<PAGE>
Page 1 of 35
Page 29 - 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, 1997
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 offices) Zip Code)
Registrant's telephone number, including area code (804) 792-7511
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 7, 1997
NO par value 44,211,969
<PAGE>
<TABLE>
<CAPTION>
DIMON INCORPORATED
INDEX
PAGE NO.
<C>
<S>
Part I. Financial Information:
Consolidated Balance Sheet - March 31, 1997
and June 30, 1996. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-4
Statement of Consolidated Income - Three Months and
Nine Months Ended March 31, 1997 and 1996. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Statement of Consolidated Cash Flows - Nine
Months Ended March 31, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-23
Management's Discussion and Analysis
of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . .24-26
Part II. Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27-28
</TABLE>
- -2-
<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEET
March 31
1997 June 30
(Unaudited) 1996
(in thousands) ____________ __________
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents. . . . . . . . . . . . . . . $ 35,575 $ 53,820
Notes receivable . . . . . . . . . . . . . . . . . . . 2,679 1,127
Trade receivables, net of allowances . . . . . . . . . 213,461 190,898
Inventories:
Tobacco . . . . . . . . . . . . . . . . . . . . . . 310,674 315,476
Other . . . . . . . . . . . . . . . . . . . . . . . 25,824 18,025
Advances on purchases of tobacco . . . . . . . . . . . 98,813 74,709
Recoverable income taxes . . . . . . . . . . . . . . . 2,392 1,563
Prepaid expenses and other assets. . . . . . . . . . . 17,732 13,157
---------------- ----------------
Total current assets . . . . . . . . . . . 707,150 668,775
---------------- ----------------
Investments and other assets
Equity in net assets of investee companies . . . . . . 8,378 8,268
Other investments. . . . . . . . . . . . . . . . . . . 2,241 2,987
Notes receivable . . . . . . . . . . . . . . . . . . . 8,468 4,078
Other. . . . . . . . . . . . . . . . . . . . . . . . . 28,600 19,151
---------------- ----------------
47,687 34,484
---------------- ----------------
Intangible assets
Excess of cost over related net assets
of businesses acquired. . . . . . . . . . . . . . . 21,677 23,121
Production and supply contracts. . . . . . . . . . . . 29,675 33,325
Pension asset. . . . . . . . . . . . . . . . . . . . . 4,130 4,130
---------------- ----------------
55,482 60,576
---------------- ----------------
Property, plant and equipment
Land . . . . . . . . . . . . . . . . . . . . . . . . . 18,907 19,223
Buildings. . . . . . . . . . . . . . . . . . . . . . . 143,133 143,741
Machinery and equipment. . . . . . . . . . . . . . . . 177,850 160,237
Allowances for depreciation (deduction). . . . . . . . (112,296) (86,426)
---------------- ----------------
227,594 236,775
---------------- ----------------
Deferred taxes and other deferred charges. . . . . . . . . 21,648 19,404
---------------- ----------------
$1,059,561 $1,020,014
================ ================
</TABLE>
- -3-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEET
March 31
1997 June 30
(Unaudited) 1996
(in thousands) ____________ __________
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable to banks . . . . . . . . . . . . . . . . $ 52,717 $ -
Accounts payable:
Trade . . . . . . . . . . . . . . . . . . . . . . . 57,521 65,970
Officers and employees. . . . . . . . . . . . . . . 9,226 24,074
Other . . . . . . . . . . . . . . . . . . . . . . . 38,884 14,462
Advances from customers. . . . . . . . . . . . . . . . 34,035 74,153
Accrued expenses . . . . . . . . . . . . . . . . . . . 29,254 51,797
Income taxes . . . . . . . . . . . . . . . . . . . . . 22,714 5,359
Long-term debt current . . . . . . . . . . . . . . . . 9,320 10,618
------------------- -------------------
Total current liabilities 253,671 246,433
------------------- -------------------
Long-term debt
Revolving Credit Notes and Other . . . . . . . . . . . 266,436 265,871
Senior Notes . . . . . . . . . . . . . . . . . . . . . 125,000 125,000
------------------- -----------------
391,436 390,871
------------------- -----------------
Deferred credits:
Income taxes . . . . . . . . . . . . . . . . . . . . . 22,566 21,496
Compensation and other benefits. . . . . . . . . . . . 43,258 44,465
------------------ -----------------
65,824 65,961
------------------- -----------------
Minority interest in subsidiaries. . . . . . . . . . . . . 525 901
------------------- -----------------
Commitments and contingencies. . . . . . . . . . . . . . . - -
------------------- -----------------
Stockholders' equity
Serial Preferred Stock:
<S> <C> <C> <C> <C>
Mar. 31 Jun. 30
Authorized shares . 10,000 10,000
Issued shares . . . - -. . . . . . . - -
Common Stock--no par value:
Mar. 31 Jun. 30
Authorized shares .125,000 125,000
Issued shares . . . 42,478 42,366. . . . . . . 138,762 136,959
Retained earnings. . . . . . . . . . . . . . . . . . . 210,127 177,419
Equity-currency conversions. . . . . . . . . . . . . . 588 2,842
Additional minimum pension liability . . . . . . . . . (1,372) (1,372)
------------------- -----------------
348,105 315,848
------------------- -----------------
$ 1,059,561 $1,020,014
=================== =================
</TABLE>
- -4-
<PAGE>
<TABLE>
<CAPTION> DIMON Incorporated and Subsidiaries
STATEMENT OF CONSOLIDATED INCOME
Three Months and Nine Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996 1997 1996
Third Third First Nine First Nine
(in thousands, except per share amounts) Quarter Quarter Months Months
------------ ------------ ---------- -----------
<S> <C> <C> <C> <C>
Sales and other operating revenues . . . . . . . .$668,146 $577,092 $1,850,221 $1,680,202
Cost of goods and services sold. . . . . . . . . 598,652 515,897 1,645,054 1,481,743
------------ ------------ -----------------------------
69,494 61,195 205,167 198,459
Selling, administrative and general expenses . . . 28,659 36,056 91,207 102,736
Restructuring and merger related costs . . . . . . - 2,750 - 5,568
------------ ------------ -----------------------------
Operating Income . . . . . . . . . . . . . . . . . 40,835 22,389 113,960 90,155
Interest expense . . . . . . . . . . . . . . . . . 9,065 10,976 30,614 38,036
------------ ------------ -----------------------------
Income before income taxes, minority
interest and equity in net income
(loss) of investee companies. . . . . . . . . . 31,770 11,413 83,346 52,119
Income taxes . . . . . . . . . . . . . . . . . . . 12,665 4,565 32,780 20,847
------------ ------------ --------------- -------------
Income before minority interest
and equity in net income (loss) of
investee companies . . . . . . . . . . . . . . . 19,105 6,848 50,566 31,272
Income applicable to minority interest . . . . . . 63 114 114 242
Equity in net income (loss) of investee
companies, net of income taxes. . . . . . . . . (225) (460) 691 (290)
------------ ----------- --------------- -------------
Income before extraordinary item . . . . . . . . . 18,817 6,274 51,143 30,740
Extraordinary item:
Partial recovery of a previous extraordinary
trade receivable write-off (net of
applicable income tax expense of $870). . . . . - - - 1,400
------------ ------------ -------------- -----------
NET INCOME . . . . . . . . . . . . . . . . . . . .$18,817 $ 6,274 $ 51,143 $ 32,140
============ ============ ============== ===========
Earnings Per Share, primary
Income before extraordinary item. . . . . . . . $.44 $.16 $1.20 $.79
Extraordinary item. . . . . . . . . . . . . . . .00 .00 .00 .04
---- ---- ------- ----
Net Income. . . . . . . . . . . . . . . . . . . $.44 $.16 $1.20 $.83
==== ==== ======= ====
Earnings Per Share, assuming full dilution
Income before extraordinary item. . . . . . . . $.44 $.16 $1.19 $.77
Extraordinary item. . . . . . . . . . . . . . . .00 .00 .00 .03
---- ---- ------- ----
Net Income. . . . . . . . . . . . . . . . . . . $.44 $.16 $1.19 $.80
==== ==== ======= ====
Average number of shares outstanding:
Primary . . . . . . . . . . . . . . . . . . . . 42,897 39,767 42,692 38,739
Assuming full dilution. . . . . . . . . . . . . 42,897 42,479 42,853 42,467
Cash dividends per share . . . . . . . . . . . . . $.15 $.135 $.435 $.405
===== ===== ===== =====
</TABLE>
- -5-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
STATEMENT OF CONSOLIDATED CASH FLOWS
Nine Months Ended March 31, 1997 and 1996
(Unaudited)
March 31 March 31
1997 1996
(in thousands) ____________ __________
<S> <C> <C>
Operating activities
Net Income . . . . . . . . . . . . . . . . . . . . . . $ 51,143 $ 32,140
