Form 8-K UNIVERSAL CORP /VA/ For: Nov 05
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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): November 5, 2014
____________________________________________
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 November 6, 2014, discussing its results for the quarter and six months ended September 30, 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 November 6, 2014, 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.
On November 5, 2014, the Company issued a press release announcing an agreement with Philip Morris International Inc. to supply U.S. tobaccos. The press release is attached as Exhibit 99.3 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 November 6, 2014, announcing quarterly dividends* | ||
99.2 | Press release dated November 6, 2014, announcing results for the quarter and six months ended September 30, 2014* | ||
99.3 | Press release dated November 5, 2014 announcing an agreement with Philip Morris International Inc. to supply U.S. tobaccos.* | ||
__________
*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: | November 6, 2014 | By: | /s/ Preston D. Wigner | |
Preston D. Wigner | ||||
Vice President, General Counsel, and Secretary | ||||
Exhibit Index
Exhibit | ||
Number | Document | |
99.1 | Press release dated November 6, 2014, announcing quarterly dividends. | |
99.2 | Press release dated November 6, 2014, announcing results for the quarter and six months ended September 30, 2014. | |
99.3 | Press release dated November 5, 2014 announcing an agreement with Philip Morris International Inc. to supply U.S. tobaccos. | |
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 44th Annual Dividend Increase
Richmond, VA " November 6, 2014 / PRNEWSWIRE
George C. Freeman, III, Chairman, President, and Chief Executive Officer of Universal Corporation (NYSE: UVV), announced today that the Companys Board of Directors has increased the quarterly dividend on the common shares of the Company by one cent to fifty two cents ($0.52) per share. The dividend is payable February 9, 2015, to common shareholders of record at the close of business on January 12, 2015. This increase indicates an annualized rate of $2.08 per share and a yield of approximately 4.6% based on the $44.76 closing price on November 5, 2014.
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, payable December 15, 2014, to shareholders of record as of 5:00 p.m. Eastern Time on December 1, 2014.
Effective with the payment of the Company's common stock dividend on November 10, 2014, 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 22.0691 common shares per $1,000 of liquidation preference of Series B Preferred Stock. The new rate is equivalent to a conversion price of approximately $45.31 per common share.
Mr. Freeman noted, "This is our 44th consecutive annual dividend increase. We are pleased to continue our strong record of providing value to our shareholders through the return of our earnings and cash flow while carefully managing our balance sheet.
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 web site 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 Six-Month Results
Richmond, VA " November 6, 2014 / PRNEWSWIRE
HIGHLIGHTS
Six Months
Diluted earnings per share of $0.35.
Revenues down 32%, to $736 million due to later market timing.
Dividend increase announced for the 44th consecutive year.
Second Quarter
Diluted earnings per share of $0.48.
Segment operating income of $29 million.
___________________________________________________________________________________
George C. Freeman, III, Chairman, President, and Chief Executive Officer of Universal Corporation (NYSE: UVV), reported that net income for the first half of fiscal year 2015, which ended on September 30, 2014, was $15.7 million, or $0.35 per diluted share, compared with $83.8 million, or $2.95 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 $1.96 per diluted share), which resulted from the favorable outcome of litigation in Brazil related to excise tax credits. Results for the current fiscal year included an income tax benefit of $8.0 million (or $0.34 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 six months decreased $23.0 million compared to the same period last year. For the second fiscal quarter ended September 30, 2014, net income was $15.0 million, or $0.48 per diluted share, compared with net income for the prior years second quarter of $25.4 million, or $0.90 per diluted share.
Segment operating income for the first half of fiscal year 2015 was $20.9 million, a decrease of $34.7 million, and for the quarter ended September 30, 2014, was $28.6 million, a decrease of $20.7 million, both compared to the same periods last fiscal year. Those declines resulted primarily from reduced volumes due to market conditions which have pushed shipments into the second half of the fiscal year. Consolidated
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revenues decreased by 32% to $735.6 million for the first half of fiscal year 2015, and by 29% to $464.1 million for the three months ended September 30, 2014, compared to the same periods in the prior year, mostly as a result of the lower volumes and lower average prices.
