Form 8-K UNIVERSAL CORP /VA/ For: Feb 03
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E-mailUNITED 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 3, 2015
____________________________________________
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) | |||
Registrants 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))
Item 2.02. | Results of Operations and Financial Condition. |
Universal Corporation (the Company ) issued a press release on February 3, 2015, discussing its results for the quarter and nine months ended December�31, 2014. The press release is attached as Exhibit 99.2 and is incorporated by reference into this Item 2.02.
Item 8.01. | Other Events. |
On February 3, 2015 the Company issued a press release announcing quarterly dividends for the Companys common stock and preferred stock. The press release is attached as Exhibit 99.1 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 3, 2015, announcing quarterly dividends* | ||
99.2 | Press release dated February 3, 2015, announcing results for the quarter and nine months ended December 31, 2014* | ||
__________
*Filed herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
UNIVERSAL CORPORATION | ||||
(Registrant) | ||||
Date: | February 3, 2015 | 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 3, 2015, announcing quarterly dividends. | |
99.2 | Press release dated February 3, 2015, announcing results for the quarter and nine months ended December 31, 2014. | |
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: | Immediately |
Phone: (804) 359-9311 | |||
Fax: (804) 254-3584 | |||
Email: [email protected] | |||
Universal Corporation Announces Quarterly Dividends
Richmond, VA February 3, 2015 / PRNEWSWIRE
George C. Freeman, III, Chairman, President and Chief Executive Officer of Universal Corporation (NYSE: UVV), announced today that the Companys Board of Directors declared a quarterly dividend of fifty- two cents ($0.52) per share on the common shares of the Company, payable May 11, 2015, to common shareholders of record at the close of business on April 14, 2015.
In addition, the Board of Directors declared a quarterly dividend of $16.875 per share on the Series B 6.75% Convertible Perpetual Preferred Stock ( Series B Preferred Stock ), payable March 16, 2015, to shareholders of record as of 5:00 p.m. Eastern Time on March 1, 2015.
�
Effective with the payment of the Company's common stock dividend on February 9, 2015, the Company will adjust the conversion rate on its Series B Preferred Stock. The adjusted conversion rate on the Series B Preferred Stock will be 22.1183 common shares per $1,000 of liquidation preference of Series B Preferred Stock. The new rate will be equivalent to a conversion price of approximately $45.21 per common share.
Headquartered in Richmond, Virginia, Universal Corporation is the leading global leaf tobacco supplier and conducts business in more than 30 countries. Its revenues for the fiscal year ended March 31, 2014, were $2.5 billion. For more information on Universal Corporation, visit its website at www.universalcorp.com.
# # #
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: | 4:00 p.m. ET |
Phone: (804) 359-9311 | |||
Fax: (804) 254-3584 | |||
Email: [email protected] | |||
Universal Corporation Reports Improved Third Quarter Results
Richmond, VA " February 3, 2015 / PRNEWSWIRE
HIGHLIGHTS
Third Quarter
Diluted earnings per share of $1.87, up 38%
Segment operating income of $94 million, up 25%
Revenues down 1% to $758 million
Nine Months
Diluted earnings per share of $2.43
Segment operating income of $114 million, down 12%
Revenues down 19% to $1.5 billion
___________________________________________________________________________________
George C. Freeman, III, Chairman, President, and Chief Executive Officer of Universal Corporation (NYSE: UVV), reported that net income for the third quarter of fiscal year 2015, which ended December 31, 2014, was $53.0 million, or $1.87 per diluted share, compared with net income for the prior years third fiscal quarter of $38.6 million, or $1.36 per diluted share. Segment operating income for the third fiscal quarter of $93.5 million increased 25% compared with the previous year, primarily due to improved results from higher gross margins and lower selling, general, and administrative costs. Consolidated revenues decreased by about 1% to $758.1 million mainly attributable to lower prices and flat total volumes.
