MORRISVILLE, N.C., June 7, 2018 /PRNewswire/ -- Alliance One
International, Inc. (NYSE: AOI) today announced results for its
fiscal year ended March 31, 2018.
Everything we do is to transform people's
lives so that together we can grow a better world.
Highlights
Fiscal 2018
- Total sales and other operating revenues increased 7.7% to
$1,846.0 million as a result of a
7.5% increase in average sales price due to favorable product mix
mainly in South America and
North America.
- Gross profit increased 13.5% to $246.2
million and gross profit as a percentage of sales improved
to 13.3% from 12.7%.
- Operating income increased 30.7% to $110.6 million when compared to the prior
year.
- Net income attributable to Alliance One International Inc. was
$52.4 million, which included a net
tax benefit of $58.8 million with
$59.4 million associated with
estimated discrete net tax benefits related to the new tax law
enacted in December.
- Adjusted EBITDA* improved 15.4% to $168.5 million.
- During the current fiscal year, the Company purchased and
cancelled $28.6 million of our
existing 9.875% senior secured second lien notes due 2021, and in
April 2018 purchased and cancelled an
additional $10.9 million. There are
currently $652.1 million of such
notes outstanding.
Fourth Quarter
- Sales increased 5.6% to $643.9
million mainly driven by the larger South American crop and
an increase in average sales price due to favorable product
mix.
- Gross profit increased 10.6% to $74.7
million and gross profit as a percentage of sales improved
to 11.6% from 11.1%.
- Operating income decreased slightly to $32.5 million.
- Net loss attributable to Alliance One International, Inc. was
$4.5 million.
- Adjusted EBITDA* improved slightly to $48.1 million.
___________________________
* Adjusted EBITDA includes an adjustment to add back costs that are
not expected to be recurring associated with the "One Tomorrow"
business initiatives of approximately $6.6
million and $150,000 for the
fiscal years ended March 31, 2018 and
2017, respectively, and approximately $2.0
million and $150,000 for the
fourth quarters of the fiscal years ended March 31, 2018 and 2017, respectively. Such
adjustment was not included in Adjusted EBITDA presented in
Alliance One's announcements of operating results for the first
three quarters of the fiscal year ended March 31, 2018 or in the forecasted Adjusted
EBITDA for that fiscal year included in those announcements.
See the reconciliation tables included in this press release for
details regarding the calculation of Adjusted EBITDA.
Pieter Sikkel, President and
Chief Executive Officer, said, "Fiscal year 2018 was a pivotal year
for Alliance One. Led by a united purpose, we further enhanced our
focus on becoming a trusted provider of responsibly-produced,
independently-verified, sustainable and traceable agricultural
products, ingredients and services to businesses and consumers. The
transformation involves heightened focus on our leaf business;
investment into new, higher-margin business lines; acquisition of
new skill sets; and an unwavering commitment to further uniting our
businesses behind a unified purpose. We are on a strategic,
long-term path designed to improve shareholder value and we are
confident in our ability to deliver best-in-class products and
services to our customers.
"Our performance this year was strong – both in terms of
financial performance as well as progress on our 'One Tomorrow'
transformation announced last quarter. Led by the proactive efforts
of our leaf business, we saw improvement in net sales, gross
profit, and net income in fiscal 2018. We actively developed new
business lines that build upon the strength of our core operations
and invested in long-term growth opportunities in e-liquids,
industrial hemp and legal cannabis. Talent acquisition has been
paramount and we have made multiple strategic hires that are
allowing us to rapidly drive progress in our new business lines as
well as our leaf business. At each step of the way, we were driven
by our shared purpose: to transform people's lives so that together
we can grow a better world.
"As an agricultural company, the farmer is at the heart of
everything we do. Our agronomy and leaf teams worldwide are in the
fields every day, working with farmers and rural communities to
help them become more sustainable. Today, many of these farmers
often produce a significant volume of non-tobacco crops as a result
of the partnership with our company. The support we provide is
helping farmers increase the yields of all their crops so they are
more food secure and can sell surplus crops in the marketplace. We
are actively working to provide viable markets for non-tobacco
crops and our next step is to build the value-added processes
locally that allow them to expand and further diversify their
income. When combined with our strong track and trace capabilities,
our agricultural core business is central to our value proposition
with customers and suppliers.
"We are focused on growth far beyond maintaining and improving
our leaf market share, as indicated by the investments made in
e-liquids, industrial hemp and legal cannabis. Over the next three
to four years, we intend to broaden our business portfolio by
focusing on value-added consumer-driven agricultural products. We
are actively investing in human capital, and bringing in new
skillsets such as branding, marketing and advertising, that will
allow us to successfully grow and develop our new business lines.
Our goal is to generate a significantly increasing portion of
revenue and profit from the new, higher-margin businesses by
2020.
