Page 1 of 24
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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 0-25734; 1-13684
DIMON INCORPORATED
(Exact name of registrant as specified in its
charter)
VIRGINIA 54-1746567
(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 April 30, 1996
NO par value 42,348,609
<PAGE>
DIMON INCORPORATED
This Form 10-Q/A1 is filed to amend Items 1,2 and 6 of the Company's Form 10-Q
for the quarter ended September 30, 1995, initially filed with the Securities
and Exchange Commission on November 14, 1995. The remaining Items have not been
amended and have not been restated in this Form 10-Q/A1.
INDEX
PAGE NO.
Part I. Financial Information:
Consolidated Balance Sheet - September 30, 1995
and June 30, 1995............................................ 3 - 4
Statement of Consolidated Income - Three Months
Ended September 30, 1995 and 1994............................ 5
Statement of Consolidated Cash Flows - Three
Months Ended September 30, 1995 and 1994..................... 6
Notes to Consolidated Financial Statements......................... 7 - 20
Management's Discussion and Analysis of Financial
Condition and Results of Operations..........................21 - 23
Part II. Other Information
Exhibits...........................................................25
-2-
<PAGE>
Item 1. Financial Statements
PART I. FINANCIAL INFORMATION
DIMON Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEET
(Unaudited)
September 30 June 30
1995 1995
(in thousands) ____________ __________
ASSETS
Current assets
Cash and cash equivalents...................... $ 60,730 $ 42,326
Notes receivable............................... 4,133 2,002
Trade receivables, net of allowances........... 131,646 182,750
Inventories:
Tobacco..................................... 775,638 410,431
Other....................................... 13,164 14,179
Advances on purchases of tobacco............... 41,528 44,379
Recoverable income taxes....................... 2,145 2,007
Prepaid expenses............................... 14,243 33,045
------------ ----------
Total current assets 1,043,227 731,119
------------ ----------
Investments and other assets
Equity in net assets of investee companies..... 20,591 22,622
Other investments.............................. 1,765 1,749
Notes receivable............................... 6,087 6,107
Other.......................................... 30,616 28,147
------------ ----------
59,059 58,625
------------ ----------
Intangible assets
Excess of cost over related net assets of
business acquired........................... 25,372 26,167
Production and supply contracts................ 37,530 36,340
Pension asset.................................. 4,219 4,219
----------- ----------
67,121 66,726
----------- ----------
Property, plant, and equipment
Land........................................... 19,021 19,432
Buildings...................................... 136,207 135,808
Machinery and equipment........................ 167,007 169,181
Allowances for depreciation.................... (93,758) (101,372)
----------- ----------
228,477 223,049
----------- ----------
Deferred charges and taxes......................... 13,603 14,089
----------- ----------
$1,411,487 $1,093,608
=========== ==========
-3-
<PAGE>
DIMON Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
September 30 June 30
1995 1995
(in thousands) ____________ ___________
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable to banks......................... $ 381,537 $ 233,736
Accounts payable:
Trade....................................... 106,066 56,559
Officers and employees...................... 19,817 20,714
Other....................................... 10,269 13,173
Advances from customers........................ 185,467 49,224
Accrued expenses............................... 49,168 57,359
Income taxes................................... 2,411 11,199
Long-term debt current......................... 12,223 11,558
---------- --------
Total current liabilities 766,958 453,522
---------- --------
Long-term debt
Revolving Credit Notes and Other............... 287,477 292,528
Convertible Subordinated Debentures............ 54,370 56,370
---------- --------
341,847 348,898
---------- --------
Deferred credits:
Income taxes................................... 19,180 10,731
Compensation................................... 41,125 40,715
---------- --------
60,305 51,446
---------- --------
Minority interest in subsidiaries.................. 518 936
---------- --------
Stockholders' equity
Serial Preferred Stock--without par value:
Sept. 30 Jun. 30
Authorized shares 10,000 10,000
Issued shares -0- -0-
Common Stock--without par value:
Sept. 30 Jun. 30
Authorized shares 125,000 125,000
Issued shares 38,230 38,092..... 81,980 80,030
Retained earnings................................ 158,767 157,880
Equity-currency conversions...................... 1,706 1,565
Additional minimum pension liability............. (1,286) (1,286)
Unrealized gain on investments................... 692 617
--------- --------
241,859 238,806
--------- --------
$1,411,487 $1,093,608
========== ==========
</TABLE>
-4-
<PAGE>
DIMON Incorporated and Subsidiaries
STATEMENT OF CONSOLIDATED INCOME
Three Months Ended September 30, 1995 and 1994
(Unaudited)
September 30 September 30
1995 1994
(in thousands, except per share amounts) __________ __________
Net sales of goods and services..................... $335,349 $271,952
Cost of goods and services sold..................... 284,490 239,910
--------- ---------
50,859 32,042
Selling, administrative and general expenses........ 30,526 28,850
Restructuring costs................................. 1,498 0
--------- ---------
Operating Income............. 18,835 3,192
--------- ---------
Other income:
Interest........................................ 2,950 1,986
Sundry.......................................... 1,393 830
--------- ---------
4,343 2,816
--------- ---------
Other deductions:
Interest........................................ 13,014 9,326
Sundry.......................................... 398 (43)
--------- ---------
13,412 9,283
--------- ---------
Income (loss) before income taxes,
minority interest and equity in net
income of investee companies ................... 9,766 (3,275)
Income taxes (benefit).............................. 3,711 (2,400)
--------- ---------
Income (loss) before minority interest
and equity in net income of investee
companies....................................... 6,055 (875)
Income applicable to minority interest.............. 4 1
Equity in net income (loss) of investee
companies, net of income taxes.................. (23) (646)
--------- ---------
NET INCOME (LOSS)................................... $ 6,028 $ (1,522)
========= =========
Earnings Per Share, primary:
NET INCOME (LOSS)................................... $0.16 $(0.04)
========= =========
Earnings Per Share, assuming full dilution:
NET INCOME.......................................... $0.16 $ *
========= =========
Average number of shares outstanding:
Primary......................................... 38,174 38,068
Assuming full dilution.......................... 42,351 42,279
Cash dividends per share............................ $0.135 $0.09
========= =========
* Computation of earnings per share is anti-dilutive for the first quarter of
fiscal year 1995.
