Alliance One International, Inc. Tel: 919 379 4300
8001 Aerial Center Parkway Fax: 919 379 4346
Post Office Box 2009 www.aointl.com
Morrisville, NC 27560-2009
Contacts: Joel L. Thomas
Alliance One International Reports Fiscal Year 2014 Results
Morrisville, NC - June 5, 2014 - Alliance One International, Inc. (NYSE: AOI) today announced operating results for its fiscal year ended March 31, 2014.
Sales and other operating revenues improved compared to last year 5.0% to $2,354.9 million driven primarily by increased green tobacco costs that were partially reflected in prices paid by customers.
Selling, general and administrative expenses decreased 8.0% to $134.1 million.
Core Pretax Income was $10.0 million after the impact of $58.1 million of net one-time, nonrecurring and unusual costs of $83.3 million and asset sale gains of $25.2 million. Prior year Core Pretax Income was $28.9 million after the net impact of one-time, nonrecurring and unusual gains of $22.2 million. The decrease in Core Pretax Income was also driven by challenging operating and trading conditions estimated to have increased cost of goods sold by an additional $31.1 million.
Total debt less cash decreased by $219.2 million to $882.9 million, when compared to the prior year, driven by accounts receivable and inventory reductions that decreased 16.9% to $937.1 million.
Challenging Operating and Trading Conditions
Operating and trading conditions presented challenges including the effects of increasing prices paid to Brazilian farmers throughout the buying season. Neither were anticipated in customer pricing and caused reductions in our purchasing program. Brazilian pricing also impacted toll processing volumes and pricing in other markets. In addition to pressures the Brazilian market placed on flavored tobacco, weather in North America reduced the US crop size versus our internal plan and combined processing and full service costs increased versus our internal plan. In Tanzania, reduced tobacco available for purchase versus our internal plan and crop quality distribution across the stalk that favored higher quality, further increased green prices and our blend costs. The estimated increase to cost of goods sold related to these impacts was approximately $31.1 million.
One-time, Nonrecurring and Unusual Items
In addition to operating and trading challenges, we also experienced one-time, nonrecurring and unusual costs of $83.3 million, of which $18.0 million was included in gross profit. Unusual Zambian and Argentinian unrecovered farmer advances were among factors that increased cost of goods sold by $12.1 million. Management anticipates that it can recover a portion in future periods. In Zambia, management changes were instituted to address growth challenges and the company continued to strengthen agronomy teams and credit evaluation processes. As a result of the high inflation in Argentina coupled with a depreciating peso, green prices in Argentina increased an average of 21.0% this year compared to last year. In response, we bought less tobacco than initially planned due to concerns about selling at increased prices. The decrease in volumes purchased resulted in unusual unrecovered advances. Additionally, we terminated a farmer arrangement in Tanzania that reduced sales and gross profit by $5.9 million.
The following information was filed by Alliance One International, Inc. (AOI) on Thursday, June 5, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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Ticker: AOI CIK: 939930 Form Type:10-K Annual Report Accession Number: 0000939930-14-000022 Submitted to the SEC: Thu Jun 05 2014 4:35:31 PM EST Accepted by the SEC: Thu Jun 05 2014 Period: Monday, March 31, 2014 Industry: Wholesale Farm Product Raw Materials