MORRISVILLE, N.C., June 14, 2017 /PRNewswire/ -- Alliance
One International, Inc. (NYSE: AOI) today announced results for its fiscal year and fourth quarter ended March 31, 2017.
Highlights
Fiscal 2017 (1)
- Sales decreased 10.0% to $1,714.7 million mainly as a result of smaller crops in the U.S.,
Brazil and Tanzania primarily related to El Niño weather
conditions, the strong U.S. dollar, changes in product mix and timing of crops.
- Gross profit as a percentage of sales improved to 12.7% from 11.9% helped by reduced lower of cost or market adjustments,
while gross profit decreased 3.9% to $217.0 million, as a result of lower volume and average
sales price.
- Net loss was $62.9 million, while Adjusted EBITDA was $136.6
million at 8.0% of sales.
- Accounts receivable and inventory reductions generated $253.6 million of cash at March 31, 2017 when compared to the prior year end.
- During the year the existing senior secured revolving credit facility was refinanced 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 certain financial covenants were eliminated enhancing business flexibility.
- During March and April 2017 the Company purchased and cancelled approximately $57.1 million of its Senior Secured Second Lien Notes, with $28.4 million in
March and an additional $28.6 million in April, leaving face value of $691.6 million outstanding at fiscal year-end and $662.9 million at the end of
April.
Fourth Quarter (1)
- Sales decreased 16.7% to $609.7 million on lower volume due to smaller weather-affected
crops, later Turkish crop timing and the timing of shipments.
- Gross profit as a percentage of sales improved to 11.1% this year, compared to 9.9% helped by reduced lower of cost or
market adjustments, while gross profit decreased 7.2% to $67.5 million on lower volume.
- Net loss was $0.3 million and Adjusted EBITDA was $44.3 million
at 7.3% of sales.
(1) Due to the reconsolidation of the Zimbabwe subsidiary
at March 31, 2016 its performance is included in consolidated financial results for fiscal 2017,
however it was not included in the prior year except for the March 31, 2016 balance sheet and a
$106.2 million gain in other income in March 2016. Adjusted EBITDA
and Adjusted Net Debt include the results and relevant balance sheet, income statement and statement of cash flow items
respectively of the Zimbabwe subsidiary in all periods.
Pieter Sikkel, Chief Executive Officer and President, said, "With our heavy weighting in
Brazil, the United States and Tanzania – three crops that were hit hardest by El Niño and had related reductions in crop size and yields
and consequently increases in conversion cost – we were significantly impacted in fiscal 2017 by unusual and uncontrollable
events, which overshadowed substantial improvements in many origins and targeted improvements to the balance sheet.
"Accounts receivable and inventory reductions from prior year-end levels generated $253.6
million of cash this year consistent with our internal plan to end the fiscal year with an uncommitted inventory level
well within our stated target range of $50.0-$150.0 million. As indicated previously, we utilize
surplus cash to reduce long-term debt, and during March and April 2017 we purchased and cancelled
approximately $57.1 million of our Senior Secured Second Lien Notes, leaving $662.9 million after purchases in April. We remain confident in our targets to purchase $25.0-$50.0 million per year of our more expensive debt with surplus cash. After giving affect to the initial
$28.4 million purchased in March, our year end cash position was $473.1
million with $475.9 million in notes payable to banks. Our liquidity position is strong and
in line with internal expectations at $852.9 million as of March 31,
2017, comprised of cash and $379.8 million of available credit lines.
"Adverse weather, the strong U.S. dollar and product mix that more heavily favored byproducts this year unfortunately impacted
our operations in Brazil, the U.S., and Tanzania and
overshadowed operations with improvement including Argentina and Malawi. Total full services volumes sold this year were consistent with last year at 381.4 million kilos
that included planned increased prior crop inventory sales. These effects, when combined with Turkish and other regions' sales
that have been pushed to next year based on the timing of crops and shipments, resulted in sales and other operating revenues
decreasing by 10.0% to $1,714.7 million from the prior year and Adjusted EBITDA decreasing 28.0% to
$136.6 million.
"As we look to fiscal year 2018, global market conditions are positive with good early weather patterns that support better
global growing conditions. These conditions should result in increased crop sizes in Brazil and
Argentina. We have almost completed buying in Zimbabwe and are
approximately 65% complete in Brazil. The 2016 Brazilian Virginia flue crop was small at
approximately 410 million kilos and is approximately 50% larger this year at 600 million kilos with good quality. The
Malawi crop is smaller this year and the U.S. crop is now in the ground. Based on current
conditions, our internal forecast anticipates significantly increased full-service and processing volumes, improved sales and
pricing, as well as improved adjusted EBITDA for fiscal year 2018 when compared to fiscal 2017. Sales are anticipated to be in a
range of approximately $1,900.0 million to $2,000.0 million with Adjusted EBITDA in a range of
approximately $165.0-$185.0 million.