Mr. Freeman stated, Our results continue to be impacted by an oversupply in tobacco leaf markets and the effects of softer demand from our customers. As is typical under these conditions, markets have developed slowly in some origins, with a later start to purchasing and processing, as well as delayed receipt of shipping instructions from customers. While we usually ship a large portion of our volumes in the second half of our fiscal year, this year significantly more volume is being pushed into this period. Improvements that we have made in Africa, including the opening of our second processing line in Mozambique, will help to move shipments out prior to our current fiscal year end, barring any unexpected logistical challenges. We expect modestly lower lamina volumes in fiscal year 2015 compared to the prior fiscal year due to soft customer demand, but we believe we remain well-positioned in the industry with our strong customer relationships, increasing customer satisfaction with our products and services, and our solid market share. Revenues for the fiscal year are also expected to be down compared to the previous fiscal year primarily due to declining prices and the soft demand that is typical of an oversupply environment. We are confident in our ability to adapt and manage through this period, as we have demonstrated in the past.
Looking forward, we continue to monitor market challenges in the global tobacco industry that may impact our customers as we explore ways to provide more value-added services, make our operations more efficient, and reduce sourcing complexity. For example, as we announced yesterday, we are expanding sales through a new leaf supply agreement with one of our longstanding global customers, Philip Morris International, Inc., for purchasing processed grades of tobacco. This new arrangement will broaden our leaf purchasing and grower support activities in the United States in fiscal year 2016. In addition, we continue to work to balance anticipated global leaf tobacco supply and demand and to minimize our uncommitted inventories, which remained within our normal range at the end of September.
I am also pleased to report that we were able to reward our shareholders for the 44th consecutive year with an annual dividend increase as announced earlier today.
FLUE-CURED AND BURLEY LEAF TOBACCO OPERATIONS:
OTHER REGIONS:
Operating income for the Other Regions segment was $11.1 million for the first half of fiscal year 2015, compared to $37.3 million in the first half of the prior fiscal year. The reduction was driven by lower volumes in all regions. The volume reductions were mainly attributable to delays of current crop shipments into the second half of the fiscal year. Gross profit margins for the segment were improved for the period, despite approximately $10 million of inventory writedowns on certain styles of tobacco that were in excess of demand. Although volumes were down for the Africa region on processing and shipment delays, shipments from Mozambique had caught up with prior year levels by September 30, 2014. Better margins in Brazil, compared with last years volatile pricing situation that pressured margins, partially offset declines from lower volumes there. Selling, general, and administrative expenses for this segment were down for the six months ended September 30, 2014, as beneficial comparisons to the prior years heavy foreign currency remeasurement and exchange losses, mostly in the Philippines and South America, and lower supplier provisions, were partially offset by a large value-added tax valuation allowance in South America. Revenues for the segment were down about 31% to $569.2 million, reflecting those lower volumes and lower average green leaf prices.
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Operating income for the Other Regions segment was down 49% to $21.7 million in the quarter ended September 30, 2014, compared with the prior year. Similar to the six-month period ended September 30, 2014, the decline was primarily related to lower volumes in most origins as well as inventory writedowns on certain styles of tobacco that were in excess of demand and partially offset by lower selling, general, and administrative expenses largely due to lower supplier provisions. Revenues for the Other Regions segment declined by 30% to $371.7 million in the quarter ended September 30, 2014, compared with the prior year, mainly as a result of the reduced volumes.
NORTH AMERICA:
North America segment operating income of $6.0 million for the six months ended September 30, 2014, decreased by $4.9 million, compared with the same period in the previous year, on reduced sales and processing volumes. The reductions were mainly due to timing, as a result of shipment orders delayed into the second half of the fiscal year, as well as the later harvesting of current crops in the United States due to this years weather conditions. Revenues for the segment declined by $60.1 million to $85.0 million on those lower volumes.
