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 DANVILLE, Va., Nov. 12 /PRNewswire/ -- In spite of lower first quarter sales and income, Dibrell Brothers' (NASDAQ-NMS: DBRL) Chairman and Chief Executive Officer, Claude B. Owen, Jr., said today that he believes the Danville, Va. based tobacco and flower dealer can achieve earnings for its fiscal year ending June 30, 1994, in the range of the Company's record perfomance in 1993. Owen attributed the decline in sales and income in Dibrell's first quarter ended September 30, 1993, in part to seasonal factors, including delayed shipping of certain foreign tobacco and to later processing of the 1993 U.S. flue-cured tobacco crop. He also noted that the Company's plan for 1994 includes a significantly larger contribution from its European flower operations, but such improvement is expected to come in subsequent periods as the summer months are historically the weakest in the international flower trade.
 For the quarter ended September 30, 1993, Dibrell recorded net income before the cumulative effect of accounting changes of $4,326,317 or $.32 per share ($.31 fully diluted) versus $8,541,801 or $.64 per share ($.57 fully diluted) last year. Net sales were $173.7 million compared to $256.3 million in last year's first quarter. During last year's first quarter, Dibrell also recognized a net benefit of $1,069,395 or $.08 per share ($.07 fully diluted) from the cumulative effect of adopting Statement of Financial Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes" and SFAS No. 106 "Employer's Accounting for Postretirement Benefits Other Than Pensions." SFAS No. 106 was adopted in the second quarter of fiscal year 1993 retroactive to the first quarter. Including the one-time effect of the accounting changes, net income in last year's first quarter was $9,611,196 or $.72 per share ($.64 fully diluted).
 Dibrell reported that sales of its tobacco division declined to $102.3 million in this year's first quarter from $179.4 million last year due principally to a drop of $24.9 million in sales of U.S. tobacco and a decline of $48.1 million in sales of South American tobacco. Owen said he expects the Company's U.S. tobacco operations to perform well for the remainder of fiscal year 1994 as Dibrell's purchases of 1993 U.S. flue-cured tobacco crop have increased by about four percent over last year and as the volume of U.S. flue-cured to be processed in Dibrell's U.S. plants will increase by 20 percent versus last year due to increased processing for the Flue-Cured Stabilization Cooperative.
 As for the outlook for the Company's non-U.S. tobacco business, Owen said that Dibrell was holding $68 million more in foreign tobacco inventories, both committed and available for sale, at September 30, 1993 than at the same date last year and that the Company anticipates that most of this inventory will be sold prior to June 30, 1994. He also said that Dibrell was adjusting downward its growing and buying programs for foreign leaf in 1994, specifically in Brazil, to adapt to reduced demand caused by newly imposed import restrictions in the United States and to the current worldwide oversupply of leaf.
 Owen said that Operating Profit from Dibrell's tobacco operations had declined to $14.3 million in this year's first quarter from $20.5 million last year due to the decrease in domestic and foreign tobacco sales. Even with improved performance by U.S. tobacco operations and the sale of foreign inventories during the remainder of the fiscal year, the Company expects its tobacco Operating Profit for the full year to be somewhat less than the $79.5 million reported in fiscal year 1993.
 The keys to matching last year's record net income in fiscal year 1994, according to Owen, are a return by Dibrell's flower business to the level of profitability achieved in fiscal year 1991 when Operating Profit reached $13.1 million versus only $6.5 million in 1993 as well as continued low interest rates.
 Owen said that Dibrell's flower business had met the Company's expectations in the first quarter as sales in constant dollars were up seven percent over last year's first quarter. However, the relative strength of the U.S. dollar versus European currencies caused flower sales, when translated into current U.S. dollars, to decline to $71.4 million versus $76.9 million last year. The seasonal operating loss in the flower business was $1.1 million this year versus $360,000 last year due primarily to a production delay in Kenya which limited quantities available for sale in Europe.
 Owen said that Dibrell experienced an approximate one percent decline in its average short-term borrowing rate versus last year as interest expense for the first quarter declined by $784,000. He said that lower borrowing rates this year should compensate for the higher levels of tobacco inventory being financed by Dibrell.
 Due to the recently enacted increase in the U.S. corporate income tax rate and to the Company's changing sources of taxable income, Dibrell expects its effective income tax rate to increase modestly in 1994.
 Dibrell is engaged in two international businesses. The primary business involves purchasing, processing and selling leaf tobacco worldwide. The other business involves the importation and distribution of fresh cut flowers in Europe, North America and Japan. As both of the Company's lines of business are seasonal, the results of a single quarter are not necessarily indicative of the results to be expected for the full year.
 (Unaudited -- 000's Except Per Share Data)
 Three Months Ended
 Sept. 30
 1993 1992
 Net sales $173,731 $256,331
 Cost of goods and services sold 145,177 221,192
 Selling, administrative and
 general expenses 17,081 17,550
 Other income and (deductions), net 1,704 2,539
 Operating profit $13,177 $20,128
 Corporate expenses 1,521 1,683
 Interest expense 4,900 5,684
 Income taxes 2,689 4,212
 Income (loss) applicable to
 minority interest 23 4
 Equity in net income (loss) of investee
 companies, net of tax 282 (3)
 Income before cumulative effect
 of accounting changes $4,326 $8,542
 Cumulative effect of accounting changes --- 1,069
 Net income $4,326 $9,611
 Earnings per share, primary:
 Income before cumulative effect
 of accounting changes $.32 $.64
 Cumulative effect of accounting changes --- .08
 Net income $.32 $.72
 Earnings per share, assuming full dilution:
 Income before cumulative effect of
 accounting changes $.31 $.57
 Cumulative effect of accounting changes --- .07
 Net income $.31 $.64
 Average number of shares outstanding:
 Primary 13,322,233 13,300,801
 Assuming full dilution 16,133,301 16,128,550
 Cash dividends per share $.18 $.15
 Sales by business segment:
 Tobacco $102,312 $179,426
 Flowers 71,419 76,905
 Total $173,731 $256,331
 Operating profit (loss) by
 business segment:
 Tobacco $14,257 $20,488
 Flowers (1,080) (360)
 Total $13,177 $20,128
 (Unaudited -- 000's)
 Sept. 30
 ASSETS 1993 1992
 Current assets $494,438 $416,590
 Investmentsand other assets 104,340 95,999
 Property, plant and
 equipment (net) 138,252 142,301
 $737,030 $654,890
 Sept. 30
 Current liabilities $348,427 $292,315
 Long-term debt
 Revolving credit notes
 and other 147,085 146,013
 Convertible subordinated
 debentures 56,475 56,900
 Deferred taxes and other
 liabilities 31,081 24,135
 Stockholders' equity 153,962 135,527
 $737,030 $654,890
 -0- 11/12/93
 /CONTACT: John Hunnicutt of Dibrell Brothers, 804-791-0151/

CO: Dibrell Brothers, Incorporated ST: Virginia IN: TOB SU: ERN

JM-SB -- CH015 -- 3950 11/12/93 18:16 EST
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Publication:PR Newswire
Date:Nov 12, 1993

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