Mr. Sikkel, concluded, "Our Company is well positioned to address complex industry dynamics. The impact of our strategic
initiatives should become more apparent as crop sizes return to normalized levels in key markets where we are now buying and will
sell during fiscal year 2018. Our strong employee base continues to innovate and develop cost-effective solutions to meet
evolving customer requirements. Our customers remain focused on optimizing their supply chains and reducing complexity. They are
planning for improvement in global sustainability and driving positive change in nicotine consumption habits with reduced risk
products. We are well positioned to assist them with all of these requirements, investing where appropriate returns should be
achievable. Growth opportunities exist and we continue to take the necessary steps to further strengthen our preferred supplier
position. Continued focus on strategic plan execution to meet our customer's growth initiatives is anticipated to improve
shareholder value."
Performance Summary for Fiscal Year-ended March 31, 2017
Total sales and other operating revenues decreased by 10.0% to $1,714.7 million and total costs
of goods and services sold decreased 10.8% to $1,497.7 million primarily due to lower average sales
prices and tobacco costs per kilo attributable to smaller crops in the U.S., Brazil and
Tanzania related to weather conditions, lower prices paid to tobacco suppliers across most
regions and changes in product mix with an increased percentage of byproduct sales versus lamina. The positive impact of currency
movements, primarily in Europe, on average tobacco costs per kilo were partially offset by
$4.8 million of lower of cost or market adjustments.
Volumes were similar to the prior fiscal year as volume increases from expanded cut rag services in the Africa region, sales of prior crop in most regions and the timing of shipments in Africa were offset by the weather-related smaller crop sizes and the timing of shipments in other regions.
Processing and other revenues and processing costs increases were primarily related to the reconsolidation of our Zimbabwe subsidiary.
As a result of lower average sales price and costs per kilo, gross profit decreased 3.9% to $217.0
million, while gross profit as a percentage of sales improved to 12.7% from 11.9%.
SG&A increased 10.1% to $136.0 million mainly due to increased legal and professional fees,
incentive compensation costs, and the inclusion of costs from our reconsolidated Zimbabwe
subsidiary this year, partially offset by the non-recurrence of reserves for customer receivables in the prior year that are now
being collected. Increases in SG&A were partially offset by the net insurance recovery related to tobacco lost by fire in
Zimbabwe last year, the non-recurrence of one-time expenses in Africa and the sale of trade tax credits in South America.
During the prior year, we determined that the significant doubt about our ability to control our Zimbabwe subsidiary was eliminated and we reconsolidated it as of March 31,
2016. As a result, we recorded a gain of $106.2 million in other operating income.
Restructuring and asset impairment charges were $1.4 million this year and are mainly related to
the former U.S. cut rag facility. Last year charges were $5.9 million and were primarily
attributable to impairment of advances to tobacco suppliers and real property in Africa.
During the third quarter of fiscal 2017, we refinanced our existing senior secured revolving credit facility with the issuance
of $275.0 million of 8.5% senior secured first lien notes due April
2021 and a $60.0 million U.S. ABL credit facility that matures in January 2021. As a result, one-time debt retirement costs of $2.3 million were
recorded for the accelerated amortization of debt issuance costs.
During the fourth quarter of fiscal 2017, we purchased $28.4 million of our senior secured
second lien notes on the open market. As a result, one-time related discounts of $3.4 million
offset by $0.7 million for the accelerated amortization of debt issuance costs and original issue
discount were recorded.
Interest costs increased 13.2% to $132.7 million from the prior year primarily 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.
Income tax expense decreased 27.0% to $23.5 million, while our effective tax rate was (59.2)%
this year compared to 35.1% last year.
Performance Summary for the Fourth Fiscal Quarter Ended March 31,
2017
Total sales and other operating revenues decreased 16.7% to $609.7 million primarily due to the
smaller weather-affected U.S. crop, the late season in Turkey and the timing of
shipments.
Gross profit decreased 7.2% to $67.5 million due to lower volumes sold, however gross profit as
a percentage of sales improved to 11.1% in the fourth quarter of fiscal 2017 compared to 9.9% for the prior-year period mainly
due to reduced lower-of-cost-or-market adjustments during the fourth quarter this year compared to the prior-year period.
