-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ch5HntpnNUxqo/Mzo/yivgO6G4kdW43OHIrAwIIsl3HQlV7RWaOw2Rq00ni9zLva 2IQfmyXTig96YMxl7jWKqg== 0001133527-04-000037.txt : 20041209 0001133527-04-000037.hdr.sgml : 20041209 20041209172539 ACCESSION NUMBER: 0001133527-04-000037 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20041209 DATE AS OF CHANGE: 20041209 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DELTA & PINE LAND CO CENTRAL INDEX KEY: 0000902277 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 621040440 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-45159 FILM NUMBER: 041194163 BUSINESS ADDRESS: STREET 1: ONE COTTON ROW CITY: SCOTT STATE: MS ZIP: 38772 BUSINESS PHONE: 6017423351 MAIL ADDRESS: STREET 1: ONE COTTON ROW CITY: SCOTT STATE: MS ZIP: 38772 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: STERLING CAPITAL MANAGEMENT LLC CENTRAL INDEX KEY: 0001133527 IRS NUMBER: 562226389 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 301 S COLLEGE ST STREET 2: STE 3200 CITY: CHARLOTTE STATE: NC ZIP: 28202 BUSINESS PHONE: 7043728670 MAIL ADDRESS: STREET 1: 301 S COLLEGE ST STREET 2: STE 3200 CITY: CHARLOTTE STATE: NC ZIP: 28202 SC 13D/A 1 dlp13ddec0804.txt 13D AMENDMENT DUE TO INCREASE IN SHARES OWNED OF 1% OF TOTAL OUTSTANDING. SCHEDULE 13D Under the Securities Exchange Act of 1934 Delta & Pine Land Co. (Name of Issuer) Common Stock, $.10 Par Value (Title of Class of Securities) 247357106 (CUSIP Number) Kenneth R. Cotner Sterling Capital Management LLC 4064 Colony Road, Suite 300 Charlotte, NC 28211 704-372-8670 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 8, 2004 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of 240.13d-1(e), 240.13d-l(f) or 240.13d-1(g), check the following box. X Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 1746 (11-03) CUSIP No. 247357106 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Sterling Capital Management LLC ID 56-2226389 2. Check the Appropriate Box if a Member of a Group (See Instructions) Not Applicable 3. SEC Use Only 4. Source of Funds (See Instructions) OO: Funds of investment advisory clients 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) Not Applicable 6. Citizenship or Place of Organization North Carolina Number of 7. sole Voting Power Shares Beneficially 0 shares owned by each Reporting Person With 8. Shared Voting Power 4,176,985 shares 9. Sole Dispositive Power 0 shares 10. Shared Dispositive Power 4,176,985 shares 11. Aggregate Amount Beneficially Owned by Each Reporting Person 4,176,985 shares 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) Not Applicable 13. Percent of Class Represented by Amount in Row (11) 10.8% 14. Type of Reporting Person (See Instructions) IA CUSIP No. 247357106 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Sterling MGT, Inc. ID 56-2226391 2. Check the Appropriate Box if a Member of a Group (See Instructions) Not Applicable 3. SEC Use Only 4. Source of Funds (See Instructions) OO: Funds of investment advisory clients 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) Not Applicable 6. Citizenship or Place of Organization North Carolina Number of 7. Sole Voting Power Shares Beneficially 0 shares owned by each Reporting Person With 8. Shared Voting Power 4,176,985 shares 9. Sole Dispositive Power 0 shares 10. Shared Dispositive Power 4,176,985 shares 11. Aggregate Amount Beneficially Owned by Each Reporting Person 4,176,985 shares 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) Not Applicable 13. Percent of Class Represented by Amount in Row (11) 10.8% 14. Type of Reporting Person (See Instructions) CO CUSIP No. 247357106 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Eduardo A. Brea 2. Check the Appropriate Box if a Member of a Group (See Instructions) Not Applicable 3. SEC Use Only 4. Source of Funds (See Instructions) OO: Funds of investment advisory clients 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) Not Applicable 6. Citizenship or Place of Organization United States Number of 7. Sole Voting Power Shares Beneficially 0 shares owned by each Reporting Person With 8. Shared Voting Power 4,176,985 shares 9. Sole Dispositive Power 0 shares 10. Shared Dispositive Power 4,176,985 shares 11. Aggregate Amount Beneficially Owned by Each Reporting Person 4,176,985 shares 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) Not Applicable 13. Percent of Class Represented by Amount in Row (11) 10.8% 14. Type of Reporting Person (See Instructions) IN CUSIP No. 247357106 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Alexander W. McAlister 2. Check the Appropriate Box if a Member of a Group (See Instructions) Not Applicable 3. SEC Use Only 4. Source of Funds (See Instructions) OO: Funds of investment advisory clients 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) Not Applicable 6. Citizenship or Place of Organization United States Number of 7. Sole Voting Power Shares Beneficially 0 shares owned by each Reporting Person With 8. Shared Voting Power 4,176,985 shares 9. Sole Dispositive Power 0 shares 10. Shared Dispositive Power 4,176,985 shares 11. Aggregate