-5-
<PAGE>
DIMON Incorporated and Subsidiaries
STATEMENT OF CONSOLIDATED CASH FLOWS
Three Months Ended September 30, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
September 30 September 30
1995 1994
(in thousands) ___________ ___________
<S> <C> <C>
Operating activities
Net Income (loss)........................................ $ 6,028 $ (1,522)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization......................... 7,678 6,782
Deferred items........................................ (1,319) (194)
Loss (gain) on foreign currency transactions.......... (204) 2,956
Gain on disposition of fixed assets................... (137) (350)
Undistributed earnings of investees................... 23 646
Income applicable to minority interest................ 4 1
Bad debt expense...................................... 301 361
Decrease (increase) in accounts receivable............ 52,579 (4,777)
Increase in inventories and advances on
purchases of tobacco................................ (358,947) (289,784)
Increase in recoverable taxes......................... (138) (357)
Decrease (increase) in prepaid expenses............... 18,733 (3,988)
Increase in accounts payable and accrued
expenses............................................ 37,365 53,831
Increase in advances from customers................... 134,128 79,082
Increase (decrease) in income taxes................... 1,764 (952)
Other................................................. 198 5,103
--------- ----------
Net cash used by operating activities............... (101,944) (153,162)
--------- ----------
Investing activities
Purchase of property and equipment....................... (7,023) (6,787)
Proceeds from sale of property and equipment............. 531 1,222
Payments on notes receivable and
receivable from investees............................. 1,010 415
Issuance of notes receivable ............................ (3,180) (1,081)
Advances for other investments and
other assets.......................................... (1,662) (1,047)
Purchase of subsidiary................................... (5,711) 0
--------- ----------
Net cash used by investing activities............... (16,035) (7,278)
--------- ----------
Financing activities
Repayment of debt........................................ (450,345) (31,431)
Proceeds from debt....................................... 590,342 201,158
Proceeds from sale of stock.............................. 1,950 0
Cash dividends paid to DIMON Incorporated
stockholders.......................................... (5,141) (3,476)
--------- ----------
Net cash provided by financing
activities........................................ 136,806 166,251
--------- ----------
Effect of exchange rate changes on cash.................... (918) (2,074)
--------- ----------
Increase in cash and cash equivalents...................... 17,909 3,737
Increase in cash from purchased subsidiary................. 495 0
Cash and cash equivalents at beginning of year............. 42,326 12,471
--------- ----------
Cash and cash equivalents at end of period........ $ 60,730 $ 16,208
========= ==========
</TABLE>
-6-
<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Primary earnings (loss) per share are computed by dividing earnings
(loss) by the weighted average number of shares outstanding plus any
common stock equivalents during each period. The fully diluted
earnings (loss) 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.
The weighted average number of shares outstanding are further increased
by common stock equivalents on employee stock options. 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.
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) considered necessary for a fair presentation have
been included.
3. On April 1, 1995, Dibrell Brothers, Incorporated (Dibrell) and
Monk-Austin, Inc. (Monk-Austin) merged into DIMON Incorporated. The
merger has been accounted for as a pooling of interests and all prior
consolidated financial statements have been restated to include the
historical results of operations of both Dibrell and Monk-Austin
including the effects of conforming the accounting policies of the two
former entities. Recorded assets and liabilities have been carried
forward at their historical book values.
4. In June, 1995, the Company provided a restructuring reserve of $17.9
million pre-tax related primarily to eliminating duplicative facilities
of tobacco operations and a reduction in the number of employees.
During the quarter ended September 30, 1995, an additional $1.5 million
pre-tax was provided for restructuring the tobacco operations in Brazil
for a reduction in the number of employees. As of September 30, 1995,
payments for the quarter of $2.4 million had been recorded as a
reduction of the restructuring reserves.
5. The results of operations for the three months ended September 30, 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.
-7-
<PAGE>
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, 1995.
7. Certain accounts of the prior periods have been reclassified for
conformity with the financial statements
of the current period.
8. The Company filed a registration statement with the Securities and
Exchange Commission relating to $125 million of Senior Notes due 2006.
