DIMON Reports Second Quarter 2005 Financial Results; Company
Confirms Fiscal 2005 Guidance and Announces Quarterly Dividend
DANVILLE, Va., Nov. 9 /PRNewswire-FirstCall/ -- DIMON Incorporated
(NYSE:DMN) today announced that net income for the quarter ended
September 30, 2004, was $5.6 million, or $0.12 per basic share,
compared to $5.5 million, or $0.12 per basic share, for the year
earlier period. The Company's underlying net income for the
quarter, a non-GAAP measure that excludes market valuation
adjustments for derivative financial instruments, discontinued
operations, and non-recurring items, was $13.7 million, or $0.31
per basic share, compared to $3.2 million, or $0.07 per basic
share, on the same basis last year. The excluded market valuation
adjustments result from interest rate swaps that must be
marked-to-market each quarter, even though they are being held to
maturity. In discussing the Company's forecast and actual operating
performance, DIMON management consistently excludes these market
valuation adjustments because they do not reflect the Company's
operating activities, are non-cash in nature, and will reverse in
their entirety (gains and losses will offset each other) during the
remaining term of the associated interest rate swaps. Management
also excludes results from discontinued operations, and gains and
charges resulting from unusual transactions or events that are not
reflective of its underlying operations, and that are not expected
to recur. DIMON's net income for the six months ended September 30,
2004, was $19.0 million, or $0.42 per basic share, compared to
$19.5 million, or $0.44 per basic share, for the year earlier
period. Underlying net income for the six months, which excludes
market valuation adjustments for derivative financial instruments,
discontinued operations, and non-recurring items, was $24.3
million, or $0.54 per basic share, compared to underlying net
income of $21.5 million, or $0.48 per basic share, on the same
basis last year. Performance Summary Sales and other operating
revenues for the second quarter were $341.1 million, compared to
$214.4 million for the year earlier quarter. As anticipated,
increased shipments from South America that were delayed from the
prior quarter due to freight constraints contributed substantially
to the sales gain. Shipments from North America, Africa, and Asia
were also higher in comparison to the year earlier quarter. Sales
and other operating revenues for the six months ended September 30,
2004 were $625.8 million, compared to $562.6 million for the year
earlier period. Gross profit as a percentage of sales and other
operating revenues for the second quarter was 16.5% compared to
19.4% for the year earlier quarter, reflecting the overall mix of
products shipped. For the six months ended September 30, 2004,
gross profit was 17.4% of revenues, compared to 19.6% for the year
earlier period. Selling, general and administrative (SG&A)
expenses for the second quarter were $31.4 million, up $4.4 million
or 16.5% in comparison to the year earlier quarter. The current
quarter expense included a $3.3 million accrual for the previously
disclosed fine assessed on the Company by the Directorate General
for Competition of the European Commission. Also, increased legal
and professional expenses for the current quarter were only
partially offset by reduced compensation expense. SG&A expenses
for the six months ended September 30, 2004 were $60.3 million,
down $3.9 million, or 6.0% in comparison to the year earlier
period. A $6.0 million provision for settlement of the DeLoach
litigation, recognized in the year earlier period, was responsible
for the majority of the reduction. Interest expense for the second
quarter increased by $2.1 million, or 20%, in comparison to the
year earlier quarter, reflecting a combination of additional
borrowing and increased effective interest rates. At September 30,
2004, total debt net of cash was $628.3 million, up $75.3 million,
or 13.6%, in comparison to September 30, 2003. The increase
primarily reflects a larger financing requirement for inventories
committed to customers, but not yet shipped. DIMON's uncommitted
inventories remain at a comfortable level. Outlook Brian J. Harker,
Chairman and Chief Executive Officer, stated, "As anticipated, the
Company's performance continued to benefit from record-sized South
American crops during the quarter. The shortage of freight
availability out of South America that we experienced in the prior
quarter eased somewhat, and we were able to complete shipment of
nearly 70% of the current year Brazilian crop by the end of
September. The Company also enjoyed increased shipments from
several other origins during the quarter. We made further progress
with our restructuring efforts, as we successfully divested our
Italian operations during the quarter, which are now recognized as
discontinued operations in our reported results. Reflecting a
generally stable market state, looking forward, we continue to
expect the Company's underlying net income to be toward the upper
end of our previously disclosed guidance of between $0.45 and $0.55
per basic share for the fiscal year ending March 31, 2005. Our
current outlook excludes estimated restructuring charges of $7
million, any effects from market valuation adjustments for
derivatives, results from discontinued operations, and other
non-recurring items." The timing and magnitude of fluctuations in
the market valuation adjustments for derivative financial
instruments (interest rate swaps) are driven primarily by
often-volatile market expectations for changes in interest rates,
and are inherently unpredictable. Because these adjustments are a
component of net income prepared in accordance with generally
accepted accounting principles, management is unable to provide
forward looking earnings guidance on that basis. Dividend DIMON's
Board of Directors, at its meeting held November 8, 2004, declared
a quarterly dividend of $0.075 per share. The dividend will be
payable December 15, 2004 to shareholders of record on December 1,
2004. Merger Agreement with Standard Commercial Corporation On
November 8, 2004, DIMON and Standard Commercial Corporation
(NYSE:STW) jointly announced that they have entered into a merger
agreement. Under the terms of the agreement, Standard Commercial
common shareholders would receive three shares of DIMON common
stock for each share of Standard Commercial common stock. Please
see the Merger Agreement news release for additional information.