E-liquids
"Purilum is the engine behind our e-liquids business. With the
capability to develop flavors from the molecular level, the company
is widely respected for its science-based approach to the creation
of flavor that can be utilized with a variety of active
ingredients. This approach played a key role in the development of
a new relationship between Purilum and Fontem Ventures, a
subsidiary of Imperial Brands PLC, pioneer in electronic vapor
technologies and owner of the leading e-vapor brand, blu.
"On April 2, 2018, our subsidiary,
AOSP Investments, LCC ("AOSPI") acquired 51% of Humble Juice
Company, a fast-growing lifestyle e-liquid brand with high-quality
products, great flavors and a broad base of loyal consumers. This
investment enhances the potential revenue and profitability of our
combined e-liquid businesses, further diversifies our e-liquid
product lines and services, and fits cohesively into our
value-added business model."
Industrial Hemp
"Through the investment in Criticality, LLC ("Criticality"), a
North Carolina based hemp
processor, our five-year goal is to become a leader in the
production of cannabidiol hemp oil ("CBD") and related consumer
products. Criticality is continuing to work with our farmer network
to grow industrial hemp in North
Carolina under the state's pilot program, which is then used
to extract CBD at Criticality's facility in North Carolina."
Cannabis
"Our Canadian cannabis business, FIGR (formerly known as
Canadian Cultivated Products), took the first steps in its
expansion efforts, breaking ground on its new greenhouse and
warehouse in Prince Edward Island.
These facilities are expected to significantly expand FIGR's
production capacity and should be operational in the summer of
2019, putting it in a strong position as cannabis becomes legal for
adult recreational use in the Canadian market.
Mr. Sikkel concluded, "The operating improvements and
transformation initiatives we began in fiscal 2018 are the
foundation of our business moving forward. We expect fiscal 2019 to
be another year of growth with contributions from both the leaf
business and next generation products. Sales are anticipated to be
in a range of approximately $1,950.0
million to $2,050.0 million
with Adjusted EBITDA in a range of approximately $170.0 million to $190.0
million. With a strong team of talented individuals driving
forward with a united purpose, we plan on continuing to deliver on
our financial commitments and make solid progress executing our
'One Tomorrow' transformation strategy. We are excited about
maximizing future opportunities to further enhance shareholder
value."
Performance Summary for Fiscal Year Ended March 31, 2018
Volumes increased 0.5% to 383.3 million kilos primarily
attributable to the larger South
America crop size and the timing of shipments from
Asia. These increases were offset
by the limited carryover of shipments from fiscal 2017 and the
short weather-related crops in Africa, primarily in Malawi.
Total sales and other operating revenues increased $131.3 million to $1,846.0
million mainly driven by a 7.5% increase in average sales
price due to favorable product mix, mainly in South America and North America, and the impact of higher green
costs in Malawi.
Gross profit increased 13.5% to $246.2
million, and gross profit as a percentage of sales improved
to 13.3% from 12.7%.
SG&A increased $13.6 million
to $149.6 million as a result of
higher professional fees associated with our "One Tomorrow"
business development initiatives and the non-recurrence of a
reversal of reserves for customer receivables in the prior
year.
Interest expense at $133.0 million
was similar to the prior year, with higher average rates offset by
lower average balances on our seasonal lines of credit.
Income tax benefit was $58.8
million compared to a tax expense of $23.5 million for the same period last year. Our
effective tax rate was 364.3% this year compared to (59.2)% last
year. The variance in the effective tax rate between this year and
last year is primarily the impact of the federal tax legislation
enacted in December 2017, including a
provisional discrete net tax benefit of $78.3 million due to a re-measurement of deferred
tax assets and liabilities, release of the valuation allowance, and
the transition tax on deemed repatriation of deferred foreign
income.
Performance Summary for the Fourth Fiscal Quarter Ended
March 31, 2018
Volumes decreased 1.7% to 127.6 million kilos primarily driven
by the larger South America crop
size, offset by the timing of shipments from Asia and the shorter weather-related crops in
Africa, primarily in Malawi.
Total sales and other operating revenues increased $34.2 million to $643.9
million mainly attributable to an increase in average sales
price due to favorable product mix primarily in South America, North
America, Asia, and
Europe, and an increase in
volume.
Gross profit increased 10.6% to $74.7
million, and gross profit as a percentage of sales improved
to 11.6% from 11.1%.
SG&A increased $11.2 million
to $46.3 million as a result of
higher professional fees associated with our "One Tomorrow"
business development initiatives and the non-recurrence of a
reversal of reserves for customer receivables in the same period
the prior year.
Operating income decreased slightly to $32.5 million when compared to same period the
prior year.
Interest expense decreased 6.1% to $32.9
million, mainly due to lower average balances on our
seasonal lines of credit.
