<PAGE>
Page 1 of 17
Page 15 - Exhibit Index
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____to_____
Commission file number 0-2912
DIBRELL BROTHERS, INCORPORATED
(Exact name of registrant as specified in its
charter)
VIRGINIA 54-0192440
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
512 Bridge Street
Danville, Virginia 24541
(Address of principal executive (Zip Code)
offices)
(804) 792-7511
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal
year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the
past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Outstanding at
Class of Common Stock May 8, 1995
$1.00 par value None*
*At March 31, 1995, there were 13,303,489 shares outstanding.
The Registrant was merged into DIMON Incorporated on April 1, 1995
<PAGE>
<TABLE>
<CAPTION>
DIBRELL BROTHERS, INCORPORATED
INDEX
PAGE NO.
<S> <C>
Part I. Financial Information:
Consolidated Balance Sheet - March 31, 1995
and June 30, 1994 . . . . . . . . . . . . . . . . . . 3 - 4
Statement of Consolidated Income - Three Months
and Nine Months Ended March 31, 1995
and 1994. . . . . . . . . . . . . . . . . . . . . . . 5
Statement of Consolidated Cash Flows - Nine
Months Ended March 31, 1995 and 1994. . . . . . . . . 6
Notes to Consolidated Financial Statements . . . . . . . . 7 - 9
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . 10 - 13
Part II. Other Information. . . . . . . . . . . . . . . . 13 - 14
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Dibrell Brothers, Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEET
(Unaudited)
March 31 June 30
1995 1994
____________ ____________
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents. . . . . . . . . .$ 39,858,325 $ 6,478,787
Notes receivable . . . . . . . . . . . . . . 1,418,224 16,500,988
Trade receivables, net of allowances . . . . 120,810,971 104,191,495
Inventories:
Tobacco . . . . . . . . . . . . . . . . . 133,880,245 218,232,958
Other . . . . . . . . . . . . . . . . . . 9,384,755 13,807,917
Advances on purchases of tobacco . . . . . . 31,308,225 29,901,995
Recoverable income taxes . . . . . . . . . . 1,607,985 1,847,936
Prepaid expenses . . . . . . . . . . . . . . 9,599,899 9,223,602
____________ ____________
Total current assets 347,868,629 400,185,678
____________ ____________
Investments and other assets
Equity in net assets of investee companies . 19,327,739 18,252,794
Other investments. . . . . . . . . . . . . . 12,555,220 14,335,925
Notes receivable . . . . . . . . . . . . . . 13,288,779 12,616,424
Other . . . . . . . . . . . . . . . . . . . 7,623,025 3,596,480
____________ ____________
52,794,763 48,801,623
____________ ____________
Intangible assets
Excess of cost over related net assets of
business acquired. . . . . . . . . . . . . 12,072,990 11,898,364
Production and supply contracts. . . . . . . 37,533,668 42,339,999
Pension asset. . . . . . . . . . . . . . . . 2,457,899 2,457,899
____________ ___________
52,064,557 56,696,262
____________ ___________
Property, plant, and equipment
Land. . . . . . . . . . . . . . . . . . . . 17,008,824 16,048,571
Buildings . . . . . . . . . . . . . . . . . 91,855,757 87,907,205
Machinery and equipment. . . . . . . . . . . 95,463,173 89,169,882
Allowances for depreciation (deduction). . . (65,675,485) (54,962,145)
____________ ____________
138,652,269 138,163,513
____________ ____________
Deferred charges and taxes . . . . . . . . . . . 8,038,651 7,609,944
____________ ____________
$599,418,869 $651,457,020
============ ============
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Dibrell Brothers, Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEET
(Unaudited)
March 31 June 30
1995 1994
____________ ____________
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable to banks . . . . . . . . . . .$120,838,002 $142,369,166
Accounts payable:
Trade . . . . . . . . . . . . . . . . . . 33,730,833 52,206,240
Officers and employees . . . . . . . . . . 18,780,113 18,072,950
Other . . . . . . . . . . . . . . . . . . 12,779,127 6,757,329
Advances from customers. . . . . . . . . . . 9,308,375 23,998,753
Accrued expenses . . . . . . . . . . . . . . 12,690,835 23,681,668
Income taxes . . . . . . . . . . . . . . . . 12,759,394 5,788,346
Long-term debt current . . . . . . . . . . . 6,751,281 4,261,601