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 DIMON's management and are subject to significant risks and
uncertainties. If underlying assumptions prove inaccurate or
unknown risks or uncertainties materialize, actual results may
differ materially from current expectations and projections. The
following factors, among others, could cause actual results to
differ from those set forth in the forward-looking statements:
changes in the timing of anticipated shipments, changes in
anticipated geographic product sourcing, political instability in
sourcing locations, currency and interest rate fluctuations, shifts
in the global supply and demand position for tobacco products, and
the impact of regulation and litigation on the DIMON's and Standard
Commercial's customers. Additional factors that could cause DIMON's
and Standard Commercial's results to differ materially from those
described in the forward-looking statements can be found in DIMON's
Annual Reports on Form 10-K/A for the fiscal year ended March 31,
2004, and other filings with the Securities and Exchange Commission
(the "SEC") which are available at the SEC's Internet site
(http://www.sec.gov/). In connection with the proposed merger of
DIMON and Standard Commercial, the parties will be filing a joint
proxy statement/prospectus and other relevant documents concerning
the merger with the U.S. Securities and Exchange Commission.
Stockholders are urged to read the proxy statement/prospectus
regarding the proposed transaction AND OTHER RELEVANT DOCUMENTS
FILED WITH THE SEC because THEY will contain important information.
Interested parties will be able to obtain a free copy of the proxy
statement/prospectus, as well as other filings containing
information about DIMON and Standard Commercial without charge at
the SEC's Internet site (http://www.sec.gov/). Copies of the proxy
statement/prospectus and the filings with the SEC that will be
incorporated by reference in the proxy statement/prospectus can
also be obtained, without charge, by directing a request to DIMON
Incorporated, 512 Bridge Street, Post Office Box 681, Danville,
Virginia 23543-0681, Attention: Investor Relations, (434) 792 7511.
The respective directors and executive officers of DIMON and
Standard Commercial and other persons may be deemed to be
"participants" in the solicitation of proxies in respect of the
proposed merger. Information regarding DIMON's directors and
executive officers is available in its proxy statement filed with
the SEC on July 13, 2004. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement/prospectus and other
relevant materials to be filed with the SEC when they become
available. DIMON Incorporated is the world's second largest dealer
of leaf tobacco with operations in more than 30 countries. For more
information on DIMON, visit the Company's website at
http://www.dimon.com/. Condensed Statement of Consolidated Income
Three Months Six Months September 30 September 30 (Unaudited -
000's Except Per Share Data) 2004 2003 2004 2003 Sales and other
operating revenues $341,068 $214,416 $625,796 $562,636 Cost of
goods and services sold 284,961 172,735 516,705 452,396 Gross
Profit 56,107 41,681 109,091 110,240 Selling, administrative and
general expenses 31,373 26,928 60,312 64,180 Other income (2,735) -
(4,630) - Restructuring and asset impairment charges 766 - 1,441 -
Operating income 26,703 14,753 51,968 46,060 Interest expense
12,782 10,643 24,884 23,262 Interest income 995 885 1,921 1,359
Derivative financial instruments (income) (464) (3,876) (6,595)
(1,838) Income tax expense 5,277 3,081 11,748 8,030 Equity in net
income (loss) of investee companies 53 (256) 142 264 Minority
interests (income) (124) (151) (359) (434) Income from continuing
operations 10,280 5,685 24,353 18,663 Loss from discontinued
operations, net of tax (4,693) (216) (5,392) (915) Extraordinary
item - Iraqi receivable recovery, net of $957 income tax - - -
1,777 Net Income $5,587 $5,469 $18,961 $19,525 Basic Earnings Per
Share: Income from continuing operations $0.23 $0.13 $0.54 $0.42
