MORRISVILLE, N.C., Feb. 6, 2017 /PRNewswire/ -- Alliance
One International, Inc. (NYSE: AOI) today announced results for its third fiscal quarter and nine months ended December 31, 2016.
Highlights
Nine Months Year-to-Date (1)
- Volumes sold increased 3.6% to 251.6 million kilos this year versus last year, primarily due to prior crop inventory sales
and the timing of shipments in North America and Africa.
- Sales decreased 5.7% to $1,105.1 million this year driven by product mix with an increased
percentage of byproduct sales versus lamina and the El Niño weather impact of smaller crops in Brazil, the U.S. and Tanzania, as well as the impact of the stronger U.S.
dollar.
- Gross profit decreased 2.3% to $149.5 million due to weather related smaller crops in certain
origins and differences in product mix, while gross profit as a percentage of sales improved to 13.5% from 13.1% driven by
differences in product mix and favorable currency impacts this year offset by lower of cost or market adjustments.
- Accounts receivable and inventory reductions generated $144.8 million of cash at December 31, 2016 when compared to the same period end of the prior year.
Third Quarter (1)
- Volumes decreased 0.7% to 101.6 million kilos versus last year due to the impact of weather related smaller crops in the
U.S. and Tanzania.
- Sales decreased 7.5% to $454.5 million this year driven by product mix with an increased
percentage of byproduct sales versus lamina and the El Niño weather impact of smaller crops in the U.S. and Tanzania, as well as the impact of the stronger U.S. dollar.
- Gross profit decreased 5.1% to $65.2 million due to weather related smaller crops in certain
origins and differences in product mix, while gross profit as a percentage of sales improved to 14.3% versus 14.0% last year,
driven by differences in product mix and favorable currency impacts this year.
- Operating income was consistent at $38.7 million with improvement in operating income as a
percentage of sales to 8.5% from 7.9% last year driven by improvements in selling, general and administrative expense
("SG&A"), other income and restructuring charges.
(1) Due to the reconsolidation of our Zimbabwe
subsidiary at March 31, 2016 its performance is included in consolidated financial results this
year, however was not included in the prior year except for the March 31, 2016 balance sheet.
Adjusted EBITDA and Adjusted Net Debt include Zimbabwe in all periods.
Pieter Sikkel, Chief Executive Officer and President, said "Our results for the nine months
ended December 31, 2016 include increased full service volumes and prior crop inventory sales.
Improved performance throughout much of our global operations offset a considerable portion of the impact created by adverse El
Niño weather, the stronger U.S. dollar and product mix that more heavily favored byproducts this year. Unfortunately, our
operations in Brazil, the U.S., and Tanzania were more heavily
affected by these factors and overshadowed operations with improvement.
"While adverse El Niño weather conditions have led to reductions in available current crop, there have been significant sales
of prior crop inventory. At quarter end, inventory decreased $90.5 million to $845.1 million when compared to the same period last year. As a result, we have significantly reduced
uncommitted inventory and are approaching our $50.0-$150.0 million stated range, with the
expectation to further decrease within the range by fiscal year-end. This will reduce net debt associated with working
capital.
"Our liquidity position is strong at $623.9 million as of December 31,
2016, comprised of $296.5 million of cash and $327.4 million
of available credit lines. Accounts receivable and inventory reductions generated $144.8 million of
cash at December 31, 2016, when compared to the same period end of the prior year. Also,
during the quarter we refinanced our existing senior secured revolving credit facility with the issuance of $275.0 million of senior secured first lien notes due April 2021 and a
$60.0 million ABL credit facility that matures in January 2021. As part of the refinancing,
we eliminated certain financial covenants that enhance business flexibility.
"We have experienced some shipping delays in Turkey due to the timing of crop purchases from
farmers that will push sales and profitability into next year. Based on the current outlook for the remainder of fiscal
year 2017, revenue is anticipated to be in a range of approximately $1,790.0 million to $1,840.0
million with Adjusted EBITDA in a range of approximately $145.0-$165.0 million and Adjusted Leverage in a range of approximately 5.4x-5.9x. Our goal remains to purchase $25.0-$50.0 million per year of our
more expensive debt.