The Company expects that the offerings of the Notes will be completed
in May, 1996. DIMON International, Inc. and Florimex Worldwide,
Inc.(collectively, the "Guarantors"), wholly owned subsidiaries of
DIMON Incorporated, have fully and unconditionally guaranteed on a
joint and several basis DIMON Incorporated's obligations to pay
principal, premium and interest relative to the $125,000,000 Senior
Notes due 2006. Management has determined that separate, full financial
statements of the Guarantors would not be material to the investors and
such financial Statements are not provided. Supplemental combining
financial information of the Guarantors is presented below:
-8-
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Income
Three Months Ended September 30, 1995
<TABLE>
<CAPTION>
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------ ----------- -------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Net sales of goods and services $ 12 $215,053 $207,175 $(86,891)b $ 335,349
Cost of goods and services sold (2,269)f 200,521 172,726 (86,488)b 284,490
--------- --------- -------- -------- -----------
2,281 14,532 34,449 (403) 50,859
Selling, administrative and general 3,306 11,912 18,105 (2,797)b,e 30,526
Restructuring 0 0 1,498 0 1,498
--------- -------- -------- -------- -----------
(1,025) 2,620 14,846 2,394 18,835
Other income:
Interest 6,817 2,273 2,597 (8,737)b 2,950
Sundry 17 590 3,180 (2,394)b,e 1,393
--------- -------- -------- --------- -----------
6,834 2,863 5,777 (11,131) 4,343
Other deductions:
Interest 6,639 7,330 7,782 (8,737)b 13,014
Sundry 0 0 398 0 398
--------- -------- -------- -------- -----------
6,639 7,330 8,180 (8,737) 13,412
Income (loss) before income taxes, minority interest and
equity in net income of investee companies (830) (1,847) 12,443 0 9,766
Income taxes (benefit) (315) (702) 4,728 0 3,711
--------- -------- -------- -------- -----------
Income (loss) before income taxes, minority
interest, equity in net income of (loss)
investee companies and extraordinary item (515) (1,145) 7,715 0 6,055
Income applicable to minority interest 0 0 4 0 4
Equity in net income (loss) of investee
companies, net of income taxes 0 114 (137) 0 (23)
Equity in net income of subsidiaries 6,543 7,573 0 (14,116)b 0
--------- -------- -------- -------- -----------
NET INCOME $ 6,028 $ 6,542 $ 7,574 $(14,116) 6,028
========= ======= ========= ======== ===========
</TABLE>
b. Inter-company eliminations.
e. Royalty expense in SG&A and Royalty income in Other Income for
Consolidated Entities.
f. Change in reserves for inter-company profit in ending inventory.
<PAGE>
DIMON Incorporated and Subsidiaries
Supplemental Combining Balance Sheet
September 30, 1995
<TABLE>
<CAPTION>
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------ ------------ -------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 3,555 $ 934 $ 29,635 $ 26,606 a $ 60,730
Notes receivable 35 3,490 608 0 4,133
Trade receivables, net of allowances 157,080 233,527 184,101 (443,062)b 131,646
Inventories:
Tobacco (2,847)c 441,228 337,257 0 775,638
Other 35 2,330 10,799 0 13,164
Advances on purchases of tobacco 293,320 8,951 22,873 (283,616)b 41,528
Recoverable income taxes 0 0 2,145 0 2,145
Prepaid expenses 2,987 785 10,471 0 14,243
---------- ------------ ---------- ------------ -----------
Total current assets 454,165 691,245 597,889 (700,072) 1,043,227
---------- ------------ ---------- ------------ -----------
Investments and other assets
Equity in net assets of investee companies 0 2,927 17,664 0 20,591
Consolidated subsidiaries 267,454 270,094 5,007 (542,555)b 0
Other investments 883 2,925 (2,043) 0 1,765
Notes receivable 81 757 5,249 0 6,087
Other 291 11,379 18,946 0 30,616
---------- ------------ ---------- ----------- ----------
268,709 288,082 44,823 (542,555) 59,059
---------- ------------ ---------- ----------- ----------
Intangible assets
Excess of cost over related net assets
of business acquired 385 13,660 11,327 0 25,372
Production and supply contracts 0 29,530 8,000 0 37,530
Pension asset 3,131 1,088 0 0 4,219
---------- ------------ ---------- ----------- ----------
3,516 44,278 19,327 0 67,121
---------- ------------ ---------- ----------- ----------
Property, plant and equipment
Land 1,770 1,827 15,424 0 19,021
Buildings 1,305 25,117 109,785 0 136,207
Machinery and equipment 5,250 47,087 114,670 0 167,007
Allowances for depreciation (815) (28,597) (64,346) 0 (93,758)
---------- ------------ ---------- ----------- ----------
7,510 45,434 175,533 0 228,477
---------- ------------ ---------- ----------- ----------
Deferred charges and taxes 9,967 3,558 78 0 13,603
========== ============ ========== =========== ==========
Total assets $743,867 $1,072,597 $837,650 $(1,242,627) $1,411,487
========== ============ ========== =========== ==========
</TABLE>
a. To adjust for cash transfers made by DIMON Incorporated to an entity which
reports on an earlier period.
b. Inter-company eliminations.
c. Reserve for inter-company profit in ending inventory.
