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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF
1934



FOR THE
QUARTER ENDED JUNE 30, 2004



COMMISSION FILE NUMBER 1-9875



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LOGO



STANDARD COMMERCIAL CORPORATION



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|                               |  |                              
|------------------------------ |  | -----------------------------
|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



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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 ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act).    YES  x    NO ̈



On August 4, 2004, the registrant had
outstanding 13,664,274 shares of common stock ($0.20 par value per share).



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PART I FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS

STANDARD COMMERCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)



|                                                                                                                            |  |                     |         |   |               |   |         |   |  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------------- | ------- | - | ------------- | - | ------- | - |  | - | ------- | -
|                                                                                                                            |  | June 30 (unaudited) |         |   | March 31 2004 |  
|                                                                                                                            |  | 2004                |         |   | 2003*         |   |        
|ASSETS                                                                                                                      |  |                     |         |   |               |   |         |   |  |   |         |  
|Cash                                                                                                                        |  | $                   | 58,466  |   |               | $ | 16,306  |   |  | $ | 27,675  |  
|Receivables                                                                                                                 |  |                     | 172,373 |   |               |   | 183,972 |   |  |   | 196,681 |  
|Inventories                                                                                                                 |  |                     | 361,021 |   |               |   | 265,451 |   |  |   | 292,334 |  
|Assets of discontinued operations                                                                                           |  |                     | 77,695  |   |               |   | 135,438 |   |  |   | 95,128  |  
|Prepaid expenses                                                                                                            |  |                     | 5,459   |   |               |   | 5,270   |   |  |   | 4,998   |  
|Marketable securities                                                                                                       |  |                     | 1,682   |   |               |   | 1,237   |   |  |   | 1,334   |  
|                                                                                                                            |  |                     |         |   |               |   |         |   |  |   |         |  
|Current assets                                                                                                              |  |                     | 676,696 |   |               |   | 607,674 |   |  |   | 618,150 |  
|                                                                                                                            |  |                     |        
|Property, plant and equipment                                                                                               |  |                     | 170,741 |   |               |   | 152,796 |   |  |   | 169,285 |  
|Investment in affiliates                                                                                                    |  |                     | 9,730   |   |               |   | 7,621   |   |  |   | 9,480   |  
|Goodwill                                                                                                                    |  |                     | 9,003   |   |               |   | 9,003   |   |  |   | 9,003   |  
|Other assets                                                                                                                |  |                     | 45,365  |   |               |   | 37,292  |   |  |   | 34,096  |  
|                                                                                                                            |  |                     |         |   |               |   |         |   |  |   |         |  
|Total assets                                                                                                                |  | $                   | 911,535 |   |               | $ | 814,386 |   |  | $ | 840,014 |  
|                                                                                                                            |  |                     |         |   |               |   |         |   |  |   |         |  
|LIABILITIES                                                                                                                 |  |                     |         |   |               |   |         |   |  |   |         |  
|Short-term borrowings                                                                                                       |  | $                   | 287,525 |   |               | $ | 223,520 |   |  | $ | 253,847 |  
|Current portion of long-term debt                                                                                           |  |                     | 8,305   |   |               |   | 6,734   |   |  |   | 8,476   |  
|Accounts payable and accrued liabilities                                                                                    |  |                     | 160,662 |   |               |   | 148,274 |   |  |   | 145,894 |  
|Liabilities of discontinued operations                                                                                      |  |                     | 25,730  |   |               |   | 23,737  |   |  |   | 31,383  |  
|Taxes accrued                                                                                                               |  |                     | 5,809   |   |               |   | 12,202  |   |  |   | 11,698  |  
|                                                                                                                            |  |                     |         |   |               |   |         |   |  |   |         |  
|Current liabilities                                                                                                         |  |                     | 488,031 |   |               |   | 414,467 |   |  |   | 451,298 |  
|                                                                                                                            |  |                     |        
|Long-term debt                                                                                                              |  |                     | 177,132 |   |               |   | 80,689  |   |  |   | 91,814  |  
|Convertible subordinated debentures                                                                                         |  |                     |        |   |               |   | 45,051  |   |  |   | 45,051  |  
|Retirement and other benefits                                                                                               |  |                     | 20,492  |   |               |   | 14,436  |   |  |   | 20,353  |  
|Deferred income taxes                                                                                                       |  |                     | 1,893   |   |               |   | 4,463   |   |  |   | 434     |  
|                                                                                                                            |  |                     |         |   |               |   |         |   |  |   |         |  
|Total liabilities                                                                                                           |  |                     | 687,548 |   |               |   | 559,106 |   |  |   | 608,950 |  
|                                                                                                                            |  |                     |         |   |               |   |         |   |  |   |         |  
|MINORITY INTERESTS                                                                                                          |  |                     | 1,564   |   |               |   | 1,918   |   |  |   | 2,000   |  
|                                                                                                                            |  |                     |         |   |               |   |         |   |  |   |         |  
|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 16,284,287 (June 03  16,236,170; Mar 04 
16,298,557) |  |                     | 3,257   |   |               |   | 3,247   |   |  |   | 3,260   |  
|Additional paid-in capital                                                                                                  |  |                     | 111,554 |   |               |   | 110,597 |   |  |   | 111,796 |  
|Unearned restricted stock plan compensation                                                                                 |  |                     | (2,750  | ) |               |   | (4,885  | ) |  |   | (3,176  | )
|Treasury shares, 2,617,707                                                                                                  |  |                     | (4,250  | ) |               |   | (4,250  | ) |  |   | (4,250  | )
|Retained earnings                                                                                                           |  |                     | 143,383 |   |               |   | 173,256 |   |  |   | 149,428 |  
|Accumulated other comprehensive loss                                                                                        |  |                     | (28,771 | ) |               |   | (24,603 | ) |  |   | (27,994 | )
|                                                                                                                            |  |                     |         |   |               |   |         |   |  |   |         |  
|Total shareholders equity                                                                                                  |  |                     | 222,423 |   |               |   | 253,362 |   |  |   | 229,064 |  
|                                                                                                                            |  |                     |         |   |               |   |         |   |  |   |         |  
|Total liabilities and shareholders equity                                                                                  |  | $                   | 911,535 |   |               | $ | 814,386 |   |  | $ | 840,014 |  
|                                                                                                                            |  |                     |         |   |               |   |         |   |  |   |         |  



The accompanying notes are an
integral part of these consolidated financial statements.

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|* | Certain amounts reclassified to comply with the current period presentation as a result of discontinuing the wool operations.
|- | -----------------------------------------------------------------------------------------------------------------------------



-2-



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STANDARD COMMERCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS

(In thousands, except per
share data; unaudited)



|                                                                                               |  |                           |         |   |       |   |         |  
|---------------------------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ----- | - | ------- | -
|                                                                                               |  | Three months endedJune 30 |        
|                                                                                               |  | 2004                      |         |   | 2003* |  
|Sales                                                                                          |  | $                         | 185,619 |   |       | $ | 174,088 |  
|                                                                                               |  |                          
|Cost of sales - materials, services and supplies                                               |  |                           | 161,854 |   |       |   | 138,371 |  
|- interest                                                                                     |  |                           | 3,554   |   |       |   | 2,575   |  
|                                                                                               |  |                           |         |   |       |   |         |  
|Gross Profit                                                                                   |  |                           | 20,211  |   |       |   | 33,142  |  
|Selling, general and administrative expenses                                                   |  |                           | 22,767  |   |       |   | 18,448  |  
|Other interest expense                                                                         |  |                           | 3,690   |   |       |   | 1,138   |  
|Other income (expense)  net                                                                   |  |                           | 472     |   |       |   | 417     |  
|                                                                                               |  |                           |         |   |       |   |         |  
|Income (loss) before taxes                                                                     |  |                           | (5,774  | ) |       |   | 13,973  |  
|Income tax benefit (expense)                                                                   |  |                           | 1,451   |   |       |   | (5,356  | )
|                                                                                               |  |                           |         |   |       |   |         |  
|Income (loss) after taxes                                                                      |  |                           | (4,323  | ) |       |   | 8,617   |  
|Minority interests                                                                             |  |                           | 267     |   |       |   | 67      |  
|Equity in earnings of affiliates                                                               |  |                           | 250     |   |       |   | 200     |  
|                                                                                               |  |                           |         |   |       |   |         |  
|Income (loss) from continuing operations                                                       |  |                           | (3,806  | ) |       |   | 8,884   |  
|Loss from discontinued operations, net of income tax of $37 and $697 at June 30, 2004 and 2003 |  |                           | (1,043  | ) |       |   | (2,272  | )
|                                                                                               |  |                           |         |   |       |   |         |  
|Net income (loss)                                                                              |  |                           | (4,849  | ) |       |   | 6,612   |  
|Retained earnings at beginning of period                                                       |  |                           | 149,428 |   |       |   | 167,495 |  
|Common stock dividends                                                                         |  |                           | (1,196  | ) |       |   | (851    | )
|                                                                                               |  |                           |         |   |       |   |         |  
|Retained earnings at end of period                                                             |  | $                         | 143,383 |   |       | $ | 173,256 |  
|                                                                                               |  |                           |         |   |       |   |         |  
|Earnings (loss) per common share                                                               |  |                           |         |   |       |   |         |  
|Basic:                                                                                         |  |                           |         |   |       |   |         |  
|From continuing operations                                                                     |  | $                         | (0.28   | ) |       | $ | 0.66    |  
|From discontinued operations                                                                   |  |                           | (0.07   | ) |       |   | (0.17   | )
|                                                                                               |  |                           |         |   |       |   |         |  
|Net                                                                                            |  | $                         | (0.35   | ) |       | $ | 0.49    |  
|                                                                                               |  |                           |         |   |       |   |         |  
|Average shares outstanding                                                                     |  |                           | 13,677  |   |       |   | 13,537  |  
|Diluted:                                                                                       |  |                           |         |   |       |   |         |  
|From continuing operations                                                                     |  | $                         | (0.28   | ) |       | $ | 0.62    |  
|From discontinued operations                                                                   |  |                           | (0.07   | ) |       |   | (0.15   | )
|                                                                                               |  |                           |         |   |       |   |         |  
|Net                                                                                            |  | $                         | (0.35   | ) |       | $ | 0.47    |  
|                                                                                               |  |                           |         |   |       |   |         |  
|Average shares outstanding                                                                     |  |                           | 13,703  |   |       |   | 15,131  |  
|                                                                                               |  |                          
|Dividend declared per common share                                                             |  | $                         | 0.0875  |   |       | $ | 0.0625  |  



The accompanying notes are an integral
part of these consolidated financial statements.

