8-K
UNIVERSAL CORP /VA/ (UVV)
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): February 4, 2020
____________________________________________
UNIVERSAL CORPORATION
(Exact name of registrant as specified in its charter)
____________________________________________
| Virginia | 001-00652 | 54-0414210 | |
|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |
| 9201 Forest Hill Avenue, | Richmond, | Virginia | 23235 |
| (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:
☐ 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 Exchange Act:
| Title of each class | Trading Symbols | Name of 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. |
|---|
Universal Corporation (the “Company”) issued a press release on February 4, 2020, discussing its results for the quarter ended December 31, 2019. The press release is attached as Exhibit 99.1 and is incorporated by reference into this Item 2.02.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 4, 2020, the Board of Directors (the “Board”) of Universal Corporation (the “Company”) increased the size of the Board to nine members and appointed Jacqueline T. Williams to serve as a new director of the Company, both effective April 1, 2020. The Board has determined that Ms. Williams qualifies as an independent director in accordance with the New York Stock Exchange Listing Standards and the Company’s Corporate Governance Guidelines. The Board anticipates naming Ms. Williams to serve on one or more additional committees of the Board in the future.
Ms. Williams, age 67, has more than 25 years of experience in government, business and financial industry organizations and currently serves as Director of the Ohio Department of Commerce, which she was appointed to by the governor of Ohio in 2015. Ms. Williams previously served as Chief of Minority Business Development with Ohio’s Development Services Agency from 2013 to 2015 and as Executive Director of the Ohio Liquor Control Commission from 2012 to 2013. She previously worked for the New America Foundation as Director in the College Savings Initiative from 2009 to 2011 and served as Executive Director for the Ohio Tuition Trust Authority from 1999 to 2009. Ms. Williams spent the first 15 years of her career with AT&T, a telecommunications, media and entertainment, and technology company. Ms. Williams has served on numerous boards for the public sector, including as a current member of the board of the Ohio Housing Finance Agency, and previously as a member of the Ohio Minority Development Finance Advisory Board and the Columbus Cancer Clinic. Ms. Williams additionally served as board chair of the Ohio Minority Business Advisory Council and the College Savings Plan Network.
Ms. Williams’ compensation will be consistent with the compensation policies applicable to the Company’s other non-employee directors as disclosed in the Company’s Proxy Statement for the Company’s 2019 Annual Meeting of Shareholders.
There are no arrangements or understandings between Ms. Williams and any other person pursuant to which she was selected as director, and there are no transactions between Ms. Williams and the Company that would require disclosure under Item 404(a) of Regulation S-K.
The Company issued a press release on February 4, 2020 announcing the appointment of Ms. Williams, a copy of which is furnished as Exhibit 99.3 to this Current Report on Form 8-K and is incorporated by reference into this Item 5.02.
| Item 8.01. | Other Events. |
|---|
On February 4, 2020, the Company issued a press release announcing a quarterly dividend for the Company’s common stock. The press release is attached as Exhibit 99.2 and is incorporated by reference into this Item 8.01.
| Item 9.01. | Financial Statements and Exhibits. | |
|---|---|---|
| (d) | Exhibits | |
| --- | --- | --- |
| No. | Description | |
| 99.1 | Press release dated February 4, 2020, announcing financial results for the quarter ended December 31, 2019. | |
| 99.2 | Press release dated February 4, 2020, announcing quarterly dividend. | |
| 99.3 | Press release dated February 4, 2020, announcing appointment of Jacqueline T. Williams to Board of Directors. | |
| 101 | Interactive Data File (submitted electronically herewith).* | |
| 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its Inline XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document In accordance with Rule 406T of Regulation S-T, the Inline XBRL related information in Exhibit 101 to this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section and shall not be part of any registration or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. | ||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
__________
*Filed herewith
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: | February 4, 2020 | By: | /s/ Preston D. Wigner |
| Preston D. Wigner | |||
| Vice President, General Counsel, and Secretary |
Exhibit Index
| Exhibit | |
|---|---|
| Number | Document |
| 99.1 | Press release dated February 4, 2020, announcing financial results for the quarter ended December 31, 2019. |
| 99.2 | Press release dated February 4, 2020, announcing quarterly dividend. |
| 99.3 | Press release dated February 4, 2020, announcing appointment of Jacqueline T. Williams to Board of Directors. |
| 101 | Interactive Data File (submitted electronically herewith).* |
| 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its Inline XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document In accordance with Rule 406T of Regulation S-T, the Inline XBRL related information in Exhibit 101 to this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section and shall not be part of any registration or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
__________
*Filed herewith
Exhibit
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: | Candace C. Formacek | RELEASE: | 4:16 p.m. ET |
|---|---|---|---|
| Phone: (804) 359-9311 | |||
| Fax: (804) 254-3584 | |||
| Email: investor@universalleaf.com |
Universal Corporation Reports Nine Month Results
Richmond, VA February 4, 2020/ PRNEWSWIRE
___________________________________________________________________________________
George C. Freeman, III, Chairman, President, and Chief Executive Officer of Universal Corporation (NYSE:UVV), reported net income for the nine months ended December 31, 2019, of $56.1 million, or $2.23 per diluted share, compared with $72.8 million, or $2.87 per diluted share, for the same period of the prior fiscal year. Excluding certain non-recurring items, detailed in Other Items below, net income and diluted earnings per share declined by $20.0 million and $0.78, respectively, for the nine months ended December 31, 2019, compared to the same period of the prior year. Operating income of $94.8 million for the nine months ended December 31, 2019, decreased by $5.6 million, compared to operating income of $100.4 million for the nine months ended December 31, 2018.
