<PAGE>
Page 1 of 30
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 December 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 February 2, 1998
NO par value 44,525,004
<PAGE>
<TABLE>
<CAPTION>
DIMON INCORPORATED
INDEX
PAGE NO.
<S> <C>
Part I. Financial Information:
Consolidated Balance Sheet - December 31, 1997
and June 30, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-4
Statement of Consolidated Income - Three Months and Six Months
Ended December 31, 1997 and 1996. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Statement of Consolidated Cash Flows - Six
Months Ended December 31, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . 7-23
Management's Discussion and Analysis
of Financial Condition and Results of Operations. . . . . . . . . . . . . . . . . . . . . 24-27
Part II. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27-28
</TABLE>
- -2-
<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEET
December 31
1997 June 30
(Unaudited) 1997
(in thousands) ____________ ____________
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 49,045 $ 107,131
Notes receivable. . . . . . . . . . . . . . . . . . . . . . . . . . 5,847 6,797
Trade receivables, net of allowances. . . . . . . . . . . . . . . . 256,284 396,156
Inventories:
Tobacco. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 876,450 583,579
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,016 25,282
Advances on purchases of tobacco. . . . . . . . . . . . . . . . . . 216,682 226,765
Recoverable income taxes. . . . . . . . . . . . . . . . . . . . . . 2,321 3,051
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . 21,379 22,718
---------------- ----------------
Total current assets. . . . . . . . . . . . . . . . . . 1,444,024 1,371,479
---------------- ----------------
Investments and other assets
Equity in net assets of investee companies. . . . . . . . . . . . . 6,443 9,326
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . 11,276 12,293
Notes receivable. . . . . . . . . . . . . . . . . . . . . . . . . . 9,898 12,738
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,165 15,803
---------------- ----------------
40,782 50,160
---------------- ----------------
Intangible assets
Excess of cost over related net assets of
businesses acquired. . . . . . . . . . . . . . . . . . . . . . . 190,007 180,435
Production and supply contracts . . . . . . . . . . . . . . . . . . 31,597 26,681
Pension asset . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,348 3,348
---------------- ----------------
224,952 210,464
---------------- ----------------
Property, plant and equipment
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,886 31,082
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189,000 196,887
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . 227,313 231,705
Allowances for depreciation . . . . . . . . . . . . . . . . . . . . (128,453) (126,922)
---------------- ----------------
317,746 332,752
---------------- ----------------
Deferred taxes and other deferred charges . . . . . . . . . . . . . . . 22,254 22,748
---------------- ----------------
$2,049,758 $1,987,603
================ ================
See notes to consolidated financial statements
</TABLE>
- -3-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEET
December 31
1997 June 30
(Unaudited) 1997
(in thousands) ____________ ______________
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable to banks. . . . . . . . . . . . . . . . . . . . . . . $ 392,923 $ 350,263
Accounts payable:
Trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,103 108,283
Officers and employees . . . . . . . . . . . . . . . . . . . . . 9,263 13,441
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,745 22,203
Advances from customers . . . . . . . . . . . . . . . . . . . . . . 198,250 69,787
Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 56,389 66,141
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,629 25,146
Long-term debt current. . . . . . . . . . . . . . . . . . . . . . . 12,527 16,222
------------------- -------------------
Total current liabilities 771,829 671,486
------------------- -------------------
Long-term debt
Revolving Credit Notes and Other. . . . . . . . . . . . . . . . . . 534,855 577,826
Convertible Subordinated Debentures . . . . . . . . . . . . . . . . 123,328 123,328
Senior Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,000 125,000
------------------- -----------------
783,183 826,154
------------------- -----------------
Deferred credits:
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,469 36,630
Compensation and other benefits . . . . . . . . . . . . . . . . . . 44,660 44,072
------------------ -----------------
69,129 80,702
------------------- -----------------
Minority interest in subsidiaries . . . . . . . . . . . . . . . . . . . 891 998
------------------- -----------------
Commitments and contingencies . . . . . . . . . . . . . . . . . . . . . - -
------------------- -----------------
Stockholders' equity
Preferred Stock--no par value:
Dec. 31 Jun. 30
------- --------
Authorized shares. . . . 10,000 10,000
Issued shares. . . . . . - -. . . . . . . . - -
Common Stock--no par value:
Dec. 31 Jun. 30
------- --------
Authorized shares. . . . 125,000 125,000 . . . . . . .
Issued shares. . . . . . 44,525 44,312 . . . . . . . 182,144 178,939
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . 246,694 229,521
Equity-currency conversions . . . . . . . . . . . . . . . . . . . . (3,245) 670
Additional minimum pension liability. . . . . . . . . . . . . . . . (867) (867)
------------------- -----------------
424,726 408,263
------------------- -----------------
$2,049,758 $1,987,603
=================== =================
</TABLE>
- -4-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
STATEMENT OF CONSOLIDATED INCOME
Three Months and Six Months Ended December 31, 1997 and 1996
(Unaudited)
1998 1997 1998 1997
Second Second First Six First Six
(in thousands, except per share amounts) Quarter Quarter Months Months
------------ ------------ --------------- --------------
<S> <C> <C> <C> <C>
Sales and other operating revenues. . . . . . . . . . . . . .$ 688,457 $771,341 $1,201,522 $1,182,075
Cost of goods and services sold . . . . . . . . . . . . . . . 620,006 700,717 1,042,935 1,046,402
------------ ------------ --------------- --------------
68,451 70,624 158,587 135,673
Selling, administrative and general expenses. . . . . . . . . . 35,509 32,044 72,577 62,548
------------ ------------ --------------- --------------
Operating Income. . . . . . . . . . . . . . . . . . . . . . . . 32,942 38,580 86,010 73,125
Interest expense. . . . . . . . . . . . . . . . . . . . . . . . 21,413 11,652 44,418 21,549
------------ ------------ --------------- --------------
Income before income taxes, minority
interest and equity in net income of
investee companies . . . . . . . . . . . . . . . . . . . . . 11,529 26,928 41,592 51,576
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 1,038 10,256 10,959 20,115
------------ ------------ --------------- -------------
Income before minority interest and
equity in net income of investee
companies. . . . . . . . . . . . . . . . . . . . . . . . . . 10,491 16,672 30,633 31,461
Income applicable to minority interest. . . . . . . . . . . . . 46 61 47 51
Equity in net income of investee
companies, net of income taxes . . . . . . . . . . . . . . . 494 450 804 916
------------ ----------- --------------- -------------
NET INCOME. . . . . . . . . . . . . . . . . . . . . . . . . . .$ 10,939 $17,061 $ 31,390 $ 32,326
============ =========== =============== =============
Basic Earnings Per Share
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . $.25 $.40 $.71 $.76
==== ==== ==== ====
Diluted Earnings Per Share
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . .25 $.40 $.69 $.76
==== ==== ==== ====
Average number of shares outstanding:
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,507 42,370 44,422 42,368
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . 49,267 42,650 49,178 42,587
Cash dividends per share. . . . . . . . . . . . . . . . . . . . $.17 $.15 $.32 $.285
==== ==== ==== =====
See notes to consolidated financial statements
</TABLE>
- -5-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
STATEMENT OF CONSOLIDATED CASH FLOWS
Six Months Ended December 31, 1997 and 1996
(Unaudited)
December 31 December 31
1997 1996
(in thousands) ____________ ____________
<S> <C> <C>
Operating activities
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 31,390 $ 32,326
