UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended May 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission File Number : 0-7908
PIONEER HI-BRED INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Iowa 42-0470520
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 Capital Square, 400 Locust, Des Moines, Iowa 50309
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (515) 245-3500
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at June 27, 1994
Common Stock ($1.00 par value) 87,723,189
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<PAGE>
PIONEER HI-BRED INTERNATIONAL, INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
ITEM 1 FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS-
MAY 31, 1994 AUGUST 31, 1993
AND MAY 31, 1993 3-4
CONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS-
THREE MONTHS AND NINE MONTHS ENDED
MAY 31, 1994 AND 1993 5
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS-
NINE MONTHS ENDED
MAY 31, 1994 AND 1993 6
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS 7-8
ITEM 2 MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 9-18
PART II. OTHER INFORMATION
ITEM 6(A) EXHIBITS 19
ITEM 6(B) REPORTS ON FORM 8-K 20
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<PAGE>
PIONEER HI-BRED INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited, in thousands)
<TABLE>
May 31, August 31, May 31,
1994 1993 1993
ASSETS
CURRENT ASSETS
<S> <C> <C> <C>
Cash and cash equivalents $ 309,186 $ 91,976 $ 170,789
Accounts and notes receivable, net 304,149 196,063 232,685
Inventories:
Finished seed 178,014 229,550 282,103
Unfinished seed 100,191 149,299 90,618
Other 3,108 3,935 6,304
Prepaid expenses 6,553 3,979 6,042
Deferred income taxes 43,597 42,180 47,068
Total current assets $ 944,798 $ 716,982 $ 835,609
LONG-TERM ASSETS 34,315 39,195 28,122
PROPERTY AND EQUIPMENT, net of
accumulated depreciation and
allowances
May 31, 1994 $377,552
August 31, 1993 $356,479
May 31, 1993 $369,750 449,325 437,660 464,456
INTANGIBLES 22,312 27,527 30,569
$1,450,750 $1,221,364 $1,358,756
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
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<PAGE>
PIONEER HI-BRED INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited, in thousands)
<TABLE>
May 31, August 31, May 31,
1994 1993 1993
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
<S> <C> <C> <C>
Short-term borrowings $ 28,219 $ 64,029 $ 60,831
Current maturities of long-term debt 912 2,250 1,545
Accounts payable, trade 84,224 79,386 92,991
Accrued compensation 38,089 42,080 33,867
Income taxes payable 130,191 17,522 109,948
Other accruals 64,215 55,846 40,171
Total current liabilities $ 345,850 $ 261,113 $ 339,353
LONG-TERM DEBT $ 65,751 $ 68,127 $ 75,642
DEFERRED ITEMS, primarily income taxes
and retirement benefits $ 62,257 60,587 $ 59,806
MINORITY INTEREST IN SUBSIDIARIES $ 6,510 $ 6,098 $ 8,657
SHAREHOLDERS' EQUITY
Preferred stock, no par value $ -- $ -- $ --
Common stock, $1 par value 92,694 92,694 92,694
Additional paid-in capital 14,317 12,962 12,961
Retained earnings 1,029,923 835,466 884,770
Cumulative translation adjustment (7,444) (6,982) (9,166)
$1,129,490 $ 934,140 $ 981,259
Less: Cost of common shares
acquired for the treasury (145,797) (97,078) (93,532)
Unearned compensation (13,311) (11,623) (12,429)
$ 970,382 $ 825,439 $ 875,298
$1,450,750 $1,221,364 $1,358,756
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
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<PAGE>
PIONEER HI-BRED INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited, in thousands)
<TABLE>
Three Months Ended Nine Months Ended
May 31, May 31,
1994 1993 1994 1993<S> <C>
<C> <C> <C>
Net sales $1,038,502 $ 930,916 $1,355,208 $1,155,923
Operating costs and expenses:
Cost of goods sold $ 393,269 $ 331,451 $ 542,690 $ 446,294
Research and development 28,799 23,309 79,557 70,077
Selling 163,954 149,818 263,232 239,723
General and administrative 34,729 29,090 91,263 80,541
Restructuring of operations - - 28,800 - - 36,000
$ 620,751 $ 562,468 $ 976,742 $ 872,635
Operating income $ 417,751 $ 368,448 $ 378,466 $ 283,288
Investment income 5,228 3,872 12,541 12,291
Interest expense (2,261) (4,699) (11,554) (14,116)
Net exchange gain (loss) (636) 151 (2,926) (4,075)
Income before items shown
below $ 420,082 $ 367,772 $ 376,527 $ 277,388
Provision for income taxes (159,632) (139,478) (143,081) (105,132)
Minority interest and other (123) 332 (816) 2,359
Income before cumulative
effect of accounting
change $ 260,327 $ 228,626 $ 232,630 $ 174,615