For the third fiscal quarter, ended December 31, 2019, net income was $26.0 million, or $1.04 per diluted share, compared with net income of $28.1 million, or $1.11 per diluted share, for the prior year’s third fiscal quarter. Excluding certain non-recurring items, detailed in Other Items below, net income and diluted earnings per share declined by $17.0 million and $0.65, respectively, for the quarter ended December 31, 2019, compared to the same quarter of the prior year. Operating income for the third quarter of fiscal year 2020 increased to $44.1 million compared with $37.7 million for the three months ended December 31, 2018.
Segment operating income was $97.1 million for the nine months ended December 31, 2019, a decrease of $28.2 million, and for the quarter ended December 31, 2019, was $44.0 million, a decrease of $18.6 million, both compared to the same periods last fiscal year. Results reflected earnings declines in the North America and Other Regions segments, partially offset by earnings improvements in the Other Tobacco Operations segment for the nine months ended December 31, 2019, both compared to the same period in the prior fiscal
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year. For the quarter ended December 31, 2019, results declined for all segments compared to the quarter ended December 31, 2018. Consolidated revenues decreased by $277.5 million to $1.3 billion for the nine months ended December 31, 2019, and by $131.1 million to $505.0 million for the three months ended December 31, 2019, compared to the same periods in fiscal year 2019, on lower sales volumes and prices.
Mr. Freeman stated, “Consistent with results reported for the first half of our current fiscal year, results through the third quarter of fiscal year 2020 continue to reflect unfavorable variances to the same period in fiscal year 2019, when we benefited from large carryover crop sales volumes, mainly in North America and Africa. Flue-cured oversupply conditions this year have also created a selective market environment that has pressured volumes and margins. In addition, customer mandated shipping instructions in the second half of fiscal year 2020 are heavily weighted to our fourth quarter.
“We have also remained focused on solidifying our position as the leading global leaf tobacco supplier. We continue to see and develop opportunities in our leaf tobacco business to gain market share and increase operating efficiencies whether it be by realignment of processing capacity, such as recent steps taken in Malawi; optimization of our sourcing footprint; or by focusing on our leadership in supplying sustainable, compliant crops.
“At the same time, we are progressing in our previously announced plans to invest in non-tobacco growth opportunities and announced the completion of our first such acquisition, FruitSmart, Inc. (“FruitSmart”), in early January 2020. We are very excited about our initial non-tobacco acquisition, offering potential for growth in adjacent markets. We believe that FruitSmart, as an established value-added fruit and vegetable ingredient processor with a business-to-business customer base in an agricultural niche market, is a good fit for our company. As we have stated, FruitSmart represents a foundational step in our building a broader agri-products service platform. We continue to work on our pipeline and are working to provide resources necessary to develop this new segment of our business in support of our long-term shareholder value objectives.”