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization. . . . . . . . . . . . . . . . . . . 23,856 16,435
Deferred items . . . . . . . . . . . . . . . . . . . . . . . . . . (5,669) 2,189
Loss (gain) on foreign currency transactions . . . . . . . . . . . (798) 82
Gain on disposition of fixed assets. . . . . . . . . . . . . . . . (1,521) (2,687)
Undistributed earnings of investees. . . . . . . . . . . . . . . . (804) (916)
Income applicable to minority interest . . . . . . . . . . . . . . 47 51
Bad debt expense . . . . . . . . . . . . . . . . . . . . . . . . . 497 697
Decrease (increase) in accounts receivable . . . . . . . . . . . . 126,994 6,887
Increase in inventories and advances on
Purchases of tobacco . . . . . . . . . . . . . . . . . . . . . . . (244,951) (258,418)
Decrease (increase) in recoverable taxes . . . . . . . . . . . . . 640 (1,261)
Decrease (increase) in prepaid expenses. . . . . . . . . . . . . . 2,159 (1,025)
Decrease in accounts payable
and accrued expenses . . . . . . . . . . . . . . . . . . . . . . (84,049) (33,376)
Increase in advances from customers. . . . . . . . . . . . . . . . 128,867 98,163
Increase (decrease) in income taxes. . . . . . . . . . . . . . . . (8,717) 14,721
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796 (8)
-------------- -----------
Net cash used by operating activities. . . . . . . . . . . . . . (31,263) (126,140)
-------------- -----------
Investing activities
Purchase of property and equipment. . . . . . . . . . . . . . . . . . (14,209) (12,652)
Proceeds from sale of property and equipment. . . . . . . . . . . . . 14,308 4,691
Payments received on notes receivable
and receivable from investees. . . . . . . . . . . . . . . . . . . - 555
Advances for notes receivable . . . . . . . . . . . . . . . . . . . . (2,868) (805)
Advances for other investments and other assets . . . . . . . . . . . (278) (250)
Purchase of remaining interest in investee. . . . . . . . . . . . . . (2,200) -
-------------- -----------
Net cash used by investing
activities . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,247) (8,461)
-------------- -----------
Financing activities
Repayment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . (989,277) (197,813)
Proceeds from debt. . . . . . . . . . . . . . . . . . . . . . . . . . 979,656 344,792
Proceeds from sale of common stock. . . . . . . . . . . . . . . . . . 3,204 205
Cash dividends paid to DIMON Incorporated
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,216) (12,075)
-------------- -----------
Net cash provided (used) by financing activities. . . . . . . . . . . (20,633) 135,109
-------------- -----------
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . (970) (50)
-------------- -----------
Increase (decrease) in cash and cash equivalents. . . . . . . . . . . . . (58,113) 458
Increase in cash from consolidation of investee . . . . . . . . . . . . . 27 -
Cash and cash equivalents at beginning of year. . . . . . . . . . . . . . 107,131 53,820
-------------- -----------
Cash and cash equivalents at end of period . . . . . . . . . . . $ 49,045 $ 54,278
============== ===========
See notes to consolidated financial statements
</TABLE>
- -6-
<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basic earnings per share is computed by dividing earnings by
the weighted average number of shares outstanding during each
period. The fully diluted earnings per share calculation
assumes that all of the Convertible Subordinated Debentures
during the periods presented were converted into Common Stock
at the beginning of the reporting period, or as of the date of
issue, thereby increasing the weighted average number of
shares considered outstanding during each period and reducing
the after-tax interest expense. The weighted average number
of shares outstanding are further increased by common stock
equivalents on employee stock options.
The Company has adopted Statement of Financial Accounting
Standards No. 128, "Earnings per Share" (FAS 128), and has
reflected changes required for all periods presented in the
accompanying unaudited consolidated financial statements. The
following information reconciles the basic weighted average
number of shares outstanding to diluted shares outstanding and
diluted earnings per share:
<TABLE>
<CAPTION>
1998 1997 1998 1997
Second Second First Six First Six
(in thousands, except per share amounts) Quarter Quarter Months Months
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Basic Earnings Per Share
Net Income. . . . . . . . . . . . . . . . . $10,939 $17,061 $31,390 $32,326
======== ======== ======== ========
Shares
Weighted Average Number of
Shares Outstanding. . . . . . . . . . 44,507 42,370 44,422 42,368
======== ======== ======== ========
Basic Earnings Per Share
Net Income. . . . . . . . . . . . . . . . . $.25 $.40 $.71 $.76
======== ======== ======== ========
Diluted Earning Per Share
Net Income. . . . . . . . . . . . . . . . . $10,939 $17,061 $31,390 $32,326
Add after tax interest expense
applicable to 6 1/4%
Convertible Debentures
issued April 1, 1997. . . . . . . . . 1,176 - 2,351 -
-------- -------- -------- --------
Net Income as adjusted. . . . . . . . . . . $12,115 $17,061 $33,741 $32,326
======== ======== ======== ========
Shares
Weighted average number of
common shares outstanding . . . . . . 44,507 42,370 44,422 42,368
Shares applicable to stock options,
net of shares assumed to be
purchased from proceeds at
average market price. . . . . . . . . 473 280 469 219
Assuming conversion of 6 1/4%
Convertible Debentures
at the beginning of each period . . . 4,287 - 4,287 -
-------- -------- --------- --------
Weighted Average Number of Shares
Outstanding . . . . . . . . . . . . . 49,267 42,650 49,178 42,587
======== ======== ======== ========
Diluted Earnings Per Share
Net Income as Adjusted. . . . . . . . . . . $.25 $.40 $.69 $.76
======== ======== ======== ========
</TABLE>
- -7-
<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Due to the provisions of FAS 128, previously
reported shares changed insignificantly; however,
previously reported earnings per share did not
change.
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. 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. In 1996 a restructuring
provision of $15.4 million was made primarily for
additional severance costs. During the year ended
June 30, 1996, the Company severed a total of 367
employees most of which were involuntarily
separated. The severed employees were primarily in
the tobacco division and worked in various
departments throughout the Company. During the year
ended June 30, 1997, additional restructuring
charges were accrued in the amount of $3.9 million,
of which $2.9 million relates to additional
severance costs and $1 million relates to a
reduction of capitalized idle plant expense. At
June 30, 1997, the remaining cash outlays associated
with employee separations are expected to total $7.9
million, of which $3.3 million will be expended in
1998. 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 six months ended December 31, 1997, the
Company paid out $1.9 million, principally for
employee separations.
4. On April 1, 1997, DIMON Incorporated acquired all
the outstanding capital stock and other rights of
Intabex Holdings Worldwide S.A. (Intabex), a
privately-owned Luxembourg holding company.
Separately, a Zimbabwe company that is a wholly-
owned subsidiary of DIMON acquired certain tobacco
assets from an Intabex affiliated company in
Zimbabwe. The purchase price was preliminarily
allocated based on estimated fair values of assets
acquired and liabilities assumed at the date of
acquisition. This preliminary allocation resulted
in an excess of purchase price over net assets
acquired of $159 million at June 30, 1997 which has
been adjusted to $168 million as of December 31,
1997, based on current estimates. The excess of
purchase price over net assets acquired is being
amortized on a straight-line basis over 40 years.
- -8-
<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. In connection with the Intabex acquisition, DIMON
issued $123.3 million of 6 1/4% Convertible
Subordinated Debentures due on March 31, 2007 (the
"Debentures"). The Debentures are convertible into
approximately 4.29 million shares of the Company's
Common Stock at a conversion price of $28.77 per
share at any time prior to maturity. The Debentures
are subordinated in right of payment to all existing
and future senior indebtedness, as defined, of the
Company, and do not have a cross-default provision.
