-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EcCFAiI7Ps9VcXHmj4UVJ2WnX3tX+w2sg2ywCp6P4L3mZ1YS6c/YPYBzNg8P3oIg NwxPNA+C3QT+3slJx6UOhg== 0000916641-01-000123.txt : 20010209 0000916641-01-000123.hdr.sgml : 20010209 ACCESSION NUMBER: 0000916641-01-000123 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD COMMERCIAL CORP CENTRAL INDEX KEY: 0000093319 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-FARM PRODUCT RAW MATERIALS [5150] IRS NUMBER: 131337610 STATE OF INCORPORATION: NC FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09875 FILM NUMBER: 1528120 BUSINESS ADDRESS: STREET 1: 2201 MILLER RD CITY: WILSON STATE: NC ZIP: 27893 BUSINESS PHONE: 9192915507 MAIL ADDRESS: STREET 1: 2201 MILLER RD CITY: WILSON STATE: NC ZIP: 27893 FORMER COMPANY: FORMER CONFORMED NAME: STANDARD COMMERCIAL TOBACCO CO INC DATE OF NAME CHANGE: 19880228 10-Q 1 0001.txt STANDARD COMMERCIAL 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended DECEMBER 31, 2000 Commission file number 1-9875 [LOGO] STANDARD COMMERCIAL CORPORATION Incorporated under the laws of I.R.S. Employer North Carolina Identification No. 13-1337610 2201 Miller Road, Wilson, North Carolina 27893 Telephone Number 252-291-5507 On February 1, 2001 the registrant had outstanding 13,242,976 shares of Common Stock ($.20 par value). 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) had been subject to such filing requirements for the past 90 days. YES X NO______ ------ PART I FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS STANDARD COMMERCIAL CORPORATION CONSOLIDATED BALANCE SHEET (In thousands, except share data)
December 31 March 31 -------------------- 2000 1999 2000 ---- ---- ---- (unaudited) ASSETS Cash..................................................................... $ 50,362 $ 30,476 $ 38,349 Receivables.............................................................. 234,126 232,421 227,300 Inventories.............................................................. 305,334 397,508 340,444 Prepaid expenses......................................................... 4,557 6,254 5,192 Marketable securities.................................................... 570 621 586 ------------------------------ Current assets....................................................... 594,949 667,280 611,871 Property, plant and equipment............................................ 145,253 151,644 146,638 Investment in affiliates................................................. 15,707 16,012 16,059 Other assets............................................................. 45,617 50,199 46,262 ------------------------------ Total assets......................................................... $801,526 $885,135 $820,830 ============================== LIABILITIES Short-term borrowings.................................................... $244,606 $326,094 $262,059 Current portion of long-term debt........................................ 9,158 11,095 14,325 Accounts payable......................................................... 133,011 131,187 132,115 Taxes accrued............................................................ 10,401 7,589 9,783 ------------------------------ Current liabilities.................................................. 397,176 475,965 418,282 Long-term debt........................................................... 128,502 134,120 130,645 Convertible subordinated debentures...................................... 60,814 69,000 69,000 Retirement and other benefits............................................ 20,856 20,364 20,536 Deferred taxes........................................................... 6,143 7,388 6,518 ------------------------------ Total liabilities.................................................... 613,491 706,837 644,981 ------------------------------ MINORITY INTERESTS....................................................... 28,256 27,393 26,772 ------------------------------ SHAREHOLDERS' EQUITY Preferred stock, $1.65 par value; authorized shares 1,000,000 Issued none Common stock, $0.20 par value; authorized shares 100,000,000 Issued 15,857,405 (Dec. 99 - 15,588,995; Mar 00 - 15,605,725)........... 3,161 3,118 3,121 Additional paid-in capital............................................... 103,797 102,898 102,986 Unearned restricted stock plan compensation.............................. (1,768) (1,747) (1,603) Treasury shares, 2,617,707............................................... (4,250) (4,250) (4,250) Retained earnings........................................................ 109,685 93,503 97,177 Accumulated other comprehensive income................................... (50,846) (42,617) (48,354) ------------------------------ Total shareholders' equity........................................... 159,779 150,905 149,077 ------------------------------ Total liabilities and equity......................................... $801,526 $885,135 $820,830 ==============================
The accompanying notes are an integral part of these financial statements. 2 STANDARD COMMERCIAL CORPORATION CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS (In thousands, except per share information; unaudited)
