FISCAL YEAR 2009 HIGHLIGHTS
-- Diluted earnings per share up 17%, to
share last year.
-- Revenues up 19% to
-- Operating income up 10% to
currency losses this year.
-- Restructuring costs last year of
FISCAL YEAR 2009 FOURTH QUARTER HIGHLIGHTS
-- Diluted earnings per share more than doubled to
-- Revenues up 21% to
-- Operating income nearly triples to
-- Restructuring costs last year of 9.6 million.
For the fourth fiscal quarter, net income was
The leaf cost increases seen in most regions during fiscal year 2009 were related to increased farmer pricing earlier in the year when crops were purchased and reflected competition from commodity crops and higher prices for fertilizer and other agronomic input materials. Those cost increases contributed to higher customer pricing. Universal also experienced significant remeasurement losses related to the rapid strengthening of the U.S. dollar compared to most currencies in tobacco sourcing markets, especially in
Mr. Freeman noted, "We are extremely pleased with the results of our operations this year. Setting aside significant currency effects, we produced improved results in almost every operation of our business. It was gratifying to see the improvements in our African results after several long, lean years while we worked to wind down our unprofitable growing projects. Teamwork and execution by our African management team and their counterparts in our corporate organization have been impressive. The currency effects in this extraordinary economic climate were dramatic, as the U.S. dollar strengthened by 44% over a six-month period against the local currency in
"Looking ahead, we have several observations and initiatives. In our major origins, we project somewhat smaller crops to be marketed in
FLUE-CURED AND BURLEY LEAF TOBACCO OPERATIONS:
For the fiscal year ended
For the fourth fiscal quarter, segment operating income for our flue-cured and burley tobacco operations increased by nearly 19% to
OTHER TOBACCO OPERATIONS:
In the Other Tobacco Operations segment, fiscal year 2009 operating income was
Interest income for the year decreased by
The consolidated effective income tax rates for the three and twelve months ended
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; 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
UNIVERSAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands of dollars, except per share data) Three Months Ended Fiscal Year Ended March 31, March 31, 2009 2008 2009 2008 (Unaudited) (Unaudited) Sales and other operating revenues $563,638 $467,181 $2,554,659 $2,145,822 Costs and expenses Cost of goods sold 468,442 390,972 2,035,318 1,715,724 Selling, general and administrative expenses 72,058 60,125 309,409 225,670 Restructuring - 9,611 - 12,915 Operating income 23,138 6,473 209,932 191,513 Equity in pretax earnings of unconsolidated affiliates 7,751 6,269 20,543 13,500 Interest income 743 3,861 2,305 17,178 Interest expense 6,417 9,634 35,631 41,908 Income before income taxes and other items 25,215 6,969 197,149 180,283 Income taxes 12,554 862 64,588 63,799 Minority interests, net of income taxes (3,101) (3,791) 822 (2,817) Income from continuing operations 15,762 9,898 131,739 119,301 Loss from discontinued operations, net of income taxes - - - (145) Net income 15,762 9,898 131,739 119,156 Dividends on convertible perpetual preferred stock (3,713) (3,713) (14,850) (14,850) Earnings available to common shareholders $12,049 $6,185 $116,889 $104,306 Earnings (loss) per common share: Basic: From continuing operations $0.48 $0.23 $4.57 $3.83 From discontinued operations - - - (0.01) Net income $0.48 $0.23 $4.57 $3.82 Diluted: From continuing operations $0.48 $0.23 $4.32 $3.71 From discontinued operations - - - (0.01) Net income $0.48 $0.23 $4.32 $3.70 See accompanying notes. UNIVERSAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands of dollars) March 31, March 31, 2009 2008 (Unaudited) ASSETS Current assets Cash and cash equivalents $212,626 $186,070 Short-term investments - 58,889 Accounts receivable, net 263,383 231,107 Advances to suppliers, net 214,282 202,025 Accounts receivable - unconsolidated affiliates 20,371 43,718 Inventories - at lower of cost or market: Tobacco 586,136 602,945 Other 60,712 42,562 Prepaid income taxes 13,181 17,696 Deferred income taxes 68,264 22,737 Other current assets 64,964 61,960 Total current assets 1,503,919 1,469,709 Property, plant and equipment Land 15,773 16,460 Buildings 251,875 254,737 Machinery and equipment 492,214 519,695 759,862 790,892 Less accumulated depreciation (447,575) (456,059) 312,287 334,833 Other assets Goodwill and other intangibles 106,097 106,647 Investments in unconsolidated affiliates 103,987 116,185 Deferred income taxes 17,376 49,632 Other noncurrent assets 94,510 109,755 321,970 382,219 