The Debentures are redeemable at the option of the
Company under certain circumstances on or after
April 1, 2000. As discussed in Note B of the June
30, 1997 Form 10-K, Intabex's former shareholders
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 indemnified liabilities against
$90 million of the Debentures. The amount of
Debentures subject to set-off declines in stages,
also as discussed in Note B of the June 30, 1997
Form 10-K.
6. On August 29, 1996, the Company received notices
from Brazilian tax authorities of proposed
adjustments to income taxes for the calendar year
1992 based on the Company's recalculation of
monetary correction as allowed under Law 8200. The
approximate proposed adjustment claims additional
tax, including penalties and interest, through June
30, 1997, of $24.1 million, before related tax
benefits for all assessed interest. In 1993, the
Company received notices from Brazilian tax
authorities of proposed adjustments to the income
tax returns of the Company's entities located in
Brazil for the calendar years ending 1988 through
1992. The approximate proposed adjustments claim
additional tax, including penalties and interest
through June 30, 1997, of $31.8 million, before
related tax benefits for all assessed interest. The
Company believes that it has properly reported its
income and paid its taxes in Brazil in accordance
with applicable laws and intends to contest the
remaining proposed adjustments vigorously. The
Company expects that the ultimate resolution of
these matters will not have a material adverse
effect on the Company's consolidated balance sheet
or results of operations.
7. The results of operations for the three and six
months ended December 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, 1997.
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
December 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 . . . . . . . . . $ (1,522) $ 1,400 $ 49,167 $ - $ 49,045
Notes receivable. . . . . . . . . . . . . . - 324 53,377 (47,854)b 5,847
Trade receivables, net of allowances. . . . 10,674 94,501 274,224 (123,115)b 256,284
Inventories:
Tobacco . . . . . . . . . . . . . . . . . - 366,796 509,654 - 876,450
Other. . . . . . . . . . . . . . . . . . 98 1,041 14,877 - 16,016
Advances on purchases of tobacco . . . . . 392,993 207,478 185,801 (569,590)b 216,682
Recoverable income taxes . . . . . . . . . - 123 2,175 23 b 2,321
Prepaid expenses . . . . . . . . . . . . . 3,096 3,720 14,563 - 21,379
------------ ------------ ------------ ------------- --------------
Total current assets. . . . . . . . . . 405,339 675,383 1,103,838 (740,536) 1,444,024
------------- ------------ ------------ -------------- ---------------
Investments and other assets
Equity in net assets of investee
companies. . . . . . . . . . . . . . . . - 2,883 10,052 (6,492)b 6,443
Consolidated subsidiaries . . . . . . . . . 425,359 457,963 11,421 (894,743)b -
Other investments . . . . . . . . . . . . . 1 4,592 71,720 (65,037)b 11,276
Notes receivable. . . . . . . . . . . . . . - 616 9,282 - 9,898
Other . . . . . . . . . . . . . . . . . . . 85,690 2,468 10,558 (85,551)b 13,165
------------ ------------- ------------- ------------- ---------------
511,050 468,522 113,033 (1,051,823) 40,782
------------- -------------- ------------- ------------- ---------------
Intangible assets
Excess of cost over related net assets
of business acquired. . . . . . . . . . . 9,380 9,202 171,425 - 190,007
Production and supply contracts . . . . . . - 18,750 12,847 - 31,597
Pension asset . . . . . . . . . . . . . . . 3,348 - - - 3,348
------------ ------------ -------------- ------------- ------------
12,728 27,952 184,272 - 224,952
------------ ------------- -------------- ------------- -------------
Property, plant and equipment
Land. . . . . . . . . . . . . . . . . . . . 1,771 1,610 26,505 - 29,886
Buildings . . . . . . . . . . . . . . . . . 4,331 25,197 159,472 - 189,000
Machinery and equipment . . . . . . . . . . 5,597 63,377 158,339 - 227,313
Allowances for depreciation . . . . . . . . (5,981) (35,699) (86,773) - (128,453)
------------ ------------ ------------- -------------- --------------
5,718 54,485 257,543 - 317,746
------------ ------------ ------------- -------------- --------------
Deferred taxes and other
deferred charges. . . . . . . . . . . . . 21,956 - 298 - 22,254
------------ ------------ ------------- -------------- --------------
Total assets. . . . . . . . . . . . . . . . $956,791 $1,226,342 $1,658,984 $(1,792,359) $2,049,758
============ ============ ============= ============== ==============
a. To correct for cash transfers made by DIMON Incorporated to an entity which reports on an earlier period.
b. Inter-company eliminations.
</TABLE>
- -10-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Balance Sheet
December 31, 1997
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------ ------------ ------------ --------------- --------------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Notes payable to banks . . . . . . . . . .$ - $ 37,835 $ 402,425 $ (47,337)b $392,923
Accounts payable:
Trade . . . . . . . . . . . . . . . . . 588 524,693 402,401 (859,579)b 68,103
Officers and employees . . . . . . . . . 4,995 180 4,088 - 9,263
Other. . . . . . . . . . . . . . . . . . 2,798 684 12,248 15 b 15,745
Advances from customers. . . . . . . . . . (170,509) 162,623 36,441 169,695 b 198,250
Accrued expenses . . . . . . . . . . . . . 2,952 7,640 47,531 (1,734)b 56,389
Income taxes . . . . . . . . . . . . . . . (11,446)c 4,479 19,062 6,534 b 18,629
Long-term debt current . . . . . . . . . . 4,581 - 9,400 (1,454)b 12,527
-------------- -------------- ------------- ---------------- ---------------
Total current liabilities. . . . . . . (166,041) 738,134 933,596 (733,860) 771,829
-------------- -------------- ------------- ---------------- ---------------
Long-term debt
Revolving Credit Notes and Other. . . . . . 413,145 - 121,710 - 534,855
Convertible Subordinated Debentures . . . . 123,328 - - - 123,328
Senior Notes. . . . . . . . . . . . . . . . 125,000 - - - 125,000
-------------- --------------- ------------- ---------------- ---------------
661,473 - 121,710 - 783,183
-------------- --------------- ------------- ---------------- ---------------
Deferred Credits
Income taxes. . . . . . . . . . . . . . . . 6,029 (7,732) 26,172 - 24,469
Compensation and other benefits . . . . . . 30,604 5,600 8,456 - 44,660
------------- --------------- ------------- ---------------- ---------------
36,633 (2,132) 34,628 - 69,129
Minority interest in subsidiaries . . . . . . - - 420 471 b 891
-------------- --------------- ------------- ---------------- ---------------
Stockholders' equity
Common stock/Paid in capital . . . . . . . 182,144 149,697 372,767 (522,464)b 182,144
Retained earnings. . . . . . . . . . . . . 246,694 340,443 198,287 (538,730)b 246,694
Equity-currency conversions. . . . . . . . (3,245) 200 (2,207) 2,007 b (3,245)
Unrealized gain on investments . . . . . . - - - - -
Additional minimum pension
liability . . . . . . . . . . . . . . . . (867) - - - (867)
Treasury stock at cost . . . . . . . . . . - - (217) 217 b -
-------------- --------------- ------------- ---------------- --------------
424,726 490,340 568,630 (1,058,970)b 424,726
-------------- --------------- ------------- ---------------- --------------
Total liabilities and equity . . . . . $ 956,791 $1,226,342 $1,658,984 $(1,792,359) $2,049,758
============== =============== ============= ================ ==============
b. Inter-company eliminations.
c. Current deferred tax on reserves for restructuring and unallocated estimated tax payments.
