SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended May 31, 1994 or
Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act 1934
For the transition period from to
Commission file number: 0-17005
DEKALB Genetics Corporation
(Exact name of registrant as specified in its charter)
Delaware 36-3586793
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3100 Sycamore Road, DeKalb, Illinois 60115
(Address of principal executive offices) (Zip Code)
815-758-3461
(Registrant's telephone number,
including area code)
Indicate 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
Title of class Outstanding as of May 31, 1994
Class A Common, no par value 788,211
Class B Common, no par value 4,355,156
Exhibit index is located on page 2
Total number of pages 18
- - -1-
<PAGE>
<PAGE>
DEKALB GENETICS CORPORATION
INDEX
Page No.
Part I - Financial Information (Unaudited except for the
Condensed Consolidated Balance Sheet as of August 31, 1993):
Management's Discussion and Analysis of Results of Operations
and Financial Position 3-6
Condensed Consolidated Statements of Operations for the nine
months ended May 31, 1994 and 1993 7
Condensed Consolidated Statements of Operations for the three
months ended May 31, 1994 and 1993 8
Condensed Consolidated Balance Sheets, May 31, 1994 and 1993
and August 31, 1993 9
Condensed Consolidated Statements of Cash Flows for the nine
months ended May 31, 1994 and 1993 10
Notes to Condensed Consolidated Financial Statements 11-13
Report of Independent Accountants 14
Part II - Other Information 15
EXHIBIT 11 - Computation of Net Earnings per Common and Common
Equivalent Share for the nine months ended May 31, 1994 and
1993 and for the three months ended May 31, 1994 and 1993 16
EXHIBIT 15 - Letter Re Unaudited Interim Financial Information 17
EXHIBIT 18 - Preferability Letter from Auditors 18
- - -2-
<PAGE>
<PAGE>
Management's Discussion and
Analysis of Results of Operations
and Financial Position
Net earnings for the first nine months of fiscal 1994 were $9.4 million ($1.80
per share) compared with $4.5 million ($.88 per share) in fiscal 1993.
Consolidated revenues were $16.0 million higher than the prior year in spite
of $4.6 million lower revenues from Argentina. North American seed and swine
revenues were $14.2 million and $7.8 million, respectively, higher than last
year.
Earnings for the first nine months of fiscal 1994 included the full $2.3
million ($.44 per share) after-tax benefit related to the suspension of the
defined benefit portion of the Company's retirement program. The earnings
effects (in millions), by segment, were $1.7 for North American seed and $0.2
each for swine, poultry and corporate. In the first quarter of fiscal 1994,
the Company adopted SFAS No. 109 for accounting for income taxes. Also, in
order to achieve a better matching of blended inventory costs with revenues,
the Company changed from the last-in, first-out (LIFO) to the average cost
inventory method, and changed the way in which it recognizes corn obsolescence
from specifically identifying quantities to an historical-based experience
approach (Note #2). The appropriate restatements have been made.
Quarterly Industry Segment Revenues and Earnings
In Millions
(Unaudited)
Third Quarter Year-to-Date
May May May May
Revenues: 1994 1993 1994 1993
Restated Restated
Seed $ 88.1 $ 79.3 $236.5 $227.2
Swine 14.2 11.3 40.4 32.6
Poultry 5.1 5.3 14.3 15.4
Total Revenues $107.4 $ 95.9 $291.2 $275.2
Earnings:
Seed $ 3.0 $ (6.0) $ 16.4 $ 10.0
Swine 2.8 1.0 5.5 2.3
Poultry 0.1 0.5 (0.6) 0.1
Total operations 5.9 (4.5) 21.3 12.4
General corporate expenses (0.9) (1.5) (2.0) (3.4)
Net interest expense (2.0) (2.3) (5.8) (6.3)
Earnings before income taxes and
accounting change $ 3.0 $ (8.3) $ 13.5 $ 2.7
Income tax provisions 0.8 (5.6) 3.7 (1.8)
Earnings before cumulative
effect of accounting change $ 2.2 $ (2.7) $ 9.8 $ 4.5
Cumulative effect of accounting
change - - (0.4) -
Net Earnings $ 2.2 $ (2.7) $ 9.4 $ 4.5
- - -3-
<PAGE>
<PAGE>
SEED
Seed segment earnings for the first nine months of fiscal 1994 were $6.4
million greater than the comparable period of fiscal 1993 due to higher
international and North American earnings. North American seed revenues
increased by nine percent, but international seed revenues decreased by eight
percent, largely due to reduced planted acres and lower average selling prices
in Argentina.
