 $2,342
$2,196 EBIT (See note 1) $1,015 $1,087 $3,291 $3,129 Basic Earnings
per Share: Income From Continuing Operations $1.27 $1.48 $4.26
$3.99 Income on Discontinued Operations - - 0.02 0.02 Net Income
$1.27 $1.48 $4.28 $4.01 Diluted Earnings (Loss) per Share: Income
From Continuing Operations $1.25 $1.46 $4.19 $3.91 (Loss) Income on
Discontinued Operations - (0.01) 0.02 0.02 Net Income $1.25 $1.45
$4.21 $3.93 Weighted Average Shares Outstanding: Basic 545.7 549.0
546.9 547.6 Diluted 554.4 560.0 555.7 558.9 Monsanto Company
Selected Financial Information (Dollars in millions) Unaudited
Condensed Statements of Consolidated Financial Position As of As of
May 31, Aug. 31, 2009 2008 Assets Current Assets: Cash and Cash
Equivalents $579 $1,613 Trade Receivables, Net 3,017 2,067
Miscellaneous Receivables 692 742 Deferred Tax Assets 410 338
Inventory, Net 3,169 2,453 Assets of Discontinued Operations - 153
Other Current Assets 132 243 Total Current Assets 7,999 7,609
Property, Plant and Equipment, Net 3,435 3,323 Goodwill 3,137 3,132
Other Intangible Assets, Net 1,436 1,531 Noncurrent Deferred Tax
Assets 887 1,000 Long-Term Receivables, Net 558 636 Noncurrent
Assets of Discontinued Operations - 236 Other Assets 518 524 Total
Assets $17,970 $17,991 Liabilities and Shareowners' Equity Current
Liabilities: Short-Term Debt, Including Current Portion of
Long-Term Debt $120 $24 Accounts Payable 711 1,090 Income Taxes
Payable 480 161 Accrued Compensation and Benefits 276 441 Accrued
Marketing Programs 676 754 Deferred Revenues 228 867 Grower
Production Accruals 122 172 Dividends Payable - 132 Liabilities of
Discontinued Operations 8 26 Miscellaneous Short-Term Accruals 866
772 Total Current Liabilities 3,487 4,439 Long-Term Debt 1,705
1,792 Postretirement Liabilities 565 590 Long-Term Deferred Revenue
496 566 Noncurrent Deferred Tax Liabilities 133 204 Long-Term
Portion of Environmental and Litigation Liabilities 203 226
Noncurrent Liabilities of Discontinued Operations - 52 Other
Liabilities 614 748 Shareowners' Equity 10,767 9,374 Total
Liabilities and Shareowners' Equity $17,970 $17,991 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, 2009 May 31, 2008
Operating Activities: Net Income $2,342 $2,196 Adjustments to
Reconcile Cash Provided by Operating Activities: Items That Did Not
Require (Provide) Cash: Depreciation and Amortization 404 423
Bad-Debt Expense 56 52 Receipt of Securities from Solutia
Settlement - (38) Stock-Based Compensation Expense 86 64 Excess Tax
Benefits from Stock-Based Compensation (24) (161) Deferred Income
Taxes 12 126 Equity Affiliate (Income) Expense, Net (11) 2 Acquired
In-Process Research and Development 162 3 Gain on Sale of a
Business (6) - Other Items (51) (10) Changes in Assets and
Liabilities that Provided (Required) Cash, Net of Acquisitions:
Trade Receivables, Net (967) (1,490) Inventory, Net (853) (387)
Deferred Revenues (666) (1) Accounts Payable and Other Accrued
Liabilities (40) 746 Net Investment Hedge Settlement 36 (97) Other
Items (44) (103) Net Cash Provided by Operating Activities 436
1,325 Cash Flows Provided (Required) by Investing Activities:
Maturities of Short-Term Investments 117 59 Capital Expenditures
(661) (530) Acquisition of Businesses, Net of Cash Acquired (280)
(113) Purchases of Long-Term Equity Securities (7) (78) Technology
and Other Investments (60) (39) Proceeds from Divestiture of a
Business 300 - Other Investments and Property Disposal Proceeds 3
51 Net Cash Required by Investing Activities (588) (650) Cash Flows
Provided (Required) by Financing .Activities: Net Change in
Financing With Less Than 90-Day Maturities (44) (28) Short-Term
Debt Reductions (45) (9) Short-Term Debt Proceeds 55 - Long-Term
Debt Reductions (70) (238) Long-Term Debt Proceeds - 548 Payments
on Other Financing - (3) Debt Issuance Costs - (5) Treasury Stock
Purchases (310) (145) Stock Option Exercises 30 100 Excess Tax
Benefits From Stock-Based Compensation 24 161 Dividend Payments
(408) (288) Net Cash (Required) Provided by Financing Activities
(768) 93 Effect of Exchange Rate Changes on Cash and Cash
Equivalents (114) 80 Net (Decrease) Increase in Cash and Cash
Equivalents (1,034) 848 Cash and Cash Equivalents at Beginning of
Period 1,613 866 Cash and Cash Equivalents at End of Period $579
$1,714 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, May 31, May 31, 2009 2008 2009
2008 EBIT - Seeds and Genomics Segment $804 $586 $2,081 $1,643 EBIT
- Agricultural Productivity Segment 211 501 1,210 1,486 EBIT -
Total 1,015 1,087 3,291 3,129 Interest Expense (Income) - Net 18
(4) 24 (8) Income Tax Provision (A) 303 280 925 941 Net Income $694
$811 $2,342 $2,196 (A) Includes the income tax provision from
continuing operations, the income tax benefit on minority interest,
and the income tax provision (benefit) 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 third quarter and nine months ended May 31, 2009 and
May 31, 2008 is included on page 1 of this release. Fiscal Year
2009 Fiscal Year Guidance 2008 Diluted Earnings (Loss) per Share
$3.76-$3.92 $3.62 Solutia Claim Settlement - ($0.23) Loss (Income)
on Discontinued Operations ($0.02) ($0.04) Restructuring Charges,
Net $0.41-$0.47 - 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
Nine Months Ended 2009 May 31, May 31, Guidance 2009 2008 Net Cash
Provided by Operating Activities $2,350 $436 $1,325 Net Cash
Required by Investing Activities (950) (588) (650) Free Cash Flow
$1,400 $(152) $675 Net Cash (Required) Provided by Financing
Activities N/A (768) 93 Effect of Exchange Rate Changes on Cash and
Cash Equivalents N/A (114) 80 Net (Decrease) Increase in Cash and
Cash Equivalents N/A $(1,034) $848 Cash and Cash Equivalents at
Beginning of Period N/A $1,613 $866 Cash and Cash Equivalents at
End of Period N/A $579 $1,714 DATASOURCE: Monsanto Company CONTACT:
Lee Quarles of Monsanto Company, +1-314-694-2330 Web Site:
http://www.monsanto.com/
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