SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): February 10, 2000
MONSANTO COMPANY
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-2516 43-0420020
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(State of Incorporation) (Commission (IRS Employer
File Number) Identification No.)
800 North Lindbergh Boulevard
St. Louis, Missouri 63167
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (314) 694-1000
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ITEM 5. OTHER EVENTS.
On February 10, 2000, Monsanto Company ("Monsanto") issued a press release
announcing its 1999 fourth quarter and full year results. A copy of the press
release is filed as Exhibit 99.1 hereto and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits. The following exhibits are filed as part of this report:
99.1 Press release, dated February 10, 2000, issued
by Monsanto.
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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: February 11, 2000
MONSANTO COMPANY
By /s/ Barbara L. Blackford
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Name: Barbara L. Blackford
Title: Chief Counsel and Assistant
Secretary
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EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press release, dated February 10, 2000, issued by Monsanto.
Jeff Bergau (312-840-5457)
MONSANTO REPORTS 1999 FOURTH-QUARTER AND FULL-YEAR RESULTS
ST. LOUIS (Feb. 10, 2000) - Monsanto Company reported aftertax income of
$69 million, or 10 cents per share, on sales of $2.3 billion for the fourth
quarter of 1999. For the full year of 1999, Monsanto recorded net income of $575
million, or 88 cents per share, on sales of $9.1 billion. Fourth quarter and
full-year 1999 results include several unusual items. If unusual items were
excluded, net income in the fourth quarter would have been $115 million, or 18
cents per share, and full-year net income would have been $650 million, or $1.00
per share.
In comparison, for the fourth quarter of 1998, Monsanto reported a net loss
of $603 million, or a loss of $1.00 per share, on sales of $1.7 billion. For the
full year of 1998, the company recorded an aftertax loss of $250 million, or a
loss of 41 cents per share, on sales of $7.2 billion. Both the fourth quarter
and full-year results included unusual items. If these items were excluded for
the fourth quarter of 1998, the company would have reported an aftertax net
income of $27 million, or 5 cents per share. For the full year of 1998, if
unusual items were excluded, aftertax income would have been $580 million, or 93
cents per share.
Fourth-quarter and full-year 1999 and 1998 net income included income from
discontinued operations. On July 1, 1999, Monsanto announced its intent to
divest its artificial sweeteners and biogum businesses. As a result, the
artificial sweeteners, biogum, alginates and Ortho lawn and garden businesses
have been reclassified as discontinued
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operations in all periods presented. During 1999, the company sold the alginates
and Ortho lawn and garden businesses. On February 4, 2000, the company announced
an agreement to sell its tabletop sweetener business. The company is continuing
to make progress on the divestiture of the remaining businesses.
Aftertax income from continuing operations, excluding unusual items, for
the fourth quarter of 1999 was $78 million, or 12 cents per share, compared with
break-even income from continuing operations, excluding unusual items, for the
same period in 1998.
Monsanto's earnings before interest expense and taxes (EBIT) for the fourth
quarter of 1999 was $124 million, compared with an EBIT loss for the fourth
quarter of 1998 of $513 million. For the full year of 1999, the company reported
EBIT of $1.1 billion, compared with EBIT of $125 million for the full year of
1998. Both fourth-quarter and full-year EBIT results include unusual items.
Earnings before interest expense, taxes, depreciation and amortization
(EBITDA), excluding unusual items, for the fourth quarter of 1999 was $367
million compared with EBITDA, excluding unusual items, for the same period in
1998 of $223 million. For the full year of 1999, EBITDA, excluding unusual
items, was $1.9 billion, compared with EBITDA, excluding unusual items, of $1.4
billion.
"As a result of strong performances from our agriculture and pharmaceutical
businesses and sound financial management, we exceeded the financial targets we
set for ourselves in the beginning of 1999," said Robert B. Shapiro, Monsanto's
chairman and chief executive officer. "The global launch of Celebrex arthritis
treatment surpassed the expectations of most industry and financial analysts.