Net income for the nine months ended December 31, 2014, was $68.8 million, or $2.43 per diluted share, compared with $122.3 million, or $4.31 per diluted share for the same period last year. Last years results included a non-recurring gain in the first fiscal quarter of $81.6 million before tax ($53.1 million after tax, or $1.87 per diluted share), from the favorable outcome of litigation in Brazil related to previous years excise tax credits. Results for the current fiscal year included an income tax benefit of $8.0 million ($0.28 per diluted share) arising from a subsidiarys payment of a portion of a fine following the unsuccessful appeal of a long-running court case. Excluding those items in both years, net income for the nine months decreased $8.4 million compared to the same period last year. Segment operating income, which excludes unusual
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items, was $114.4 million for the nine-month period, a decrease of $15.9 million from the prior year. That reduction was mainly attributable to reduced volumes due to market conditions that have pushed shipments later into the fiscal year, offset in part by lower selling, general and administrative costs. Revenues declined by 19% to $1.5 billion for the first nine months of fiscal year 2015, primarily as a result of those lower volumes and lower average prices.
Mr. Freeman stated, The current fiscal year continues to develop as we expected, with shipments heavily weighted towards the second half of the year. Third quarter lamina volumes shipped by our flue-cured and burley operations were the highest that weve seen for several years. In addition, our third quarter operating earnings benefitted from lower selling, general, and administrative costs, as well as improved gross margins. Our prudent inventory management has kept uncommitted levels in the normal range, at 14%. The robust third quarter sales volumes and operating profit improvements offset a portion of the large declines we reported in the first half of the year from the later start to the markets and delayed receipt of shipping instructions from customers caused by the oversupply conditions this year.
Although it is early and logistics delays can always occur, the fourth fiscal quarters processing and shipping schedules are proceeding as anticipated, with the largest portion of shipping volumes coming from the Africa origins. We continue to expect stronger fourth quarter sales volumes compared to the same quarter last year. The current outlook for the 2015 crops, which will impact our fiscal year 2016 results, indicates decreased production volumes in the key growing areas, which is an important step towards more balanced markets.
I am proud of the achievements of our operations around the globe, as we have managed well through these uncertain markets. Our balance sheet remains strong, and our major refinancing in December ensures that we are well-positioned to meet the future financial needs of our business. We are optimistic about the prospects for our industry, and we continue to see opportunities to enhance our business by providing supply chain efficiencies, such as improved leaf utilization, that also bring value to our customers.
FLUE-CURED AND BURLEY LEAF TOBACCO OPERATIONS:
OTHER REGIONS:
Operating income for the Other Regions segment for the quarter ended December 31, 2014, improved by 20% to $79.0 million compared with the prior year, on increased total volumes and better overall margins. Higher lamina volumes and gross margin recovery from last years volatile market pricing supported improved results in Brazil. Africa volumes continued to lag the previous years levels, mostly due to shipments delayed into the fourth fiscal quarter. Results for the segment during the third fiscal quarter were positively impacted by larger sales and trading volumes in Asia, while volumes in Europe were lower on smaller crops and shipping delays, reducing earnings in that region. Selling, general, and administrative expenses for the Other Regions segment were down significantly for the quarter, driven mainly by lower provisions for suppliers, lower incentive compensation costs, and positive comparisons of value-added tax valuation allowances relative to the same period last year. Revenues for the Other Regions segment declined by 2% to $604.1 million for the third quarter on slightly higher volumes at lower average green leaf prices.
Operating income for the nine months ended December 31, 2014, was $90.0 million for the segment, compared to $102.8 million in the prior fiscal year. Although sales volumes remained lower for all regions relative to the prior year nine-month period, strong shipment volumes and profit improvements in the third fiscal quarter helped to narrow the earnings shortfall caused by oversupply conditions and delays of current crop shipments noted in the first half of the year. In addition, operating margins for the segment improved for the period, despite inventory writedowns and pricing pressures that typically accompany oversupply
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conditions. Selling, general, and administrative expenses for this segment were substantially lower for the nine months ended December 31, 2014, mainly from beneficial comparisons to the prior years foreign currency remeasurement and exchange losses, mostly in the Philippines and South America, as well as lower provisions for suppliers and lower incentive compensation costs. Revenues for the segment were down about 19% to $1.2 billion, reflecting those lower volumes and slightly lower average green leaf prices.