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization . . . . . . . . . . . 24,462 24,234
Deferred items. . . . . . . . . . . . . . . . . . . (2,504) 1,193
Loss (gain) on foreign currency transactions. . . . 22 (73)
Gain on disposition of fixed assets . . . . . . . . (2,925) (1,385)
Gain on sale of investee. . . . . . . . . . . . . . - (3,751)
Gain on sale of investment. . . . . . . . . . . . . - (1,090)
Undistributed (earnings) loss of investees. . . . . (691) 290
Dividends received from investees . . . . . . . . . - 289
Income applicable to minority interest. . . . . . . 113 242
Bad debt expense. . . . . . . . . . . . . . . . . . 808 1,078
Increase in accounts receivable . . . . . . . . . . (28,292) (13,994)
Decrease (increase) in inventories and advances on
purchases of tobacco. . . . . . . . . . . . . . . (32,600) 31,102
Decrease (increase) in recoverable taxes. . . . . . (933) 103
Decrease (increase) in prepaid expenses . . . . . . (4,995) 12,965
Increase (decrease) in accounts payable
and accrued expenses. . . . . . . . . . . . . . . (10,594) 34,599
Increase (decrease) in advances from customers. . . (40,551) 26,908
Increase in income taxes. . . . . . . . . . . . . . 17,565 1,590
Other . . . . . . . . . . . . . . . . . . . . . . . 37 92
------------ -----------
Net cash provided (used) by operating
activities. . . . . . . . . . . . . . . . . . . . (29,935) 146,532
------------ -----------
Investing activities
Purchase of property and equipment . . . . . . . . . . (21,082) (20,609)
Proceeds from sale of property and equipment . . . . . 7,429 3,273
Payments received on notes receivable
and receivable from investees . . . . . . . . . . . 1,357 1,380
Advances for notes receivable. . . . . . . . . . . . . (4,106) (7,892)
Proceeds from other investments and other assets . . . 2,165 20,935
Prepaid purchase cost - Intabex. . . . . . . . . . . . (14,939) -
Purchase of subsidiary . . . . . . . . . . . . . . . . - (6,543)
----------- ------------
Net cash used by investing
activities. . . . . . . . . . . . . . . . . . . . (29,176) (9,456)
----------- ------------
Financing activities
Repayment of debt. . . . . . . . . . . . . . . . . . . (423,553) (218,821)
Proceeds from debt . . . . . . . . . . . . . . . . . . 481,375 67,238
Proceeds from sale of common stock . . . . . . . . . . 1,804 3,287
Cash dividends paid to DIMON Incorporated
stockholders. . . . . . . . . . . . . . . . . . . . (18,435) (15,969)
----------- ------------
Net cash provided (used) by financing activities . . . 41,191 (164,265)
----------- ------------
Effect of exchange rate changes on cash. . . . . . . . . . (325) (2,989)
----------- ------------
Decrease in cash and cash equivalents. . . . . . . . . . . (18,245) (30,178)
Cash and cash equivalents at beginning of year . . . . . . 53,820 42,326
----------- ------------
Cash and cash equivalents at end of period. . . . $ 35,575 $ 12,148
============ ============
</TABLE>
- -6-
<PAGE>
DIMON 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 outstanding December 31, 1995, were converted during the
quarter ended March 31, 1996, into Common Stock at the beginning of
the reporting periods thereby increasing the weighted average number
of shares considered outstanding during the periods. Also, all
interest expense on the debentures for the periods is added to pre-
tax income and the hypothetical additional income tax expense is
deducted. The weighted average number of shares outstanding is
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) 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. In
connection with the merger, the Company incurred legal, accounting
and financial consultants costs of $8.1 million and commenced
various activities to restructure its worldwide operations. 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 six months ended December 31, 1995, an
additional $2.8 million, pre-tax, was provided for restructuring the
tobacco operations primarily in Brazil for a reduction in the number
of employees. Other provisions subsequent to December 31, 1995
increased the 1996 fiscal year restructuring provision to $15.4
million which was primarily for additional severance costs. During
the year ended June 30, 1996, the Company severed a total of 367
employees in connection with restructuring. The severed employees
were primarily in the tobacco division and worked in various
departments throughout the Company. At June 30, 1996, the remaining
cash outlays associated with employee separations were expected to
total $15.2 million, of which $10.8 million will be expended in
1997. Remaining amounts relate primarily to the pension plan charge
and other deferred compensation, which will be made as required for
funding appropriate pension and other payments in future years. No
additional restructuring charges are anticipated.
During the nine months ended March 31, 1997, the Company paid out
$8.8 million, principally for employee separations.
4. On February 9, 1996, the Company called for redemption on March 11,
1996, all of the $54.3 million outstanding Convertible Subordinated
Debentures. As of March 4, 1996, holders of Debentures had
converted 99.85% of the Debentures into 4,035,969 shares of the
Company's common stock. The remaining Debentures were redeemed on
March 11, 1996, for $89,188. The Company funded the redemption
price for these Debentures from working capital. Pro forma primary
earnings per share as if the conversion had taken place at the
beginning of the period would have been $.16 and $.79 for the three
and nine months ended March 31, 1996, equal to the fully diluted
amounts as disclosed in the statement of consolidated income.
- -7-
<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. In the fourth quarter of fiscal 1996 the Company reclassified Other
income into Sales and other operating revenues. The Company also
reclassified Sundry deductions into Cost of goods sold. Both Other
income and Sundry deductions are not material and the
reclassification does not affect Net income. Prior year accounts
have been reclassified for conformity within the financial
statements.
6. The results of operations for the three months and nine months ended
March 31, 1997 and 1996 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. 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, 1996.
7. On April 1, 1997, the Company acquired 100% of the shares of Intabex
Worldwide S.A. ("Intabex") and certain tobacco related assets in
Zimbabwe. Intabex is a privately-owned Luxembourg holding company
with coordination and service offices in Wokingham, England, near
London. It owns and operates leaf tobacco buying, processing and
exporting operations in principal tobacco markets around the world
including the United States, Brazil, Argentina, Malawi, Italy and
Thailand. Additionally, through an affiliated company in Zimbabwe
whose tobacco interests DIMON is acquiring separately, Intabex is a
major supplier of Zimbabwean and other African grown tobacco to the
cigarette industry. An Intabex subsidiary, Compania de Filipinas
(CdF), is one of the two major suppliers of premium cigar leaf and
other dark air-cured tobaccos to the resurgent cigar industry in the
United States and Europe.
The $264.19 million aggregate purchase price for Intabex, the
Zimbabwe assets and other rights acquired consisted of 1.70 million
shares of DIMON common stock, $140 million in 10-year, 6.25 percent
subordinated debentures convertible into 4.866 million DIMON shares
at $28.77 per share, and $86.12 million in cash. The purchase
price is subject to adjustment to the extent that the consolidated
net worth of Intabex in its March 31, 1997 balance sheet, calculated
in accordance with U.S. GAAP, supplemented by specified accounting
principals, is less than $142 million. Any such adjustment is
repayable in immediately available funds together with interest
accrued from April 1, 1997.
Intabex's shareholders, Folium Inc., Tabacalera, S.A. and Leaf
Management Investments Ltd., have agreed to indemnify DIMON against
certain liabilities in connection with the acquisition of Intabex,
subject to a maximum of $90 million. DIMON may set-off any such
liabilities against $90 million of the debentures held by Folium and
Tabacalera. The amount of debentures subject to set-off declines in
stages, with $15 million subject to set-off after October 1, 1998
through July 31, 1999, and $10 million subject to set-off from
August 1, 1999, through April 1, 2000, subject to extension with
respect to outstanding claims. A DIMON subsidiary in Zimbabwe is
entitled to similar indemnification and set-off rights in connection
with the Zimbabwe tobacco assets purchased, subject to a maximum of
$12 million.