Income tax expense increased $4.8
million to $7.5 million.
Earnings Per Share
Fiscal Year 2018
For the fiscal year ended March 31,
2018, the Company reported a net income attributable to
Alliance One International, Inc. of $52.4
million, or $5.83 per basic
share, compared to a net loss, attributable to Alliance One
International, Inc. for the last fiscal year of $62.9 million, or $(7.05) per basic share.
Fourth Quarter 2018
For the fourth quarter ended March 31,
2018, the Company reported net loss, attributed to Alliance
One International, Inc. of $4.5
million, or $(0.50) per basic
share, compared to a net loss attributable to Alliance One
international, Inc. for the fourth quarter of last year of
$0.3 million, or $(0.03) per basic share.
Liquidity and Capital Resources
As of March 31, 2018, available
credit lines and cash were $625.1
million, comprised of $264.7
million in cash and $360.4
million of credit lines that excluded $7.5 million exclusively for letters of credit.
Available credit lines were comprised of $60.0 million under the U.S. ABL credit facility
for general corporate purposes and subject to a limitation based on
outstanding cash, as well as $300.4
million of foreign seasonal credit lines. In the future, the
Company may elect to redeem, repay, make open market purchases,
retire, or cancel indebtedness prior to stated maturity under its
various global bank facilities and outstanding public notes, as
they may permit.
Financial Results Investor Call
The Company will hold a conference call to report financial
results for the period ended March 31,
2018, on June 7, 2018 at
8:00 A.M. ET. The dial in number for
the call is (877) 260-1479 or outside the U.S. (334) 323-0522 and
conference ID 8903737. Those seeking to listen to the call may
access a live broadcast on the Alliance One website. Please visit
www.aointl.com 15 minutes in advance to register.
For those who are unable to listen to the live event on
June 7, 2018, a replay will be
available by telephone from 11:00 a.m. ET Thursday, June 7, 2018 through 11:00 a.m. ET
Tuesday, June 12, 2018. To access the
replay, dial (888) 203-1112 within the U.S., or (719) 457-0820
outside the U.S., and enter access code 8903737. Any replay,
rebroadcast, transcript or other reproduction of this conference
call, other than the replay accessible by calling the number above,
has not been authorized by Alliance One and is strictly prohibited.
Investors should be aware that any unauthorized reproduction of
this conference call may not be an accurate reflection of its
contents.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995.
These statements are based on current expectations of future
events. Such statements include, but are not limited to, statements
about future financial and operating results, plans, objectives,
expectations and intentions and other statements that are not
historical facts. Such statements are based on the current beliefs
and expectations of management and are subject to significant risks
and uncertainties. If underlying assumptions prove inaccurate
or known or unknown risks or uncertainties materialize, actual
results may differ materially from those currently anticipated
expected or projected. The following factors, among others, could
cause actual results to differ from those expressed or implied by
the forward-looking statements: changes in the timing of
anticipated shipments, changes in anticipated geographic product
sourcing, political instability, currency and interest rate
fluctuations, shifts in the global supply and demand position for
tobacco products, changes in tax laws and regulations or the
interpretation of tax laws and regulations, resolution of tax
matters, adverse weather conditions, changes in costs incurred in
supplying tobacco and related services, the impact of regulation
and litigation and risks and uncertainties associated with our new
business lines, including the risk of obtaining anticipated
regulatory approvals in Canada,
and the potential enactment of Canadian legislation legalizing the
production and sale of cannabis for recreational use, as well as
the progress of legalization of cannabis for medicinal and adult
recreational uses in other jurisdictions. Additional factors that
could cause the Company's results to differ materially from those
expressed or implied by forward-looking statements can be found in
the Company's most recent Annual Report on Form 10-K for the period
ended March 31, 2018 and the other
filings with the Securities and Exchange Commission (the "SEC")
which are available at the SEC's Internet site
(http://www.sec.gov).
Non-GAAP Financial Information
This press release contains financial measures that have not
been prepared in accordance with generally accepted accounting
principles in the United States
("U.S. GAAP" or "GAAP"). They include EBITDA, Adjusted EBITDA and
Adjusted Net Debt. Tables showing the reconciliation of these
non-GAAP financial measures are attached to the release.
Adjusted EBITDA anticipated for fiscal year 2019 is calculated
in a manner consistent with the presentation of Adjusted EBITDA in
the attached tables, including the adjustment to addback costs that
are not expected to be recurring associated with the "One Tomorrow"
business initiatives. Because of the forward-looking nature of this
estimate of Adjusted EBITDA, it is impractical to present a
quantitative reconciliation of such measure to a comparable GAAP
measure, and accordingly no such GAAP measure is being
presented.
About Alliance One International, Inc.
