-----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, HMaotvsvYYFHT3LGfVQJaYwqBzOzF9yzWE5NqsRSYueO+zGHGxzrkR1PTtcH3UOq anlR/xNAytxbqvh1SbBrMQ== 0001068800-98-000009.txt : 19981102 0001068800-98-000009.hdr.sgml : 19981102 ACCESSION NUMBER: 0001068800-98-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981015 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981030 SROS: NYSE 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: 98733864 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 MONSANTO COMPANY FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 -------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 15, 1998 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 October 15, 1998, Monsanto Company (the "Company") issued a press release announcing the Company's financial results for the third quarter of 1998. 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 October 15, 1998, 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: October 30, 1998 MONSANTO COMPANY By /s/ Michael R. Hogan ------------------------------ Name: Michael R. Hogan Vice President and Controller (Principal Accounting Officer) EXHIBIT INDEX
Exhibit Number Description - ------ ----------- 99.1 Press release, dated October 15, 1998, issued by Monsanto Company
EX-99.1 2 PRESS RELEASE Exhibit 99.1 Immediately Scarlett Lee Foster (314-694-2883) scarlett.l.foster@monsanto.com MONSANTO REPORTS THIRD-QUARTER EARNINGS ST. LOUIS, Oct. 15, 1998 - Monsanto Company reported an aftertax loss from continuing operations of $100 million, or a loss of 17 cents per share on a diluted basis, on sales of $2 billion in the third quarter of 1998. Third- quarter results included a one-time charge totaling $187 million aftertax for acquired in-process research and development (R&D) associated with the acquisitions of Plant Breeding International Cambridge and First Line Seeds. If that charge was excluded, the aftertax income from continuing operations would have been $87 million, or 13 cents per share on a diluted basis. In comparison, the aftertax loss from continuing operations in the same period in 1997 was $167 million, or a loss of 28 cents per share on a diluted basis, on sales of $1.7 billion. Results in the third quarter of 1997 included a one-time write-off of $270 million aftertax for acquired in-process R&D associated with the acquisition of Holden's Foundation Seeds. If that charge was excluded, aftertax income from continuing operations would have been $103 million, or 17 cents per share on a diluted basis. "With the major acquisitions we've announced in recent months, and as our new products move toward the marketplace, we're focused on getting strong financial results from our core businesses to fund our growth; rigorously prioritizing among our businesses and growth programs to improve near-term income and generate additional cash; developing and launching our new products around the world; and integrating our seed businesses and accelerating their contribution to our growth and profitability," said Robert B. Shapiro, Monsanto chairman and chief executive officer. - more - - 2 - In the third quarter, growth spending rose approximately $180 million, or more than 50 percent, compared with growth spending in the third quarter of 1997. Growth spending in the first nine months of the year rose $530 million from growth spending in the same period last year, for an increase of approximately 60 percent. Most technology, infrastructure expansion and acquisition-related costs are included in growth spending. Sales for the agricultural business rose 18 percent for the quarter. Volumes for Roundup herbicide in the quarter continued above the trend-line growth of 20 percent annually. Operating income primarily was affected by the in-process R&D charge, amortization for prior acquisitions, and higher spending on biotechnology and genomics research. In addition, expected seasonal fluctuations of the seed businesses also lowered operating income. Pharmaceutical sales and operating income rose substantially. Increased sales in the quarter for Daypro and Arthrotec arthritis treatments continued to bolster Searle as the leading supplier of prescription arthritis treatments in the United States. R&D spending increased significantly in the quarter as Searle continues to develop and prepare