____________ ____________
Total current liabilities 227,637,960 277,136,053
____________ ____________
Long-term debt
Revolving Credit Notes and Other . . . . . . 156,210,456 155,161,454
Convertible Subordinated Debentures. . . . . 56,475,000 56,475,000
________________________
212,685,456 211,636,454
____________ ____________
Deferred credits:
Income taxes . . . . . . . . . . . . . . . . 4,678,157 5,675,298
Compensation and other benefits. . . . . . . 24,173,972 23,424,455
____________ ____________
28,852,129 29,099,753
____________ ____________
Minority interest in subsidiaries. . . . . . . . 1,014,432 1,226,687
____________ ____________
Stockholders' equity
Serial Preferred Stock--without par value:
Mar. 31 Jun. 30
Authorized shares 1,000,000 1,000,000
Issued shares -0- -0-
Common Stock--par value $1 per share
Mar. 31 Jun. 30
Authorized shares 50,000,000 50,000,000
Issued shares 13,303,489 13,303,089. . 13,303,489 13,303,089
Additional capital . . . . . . . . . . . . . . 18,599,006 18,590,756
Retained earnings. . . . . . . . . . . . . . . 101,165,247 103,057,649
Equity-currency conversions. . . . . . . . . . (1,117,144) (960,183)
Additional minimum pension liability . . . . . (1,373,936) (1,373,936)
Unrealized loss on investments . . . . . . . . (1,347,770) (259,302)
____________ ____________
129,228,892 132,358,073
____________ ____________
$599,418,869 $651,457,020
============ ============
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Dibrell Brothers, Incorporated and Subsidiaries
STATEMENT OF CONSOLIDATED INCOME
Three Months and Nine Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994 1995 1994
Third Third First Nine First Nine
Quarter Quarter Months Months
____________ ____________ ____________ ____________
<S> <C> <C>
Net sales of goods and services . . . . . . . . $325,963,463 $251,594,015 $812,021,221 $691,542,186
Cost of goods and services sold . . . . . . . . 290,239,724 226,016,163 723,271,618 610,383,659
____________ ____________ ____________ ____________
35,723,739 25,577,852 88,749,603 81,158,527
Selling, administrative and general expenses. . 21,927,464 18,734,342 63,298,110 56,796,355
____________ ____________ ____________ ____________
Operating Income. . . . . . . . 13,796,275 6,843,510 25,451,493 24,362,172
Other income:
Interest . . .. . . . . . . . . . . . . . . . 1,165,748 1,056,362 4,730,884 2,606,095
Sundry . . . .. . . . . . . . . . . . . . . . 1,625,151 1,665,983 2,707,132 3,362,503
____________ ____________ ____________ ____________
2,790,899 2,722,345 7,438,016 5,968,598
Other deductions:
Interest . . .. . . . . . . . . . . . . . . . 6,279,560 5,056,163 19,435,120 15,572,980
Sundry . . . .. . . . . . . . . . . . . . . . 280,290 102,891 661,205 277,886
____________ ____________ ____________ ____________
6,559,850 5,159,054 20,096,325 15,850,866
Income before income taxes, minority interest,
equity in net income of investee companies
and cumulative effect of accounting changes . 10,027,324 4,406,801 12,793,184 14,479,904
Income taxes . .. . . . . . . . . . . . . . . . 5,719,819 1,630,063 7,292,115 5,357,564
____________ ____________ ____________ ____________
Income before minority interest, equity in net
income of investee companies and cumulative
effect of accounting changes. . . . . . . . . 4,307,505 2,776,738 5,501,069 9,122,340
Income applicable to minority interest . . . . 148,656 249,398 271,934 465,773
Equity in net income (loss) of investee
companies, net of income taxes. . . . . . . . (125,607) (11,264) 860,498 394,168
____________ ____________ ____________ ____________
NET INCOME . . .. . . . . . . . . . . . . . . . $ 4,033,242 $ 2,516,076 $ 6,089,633 $ 9,050,735
Earnings Per Share, primary:
Net Income . . . . . . . . . . . . . . . . . $.30 $.19 $.46 $.68
Earnings Per Share, assuming full dilution:
Net Income . . . . . . . . . . . . . . . . . $.29 $ * $ * $ *
Average number of shares outstanding:
Primary. . . . . . . . . . . . . . . . . . . . 13,313,236 13,311,561 13,312,478 13,323,075
Assuming full dilution . . . . . . . . . . . . 16,121,034 16,113,595 16,120,854 16,127,946
Cash dividends per share . . . . . . . . . . . . $.20 $.18 $.60 $.54
</TABLE>
* Computation of earnings per share is anti-dilutive for the third quarter of
fiscal year 1994 and the first nine months of fiscal years 1994 and 1995.