Alliance One International is an agricultural company that
delivers value-added products and services to businesses and
customers, and is a trusted provider of responsibly sourced,
independently verified, sustainable and traceable products and
ingredients.
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
March 31
|
|
March 31
|
(in thousands,
except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Sales and other
operating revenues
|
$
643,851
|
|
$
609,691
|
|
$
1,845,966
|
|
$
1,714,750
|
Cost of goods and
services sold
|
569,127
|
|
542,145
|
|
1,599,775
|
|
1,497,721
|
Gross
profit
|
74,724
|
|
67,545
|
|
246,191
|
|
217,029
|
Selling, general and
administrative expenses
|
46,314
|
|
35,078
|
|
149,588
|
|
135,982
|
Other
income
|
4,472
|
|
585
|
|
14,382
|
|
4,896
|
Restructuring and
asset impairment charges
|
382
|
|
307
|
|
382
|
|
1,375
|
Operating
income
|
32,500
|
|
32,744
|
|
110,603
|
|
84,568
|
Debt retirement
expense (benefit)
|
-
|
|
(2,639)
|
|
(2,975)
|
|
(300)
|
Interest
expense
|
32,899
|
|
35,031
|
|
132,978
|
|
132,667
|
Interest
income
|
976
|
|
2,269
|
|
3,271
|
|
8,157
|
Income (loss) before
income taxes and other items
|
577
|
|
2,621
|
|
(16,129)
|
|
(39,642)
|
Income tax expense
(benefit)
|
7,471
|
|
2,706
|
|
(58,764)
|
|
23,480
|
Equity in net income
(loss) of investee companies
|
2,151
|
|
(439)
|
|
9,271
|
|
(149)
|
Net income
(loss)
|
(4,743)
|
|
(524)
|
|
51,906
|
|
(63,271)
|
|
Less: Net loss
noncontrolling interests
|
(242)
|
|
(215)
|
|
(530)
|
|
(343)
|
Net income (loss)
attributable to Alliance One International, Inc.
|
$
(4,501)
|
|
$
(309)
|
|
$
52,436
|
|
$
(62,928)
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
(0.50)
|
|
$
(0.03)
|
|
$
5.83
|
|
$
(7.05)
|
|
Diluted
|
$
(0.50)
|
|
$
(0.03)
|
|
$
5.81
|
|
$
(7.05)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
9,012
|
|
8,952
|
|
8,989
|
|
8,930
|
|
Diluted
|
9,012
|
|
8,952
|
|
8,989
|
|
8,930
|
|
|
|
|
|
|
|
RECONCILIATION OF
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION ("ADJUSTED EBITDA")(1)
(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
FYE
|
(in
thousands)
|
June 30,
2017
|
Sept 30,
2017
|
Dec 31,
2017
|
March 31,
2018
|
|
March 31,
2018
|
|
|
|
|
|
|
|
U.S. GAAP - Net
Income(loss) attributable to Alliance One International,
Inc.
|
$
(32,543)
|
$
1,023
|
$
88,456
|
$
(4,501)
|
|
$
52,436
|
|
|
|
|
|
|
|
Plus: Interest
expense
|
34,101
|
32,756
|
33,222
|
32,899
|
|
132,978
|
Plus: Income tax
expense (benefit)
|
646
|
6,404
|
(73,282)
|
7,469
|
|
(58,764)
|
Plus: Depreciation
and amortization expense
|
8,387
|
8,284
|
8,174
|
8,753
|
|
33,598
|
|
|
|
|
|
|
|
EBITDA (1)
|
10,590
|
48,467
|
56,570
|
44,621
|
|
160,248
|
|
|
|
|
|
|
|
Plus: Abnormal
unrecovered advances (recoveries) to suppliers(2)
|
-
|
-
|
-
|
-
|
|
-
|
Plus: Reserves for
(recoveries on) doubtful customer receivables
|
-
|
(63)
|
(59)
|
(29)
|
|
(151)
|
Plus: Non-cash
employee stock based compensation
|
291
|
253
|
271
|
320
|
|
1,135
|
Less: Other income
(expense)
|
4,304
|
4,586
|
1,019
|
4,473
|
|
14,382
|
Plus: Fully reserved
recovery of tax (3)
|
2,375
|
2,265
|
2,258
|
4,937
|
|
11,835
|
Plus: Restructuring
and asset impairment charges
|
-
|
-
|
-
|
383
|
|
383
|
Plus: Costs
associated with transformation related to "One Tomorrow"
new business initiatives, not anticipated to be recurring
costs(4)
|
740
|
798
|
3,058
|
1,997
|
|
6,593
|
Plus: Debt retirement
expense (income)
|
(2,975)
|
-
|
-
|
-
|
|
(2,975)
|
Plus: Amortization of
basis difference - CBT investment(5)
|
318
|
335
|
512
|
354
|
|
1,519
|
Plus: Kenyan
investigation legal & professional costs
|
1,556
|
214
|
161
|
49
|
|
1,980
|
Less: Kenyan green
leaf operation Adjusted EBITDA(6)
|
(1,072)
|
(3,032)
|
1,668
|
107
|
|
(2,329)
|
Plus: Reconsolidated
subsidiary incremental EBITDA after elimination
of related party transactions with AOI and its consolidated
subsidiaries(7)
|
-
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
$
9,662
|
$
50,714
|
$
60,083
|
$
48,051
|
|
$
168,514
|
|
|
|
|
|
|
|
Total debt
|
|
|
|
|
|
$
1,347,584
|
Less:
Cash
|
|
|
|
|
|
264,660
|
Total debt less
cash
|
|
|
|
|
|
$
1,082,924
|
|
|
|
|
|
|
|
