8-K
UNIVERSAL CORP /VA/ (UVV)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CurrentReport
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 12, 2024
UNIVERSAL
CORPORATION
(Exact Name of Registrant as Specified in itsCharter)
Virginia
(State or Other Jurisdiction of Incorporation)
| 001-00652 | 54-0414210 | ||
|---|---|---|---|
| (Commission<br><br> <br>File Number) | (IRS Employer<br><br> <br>Identification No.) | ||
| 9201 Forest Hill Avenue, | Richmond, | Virginia | 23235 |
| --- | --- | --- | --- |
| (Address of Principal Executive Offices) | (Zip code) |
(804) 359-9311
(Registrant’s Telephone Number, IncludingArea Code)
Not Applicable
(Former Name or Former Address, if Changed SinceLast Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, no par value | UVV | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | ¨ |
|---|---|
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
| --- | --- |
| Item 2.02 | Results of Operations and Financial Condition. |
| --- | --- |
On November 12, 2024, Universal Corporation (the “Company”) issued a press release (the “Press Release”) discussing certain preliminary unaudited financial results for the quarter ended September 30, 2024. These preliminary financial results are unaudited, based on currently available information and are not a comprehensive statement of the financial results for this period. Consequently, the preliminary unaudited financial results do not present all necessary information for a complete understanding of the Company’s financial condition as of September 30, 2024 or its results of operations for the quarter ended September 30, 2024. Actual results may differ from these preliminary unaudited financial results due to developments that may arise between the date of the press release and the time that financial results for the quarter ended September 30, 2024 are finalized. A copy of this release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
| Item 2.04 | Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation underan Off-Balance Sheet Arrangement. |
|---|
On November 6, 2024, the Company entered into a Consent with respect to that certain Credit Agreement, dated December 15, 2022, among the Company, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Credit Agreement”). Under the Credit Agreement the Company covenants to deliver its quarterly financial statements within 45 days following quarter end (the “Quarterly Financials Covenant”). As set forth in Item 8.01 herein, due to the ongoing internal investigation the Company will be unable to comply with the Quarterly Financials Covenant for the quarter ended September 30, 2024 (“Second Quarter 2025 Financials”). Due to the anticipated delay in delivery of the Second Quarter 2025 Financials, the Consent provides for, among other things, an extension until December 31, 2024 for delivery by the Company of the Second Quarter 2025 Financials.
| Item 8.01 | Other Events. |
|---|
In August 2024, after filing the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, Universal’s management was made aware of embezzlement by a former senior finance employee at the Company’s Mozambique subsidiary, Mozambique Leaf Tobacco Ltda.. The Company promptly began conducting an internal investigation led by independent outside advisors, including legal advisors and forensic accountants, to review the accounting transactions and procedures related to the embezzlement. As of the date of this Form 8-K, and subject to further investigation, the Company, with the assistance of its independent advisors, currently has identified approximately $7 million in the aggregate of unauthorized payments during fiscal years 2022 through 2025. As of the date hereof, the Company has not determined whether material adjustments to its previously issued financial statements will be necessary as a result of this matter or whether internal controls over financial reporting were designed and operating effectively.
As a result of the additional time required to complete its internal investigation, the process of finalizing financial statements for the second quarter of fiscal year 2025 could not be completed on a timely basis. Therefore, the Company is postponing its second fiscal quarter 2025 earnings release and conference call to allow additional time to complete the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (“Form 10-Q”). The Company intends to make a subsequent announcement to schedule the date and time of its second quarter earnings report once the filing date of its Form 10-Q is confirmed.
The Company filed today a Form 12b-25, Notification of Late Filing, with the U.S. Securities and Exchange Commission, which will extend the deadline for the Company to file the Form 10-Q from November 12, 2024 until November 18, 2024. The Company intends to file the Form 10-Q as soon as practicable after the conclusion of the internal investigation, which it expects will not occur prior to the extended deadline of November 18, 2024. The Company expects to receive a standard filing delinquency notification from the New York Stock Exchange (“NYSE”) and to discuss the status of the Form 10-Q with the NYSE. The NYSE typically grants listed companies a six-month period to cure a filing delinquency. The Company is committed to completing a deliberate, thorough investigation while diligently working to fulfill all reporting obligations.
The text under “Other Corporate Developments” of the Press Release is filed herewith as Exhibit 99.1 and incorporated herein by reference.