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<PAGE>
<TABLE>
<CAPTION>
Dibrell Brothers, Incorporated and Subsidiaries
STATEMENT OF CONSOLIDATED CASH FLOWS
Nine Months Ended March 31, 1995 and 1994
(Unaudited)
March 31 March 31
1995 1994
------------ -------------
<S> <C> <C>
Operating activities
Net Income . . . . . . . . . . . . . . . . . . . . . $ 6,089,633 $ 9,050,735
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization . . . . . . . . . . . 17,646,816 13,479,600
Deferred items. . . . . . . . . . . . . . . . . . . (360,151) 85,298
Loss (gain) on foreign currency transactions. . . . 272,792 (267,864)
Gain on disposition of fixed assets . . . . . . . . (414,760) (668,586)
Undistributed earnings of investees . . . . . . . . (860,498) (394,168)
Dividends received from investees . . . . . . . . . 400,000 496,950
Income applicable to minority interest. . . . . . . 271,934 465,773
Bad debt expense. . . . . . . . . . . . . . . . . . 1,468,794 1,115,016
Decrease (increase) in accounts receivable. . . . . (9,170,478) 24,434,527
Decrease in inventories and advances on
purchases of tobacco. . . . . . . . . . . . . . . 82,313,788 12,416,917
Decrease in recoverable taxes . . . . . . . . . . . 475,279 563,012
Decrease (increase) in prepaid expenses . . . . . . (103,902) 293,691
Decrease in accounts payable and accrued
expenses. . . . . . . . . . . . . . . . . . . . . (28,807,645) (26,059,758)
Decrease in advances from customers . . . . . . . . (16,285,882) (14,920,542)
Increase (decrease) in income taxes . . . . . . . . 6,354,791 (1,539,660)
Other . . . . . . . . . . . . . . . . . . . . . . . (297) 2,510
Net cash provided by operating activities . . . . 59,290,214 18,553,451
______________ _____________
Investing activities
Purchase of property and equipment. . . . . . . . . . (9,884,758) (15,421,220)
Proceeds from sale of property and equipment. . . . . 2,058,279 3,064,646
Payments on notes receivable and
receivable from investees . . . . . . . . . . . . . 18,551,777 4,015,753
Increase in notes receivable and receivable from
investees . . . . . . . . . . . . . . . . . . . . . (3,460,920) (17,839,603)
Increase other investments and other assets . . . . . (945,755) (7,395,623)
Purchase of minority interest in subsidiaries . . . . (484,189) (193,751)
Net cash provided (used) by investing activities. . 5,834,434 (33,769,798)
______________ _____________
Financing activities
Repayment of debt . . . . . . . . . . . . . . . (135,089,957) (149,164,863)
Proceeds from debt. . . . . . . . . . . . . . . 111,842,188 212,604,241
Cash dividends paid to Dibrell Brothers,
Inc. stockholders . . . . . . . . . . . . . . (7,745,034) (7,183,433)
Cash dividends paid to minority stockholders. . (236,979) (317,483)
Proceeds from issuance of common stock. . . . . 8,650 28,114
______________ _____________
Net cash provided (used) by financing
activities. . . . . . . . . . . . . . . . (31,221,132) 55,966,576
Effect of exchange rate changes on cash . . . . . (523,977) (126,959)
Increase in cash and cash equivalents . . . . . . 33,379,539 40,623,270
Cash and cash equivalents at beginning of year. . 6,478,787 12,304,626
______________ _____________
Cash and cash equivalents at end of period. $ 39,858,326 $ 52,927,896
</TABLE>
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<PAGE>
DIBRELL BROTHERS, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Primary earnings per share are computed by dividing earnings by
the weighted average number of shares outstanding plus any common
stock equivalents during each period. The fully diluted earnings
per share calculation assumes that all of the Convertible Subordinated
Debentures were converted into Common Stock at the beginning of the
reporting period thereby increasing the weighted average number of
shares considered outstanding during each period. Also, all interest
expense on the debentures for the period is added to pre-tax income
and the hypothetical additional income tax expense is deducted.
The weighted average number of shares outstanding is further
increased by common stock equivalents on employee stock options.