Third quarter ended Nine months ended December 31 December 31 --------------------- --------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Sales - tobacco............................................. $ 317,945 $ 221,769 $ 664,855 $ 600,445 - nontobacco.......................................... 62,863 56,147 168,501 152,716 -------- -------- -------- -------- Total sales............................................. 380,808 277,916 833,356 753,161 Cost of sales - materials, services and supplies............ 335,799 243,765 717,469 655,702 - interest.................................... 7,524 8,621 24,312 19,125 -------- -------- -------- -------- Gross profit............................................ 37,485 25,530 91,575 78,334 Selling, general and administrative expenses................. 21,614 19,493 59,896 59,429 Other interest expense....................................... 2,889 2,691 6,540 10,199 Other income (expense) - net................................. 545 508 1,226 1,947 -------- -------- -------- -------- Income before taxes..................................... 13,527 3,854 26,365 10,653 Income taxes................................................. (6,675) (1,693) (12,255) (5,937) -------- -------- -------- -------- Income after taxes...................................... 6,852 2,161 14,110 4,716 Minority interests........................................... (1,139) 31 (1,783) 268 Equity in earnings of affiliates............................. (6) 351 85 1,031 -------- -------- -------- -------- Income before extraordinary gain........................ 5,707 2,543 12,412 6,015 Extraordinary gain due to buyback of convertible subordinated debentures, net of income tax charge of $730 for quarter and $1,059 for nine months.................. 1,417 -0- 2,056 -0- -------- --------- -------- -------- Net income ............................................. 7,124 2,543 14,468 6,015 Retained earnings at beginning of period..................... 103,220 91,585 97,177 89,430 Common stock dividends....................................... (659) (625) (1,960) (1,942) -------- -------- -------- -------- Retained earnings at end of period........................... $ 109,685 $ 93,503 $ 109,685 $ 93,503 ======== ======== ======== ======== Earnings per common share Basic Income before extraordinary gain........................ $ 0.43 $ 0.20 $ 0.95 $ 0.46 Extraordinary gain...................................... $ 0.11 $ 0.00 $ 0.16 $ 0.00 --------- --------- --------- --------- Net income.............................................. $ 0.54 $ 0.20 $ 1.11 $ 0.46 --------- --------- --------- --------- - average shares outstanding........................ 13,198 12,964 13,087 12,948 Diluted Income before extraordinary gain........................ $ 0.42 $ 0.20 $ 0.95 $ 0.46 Extraordinary gain...................................... $ 0.09 $ 0.00 $ 0.14 $ 0.00 --------- --------- --------- --------- Net income.............................................. $ 0.51 $ 0.20 $ 1.09 $ 0.46 --------- --------- --------- --------- - average shares outstanding........................ 15,332 15,312 15,355 15,297 Dividends paid per common share.............................. $ 0.05 $ 0.05 $ 0.15 $ 0.15
The accompanying notes are an integral part of these financial statements. 3 STANDARD COMMERCIAL CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands; unaudited)
Nine months ended December 31 -------------------------- 2000 1999 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income............................................................... $ 14,468 $ 6,015 Depreciation and amortization......................................... 15,392 16,287 Minority interests.................................................... 1,783 (268) Deferred income taxes................................................. (311) (1,295) Undistributed earnings of affiliates, net of dividends received....... 10 (1,031) Gain on buyback of subordinated debentures............................ (2,056) 0 Gain on disposition of property, plant and equipment.................. (189) (282) Other................................................................. (788) 1,086 -------------------------- 28,309 20,512 Net changes in working capital other than cash Receivables........................................................... (12,050) (5,212) Inventories........................................................... 31,185 (23,811) Current payables...................................................... 8,686 (21,974) --------------------------- CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES......................... 56,130 (30,485) --------------------------- CASH FLOWS FROM INVESTING ACTIVITIES Property, plant and equipment - additions............................... (12,584) (14,363) - dispositions............................ 410 1,538 Business (acquisitions) dispositions..................................... 9 (2,420) --------------------------- CASH USED FOR INVESTING ACTIVITIES....................................... (12,165) (15,245) -------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Net change in short-term borrowings...................................... (17,453) 45,508 Proceeds from long-term borrowings....................................... 7,359 2,123 Repayment of long-term borrowings........................................ (14,618) (13,477) Buyback of convertible subordinated debentures........................... (6,130) 0 Dividends paid........................................................... (1,960) (1,942) Other.................................................................... 850 227 -------------------------- CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES........................ (31,952) 32,439 -------------------------- Increase (decrease) in cash for period................................... 12,013 (13,291) Cash at beginning of period.............................................. 38,349 43,767 -------------------------- CASH AT END OF PERIOD.................................................... $ 50,362 $ 30,476 ========================== Cash payments for - interest........................................... $ 23,386 $ 24,785 - income taxes....................................... $ 10,788 $ 12,088
