UVV 8-K
Universal Corp /Va/ (UVV)
8-K
2025-05-29
For: 2025-05-29
View Original
Added on
April 10, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________________
FORM 8-K
____________________________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 29, 2025
____________________________________________
(Exact name of registrant as specified in its charter)
____________________________________________
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
Registrant’s telephone number, including area code
(804 ) 359-9311
Not applicable
(Former name or former address, if changed since last 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:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of Exchange on which registered | ||||||
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.
Universal Corporation (the “Company”) issued a press release on May 29, 2025, discussing its results for the quarter and fiscal year ended March 31, 2025. The press release is attached as Exhibit 99.1 and is incorporated by reference into this Item 2.02.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits | ||||||||||
| No. | Description | ||||||||||
| 99.1 | |||||||||||
| 104 | Cover 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, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
UNIVERSAL CORPORATION | ||||||||||||||
| (Registrant) | ||||||||||||||
| Date: | May 29, 2025 | 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 Corporation Investor Relations | RELEASE: | 4:15 p.m. ET | ||||||||
| Phone: (804) 359-9311 | |||||||||||
| Fax: (804) 254-3584 | |||||||||||
| Email: [email protected] | |||||||||||
Universal Corporation Reports Fiscal Year and Fourth Quarter 2025 Results
Revenue of $2.9 Billion for Fiscal Year 2025, up 7% year-over-year
Operating Income of $232 million for Fiscal Year 2025, up 5% year-over-year
Highlights Continued Strong Operational Performance
Richmond, VA • May 29, 2025 / BUSINESSWIRE
___________________________________________________________________________________
Universal Corporation (NYSE:UVV) (“Universal” or the “Company”), a global business-to-business agriproducts company, today announced financial results for the full fiscal year and fourth quarter ended March 31, 2025.
Preston D. Wigner, Chairman, President, and Chief Executive Officer of Universal, stated, “Fiscal year 2025 was an exceptional year for Universal. We executed against our business plan and increased revenue and operating income on a consolidated basis and for both of our operating segments. The improved results for our Tobacco Operations segment were driven by continued strong demand from our customers, successful global tobacco marketing and procurement efforts, as well as improved volumes and quality of burley tobacco crops in Africa. Our Ingredients Operations segment benefited from higher sales volumes, including increases in sales of value-added products, supported by increased capabilities from the growth in our sales, marketing, and product development teams, and the completion of the expansion project at our Lancaster, Pennsylvania facility. We are very encouraged by the interest we are seeing from customers in our newly produced and developed ingredient products.
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Mr. Wigner continued, "As I reflect on fiscal year 2025, I thank our employees, customers, shareholders, and other stakeholders for their support throughout the year. As we move into fiscal year 2026, we foresee continued strong demand for tobacco and larger tobacco crops shifting global markets to more balanced tobacco supply positions. We are also continuing our progress with Universal Ingredients and supporting existing and new customers with our platform resources and our expanded and enhanced ingredients facility. I am excited about our prospects for the year ahead as we seek to further maximize and optimize our tobacco business, grow our ingredients business, and strengthen our Company to drive increasing value for all Universal stakeholders."
| FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | Change | Fiscal Year Ended March 31, | Change | ||||||||||||||||||||||||||||||||
| (in millions of dollars, except per share data) | 2025 | 2024 | % | 2025 | 2024 | % | |||||||||||||||||||||||||||||
| Consolidated Results | |||||||||||||||||||||||||||||||||||
| Sales and other operating revenue | $ | 702.3 | $ | 770.9 | (9) | % | $ | 2,947.3 | $ | 2,748.6 | 7 | % | |||||||||||||||||||||||
| Cost of goods sold | 586.3 | 619.9 | (5) | % | 2,398.6 | 2,212.5 | 8 | % | |||||||||||||||||||||||||||
| Gross profit margin | 19.8 | % | 24.4 | % | -460 bps | 18.6 | % | 19.5 | % | -90 bps | |||||||||||||||||||||||||
| Selling, general and administrative expenses | 73.2 | 82.7 | (11) | % | 305.3 | 310.6 | (2) | % | |||||||||||||||||||||||||||
| Restructuring and impairment costs | — | — | NA | 10.6 | 3.5 | 200 | % | ||||||||||||||||||||||||||||
| Operating income (as reported) | 42.8 | 68.2 | (37) | % | 232.8 | 222.0 | 5 | % | |||||||||||||||||||||||||||
| Adjusted operating income (Non-GAAP)* | 42.8 | 73.0 | (41) | % | 243.4 | 230.3 | 6 | % | |||||||||||||||||||||||||||
| Net income attributable to Universal Corporation | 9.3 | 40.3 | (77) | % | 95.0 | 119.6 | (21) | % | |||||||||||||||||||||||||||
| Adjusted net income attributable to Universal Corporation (non-GAAP*) | 20.2 | 44.8 | (55) | % | 116.3 | 127.1 | (8) | % | |||||||||||||||||||||||||||
| Diluted earnings per share (as reported) | 0.37 | 1.61 | (77) | % | 3.78 | 4.78 | (21) | % | |||||||||||||||||||||||||||
| Adjusted diluted earnings per share (Non-GAAP)* | 0.80 | 1.79 | (55) | % | 4.63 | 5.08 | (9) | % | |||||||||||||||||||||||||||
| Segment Results | |||||||||||||||||||||||||||||||||||
| Tobacco operations sales and other operating revenues | $ | 612.6 | $ | 696.3 | (12) | % | $ | 2,608.7 | $ | 2,438.8 | 7 | % | |||||||||||||||||||||||
| Tobacco operations operating income | 45.8 | 73.5 | (38) | % | 240.2 | 222.4 | 8 | % | |||||||||||||||||||||||||||
| Ingredients operations sales and other operating revenues | 89.7 | 74.6 | 20 | % | 338.6 | 309.8 | 9 | % | |||||||||||||||||||||||||||
| Ingredients operations operating income | 4.4 | (1.0) | 527 | % | 12.3 | 3.9 | 212 | % | |||||||||||||||||||||||||||
*See Reconciliation of Certain Non-GAAP Financial Measures in Other Items below.