Similarly, segment operating income for the second quarter of fiscal year 2015 of $4.3 million was down $4.2 million compared with last years comparable period, on lower sales volumes in Mexico and Guatemala, mainly due to later timing of shipments and delays at the ports. Those factors were partly offset by reduced selling, general, and administrative costs, mostly on lower postretirement benefit costs. The volume reduction also influenced second quarter fiscal year 2015 revenues, which declined by 34% to $53.3 million for the segment.
OTHER TOBACCO OPERATIONS:
For the first half of fiscal year 2015, the Other Tobacco Operations segments operating income decreased by $3.6 million to $3.9 million from results for the same period last fiscal year. The dark tobacco operations saw declines primarily as a result of lower overall volumes and higher provisions on supplier advances. Those declines were partially mitigated by improved results for the oriental joint venture on better margins from product mix and the absence of the prior fiscal years currency exchanges losses from devaluation of the Turkish lira. The segment results were also impacted this fiscal year by operational startup costs incurred by our new liquid nicotine and food ingredients businesses. Selling, general, and administrative costs for the segment were lower on reduced foreign currency exchange and remeasurement losses, principally in Indonesia. Revenues for the Other Tobacco Operations segment were down about 28% to $81.3 million for the first half of fiscal year 2015, primarily attributable to the lower volumes in the dark tobacco operations.
The Other Tobacco Operations segment operating income improved by $4.3 million to $2.6 million for the quarter ended September 30, 2014, compared with the same period for the previous fiscal year. Results for the dark tobacco business improved slightly for the second fiscal quarter, as benefits from favorable comparisons to last years Indonesian foreign currency remeasurement and exchange losses were offset by lower sales volumes of wrapper tobaccos in that origin due to adverse weather conditions that reduced the availability of wrapper in the crop. Results in the fiscal quarter increased for the oriental joint venture on higher volumes, better margins from product mix, and lower selling, general and administrative costs. Revenues for the segment of $39.1 million for the second fiscal quarter were relatively flat, as the lower volumes for the dark tobacco business were offset by volume increases due to the timing of shipments of oriental tobaccos into the United States.
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OTHER ITEMS:
Cost of goods sold decreased by about 29% to $379.0 million for the second quarter, and by about 33% to $595.0 million for the first half of fiscal year 2015. The percentage reductions in both periods are comparable to the revenue reductions and reflect the lower sales volumes in the respective periods, as well as lower green leaf prices.
Selling, general, and administrative costs decreased by $11.5 million and by $8.6 million in the first half and second quarter of fiscal year 2015, respectively. In both periods, the declines were chiefly due to favorable comparisons to the previous years currency remeasurement and exchange losses, mainly in Asia and South America, lower loss provisions on advances to suppliers, and lower incentive compensation costs. Those benefits for the six-month period were partly offset by higher value-added tax valuation allowances in South America.
The consolidated effective income tax rates were approximately 24% and 29% for the quarters ended September 30, 2014 and 2013, respectively. Income taxes for the first half 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 six months ended September 30, 2014, was approximately 10%. The consolidated effective tax rate for the six-month period ended September 30, 2013, was 33%. The rates for all periods were lower than the 35% federal statutory rate because of lower effective tax rates on income from certain foreign subsidiaries. The effective tax rate for the six months ended September 30, 2013, was also lower than the federal statutory rate because of changes in exchange rates on deferred income tax assets and liabilities.
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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 November 6, 2014, 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 February 5, 2015. A taped replay of the call will be available through November 19, 2014, by dialing (855) 859-2056. The confirmation number to access the replay is 24066410.
