Replies to post #142 on Monument Circle Acquisition Corp (MON)

[DewDiligence]

MON was +4% today (despite the down market) on the following PR,
which accompanied a webcast at an ag conference sponsored by BMO
Capital Markets. The only genuinely bullish news is that MON has
gained market share in Brazil and Argentina; in other respects,
today’s disclosures echo what MON said at its FY2Q10 earnings
release in April (#msg-48718520, #msg-48717826). Today’s webcast
slides: http://www.monsanto.com/pdf/investors/2010/05_19_10.pdf .

MON’s shares have taken a beating this year stemming from lowered
2011-2012 guidance and an ongoing antitrust investigation (which
won’t amount to much, IMO); perhaps this week was the bottom.

http://finance.yahoo.com/news/Monsantos-Enhanced-US-prnews-1365242638.html?x=0&.v=1

›Monsanto's Enhanced U.S. Portfolio, Best-in-Class Seeds and Traits Designed to Deliver Unit Volume Growth in 2011

- Share Gains in Recently-Completed Latin American Season Demonstrate Strength of Innovation -

Wednesday May 19, 2010, 8:00 am EDT

ST. LOUIS, May 19, 2010 /PRNewswire-FirstCall/ -- Its enhanced corn strategy in the United States and increased share in Latin America illustrate Monsanto Company's (NYSE:MON) growth potential, Brett Begemann, executive vice president – Seeds & Traits, will tell investors today at BMO Capital Markets 2010 Agricultural Protein & Fertilizer Conference in New York.

Developing and deploying best-in-class seeds and traits that return value to farmers is what Monsanto does best, Begemann will say, and is the driver of the company's expected mid-teens earnings per share growth opportunity beginning in 2011 [consistent with the lowered guidance given in April].

"Our core seeds and traits strategy has not changed," Begemann will say. "True innovation on farm and great products are what Monsanto has always delivered and will continue to deliver in the years to come. I'm more confident than ever in this business because we have made the necessary tactical adjustments to provide greater certainty in achieving that strategic objective."

Citing a robust product strategy expected to deliver unit volume growth and improved average gross-profit per acre in its U.S. branded corn portfolio in 2011, Begemann will say the company is well-positioned with its most robust product line-up ever, a customer-centric strategy and market research that supports its plan.

Begemann will announce recent share gains in Latin America, despite a decline in overall acres. Nearly 65 percent of the corn Monsanto sold in Argentina was a double-stack, which drove a one-point share gain. In Brazil, Monsanto sold five million acres of its YieldGard® Corn Borer, which helped the company realize a three-point share gain. [In the seed marketplace, where farmers tend to be loyal to their favorite brands, market-share changes of a few percentage points are a big deal.]

Begemann will say recently concluded market research indicates that for a majority of U.S. farmers, Monsanto's reduced-refuge family of corn traits products creates a compelling opportunity for conversion and adoption while the company's top-performing product portfolio creates more choices for farmers. [See #msg-48335964 and various other posts on #board-6650 for discussion of MON’s refuge-reduction and refuge-in-a-bag positioning in the US corn market] "The data is clear – when you offer innovative, higher-yielding technology at a compelling price, farmers see the value," Begemann will say, adding that Monsanto will maximize its customer-focused approach by looking at pricing as a tool to deliver a value proposition that makes it easier for farmers to adopt and gain experience with new technologies.

Genuity® SmartStax™ remains the anchor for the enhanced product portfolio for the 40 million to 50 million acres in the highest-yielding region of the core Corn Belt. [“Core Corn Belt” means Iowa, Illinois, Indiana, Ohio, and part of Minnesota.] Monsanto's pilot program with Genuity® VT Double PRO™ proved successful for U.S. corn farmers in geographies with less productive soils and in environments with low rootworm pressure [i.e. the Western and High Plains states]. US. The first double stack product on the market to include a reduced-refuge option at 5 percent in the Corn Belt, Genuity® VT Double PRO™ rounds out a U.S. portfolio that also includes the company's successful second-generation triple-stack corn, Genuity® VT Triple PRO™. Genuity® VT Triple PRO™ offers a lower refuge option of 20 percent in the cotton-growing regions in the South. [The EPA-mandated corn refuge is larger (20% rather than 5%) in the cotton-growing region of the southern US because the development of resistant corn pests could theoretically endanger the cotton crop.]

