Press Release
<< Back
Universal Corporation Reports Strong First Quarter Earnings
RICHMOND, Va.,
HIGHLIGHTS
Diluted earnings per share increased to
Revenues up 22% to
Operating income up 83% to
Mr. Freeman stated, "We are very pleased with our performance during the first quarter. Each of our operations performed as we had expected or better. Earlier shipments of Brazilian and European tobacco boosted our results, and leaf costs were lower due to the stronger U.S. dollar. Looking at the current worldwide situation, we see the U.S. dollar beginning to weaken again, which could increase costs as we enter the next purchasing season. We will be monitoring these factors as the year progresses, and we will be working to control our costs.
"We do not foresee any oversupply of flue-cured tobacco in the coming year. Global burley availability improved after the shortage of filler style crops two years ago, and there is a large crop again this year. So it is likely that we will see some oversupply of burley. Worldwide dealer inventories for flue-cured and burley tobacco are about 70 million kilos compared to about 80 million kilos last year.
"
"Two Board members are retiring after long service to the Company:
FLUE-CURED AND BURLEY LEAF TOBACCO OPERATIONS:
Operating income for our flue-cured and burley tobacco operations increased by 85% to
OTHER TOBACCO OPERATIONS:
The Other Tobacco Operations segment performed well as the oriental tobacco joint venture results improved, mainly due to a more favorable sales mix as well as to certain cost containment measures. Dark tobacco results also improved on better product mix although volumes declined. During the last quarter of fiscal year 2009, customers had purchased leaf earlier than usual in anticipation of the enactment of U.S. excise tax increases, and thus volumes were lower this year. Despite the lower volumes, dark tobacco revenues, which are the predominant factor in segment revenues, increased due to higher prices caused by increased leaf costs during last year's purchasing season and a more favorable product mix.
OTHER ITEMS:
Cost of sales increased by 18% to
Additional information
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
At
Headquartered in
UNIVERSAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of dollars, except per share data)
Three Months Ended
June 30,
2009 2008
(Unaudited)
Sales and other operating revenues $616,112 $506,287
Costs and expenses
Cost of goods sold 476,748 403,253
Selling, general and administrative
expenses 69,592 64,847
Operating income 69,772 38,187
Equity in pretax earnings (loss) of
unconsolidated affiliates 3,641 (50)
Interest income 565 950
Interest expense 8,155 7,666
Income before income taxes and other items 65,823 31,421
Income taxes 22,019 10,281
Net income 43,804 21,140
Less: net income attributable to
noncontrolling interests in subsidiaries (59) (29)
Net income attributable to Universal Corporation 43,745 21,111
Dividends on
NOTE 1. BASIS OF PRESENTATION
NOTE 2. ACCOUNTING PRONOUNCEMENTS
Effective
NOTE 3. 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 other litigation and tax examinations 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 4. EARNINGS PER SHARE
The following table sets forth the computation of earnings per share for the periods presented in the consolidated statements of income.
Three Months Ended
June 30,
(in thousands, except per share data) 2009 2008
Basic Earnings Per Share
Numerator for basic earnings per share
Net income attributable to Universal Corporation $43,745 $21,111
Less: Dividends on convertible perpetual
preferred stock (3,712) (3,712)
Earnings available to
For the three months ended
NOTE 5. 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
June 30,
(in thousands of dollars) 2009 2008
SALES AND OTHER OPERATING REVENUES
Flue-cured and burley leaf tobacco operations:
North America $36,132 $48,427
Other regions (1) 521,172 401,485
Subtotal 557,304 449,912
Other tobacco operations (2) 58,808 56,375
Consolidated sales and other operating revenues $616,112 $506,287
OPERATING INCOME (LOSS)
Flue-cured and burley leaf tobacco operations:
North America $306 $(426)
Other regions (1) 63,909 35,185
Subtotal 64,215 34,759
Other tobacco operations (2) 9,198 3,378
Segment operating income 73,413 38,137
Less:
Equity in pretax earnings (loss) of
unconsolidated affiliates (3) 3,641 (50)
Consolidated operating income $69,772 $38,187
(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) Item is included in segment operating income, but not included in
consolidated operating income.
SOURCEUniversal Corporation
CONTACT:Karen M. L. Whelan of Universal Corporation, +1-804-359-9311, or fax: +1-804-254-3584, investor@universalleaf.com/ Web Site: http://www.universalcorp.com /