FLUE-CURED AND BURLEY LEAF TOBACCO OPERATIONS:
OTHER REGIONS:
Operating income for the Other Regions segment decreased by $28.7 million to $68.1 million for the nine months and by $13.9 million to $39.4 million for the quarter ended December 31, 2019, compared with the same periods for fiscal year 2019. In both periods, volumes decreased in Africa, mainly from lower carryover crop sales and later customer mandated shipment timing. In Brazil, sales volumes were up in the nine months ended December 31, 2019, on higher carryover sales and earlier current crop shipments, but down in the quarter ended December 31, 2019, on lower current crop shipments, both compared to the same periods in the prior fiscal year. Results for Europe were down in the nine months and quarter ended December 31, 2019, on lower processing and sales volumes, compared to the same periods in the prior year. Results for Asia were up for the nine months ended December 31, 2019, on higher trading volumes, but declined in the quarter ended December 31, 2019. Selling, general, and administrative costs for the segment were lower for the nine months ended December 31, 2019, largely on favorable foreign currency comparisons and lower customer claim costs partially offset by lower net recoveries on advances to suppliers, compared with the same period in the prior fiscal year. For the quarter ended December 31, 2019, selling, general, and administrative costs were lower than those in the quarter ended December 31, 2018, on favorable currency comparisons, mainly in Mozambique and Brazil. Revenues for the Other Regions segment of $944.1 million
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for the nine months and $386.3 million for the quarter ended December 31, 2019, were down $145.1 million and $96.9 million, respectively, compared to the same period last year, on lower volumes and sales prices.
NORTH AMERICA:
Operating income for the North America segment of $6.7 million for the nine months ended December 31, 2019, was down by $13.7 million, compared to the same period for the prior fiscal year, primarily on significantly lower carryover crop sales volumes. In the first half of fiscal year 2019, carryover crop sales volumes were higher on shipments that had been delayed due to reduced transportation availability in the United States. In addition, in the nine months ended December 31, 2019, carryover crop sales volumes were down on reduced sales of U.S. burley tobaccos and current crop sales volumes were down in Mexico and Guatemala due to lower sales volumes and smaller crop sizes, compared to the same period in fiscal year 2019. Operating income for the North America segment of $0.4 million for the quarter ended December 31, 2019, was down by $2.8 million, compared to the same period for the prior fiscal year, mainly on lower sales volumes in Guatemala and lower sales and processing volumes in the United States. Selling, general, and administrative costs for the North America segment were down for the nine months, largely on favorable currency comparisons in Mexico, and flat for the quarter ended December 31, 2019, compared to the same periods in the prior fiscal year. Revenues for this segment decreased, by $126.7 million to $134.6 million for the nine months, and by $28.6 million to $49.4 million for the quarter ended December 31, 2019, compared to the same periods in the prior fiscal year, on the lower volumes and sales prices.
OTHER TOBACCO OPERATIONS:
The Other Tobacco Operations segment operating income of $22.3 million increased by $14.2 million for the nine months ended December 31, 2019, compared with the same period last fiscal year. For the quarter ended December 31, 2019, the segment’s operating income of $4.3 million declined by $1.9 million compared to the same period last year. In both periods, results for our dark tobacco operations improved from higher wrapper sales volumes, influenced in part by earlier shipment timing in the third fiscal quarter of 2020 compared to the previous fiscal year. Results for our oriental joint venture were down for the nine months and quarter ended December 31, 2019, compared to the same periods in the prior fiscal year, primarily from lower sales volumes, due in part to some customer shipments delayed into the fourth quarter of fiscal 2020, as well as unfavorable currency remeasurement and exchange variances in both periods. Selling, general, and administrative costs for the segment were down in both the nine months and third fiscal quarter ended December 31, 2019 compared with those periods in the prior fiscal year, mostly from favorable comparisons to higher value-added tax charges in the third quarter of fiscal 2019. Revenues for the segment decreased by $5.7 million to $199.2 million for the nine months, and by $5.5 million to $69.4 million for the third quarter ended December 31, 2019, as higher dark tobacco operations revenues were more than offset by lower sales volumes from the timing of shipments of oriental tobaccos into the United States.
OTHER ITEMS:
Cost of goods sold in the nine months and quarter ended December 31, 2019, decreased by 19% and 21% to $1.0 billion and $412.1 million, respectively, both compared with the same periods in the prior fiscal year, consistent with similar percentage decreases in revenues. Selling, general, and administrative costs for the nine months and quarter ended December 31, 2019 decreased by $14.4 million to $152.8 million, and by $9.4 million to $48.9 million, respectively. Reductions in both periods reflected positive foreign currency remeasurement and exchange variances as well as lower value-added tax charges, while the nine-month comparison also benefitted from better customer claim experience and lower incentive compensation costs, offset in part by lower net recoveries on advances to suppliers compared to the same period in the prior fiscal year.