The product has significant momentum in the marketplace and considerable growth
potential remains. We continued to see strong growth in volumes of Roundup
herbicide and sales of seed with Monsanto's biotechnology traits. We also made
important progress on strengthening our
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balance sheet. We reduced debt through management of capital expenditures, and
working capital as a percentage of sales declined in 1999 when compared with
working capital as a percentage of sales in 1998."
EBIT, excluding unusual items, for the agriculture segment during the
fourth quarter of 1999 was $11 million, compared with an EBIT loss, excluding
unusual items, of $53 million for the same period in 1998. For the full year of
1999, the segment recorded EBIT, excluding unusual items, of $775 million,
compared with EBIT, excluding unusual items, of $868 million for the full year
of 1998. The year-to-year decline in EBIT for the agriculture segment was a
result of higher amortization costs associated with the company's recently
acquired seed businesses.
EBITDA, excluding unusual items, in the fourth quarter of 1999 was $168
million for the segment, compared with EBITDA, excluding unusual items, of $60
million in the fourth quarter of 1998. EBITDA, excluding unusual items, for the
full year of 1999 was $1.3 billion, compared with EBITDA, excluding unusual
items, of $1.2 billion in 1998. The year-to-year increase in EBITDA, excluding
unusual items, for the agricultural segment was primarily a result of growth in
volumes of Roundup herbicide, the inclusion of a full year of results from seed
companies acquired in 1998, and revenues from licensing of biotechnology traits.
Volumes of Roundup herbicide increased above the product's historic 20 percent
growth trend. Global acres of crops containing Monsanto biotechnology traits
rose to 86 million acres, compared with 58 million acres in 1998, an increase of
48 percent. Early indications regarding planting intentions by U.S. growers
continue to suggest that acres containing Monsanto biotechnology traits in 2000
are expected to at least equal and, more likely, exceed 1999 acres.
Searle, Monsanto's pharmaceutical segment, reported EBIT, excluding unusual
items, of $223 million for the fourth quarter of 1999, compared with EBIT,
excluding unusual items, of
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$181 million during the same period in 1998. For the full year of 1999, Searle
recorded EBIT, excluding unusual items, of $655 million, compared with full-year
EBIT, excluding unusual items, of $309 million in 1998.
EBITDA, excluding unusual items, for the segment was $263 million during
the fourth quarter of 1999, compared with EBITDA, excluding unusual items, of
$224 million during the fourth quarter of 1998. EBITDA, excluding unusual items,
for the segment for the full year of 1999 was $813 million, compared with
EBITDA, excluding unusual items, of $451 million for the full year of 1998.
The launch of Celebrex arthritis treatment was the primary driver for the
increase in EBIT, excluding unusual items, and EBITDA, excluding unusual items,
in 1999. Though the product was launched in late January 1999, total product
sales exceeded $1.5 billion in 1999, including more than $500 million in the
fourth quarter. The Celebrex launch was the most successful in industry history,
with 16.6 million total prescriptions in 1999, including 9.7 million new
prescriptions and 6.9 million refills.
On December 19, 1999, Monsanto and Pharmacia & Upjohn, Inc. entered into
a definitive agreement to create a new global pharmaceutical company. The
merger is expected to close in the first half of 2000.
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Notes to editors: Roundup and Celebrex are trademarks owned or licensed by
Monsanto Company and its subsidiaries.
Certain statements made in this 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.