Total assets $2,138,176 $2,186,761 See accompanying notes. UNIVERSAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands of dollars) March 31, March 31, 2009 2008 (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable and overdrafts $168,608 $126,229 Accounts payable and accrued expenses 236,837 249,005 Accounts payable - unconsolidated affiliates 19,191 10,343 Customer advances and deposits 14,162 21,030 Accrued compensation 24,710 25,484 Income taxes payable 6,867 8,886 Current portion of long-term obligations 79,500 - Total current liabilities 549,875 440,977 Long-term obligations 331,808 402,942 Pensions and other postretirement benefits 91,248 88,278 Other long-term liabilities 79,159 98,956 Deferred income taxes 52,842 36,795 Total liabilities 1,104,932 1,067,948 Minority interests 3,771 3,182 Shareholders' equity Series B 6.75% Convertible Perpetual Preferred Stock, no par value, 5,000,000 shares authorized, 219,999 shares issued and outstanding (219,999 at March 31, 2008) 213,023 213,023 Common stock, no par value, 100,000,000 shares authorized, 24,999,127 shares issued and outstanding (27,162,150 at March 31, 2008) 194,037 206,436 Retained earnings 686,960 711,655 Accumulated other comprehensive loss (64,547) (15,483) Total shareholders' equity 1,029,473 1,115,631 Total liabilities and shareholders' equity
$2,138,176 $2,186,761 See accompanying notes. UNIVERSAL CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands of dollars) Fiscal Year Ended March 31, 2009 2008 (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES OF CONTINUING OPERATIONS: Net income $131,739 $119,156 Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: Net loss from discontinued operations - 145 Depreciation 40,761 41,383 Amortization 1,029 1,857 Provisions for losses on advances and guaranteed loans to suppliers 26,908 22,323 Currency remeasurement (gain) loss, net 45,987 (15,168) Restructuring costs - 12,915 Other, net 22,896 22,761 Changes in operating assets and liabilities, net (170,254) (114,800) Net cash provided by operating activities of continuing operations 99,066 90,572 CASH FLOWS FROM INVESTING ACTIVITIES OF CONTINUING OPERATIONS: Purchase of property, plant and equipment (35,656) (27,704) Purchase of short-term investments (9,658) (58,889) Maturities and sales of short-term investments 68,848 - Proceeds from sale of businesses, less cash of businesses sold - 26,556 Proceeds from sale of property, plant, and equipment 15,084 23,206 Other, net 3,500 12,846 Net cash provided (used) by investing activities of continuing operations 42,118 (23,985) CASH FLOWS FROM FINANCING ACTIVITIES OF CONTINUING OPERATIONS: Issuance (repayment) of short-term debt, net 59,934 (19,957) Repayment of long-term debt - (164,000) Issuance of common stock 37 24,372 Repurchase of common stock (111,073) (16,700) Dividends paid on convertible perpetual preferred stock (14,850) (14,850) Dividends paid on common stock (45,938) (48,602) Other (104) (981) Net cash used by financing activities of continuing operations (111,994) (240,718) Net cash provided (used) by continuing operations 29,190 (174,131) CASH FLOWS FROM DISCONTINUED OPERATIONS: Net cash provided by operating activities of discontinued operations - 6,495 Net cash used by investing activities of discontinued operations - (17) Net cash used by financing activities of discontinued operations - (4,957) Net cash provided by discontinued operations - 1,521 Effect of exchange rate changes on cash (2,634) 205 Net increase (decrease) in cash and cash equivalents 26,556 (172,405) Cash and cash equivalents of continuing operations at beginning of year 186,070 358,236 Cash and cash equivalents of discontinued operations at beginning of year - 239 Less: Cash and cash equivalents of discontinued operations at end of year - - Cash and cash equivalents at end of year $212,626 $186,070 See accompanying notes. NOTE 1. BASIS OF PRESENTATION
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. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended
NOTE 2. GUARANTEES AND OTHER CONTINGENT LIABILITIES
Guarantees of bank loans to growers for crop financing and construction of curing barns or other tobacco producing assets are industry practice in
Various subsidiaries of the Company are involved in litigation incidental to their business activities. While the outcome of these matters cannot be predicted with certainty, management is vigorously defending the claims and does not currently expect that any of them will have a material adverse effect on the Company's financial position. However, should one or more of these matters be resolved in a manner adverse to management's current expectation, the effect on the Company's results of operations for a particular fiscal reporting period could be material.