<PAGE>
DIMON Incorporated and Subsidiaries
Supplemental Combining Balance Sheet
September 30, 1995
<TABLE>
<CAPTION>
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------ ------------ -------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Current Liabilities
Notes payable to banks $145,900 $ - $235,637 $ - $ 381,537
Accounts payable:
Trade 717 606,788 107,306 (608,745)b 106,066
Officers and employees 13,423 164 6,230 0 19,817
Other (402) 644 10,027 0 10,269
Advances from customers 3,915 169,879 99,907 (88,234)b 185,467
Accrued expenses 4,735 8,758 36,533 (858)b 49,168
Income taxes (12,182)d 2,241 12,618 (266)b 2,411
Long-term debt current 4,286 0 7,937 0 12,223
--------- ------------ --------- ------------ -----------
Total current liabilities 160,392 788,474 516,195 (698,103) 766,958
--------- ------------ --------- ------------ -----------
Long-term debt
Revolving Credit Notes and Other 260,286 2,615 24,576 0 287,477
Convertible Subordinated Debentures 54,370 0 0 0 54,370
--------- ------------ --------- ------------ -----------
314,656 2,615 24,576 0 341,847
--------- ------------ --------- ------------ -----------
Deferred Credits
Income taxes 431 173 18,576 0 19,180
Compensation 26,529 7,464 7,132 0 41,125
--------- ------------ --------- ------------ -----------
26,960 7,637 25,708 0 60,305
--------- ------------ --------- ------------ -----------
Minority interest in subsidiaries 0 0 518 0 518
--------- ------------ --------- ------------ -----------
Stockholders' equity
Common stock 81,980 110,709 169,960 (280,669)b 81,980
Retained earnings 158,767 160,596 96,765 (257,361)b 158,767
Equity-currency conversions 1,706 1,874 3,236 (5,110)b 1,706
Unrealized gain on investments 692 692 692 (1,384)b 692
Additional minimum pension liability (1,286) 0 0 0 (1,286)
--------- ------------ --------- ------------ -----------
241,859 273,871 270,653 (544,524)b 241,859
========= ============ ========= ============ ===========
Total liabilities and equity $743,867 $1,072,597 $837,650 $(1,242,627) $1,411,487
========= ============ ========= ============ ===========
</TABLE>
b. Inter-company eliminations.
d. Current deferred tax on reserves for restructuring and unallocated,
estimated tax payments.
<PAGE>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Cash Flows
Three Months Ended September 30, 1995
<TABLE>
<CAPTION>
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------ ---------- -------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Operating activities
Net Income $ 6,028 $ 6,542 $ 7,574 $ (14,116)b $ 6,028
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 525 2,609 4,544 0 7,678
Deferred items 959 90 (2,368) 0 (1,319)
Loss (gain) on foreign currency transactions 0 (30) (174) 0 (204)
Gain on disposition of fixed assets (14) (16) (107) 0 (137)
Undistributed earnings of investees/subsidiaries (6,542) (7,688) 137 14,116 b 23
Income applicable to minority interest 0 0 4 0 4
Bad debt expense 0 0 301 0 301
Decrease (increase) in accounts receivable (6,509) (3,913) (123,769) 186,770 b 52,579
Decrease (increase) in inventories and advances on
purchases of tobacco (82,542) (23,958) (301,482) 49,035 b (358,947)
Decrease in recoverable taxes 0 0 (138) 0 (138)
Decrease (increase) in prepaid expenses 9,415 (131) 9,449 0 18,733
Increase (decrease) in accounts payable
and accrued expenses (5,025) 373,457 67,003 (398,070)b 37,365
Increase (decrease) in advances from customers 36 (337,481) 301,346 170,227 b 134,128
Increase (decrease) in income taxes (1,153) 695 2,488 (266)b 1,764
Other 0 (790) 988 0 198
---------- ----------- ---------- --------- -----------
Net cash provided (used) by operating activities (84,822) 9,386 (34,204) 7,696 (101,944)
---------- ----------- ---------- --------- -----------
Investing activities
Purchase of property and equipment (51) (2,028) (4,944) 0 (7,023)
Proceeds from sale of property and equipment 14 39 478 0 531
Payments on notes receivable and
receivable from investees 26 3 981 0 1,010
Issuance of notes receivable (83) (2,382) (715) 0 (3,180)
Advances for other investments
and other assets 5,120 (5,776) 6,949 (7,955)b (1,662)
Purchase of subsidiary 0 (5,711) 0 0 (5,711)
---------- ----------- ---------- --------- -----------
Net cash provided (used) by investing activities 5,026 (15,855) 2,749 (7,955) (16,035)
---------- ----------- ---------- --------- -----------
</TABLE>
b. Inter-company eliminations
<PAGE>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Cash Flows (Continued)
Three Months Ended September 30, 1995
<TABLE>
<CAPTION>
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------ ---------- -------------- ------------ -------
<S> <C> <C> <C> <C> <C>
Financing activities
Financing activities
Repayment of debt (57,129) (571) (32,433) 0 (90,133)
Proceeds from debt 142,343 0 87,787 0 230,130
Proceeds from sale of stock 1,950 0 0 0 1,950
Cash dividends paid to DIMON Incorporated
stockholders (5,141) 5,600 (5,600) 0 (5,141)
---------- --------- -------- -------- ---------