DIMON has granted Folium and Tabacalera, formerly Intabex's largest
shareholders, the right to require DIMON to register the common
stock issued in connection with the acquisition of Intabex or upon
conversion of the debentures and the debentures themselves. The
demand registration rights may be exercised not more than twice by
each of Folium and Tabacalera and may not be exercised before April
1, 1998, or after March 31, 2001, subject to extension if
registration is deferred by DIMON in certain cases. Prior to April
1, 1998, the DIMON shares and debentures will be "restricted" and
transferable only pursuant to any applicable exemption from
registration pursuant to the Securities Act of 1933.
- -8-
<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Also as part of the transaction, Anthony C.B. Taberer, the Chairman
of Intabex, joined DIMON's Board of Directors and became non-
executive Chairman of Intabex. Mr. Taberer will serve as a
consultant to a trading subsidiary of Intabex under an agreement
with an initial term expiring in October 2000. Folium has executed
Non-Competition Agreements providing that it will not compete in the
non-U.S. tobacco business through March 2002. Mr. Taberer also has
agreed to be subject to these agreements.
The Company expects to allocate the purchase price to the various
assets acquired and liabilities assumed based on the March 31, 1997
Intabex financial statements and include Intabex's June 30, 1997
accounts in the Consolidated Balance Sheet and in the Consolidated
Statement of Income for the three months ended June 30, 1997. At
March 31, 1997, the Company had advanced $14.9 million of the
purchase price which is included in Other Assets in the Consolidated
Balance Sheet.
As Intabex was not required to keep historical cost and translation
information in conformity with U.S. Generally Accepted Accounting
Principles, financial information is neither readily nor practically
available for Intabex for quarterly periods prior to the
acquisition. Therefore, it is not possible to provide supplemental
pro forma information on the results of the Company's consolidated
operations as if these acquisitions took place at the beginning of
the current or preceding fiscal years. Net sales and net income for
the twelve-month periods ending March 31, 1996, 1995 and 1994 were
(in millions):
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Net sales $566.1 $369.7 $310.7
Net income 10.3 6.8 8.1
</TABLE>
8. On May 29, 1996, the Company issued $125 million in 8 7/8% Senior
Notes (the "Notes") due 2006. The Notes are general unsecured
obligations of the Company and rank equally in right of payment with
all other unsubordinated indebtedness. DIMON International, Inc.
and Florimex Worldwide, Inc.(collectively, the "Guarantors"), wholly
owned subsidiaries of the Company, have fully and unconditionally
guaranteed on a joint and several basis the Company's obligations to
pay principal, premium and interest relative to the Notes.
Management has determined that separate, full financial statements
of the Guarantors would not be material to investors and such
financial statements are not provided. Supplemental combining
financial information of the Guarantors is presented below:
- -9-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Balance Sheet
March 31, 1997
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents $ (286)$ (928) $ 31,412 $ 5,377 a $ 35,575
Notes receivable - 417 10,290 (8,028) b 2,679
Trade receivables, net of
allowances 13,330 124,084 230,928 (154,881)b 213,461
Inventories:
Tobacco - 61,716 256,045 (7,087)b 310,674
Other 71 1,976 23,777 - 25,824
Advances on purchases of tobacco 142,996 101,518 59,656 (205,357)b 98,813
Recoverable income taxes - - 2,392 - 2,392
Prepaid expenses and other assets 2,512 2,296 12,924 - 17,732
------------ ------------ --------------------------- --------------
Total current assets 158,623 291,079 627,424 (369,976) 707,150
------------- ------------ ------------------------------------------
Investments and other assets
Equity in net assets of investee
companies - 2,038 6,340 - 8,378
Consolidated subsidiaries 368,476 369,837 63,188 (801,501)b -
Other investments 1 2,117 5,130 (5,007)b 2,241
Notes receivable - 676 7,792 - 8,468
Other 15,078 2,874 10,648 - 28,600
------------------------- --------------------------------------------
383,555 377,542 93,098 (806,508) 47,687
-----------------------------------------------------------------------
Intangible assets
Excess of cost over related net assets
of business acquired 366 10,771 10,540 - 21,677
Production and supply contracts - 22,411 7,264 - 29,675
Pension asset 4,130 - - - 4,130
------------ ------------------------------------------ -------------
4,496 33,182 17,804 - 55,482
---------------------------------------------------------------------
Property, plant and equipment
Land 1,771 1,816 15,320 - 18,907
Buildings 4,543 25,495 113,095 - 143,133
Machinery and equipment 5,163 54,541 118,146 - 177,850
Allowances for depreciation (5,573) (31,688) (75,035) - (112,296)
------------ ------------ ---------------------------------------------
5,904 50,164 171,526 - 227,594
------------ ---------------------------------------------------------
Deferred taxes and
other deferred charges 21,521 - 127 - 21,648
------------ ----------- --------- ---------- -----------
Total assets $574,099 $751,967 $909,979 $(1,176,484) $1,059,561
======== ======== ======== ========== ===========
a. To correct for cash transfers made by DIMON Incorporated to an entity which reports on an earlier period.
b. Inter-company eliminations.
</TABLE>
- -10-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Balance Sheet
March 31, 1997
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Current Liabilities
Notes payable to banks $ - $ 11,325 $248,184 $ (206,792) $52,717
Accounts payable:
Trade 197 292,927 61,086 (296,689)b 57,521
Officers and employees 3,892 220 5,114 - 9,226
Other 3,184 2,999 35,227 (2,526)b 38,884
Advances from customers (1,215) 24,194 61,034 (49,978)b 34,035
Accrued expenses 4,029 4,686 20,539 - 29,254
Income taxes (12,446)c 8,102 27,058 - 22,714
Long-term debt current 4,286 - 6,488 (1,454)b 9,320
------------------------------------------------------------------------
Total current liabilities 1,927 344,453 464,730 (557,439) 253,671
------------------------------------------------------------------------
Long-term debt
Revolving Credit Notes and Other 61,229 - 19,442 185,765 b 266,436
Senior Notes 125,000 - - - 125,000
-------------------------------------------------------------------------
186,229 - 19,442 185,765 391,436
-------------------------------------------------------------------------
Deferred Credits
Income taxes 6,197 (6,571) 22,940 - 22,566
Compensation and other benefits 31,641 5,102 6,515 - 43,258
------------------------------------------------------------------------
37,838 (1,469) 29,455 - 65,824
-------------------------------------------------------------------------
Minority interest in subsidiaries - - 525 - 525
-------------------------------------------------------------------------
Stockholders' equity
Common stock 138,762 144,690 200,421 (345,111)b 138,762
Retained earnings 210,127 261,450 192,551 (454,001)b 210,127
Equity-currency conversions 588 2,843 2,855 (5,698)b 588
Additional minimum pension liability (1,372) - - - (1,372)
------------------------------------------------------------------------
348,105 408,983 395,827 (804,810) 348,105
------------------------------------------------------------------------
Total liabilities and equity $574,099 $751,967 $909,979 $(1,176,484) $1,059,561
======== ======== ======== ============ ===========
b. Inter-company eliminations.
c. Current deferred tax on reserves for restructuring and unallocated, estimated tax payments.
- -11-
<PAGE>
</TABLE>
<TABLE>
<CAPTION> DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Income
Three Months Ended March 31, 1997
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Sales and other operating revenues $ 3,797 $ 481,118 $ 273,444 $ (90,213)a $668,146
Cost of goods and services sold - 451,958 239,358 (92,664)a 598,652
-------------------------- ------------- --------------- -------------
3,797 29,160 34,086 2,451 69,494
Selling, administrative and
general expenses 2,097 13,576 5,504 7,482 a,b 28,659
------------------------- ------------ --------------- -------------
Operating income 1,700 15,584 28,582 (5,031) 40,835
Interest Expense 4,372 4,386 5,338 (5,031)a 9,065
------------------------- ------------ --------------- -------------
Income (loss) before income taxes,
minority interest and equity in
net income (loss) of
investee companies (2,672) 11,198 23,244 - 31,770
Income taxes (benefits) (409) 4,445 8,629 - 12,665
-------------------------- ------------- --------------- ------------
Income (loss) before minority interest,
equity in net income (loss) of
investee companies (2,263) 6,753 14,615 - 19,105
Income applicable to minority interest - - 63 - 63
Equity in net income (loss) of investee
companies, net of income taxes - (123) (102) - (225)
Equity in net income of subsidiaries 21,080 14,450 - (35,530) a -
------------ ------------ ------------ --------------- ------------
NET INCOME $18,817 $ 21,080 $ 14,450 $(35,530) $ 18,817
============ ============ ============ =============== ============
a. Inter-company eliminations.
b Royalty expense in SG&A and Royalty income in Sales and other operating revenues for Consolidated Entities.