Cumulative effect of
accounting change, net of
income taxes of $10,849 - - - - - - (16,969)
Net income $ 260,327 $ 228,626 $ 232,630 $ 157,646
Income per common share:*
Income before cumulative
effect of accounting
change $ 2.94 $ 2.53 $ 2.61 $ 1.93
Cumulative effect of
accounting change - - - - - - (.19)
Net income $ 2.94 $ 2.53 $ 2.61 $ 1.74
Dividends per common
share* $ .14 $ .12 $ .42 $ .36
Weighted average number of
common shares
outstanding 88,472 90,370 89,078 90,331
* Not in thousands
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
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<PAGE> PIONEER HI-BRED INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
<TABLE>
Nine Months Ended
May 31,
1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 232,630 $ 157,646
Noncash items included in net income:
Depreciation and amortization 50,588 44,005
Cumulative effect of accounting change - - 16,969
Other 7,540 25,784
Net change in assets and liabilities 96,122 (33,846)
Net cash provided by operating activities $ 386,880 $ 210,558
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investment $ - - $ 15,400
Payments received on notes receivable 7,971 10,891
Disbursements for notes receivable (4,947) (6,853)
Capital expenditures (49,853) (82,740)
Other (3,177) 8,671
Net cash used in investing activities $ (50,006) $ (54,631)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on short-term borrowings $ (31,803) $ (21,215)
Proceeds from long-term borrowings 345 12,784
Principal payments on long-term
borrowings (1,834) (10,714)
Purchase of common stock (52,153) (22,443)
Dividends paid (37,437) (32,526)
Net cash used in financing activities $(122,882) $ (74,114)
Effect of exchange rate changes on cash
and cash equivalents $ (1,220) $ (8,615)
Effect of change in year-end of the company's
international subsidiaries on cash and cash
equivalents $ 4,438 $ - -
Net increase in cash and cash equivalents $ 217,210 $ 73,198
Cash and cash equivalents, beginning 91,976 97,591
CASH AND CASH EQUIVALENTS, ENDING $ 309,186 $ 170,789
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest $ 14,344 $ 17,278
Income taxes $ 46,111 $ 45,937
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
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<PAGE> PIONEER HI-BRED INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited
consolidated condensed financial statements contain all
adjustments (consisting of only normal recurring accruals)
necessary to fairly present the financial position as of May
31, 1994 and 1993, and the results of operations and cash
flows for the nine months ended May 31, 1994 and 1993.
Because of the seasonal nature of the Company's business, the
results of operations for the nine months ended May 31, 1994,
are not necessarily indicative of the results to be expected
for the full year.
2. The Company is involved in litigation and disputes which are
normal to its business. Management does not believe that the
disposition of pending litigation will have a material
adverse impact on the consolidated financial position and
results of operations of the Company.
The Company has guaranteed the repayment of principal and
interest on certain obligations of Village Court Associates,
an affiliated real estate venture. At May 31, 1994, such
guarantees totaled approximately $23 million.
On February 5, 1981, the Company initiated litigation in the
Federal District Court for the Southern District of Iowa
against Holden Foundation Seeds, Inc. alleging that the named
defendants had improperly obtained and used one of the
Company's proprietary lines of corn breeding material. On
October 30, 1987, a judgment was entered against Holden
Foundation Seeds, Inc. on the issue of liability. On
December 30, 1991, the court entered a judgment against
Holden in the sum of $46.7 million plus interest from
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<PAGE>
December 30, 1991. On September 23, 1992, the court issued
its final order in the case. Both parties appealed, and on
July 12, 1994, the U.S. Circuit Court of Appeals in St. Louis
affirmed the 1992 decision. Both parties are considering
their legal options. The Company has not recognized any
benefit in the financial statements related to this judgment.
3. During the first quarter of fiscal 1994, the Company changed
the reporting period of its international subsidiaries from
June to August to have the subsidiaries' accounting period
match the Company's. The effect of this change, a net loss
of $.7 million, was recorded as a reduction in retained
earnings.