Net cash provided (used) by financing activities 82,023 5,029 49,754 0 136,805
---------- --------- -------- -------- ---------
Effect of exchange rate changes on cash 0 0 (918) 0 (918)
---------- --------- -------- -------- ---------
Increase (decrease) in cash and cash equivalents 2,227 (1,440) 17,381 (259)b 17,909
Increase(decrease) in cash from purchased subsidiary 0 495 0 0 495
Cash and cash equivalents at beginning of year 1,328 1,879 12,254 26,865 b 42,326
========== ========= ======== ======== =========
Cash and cash equivalents at end of period $ 3,555 $ 934 $ 29,635 $26,606 $ 60,730
========== ========= ======== ======== =========
</TABLE>
b. Inter-company eliminations
<PAGE>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Income
Three Months Ended September 30, 1994
<TABLE>
<CAPTION>
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------ ---------- -------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Net sales of goods and services $ 11 $126,542 $154,098 $(8,699)c $271,952
Cost of goods and services sold 5,222 e 116,375 127,015 (8,703)c 239,909
-------- ---------- --------- --------- ---------
(5,211) 10,167 27,083 4 32,043
Selling, administrative and general 3,881 12,026 13,769 (825)c 28,851
-------- ---------- --------- --------- ---------
(9,092) (1,859) 13,314 829 3,192
Other income:
Interest 4,056 1,940 2,552 (6,561)c 1,987
Sundry 141 576 120 (7)c 830
-------- ---------- --------- --------- ---------
4,197 2,516 2,672 (6,568) 2,817
Other deductions:
Interest 3,366 5,440 7,082 (6,561)c 9,327
Sundry 21 17 (903) 822 c (43)
-------- ---------- ---------- --------- ---------
3,387 5,457 6,179 (5,739) 9,284
Income (loss) before income taxes, minority interest,
equity in net income of investee companies (8,282) (4,800) 9,807 0 (3,275)
Income taxes (benefits) (6,069) (3,519) 7,188 0 (2,400)
-------- ---------- --------- --------- ---------
Income (loss) before minority interest and equity in net
income of investee companies (2,213) (1,281) 2,619 0 (875)
Income applicable to minority interest 0 0 1 0 1
Equity in net income (loss) of investee companies,
net of income taxes (34) 241 (853) 0 (646)
Equity in net income of subsidiaries 725 1,765 0 (2,490)c 0
-------- ---------- --------- --------- ---------
NET INCOME (1,522) 725 1,765 (2,490) (1,522)
======== ========== ========= ========= =========
</TABLE>
c. Inter-company eliminations
e. Change in reserves for inter-company profit in ending inventory.
<PAGE>
DIMON Incorporated and Subsidiaries
Supplemental Combining Balance Sheet
September 30, 1994
<TABLE>
<CAPTION>
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------ ------------ -------------- -------------- ---------
<S> <C> <C> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents $202,156 $ (190,383) a $ (2,286) $ 6,722 b $ 16,209
Notes receivable 15 1,909 15,587 0 17,511
Trade receivables, net of allowances 3,728 118,908 69,715 (24,530)c 167,821
Inventories:
Tobacco (6,883)d 423,548 200,888 0 617,553
Other 0 790 8,640 0 9,430
Advances on purchases of tobacco 38,789 126,255 47,881 (86,225)c 126,700
Recoverable income taxes 0 0 5,104 0 5,104
Prepaid expenses 966 6,829 10,360 0 18,155
---------- ----------- ----------- ----------- -----------
Total current assets 238,771 487,856 355,889 (104,033) 978,483
---------- ----------- ----------- ----------- -----------
Investments and other assets
Equity in net assets of investee companies 0 2,624 31,826 0 34,450
Consolidated subsidiaries 293,040 238,098 5,007 (536,145)c 0
Other investments 13,941 (198) 3,873 0 17,616
Notes receivable 56 225 13,006 0 13,287
Other 433 11,838 (8,477) 0 3,794
---------- ----------- ----------- ----------- -----------
307,470 252,587 45,235 (536,145) 69,147
---------- ----------- ----------- ----------- -----------
Intangible assets
Excess of cost over related net assets of
business acquired 396 1,772 10,079 0 12,247
Production and supply contracts 0 31,510 9,600 0 41,110
Pension asset 2,458 0 0 0 2,458
---------- ----------- ----------- ----------- -----------
2,854 33,282 19,679 0 55,815
---------- ----------- ----------- ----------- -----------
Property, plant and equipment
Land 68 3,201 15,470 0 18,739
Buildings 1,272 28,361 96,917 0 126,550
Machinery and equipment 663 56,696 99,055 0 156,414
Allowances for depreciation (657) (43,026) (45,701) 0 (89,384)
---------- ----------- ----------- ----------- -----------
1,346 45,232 165,741 0 212,319
---------- ----------- ----------- ----------- -----------
Deferred taxes and other deferred charges 7,498 6,893 (560) 0 13,831
---------- ----------- ----------- ----------- -----------
Total assets $ 557,939 $ 825,850 $ 585,984 $(640,178) $ 1,329,595
========== =========== =========== =========== ============
</TABLE>
a. Unrestricted cash balance available in DIMON Incorporated.
b. To adjust for cash transfers made by DIMON Incorporated
to an entity which reports on an earlier period.
c. Inter-company eliminations.
d. Reserve for inter-company profit in ending inventories.