Fiscal Year 2025 Highlights
Consolidated Results
•Revenues up 7% to $2.9 billion on higher tobacco sales prices.
•Operating income up 5% to $232.8 million on improved performance in both the Tobacco Operations and Ingredient Operations segments.
Tobacco Operations Segment
•Revenues and operating income up 7% and 8%, respectively.
•Historically high green tobacco prices.
•Tobacco sales prices up 12% with slight decline in tobacco sales volumes of about 4%.
•Tobacco Operations segment results reflected:
▪Strong customer demand;
▪Successful tobacco procurement and marketing efforts;
▪Higher quality, better yielding burley crops in Africa;
▪Higher carryover crop sales;
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▪Weather-reduced crop sizes in Brazil and the United States; and
▪Higher inventory write-downs.
•Outlook
▪Flue-cured and burley tobacco crops grown outside of China are expected to increase by 20% and 30%, respectively, in fiscal year 2026.
▪Crop purchases in Brazil in fiscal year 2026 are not following the accelerated patterns seen in fiscal year 2025.
Ingredients Operations Segment
•Higher revenues and operating income on increased sales volumes.
•Cost of raw materials for certain traditional products were at extremely low levels.
•Continued high level of interest in value-added products, reflecting effectiveness of platform investments.
Select Balance Sheet Items, Liquidity, and Debt
•Cash balance of $260.1 million at fiscal year-end.
•Total debt up $38.4 million at fiscal year-end.
•Net debt down $179.6 million at fiscal year-end on more normalized working capital requirements.
•Approximately $270 million available under revolving credit facility as of fiscal year-end.
Additional Items
•Restructuring and impairment costs of $10.6 million related to previously announced consolidation of the Company’s European sheet operations.
•Pension settlement charge of $14.1 million
Fourth Quarter 2025 Highlights
Consolidated Results
•Revenues and operating income down in the quarter on lower tobacco sales volumes due to earlier shipments in fiscal year 2025.
Tobacco Operations Segment
•Tobacco Operations segment results reflected:
▪Lower sales volumes of approximately 28% quarter-over-quarter on earlier timing of tobacco shipments in fiscal year 2025;
▪Impact of weather-reduced crops from certain origins; and
▪Higher inventory write-downs.
•Selling, general, and administrative expenses for the Tobacco Operations segment included favorable variances for foreign currency comparisons and the absence of a value-added tax settlement in the prior fiscal year.
Ingredients Operations Segment
•Increased sales volumes for certain new products, particularly in the beverage category.
•Recent increases in raw material prices for certain traditional products.
•Some increased sales due to anticipated tariffs.
Sustainability Update
Mr. Wigner stated, “As the largest global tobacco leaf merchant, sustainability has been deeply embedded in our DNA. We believe our commitment to setting high standards, promoting a sustainable supply chain, and providing transparency about our sustainability efforts is a strategic part of our business. I am proud of our accomplishments and advances in fiscal year 2025, and I am confident in our ability to leverage our
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expertise in this area to further strengthen our Company in fiscal year 2026. We believe sustainability is good for our business and represents our good stewardship in the communities in which we operate.”
Universal released its 2024 Sustainability Report in December 2024, highlighting its efforts in strengthening supply chain resiliency, continuing to be a strong partner for its farming communities, and advancing energy efficiency. Universal’s business strategy integrates responsible business practices, and the Company believes its commitment to sustainability is a competitive advantage in the global marketplace.