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|* | Certain amounts reclassified to comply with the current period presentation as a result of discontinuing the wool operations.
|- | -----------------------------------------------------------------------------------------------------------------------------



-3-



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STANDARD COMMERCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands; unaudited)



|                                                               |  |                           |          |   |       |   |         |  
|-------------------------------------------------------------- |  | ------------------------- | -------- | - | ----- | - | ------- | -
|                                                               |  | Three months endedJune 30 |         
|                                                               |  | 2004                      |          |   | 2003* |  
|CASH FLOWS FROM OPERATING ACTIVITIES                           |  |                           |          |   |       |   |         |  
|Net income (loss)                                              |  | $                         | (4,849   | ) |       | $ | 6,612   |  
|Loss from discontinued operations                              |  |                           | 1,043    |   |       |   | 2,272   |  
|Depreciation and amortization                                  |  |                           | 6,078    |   |       |   | 4,310   |  
|Minority interest                                              |  |                           | (267     | ) |       |   | (67     | )
|Deferred income taxes                                          |  |                           | 1,459    |   |       |   | (290    | )
|Undistributed earnings of affiliates net of dividends received |  |                           | (250     | ) |       |   | (200    | )
|Redemption premium on repayment of debt                        |  |                           | 964      |   |       |   |        |  
|(Gain) loss on disposition of fixed assets                     |  |                           | (337     | ) |       |   | (16     | )
|Other                                                          |  |                           | (1,139   | ) |       |   | 533     |  
|                                                               |  |                           |          |   |       |   |         |  
|                                                               |  |                           | 2,702    |   |       |   | 13,154  |  
|Net changes in working capital other than cash                 |  |                           |          |   |       |   |         |  
|Receivables                                                    |  |                           | 16,221   |   |       |   | (27,086 | )
|Inventories                                                    |  |                           | (69,622  | ) |       |   | (46,153 | )
|Current payables                                               |  |                           | 8,842    |   |       |   | 13,456  |  
|                                                               |  |                           |          |   |       |   |         |  
|Cash used for continuing operations                            |  |                           | (41,857  | ) |       |   | (46,629 | )
|Cash from (used for) discontinued operations                   |  |                           | 10,714   |   |       |   | (1,207  | )
|                                                               |  |                           |          |   |       |   |         |  
|CASH USED FOR OPERATING ACTIVITIES                             |  |                           | (31,143  | ) |       |   | (47,836 | )
|                                                               |  |                           |          |   |       |   |         |  
|CASH FLOW FROM INVESTING ACTIVITIES                            |  |                           |          |   |       |   |         |  
|Property, plant and equipment - additions                      |  |                           | (7,056   | ) |       |   | (8,497  | )
|- dispositions                                                 |  |                           | 658      |   |       |   | 64      |  
|                                                               |  |                           |          |   |       |   |         |  
|Cash used for continuing operations                            |  |                           | (6,398   | ) |       |   | (8,433  | )
|Cash from discontinued operations                              |  |                           | 23       |   |       |   | 1,052   |  
|                                                               |  |                           |          |   |       |   |         |  
|CASH USED FOR INVESTING ACTIVITIES                             |  |                           | (6,375   | ) |       |   | (7,381  | )
|                                                               |  |                           |          |   |       |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES                           |  |                           |          |   |       |   |         |  
|Net change in short-term borrowings                            |  |                           | 33,678   |   |       |   | 41,418  |  
|Proceeds from long-term borrowings                             |  |                           | 155,652  |   |       |   | 6,836   |  
|Repayment of long-term borrowings                              |  |                           | (9,515   | ) |       |   | (3,650  | )
|Repayment of debt                                              |  |                           | (111,192 | ) |       |   |        |  
|Other                                                          |  |                           | (244     | ) |       |   | 113     |  
|                                                               |  |                           |          |   |       |   |         |  
|CASH PROVIDED BY FINANCING ACTIVITIES                          |  |                           | 68,379   |   |       |   | 44,717  |  
|                                                               |  |                           |          |   |       |   |         |  
|Effect of exchange rate changes on cash                        |  |                           | (70      | ) |       |   | 236     |  
|                                                               |  |                           |          |   |       |   |         |  
|Increase (decrease) in cash for period                         |  |                           | 30,791   |   |       |   | (10,264 | )
|Cash at beginning of period                                    |  |                           | 27,675   |   |       |   | 26,570  |  
|                                                               |  |                           |          |   |       |   |         |  
|CASH AT END OF PERIOD                                          |  | $                         | 58,466   |   |       | $ | 16,306  |  
|                                                               |  |                           |          |   |       |   |         |  
|Cash payments for - interest                                   |  | $                         | 6,372    |   |       | $ | 1,814   |  
|- income taxes                                                 |  | $                         | 2,855    |   |       | $ | 6,158   |  



The accompanying notes are an integral
part of these consolidated financial statements.

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|* | Certain amounts reclassified to comply with the current period presentation as a result of discontinuing the wool operations.
|- | -----------------------------------------------------------------------------------------------------------------------------



-4-



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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 consolidated financial statements and notes thereto included in the
Companys latest Annual Report on Form 10-K. The interim period consolidated 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 financial condition and results of operations. All such adjustments are of normal, recurring nature and there were no material changes in accounting policies during the period ended June 30, 2004. Because of the nature of the
Companys business, fluctuations in results for interim periods are not necessarily indicative of business trends or results to be expected for other interim periods or a full year.



|2. | DISCONTINUED OPERATIONS
|-- | -----------------------



During the second quarter of fiscal 2004, the Company decided to focus on the core tobacco operations and close all its wool operations located in the UK,
Chile, France, Germany and Australia. As a result of this decision to dispose of these operations, they have been classified as available for sale and qualify for held for disposal treatment under Statement of Financial Accounting Standards
(SFAS) No 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The unit in Australia was sold in fiscal 2004. The operations of the processing mill in France was shutdown in April 2004 and its assets, along with
the remaining trading operations in France and Germany, and the trading and processing operations in the UK and Chile, are expected to be sold or terminated by September 30, 2004. The fair value of the remaining operations was determined based on
current negotiations with prospective purchasers and comparisons with other industry transactions.



These wool units are expected to incur additional operating losses until final disposition. Once disposed, the Company will not retain a financial
interest and it has not identified any significant contingent liabilities that would delay or significantly alter the plan of disposition. The Company will continue to guarantee the debt of the wool units until disposition, at which time it does not
expect to provide any guarantees for the obligations or commitments of the wool units.



The Company has accounted for the sale of the wool units as discontinued operations, in accordance with the provisions of SFAS No 144. The results for all periods presented are included in the consolidated financial
statements as discontinued operations. As noted above, because the existing debt of the wool units is guaranteed by the Company, it has not included any such debt in liabilities of discontinued operations.



The wool operating loss, which primarily relates to overhead incurred, for
the three months ended June 30, 2004, was $1.0 million, versus $2.3 million in the prior year period. The basic loss per share for the discontinued operations for the quarter was $0.07, versus a loss of $0.17 in the prior year period.



Revenues and the assets and liabilities for these units were as follows:



|               |  |                           |        |      |   |       
|-------------- |  | ------------------------- | ------ | ---- | - | ------
|               |  | Three months endedJune 30
|(In thousands) |  | 2004                      |        | 2003
|Revenues       |  | $                         | 35,295 |      | $ | 42,582



|                                       |  |         |        |               |   |         |  |   |       
|-------------------------------------- |  | ------- | ------ | ------------- | - | ------- |  | - | ------
|                                       |  | June 30 |        | March 31 2004
|(In thousands)                         |  | 2004    |        | 2003          |  
|Inventory                              |  | $       | 37,982 |               | $ | 68,699  |  | $ | 50,827
|Receivables                            |  |         | 36,616 |               |   | 40,978  |  |   | 40,826
|Other assets                           |  |         | 3,097  |               |   | 25,761  |  |   | 3,475 
|                                       |  |         |        |               |   |         |  |   |       
|Assets                                 |  |         | 77,695 |               |   | 135,438 |  |   | 95,128
|Accounts payable and other liabilities |  |         | 25,730 |               |   | 23,737  |  |   | 31,383
|                                       |  |         |        |               |   |         |  |   |       
|Net assets available for sale          |  | $       | 51,965 |               | $ | 111,701 |  | $ | 63,745
|                                       |  |         |        |               |   |         |  |   |       



-5-



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STANDARD COMMERCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



|2. | DISCONTINUED OPERATIONS continued
|-- | ---------------------------------



Wool debt guaranteed by the Company not included in discontinued operations was as follows:



|                                    |  |         |        |               |   |        |  |   |       
|----------------------------------- |  | ------- | ------ | ------------- | - | ------ |  | - | ------
|                                    |  | June 30 |        | March 31 2004
|(In thousands)                      |  | 2004    |        | 2003          |  
|Bank borrowings                     |  | $       | 34,613 |               | $ | 68,092 |  | $ | 44,974
|Current portion of long-term debt   |  |         | 21     |               |   | 763    |  |   | 305   
|                                    |  |         |        |               |   |        |  |   |       
|Total current                       |  |         | 34,634 |               |   | 68,855 |  |   | 45,279
|Long-term portion of long-term debt |  |         | 167    |               |   |       |  |   | 190   
|                                    |  |         |        |               |   |        |  |   |       
|Total debt guaranteed               |  | $       | 34,801 |               | $ | 68,855 |  | $ | 45,469
|                                    |  |         |        |               |   |        |  |   |       



|3. | COMPREHENSIVE INCOME
|-- | --------------------



The components of comprehensive income (loss) were as follows:



|                                   |  |                           |        |   |      |   |        |  
|---------------------------------- |  | ------------------------- | ------ | - | ---- | - | ------ | -
|                                   |  | Three months endedJune 30 |       
|(In thousands)                     |  | 2004                      |        |   | 2003 |  
|Net income (loss)                  |  | $                         | (4,849 | ) |      | $ | 6,612  |  
|Other comprehensive income (loss): |  |                           |        |   |      |   |        |  
|Translation adjustment             |  |                           | (778   | ) |      |   | 5,397  |  
|Derivative financial instruments   |  |                           | 1      |   |      |   | (196   | )
|                                   |  |                           |        |   |      |   |        |  
|Total comprehensive income (loss)  |  | $                         | (5,626 | ) |      | $ | 11,813 |  
|                                   |  |                           |        |   |      |   |        |  



|4. | EARNINGS PER SHARE
|-- | ------------------



Earnings per share has been presented in conformity with SFAS No. 128. The diluted earnings per share for the three months ended June 30, 2003 include the
effect of the convertible subordinated debentures, which if converted would have increased the weighted number of shares and net income applicable to common stock. The weighted number of shares were increased by shares subject to employee stock
options. Employee stock options with exercise prices greater than the average market price of common shares were not included in computation of diluted earnings per share.



|5. | DERIVATIVE FINANCIAL INSTRUMENTS
|-- | --------------------------------



The Companys derivative usage is principally foreign currency forwards. These contracts typically have maturities of less than one year. As a matter
of policy, the Company does not use derivative instruments unless there is an underlying exposure. The Companys foreign currency forwards have been designated and qualify as cash flow hedges under the criteria of SFAS No. 133. SFAS No. 133
requires that the effective portion of the changes in fair value of derivatives that qualify as cash flow hedges be recognized in other comprehensive income, while the ineffective portion be recognized immediately in earnings. The fair value of the
Companys foreign currency forward contracts at June 30, 2004 was $2.2 million with a notional value of $2.2 million.



|6. | STOCK-BASED COMPENSATION
|-- | ------------------------



The Company has adopted SFAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure  an amendment of FASB Statement
No. 123. As permitted under SFAS No. 123, Accounting for Stock-Based Compensation, the Company accounts for stock options under the intrinsic value method of recognition and measurement principles of Accounting Principles Board
(APB) Opinion No. 25, Accounting for Stock Issued to Employees. No stock-based employee compensation cost is reflected in net income (loss) because all options granted under these plans had an exercise price equal to the market
value of the underlying common stock on the date of grant. As required by SFAS No. 148, the following table illustrates the effect on net income (loss) and earnings (loss) per share if the Company had applied the fair value recognition provisions of
SFAS No. 123, as amended