In prior years, the quarterly reporting periods of the
Company's international subsidiaries ended in September,
December, March, and June, two months prior to the quarterly
periods of the fiscal year used in the United States and
Canada. Due to the seasonal nature of the seed business,
changing the reporting year-end of the international
subsidiaries from June to August has a significant impact on
quarter results.
In Europe, the change in reporting periods shifted sales and
operating profits typically recorded in the third and fourth
quarters to the second and third quarters. In Central and
South America, the change shifts sales from first quarter to
the fourth quarter.
-8-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with
the attached unaudited condensed consolidated financial
statements and notes, and with the Company's audited financial
statements and notes for the fiscal year ended August 31, 1993.
MATERIAL CHANGES IN FINANCIAL CONDITION:
Due to the seasonal nature of the agricultural seed business,
the Company generates most of its cash from operations during the
second and third quarters of the fiscal year. Cash generated
during this time is used to meet the cash needs of the period and
to pay the commercial paper and accounts payable which are the
Company's primary sources of financing during the first and
fourth quarters of the fiscal year. Any excess funds are
invested, primarily in short-term commercial paper.
Most of the Company's financing is done through the issuance
of commercial paper in the U.S., backed by revolving and seasonal
lines of credit. In addition, foreign lines of credit and direct
borrowing agreements are relied upon to support overseas
financing needs. Short-term debt at May 31, 1994, consisted of
$28.2 million in direct short-term borrowings from foreign banks.
The Company has the following domestic lines of credit
available for fiscal 1994:
<TABLE>
(In thousands)
Revolving Seasonal Total
<S> <C> <C> <C>
First quarter $100,000 $ 75,000 $175,000
Second quarter $100,000 $ 99,000 $199,000
Third quarter $ 50,000 none $ 50,000
Fourth quarter $ 50,000 none $ 50,000
</TABLE>
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<PAGE>
The Company also has a $100 million private medium-term note
program of which $50 million was outstanding as of May 31, 1994. The
medium-term note matures in February, 1996.
Cash and cash equivalents at May 31, 1994, are higher than last
year primarily due to cash receipts on record-setting sales through
third quarter. The increased sales through May 31, 1994, are the
result of higher North American corn sales and the recognition of
substantially all of European sales due to the change in their
accounting periods. As a result, accounts and notes receivable also
increased from the period reported a year ago.
Seed inventories are down from the previous year due to below-
average yields harvested last fall and higher seed sales in the
current year.
Record levels of cash receipts and a move to funding international
subsidiaries internally are the principal factors in lower short-term
borrowings at May 31, 1994.
Other accruals increased at May 31, 1994 compared to the previous
year as a result of customer deposits in Central and South America.
The change in reporting year-end shifted these deposits from fourth
quarter to third quarter.
During the nine months ended May 31, 1994, an additional 1.4
million shares of the Company's stock was repurchased for $52 million.
On June 16, 1994, the Board of Directors authorized the repurchase of
an additional five million shares of the Company's stock. To date, of
the total 10.3 million shares authorized, 5 million have been
repurchased.
On June 16, 1994, the Company declared a regular quarterly cash
dividend of $.17 per share, up 21 percent from the $.14 per share
dividend paid the prior four quarters.
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<PAGE>
MATERIAL CHANGES IN RESULTS OF OPERATIONS:
Net income for the nine months ended May 31, 1994, was $232.6
million, or $2.61 per share, compared to net income of $157.6 million,
or $1.74 per share, for the same period a year ago. Net income for
the first nine months of fiscal 1993 includes the cumulative effect of
adopting Financial Accounting Standards Board Statement No. 106 which
had the effect of reducing fiscal 1993 results $.19 per share.
Excluding the effect of this accounting change, per-share net income
for the first nine months of fiscal 1993 was $1.93 per-share compared
to net income of $2.61 per-share for the current period. Prior year
results also included provisions totaling $36 million, or $.25 per
share, for costs associated with realigning the Company's operations
in Africa and the Middle East.
Record seed sales in North America helped improve sales for the
nine-month period 17 percent, to a record $1.355 billion. Seed corn
sales in North America increased $102 million, or 14 percent, while
earlier soybean seed deliveries increased sales $26 million, or 33
percent, compared to the previous year. The change in subsidiaries'
reporting period is responsible for the majority of the remaining
improvement.
Management expects record earnings for fiscal 1994 and believes
there is an excellent chance for the Company to reach its goal of 20
percent return on ending equity this year - one year earlier than
targeted.