As disclosed in the Company’s 2024 Sustainability Report, Universal continues to support its supply chain sustainability goals and has substantially met its existing targets of zero child labor, appropriate labor accommodations, farm worker minimum wage payments, and personal protective equipment access. The Company’s leaf technicians made over 1.8 million visits to more than 175,000 contracted farmers to maintain its visibility and traceability in the Company’s supply chain. Universal also continues to enhance transparency and collaboration with its stakeholders by reporting to the Sustainable Tobacco Program. Universal has trained over 175,000 farmers on Good Agricultural Practices and Agricultural Labor Practices to advance environmental and human rights best practices throughout the Company’s contracted farmer base.
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Other Items
Reconciliation of Certain Non-GAAP Financial Measures
References to adjusted operating income (loss), adjusted net income (loss) attributable to Universal Corporation, adjusted diluted earnings (loss) per share, and the total for segment operating income (loss) are references to non-GAAP financial measures. These measures are not financial measures calculated in accordance with generally accepted accounting principals ("GAAP") and should not be considered as substitutes for operating income (loss), net income (loss) attributable to Universal Corporation, diluted earnings (loss) per share, cash from operating activities or any other operating or financial performance measure calculated in accordance with GAAP, and may not be comparable to similarly-titled measures reported by other companies. Reconciliations of adjusted operating income (loss) to consolidated operating (income), adjusted net income (loss) attributable to Universal Corporation to consolidated net income (loss) attributable to Universal Corporation and adjusted diluted earnings (loss) per share to diluted earnings (loss) per share are provided below. In addition, a reconciliation of the total for segment operating income (loss) to consolidated operating income (loss) is provided in Note 3. "Segment Information" to the consolidated financial statements. Management evaluates the consolidated Company and segment performance excluding certain significant charges or credits. Management believes these non-GAAP financial measures, which exclude items that it believes are not indicative of its core operating results, can provide investors with important information that is useful in understanding its business results and trends.
References to net debt, net capitalization, and net debt to net capitalization ratio are also references to non-GAAP financial measures. These measures are not financial measures calculated in accordance with GAAP and should not be considered substitutes for total debt, total capitalization, total debt to total capitalization ratio, or any other operating or financial performance measures calculated in accordance with GAAP, and may not be comparable to similarly-titled measures reported by other companies. Reconciliations of net debt to total debt and net capitalization to total capitalization are provided below to the extent these non-GAAP financial measures are referenced. Management believes these non-GAAP measures are meaningful indicators of liquidity and financial position.
The following tables set forth certain non-recurring items included in reported results to reconcile adjusted operating income to consolidated operating income and adjusted net income to net income attributable to Universal Corporation and adjusted diluted earnings per share to diluted earnings per share:
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| Adjusted Operating Income Reconciliation | ||||||||||||||||||||||||||
| Three Months Ended March 31, | Fiscal Year Ended March 31, | |||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| As Reported: Consolidated operating income | $ | 42,760 | $ | 68,198 | $ | 232,797 | $ | 222,009 | ||||||||||||||||||
Value-added tax settlement costs(1) | — | 4,754 | — | 4,754 | ||||||||||||||||||||||
Restructuring and impairment costs(2) | — | — | 10,573 | 3,523 | ||||||||||||||||||||||
| Adjusted operating income (Non-GAAP) | $ | 42,760 | $ | 72,952 | $ | 243,370 | $ | 230,286 | ||||||||||||||||||
| Adjusted Net Income and Adjusted Diluted Earnings Per Share Reconciliation | ||||||||||||||||||||||||||
| Three Months Ended March 31, | Fiscal Year Ended March 31, | |||||||||||||||||||||||||
| (in thousands except for per share amounts) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| As Reported: Net income attributable to Universal Corporation | $ | 9,338 | $ | 40,318 | $ | 95,047 | $ | 119,598 | ||||||||||||||||||
Value-added tax settlement costs(1) | — | 4,754 | — | 4,754 | ||||||||||||||||||||||
Restructuring and impairment costs(2) | — | — | 10,573 | 3,523 | ||||||||||||||||||||||
Pension settlement charge(3) | 14,101 | — | 14,101 | — | ||||||||||||||||||||||
Interest expense for value-added tax settlement(1) | — | 245 | — | 245 | ||||||||||||||||||||||
| Total of Non-GAAP adjustments to income before income taxes | 14,101 | 4,999 | 24,674 | 8,522 | ||||||||||||||||||||||
Income tax benefit from value-added tax settlement(1)(4) | — | (498) | — | (498) | ||||||||||||||||||||||
Income tax benefit from restructuring and impairment costs(2)(4) | — | — | (132) | (512) | ||||||||||||||||||||||
Income tax benefit from pension settlement charge(3)(4) | (3,257) | — | (3,257) | — | ||||||||||||||||||||||
| Total of income tax impacts for Non-GAAP adjustments to income before income taxes | (3,257) | (498) | (3,389) | (1,010) | ||||||||||||||||||||||
| As adjusted: Net income attributable to Universal Corporation (Non-GAAP) | $ | 20,182 | $ | 44,819 | $ | 116,332 | $ | 127,110 | ||||||||||||||||||
| As reported: Diluted earnings per share | $ | 0.37 | $ | 1.61 | $ | 3.78 | $ | 4.78 | ||||||||||||||||||
| Adjusted: Diluted earnings per share (Non-GAAP) | $ | 0.80 | $ | 1.79 | $ | 4.63 | $ | 5.08 | ||||||||||||||||||
(1) In the fourth quarter of fiscal year 2024, the Company utilized a voluntary government-sponsored value-added tax program in Brazil to settle a previously contested assessment. The Company's participation in the settlement program eliminates any future litigation regarding the matter.