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 September 30, | Six Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Sales and other operating revenues | $ | 464,116 | $ | 650,869 | $ | 735,588 | $ | 1,084,397 | ||||||||
Costs and expenses | ||||||||||||||||
Cost of goods sold | 379,045 | 531,557 | 594,977 | 893,617 | ||||||||||||
Selling, general and administrative expenses | 59,809 | 68,455 | 123,586 | 135,074 | ||||||||||||
Other income | (81,619 | ) | ||||||||||||||
Restructuring costs | 3,350 | 1,308 | 3,350 | 1,308 | ||||||||||||
Operating income | 21,912 | 49,549 | 13,675 | 136,017 | ||||||||||||
Equity in pretax earnings (loss) of unconsolidated affiliates | 3,317 | (1,563 | ) | 3,918 | (34 | ) | ||||||||||
Interest income | 67 | 143 | 210 | 404 | ||||||||||||
Interest expense | 4,852 | 6,160 | 8,872 | 11,466 | ||||||||||||
Income before income taxes | 20,444 | 41,969 | 8,931 | 124,921 | ||||||||||||
Income tax expense (benefit) | 4,960 | 12,139 | (7,078 | ) | 41,178 | |||||||||||
Net income | 15,484 | 29,830 | 16,009 | 83,743 | ||||||||||||
Less: net (income) loss attributable to noncontrolling interests in subsidiaries | (459 | ) | (4,386 | ) | (267 | ) | 10 | |||||||||
Net income attributable to Universal Corporation | 15,025 | 25,444 | 15,742 | 83,753 | ||||||||||||
Dividends on Universal Corporation convertible perpetual preferred stock | (3,713 | ) | (3,713 | ) | (7,425 | ) | (7,425 | ) | ||||||||
Earnings available to Universal Corporation common shareholders | $ | 11,312 | $ | 21,731 | $ | 8,317 | $ | 76,328 | ||||||||
Earnings per share attributable to Universal Corporation common shareholders: | ||||||||||||||||
Basic | $ | 0.49 | $ | 0.94 | $ | 0.36 | $ | 3.28 | ||||||||
Diluted | $ | 0.48 | $ | 0.90 | $ | 0.35 | $ | 2.95 | ||||||||
See accompanying notes.
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UNIVERSAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
September�30, | September�30, | March�31, | ||||||||||
2014 | �� | 2013 | 2014 | |||||||||
(Unaudited) | (Unaudited) | |||||||||||
ASSETS | ||||||||||||
Current assets | �� | |||||||||||
Cash and cash equivalents | $ | 29,567 | �� | $ | 74,631 | $ | 163,532 | |||||
Accounts receivable, net | 290,162 | �� | 365,777 | 468,015 | ||||||||
Advances to suppliers, net | 70,296 | �� | 62,013 | 134,621 | ||||||||
Accounts receivableunconsolidated affiliates | 98,707 | �� | 70,175 | 7,375 | ||||||||
Inventoriesat lower of cost or market: | �� | |||||||||||
Tobacco | 1,164,293 | �� | 1,037,320 | 639,812 | ||||||||
Other | 100,516 | �� | 80,651 | 67,219 | ||||||||
Prepaid income taxes | 28,138 | �� | 28,004 | 27,866 | ||||||||
Deferred income taxes | 34,560 | �� | 30,751 | 22,052 | ||||||||
Other current assets | 83,754 | �� | 130,721 | 142,755 | ||||||||
Total current assets | 1,899,993 | �� | 1,880,043 | 1,673,247 | ||||||||
Property, plant and equipment | �� | |||||||||||
Land | 17,022 | �� | 17,231 | 17,275 | ||||||||
Buildings | 239,568 | �� | 237,923 | 239,913 | ||||||||
Machinery and equipment | 577,064 | �� | 563,615 | 562,597 | ||||||||
833,654 | �� | 818,769 | 819,785 | |||||||||
Less: accumulated depreciation | (528,722 | ) | �� | (530,038 | ) | (523,239 | ) | |||||
304,932 | �� | 288,731 | 296,546 | |||||||||
Other assets | �� | |||||||||||
Goodwill and other intangibles | 99,291 | �� | 99,648 | 99,453 | ||||||||
Investments in unconsolidated affiliates | 88,841 | �� | 99,362 | 95,305 | ||||||||
Deferred income taxes | 18,861 | �� | 28,026 | 14,562 | ||||||||
Other noncurrent assets | 68,973 | �� | 87,748 | 91,794 | ||||||||
275,966 | �� | 314,784 | 301,114 | |||||||||
Total assets | $ | 2,480,891 | �� | $ | 2,483,558 | $ | 2,270,907 | |||||
See accompanying notes.
