AOI Reports Full-Year Results

Source from:  Tobacco Reporter 06/14/2011

Alliance One International Inc. reported a net loss of $71.6 million for its fiscal year ended March 31, 2011, compared with net income of $79.2 million, for the prior fiscal year. "Despite a challenging fiscal year 2011, our pretax income was $32.8 million as we continue to work through global oversupply and modified manufacturer sourcing strategies that have had an impact on our results," said Mark W. Kehaya, CEO. "To reposition our business to address these challenges we incurred $23.5 million in restructuring charges during the year in addition to $30 million in costs related to lower of cost or market inventory charges, debt retirement, customer bad debt, FCPA related monitor and attorney expenses and deferred compensation items, which were partially offset by a $37.8 gain on sale of assets and the assignment of farmer contracts to Philip Morris International's Brazilian subsidiary. "The largest item impacting net income/(loss), was a non-cash $108.5 million increase in the valuation allowance based on management's evaluation of the realization of U.S. deferred tax benefits. Actual cash taxes paid were only $12.9 million. "Our strategy to address these challenges relies in part on listening to what our customers value and deploying resources to meet their requirements where there is a clear benefit to Alliance One. Our customers are focused on good value and quality, supply security, social responsibility, and a sustainable farmer model, to name a few key areas and we have capital projects slated for this coming year that support these interests. "As such, we have already instituted a number of business refinements and are on track to continue to deliver identified efficiency improvements and cost reductions over the next eighteen months that enhance our competitive position and should translate to long term improved financial performance. "Our liquidity position is strong and this week we extended our $290 million U.S. revolver to March 31, 2013. Also, at the same time, we modified certain covenants to enhance business flexibility over the next two years, while providing for certain projects and additional financing vehicles. Combined with improving global industry dynamics, our drive, efficiency enhancements and execution are concentrated on repositioning our business for the future to meet our customers' requirements as they evolve, which should deliver increased shareholder value." Enditem