</TABLE>
- -11-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Income
Three Months Ended December 31, 1997
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------- ------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Sales and other operating revenues. . . . . . $ 5,637 $461,007 $437,008 $(215,195)a $688,457
Cost of goods and services sold . . . . . . . - 440,010 393,511 (213,515)a 620,006
------------- ------------- ------------- --------------- -------------
5,637 20,997 43,497 (1,680) 68,451
Selling, administrative and
general expenses. . . . . . . . . . . . . . 2,384 12,053 19,303 1,769 a,b 35,509
------------ ------------- ------------ --------------- -------------
Operating income (loss) . . . . . . . . . . . 3,253 8,944 24,194 (3,449) 32,942
Interest Expense. . . . . . . . . . . . . . . 10,900 6,572 7,390 (3,449)a 21,413
------------- ------------- ------------- --------------- ------------
Income (loss) before income taxes, minority
interest and equity in net income of
investee companies . . . . . . . . . . . . (7,647) 2,372 16,804 - 11,529
Income taxes (benefit). . . . . . . . . . . . (3,611) (329) 4,978 - 1,038
------------- ------------- ------------- --------------- ------------
Income (loss) before minority interest,
equity in net income of investee
companies . . . . . . . . . . . . . . . . (4,036) 2,701 11,826 - 10,491
Income applicable to
minority interest . . . . . . . . . . . . - - 46 - 46
Equity in net income (loss) of investee
companies, net of income taxes. . . . . . . - - 494 - 494
Equity in net income of subsidiaries. . . . . 14,975 12,274 - (27,249)a -
------------ ------------ ------------ --------------- ------------
NET INCOME. . . . . . . . . . . . . . . . . . $10,939 $ 14,975 $ 12,274 $ (27,249) $ 10,939
============ ============ ============ =============== ============
a. Inter-company eliminations.
b. Royalty expense in SG&A and Royalty income in Other Income for Consolidated Entities.
</TABLE>
- -12-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Income
Six Months Ended December 31, 1997
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------- ------------- -------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Sales and other operating revenues. . . . . . $ 8,877 $684,538 $903,811 $(395,704)a $1,201,522
Cost of goods and services sold . . . . . . . - 649,941 774,032 (381,038)a 1,042,935
------------- ------------- ------------- --------------- -------------
8,877 34,597 129,779 (14,666) 158,587
Selling, administrative and
general expenses. . . . . . . . . . . . . . 7,171 22,930 44,505 (2,029)a,b 72,577
------------ ------------- ------------ --------------- -------------
Operating income (loss) . . . . . . . . . . . 1,706 11,667 85,274 (12,637) 86,010
Interest Expense. . . . . . . . . . . . . . . 19,543 11,075 26,437 (12,637)a 44,418
------------- ------------- ------------- --------------- ------------
Income (loss) before income taxes, minority
interest and equity in net income of
investee companies . . . . . . . . . . . . (17,837) 592 58,837 - 41,592
Income taxes (benefit). . . . . . . . . . . . (6,974) (916) 18,849 - 10,959
------------- ------------- ------------- --------------- ------------
Income (loss) before minority interest,
equity in net income of investee
companies . . . . . . . . . . . . . . . . (10,863) 1,508 39,988 - 30,633
Income applicable to minority
interest. . . . . . . . . . . . . . . . . . - - 47 - 47
Equity in net income (loss) of investee
companies, net of income taxes. . . . . . . - - 804 - 804
Equity in net income of subsidiaries. . . . . 42,253 40,745 - (82,998)a -
------------ ------------ ------------ --------------- ------------
NET INCOME. . . . . . . . . . . . . . . . . . $31,390 $ 42,253 $ 40,745 $(82,998) $ 31,390
============ ============ ============ =============== ============
a. Inter-company eliminations.
b. Royalty expense in SG&A and Royalty income in Other Income for Consolidated Entities.
</TABLE>
- -13-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Cash Flows
Six Months Ended December 31, 1997
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
-------------- ------------ -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Operating activities
Net Income. . . . . . . . . . . . . . . . . $31,390 $42,253 $40,745 $ (82,998)a $ 31,390
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and
amortization . . . . . . . . . . . . . 1,112 6,251 16,493 - 23,856
Deferred items . . . . . . . . . . . . . (734) (957) (3,978) - (5,669)
Loss (gain) on foreign
currency
transactions . . . . . . . . . . . . . (181) 57 (674) - (798)
Loss (gain) on disposition
of fixed assets. . . . . . . . . . . . - (135) (1,386) - (1,521)
Undistributed earnings of
investees
/subsidiaries . . . . . . . . . . . . (42,253) (40,745) (804) 82,998 a (804)
Income applicable to minority
interest . . . . . . . . . . . . . . . - - 47 - 47
Bad debt expense . . . . . . . . . . . . - (10) 507 - 497
Decrease (increase) in accounts
receivable . . . . . . . . . . . . . . 7,065 (1,576) 178,499 (56,994)a 126,994
Increase in inventories and
advances on purchases
of tobacco . . . . . . . . . . . . . . (149,381) (348,324) 55,252 197,502 a (244,951)
Decrease (increase) in recoverable
taxes. . . . . . . . . . . . . . . . . - (123) 786 (23)a 640
Decrease (increase) in prepaid
expenses . . . . . . . . . . . . . . . (915) (1,005) 4,079 - 2,159
Decrease in accounts payable
and accrued expenses . . . . . . . . . 1,191 193,389 102,373 (381,002)a (84,049)
Increase in advances from
customers. . . . . . . . . . . . . . . (9,019) 141,003 (208,659) 205,542 a 128,867
Increase (decrease) in income
taxes. . . . . . . . . . . . . . . . . (7,163) (755) (7,333) 6,534 a (8,717)
Other. . . . . . . . . . . . . . . . . . - - 796 - 796
-------------- -------------- ------------ ------------- --------------
Net cash provided (used) by
operating activities. . . . . . . . . (168,888) (10,677) 176,743 (28,441) (31,263)
-------------- -------------- ------------ ------------- --------------
Investing activities
Purchase of property and equipment . . . . (687) (3,701) (9,821) - (14,209)
Proceeds from sale of property and
equipment. . . . . . . . . . . . . . . . . - 578 13,730 - 14,308
Payments on notes receivable and
receivable from investees. . . . . . . . - 71 (2,176) 2,105 a -
Advances for notes receivable. . . . . . . - - (2,868) - (2,868)
Proceeds from or (advances) for other
investments and other assets . . . . . . (111) (1,945) 5,005 (3,227)a (278)
Purchase of remaining interest
in investee . . . . . . . . . . . . . . . - - (2,200) - (2,200)
-------------- -------------- ------------ ------------- --------------
Net cash provided (used) by investing
activities. . . . . . . . . . . . . . . (798) (4,997) 1,670 (1,122) (5,247)
-------------- -------------- ------------ ------------- --------------
a. Inter-company eliminations
</TABLE>
- -14-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Cash Flows (Continued)
Six Months Ended December 31, 1997
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
-------------- -------------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Financing activities
Repayment of debt. . . . . . . . . . . . . $(648,616) $ - $(340,661) $ - $(989,277)