(2) Restructuring and impairment costs are included in Consolidated operating income in the consolidated statements of income, but excluded for purposes of Adjusted operating income, Adjusted net income available to Universal Corporation, and Adjusted diluted earnings per share.
(3) In March 2025, the Company completed a pension de-risking transaction or "pension lift-out" to transfer approximately $47 million of its qualified domestic pension plan obligations and assets to a third-party insurer through the purchase of of a non-participating annuity. The obligations transferred to the third-party insurer covered the respective benefit obligations for a subset of retirees currently receiving benefit payments. The transaction triggered settlement accounting that required the Company to immediately recognize a portion of the accumulated comprehensive losses associated with the defined benefit pension plan.
(4) The income tax effect of Non-GAAP adjustments was determined based on the timing and nature of the specific Non-GAAP adjustments and their relevant jurisdictional income tax rates (foreign, state, and local) and the applicable U.S. federal income tax rates. The Company considers current and deferred income tax rates to calculate the impact to income taxes for the Non-GAAP adjustments.
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The following table reconciles total debt to net debt and net capitalization:
| Net Debt and Net Capitalization Reconciliation | ||||||||||||||
| March 31, | March 31, | |||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| Add: Notes payable and overdrafts | $ | 455,039 | $ | 417,217 | ||||||||||
| Add: Long-term obligations | 617,918 | 617,364 | ||||||||||||
| Add: Current portion of long-term obligations | — | — | ||||||||||||
| Total Debt | 1,072,957 | 1,034,581 | ||||||||||||
| Add: Customer advances and deposits | 3,763 | 17,179 | ||||||||||||
| Less: Cash and cash equivalents | 260,115 | 55,593 | ||||||||||||
| Net Debt (Non-GAAP) | $ | 816,605 | $ | 996,167 | ||||||||||
| Add: Total Universal Corporation shareholders' equity | 1,458,556 | 1,437,207 | ||||||||||||
| Net Capitalization (Non-GAAP) | $ | 2,275,161 | $ | 2,433,374 | ||||||||||
| Net Debt/Net Capitalization (Non-GAAP) | 36 | % | 41 | % | ||||||||||
Investor Conference Call
At 5:00 p.m. (Eastern Time) on May 29, 2025, the Company will host a conference call to discuss these results. Those wishing to listen to the call may do so by visiting www.universalcorp.com at that time. A replay of the webcast will be available at that site through August 29, 2025. A taped replay of the call will also be available through June 12, 2025, by dialing (800) 770-2030 (Playback ID: 5786366#).
About Universal Corporation
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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CAUTIONARY STATEMENTS REGARDING FORWARD-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 fiscal year 2026 performance, our strategic plans, ingredients business, tobacco business, including expectations with respect to size, shipments and sales and purchases of tobacco crops. 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: product purchased not meeting quality and quantity requirements; reliance on a few large customers; anticipated levels of demand for and supply of our products and services; tobacco growing conditions and customer requirements; major shifts in customer requirements for leaf tobacco; higher inflation rates, tariffs and other pressures on costs; weather and other conditions; exposure to certain legal. regulatory and financial risks related to climate change; industry-specific risks related to our plant-based ingredients businesses; disruption of our supply chain for our plant-based ingredients; success in pursuing strategic investments or acquisitions and integration of new businesses and the impact of these new businesses on future results; our ability to maintain effective information technology systems and safeguard confidential information; our inability to attract, develop, retain, motivate, and maintain good relationships with our workforce; our dependence on a seasonal workforce; epidemics, pandemics or similar widespread public health concerns; government efforts to regulate the production and consumption of tobacco products; government actions on the sourcing of leaf tobacco; economic and political conditions in the countries in which we and our customers operate, including the ongoing impacts from international conflicts; sustainability considerations from governments and other stakeholders; changes in tax laws in the countries where we do business; material weaknesses in our internal control over financial reporting; our inability to use a Form S-3 registration statement; failure of our customers or suppliers to repay extensions of credit; changes in exchange rates; changes in interest rates; and low investment performance by our defined benefit pension plan assets and changes in pension plan valuation assumptions. Please also refer to the risks and uncertainties 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 in Part II, Item 1A. "Risk Factors" in Universal’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, and related disclosures in other filings that Universal files with the SEC 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.