Loss from discontinued operations (0.11) (0.01) (0.12) (0.02)
Extraordinary item - Iraqi receivable recovery - - - 0.04 Net
income $0.12 $0.12 $0.42 $0.44 Diluted Earnings Per Share Income
from continuing operations $0.23 $0.13 $0.54 $0.41 Loss from
discontinued operations (0.11) (0.01) (0.12) (0.02) Extraordinary
item - Iraqi receivable recovery - - - 0.04 Net income $ 0.12 $
0.12 $ 0.42 $ 0.43 Average number of shares outstanding: Basic
44,873 44,602 44,860 44,570 Diluted 45,349 45,270 45,392 45,192
Cash dividends per share $.075 $.075 $0.15 $0.15 Reconciliation of
Net Income Figures Used in Press Release Three Months Six Months
September 30 September 30 (Unaudited - 000's Except Per Share Data)
2004 2003 2004 2003 GAAP Net Income $5,587 $5,469 $18,961 $19,525
Discontinued operations 4,693 216 5,392 915 Extraordinary item -
Iraqi receivable recovery - - - (1,777) GAAP Net Income from
Continuing Operations 10,280 5,685 24,353 18,663 Reconciling items,
net of tax effect: Market valuation adjustments for derivatives
(302) (2,519) (4,287) (1,078) Restructuring charges 498 - 937 -
DGCOMP assessment - Spain 3,250 - 3,250 - Settlement charge for
DeLoach litigation - - - 3,900 Non-GAAP Underlying Net Income
$13,726 $3,166 $24,253 $21,485 Non-GAAP Underlying Net Income per
Basic Share $0.31 $0.07 $0.54 $0.48 GAAP Net Income per Basic Share
$0.12 $0.12 $0.42 $0.44 Note 1 - Derivative Financial Instruments:
Effective July 1, 2000, the Company adopted Statement of Financial
Accounting Standards Number 133 (FAS133), "Accounting for
Derivative Instruments and Hedging Activities." FAS133 eliminates
special hedge accounting if the interest rate swap instruments do
not meet certain criteria, thus requiring the Company to recognize
all changes in their fair value in its current earnings. For the
quarters ended September 30, 2004 and 2003, the Company recognized
non-cash income of $464 and $3,876, respectively, from the change
in the fair value of swap instruments. For the six months ended
September 30, 2004 and 2003, the Company recognized non-cash income
of $6,595 and $1,838 respectively, from the change in the fair
value of these derivative financial instruments. As a result of
fluctuations in interest rates, and volatility in market
expectations, the fair market value of interest rate swap
instruments can be expected to appreciate or depreciate over time.
The Company plans to continue its practice of economically hedging
various components of its debt portfolio. However, as a result of
FAS133, certain swap instruments have and may continue to create
volatility in reported earnings. Note 2 - Discontinued Operations:
During fiscal 2004, the Company's Board of Directors approved a
plan designed to improve long-term profitability that included the
disposal of its Italian processing facility. On September 30, 2004,
concurrent with the sale of the Italian processing facility, the
Company made a decision to discontinue Italian operations.
Therefore, the results of operations, other than interest expense
related to subsidiary debt guaranteed by the Company, have been
reclassified and presented as discontinued operations in the
financial statements for all periods presented. Note 3 -
Extraordinary Item: On May 1, 2003, the Company received $2,734
from the United Nations Compensation Commission in connection with
a claim filed by a predecessor company, Monk-Austin, Incorporated.
The claim arose from an uncollected trade receivable from the Iraqi
Tobacco Monopoly, which related to transactions that occurred prior
to Iraq's invasion of Kuwait in August 1990. The predecessor
company charged off the entire receivable, net of tax, as a $5,202
extraordinary loss during its fiscal year 1991. DATASOURCE: DIMON
Incorporated CONTACT: Ritchie L. Bond of DIMON Incorporated,
+1-434-791-6952 Web site: http://www.dimon.com/
Copyright
Standard Commercial (NYSE:STW)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Standard Commercial (NYSE:STW)
Gráfica de Acción Histórica
De May 2023 a May 2024