"While it is still early, as we look to next fiscal year, La Niña weather patterns that support better global growing
conditions are present and should support crop size increases in a number of key markets. As such, initial reports indicate
larger 2017 crops that we have begun to purchase in Brazil and will start to purchase in
Africa during the quarter ending March 31, 2017, which are planned
to be sold during our fiscal year ending March 31, 2018. The 2016 Brazilian Virginia flue crop was
abnormally low at approximately 410 million kilos versus 570 in the prior year. The 2017 crop is anticipated to be
approximately 50% larger at 600 million kilos and current quality appears to be good and in line with expectations. We are
expecting similar positive crop size increases in other key markets.
Mr. Sikkel, concluded, "I am confident in the underlying strength of our Company and ability to navigate challenging industry
dynamics. The impact of our implemented strategic initiatives should be recognized as crop sizes return to more normal levels in
certain markets related to crops we are now buying and will sell next fiscal year. Additionally, our talented employees continue
to develop new, cost-effective solutions to meet changing customer requirements. Our customers are focused on their supply
chains, increasing regulation and changing nicotine consumption habits. Supply chain simplification is a priority for them, and
we have the capabilities and infrastructure to further support our customers' reversal of their partial vertical integration
strategies. Further, our agronomy and operational teams are well-positioned to support manufacturers' next generation reduced
risk products. Continued focus on key strategic initiatives that support our customers' growth strategies should drive improved
long-term shareholder value."
Performance Summary for the Nine Months Ended December 31, 2016
Total sales and other operating revenues decreased by 5.7% to $1,105.1 million and total costs
of goods and services sold decreased 6.2% to $955.6 million. Changes in product mix, smaller crops
in Brazil, the U.S. and Tanzania related to El Niño weather
conditions and the stronger U.S. dollar that resulted in lower prices paid to tobacco suppliers across most regions, reduced
average sales prices and tobacco costs per kilo. Processing and other revenues and processing costs increases were primarily
related to the reconsolidation of our Zimbabwe subsidiary.
Gross profit decreased 2.3% to $149.5 million, while gross profit as a percentage of sales
improved to 13.5% from 13.1%, mainly due to lower average sales price and costs per kilo. The positive impact of currency
movements on average tobacco costs per kilo were partially offset by $9.2 million of lower of cost
or market inventory adjustments. Partially offsetting the impact of lower prices was a 3.6% increase in volumes from changes in
certain customer requirements, prior crop inventory sales in most regions and the timing of shipments in North America and Africa.
SG&A increased 16.0% to $100.9 million, primarily related to Kenya legal and professional fees, incentive compensation costs, additional audit related fees and the
inclusion of costs from our reconsolidated Zimbabwe subsidiary this year that were partially
offset by the non-recurrence of reserves for customer receivables in the prior year.
Other Income increased $4.2 million to $4.3 million driven by the
net insurance recovery from tobacco lost in the Zimbabwe fire last year, the non-recurrence of
one-time expenses in Africa, and the sale of trade tax credits in South America.
Restructuring and asset impairment charges decreased 73.2% to $1.1 million in the current year,
and are mainly related to our former U.S. cut rag facility. Restructuring and asset impairment charges in the prior year
were primarily attributable to impairment of advances to tobacco suppliers and real property in Africa.
In October 2016, the prior senior secured revolving credit facility was refinanced with the
issuance of $275.0 million of 8.5% senior secured first lien notes due April
2021, and a $60.0 million ABL credit facility that matures in January 2021. As a
result, one-time debt retirement costs of $2.3 million were recorded for accelerated amortization
of debt issuance costs.
Interest expense increased 12.3% to $97.6 million, mainly due to higher average borrowings and
higher average rates on our seasonal lines of credit, as well as increased amortization of debt issuance costs and the inclusion
of interest costs from our reconsolidated Zimbabwe subsidiary this year. Cash interest cost
increased 10.4% to $64.3 million.
This year the effective tax rate was (49.2)% compared to (111.1)% last year and cash taxes paid decreased 42.6% to
$7.1 million this year.
Performance Summary for the Fiscal Quarter Ended December 31,
2016
Total sales and other operating revenues decreased 7.5% to $454.5 million and total costs of
goods and services sold decreased 7.8% to $389.3 million. Changes in product mix, smaller crops in
the U.S. and Tanzania related to El Niño weather conditions, and the stronger U.S. dollar that
resulted in lower prices paid to tobacco suppliers across most regions, reduced average sales prices and tobacco costs per kilo.
Processing and other revenues and processing costs decreases were related to the impact of weather on the U.S. crop this year,
and the timing of processing customer requirements in South America.
