-----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, QvRRGU4mzLtbkPpaAP9awEq8Tlf1K6qOzU/kEgfhHuc2uS1zz4U4fG+fxrWJrLs1 55fkhjFUHAZqUf4ErqYH4w== 0000067686-99-000003.txt : 19990302 0000067686-99-000003.hdr.sgml : 19990302 ACCESSION NUMBER: 0000067686-99-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990301 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990301 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONSANTO CO CENTRAL INDEX KEY: 0000067686 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 430420020 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-02516 FILM NUMBER: 99554687 BUSINESS ADDRESS: STREET 1: 800 N LINDBERGH BLVD CITY: ST LOUIS STATE: MO ZIP: 63167 BUSINESS PHONE: 3146941000 MAIL ADDRESS: STREET 1: 800 NORTH LINDBERGH BLVD CITY: ST LOUIS STATE: MO ZIP: 63167 FORMER COMPANY: FORMER CONFORMED NAME: MONSANTO CHEMICAL CO DATE OF NAME CHANGE: 19711003 8-K 1 8-K DATED MARCH 1, 1999 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURTIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): March 1, 1999 (January 21, 1999) MONSANTO COMPANY _________________________________ (Exact Name of Registrant as Specified in Charter) Delaware 1-2516 43-0420020 __________ _______ ___________ 800 North Lindbergh Boulevard St. Louis, Missouri 63167 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (314) 694-1000 ITEM 5. OTHER EVENTS On January 21, 1999, Monsanto Company (the "Company") issued a press release announcing the Company's financial results for the fourth quarter of 1998 and the full year. A copy of the press release issued by the Company is filed as an exhibit hereto and is incorporated by reference herein. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibits. The following exhibit is filed as part of this report: 99.1 Press release dated January 21, 1999, issued by Monsanto Company SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: March 1, 1999 MONSANTO COMPANY By: /s/ Richard B. Clark _____________________________ Name: Richard B. Clark Vice President and Controller (Principal Accounting Officer) EXHIBIT INDEX Exhibit Number Description 99.1 Press release, dated January 21, 1999, issued by Monsanto Company EX-99.1 2 PRESS RELEASE DATED JANUARY 21, 1999 Exhibit 99.1 Immediately Scarlett Lee Foster (314-694-2883) MONSANTO REPORTS 1998 FOURTH-QUARTER AND FULL-YEAR RESULTS ST. LOUIS, Jan. 21, 1999 - Monsanto Company reported an aftertax loss from continuing operations for the fourth quarter of 1998 of $603 million, or a loss of $1.00 per share on both a basic and diluted basis. Sales during the period were $2.1 billion. For the year, the company recorded an aftertax loss from continuing operations of $250 million, or a loss of 41 cents per share on both a basic and diluted basis. Sales reached $8.6 billion. Both the fourth quarter and the year were affected by charges for restructuring, acquired in-process research and development (R&D) and other unusual items. If these items were excluded for the fourth quarter, aftertax income from continuing operations would have been $27 million, or 5 cents per share on a diluted basis. For the full year, if unusual items were excluded, aftertax income from continuing operations would have been $580 million, or 93 cents per share on a diluted basis. Based on an EBIT measure (earnings before interest expense and taxes), the company recorded a fourth-quarter loss of $748 million, which included restructuring, in-process R&D and other charges of $858 million. If the unusual items were excluded, fourth-quarter EBIT would have been $110 million. For the full year, EBIT was $69 million, which included restructuring, in-process R&D and other charges of $1.1 billion. EBITDA (earnings before interest expense, taxes, depreciation and amortization, and excluding unusual items) was $320 million for the last quarter of 1998 and $1.8 billion for the full year. EBITDA is a cash-based measure of operating profitability. - more - - 2 - "We completed several of the critical steps in our life sciences strategy in 1998 and put in place the platforms that will accelerate the commercialization and growth of our new products," said Robert B. Shapiro, Monsanto chairman and chief executive officer. "Our efforts in 1999 will be centered on continuing to grow strong base businesses like Roundup herbicide, integrating our newly acquired seed companies, commercializing new products like Celebrex arthritis treatment, and accelerating the development of our product pipeline." In comparison, aftertax income from continuing operations in 1997 was $5 million, or 1 cent per share on a diluted basis, on sales of $1.8 billion for the quarter, and $294 million, or 48 cents per share on a diluted basis, on sales of $7.5 billion for the year. If unusual items in 1997 were