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STANDARD COMMERCIAL AGREES TO SELL NURSERY; FIRST QUARTER TO INCLUDE TOBACCO INVENTORY PROVISION AND RESTRUCTURING CHARGE

 WILSON, N.C., Aug. 3 /PRNewswire/ -- Standard Commercial Corporation (NYSE: STW) has executed a letter of intent to sell its wholesale nursery business to Zelenka Nursery, Inc. The sale is subject to customary contingencies and conditions which are expected to be completed within 30 days. Zelenka, based in Grand Haven, Mich. is among the top ten nurseries in the United States in terms of sales, and is interested in acquiring a southern operation to extend its growing season and expand its market coverage.
 Standard's President, Marvin W. Coghill, said, "Sale of the nursery business is in keeping with our stated intention of divesting nonstrategic operations and the company will book a gain on the disposal. Also, we are pleased that Zelenka intends to retain most of the existing workforce."
 Concerning the June 30, 1993, first quarter, J. Alec G. Murray, vice chairman and chief executive officer, said: "We had anticipated difficult trading conditions for our tobacco business as a result of current world surpluses created by substantial 1993 crop production increases in Brazil, Zimbabwe and a few other countries. However, these uncertainties have been exacerbated by the impact of possible import restrictions and higher excise taxes in the United States to the point the prices for non-U.S. leaf have fallen further than expected, and sales since our March 31 fiscal year end have stagnated. As a consequence operating margins have come under added pressure and inventory turnover has slowed."
 Murray went on to say: "Trading conditions are expected to improve as crop sizes are reduced and the market settles down to new price levels, but the timing of the improvement is difficult to predict. In the meantime our announced plans to enhance the competitiveness of our U.S. tobacco operations by consolidating our W.A. Adams leaf buying and processing operations with those in Wilson are being implemented, and we are examining ways to further reduce costs throughout the entire organization. Consequently, we have taken a decision to record a pretax charge of $18 million to provide for possible losses on disposal of inventories and costs related to restructuring as a result of which our June 1993 first quarter preliminary results show a net loss of $19.9 million."
 Details for the June quarter will be released on Aug. 9. Taking in to account the special charge and current difficult trading environment, the company expects to show a loss on its tobacco operations for the year. Murray added, "Unless conditions deteriorate further we believe that the action taken will position the company to get earnings back on a growth track."
 Standard Commercial is one of the world's largest leaf tobacco dealers and among the top international wool trading companies. It operates in virtually every tobacco and wool producing nation and sells worldwide to tobacco manufacturers and various wool users.
 -0- 8/3/93
 /CONTACT: G.M. Ross, Standard Commercial Corporation, 919-291-5507/
 (STW)


CO: Standard Commercial Corporation ST: North Carolina IN: TOB SU: ERP TNM

SB-MM -- CH012 -- 9107 08/03/93 17:44 EDT
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Publication:PR Newswire
Date:Aug 3, 1993
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