</TABLE>
- -12-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Income
Nine Months Ended March 31, 1997
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Sales and other operating revenues $12,624 $1,288,350 $920,688 $(371,441)a $1,850,221
Cost of goods and services sold 47 1,208,620 783,839 (347,452)a 1,645,054
-------------------------- -------------------------------------------
12,577 79,730 136,849 (23,989) 205,167
Selling, administrative and
general expenses 8,753 47,613 41,834 (6,993)a,b 91,207
------------------------- ------------------------------------------
Operating income 3,824 32,117 95,015 (16,996) 113,960
Interest Expense 14,248 14,259 19,103 (16,996)a 30,614
------------------------- ------------------------------------------
Income (loss) before income taxes,
minority interest and equity in
net income of
investee companies (10,424) 17,858 75,912 - 83,346
Income taxes (benefits) (4,099) 7,023 29,856 - 32,780
-------------------------- ------------------------------ ------------
Income (loss) before minority interest,
equity in net income of investee
companies (6,325) 10,835 46,056 - 50,566
Income applicable to minority interest - - 114 - 114
Equity in net income of investee
companies, net of income taxes - 480 211 - 691
Equity in net income of subsidiaries 57,468 46,153 - (103,621)a -
------------ ------------ ------------ ------------ -------------
NET INCOME (LOSS) $51,143 $ 57,468 $ 46,153 $(103,621) $ 51,143
======== ============= ============ ============ =============
a. Inter-company eliminations.
b Royalty expense in SG&A and Royalty income in Sales and other operating revenues for Consolidated Entities.
- -13-
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Cash Flows
Nine Months Ended March 31, 1997
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Operating activities
Net Income $51,143 $57,468 $46,153 $(103,621)a $51,143
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,895 8,352 14,215 - 24,462
Deferred items 1,003 (3,839) 332 - (2,504)
Gain on foreign currency transactions - 83 (61) - 22
Loss (gain) on disposition of
fixed assets 11 (1,649) (1,287) - (2,925)
Undistributed earnings of
investees/subsidiaries (57,468) (46,633) (211) 103,621 a (691)
Income applicable to
minority interest - - 113 - 113
Bad debt expense - - 808 - 808
Decrease (increase) in accounts
receivable 13,432 54,232 (36,704) (59,252)a (28,292)
Decrease (increase) in inventories
and advances on purchases
of tobacco 25,597 (81,141) (17,821) 40,765 a (32,600)
Increase in recoverable taxes - - (933) - (933)
Decrease (increase) in prepaid
expenses 1,530 (1,302) (5,223) - (4,995)
Increase (decrease) in accounts
payable and accrued expenses (11,715) 3,875 (6,914) 4,160 a (10,594)
Increase (decrease) in
advances from customers (5,683) (25,535) (11,340) 2,007 a (40,551)
Increase in income taxes 44 5,021 12,223 277 a 17,565
Other - - 37 - 37
-------------- ---------- ------------ ------------- --------------
Net cash provided (used)
by operating activities 19,789 (31,068) (6,613) (12,043) (29,935)
-------------- ---------- ------------ ------------- --------------
Investing activities
Purchase of property and equipment (145) (6,266) (14,671) - (21,082)
Proceeds from sale of property and
equipment 208 1,842 5,379 - 7,429
Payments on notes receivable and
receivable from investees - 169 1,188 - 1,357
Advances on notes receivable - - (30,694) 26,588 a (4,106)
Proceeds from or (advances) for other
investments and other assets (1,664) 15,930 (14,561) 2,460 a 2,165
Prepaid purchase cost - Intabex (14,939) - - - (14,939)
-------------- ---------- ------------ ------------- --------------
Net cash provided (used)
by investing activities (16,540) 11,675 (53,359) 29,048 (29,176)
-------------- ---------- ------------ ------------- --------------
a. Inter-company eliminations
</TABLE>
- -14-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Cash Flows (Continued)
Nine Months Ended March 31, 1997
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Financing activities
Repayment of debt $(236,087) $ (1,418) $(186,048) $ - $(423,553)
Proceeds from debt 248,460 11,326 233,300 (11,711)a 481,375
Proceeds from sale of common stock 1,804 1,663 (1,663) - 1,804
Cash dividends paid to DIMON Incorporated
stockholders (18,435) - - - (18,435)
--------------- ---------- ------------ ------------- --------------
Net cash provided (used) by financing
activities (4,258) 11,571 45,589 (11,711) 41,191
--------------- ---------- ------------ ------------- --------------
Effect of exchange rate changes on cash - - (325) - (325)
--------------- ---------- ------------ ------------- --------------
Increase (decrease) in cash and cash
equivalents (1,009) (7,822) (14,708) 5,294 (18,245)
Cash and cash equivalents at beginning of
year 723 6,894 46,120 83 a 53,820
--------------- ---------- ------------ ------------ -------------
Cash and cash equivalents at end of
period $ (286) $ (928) $31,412 $5,377 $ 35,575
============== ========= ============ ============ =============
a. Inter-company eliminations
</TABLE>
- -15-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Balance Sheet
June 30, 1996
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 723 $ 6,894 $ 46,120 $ 83 a $ 53,820
Notes receivable - 475 19,347 (18,695)b 1,127
Trade receivables, net of allowances 26,762 178,390 162,624 (176,878)b 190,898
Inventories:
Tobacco - 54,729 260,747 - 315,476
Other 49 1,174 16,802 - 18,025
Advances on purchases of tobacco 168,616 28,113 49,659 (171,679)b 74,709
Recoverable income taxes - - 1,563 - 1,563
Prepaid expenses and other assets 4,190 979 7,988 - 13,157
-------------- ----------- ------------- -------------- --------------
Total current assets 200,340 270,754 564,850 (367,169) 668,775
-------------- ----------- ------------- -------------- --------------
Investments and other assets
Equity in net assets of investee
companies - 5,884 2,384 - 8,268
Consolidated subsidiaries 288,533 336,667 21,230 (646,430)b -
Other investments 23,067 2,861 9,337 (32,278)b 2,987
Notes receivable 139 3,965 (26) - 4,078
Other - 981 18,170 - 19,151
-------------- --------- ------------- -------------- -------------
311,739 350,358 51,095 (678,708) 34,484
-------------- --------- ------------- -------------- -------------
Intangible assets
Excess of cost over related net assets
of business acquired 375 8,281 14,465 - 23,121
Production and supply contracts - 25,960 7,365 - 33,325
Pension asset 3,042 1,088 - - 4,130
-------------- ------------- ------------- --------------- ------------
3,417 35,329 21,830 - 60,576
-------------- ------------- ------------- --------------- ------------
Property, plant and equipment
Land 1,770 1,925 15,528 - 19,223
Buildings 4,739 25,568 113,434 - 143,741
Machinery and equipment 5,271 48,858 106,108 - 160,237
Allowances for depreciation (4,883) (26,877) (54,666) - (86,426)
-------------- ------------- ------------- --------------- ------------
6,897 49,474 180,404 - 236,775
-------------- ------------- ------------- --------------- ------------
Deferred taxes and other deferred charges 19,259 - 145 - 19,404
-------------- ------------- ------------- --------------- -----------
Total assets $541,652 $705,915 $818,324 $(1,045,877) $1,020,014
========= ========= ============ ============= ===========
a. To adjust for cash transfers made by DIMON Incorporated to an entity which reports on an earlier period.
b. Inter-company eliminations.