The accompanying notes are an integral part of these financial statements. 4 STANDARD COMMERCIAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1.BASIS OF PRESENTATION The interim statements presented herein should be read in conjunction with the audited financial statements and notes thereto included in the Company's latest Annual Report on Form 10-K. The interim period financial statements have been prepared by the Company without audit and contain all of the adjustments which are, in the opinion of the management, necessary for a fair statement of the results of operations. All such adjustments are of normal, recurring nature and there were no material changes in accounting policies during the period ended December 31, 2000. Because of the nature of the Company's businesses, fluctuations in results for interim periods are not necessarily indicative of business trends or results to be expected for a full year. 2.INVENTORIES December 31 March 31 -------------------------------- -------- (In thousands) 2000 1999 2000 ---- ---- ---- Tobacco $238,069 $333,654 $278,343 Nontobacco 67,265 63,854 62,101 -------- -------- -------- Total $305,334 $397,508 $340,444 -------- -------- -------- 3.COMPREHENSIVE INCOME The statement on comprehensive income requires that an enterprise (a) classify items of other comprehensive income by their nature in a financial statement and (b) display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of the balance sheet. The components of comprehensive income were as follows:
Quarter ended Nine months ended December 31 December 31 ----------- ----------- 2000 1999 2000 1999 ---- ---- ---- ---- (In thousands) Net income $ 7,124 $ 2,543 $14,468 $ 6,015 Other comprehensive income: Translation adjustment 4,240 (2,680) (2,492) (4,831) ------- -------- -------- -------- Total comprehensive income (loss) $11,364 $ (137) $11,976 $ 1,184 ------- -------- ------- -------
4.EARNINGS PER SHARE Earnings per share has been presented in conformity with Statement of Financial Accounting Standards No.128. The incremental shares from assumed conversion of 7-1/4% convertible subordinated debentures are not included in computing the diluted per share amounts for the third quarter and nine months ended December 31, 1999 because the calculations include adjustments which are antidilutive. For the periods ended December 31, 2000 and December 31, 1999, outstanding stock options were not included in the computation of diluted earnings per share because the option exercise price was greater than the average market price of the common shares. 5 STANDARD COMMERCIAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5.SEGMENT INFORMATION The company is engaged in purchasing, processing and selling leaf tobacco and wool. Its activities other than these are minimal. Segment revenue and net income are as follows:
Quarter ended Nine months ended December 31 December 31 ----------- ----------- 2000 1999 2000 1999 ---- ---- ---- ---- (In thousands) Sales Tobacco $317,945 $221,769 $664,855 $600,445 Nontobacco 62,863 56,147 168,501 152,716 -------- -------- -------- -------- $380,808 $277,916 $833,356 $753,161 -------- -------- -------- -------- Net income (loss) Tobacco $ 6,731 $ 2,932 $ 13,550 $ 8,429 Nontobacco 393 (389) 918 (2,414) -------- -------- -------- -------- $ 7,124 $ 2,543 $ 14,468 $ 6,015 -------- -------- -------- --------
6.SENIOR NOTES The 8-7/8% Senior Notes due 2005 were issued by Standard Commercial Tobacco Co., Inc. (the "Issuer"), a wholly owned subsidiary of the Company. The Company and Standard Wool, Inc., a wholly owned subsidiary of the Company (the "Guarantors"), jointly and severally, guarantee, on a senior basis, the full and prompt performance of the Issuer's obligations under the terms of the indenture. Management has determined that full financial statements of the Guarantors would not be material to investors and those financial statements are not provided. The following supplemental combining financial statements present information regarding the Issuer and the Guarantors. 6 STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING BALANCE SHEET December 31, 2000 (In thousands; unaudited)
Standard Commercial Standard Other Tobacco Co. Commercial Standard Subsidiaries Inc. Corporation Wool Inc. (Non- (Issuer) (Guarantor) (Guarantor) Guarantors) Eliminations Total -------- ----------- ----------- ----------- ------------ ----- Assets Cash $ 8,097 $ - $ 28 $ 42,237 $ - 50,362 Receivables 39,831 16 16 194,263 - 234,126 Intercompany receivables 136,000 7,519 49 16,655 (160,223) - Inventories 67,277 - - 238,057 - 305,334 Prepaids and other 189 158 1 4,209 - 4,557 Marketable securities - 1 - 569 - 570 --------------------------------------------------------------------------------------- Current assets 251,394 7,694 94 495,990 (160,223) 594,949 Property, plant and equipment 20,900 - 14 124,339 - 145,253 Investment in subsidiaries 90,263 196,247 29,946 149,866 (466,322) - Investment in affiliates - - - 15,707 - 15,707 Other noncurrent assets 722 9,692 - 35,203 - 45,617 --------------------------------------------------------------------------------------- Total assets $ 363,279 $213,633 $ 30,054 $821,105 $ (626,545) $ 801,526 ======================================================================================= Liabilities Short-term borrowings $ - $ 7 $ - $244,599 $ - $244,606 Current portion of long-term debt - - - 9,158 - 9,158 Accounts payable 18,078 1,750 - 113,183 - 133,011 Intercompany accounts payable 34,042 228 1,548 124,405 (160,223) - Taxes