(Total debt less
cash) /Adjusted EBITDA(1)
|
|
|
|
|
|
6.43x
|
|
|
|
|
|
|
|
(1) Earnings before
interest, taxes, depreciation and amortization ("EBITDA") and
adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA") are not measures of results of
operations under generally accepted accounting principles in the
United States ("U.S. GAAP") and should not be considered as an
alternative to other U.S. GAAP measurements. We have
presented EBITDA and Adjusted EBITDA to adjust for the items
identified above because we believe that it would be helpful to the
readers of our financial information to understand the impact of
these items on our reported results. This presentation enables
readers to better compare our results to similar companies that may
not incur the sporadic impact of various items identified
above. Management acknowledges that there are many items that
impact a company's reported results and this list is not intended
to present all items that may have impacted these results. EBITDA,
Adjusted EBITDA and any ratios calculated based on these measures
are not necessarily comparable to similarly-titled measures used by
other companies or appearing in our debt obligations or agreements.
EBITDA and Adjusted EBITDA as presented may not equal column or row
totals due to rounding.
|
|
|
|
|
|
|
|
(2) Unrecovered
amounts expensed directly to cost of goods and services sold in the
income statement for abnormal yield adjustments or unrecovered
amounts from prior crops. Normal yield adjustments are capitalized
into the cost of the current crop and are expensed as cost of goods
and services sold as that crop is sold.
|
|
|
|
|
|
|
|
(3) Represents income
(included in Other income (expense)) from cash received in the
period presented from the sale of Brazilian intrastate trade tax
credits that had been generated by intrastate purchases of tobacco
primarily in prior crop years. The Brazilian states of Rio
Grande do Sul and Santa Catarina permit the sale or transfer of
excess credits to third parties subject to approval by the related
tax authorities. The Company has long-term agreements with
these Brazilian state governments regarding the amounts and timing
of credits that can be sold. Intrastate trade tax credits
that are not able to be sold under existing agreements are
capitalized into the cost of the current crop and are expensed as
cost of goods and services sold as that crop is sold.
|
|
(4) Includes expenses
incurred associated with the development and initial implementation
of the "One Tomorrow" business transformation strategy, including
business development expenses consisting of legal, strategic
consulting, business brokerage and other professional fees,
communications expenses consisting principally of fees to branding
consultants and for translation services, and human resources
expenses, including primarily professional fees related to
recruiting and employee communications, as
follows:
|
|
|
Three Months
Ended
|
|
FYE
|
(in
thousands)
|
June 30,
2017
|
Sept 30,
2017
|
Dec 31,
2017
|
March 31,
2018
|
|
March 31,
2018
|
|
|
|
|
|
|
|
Business
development
|
$
725
|
$
754
|
$
2,690
|
$
1,873
|
|
$
6,042
|
Communications
|
13
|
36
|
334
|
102
|
|
484
|
Human
resources
|
2
|
8
|
34
|
23
|
|
67
|
|
$
740
|
$
798
|
$
3,058
|
$
1,997
|
|
$
6,593
|
|
|
(5) Related to a
former Brazilian subsidiary that is now deconsolidated following
the completion of a joint venture in March 2014.
|
|
|
|
|
|
|
|
(6) Adjusted EBITDA
of our former green leaf sourcing operation in Kenya of $(2,329)
for the fiscal year ended March 31, 2018 and for each of the
quarters therein is calculated on the same basis as Adjusted EBITDA
presented in this table. In fiscal year 2016 we decided to
exit green leaf sourcing in the Kenyan market as part of our
restructuring program.
|
|
|
|
|
|
|
|
(7) Adjusted EBITDA
of the subsidiary reconsolidated at the end of the fourth quarter
of fiscal year 2016 is calculated on the same basis as Adjusted
EBITDA as presented in this table, with eliminations for related
party transactions with AOI and its consolidated subsidiaries, and
will be include in consolidated information going forward.