NORTH AMERICA:
Operating income for the North America segment for the third quarter of fiscal year 2015 was $15.9 million, up $8.1 million compared to the same period of the prior year. Increased third-party processing in the United States and higher lamina sales volumes, including shipments from Guatemala and Mexico delayed from the previous quarter, contributed to the earnings improvement. Revenues for the quarter increased by 13% to $118.8 million on those increased volumes and improved product mix. Operating results for the nine months ended December 31, 2014, increased by $3.2 million to $21.8 million for the segment, compared with the same period for the previous year, mainly due to increased third party processing volumes and improved product mix, despite lower overall sales volumes. Revenues for the period decreased 19% to $203.8 million on the lower sales volumes. For both the three and nine months ended December 31, 2014, selling, general, and administrative costs were down slightly for the segment.
�
OTHER TOBACCO OPERATIONS:
The Other Tobacco Operations segment reported an operating loss of $1.3 million for the third fiscal quarter ended December 31, 2014, a reduction of $2.7 million from earnings of $1.4 million for the same period of the prior year. Results for the dark tobacco operations for the period were relatively flat, as the effects of reduced volumes were mitigated by favorable currency remeasurement variances, mainly in Indonesia, compared with the prior year. Results for the oriental joint venture declined in the quarter, primarily due to the timing of shipments of oriental tobaccos into the U.S., which were delayed into the fourth quarter of fiscal year 2015, partially offset by favorable foreign currency remeasurement comparisons to losses from Turkish lira devaluation last year. The third quarter segment results were also impacted by operational startup costs incurred by our new liquid nicotine and food ingredients businesses in the special services group. Revenues for this segment decreased for the third fiscal quarter by $11.2 million to $35.1 million, mainly due to the timing of shipments of oriental tobaccos into the United States.
For the nine months ended December 31, 2014, segment operating income of $2.6 million was down from $8.9 million. Results for the oriental joint venture improved during the period, attributable mostly to favorable currency remeasurement comparisons in Turkey. Those results were more than offset by lower sales volumes in the dark tobacco operations and start-up costs in the special services group during the period. Selling, general, and administrative costs for the segment were lower on reduced foreign currency exchange and remeasurement losses, principally in Indonesia. Revenues for the segment were down by $42.2 million to $116.5 million for the nine-month period ended December 31, 2014, primarily attributable to the lower volumes for the dark tobacco operations, as well as the timing of shipments of oriental tobaccos into the United States delayed into next quarter.
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OTHER ITEMS:
Cost of goods sold decreased by about 3% to $610.5 million for the third fiscal quarter, and by about 21% to $1.2 billion for the nine months ended December 31, 2014. The percentage reductions in both periods reflect the lower green leaf prices and lower sales volumes in the respective periods, compared with the prior year. Selling, general, and administrative costs decreased by $12.9 million in the third fiscal quarter and $24.4 million for the nine months ended December 31, 2014, compared with the respective prior year periods. Favorable comparisons to the previous years currency remeasurement and exchange losses accounted for about $2 million and $13 million of the reduction for the quarter and nine-month periods, respectively. Declines were also attributable to lower provisions for losses on advances to suppliers, lower incentive compensation costs, and lower corporate overhead for both periods, while the third fiscal quarter also benefited from positive comparisons of value-added tax valuation allowances.
The consolidated effective income tax rates were approximately 34% and 33% for the quarters ended December 31, 2014 and 2013, respectively. Income taxes for the first nine months of fiscal year 2015 were impacted by a non-recurring benefit of $8.0 million arising from the partial payment of the European Commission fine by our Italian subsidiary in June 2014.� Excluding that item, the consolidated effective tax rate for the nine months ended December 31, 2014, was about 32%, compared with the prior years rate of 33% for the same period.
On December 30, 2014, the Company executed a new senior unsecured credit facility agreement with a group of banks, which consolidated and extended maturities of its previous short-term revolving credit and long-term borrowing facilities. The new agreement includes a $430 million 5-year revolving credit facility, a $150 million 5-year term loan, and a $220 million 7-year term loan. The revolving credit facility contains terms and conditions that are substantially similar to the Companys previous revolving credit facility. The term loans, which were fully funded at closing, require no amortization and are prepayable without penalty prior to maturity. The facilities include a customary accordion feature allowing for additional borrowings of up to $100 million under certain conditions. Currently, borrowings under the revolving credit agreement bear interest at variable rates based on LIBOR plus a margin of 1.50% to 1.75%. The Company subsequently entered interest rate swap agreements to fix the variable interest component of the 5- and 7-year term loans to 1.44% and 1.73%, respectively. The effective rates on the 5- and 7-year term loans were 2.94% and 3.48%, respectively, as of February 3, 2015.