Annual results are expected to be outstanding. However, the
fourth quarter of 1994 is expected to show a greater loss than last
year's $.42 per-share due to the earlier recognition of sales and
related margin in North America and Europe this year.
Ideal weather conditions in North America this spring allowed
customers to plant seed early. As of May 31, 1994, approximately 98
percent of total estimated corn acreage and 78 percent of total
estimated soybean acreage were planted compared to approximately 90
percent and 45 percent at May 31, 1993. With planting decisions made
earlier, the Company expects approximately one million fewer soybean
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<PAGE>
seed unit sales in 1994's fourth quarter compared to 1993's. Fourth
quarter North American unit sales of seed corn in the current year
should approximate the 400,000 units sold for the same period a year
ago.
Due to the change in the subsidiaries' reporting period, Europe is
expected to have minimal fourth quarter sales this year compared to
$65 million last year. However, in Central and South America, fourth
quarter sales could be $15 million higher than last year.
<TABLE>
Net Sales and Operating Income (Loss)
(Unaudited, in thousands)
<S> <C> <C> <C> <C> <C> <C>
Quarter Ended Nine Months Ended
May 31, Percentage May 31, Percentage
1994 1993 Change 1994 1993 Change
Net sales:
Corn $ 866,810 $800,921 8.22% $1,102,780 $ 960,756 14.78%
Soybeans 100,863 76,590 31.70% 108,924 81,241 34.08%
Other 70,829 53,405 32.63% 143,504 113,926 25.96%
Total net
sales $1,038,502 $930,916 11.56% $1,355,208 $1,155,923 17.24%
Product operating
profit (loss):
Corn $ 407,991 $398,661 2.34% $ 420,460 $ 370,774 13.40%
Soybeans 22,167 15,132 46.49% 11,079 3,735 196.63%
Other 3,828 (4,558) (10,722) (18,316) 41.46%
Restructuring
of operations - - 28,800 - - (36,000)
Product line
operating
profit $ 433,986 $380,435 14.08% $ 420,817 $ 320,193 31.43%
Indirect general &
administrative
expenses 16,235 11,987 35.43% 42,351 36,905 14.76%
Operating income $ 417,751 $368,448 13.38% $ 378,466 $ 283,288 33.60%
Units delivered, North America
Corn 9,574 8,417 13.75% 11,159 9,870 13.06%
Soybeans 7,361 5,925 24.24% 8,025 6,278 27.83%
</TABLE>
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<PAGE>NORTH AMERICAN OPERATIONS
Seed Corn
Sales in North America accounted for nearly 75 percent of 1994 and
1993 year-to-date worldwide seed corn sales. North American sales
improved $91 million, or 15 percent, and $102 million, or 14 percent,
for the quarter and nine months ended May 31, 1994. A 13 percent
increase in units delivered accounted for $94 million of the year-to-
date North American improvement. An increase in the average sales
price accounts for the remaining improvement.
Preliminary figures indicate that annual North American seed corn
sales are expected to reach 11.2 million units, a 12 percent increase
over fiscal 1993 levels. Seed corn acreage in North America is
expected to be 7 percent higher than last year, in large part due to a
decrease in the U.S. farm program set-aside from 10 percent to zero.
Accordingly, the Company estimates it will post a market share gain of
approximately 2 percentage points.
North American seed corn operating profit improved approximately
$35 million for the quarter and nine months ended May 31, 1994.
Additional unit sales improved year-to-date operating profit $50
million over last year. An increase in the average sales price of
seed corn within North America improved operating results $8 million
due to an increase in the card price of the Company's top-performing
hybrids and a shift by customers to higher-priced hybrids. Higher
per-unit cost of sales reduced year-to-date operating profit $16
million. Below average seed field yields last fall resulting from
poor weather conditions in the midwest and higher commodity costs
increased the per-unit cost of the 1993 crop.
World-wide research expenses increased $9 million, or 14 percent,
through May 31, 1994. Planned growth in field testing and winter
nursery costs and additional costs related to technology acquisitions
account for most of the increase. On an annual basis, research
expenses are expected to increase approximately 9 percent. For the
nine months ended May 31, 1994, North American research expenses for
corn account for $7 million of the total increase.
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<PAGE>
Seed corn fixed selling and general and administrative expenses in
North America remained comparable to the prior year. Variable seed
corn selling costs (commission and shipping costs) as a percentage of
sales was also comparable to the prior year-to-date results.