Proceeds from debt . . . . . . . . . . . . 827,990 - (103,355) 48,311 a (979,656)
Proceeds from sale of common stock 3,204 5,007 - (5,007)a 3,204
Cash dividends paid to DIMON Incorporated
stockholders . . . . . . . . . . . . . . (14,216) (5,456) 5,456 - (14,216)
-------------- -------------- ------------ ------------- --------------
Net cash provided (used) by financing
activities . . . . . . . . . . . . . . 168,362 (449) (231,850) 43,304 (20,633)
-------------- -------------- ------------ ------------- --------------
Effect of exchange rate changes
on cash . . . . . . . . . . . . . . . . . . - 68 (1,038) - (970)
-------------- -------------- ------------ ------------- --------------
Increase (decrease) in cash and cash
equivalents . . . . . . . . . . . . . . . . (1,324) (16,055) (54,475) 13,741 (58,113)
Cash and cash equivalents from
consolidation of investee . . . . . . . . . - - 27 - 27
Cash and cash equivalents at beginning of
year. . . . . . . . . . . . . . . . . . . . (198) 17,455 103,615 (13,741)a 107,131
-------------- -------------- ------------ ------------- --------------
Cash and cash equivalents at end of
period. . . . . . . . . . . . . . . . $ (1,522) $ 1,400 $ 49,167 $ - $ 49,045
=============== ============== ============ ============= ==============
a. Inter-company eliminations
</TABLE>
- -15-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Balance Sheet
June 30, 1997
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------ ------------ ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents . . . . . . . . . . . $ (198) $ 17,455 $ 103,615 $ (13,741)a $ 107,131
Notes receivable. . . . . . . . . . . . . . . . - 416 52,130 (45,749)b 6,797
Trade receivables, net of allowances. . . . . . 17,559 92,954 465,752 (180,109)b 396,156
Inventories:
Tobacco . . . . . . . . . . . . . . . . . . . - 44,905 538,783 (109)b 583,579
Other. . . . . . . . . . . . . . . . . . . . 70 1,137 24,075 - 25,282
Advances on purchases of tobacco . . . . . . . 243,640 180,948 174,156 (371,979)b 226,765
Recoverable income taxes . . . . . . . . . . . - - 3,051 - 3,051
Prepaid expenses . . . . . . . . . . . . . . . 2,197 2,715 17,806 - 22,718
------------ ------------ ------------ ------------- --------------
Total current assets. . . . . . . . . . . . 263,268 340,530 1,379,368 (611,687) 1,371,479
------------- ------------ ------------ -------------- ---------------
Investments and other assets
Equity in net assets of investee
companies. . . . . . . . . . . . . . . . . . - 2,832 6,494 - 9,326
Consolidated subsidiaries . . . . . . . . . . . 396,525 411,817 135,356 (943,698)b -
Other investments . . . . . . . . . . . . . . . 1 2,617 14,682 (5,007)b 12,293
Notes receivable. . . . . . . . . . . . . . . . - 660 12,078 - 12,738
Other . . . . . . . . . . . . . . . . . . . . . 76,077 3,042 12,622 (75,938)b 15,803
------------ ------------- ------------- ------------- ---------------
472,603 420,968 181,232 (1,024,643) 50,160
------------- -------------- ------------- ------------- ---------------
Intangible assets
Excess of cost over related net assets
of businesses acquired. . . . . . . . . . . . 152,870 10,346 17,219 - 180,435
Production and supply contracts . . . . . . . . - 21,053 5,628 - 26,681
Pension asset . . . . . . . . . . . . . . . . . 3,348 - - - 3,348
------------ ------------ -------------- ------------- -------------
156,218 31,399 22,847 - 210,464
------------ ------------- -------------- ------------- --------------
Property, plant and equipment
Land. . . . . . . . . . . . . . . . . . . . . . 1,771 1,816 27,495 - 31,082
Buildings . . . . . . . . . . . . . . . . . . . 4,281 25,871 166,735 - 196,887
Machinery and equipment . . . . . . . . . . . . 4,959 60,109 166,637 - 231,705
Allowances for depreciation . . . . . . . . . . (5,380) (33,751) (87,791) - (126,922)
------------ ------------ ------------- -------------- ---------------
5,631 54,045 273,076 - 332,752
------------ ------------ ------------- -------------- ---------------
Deferred taxes and other
deferred charges . . . . . . . . . . . . . . . 22,295 - 453 - 22,748
------------ ------------ ------------- -------------- ---------------
Total assets. . . . . . . . . . . . . . . . . . . $ 920,015 $846,942 $1,856,976 ($1,636,330) $1,987,603
============ ============ ============= ============== ===============
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, 1997
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
-------------- -------------- ------------- ---------------- ---------------
<S> <S> <S> <S> <S> <S>
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Notes payable to banks . . . . . . . . . . . . $ - $ 37,835 $409,530 $ (97,102)b $ 350,263
Accounts payable:
Trade . . . . . . . . . . . . . . . . . . . 238 333,028 255,852 (480,835)b 108,283
Officers and employees . . . . . . . . . . . 4,760 989 7,692 - 13,441
Other. . . . . . . . . . . . . . . . . . . . 2,963 133 18,568 539 b 22,203
Advances from customers. . . . . . . . . . . . (18,063) 21,456 102,241 (35,847)b 69,787
Accrued expenses . . . . . . . . . . . . . . . 2,181 5,344 58,616 - 66,141
Income taxes . . . . . . . . . . . . . . . . . (4,282)c 5,397 24,031 - 25,146
Long-term debt current . . . . . . . . . . . . 4,581 - 11,641 - 16,222
-------------- -------------- ------------- ---------------- ---------------
Total current liabilities. . . . . . . . . (7,622) 404,182 888,171 (613,245) 671,486
-------------- -------------- ------------- ---------------- ---------------
Long-term debt
Revolving Credit Notes and Other. . . . . . . . 233,772 - 344,054 - 577,826
Convertible Subordinated Debentures . . . . . . 123,328 - - - 123,328
Senior Notes. . . . . . . . . . . . . . . . . . 125,000 - - - 125,000
-------------- --------------- ------------- ---------------- ---------------
482,100 - 344,054 - 826,154
-------------- --------------- ------------- ---------------- ---------------
Deferred Credits
Income taxes. . . . . . . . . . . . . . . . . . 6,624 (6,572) 36,578 - 36,630
Compensation and other benefits . . . . . . . . 30,650 5,957 7,465 - 44,072
------------- --------------- ------------- ---------------- ---------------
37,274 (615) 44,043 - 80,702
Minority interest in subsidiaries . . . . . . . . - - 527 471 b 998
-------------- --------------- ------------- ---------------- ---------------
Stockholders' equity
Common stock/Paid-in-capital . . . . . . . . . 178,939 144,690 342,577 (487,267)b 178,939
Retained earnings. . . . . . . . . . . . . . . 229,521 298,190 235,545 (533,735)b 229,521
Equity-currency conversions. . . . . . . . . . 670 495 2,276 (2,771)b 670
Additional minimum pension liability . . . . . (867) - - - (867)
Treasury stock . . . . . . . . . . . . . . . . - - (217) 217 b -
-------------- --------------- ------------- ---------------- --------------
408,263 443,375 580,181 (1,023,556) 408,263
-------------- --------------- ------------- ---------------- --------------
Total liabilities and equity . . . . . . . $ 920,015 $846,942 $1,856,976 ($1,636,330) $1,987,603
============== =============== ============= ================ ==============
b. Inter-company eliminations.
c. Current deferred tax on reserves for restructuring and unallocated estimated tax payments.