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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 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, operating income, 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 to consolidated operating income is 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 these 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 information 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 earnings and expectations for its performance are forward-looking statements based upon management's current knowledge and assumptions about future events, including 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; 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, 2014, 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 fiscal year ended March 31, 2014.
At 5:00 p.m. (Eastern Time) on February 3, 2015, 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 5, 2015. A taped replay of the call will be available through February 17, 2015, by dialing (855) 859-2056. The confirmation number to access the replay is 70319833.
Headquartered in Richmond, Virginia, Universal Corporation is the leading global leaf tobacco supplier and conducts business in more than 30 countries. Its revenues for the fiscal year ended March 31, 2014, were $2.5 billion. For more information on Universal Corporation, visit its 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, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Sales and other operating revenues | $ | 758,054 | $ | 767,802 | $ | 1,493,642 | $ | 1,852,199 | ||||||||
Costs and expenses | ||||||||||||||||
Cost of goods sold | 610,482 | 628,495 | 1,205,459 | 1,522,112 | ||||||||||||
Selling, general and administrative expenses | 53,539 | 66,468 | 177,125 | 201,542 | ||||||||||||
Other income | (81,619 | ) | ||||||||||||||
Restructuring costs | 1,143 | 3,400 | 4,493 | 4,708 | ||||||||||||
Operating income | 92,890 | 69,439 | 106,565 | 205,456 | ||||||||||||
Equity in pretax earnings (loss) of unconsolidated affiliates | (527 | ) | 1,789 | 3,391 | 1,755 | |||||||||||
Interest income | 148 | 344 | 358 | 748 | ||||||||||||
Interest expense | 4,637 | 5,157 | 13,509 | 16,623 | ||||||||||||
Income before income taxes | 87,874 | 66,415 | 96,805 | 191,336 | ||||||||||||
Income tax expense | 29,797 | 22,212 | 22,719 | 63,390 | ||||||||||||
Net income | 58,077 | 44,203 | 74,086 | 127,946 | ||||||||||||
Less: net (income) loss attributable to noncontrolling interests in subsidiaries | (5,038 | ) | (5,618 | ) | (5,305 | ) | (5,608 | ) | ||||||||
Net income attributable to Universal Corporation | 53,039 | 38,585 | 68,781 | 122,338 | ||||||||||||
Dividends on Universal Corporation convertible perpetual preferred stock | (3,712 | ) | (3,712 | ) | (11,137 | ) | (11,137 | ) | ||||||||
Cost in excess of carrying value on repurchase of convertible perpetual stock | (18 | ) | (18 | ) | ||||||||||||
Earnings available to Universal Corporation common shareholders | $ | 49,309 | $ | 34,873 | $ | 57,626 | $ | 111,201 | ||||||||
Earnings per share attributable to Universal Corporation common shareholders: | ||||||||||||||||
Basic | $ | 2.13 | $ | 1.50 | $ | 2.49 | $ | 4.78 | ||||||||
Diluted | $ | 1.87 | $ | 1.36 | $ | 2.43 | $ | 4.31 | ||||||||
See accompanying notes.