2. The accompanying unaudited consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q
and do not include all of the information and footnotes required
by generally accepted accounting principles for complete
financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals and the non-
recurring items referred to in Note 3) considered necessary for a
fair presentation have been included.
3. On July 1, 1994, the Company adopted Statements of Financial
Accounting Standards No. 112 "Employers' Accounting for Post-
employment Benefits" and No. 115 "Accounting for Certain Investments
in Debt and Equity Securities." There was no material impact on
the Company's operations or financial position.
4. On October 23, 1994, Dibrell Brothers, Incorporated and Monk-Austin,
Inc. announced execution of a definitive Agreement and Plan
of Reorganization pursuant to which the businesses of Dibrell and
Monk-Austin would be combined. At special meetings on March 31, 1995,
the shareholders of both Dibrell and Monk-Austin approved the
Agreement and related combination. As a result, Dibrell and Monk-
Austin were merged into DIMON and each share of Monk-Austin Common
Stock outstanding at the merger date was converted into 1.0 share,
and each share of Dibrell Common Stock outstanding at the merger date
was converted into 1.5 shares, of DIMON Common Stock. The effective
date of the merger was April 1, 1995, and will be accounted for
as a pooling of interests. All future consolidated financial
statements will be restated for periods ending prior to the merger
to include the historical results of operations of both Dibrell
and Monk-Austin. Recorded assets and liabilities will be carried
forward to the combined company at their historical book
values.
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<PAGE>
DIBRELL BROTHERS, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following schedule presents unaudited pro forma amounts
representing a combination of Dibrell and Monk-Austin:
<TABLE>
<CAPTION>
(In Thousands
except for per share)
March 31, 1995
Three Months Nine Months
------------ -----------
<S> <C> <C>
Sales of goods and services $644,202 $1,547,674
Operating income 23,792 47,940
Net income 6,971 5,131
Net income per share .18 .13
(computation of net income per share is anti-dilutive for both
periods)
</TABLE>
To conform the accounting practices of Dibrell and Monk-
Austin, currency gains and losses relating to operations have
been treated as production costs in the unaudited pro forma
data. Other inventory costing method adjustments have also been
reflected in the unaudited pro forma data for the three and nine
months ended March 31, 1995. These adjustments result in the
inclusion of all costs related to farmer assistance as a part of
the purchase cost of tobacco on a consistent basis. There could
be additional conforming adjustments that will be determined by the
end of our fiscal year.
The pro forma financial information is presented for illustrative
purposes only and is not necessarily indicative of the results of
operations that would have occurred if the merger had been consummated
at the beginning of the periods, nor is it necessarily indicative of
future operating results. Further, the pro forma financial
information does not give effect to any synergies that are expected
to occur due to the integration of Dibrell's and Monk-Austin's
operations. Additionally, the pro forma information excludes (a)
the transaction costs of the merger, estimated to be approximately
$6.3 million for the financial advisors and regulatory filing fees
plus $1.2 million for legal and accounting fees, printing expenses
and other miscellaneous expenses, and (b) nonrecurring costs and
expenses associated with integrating the operations of the business.
Certain material, nonrecurring adjustments will be recorded in
conjunction with the combination, but the amount of these
adjustments cannot be determined until DIMON has reviewed all
duplicative facilities, operations and systems of Dibrell and
Monk-Austin. The aggregate amount of these adjustments will include
costs associated with closing duplicative facilities; consolidating
operations and systems; severance pay for terminations, early
retirement and related employee benefits; and expenses incurred in
connection with the merger. DIMON has not yet quantified these
adjustments, other than the estimated expenses of the
merger discussed previously and the $11 million estimated cost
of the early retirement programs announced by each company. The
impact of these transaction costs and nonrecurring adjustments
are expected to be recorded in the fourth quarter of fiscal year
1995.
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<PAGE>
DIBRELL BROTHERS, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. The results of operations for the three months and nine months
ended March 31, 1995 and 1994 are not necessarily indicative of
the results to be expected for the full year and should not be
relied on as a basis for projecting year end results. The
Company's operations are seasonal and quarterly comparisons are
of little value.
6. For additional information regarding accounting principles
and other financial data, see Notes to Consolidated
Financial Statements in the Annual Report on Form 10-K for
the fiscal year ended June 30, 1994.
7. Certain accounts of the prior periods have been
reclassified for conformity with the financial statements
of the current period.