NORTH AMERICAN SEED
North American seed results were $4.2 million above fiscal 1993. Although
revenues were nine percent higher in fiscal 1994, costs increased by over
eighteen percent and gross margin declined by one percent. The revenue
increase was the result of higher corn and soybean volumes, partially offset
by lower corn average selling prices due to smaller-sized seed and increased
customer participation in early payment discount programs. North American
corn acreage is approximately seven percent higher than last year while the
Company's sales volume to date was up nearly nine percent. However, unusual
spring planting conditions contributed to high seed returns in fiscal 1993 and
the Company expects that the fiscal 1994 full year corn volume increase will
be greater than nine percent because significant returns are not anticipated
in the fourth quarter of fiscal 1994. The margin decrease was largely
attributable to higher seed corn unit production costs resulting from a
smaller crop and below target yields in the 1993 crop coupled with a lower
average selling price for corn. Operating expenses were approximately five
percent below the prior year.
North American seed segment earnings for the third quarter were $3.0 million
higher than last year largely due to increased corn and soybean volume and the
benefit arising from the suspension of the defined benefit portion of the
Company's retirement program. The earnings increase was partially offset by
the increased unit cost associated with the 1993 crop.
INTERNATIONAL SEED
International seed segment earnings increased $2.2 million from fiscal 1993.
Argentine revenues and earnings were lower due to a reduction in planted acres
resulting, in part, from adverse weather conditions. Higher unit costs and
lower average selling prices also contributed to the lower earnings. However,
losses from Spain and Australia recorded in the third quarter of fiscal 1993
were not present in fiscal 1994. In spite of the reduced Argentine earnings
in fiscal 1994, DEKALB Argentina maintained its dominant corn market share.
Earnings from international seed exports were down significantly from last
year as a result of higher costs of seed produced in the U.S. for export and
lower export volumes to Latin American countries and Europe.
International seed third quarter 1994 earnings were $6.0 million above the
same period in the prior year due to the absence of losses in Spain and
Australia, partially offset by lower earnings in Argentina.
- - -4-
<PAGE>
<PAGE>
SWINE
Swine segment earnings for the first nine months of fiscal 1994 were $3.2
million more than the previous year. Revenues were 24 percent higher than
last year due to increased breeding stock and market animal volumes and
prices. Breeding stock volume increased by 21 percent and market animal
volume increased by six percent. Average prices received increased by nine
and seven percent, respectively, for breeding stock and market animals.
Compared to the prior year, cost of revenues increased 24 percent due to
higher feed prices, greater swine volumes and the costs associated with two
new production farms. Swine gross margin was 24 percent above fiscal 1993.
Operating expenses were only five percent higher than the prior year.
Third quarter earnings were $1.8 million above the prior year third quarter
due to higher animal volumes and prices. A revenue increase of $2.9 million
was partially offset by higher production costs resulting from higher feed
costs and start-up costs of the new facilities. Operating expenses were
slightly higher than the prior year third quarter.
POULTRY
Poultry's loss of $0.6 million through the first nine months was $0.7 million
below profit of $0.1 million in the prior year. Decreased export parent and
grandparent earnings due to an embargo in Venezuela and a lack of hard
currency in Bulgaria coupled with a decrease in domestic parent earnings were
partially offset by lower operating expenses.