excluded, aftertax income from continuing operations would have been $55 million, or 9 cents per share on a diluted basis, for the fourth quarter, and $749 million, or $1.23 per share on a diluted basis, for the full year. In 1997, EBIT was $56 million for the fourth quarter, which included $75 million of in-process R&D charges, and $536 million for the 12-month period, which included charges of $684 million for in-process R&D. (EBITDA for 1997 was $269 million for the fourth quarter and $1.7 billion for the year.) In the fourth quarter of 1998, Monsanto reported pretax restructuring and special charges of $625 million. These charges primarily will cover the costs necessary to eliminate roughly 1,700 jobs in 1999, to write down assets being sold, and to dispose of nonstrategic assets and product lines. These initiatives are expected to generate annual pretax savings of approximately $160 million. The expenses associated with these charges are expected to be fully offset by cost savings within 20 months. Additional cost-saving actions are being considered that may require future charges. Fourth-quarter 1998 results also included net pretax charges of $233 million, primarily for in-process R&D write-offs associated with the purchase of DEKALB Genetics Corporation, Plant Breeding International Cambridge Limited, and the international seed operations of Cargill Inc. - more - - 3 - In 1998, the company invested $2.1 billion pretax for growth spending, which included costs associated with research and technology, major product developments, new product launches and other growth initiatives. This is a 52 percent increase from growth spending in 1997. These growth investments reduced year-to-year EBIT by approximately $720 million. Unlike the EBIT measure for the company, the EBIT measure for Monsanto's specific business segments excludes unusual items, thereby more closely approximating the cash-generating ability of each business. Based on EBIT, the agricultural segment had a loss of $79 million for the quarter and earnings of $737 million for the year, roughly flat with the returns in the comparable periods in 1997. Technology, selling, administration and amortization costs negatively affected year-to-year EBIT, primarily because of the inclusion of recently acquired seed companies in the segment's results. (EBITDA for the agricultural segment was $35 million for the quarter and $1.1 billion for 1998. This compares with a loss of $11 million and earnings of $939 million, respectively, in 1997.) For the year, worldwide volumes for Roundup herbicide increased more than 25 percent compared with volumes last year. The overall number of acres planted with crops enhanced by Monsanto's biotechnology traits tripled, and new products were launched for corn and potatoes in the United States and cotton in China. Searle, Monsanto's pharmaceutical segment, had EBIT of $179 million for the fourth quarter and $309 million for the year, increases of 14 percent and 8 percent, respectively, from results for the quarter and year in 1997. (On a year-to-year comparison, Searle's EBITDA was $451 million in 1998 vs. $422 million in 1997. In the fourth quarter, EBITDA improved to $222 million in 1998, compared with $197 million in the previous year.) Sales reached a record for the year, fueled by sales of more than $300 million for both Daypro and Arthrotec arthritis treatments and of more than $400 million for Ambien short-term treatment for insomnia. Searle became the No. 1 provider of branded arthritis treatments in 1998 and will add Celebrex to its -more- - 4 - arthritis portfolio in 1999. Results for Searle for the fourth quarter included approximately $200 million from partnering and product-rights agreements. For the full year, Searle's EBIT and EBITDA also benefited from roughly $250 million higher partnering and product-rights payments when compared with 1997 payments. Celebrex, the first drug of its kind approved for relief of the signs and symptoms of osteoarthritis and adult rheumatoid arthritis, was approved in the United States on Dec. 31, 1998, and in Brazil on Jan. 15, 1999. Shipments of Celebrex to chain and independent pharmacies in the United States also began this week. Searle continues to focus its research efforts on compounds in three key therapeutic areas: arthritis/pain and inflammation, oncology and cardiovascular disease. Six of the company's pipeline candidates are currently in advanced stage (Phase III) clinical trials. These investigational drugs include: valdecoxib, a second-generation COX-2 inhibitor being evaluated for enhanced inflammation and pain efficacy; parecoxib, a COX-2 inhibitor for post-surgery pain management; and celecoxib, a COX-2 inhibitor designed to reduce polyps that may be precursors to certain