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<PAGE>
DIBRELL BROTHERS, INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations:
Three Months Ended March 31, 1995 Compared to Three Months Ended March 31, 1994:
Net sales increased $74,369,448 (29.6%) for the three months ended March 31,
1995 from the same period in 1994. Tobacco sales increased $71,360,706 (49.6%)
with increases in both quantities and average prices for both U.S. grown and
foreign grown tobacco. The increased sales of foreign grown tobacco were
primarily due to sales from Brazil. Flower sales increased $3,008,742 (2.8%)
due primarily to the effects of applying U.S. dollar exchange rates to the
European operations, partially offset by decreased sales in the North American
operations.
Cost of sales and expenses increased $67,416,683 (27.5%) for the period ended
March 31, 1995 from the same period in 1994. Cost of sales and expenses of
the tobacco operations increased $62,717,904 (45.5%) primarily due to
increased sales. The gross margin for the tobacco operations increased
$10,054,057 (70.2%) primarily due to increased sales and gross profits of
tobacco from South America, offset partially by decreased sales and gross
profits on tobacco from Africa. The increase in Brazil is partially due
to a $4.0 million reserve provided during the three months ended March 31,
1994. The gross margin as a percentage of net sales of goods and services
for the tobacco operations increased from 10.0% to 11.3% due primarily to
increased sales with increased margins of South American and U.S. tobacco
and the above mentioned reserve on South American tobacco, offset partially
by decreased gross profits ofits from the African operations. Cost of sales
and expenses for the flower operations increased $3,849,761 (3.6%) primarily
due to increased costs in the North American operations and increased salary
costs of the European operations. The gross margin for the flower operations
increased $91,830 (.8%) due primarily to increased margins in Europe,
partially offset by decreased margins in North America. The gross margin
percentage for the flower operation decreased from 10.4% to 10.2%. Corporate
expenses increased $849,018 (69.4%) due primarily to increased personnel costs.
Other income, Interest and Sundry, increased $68,554 (2.5%) for the period
ended March 31, 1995 from the same period in 1994. Interest income increased
$109,386. Sundry income decreased $40,832.
Other deductions, primarily Interest expense, increased $1,400,796 (27.2%) for
the period ended March 31, 1995. Interest expense increased $1,223,397 due to
increased average interest rates, offset partially by lower average short-term
borrowings.
The effective tax rate increased from 37.0% in 1994 to 57.0% in 1995 based on
estimates of taxable income projected for each year.
The income applicable to minority interest decreased $100,742 from the same
period last year.
Equity in net income of the tobacco investee companies decreased $114,343
(29.0%) from the same period last year due primarily to the Company's investee
in Greece.
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<PAGE>
DIBRELL BROTHERS, INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Nine Months Ended March 31, 1995 Compared to Nine Months Ended March 31, 1994:
Net sales increased $120,479,035 (17.4%) for the nine months ended March 31,
1995 from the same period in 1994. Tobacco sales increased $111,566,649
(26.9%) and flower sales increased $8,912,386 (3.2%). The increase in
tobacco sales is due to higher average prices of both U.S. and foreign
grown tobacco and increased quantities of foreign grown tobacco, offset
partially by decreased quantities of U.S. grown tobacco. The tobacco sales
increased in the nine months ended March 31, 1995, due to operations in the
U.S. and Brazil. The decrease in flower sales is due primarily to the effects
of applying U.S. dollar exchange rates to the European operations, offset
partially by decreased sales in the North American operations.
Cost of sales and expenses increased $119,389,714 (17.9%) for the period ended
March 31, 1995 from the same period in 1994. Cost of sales and expenses of the
tobacco operations increased $104,081,826 (26.8%) primarily due to increased
sales of U.S. and Brazilian grown tobacco. The gross margin for the tobacco
operations increased $8,938,111 (17.0%) primarily due to increased sales on
the operations in the U.S. and Brazil, partially offset by decreased gross
margins in Africa. The increase in Brazil is partially due to a $4.0 million
reserve provided during the nine months ended March 31, 1994. The gross
margin as a percentage of net sales of goods and services for the tobacco
operations decreased from 12.7% to 11.7% due to decreased margins of the U.S.
and Brazilian tobacco operations.