Fiscal 1994 third quarter earnings were $0.4 million below the third quarter
of fiscal 1993, as the result of the lower export and domestic breeder
activity.
GENERAL
In October 1993, the Board of Directors approved management's suspension of
the defined benefit portion of the Company's retirement program. The full
effect of this curtailment was a benefit of $2.3 million after-tax.
The effective tax rate decreased from 30.0 percent in the first nine months of
fiscal 1993 to 27.0 percent in the same period of fiscal 1994. For each
interim period, the tax rate is determined from an estimate of full year
earnings and the resultant tax. In fiscal 1994, the full year estimate
includes a benefit associated with international seed losses incurred in prior
years but utilized in the current year.
- - -5-
<PAGE>
<PAGE>
FINANCIAL POSITION
During the first three quarters of fiscal 1994, the net cash out flow from
operations was $1.0 million compared with an outflow of $38.7 million in the
prior year period. This difference resulted from significantly lower
inventory acquisition costs, resulting from smaller crop production, and the
generation of receipts from early cash discount programs.
Cash requirements for the first nine months were provided by earnings and
existing short-term credit facilities. Committed credit lines include a $50
million revolving credit facility through December 31, 1996 and a $15 million
facility available through November 29, 1994. The revolving credit facility
limits total borrowing by establishing limits on certain balance sheet values
and ratios. The most restrictive of these covenants requires the Company to
maintain tangible net worth greater than $65.0 million, and at May 31, 1994,
tangible net worth was $79.3 million. The Company also has numerous
uncommitted credit facilities available and draws upon them periodically,
including during the nine months ended May 31, 1994.
Management believes its operating cash flow and existing lines of credit are
sufficient to cover normal and expected working capital needs, capital
expenditures, dividends and debt maturities.
- - -6-
<TABLE>
<CAPTION>
DEKALB Genetics Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the nine months ended May 31, 1994 and 1993
(Dollars in millions except per share amounts)
(Unaudited)
May May
1994 1993
Restated
<S> <C> <C>
Revenues:
Operating revenues $284.0 $268.8
Royalty income 7.2 6.4
291.2 275.2
Cost and Expenses:
Cost of operating revenues 160.5 137.1
Selling expense 56.7 58.6
Research and development cost 39.0 39.2
General and administrative expense 14.9 24.5
271.1 259.4
Operating Earnings 20.1 15.8
Interest expense, net of interest income of
$0.2 in 1994 and $0.3 in 1993 (5.8) (6.3)
Other expense, net (0.8) (6.8)
Earnings before income taxes and cumulative effect
of accounting change 13.5 2.7
Income tax provision 3.7 (1.8)
Earnings before cumulative effect of account 9.8 4.5
Cumulative effect of accounting change (0.4) -
NET EARNINGS $9.4 $4.5
Earnings per share before cumulative
effect of accounting change $1.89 $0.88
Accounting change (0.09) -
NET EARNINGS PER SHARE $1.80 $0.88
DIVIDENDS PER SHARE ($0.60) ($0.60)
The accompanying notes are an integral part of the financial statements.
- - -7-
</TABLE>
<TABLE>
<CAPTION>
DEKALB Genetics Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended May 31, 1994 and 1993
(Dollars in millions except per share amounts)
(Unaudited)
May May
1994 1993
Restated
<S> <C> <C>
Revenues:
Operating revenues $104.0 $92.4
Royalty income 3.4 3.5
107.4 95.9
Cost and Expenses:
Cost of operating revenues 58.9 49.7
Selling expense 22.4 23.6
Research and development cost 15.2 14.8
General and administrative expense 6.2 8.2
102.7 $96.3
Operating Earnings (Loss) 4.7 (0.4)
Interest expense, net of interest income of (2.0) (2.3)
Other income (expense), net 0.3 (5.6)
Earnings before income taxes 3.0 (8.3)
Income tax provision 0.8 (5.6)
NET EARNINGS (LOSS) $2.2 ($2.7)
NET EARNINGS (LOSS) PER SHARE $0.43 ($0.51)
DIVIDENDS PER SHARE $0.20 $0.20
The accompanying notes are an integral part of the financial statements.
