MORRISVILLE, N.C., Nov. 9 /PRNewswire-FirstCall/ -- Alliance One
International, Inc. (NYSE:AOI) today announced results for its
second fiscal quarter ended September 30, 2009. Second Quarter
Results Driven by core global operations, for the quarter and six
months ended September 30, 2009, Operating Income increased $28.3
million and $39.2 million to $67.9 million and $119.1 million,
respectively. During the second fiscal quarter this year the
Company incurred a one time $40.3 million pre-tax, cash and
non-cash debt retirement expense associated with the July-August
2009 debt refinancing, versus $1.0 million last year. Both
negatively impacted Net Income. In that regard, for the second
quarter ended September 30, 2009, the Company reported a net loss
of $1.5 million, or $0.02 per basic share, compared to net income
of $20.4 million, or $0.23 per basic share, last year.
Additionally, for the six months ended September 30, 2009, the
Company reported net income of $13.0 million, or $0.15 per basic
share, compared to net income of $35.7 million or $0.40 per basic
share for the same period of the prior fiscal year. Robert E.
Harrison, Chief Executive Officer, said, "Volume, sales and margins
this quarter were improved versus last year and met our
expectations. Improvements were achieved in what continues to be a
very fluid environment with costs increasing in many markets, a US
dollar that has begun to weaken again and implementation of certain
manufacturer security of supply strategies that provide challenges
as well as opportunities. Continued strong customer support and the
positive impact of cost containment initiatives are key elements to
our strategic plan execution. "To better position ourselves in this
operating environment, we have continued to focus on enhancing our
capabilities to deliver specialized services and value-added
products. As such, I am pleased to announce that we have just
received six US Patent Office "Notices of Allowance" for three
lower alkaloid variety burley tobaccos, developed over an eight
year period utilizing conventional plant breeding methods at our
R&D facility in Brazil. We originally reported these new
varieties in November 2007, which further reinforces our commitment
to the industry's ongoing research to develop new products. We
believe these new varieties retain the desirable leaf quality,
grower yields and smoking characteristics typical of existing
Brazilian burley tobaccos and we have now started commercial
production. Also, on November 6th, we announced commencing work on
a new 70 million kilo factory in the Brazilian State of Santa
Catarina that will be operational for processing the 2011 crop. Our
new factory will place processing closer to this key growing area,
establish additional needed storage and meet our investment
objectives. Mr. Harrison concluded, "Looking to the future we are
strengthening our balance sheet through continued emphasis on
working capital management combined with our long term debt
refinancing that we just completed during the quarter. Our
refinancing extends maturities and successfully establishes a solid
base for future business growth. Going forward, many industry
drivers will remain unchanged, although our dynamic marketplace
will present new challenges and no doubt new opportunities as well,
that will transform our thinking and shape future performance
improvements. Our global workforces' overarching belief is focus on
customer needs and requirements, combined with innovative
solutions, will strengthen our ability to enhance future
performance and ultimately create additional long-term shareholder
value." Performance Summary for the Second Fiscal Quarter Ended
September 30, 2009 The following is a brief overview of our
financial results for the quarter ended September 30, 2009.
Additional information on our results may be found in our Quarterly
Report on Form 10-Q filed on November 9, 2009. Sales and other
operating revenues increased 13.1% to $675.2 million in 2009 versus
last year primarily driven by an 11.9% increase in quantities sold
and a 1.7% average sales price increase. South America Region
tobacco sales increased $24.2 million resulting from a 12.7 million
increase in kilos sold following the recovery of purchasing and
processing delays from the first quarter and increased by-product
sales. The effect of the change in product mix is that while
average lamina and by-product sales prices increased this year,
higher quantities sold of lower priced by-products caused the
overall average selling price per kilo to decrease $0.43. Other
Regions tobacco sales increased $57.1 million mainly as a result of
a $0.53 per kilo average sales price increase and an additional 4.3
million kilos sold. Volume increases were driven by African
shipments delayed from the prior quarter as well as the larger
current Malawi crop, while average African sales prices remained
fairly constant. European volumes and average selling prices
increased, and combined with Euro strength, also resulted in
increased revenue contribution. Partially offsetting these
improvements were delayed shipments from Thailand and a $3.2
million decrease in African and European processing and other
revenues driven by lower volumes. Gross profit increased 32.8% to
$106.8 million in 2009, and as a percentage of sales improved from
13.5% in 2008 to 15.8% this year. South America Region gross profit
increased $17.9 million primarily as a result of increased volumes
that were delayed from the prior quarter and derivative financial
instrument gains. Partially offsetting these improvements are
significant exchange losses due to the volatility of the Brazilian
Real this quarter compared to the same quarter in the prior year.
Other Regions gross profit increased $8.5 million mainly due to
lower green costs and larger crop size in Malawi, gains on
derivative financial instruments and increased volumes due to
delayed shipments from last quarter. Selling, administrative and
general expenses increased 5.1% from 2008 to $42.1 million in 2009.
The increase is largely due to increased stock based compensation
costs, as well as increased legal and professional fees, which were
partially offset by hedging gains on forward currency contracts.