"What we learned with both our doubles and triples last year was that this family of reduced-refuge products is tremendously appealing to U.S. corn farmers when we demonstrate the value proposition," Begemann will say. "We expect to effectively execute this new approach to deliver these products to farmers, and in doing so earn volume growth and increase gross profit per acre for farmers and Monsanto."

Discussing Genuity® Roundup Ready 2 Yield® soybean seeds [MON’s second-generation product to supersede Roundup Ready soybeans, which go off-patent in 2014], Begemann will note the company achieved broad trial with more than 40 percent of branded customers trying the product this year. [RR2Y soybeans have been a major disappointment to date, which is attributable in part to MON’s overpricing.] With the 2010 portfolio including new, high-performing Class of '10 varieties that represent 70 percent of the company's branded varieties, Begemann will say Monsanto continues to offer a better match for various growing conditions.

A live webcast of Begemann's presentation will be available through Monsanto's web site at: http://www.monsanto.com/investors. Following today's live broadcast set for 11:45 a.m. C.T., a replay of the webcast will be available on the Monsanto web site for three weeks. To access presentation slides and the simultaneous audio webcast of the presentation, visitors may need to download Windows Media Player™ prior to listening to the webcast.‹

[DewDiligence]

MON Reports FY3Q10 Results

[Inasmuch as MON preannounced an awful quarter and a “reset” of the Roundup business in May, there’s nothing especially surprising in the quarterly results or the outlook. Non-GAAP EPS for the quarter was 0.81, slightly ahead of the (reduced) guidance of 0.75-0.80 issued in May. The $2.40-2.60 guidance for FY2010 non-GAAP EPS implies that non-GAAP EPS in FY4Q10 will be between a loss of 0.09 and a gain of 0.11.

The CC slides are at http://www.monsanto.com/pdf/investors/2010/06_30_10.pdf . Please see the link below for the financial tables.]

http://monsanto.mediaroom.com/index.php?s=43&item=859

›Wednesday June 30, 2010, 8:00 am

ST. LOUIS, June 30, 2010 /PRNewswire-FirstCall/ -- Monsanto Company (NYSE:MON) today announced its third-quarter financial results and highlighted some of the actions in progress to generate expected annual earnings growth percentages in the mid-teens. With its earnings results for the quarter and year-to-date in line with adjustments the company announced last month, company executives said the business is strong and well-positioned for future growth.

"We've made some real changes to our portfolio and business approach, and the positive feedback I'm hearing from our customers tells me we are on the right track," said Hugh Grant, chairman, president and chief executive officer for Monsanto. "We have demonstrated agility in the face of adversity, enhancing our portfolio and equipping our sales team with an unprecedented amount of product choices and price points to offer our customers. We've repositioned our Roundup® business to recognize its appropriate role in supporting our Seeds and Genomics segment. And we've demonstrated an ability to leverage our operational savings and sustain a strategic investment in research and development. This year has brought its challenges, yet we are quickly evolving into a newer, leaner, stronger Monsanto, well-positioned to meet our objective for mid-teens earnings growth driven by our seeds and traits business."

Results of Operations

Price decreases for Roundup® and other glyphosate-based herbicides affected the company's results as expected [and previously announced], despite the volume growth achieved for these products. Net sales decreased $199 million, or 6 percent, in the three-month comparison and $1.3 billion, or 13 percent, year to date. Net income in the third quarter was $384 million.

Gross profit declined 24 percent in the quarter to $1.4 billion, also driven by the price decreases for Roundup® and other glyphosate-based herbicides. For the first nine months, gross profit is down 28 percent or $1.7 billion.

Operating expenses were flat overall, with a slight decrease for selling, general and administrative (SG&A) expenses for the three month comparison. R&D expenses increased slightly as the company continues to manage more projects in advanced pipeline phases. As a percent of net sales, SG&A expenses were 17 percent and R&D expenses were 10 percent. Restructuring expense for the quarter was $86 million. This included $52 million charged to cost-of-goods related to discontinued products worldwide.

Earnings per share (EPS) for the third quarter was $0.70 on an as-reported basis [GAAP], and $0.81 on an ongoing basis [this is non-GAAP, which excluding restructuring charges]. EPS for the first nine months of fiscal year 2010 was $2.27 on an as-reported basis, and $2.49 on an ongoing basis.

Cash Flow

The company saw an expected increase in cash outflow for the quarter, attributed to the Roundup® business. For the first nine months of fiscal year 2010, cash flow required by operations was $538 million compared to a source of $443 million for the same period last year. Net cash required by investing activities for the first nine months of fiscal year 2010 was $614 million, as compared to $588 million for the same period of fiscal year 2009.