- - -8-
</TABLE>
<TABLE>
<CAPTION>
DEKALB Genetics Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
May 31, 1994 and 1993 and August 31, 1993
(Dollars in millions)
May May August
1994 1993 1993
Restated
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $1.6 $0.9 $3.5
Notes and accounts receivable, net of allowance for
doubtful accounts of $2.2 at May 31, 1994, $1.3 at
May 31, 1993 and $1.6 at August 31, 19 108.9 100.6 36.8
Inventories (Note 2) 83.8 99.5 118.2
Deferred income taxes 6.3 5.5 5.7
Other current assets 3.1 4.8 3.4
Total current assets 203.7 211.3 167.6
Investments in and advances to related com 7.5 8.1 9.1
Intangible assets 41.7 42.8 42.6
Other assets 4.5 4.8 4.8
Property, plant and equipment, at cost 241.6 230.1 232.1
Less accumulated depreciation and amort(144.1) (138.4) (138.8)
Net property, plant and equipment 97.5 91.7 93.3
Total assets $354.9 $358.7 $317.4
Current liabilities:
Notes payable $69.1 $69.0 $55.1
Accounts payable, trade 6.2 5.7 6.8
Other accounts payable 11.3 6.5 5.5
Other current liabilities 43.7 47.2 32.6
Total current liabilities 130.3 128.4 100.0
Deferred compensation and other credits 5.3 5.9 5.8
Deferred income taxes 13.2 12.5 11.7
Long-term debt, less current maturities 85.1 93.0 85.2
Commitments and contingent liabilities (Note 4)
Shareholders' equity:
Capital stock:
Common, Class A; authorized 5,000,000 0.1 0.1 0.1
Common, Class B; authorized 15,000,000 0.4 0.4 0.4
Capital in excess of stated value 80.0 79.7 79.9
Retained earnings 45.6 43.2 39.2
Currency translation adjustments (Note 3 (2.7) (2.1) (2.5)
123.4 121.3 117.1
Less treasury stock, at cost (2.4) (2.4) (2.4)
Total shareholders' equity 121.0 118.9 114.7
Total liabilities and shareholders' equity$354.9 $358.7 $317.4
The accompanying notes are an integral part of the financial statements.
- - -9-
</TABLE>
<TABLE>
<CAPTION>
DEKALB Genetics Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended May 31, 1994 and 1993
(Dollars in millions)
May May
1994 1993
Restated
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $9.4 $4.5
Adjustments to reconcile net income to net cash
flow from operating activities:
Depreciation and amortization 9.0 8.2
Interest on zero coupon note - 2.9
Equity earnings, net of dividends 1.3 0.8
Cumulative effect of accounting change 0.4 -
Provision for deferred income taxes 0.9 (5.4)
Provision for inventory valuation 10.0 8.7
Loss on dissolution of foreign subsidiary - 5.4
Other 0.8 0.5
Changes in assets and liabilities:
Receivables (73.1) (66.8)
Inventories 24.4 (9.1)
Other current assets (0.5) 0.7
Accounts payable 5.2 (4.9)
Accrued expenses 12.2 16.3
Other assets and liabilities (1.0) (0.5)
Net cash flow from operating activities ($1.0) ($38.7)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (12.3) (10.7)
Proceeds from sale of property, plant and equipme 0.6 0.5
Other - 0.1
Net cash flow from investing activities ($11.7) ($10.1)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuing debt 14.1 73.8
Principal payments made on debt (0.2) (30.0)
Dividends paid (3.1) (3.1)
Other 0.1 0.4
Net cash flow from financing activities $10.9 $41.1
Net effect of exchange rates on cash (0.1) (0.8)
Net decrease in cash and cash equivalents (1.9) (8.5)
Cash and cash equivalents August 31 3.5 9.4
Cash and cash equivalents at the end of May $1.6 $0.9
Supplemental Cash Flow Information
Cash paid during the period for:
Income taxes $2.0 $1.3
Interest $5.5 $9.5
The accompanying notes are an integral part of the financial statements.