-6-



---

STANDARD COMMERCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|6. | STOCK-BASED COMPENSATION Continued
|-- | ----------------------------------



by SFAS No. 148, to stock-based employee compensation:



|                                                                                                            |  |                           |        |   |      |   |       |  
|----------------------------------------------------------------------------------------------------------- |  | ------------------------- | ------ | - | ---- | - | ----- | -
|                                                                                                            |  | Three months endedJune 30 |       
|                                                                                                            |  | 2004                      |        |   | 2003 |  
|Net income (loss) (in thousands):                                                                           |  |                           |        |   |      |   |       |  
|As reported                                                                                                 |  | $                         | (4,849 | ) |      | $ | 6,612 |  
|Deduct Total stock-based compensation expense determined under fair value method of all awards, net of tax |  |                           | (45    | ) |      |   | (50   | )
|                                                                                                            |  |                           |        |   |      |   |       |  
|Pro forma                                                                                                   |  | $                         | (4,894 | ) |      | $ | 6,562 |  
|                                                                                                            |  |                           |        |   |      |   |       |  
|Diluted                                                                                                     |  | $                         | (4,849 | ) |      | $ | 7,151 |  
|Deduct Total stock-based compensation expense determined under fair value method of all awards, net of tax |  |                           | (45    | ) |      |   | (50   | )
|                                                                                                            |  |                           |        |   |      |   |       |  
|Pro forma                                                                                                   |  | $                         | (4,894 | ) |      | $ | 7,101 |  
|                                                                                                            |  |                           |        |   |      |   |       |  
|Basic earnings (loss) per share:                                                                            |  |                           |        |   |      |   |       |  
|As reported                                                                                                 |  | $                         | (0.35  | ) |      | $ | 0.49  |  
|Pro forma                                                                                                   |  |                           | (0.36  | ) |      | $ | 0.48  |  
|                                                                                                            |  |                          
|Diluted earnings (loss) per share:                                                                          |  |                           |        |   |      |   |       |  
|As reported                                                                                                 |  | $                         | (0.35  | ) |      | $ | 0.47  |  
|Pro forma                                                                                                   |  |                           | (0.36  | ) |      | $ | 0.47  |  



|7. | GOODWILL AND OTHER INTANGIBLE ASSETS
|-- | ------------------------------------



In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill
and Other Intangible Assets. SFAS No. 141 requires the use of the purchase method of accounting for business combinations initiated after June 30, 2001 and broadens the criteria for recording intangible assets separate from goodwill. SFAS No.
142 uses a non-amortization approach to account for purchased goodwill and certain intangible assets with indefinite useful lives and also requires at least an annual assessment for impairment by applying a fair-value-based test. Intangible assets
with finite useful lives will continue to be amortized over their useful lives.



SFAS No. 142 requires that goodwill be tested for impairment annually at the same time each year and on an interim basis when events or circumstances change. The Company performs its annual goodwill impairment test as
of September 30, and any subsequent impairment losses, if any, will be reflected in operating income in the statements of income.



The carrying value of intangible assets other than goodwill as of June 30, 2004 represents deferred long-term debt financing fees. These intangible assets
were determined by management to meet the criterion for recognition apart from goodwill and to have finite lives. The Company did not have any indefinite-lived intangible assets, other than goodwill. In conjunction with the debt refinancing
discussed in Note 11, the Company wrote-off $1.4 million of deferred financing fees during the quarter ended June 30, 2004. Based on managements analysis of all pertinent factors, no adjustments were necessary to the remaining useful lives of
these assets, which will continue to be amortized on a straight-line basis through 2012.



|                            |  |       |        |  
|--------------------------- |  | ----- | ------ | -
|INTANGIBLES                 |  | Total |       
|(In thousands)              |  |       |       
|At April 1, 2004            |  | $     | 1,368  |  
|Additions                   |  |       | 5,770  |  
|Less amortized              |  |       | (1,626 | )
|                            |  |       |        |  
|Balance as of June 30, 2004 |  | $     | 5,512  |  
|                            |  |       |        |  



-7-



---

STANDARD COMMERCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|8. | PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS
|-- | -----------------------------------------------



Net Periodic Benefit Cost for All Significant Plans



|                                   |  |                               |       |   |                                |   |       |      |  |   |      |   |  |   |     |  
|---------------------------------- |  | ----------------------------- | ----- | - | ------------------------------ | - | ----- | ---- |  | - | ---- | - |  | - | --- | -
|                                   |  | Defined Benefit Pension Plans |       |   | Other Post-retirement Benefits |  
|                                   |  | Three months ended June 30    |       |   | Three months ended June 30     |  
|(In thousands)                     |  | 2004                          |       |   | 2003                           |   |       | 2004 |  |   | 2003 |  
|Service cost                       |  | $                             | 959   |   |                                | $ | 779   |      |  | $ | 114  |   |  | $ | 93  |  
|Interest cost                      |  |                               | 1,052 |   |                                |   | 936   |      |  |   | 176  |   |  |   | 174 |  
|Expected return on plan assets     |  |                               | (943  | ) |                                |   | (731  | )    |  |   |     |   |  |   |    |  
|Amortization of prior service cost |  |                               | 37    |   |                                |   | 36    |      |  |   | (35  | ) |  |   | (35 | )
|Recognized net actuarial loss      |  |                               | 262   |   |                                |   | 251   |      |  |   | 26   |   |  |   | 9   |  
|                                   |  |                               |       |   |                                |   |       |      |  |   |      |   |  |   |     |  
|Net periodic benefit cost          |  | $                             | 1,367 |   |                                | $ | 1,271 |      |  | $ | 281  |   |  | $ | 241 |  
|                                   |  |                               |       |   |                                |   |       |      |  |   |      |   |  |   |     |  



Employer
Contributions



Pension Plans



The Company has defined benefit pension plans which cover employees in the
United States and a number of other countries. Benefits are based on length of service and eligible compensation.



The Companys funding policy is to contribute to those plans when pension laws and economies either require or encourage funding. As previously
disclosed in the Companys financial statements for the year ended March 31, 2004, the Company expects to contribute $1.5 million to its U.S. qualified pension plan trust in fiscal 2005. No contributions were made to this plan in the first
quarter of fiscal 2005. The Company also has a non-qualified supplemental pension plan to which it made $58,000 of benefit payments in the first quarter of fiscal 2005.



Other Post-retirement Benefits



The Company also provides health care and life insurance benefits for substantially all of its retired salaried employees in
the U.S. These benefits are accounted for in accordance with SFAS No. 106, Employers Accounting for Post-retirement Benefits Other Than Pensions, which requires the accrual of the estimated cost of retiree benefit payments during the years
the employee provides services. The Company expects the ongoing impact of SFAS No. 106 as it relates to employees of foreign subsidiaries to be immaterial. The Company expenses the costs of these benefits as incurred. In fiscal 2005, the Company
does not expect to contribute assets to its other post retirement benefit plan trust. Benefit payments to retirees under the plan are expected to be approximately $600,000 for this year. In the first quarter of fiscal 2005, we made benefit payments
of $125,000 to the plan.



|9. | RECENT ACCOUNTING PRONOUNCEMENTS
|-- | --------------------------------



In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) was signed into law. In accordance with
guidance issued by the FASB in FASB Staff Position 106-1, the Company has elected to defer the effects of the Act due to uncertainties regarding the effects of the implementation of the Act and the accounting for certain provisions of the Act.
Therefore, Other Post-Employment Benefits (OPEB) information presented in the financial statements does not reflect the effects of the Act. The FASB recently issued definitive accounting guidance for the Act in FASB Staff Position 106-2,
which is effective for the Company in the quarter ended September 30, 2004. FASB Staff Position 106-2 will result in the recognition of lower OPEB costs to reflect prescription drug-related federal subsidies to be received under the Act. The Company
expects that it will benefit from the new legislation, and that it will not have to amend its current post-retirement benefit plan in order to do so. However, the Company has not yet determined the amount of subsidy that will be received as a result
of the new legislation.



-8-



---

STANDARD COMMERCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|10. | LEGAL PROCEEDINGS
|--- | -----------------



On February 26, 2001, the Company was served with a Third Amended Complaint, naming it and other leaf merchants as defendants in Deloach, et al. V. Philip
Morris Inc., et al., a suit originally filed against U.S. cigarette manufacturers in the United States District Court for the District of Columbia and subsequently moved to the United States District Court for the Middle District of North Carolina,
Greensboro Division (Case No. 00-CV-1235). The Deloach suit was a class action claim brought on behalf of U.S. tobacco growers and quota holders alleging that defendants violated antitrust laws by bid-rigging at tobacco auctions and by conspiring to
undermine the tobacco quota and price support program administered by the federal government. Plaintiffs sought injunctive relief, trebled damages in an unspecified amount, pre- and post-judgment interest, attorneys fees and costs of
litigation. On April 3, 2002, the Court granted the plaintiffs motion for class action certification. In May 2003, the Company, along with all but one of the other defendants, entered into a settlement agreement with the plaintiffs which
received final approval, and which accorded the Company a full release from all the claims in exchange for a payment of $7.0 million towards a larger total settlement agreement. On April 22, 2004, the case was settled and the settlement approved by
the Court as to the remaining defendant.



In October 2001, the
Directorate GeneralCompetition of the European Commission, or DG Comp, began conducting an administrative investigation of certain selling and buying practices alleged to have occurred within the leaf tobacco industry in some countries within
the European Union, including Spain, Italy and Greece. The Company, through its local subsidiaries, is cooperating fully with the investigation and has discovered and voluntarily disclosed information which tends to establish that a number of leaf
dealers, including its subsidiaries, have jointly agreed with respect to green tobacco prices and purchase quantities. In respect of the Spanish investigation, on December 15, 2003, the DG Comp served on 20 entities within the Spanish leaf tobacco
industry, including the Company and three of its subsidiaries, a Statement of Objections alleging certain infringements of the antitrust laws of the European Union. On March 1, 2004, the DG Comp served a similar Statement of Objections on 11
entities within the Italian leaf tobacco industry, including the Company and one of its subsidiaries. The Company has responded to the Statement regarding the Spanish investigation and to the Statement regarding the Italian investigation and will
continue to cooperate in the investigations. Through the Statements, DG Comp intends to impose, where appropriate and probably late in 2004, administrative penalties on the entities it determines have infringed the EC anti-competition laws. The
Company expects to be assessed penalties in the cases and expects that the penalties could be material to its earnings. DG Comp has, however, indicated that there may be mitigating circumstances in both investigations, including our cooperation with
the DG Comp. The Company is currently unable to assess the amount of such penalties, but expects that the mitigating factors could result in a reduction in any penalties imposed.



Except for the above, neither the Company nor any of its subsidiaries are currently involved in any litigation that it
believes would, individually or in the aggregate, have a material adverse effect on its consolidated financial position, consolidated results of operations, or liquidity nor, to its knowledge, is any such litigation currently threatened against the
Company or its subsidiaries.



|11. | DEBT
|--- | ----



On April 2, 2004, the Companys major tobacco subsidiaries entered into a new three year unsecured revolving bank facility to replace the existing revolving bank credit facility. The new facility provides for
borrowings of $150.0 million for working capital and other general corporate purposes, and the interest rate on borrowings under the facility is variable. The rate is currently LIBOR plus 2.0%. The borrowings under the facility are guaranteed by the
Company and certain of its tobacco subsidiaries. The new facility includes certain financial covenants that, among other things, require the Company to maintain tangible net worth, current ratio, interest cover ratio and also includes certain
borrowing base restrictions. The Company is in compliance with all financial covenants as of June 30, 2004.