NOTE 3. EARNINGS PER SHARE
The following table sets forth the computation of earnings per share for the three months and fiscal years ended
Three Months Ended Fiscal Year Ended March 31, March 31, 2009 2008 2009 2008 (In thousands, except per share data) Basic Earnings Per Share ------------------------ Numerator for basic earnings (loss) per share From continuing operations: Income from continuing operations $15,762 $9,898 $131,739 $119,301 Less: Dividends on convertible perpetual preferred stock (3,713) (3,713) (14,850) (14,850) Earnings available to common shareholders from continuing operations 12,049 6,185 116,889 104,451 From discontinued operations: Loss available to common shareholders from discontinued operations - - - (145) Net income available to common shareholders $12,049 $6,185 $116,889 $104,306 Denominator for basic earnings (loss) per share Weighted average shares outstanding 24,991 27,196 25,570 27,263 Basic earnings (loss) per share: From continuing operations $0.48 $0.23 $4.57 $3.83 From discontinued operations - - - (0.01) Net income per share $0.48 $0.23 $4.57 $3.82 Diluted Earnings Per Share -------------------------- Numerator for diluted earnings (loss) per share From continuing operations: Earnings available to common shareholders from continuing operations $12,049 $6,185 $116,889 $104,451 Add: Dividends on convertible perpetual preferred stock (if conversion assumed) - - 14,850 14,850 Earnings available to common shareholders from continuing operations for calculation of diluted earnings per share 12,049 6,185 131,739 119,301 From discontinued operations: Loss available to common shareholders from discontinued operations - - - (145) Net income available to common shareholders $12,049 $6,185 $131,739 $119,156 Denominator for diluted earnings (loss) per share: Weighted average shares outstanding 24,991 27,196 25,570 27,263 Effect of dilutive securities (if conversion or exercise assumed) Convertible perpetual preferred stock - - 4,718 4,711 Employee share-based awards 122 204 178 212 Denominator for diluted earnings (loss) per share 25,113 27,400 30,466 32,186 Diluted earnings (loss) per share: From continuing operations $0.48 $0.23 $4.32 $3.71 From discontinued operations - - - (0.01) Net income per share $0.48 $0.23 $4.32 $3.70 NOTE 4. SEGMENT INFORMATION
The principal approach used by management to evaluate the Company's performance is by geographic region, although some components of the business are 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 pretax earnings of unconsolidated affiliates.
Operating results for the Company's reportable segments for each period presented in the consolidated statements of income were as follows:
Three Months Ended Fiscal Year Ended March 31, March 31, 2009 2008 2009 2008 (in thousands of dollars) SALES AND OTHER OPERATING REVENUES Flue-cured and burley leaf tobacco operations: North America $152,627 $114,166 $416,899 $336,170 Other regions(1) 278,131 238,956 1,848,430 1,485,304 Subtotal 430,758 353,122 2,265,329 1,821,474 Other tobacco operations(2) 132,880 114,059 289,330 324,348 Consolidated sales and other operating revenues $563,638 $467,181 $2,554,659 $2,145,822 OPERATING INCOME (LOSS) Flue-cured and burley leaf tobacco operations: North America $20,792 $16,015 $48,010 $34,379 Other regions(1) (6,909) (4,339) 140,476 143,589 Subtotal 13,883 11,676 188,486 177,968 Other tobacco operations(2) 17,006 10,677 41,989 39,960 Segment operating income 30,889 22,353 230,475 217,928 Less: Equity in pretax earnings of unconsolidated affiliates(3) 7,751 6,269 20,543 13,500 Restructuring and impairment costs(4) - 9,611 - 12,915 Consolidated operating income $23,138 $6,473 $209,932 $191,513 (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. Oriental does not contribute significantly to the reported amounts for sales and other operating revenues because its financial results consist principally of equity in the pretax earnings of an unconsolidated affiliate. (3) Item is included in segment operating income, but not included in consolidated operating income. (4) Item is not included in segment operating income, but is included in consolidated operating income.
Web Site: http://www.universalcorp.com (UVV)