SG&A decreased 4.1% to $35.1 million primarily as a result of the reversal of reserves for
customer receivables in the fiscal 2017 fourth quarter.
Except for the non-recurrence of the $106.2 million gain on reconsolidation of Zimbabwe in the prior year, operating income decreased slightly $0.8 million
primarily due to a $5.2 million decrease in gross profit partially offset by reduced SG&A and
lower restructuring charges.
Interest expense increased 15.7% to $35.0 million from the prior-year period primarily due to
the reconsolidation of our Zimbabwe subsidiary at March 31, 2016,
higher amortization of debt issuance costs and higher average borrowings. Debt retirement income relates to the repurchase
of $28.4 million of our senior secured second lien notes during the fourth quarter of fiscal
2017.
Income tax expense decreased 74.5% to $2.7 million, while our effective tax rate was 103.3% this
year compared to 9.5% for the prior-year period.
Earnings Per Share
Fiscal Year
For the 12 months ended March 31, 2017, net loss was $62.9
million, or $7.05 per basic share, compared to net income of $65.5
million or $7.38 per basic share for the prior year period. Included in net loss this year
was $7.2 million of legal and professional costs associated the Kenya matter, $1.4 million of restructuring and asset impairment charges and
$8.0 million of loss related to Kenya green leaf operations.
Included in net income last year was $8.6 million of legal and professional costs for the
Kenya matter, $106.2 million related to the Zimbabwe reconsolidation, $16.7 million of loss related to Kenya green leaf sourcing, and $5.9 million of restructuring and asset
impairment charges.
Fourth Quarter
For the fourth quarter ended March 31, 2017, net loss was $0.3
million, or $.03 per basic share, compared to net income of $100.8
million, or $11.33 per basic share, last year. Last year's results included a $106.2 million gain associated with the reconsolidation of the Zimbabwe
subsidiary.
Liquidity and Capital Resources
As of March 31, 2017, available credit lines and cash were $852.9
million, comprised of $473.1 million in cash and $379.8
million of credit lines, comprised of $60.0 million available under the U.S. ABL credit
facility for general corporate purposes (subject to limitations on borrowing if unrestricted cash and cash equivalents exceed
$180.0 million) and $319.8 million of foreign seasonal credit
lines.
Additionally, 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.
Fiscal Year 2017 Financial Results Investor Call
The Company will hold a conference call to report financial results for its fiscal year-ended March 31,
2017, on Thursday, June 15, 2017 at 8:00 A.M. EDT. 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. EDT, Thursday, June 15, 2017 through 11:00 A.M.
Tuesday, June 20, 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 9596785. 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, adverse weather conditions, changes in costs incurred in
supplying tobacco and related services 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).
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 2018 is calculated in a manner consistent with the presentation of
Adjusted EBITDA in the attached tables. 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 is a leading global independent leaf merchant. For more information on Alliance One, visit the Company's website
at www.aointl.com.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
March 31
|
|
March 31
|
|
(in thousands, except per share data)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenues
|
$ 609,691
|
|
$ 732,318
|
|
$ 1,714,750
|
|
$ 1,904,592
|
|
Cost of goods and services sold
|
542,145
|
|
659,532
|
|
1,497,721
|
|
1,678,798
|
|
Gross profit
|
67,545
|
|
72,786
|
|
217,029
|
|
225,794
|
|
Selling, general and administrative expenses
|
35,078
|
|
36,561
|
|
135,982
|
|
123,546
|
|
Other income
|
585
|
|
105,302
|
|
4,896
|
|
105,427
|
|
Restructuring and asset impairment charges
|
307
|
|
1,801
|
|
1,375
|
|
5,888
|
|
Operating income
|
32,744
|
|
139,727
|
|
84,568
|
|
201,787
|
|
Debt retirement expense (income)
|
(2,639)
|
|
-
|
|
(300)
|
|
-
|
|
Interest expense
|
35,031
|
|
30,279
|
|
132,667
|
|
117,190
|
|
Interest income
|
2,269
|
|
1,685
|
|
8,157
|
|
7,077
|
|
Income (loss) before income taxes and other items
|
2,621
|
|
111,133
|
|
(39,642)
|
|
91,674
|
|
Income tax expense
|
2,706
|
|
10,598
|
|
23,480
|
|
32,215
|
|
Equity in net income (loss) of investee companies
|
(439)
|
|
307
|
|
(149)
|
|
5,986
|
|
Net income (loss)
|
(524)
|
|
100,841
|
|
(63,271)
|
|
65,445
|
|
Less: Net income (loss) noncontrolling interests
|
(215)
|
|
28
|
|
(343)
|
|
(87)
|
|
Net income (loss) attributable to Alliance One International,
Inc.
