The Mosaic Company has reported preliminary results for its fiscal second quarter ended Nov. 30, 2004. As a result of the business combination between Cargill Crop Nutrition and IMC Global Inc. (IMC), results include a full quarter of operations from the former Cargill Crop Nutrition but only 39 days of operations from the former IMC.

Mosaic's net sales for the second quarter were $1.1 billion compared to $0.7 billion a year ago. The company incurred a net loss of $15.5 million, or after preferred stock dividends, $16.6 million or $0.05 per common share, compared to net income of $19.2 million or $0.08 per common share for the prior year period. The year ago comparisons include only financial data for Cargill Crop Nutrition and do not include IMC.

Additional cost of goods sold of $30 million was recorded for post-combination purchase accounting adjustments related to valuing IMC's inventory at fair market value at the date of the combination. The entire impact from recording IMC's inventory at fair market value was recognized in the quarter as the related inventory was sold. Costs related to the three hurricanes that affected Cargill Crop Nutrition's Florida phosphate operations prior to the combination totaled approximately $30 million, consisting of expenses related to lost production, plant repairs and establishing an environmental reserve. Non-cash foreign currency losses were $22 million in the period primarily as a result of the strengthening of the Canadian dollar against the U.S. dollar.

Selling, general and administrative (SG&A) costs were $45.4 million, an increase of $20.6 million compared with Cargill Crop Nutrition a year ago. A majority of the increase resulted from the inclusion of SG&A from the former IMC entities as well as various merger-related expenses.

Mosaic successfully completed its bond consent solicitation process in early January. By offering Mosaic guarantees on IMC's long-term notes, Mosaic will receive relief from certain restrictive debt covenants which will facilitate synergy capture within the expected timetable.

Source: Company Release