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The following tables set forth certain non-recurring items included in reported results:
| Adjusted Operating Income | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||
| (in millions) | 2019 | 2018 | 2019 | 2018 | |||||
| As Reported: Consolidated operating income | $ | 44.1 | $ | 37.7 | $ | 94.8 | $ | 100.4 | |
| FruitSmart acquisition transaction costs^(1)^ | 0.9 | — | 1.9 | — | |||||
| Restructuring and impairment costs^(2)^ | — | 19.4 | — | 19.5 | |||||
| Adjusted operating income | $ | 45.0 | $ | 57.1 | $ | 96.7 | $ | 119.9 | |
| Adjusted Net Income and Diluted Earnings Per Share | |||||||||
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||
| (in millions and reported net of income taxes) | 2019 | 2018 | 2019 | 2018 | |||||
| As Reported: Net income available to Universal Corporation | $ | 26.0 | $ | 28.1 | $ | 56.1 | $ | 72.8 | |
| FruitSmart acquisition transaction costs^(1)^ | 0.9 | — | 1.9 | — | |||||
| Restructuring and impairment costs^(2)^ | — | 15.8 | — | 15.8 | |||||
| Unresolved income tax matter for a foreign subsidiary | — | — | 2.8 | — | |||||
| Income tax benefit from dividend withholding tax liability reversal^(3)^ | — | — | — | (7.8 | ) | ||||
| Adjusted Net income available to Universal Corporation | $ | 26.9 | $ | 43.9 | $ | 60.8 | $ | 80.8 | |
| Adjusted diluted earnings per share | $ | 1.08 | $ | 1.73 | $ | 2.41 | $ | 3.19 | |
| ^(1)^ | The Company incurred legal and professional fees associated with the acquisition of FruitSmart (effective January 1, 2020). These costs are not deductible for U.S. income tax purposes. | ||||||||
| --- | --- | ||||||||
| ^(2)^ | In the third quarter of fiscal year 2019, the Company recognized a restructuring and impairment charge related to the Company's operations in Tanzania. | ||||||||
| --- | --- | ||||||||
| ^(3)^ | During fiscal year 2019, the Company reversed a portion of a liability previously recorded for dividend withholding taxes on the cumulative retained earnings of a foreign subsidiary. | ||||||||
| --- | --- |
The Company’s consolidated effective tax rates for the nine months and quarter ended December 31, 2019, were approximately 30% and 26%, respectively. Income tax expense for the nine months ended December 31, 2019 included a $2.8 million net tax accrual ($0.11 per diluted share) for an unresolved tax matter at a foreign subsidiary. Without the effect of this item, the consolidated effective tax rate for the nine months ended December 31, 2019, would have been 27%.
The Company’s consolidated effective tax rates for the nine months and quarter ended December 31, 2018, were approximately 19% and 20%, respectively. Income tax expense for the nine months ended December 31, 2018 included a $7.8 million ($0.30 per diluted share) benefit from reversing a portion of a liability previously recorded for dividend withholding taxes on the cumulative retained earnings of a foreign subsidiary. Without the effect of this item, the consolidated effective tax rate for the nine months ended December 31, 2018, would have been 27%.
The effective tax rates for all periods include the benefit of various tax planning opportunities, as well as the net effect of items accounted for on a discrete basis in the respective reporting periods.
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Additional information
Amounts included in the previous discussion are attributable to Universal Corporation and exclude earnings related to non-controlling interests in subsidiaries. In addition, the total for segment operating income (loss) referred to in this discussion is a non-GAAP measure. This measure is not a financial measure calculated in accordance with GAAP and should not be considered as a substitute for net income (loss), operating income (loss), cash from operating activities or any other operating performance measure calculated in accordance with GAAP, and it may not be comparable to similarly titled measures reported by other companies. A reconciliation of the total for segment operating income (loss) to consolidated operating income (loss) is provided in Note 3. Segment Information, included in this earnings release. The Company evaluates its segment performance excluding certain significant charges or credits. The Company believes this measure, which excludes items that it believes are not indicative of its core operating results, provides investors with important information that is useful in understanding its business results and trends.
This release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Company cautions readers that any statements contained herein regarding financial condition, results of operation, and future business plans, operations, opportunities, and prospects for its performance are forward-looking statements 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, integration of FruitSmart and the impact of the FruitSmart acquisition on future results; product purchased not meeting quality and quantity requirements; reliance on a few large customers; its ability to maintain effective information technology systems and safeguard confidential information; anticipated levels of demand for and supply of its products and services; costs incurred in providing these products and services; timing of shipments to customers; changes in market structure; government regulation; 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 food ingredient business; exposure to certain regulatory and financial risks related to climate change; changes in estimates and assumptions underlying its 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. A further list and description of these risks, uncertainties, and other factors can be found in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2019, and in other documents the Company files with the Securities and Exchange Commission. This information should be read in conjunction with the Annual Report on Form 10-K for the year ended March 31, 2019 and the Form 10-Q for the most recently ended fiscal quarter. The Company 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.