<PAGE>
DIMON Incorporated and Subsidiaries
Supplemental Combining Balance Sheet
September 30, 1994
<TABLE>
<CAPTION>
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------ ------------ -------------- -------------- ---------
<S> <C> <C> <C> <C> <C>
Current Liabilities
Notes payable $ 164,816 $ 72,284 $186,421 $ 6,600 b $430,121
Accounts payable:
Trade 17,453 59,763 80,886 (73,423)c 84,679
Officers and employees 1,372 13,192 2,997 0 17,561
Other 580 20 6,683 0 7,283
Advances from customers 0 270,464 (14,265) (82,587)c 173,612
Accrued expenses 1,443 7,071 24,309 (1,016)c 31,807
Income taxes (13,219)e 202 18,038 0 5,021
Long-term debt current 0 5,124 11,402 0 16,526
---------- ---------- ---------- ----------- ---------
Total current liabilities 172,445 428,120 316,471 (150,426) 766,610
---------- ---------- ---------- ----------- ---------
Long-term debt
Revolving Credit Notes and Other 28,857 128,144 26,569 0 183,570
Convertible Subordinated Debentures 56,475 0 0 0 56,475
---------- ---------- ---------- ----------- ---------
85,332 128,144 26,569 0 240,045
---------- ---------- ---------- ----------- ---------
Deferred Credits
Income taxes 520 (2,083) 11,691 0 10,128
Compensation and other benefits 19,422 6,784 5,229 0 31,435
---------- ---------- ---------- ----------- ---------
19,942 4,701 16,920 0 41,563
---------- ---------- ---------- ----------- ---------
Minority interest in subsidiaries 0 0 1,157 0 1,157
---------- ---------- ---------- ----------- ---------
Stockholders' equity
Common stock 79,861 108,521 119,673 (228,194) 79,861
Retained earnings 198,618 152,403 101,488 (253,891) 198,618
Equity-currency conversions 1,237 1,632 1,378 (3,010) 1,237
Unrealized loss on MES 1,878 2,329 2,328 (4,657) 1,878
Additional minimum pension liability (1,374) 0 0 0 (1,374)
---------- ---------- ---------- ----------- ---------
280,220 264,885 224,867 (489,752) 280,220
---------- ---------- ---------- ----------- ---------
Total liabilities and equity $ 557,939 $825,850 $585,984 $(640,178) $1,329,595
========== ========== ========== =========== =========
</TABLE>
b. To correct for cash transfers made by DIMON Incorporated to an entity which
reports on an earlier period.
c. Inter-company eliminations.
e. Current deferred tax on reserves for unallocated, estimated tax payments.
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Cash Flows
Three Months Ended September 30, 1994
DIMON
(in thousands) Incorporated Guarantors Non-Guarantors Eliminations Total
---------------- ---------- --------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Operating Activities
Net Income (Loss) $ (1,522) $ 725 $ 1,765 $ (2,490) $ (1,522)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
Depreciation and amortization (15) 2,408 4,389 0 6,782
Deferred items (307) (1,418) 1,531 0 (194)
Loss (gain) on foreign currency transactions (56) 14 2,998 0 2,956
Gain on disposition of fixed assets 0 (120) (230) 0 (350)
Undistributed earnings of investees/subsidiaries (691) (2,006) 853 2,490 646
Income applicable to minority interest 0 0 1 0 1
Bad debt expense 64 (30) 327 0 361
Decrease (increase) in accounts receivable 112,349 26,471 (2,458) (141,138) (4,776)
Decrease (increase) in inventories and advances on
purchases of tobacco 13,673 (353,367) 32,610 17,300 (289,784)
Decrease (increase) in recoverable taxes 1,666 0 (2,023) 0 (357)
Decrease (increase) in prepaid expenses (79) (2,472) (1,437) 0 (3,988)
Increase (decrease) in accounts payable
and accrued expenses 9,434 (88,640) 41,828 91,209 53,831
Increase (decrease) in advances from customers (937) 179,600 (87,198) (12,383) 79,082
Increase (decrease) in income taxes (8,309) (1,972) 9,329 0 (952)
Other 0 0 5,103 0 5,103
------------ ----------- ---------- ---------- ---------
Net cash provided (used) by operating activities 125,270 (240,807) 7,388 (45,012) (153,161)
------------ ----------- ---------- ---------- ---------
Investing Activities
Purchase of property and equipment (26) (2,841) (3,920) 0 (6,787)
Proceeds from sale of property and equipment 0 465 757 0 1,222
Payments received on notes receivable and
receivable from investees 4 319 92 0 415
Advances for notes receivable 0 (364) (717) 0 (1,081)
Proceeds from or advances for investees,
other investments and other assets (17,937) (6,101) (22,090) 45,081 (1,047)
------------ ----------- ---------- ---------- ---------
Net cash provided (used) by investing activities $ (17,959) $ (8,522) $(25,878) $ 45,081 $ (7,278)
------------ ----------- ---------- ---------- ---------
c. Intercompany eliminations.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Cash Flows (continued)
Three Months Ended September 30, 1994
DIMON
(in thousands) Incorporated Guarantors Non-Guarantors Eliminations Total
--------------- ---------- --------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Financing Activities
Repayment of debt $ (4,286) $ (617) $ (26,528) $ 0 $(31,431)
Proceeds from debt 96,317 57,683 40,558 6,600 201,158
Cash dividends paid to DIMON Incorporated stockholders (3,476) 0 0 0 (3,476)
----------- ----------- ----------- --------- ----------
Net cash provided (used) by financing activities 88,555 57,066 14,030 6,600 166,251
----------- ----------- ----------- --------- ----------
Effect of exchange rate changes on cash 0 0 (2,074) 0 (2,074)
----------- ----------- ----------- --------- ----------
Increase (decrease) in cash and cash equivalents 195,866 (192,263) (6,534) 6,669 3,738
Cash and cash equivalents at beginning of year 6,290 1,880 4,248 53 12,471
----------- ----------- ----------- --------- ----------
Cash and cash equivalents at end of period $ 202,156 $ (190,383) $ (2,286) $ 6,722 $16,209
=========== =========== =========== ========= ==========
</TABLE>
c. Intercompany eliminations.