</TABLE>
- -16-
<PAGE>
<TABLE>
<CAPTION> DIMON Incorporated and Subsidiaries
Supplemental Combining Balance Sheet
June 30, 1996
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Current Liabilities
Notes payable to banks $ - $ - $ - $ - $ -
Accounts payable:
Trade 1,423 281,706 86,216 (303,375)b 65,970
Officers and employees 14,427 2,263 7,384 - 24,074
Other 4,749 1,554 8,159 - 14,462
Advances from customers 3,380 49,729 73,029 (51,985)b 74,153
Accrued expenses 2,418 13,941 35,438 - 51,797
Income taxes (12,489)c 3,083 15,042 (277)b 5,359
Long-term debt current 4,286 350 5,982 - 10,618
-------------- ------------- ------------- --------------- ---------------
Total current liabilities 18,194 352,626 231,250 (355,637) 246,433
-------------- ------------- ------------- --------------- ---------------
Long-term debt
Revolving Credit Notes and Other 48,856 1,068 226,717 (10,770)b 265,871
Senior Notes 125,000 - - - 125,000
-------------- ------------- ------------- --------------- ---------------
173,856 1,068 226,717 (10,770) 390,871
-------------- ------------- ------------- --------------- ---------------
Deferred Credits
Income taxes 6,198 (6,259) 21,557 - 21,496
Compensation and other benefits 27,556 8,629 8,280 - 44,465
-------------- ------------- ------------- --------------- ---------------
33,754 2,370 29,837 - 65,961
-------------- ------------- ------------- --------------- ---------------
Minority interest in subsidiaries - - 901 - 901
-------------- ------------- ------------- --------------- ---------------
Stockholders' equity
Common stock 136,959 143,026 180,366 (323,392)b 136,959
Retained earnings 177,419 203,982 146,398 (350,380)b 177,419
Equity-currency conversions 2,842 2,843 2,855 (5,698)b 2,842
Additional minimum pension liability (1,372) - - - (1,372)
Unrealized gain on investments - - - - -
-------------- ------------- ------------- --------------- ---------------
315,848 349,851 329,619 (679,470) 315,848
-------------- ------------- ------------- --------------- ---------------
Total liabilities and equity $541,652 $705,915 $818,324 $(1,045,877) $1,020,014
======== ======== ======== ============ ===========
b. Inter-company eliminations.
c. Current deferred tax on reserves for restructuring and unallocated, estimated tax payments.
</TABLE>
- -17-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Income
Three Months Ended March 31, 1996
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Sales and other operating revenues $6,178 $394,554 $243,506 $(67,146)a,c $577,092
Cost of goods and services sold 4 364,919 214,669 (63,695)a 515,897
--------------- ------------------------------ -------------- ----------
6,174 29,635 28,837 (3,451) 61,195
Selling, administrative and general (27)b 24,486 7,587 4,010 a,c 36,056
Restructuring and merger related costs 1,500 370 880 - 2,750
--------------- ------------------------------ -------------- -----------
Operating income 4,701 4,779 20,370 (7,461) 22,389
Interest expense 5,140 6,953 6,344 (7,461)a 10,976
--------------- ------------------------------ -------------- -----------
Income (loss) before income taxes,
minority interest, equity in net
income of investee companies (439) (2,174) 14,026 - 11,413
Income taxes (benefits) (176) (870) 5,611 - 4,565
--------------- ------------------------------ -------------- -----------
Income (loss) before income taxes,
minority interest, equity in net
income of investee companies (263) (1,304) 8,415 - 6,848
Income applicable to minority interest - - 114 - 114
Equity in net income (loss) of investee
companies, net of income taxes - (241) (219) - (460)
Equity in net income of subsidiaries 6,537 8,082 - (14,619)a -
--------------- ------------------------------ -------------- -----------
NET INCOME $ 6,274 $ 6,537 $ 8,082 $ (14,619) $ 6,274
======== ============ ======== =========== ========
a. Inter-company eliminations.
b. Invoiced services to affiliates.
c. Royalty expense in SG&A and Royalty income in Sales and other operating revenues for Consolidated Entities.
</TABLE>
- -18-
<PAGE>
<TABLE>
<CAPTION> DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Income
Nine Months Ended March 31, 1996
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Sales and other operating revenues $ 22,271 $1,204,193 $ 797,381 $(343,643)a,c $1,680,202
Cost of goods and services sold (5,066)b 1,123,895 671,770 (308,856)a 1,481,743
--------------- ------------- ----------- ------------------ ----------
27,337 80,298 125,611 (34,787) 198,459
Selling, administrative and general 8,491 55,787 44,954 (6,496)a,c 102,736
Restructuring and merger related costs 2,097 1,000 2,471 - 5,568
--------------- ------------- ----------- ------------------ -----------
Operating income 16,749 23,511 78,186 (28,291) 90,155
Interest expense 20,193 24,410 21,724 (28,291)a 38,036
--------------- ------------- ----------- ------------------ -----------
Income (loss) before income taxes,
minority interest, equity in net
income of investee companies and
extraordinary item (3,444) (899) 56,462 - 52,119
Income taxes (benefits) (1,378) (360) 22,585 - 20,847
--------------- ------------- ----------- ------------------- ----------
Income (loss) before income taxes,
minority interest, equity in net
income of investee companies and
extraordinary item (2,066) (539) 33,877 - 31,272
Income applicable to minority interest - - 242 - 242
Equity in net income (loss) of investee
companies, net of income taxes - 202 (492) - (290)
Equity in net income of subsidiaries 34,206 33,143 - (67,349)a -
--------------- ------------- ----------- ----------------- ------------
Income before extraordinary item 32,140 32,806 33,143 (67,349) 30,740
Extraordinary item:
Partial recovery of a previous
extraordinary trade receivable
write-off (net of applicable
income tax expense of $870) - 1,400 - - 1,400
--------------- ------------- ------------ ---------------- ------------
NET INCOME $32,140 $34,206 $33,143 $(67,349) $32,140
============= ============ =========== ============= ===========
a. Inter-company eliminations.
b. Change in reserves for inter-company profit in ending inventory.
c. Royalty expense in SG&A and Royalty income in Sales and other operating revenues for Consolidated Entities.
</TABLE>
- -19-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Cash Flows
Nine Months Ended March 31, 1996
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Operating activities
Net Income $ 32,140 $ 34,206 $ 33,143 $ (67,349)a $ 32,140
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,730 8,048 14,456 - 24,234
Deferred items (533) 265 1,461 - 1,193
Loss (gain) on foreign currency
transactions 46 (65) (54) - (73)
Gain on disposition of fixed assets (14) (227) (1,144) - (1,385)
Gain on sale of investee - - (3,751) - (3,751)
Gain on sale of investment - - (1,090) - (1,090)
Undistributed earnings of
investees/subsidiaries (34,205) (33,346) 492 67,349 a 290
Dividends received from investees - - 289 - 289
Income applicable to minority interest - - 242 - 242
Bad debt expense - (10) 1,088 - 1,078
Decrease (increase) in accounts
receivable 132,233 (42,334) 1,204 (105,097)a (13,994)
Decrease (increase) in inventories and
advances on purchases of tobacco 40,311 182,069 (132,513) (58,765)a 31,102
Decrease in recoverable taxes - - 103 - 103
Decrease (increase) in prepaid expenses 8,003 (473) 5,435 - 12,965
Increase (decrease) in accounts
payable and accrued expenses (8,877) 211,262 (58,647) (109,139)a 34,599
Increase (decrease) in advances
from customers (429) (339,322) 152,952 213,707 a 26,908
Increase (decrease) in income
taxes (3,156) 318 4,428 - 1,590
Other - 13 79 - 92
------------- ---------------------------- ------------- -------------
Net cash provided (used) by
operating activities 167,249 20,404 18,173 (59,294) 146,532
------------- ---------------------------- ------------- -------------
Investing activities
Purchase of property and equipment (111) (5,048) (15,450) - (20,609)
Proceeds from sale of property
and equipment 14 320 2,939 - 3,273
Payments on notes receivable and
receivable from investees 34 827 519 - 1,380
Advances for notes receivable (83) (358) (3,184) (4,267)a (7,892)
Proceeds from or (advances) for other
Investments and other assets 5,600 (8,306) 27,722 (4,081)a 20,935
Purchase of subsidiary - (6,543) - - (6,543)
------------- -------------- ------------- ------------ -------------
Net cash provided (used) by
investing activities $ 5,454 $ (19,108) $ 12,546 $ (8,348) $ (9,456)
------------- ------------- -------------- ------------ -------------
</TABLE>
- -20-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Cash Flows (Continued)
Nine Months Ended March 31, 1996
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Financing activities
Repayment of debt $(183,968) $ (1,769) $ (61,159) $ 28,075 a $(218,821)
Proceeds from debt 25,243 - 41,995 - 67,238
Proceeds from sale of stock 3,287 - - - 3,287
Cash dividends paid to DIMON Incorporated
stockholders (16,013) - 44 - (15,969)
-------------- ------------ ------------ ------------ -------------
Net cash provided (used) by financing
activities (171,451) (1,769) (19,120) 28,075 (164,265)
Effect of exchange rate changes on cash - 3,560 (3,568) (2,981)a (2,989)
-------------- ------------ ------------ ------------- -------------
Increase (decrease) in cash and cash
equivalents 1,252 3,087 8,031 (42,548) (30,178)
Cash and cash equivalents at beginning
of year 1,328 1,879 12,254 26,865 a 42,326
-------------- ------------ ------------ ------------- -------------
Cash and cash equivalents at end
of period $ 2,580 $ 4,966 $ 20,285 $ (15,683) $ 12,148
============= =========== ========== =========== ==========
a. Inter-company eliminations.