malignant tumors. Other investigational drugs being evaluated in Phase III trials are: eplerenone, a cardiovascular candidate for the treatment of hypertension and congestive heart failure; leridistim, a blood cell growth factor designed to help prevent infections in cancer patients after chemotherapy; and hormone replacement therapy patches for the treatment of menopausal symptoms and estrogen deficiency. EBIT for the nutrition and consumer segment was $51 million for the quarter, down 34 percent from EBIT in last year's fourth quarter, and $278 million for the year, down 14 percent in year-to-year comparisons, primarily because of the timing of sales of NutraSweet brand sweetener to major customers, and higher spending on neotame and science-based nutrition projects. (EBITDA for the nutrition and consumer segment was $88 million in the fourth-quarter of 1998, and $109 million in the same period during 1997. For the full year, the segment's - more - - 5 - EBITDA was $405 million in 1998 vs. $440 million in 1997.) Market share for both tabletop sweeteners and biogums improved in 1998 as compared with 1997 results. At the end of 1998, a general use petition for neotame, a new high-intensity sweetener, was filed with the FDA. -oOo- Notes to editors: Roundup, Celebrex, Daypro, Arthrotec, Ambien and NutraSweet are trademarks or service marks owned or licensed by Monsanto Company and its subsidiaries. In-process R&D is an accounting treatment that values and immediately writes off research that is under way at the time of an acquisition but that has not yet resulted in commercial products. EBIT for the company includes unusual items, such as restructuring, in-process R&D and other charges; EBIT for business segments excludes unusual items. Certain statements made in the news release, including those relating to the company's future performance, and business and financial plans, are forward-looking statements. These forward-looking statements are based on current expectations, currently available information and assumptions that the company believes to be reasonable. However, forward-looking statements necessarily involve risks and uncertainties and actual results may differ materially from those suggested. Factors that could cause actual results to differ materially from those anticipated include but are not limited to the economic, competitive, governmental, technological, business, financial and other factors identified in Monsanto's 10-K, 10-Q and 8-K filings with the Securities and Exchange Commission. - 6 - Monsanto Company and Subsidiaries Statement of Consolidated Income (Dollars in millions, except per share) UNAUDITED Three Months Ended Twelve Months Ended December 31, December 31, ------------------- ------------------- 1998 1997 1998 1997 -------- -------- -------- -------- Net Sales $ 2,148 $ 1,820 $ 8,648 $ 7,514 Costs, Expenses and Other: Cost of Goods Sold 971 749 3,593 3,091 Selling, General and Administrative Expenses 675 557 2,421 2,023 Technological Expenses 391 326 1,358 1,044 Acquired In-Process Research and Development 213 75 402 684 Amortization of Intangible Assets 281 59 487 173 Restructuring and Other Special Charges - Net 307 272 Interest Expense 98 59 312 170 Interest Income (11) (9) (50) (45) Other Expense - Net 69 7 96 8 -------- -------- -------- -------- Income (Loss) from Continuing Operations Before Taxes (846) (3) (243) 366 Income Taxes (243) (8) 7 72 -------- -------- -------- -------- Income (Loss) from Continuing Operations (603) 5 (250) 294 Income from Discontinued Operations 176 -------- -------- -------- -------- Net Income (Loss) $ (603) $ 5 $ (250) $ 470 -------- -------- -------- -------- Basic Earnings/(Loss) Per Share Continuing Operations $ (1.00) $ 0.01 $ (0.41) $ 0.50 Discontinued Operations 0.30 -------- -------- -------- -------- Total $ (1.00) $ 0.01 $ (0.41) $ 0.80 -------- -------- -------- -------- Diluted Earnings/(Loss) Per Share Continuing Operations $ (1.00) $ 0.01 $ (0.41) $ 0.48 Discontinued Operations 0.29 -------- -------- -------- -------- Total $ (1.00) $ 0.01 $ (0.41) $ 0.77 -------- -------- -------- -------- Weighted Average Common Shares - Basic (in millions) 603.5 590.2 -------- -------- Weighted Average Common Shares - Diluted (in millions) 603.5 610.5 -------- -------- Earnings Before Interest and Tax Expense (EBIT): $ (748) $ 56 $ 69 $ 536 -------- -------- -------- -------- For 1998, 23.5 million common equivalent shares are not included in computing the diluted loss per share from continuing operations because they are antidilutive. - more - - 7 - Monsanto Company and Subsidiaries Segment Data (Dollars in millions) UNAUDITED Three Months Ended December 31, ------------------------------------------- 1998 1997 --------------------- --------------------- Net