- - -10-
</TABLE>
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The consolidated financial statements included herein are presented in
accordance with the requirements of Form 10-Q and consequently do not
include all of the disclosures normally required by generally accepted
accounting principles or those normally made in the Company's annual Form
10-K filing. In order to facilitate a better comparison of the highly
seasonal seed operations of the Company, a Condensed Consolidated Balance
Sheet at May 31, 1993, is included herein as part of the condensed
consolidated financial statements.
The results presented are unaudited (other than the Condensed Consolidated
Balance Sheet at August 31, 1993, which is derived from the Company's
audited year-end balance sheet) but include, in the opinion of management,
all adjustments of a normal recurring nature necessary for a fair
statement of the results of operations and financial position for the
respective interim periods.
Certain costs and expenses incurred in the North American and
international seed businesses are charged against income as sales are
recognized for interim reporting purposes. The Company believes this
method more closely matches revenues with expenses and results in more
comparability of reporting periods within the year. Since there are only
minor North American seed sales recorded in the first and fourth quarters,
this method defers first quarter expenses related to sales which will
occur later in the year, primarily in the second quarter; it also
anticipates expenses incurred in the fourth quarter, primarily in the
third quarter. Southern hemisphere international seed sales occur largely
in the first and second quarters and this same method anticipates future
expenses from the third and fourth quarters and matches them against the
first and second quarter revenues.
2. Inventories, valued at the lower of cost (principally average and actual
cost) or market (in millions), were as follows:
May May August
1994 1993 1993
Restated
Commercial seed $ 70.5 $ 87.7 $106.4
Commercial poultry and swine 8.8 7.5 7.7
Supplies and other 4.5 4.3 4.1
$ 83.8 $ 99.5 $118.2
During the third quarter of fiscal 1994, the Company changed the
accounting method of valuing its commercial seed inventories, previously
valued using the last-in, first-out (LIFO) method, to average cost. The
Company's planning, production and sales activity include the utilization
of commercial seed inventories from more than one crop year. However, the
use of the LIFO method, in effect, caused the matching of the most recent
crop year's cost with current revenues. This caused significant
commercial seed earnings volatility given year-to-year uncertainties such
- - -11-
<PAGE>
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(continued)
as crop size, yield and market prices. Therefore, the Company believes the
average cost method of inventory valuation achieves a better matching of
blended inventory costs with revenues and better reflects the utilization
of commercial seed inventory units. The change in accounting method has
been applied retroactively and financial information for all periods
presented has been restated to eliminate the effect of LIFO on prior
periods. In fiscal 1994, nine months earnings through May 31, 1994 were
$1.3 million ($.24 per share) higher and third quarter earnings increased
$0.2 million ($.05 per share) as a result of the change. Net earnings for
the nine months ended May 31, 1993 decreased $1.6 million ($.29 per share)
while net earnings decreased $0.9 million ($.15 per share) for the third
quarter of fiscal 1993.
In addition, management decided to recognize corn obsolescence based on
historical experience in order to achieve more timely and accurate
obsolescence estimates. Net earnings for the nine months of fiscal 1994
were reduced by $0.9 million ($.18 per share) due to the additional
provision required. Third quarter earnings were $0.3 million or $.07 per
share lower as a result of this change.