</TABLE>
- -17-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Income
Three Months Ended December 31, 1996
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------- ------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Sales and other operating revenues. . . . . . . .$ 5,442 $ 587,146 $ 383,111 $(204,358)a $771,341
Cost of goods and services sold . . . . . . . . . 6,114 552,917 327,532 (185,846)a 700,717
------------- ------------- ------------- --------------- -------------
(672) 34,229 55,579 (18,512) 70,624
Selling, administrative and
general expenses . . . . . . . . . . . . . . . . 3,406 21,069 19,209 (11,640)a,b 32,044
------------ ------------- ------------ --------------- -------------
Operating income. . . . . . . . . . . . . . . . . (4,078) 13,160 36,370 (6,872) 38,580
Interest Expense. . . . . . . . . . . . . . . . . (210) 6,011 12,723 (6,872)a 11,652
------------ ------------- ------------ --------------- -------------
Income (loss) before income taxes, minority
interest and equity in net income of
investee companies . . . . . . . . . . . . . . (3,868) 7,149 23,647 - 26,928
Income taxes (benefits) . . . . . . . . . . . . . (2,137) 2,774 9,619 - 10,256
------------- ------------- ------------- --------------- ------------
Income (loss) before minority interest,
equity in net income of investee
companies . . . . . . . . . . . . . . . . . . . (1,731) 4,375 14,028 - 16,672
Income applicable to minority interest. . . . . . - - 61 - 61
Equity in net income (loss) of investee
companies, net of income taxes. . . . . . . . . - 523 (73) - 450
Equity in net income of subsidiaries. . . . . . . 18,792 13,894 - (32,686) -
Extraordinary items . . . . . . . . . . . . . . . - - - - -
------------ ------------ ------------ --------------- ------------
NET INCOME. . . . . . . . . . . . . . . . . . . .$ 17,061 $ 18,792 $ 13,894 $(32,686) $ 17,061
============ ============ ============ =============== ============
a. Inter-company eliminations.
b 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
Six Months Ended December 31, 1996
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
------------- ------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Sales and other operating revenues. . . . . . . . $ 8,827 $ 807,232 $ 647,244 $(281,228)a $1,182,075
Cost of goods and services sold . . . . . . . . . 6,161 756,662 538,367 (254,788)a 1,046,402
------------- ------------- ------------- --------------- -------------
2,666 50,570 108,877 (26,440) 135,673
Selling, administrative and
general expenses. . . . . . . . . . . . . . . . 6,656 34,037 36,330 (14,475)a,b 62,548
------------ ------------- ------------ --------------- -------------
Operating income. . . . . . . . . . . . . . . . . (3,990) 16,533 72,547 (11,965) 73,125
Interest Expense. . . . . . . . . . . . . . . . . 3,762 9,873 19,879 (11,965)a 21,549
------------ ------------- ------------ --------------- -------------
Income (loss) before income taxes, minority
interest and equity in net income of
investee companies . . . . . . . . . . . . . . (7,752) 6,660 52,668 - 51,576
Income taxes (benefits) . . . . . . . . . . . . . (3,690) 2,578 21,227 - 20,115
------------- ------------- ------------- --------------- ------------
Income (loss) before minority interest,
equity in net income of investee
companies . . . . . . . . . . . . . . . . . . . (4,062) 4,082 31,441 - 31,461
Income applicable to minority interest. . . . . . - - 51 - 51
Equity in net income (loss) of investee
companies, net of income taxes. . . . . . . . . - 603 313 - 916
Equity in net income of subsidiaries. . . . . . . 36,388 31,703 - (68,091) -
Extraordinary items . . . . . . . . . . . . . . . - - - - -
------------ ------------ ------------ --------------- -------------
NET INCOME (LOSS) . . . . . . . . . . . . . . . . $ 32,326 $ 36,388 $ 31,703 $(68,091) $ 32,326
============ ============ ============ =============== =============
a. Inter-company eliminations.
b. 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
Six Months Ended December 31, 1996
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
-------------- -------------- -------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Operating activities
Net Income. . . . . . . . . . . . . . . . . . .$ 32,326 $36,388 $31,703 $(68,091)a $32,326
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization. . . . . . . . 1,289 5,589 9,557 - 16,435
Deferred items . . . . . . . . . . . . . . . 211 (432) 2,410 - 2,189
Loss on foreign currency
transactions . . . . . . . . . . . . . . . - 56 26 - 82
Loss (gain) on disposition of
fixed assets . . . . . . . . . . . . . . . 44 (1,459) (1,272) - (2,687)
Undistributed earnings of
investees/subsidiaries. . . . . . . . . . (36,388) (32,306) (313) 68,091 a (916)
Income applicable to minority
interest. . . . . . . . . . . . . . . . . - - 51 - 51
Bad debt expense . . . . . . . . . . . . . . - - 697 - 697
Decrease (increase) in accounts
receivable . . . . . . . . . . . . . . . . (10,096) 48,829 11,023 (42,869)a 6,887
Decrease (increase) in inventories and
advances on purchases of tobacco . . . . . (58,656) (303,464) 23,124 80,578 a (258,418)
Increase in recoverable taxes. . . . . . . . - (84) (1,177) - (1,261)
Decrease (increase) in prepaid
expenses . . . . . . . . . . . . . . . . . 532 (1,605) 37 11 a (1,025)
Increase (decrease) in accounts payable
and accrued expenses . . . . . . . . . . . (12,487) 114,870 (55,832) (79,927)a (33,376)
Increase (decrease) in advances from
customers. . . . . . . . . . . . . . . . . (3,464) 112,563 (51,884) 40,948 a 98,163
Increase in income taxes . . . . . . . . . . 1,522 794 12,128 277 a 14,721
Other. . . . . . . . . . . . . . . . . . . . - (1) (7) - (8)
-------------- -------------- ------------ ------------- --------------
Net cash used by operating
activities. . . . . . . . . . . . . . . (85,167) (20,262) (19,729) (982) (126,140)
-------------- -------------- ------------ ------------- --------------
Investing activities
Purchase of property and equipment . . . . . . (112) (3,111) (9,429) - (12,652)
Proceeds from sale of property and
equipment . . . . . . . . . . . . . . . . . 4 1,544 3,143 - 4,691
Payments on notes receivable and
receivable from investees. . . . . . . . . . - 330 225 - 555
Advances on notes receivable . . . . . . . . . - - (1,298) 493 a (805)
Proceeds from or (advances) for other
investments and other assets . . . . . . . . (1,663) 14,814 (16,456) 3,055 (250)
-------------- -------------- ------------ ------------- --------------
Net cash provided (used) by investing
activities. . . . . . . . . . . . . . . . . (1,771) 13,577 (23,815) 3,548 (8,461)
-------------- -------------- ------------ ------------- --------------
a. Inter-company eliminations
</TABLE>
- -20-
<PAGE>
<TABLE>
<CAPTION>
DIMON Incorporated and Subsidiaries
Supplemental Combining Statement of Cash Flows (Continued)
Six Months Ended December 31, 1996
(Unaudited)
(in thousands) DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
-------------- -------------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Financing activities
Repayment of debt. . . . . . . . . . . . . . .$ (109,150) $ (424) $(88,239) $ - $(197,813)
Proceeds from debt . . . . . . . . . . . . . . 206,666 - 138,517 (391)a 344,792
Proceeds from sale of common stock . . . . . . 205 - - - 205
Cash dividends paid to DIMON Incorporated
stockholders . . . . . . . . . . . . . . . . (12,075) 1,663 - (1,663)a (12,075)
-------------- -------------- ------------ ------------- --------------
Net cash provided (used) by financing
activities . . . . . . . . . . . . . . . . 85,646 1,239 50,278 (2,054) 135,109
-------------- -------------- ------------ ------------- --------------
Effect of exchange rate
changes on cash . . . . . . . . . . . . . . . . - - (50) - (50)
-------------- -------------- ------------ ------------- --------------
Increase (decrease) in cash and cash
equivalents . . . . . . . . . . . . . . . . . . (1,292) (5,446) 6,684 512 458
Cash and cash equivalents at beginning of
year. . . . . . . . . . . . . . . . . . . . . . 723 6,894 46,120 83 53,820
-------------- -------------- ------------ ------------- --------------
Cash and cash equivalents at end of
period. . . . . . . . . . . . . . . . . .$ (569) $ 1,448 $52,804 $ 595 $54,278
============== ============== =========== ============= ==============
a. Inter-company eliminations
</TABLE>
- -21-
<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. 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, 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.