Amount Beneficially Owned by Each Reporting Person 4,176,985 shares 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) Not Applicable 13. Percent of Class Represented by Amount in Row (11) 10.8% 14. Type of Reporting Person (See Instructions) IN CUSIP No. 247357106 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). David M. Ralston 2. Check the Appropriate Box if a Member of a Group (See Instructions) Not Applicable 3. SEC Use Only 4. Source of Funds (See Instructions) OO: Funds of investment advisory clients 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) Not Applicable 6. Citizenship or Place of Organization United States Number of 7. Sole Voting Power Shares Beneficially 0 shares owned by each Reporting Person With 8. Shared Voting Power 4,176,985 shares 9. Sole Dispositive Power 0 shares 10. Shared Dispositive Power 4,176,985 shares 11. Aggregate Amount Beneficially Owned by Each Reporting Person 4,176,985 shares 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) Not Applicable 13. Percent of Class Represented by Amount in Row (11) 10.8% 14. Type of Reporting Person (See Instructions) IN CUSIP No. 247357106 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Brian R. Walton 2. Check the Appropriate Box if a Member of a Group (See Instructions) Not Applicable 3. SEC Use Only ............................ 4. Source of Funds (See Instructions) OO: Funds of investment advisory clients 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) Not Applicable 6. Citizenship or Place of Organization United States Number of 7. Sole Voting Power Shares Beneficially 0 shares owned by each Reporting Person With 8. Shared Voting Power 4,176,985 shares 9. Sole Dispositive Power 0 shares 10. Shared Dispositive Power 4,176,985 shares 11. Aggregate Amount Beneficially Owned by Each Reporting Person 4,176,985 shares 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) Not Applicable 13. Percent of Class Represented by Amount in Row (11) 10.8% 14. Type of Reporting Person (See Instructions) IN CUSIP No. 247357106 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Mark W. Whalen 2. Check the Appropriate Box if a Member of a Group (See Instructions) Not Applicable 3. SEC Use Only .. 4. Source of Funds (See Instructions) OO: Funds of investment advisory clients 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) Not Applicable 6. Citizenship or Place of Organization United States Number of 7. Sole Voting Power Shares Beneficially 0 shares owned by each Reporting Person With 8. Shared Voting Power 4,176,985 shares 9. Sole Dispositive Power 0 shares 10. Shared Dispositive Power 4,176,985 shares 11. Aggregate Amount Beneficially Owned by Each Reporting Person 4,176,985 shares 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) Not Applicable 13. Percent of Class Represented by Amount in Row (11) 10.8% 14. Type of Reporting Person (See Instructions) IN ITEM 1. SECURITY AND ISSUER This Schedule 13D relates to the common stock, $.10 par value (the "Securities"), of Delta & Pine Land Co., a Delaware corporation (the "Issuer"). The principal executive office of the Issuer is located at One Cotton Row, Scott, Mississippi 38772. ITEM 2. IDENTITY AND BACKGROUND (a), (b), (c) and (f). This statement is being filed jointly by Sterling Capital Management LLC ("Sterling"), Sterling MGT, Inc. ("MGT"), Eduardo A. Brea ("Brea"), Alexander W. McAlister ("McAlister"), David M. Ralston ("Ralston"), Brian R. Walton ("Walton"), and Mark W. Whalen ("Whalen"). Sterling is an investment adviser registered with the Securities & Exchange Commission under the Investment Advisers Act of 1940. The address of its principal office is 4064 Colony Road, Suite 300, Charlotte, NC 28211. Sterling serves as an investment adviser to individual and institutional clients. The Securities of the Issuer reported in Item 5 were acquired on behalf of the investment advisory clients of Sterling, under discretionary authority granted to Sterling. MGT is the Managing Member of Sterling and has the same address as Sterling. Brea, McAlister, Ralston, Walton, and Whalen are controlling shareholders of MGT and such activities constitute their primary occupations, each are United States citizens and each has the same business address as Sterling and MGT. MGT, Brea, McAlister, Ralston, Walton, and Whalen are control persons under 17 C.F.R. 240.l3d-1(b)(1)(ii)(G). (d) and (e). None of the entities or persons identified in this Item 2 has during the past five years been convicted in any criminal proceeding, nor been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The respective investment advisory clients of Sterling used approximately $96,399,430 in the aggregate to purchase the Securities reported in this filing. All assets used to purchase Securities were assets of these respective clients and none were assets of Sterling. In addition, none of the proceeds used to purchase the Securities were provided through borrowings of any nature. ITEM 4. PURPOSE OF TRANSACTION On January 9, 2004 and January 23, 2004, Sterling sent letters to the members of the board of directors of Delta & Pine