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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,
------------------- -------------------
1999 1998 1999 1998
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Net Sales $ 2,342 $ 1,733 $ 9,146 $ 7,237
Costs, Expenses and Other:
Cost of Goods Sold 822 797 3,272 2,912
Selling, General and
Administrative Expenses 877 601 2,984 2,129
Technological Expenses 365 377 1,373 1,308
Acquired In-Process Research and
Development 213 402
Amortization of Intangible Assets 115 119 374 286
Restructuring Expense (Income) (25) 188 (15) 153
Interest Expense 73 66 345 210
Interest Income (15) (12) (45) (47)
Other Expense (Income), Net 79 (37) 107 (31)
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Income (Loss) from Continuing
Operations Before Taxes 51 (579) 751 (85)
Income Tax Expense (Benefit) 5 (169) 248 46
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Income (Loss) from Continuing
Operations 46 (410) 503 (131)
Income (Loss) from Discontinued
Operations, Net of Tax (193) 57 (119)
Gain on Sale of Discontinued
Operations, Net of Tax 23 35
Cumulative Effect of Change in
Accounting Principle, Net
of Tax (2) (20)
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Net Income (Loss) $ 69 $ (603) $ 575 $ (250)
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EBIT(1)from Continuing Operations $ 124 $ (513) $ 1,096 $ 125
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In June, 1999, Monsanto management committed to a plan to sell its artificial
sweeteners and biogum businesses. The results of operations and financial
position of these businesses, and of the alginates and Ortho lawn-and-garden
products businesses, have been reclassified as discontinued operations for all
periods presented; the consolidated financial statements and notes have been
reclassified to conform to this presentation. Monsanto also transferred the
Roundup lawn-and-garden and nutrition research operations of the former
Nutrition and Consumer Products segment to the Agricultural Products and
Corporate and Other segments, respectively.
(1) EBIT (earnings before interest expense and taxes) is income (loss) from
continuing operations before taxes, excluding interest expense. Segment EBIT
excludes restructuring and unusual items.
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Monsanto Company and Subsidiaries
Earnings Per Share
(Dollars in millions, except per share)
UNAUDITED
Three Months Ended Twelve Months Ended
December 31, December 31,
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1999 1998 1999 1998
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Basic Earnings (Loss) Per Share
Continuing Operations $ 0.07 $ (0.69) $ 0.79 $ (0.22)
Discontinued Operations (0.31) 0.09 (0.19)
Gain on Sale of Discontinued
Operations 0.04 0.06
Cumulative Effect of Change in
Accounting Principle (2) (0.03)
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Total $ 0.11 $ (1.00) $ 0.91 $ (0.41)
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Diluted Earnings (Loss) Per Share
Continuing Operations $ 0.07 $ (0.69) $ 0.77 $ (0.22)
Discontinued Operations (0.31) 0.09 (0.19)
Gain on Sale of Discontinued
Operations 0.03 0.05
Cumulative Effect of Change in
Accounting Principle (2) (0.03)
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Total $ 0.10 $ (1.00) $ 0.88 $ (0.41)
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Weighted Average Common Shares
Basic - (in millions) 633.4 603.4
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Diluted - (in millions) 649.8 626.9
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(2) In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin 101, Revenue "Recognition in Financial Statements" (SAB
101) which provides guidance related to revenue recognition based on
interpretations and practices followed by the SEC. SAB 101 requires
companies to report any changes in revenue recognition as an accounting
change at the time of implementation in accordance with APB Opinion No. 20,
"Accounting Changes". Monsanto recorded a cumulative effect of a change in
accounting principle, effective Jan. 1, 1999, for revenue recognized in 1998
related to the sale of marketing rights to The Scotts Company. The effect on
earnings in 1999 was an after tax loss of $20 million, net of taxes of $12
million.