Net cash required by financing activities for the first nine months of 2010 was $323 million, compared to net cash required of $775 million for the same period of fiscal year 2009.

Free cash flow was a use of $1.15 billion for the first nine months of fiscal year 2010, compared to a use of $145 million for the first nine months of fiscal year 2009.

Seeds and Genomics Segment Detail

The Seeds and Genomics segment consists of the company's global seeds and related traits business, and biotechnology platforms.

For the quarter, sales in the segment have increased by 5 percent. In corn, approximately 33 million acres of its triple-stack and SmartStax™ products were planted in the United States, up from 31 million last year. [This is obviously not a great growth rate for a new product; the tepid growth reflects MON’s acknowledged mistake of overpricing SmartStax.] More than 75 percent of the company's branded corn portfolio in the United States is either a triple stack or Genuity® SmartStax™, which represents a step change improvement over last year. [However, the growth in non-SmartStax triple-stack products does not provide as much profit as the anticipated growth of SmartStax would have done.] This complements growth in South America, where the increase in trait acres in Brazil and Argentina has had a positive overall mix effect on the business. [South America is perhaps the only bright spot in MON’s business this year.]

The company also cited progress with its Genuity® Roundup Ready 2 Yield® soybean, with more than 40 percent of its branded customers trying even more varieties this year. That next-generation soybean platform is gaining momentum as third parties, including new commercial licensees, continue to evaluate and choose Roundup Ready 2 Yield®.

Cotton and vegetables continue to track well with expectations, delivering volume and margin improvements to the seeds-and-traits portfolio.

In total, sales for Monsanto's Seeds and Genomics segment in the third quarter of fiscal 2010 increased slightly over last year's third quarter, consistent with company's expectations. The company expects total gross profit for the segment to come in at a range of $4.6 to $4.7 billion for the [fiscal] year, an increase over 2009. [The Seeds and Genomics segment had $4.5B of gross profit in FY2009—see #msg-42341821 and scan about halfway down.]

Agricultural Productivity Segment Detail

The Agricultural Productivity segment consists of the crop protection products and lawn-and-garden herbicide products. Sales in the third quarter of fiscal 2010 for Monsanto's Agricultural Productivity segment declined 34 percent or $313 million compared with the same period last year. Gross profit was a loss of $189 million in the quarter for Roundup® and other glyphosate-based herbicides, reflecting the impact associated with the repositioning of the Roundup® business.

For the third quarter, the company released strong results from the Other Agricultural Productivity part of this segment, reflecting a record year in the lawn-and-garden business. For the fiscal year, the segment is expected to deliver approximately $450 million to $600 million in gross profit, which includes a Roundup® contribution of between $50 and $200 million after the repositioning actions.

Outlook

Monsanto affirmed its cash flow and EPS guidance and provided preliminary financial guidance for fiscal year 2011. The company expects free cash flow for fiscal year 2010 will be in the range of $400 million to $500 million including the after-tax cash effect from a restructuring charge. Net cash provided by operating activities is expected to be $1.3 billion to $1.5 billion, and net cash required by investing activities is expected to be approximately $900 million to $1 billion for fiscal year 2010.

The company expects fiscal-year 2010 earnings per share to be in the range of $2.40 to $2.60 on an ongoing basis [non-GAAP, excluding restructuring charges] and $2.15 to $2.41 on an as-reported basis. [The $2.40-2.60 FY range for non-GAAP EPS implies that non-GAAP EPS in FY4Q10 will be between a loss of 0.09 and a gain of 0.11.].

SG&A expenses continued to track below expectations and are expected to represent approximately $2 billion to $2.1 billion for the year.

Sharing the first view of fiscal year 2011 since the company's repositioning of its Roundup® business last month, the company outlined the key metrics that will enable it to meet its objective of achieving earnings growth in the mid-teen percentages going forward. Monsanto's growth is expected to come exclusively from the Seeds and Genomics segment, where the company expects gross profit growth in the double digits. The company expects top-line growth from an increase in unit volume as well as mix improvement as Monsanto expands the availability of its new products.

Central to that strategy is U.S. corn, where Monsanto will offer more products at more price points. South America corn is also a key driver, as the company is poised to increase penetration of its first-generation double-stack corn in Argentina, which will serve as building block for the technology progression that's already under way in the United States. The same is true for Brazil, where stacked traits will create new opportunities for farmers as the company prepares to introduce its second-generation Corn Borer technology. In soybeans, Monsanto is confident that as its pricing approach enables more farmers to experience the benefits of Genuity® Roundup Ready 2 Yield® and see it perform on farm, it will enable the company to win new customers.