Gross profit decreased 5.1% to $65.2 million, while gross profit as a percentage of sales
improved to 14.3% compared to 14.0% last year. Volumes decreased slightly as the smaller crops were significantly offset by
the timing of shipments and prior year inventory sales in most regions.
SG&A decreased 1.4% to $28.7 million primarily from the non-recurrence of reserves for
customer receivables in the prior year that were offset by increased personnel costs.
Other income increased $2.1 million to $2.7 million, mainly due to
the net insurance recovery related to tobacco lost in the Zimbabwe fire last year.
Operating income remained consistent with the prior year at $38.7 million with improvement in
operating income as a percentage of sales to 8.5% from 7.9% last year, primarily due to improvements in SG&A, other income
and restructuring.
During the three months ended December 31, 2016, one-time debt retirement costs of $2.3 million were recorded for accelerated amortization of debt issuance costs.
Interest expense increased 15.5% to $35.1 million compared to the prior year, primarily due to
higher average borrowings on our seasonal lines of credit at higher average rates, and the inclusion of interest costs from our
reconsolidated Zimbabwe subsidiary this year. Cash interest cost increased $1.5 million to $6.5 million.
The effective tax rate was 692.1% this year compared to 17.4% last year and cash taxes paid decreased 37.5% to $2.4 million this year.
Earnings Per Share
Nine Months
For the nine months ended December 31, 2016, the Company reported a net loss of $62.6 million, or $7.02 per basic share, compared to a net loss of $35.3 million, or $3.97 per basic share, for the same period last year. Included
in net loss in the current year period were $9.0 million of discrete prior period Zimbabwe withholding tax, $5.6 million of legal and professional costs for the
Kenya matter and $6.4 million of loss related to Kenya green leaf sourcing mainly for storage as the operation continues to wind down. After adjusting for
tax, the net impact of these items negatively impacted earnings per basic share by $2.13 through
the first nine months of this fiscal year.
Third Quarter
For the quarter ended December 31, 2016, the Company reported a net loss of $15.5 million, or $1.73 per basic share, compared to net income last year of
$11.7 million, or $1.32 per basic share. Included in net loss this
quarter were $9.0 million of discrete prior period Zimbabwe
withholding tax, $0.4 million of legal and professional costs for the Kenya matter and $0.8 million of loss related to Kenya green leaf sourcing mainly for storage as the operation continues to wind down. After adjusting for
tax, the net impact of these items negatively impacted earnings per basic share by $1.12 this
quarter.
Liquidity and Capital Resources
At December 31, 2016, available credit lines and cash were $623.9
million, comprised of $296.5 million in cash and $327.4
million of credit lines, of which $60.0 million was available under the ABL credit facility
for general corporate purposes and $262.0 million of foreign seasonal credit lines in addition to
$5.4 million exclusively for letters of credit. Borrowing is permitted under the ABL credit
facility only to the extent that, after consideration of the application of the proceeds of the borrowing, the Company's
unrestricted cash and cash equivalents would not exceed $180.0 million. On October 14, 2016, the $210.3 million senior secured revolving credit facility was
refinanced with a new $60.0 million ABL credit facility and $275.0
million of 8.5% senior secured first lien notes.
The Company may in the future 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 December 31,
2016, on February 7, 2017 at 8:00 a.m. ET. The dial in number
for the call is (888) 632-3384 or outside the U.S. (785) 424-1675 and conference ID 1742731. 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, a replay will be available by telephone from 11:00 a.m. ET Tuesday, February 7, 2017 through 11:00 a.m. ET Sunday, February 12,
2017. To access the replay, dial (888) 203-1112 within the U.S., or (719) 457-0820 outside the U.S., and enter access code
1742731.
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 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, factors affecting AOI's ability to reduce its corporate debt, including factors that
would restrict it from purchasing its outstanding public notes, and the impact of regulation and litigation. Additional factors
that could cause AOI's results to differ materially from those expressed or implied by forward-looking statements can be found in
AOI's most recent Annual Report on Form 10-K 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).
About Alliance One International, Inc.