Cost of sales and expenses for the flower operations increased $13,500,432
(4.9%) primarily due to decreased gross margins in the North American
operations and increased personnel and professional expenses in the European
operations. The gross margin for the flower operations decreased from 10.3%
to 9.5% due primarily to costs in the European operations. Corporate expenses
increased $1,807,456 (41.8%) due primarily to increased personnel and
professional expenses.
Other income, Interest and Sundry, increased $1,469,418 (24.6%) for the period
ended March 31, 1995 from the same period in 1994. Interest income increased
$2,124,789 while Sundry decreased $655,371. The increase in Interest Income
is primarily due to interest on the tobacco operations' increased average
short-term investments in Brazil and short-term financing of certain
receivables.
Other deductions, primarily Interest expense, increased $4,245,459 (26.8%) for
the period ended March 31, 1995. Interest expense increased $3,862,140
primarily due to higher average interest rates and, to a lesser extent,
increased average short-term borrowings. Sundry expense increased $383,319.
The effective tax rate increased from 37.0% in 1994 to 57.0% in 1995 based on
estimates of taxable income projected for each year.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The income applicable to minority interest increased $193,839 from the same
period last year.
Equity in net income of the tobacco investee companies increased $466,330
(118.3%) from the same period last year. The increase is primarily due to the
Company's investee in Greece.
Other Information:
Effective April 1, 1995, the Company and Monk-Austin, Inc. were merged into
DIMON Incorporated. See Note 4 of the Notes to Consolidated Financial
Statements.
Financial Condition:
Dibrell's working capital decreased from $123.0 million at June 30, 1994 to
$120.2 million at March 31, 1995. The current ratio increased from 1.4 to 1
at June 30, 1994 to 1.5 to 1 at March 31, 1995. The increase in the current
ratio is due to current liabilities decreasing at a higher percentage than the
percentage increase of current assets. The larger changes in the individual
components of current assets and current liabilities relate to the tobacco
operations. Current assets decreased primarily due to the decrease in
Inventories Tobacco of $84.4 million and the decrease in Notes receivable of
$15.1 million, partially offset by the increase in Cash and cash equivalents
of $33.4 million and the increase in Trade receivables of $16.6 million.
Current liabilities decreased primarily due to the decrease in Notes payable
to banks of $21.5 million and the decrease in Accounts Payable Trade of $18.5
million. The decrease in Inventories Tobacco is primarily due to the Company's
efforts to reduce uncommitted tobacco inventory, which decreased to $49.5
million at the end of the third quarter compared to $100.7 million at June 30,
1994.
Cash increased to $39.9 million at March 31, 1995. Dibrell's cash flow for the
nine months ended March 31, 1995, was primarily affected by tobacco
operations' increased cash from operating activities, partially offset by
decreased cash from its financing activities.
At March 31, 1995, Dibrell had lines of credit of $699 million, including the
long-term credit agreements. At March 31, 1995, the unused lines of credit
amounted to $404 million. Total maximum outstanding short-term borrowings
during the nine months ended March 31, 1995, were $427 million.
Dibrell's management believes that Dibrell's capital resources are adequate to
meet its capital needs through June 30, 1995.
-12-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
To assure long-term liquidity, DIMON Incorporated (see Note 4 of the Notes to
Consolidated Financial Statements) entered into a $250 million Credit
Agreement on March 31, 1995, with 13 banks (the Revolver). This Revolver
replaces Dibrell's Revolving Credit Notes of $130 million and Monk-Austin's
Credit Agreement of $125 million. The interest rates available under the
Revolver depend on the type of advance selected. The primary advance rate is
the agent bank's base lending rate (9% at March 31, 1995). The Revolver is
subject to certain commitment fees and covenants that among other things
require DIMON to maintain minimum working capital and tangible net worth
amounts and require specific liquidity and long-term solvency ratios. The
Revolver's initial term is to March 31, 1997, and, pending approval by the
lenders, may be extended for up to three additional years.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a)(c) A Special Meeting of Stockholders was held on March 31, 1995.
The shareholders were asked to approve the agreement and Plan of
Reorganization, dated as of October 22, 1994, and amended and
restated as of February 22, 1995, among the Company, Monk-Austin, Inc.
and DIMON Incorporated and the related Plan of Merger pursuant to which
the Company will be merged with and into DIMON Incorporated, as
described in the Joint Proxy Statement/Prospectus that accompanies the
Notice of Special Meeting of Shareholders. Proxies were solicited by
the Company's management pursuant to Regulation 14 under the
Securities Exchange Act of 1934; there was no solicitation opposition
to the proposal.