Net Segment: (1) Sales EBIT (2) Sales EBIT (2) -------- -------- -------- -------- Agricultural Products $ 787 $ (79) $ 562 $ (82) Nutrition & Consumer Products 362 51 399 77 Pharmaceuticals 953 179 789 157 Corporate & Other 46 (41) 70 (21) Restructuring & Unusuals (858) (75) -------- -------- -------- -------- Total $ 2,148 $ (748) $ 1,820 $ 56 -------- -------- -------- -------- Twelve Months Ended December 31, ----------------------------------------- 1998 1997 ------------------- ------------------- Net Net Segment: (1) Sales EBIT (2) Sales EBIT (2) -------- -------- -------- -------- Agricultural Products $ 4,032 $ 737 $ 3,274 $ 731 Nutrition & Consumer Products 1,533 278 1,552 322 Pharmaceuticals 2,894 309 2,443 286 Corporate & Other 189 (195) 245 (119) Restructuring & Unusuals (1,060) (684) -------- -------- -------- -------- Total $ 8,648 $ 69 $ 7,514 $ 536 -------- -------- -------- -------- (1) As a result of adopting Financial Accounting Standard No. 131, which defines new segment reporting rules, Monsanto changed its measure of segment profit from operating income to EBIT (defined in note 2 below). In addition, Monsanto transferred two small businesses that were previously reported in Corporate & Other to Agricultural Products and Pharmaceuticals. Prior-year segment information has been reclassified to conform to the current presentation. (2) EBIT (earnings before interest expense and taxes) is income (loss) from continuing operations before taxes, excluding interest expense. Segment EBIT excludes unusual items. The unusual items included restructuring charges, write-offs for in-process research and development, asset impairments and other unusual items. - more - - 8 - Monsanto Company and Subsidiaries Segment Data (Dollars in millions) UNAUDITED EBITDA (3) ----------------------------------------- Three Months Twelve Months ------------------- ------------------- Segment: 1998 1997 1998 1997 -------- -------- -------- -------- Agricultural Products $ 35 $ (11) $1,092 $ 939 Nutrition & Consumer Products 88 109 405 440 Pharmaceuticals 222 197 451 422 Corporate & Other (25) (26) (183) (94) -------- -------- -------- -------- Total $ 320 $ 269 $1,765 $1,707 -------- -------- -------- -------- (3) EBITDA (Earnings before interest expense, taxes, depreciation and amortization excluding unusuals) is EBIT excluding depreciation, amortization, and the effects of unusual items. (4) Pretax expense related to restructuring programs, acquired in-process research and development, asset impairments and other unusual items were recorded in the Statement of Consolidated Income in the following categories: Three Months Ended Twelve Months Ended December 31, December 31, ------------------- ------------------- 1998 1997 1998 1997 -------- -------- -------- -------- Costs and Expenses: Cost of Goods Sold $ 74 $ 118 Acquired In-Process Research and Development 213 $ 75 402 $ 684 Amortization of Intangible Assets 193 217 Restructuring and Other Special Charges - Net 307 272 Other Expense - Net 71 51 -------- -------- -------- -------- Income from Continuing Operations Before Taxes $ 858 $ 75 $1,060 $ 684 -------- -------- -------- -------- Aftertax, the unusual items totaled $630 million, or $1.01 per share, for the fourth quarter of 1998; $50 million, or $0.08 per share, for the fourth quarter of 1997; $830 million, or $1.33 per share, for the year ended December 31, 1998; and $455 million, or $0.75 per share, for the year ended December 31, 1997. The per-share amounts for 1998 in this paragraph were computed based on the weighted average number of common and common equivalent shares of 627.0 million. - more - - 9 - Monsanto Company and Subsidiaries Statement of Consolidated Financial Position (Dollars in millions) UNAUDITED Dec. 31, Dec. 31, ASSETS 1998 1997 -------- -------- Current Assets: Cash and cash equivalents $ 89 $ 134 Trade Receivables 2,404 1,823 Prepaid Assets & Other Receivables 1,141 692 Deferred income tax benefit 567 243 Inventories 2,004 1,374 -------- -------- Total Current Assets 6,205 4,266 -------- -------- Net Property, Plant and Equipment 3,254 2,400 Intangible Assets 6,047 2,837 Investment & Other Assets 1,233 1,271 -------- -------- Total Assets $16,739 $10,774 -------- -------- LIABILITIES AND SHAREOWNERS' EQUITY Current Liabilities Payables and accruals $ 2,998 $ 1,813 Short-term debt 1,069 1,726 -------- -------- Total Current Liabilities 4,067 3,539 -------- -------- Long-Term Debt 6,259 1,979 Postretirement Liabilities 871 735 Other Liabilities 536 417 Shareowners' Equity 5,006 4,104 -------- -------- Total Liabilities and Shareowners' Equity $16,739 $10,774 -------- --------- Working Capital $ 2,138 $ 727 -------- -------- Debt to Capital Ratio 59% 47% -----END PRIVACY-ENHANCED MESSAGE-----