The company's R&D pipeline fuels the growth expected from seeds and traits, and Monsanto plans to resource that pipeline for success as it continues to support a higher number of projects in the more costly later stages of development. To reinforce this commitment, executives said Monsanto will move to providing a range for R&D spend annually rather than a metric that adjusts with sales. The range for 2011 is expected to represent an increase over the 2010 endpoint, but at a rate somewhat below the growth over the past few years.

The company expects gross profit for its Agricultural Productivity Segment at $550 million to $600 million in fiscal year 2011. Operational leverage is expected to be a key contributor to the earnings growth targets, and executives pointed to an institutionalized cost discipline that allows SG&A spend to hold at inflation-level growth.

Webcast Information

In conjunction with this announcement, Monsanto will hold a conference call at 8:30 a.m. central time (9:30 a.m. eastern time) today. The call will focus on these results and may include a discussion of Monsanto's strategic initiatives and other matters related to the company's business.

Presentation slides and a simultaneous audio webcast of the conference call may be accessed by visiting the company's web site at www.monsanto.com and clicking on "Investor Information." Visitors may need to download Windows Media Player™ prior to listening to the webcast. Following the live broadcast, a replay of the webcast will be available on the Monsanto Web site for three weeks.‹

[DewDiligence]

Monsanto Reports FY2Q11 Results

[Results for the fiscal quarter ending 2/28/11 were uneventful and in-line with prior guidance; however, investors were evidently expecting MON to *raise* EPS guidance for the fiscal year and, when this didn’t happen, the stock sold off about 5%.

As I’ve previously noted, many investors seem to think there’s a direct relationship between crop prices and MON’s seed prices; there isn’t, at least in the short run, but sky-high crop prices are presumably the reason investors expected more from this quarter than they got. Nonetheless, even after the recent sell-off, the stock is doing ok when you consider that it’s up more than 50% from its mid-2010 low.

There are no further annotations in this PR because it’s all self-explanatory and consistent with the prior non-GAAP EPS guidance of $2.72-2.82 for the fiscal year and 13-17% average annual EPS growth during the next 5 years.

I’ve included image files below for some, but not all, of the financial tables in the PR; among those included are the reconciliations from non-GAAP to GAAP. Webcast slides (17 pages) are at: http://www.monsanto.com/investors/Documents/2011/04-06-11.pdf .]

http://monsanto.mediaroom.com/index.php?s=43&item=938

›Company Confirms Full-Year Ongoing Earnings Per Share Guidance, Raises Free Cash Flow Expectation

April 6, 2011, 8:00 am EDT

ST. LOUIS, April 6, 2011 /PRNewswire/ -- With half its fiscal year complete, Monsanto Company (NYSE: MON ) today said a solid sales season for its U.S. seeds and traits business and disciplined approach to spending have positioned the company to realize its mid-teens earnings growth opportunity this year and set a strong foundation for coming seasons. In reporting its earnings results for the quarter ending Feb. 28, 2011, the company highlighted performance tracking with projections in both the seeds and genomics and agricultural productivity segments that affirms its full-year ongoing earnings per share guidance. The company also increased its free cash flow guidance for the full-year, driven by better than expected working-capital management and a strong economic climate in agriculture.





"We came into this year with an operational plan built around creating value for our customers," said Hugh Grant, chairman, president and chief executive officer for Monsanto. "It was a plan that was designed for balanced growth – across crops, across geographies and through a combination of mix and volume improvements. We exist to serve our farmer customers, and it is rewarding to see this plan is resonating with them. Given the tempo of the year, we are where we should be, and we have the right pieces and the right execution to feel very good that mid-teens earnings growth in 2011 is on track."

Results of Operations

Net sales increased $239 million, or 6 percent, in the three-month comparison driven by volume in both the seeds and genomics and agricultural productivity segments. Net income in the second quarter was $1 billion.

Gross profit rose 10 percent in the quarter to $2.3 billion, with margins higher due to cost improvements. For the first six months, gross profit is up 10 percent or $288 million.

Operating expenses were up $2 million in the second quarter compared to the prior year. In the three-month comparison, selling, general and administrative (SG&A) expenses decreased 2 percent. R&D expenses increased as the company continues to manage more projects in advanced pipeline phases.