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>
DECEMBER 31, 1997
DEBIT(CREDIT)
(Unaudited)
DIMON Non-
(in thousands) Incorporated Guarantors Guarantors
------------ ---------- ----------
<S> <C> <C> <C>
Accounts Receivable . . . . . . . . . . . . . . . $10,644 $19,499 $132,386
Advances on Purchases . . . . . . . . . . . . . . 392,993 171,523 103,108
Accounts Payable Trade. . . . . . . . . . . . . . (444) (518,324) (349,459)
Advances from Customers . . . . . . . . . . . . . 170,509 - (5,671)
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1997
DEBIT(CREDIT)
DIMON Non-
(in thousands) Incorporated Guarantors Guarantors
------------ ---------- ----------
<S> <C> <C>
Accounts Receivable . . . . . . . . . . . . . . . $ 14,493 $ 11,439 $ 170,529
Advances on Purchases . . . . . . . . . . . . . . 243,640 174,860 55,019
Accounts Payable. . . . . . . . . . . . . . . . . (61) (321,440) (158,995)
Advances from Customers . . . . . . . . . . . . . 18,063 (32) (60,944)
</TABLE>
- -23-
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(in thousands)
Three Months Ended December 31, 1997 Compared to Three Months Ended
December 31, 1996:
Net sales and other operating revenues were $688,457, a
decrease of $82,884, or 10.7%, for the three months ended
December 31, 1997, from $771,341 for the same period in
1996, in spite of an overall modest increase in sales
volumes. The decrease in tobacco sales revenues of
$72,205, or 10.9%, was primarily due to lower average
prices of foreign and U.S. grown tobacco and decreased
quantities of U.S. grown tobacco, partially offset by
increased quantities of foreign grown tobacco and new
origins from Intabex entities. Volumes of foreign
tobacco shipped during the quarter increased by more than
30% while volumes of U.S. tobacco sold during the quarter
declined by over 20%. Average prices decreased due
primarily to decreases in prices of tobacco purchased and
product mix. The changes are primarily due to decreased
average prices of foreign and U.S. grown tobacco of
$56,000 and decreased quantities for U.S. grown tobacco
of $90,000, offset partially by increased quantities of
foreign grown tobacco of $38,000 and increased quantities
of new origins of $29,000. The foreign grown sales price
decreases and increased quantities were primarily in
South America and Africa. The significant decline in
U.S. tobacco sales volumes reflect a curtailment of leaf
purchases by certain of the Company's key U.S. domestic
customers in anticipation of either a tobacco settlement
or higher excise taxes on cigarettes sold in the U.S.
The Company was also negatively impacted by devaluing
currencies in certain Asian countries that caused some
customers to delay or cancel shipments of tobacco. The
Company believes that the risks of further delays in
shipments and the realization of lower average prices
could continue in future periods. Sales in the flower
division decreased $10,679, or 9.9%. This was primarily
due to the continuing strength of the U.S. dollar versus
European currencies which negatively impacted sales by
approximately $12,800.
Cost of sales and expenses for the period ended December
31, 1997, were $655,515, a decrease of $77,246, or 10.5%
from $732,761 for the three months ended December 31,
1996. Cost of sales and expenses of the tobacco
operations decreased $67,599, or 10.8%, primarily due to
decreased sales, offset partially by increased selling,
general and administrative expense in connection with the
Intabex acquisition including approximately $1,000 of
amortization costs. The gross profit for the tobacco
operations decreased $285, or .5%, due primarily to
decreased sales of U.S. grown tobacco, offset partially
by increased gross profit from the Dark tobacco
operations from Intabex. The gross margin percentage
increased from 8.9% to 9.9%. Cost of sales and expenses
for the Company's flower segment decreased $9,578, or
9.1%, primarily due to decreased sales and decreased
personnel expenses. The gross margin for the flowers
operations decreased $1,189 primarily due to decreased
margins in Germany and the effect of the U.S. dollar
exchange rates. Corporate expenses decreased $69 due to
decreased personnel costs.
Interest expense increased $9,761 for the quarter ended
December 31, 1997, from the same period last year
primarily due to higher average borrowings, partially
offset by lower average rates.
The effective income tax rate decreased from 38.1% in
fiscal year 1997 to 9.0% in fiscal year 1998. The
reduction in the rate for the quarter is primarily due to
a combination of changes in the overall blend of taxable
income and reductions of tax rates from changes in the
laws of the various countries in which the Company
operates.
Equity in net income of the tobacco investee companies
increased $44 in fiscal year 1998 from the same period
last year. The increase is primarily due to investee
entities of Intabex, offset partially due to
consolidating operations in North America that were
investees in fiscal year 1997.
- -24-
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
(in thousands)
Six Months Ended December 31, 1997 Compared to Six Months Ended
December 31, 1996:
Net sales and other operating revenues were $1,201,522,
an increase of $19,447, or 1.6%, for the six months ended
December 31, 1997, from $1,182,075 for the same period in
1996. Overall volumes of tobacco sales increased by
approximately 14% over the prior year period. The
increase in tobacco sales of $39,138, or 3.9%, was due
primarily to increased quantities of foreign grown
tobaccos and new origins from Intabex entities totaling
approximately 38%. This was partially offset by a
decrease in quantities of U.S. grown tobacco of
approximately 20% and decreased average prices of foreign
grown tobacco. The changes primarily of increased
quantities of foreign grown tobacco, new origins of
Intabex entities and processing services accounted for
$100,000, and $59,000 and $19,000, respectively, of the
increase, and decreased quantities of U.S. grown tobacco
and decreased average prices of foreign grown tobaccos
accounted for $88,000 and $54,000, respectively, of the
decrease. The increased quantities were primarily from
South America and Europe. The decreased average prices
were due to decreases in prices of purchased tobacco and
product mix on sales from Brazil and Africa. The
decreased quantities of U.S. grown tobacco is due
primarily to decreased orders from domestic cigarette
manufacturers because of uncertainties surrounding the
tobacco settlement. The Company was also negatively
impacted by devaluing currencies in certain Asian
countries that caused some customers to delay or cancel
shipments of tobacco. The Company believes that the
risks of further delays in shipments could continue in
future periods. The decrease in flower sales of $19,691,
or 10.4%, was due primarily to an approximate $24,700
decrease due to the effect of applying U.S. dollar
exchange rates.
Cost of sales and expenses, for the period ended December
31, 1997, were $1,115,513, an increase of $6,562, or .6%,
from $1,108,951, from the same period in 1996. Cost of
sales and expenses of the tobacco operations increased
$24,787, or 2.7%, primarily due to increased expenses
related to Intabex including approximately $2,000 of
amortization costs. The gross profit from the tobacco
operations increased $25,746, or 22.2%, primarily due to
the increases in the first quarter of fiscal year 1998 in
Europe, Asia and North America. There were additional
increases in Europe in the second quarter, offset with
decreases in North America, South America and Asia. The
gross margin percentage for tobacco operations increased
from 11.7% to 13.7%. Cost of sales and expenses for the
flower operations decreased $18,708, or 10.0%, primarily
due to decreased sales and decreased personnel costs.
The gross margin for the flower operations decreased
$2,833, or 14.4%, and the gross margin percentage for the
flower operation decreased from 10.4% to 9.9%, both due
primarily to the economic conditions in Germany.