to launch its new product pipeline. Sales and operating income included $140 million in milestone payments from Pfizer Inc. as part of the partnering agreement between Searle and Pfizer for the development and launch of Searle's celecoxib, a proposed member of a new class of drugs known as specific COX-2 inhibitors. This agent is under priority review by the U.S. Food and Drug Administration for acute or chronic use in the treatment of the signs and symptoms of osteoarthritis and rheumatoid arthritis and for the management of pain. Searle has recently changed the proposed brand name for this drug from Celebra to Celebrex, at the FDA's request. The FDA believed, and Searle shared the concern, that the trade name Celebra could potentially be confused with an anti-depressant on the market, called Celexa. The name Celebrex also has been filed by Searle in 115 countries worldwide. - more - - 3 - Sales and operating income for the nutrition and consumer sector in the third quarter increased modestly. Sales of tabletop sweeteners were up, but sales of NutraSweet brand sweetener were down, as expected, because of higher shipments in the second quarter. Sales and operating income for the sector also included $32 million in payments as part of the agency agreement with The Scotts Company to market Roundup herbicide for lawn and garden uses. -oOo- Notes to editors: Roundup, Arthrotec, Daypro 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 was under way at the time of the acquisition but that has not yet resulted in commercial products. Certain statements made in this press release, including those relating to future performance, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause results to differ significantly from those set forth in those statements. Among other things, these forward-looking statements are based on current expectations, but actual results may differ materially from anticipated future events or results. Factors that could cause actual results to differ materially from those anticipated include the economic, competitive, governmental, technological, financial and other factors identified in Monsanto's filings with the Securities and Exchange Commission, and the ability to integrate acquisitions. EVA and Economic Value Added are trademarks of Stern Stewart & Co. - 4 - Monsanto Company and Subsidiaries Statement of Consolidated Income (Dollars in millions, except per share) UNAUDITED
Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------- 1998 1997 1998 1997 -------- -------- -------- -------- Net Sales $ 1,986 $ 1,724 $ 6,500 $ 5,694 Costs and Expenses: Cost of Goods Sold 768 685 2,622 2,342 Selling, General and Administrative Expenses 585 512 1,746 1,466 Technological Expenses 359 264 967 718 Acquired In-Process Research and Development 189 436 189 609 Amortization of Intangible Assets 64 43 206 114 Restructuring Expense (Income) (35) -------- -------- -------- -------- Operating Income (Loss) 21 (216) 805 445 Interest Expense (72) (42) (214) (111) Interest Income 17 13 39 36 Other Income (Expense) - Net (29) (28) (27) (1) -------- -------- -------- -------- Income (Loss) from Continuing Operations Before Taxes (63) (273) 603 369 Income Taxes 37 (106) 250 80 -------- -------- -------- -------- Income (Loss) from Continuing Operations (100) (167) 353 289 Income from Discontinued Operations 34 176 -------- -------- -------- -------- Net Income (Loss) $ (100) $ (133) $ 353 $ 465 -------- -------- -------- -------- Basic Earnings (Loss) Per Share Continuing Operations $ (0.17) $ (0.29) $ 0.59 $ 0.49 Discontinued Operations 0.06 0.30 -------- -------- -------- -------- Total $ (0.17) $ (0.23) $ 0.59 $ 0.79 -------- -------- -------- -------- Diluted Earnings (Loss) Per Share Continuing Operations $ (0.17) $ (0.28) $ 0.56 $ 0.47 Discontinued Operations 0.05 0.29 -------- -------- -------- -------- Total $ (0.17) $ (0.23) $ 0.56 $ 0.76 -------- -------- -------- -------- Weighted Average Number of Common Shares (in millions) 600.4 588.7 -------- -------- Weighted Average Number of Common and Common Equivalent Shares (in millions) 626.9 609.6 -------- -------- Economic Value Added (in millions) $ (2) $ (39) $ 266 $ 291 -------- -------- -------- --------
- more - - 5 - Monsanto Company and Subsidiaries Segment Data (Dollars in millions) UNAUDITED