accrued 18,577 (9,718) - 1,542 - 10,401 --------------------------------------------------------------------------------------- Current liabilities 70,697 (7,733) 1,548 492,887 (160,223) 397,176 Long-term debt 115,000 - - 13,502 - 128,502 Convertible subordinated debentures - 60,814 - - - 60,814 Retirement and other benefits 9,286 773 - 10,797 - 20,856 Deferred taxes (933) (1,557) - 8,633 - 6,143 --------------------------------------------------------------------------------------- Total liabilities 194,050 52,297 1,548 525,819 (160,223) 613,491 Minority interests - - - 28,256 - 28,256 Shareholders' equity Common stock 993 3,161 32,404 155,178 (188,575) 3,161 Additional paid-in capital 130,860 103,797 - 59,753 (190,613) 103,797 Unearned restricted stock plan compensation (597) (211) (13) (947) - (1,768) Treasury stock at cost - (4,250) - - - (4,250) Retained earnings 60,594 109,685 6,869 103,892 (171,355) 109,685 Accumulated other comprehensive income (22,621) (50,846) (10,754) (50,846) 84,221 (50,846) --------------------------------------------------------------------------------------- Total shareholders' equity 169,229 161,336 28,506 267,030 (466,322) 159,779 --------------------------------------------------------------------------------------- Total liabilities and equity $ 363,279 $213,633 $ 30,054 $821,105 $ (626,545) $801,526 =======================================================================================
7 STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS Third quarter ended December 31, 2000 (In thousands; unaudited)
Standard Commercial Standard Other Tobacco Co. Commercial Standard Subsidiaries Inc. Corporation Wool Inc. (Non- (Issuer) (Guarantor) (Guarantor) Guarantors) Eliminations Total -------- ----------- ----------- ----------- ------------ ----- Sales $195,262 $ - $ 48 $ 257,268 $ (71,770) $ 380,808 Cost of sales: Materials services and supplies 180,127 - - 227,442 (71,770) 335,799 Interest 2,871 - - 4,653 - 7,524 ------------------------------------------------------------------------------- Gross profit 12,264 - 48 25,173 - 37,485 Selling, general & administrative expenses 3,108 996 68 17,442 - 21,614 Other interest expense 1,102 1,274 - 513 - 2,889 Other income (expense) net 1,538 (74) - (919) - 545 ------------------------------------------------------------------------------- Income (loss) before taxes 9,592 (2,344) (20) 6,299 - 13,527 Income taxes 3,261 (797) - 4,211 - 6,675 ------------------------------------------------------------------------------- Income (loss) after taxes 6,331 (1,547) (20) 2,088 - 6,852 Minority interests - - - (1,139) - (1,139) Equity in earnings of affiliates - - - (6) - Equity in earnings of subsidiaries 527 7,254 416 - (8,197) ------------------------------------------------------------------------------- Income before extraordinary gain 6,858 5,707 396 943 (8,197) 5,707 Extaordinary gain due to buyback of Convertible subordinated debentures net of income tax charge of $329,000 - 1,417 - - - 1,417 ------------------------------------------------------------------------------- Net income 6,858 7,124 396 943 (8,197) 7,124 Retained earnings at beginning of period 53,736 103,220 6,473 102,949 (163,158) 103,220 Common stock dividends - (659) - - - (659) ------------------------------------------------------------------------------- Retained earnings at end of period $ 60,594 $109,685 $ 6,869 $ 103,892 $(171,355) $ 109,685 ===============================================================================
8 STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS Nine months ended December 31, 2000 (In thousands; unaudited)
Standard Commercial Standard Other Tobacco Co. Commercial Standard Subsidiaries Inc. Corporation Wool Inc. (Non- (Issuer) (Guarantor) (Guarantor) Guarantors) Eliminations Total -------- ----------- ----------- ----------- ------------ ----- Sales $ 322,142 $ - $ 134 $ 713,388 $ (202,308) $ 833,356 Cost of sales: Materials services and supplies 284,605 - - 635,172 (202,308) 717,469 Interest 9,626 - - 14,686 - 24,312 ---------------------------------------------------------------------------------- Gross profit 27,911 - 134 63,530 - 91,575 Selling, general & administrative expenses 8,576 2,780 174 48,366 - 59,896 Other interest expense 1,451 3,897 - 1,192 - 6,540 Other income (expense) net 2,820 1 8 (1,603) - 1,226 ---------------------------------------------------------------------------------- Income (loss) before taxes 20,704 (6,676) (32) 12,369 - 26,365 Income taxes 7,039 (2,270) - 7,486 - 12,255 ---------------------------------------------------------------------------------- Income (loss) after taxes 13,665 (4,406) (32) 4,883 - 14,110 Minority interests - - - (1,783) - (1,783) Equity in earnings of affiliates - - - 85 - 85 Equity in earnings of subsidiaries 2,218 16,818 967 - (20,003) - ---------------------------------------------------------------------------------- Income before extraordinary gain 15,883 12,412 935 3,185 (20,003) 12,412 Extaordinary gain due to buyback of Convertible subordinated debentures net of income tax charge of $329,000 - 2,056 - - - 2,056 ---------------------------------------------------------------------------------- Net income 15,883 14,468 935 3,185 (20,003) 14,468 Retained earnings at beginning of period 44,711 97,177 5,934 100,707 (151,352) 97,177 Common stock dividends - (1,960) - - - (1,960) ---------------------------------------------------------------------------------- Retained earnings at end of period $ 60,594 $ 109,685 $ 6,869 $ 103,892 (171,355) $ 109,685 ==================================================================================
