MORRISVILLE, N.C., March 11, 2015 /PRNewswire/ -- Alliance One International, Inc. (NYSE: AOI) announced today plans for the first phase of the Company's global restructuring program focused on efficiency and cost improvements. The initial phase is anticipated to be principally completed over the next 18 months and provide between $30 and $35 million in annual recurring cost savings. Actions are planned to be taken by June 30, 2015 anticipated to achieve $20 to $25 million in such cost savings and an additional $4 to $6 million by September 30, 2015, with the remainder implemented by September 30, 2016.
Additionally, the Company expects to incur total expense of $10 to $12 million for this phase of the program, with $7 to $8 million for the quarter ended March 31, 2015, related to asset impairment of $1 to $2 million and severance of $5 to $6 million. The remaining approximately $4 million is mainly related to compensation modification expense to be incurred through March 31, 2018.
The second phase of efficiency and cost improvements will include the restructuring of certain operations not meeting strategic business objectives and performance metrics. Details of the second phase will be announced at a later date.
"As the dynamics of our industry change, we must make efficiency enhancements to ensure Alliance One is positioned to meet our customers' evolving requirements," said Pieter Sikkel, President and Chief Executive Officer. "Our global restructuring program is focused on further improving efficiencies in our operations around the world, reducing our cost structure and optimizing our global footprint. We must maximize the core markets where additional investments have been made over the past four years and align our business where growth opportunities exist.
"We will continue to monitor industry trends that are impacting our customers' volumes as we execute our plans to enhance efficiency, reduce sourcing complexity and provide value-added services. We anticipate that the execution of the first phase of our restructuring program, combined with our focus on continuous improvement, will deliver improved shareholder value."
About Alliance One International, Inc.: Alliance One International (AOI) is a leading independent leaf merchant which selects, purchases, processes, packs, stores, and ships leaf tobacco to customers in more than 90 countries across the globe. Committed to helping farmers become more sustainable and produce higher yielding and higher quality tobacco, food and cash crops, the company also provides agronomy expertise and financing to suppliers. For more information, visit www.aointl.com.
This press release contains forward-looking statements, including the cost savings anticipated to result from the first phase of the global restructuring program. These forward-looking statements involve risks and uncertainties, and, accordingly, actual results may differ materially from those reflected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained under the heading of "Risk Factors" listed from time to time in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K.
SOURCE Alliance One International, Inc.