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UNIVERSAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
December�31, | December�31, | March�31, | ||||||||||
2014 | �� | 2013 | 2014 | |||||||||
(Unaudited) | (Unaudited) | |||||||||||
ASSETS | ||||||||||||
Current assets | �� | |||||||||||
Cash and cash equivalents | $ | 120,315 | �� | $ | 191,867 | $ | 163,532 | |||||
Accounts receivable, net | 290,234 | �� | 329,120 | 468,015 | ||||||||
Advances to suppliers, net | 106,563 | �� | 120,443 | 134,621 | ||||||||
Accounts receivableunconsolidated affiliates | 342 | �� | 776 | 7,375 | ||||||||
Inventoriesat lower of cost or market: | �� | |||||||||||
Tobacco | 1,011,234 | �� | 841,834 | 639,812 | ||||||||
Other | 74,791 | �� | 74,377 | 67,219 | ||||||||
Prepaid income taxes | 13,842 | �� | 28,015 | 27,866 | ||||||||
Deferred income taxes | 40,588 | �� | 24,438 | 22,052 | ||||||||
Other current assets | 80,683 | �� | 127,086 | 142,755 | ||||||||
Total current assets | 1,738,592 | �� | 1,737,956 | 1,673,247 | ||||||||
Property, plant and equipment | �� | |||||||||||
Land | 16,868 | �� | 17,249 | 17,275 | ||||||||
Buildings | 239,177 | �� | 239,194 | 239,913 | ||||||||
Machinery and equipment | 580,026 | �� | 565,985 | 562,597 | ||||||||
836,071 | �� | 822,428 | 819,785 | |||||||||
Less: accumulated depreciation | (530,731 | ) | �� | (531,696 | ) | (523,239 | ) | |||||
305,340 | �� | 290,732 | 296,546 | |||||||||
Other assets | �� | |||||||||||
Goodwill and other intangibles | 99,220 | �� | 99,537 | 99,453 | ||||||||
Investments in unconsolidated affiliates | 82,341 | �� | 95,095 | 95,305 | ||||||||
Deferred income taxes | 12,358 | �� | 27,760 | 14,562 | ||||||||
Other noncurrent assets | 60,975 | �� | 89,349 | 91,794 | ||||||||
254,894 | �� | 311,741 | 301,114 | |||||||||
Total assets | $ | 2,298,826 | �� | $ | 2,340,429 | $ | 2,270,907 | |||||
See accompanying notes.
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UNIVERSAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
December�31, | December�31, | March�31, | ||||||||||
2014 | �� | 2013 | 2014 | |||||||||
(Unaudited) | �� | (Unaudited) | ||||||||||
LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||||||
Current liabilities | �� | |||||||||||
Notes payable and overdrafts | $ | 116,771 | $ | 72,341 | $ | 62,905 | ||||||
Accounts payable and accrued expenses | 146,516 | 196,255 | 212,422 | |||||||||
Accounts payableunconsolidated affiliates | 12,500 | 32,216 | 65 | |||||||||
Customer advances and deposits | 65,450 | 59,779 | 15,869 | |||||||||
Accrued compensation | 20,469 | 23,905 | 31,772 | |||||||||
Income taxes payable | 12,596 | 15,741 | 15,694 | |||||||||
Current portion of long-term obligations | 115,000 | 116,250 | ||||||||||
Total current liabilities | 374,302 | �� | 515,237 | 454,977 | ||||||||
Long-term obligations | 370,000 | 245,000 | 240,000 | |||||||||
Pensions and other postretirement benefits | 73,052 | 92,762 | 85,081 | |||||||||
Other long-term liabilities | 34,077 | 36,348 | 34,457 | |||||||||
Deferred income taxes | 42,843 | 59,772 | 45,500 | |||||||||
Total liabilities | 894,274 | 949,119 | 860,015 | |||||||||
Shareholders equity | �� | |||||||||||
Universal Corporation: | ||||||||||||
Preferred stock: | �� | |||||||||||
Series A Junior Participating Preferred Stock, no par value, 500,000 shares authorized, none issued or outstanding | �� | |||||||||||
Series B 6.75% Convertible Perpetual Preferred Stock, no par value, 220,000 shares authorized, 219,596 shares issued and outstanding (219,999 at December 31, 2013, and March 31, 2014) | 212,633 | �� | 213,023 | 213,023 | ||||||||
Common stock, no par value, 100,000,000 shares authorized, 22,839,717 shares issued and outstanding (23,216,312 at December 31, 2013, and 23,216,312 at March 31, 2014) | 205,699 | 204,104 | 206,446 | |||||||||
Retained earnings | 997,380 | �� | 982,109 | 993,093 | ||||||||
Accumulated other comprehensive loss | (47,168 | ) | �� | (40,135 | ) | (34,332 | ) | |||||
Total Universal Corporation shareholders' equity | 1,368,544 | �� | 1,359,101 | 1,378,230 | ||||||||
Noncontrolling interests in subsidiaries | 36,008 | 32,209 | 32,662 | |||||||||
Total shareholders' equity | 1,404,552 | 1,391,310 | 1,410,892 | |||||||||
Total liabilities and shareholders' equity | $ | 2,298,826 | �� | $ | 2,340,429 | $ | 2,270,907 | |||||
See accompanying notes.