<PAGE>
8. (a) Each of the Guarantors, the Company's wholly-owned
subsidiaries, DIMON International, Inc. and Florimex
Worldwide Inc., will fully and unconditionally
guarantee on a joint and several basis the performance
and punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all of the
Company's obligations under the Notes and the related
indenture, including its obligations to pay principal,
premium, if any, and interest with respect to the
Notes. The obligations of each Guarantor will be
limited to the maximum amount which, after giving
effect to all other contingent and fixed liabilities of
such Guarantor and after giving effect to any
collections from or payments made by or on behalf of
any other Guarantor in respect of the obligations of
such other Guarantor under its Guarantee or pursuant to
its contribution obligations under the Indenture, can
be guaranteed by the relevant Guarantor without
resulting in the obligations of such Guarantor under
its Guarantee constituting a fraudulent conveyance or
fraudulent transfer under applicable federal or state
law. Each of the Guarantees will be a guarantee of
payment and not collection. Each Guarantor that makes a
payment or distribution under a Guarantee shall be
entitled to a contribution from each other Guarantor in
an amount pro rata, based on the assets less
liabilities of each Guarantor determined in accordance
with generally accepted accounting principles (GAAP).
The Company will not be restricted from selling or
otherwise disposing of any of the Guarantors other than
DIMON International, Inc. provided that the proceeds of
any such sale are applied as required by the Indenture.
Florimex Worldwide, Inc. is the primary holding and
operating company in the U.S. and represents the lead
company for the flowers segment. The cut flowers
operations consist of buying flowers from sources
throughout the world and transporting them, normally by
air, to operating units for resale to wholesalers and
retailers.
DIMON International, Inc. is the primary holding and
operating company in the U.S. and represents the lead
company in the Tobacco division whose operations
consist primarily of selecting, buying, processing,
packing, shipping, storage and financing tobacco.
(b) DIMON Incorporated and each of the Guarantors has
accounted for their respective subsidiaries on the
equity basis.
(c) Certain reclassifications were made to conform all of the
financial information to the financial presentation on a
consolidated basis. The principal eliminating entries
eliminate investments in subsidiaries and intercompany
balances.
-19-
<PAGE>
(d) Included in the above balance sheets are certain related party
balances among borrower, the guarantors and non-guarantors.
Due to the Company's world-wide operations, related party
activity is included in most balance sheet accounts. The
tables below set forth the significant intercompany balances
for each of the periods presented.
SEPTEMBER 30, 1995
DEBIT(CREDIT)
<TABLE>
<CAPTION>
DIMON Non-
Incorporated Guarantors Guarantors
<S> <C> <C> <C>
Accounts Receivable $ 157,003 $ 180,177 $ 118,701
Advances on Purchases 293,320 0 (4,606)
Accounts Payable (493) (555,099) (53,972)
Advances from Customers (3,915) 0 (87,970)
</TABLE>
SEPTEMBER 30,1994
DEBIT(CREDIT)
<TABLE>
<CAPTION>
DIMON Non-
Incorporated Guarantors Guarantors
<S> <C> <C> <C>
Accounts Receivable $ 3,728 $ 56,711 $ 29,445
Advances on Purchases 1,644 74,385 103,273
Accounts Payable (17,381) (25,325) (40,000)
Advances from Customers 0 (113,132) 32,067
</TABLE>
-20-
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
(in thousands)
RESULTS OF OPERATIONS:
Three Months Ended September 30, 1995 Compared to Three Months Ended September
30, 1994:
Net sales increased $63,397 (23.3%) for the three months ended September 30,
1995 from the same period in 1994. The increase in tobacco sales of $62,217
(31.1%) was primarily due to increased quantities and higher average prices of
foreign grown tobacco sold. Prices and quantities of U.S. grown tobacco sold
increased to a lesser extent. Increased quantities and higher average prices of
foreign grown tobacco accounted for $42,424 and $9,193, respectively, of the
increase, while increased quantities and higher average prices of U.S. tobacco
accounted for $7,143 of the increase. The balance of the increase was due to
increased revenues from services. The foreign tobacco sales increased primarily
in South America, Africa and Europe. The average prices on foreign grown tobacco
increased in virtually all of DIMON's operating markets due to the continuing
reduction in worldwide leaf oversupply and to improving demand. The increase in
Europe was primarily due to sales of the oriental tobacco operations in Greece
and Turkey acquired in fiscal 1995. Flower sales increased $1,180 (1.6%) due
primarily to the effects of applying U.S. dollar exchange rates to European
operations.
Cost of sales and expenses, including a $1,498 charge for restructuring for the
quarter ended September 30, 1995, increased $47,754 (17.8%) from the same period
in 1994. Cost of sales and expenses of the tobacco operations increased $45,685
(23.9%) primarily due to increased sales quantities of foreign grown and U.S.
tobacco. The Company's restructuring of the tobacco operations continued in
Brazil which reduced the number of production workers during the second quarter.