.
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UNIVERSAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars, except per share data)
| Three Months Ended March 31, | Fiscal Year Ended March 31, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||||||||
| Sales and other operating revenues | $ | 702,279 | $ | 770,860 | $ | 2,947,284 | $ | 2,748,573 | ||||||||||||||||||
| Costs and expenses | ||||||||||||||||||||||||||
| Cost of goods sold | 586,276 | 619,942 | 2,398,627 | 2,212,475 | ||||||||||||||||||||||
| Selling, general and administrative expenses | 73,243 | 82,720 | 305,287 | 310,566 | ||||||||||||||||||||||
| Restructuring and impairment costs | — | — | 10,573 | 3,523 | ||||||||||||||||||||||
| Operating income | 42,760 | 68,198 | 232,797 | 222,009 | ||||||||||||||||||||||
| Equity in pretax earnings of unconsolidated affiliates | 7,456 | 4,251 | 9,103 | 756 | ||||||||||||||||||||||
| Pension settlement charge | 14,101 | — | 14,101 | — | ||||||||||||||||||||||
| Other non-operating income | 1,176 | 905 | 2,569 | 3,084 | ||||||||||||||||||||||
| Interest income | 1,757 | 466 | 3,483 | 4,504 | ||||||||||||||||||||||
| Interest expense | 18,326 | 18,152 | 79,636 | 66,273 | ||||||||||||||||||||||
| Income before income taxes | 20,722 | 55,668 | 154,215 | 164,080 | ||||||||||||||||||||||
| Income taxes | 6,394 | 9,611 | 40,946 | 31,109 | ||||||||||||||||||||||
| Net income | 14,328 | 46,057 | 113,269 | 132,971 | ||||||||||||||||||||||
| Less: net income attributable to noncontrolling interests in subsidiaries | (4,990) | (5,739) | (18,222) | (13,373) | ||||||||||||||||||||||
| Net income attributable to Universal Corporation | $ | 9,338 | $ | 40,318 | $ | 95,047 | $ | 119,598 | ||||||||||||||||||
| Earnings per share: | ||||||||||||||||||||||||||
| Basic | $ | 0.37 | $ | 1.62 | $ | 3.81 | $ | 4.81 | ||||||||||||||||||
| Diluted | $ | 0.37 | $ | 1.61 | $ | 3.78 | $ | 4.78 | ||||||||||||||||||
See accompanying notes.
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UNIVERSAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
| March 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| ASSETS | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | 260,115 | $ | 55,593 | ||||||||||
| Accounts receivable, net | 625,876 | 525,262 | ||||||||||||
| Advances to suppliers, net | 169,385 | 139,064 | ||||||||||||
| Accounts receivable—unconsolidated affiliates | 7,143 | 5,385 | ||||||||||||
| Inventories—at lower of cost or net realizable value: | ||||||||||||||
| Tobacco | 806,332 | 1,070,580 | ||||||||||||
| Other | 189,610 | 193,518 | ||||||||||||
| Prepaid income taxes | 19,595 | 19,484 | ||||||||||||
| Other current assets | 78,041 | 93,655 | ||||||||||||
| Total current assets | 2,156,097 | 2,102,541 | ||||||||||||
| Property, plant and equipment | ||||||||||||||
| Land | 26,113 | 26,244 | ||||||||||||
| Buildings | 333,398 | 323,969 | ||||||||||||
| Machinery and equipment | 723,935 | 693,868 | ||||||||||||
| 1,083,446 | 1,044,081 | |||||||||||||
| Less accumulated depreciation | (710,472) | (678,201) | ||||||||||||
| 372,974 | 365,880 | |||||||||||||
| Other assets | ||||||||||||||
| Operating lease right-of-use assets | 34,260 | 32,510 | ||||||||||||
| Goodwill, net | 213,840 | 213,869 | ||||||||||||
| Other intangibles, net | 57,836 | 68,883 | ||||||||||||
| Investments in unconsolidated affiliates | 79,317 | 76,289 | ||||||||||||
| Deferred income taxes | 16,539 | 15,181 | ||||||||||||
| Pension asset | 12,819 | 11,857 | ||||||||||||
| Other noncurrent assets | 45,870 | 50,229 | ||||||||||||
| 460,481 | 468,818 | |||||||||||||
| Total assets | $ | 2,989,552 | $ | 2,937,239 | ||||||||||
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UNIVERSAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
| March 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
| Current liabilities | ||||||||||||||
| Notes payable and overdrafts | $ | 455,039 | $ | 417,217 | ||||||||||
| Accounts payable | 98,036 | 108,727 | ||||||||||||
| Accounts payable—unconsolidated affiliates | 1,999 | 1,621 | ||||||||||||
| Customer advances and deposits | 3,763 | 17,179 | ||||||||||||
| Accrued compensation | 44,646 | 39,766 | ||||||||||||