On April 2, 2004, the Company issued $150.0 million of 8% senior notes due 2012. The proceeds were used to redeem the $45.1 million outstanding 71/4% convertible subordinated debentures and to



-9-



---

STANDARD COMMERCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|11. | DEBTContinued
|--- | -------------



retire the $65.2 million 87/8% senior notes due 2005. The new notes are guaranteed by its U.S. tobacco subsidiary on a senior unsecured basis. The indentures governing these senior notes contain certain covenants that, among other things, limit the
Companys ability to (1) pay dividends, (2) incur additional indebtedness, (3) transfer or issue shares of capital stock of subsidiaries to third parties, (4) sell assets, (5) issue preferred stock, (6) incur or assume any liens that secures
obligations under any indebtedness on any asset or property, or (7) merge with or into any entity.



|12. | SENIOR NOTES
|--- | ------------



On April 2, 2004, $150 million of 8 % Senior Notes due 2012 were issued by the Company and guaranteed by Standard Commercial Tobacco Co., Inc., a wholly
owned U.S. tobacco subsidiary, on a senior unsecured basis. Management has determined that full financial statements of the Guarantor would not be material to investors and such financial statements are not provided. The following supplemental
combining financial statements present information regarding the Company and the Guarantor.



-10-



---

STANDARD COMMERCIAL CORPORATION



SUPPLEMENTAL COMBINING BALANCE SHEET

June 30, 2004

(In thousands)



|                                            |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|------------------------------------------- |  | ------------------------------------- | ------- | - | --------------------------------------------- | - | ------- | -------------------------------- |  | ---------------------------------- | - |  | ------------ | ------- | - | ----- | - | ---------- | - |  | - | ------- | -
|                                            |  | StandardCommercialCorporation(Issuer) |         |   | StandardCommercialTobacco Co. Inc.(Guarantor) |   |         | StandardWool Inc.(Non-Guarantor) |  | Other Subsidiaries(Non-Guarantors) |   |  | Eliminations |         |   | Total |  
|Assets                                      |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|Cash                                        |  | $                                     | 64      |   |                                               | $ | 10,629  |                                  |  | $                                  |  |  | $            | 47,773  |   |       | $ |           |   |  | $ | 58,466  |  
|Receivables                                 |  |                                       | 13      |   |                                               |   | 15,860  |                                  |  |                                    |  |  |              | 156,500 |   |       |   |           |   |  |   | 172,373 |  
|Intercompany receivables                    |  |                                       | 177,064 |   |                                               |   | 164,834 |                                  |  |                                    |  |  |              | 67,182  |   |       |   | (409,080   | ) |  |   |        |  
|Inventories                                 |  |                                       |        |   |                                               |   | 63,957  |                                  |  |                                    |  |  |              | 297,064 |   |       |   |           |   |  |   | 361,021 |  
|Assets of discontinued operations           |  |                                       |        |   |                                               |   |        |                                  |  |                                    |  |  |              | 77,695  |   |       |   |           |   |  |   | 77,695  |  
|Prepaid expenses                            |  |                                       | (153    | ) |                                               |   | 1,044   |                                  |  |                                    |  |  |              | 4,568   |   |       |   |           |   |  |   | 5,459   |  
|Marketable securities                       |  |                                       | 1       |   |                                               |   |        |                                  |  |                                    |  |  |              | 1,681   |   |       |   |           |   |  |   | 1,682   |  
|                                            |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|Current assets                              |  |                                       | 176,989 |   |                                               |   | 256,324 |                                  |  |                                    |  |  |              | 652,463 |   |       |   | (409,080   | ) |  |   | 676,696 |  
|Property, plant and equipment               |  |                                       |        |   |                                               |   | 43,174  |                                  |  |                                    |  |  |              | 127,567 |   |       |   |           |   |  |   | 170,741 |  
|Investment in subsidiaries                  |  |                                       | 247,878 |   |                                               |   | 189,284 |                                  |  |                                    |  |  |              | 156,438 |   |       |   | (593,600   | ) |  |   |        |  
|Investment in affiliates                    |  |                                       |        |   |                                               |   |        |                                  |  |                                    |  |  |              | 9,730   |   |       |   |           |   |  |   | 9,730   |  
|Other noncurrent assets                     |  |                                       | 19,692  |   |                                               |   | (2,304  | )                                |  |                                    |  |  |              | 36,980  |   |       |   |           |   |  |   | 54,368  |  
|                                            |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|Total assets                                |  | $                                     | 444,559 |   |                                               | $ | 486,478 |                                  |  | $                                  |  |  | $            | 983,178 |   |       | $ | (1,002,680 | ) |  | $ | 911,535 |  
|                                            |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|Liabilities                                 |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|Short-term borrowings                       |  | $                                     |        |   |                                               | $ | 21,778  |                                  |  | $                                  |  |  | $            | 265,747 |   |       | $ |           |   |  | $ | 287,525 |  
|Current portion of long-term debt           |  |                                       |        |   |                                               |   |        |                                  |  |                                    |  |  |              | 8,305   |   |       |   |           |   |  |   | 8,305   |  
|Accounts payable                            |  |                                       | 15,605  |   |                                               |   | 14,988  |                                  |  |                                    |  |  |              | 130,069 |   |       |   |           |   |  |   | 160,662 |  
|Liabilities of discontinued operations      |  |                                       |        |   |                                               |   |        |                                  |  |                                    |  |  |              | 25,730  |   |       |   |           |   |  |   | 25,730  |  
|Intercompany accounts payable               |  |                                       | 59,594  |   |                                               |   | 188,265 |                                  |  |                                    |  |  |              | 161,221 |   |       |   | (409,080   | ) |  |   |        |  
|Taxed accrued                               |  |                                       | (5,913  | ) |                                               |   | 828     |                                  |  |                                    |  |  |              | 10,894  |   |       |   |           |   |  |   | 5,809   |  
|                                            |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|Current liabilities                         |  |                                       | 69,286  |   |                                               |   | 225,859 |                                  |  |                                    |  |  |              | 601,966 |   |       |   | (409,080   | ) |  |   | 488,031 |  
|Long-term debt                              |  |                                       | 150,000 |   |                                               |   |        |                                  |  |                                    |  |  |              | 27,132  |   |       |   |           |   |  |   | 177,132 |  
|Retirement and other benefits               |  |                                       | 1,070   |   |                                               |   | 10,048  |                                  |  |                                    |  |  |              | 9,374   |   |       |   |           |   |  |   | 20,492  |  
|Deferred taxes                              |  |                                       | (486    | ) |                                               |   | (546    | )                                |  |                                    |  |  |              | 2,925   |   |       |   |           |   |  |   | 1,893   |  
|                                            |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|Total liabilities                           |  |                                       | 219,870 |   |                                               |   | 235,361 |                                  |  |                                    |  |  |              | 641,397 |   |       |   | (409,080   | ) |  |   | 687,548 |  
|                                            |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|Minority interests                          |  |                                       |        |   |                                               |   |        |                                  |  |                                    |  |  |              | 1,564   |   |       |   |           |   |  |   | 1,564   |  
|                                            |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|Shareholders equity                        |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|Common stock                                |  |                                       | 3,257   |   |                                               |   | 993     |                                  |  |                                    |  |  |              | 152,571 |   |       |   | (153,564   | ) |  |   | 3,257   |  
|Additional paid-in capital                  |  |                                       | 111,554 |   |                                               |   | 130,860 |                                  |  |                                    |  |  |              | 60,564  |   |       |   | (191,424   | ) |  |   | 111,554 |  
|Unearned restricted stock plan compensation |  |                                       | (484    | ) |                                               |   | (654    | )                                |  |                                    |  |  |              | (1,612  | ) |       |   |           |   |  |   | (2,750  | )
|Treasury stock at cost                      |  |                                       | (4,250  | ) |                                               |   |        |                                  |  |                                    |  |  |              |        |   |       |   |           |   |  |   | (4,250  | )
|Retained earnings                           |  |                                       | 143,383 |   |                                               |   | 134,389 |                                  |  |                                    |  |  |              | 156,744 |   |       |   | (291,133   | ) |  |   | 143,383 |  
|Accumulated other comprehensive loss        |  |                                       | (28,771 | ) |                                               |   | (14,471 | )                                |  |                                    |  |  |              | (28,050 | ) |       |   | 42,521     |   |  |   | (28,771 | )
|                                            |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|Total shareholders equity                  |  |                                       | 224,689 |   |                                               |   | 251,117 |                                  |  |                                    |  |  |              | 340,217 |   |       |   | (593,600   | ) |  |   | 222,423 |  
|                                            |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  
|Total liabilities and equity                |  | $                                     | 444,559 |   |                                               | $ | 486,478 |                                  |  | $                                  |  |  | $            | 983,178 |   |       | $ | (1,002,680 | ) |  | $ | 911,535 |  
|                                            |  |                                       |         |   |                                               |   |         |                                  |  |                                    |   |  |              |         |   |       |   |            |   |  |   |         |  



-11-



---

STANDARD COMMERCIAL CORPORATION



SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS

Three months ended June 30, 2004

(In
thousands)