At 5:00 p.m. (Eastern Time) on February 4, 2020, 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 May 4, 2020. A taped replay of the call will be available through February 18, 2020, by dialing (855) 859-2056. The confirmation number to access the replay is 7190448.
Universal Corporation (NYSE: UVV), headquartered in Richmond, Virginia, sources, processes, and supplies agri-products. Tobacco has been our principal focus since our founding in 1918, and we are the leading global leaf tobacco supplier. We conduct business in more than 30 countries on five continents. Our revenues for the fiscal year ended March 31, 2019, were $2.2 billion. For more information on Universal Corporation, visit our website at www.universalcorp.com.
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UNIVERSAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars, except per share data)
| Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Sales and other operating revenues | $ | 505,049 | $ | 636,107 | $ | 1,277,885 | $ | 1,555,430 | ||||
| Costs and expenses | ||||||||||||
| Cost of goods sold | 412,076 | 520,677 | 1,030,233 | 1,268,319 | ||||||||
| Selling, general and administrative expenses | 48,858 | 58,302 | 152,824 | 167,244 | ||||||||
| Restructuring and impairment costs | — | 19,447 | — | 19,447 | ||||||||
| Operating income | 44,115 | 37,681 | 94,828 | 100,420 | ||||||||
| Equity in pretax earnings (loss) of unconsolidated affiliates | (69 | ) | 5,512 | 2,281 | 5,437 | |||||||
| Other non-operating income | 633 | 163 | 1,893 | 549 | ||||||||
| Interest income | 164 | 233 | 1,412 | 1,044 | ||||||||
| Interest expense | 5,197 | 4,732 | 14,361 | 13,274 | ||||||||
| Income before income taxes and other items | 39,646 | 38,857 | 86,053 | 94,176 | ||||||||
| Income taxes | 10,328 | 7,768 | 26,093 | 17,734 | ||||||||
| Net income | 29,318 | 31,089 | 59,960 | 76,442 | ||||||||
| Less: net income attributable to noncontrolling interests in subsidiaries | (3,352 | ) | (2,954 | ) | (3,845 | ) | (3,682 | ) | ||||
| Net income attributable to Universal Corporation | $ | 25,966 | $ | 28,135 | $ | 56,115 | $ | 72,760 | ||||
| Earnings per share: | ||||||||||||
| Basic | $ | 1.04 | $ | 1.12 | $ | 2.24 | $ | 2.90 | ||||
| Diluted | $ | 1.04 | $ | 1.11 | $ | 2.23 | $ | 2.87 |
See accompanying notes.
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UNIVERSAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
| December 31, | December 31, | March 31, | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | |||||||
| (Unaudited) | (Unaudited) | ||||||||
| ASSETS | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | $ | 64,734 | $ | 138,358 | $ | 297,556 | |||
| Accounts receivable, net | 271,981 | 336,564 | 368,110 | ||||||
| Advances to suppliers, net | 120,079 | 98,942 | 106,850 | ||||||
| Accounts receivable—unconsolidated affiliates | 24,748 | 77,543 | 30,951 | ||||||
| Inventories—at lower of cost or net realizable value: | |||||||||
| Tobacco | 937,661 | 867,181 | 629,606 | ||||||
| Other | 84,621 | 74,360 | 69,611 | ||||||
| Prepaid income taxes | 13,619 | 21,170 | 14,264 | ||||||
| Other current assets | 61,450 | 70,309 | 71,197 | ||||||
| Total current assets | 1,578,893 | 1,684,427 | 1,588,145 | ||||||
| Property, plant and equipment | |||||||||
| Land | 22,510 | 23,018 | 22,952 | ||||||
| Buildings | 255,202 | 253,150 | 261,976 | ||||||
| Machinery and equipment | 609,976 | 603,752 | 608,191 | ||||||
| 887,688 | 879,920 | 893,119 | |||||||
| Less accumulated depreciation | (592,457 | ) | (572,634 | ) | (590,625 | ) | |||
| 295,231 | 307,286 | 302,494 | |||||||
| Other assets | |||||||||
| Operating lease right-of-use assets | 34,230 | — | — | ||||||
| Goodwill and other intangibles | 98,042 | 98,008 | 97,994 | ||||||
| Investments in unconsolidated affiliates | 77,783 | 80,558 | 80,482 | ||||||
| Deferred income taxes | 16,354 | 13,959 | 13,357 | ||||||
| Other noncurrent assets | 50,186 | 44,378 | 50,712 | ||||||
| 276,595 | 236,903 | 242,545 | |||||||
| Total assets | $ | 2,150,719 | $ | 2,228,616 | $ | 2,133,184 |
See accompanying notes.