Other income (expense) was $3.1 million in 2009 compared to $(0.8)
million in 2008, due to a $3.9 million gain primarily from the sale
of a redundant Turkish warehouse this year. Impacting results were
losses on the sale of receivables which were $(0.8) million in both
2009 and 2008 under our accounts receivable securitization. Debt
retirement expense was $40.3 million in 2009 compared to $1.0
million in 2008. The 2009 increase was driven by our long term debt
refinancing that included costs associated with the redemption of
our prior senior and senior subordinated notes of $22.9 million in
tender premiums, $16.9 million in accelerated non-cash debt
issuance costs and original issue discounts, and $0.5 million in
fees and other related costs. Debt prepayment in 2008 resulted in
accelerated amortizing debt issuance costs. Interest expense
increased $6.4 million to $32.8 million in 2009 primarily due to
slightly higher average borrowings and higher average interest
rates on our seasonal borrowings compared to the prior year.
Liquidity and Capital Resources As of September 30, 2009, available
credit lines and cash increased 34.9% over the fiscal year ended
March 31, 2009 to $660.8 million comprised of $97.5 million in
cash, $554.9 million of credit lines and $8.4 million exclusively
for letters of credit. Additionally, from time to time in the
future, we may elect to redeem, repay, make open market purchases,
retire or cancel indebtedness prior to stated maturity under our
various global bank facilities or outstanding public notes, as
permitted. 2010 Fiscal Year, Second Quarter Financial Results
Investor Call The Company will hold a conference call to report
financial results for its second fiscal quarter ended September 30,
2009, on November 9, 2009 at 5:00 P.M. ET. Those seeking to listen
to the call may access a live broadcast on the Alliance One
website. Please visit http://www.aointl.com/ fifteen minutes in
advance to register. For those who are unable to listen to the live
event, a replay will be available by telephone from 8:00 P.M. ET,
November 9th through 8:00 P.M. November 14th. To access the replay,
dial (888) 203-1112 within the U.S., or (719) 457-0820 outside the
U.S., and enter access code 4924617. 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. 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
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 customers. Additional
factors that could cause AOI's results to differ materially from
those described in forward-looking statements can be found in AOI's
Annual Reports on Form 10-K and other filings with the Securities
and Exchange Commission (the "SEC") which are available at the
SEC's Internet site (http://www.sec.gov/). Three Months Ended Six
Months Ended (in thousands, except per September 30, September 30,
share amounts) 2009 2008 2009 2008 ---- ---- ---- ---- Sales and
other operating revenues $675,154 $597,092 $1,085,638 $1,056,257
Cost of goods and services sold 568,328 516,647 890,850 899,149 ---
--- ------- ------- Gross profit 106,826 80,445 194,788 157,108
Selling, administrative and general expenses 42,063 40,016 78,392
78,249 Other income (expense) 3,145 (825) 2,705 1,449 Restructuring
and asset impairment charges (recovery) - (44) - 452 --- --- ---
--- Operating income 67,908 39,648 119,101 79,856 Debt retirement
expense 40,288 954 40,288 954 Interest expense (includes debt
amortization of $2,433 and $1,292 for the three months and $4,285
and $2,233 for the six months in 2009 and 2008, respectively)
32,776 26,385 57,744 50,814 Interest income 1,188 705 2,104 1,642
----- --- ----- ----- Income (loss) before income taxes and other
items (3,968) 13,014 23,173 29,730 Income tax expense (benefit)
(2,592) (6,408) 9,673 (4,615) Equity in net income of investee
companies - 1,099 - 1,099 --- --- --- ----- Income (loss) from
continuing operations (1,376) 20,521 13,500 35,444 Income (loss)
from discontinued operations, net of tax - (45) - 463 --- --- ---
--- Net income (loss) (1,376) 20,476 13,500 35,907 Less: Net income
attributable to noncontrolling interests 82 119 481 245 -- --- ---
--- Net income (loss) attributable to Alliance One International,
Inc. $(1,458) $20,357 $13,019 $35,662 ------- ------- -------
------- Amounts attributable to Alliance One International, Inc.
Income (loss) from continuing operations $(1,458) $20,402 $13,019
$35,199 Income (loss) from discontinued operations - (45) - 463 ---
--- --- --- Net income (loss) attributable to Alliance One
International, Inc. $(1,458) $20,357 $13,019 $35,662 -------
------- ------- ------- Basic earnings (loss) per share Net income
(loss) from continuing operations $(.02) $.23 $.15 $.39 Income
(loss) from discontinued operations - - - .01 --- --- --- --- Net
income (loss) $(.02) $.23 $.15 $.40 ----- ---- ---- ---- Diluted
earnings (loss) per share Net income (loss) from continuing
operations $(.02) $.23 $.14 $.39 Income (loss) from discontinued
operations - - - .01 --- --- --- --- Net income (loss) $(.02) $.23
$.14 $.40 ----- ---- ---- ---- Average number of shares outstanding
Basic 88,598 88,303 88,539 88,255 Diluted 88,598 89,076 100,425
89,175 DATASOURCE: Alliance One International, Inc. CONTACT: Joel
L. Thomas, +1-919-379-4300 Web Site: http://www.aointl.com/
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