9 STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING STATEMENT OF CASH FLOWS Nine months ended December 31, 2000 (In thousands; unaudited)
Standard Commercial Standard Other Tobacco Co. Commercial Standard Subsidiaries Inc. Corporation Wool Inc. (Non- (Issuer) (Guarantor) (Guarantor) Guarantors) Eliminations Total -------- ----------- ----------- ----------- ------------ ----- Cash provided by (used in) operating activities $ 21,372 $ - $ (14) $ 34,772 $ - $ 56,130 Cash flows from investing activities Property, plant and equipment - additions (1,072) - - (11,512) - (12,584) - disposals 1 - - 409 - 410 Business (acquisitions) dispositions - - - 9 - 9 --------------------------------------------------------------------------------- Cash provided by (used in) investing activities (1,071) - - (11,094) (12,165) Cash flows from financing activities: Proceeds from long-term borrowings - - - 7,359 - 7,359 Repayment of long-term borrowings (2,940) - - (11,678) - (14,618) Net change in short-term borrowings (10,212) 7 - (7,248) - (17,453) Buyback of debentures - (6,130) - - - (6,130) Dividends received /( paid) - (1,960) - - - (1,960) Other 136 7,963 - (7,249) - 850 --------------------------------------------------------------------------------- Cash provided by (used in) financing activities (13,016) (120) - (18,816) - (31,952) Increase (decrease) in cash for year 7,285 (120) (14) 4,862 - 12,013 Cash at beginning of year 812 120 42 37,375 - 38,349 --------------------------------------------------------------------------------- Cash at end of year $ 8,097 $ - $ 28 $ 42,237 - $ 50,362 ================================================================================= Interest $ 5,389 $ 2,486 $ - $ 15,511 $ 23,386 Income taxes 1,133 1,600 - 8,055 10,788
10 STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING BALANCE SHEET December 31, 1999 (In thousands; unaudited)
Standard Commercial Standard Other Tobacco Co. Commercial Standard Subsidiaries Inc. Corporation Wool Inc. (Non- (Issuer) (Guarantor) (Guarantor) Guarantors) Eliminations Total -------- ----------- ----------- ----------- ------------ ----- Assets Cash $ - $ 75 $ 65 $ 30,336 $ - $ 30,476 Receivables 33,475 2,067 140 196,739 0 232,421 Intercompany receivables 138,004 16,511 38 20,415 (174,968) 0 Inventories 152,902 0 377 244,229 0 397,508 Prepaids and other 981 291 11 4,971 0 6,254 Marketable securities 0 1 0 620 0 621 ------------------------------------------------------------------------------ Current assets 325,362 18,945 631 497,310 (174,968) 667,280 Property, plant and equipment 22,946 0 79 128,619 0 151,644 Investment in subsidiaries 93,803 228,156 30,483 166,214 (518,656) 0 Investment in affiliates 0 0 0 16,012 0 16,012 Other noncurrent assets 4,982 10,068 3 35,146 0 50,199 ------------------------------------------------------------------------------ Total assets $447,093 $ 257,169 $ 31,196 $ 843,301 $ (693,624) $885,135 ============================================================================== Liabilities Short-term borrowings $ 32,887 $ - $ - $ 293,207 $ - $326,094 Current portion of long-term debt 0 0 0 11,095 0 11,095 Accounts payable 17,354 1,876 10 111,947 0 131,187 Intercompany payables 62,539 40,490 1,813 70,126 (174,968 0 Taxes accrued 8,871 (6,040) 0 4,758 0 7,589 ------------------------------------------------------------------------------ Current liabilities 121,651 36,326 1,823 491,133 (174,968) 475,965 Long-term debt 117,940 0 0 16,180 0 134,120 Convertible subordinated debentures 0 69,000 0 0 0 69,000 Retirement and other benefits 8,813 765 0 10,786 0 20,364 Deferred taxes 125 (1,548) 0 8,811 0 7,388 ------------------------------------------------------------------------------ Total liabilities 248,529 104,543 1,823 56,910 (174,968) 706,837 ------------------------------------------------------------------------------ Minority interests - - - 27,393 - 27,393 ------------------------------------------------------------------------------ Shareholders' equity Common stock 993 3,118 32,404 164,389 (197,786) 3,118 Additional paid-in capital 130,860 102,898 0 64,839 (195,699) 102,898 Unearned restricted stock plan compensation (594) (26) (7) (1,120) 0 (1,747) Treasury stock at cost 0 (4,250) 0 0 0 (4,250) Retained earnings 86,848 93,503 4,216 103,507 (194,571) 93,503 Accumulated other comprehensive income (19,543) (42,617) (7,240) (42,617) 69,400 (42,617) ------------------------------------------------------------------------------ Total shareholders' equity 198,564 152,626 29,373 288,998 (518,656) 150,905 ------------------------------------------------------------------------------ Total liabilities and equity $447,093 $ 257,169 $ 31,196 $843,301 $(693,624) $885,135 ================================================================================
11 STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS Quarter ended December 31, 1999. (In thousands; unaudited)