The proposal was approved by the following vote of shareholders:
11,184,639 shares were voted for the approval, 178,504 shares were
voted against the approval, 61,621 shares abstained with 1,067,338
shares not voting.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Computation of Earnings Per Common Share
(b) Reports on Form 8-K
The Registrant filed a Current Report on Form 8-K/A2 dated March 6,
1995, amending the Form 8-K filed on October 25, 1994, and the
Form 8-K/A1 filed on October 28, 1995 for Items 5 and 7, in respect
to the Agreement and Plan of Reorganization.
-13-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DIMON INCORPORATED
Date May 11, 1995 /s/ Jerry L. Parker
Jerry L. Parker
Vice President -
Controller
(Principal Accounting
Officer)
-14-
<PAGE>
<TABLE>
<CAPTION>
DIMON INCORPORATED
EXHIBIT INDEX
-------------
Description Page No.
- --------------------------------------- --------
<S> <C>
11 - Computation of Earnings 16
27 - Financial Data Schedule 17
</TABLE>
-15-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
Dibrell Brothers Incorporated and Subsidiaries
Computation of Earnings Per Common Share
Three and Nine Months Ended March 31, 1995 and 1994
1995 1994 1995 1994
Third Third First Nine First Nine
Quarter Quarter Months Months
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Primary
Earnings
Net Income . . . . . . . . . . . . . $ 4,033,242 $ 2,516,076 $ 6,089,633 $ 9,050,735
Shares
Weighted average number of
common shares outstanding . . . . 13,303,489 13,303,089 13,303,309 13,302,478
Shares applicable to stock options,
net of shares assumed to be
purchased from proceeds at
average market price . . . . . . . 9,747 8,472 9,169 20,597
Average Number of Shares
Outstanding. . . . . . . . . . . . 13,313,236 13,311,561 13,312,478 13,323,075
Earnings per Share
Net Income . . . . . . . . . . . . . $.30 $.19 $.46 $.68
Assuming Full Dilution
Earnings
Net Income . . . . . . . . . . . . . $ 4,033,242 $ 2,516,076 $ 6,089,633 $ 9,050,735
Add after tax interest
expense applicable
to 7 3/4% Convertible
Debentures issued
June 3, 1991 . . . . . . . . . . . 667,902 668,558 2,003,705 2,004,491
Adjusted Net Income. . . . . . . . . $ 4,701,144 $ 3,184,634 $ 8,093,338 $11,055,226
Shares
Weighted average number of
common shares outstanding. . . . . 13,303,489 13,303,089 13,303,309 13,302,478
Shares applicable to stock options,
net of shares assumed to be
purchased from proceeds at
ending market price. . . . . . . . 15,511 8,472 15,511 23,434
Assuming conversion of 7 3/4%
Convertible Debentures
at beginning of period. . . . . . 2,802,034 2,802,034 2,802,034 2,802,034
Average Number of Shares
Outstanding. . . . . . . . . . . . 16,121,034 16,113,595 16,120,854 16,127,946
Earnings Per Share
Net Income as Adjusted . . . . . . . $.29 $.20 $.50 $.69
</TABLE>
- 16-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLAR
<EXCHANGE-RATE> 1
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> MAR-31-1995
<PERIOD-TYPE> 9-MOS
<S> <C>
<CASH> 39,858,325
<SECURITIES> 0
<RECEIVABLES> 128,565,319
<ALLOWANCES> 7,754,348
<INVENTORY> 143,265,000
<CURRENT-ASSETS> 347,868,629
<PP&E> 204,327,754
<DEPRECIATION> (65,675,485)
<TOTAL-ASSETS> 599,418,869
<CURRENT-LIABILITIES> 227,637,960
<BONDS> 212,685,456
<COMMON> 13,303,489
0
0
<OTHER-SE> 115,925,403
<TOTAL-LIABILITY-AND-EQUITY> 599,418,869
<SALES> 812,021,221
<TOTAL-REVENUES> 812,021,221
<CGS> 723,271,618
<TOTAL-COSTS> 723,271,618
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,468,794
<INTEREST-EXPENSE> 19,435,120
<INCOME-PRETAX> 12,793,184
<INCOME-TAX> 7,292,115
<INCOME-CONTINUING> 6,089,633
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,089,633
<EPS-PRIMARY> 0.46
<EPS-DILUTED> 0.46
<PAGE>
</TABLE>