Alliance One is a leading global independent leaf merchant. For more information on Alliance One, visit the Company's website
at www.aointl.com.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
December 31,
|
|
December 31,
|
|
(in thousands, except per share data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenues
|
$ 454,535
|
|
$ 491,139
|
|
$ 1,105,060
|
|
$ 1,172,274
|
|
Cost of goods and services sold
|
389,383
|
|
422,401
|
|
955,576
|
|
1,019,265
|
|
Gross profit
|
65,152
|
|
68,738
|
|
149,484
|
|
153,009
|
|
Selling, general and administrative expenses
|
28,736
|
|
29,124
|
|
100,904
|
|
86,986
|
|
Other income
|
2,688
|
|
594
|
|
4,311
|
|
125
|
|
Restructuring and asset impairment charges
|
450
|
|
1,525
|
|
1,068
|
|
4,087
|
|
Operating income
|
38,654
|
|
38,683
|
|
51,823
|
|
62,061
|
|
Debt Retirement Expense
|
2,339
|
|
-
|
|
2,339
|
|
-
|
|
Interest expense
|
35,129
|
|
30,356
|
|
97,635
|
|
86,911
|
|
Interest income
|
1,845
|
|
2,744
|
|
5,888
|
|
5,393
|
|
Income (Loss) before income taxes and other items
|
3,031
|
|
11,071
|
|
(42,263)
|
|
(19,457)
|
|
Income tax expense
|
20,977
|
|
1,930
|
|
20,774
|
|
21,617
|
|
Equity in net income of investee companies
|
2,351
|
|
2,544
|
|
290
|
|
5,679
|
|
Net income (loss)
|
(15,595)
|
|
11,685
|
|
(62,747)
|
|
(35,395)
|
|
Less: Net loss noncontrolling interests
|
(138)
|
|
(50)
|
|
(127)
|
|
(115)
|
|
Net income (loss) attributable to Alliance One International,
Inc.
|
$ (15,457)
|
|
$ 11,735
|
|
$ (62,620)
|
|
$ (35,280)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings income (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
$ (1.73)
|
|
$ 1.32
|
|
$ (7.02)
|
|
$ (3.97)
|
|
Diluted
|
$ (1.73)
|
|
$ 1.32
|
|
$ (7.02)
|
|
$ (3.97)
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
8,941
|
|
8,889
|
|
8,923
|
|
8,878
|
|
Diluted
|
8,941
|
|
8,889
|
|
8,923
|
|
8,878
|
|
RECONCILIATION OF ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATION ("ADJUSTED EBITDA")(1) (Unaudited)
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
(in thousands)
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2016
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Alliance One International,
Inc.
|
$
(15,457)
|
|
$
11,735
|
|
$
(62,620)
|
|
$
(35,280)
|
|
|
|
|
|
|
|
|
|
Plus: Interest expense
|
35,129
|
|
30,356
|
|
97,635
|
|
86,911
|
|
Plus: Income tax expense
|
20,977
|
|
1,930
|
|
20,774
|
|
21,617
|
|
Plus: Depreciation and amortization expense
|
8,506
|
|
7,057
|
|
25,859
|
|
21,018
|
|
|
|
|
|
|
|
|
|
EBITDA(1)
|
49,155
|
|
51,079
|
|
81,648
|
|
94,266
|
|
|
|
|
|
|
|
|
|
Plus: Abnormal unrecovered advances (recoveries) to suppliers(2)
|
-
|
|
8
|
|
-
|
|
439
|
|
Plus: Reserves for (recoveries on) doubtful customer receivables
|
(2,943)
|
|
(33)
|
|
(2,800)
|
|
(181)
|
|
Plus: Non-cash employee stock based compensation
|
335
|
|
600
|
|
1,180
|
|
2,074
|
|
Less: Other income (expense)
|
2,688
|
|
594
|
|
4,312
|
|
125
|
|
Plus: Restructuring and asset impairment charges
|
449
|
|
1,525
|
|
1,068
|
|
4,087
|
|
Plus: Debt retirement expense (income)
|
2,339
|
|
-
|
|
2,339
|
|
-
|
|
Plus: Amortization of basis difference - CBT investment(3)
|
583
|
|
450
|
|
1,208
|
|
1,218
|
|
Plus: Kenyan investigation legal & professional costs
|
436
|
|
1,771
|
|
5,565
|
|
1,771
|
|
Less: Kenyan green leaf operation Adjusted EBITDA(4)
|
(840)
|
|
(317)
|
|
(6,388)
|
|
(12,193)
|
|
Plus: Reconsolidated subsidiary incremental EBITDA after elimination of
related party transactions with AOI and its consolidated subsidiaries(5)
|
-
|
|
2,864
|
|
-
|
|
8,855
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(1)
|
$
48,506
|
|
$
57,988
|
|
$
92,284
|
|
$ 124,597
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Related to a former Brazilian subsidiary that is now deconsolidated
following the completion of a joint venture in March 2014.