</TABLE>
- -21-
<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. a. Each of the Guarantors, the Company's wholly-owned subsidiaries,
DIMON International, Inc. and Florimex Worldwide Inc., have
fully and unconditionally guaranteed 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 are 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
are 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 is not 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, storing 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.
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.
- -22-
<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
MARCH 31, 1997
DEBIT(CREDIT)
(Unaudited)
DIMON Non-
Incorporated Guarantors Guarantors
<S> <C> <C> <C>
Accounts Receivable $ 13,317 $ 11,002 $ 95,946
Advances on Purchases 142,996 90,537 30,572
Accounts Payable Trade - (282,793) (17,290)
Advances from Customers 1,214 (466) (51,524)
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1996
DEBIT(CREDIT)
DIMON Non-
Incorporated Guarantors Guarantors
<S> <C> <C> <C>
Accounts Receivable $ 26,761 $ 120,661 $ 54,267
Advances on Purchases 168,616 16,886 18,963
Accounts Payable Trade (70) (272,781) (40,033)
Advances from Customers (3,380) (37) (52,256)
</TABLE>
- -23-
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(in thousands)
Three Months Ended March 31, 1997 Compared to Three Months Ended
March 31,1996:
Sales and other operating revenues for the three-month period ended
March 31, 1997 were $668.1 million, an increase of 15.8% from $577.1
million for the three-month period ended March 31, 1996. Sales from
tobacco operations increased 22.0% to $561.4 million in the three-month
period ended March 31, 1997 from $460.2 million in the corresponding
period in 1996. The increase in tobacco sales was primarily due to
higher average prices, increases in quantities and increases in revenue
from services for U.S. grown tobacco and increases in average prices for
foreign grown tobacco, partially offset by decreases in quantities and
in revenue from services. Higher average prices, increased quantities
and increases in revenue from services for U.S. tobacco and higher
average prices and decreased quantities for foreign grown tobacco
accounted for $17.6 million, $27.4 million, $20.7 million, $53.7
million and a decrease of $15.0 respectively, of the increase in
tobacco revenues. Increased quantities of products at higher average
prices increased sales of U.S. grown tobacco. The increase in revenue
for services was primarily related to processing for Lorillard Tobacco
pursuant to an agreement entered into the late fiscal 1995. Higher
prices of foreign grown tobacco was from virtually every origin,
including additional quantities in Brazil due to earlier than normal
sales at higher average prices due to product mix. Sales from flower
operations decreased 8.7%, to $106.8 million in the three-month period
ended March 31, 1997 from $116.9 million for the three-month period ended
March 31, 1996. This decrease in flower sales was primarily due to an
approximate $10.7 million decrease due to the effect of applying U.S.
dollar exchange rates.
Cost of sales and expenses for the period ended March 31, 1997, were
$627.3 million, an increase of $75.3 million, or 13.7%, from $552.0
million, before the $2.7 million charge for restructuring costs, for
the three-month period ended March 31, 1996. Cost of sales and expenses
for the tobacco operations increased $86.5 million, or 19.9%, in the
three-month period ended March 31, 1997 over the corresponding period
in 1996, primarily due to the increased sales of tobacco in the period.
The gross profit for the tobacco operations increased 19.5% for the
three-month period ended March 31, 1997 over the corresponding period
in 1996, primarily due to increased sales of tobacco from Brazil. The
Company's gross margin percentage for tobacco operations decreased to
10.2% for the three-month period ended March 31, 1997 from 10.4% for the
corresponding period in 1996, due to lower gross margins in the U.S.,
South American and European tobacco operations. Cost of sales and
expenses for the flower operations decreased $10.1 million, or 9.0%,
in the three-month period ended March 31, 1997 from the corresponding
period in 1996. The Company's gross margin percentage for flower
operations was the same at 11.3% for the three-month period ended
March 31, 1997 and for the corresponding period in 1996. Corporate
expenses decreased $1.1 million, or 33.7%, for the three-month period
ended March 31, 1997 from the corresponding period in 1996, primarily
due to decreased personnel costs.
Interest expense decreased $1.9 million (17.4%) due to decreased rates,
partially offset by increased borrowings.
The effective tax rate decreased to 39.9% for the three-month period
ended March 31, 1997 from 40.0% for the corresponding period in 1996,
based on estimates of taxable income projected for each year.
Equity in net loss of the tobacco investee companies decreased $235
thousand for the three-month period ended March 31, 1997 from the
corresponding period in 1996 due to increased income on the tobacco
operations in the U.S. and Greece.
- -24-
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
(in thousands)
Nine Months Ended March 31, 1997 Compared to Nine Months Ended
March 31, 1996:
Sales and other operating revenues for the nine-month period ended
March 31, 1997 were $1.850 billion, an increase of 10.1% from
$1.680 billion for the nine-month period ended March 31, 1996.
Sales from tobacco operations increased 12.4%, to $1.553 billion in
the nine-month period ended March 31, 1997 from $1.382 billion in the
corresponding period in 1996. The increase in tobacco sales was due to
higher average prices of foreign grown tobacco, increased quantities,
increased average prices and increased service revenues from U.S.
tobacco, partially offset by decreased quantities of foreign grown
tobacco. The increase in average prices for foreign grown tobacco,
increased quantities, higher average prices and increased service
revenues accounted for $121.1 million, $51.7 million, $9.1 million
and $14.1 million of the increase in tobacco revenues, respectively,
offset by a $25.8 million due to decreased quantities of foreign grown
tobacco. The increased U.S. and foreign tobacco sales, primarily Africa
and Asia, are due to product mix.
Sales from flower operations decreased .5%, from $298.3 million in the
nine-month period ended March 31, 1996 to $297.0 million for the
nine-month period ended March 31, 1997. This decrease in flower sales
was primarily due to an approximate $20.2 million decrease due to the
effect of applying U.S. dollar exchange rates, offset partially by
increases in European operations and Baardse.
Cost of sales and expenses for the nine-month period ended March 31,
1997, were $1.736 billion, an increase of $151.8 million, or 9.6%,
from $1.584 billion, before the $5.6 million charge for restructuring
costs, for the nine-month period ended March 31, 1996. Cost of sales
and expenses for the tobacco operations increased $157.5 million, or
12.3%, in the nine-month period ended March 31, 1997 over the
corresponding period in 1996, primarily due to the higher sales in the
period for tobacco grown in the U.S., Africa and Asia. The gross profit
for the tobacco operations increased 4.0% for the nine-month period ended
March 31, 1997 over the corresponding period in 1996, primarily due to
increased sales and gross margins on the operations in Africa, Asia and
South America, offset partially by decreased gross margins on the U.S.
operations. The Company's gross margin percentage for tobacco operations
decreased to 11.2% for the nine-month period ended March 31, 1997 from
12.1% for the corresponding period in 1996, due to lower gross margins
in the U.S. operations, offset partially by higher gross margins in
Africa, Asian and South America. Cost of sales and expenses for the
flower operations decreased $3.1 million, or 1.1%, in the nine-month
period ended March 31, 1997 from the corresponding period in 1996
primarily due to the effect of applying U.S. dollar exchange rates.
The Company's gross margin percentage for flower operations was the
same at 10.7% for the nine-month period ended March 31, 1997 and for the
corresponding period in 1996. Corporate expenses decreased $2.6 million,
or 23.0%, for the nine-month period ended March 31, 1997 from the
corresponding period in 1996, primarily due to decreased personnel costs.
Interest expense decreased $7.4 million (19.5%) due to decreased rates,
partially offset by increased borrowings.
The effective tax rate decreased to 39.3% for the nine-month period ended
March 31, 1997 from 40.0% for the corresponding period in 1996, based on
estimates of taxable income projected for each year.