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UNIVERSAL CORPORATION ����
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
Nine Months Ended December 31, | ||||||||
2014 | 2013 | |||||||
(Unaudited) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 74,086 | $ | 127,946 | ||||
Adjustments to reconcile net income to net cash used by operating activities: | ||||||||
Depreciation | 26,355 | 29,058 | ||||||
Amortization | 1,635 | 1,244 | ||||||
Net provision for losses on advances and guaranteed loans to suppliers | 668 | 9,081 | ||||||
Foreign currency remeasurement loss (gain), net | 14,231 | 14,649 | ||||||
Equity in net loss (income) of unconsolidated affiliates, net of dividends | 2,001 | 5,530 | ||||||
Gain on favorable outcome of excise tax case in Brazil | (81,619 | ) | ||||||
Restructuring costs | 4,493 | 4,708 | ||||||
Other, net | (2,720 | ) | 7,105 | |||||
Changes in operating assets and liabilities, net | (122,372 | ) | (131,853 | ) | ||||
Net cash used by operating activities | (1,623 | ) | (14,151 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property, plant and equipment | (43,207 | ) | (30,846 | ) | ||||
Proceeds from sale of property, plant and equipment | 3,791 | 1,497 | ||||||
Net cash used by investing activities | (39,416 | ) | (29,349 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Issuance (repayment) of short-term debt, net | 57,075 | (36,725 | ) | |||||
Issuance of long-term obligations | 370,000 | 175,000 | ||||||
Repayment of long-term obligations | (356,250 | ) | (207,500 | ) | ||||
Dividends paid to noncontrolling interests | (1,977 | ) | (1,962 | ) | ||||
Issuance of common stock | 187 | 457 | ||||||
Repurchase of perpetual convertible preferred stock | (349 | ) | ||||||
Repurchase of common stock | (20,473 | ) | (14,145 | ) | ||||
Dividends paid on convertible perpetual preferred stock | (11,137 | ) | (11,137 | ) | ||||
Dividends paid on common stock | (35,485 | ) | (34,880 | ) | ||||
Debt issuance costs and other | (2,985 | ) | (875 | ) | ||||
Net cash used by financing activities | (1,394 | ) | (131,767 | ) | ||||
Effect of exchange rate changes on cash | (784 | ) | (730 | ) | ||||
Net decrease in cash and cash equivalents | (43,217 | ) | (175,997 | ) | ||||
Cash and cash equivalents at beginning of year | 163,532 | 367,864 | ||||||
Cash and cash equivalents at end of period | $ | 120,315 | $ | 191,867 | ||||
See accompanying notes.
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NOTE 1. BASIS OF PRESENTATION
Universal Corporation, with its subsidiaries ( Universal or the Company ), is the leading global leaf tobacco supplier. Because of the seasonal nature of the Companys 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 Companys Annual Report on Form 10-K for the fiscal year ended March 31, 2014.