| Income taxes payable | 12,586 | 7,477 | ||||||||||||
| Current portion of operating lease liabilities | 10,742 | 10,356 | ||||||||||||
| Accrued expenses and other current liabilities | 123,350 | 109,015 | ||||||||||||
| Current portion of long-term debt | — | — | ||||||||||||
| Total current liabilities | 750,161 | 711,358 | ||||||||||||
| Long-term debt | 617,918 | 617,364 | ||||||||||||
| Pensions and other postretirement benefits | 35,336 | 43,251 | ||||||||||||
| Long-term operating lease liabilities | 20,608 | 19,302 | ||||||||||||
| Other long-term liabilities | 22,901 | 27,902 | ||||||||||||
| Deferred income taxes | 42,090 | 39,139 | ||||||||||||
| Total liabilities | 1,489,014 | 1,458,316 | ||||||||||||
| Shareholders’ equity | ||||||||||||||
| Universal Corporation: | ||||||||||||||
| Preferred stock: | ||||||||||||||
Series A Junior Participating Preferred Stock, no par value, 500,000 shares authorized, none issued or outstanding | — | — | ||||||||||||
Common stock, no par value, 100,000,000 shares authorized, 24,715,625 shares issued and outstanding (24,573,408 at March 31, 2024) | 351,626 | 345,596 | ||||||||||||
| Retained earnings | 1,186,981 | 1,173,196 | ||||||||||||
| Accumulated other comprehensive loss | (80,051) | (81,585) | ||||||||||||
| Total Universal Corporation shareholders' equity | 1,458,556 | 1,437,207 | ||||||||||||
| Noncontrolling interests in subsidiaries | 41,982 | 41,716 | ||||||||||||
| Total shareholders' equity | 1,500,538 | 1,478,923 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 2,989,552 | $ | 2,937,239 | ||||||||||
See accompanying notes.
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Universal Corporation
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UNIVERSAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
| Fiscal Year Ended March 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||
| Net income | $ | 113,269 | $ | 132,971 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | 59,773 | 58,326 | ||||||||||||
| Provision for losses (recoveries) on advances | 1,938 | 14,090 | ||||||||||||
| Inventory write-downs | 19,769 | 9,234 | ||||||||||||
| Stock-based compensation expense | 8,531 | 12,063 | ||||||||||||
| Foreign currency remeasurement loss (gain), net | 6,096 | 5,114 | ||||||||||||
| Foreign currency exchange contracts | 916 | (365) | ||||||||||||
| Deferred income taxes | 1,083 | (5,404) | ||||||||||||
| Equity in net income of unconsolidated affiliates, net of dividends | (3,031) | (1,239) | ||||||||||||
| Restructuring and impairment costs | 10,573 | 3,523 | ||||||||||||
| Restructuring payments | (1,568) | (1,181) | ||||||||||||
| Pension settlement | 14,101 | — | ||||||||||||
| Other, net | 1,406 | 1,001 | ||||||||||||
| Changes in operating assets and liabilities, net: | 94,118 | (302,765) | ||||||||||||
| Net cash provided (used) by operating activities | 326,974 | (74,632) | ||||||||||||
| Cash Flows From Investing Activities: | ||||||||||||||
| Purchase of property, plant and equipment | (62,601) | (66,013) | ||||||||||||
| Proceeds from sale of business, less cash of businesses sold | — | 3,757 | ||||||||||||
| Proceeds from sale of property, plant and equipment | 3,783 | 2,257 | ||||||||||||
| Net cash used by investing activities | (58,818) | (59,999) | ||||||||||||
| Cash Flows From Financing Activities: | ||||||||||||||
| Issuance (repayment) of short-term debt, net | 37,696 | 223,000 | ||||||||||||
| Dividends paid to noncontrolling interests in subsidiaries | (17,530) | (10,572) | ||||||||||||
| Repurchase of common stock | — | (4,744) | ||||||||||||
| Dividends paid on common stock | (79,686) | (78,402) | ||||||||||||
| Debt issuance costs and other | (3,715) | (3,607) | ||||||||||||
| Net cash provided (used) by financing activities | (63,235) | 125,675 | ||||||||||||
| Effect of exchange rate changes on cash | (399) | (141) | ||||||||||||
| Net increase (decrease) in cash and cash equivalents | 204,522 | (9,097) | ||||||||||||
| Cash, restricted cash and cash equivalents at beginning of year | 55,593 | 64,690 | ||||||||||||
| Cash, Restricted Cash and Cash Equivalents at End of Year | $ | 260,115 | $ | 55,593 | ||||||||||
See accompanying notes.