The gross profit for the tobacco operations increased $18,016 (69.5%) due
primarily to increased margins on sales of Brazilian tobacco, the new oriental
tobacco operations and write downs in fiscal 1995 on inventories of Turkish
tobacco. The gross margin for the tobacco operations increased from 13.0% to
16.8% due primarily to increased gross margins in Brazil and Turkey. Cost of
sales and expenses for the flower operations increased $214 (.3%). The gross
margin for the flower operations increased $800 (13.1%) and the gross margin
percentage for the flower operations increased from 8.5% to 9.4%, both due
primarily to increased gross margins in the North America operations. Corporate
expenses increased $357 (12.6%).
Other income, Interest and Sundry, increased $1,527 (54.2%) for the quarter
ended September 30, 1995 from the same period in 1994. Interest income increased
$964 while Sundry income increased $563 from the same period in 1994. The
increase in Interest income is primarily due to interest charged on receivables
in the tobacco operations. The increase in Sundry income is primarily due to
dividends received on cost investments in the South American tobacco operations.
-21-
<PAGE>
Other deductions, primarily Interest expense, increased $4,129 (44.5%) for the
quarter ended September 30, 1995. Interest expense increased $3,688 primarily
due to higher average borrowings related to increased levels of tobacco
operations.
The effective income tax rate decreased from a 73.3% tax benefit in fiscal year
1995 to 38.0% in fiscal year 1996 based on estimates of taxable income projected
for each year. The effective tax benefit in 1995 was due to non-taxable
operating transaction adjustments related to the translation of foreign
financial statements.
Equity in net income of the tobacco investee companies decreased $623 (96.4%)
from the same period last year. The decrease is due to decreased net income on
operations in Brazil and Malawi, offset partially by increased income on
operations in Greece. Dibrell's interest in an investee in Malawi was sold
during late fiscal 1995.
FINANCIAL CONDITION:
The purchasing and processing activities of the Company's tobacco business are
seasonal. The Company's need for capital fluctuates accordingly and, at any of
several seasonal peaks, the Company's outstanding indebtedness may be
significantly greater or lesser than at year end. The Company historically has
needed capital in excess of cash flow from operations to finance inventory and
accounts receivable and, more recently, to finance acquisitions of foreign
acquisitions of foreign tobacco operations and flower operations. The Company
also prefinances tobacco crops in certain foreign countries by making cash
advances to farmers prior to and during the growing season.
DIMON's working capital increased from $277,597 at June 30, 1995 to $276,269 at
September 30, 1995. The current ratio of 1.6 to 1 at June 30, 1995 decreased to
1.4 to 1 at September 30, 1995 as current liabilities increased at a higher
percentage than the percentage increase of current assets. The larger increases
in the individual components of current assets and current liabilities reflect
an increased level of tobacco operations. Current assets increased primarily due
to the increase in Tobacco inventories of $365,207, partially offset by the
decrease in Trade receivables of $51,104. Current liabilities increased
primarily due to the increases in Advances from customers of $136,243, Notes
payable to banks of $147,801 and Accounts payable of $49,507. Tobacco
inventories, Notes payable to banks and Advances from customers increased due
primarily to the seasonal increase in the operations in the U.S. and Africa, and
the acquisition of the oriental operations in late fiscal 1995, offset partially
by the decrease in operations in Brazil.
Cash flows used in operating activities decreased $51,218 (66.5% to $101,944 for
the three months ended September 30, 1995 over the same period last year, due
primarily to (i) the increase in accounts receivable as a result of the increase
in sales and
-22-
<PAGE>
advances from customers offset partially by decreased accounts payable and
accrued expenses and (ii) the increase in inventory as a result of increased
purchases. Cash flows used in investing activities increased $8,757 (220.3%)
from $7,278 primarily resulting from the purchase of a subsidiary. Cash flows
provided by financing activities decreased $29,445 (82.3%) from $166,251 due
primarily to the increased proceeds from debt.
At September 30, 1995, DIMON had lines of credit of $1,006,107, excluding the
long-term credit agreements. At September 30, 1995, the unused lines of credit
amounted to $457,698. Total maximum outstanding borrowings during the quarter
ended September 30, 1995, were $456,276.
DIMON's management believes that DIMON's capital resources are adequate to meet
its capital needs through June 30, 1996.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - 11.1 - Computation of Earnings (Loss) Per Common
Share (Previously Filed)
27 - Financial Data Schedule
(b) Reports on Form 8-K - None
-23-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
DIMON INCORPORATED
/s/ Jerry L. Parker
Date May 8, 1996 _____________________
Jerry L. Parker
Vice President -
Controller
(Principal Accounting
Officer)
-24-
EXHIBIT INDEX
Exhibit Page No.
11.1 Computation of Earnings (Loss) Per Common
Share (Previously Filed) --
27 Financial Data Schedule 26
-25-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 60,730
<SECURITIES> 0
<RECEIVABLES> 142,778
<ALLOWANCES> 6,999
<INVENTORY> 778,802
<CURRENT-ASSETS> 1,043,227
<PP&E> 322,235
<DEPRECIATION> (93,758)
<TOTAL-ASSETS> 1,411,487
<CURRENT-LIABILITIES> 766,958
<BONDS> 341,847
81,980
0
<COMMON> 0
<OTHER-SE> 159,879
<TOTAL-LIABILITY-AND-EQUITY> 1,411,487
<SALES> 335,349
<TOTAL-REVENUES> 335,349
<CGS> 284,490
<TOTAL-COSTS> 284,490
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 301
<INTEREST-EXPENSE> 13,014
<INCOME-PRETAX> 9,766
<INCOME-TAX> 3,711
<INCOME-CONTINUING> 6,028
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,028
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