|
$ (309)
|
|
$ 100,813
|
|
$ (62,928)
|
|
$ 65,532
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
$ (0.03)
|
|
$ 11.33
|
|
$ (7.05)
|
|
$ 7.38
|
|
Diluted
|
$ (0.03)
|
|
$ 11.33
|
|
$ (7.05)
|
|
$ 7.38
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
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Basic
|
8,952
|
|
8,895
|
|
8,930
|
|
8,882
|
|
Diluted
|
8,952
|
|
8,896
|
|
8,930
|
|
8,883
|
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RECONCILIATION OF ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATION ("ADJUSTED
EBITDA")(1) (Unaudited)
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|
|
|
|
|
|
|
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Three Months Ended
|
|
FYE
|
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(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: Restructuring and asset impairment charges
|
41
|
577
|
449
|
307
|
|
1,375
|
|
Plus: Debt retirement expense (income)
|
-
|
-
|
2,339
|
(2,639)
|
|
(300)
|
|
Plus: Amortization of basis difference - CBT investment(3)
|
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(4)
|
(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(5)
|
-
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(1)
|
$ 10,480
|
$ 33,299
|
$ 48,506
|
$ 44,298
|
|
$ 136,583
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
|
|
|
$ 1,428,868
|
|
Less: Debt of reconsolidated subsidiary funded by
affiliate(6)
|
|
|
|
|
|
-
|
|
Total adjusted debt
|
|
|
|
|
|
$ 1,428,868
|
|
Less: Cash
|
|
|
|
|
|
473,110
|
|
Total adjusted debt less cash(6)
|
|
|
|
|
|
$ 955,758
|
|
|
|
|
|
|
|
|
(Total adjusted debt less cash) /Adjusted EBITDA(1)(6)
|
|
|
|
|
|
7.00x
|
|
|
|
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|
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(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.
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|
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|
|
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|
|
(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.
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|
|
|
|
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(3) Related to a former Brazilian subsidiary that is now deconsolidated
following the completion of a joint venture in March 2014.
|
|
|
|
|
|
|
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(4) 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.
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(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 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.
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|
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|
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(6) 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.
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|
RECONCILIATION OF ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATION ("ADJUSTED
EBITDA")(1) (Unaudited)
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
FYE(4)
|
|
(in thousands)
|
June 30, 2015(4)
|
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: 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(3)
|
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(5)
|
(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(6)
|
1,252
|
4,738
|
2,864
|
7,945
|
|
16,800
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(1)
|
$ 16,172
|
$ 50,436
|
$ 57,988
|
$ 65,018
|
|
$ 189,614
|
|
|
|
|
|
|
|
|
Total debt(7)
|
|
|
|
|
|
$ 1,386,559
|
|
Less: Debt of reconsolidated subsidiary funded by
affiliate(8)
|
|
|
|
|
|
84,258
|
|
Total adjusted debt
|
|
|
|
|
|
$ 1,302,301
|
|
Less: Cash
|
|
|
|
|
|
199,720
|
|
Total adjusted debt less cash(7)(8)
|
|
|
|
|
|
$ 1,102,581
|
|
|
|
|
|
|
|
|
(Total adjusted debt less cash) /Adjusted EBITDA(1)(7)(8)
|
|
|
|
|
|
5.81x
|
|
|
|
|
|
|
|
|
(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) 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.
|
|
|
|
|
|
|
|
|
(5) 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.
|
|
|
|
|
|
|
|
|
(6) 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.
|
|
|
|
|
|
|
|
|
(7) 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.
|
|
|
|
|
|
|
|
|
(8) 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.
|
|
RECONCILIATION OF ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATION ("ADJUSTED
EBITDA")(1) (Unaudited)
|
|
|
|
|
|
|
|
|
Three Months Ended(4)
|
|
FYE(4)(9)
|
|
(in thousands)
|
June 30, 2014
|
Sept 30, 2014
|
Dec 31, 2014
|
March 31, 2015
|
|
March 31, 2015
|
|
|
|
|
|
|
|
|
U.S. GAAP - Net Income(loss) attributable to Alliance One
International, Inc.