Additionally, the calculation of total adjusted debt less cash
includes the cash of the subsidiary reconsolidated at the end of
the fourth quarter of fiscal year 2016 and the debt of that
subsidiary not funded by a subsidiary of AOI.
|
RECONCILIATION OF
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION ("ADJUSTED EBITDA")(1)
(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
FYE
|
(in
thousands)
|
June 30,
2016
|
Sept 30,
2016
|
Dec 31,
2016
|
March 31,
2017
|
|
March 31,
2017
|
|
|
|
|
|
|
|
U.S. GAAP - Net
Income(loss) attributable to Alliance One International,
Inc.
|
$
(31,505)
|
$
(15,657)
|
$
(15,457)
|
$
(309)
|
|
$
(62,928)
|
|
|
|
|
|
|
|
Plus: Interest
expense
|
30,602
|
31,904
|
35,129
|
35,031
|
|
132,667
|
Plus: Income tax
expense
|
(3,830)
|
3,627
|
20,977
|
2,707
|
|
23,481
|
Plus: Depreciation
and amortization expense
|
8,752
|
8,601
|
8,506
|
8,617
|
|
34,476
|
|
|
|
|
|
|
|
EBITDA (1)
|
4,019
|
28,475
|
49,155
|
46,047
|
|
127,696
|
|
|
|
|
|
|
|
Plus: Abnormal
unrecovered advances (recoveries) to suppliers(2)
|
-
|
-
|
-
|
-
|
|
-
|
Plus: Reserves for
(recoveries on) doubtful customer receivables
|
43
|
100
|
(2,943)
|
(2,744)
|
|
(5,545)
|
Plus: Non-cash
employee stock based compensation
|
392
|
453
|
335
|
371
|
|
1,551
|
Less: Other income
(expense)
|
(481)
|
2,104
|
2,688
|
585
|
|
4,896
|
Plus: Fully reserved
recovery of tax (3)
|
1,585
|
2,221
|
2,382
|
3,167
|
|
9,356
|
Plus: Restructuring
and asset impairment charges
|
41
|
577
|
449
|
307
|
|
1,375
|
Plus: Costs
associated with transformation related to "One Tomorrow"
new business initiatives, not anticipated to be recurring
costs(4)
|
-
|
-
|
-
|
150
|
|
150
|
Plus: Debt retirement
expense (income)
|
-
|
-
|
2,339
|
(2,639)
|
|
(300)
|
Plus: Amortization of
basis difference - CBT investment(5)
|
307
|
318
|
583
|
310
|
|
1,518
|
Plus: Kenyan
investigation legal & professional costs
|
3,551
|
1,578
|
436
|
1,606
|
|
7,171
|
Less: Kenyan green
leaf operation Adjusted EBITDA(6)
|
(1,647)
|
(3,901)
|
(840)
|
(1,625)
|
|
(8,013)
|
Plus: Reconsolidated
subsidiary incremental EBITDA after elimination of related party
transactions with AOI and its consolidated
subsidiaries(7)
|
-
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
$
12,065
|
$
35,519
|
$
50,887
|
$
47,614
|
|
$
146,088
|
|
|
|
|
|
|
|
Total debt
|
|
|
|
|
|
$
1,428,868
|
Less:
Cash
|
|
|
|
|
|
473,110
|
Total debt less
cash
|
|
|
|
|
|
$
955,758
|
|
|
|
|
|
|
|
(Total debt less
cash) /Adjusted EBITDA(1)
|
|
|
|
|
|
6.54x
|
|
|
|
|
|
|
|
(1) Earnings before
interest, taxes, depreciation and amortization ("EBITDA") and
adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA") are not measures of results of
operations under generally accepted accounting principles in the
United States ("U.S. GAAP") and should not be considered as an
alternative to other U.S. GAAP measurements. We have
presented EBITDA and Adjusted EBITDA to adjust for the items
identified above because we believe that it would be helpful to the
readers of our financial information to understand the impact of
these items on our reported results. This presentation enables
readers to better compare our results to similar companies that may
not incur the sporadic impact of various items identified
above. Management acknowledges that there are many items that
impact a company's reported results and this list is not intended
to present all items that may have impacted these results. EBITDA,
Adjusted EBITDA and any ratios calculated based on these measures
are not necessarily comparable to similarly-titled measures used by
other companies or appearing in our debt obligations or agreements.