Equity in net income of the tobacco investee companies increased $981
thousand for the nine-month period ended March 31, 1997 from the
corresponding period in 1996. The increase is primarily due to the loss
for the tobacco operations investee in Brazil which was sold during
fiscal 1996 and to increased income in the tobacco operations in the U.S.
and Greece.
- -25-
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
(in thousands)
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 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.
Reflecting the seasonal increase in the tobacco operations, DIMON's
working capital increased from $422.3 million at June 30, 1996 to $453.5
million at March 31, 1997. The current ratio of 2.7 to 1 at June 30,
1996 increased to 2.8 to 1 at March 31, 1997. At March 31, 1997, current
assets increased $38.4 million, or 5.7%, and current liabilities
increased $7.2 million, or 2.9%, from June 30, 1996. Current assets
increased primarily due to increases in Trade receivables and Advances
on purchases of tobacco. Current liabilities increased primarily due to
increases in Notes payable to banks, Accounts payable other, partially
offset by decreases in Advances from customers and Accrued expenses.
Cash flows provided in operating activities decreased $176.5 million
from $146.6 million to a $29.9 million of cash flows used for the nine
months ended March 31, 1997 from the same period last year, due
primarily to increases in Trade receivables and Advances on purchases
of tobacco and decreases in Advances from customers and in Accounts
payable and Accrued expenses. Cash flows used in investing activities
increased $19.7 million reflecting sale of RGT shares and Philip Morris
shares in 1995, the Prepaid purchase cost-Intabex and offset partially
by the 1995 purchase of a subsidiary. Cash flows used by financing
activities increased $205.5 million to $41.2 million of cash flows
provided primarily due to net increased borrowings.
At March 31, 1997, DIMON had seasonally adjusted lines of credit of
$955.4 million, excluding the long-term credit agreements. These
lines bear interest at rates ranging from 1.7% to 11.6%. At March 31,
1997, unused lines of credit amounted to $536.2 million net of $155.1
million of letters of credit and guarantees that reduce lines of credit.
Total maximum outstanding short-term borrowings during the nine months
ended March 31, 1997 were $566.5 million.
The Company uses its $240 million Revolving Credit Facility to
reclassify $240 million of its short-term debt. The interest rates
available under the Revolving Credit Facility depend on the type of
advance selected and are based either on the agent bank's base lending
rate (which was 8.50% at March 31, 1997, and is adjusted with changes in
interest rates generally) or LIBOR plus 0.75%, through March 15, 1997,
and thereafter plus a spread of 0.45% to 1.25% based on the ratings
assigned to the Company's outstanding senior debt or on its consolidated
interest coverage ratio. The Revolving Credit Facility is subject to
certain commitment fees and covenants that among other things require
the Company to maintain minimum working capital and tangible net worth
amounts, require specific liquidity and long-term solvency ratios and
restrict acquisitions and, under certain circumstances, payment of
dividends by the Company. The Revolving Credit Facility originally
terminated on March 15, 1998, but has been extended until June 30,
1998, and may be extended thereafter, year to year, upon approval of the
Lenders. As of March 31, 1997, there were no borrowings outstanding
under the Revolving Credit Facility.
The Company has historically financed its operations through a
combination of short-term lines of credit, customer advances, cash from
operations and equity and equity-linked securities. At March 31, 1997,
the Company had no material capital expenditure commitments other than
the acquisition of Intabex as of April 1, 1997. The Company believes
that these sources of funds combined with the Senior Notes are sufficient
to fund the Company's purchasing and capital needs for fiscal 1997.
- -26-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits 10 - Amendment of March 14, 1997, to the
Credit Agreement dated March 15, 1996
11 - Computation of Earnings Per Common Share
27 - Financial Data Schedule
(b) Reports on Form 8-K: On April 16, 1997, the Company filed a
Form 8-K reporting, under Item 2 and Item 7 thereof, that the
Company had acquired all of the outstanding shares of Intabex
Worldwide S.A. and certain assets in Zimbabwe.
The following exhibits were filed with the Form 8-K:
10.1 Stock Purchase Agreement, dated as of February 14, 1997,
among DIMON Incorporated, Intabex Holdings Worldwide S.A.,
Folium Inc., Leaf Management Investments Ltd. and
Tabacalera S.A.
10.2 Indenture, dated as of April 1, 1997, by DIMON
Incorporated to LaSalle National Bank, relating to
$140 Million of 6 1/4% Convertible Subordinated Debentures
due March 31, 2007
10.3 Non-Competition Agreement, dated as of April 1, 1997, by and
between Intabex S.A. (Zug) and Folium Inc.
10.4 Registration Rights Agreement, dated as of April 1, 1997,
by and between DIMON Incorporated, Tabacalera S.A., Folium
Inc. and Leaf Management Investments Ltd.
10.5 Consulting Agreement, dated April 1, 1997, by and between
Intabex S.A. (Zug) and Anthony C.B. Taberer
10.6 Asset Purchase Agreement, dated as of February 14, 1997, by
and between Dibrell Brothers Zimbabwe (Private) Limited and
Tabex (Private) Limited
10.7 Non-Competition Agreement, dated as of April 1, 1997,
by and between Intabex S.A. (Zug) and Folium Inc.
- -27-
<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 12, 1997 Jerry L. Parker
Vice President - Controller
(Principal Accounting Officer)
- -28-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
-------------------------
Exhibit Page No.
- ---------- ---------------
<S> <C>
10 Amendment of March 14, 1997, to Credit Agreement 30 - 33
11 Computation of Earnings Per Common Share 34
27 Financial Data Schedule 35
- -29-
</TABLE>
<PAGE>
EXHIBIT-10
March 14, 1997
DIMON Incorporated
512 Bridge Street
Danville, Virginia 24543
Attention: James A. Cooley
Vice President and Treasurer
Re: Credit Agreement dated as of March 15, 1996 (the "Credit
Agreement") among DIMON Incorporated (the "Borrower"), the
several lenders party thereto (the "Lenders") and NationsBank,
N.A., as agent for the Lenders (in such capacity, the "Agent")
Dear Jim:
The defined terms in the above referenced Credit Agreement are
incorporated herein by reference.
You have informed us that the Borrower has entered into an agreement to
acquire (the "Intabex Acquisition") Intabex Holdings Worldwide S.A.
("Intabex") and the tobacco related assets of its affiliate, Tabex PVT
Limited. In connection therein, you have requested that the Lenders
consent to the Intabex Acquisition, make certain amendments to the Credit
Agreement necessary in connection with the Intabex Acquisition and extend
the Termination Date under and as defined in the Credit Agreement.
Pursuant to your request, the undersigned Lenders hereby agree with you as
follows:
( a ) The Borrower shall be permitted to consummate the
Intabex Acquisition notwithstanding the terms of Section 8.5
( a ) of the Credit Agreement, provided that
( i ) The purchase agreement (including all
schedules exhibits thereto) for the Intabex Acquisition
(the "Purchase Agreement") is reasonably satisfactory in
form and substance to the Agent and is not altered,
amended or otherwise changed or supplemented in any
material respect without the prior written consent of
the Agent;
( ii ) The Purchase Agreement is consummated
( A ) on or before June 30, 1997, ( B ) in accordance
with the terms thereof (including without limitation by
satisfaction in all material respects of the conditions
precedent to the obligations of the Borrower as buyer
thereunder) and ( C ) in compliance with applicable law
and regulatory approvals;
( iii ) The representations and
warranties set forth in Article V of the Credit
Agreement (except for those expressly relating to an
earlier date) are true and correct in all material
respects as of the date of the Intabex Acquisition after
giving effect thereto; and
- -30-
<PAGE>
March 14, 1997
Page 2
( iv ) No Default or Event of Default exists and
is continuing as of the date of the Intabex Acquisition after
giving effect thereto.
In addition, the parties hereto expressly acknowledge and
agree that the Intabex Acquisition shall not be included in
any determination regarding additional acquisitions under
Section 8.5.
( b ) The Borrower shall be permitted to issue to the
seller of Intabex the Borrower's $140 million subordinated
debenture bearing interest at 6.25% and maturing in ten years,
without regard to requirements of Section 8.2 ( a ) ( ii ).