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UNIVERSAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
| December 31, | December 31, | March 31, | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | |||||||
| (Unaudited) | (Unaudited) | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
| Current liabilities | |||||||||
| Notes payable and overdrafts | $ | 92,592 | $ | 129,316 | $ | 54,023 | |||
| Accounts payable and accrued expenses | 130,165 | 144,107 | 145,506 | ||||||
| Accounts payable—unconsolidated affiliates | 7,494 | 1,470 | 106 | ||||||
| Customer advances and deposits | 8,230 | 56,355 | 21,675 | ||||||
| Accrued compensation | 21,761 | 23,989 | 31,372 | ||||||
| Income taxes payable | 1,991 | 3,090 | 1,066 | ||||||
| Current portion of operating lease liabilities | 8,394 | — | — | ||||||
| Current portion of long-term debt | — | — | — | ||||||
| Total current liabilities | 270,627 | 358,327 | 253,748 | ||||||
| Long-term debt | 368,698 | 368,438 | 368,503 | ||||||
| Pensions and other postretirement benefits | 55,305 | 41,601 | 59,257 | ||||||
| Long-term operating lease liabilities | 23,465 | — | — | ||||||
| Other long-term liabilities | 51,185 | 38,467 | 43,214 | ||||||
| Deferred income taxes | 28,228 | 32,000 | 28,584 | ||||||
| Total liabilities | 797,508 | 838,833 | 753,306 | ||||||
| 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 24,693,557 shares issued and outstanding at December 31, 2019 (24,968,799 at December 31, 2018 and 24,989,946 at March 31, 2019) | 324,388 | 326,323 | 326,600 | ||||||
| Retained earnings | 1,089,718 | 1,093,829 | 1,106,178 | ||||||
| Accumulated other comprehensive loss | (104,310 | ) | (75,667 | ) | (95,691 | ) | |||
| Total Universal Corporation shareholders' equity | 1,309,796 | 1,344,485 | 1,337,087 | ||||||
| Noncontrolling interests in subsidiaries | 43,415 | 45,298 | 42,791 | ||||||
| Total shareholders' equity | 1,353,211 | 1,389,783 | 1,379,878 | ||||||
| Total liabilities and shareholders' equity | $ | 2,150,719 | $ | 2,228,616 | $ | 2,133,184 |
See accompanying notes.
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Universal Corporation
Page 9
UNIVERSAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
| Nine Months Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2019 | 2018 | |||||
| (Unaudited) | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
| Net income | $ | 59,960 | $ | 76,442 | ||
| Adjustments to reconcile net income to net cash used by operating activities: | ||||||
| Depreciation | 27,500 | 27,651 | ||||
| Net provision for losses (recoveries) on advances and guaranteed loans to suppliers | 93 | (3,045 | ) | |||
| Foreign currency remeasurement (gain) loss, net | (2,179 | ) | 1,790 | |||
| Restructuring and impairment costs | — | 19,447 | ||||
| Restructuring payments | (444 | ) | (762 | ) | ||
| Other, net | 2,714 | 6,812 | ||||
| Changes in operating assets and liabilities, net | (260,542 | ) | (225,648 | ) | ||
| Net cash used by operating activities | (172,898 | ) | (97,313 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
| Purchase of property, plant and equipment | (21,692 | ) | (28,370 | ) | ||
| Proceeds from sale of property, plant and equipment | 2,946 | 1,377 | ||||
| Other | 496 | 2,000 | ||||
| Net cash used by investing activities | (18,250 | ) | (24,993 | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
| Issuance of short-term debt, net | 41,201 | 85,893 | ||||
| Dividends paid to noncontrolling interests | (3,359 | ) | (1,260 | ) | ||
| Repurchase of common stock | (20,125 | ) | (1,443 | ) | ||
| Dividends paid on common stock | (56,601 | ) | (51,156 | ) | ||
| Other | (2,883 | ) | (4,946 | ) | ||
| Net cash (used) provided by financing activities | (41,767 | ) | 27,088 | |||
| Effect of exchange rate changes on cash | 93 | (552 | ) | |||
| Net decrease in cash and cash equivalents | (232,822 | ) | (95,770 | ) | ||
| Cash and cash equivalents at beginning of year | 297,556 | 234,128 | ||||
| Cash and cash equivalents at end of period | $ | 64,734 | $ | 138,358 |
See accompanying notes.