|                                           |  |                                       |         |   |                                               |   |         |                                    |  |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|------------------------------------------ |  | ------------------------------------- | ------- | - | --------------------------------------------- | - | ------- | ---------------------------------- |  | ---------------------------------- | - |  | ------------ | ------- | - | ----- | - | -------- | - |  | - | ------- | -
|                                           |  | StandardCommercialCorporation(Issuer) |         |   | StandardCommercialTobacco Co. Inc.(Guarantor) |   |         | Standard Wool Inc. (Non-Guarantor) |  | Other Subsidiaries(Non-Guarantors) |   |  | Eliminations |         |   | Total |  
|Sales                                      |  | $                                     |        |   |                                               | $ | 39,015  |                                    |  | $                                  |  |  | $            | 253,227 |   |       | $ | (106,623 | ) |  | $ | 185,619 |  
|Cost of sales:                             |  |                                       |         |   |                                               |   |         |                                    |  |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Materials services and supplies            |  |                                       |        |   |                                               |   | 34,053  |                                    |  |                                    |  |  |              | 234,424 |   |       |   | (106,623 | ) |  |   | 161,854 |  
|Interest                                   |  |                                       |        |   |                                               |   | 23      |                                    |  |                                    |  |  |              | 3,531   |   |       |   |         |   |  |   | 3,554   |  
|                                           |  |                                       |         |   |                                               |   |         |                                    |  |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Gross profit                               |  |                                       |        |   |                                               |   | 4,939   |                                    |  |                                    |  |  |              | 15,272  |   |       |   |         |   |  |   | 20,211  |  
|Selling, general & administrative expenses |  |                                       | 2,027   |   |                                               |   | 5,573   |                                    |  |                                    |  |  |              | 15,167  |   |       |   |         |   |  |   | 22,767  |  
|Other interest expense                     |  |                                       | 3,199   |   |                                               |   | 1,493   |                                    |  |                                    |  |  |              | (1,002  | ) |       |   |         |   |  |   | 3,690   |  
|Other income (expense) net                 |  |                                       | 1,614   |   |                                               |   | (1,111  | )                                  |  |                                    |  |  |              | (31     | ) |       |   |         |   |  |   | 472     |  
|                                           |  |                                       |         |   |                                               |   |         |                                    |  |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income (loss) before taxes                 |  |                                       | (3,612  | ) |                                               |   | (3,238  | )                                  |  |                                    |  |  |              | 1,076   |   |       |   |         |   |  |   | (5,774  | )
|Income tax expense (benefit)               |  |                                       | (1,373  | ) |                                               |   | (1,233  | )                                  |  |                                    |  |  |              | 1,155   |   |       |   |         |   |  |   | (1,451  | )
|                                           |  |                                       |         |   |                                               |   |         |                                    |  |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income (loss) after taxes                  |  |                                       | (2,239  | ) |                                               |   | (2,005  | )                                  |  |                                    |  |  |              | (79     | ) |       |   |         |   |  |   | (4,323  | )
|Minority interests                         |  |                                       |        |   |                                               |   |        |                                    |  |                                    |  |  |              | 267     |   |       |   |         |   |  |   | 267     |  
|Equity in earnings of affiliates           |  |                                       |        |   |                                               |   |        |                                    |  |                                    |  |  |              | 250     |   |       |   |         |   |  |   | 250     |  
|Equity in earnings of subsidiaries         |  |                                       | (1,567  | ) |                                               |   | 438     |                                    |  |                                    |  |  |              |        |   |       |   | 1,129    |   |  |   |        |  
|                                           |  |                                       |         |   |                                               |   |         |                                    |  |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income (loss) from continuing operations   |  |                                       | (3,806  | ) |                                               |   | (1,567  | )                                  |  |                                    |  |  |              | 438     |   |       |   | 1,129    |   |  |   | (3,806  | )
|Discontinued operations                    |  |                                       | (1,043  | ) |                                               |   |        |                                    |  |                                    |  |  |              |        |   |       |   |         |   |  |   | (1,043  | )
|                                           |  |                                       |         |   |                                               |   |         |                                    |  |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Net income (loss)                          |  |                                       | (4,849  | ) |                                               |   | (1,567  | )                                  |  |                                    |  |  |              | 438     |   |       |   | 1,129    |   |  |   | (4,849  | )
|Retained earnings at beginning of period   |  |                                       | 149,428 |   |                                               |   | 135,956 |                                    |  |                                    |  |  |              | 156,306 |   |       |   | (292,262 | ) |  |   | 149,428 |  
|Common stock dividends                     |  |                                       | (1,196  | ) |                                               |   |        |                                    |  |                                    |  |  |              |        |   |       |   |         |   |  |   | (1,196  | )
|                                           |  |                                       |         |   |                                               |   |         |                                    |  |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Retained earnings at end of period         |  | $                                     | 143,383 |   |                                               | $ | 134,389 |                                    |  | $                                  |  |  | $            | 156,744 |   |       | $ | (291,133 | ) |  | $ | 143,383 |  
|                                           |  |                                       |         |   |                                               |   |         |                                    |  |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  



-12-



---

SUPPLEMENTAL COMBINING STATEMENT OF CASH FLOWS

Three months ended June 30, 2004

(In
thousands)



|                                                    |  |                                       |          |   |                                               |   |         |                                  |  |                                    |   |  |              |         |       |  |   |   |  |   |          |  
|--------------------------------------------------- |  | ------------------------------------- | -------- | - | --------------------------------------------- | - | ------- | -------------------------------- |  | ---------------------------------- | - |  | ------------ | ------- | ----- |  | - | - |  | - | -------- | -
|                                                    |  | StandardCommercialCorporation(Issuer) |          |   | StandardCommercialTobacco Co.Inc. (Guarantor) |   |         | StandardWool Inc.(Non-Guarantor) |  | OtherSubsidiaries(Non- Guarantors) |   |  | Eliminations |         | Total | 
|Cash provided by (used for) operating activities    |  | $                                     | (100,457 | ) |                                               | $ | 79,371  |                                  |  | $                                  |  |  | $            | (10,057 | )     |  | $ |  |  | $ | (31,143  | )
|Cash flows from investing activities                |  |                                       |          |   |                                               |   |         |                                  |  |                                    |   |  |              |         |       |  |   |   |  |   |          |  
|Property, plant and equipment                       |  |                                       |          |   |                                               |   |         |                                  |  |                                    |   |  |              |         |       |  |   |   |  |   |          |  
|additions                                          |  |                                       |         |   |                                               |   | (3,052  | )                                |  |                                    |  |  |              | (4,004  | )     |  |   |  |  |   | (7,056   | )
|disposals                                          |  |                                       |         |   |                                               |   | 437     |                                  |  |                                    |  |  |              | 221     |       |  |   |  |  |   | 658      |  
|                                                    |  |                                       |          |   |                                               |   |         |                                  |  |                                    |   |  |              |         |       |  |   |   |  |   |          |  
|Cash provided by (used for) continuing activities   |  |                                       |         |   |                                               |   | (2,615  | )                                |  |                                    |  |  |              | (3,783  | )     |  |   |  |  |   | (6,398   | )
|Cash provided by (used for) discontinued activities |  |                                       |         |   |                                               |   |        |                                  |  |                                    |  |  |              | 23      |       |  |   |  |  |   | 23       |  
|                                                    |  |                                       |          |   |                                               |   |         |                                  |  |                                    |   |  |              |         |       |  |   |   |  |   |          |  
|Cash provided by (used for) investing activities    |  |                                       |         |   |                                               |   | (2,615  | )                                |  |                                    |  |  |              | (3,760  | )     |  |   |  |  |   | (6,375   | )
|Cash flows from financing activities:               |  |                                       |          |   |                                               |   |         |                                  |  |                                    |   |  |              |         |       |  |   |   |  |   |          |  
|Proceeds from long-term borrowings                  |  |                                       | 145,722  |   |                                               |   |        |                                  |  |                                    |  |  |              | 9,930   |       |  |   |  |  |   | 155,652  |  
|Repayment of long-term borrowings                   |  |                                       |         |   |                                               |   |        |                                  |  |                                    |  |  |              | (9,515  | )     |  |   |  |  |   | (9,515   | )
|Net change in short-term borrowings                 |  |                                       |         |   |                                               |   | (1,050  | )                                |  |                                    |  |  |              | 34,728  |       |  |   |  |  |   | 33,678   |  
|Repayment of debt                                   |  |                                       | (45,051  | ) |                                               |   | (66,141 | )                                |  |                                    |  |  |              |        |       |  |   |  |  |   | (111,192 | )
|Other                                               |  |                                       | (244     | ) |                                               |   |        |                                  |  |                                    |  |  |              |        |       |  |   |  |  |   | (244     | )
|                                                    |  |                                       |          |   |                                               |   |         |                                  |  |                                    |   |  |              |         |       |  |   |   |  |   |          |  
|Cash provided by (used in) financing activities     |  |                                       | 100,427  |   |                                               |   | (67,191 | )                                |  |                                    |  |  |              | 35,143  |       |  |   |  |  |   | 68,379   |  
|                                                    |  |                                       |          |   |                                               |   |         |                                  |  |                                    |   |  |              |         |       |  |   |   |  |   |          |  
|Effect of exchange rate changes on cash             |  |                                       |         |   |                                               |   |        |                                  |  |                                    |  |  |              | (70     | )     |  |   |  |  |   | (70      | )
|                                                    |  |                                       |          |   |                                               |   |         |                                  |  |                                    |   |  |              |         |       |  |   |   |  |   |          |  
|Increase (decrease) in cash for year                |  |                                       | (30      | ) |                                               |   | 9,565   |                                  |  |                                    |  |  |              | 21,256  |       |  |   |  |  |   | 30,791   |  
|Cash at beginning of year                           |  |                                       | 94       |   |                                               |   | 1,064   |                                  |  |                                    |  |  |              | 26,517  |       |  |   |  |  |   | 27,675   |  
|                                                    |  |                                       |          |   |                                               |   |         |                                  |  |                                    |   |  |              |         |       |  |   |   |  |   |          |  
|Cash at end of period                               |  | $                                     | 64       |   |                                               | $ | 10,629  |                                  |  | $                                  |  |  | $            | 47,773  |       |  | $ |  |  | $ | 58,466   |  
|                                                    |  |                                       |          |   |                                               |   |         |                                  |  |                                    |   |  |              |         |       |  |   |   |  |   |          |  
|Interest                                            |  | $                                     | 299      |   |                                               | $ | 1,434   |                                  |  | $                                  |  |  | $            | 4,639   |       |  |   |   |  | $ | 6,372    |  
|Income taxes                                        |  |                                       | 19       |   |                                               |   |        |                                  |  |                                    |  |  |              | 2,836   |       |  |   |   |  |   | 2,855    |  



-13-



---

STANDARD COMMERCIAL CORPORATION



SUPPLEMENTAL COMBINING BALANCE SHEET

June 30, 2003

(In thousands)