Soybeans
Current quarter and year-to-date soybean seed sales increased 32
percent and 34 percent over prior year levels. Results through third
quarter are virtually all from North American operations. Units
delivered are running approximately 28 percent ahead of last year and
represents $23 million of the improvement. This is the result of
earlier seed delivery in the current year. Poor weather conditions in
the midwest last year significantly delayed planting.
On an annual basis, unit sales are expected to increase 4 percent
over fiscal 1993 results. Improvements in product performance and
availability of key varieties when and where they were in demand
played important roles in this increase. Poor growing conditions last
year caused tight supplies of some varieties, limiting sales growth
potential.
Operating profit for North American soybean seed for the first
nine months of fiscal 1994 improved $7 million, more than double the
results from the same period last year. Increased unit sales was the
main factor in this change, increasing operating profit $6 million.
An increase in the average sales price per-unit contributed another $3
million to the improvement, however, increased per-unit cost of goods
sold resulting from higher commodity prices reduced operating profit
$2 million. Variable selling and marketing costs as a percentage of
sales were comparable between years.
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<PAGE>
Other Products
<TABLE>
Other Products Net Sales
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Quarter Ended Nine Months Ended
May 31, Percentage May 31, Percentage
1994 1993 Change 1994 1993 Change
Net sales:
Other seeds $ 40,561 $ 38,900 4.27% $ 82,078 $ 74,552 10.09%
Microbial products 9,607 5,325 80.41% 20,516 16,059 27.75%
Developing products 20,661 9,180 125.06% 40,910 23,315 75.47%
Total net sales $ 70,829 $ 53,405 32.63% $143,504 $113,926 25.96%
Contribution:
Other seeds $ 8,552 $ 6,897 $ 14,423 $ 10,511
Microbial products 4,142 1,312 5,486 2,081
Developing products (2,358) (7,297) (11,467) (9,384)
Total
contributions $ 10,336 $ 912 $ 8,442 $ 3,208
Joint fixed costs (6,508) (5,470) (19,164) (21,524)
Total operating
income/(loss) $ 3,828 $ (4,558) $(10,722) $(18,316)
</TABLE>
Total other products net sales for the quarter and nine months ended May
31, 1994, improved 33 percent and 26 percent over the same periods a year ago.
Other seeds sales improved in large part due to higher sunflower sales.
Developing product sales improved as a result of increased specialty plant
product sales.
Increased unit sales of sunflower account for the majority of the other
products improvement in operating profit. These improvements should carry
through to year-end. Microbial products improved operating profit $4 million
through third quarter, mostly the result of the change in reporting period of
the Company's international subsidiaries. On an annual basis, microbial
products operating results could increase 20 percent from a year ago.
-15-
<PAGE>
INTERNATIONAL SUBSIDIARIES
A shift in seed sales recognition between quarters, resulting from the
change in the reporting period of the Company's international subsidiaries,
improved sales $40 million and operating profit $14 million for the first nine
months of fiscal 1994. Virtually all of these sales and operating profit
improvements fall within the seed corn product line. Reserves taken in 1993
related to the restructure of operations in Africa and the Middle East also had
the effect of improving comparative year-to-year operating results.
In Europe, year-to-date sales and operating profit improved $40 million
and $26 million, respectively. The sales season in Europe is similar to that
of North America. As a result, the majority of sales occur from February to
May. With April and May included in fourth quarter a year ago, operating
profit totaling $12 million was recognized in the period. In the current year,
with sales virtually complete in the region, a fourth quarter operating loss is
expected.
For all of fiscal 1994, operating results in Europe should be comparable
to fiscal 1993. Fiscal 1994 acreage has decreased some from last year. Unit
sales, however, are expected to increase in the region, principally a result of
improved sales in Hungary and Spain. Hungarian sales and operating results
will improve from a year ago as the market in this country continues to
develop. Sales and operating results in Spain are expected to improve
following several years of drought. However, the strengthening of the U.S.
dollar against the Italian lira and reduced unit sales and selling price in
France and Germany will offset most of these gains.
Year-to-date sales and operating results in Central and South America
decreased $6 million and $7 million, respectively, from 1993 levels. For the
year, operating profit in this region is expected to improve approximately $4
million, or over 50 percent. As discussed in the previous two quarters,
subsidiaries in this region record a large portion of their sales in July and
August
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<PAGE>
and, prior to fiscal 1994, results for these two months were included in the
first quarter of the following fiscal year. Beginning in fiscal 1994, the July
and August operating results will be included in the fourth quarter of the
current fiscal year.