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UNIVERSAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
September�30, | September�30, | March�31, | ||||||||||
2014 | �� | 2013 | 2014 | |||||||||
(Unaudited) | �� | (Unaudited) | ||||||||||
LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||||||
Current liabilities | �� | |||||||||||
Notes payable and overdrafts | $ | 359,349 | $ | 194,266 | $ | 62,905 | ||||||
Accounts payable and accrued expenses | 154,826 | 222,226 | 212,422 | |||||||||
Accounts payableunconsolidated affiliates | 1,150 | 8 | 65 | |||||||||
Customer advances and deposits | 57,723 | 92,871 | 15,869 | |||||||||
Accrued compensation | 20,272 | 22,152 | 31,772 | |||||||||
Income taxes payable | 11,164 | 14,694 | 15,694 | |||||||||
Current portion of long-term obligations | 118,750 | 213,750 | 116,250 | |||||||||
Total current liabilities | 723,234 | �� | 759,967 | 454,977 | ||||||||
Long-term obligations | 230,000 | 173,750 | 240,000 | |||||||||
Pensions and other postretirement benefits | 74,975 | 95,098 | 85,081 | |||||||||
Other long-term liabilities | 34,567 | 35,911 | 34,457 | |||||||||
Deferred income taxes | 39,235 | 59,373 | 45,500 | |||||||||
Total liabilities | 1,102,011 | 1,124,099 | 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, 219,999 shares issued and outstanding (219,999 at September 30, 2013 and March 31, 2014) | 213,023 | �� | 213,023 | 213,023 | ||||||||
Common stock, no par value, 100,000,000 shares authorized, 23,183,259 shares issued and outstanding (23,215,946 at September 30, 2013, and 23,216,312 at March 31, 2014) | 207,552 | 202,844 | 206,446 | |||||||||
Retained earnings | 971,391 | �� | 959,242 | 993,093 | ||||||||
Accumulated other comprehensive loss | (44,001 | ) | �� | (42,505 | ) | (34,332 | ) | |||||
Total Universal Corporation shareholders' equity | 1,347,965 | �� | 1,332,604 | 1,378,230 | ||||||||
Noncontrolling interests in subsidiaries | 30,915 | 26,855 | 32,662 | |||||||||
Total shareholders' equity | 1,378,880 | 1,359,459 | 1,410,892 | |||||||||
Total liabilities and shareholders' equity | $ | 2,480,891 | �� | $ | 2,483,558 | $ | 2,270,907 | |||||
See accompanying notes.