Standard Commercial Standard Other Wool Tobacco Co. Commercial Standard Subsidiaries Inc. Corporation Wool Inc. (Non- (Issuer) (Guarantor) (Guarantor) Guarantors) Eliminations Total -------- ----------- ----------- ----------- ------------ ----- Sales $ 107,664 $ - $ 265 $ 245,130 $ (75,143) $ 277,916 Cost of sales: Materials services and supplies 97,650 - 281 220,977 (75,143) 243,765 Interest 2,247 - - 6,374 - 8,621 ----------------------------------------------------------------------------------- Gross profit 7,767 - (16) 17,779 - 25,530 Selling, general & administrative expenses 3,406 775 98 15,214 - 19,493 Other interest expense 1,050 1,313 - 328 - 2,691 Other income (expense)- net 681 111 (46) (238) - 508 ----------------------------------------------------------------------------------- Income (loss) before taxes 3,992 (1,977) (160) 1,999 - 3,854 Income taxes 1,357 (671) 81 926 - 1,693 ----------------------------------------------------------------------------------- Income (loss) after taxes 2,635 (1,306) (241) 1,073 - 2,161 Minority interests - - - 31 - 31 Equity in earnings of affiliates - - - 351 - 351 Equity in earnings of subsidiaries 1,574 3,849 (119) - (5,304) - ----------------------------------------------------------------------------------- Net income 4,209 2,543 (360) 1,455 (5,304) 2,543 Retained earnings at beginning of period 82,639 91,585 4,576 102,052 (189,267) 91,585 Common stock dividends - (625) - - - (625) ----------------------------------------------------------------------------------- Retained earnings at end of period $ 86,848 $ 93,503 $ 4,216 $ 103,507 $ (194,571) $ 93,503 ===================================================================================
12 STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS Nine months ended December 31, 1999 (In thousands; unaudited)
Standard Commercial Standard Other Tobacco Co. Commercial Standard Subsidiaries Inc. Corporation Wool Inc. (Non- (Issuer) (Guarantor) (Guarantor) Guarantors) Eliminations Total -------- ----------- ----------- ----------- ------------ ----- Sales $ 174,453 $ - $ 850 $762,724 $ (184,866) $753,161 Cost of sales: Materials services and supplies 155,450 - 835 684,283 (184,866) 655,702 Interest 2,607 - - 16,518 - 19,125 ------------------------------------------------------------------------------------- Gross profit 16,396 - 15 61,923 - 78,334 Selling, general & administrative expenses 9,470 2,231 276 47,452 - 59,429 Other interest expense 4,927 3,940 - 1,332 - 10,199 Other income (expense)- net 2,290 122 (138) (327) - 1,947 ------------------------------------------------------------------------------------- Income (loss) before taxes 4,289 (6,049) (399) 12,812 - 10,653 Income taxes 1,458 (2,056) - 6,535 - 5,937 ------------------------------------------------------------------------------------- Income (loss) after taxes 2,831 (3,993) (399) 6,277 - 4,716 Minority interests - - - 268 - 268 Equity in earnings of affiliates - - - 1,031 - 1,031 Equity in earnings of subsidiaries 9,562 10,008 (1,986) - (17,584) - ------------------------------------------------------------------------------------- Net income 12,393 6,015 (2,385) 7,576 (17,584) 6,015 Retained earnings at beginning of period 81,455 89,430 6,601 95,931 (183,987) 89,430 Common stock dividends (7,000) (1,942) - - 7,000 (1,942) ------------------------------------------------------------------------------------- Retained earnings at end of period $ 86,848 $ 93,503 $ 4,216 $103,507 $ (194,571) $ 93,503 =====================================================================================
13 STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING STATEMENT OF CASH FLOWS Nine months ended December 31, 1999 (In thousands; unaudited)
Standard Commercial Standard Other Tobacco Co. Commercial Standard Subsidiaries Inc. Corporation Wool Inc. (Non- (Issuer) (Guarantor) (Guarantor) Guarantors) Eliminations Total ------ --------- --------- ---------- ------------ ----- Cash provided by (used in) operating activities $ (32,673) $ 1,789 $ 26 $ 373 $ - $ (30,485) ----------------------------------------------------------------------------------- Cash flows from investing activities Property, plant and equipment - additions (1,167) - (13) (13,183) - (14,363) - disposals 91 - - 1,447 - 1,538 Business (acquisitions) dispositions - - - (2,420) - (2,420) ----------------------------------------------------------------------------------- Cash provided by (used in) investing activities (1,076) - (13) (14,156) - (15,245) ----------------------------------------------------------------------------------- Cash flows from financing activities: Net change in short-term borrowings 32,887 - - 12,621 - 45,508 Proceeds from long-term borrowings - - - 2,123 - 2,123 Repayment of long-term borrowings - - - (13,477) - (13,477) Dividends paid - (1,942) - - - (1,942) Other (1) 228 - - - 227 ----------------------------------------------------------------------------------- Cash provided by (used in) financing activities 32,886 (1,714) - 1,267 - 32,439 ----------------------------------------------------------------------------------- Increase (decrease) in cash for year (863) 75 13 (12,516) - (13,291) Cash at beginning of year 863 - 52 42,852 - 43,767 ----------------------------------------------------------------------------------- Cash at end of year $ - $ 75 $ 65 $ 30,336 $ - $ 30,476 =================================================================================== Cash payments for - Interest $ 5,759 $ 2,501 $ - $ 16,525 $ - $ 24,785 - Income taxes 345 1,710 - 10,033 - 12,088
