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DEKALB GENETICS FORECASTS LOWER EARNINGS FOR FISCAL 1993 AND REPORTS LOSS FOR THIRD QUARTER; DUE PRIMARILY TO INTERNATIONAL SEED OPERATIONS

 DEKALB, Ill., July 8 /PRNewswire/ -- DEKALB Genetics Corporation (NASDAQ-NMS: SEEDB), said today that earnings for fiscal 1993 will be significantly below last year, contrary to earlier indications. DEKALB cited a greater than expected operating loss for its international seed operations and a decision by the company to end direct participation in two markets. In addition, DEKALB's U.S. sorghum results will be substantially below fiscal 1993. These factors combined to produce a loss for the third fiscal quarter.
 For the quarter ended May 31, 1993, DEKALB reported a loss of $1.8 million, or 36 cents per share, compared with earnings of $1.5 million, or 29 cents per share, in the same quarter last year. Revenues were off 5 percent to $92.4 million from $97.4 million.
 For the nine months, DEKALB reported net earnings of $6.1 million, or $1.17 per share, down 37 percent from $9.7 million, or $1.83 per share, in the same period last year. Revenues declined almost 3 percent to $268.8 million from $276.2 million.
 "Our international seed operations were down substantially for the nine-month period, principally because of Spain, Australia and Canada," said Bruce P. Bickner, chairman and chief executive officer. "Although our Argentine operation has reported excellent gains in sales and profits, its performance was not able to offset difficulties in these other markets.
 "In Spain, for example, we downsized our operation in fiscal 1992, but the market has continued to deteriorate very rapidly," he said. "European Community policy, along with other changes in the Spanish seed market, have severely reduced future gross margin opportunities in Spain. We believe it is in the best interests of our shareholders to end our exposure to ongoing losses in markets with only limited upside potential. Consequently, we will terminate our direct participation in both Spain and Australia before the end of fiscal 1993, serving these markets instead through licensee representation."
 Bickner noted that the company's quarterly loss was DEKALB's first since becoming an independent public company in 1988. "This is a major disappointment. We are taking other significant steps to improve our financial performance," he said. "We are now consolidating and refocusing management. Going forward, these organizational and personnel changes will reduce our overhead and improve our ability to respond more rapidly to our customers' needs. More specifically, the DEKALB Plant Genetics partnership will be dissolved, and all seed business will be conducted as an operating division of DEKALB Genetics Corporation. Richard Ryan, president of DEKALB Genetics Corporation, has assumed direct management responsibility for DEKALB's
worldwide seed marketing and operations. Thomas Rice, senior vice president, research of DEKALB Genetics Corporation, continues to direct all conventional and biotechnology research and other plant technology matters. Both individuals report directly to me."
 Bickner added that the fourth quarter is not expected to have a significant impact on 1993 earnings. Because of the seasonal nature of the seed business, the fourth quarter is typically a period in which the company makes adjustments for seed returns and expenses which were estimated for the first nine months.
 Seed Operations
 Because of weak performance from international operations, DEKALB's seed business reported a pre-tax loss in the third quarter of $5.1 million, compared with earnings of $4.0 million in the same quarter of fiscal 1992. Seed revenues declined 6 percent to $75.8 million from $80.6 million last year.
 For the nine months, seed operations recorded pre-tax earnings of $12.5 million, down 36 percent from $19.6 million last year. Revenues of $220.8 million were down 3 percent from $227.4 million in the same period of fiscal 1992.
 "U.S. seed corn volume is trailing last year because of much lower planted acreage," Bickner said. "According to the most recent USDA report, corn acreage is down by more than 6 percent from last year's 79.3 million acres. Acreage was expected to decrease this year because of higher government set-aside requirements. However, heavy spring rains have reduced corn plantings even further.
 "Demand was very strong this spring for our newly released corn hybrids, but our total corn volume will be down," Bickner said. "The larger acreage reduction, together with product shifting, have increased the amount of unused seed returned to the company. We had expected to gain share in the U.S. corn market this year, but we have not been able to accomplish that objective. Fortunately, unit margins for U.S. corn are up this year because of lower unit costs and higher average selling prices. Our domestic corn operation should report an improved profit contribution this year.
 "The results from DEKALB sorghum will be substantially lower, however," he added.
 "Planted sorghum acreage is estimated to be 17 percent below last year, which has resulted in lower volume for DEKALB's product line. Sorghum margins are lower as well because of higher production and conditioning costs."
 Bickner also noted that DEKALB received payment in the third quarter on the sale of more than 500,000 units of hybrid seed corn to the Ukraine. The shipment included excess quantities of seed that otherwise may have been written off. "Ukrainian farmers faced a shortage of good- quality seed for this year's growing season, and we were pleased to help answer that need," Bickner said. "Fortunately, early U.S. corn hybrids are adaptable to the major growing areas of the Ukraine."
 Swine Operations
 For the quarter, DEKALB Swine reported pre-tax earnings of $1.0 million, off slightly from $1.2 million in the same period last year. Revenues were unchanged at $11.3 million. For the nine months, earnings were $2.3 million, compared with $3.4 million in the prior-year period. Revenues slipped to $32.6 million from $33.1 million. A less profitable breeding stock sales mix was primarily responsible for the decreases.
 "DEKALB Swine recently unveiled a new line of hybrid breeding animals, and the industry reaction is very positive," Bickner said. "Our research program is focused primarily on increasing the quantity and quality of lean meat, and these new animals reflect significant improvements. We will begin to ship these new breeding animals to customers late this summer, and we expect them to contribute to breeding stock sales gains in 1994."
 Based in DeKalb, Illinois, DEKALB Genetics Corporation is engaged in the research, production and marketing of agricultural seed, hybrid swine and egg-laying breeding stock. DEKALB Genetics Corporation Class B Common Stock is traded on the NASDAQ National Market System, under the symbol SEEDB.
 DEKALB Genetics Corporation
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In Millions, Except Per Share Amounts)
 Three Months Ended Nine Months Ended
 5/31/93 5/31/92 5/31/93 5/31/92
 Operating Revenues $92.4 $97.4 $268.8 $276.2
 Earnings (Loss) Before
 Income Taxes (7.0) 2.3 5.2 14.8
 Net Earnings (Loss) ($1.8) $1.5 $6.1 $9.7
 Net Earnings (Loss) Per Share:
 Primary ($0.36) $0.29 $1.17 $1.88
 Fully Diluted -- -- -- $1.83
 Dividends Declared Per Share $.20 $.20 $.60 $.60
 -0- 7/08/93
 /CONTACT: Thomas R. Rauman, chief financial officer, 612-758-9223, of DEKALB Genetics/
 (SEEDB)


CO: DEKALB Genetics Corporation ST: Illinois IN: AGR SU: ERN

DB -- MN002 -- 9311 07/08/93 08:00 EDT
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