( c ) The reference in Section 8.2 ( b ) to $5,000,000
is hereby increased to $90,000,000, the reference in Section
8.2 ( b ) to $525,000,000 is hereby increased to $850,000,000
and the parties hereto acknowledge that the Borrower will not
be required to satisfy the conditions contained in the proviso
at the end of Section 8.2 ( b ) with respect to Debt assumed
in connection with the Intabex Acquisition.
( d ) The reference in Section 8.3 to $75,000,000
is hereby increased to $150,000,000.
( e ) The term "Change of Control" set forth in
Section 1.1 of the Credit Agreement hereafter shall be
deemed to include, without limitation, a Change of Control
under and as defined in Section 1406 of the Indenture attached
as Exhibit J to the Purchase Agreement.
( f ) The definition of "Termination Date" set
forth in Section 1.1 of the Credit Agreement is hereby amended
in its entirety to read as follows:
"Termination Date" shall mean the earlier to occur of
( i ) June 30, 1998 or such later anniversary thereof as
the Commitments may have extended by the Lenders
pursuant to Section 2.8, or ( ii ) the date of
termination in whole of the Aggregate Commitment pursuant
to Section 2.5 or 9.2.
The consent and amendment set forth above shall be and become
effective as of the date hereof when counterparts of this
letter agreement shall have been duly executed on behalf of
(A) the Borrower, (B) each of the Guarantors and (C)(1) with
respect to the consents and amendments contained in paragraphs
( a ), ( b ), ( c ), ( d ) and ( e ) above, the Required
Lenders and (2) with respect to the amendment contained in
paragraph ( f ) above, each of the Lenders.
Except as waived or amended hereby, all of the terms and
provisions of the Credit Agreement shall remain in full force
and effect.
This letter may be executed in any number of counterparts,
each of which shall constitute an original but all of which
when taken together shall constitute but one contract.
- -31-
<PAGE>
May 14, 1997
Page 3
<TABLE>
<CAPTION>
THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH
OF VIRGINIA.
Sincerely,
<S> <C>
NATIONSBANK, N.A. CRESTAR BANK
By /s/ Hugh S. Miles, III By /s/ C. Gray Key
Title Exec. Vice President Title Vice President
ABN AMRO BANK N.V. NEW YORK FIRST UNION NATIONAL BANK OF BRANCH
VIRGINIA
By /s/ Ronald C. Spurga By /s/ Stewart A. Marley
Title Vice President Title Senior Vice President
By /s/ Christopher M. Blount
Title AVP
BANK OF AMERICA NATIONAL TRUST CORESTATES BANK, N.A.
AND SAVINGS ASSOCIATION
By /s/ Kenneth Washington By /s/ John D. Brady
Title Vice President Title Assistant Vice President
THE BANK OF NOVA SCOTIA SIGNET BANK
By /s/ J. Alan Edwards By /s/ J. Charles Link
Title Authorized Signatory Title Senior Vice President
BANK OF TOKYO-MITSUBISHI TRUST COMPANY, SOCIETE GENERALE
f/k/a THE BANK OF TOKYO TRUST
By /s/ Rick Kay By /s/ Jerome Jacques
Title Vice President Title SVP
COOPERATIVE CENTRALE RAIFFEISEN- THE SUMITOMO BANK, LIMITED
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND," ATLANTA BRANCH By /s/ John C. Kissinger
Title Joint General Manager
By /s/ Theodore W. Cox
Title Vice President
WACHOVIA BANK OF NORTH
CAROLINA, N.A.
By /s/ Keith Sherman
Title SVP
</TABLE>
(signatures continued)
- -32-
<PAGE>
May 14, 1997
Page 4
ACCEPTED AND AGREED:
Borrower:
DIMON INCORPORATED
By /s/ J. A. Cooley / /s/ J. O. Hunnicutt
Title VP and Treasurer / Secretary
GUARANTORS:
DIMON INTERNATIONAL, INC.
By /s/ J. A. Cooley / /s/ J. O. Hunnicutt
Title Treasurer / Assistant Secretary
FLORIMEX WORLDWIDE, INC.
By /s/ J. O. Hunnicutt / /s/ Dwight L. Ferguson
Title Secretary / President
- -33-
<PAGE>
<TABLE>
EXHIBIT 11
DIMON INCORPORATED AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
NINE MONTHS ENDED MARCH 31, 1997 AND 1996
1997 1996 1997 1996
Third Third First Nine First Nine
(in thousands, except per share amounts) Quarter Quarter Months Months
<S> <C> <C> <C> <C>
Primary
Earnings
Income before extraordinary
Item . . . . . . . . . . . . . . . . . . . . .$18,817 $ 6,274 $51,143 $30,740
Extraordinary item. . . . . . . . . . . . . . . . . - - - 1,400
-------- -------- -------- --------
Net Income. . . . . . . . . . . . . . . . . . . . .$18,817 $ 6,274 $51,143 $32,140
======== ======== ======== ========
Shares
Weighted average number of
common shares outstanding. . . . . . . . . . . 42,433 39,583 42,389 38,633
Shares applicable to stock options,
net of shares assumed to be
purchased from proceeds at
average market price . . . . . . . . . . . . . 464 184 303 106
------- -------- -------- --------
Average Number of Shares
Outstanding. . . . . . . . . . . . . . . . . . 42,897 39,767 42,692 38,739
======== ======== ======== ========
Earnings per Share
Income before extraordinary
item . . . . . . . . . . . . . . . . . . . . . $.44 $.16 $1.20 $.79
Extraordinary item. . . . . . . . . . . . . . . . . .00 .00 .00 .04
-------- ------- ------- --------
Net Income. . . . . . . . . . . . . . . . . . . . . $.44 $.16 $1.20 $.83
======== ======= ======= ========
Assuming Full Dilution Earnings
Income before extraordinary
item . . . . . . . . . . . . . . . . . . . . .$18,817 $ 6,274 $51,143 $30,740
Extraordinary item. . . . . . . . . . . . . . . . . - - - 1,400
------- ------- ------- -------
Net Income. . . . . . . . . . . . . . . . . . . . .$18,817 $ 6,274 $51,143 $32,140
Add after tax interest expense
applicable to 7 3/4%
Convertible Debentures
issued June 3, 1993. . . . . . . . . . . . . . - 452 - 1,765
-------- -------- -------- --------
Adjusted Net Income . . . . . . . . . . . . . . . .$18,817 $ 6,726 $51,143 $33,905
======= ======== ======== ========
Shares
Weighted average number of
common shares outstanding. . . . . . . . . . . 42,433 39,583 42,389 38,633
Shares applicable to stock options,
net of shares assumed to be
purchased from proceeds at
ending market price. . . . . . . . . . . . . . 464 184 464 184
Assuming conversion of 7 3/4%
Convertible Debentures
at beginning of period . . . . . . . . . . . . - 2,712 - 3,650
------- ------- ------- -------
Average Number of Shares
Outstanding. . . . . . . . . . . . . . . . . . 42,897 42,479 42,853 42,467
======= ======= ======= =======
Earnings Per Share
Income as adjusted before
extraordinary items. . . . . . . . . . . . . . $.44 $.16 $1.19 $.77
Extraordinary items . . . . . . . . . . . . . . . . .00 .00 .00 .03
------- ------- ------- --------
Net Income as Adjusted. . . . . . . . . . . . . . . $.44 $.16 $1.19 $.80
======= ======= ======= ========
</TABLE>
- -34- >
<TABLE> <S> <C>
<PAGE>
<CAPTION>
EXHIBIT 27
<S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 35,575
<SECURITIES> 0
<RECEIVABLES> 213,461
<ALLOWANCES> (5,277)
<INVENTORY> 336,498
<CURRENT-ASSETS> 707,150
<PP&E> 339,890
<DEPRECIATION> (112,296)
<TOTAL-ASSETS> 1,059,561
<CURRENT-LIABILITIES> 253,671
<BONDS> 391,436
<COMMON> 138,762
0
0
<OTHER-SE> 209,343
<TOTAL-LIABILITY-AND-EQUITY> 1,059,561
<SALES> 1,850,221
<TOTAL-REVENUES> 1,850,221
<CGS> 1,645,054
<TOTAL-COSTS> 1,645,054
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 808
<INTEREST-EXPENSE> 30,614
<INCOME-PRETAX> 83,346
<INCOME-TAX> 32,780
<INCOME-CONTINUING> 51,143
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 51,143
<EPS-PRIMARY> 1.20
<EPS-DILUTED> 1.19
<PAGE>
</TABLE>