3. Foreign-currency assets and liabilities, except for operations in economies
historically experiencing hyperinflation, are translated into their U.S.
dollar equivalents based on rates of exchange prevailing at the end of the
respective period. Translation adjustments resulting from translating
foreign currency financial statements of consolidated subsidiaries into
their U.S. dollar equivalents are reported separately and accumulated in a
separate component of stockholders' equity. The following summarizes the
activity in the translation adjustment account:
(In millions)
May May
1994 1993
Balance at September 1 $(2.5) $(1.2)
Translation gain (loss) (0.2) (0.9)
Balance at end of May $(2.7) $(2.1)
Aggregate exchange gains and losses arising from the translation of foreign
currency transactions in other than the functional currency of the
particular entity are included in income. Translation gains or losses in
hyperinflationary economies are also included in income.
4. The Company and its subsidiaries are defendants in various legal actions
arising in the course of business activities. In the opinion of
management, these actions will not result in a material adverse effect on
the Company's consolidated operations or financial position.
Most potential property losses are self-insured.
- - -12-
<PAGE>
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
5. In October 1993, the Board of Directors approved management's suspension of
the defined benefit portion of the Company's retirement program. The
cumulative effect of this curtailment was a benefit of $2.3 million
after-tax.
6. Effective September 1, 1993, the Company changed its method of accounting
for income taxes by adopting the provisions of Statement of Financial
Accounting Standards No. 109 (SFAS No. 109), "Accounting for Income Taxes".
SFAS 109 requires a change from the deferred method of accounting for
income taxes under APB Opinion 11 to the asset and liability method of
accounting for income taxes. Under the asset and liability method,
deferred tax assets and liabilities are recognized for the expected future
tax consequences attributable to differences between the financial
statement and tax bases of assets and liabilities using enacted tax rates
expected to apply in the years in which the temporary differences are
expected to reverse. As permitted by SFAS 109, the Company has elected not
to restate the financial statements of prior years.
The adoption of SFAS 109 resulted in the recognition of $0.4 million, or
$.09 per share, of deferred tax expense. This amount is included as a
charge to net income as the cumulative effect of change in accounting
principle.
The effective tax rate decreased from 30.0% in the first nine months of
fiscal 1993 to 27.0% in the same period of fiscal 1994. For each interim
period, the tax rate is determined from an estimate of full year earnings
and the resultant tax. In fiscal 1994, the full year estimate included a
benefit associated with international seed losses incurred in prior years
but utilized in the current year.
7. In fiscal 1994, the Company classified royalty income as revenues rather
than non-operating income. Prior years have been restated to conform with
the current year presentation. In addition, certain other
reclassifications have been made for comparability purposes. These
restatements had no effect on net earnings.
- - -13-
<PAGE>
<PAGE>
<AUDIT-REPORT>
Report of Independent Accountants
Board of Directors
DEKALB Genetics Corporation
We have made a review of the condensed consolidated balance sheets of DEKALB
Genetics Corporation as of May 31, 1994, and 1993, the related condensed
consolidated statements of operations for the three and nine-month periods
then ended and the statements of cash flows for the nine-month periods then
ended in accordance with standards established by the American Institute of
Certified Public Accountants.
A review of interim financial information consists principally of obtaining an
understanding of the system for the preparation of interim financial
information, applying analytical review procedures to financial data, and
making inquiries of persons responsible for financial and accounting matters.
It is substantially less in scope than an audit made in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the consolidated financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of August 31, 1993, and the
related consolidated statements of operations and cash flows for the year then
ended (not presented herein), and in our report dated October 12, 1993, we
expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of August 31, 1993 is fairly presented, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived before restatement for the retroactive change relating to
inventory described in Note 2.
COOPERS & LYBRAND
Chicago, Illinois
July 8, 1994
- - -14-
</AUDIT-REPORT>
<PAGE>
<PAGE>
Part II
OTHER INFORMATION
Item 1. Legal Proceedings
The Company and its subsidiaries are defendants in various legal actions
arising in the course of business activities. In the opinion of
management, these actions will not result in a material adverse effect on
the Company's consolidated operations or financial position.