Corporate expenses decreased $483, or 7.3%, due primarily
to decreased personnel costs.
Interest expense increased $22,869 for the six months
ended December 31, 1997, from the same period last year
primarily due to higher average borrowings, partially
offset by lower average rates.
The effective tax rate decreased from 39.0% in fiscal
year 1997 to 26.3% in fiscal year 1998. The reduction in
the rate for the quarter is primarily due to a
combination of changes in the overall blend of taxable
income and reductions of tax rates from changes in the
laws of the various countries in which the Company
operates.
Equity in net income of the tobacco investee companies
decreased $111 in fiscal year 1998 from the same period
last year. The decrease is primarily due to
consolidating operations in North America and Greece that
were investees in fiscal year 1997, partially offset by
investee entities of Intabex.
- -25-
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
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 decreased from
$699,993 at June 30, 1997 to $672,195 at December 31,
1997. The current ratio of 2.0 to 1 at June 30, 1997
decreased to 1.9 to 1 at December 31, 1997. At December
31, 1997, current assets increased $72,545, or 5.3%, and
current liabilities increased $100,343, or 14.9%, from
June 30, 1997. Current assets increased primarily due to
increases in tobacco inventories of $292,871, partially
offset by decreases in trade receivables and cash of
$139,872 and $58,086, respectively. Current liabilities
increased primarily due to increases in advances from
customers and notes payable to banks of $128,463 and
$42,660, respectively, partially offset by accounts
payable trade of $40,180.
Although total working capital has decreased, shipments
of tobacco inventory which were delayed by one quarter,
projected sales which did not occur and shipments to
customers in east Asia which have been postponed to the
next fiscal year have contributed to total working
capital assets which were approximately $100 million more
at December 31, 1997 than the Company had previously
planned. This higher than expected working capital asset
level, together with the additional borrowings
outstanding as a result of the Intabex acquisition, has
negatively impacted net income due to the additional
interest expense for the three-month and six-month
periods. Interest expense for the three months and six
months ended December 31, 1997 totaled $21,413 and
$44,418, respectively. These amounts were approximately
84% and 106% over interest expense for the comparable
1996 periods.
At December 31, 1997, DIMON had seasonally adjusted lines
of credit of $1,157 million, excluding the long-term
credit agreements. These lines bear interest at rates
ranging from 5.51% to 11.08%. At December 31, 1997,
unused lines of credit amounted to $293 million, net of
$101 million of letters of credit and guarantees that
reduce lines of credit. Total maximum outstanding
borrowings during the six months ended December 31, 1997
were $625 million.
To ensure long-term liquidity, DIMON entered into a $500
million New Credit Facility, effective June 27, 1997,
with 20 banks which replaced DIMON's $240 million
existing credit facility. The Company had $130 million
of borrowings under these agreements at December 31,
1997. The Company uses the New Credit Facility to
classify $370 million of working capital loans to
Revolving Credit Notes at December 31, 1997. It is the
Company's intent to finance at least $500 million on a
long-term basis. The New Credit Facility is subject to
certain commitment fees and covenants that, among other
things, require DIMON to maintain minimum working
capital and tangible net worth amounts, require specific
liquidity and long-term solvency ratios and restrict
acquisitions. The New Credit Facility's initial term
expires on June 27, 2000, and subject to approval by the
lenders, may be extended. The rates of interest are
based upon the type of loan requested by the Company.
During the life of the agreement, the interest rate could
be the prime rate or the LIBOR rate adjusted. The
primary advance rate is the agent bank's base lending
rate (8.50% at December 31, 1997). The Company pays a
commitment fee of 1/4% per annum on any unused portion of
the facility. Decisions relative to repayments and
reborrowings are made based on circumstances then
existing, including management's judgment as to the most
effective utilization of funds.
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. 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 1998.
- -26-
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Cash flows used in operating activities decreased $94,877
from $126,140 to $31,263 for the six months ended
December 31, 1997 over the same period last year, due
primarily to decreases in accounts receivable and
increases in advances from customers offset by decreases
in accounts payable and accrued expenses. Cash flows
used in investing activities decreased $3,214 primarily
due to increased proceeds from the sale of property and
equipment offset partially by an increase in advances for
notes receivable and purchase of remaining interest in
investee. Cash flows provided by financing activities
decreased $155.842 to ($20,633) primarily due to net
decreased borrowings.
OTHER INFORMATION:
Although the Company believes that there continue to be
certain positive fundamentals in the tobacco business on
a global basis, the Company does not expect the current
currency crisis in east Asia and the related effect on
purchasing power of Asian customers to improve in the
near term. The Company also believes that the heightened
prospect of increased retail prices and thus lower
expected consumption of cigarettes in the U.S. continues
to impact the purchasing decisions, relating to both U.S.
and foreign leaf tobacco, of certain of the Company's
primary U.S. based customers. In addition, lower
production volumes due to weather patterns in the
Brazilian market are expected to mitigate the Company's
opportunity for continued growth in export volumes from
that country. The Company believes that the risks of
further delays in shipments and the realization of lower
average prices could continue in future periods.
In view of these uncertainties, the Company believes that
it is not likely that there will be robust growth in
sales and operating profit for the remainder of the
fiscal year. Additionally, the Company continues to
gauge the changing environment and demand for its
products and will continue to implement responsive
programs to moderate the effects on future periods.
The Company is evaluating the strategic fit of its flower
operations with DIMON's long-term growth plans and is
considering several alternatives regarding the
optimization of this division's contribution to
shareholder value.
Factors that may affect future results
The foregoing discussion may contain forward-looking
statements, generally identified by phrases such as "the
Company expects" or words of similar effect. Certain
important factors that in some cases have affected, and
in the future could affect, the Company's actual results
and could cause the Company's actual results for 1998 and
beyond to differ materially from those expressed in any
forward-looking statements made by the Company are
discussed above under "OTHER INFORMATION" and in the
Company's Annual Report on Form 10-K for the year ended
June 30, 1997, under the caption "Managements' Discussion
and Analysis of Financial Condition and Results of
Operations - Factors that May Affect Future Results."
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits 27 - Financial Data Schedule
(b) Reports on Form 8-K - None
- -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 February 16, 1998 Jerry L. Parker
Senior Vice President - Controller
(Principal Accounting Officer)
- -28-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
----------------------
Exhibit Page No.
- ------- --------
<S> <C>
27 Financial Data Schedule . . . . . . . . . . . . . . 30
- -29-
</TABLE>
<TABLE> <S> <C>
<PAGE>
<CAPTION>
EXHIBIT 27
<S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 49,045
<SECURITIES> 0
<RECEIVABLES> 256,284
<ALLOWANCES> 10,172
<INVENTORY> 892,466
<CURRENT-ASSETS> 1,444,025
<PP&E> 446,199
<DEPRECIATION> (128,453)
<TOTAL-ASSETS> 2,049,758
<CURRENT-LIABILITIES> 771,830
<BONDS> 783,183
<COMMON> 182,144
0
0
<OTHER-SE> 242,582
<TOTAL-LIABILITY-AND-EQUITY> 2,049,758
<SALES> 1,201,522
<TOTAL-REVENUES> 1,201,522
<CGS> 1,042,936
<TOTAL-COSTS> 1,042,936
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 498
<INTEREST-EXPENSE> 44,418
<INCOME-PRETAX> 41,592
<INCOME-TAX> 10,959
<INCOME-CONTINUING> 31,390
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,390
<EPS-PRIMARY> .71
<EPS-DILUTED> .69
<PAGE>
</TABLE>