CAUTIONARY
STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This Form 8-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Among other things, these statements include statements regarding the ongoing internal investigation including descriptions of its scope and impact, expectations about the Company’s reporting of its results and filing its Form 10-Q for the quarter ended September 30, 2024, the potential financial statement impact of the investigated matter, and the preliminary unaudited financial information for the quarter ending September 30, 2024. These forward-looking statements are generally identified by the use of words such as we “expect,” “believe,” “anticipate,” “could,” “should,” “may,” “plan,” “will,” “predict,” “estimate,” and similar expressions or words of similar import. These forward-looking statements are based upon management’s current knowledge and assumptions about future events and involve risks and uncertainties that could cause actual results, performance, or achievements to be materially different from any anticipated results, prospects, performance, or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the uncertainty of the ultimate findings of the ongoing internal investigation, as well as the timing of its completion and costs and expenses arising out of the ongoing internal investigation process and its results; the impact of the ongoing internal investigation on us, our management and operations, including financial impact as well as any litigation or regulatory action that may arise from the ongoing internal investigation; the impact of the internal investigation on our conclusions regarding the effectiveness of our internal control over financial reporting and our disclosure controls and procedures; our ability to regain compliance with the NYSE listing requirements; success in pursuing strategic investments or acquisitions and integration of new businesses and the impact of these new businesses on future results; product purchased not meeting quality and quantity requirements; our reliance on a few large customers; our ability to maintain effective information technology systems and safeguard confidential information; anticipated levels of demand for and supply of our products and services; costs incurred in providing these products and services including increased transportation costs and delays attributed to global supply chain challenges; timing of shipments to customers; higher inflation rates; changes in market structure; government regulation and other stakeholder expectations; economic and political conditions in the countries in which we and our customers operate, including the ongoing impacts from international conflicts; product taxation; industry consolidation and evolution; changes in exchange rates and interest rates; impacts of regulation and litigation on its customers; industry-specific risks related to its plant-based ingredient businesses; exposure to certain regulatory and financial risks related to climate change; changes in estimates and assumptions underlying our critical accounting policies; the promulgation and adoption of new accounting standards, new government regulations and interpretation of existing standards and regulations; and general economic, political, market, and weather conditions. Actual results, therefore, could vary from those expected. Please also refer to such other factors as discussed in Part I, Item 1A. “Risk Factors” of Universal’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 and related disclosures in other filings, which have been filed with the U.S. Securities and Exchange Commission and are available on the SEC’s website at www.sec.gov. All risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking statements, and all of the forward-looking statements are expressly qualified by the cautionary statements contained or referred to herein and therein. Universal cautions investors not to place undue reliance on any forward-looking statements as these statements speak only as of the date when made, and it undertakes no obligation to update any forward-looking statements made, except as required by law.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
(d) Exhibits
| 99.1 | Press Release, dated November 12, 2024. |
|---|---|
| 104 | Cover<br>Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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 hereunto duly authorized.
| **** | UNIVERSAL CORPORATION | |
|---|---|---|
| Date: November 12, 2024 | By: | /s/ Catherine H. Claiborne |
| Catherine H. Claiborne | ||
| Vice President, General Counsel, and Secretary |
Exhibit 99.1
P.O. Box 25099 ~ Richmond, VA 23260 ~ Phone: (804) 359-9311 ~ Fax: (804) 254-3584
P R E S S R E L E A S E
| CONTACT: | Universal<br>Corporation Investor Relations | RELEASE: | 8:00<br>a.m. ET | |
|---|---|---|---|---|
| Phone: | (804)<br>359-9311 | |||
| Fax: | (804)<br>254-3584 | |||
| Email: | investor@universalleaf.com |
Universal CorporationProvides Second Quarter Fiscal Year 2025
Financial andOperational Update
Reports PreliminarySecond Quarter Fiscal Year 2025 Results
Highlights ContinuedStrong Operational Performance
Files Form 12b-25,Delays Second Quarter 2025 Earnings Release and Conference Call
Richmond, VA / November 12, 2024 / PRNEWSWIRE
Universal Corporation (NYSE:UVV) (“Universal” or the “Company”), a global business-to-business agriproducts company, today is providing a financial and operational update for the second quarter of fiscal year 2025, including preliminary results for the quarter.
Preston D. Wigner, Chairman, President, and Chief Executive Officer of Universal Corporation, stated, “The Universal team delivered another quarter of solid results, driven by strong customer demand from our Tobacco Operations segment and larger, higher quality, and better yielding crops in Africa. We believe our Tobacco Operations segment will continue its strong performance in the second half of our fiscal year. We also continued to grow Universal Ingredients’ market presence in the quarter and saw increased interest from new and existing customers, despite higher food costs creating pricing pressures. We expect our newly expanded ingredients facility to support increases in production and meaningfully contribute to our fiscal year 2026 results. Looking ahead, we are keenly focused on maximizing and optimizing our tobacco business and continuing to expand our ingredients business while identifying additional ways for the two businesses to work together. We will keep shareholders updated on our progress across these key initiatives aimed at creating enhanced value.”