Item 6. Exhibits and Reports on Form 8-K Page
(a) Exhibit 11 - Earnings Per Share Computation 16
Exhibit 15 - Letter Re Unaudited Interim Financial Information 17
Exhibit 18 - Preferability Letter from Auditors 18
(b) Reports on Form 8-K -
No Form 8-K was filed during the three months ended May 31, 1994.
SIGNATURE
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.
DEKALB Genetics Corporation
Date: July 8, 1994 Thomas R. Rauman
(Signature)
Thomas R. Rauman
Vice President-Finance,
Chief Financial Officer
- - -15-
<PAGE>
EXHIBIT 11
COMPUTATION OF NET EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE
For the nine months ended May 31, 1994 and 1993
May May
1994 1993
Restated
PRIMARY EARNINGS PER SHARE:
Shares
Average shares outstanding 5,140,385 5,128,984
Net average additional shares outstanding
assuming dilutive stock options exercised
and proceeds used to purchase treasury stock
at average market price 77,196 65,425
Average number of common and common
equivalent shares outstanding 5,217,581 5,194,409
Net Earnings
Net earnings for primary earnings per share $9,407,000 $4,552,000
Primary Earnings Per Share $1.80 $0.88
COMPUTATION OF NET EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE
For the three months ended May 31, 1994 and 1993
May May
1994 1993
Restated
PRIMARY EARNINGS PER SHARE:
Shares
Average shares outstanding 5,142,026 5,134,274
Net average additional shares outstanding
assuming dilutive stock options exercised
and proceeds used to purchase treasury stock
at average market price 96,391 71,041
Average number of common and common
equivalent shares outstanding 5,238,417 5,205,315
Net Earnings
Net earnings for primary earnings per share $2,255,000 $(2,635,000)
Primary Earnings Per Share $0.43 $(0.51)
- - -16-
<PAGE>
<PAGE>
EXHIBIT 15
Securities & Exchange Commission
Washington, D.C. 20549
We are aware that our report dated July 8, 1994, on our review of the interim
financial information of DEKALB Genetics Corporation as of May 31, 1994 and
1993, and the three-month and nine-month periods then ended, included in this
Form 10-Q, is incorporated by reference into the Registration Statements No.
33-24875, No. 33-33305 and No. 33-39986 on Form S-8. Pursuant to Rule 436(c)
under the Securities Act of 1933, this report should not be considered a part
of the registration statement prepared or certified by us within the meaning
of Sections 7 and 11 of that Act.
COOPERS & LYBRAND
Chicago, Illinois
July 8, 1994
- - -17-
<PAGE>
<PAGE>
EXHIBIT 18
July 8, 1994
DEKALB Genetics Corporation
3100 Sycamore Road
DeKalb, IL 60115
We are providing this letter to you for inclusion as an exhibit to your Form
10-Q filing pursuant to Item 601 of Regulation S-K.
We have read management's justification for the change in accounting from the
last-in, first-out (LIFO) method to the average cost inventory method
contained in the DEKALB Genetics Corporation ("DEKALB" or the "Company") Form
10-Q for the quarter ended May 31, 1994. Based on our reading of the data and
discussion with Company officials of the business judgement and business
planning factors relating to the change, we believe management's justification
to be reasonable. Accordingly, we concur that the newly adopted accounting
principle described above is preferable in the Company's circumstances to the
method previously applied.
We have not audited any financial statements of DEKALB as of any date or for
any period subsequent to August 31, 1993, nor have we audited the application
of the change in accounting principle disclosed in Form 10-Q of DEKALB for the
nine months ended May 31, 1994; accordingly, our comments are subject to
revision on completion of an audit of the financial statements that include
the accounting change.
Very truly yours,
Coopers & Lybrand
- - -18-