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Universal Corporation
Page 13
NOTE 1. BASIS OF PRESENTATION
Universal Corporation, with its subsidiaries (“Universal” or the “Company”), is a global business-to-business agriproducts supplier to consumer product manufacturers. The Company is the leading global leaf tobacco supplier and provides high-quality plant-based ingredients to food and beverage end markets. Because of the seasonal nature of the Company’s business, the results of operations for any fiscal quarter will not necessarily be indicative of results to be expected for other quarters or a full fiscal year. All adjustments necessary to state fairly the results for the period have been included and were of a normal recurring nature. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025, which the Company expects to file with the SEC on May 30, 2025.
NOTE 2. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:
| Three Months Ended March 31, | Fiscal Year Ended March 31, | |||||||||||||||||||||||||
| (in thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Basic Earnings Per Share | ||||||||||||||||||||||||||
| Numerator for basic earnings per share | ||||||||||||||||||||||||||
| Net income attributable to Universal Corporation | $ | 9,338 | $ | 40,318 | $ | 95,047 | $ | 119,598 | ||||||||||||||||||
| Denominator for basic earnings per share | ||||||||||||||||||||||||||
| Weighted average shares outstanding | 24,984,987 | 24,846,063 | 24,947,208 | 24,851,858 | ||||||||||||||||||||||
| Basic earnings per share | $ | 0.37 | $ | 1.62 | $ | 3.81 | $ | 4.81 | ||||||||||||||||||
| Diluted Earnings Per Share | ||||||||||||||||||||||||||
| Numerator for diluted earnings per share | ||||||||||||||||||||||||||
| Net income attributable to Universal Corporation | $ | 9,338 | $ | 40,318 | $ | 95,047 | $ | 119,598 | ||||||||||||||||||
| Denominator for diluted earnings per share: | ||||||||||||||||||||||||||
| Weighted average shares outstanding | 24,984,987 | 24,846,063 | 24,947,208 | 24,851,858 | ||||||||||||||||||||||
| Effect of dilutive securities | ||||||||||||||||||||||||||
| Employee and outside director share-based awards | 179,490 | 266,044 | 180,148 | 189,056 | ||||||||||||||||||||||
| Denominator for diluted earnings per share | 25,164,477 | 25,112,107 | 25,127,356 | 25,040,914 | ||||||||||||||||||||||
| Diluted earnings per share | $ | 0.37 | $ | 1.61 | $ | 3.78 | $ | 4.78 | ||||||||||||||||||
NOTE 3. SEGMENT INFORMATION
Management regularly evaluates the Company’s global business activities, including product and service offerings to its customers, as well as senior management’s operational and financial responsibilities. Assessments include an analysis of how its Chief Operating Decision Maker (“CODM”) measures business performance and allocates resources. As a result of this analysis, senior management has determined the Company conducts operations across two reportable operating segments, Tobacco Operations and Ingredients Operations.
The Tobacco Operations segment activities involve contracting, procuring, processing, packing, storing, and shipping leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products throughout the world. Through various operating subsidiaries located in tobacco-growing countries around the world and significant ownership interests in unconsolidated affiliates, the Company processes and/or sells flue-cured and burley tobaccos, dark air-cured tobaccos, and oriental tobaccos. Flue-cured, burley, and oriental tobaccos are used principally in the manufacture of cigarettes, and dark air-cured tobaccos are used mainly in the manufacture of cigars, pipe tobacco, and smokeless tobacco products. Some of these tobacco types are also used in the manufacture of next generation tobacco products that are intended to provide consumers with
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Universal Corporation
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an alternative to traditional combustible products. The Tobacco Operations segment also provides physical and chemical product testing for tobacco customers. A substantial portion of the Company’s Tobacco Operations’ revenues are derived from sales to a limited number of large, multinational cigarette and cigar manufacturers.
The Ingredients Operations segment provides its customers with a broad variety of plant-based ingredients for both human and pet consumption. The Ingredients Operations segment utilizes a variety of value-added manufacturing processes converting raw materials into a wide spectrum of fruit and vegetable juices, concentrates, dehydrated products, botanical extracts, and flavorings. Customers for the Ingredients Operations segment include large multinational food and beverage companies, smaller independent manufacturers, and retail organizations. FruitSmart, Inc. (“FruitSmart”), Silva International, Inc. (“Silva”), and Shank's Extracts, LLC d/b/a Universal Ingredients-Shank’s (“Universal Ingredients-Shank’s”) are the primary operations for the Ingredients Operations segment. FruitSmart supplies a broad set of juices, concentrates, pomaces, purees, fruit fibers, seeds, seed powders, and other value-added products to food, beverage, and flavor companies throughout the United States and internationally. Silva procures dehydrated vegetables, fruits, and herbs from around the world and specializes in processing natural materials into custom designed dehydrated vegetable and fruit-based ingredients for a variety of end products. Universal Ingredients-Shank’s offers a diversified portfolio of botanical extracts, distillates, natural flavors, and color for industrial and private label customers worldwide, and is known for their significant vanilla expertise. Universal Ingredients - Shank’s is also equipped to offer customers custom bottling and packaging for their products.