14 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations Sales for the quarter ended December 31, 2000 were $380.8 million, an increase of 37% from a year earlier. Sales for the nine-month period were $833.4 million, up 11% from same period a year earlier. Tobacco division sales of $317.9 million and $664.9 million for the current quarter and nine months respectively, were up 43% for the quarter and 11% for the nine-month from the corresponding periods in 2000. Overall, for the quarter, tobacco volume was up 25%, largely due to increases in North America, Europe, Far East, South America, and CIS and average prices were higher due to sales mix. For the nine-month period, volume was 4% higher and the average prices were up by 7% over the corresponding period in fiscal 2000. Shipments from Africa were lower than fiscal 2000 corresponding quarter and nine months, mainly due to delays in shipment resulting from late start of auction floors in Zimbabwe and delayed crop in Malawi. The fluctuation in sales from quarter to quarter is also due in part to a change in customer intake patterns resulting from industry consolidation. Looking forward for the next quarter and the full year, sales revenues may be negatively impacted by the decision of several large cigarette manufacturers in the U.S. to contract some of their burley requirements directly from farmers. This should not materially impact income however, as we will continue to receive and process these contracted tobaccos. Nontobacco sales of $62.9 million and $168.5 million for the current quarter and nine months, respectively, were up 12% and 10% from the same periods a year earlier. The improvement in the current quarter and nine months was largely due to the firming of wool markets, which was influenced by strong demand from China, continuing interest for superfine wools, cashmere and mohair from the fashion industry, a steady reduction of Australian wool stock-pile and reduced quantity of fresh wool stock on Australian farms. Gross profit for the quarter and nine months of $37.5 million and $91.6 million improved 47% and 17% from the corresponding periods in fiscal 2000, due primarily to increase in tobacco sales and sales mix and better trading conditions in wool division. After a strategic review, the Company terminated its operations in Tanzania and is in the process of exiting the market. This has resulted in a reduction in gross margin in our tobacco division and a reduction in after tax income of $5.5 million and is included in the year to date divisional results. Selling general and administrative expenses for the quarter and nine months were 6% and 7% of the sales versus 7.0% and 8% during the corresponding periods in fiscal 2000. The prior year periods included the write-off of a receivable from a wool affiliate in liquidation and the export credit note arrangement with a Brazilian bank that filed for bankruptcy. The effective tax rate has increased to 49% in the current quarter from 44% a year earlier and for the nine months the rate has decreased from 56% to 47%. This was due to differences in tax rates and credits not utilized in some areas where losses were incurred. For the nine months ended December 31, 1999 losses were incurred in the nontobacco segment where tax relief was not available. This segment recorded a small profit during the current year periods. Net income for the quarter was $7.1 million or $0.54 per share on a basic basis, versus $2.5 million, or $0.20 per share for the corresponding prior year quarter. For the nine months period, net income was $14.5 million or $1.11 per share on a basic basis, versus $6.0 million, or $0.46 per share in the prior year period. The current periods net income included extraordinary gains of $0.11 and $0.16 per share for the quarter and nine months, respectively, due to buyback of convertible subordinated debentures. The diluted earnings per share for the current quarter and nine months are $0.42 and $0.95 before extraordinary gain and $0.51 and $1.09 after extraordinary gains. Basic and diluted earnings are the same for prior year periods because the calculation of diluted earnings per share includes adjustments that are antidilutive. 15 STANDARD COMMERCIAL CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Liquidity and Capital Resources Working capital at December 31, 2000 was $197.8 million, compared to $191.3 million a year earlier. Long-term debt and convertible subordinated debentures at December 31, 2000 were $13.8 million lower than a year ago. Most of the working capital increase was due to contributions from operating activities. During the current nine months the Company bought $8.2 million of its convertible subordinated debentures using internally generated working capital. Capital expenditures during the current year of $12.6 million consisted of $10.6 million in the tobacco division that included $3.1 million addition to a tobacco warehousing facility in Italy, $3.0 million for the second threshing line in Brazil and routine capital expenditures, and $2.0 million in the wool division. The Company continues to closely monitor its inventory levels, which are down from $397.5 million a year ago to $305.3 million at December 31, 2000. On May 19, 1999 the Company's major tobacco subsidiaries amended their global revolving bank credit facility. The facility was increased from $200.0 million to $250.0 million and the maturity date was extended to July 31, 2002. Financial covenants and other terms and conditions are essentially unchanged. Borrowings under the facility continue to be guaranteed by the Company and are secured by substantially all of the assets of the borrowers. Certain debt agreements to which the Company and its subsidiaries are parties contain financial covenants that could restrict the payment of cash dividends. Under its most restrictive covenant, the Company had approximately $14.5 million of retained earnings available for distribution as dividends at December 31, 2000. Based on the outlook for the tobacco and wool divisions, management anticipates that it will be able to service the interest and principal on its indebtedness, maintain adequate working capital and provide for capital expenditures out of operating cash flow. Subsequent Events The Company plans to continue its debt repurchase program announced in June 2000 under which it had repurchased $8.2 million debentures during the nine months ended December 31, 2000. As of