|
$ (23,685)
|
$ (8,151)
|
$ 1,563
|
$ 2,411
|
|
$ (27,862)
|
|
|
|
|
|
|
|
|
Plus: Interest expense
|
26,922
|
28,495
|
28,277
|
29,579
|
|
113,273
|
|
Plus: Income tax expense
|
319
|
10,980
|
3,146
|
7,474
|
|
21,918
|
|
Plus: Depreciation and amortization expense
|
7,500
|
7,312
|
7,434
|
7,376
|
|
29,623
|
|
|
|
|
|
|
|
|
EBITDA (1)
|
11,056
|
38,635
|
40,421
|
46,840
|
|
136,952
|
|
|
|
|
|
|
|
|
Plus: Abnormal unrecovered advances to suppliers(2)
|
463
|
18
|
-
|
604
|
|
1,085
|
|
Plus: Reserves for (recoveries on) doubtful customer receivables
|
204
|
4,062
|
8,151
|
(49)
|
|
12,368
|
|
Plus: Non-cash employee stock based compensation
|
730
|
893
|
772
|
633
|
|
3,028
|
|
Less: Other income
|
800
|
327
|
146
|
(1,339)
|
|
(66)
|
|
Plus: Restructuring and asset impairment charges
|
-
|
500
|
-
|
8,618
|
|
9,118
|
|
Plus: Debt retirement expense (income)
|
-
|
-
|
(338)
|
(433)
|
|
(771)
|
|
Plus: Amortization of basis difference - CBT investment(3)
|
550
|
1,108
|
801
|
355
|
|
2,814
|
|
Plus: Kenyan investigation legal & professional costs
|
-
|
-
|
-
|
-
|
|
-
|
|
Less: Kenyan green leaf operation Adjusted EBITDA(5)
|
(2,140)
|
(7,448)
|
(1,141)
|
(4,184)
|
|
(14,913)
|
|
Plus: Reconsolidated subsidiary incremental EBITDA after elimination
of related party transactions with AOI and its consolidated
subsidiaries(6)
|
(2,493)
|
3,558
|
(220)
|
9,001
|
|
9,846
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(1)
|
$ 11,850
|
$ 55,895
|
$ 50,582
|
$ 71,093
|
|
$ 189,420
|
|
|
|
|
|
|
|
|
Total debt(7)
|
|
|
|
|
|
$ 1,060,345
|
|
Plus: Debt of reconsolidated subsidiary funded by
non-affiliate(8)
|
|
|
|
|
49,208
|
|
Total adjusted debt
|
|
|
|
|
|
$ 1,109,553
|
|
Less: Cash
|
|
|
|
|
|
143,849
|
|
Less: Cash of reconsolidated subsidiary
|
|
|
|
|
|
2,893
|
|
Total adjusted debt less adjusted cash(7)(8)
|
|
|
|
|
|
$ 962,811
|
|
|
|
|
|
|
|
|
(Total adjusted debt less adjusted cash) /Adjusted
EBITDA(1)(7)(8)
|
|
|
|
|
5.08x
|
|
|
|
|
|
|
|
|
(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) The fiscal year ended March 31, 2015 was restated due to the Kenya
matter previously disclosed, as well as all quarters in the fiscal year.
|
|
|
|
|
|
|
|
|
(5) Adjusted EBITDA of our former green leaf sourcing operation in Kenya of
$(14,913) for the fiscal year ended March 31, 2015 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.
|
|
|
|
|
|
|
|
|
(6) 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.
|
|
|
|
|
|
|
|
|
(7) 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, 2015 balances has been adjusted in accordance with the adoption of this guidance.
|
|
|
|
|
|
|
|
|
(8) 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 other than the amount
attributable to the participation interest of another AOI subsidiary funding the remaining portion of the borrowing under
that facility.
|
|
|
|
|
|
|
|
|
(9) During the year ended March 31, 2016, the Company identified certain
immaterial errors in previously issued financial statements related to inventory and income tax. The
Company became aware of improper inventory entries in a European subsidiary's records resulting in an understatement of
cost of goods sold of $674 for the quarter ended
December 31, 2014. The Company identified a misstatement of recoverable income tax in an international jurisdiction
in prior periods resulting in an understatement of income
tax expense of $1,058 for the quarter ended December 31, 2014.
|
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/alliance-one-international-reports-fiscal-year-2017-and-fourth-quarter-results-300474124.html
SOURCE Alliance One International, Inc.