ST. LOUIS, Feb. 14 /PRNewswire-FirstCall/ -- In separate presentations to investors over the next two weeks, Monsanto executives will outline growth opportunities for the seed and trait industry, as well as the path forward for Monsanto’s growth.
Monsanto’s Chairman, President and Chief Executive Officer, Hugh Grant, will deliver presentations at two investor conferences. Grant will present on Monsanto’s business performance, the adoption of its current commercial offerings, as well as discussing the company’s near- and long-term growth opportunities. Grant’s presentations will be part of the BIO CEO & Investor Conference in New York today; and part of the Morgan Stanley Basic Materials Conference 2006 in New York on Tuesday, Feb. 21.
In a separate presentation today, Monsanto’s Chief Technology Officer and Executive Vice President, Robb Fraley, will highlight developments within the company’s research-and-development (R&D) pipeline, the contribution of this research to the company’s long-term growth objectives, and its current progress in advancing research toward commercial development. Fraley’s presentation will be part of the Goldman Sachs’ Tenth Annual Agricultural Forum 2006 in New York.
Traits Business Delivers Value to the Farm, Expected To Drive Near-Term Growth
During his remarks at the conferences, Grant will address the continued opportunity of trait expansion within the U.S. corn market. The company’s trait technologies -- including the YieldGard family of insect-protected corn traits and Roundup Ready Corn 2 -- are expected to remain a core growth opportunity in the near-term. Monsanto’s YieldGard Rootworm corn is likely to be planted on between 8 million and 10 million acres in 2006, and up to 25-to- 30 million acres through 2010, Grant noted.
“Corn farmers in the United States recognize the tremendous value and performance that Monsanto’s insect-protected and herbicide-tolerant traits are providing to their farms,” Grant said. “This season, we are seeing strong order patterns in our corn traits business, and early indications also reinforce that the company’s value-pricing model is expected to drive penetration of our corn traits.”
In addition to growth within its corn trait business, Monsanto also expects its U.S. corn seeds business to increase its market share for a fifth consecutive season. The company also expects continued adoption of its seed and trait offerings in other world markets, like Brazil and Australia.
R&D Advancements Drive Long-Term Opportunities, Led by Next Generation Trait Families
Monsanto’s Fraley will discuss developments within the company’s R&D program and outline the company’s focus on agronomic and consumer-oriented products, like drought tolerance and Omega 3 soybeans, respectively.
“This past season was a blockbuster year for Monsanto’s R&D program,” said Fraley. “We have more pipeline prospects being tested than ever before, and we’re seeing our initial research advance from scientific concepts toward commercial offerings.”
The company noted that its research discovery program is also rich with next-generation technologies. Fraley noted that the company’s R&D focus is now delivering “families” of technologies, like Roundup RReady2Yield soybeans and drought-tolerant corn, which are expected to offer a wider set of benefits to farmers and consumers, as compared with the company’s commercial first- and second-generation product offerings. Fraley noted that he expects Monsanto to have transitioned or be in the process of transitioning every one of its first-generation products to enhanced second- and even third-generation products, by the next decade.
Outlook
In the presentations, Monsanto executives will confirm that its full-year 2006 EPS guidance will be toward the upper end of its range of $2.35 to $2.50, on a reported and ongoing basis. The company also confirmed that it expects EPS will be in the range of $2.82 to $3.00 on a reported and an ongoing basis for fiscal year 2007, which reflects a 20 percent growth rate from the fiscal year 2006 EPS guidance. (For a reconciliation of EPS on an ongoing basis, see note 1.)
The company will also confirm that its guidance for free cash flow in fiscal year 2006 remains in the range of $825 million to $900 million. The company will also confirm that it expects free cash flow for fiscal year 2007 to be in the range of $875 million to $950 million, excluding cash that may be used for a rights offering in the bankruptcy proceedings of Solutia, Inc. (For a reconciliation of free cash flow, see note 2.)