|
|
|
|
|
|
|
|
|
|
(4) Adjusted EBITDA of our former green leaf sourcing operation in
Kenya 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.
|
|
|
|
|
|
|
|
|
|
(5) 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 is included in consolidated
information thereafter.
|
|
RECONCILIATION OF ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATION ("ADJUSTED EBITDA")(1) (Unaudited)
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
(in thousands)
|
December 31, 2015
|
|
December 31, 2014
|
|
December 31, 2015
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Alliance One International,
Inc.
|
$
11,735
|
|
$
1,563
|
|
$
(35,280)
|
|
$
(30,273)
|
|
|
|
|
|
|
|
|
|
Plus: Interest expense
|
30,356
|
|
28,277
|
|
86,911
|
|
83,694
|
|
Plus: Income tax expense
|
1,930
|
|
3,146
|
|
21,617
|
|
14,444
|
|
Plus: Depreciation and amortization expense
|
7,057
|
|
7,434
|
|
21,018
|
|
22,246
|
|
|
|
|
|
|
|
|
|
EBITDA(1)
|
51,079
|
|
40,421
|
|
94,266
|
|
90,112
|
|
|
|
|
|
|
|
|
|
Plus: Abnormal unrecovered advances to suppliers(2)
|
8
|
|
-
|
|
439
|
|
481
|
|
Plus: Reserves for (recoveries on) doubtful customer receivables
|
(33)
|
|
8,151
|
|
(181)
|
|
12,417
|
|
Plus: Non-cash employee stock based compensation
|
600
|
|
772
|
|
2,074
|
|
2,395
|
|
Less: Other income (expense)
|
594
|
|
146
|
|
125
|
|
1,273
|
|
Plus: Restructuring and asset impairment charges
|
1,525
|
|
0
|
|
4,087
|
|
500
|
|
Plus: Debt retirement expense (income)
|
-
|
|
(338)
|
|
-
|
|
(338)
|
|
Plus: Amortization of basis difference - CBT investment(3)
|
450
|
|
801
|
|
1,218
|
|
2,459
|
|
Plus: Kenyan investigation legal & professional costs
|
1,771
|
|
-
|
|
1,771
|
|
-
|
|
Less: Kenyan green leaf operation Adjusted EBITDA(4)
|
(317)
|
|
(1,141)
|
|
(12,193)
|
|
(10,729)
|
|
Plus: Reconsolidated subsidiary incremental EBITDA after elimination of
related party transactions with AOI and its consolidated subsidiaries(5)
|
2,864
|
|
(220)
|
|
8,855
|
|
845
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(1)
|
$
57,988
|
|
$
50,582
|
|
$ 124,597
|
|
$ 118,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Related to a former Brazilian subsidiary that is now deconsolidated
following the completion of a joint venture in March 2014.
|
|
|
|
|
|
|
|
|
|
(4) Adjusted EBITDA of our former green leaf sourcing operation in
Kenya 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.
|
|
|
|
|
|
|
|
|
|
(5) 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 is included in
consolidated information thereafter.
|
|
RECONCILIATION OF ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATION ("ADJUSTED EBITDA")(1) (Unaudited)
|
|
Fiscal Year Ended
|
|
LTM(9)
|
|
Fiscal Year Ended
|
|
LTM(9)
|
|
(in thousands)
|
March 31, 2016
|
|
December 31, 2016
|
|
March 31, 2015
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Alliance One International,
Inc.