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Universal Corporation
Page 10
NOTE 1. BASIS OF PRESENTATION
Universal Corporation, which together with its subsidiaries is referred to herein as “Universal” or the “Company,” is the leading global leaf tobacco supplier. 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. Certain amounts in prior year statements have been reclassified to conform to the current year presentation. This Form 10-Q 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, 2019.
NOTE 2. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:
| Three Months Ended December 31, | Nine Months Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands, except share and per share data) | 2019 | 2018 | 2019 | 2018 | ||||
| Basic Earnings Per Share | ||||||||
| Numerator for basic earnings per share | ||||||||
| Net income attributable to Universal Corporation | $ | 25,966 | $ | 28,135 | $ | 56,115 | $ | 72,760 |
| Denominator for basic earnings per share | ||||||||
| Weighted average shares outstanding | 24,931,711 | 25,162,268 | 25,058,525 | 25,126,595 | ||||
| Basic earnings per share | $ | 1.04 | $ | 1.12 | $ | 2.24 | $ | 2.90 |
| Diluted Earnings Per Share | ||||||||
| Numerator for diluted earnings per share | ||||||||
| Net income attributable to Universal Corporation | $ | 25,966 | $ | 28,135 | $ | 56,115 | $ | 72,760 |
| Denominator for diluted earnings per share: | ||||||||
| Weighted average shares outstanding | 24,931,711 | 25,162,268 | 25,058,525 | 25,126,595 | ||||
| Effect of dilutive securities | ||||||||
| Employee share-based awards | 123,343 | 203,498 | 119,992 | 202,878 | ||||
| Denominator for diluted earnings per share | 25,055,054 | 25,365,766 | 25,178,517 | 25,329,473 | ||||
| Diluted earnings per share | $ | 1.04 | $ | 1.11 | $ | 2.23 | $ | 2.87 |
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Universal Corporation
Page 11
NOTE 3. SEGMENT INFORMATION
The principal approach used by management to evaluate the Company’s performance is by geographic region, although the dark air-cured and oriental tobacco businesses are each evaluated on the basis of their worldwide operations. The Company evaluates the performance of its segments based on operating income after allocated overhead expenses (excluding significant non-recurring charges or credits), plus equity in the pretax earnings of unconsolidated affiliates.
Operating results for the Company’s reportable segments for each period presented in the consolidated statements of income and comprehensive income were as follows:
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands of dollars) | 2019 | 2018 | 2019 | 2018 | |||||||
| SALES AND OTHER OPERATING REVENUES | |||||||||||
| Flue-Cured and Burley Leaf Tobacco Operations: | |||||||||||
| North America | $ | 49,378 | $ | 78,009 | $ | 134,649 | $ | 261,347 | |||
| Other Regions ^(1)^ | 386,261 | 483,161 | 944,083 | 1,089,180 | |||||||
| Subtotal | 435,639 | 561,170 | 1,078,732 | 1,350,527 | |||||||
| Other Tobacco Operations ^(2)^ | 69,410 | 74,937 | 199,153 | 204,903 | |||||||
| Consolidated sales and other operating revenue | $ | 505,049 | $ | 636,107 | $ | 1,277,885 | $ | 1,555,430 | |||
| OPERATING INCOME | |||||||||||
| Flue-Cured and Burley Leaf Tobacco Operations: | |||||||||||
| North America | $ | 352 | $ | 3,147 | $ | 6,714 | $ | 20,395 | |||
| Other Regions ^(1)^ | 39,430 | 53,283 | 68,140 | 96,828 | |||||||
| Subtotal | 39,782 | 56,430 | 74,854 | 117,223 | |||||||
| Other Tobacco Operations ^(2)^ | 4,264 | 6,210 | 22,255 | 8,081 | |||||||
| Segment operating income | 44,046 | 62,640 | 97,109 | 125,304 | |||||||
| Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates ^(3)^ | 69 | (5,512 | ) | (2,281 | ) | (5,437 | ) | ||||
| Restructuring and impairment costs ^(4)^ | — | (19,447 | ) | — | (19,447 | ) | |||||
| Consolidated operating income | $ | 44,115 | $ | 37,681 | $ | 94,828 | $ | 100,420 | |||
| ^(1)^ | Includes South America, Africa, Europe, and Asia regions, as well as inter-region eliminations. | ||||||||||
| --- | --- | ||||||||||
| ^(2)^ | Includes Dark Air-Cured, Special Services, and Oriental, as well as inter-company eliminations. Sales and other operating revenues for this reportable segment include limited amounts for Oriental because the business is accounted for on the equity method and its financial results consist principally of equity in the pretax earnings (loss) of an unconsolidated affiliates. | ||||||||||
| --- | --- | ||||||||||
| ^(3)^ | Equity in pretax earnings (loss) of unconsolidated affiliates is included in segment operating income (Other Tobacco Operations segment), but is reported below consolidated operating income and excluded from that total in the consolidated statements of income and comprehensive income. | ||||||||||