About Monsanto Company
Monsanto Company is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. For more information on Monsanto, see http://www.monsanto.com .
Cautionary Statements Regarding Forward-Looking Information:
Certain statements contained in this release are “forward-looking statements,” such as statements concerning the company’s anticipated financial results, current and future product performance, regulatory approvals, business and financial plans and other non-historical facts. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, the company’s actual performance and results may differ materially from those described or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, among others: continued competition in seeds, traits and agricultural chemicals; the company’s exposure to various contingencies, including those related to intellectual property protection, regulatory compliance and the speed with which approvals are received, and public acceptance of biotechnology products; the success of the company’s research and development activities; the outcomes of major lawsuits, including proceedings related to Solutia Inc.; developments related to foreign currencies and economies; successful completion and operation of recent and proposed acquisitions; fluctuations in commodity prices; compliance with regulations affecting our manufacturing; the accuracy of the company’s estimates related to distribution inventory levels; the company’s ability to fund its short-term financing needs and to obtain payment for the products that it sells; the effect of weather conditions, natural disasters and accidents on the agriculture business or the company’s facilities; and other risks and factors detailed in the company’s filings with the SEC. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this release. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results.
Note to editors: Roundup Ready, Roundup RReady2Yield and YieldGard are trademarks owned by Monsanto Company and its wholly owned subsidiaries
Monsanto Company Reconciliations of Non-GAAP Financial Measures Unaudited
Ongoing EPS and Free Cash Flow: The presentations of ongoing EPS and free cash flow are not intended to replace net income (loss), cash flows, financial position or comprehensive income (loss), and they are not measures of financial performance as determined in accordance with generally accepted accounting principles (GAAP) in the United States. The following tables reconcile ongoing EPS and free cash flow to the respective most directly comparable financial measures calculated in accordance with GAAP.
1. Reconciliation of EPS to Ongoing EPS: Ongoing EPS is calculated excluding certain after-tax items which Monsanto does not consider part of ongoing operations. Fiscal Year Fiscal Year Fiscal Year 2007 2006 2005 Target Target Diluted Earnings per Share $2.82 - $3.00 $2.35 - $2.50 $0.94 In-Process R&D Write-Off Related to the Seminis and Emergent Acquisitions - - 0.91 Solutia-Related Charge - - 0.64 Tax Benefit on Loss from European Wheat and Barley Business - - (0.39) Restructuring Charges - Net - - 0.02 Income on Discontinued Operations and Related Restructuring - - (0.04) Diluted Earnings per Share from Ongoing Business $2.82 - $3.00 $2.35 - $2.50 $2.08 2. Reconciliation of Free Cash Flow: Free cash flow represents the total of cash flows from operations and investing activities. With respect to the projected free cash flow guidance provided under the caption “Fiscal Year 2006 Target” and “Fiscal Year 2007 Target,” Monsanto does not include any estimates or projections of Net Cash Provided (Required) by Financing Activities because in order to prepare any such estimate or projection, Monsanto would need to rely on market factors and conditions that are outside of its control. (Dollars in millions) Fiscal Year Fiscal Year Fiscal Year 2007 2006 2005 Target Target Net Cash Provided by Operations $1,375 - $1,450 $1,300-$1,375 $1,737 Net Cash Required by Investing Activities $(500) $(475) (1,667) Free Cash Flow $875 - $950 $825 - $900 $70 Net Cash Provided (Required) by Financing Activities N/A N/A (582) Net Increase (Decrease) in Cash and Cash Equivalents N/A N/A (512) Cash and Cash Equivalents at Beginning of Period N/A N/A 1,037 Cash and Cash Equivalents at End of Period N/A N/A $525
Monsanto Company
CONTACT: Media, Lee Quarles, +1-314-694-2330, or Analysts, Scarlett LeeFoster, +1-314-694-8148, both for Monsanto Company
Web site: http://www.monsanto.com/
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