|
$
65,532
|
|
$
38,193
|
|
$
(27,862)
|
|
$
(32,869)
|
|
|
|
|
|
|
|
|
|
Plus: Interest expense
|
117,190
|
|
127,914
|
|
113,273
|
|
116,490
|
|
Plus: Income tax expense
|
32,215
|
|
31,372
|
|
21,918
|
|
29,091
|
|
Plus: Depreciation and amortization expense
|
28,361
|
|
33,202
|
|
29,623
|
|
28,394
|
|
|
|
|
|
|
|
|
|
EBITDA(1)
|
243,298
|
|
230,681
|
|
136,952
|
|
141,106
|
|
|
|
|
|
|
|
|
|
Plus: Abnormal unrecovered advances (recoveries) to suppliers(2)
|
-
|
|
(439)
|
|
1,085
|
|
1,043
|
|
Plus: Reserves for (recoveries on) doubtful customer receivables
|
(169)
|
|
(2,788)
|
|
12,368
|
|
(230)
|
|
Plus: Non-cash employee stock based compensation
|
2,425
|
|
1,531
|
|
3,028
|
|
2,707
|
|
Less: Other income (expense)
|
105,427
|
|
109,613
|
|
(66)
|
|
(1,215)
|
|
Plus: Restructuring and asset impairment charges
|
5,888
|
|
2,869
|
|
9,118
|
|
12,705
|
|
Plus: Debt retirement expense (income)
|
-
|
|
2,339
|
|
(771)
|
|
(433)
|
|
Plus: Amortization of basis difference - CBT investment(3)
|
1,554
|
|
1,543
|
|
2,814
|
|
1,573
|
|
Plus: Kenyan investigation legal & professional costs
|
8,579
|
|
12,373
|
|
-
|
|
1,771
|
|
Less: Kenyan green leaf operation Adjusted EBITDA(4)
|
(16,666)
|
|
(10,861)
|
|
(14,913)
|
|
(16,377)
|
|
Plus: Reconsolidated subsidiary incremental EBITDA after elimination of
related party transactions with AOI and its consolidated subsidiaries(5)
|
16,800
|
|
7,945
|
|
9,846
|
|
17,856
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(1)
|
$ 189,614
|
|
$ 157,302
|
|
$ 189,420
|
|
$ 195,690
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
$ 1,537,704
|
|
|
|
$ 1,462,251
|
|
Less: Debt of reconsolidated subsidiary funded by
affiliate(6)
|
|
|
77,897
|
|
|
|
-
|
|
Plus: Debt of reconsolidated subsidiary funded by
non-affiliate(7)
|
|
|
-
|
|
|
|
47,623
|
|
Total adjusted debt
|
|
|
$ 1,459,807
|
|
|
|
$ 1,509,874
|
|
Less: Cash
|
|
|
296,490
|
|
|
|
195,230
|
|
Less: Cash of reconsolidated subsidiary(8)
|
|
|
-
|
|
|
|
1,326
|
|
Total adjusted debt less adjusted cash
|
|
|
1,163,317
|
|
|
|
1,313,318
|
|
|
|
|
|
|
|
|
|
(Total adjusted debt less adjusted cash) /Adjusted EBITDA(1)(8)
|
|
|
7.40x
|
|
|
|
6.71x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Related to a former Brazilian subsidiary that is now deconsolidated
following the completion of a joint venture in March 2014.
|
|
|
|
|
|
|
|
|
|
(4) Adjusted EBITDA of our former green leaf sourcing operation in Kenya 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.
|
|
|
|
|
|
|
|
|
|
(5) 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 is included in consolidated
information thereafter.
|
|
|
|
|
|
|
|
|
|
(6) Represents the portion of outstanding debt of the subsidiary
reconsolidated at the end of the fourth quarter of the fiscal year ended March 31, 2016 under a credit facility
attributable to the participation interest of another AOI subsidiary funding that portion of the borrowing under the
facility.
|
|
|
|
|
|
|
|
|
|
(7) Represents the portion of outstanding debt of the subsidiary
reconsolidated at the end of the fourth quarter of the fiscal year ended March 31, 2016 under a credit facility other
than the amount attributable to the participation interest of another AOI subsidiary funding the remaining portion of the
borrowing under that facility.
|
|
|
|
|
|
|
|
|
|
(8) The calculation of total adjusted debt less adjusted cash at December
31, 2015 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.
|
|
|
|
|
|
|
|
|
|
(9) Items for the twelve months ended December 31, 2016 are derived by
adding the items for the nine months ended December 31, 2016 and the fiscal year ended March 31, 2016 and subtracting the
items for the nine months ended December 31, 2015. Items for the twelve months ended December 31, 2015 are derived
by adding the items for the nine months ended December 31, 2015 and the fiscal year ended March 31, 2015 and subtracting
the items for the nine months ended December 31, 2014.
|
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/alliance-one-international-reports-improved-sales-volumes-and-improved-gross-profit-as-a-percentage-of-sales-for-the-nine-months-ended-december-31-2016-300402670.html
SOURCE Alliance One International, Inc.