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Universal Corporation
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PreliminaryUnaudited Financial Results
(in millions of dollars, except per share data)
| Three Months Ended | ||
|---|---|---|
| September 30, | ||
| 2024 | ||
| Consolidated Results | ||
| Sales and other operating revenue | $ | 710.8 |
| Restructuring and impairment costs | 10.6 | |
| Operating income | 70.7 | |
| Net Income attributable to Universal Corporation | 27.6 | |
| Basic earnings per share | 1.11 | |
| Diluted earnings per share | 1.10 | |
| Segment Results | ||
| Tobacco operations sales and other operating revenues | $ | 630.2 |
| Tobacco operations operating income | 79.3 | |
| Ingredients operations sales and other operating revenues | 80.6 | |
| Ingredients operations operating income | 1.3 |
Highlights ofthe Quarter
ConsolidatedResults
| · | Revenues<br> and operating income driven by strong tobacco sales volumes and prices. |
|---|
Tobacco OperationsSegment
| · | Tobacco<br> Operations segment results reflect continued strong customer demand; larger, higher quality,<br> better yielding crops in Africa; accelerated shipment timing per certain customers’<br> requests; sales of carryover crops. |
|---|---|
| · | Successful<br> tobacco procurement and marketing efforts, despite negative impacts from adverse weather,<br> mainly in South America and North America this fiscal year. |
| --- | --- |
| · | Uncommitted<br> tobacco inventory levels remained low at about 10% at quarter end. |
| --- | --- |
IngredientsOperations Segment
| · | Increased<br> sales volumes for the Ingredients Operations segment. |
|---|---|
| · | Customer<br> pressure due to the inflationary environment impacted demand and pricing for certain products<br> in the Ingredients Operations segment. |
| --- | --- |
| · | Anticipated<br> increases in production resulted in additional expenses for increased staffing at the expanded<br> Lancaster, Pennsylvania, ingredients facility. |
| --- | --- |
Liquidity andDebt
| · | Cash<br> balance at quarter end was approximately $80 million. |
|---|---|
| · | Approximately<br> $330 million available under revolving credit facility as of quarter end. |
| --- | --- |
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Universal Corporation
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| · | Net<br> debt, defined as the sum of notes payable and overdrafts, long-term debt (including any current<br> portion, and customer advances and deposits, less cash and cash equivalents) was approximately<br> $1.1 billion at quarter end. |
|---|---|
| · | Expect<br> continued strong demand for leaf tobacco will support intention to reduce net debt levels<br> over the next few quarters. |
| --- | --- |
Additional Item
| · | Restructuring<br> and impairment costs related to the previously announced consolidation of the Company’s<br> European sheet operations. |
|---|
The preliminaryunaudited financial results for the quarter ended September 30, 2024, included in this press release represent the most currentinformation available to management and are not a comprehensive statement of the financial results for this period. Consequently, thepreliminary unaudited financial results do not present all necessary information for a complete understanding of the Company’sfinancial condition as of September 30, 2024 or its results of operations for the quarter ended September 30, 2024. Actualresults may differ from these preliminary unaudited results due to developments that may arise between the date of this press releaseand the time that financial results for the quarter ended September 30, 2024 are finalized.
SustainabilityUpdate
Universal continually looks to set new standards for social and environmental performance. The Company recently completed a thorough assessment of its sustainability practices and performance through EcoVadis, a leading global third-party platform for business sustainability ratings. As a result of the assessment, EcoVadis ranked Universal in the 91^st^ percentile of the companies rated globally in the prior 12 months. The assessment included 21 sustainability criteria across four core themes: Environment, Labor & Human Rights, Ethics, and Sustainable Procurement.
Other CorporateDevelopments
The Company has filed a Form 12b-25, Notification of Late Filing, with the U.S. Securities and Exchange Commission (“SEC”) in connection with its inability to timely file the Form 10-Q for its second quarter of fiscal year 2025 ended September 30, 2024. As noted in the Form 12b-25 filed today, in August 2024 the Company commenced an internal investigation led by independent outside advisors, including legal counsel and forensic accountants, regarding certain allegations related to embezzlement by a former senior finance employee at the Company’s Mozambique subsidiary, Mozambique Leaf Tobacco Ltda. The Company continues to work diligently with its independent advisors to complete the internal investigation as soon as possible. Although substantial progress has been made on the investigation, the work is ongoing, and the Company is currently unable to predict the outcome or time frame for completion of the investigation. The Company currently has identified approximately $7 million in the aggregate of unauthorized payments during fiscal years 2022 through 2025. The Company intends to pursue sources of recovery, including Company-maintained insurance. As of the date of this press release, the Company does not believe the matter under investigation will have a material negative impact on its financial results for fiscal year 2025.