Universal incurs corporate overhead expenses related to senior management, sales, finance, legal, and other functions that are centralized at its corporate headquarters, as well as functions performed at several sales and administrative offices around the world. These overhead expenses are currently allocated to the reportable operating segments, generally on the basis of projected annual financial and operational performance, including volumes planned to be purchased and/or processed. Management believes this method of allocation is currently representative of the value of the related services provided to the operating segments. The CODM, which has been identified as a group comprised of the Company's Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer, currently evaluates the performance of the operating segments based on operating income after allocated overhead expenses, plus equity in the pretax earnings of unconsolidated affiliates ("Segment Operating Income"). The CODM also uses Segment Operating Income for planning, forecasting, and allocating capital and other resources to the operating segments.
Operating results for the Company’s reportable segments for each period presented in the consolidated statements of income were as follows:
| Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | ||||||||||||||||||||||||||||||||||
| (in thousands of dollars) | Tobacco Operations | Ingredients Operations | Consolidated | Tobacco Operations | Ingredients Operations | Consolidated | |||||||||||||||||||||||||||||
| Sales and other operating revenues | $ | 612,624 | $ | 89,655 | $ | 702,279 | $ | 696,281 | $ | 74,579 | $ | 770,860 | |||||||||||||||||||||||
| Cost of goods sold | (516,265) | (70,011) | (586,276) | (562,542) | (57,400) | (619,942) | |||||||||||||||||||||||||||||
| Selling, general and administrative expenses | (40,959) | (12,082) | (53,041) | (49,506) | (15,111) | (64,617) | |||||||||||||||||||||||||||||
| Corporate overhead allocated to the segments | (17,030) | (3,172) | (20,202) | (15,007) | (3,096) | (18,103) | |||||||||||||||||||||||||||||
Equity in pretax earnings (loss) of unconsolidated affiliates (1) | 7,456 | — | 7,456 | 4,251 | — | 4,251 | |||||||||||||||||||||||||||||
| Segment operating income | 45,826 | 4,390 | 50,216 | 73,477 | (1,028) | 72,449 | |||||||||||||||||||||||||||||
Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates (1) | (7,456) | (4,251) | |||||||||||||||||||||||||||||||||
Restructuring and impairment costs (2) | — | — | |||||||||||||||||||||||||||||||||
| Consolidated total | $ | 42,760 | $ | 68,198 | |||||||||||||||||||||||||||||||
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| Fiscal Year Ended March 31, 2025 | Fiscal Year Ended March 31, 2024 | ||||||||||||||||||||||||||||||||||
| (in thousands of dollars) | Tobacco Operations | Ingredients Operations | Consolidated | Tobacco Operations | Ingredients Operations | Consolidated | |||||||||||||||||||||||||||||
| Sales and other operating revenues | $ | 2,608,675 | $ | 338,609 | $ | 2,947,284 | $ | 2,438,775 | $ | 309,798 | $ | 2,748,573 | |||||||||||||||||||||||
| Cost of goods sold | (2,133,063) | (265,564) | (2,398,627) | (1,975,955) | (236,520) | (2,212,475) | |||||||||||||||||||||||||||||
| Selling, general and administrative expenses | (179,340) | (48,610) | (227,950) | (179,569) | (56,624) | (236,193) | |||||||||||||||||||||||||||||
| Corporate overhead allocated to the segments | (65,195) | (12,142) | (77,337) | (61,655) | (12,718) | (74,373) | |||||||||||||||||||||||||||||
Equity in pretax earnings (loss) of unconsolidated affiliates(1) | 9,103 | — | 9,103 | 756 | — | 756 | |||||||||||||||||||||||||||||
| Segment operating income | 240,180 | 12,293 | 252,473 | 222,352 | 3,936 | 226,288 | |||||||||||||||||||||||||||||
Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates(1) | (9,103) | (756) | |||||||||||||||||||||||||||||||||
Restructuring and impairment costs (2) | (10,573) | (3,523) | |||||||||||||||||||||||||||||||||
| Consolidated operating income | $ | 232,797 | $ | 222,009 | |||||||||||||||||||||||||||||||
(1)Equity in pretax earnings of unconsolidated affiliates is included in reportable segment operating income, but is reported below consolidated operating income and excluded from that total in the consolidated statements of income.
(2)Restructuring and impairment costs are excluded from reportable segment operating income, but are included in consolidated operating income in the consolidated statements of income.
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