EBITDA and Adjusted EBITDA as presented may not equal column or row
totals due to rounding.
|
|
|
|
|
|
|
|
(2) Unrecovered
amounts expensed directly to cost of goods and services sold in the
income statement for abnormal yield adjustments or unrecovered
amounts from prior crops. Normal yield adjustments are capitalized
into the cost of the current crop and are expensed as cost of goods
and services sold as that crop is sold.
|
|
|
|
|
|
|
|
(3) Represents income
(included in Other income (expense)) from cash received in the
period presented from the sale of Brazilian intrastate trade tax
credits that had been generated by intrastate purchases of tobacco
primarily in prior crop years. The Brazilian states of Rio
Grande do Sul and Santa Catarina permit the sale or transfer of
excess credits to third parties subject to approval by the related
tax authorities. The Company has long-term agreements with
these Brazilian state governments regarding the amounts and timing
of credits that can be sold. Intrastate trade tax credits
that are not able to be sold under existing agreements are
capitalized into the cost of the current crop and are expensed as
cost of goods and services sold as that crop is sold.
|
(4) Represents
consulting and professional fees incurred in the early-stage
development of the "One Tomorrow" business transformation
strategy.
|
|
|
|
|
|
|
|
(5) Related to a
former Brazilian subsidiary that is now deconsolidated following
the completion of a joint venture in March 2014.
|
|
|
|
|
|
|
|
(6) Adjusted EBITDA
of our former green leaf sourcing operation in Kenya of $(8,013)
for the fiscal year ended March 31, 2017 and for each of the
quarters therein is calculated on the same basis as Adjusted EBITDA
presented in this table. In fiscal year 2016 we decided to
exit green leaf sourcing in the Kenyan market as part of our
restructuring program.
|
|
|
|
|
|
|
|
(7) Adjusted EBITDA
of the subsidiary reconsolidated at the end of the fourth quarter
of fiscal year 2016 is calculated on the same basis as Adjusted
EBITDA as presented in this table, with eliminations for related
party transactions with AOI and its consolidated subsidiaries, and
will be include in consolidated information going forward.
Additionally, the calculation of total adjusted debt less cash
includes the cash of the subsidiary reconsolidated at the end of
the fourth quarter of fiscal year 2016 and the debt of that
subsidiary not funded by a subsidiary of AOI.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION ("ADJUSTED EBITDA")(1)
(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
FYE(4)
|
(in
thousands)
|
June 30,
2015(5)
|
Sept 30,
2015
|
Dec 31,
2015
|
March 31,
2016
|
|
March 31,
2016
|
|
|
|
|
|
|
|
U.S. GAAP - Net
Income(loss) attributable to Alliance One International,
Inc.
|
$
(25,950)
|
$
(21,066)
|
$
11,735
|
$
100,813
|
|
$
65,532
|
|
|
|
|
|
|
|
Plus: Interest
expense
|
27,773
|
28,782
|
30,356
|
30,279
|
|
117,190
|
Plus: Income tax
expense (benefit)
|
(3,215)
|
22,902
|
1,930
|
10,598
|
|
32,215
|
Plus: Depreciation
and amortization expense
|
7,064
|
6,897
|
7,057
|
7,343
|
|
28,361
|
|
|
|
|
|
|
|
EBITDA (1)
|
5,672
|
37,515
|
51,078
|
149,033
|
|
243,298
|
|
|
|
|
|
|
|
Plus: Abnormal
unrecovered advances (recoveries) to suppliers(2)
|
430
|
-
|
8
|
(439)
|
|
-
|
Plus: Reserves for
(recoveries on) doubtful customer receivables
|
(84)
|
(65)
|
(33)
|
12
|
|
(169)
|
Plus: Non-cash
employee stock based compensation
|
813
|
661
|
600
|
351
|
|
2,425
|
Less: Other income
(expense)
|
559
|
(1,027)
|
594
|
105,302
|
|
105,427
|
Plus: Fully reserved
recovery of tax (3)
|
345
|
814
|
1,092
|
2,058
|
|
4,309
|
Plus: Restructuring
and asset impairment charges (recoveries)
|
2,948
|
(385)
|
1,525
|
1,801
|
|
5,888
|
Plus: Debt retirement
expense (income)
|
-
|
-
|
-
|
-
|
|
-
|
Plus: Amortization of
basis difference - CBT investment(4)
|
322
|
446
|
450
|
336
|
|
1,554
|
Plus: Kenyan
investigation legal & professional costs
|
-
|
-
|
1,771
|
6,808
|
|
8,579
|
Less: Kenyan green
leaf operation Adjusted EBITDA(6)
|
(5,377)
|
(6,499)
|
(317)
|
(4,473)
|
|
(16,666)
|
Plus: Reconsolidated
subsidiary incremental EBITDA after elimination
of related party transactions with AOI and its consolidated
subsidiaries(7)
|
1,252
|
4,738
|
2,864
|
7,945
|
|
16,800
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
$
16,517
|
$
51,250
|
$
59,079
|
$
67,076
|
|
$
193,923
|
|
|
|
|
|
|
|
Total
debt(8)
|
|
|
|
|
|
$
1,386,559
|
Less: Debt of
reconsolidated subsidiary funded by affiliate(9)
|
|
|
|
|
|
84,258
|
Total adjusted
debt
|
|
|
|
|
|
$
1,302,301
|
Less:
Cash
|
|
|
|
|
|
199,720
|
Total adjusted debt
less cash(8)
|
|
|
|
|
|
$
1,102,581
|
|
|
|
|
|
|
|
(Total adjusted debt
less cash) /Adjusted EBITDA(1)(8)(9)
|
|
|
|
|
|
5.69x
|
|
|
|
|
|
|
|
(1) Earnings before
interest, taxes, depreciation and amortization ("EBITDA") and
adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA") are not measures of results of
operations under generally accepted accounting principles in the
United States ("U.S. GAAP") and should not be considered as an
alternative to other U.S. GAAP measurements. We have
presented EBITDA and Adjusted EBITDA to adjust for the items
identified above because we believe that it would be helpful to the
readers of our financial information to understand the impact of
these items on our reported results. This presentation enables
readers to better compare our results to similar companies that may
not incur the sporadic impact of various items identified
above. Management acknowledges that there are many items that
impact a company's reported results and this list is not intended
to present all items that may have impacted these results. EBITDA,
Adjusted EBITDA and any ratios calculated based on these measures
are not necessarily comparable to similarly-titled measures used by
other companies or appearing in our debt obligations or agreements.