| --- | --- | ||||||||||
| ^(4)^ | Restructuring and impairment costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income and comprehensive income. | ||||||||||
| --- | --- |
Exhibit
Exhibit 99.2
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: | Candace C. Formacek | RELEASE: | 4:15 p.m. ET |
|---|---|---|---|
| Phone: (804) 359-9311 | |||
| Fax: (804) 254-3584 | |||
| Email: investor@universalleaf.com |
Universal Corporation Announces Quarterly Dividend
Richmond, VA February 4, 2020 / PRNEWSWIRE
George C. Freeman, III, Chairman, President, and Chief Executive Officer of Universal Corporation (NYSE:UVV), announced today that the Company's Board of Directors declared a quarterly dividend of seventy-six cents ($0.76) per share on the common shares of the Company, payable May 4, 2020, to common shareholders of record at the close of business on April 13, 2020.
Universal Corporation (NYSE: UVV), headquartered in Richmond, Virginia, sources, processes, and supplies agri-products. Tobacco has been our principal focus since our founding in 1918, and we are the leading global leaf tobacco supplier. We conduct business in more than 30 countries on five continents. Our revenues for the fiscal year ended March 31, 2019, were $2.2 billion. For more information on Universal Corporation, visit our website at www.universalcorp.com.
#
Exhibit
Exhibit 99.3
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: | Candace C. Formacek | RELEASE: | 4:16 p.m. ET |
|---|---|---|---|
| Phone: (804) 359-9311 | |||
| Fax: (804) 254-3584 | |||
| Email: investor@universalleaf.com |
Universal Corporation Appoints Jacqueline T. Williams to Board of Directors
Richmond, VA February 4, 2020/ PRNEWSWIRE
Universal Corporation (NYSE: UVV) today announced the appointment of Jacqueline T. Williams to the Universal Corporation Board of Directors, effective April 1, 2020. With this appointment, the Universal Corporation Board expands to nine directors, eight of whom are independent.
“We are delighted to have Jackie Williams join the Universal Corporation Board of Directors,” said George C. Freeman, III, Chairman, President and Chief Executive Officer of Universal Corporation. “Jackie is an accomplished executive who brings more than 40 years of experience in leadership roles across the public and private sectors. The diversity of her experience will be a valuable addition to our Board and we look forward to benefiting from her unique insights and informed perspectives.”
Ms. Williams has held several leadership roles for the state of Ohio over the last decade. In her most recent role as the Director of the Ohio Department of Commerce, to which she was appointed by the governor of Ohio, Ms. Williams oversaw strategy and operations for the regulation of 28 unique industries. As Chief of Minority Business Development with the state’s Development Services Agency, she generated an unprecedented $165 million in spending with minority- and women-owned businesses. As Executive Director of the Ohio Liquor Control Commission, she transformed the state’s liquor industry by implementing improved business practices.
She previously worked for the New America Foundation as a Director in the College Savings Initiative where she designed and developed the country’s first universal college savings plan for the city of San Francisco in collaboration with that city’s treasurer. Previously, Ms. Williams served for a decade as an Executive Director for the Ohio Tuition Trust Authority. She spent the first 15 years of her career with AT&T.
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Ms. Williams holds a B.A. in Psychology and Sociology and an M.S. in Administration from Miami University in Ohio. She is a featured speaker on topics including public policy, consumer protection, diversity and inclusion, minority business enterprises and economic development. Among other awards and honors throughout her career, in 2006 Ms. Williams was chosen as one of “12 Women You Should Know” by Women for Economic Leadership Development.
Universal Corporation (NYSE: UVV), headquartered in Richmond, Virginia, sources, processes, and supplies agri-products. Tobacco has been our principal focus since our founding in 1918, and we are the leading global leaf tobacco supplier. We conduct business in more than 30 countries on five continents. Our revenues for the fiscal year ended March 31, 2019, were $2.2 billion. For more information on Universal Corporation, visit our website at www.universalcorp.com.