Land Company encouraging the board to consider recapitalizing the company. In late January 2004, we also discussed a specific proposal for recapitalization and on March 24 we sent another letter encouraging management to address our concerns on the conference call following their 2Q earnings release. Sterling believes that Delta & Pine has retained significantly more capital than is necessary to operate its business. By acting on our recommendation, we believe that Delta & Pine can lower its cost of capital and materially improve the company's valuation in the public securities markets. We have attached copies of our recent correspondence with Delta & Pine. On August 27, 2004 representatives of Sterling capital met with Delta and Pine's Chairman and Chief Executive Officer to discuss our proposed recapitalization initiative. This proposal was a follow-up to the presentation first provided to Delta and Pine's board of directors in January of 2004. Sterling continues to believe that Delta and Pine has retained significantly more capital than is necessary to operate its business. By acting on our recommendation, we believe that Delta can lower its cost of capital and materially improve the company's valuation in the public securities markets. Attached is an exerpt from the presentation used during the August 27, 2004 meeting. The Securities reported in this filing have been acquired for investment purposes on behalf of client accounts over which Sterling has discretionary investment authority. In pursuing such investment purposes, Sterling may further purchase, hold, vote, trade, dispose or otherwise deal in the Securities at times, and in such manner, as they deem advisable to benefit from changes in market prices of such Securities, changes in the Issuer's operations, business strategy or prospects, or from sale or merger of the Issuer. To evaluate such alternatives, Sterling will routinely monitor the Issuer's operations, prospects, business development, management, competitive and strategic matters, capital structure, and prevailing market conditions, as well as alternative investment opportunities and other investment considerations. Consistent with its investment research methods and evaluation criteria, Sterling may discuss such matters with management or directors of the Issuer, other shareholders, industry analysts, existing or potential strategic partners or competitors, investment and financing professionals, sources of credit and other investors. Such factors and discussions may materially affect, and result in, Sterling modifying its clients' ownership of the Securities, exchanging information with the Issuer pursuant to appropriate confidentiality or similar agreements, proposing changes in the Issuer's operations, governance or capitalization, or in proposing one or more of the other actions described in subsections (a) through (j) of Item 4 of Schedule 13D. Sterling reserves the right to formulate other plans and/or make other proposals, and take such actions with respect to their investment in the Issuer, including any or all of the actions set forth in paragraphs (a) through (j) of Item 4 of Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) and (b). The aggregate number and percentage of Securities to which this Schedule 13D relates is 4,176,985 shares of the common stock of the Issuer, constituting approximately 10.8% of the 38,550,251 shares outstanding. Securities reported as beneficially owned by Sterling are also reported as beneficially owned by each of MGT, Brea, McAlister, Ralston, Walton, and Whalen as control persons. By reason of such relationships, each of the above entities and individuals are reported as having shared power to vote or to direct the vote, and shared power to dispose or direct the disposition of, such Securities. (c). The following transactions in the Issuer's Securities were effected by Sterling during the sixty days preceding the date of this report. On certain days, multiple transactions may have been executed at different times. The data below include the total shares and average price for all buy or sell transactions effected for each day. All such transactions represent open market transactions. Transaction Trade Date Shares Average Price Buy 10/12/2004 Total 3,800 $27.55 Buy 10/20/2004 Total 8,875 $25.38 Buy 10/21/2004 Total 16,900 $25.50 Buy 10/22/2004 Total 10,700 $25.54 Buy 10/29/2004 Total 3,400 $26.34 Buy 11/01/2004 Total 200 $26.32 Buy 11/04/2004 Total 6,500 $26.37 Buy 11/05/2004 Total 13,400 $26.65 Buy 11/08/2004 Total 7,200 $26.94 Buy 11/12/2004 Total 100 $26.93 Buy 11/19/2004 Total 7,700 $26.05 Buy 11/23/2004 Total 400 $26.16 Buy 11/26/2004 Total 7,075 $26.94 Buy 11/29/2004 Total 3,150 $27.25 Buy 11/30/2004 Total 5,800 $26.69 Buy 12/01/2004 Total 11,900 $26.92 Buy 12/02/2004 Total 16,400 $26.46 Buy 12/03/2004 Total 49,800 $26.24 Buy 12/06/2004 Total 87,150 $26.50 12/07/2004 Total 182,400 $26.28 Transaction Trade Date Shares Average Price Sale 10/13/2004 Total (200) $25.80 Sale 10/15/2004 Total (700) $25.21 Sale 10/20/2004 Total (3,300) $25.19 Sale 10/26/2004 Total (900) $25.22 Sale 10/27/2004 Total (500) $26.46 Sale 11/03/2004 Total (200) $26.32 Sale 11/05/2004 Total (800) $26.44 Sale 11/22/2004 Total (150) $25.78 Sale 11/23/2004 Total (1,800) $26.09 Sale 11/26/2004 Total (200) $26.64 (d). The investment advisory clients of Sterling have the sole right to receive and, subject to notice, to withdraw the proceeds from the sale of the Securities. Such clients may also terminate the investment advisory agreements without penalty upon appropriate notice. (e). Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER The powers of disposition with respect to Securities owned by discretionary accounts of Sterling are established in written investment advisory agreements between clients and Sterling, which are entered into in the normal and usual course of the business of Sterling as a registered investment adviser and which are generally applicable to all securities purchased for the benefit of each such discretionary account. There are no special or different agreements relating to the Securities of the Issuer. The written investment advisory agreements with clients do not contain provisions relating to borrowing of funds to finance the acquisition of the Securities, acquisition of control, transfer of securities, joint ventures, or any of the other transactions listed in the instructions to Item 7 of Schedule 13D other than voting of proxies. In connection with voting, Sterling may be allowed or directed to vote the proxies received by discretionary accounts. SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: December 8, 2004 STERLING CAPITAL MANAGEMENT LLC By /s/ Kenneth R. Cotner ______________________________________ Kenneth R. Cotner Director and Chief Operating Officer EX-99 2 dlppresaug04.txt AUGUST 2004 PRESENTATION TO MANAGEMENT Delta & Pine Land Company August, 2004 Patrick W. Rau, CFA - Director & Principal Brian R. Walton, CFA - Managing Director PROPOSAL: "A $280 MM tender offer would meaningfully improve Delta & Pine Land's cost of capital, improve return on capital and improve valuation of the common stock." RATIONALE FOR RECAPITALIZATION - - Return on assets has steadily declined in recent years despite improving operating margins - - An appropriate capital base will help to reverse the slide in the company's return on capital A TENDER OFFER IS THE BEST APPROACH TO RECAPITALIZATION o Acquisitions: Given current initiatives and the company's competitive positioning, there do not appear to be any large, practical acquisition candidates available. o Cash Dividend: Although improved, cash dividends remain less tax advantaged. Further, value enhancement is limited due to lack of share arbitrage. o Share Tender: Achieves desired objective. Preferred to a cash dividend because the company's shares still appear undervalued, regardless of the outcome of the Monsanto lawsuit. LARGE SHARE PURCHASES DRIVE SUPERIOR LONG-TERM RETURNS They reflect several highly positive factors: - Pro-active, opportunistic management - - A strong level of conviction in the company's long-term prospects - - Significant financial strength and flexibility - - An attractive public market valuation FOR DELTA & PINE LAND, A SHARE REPURCHASE IS PARTICULARLY COMPELLING - - Given the current low of interest rates and the firm's dividend policy, the transaction would be free cash flow neutral. - - The transaction would generate a 3 year internal rate of return of 17-23%. - - After four years, the company would be debt free. Earnings Progression: Valuation - - Fiscal 2004 core earnings $0.90/share $28/share - - Impact of lower share count $0.50 - - Higher U.S. cotton acreage $0.10 - - Growth in international markets $0.10 - - VipCot licensing agreement $0.40 - - Syngenta glyphosate technology fees $0.10 - - RoundupReady Flex (incremental tech fee) $0.05 - - Tech fees from other technologies $0.05 Fiscal 2007 Core Earnings $2.20/share $45+/share HOW MUCH? $280 MM is appropriate A. No large cash outlays are looming B. EBITDA should exceed $70 MM in 2005 C. Cash flows should remain relatively stable over the next several years D. Peak seasonal borrowing needs funded via remaining cash and bank facility BALANCE SHEET REMAINS STRONG & COST OF CAPITAL SIGNIFICANTLY REDUCED cash tender of: $280 MM - Cash at year end ($150 MM) - New long term debt ($150 MM) Remaining cash $20 MM Net Long Term Debt Post Tender Offer $130 MM Suggested S&P Rating Projected 2005 EBITDA Interest Coverage: 9.3X A Total Debt/Projected 2005 EBITDA 2.1X A to A- (5 yr. maturity 50-60 bp; spread 5% coupon) TIMING AND MAGNITUDE ARE CRITICAL - - Current level of interest rates provides uniquely low borrowing costs. - - Share price does not reflect improving long term outlook or potential Monsanto settlement. - - Current cost of capital at DLP is excessive, which depresses stock valuation and return metrics. - - Lack of permanent leverage is inconsistent with business model's stable revenue and cash flow characteristics. - - Failure to fully "reshape" balance sheet and reduce outstanding shares will result in structurally lower shareholder value. -----END PRIVACY-ENHANCED MESSAGE-----