Three Months Ended September 30, ------------------------------------------- 1998 1997 --------------------- --------------------- Net Operating Net Operating Sales Income(Loss) Sales Income(Loss) Segment: -------- ------------ -------- ------------ Agricultural Products $ 794 $ (129) $ 672 $ (295) Nutrition & Consumer Products 332 46 342 37 Pharmaceuticals 790 133 605 77 Corporate & Other 70 (29) 105 (35) -------- -------- -------- -------- Total $ 1,986 $ 21 $ 1,724 $ (216) -------- -------- -------- -------- Nine Months Ended September 30, ------------------------------------------- 1998 1997 --------------------- --------------------- Net Operating Net Operating Sales Income(Loss) Sales Income(Loss) Segment: -------- ------------ -------- ------------ Agricultural Products $ 3,169 $ 597 $ 2,603 $ 268 Nutrition & Consumer Products 1,162 203 1,148 139 Pharmaceuticals 1,903 186 1,633 147 Corporate & Other 266 (181) 310 (109) -------- -------- -------- -------- Total $ 6,500 $ 805 $ 5,694 $ 445 -------- -------- -------- -------- Operating income in 1998 and 1997 has been affected by restructuring programs, acquired-in process research and development, and other unusual items, as follows: Operating (Income) / Expense ----------------------------------------- Three Months Nine Months ------------------- ------------------- Segment: 1998 1997 1998 1997 -------- -------- -------- -------- Agricultural Products $ 189 $ 436 $ 189 $ 558 Nutrition & Consumer Products 51 Pharmaceuticals (35) Corporate & Other 68 -------- -------- -------- -------- Total $ 189 $ 436 $ 222 $ 609 -------- -------- -------- -------- - more - - 6 - Monsanto Company and Subsidiaries Segment Data (Dollars in millions) UNAUDITED Operating Contribution ----------------------------------------- Three Months Nine Months ------------------- ------------------- Segment: 1998 1997 1998 1997 -------- -------- -------- -------- Agricultural Products $ 67 $ 144 $ 799 $ 837 Nutrition & Consumer Products 58 47 238 221 Pharmaceuticals 139 82 171 163 Corporate & Other (5) (34) (87) (109) -------- -------- -------- -------- Total $ 259 $ 239 $1,121 $1,112 -------- -------- -------- -------- Operating contribution is a measure of a segment's cash-based operating profitability. It excludes goodwill amortization and the effects of unusual items from operating income, such as pretax charges for in-process research and development and restructuring. Pretax (Income) / Expense related to restructuring programs, acquired in-process research and development and other unusual items were recorded in the Statement of Consolidated Income in the following categories. Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------- 1998 1997 1998 1997 -------- -------- -------- -------- Costs and Expenses: Cost of Goods Sold $ $ $ 44 $ Acquired In-Process Research and Development 189 436 189 609 Amortization of Intangible Assets 24 Restructuring Expense (35) -------- -------- -------- -------- Operating Income 189 436 222 609 Other (Income) / Expense - Net (20) -------- -------- -------- -------- Income from Continuing Operations Before Taxes $ 189 $ 436 $ 202 $ 609 -------- -------- -------- --------
- more - - 7 - Monsanto Company and Subsidiaries Statement of Consolidated Financial Position (Dollars in millions) UNAUDITED
Sep. 30, Dec. 31, ASSETS 1998 1997 -------- -------- Current Assets: Cash and cash equivalents $ 215 $ 134 Receivables 3,576 2,515 Deferred income tax benefit 302 243 Inventories 1,505 1,374 -------- -------- Total Current Assets 5,598 4,266 -------- -------- Net Property, Plant and Equipment 2,729 2,400 Investment in Affiliates 359 329 Intangible Assets 3,127 2,837 Other Assets 1,053 942 -------- -------- Total Assets $12,866 $10,774 -------- -------- LIABILITIES AND SHAREOWNERS' EQUITY Current Liabilities Payables and accruals $ 2,271 $ 1,813 Short-term debt 2,169 1,726 -------- -------- Total Current Liabilities 4,440 3,539 -------- -------- Long-Term Debt 2,506 1,979 Deferred Income Taxes 100 97 Postretirement Liabilities 838 735 Other Liabilities 296 320 Shareowners' Equity 4,686 4,104 -------- -------- Total Liabilities and Shareowners' Equity $12,866 $10,774 -------- -------- Working Capital $ 1,158 $ 727 -------- -------- Debt to Capital Ratio 50% 47%
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