Earnings per share (EPS) for the second quarter was $1.88 on an as-reported basis, and $1.87 on an ongoing basis. EPS for the first six months of fiscal year 2011 was $1.88 on an as-reported basis, and $1.89 on an ongoing basis. (For a reconciliation of EPS to ongoing EPS see page 1).

Cash Flow

The second quarter saw a continuation of the strong start to the year. For the first half of fiscal year 2011, cash flow from operations was a source of $1.4 billion compared to $256 million in the first half last year. Net cash required by investing activities for the first half of fiscal year 2011 was $524 million, compared to $345 million for the same period of fiscal year 2010.

Net cash required by financing activities for the first half of 2011 was $668 million, compared to net cash required of $259 million for the same period of fiscal year 2010. The company continues to make progress on its current $1 billion, three-year share repurchase authorization, spending $114 million on repurchases in the second quarter for a total purchase of $381 million for the first half of the fiscal year.

Free cash flow was a source of $917 million for the first half of fiscal year 2011, compared to a use of $89 million for the first half of fiscal year 2010. (For a reconciliation of free cash flow, see note 1.)

Outlook

The company affirmed its previously announced ongoing EPS guidance and raised its full-year free cash flow guidance for fiscal year 2011 to the range of $900 million to $1.1 billion. The company expects net cash provided by operating activities to be $1.8 billion to $2.1 billion, and net cash required by investing activities to be approximately $900 million to $1 billion for fiscal year 2011. (For a reconciliation of free cash flow, see note 1.)

The company confirmed full-year 2011 ongoing EPS guidance is in the range of $2.72 to $2.82. Full-year 2011 EPS guidance on an as-reported basis is in the range of $2.66 to $2.79. (For a reconciliation of EPS, see note 1.)



The Seeds and Genomics segment consists of the company's global seeds and related traits business.

In total, sales for Monsanto's Seeds and Genomics segment in the second quarter of fiscal 2011 increased 5 percent or $173 million, driven by global unit volume growth and a mix upgrade in the United States.

While it's early in the season, the company indicated sales are pacing to meet the mid-teens millions of U.S. acres it had expected for both its Genuity® Roundup Ready 2 Yield® soybeans and the Genuity® reduced refuge corn family this year. This brings a positive mix improvement across Monsanto's U.S. soybean and corn portfolios.

Globally, the company saw higher branded corn sales in Brazil, the United States and Europe in the quarter. In U.S. corn, the company has made significant product and pricing strategy moves, identifying lead products in each of the major geographies while making all products available across areas to meet farmers' needs. Genuity® SmartStax®, which provides the broadest spectrum of insect and weed control, is receiving strong interest in heavy rootworm areas of the Northern Corn Belt. Genuity® VT Triple PRO® and Genuity® VT Double PRO® are complementing the Genuity® SmartStax® build-out, with Genuity® VT Triple PRO® generating strong interest in the South as Genuity® VT Double PRO® does the same in areas with an established doubles market.

The cotton business also is performing well this year, with mix and volume improvements led by second-generation trait offerings and continued breeding gains. The company maintained a positive outlook for vegetables, with the gross profit decline attributed primarily to sales mix timing, which is expected to normalize over the rest of the year.




The Agricultural Productivity segment consists of the crop protection products and lawn-and-garden herbicide products.

Over the last year, the company has made fundamental changes in the crop protection business in particular as it relates to Roundup® and other glyphosate-based herbicides. With this quarter, the structural changes made to this segment are now reflected in the company's financial statements.

In our Agricultural Productivity reportable segment, the company has consolidated the Roundup® and other glyphosate-based herbicides, selective chemistry and lawn-and-garden businesses. The company made this change because the Agricultural Productivity segment now is managed as one business, and the ongoing operations of that business reflect the restructuring that is now complete.

Sales in the second quarter of fiscal 2011 for Monsanto's Agricultural Productivity segment increased 10 percent, with gross profit improvement as well as a function of volume and cost improvements primarily related to production efficiencies following the restructuring.


NOTE 1 (Reconciliation tables)


Reconciliation of EBIT to Net Income (Loss):





Reconciliation of EPS to Ongoing [non-GAAP] EPS:




Reconciliation of Free Cash Flow: Free cash flow represents the total of cash flows from operating activities and investing activities, as reflected in the Statements of Consolidated Cash Flows presented in this release. With respect to the fiscal year 2011 free cash flow guidance, 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.