As a result of the additional time required to complete its internal investigation, the process of finalizing financial statements for the second quarter of fiscal year 2025 could not be completed on a timely basis. Universal intends to file the Form 10-Q as soon as practicable after the conclusion of the internal investigation, which it expects will not occur prior to the Form12b-25 extended deadline of November 18, 2024. As of the date of this press release, the Company has not determined whether material adjustments to its previously issued financial statements will be necessary as a result of the matter or whether internal controls over financial reporting were designed and operating effectively. Universal expects to receive a standard filing delinquency notification from the New York Stock Exchange (“NYSE”) and to discuss the status of the Form 10-Q with the NYSE. The NYSE typically grants listed companies a six-month period to cure a filing delinquency. Universal is committed to completing a deliberate, thorough investigation while diligently working to fulfill all reporting obligations.
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Universal Corporation
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Mr. Wigner continued, “Integrity is a core value of ours and a key to everything we do at Universal. We are committed to ensuring that this matter is handled appropriately, and we are working to complete this investigation as soon as practicable.”
Additional information regarding the Company’s internal investigation can be found in its filings with the SEC.
Earnings Releaseand Investor Conference Call
The Company is postponing its second quarter earnings release and conference call to allow additional time to complete the Form 10-Q for its second quarter of fiscal year 2025 ended September 30, 2024. The Company intends to make a subsequent announcement to schedule the date and time of its second quarter earnings report once the filing date of its Form 10-Q is confirmed.
About UniversalCorporation
Universal Corporation (NYSE: UVV) is a global agricultural company with over 100 years of experience supplying products and innovative solutions to meet our customers’ evolving needs and precise specifications. Through our diverse network of farmers and partners across more than 30 countries on five continents, we are a trusted provider of high-quality, traceable products. We leverage our extensive supply chain expertise, global reach, integrated processing capabilities, and commitment to sustainability to provide a range of products and services designed to drive efficiency and deliver value to our customers. For more information, visit www.universalcorp.com.
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Universal Corporation
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CAUTIONARY STATEMENTS REGARDINGFORWARD-LOOKING INFORMATION
This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Among other things, these statements include statements made in Mr. Wigner’s quotations, statements regarding expectations with respect to our ingredients facility, ingredients business, and tobacco business, the ongoing internal investigation including descriptions of its scope and impact, expectations about the Company’s reporting of its results and filing its Form 10-Q for the quarter ended September 30, 2024, the potential financial statement impact of the investigated matter, and the preliminary unaudited financial information for the quarter ending September 30, 2024. These forward-looking statements are generally identified by the use of words such as we “expect,” “believe,” “anticipate,” “could,” “should,” “may,” “plan,” “will,” “predict,” “estimate,” and similar expressions or words of similar import. These forward-looking statements are based upon management’s current knowledge and assumptions about future events and involve risks and uncertainties that could cause actual results, performance, or achievements to be materially different from any anticipated results, prospects, performance, or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the uncertainty of the ultimate findings of the ongoing internal investigation, as well as the timing of its completion and costs and expenses arising out of the ongoing internal investigation process and its results; the impact of the ongoing internal investigation on us, our management and operations, including financial impact as well as any litigation or regulatory action that may arise from the ongoing internal investigation; the impact of the internal investigation on our conclusions regarding the effectiveness of our internal control over financial reporting and our disclosure controls and procedures; our ability to regain compliance with NYSE listing requirements; success in pursuing strategic investments or acquisitions and integration of new businesses and the impact of these new businesses on future results; product purchased not meeting quality and quantity requirements; our reliance on a few large customers; our ability to maintain effective information technology systems and safeguard confidential information; anticipated levels of demand for and supply of our products and services; costs incurred in providing these products and services including increased transportation costs and delays attributed to global supply chain challenges; timing of shipments to customers; higher inflation rates; changes in market structure; government regulation and other stakeholder expectations; economic and political conditions in the countries in which we and our customers operate, including the ongoing impacts from international conflicts; product taxation; industry consolidation and evolution; changes in exchange rates and interest rates; impacts of regulation and litigation on its customers; industry-specific risks related to its plant-based ingredient businesses; exposure to certain regulatory and financial risks related to climate change; changes in estimates and assumptions underlying our critical accounting policies; the promulgation and adoption of new accounting standards, new government regulations and interpretation of existing standards and regulations; and general economic, political, market, and weather conditions. Actual results, therefore, could vary from those expected. Please also refer to such other factors as discussed in Part I, Item 1A. “Risk Factors” of Universal’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024, and related disclosures in other filings which have been filed with the U.S. Securities and Exchange Commission and are available on the SEC’s website at www.sec.gov. All risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking statements, and all of the forward-looking statements are expressly qualified by the cautionary statements contained or referred to herein and therein. Universal cautions investors not to place undue reliance on any forward-looking statements as these statements speak only as of the date when made, and it undertakes no obligation to update any forward-looking statements made, except as required by law.