|                                            |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|------------------------------------------- |  | ---------------------------------------- | ------- | - | ------------------------------------------- | - | ------- | ---------------------------- |  | - | ---------------------------------- | - |  | ------------ | ------- | - | ----- | - | -------- | - |  | - | ------- | -
|                                            |  | StandardCommercialCorporation(Guarantor) |         |   | StandardCommercialTobacco Co. Inc. (Issuer) |   |         | StandardWool Inc.(Guarantor) |  |   | Other Subsidiaries(Non-Guarantors) |   |  | Eliminations |         |   | Total |  
|Assets                                      |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Cash                                        |  | $                                        | 52      |   |                                             | $ | 2,098   |                              |  | $ |                                   |   |  | $            | 14,156  |   |       | $ |         |   |  | $ | 16,306  |  
|Receivables                                 |  |                                          |        |   |                                             |   | 18,211  |                              |  |   |                                   |   |  |              | 165,761 |   |       |   |         |   |  |   | 183,972 |  
|Intercompany receivables                    |  |                                          | 18,228  |   |                                             |   | 101,339 |                              |  |   |                                   |   |  |              | 37,570  |   |       |   | (157,137 | ) |  |   |        |  
|Inventories                                 |  |                                          |        |   |                                             |   | 58,258  |                              |  |   |                                   |   |  |              | 207,193 |   |       |   |         |   |  |   | 265,451 |  
|Assets of discontinued operations           |  |                                          |        |   |                                             |   |        |                              |  |   |                                   |   |  |              | 135,438 |   |       |   |         |   |  |   | 135,438 |  
|Prepaid expenses                            |  |                                          |        |   |                                             |   | 1,740   |                              |  |   |                                   |   |  |              | 3,530   |   |       |   |         |   |  |   | 5,270   |  
|Marketable securities                       |  |                                          | 1       |   |                                             |   |        |                              |  |   |                                   |   |  |              | 1,236   |   |       |   |         |   |  |   | 1,237   |  
|                                            |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Current assets                              |  |                                          | 18,281  |   |                                             |   | 181,646 |                              |  |   |                                   |   |  |              | 564,884 |   |       |   | (157,137 | ) |  |   | 607,674 |  
|Property, plant and equipment               |  |                                          |        |   |                                             |   | 37,730  |                              |  |   |                                   |   |  |              | 115,066 |   |       |   |         |   |  |   | 152,796 |  
|Investment in subsidiaries                  |  |                                          | 269,964 |   |                                             |   | 174,817 |                              |  |   | 14,045                             |   |  |              | 154,840 |   |       |   | (613,666 | ) |  |   |        |  
|Investment in affiliates                    |  |                                          |        |   |                                             |   |        |                              |  |   |                                   |   |  |              | 7,621   |   |       |   |         |   |  |   | 7,621   |  
|Other noncurrent assets                     |  |                                          | 13,694  |   |                                             |   | 918     |                              |  |   |                                   |   |  |              | 31,683  |   |       |   |         |   |  |   | 46,295  |  
|                                            |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Total assets                                |  | $                                        | 301,939 |   |                                             | $ | 395,111 |                              |  | $ | 14,045                             |   |  | $            | 874,094 |   |       | $ | (770,803 | ) |  | $ | 814,386 |  
|                                            |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Liabilities                                 |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Short-term borrowings                       |  | $                                        |        |   |                                             | $ | 17,384  |                              |  | $ |                                   |   |  | $            | 206,136 |   |       | $ |         |   |  | $ | 223,520 |  
|Current portion of long-term debt           |  |                                          |        |   |                                             |   |        |                              |  |   |                                   |   |  |              | 6,734   |   |       |   |         |   |  |   | 6,734   |  
|Accounts payable                            |  |                                          | 9,113   |   |                                             |   | 12,237  |                              |  |   |                                   |   |  |              | 126,924 |   |       |   |         |   |  |   | 148,274 |  
|Liabilities of discontinued operations      |  |                                          |        |   |                                             |   |        |                              |  |   |                                   |   |  |              | 23,737  |   |       |   |         |   |  |   | 23,737  |  
|Intercompany accounts payable               |  |                                          | 1,032   |   |                                             |   | 29,701  |                              |  |   | 903                                |   |  |              | 125,501 |   |       |   | (157,137 | ) |  |   |        |  
|Taxed accrued                               |  |                                          | (11,362 | ) |                                             |   | 8,498   |                              |  |   |                                   |   |  |              | 15,066  |   |       |   |         |   |  |   | 12,202  |  
|                                            |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Current liabilities                         |  |                                          | (1,217  | ) |                                             |   | 67,820  |                              |  |   | 903                                |   |  |              | 504,098 |   |       |   | (157,137 | ) |  |   | 414,467 |  
|Long-term debt                              |  |                                          |        |   |                                             |   | 65,177  |                              |  |   |                                   |   |  |              | 15,512  |   |       |   |         |   |  |   | 80,689  |  
|Convertible subordinated debentures         |  |                                          | 45,051  |   |                                             |   |        |                              |  |   |                                   |   |  |              |        |   |       |   |         |   |  |   | 45,051  |  
|Retirement and other benefits               |  |                                          | 994     |   |                                             |   | 9,616   |                              |  |   |                                   |   |  |              | 3,826   |   |       |   |         |   |  |   | 14,436  |  
|Deferred taxes                              |  |                                          | (428    | ) |                                             |   | (1,480  | )                            |  |   |                                   |   |  |              | 6,371   |   |       |   |         |   |  |   | 4,463   |  
|                                            |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Total liabilities                           |  |                                          | 44,400  |   |                                             |   | 141,133 |                              |  |   | 903                                |   |  |              | 529,807 |   |       |   | (157,137 | ) |  |   | 559,106 |  
|                                            |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Minority interests                          |  |                                          |        |   |                                             |   |        |                              |  |   |                                   |   |  |              | 1,918   |   |       |   |         |   |  |   | 1,918   |  
|                                            |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Shareholders equity                        |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Common stock                                |  |                                          | 3,247   |   |                                             |   | 993     |                              |  |   | 32,404                             |   |  |              | 166,365 |   |       |   | (199,762 | ) |  |   | 3,247   |  
|Additional paid-in capital                  |  |                                          | 110,597 |   |                                             |   | 130,860 |                              |  |   |                                   |   |  |              | 60,564  |   |       |   | (191,424 | ) |  |   | 110,597 |  
|Unearned restricted stock plan compensation |  |                                          | (708    | ) |                                             |   | (1,120  | )                            |  |   |                                   |   |  |              | (3,057  | ) |       |   |         |   |  |   | (4,885  | )
|Treasury stock at cost                      |  |                                          | (4,250  | ) |                                             |   |        |                              |  |   |                                   |   |  |              |        |   |       |   |         |   |  |   | (4,250  | )
|Retained earnings                           |  |                                          | 173,256 |   |                                             |   | 133,760 |                              |  |   | (18,823                            | ) |  |              | 143,957 |   |       |   | (258,894 | ) |  |   | 173,256 |  
|Accumulated other comprehensive loss        |  |                                          | (24,603 | ) |                                             |   | (10,515 | )                            |  |   | (439                               | ) |  |              | (25,460 | ) |       |   | 36,414   |   |  |   | (24,603 | )
|                                            |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Total shareholders equity                  |  |                                          | 257,539 |   |                                             |   | 253,978 |                              |  |   | 13,142                             |   |  |              | 342,369 |   |       |   | (613,666 | ) |  |   | 253,362 |  
|                                            |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Total liabilities and equity                |  | $                                        | 301,939 |   |                                             | $ | 395,111 |                              |  | $ | 14,045                             |   |  | $            | 874,094 |   |       | $ | (770,803 | ) |  | $ | 814,386 |  
|                                            |  |                                          |         |   |                                             |   |         |                              |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  



-14-



---

STANDARD COMMERCIAL CORPORATION



SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS

Three months ended June 30, 2003

(In
thousands)



|                                           |  |                                          |         |   |                                             |   |                                |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|------------------------------------------ |  | ---------------------------------------- | ------- | - | ------------------------------------------- | - | ------------------------------ |  | - | ---------------------------------- | - |  | ------------ | ------- | - | ----- | - | -------- | - |  | - | ------- | -
|                                           |  | StandardCommercialCorporation(Guarantor) |         |   | StandardCommercialTobacco Co. Inc. (Issuer) |   | Standard Wool Inc. (Guarantor) |  |   | Other Subsidiaries(Non-Guarantors) |   |  | Eliminations |         |   | Total |  
|Sales                                      |  | $                                        |        |   |                                             | $ | 33,503                         |  | $ |                                   |   |  | $            | 212,929 |   |       | $ | (72,344  | ) |  | $ | 174,088 |  
|Cost of sales:                             |  |                                          |         |   |                                             |   |                                |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Materials services and supplies            |  |                                          |        |   |                                             |   | 27,663                         |  |   |                                   |   |  |              | 183,052 |   |       |   | (72,344  | ) |  |   | 138,371 |  
|Interest                                   |  |                                          |        |   |                                             |   | 95                             |  |   |                                   |   |  |              | 2,480   |   |       |   |         |   |  |   | 2,575   |  
|                                           |  |                                          |         |   |                                             |   |                                |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Gross profit                               |  |                                          |        |   |                                             |   | 5,745                          |  |   |                                   |   |  |              | 27,397  |   |       |   |         |   |  |   | 33,142  |  
|Selling, general & administrative expenses |  |                                          | 1,334   |   |                                             |   | 4,100                          |  |   |                                   |   |  |              | 13,014  |   |       |   |         |   |  |   | 18,448  |  
|Other interest expense                     |  |                                          | 814     |   |                                             |   | 1,396                          |  |   |                                   |   |  |              | (1,072  | ) |       |   |         |   |  |   | 1,138   |  
|Other income (expense) net                 |  |                                          | (79     | ) |                                             |   | 1,317                          |  |   |                                   |   |  |              | (821    | ) |       |   |         |   |  |   | 417     |  
|                                           |  |                                          |         |   |                                             |   |                                |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income (loss) before taxes                 |  |                                          | (2,227  | ) |                                             |   | 1,566                          |  |   |                                   |   |  |              | 14,634  |   |       |   |         |   |  |   | 13,973  |  
|Income tax expense (benefit)               |  |                                          | (846    | ) |                                             |   | 595                            |  |   |                                   |   |  |              | 5,607   |   |       |   |         |   |  |   | 5,356   |  
|                                           |  |                                          |         |   |                                             |   |                                |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income (loss) after taxes                  |  |                                          | (1,381  | ) |                                             |   | 971                            |  |   |                                   |   |  |              | 9,027   |   |       |   |         |   |  |   | 8,617   |  
|Minority interests                         |  |                                          |        |   |                                             |   |                               |  |   |                                   |   |  |              | 67      |   |       |   |         |   |  |   | 67      |  
|Equity in earnings of affiliates           |  |                                          |        |   |                                             |   |                               |  |   |                                   |   |  |              | 200     |   |       |   |         |   |  |   | 200     |  
|Equity in earnings of subsidiaries         |  |                                          | 10,265  |   |                                             |   | 9,294                          |  |   |                                   |   |  |              |        |   |       |   | (19,559  | ) |  |   |        |  
|                                           |  |                                          |         |   |                                             |   |                                |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income from continuing operations          |  |                                          | 8,884   |   |                                             |   | 10,265                         |  |   |                                   |   |  |              | 9,294   |   |       |   | (19,559  | ) |  |   | 8,884   |  
|Discontinued operations                    |  |                                          | (2,272  | ) |                                             |   |                               |  |   | (2,272                             | ) |  |              | (2,272  | ) |       |   | 4,544    |   |  |   | (2,272  | )
|                                           |  |                                          |         |   |                                             |   |                                |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Net income (loss)                          |  |                                          | 6,612   |   |                                             |   | 10,265                         |  |   | (2,272                             | ) |  |              | 7,022   |   |       |   | (15,015  | ) |  |   | 6,612   |  
|Retained earnings at beginning of period   |  |                                          | 167,495 |   |                                             |   | 123,495                        |  |   | (16,551                            | ) |  |              | 136,935 |   |       |   | (243,879 | ) |  |   | 167,495 |  
|Common stock dividends                     |  |                                          | (851    | ) |                                             |   |                               |  |   |                                   |   |  |              |        |   |       |   |         |   |  |   | (851    | )
|                                           |  |                                          |         |   |                                             |   |                                |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  
|Retained earnings at end of period         |  | $                                        | 173,256 |   |                                             | $ | 133,760                        |  | $ | (18,823                            | ) |  | $            | 143,957 |   |       | $ | (258,894 | ) |  | $ | 173,256 |  
|                                           |  |                                          |         |   |                                             |   |                                |  |   |                                    |   |  |              |         |   |       |   |          |   |  |   |         |  