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Monsanto Company and Subsidiaries
Segment Data
(Dollars in millions)
UNAUDITED
Three Months Ended December 31,
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1999 1998
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Net Net
Segment: Sales EBIT (1) Sales EBIT (1)
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Agricultural Products $ 1,082 $ 11 $ 824 $ (53)
Pharmaceuticals 1,224 223 855 181
Corporate & Other 36 (84) 54 (81)
Restructuring & Unusuals (26) (560)
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Total from Continuing Operations $ 2,342 $ 124 $ 1,733 $ (513)
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Twelve Months Ended December 31,
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1999 1998
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Net Net
Segment: Sales EBIT (1) Sales EBIT (1)
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Agricultural Products $ 5,102 $ 775 $ 4,264 $ 868
Pharmaceuticals 3,920 655 2,771 309
Corporate & Other 124 (270) 202 (290)
Restructuring & Unusuals (64) (762)
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Total from Continuing Operations $ 9,146 $ 1,096 $ 7,237 $ 125
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EBITDA (excluding unusual items) (3)
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Three Months Twelve Months
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Segment: 1999 1998 1999 1998
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Agricultural Products $ 168 $ 60 $1,275 $1,223
Pharmaceuticals $ 263 224 813 451
Corporate & Other (64) (61) (198) (269)
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Total from Continuing Operations $ 367 $ 223 $ 1,890 $ 1,405
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(3) EBITDA (excluding unusual items) is net earnings (loss) before income
taxes, interest expense, depreciation expense, amortization expense, and
excluding the effects of restructuring and unusual items.
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Monsanto Company and Subsidiaries
Restructuring and Unusual Items
(Dollars in millions)
UNAUDITED
(4) (Income) / expense related to restructuring, costs associated with the
failed merger between Monsanto and Delta and Pine Land Company, gain from
divested businesses, sale of a portion of discontinued operations, 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 Twelve Months Ended
December 31, December 31,
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1999 1998 1999 1998
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Cost and Expenses:
Cost of Goods Sold $ $ 54 $ 20 $ 98
Acquired In-Process Research
and Development 213 402
Amortization of Intangible Assets 42 8 66
Restructuring Expenses (Income) (24) 188 (14) 153
Other Expense 50 63 50 43
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Expense Before Taxes 26 560 64 762
Income Tax Expense (Benefit) 6 (150) (7) (152)
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After Tax Expense From Continuing
Operations 32 410 57 610
(Income) Loss from Discontinued
Operations, Net of Tax of
$78, $15 and $78, 220 (27) 220
respectively
Loss on Sale of Discontinued
Operations, Net of Tax of
$8 and $15, respectively 14 25
Cumulative Effect of Change in
Accounting Principle, Net
of Tax of $12 20
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Net Expense $ 46 $ 630 $ 75 $ 830
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Monsanto Company and Subsidiaries
Statement of Consolidated Financial Position
(Dollars in millions)
UNAUDITED
Dec. 31, Dec. 31,
ASSETS 1999 1998
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Current Assets
Cash and cash equivalents $ 284 $ 89
Trade receivables 2,618 2,119
Prepaid assets & other receivables 711 777
Deferred income tax benefit 446 488
Inventories 1,728 1,722
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Total Current Assets 5,787 5,195
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Net Property, Plant and Equipment 3,320 2,865
Intangible Assets 4,670 5,281
Investment & Other Assets 1,201 1,120
Net Assets of Discontinued Operations (5) 1,557 1,924
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Total Assets $16,535 $16,385
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LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities
Payables and accruals $ 2,970 $ 2,711
Short-term debt 780 1,069
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Total Current Liabilities 3,750 3,780
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Long-Term Debt 5,903 6,259
Postretirement Liabilities 962 848
Other Liabilities 571 512
Shareowners' Equity 5,349 4,986
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Total Liabilities and Shareowners' Equity $16,535 $16,385
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Working Capital (6) $ 2,378 $ 2,137
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Debt to Capital Ratio 56% 60%
(5) In 1999 and 1998, respectively, Net Assets of Discontinued Operations
include Current Assets of $545 million and $994 million and Noncurrent
Assets of $1,216 million and $1,269 million offset by Current Liabilities
of $204 million and $272 million and Noncurrent Liabilities of $-0- million
and $67 million.
(6) Working Capital includes Current Assets and Current Liabilities from
Discontinued Operations.
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