EBITDA and Adjusted EBITDA as presented may not equal column or row
totals due to rounding.
|
|
|
|
|
|
|
|
(2) Unrecovered
amounts expensed directly to cost of goods and services sold in the
income statement for abnormal yield adjustments or unrecovered
amounts from prior crops. Normal yield adjustments are capitalized
into the cost of the current crop and are expensed as cost of goods
and services sold as that crop is sold.
|
|
|
|
|
|
|
|
(3) Represents income
(included in Other income (expense)) from cash received in the
period presented from the sale of Brazilian intrastate trade tax
credits that had been generated by intrastate purchases of tobacco
primarily in prior crop years. The Brazilian states of Rio
Grande do Sul and Santa Catarina permit the sale or transfer of
excess credits to third parties subject to approval by the related
tax authorities. The Company has long-term agreements with
these Brazilian state governments regarding the amounts and timing
of credits that can be sold. Intrastate trade tax credits
that are not able to be sold under existing agreements are
capitalized into the cost of the current crop and are expensed as
cost of goods and services sold as that crop is sold.
|
|
|
|
|
|
|
|
(4) Related to a
former Brazilian subsidiary that is now deconsolidated following
the completion of a joint venture in March 2014.
|
|
|
|
|
|
|
|
(5) The quarter ended
June 30, 2015 was restated due to the Kenya matter previously
disclosed, as well as all quarters in the previous fiscal
year-to-date periods.
|
|
|
|
|
|
|
|
(6) Adjusted EBITDA
of our former green leaf sourcing operation in Kenya of $(16,666)
for the fiscal year ended March 31, 2016 and for each of the
quarters therein is calculated on the same basis as Adjusted EBITDA
presented in this table. In fiscal year 2016 we decided to
exit green leaf sourcing in the Kenyan market as part of our
restructuring program.
|
|
|
|
|
|
|
|
(7) Adjusted EBITDA
of the subsidiary reconsolidated at the end of the fourth quarter
of fiscal year 2016 is calculated on the same basis as Adjusted
EBITDA as presented in this table, with eliminations for related
party transactions with AOI and its consolidated subsidiaries, and
will be include in consolidated information going forward.
Additionally, the calculation of total adjusted debt less cash
includes the cash of the subsidiary reconsolidated at the end of
the fourth quarter of fiscal year 2016 and the debt of that
subsidiary not funded by a subsidiary of AOI.
|
|
|
|
|
|
|
|
(8) On April 1, 2016,
new accounting guidance that changed the presentation of debt
issuance costs in financial statements was adopted on a
retrospective basis. Therefore the March 31, 2016 balances has been
adjusted in accordance with the adoption of this
guidance.
|
|
|
|
|
|
|
|
(9) Represents the
portion of outstanding debt of the subsidiary reconsolidated at the
end of the fourth quarter of fiscal year 2016 under a credit
facility attributable to the participation interest of another AOI
subsidiary funding that portion of the borrowing under that
facility. As a result of a direct assignment of the interest
in such facility to another subsidiary of Alliance One on March 2,
2017, the amount of the debt attributable to the interest of such
other subsidiary is eliminated in the determination of consolidated
total debt on or after March 2, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/alliance-one-international-reports-fiscal-year-2018-results-with-improved-sales-gross-profit-and-net-income-as-well-as-significant-progress-on-one-tomorrow-transformation-300661379.html
SOURCE Alliance One International, Inc.