-15-



---

SUPPLEMENTAL COMBINING STATEMENT OF CASH FLOWS

Three months ended June 30, 2003

(In
thousands)



|                                                    |  |                                          |       |   |                                            |   |        |                              |  |                                    |   |  |              |         |       |  |   |   |  |   |         |  
|--------------------------------------------------- |  | ---------------------------------------- | ----- | - | ------------------------------------------ | - | ------ | ---------------------------- |  | ---------------------------------- | - |  | ------------ | ------- | ----- |  | - | - |  | - | ------- | -
|                                                    |  | StandardCommercialCorporation(Guarantor) |       |   | StandardCommercialTobacco Co.Inc. (Issuer) |   |        | StandardWool Inc.(Guarantor) |  | OtherSubsidiaries(Non- Guarantors) |   |  | Eliminations |         | Total | 
|Cash provided by (used for) operating activities    |  | $                                        | (2    | ) |                                            | $ | 9,070  |                              |  | $                                  |  |  | $            | (56,904 | )     |  | $ |  |  | $ | (47,836 | )
|Cash flows from investing activities                |  |                                          |       |   |                                            |   |        |                              |  |                                    |   |  |              |         |       |  |   |   |  |   |         |  
|Property, plant and equipment                       |  |                                          |       |   |                                            |   |        |                              |  |                                    |   |  |              |         |       |  |   |   |  |   |         |  
|additions                                          |  |                                          |      |   |                                            |   | (3,155 | )                            |  |                                    |  |  |              | (5,342  | )     |  |   |  |  |   | (8,497  | )
|disposals                                          |  |                                          |      |   |                                            |   |       |                              |  |                                    |  |  |              | 64      |       |  |   |  |  |   | 64      |  
|                                                    |  |                                          |       |   |                                            |   |        |                              |  |                                    |   |  |              |         |       |  |   |   |  |   |         |  
|Cash provided by (used for) continuing activities   |  |                                          |      |   |                                            |   | (3,155 | )                            |  |                                    |  |  |              | (5,278  | )     |  |   |  |  |   | (8,433  | )
|Cash provided by (used for) discontinued activities |  |                                          |      |   |                                            |   |       |                              |  |                                    |  |  |              | 1,052   |       |  |   |  |  |   | 1,052   |  
|                                                    |  |                                          |       |   |                                            |   |        |                              |  |                                    |   |  |              |         |       |  |   |   |  |   |         |  
|Cash provided by (used for) investing activities    |  |                                          |      |   |                                            |   | (3,155 | )                            |  |                                    |  |  |              | (4,226  | )     |  |   |  |  |   | (7,381  | )
|Cash flows from financing activities:               |  |                                          |       |   |                                            |   |        |                              |  |                                    |   |  |              |         |       |  |   |   |  |   |         |  
|Proceeds from long-term borrowings                  |  |                                          |      |   |                                            |   |       |                              |  |                                    |  |  |              | 6,836   |       |  |   |  |  |   | 6,836   |  
|Repayment of long-term borrowings                   |  |                                          |      |   |                                            |   |       |                              |  |                                    |  |  |              | (3,650  | )     |  |   |  |  |   | (3,650  | )
|Net change in short-term borrowings                 |  |                                          |      |   |                                            |   | (4,393 | )                            |  |                                    |  |  |              | 45,811  |       |  |   |  |  |   | 41,418  |  
|Other                                               |  |                                          |      |   |                                            |   | 113    |                              |  |                                    |  |  |              |        |       |  |   |  |  |   | 113     |  
|                                                    |  |                                          |       |   |                                            |   |        |                              |  |                                    |   |  |              |         |       |  |   |   |  |   |         |  
|Cash provided by (used in) financing activities     |  |                                          |      |   |                                            |   | (4,280 | )                            |  |                                    |  |  |              | 48,997  |       |  |   |  |  |   | 44,717  |  
|                                                    |  |                                          |       |   |                                            |   |        |                              |  |                                    |   |  |              |         |       |  |   |   |  |   |         |  
|Effect of exchange rate changes on cash             |  |                                          |      |   |                                            |   |       |                              |  |                                    |  |  |              | 236     |       |  |   |  |  |   | 236     |  
|                                                    |  |                                          |       |   |                                            |   |        |                              |  |                                    |   |  |              |         |       |  |   |   |  |   |         |  
|Increase (decrease) in cash for year                |  |                                          | (2    | ) |                                            |   | 1,635  |                              |  |                                    |  |  |              | (11,897 | )     |  |   |  |  |   | (10,264 | )
|Cash at beginning of year                           |  |                                          | 54    |   |                                            |   | 463    |                              |  |                                    |  |  |              | 26,053  |       |  |   |  |  |   | 26,570  |  
|                                                    |  |                                          |       |   |                                            |   |        |                              |  |                                    |   |  |              |         |       |  |   |   |  |   |         |  
|Cash at end of period                               |  | $                                        | 52    |   |                                            | $ | 2,098  |                              |  | $                                  |  |  | $            | 14,156  |       |  | $ |  |  | $ | 16,306  |  
|                                                    |  |                                          |       |   |                                            |   |        |                              |  |                                    |   |  |              |         |       |  |   |   |  |   |         |  
|Interest                                            |  | $                                        |      |   |                                            | $ | 137    |                              |  | $                                  |  |  | $            | 1,677   |       |  |   |   |  | $ | 1,814   |  
|Income taxes                                        |  |                                          | 1,300 |   |                                            |   |       |                              |  |                                    |  |  |              | 4,858   |       |  |   |   |  |   | 6,158   |  



-16-



---

Item 2

MANAGEMENTS
DISCUSSION AND ANALYSIS OF

|RESULTS | OF OPERATIONS AND FINANCIAL CONDITION
|------- | -------------------------------------



Executive Summary



On a global basis, supply and demand remain relatively balanced as a large crop in Brazil has offset smaller crops in Zimbabwe. There is still an oversupply condition for the oriental styles. Inventory balances at
June 30, 2004 are $95.6 million higher than the June 30, 2003 level. The level of inventory fluctuates based on customer shipment schedules and availability of shipping containers. The increase also reflects the additions to inventory that result
from new operations that are becoming fully operational such as our new growing projects in Africa.



The Euro remains strong against the U.S. Dollar. While most of the sales are denominated in dollars, local country operating costs, including the purchasing and processing costs for tobaccos, are incurred in local
currency. This has increased the costs of European tobaccos from the prior year that are currently being sold.



During the three months ended June 30, 2004, we issued $150 million of 8% senior notes due 2012, redeemed $45.1 million 71/4% convertible debentures and retired $65.2 million 87/8% senior
notes due 2005. Early in April 2004, our major tobacco subsidiaries entered into a new $150 million three year unsecured revolving facility.



|Consolidated | Results of Operations (in thousands)
|------------ | ------------------------------------



|                                            |  |                           |         |   |      |   |         |                       |  |   |         |  
|------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | ------- | --------------------- |  | - | ------- | -
|                                            |  | Three Months EndedJune 30 |         |   |      |  
|                                            |  | 2004                      |         |   | 2003 |   |         | Increase / (Decrease) | 
|Sales                                       |  | $                         | 185,619 |   |      | $ | 174,088 |                       |  | $ | 11,531  |  
|Gross profit                                |  |                           | 20,211  |   |      |   | 33,142  |                       |  |   | (12,931 | )
|Selling general and administrative expenses |  |                           | 22,767  |   |      |   | 18,448  |                       |  |   | 4,319   |  
|Interest expense                            |  |                           | 3,690   |   |      |   | 1,138   |                       |  |   | 2,552   |  
|Income tax (benefit) expense                |  |                           | (1,451  | ) |      |   | 5,356   |                       |  |   | (6,807  | )
|Income (loss) from continuing operations    |  |                           | (3,806  | ) |      |   | 8,884   |                       |  |   | (12,690 | )
|Loss from discontinued operations           |  |                           | (1,043  | ) |      |   | (2,272  | )                     |  |   | 1,229   |  
|Net income (loss)                           |  |                           | (4,849  | ) |      |   | 6,612   |                       |  |   | (11,461 | )



Sales.Sales for the three
months ended June 30, 2004 increased by 6.6% to $185.6 million from $174.1 million in the prior year period. The volume of tobacco sold during the current quarter increased by 5.3% over the prior year quarter. This was mainly due to increased
shipments from Brazil, Turkey, Italy and India. Sales were lower for Kenya/Congo, Argentina, Thailand and Malawi than the prior year period primarily due to delays in shipments.



Gross Profit.Gross profit for the three months ending June 30, 2004 decreased $12.9 million from the prior years period. The
main reason for the decline was higher product costs related to higher farmer prices in South America coupled with lower shipments from Malawi and Zimbabwe. In the case of Malawi, shipments were unfavorably impacted by reduced factory efficiencies
caused by foreign material in tobacco received at auction. This caused delays in our planned packing schedules which were further impacted by a shortage of containers. We are also still feeling the impact of last years currency inflated
European crop that is shipping in this fiscal year. Gross margin was also negatively affected by increased interest cost due to higher operating assets.



-17-



---

Item 2

MANAGEMENTS DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION(Continued)



Selling, General and Administrative Expenses.SG&A expenses were
higher by $4.3 million or 23.4% compared to the prior year quarter. The increase was mainly due to higher expenses related to compensation increases of $2.4 million, legal $0.4 million, communication and rent $0.4 million and other normal
inflationary increases.



Interest Expense.Interest expense was higher
by $2.6 million due to increased borrowings, higher interest on the new $150 million senior notes issued in April 2004 and the early redemption fee of $1.0 million on the May 2004 early retirement of the 87/8% senior notes issue.



Income taxes.Income tax charges or credits as a percentage of
pretax income can vary due to differences in tax rates and relief available in areas where profits are earned or losses are incurred. The effective tax rate for the quarter was 25% versus 38% for the prior year period.



Loss from Continuing Operations.Loss from continuing operations was $3.8 million
versus profit of $8.9 million in the prior year period.



Loss from
Discontinued Operations.The wool operating loss for the three months to June 30, 2004 was $1.0 million versus a loss of $2.3 million in the prior year period. The reduction was due to the sale late in fiscal 2004 of units in Australia.



Net Income.The consolidated net loss was $4.8 million, primarily due
to difficult trading conditions in tobacco business, versus the prior year period net income of $6.6 million.



Discontinued operations



During the
second quarter of fiscal 2004, we decided to focus on the core tobacco operations and close all our wool operations located in the UK, Chile, France, Germany and Australia. As a result of this decision to dispose of these operations, they have been
classified as available for sale and qualify for held for disposal treatment under SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets. The unit in Australia was sold in fiscal 2004. The operations of the processing
mill in France was shutdown in April 2004 and its assets, along with the remaining trading operations in France and Germany, and the trading and processing operations in the UK and Chile, are expected to be sold or terminated by September 30, 2004.
The fair value of the remaining operations was determined based on current negotiations with prospective purchasers and comparisons with other industry transactions.



These wool units are expected to incur additional operating losses until final disposition. Once disposed, we will not retain a financial
interest and we have not identified any significant contingent liabilities that would delay or significantly alter the plan of disposition. We will continue to guarantee the debt of the wool units until disposition, at which time we do not expect to
provide any guarantees for the obligations or commitments of the wool units.



We have accounted for the sale of the wool units as discontinued operations, in accordance with the provisions of SFAS No 144. The results for all periods presented are included in the consolidated financial statements as discontinued
operations. As noted above, because the existing debt of the wool units is guaranteed by us, we have not included any such debt in liabilities of discontinued operations.



The wool operating loss, which primarily relates to overhead incurred, for the three months ended June 30, 2004, was $1.0 million, versus
$2.3 million in the prior year period. The basic loss per share for the discontinued operations for the quarter was $0.07, versus a loss of $0.17 in the prior year period.