In the remaining regions, year-to-date sales improved $6 million and
operating results decreased $5 million from the same period a year ago. Of
these totals, Mexico contributed increased sales and operating results totaling
$4 million and $2 million, respectively. Increased unit sales on reduced
acreage, higher selling prices, and lower production costs resulting from
improved yields were the main factors for this improvement. The remaining
decrease in operating results is principally the result of fiscal 1993
collections on previously written-off accounts receivable in the C.I.S.
Continued sales growth resulting from exceptional product performance is
expected to increase 1994 annual operating results in Mexico 25 percent, or
approximately $5 million over the prior year. In addition, increased unit
sales in the remaining key markets in Africa and the Middle East is expected to
result in increased sales and improved operating results from the levels
recorded in fiscal 1993.
NET FINANCIAL AND OTHER
Interest expense decreased $3 million for the first nine months of fiscal
1994 compared to the same period a year ago. Record cash receipts resulting
from record-setting sales allowed the Company to fund international
subsidiaries internally, thus reducing external borrowing costs.
The estimated fiscal 1994 world-wide effective tax rate reflected in the
third quarter is 38 percent. The actual world-wide effective tax rate for
fiscal 1993 was 39.1 percent.
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<PAGE>
Financial Accounting Standards Board Statement No. 106 "Employers'
Accounting for Postretirement Benefits Other Than Pensions" was adopted for
U.S. based employees in fiscal 1993. The Company elected to immediately
recognize the transition obligation, which totaled $27.8 million before tax, as
a cumulative effect of accounting change.
Due to the seasonality of the seed business, single quarter results are
seldom indicative of year-end results and quarter-to-quarter comparisons are
not always meaningful. Accordingly, such comparisons are not emphasized.
Typically, most of the Company's revenue and operating profit is generated in
the third quarter.
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<PAGE>
[ARTICLE] 5
<TABLE>
[MULTIPLIER] 1,000
VOLUNTARY SCHEDULE - CERTAIN FINANCIAL INFORMATION
REGULATION STATEMENT CAPTION THIRD QTR THIRD QTR --------- YEAR TO DATE----
1994 1993 1994 1993
<S> <C> <C> <C> <C> <C>
5-02(1) Cash and cash equivalents 309186 170789
5-02(3)(a)(1) Accounts and notes receivable, net 304149 232685
5-02(6)(a)(1) Inventory 281313 379025
5-02(9) Total current assets 944798 835609
5-02(13) Property, plant and equipment 826877 834206
5-02(14) Accumulated depreciation 377552 369750
5-02(18) Total assets 1450750 1358756
5-02(21) Total current liabilities 345850 339353
5-02(22) Long-term debt 65751 75642
5-02(30) Common stock 92694 92694
5-02(31) Other Shareholders Equity 877688 782604
5-03(b)(1)(a) Net sales 1038502 930916 1355208 1155923
5-03(b)(2)(a) Cost of goods sold and research 422068 354760 622247 516371
5-03(b)3 Restructuring of operations - - 28800 - - 36000
5-03(b)(4) Selling, general and admin. 198683 178908 354495 320264
5-03(b)(8) Financial income (expense), net 2331 (676) (1939) (5900)
5-03(b)(10) Income before taxes & other items 420082 367772 376527 277388
5-03(b)(11) Income tax benefit/(expense) (159632) (139478) (143081) (105132)
5-03(b)(14) Income/(loss) continuing operations 260327 228626 232630 174615
5-03(b)(18) Cumulative effect-chngs in acctg. prin. - - - - - - (16969)
5-03(b)(19) Net income/(loss) 260327 228626 232630 157646
6-03(b)(20) Earnings/(loss) per share 2.94 2.53 2.61 1.74
</TABLE>
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<PAGE>
PIONEER HI-BRED INTERNATIONAL, INC.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
No reports on Form 8-K were filed with the Commission
during the three months ended May 31, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
PIONEER HI-BRED INTERNATIONAL, INC.
(Registrant)
Date
THOMAS N. URBAN, CHAIRMAN OF THE
BOARD AND PRESIDENT
Date
JERRY L. CHICOINE, SENIOR VICE
PRESIDENT AND CHIEF
FINANCIAL OFFICER
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