-- M O R E --
Universal Corporation
Page 11
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) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Basic Earnings Per Share | ||||||||||||||||
Numerator for basic earnings per share | ||||||||||||||||
Net income attributable to Universal Corporation | $ | 53,039 | $ | 38,585 | $ | 68,781 | $ | 122,338 | ||||||||
Less: Dividends on convertible perpetual preferred stock | (3,712 | ) | (3,712 | ) | (11,137 | ) | (11,137 | ) | ||||||||
Less: Cost in excess of carrying value on repurchases of convertible perpetual preferred stock | (18 | ) | (18 | ) | ||||||||||||
Earnings available to Universal Corporation common shareholders for calculation of basic earnings per share | 49,309 | 34,873 | 57,626 | 111,201 | ||||||||||||
�Denominator for basic earnings per share | ||||||||||||||||
Weighted average shares outstanding | 23,095,861 | 23,216,145 | 23,165,553 | 23,246,396 | ||||||||||||
�Basic earnings per share | $ | 2.13 | $ | 1.50 | $ | 2.49 | $ | 4.78 | ||||||||
Diluted Earnings Per Share | ||||||||||||||||
Numerator for diluted earnings per share | ||||||||||||||||
Earnings available to Universal Corporation common shareholders | $ | 49,309 | $ | 34,873 | $ | 57,626 | $ | 111,201 | ||||||||
Add: Dividends on convertible perpetual preferred stock (if conversion assumed) | 3,712 | 3,712 | 11,137 | 11,137 | ||||||||||||
Add: Cost in excess of carrying value on repurchases of convertible perpetual preferred stock | 18 | 18 | ||||||||||||||
Earnings available to Universal Corporation common shareholders for calculation of diluted earnings per share | 53,039 | 38,585 | 68,781 | 122,338 | ||||||||||||
Denominator for diluted earnings per share | ||||||||||||||||
Weighted average shares outstanding | 23,095,861 | 23,216,145 | 23,165,553 | 23,246,396 | ||||||||||||
Effect of dilutive securities (if conversion or exercise assumed) | ||||||||||||||||
Convertible perpetual preferred stock | 4,852,940 | 4,824,320 | 4,845,818 | 4,818,274 | ||||||||||||
Employee share-based awards | 342,216 | 323,947 | 328,060 | 323,867 | ||||||||||||
Denominator for diluted earnings per share | 28,291,017 | 28,364,412 | 28,339,431 | 28,388,537 | ||||||||||||
Diluted earnings per share | $ | 1.87 | $ | 1.36 | $ | 2.43 | $ | 4.31 | ||||||||
-- M O R E --
Universal Corporation
Page 12
NOTE 3. SEGMENT INFORMATION
The principal approach used by management to evaluate the Companys 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 Companys reportable segments for each period presented in the consolidated statements of income were as follows:
Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||
(in thousands of dollars) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
SALES AND OTHER OPERATING REVENUES | ||||||||||||||||
Flue-cured and burley leaf tobacco operations: | ||||||||||||||||
North America | $ | 118,844 | ��� | $ | 105,430 | ��� | $ | 203,850 | ��� | $ | 250,548 | |||||
Other regions�(1) | 604,100 | ��� | 616,038 | ��� | 1,173,341 | ��� | 1,442,908 | |||||||||
Subtotal | 722,944 | 721,468 | 1,377,191 | 1,693,456 | ||||||||||||
Other tobacco operations�(2) | 35,110 | ��� | 46,334 | ��� | 116,451 | ��� | 158,743 | |||||||||
Consolidated sales and other operating revenues | $ | 758,054 | $ | 767,802 | $ | 1,493,642 | $ | 1,852,199 | ||||||||
OPERATING INCOME | ||||||||||||||||
Flue-cured and burley leaf tobacco operations: | ||||||||||||||||
North America | $ | 15,864 | ��� | $ | 7,728 | ��� | $ | 21,821 | ��� | $ | 18,622 | |||||
Other regions�(1) | 78,958 | ��� | 65,527 | ��� | 90,044 | ��� | 102,797 | |||||||||
Subtotal | 94,822 | 73,255 | 111,865 | 121,419 | ||||||||||||
Other tobacco operations�(2) | (1,316 | ) | ��� | 1,373 | ��� | 2,584 | ��� | 8,881 | ||||||||
Segment operating income | 93,506 | 74,628 | 114,449 | 130,300 | ||||||||||||
Deduct: Equity in pretax loss (earnings) of unconsolidated affiliates (3) | 527 | (1,789 | ) | (3,391 | ) | (1,755 | ) | |||||||||
Restructuring costs (4) | (1,143 | ) | (3,400 | ) | (4,493 | ) | (4,708 | ) | ||||||||
Add: Other income (5) | 81,619 | |||||||||||||||
Consolidated operating income | $ | 92,890 | $ | 69,439 | $ | 106,565 | $ | 205,456 | ||||||||
(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 its financial results consist principally of equity in the pretax earnings of an unconsolidated affiliate. |
(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 costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income and comprehensive income. |
(5)� | Other income represents the gain on the favorable outcome of the IPI tax credit case in Brazil. This item is excluded from segment operating income, but is included in consolidated operating income in the consolidated statements of income and comprehensive income. |
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