-18-



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Item 2

MANAGEMENTS DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Continued)



Liquidity and Capital Resources



The following table is a summary of items from our consolidated balance sheet and our
statement of consolidated cash flows at the dates or for the periods presented (in thousands, except for current ratio).



|                                      |  |             |         |               |   |         |  |   |        
|------------------------------------- |  | ----------- | ------- | ------------- | - | ------- |  | - | -------
|                                      |  | June 30     |         | March 31 2004
|                                      |  | 2004        |         | 2003          |  
|                                      |  | (unaudited) |         |              
|Cash and cash equivalents             |  | $           | 58,466  |               | $ | 16,306  |  | $ | 27,675 
|Receivables                           |  |             | 172,373 |               |   | 183,972 |  |   | 196,681
|Inventories                           |  |             | 361,021 |               |   | 265,451 |  |   | 292,334
|Total current assets                  |  |             | 676,696 |               |   | 607,674 |  |   | 618,150
|Working capital                       |  |             | 188,665 |               |   | 193,207 |  |   | 166,852
|Short-term borrowings                 |  |             | 287,525 |               |   | 223,520 |  |   | 253,847
|Accounts payable                      |  |             | 160,662 |               |   | 148,274 |  |   | 145,894
|Total current liabilities             |  |             | 488,031 |               |   | 414,467 |  |   | 451,298
|Current ratio                         |  |             | 1.39:1  |               |   | 1.47:1  |  |   | 1.37:1 
|Total long-term debt                  |  |             | 177,132 |               |   | 125,740 |  |   | 136,865
|Shareholders equity                  |  |             | 222,423 |               |   | 253,362 |  |   | 229,064
|Capital expenditures                  |  |             | 7,056   |               |   | 8,497   |  |   | 36,690 
|Depreciation and amortization expense |  |             | 6,078   |               |   | 4,310   |  |   | 18,025 



Working capital at June 30, 2004 was
$188.7 million, down from the $193.2 million at June 30, 2003. The net contributions from financing activity of $68.4 million was offset by $6.4 million used for investing activity and $69.6 million increase in inventories. The increase in the value
of inventories was largely due to larger growing projects and shipping delays in Africa, crop size in South America and higher currency adjusted inventories in Europe. We continue to monitor our inventories, which fluctuate depending on seasonal
factors and timing of deliveries to customers.



Cash used for operating
activities at June 30, 2004 totaled $31.1 million, primarily due to the increase in inventory of $69.6 million, partly offset by net cash flows from the reduction in receivables, discontinued operations and increase in payables.



Cash used for investing activities of $6.4 million at June 30, 2004 related to capital
expenditures in our facilities in the U.S., Turkey and Brazil.



The increase in
cash and cash equivalents was largely due to timing of receipt of cash from customers against the timing of maturities of short-term borrowings.



Financing Arrangements. We incur short-term debt to finance our seasonal working capital needs, which typically peak in the third quarter, under secured lines of
credit with several banks.



On April 2, 2004, our major tobacco subsidiaries
entered into a new three year unsecured revolving bank facility to replace the existing revolving bank credit facility. The new facility provides for borrowings of $150.0 million for working capital and other general corporate purposes, and the
interest rate on borrowings under the facility is variable. The rate is currently LIBOR plus 2.0%. The borrowings under the facility are guaranteed by us and certain of our tobacco subsidiaries. The new facility includes certain financial covenants
that, among other things, require us to maintain tangible net worth, current ratio, interest cover ratio and also includes certain borrowing base restrictions. We are in compliance with all financial covenants as of June 30, 2004.



On April 2, 2004, we issued $150.0 million of 8% senior notes due 2012. The proceeds were
used to redeem the $45.1 million outstanding 71/4% convertible subordinated debentures and to retire the $65.2
million 87/8% senior notes due 2005. The new notes are guaranteed by our U.S. tobacco subsidiary on a senior
unsecured basis. The indentures governing these senior notes contain covenants that, among other things, limit our ability to (1) pay dividends, (2) incur additional indebtedness, (3) transfer or issue shares of capital stock of subsidiaries to
third parties, (4) sell assets, (5) issue preferred stock, (6) incur or assume any liens that secures obligations under any indebtedness on any asset or property, or (7) merge with or into any entity.



-19-



---

Item 2

MANAGEMENTS DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Continued)



Debt agreements to which our subsidiaries and we are parties contain
financial covenants, which could restrict the payment of cash dividends. Under the most restrictive covenant, we had approximately $18.8 million of retained earnings available for distribution as dividends at June 30, 2004.



We continue to guarantee the debt of the wool units up to their actual disposition and
accordingly have not included the wool debt in the liabilities of discontinued operations. At June 30, 2004, this amounted to $34.8 million. We believe that the disposition of the wool operations will not have a material impact on our overall
liquidity needs.



A growing trend that has developed as a response to the
market disruptions in Zimbabwe is the development of new growing projects in Zambia and Mozambique, and to some extent Malawi. These new growing projects generally involve growers with small individual farms rather than large commercial farms such
as existed in Zimbabwe. As a result, we might need to provide additional pre-financing to these small individual farms to develop these new crops, which could increase the pressure on our short-term liquidity resources.



On June 9, 2004, the Board of Directors approved a quarterly cash dividend of $0.0875 per
share on common shares payable on July 15, 2004.



Based on the outlook for the
business for the next 12 months, we anticipate that we will be able to service the interest and principal on our indebtedness, maintain adequate working capital and provide for capital expenditures out of operating cash flow and available borrowings
under our credit facilities. Our future operating performance will be subject to economic conditions and to financial, political, agricultural and other factors, many of which are beyond our control.



Contractual Obligations



We have tobacco purchase obligations that result from contracts with growers to buy either specified quantities of tobacco or the
growers total tobacco production. This is a normal and routine practice in our industry in some areas, notably Brazil and Turkey. At June 30, 2004 we had contractual obligations with tobacco growers to purchase tobacco for approximately $103
million. Payments due under these obligations within a year total $53 million and the remainder are due between 1 and 3 years.



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 we have little or no control. These include changes in timing of
shipments, weather, demand for and supply of leaf tobacco and wool, tobacco litigation or legislation, customer consolidations, changes in general economic conditions, political risks and changes in government regulations or pricing or payment
policies. Additional information regarding these factors is contained in our other Securities and Exchange Commission filings, copies of which are available upon request from us. We assume no obligation to update any of these forward-looking
statements.



Item 3. Quantitative and Qualitative Disclosures About Market
Risk



As disclosed in our Annual Report on Form 10-K for the year ended
March 31, 2004, we are exposed to market risk primarily related to foreign exchange and interest rates. These exposures are actively monitored by management. To manage the volatility relating to these exposures, we enter into derivative financial
instruments. The objective is to reduce, where we deem appropriate, fluctuations in earnings and cash flows



-20-



---

Item 2

MANAGEMENTS DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION(Continued)



associated with changes in interest rates and foreign currency rates. It is
our policy and practice to use derivative financial instruments only to the extent necessary to manage exposures. Our market risk has not changed substantially since March 31, 2004.



Item 4. Controls and Procedures



| | (a) | As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e)) pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Chief Executive Officer and Chief Financial
Officer have concluded that our disclosure controls and procedures are effective.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | No change in our internal control over financial reporting occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



-21-



---

PART II - OTHER INFORMATION



Item 1. Legal Proceedings



On February 26, 2001, we were served with a Third Amended Complaint, naming us and other leaf merchants as defendants in Deloach, et al. V. Philip Morris Inc., et al., a
suit originally filed against U.S. cigarette manufacturers in the United States District Court for the District of Columbia and subsequently moved to the United States District Court for the Middle District of North Carolina, Greensboro Division
(Case No. 00-CV-1235). The Deloach suit was a class action claim brought on behalf of U.S. tobacco growers and quota holders alleging that defendants violated antitrust laws by bid-rigging at tobacco auctions and by conspiring to undermine the
tobacco quota and price support program administered by the federal government. Plaintiffs sought injunctive relief, trebled damages in an unspecified amount, pre- and post-judgment interest, attorneys fees and costs of litigation. On April 3,
2002, the Court granted the plaintiffs motion for class action certification. In May 2003, we along with all but one of the other defendants, entered into a settlement agreement with the plaintiffs which received final approval, and which
accorded us a full release from all the claims in exchange for a payment of $7.0 million towards a larger total settlement agreement. On April 22, 2004, the case was settled and the settlement approved by the Court as to the remaining defendant.



In October 2001, the Directorate GeneralCompetition of the European
Commission, or DG Comp, began conducting an administrative investigation of certain selling and buying practices alleged to have occurred within the leaf tobacco industry in some countries within the European Union, including Spain, Italy and
Greece. We, through our local subsidiaries, are cooperating fully with the investigation and have discovered and voluntarily disclosed information which tends to establish that a number of leaf dealers, including our subsidiaries, have jointly
agreed with respect to green tobacco prices and purchase quantities. In respect of the Spanish investigation, on December 15, 2003, the DG Comp served on 20 entities within the Spanish leaf tobacco industry, including our company and three of our
subsidiaries, a Statement of Objections alleging certain infringements of the antitrust laws of the European Union. On March 1, 2004, the DG Comp served a similar Statement of Objections on 11 entities within the Italian leaf tobacco industry,
including our company and one of our subsidiaries. We have responded to the Statement regarding the Spanish investigation and to the Statement regarding the Italian investigation and will continue to cooperate in the investigations. Through the
Statements, DG Comp intends to impose, where appropriate and probably late in 2004, administrative penalties on the entities it determines have infringed the EC anti-competition laws. We expect to be assessed penalties in the cases and expect that
the penalties could be material to our earnings. DG Comp has, however, indicated that there may be mitigating circumstances in both investigations, including our cooperation with the DG Comp. We are currently unable to assess the amount of such
penalties, but expect that the mitigating factors could result in a reduction in any penalties imposed.



Except for the above, neither we nor any of our subsidiaries are currently involved in any litigation that we believe would, individually or in the aggregate, have a material adverse effect on our consolidated
financial position, consolidated results of operations, or liquidity nor, to our knowledge, is any such litigation currently threatened against us or our subsidiaries.



-22-



---

PART II - OTHER INFORMATION (Continued)



Item 6. Exhibits and Reports on Form 8-K



|(a) | Exhibits:
|--- | ---------



|          |  |                                                                                                                                                                             
|--------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit # |  | Description                                                                                                                                                                 
|11        |  | Computation of earnings per common share                                                                                                                                    
|          | 
|31.1      |  | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)                                                                                                     
|          | 
|31.2      |  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)                                                                                                     
|          | 
|32        |  | Certification by the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



|(b) | Reports on Form 8-K:
|--- | --------------------



| |  | June 3, 2004, as amended June 14, 2004, under Item 12 to report the year ended March 31, 2004 operating and financial results.
| | - | ------------------------------------------------------------------------------------------------------------------------------



| |  | June 10, 2004 under Item 5 to report that the Board of Directors had approved a quarterly cash dividend of $0.0875 per share on our common shares.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------



-23-



---

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.



|                     |  |     |  |                                                                      
|-------------------- |  | --- |  | ---------------------------------------------------------------------
|                     |  |     |  | STANDARD COMMERCIAL CORPORATION                                      
|                     |  |     |  | (Registrant)                                                         
|                     |  |    
|Date: August 5, 2004 |  | By: |  | /s/ Robert E. Harrison                                               
|                     |  |     |  | Robert E. Harrison President and Chief Executive
Officer             
|                     |  |    
|                     |  | By: |  | /s/ Robert A. Sheets                                                 
|                     |  |     |  | Robert A. Sheets Executive Vice President and
Chief Financial Officer