February 1, 2001 an additional $4.3 million face amount of debentures had been purchased at a discount. Assuming no additional purchases, a gain will be reported as extraordinary item, net of tax of approximately $0.6 million in the fourth fiscal quarter ending March 31, 2001. We plan to continue to make purchases as opportunities become available at a discount and working capital is available.The Company is restricted by certain of its debt covenants to the amount it can allocate for such repurchases. This amount is currently limited to approximately $25.0 million of face amount. We will continue to update progress of this program in our quarterly and annual reports. Forward-Looking Statements Statements in this report that are not purely statements of historical fact may be deemed to be forward-looking. Readers are cautioned that any such forward-looking statements are based upon management's current knowledge and assumptions, and actual results could be affected in a material way by many factors, including ones over which the Company has little or no control, e.g. unforeseen changes in shipping schedules; the balance between supply and demand; and market, economic, political and weather conditions. More information regarding certain of these factors is contained in the Company's other SEC filings, copies of which are available upon request from the Company. The Company assumes no obligation to update any of these forward-looking statements. 16 PART II - OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K a. The following exhibits are filed as a part of this report: 11 Computation of Earnings per Common Share. b. The Company did not file any reports on Form 8-K during the quarter. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: February 7, 2001. STANDARD COMMERCIAL CORPORATION (Registrant) By /s/ Robert E Harrison -------------------------------------------- Robert E Harrison President, Chief Executive Officer By /s/ Robert A Sheets -------------------------------------------- Robert A Sheets Vice President and Chief Financial Officer 17 STANDARD COMMERCIAL CORPORATIONCOMPUTATION OF EARNINGS PER COMMON SHARE EXHIBIT 11 (In thousands, except share information; unaudited)
Third quarter ended Nine months ended December 31 December 31 ------------------------ ------------------------ 2000 1999 2000 1999 ---- ---- ---- ---- BASIC Income before extraordinary gain............................ $ 5,707 $ 2,543 $ 12,412 $ 6,015 Extraordinary gain.......................................... 1,417 0 2,056 0 ----------- ----------- ----------- ----------- Net income applicable to common stock....................... $ 7,124 $ 2,543 $ 14,468 $ 6,015 ----------- ----------- ----------- ----------- Basic average shares outstanding............................ 13,197,576 12,963,659 13,087,355 12,948,005 ----------- ----------- ----------- ----------- Earnings per common share before extraordinary gain........ $ 0.43 $ 0.20 $ 0.95 $ 0.46 Extraordinary gain per common share........................ $ 0.11 $ 0.00 $ 0.16 $ 0.00 ----------- ----------- ----------- ----------- Net income per common share................................ $ 0.54 $ 0.20 $ 1.11 $ 0.46 ----------- ----------- ----------- ----------- DILUTED Income before extraordinary gain............................ $ 5,707 $ 2,543 $ 12,412 $ 6,015 Add - after-tax interest expense on 7 1/4% convertible subordinated debentures.................. 750 825 2,390 2,475 ----------- ----------- ----------- ----------- Adjusted income before extraordinary gain................... 6,457 3,368 14,802 8,490 Extraordinary gain.......................................... 1,417 0 2,056 0 ----------- ----------- ----------- ----------- Adjusted income after extraordinary gain.................... $ 7,874 $ 3,368 $ 16,858 $ 8,490 ----------- ----------- ----------- ----------- Basic average shares outstanding............................ 13,197,576 12,963,659 13,087,355 12,948,005 Increase in shares outstanding assuming conversion of 7 1/4% convertible subordinated debentures at November 13, 1991........................... 2,134,422 2,348,536 2,267,710 2,348,536 ----------- ----------- ----------- ----------- Diluted average shares outstanding......................... 15,331,998 15,312,195 15,355,065 15,296,541 ----------- ----------- ----------- ----------- Earnings per common share before extraordinary gain......... $ 0.42 $ 0.20 $ 0.95 $ 0.46 Extraordinary gain per common share........................ $ 0.09 $ 0.00 $ 0.14 $ 0.00 ----------- ----------- ----------- ----------- Net income per common share................................ $ 0.51 $ 0.20 $ 1.09 $ 0.46 ----------- ----------- ----------- -----------
Note: The incremental shares from assumed conversion of 7-1/4% convertible subordinated debentures are not included in computing the diluted per share amounts for the third quarter and nine months ended December 31, 1999 because the calculations include adjustments which are antidilutive. For the periods ended December 31, 2000 and December 31, 1999 outstanding stock options were not included in the computation of diluted earnings per share because the option exercise price was greater than the average market price of the common shares. 18 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 3-MOS MAR-31-2001 DEC-31-2000 MAR-31-2000 50,362 570 234,126 0 305,334 594,949 145,253 0 801,526 397,176 189,316 0 0 3,161 156,618 801,526 833,356 833,356 741,781 741,781 0 0 0 26,365 12,255 12,412 0 2,056 0 14,468 1.11 1.09 SHOWN NET IN FINANCIAL STATEMENTS NOT SHOWN SEPARATELY UNDER MATERIALITY GUIDELINES
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