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UNIVERSAL CORPORATION ����
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
Six Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
(Unaudited) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 16,009 | $ | 83,743 | ||||
Adjustments to reconcile net income to net cash used by operating activities: | ||||||||
Depreciation | 17,298 | 20,034 | ||||||
Amortization | 816 | 835 | ||||||
Net provision for losses (recoveries) on advances and guaranteed loans to suppliers | (2,497 | ) | 3,556 | |||||
Foreign currency remeasurement loss (gain), net | 7,156 | 7,009 | ||||||
Gain on favorable outcome of excise tax case in Brazil | (81,619 | ) | ||||||
Restructuring costs | 3,350 | 1,308 | ||||||
Other, net | (9,470 | ) | 2,421 | |||||
Changes in operating assets and liabilities, net | (386,404 | ) | (344,433 | ) | ||||
Net cash used by operating activities | (353,742 | ) | (307,146 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property, plant and equipment | (30,571 | ) | (19,772 | ) | ||||
Proceeds from sale of property, plant and equipment | 983 | 334 | ||||||
Net cash used by investing activities | (29,588 | ) | (19,438 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Issuance (repayment) of short-term debt, net | 297,507 | 85,150 | ||||||
Repayment of long-term obligations | (7,500 | ) | (5,000 | ) | ||||
Dividends paid to noncontrolling interests | (1,977 | ) | (1,884 | ) | ||||
Issuance of common stock | 187 | 457 | ||||||
Repurchase of common stock | (7,202 | ) | (14,145 | ) | ||||
Dividends paid on convertible perpetual preferred stock | (7,425 | ) | (7,425 | ) | ||||
Dividends paid on common stock | (23,661 | ) | (23,272 | ) | ||||
Net cash provided by financing activities | 249,929 | 33,881 | ||||||
Effect of exchange rate changes on cash | (564 | ) | (530 | ) | ||||
Net decrease in cash and cash equivalents | (133,965 | ) | (293,233 | ) | ||||
Cash and cash equivalents at beginning of year | 163,532 | 367,864 | ||||||
Cash and cash equivalents at end of period | $ | 29,567 | $ | 74,631 | ||||
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.
NOTE 2.���EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
(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 | $ | 15,025 | $ | 25,444 | $ | 15,742 | $ | 83,753 | ||||||||
Less: Dividends on convertible perpetual preferred stock | (3,713 | ) | (3,713 | ) | (7,425 | ) | (7,425 | ) | ||||||||
Earnings available to Universal Corporation common shareholders for calculation of basic earnings per share | $ | 11,312 | $ | 21,731 | $ | 8,317 | $ | 76,328 | ||||||||
�Denominator for basic earnings per share | ||||||||||||||||
Weighted average shares outstanding | 23,178,082 | 23,207,043 | 23,200,589 | 23,261,604 | ||||||||||||
�Basic earnings per share | $ | 0.49 | $ | 0.94 | $ | 0.36 | $ | 3.28 | ||||||||
Diluted Earnings Per Share | ||||||||||||||||
Numerator for diluted earnings per share | ||||||||||||||||
Earnings available to Universal Corporation common shareholders | $ | 11,312 | $ | 21,731 | $ | 8,317 | $ | 76,328 | ||||||||
Add: Dividends on convertible perpetual preferred stock (if conversion assumed) | 3,713 | 7,425 | ||||||||||||||
Earnings available to Universal Corporation common shareholders for calculation of diluted earnings per share | $ | 11,312 | $ | 25,444 | $ | 8,317 | $ | 83,753 | ||||||||
Denominator for diluted earnings per share | ||||||||||||||||
Weighted average shares outstanding | 23,178,082 | 23,207,043 | 23,200,589 | 23,261,604 | ||||||||||||
Effect of dilutive securities (if conversion or exercise assumed) | ||||||||||||||||
Convertible perpetual preferred stock | 4,818,160 | 4,815,235 | ||||||||||||||
Employee share-based awards | 330,345 | 311,342 | 320,982 | 323,827 | ||||||||||||
Denominator for diluted earnings per share | 23,508,427 | 28,336,545 | 23,521,571 | 28,400,666 | ||||||||||||
Diluted earnings per share | $ | 0.48 | $ | 0.90 | $ | 0.35 | $ | 2.95 | ||||||||
-- M O R E --
Universal Corporation
Page 11
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 September 30, | Six Months Ended September 30, | |||||||||||||||
(in thousands of dollars) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
SALES AND OTHER OPERATING REVENUES | ||||||||||||||||
Flue-cured and burley leaf tobacco operations: | ||||||||||||||||
North America | $ | 53,308 | ��� | $ | 80,967 | ��� | $ | 85,006 | ��� | $ | 145,118 | |||||
Other regions�(1) | 371,669 | ��� | 530,610 | ��� | 569,241 | ��� | 826,870 | |||||||||
Subtotal | 424,977 | 611,577 | 654,247 | 971,988 | ||||||||||||
Other tobacco operations�(2) | 39,139 | ��� | 39,292 | ��� | 81,341 | ��� | 112,409 | |||||||||
Consolidated sales and other operating revenues | $ | 464,116 | $ | 650,869 | $ | 735,588 | $ | 1,084,397 | ||||||||
OPERATING INCOME | ||||||||||||||||
Flue-cured and burley leaf tobacco operations: | ||||||||||||||||
North America | $ | 4,278 | ��� | $ | 8,539 | ��� | $ | 5,957 | ��� | $ | 10,894 | |||||
Other regions�(1) | 21,661 | ��� | 42,454 | ��� | 11,086 | ��� | 37,270 | |||||||||
Subtotal | 25,939 | 50,993 | 17,043 | 48,164 | ||||||||||||
Other tobacco operations�(2) | 2,640 | ��� | (1,699 | ) | ��� | 3,900 | ��� | 7,508 | ||||||||
Segment operating income | 28,579 | 49,294 | 20,943 | 55,672 | ||||||||||||
Deduct: Equity in pretax loss (earnings) of unconsolidated affiliates (3) | (3,317 | ) | 1,563 | (3,918 | ) | 34 | ||||||||||
Restructuring costs (4) | (3,350 | ) | (1,308 | ) | (3,350 | ) | (1,308 | ) | ||||||||
Add: Other income (5) | 81,619 | |||||||||||||||
Consolidated operating income | $ | 21,912 | $ | 49,549 | $ | 13,675 | $ | 136,017 | ||||||||
(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. |
###
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: | 9:15 a.m. ET |
Phone: (804) 359-9311 | |||
Fax: (804) 254-3584 | |||
Email: [email protected] | |||
Universal Corporation Announces Agreement with Philip Morris International Inc. to Supply U.S. Tobaccos
Richmond, VA " November 5, 2014 / PRNEWSWIRE
George C. Freeman, III, Chairman, President and Chief Executive Officer of Universal Corporation (NYSE: UVV) ( Universal ), announced today that the Companys subsidiary, Universal Leaf North America U.S., Inc. ( ULNA ) will increase its direct purchases of flue-cured and burley tobaccos, expanding its support of United States tobacco growers, as part of a new leaf supply agreement with Philip Morris International Inc. ( PMI ). PMIs decision to adopt a new leaf buying model for their U.S. leaf purchasing operations, announced separately today, provides for a transition from a direct farmer contracting model to purchasing processed grades of tobaccos through two global leaf suppliers in the United States. The transition is expected to provide important supply chain efficiencies and is indicative of PMIs and Universals strong commitment to the grower communities and PMIs intent to remain a major purchaser of U.S.-grown leaf tobacco. The change will be effective for the 2015 crop and will include the assignment of certain grower contracts and use of receiving station operations.
Mr. Freeman stated, We are very excited about this opportunity to meet the evolving needs of one of our longstanding global business partners, while broadening our leaf purchasing and grower support activities in the United States. As the global leader in the supply of leaf tobacco, we are well positioned to continue our support of Good Agricultural Practices, and are committed to the expansion of the Agricultural Labor Practices code ( ALP ) across our full U.S. grower base. ALP is designed to further our corporate goals and the goals of our customers of progressively addressing and eliminating concerns found in agriculture with child and other labor issues, and achieving safe and fair working conditions on all farms from which we source tobacco.
Clayton G. Frazier, President of ULNA, added, The expansion of direct contracting by Universal will provide procurement synergies and economies of scale and will promote efficient leaf utilization of packed grades of U.S. tobaccos supplied to PMI and our other customers. In addition, we look forward to expanding our relationships and services to further strengthen our grower communities. These positive developments, in conjunction with our recently announced entry into the sweet potato juicing and dehydration business, Carolina Innovative Food Ingredients, Inc., illustrate the continued strong commitment of Universal
to tobacco growers in the United States. The production of sweet potatoes provides many tobacco farmers with an important and economically viable crop grown in rotation with tobacco.
�
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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