Universal Corporation
UNIVERSAL CORP /VA/ (Form: 8-K, Received: 11/07/2017 16:20:39)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________________

FORM 8-K
____________________________________________

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 7, 2017
____________________________________________

UNIVERSAL CORPORATION
(Exact name of registrant as specified in its charter)
____________________________________________


Virginia
 
001-00652
 
54-0414210
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
 
 
9201 Forest Hill Avenue, Richmond, Virginia
 
 
 
23235
(Address of principal executive offices)
 
 
 
(Zip Code)

Registrant’s telephone number, including area code
(804) 359-9311

Not applicable
(Former name or former address, if changed since last report)
____________________________________________


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company      ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.              ¨






Item 2.02.
Results of Operations and Financial Condition.

Universal Corporation (the “Company”) issued a press release on November 7, 2017 , discussing its results for the quarter ended September 30, 2017 . The press release is attached as Exhibit 99.1 and is incorporated by reference into this Item 2.02.

Item 8.01.
Other Events.

On November 7, 2017 , the Company issued a press release announcing a quarterly dividend for the Company’s common stock and the approval of a share repurchase program. The press release is attached as Exhibit 99.2 and is incorporated by reference into this Item 8.01.





Item 9.01.
Financial Statements and Exhibits.

(d)
Exhibits
 
 
 
 
 
 
 
No.
 
Description
 
 
 
 
 
99.1
 
 
 
 
 
 
99.2
 







SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
UNIVERSAL CORPORATION
 
 
(Registrant)
 
 
 
 
 
Date:
November 7, 2017
By:
/s/ Preston D. Wigner
 
 
 
 
Preston D. Wigner
 
 
 
 
Vice President, General Counsel, and Secretary








Exhibit Index
Exhibit
 
 
Number
 
Document
 
 
 
99.1
 
 
 
 
99.2
 




Exhibit 99.1
UNIVERSALCORPBLUEA05.JPG
P.O. Box 25099 ~ Richmond, VA 23260 ~ Phone: (804) 359-9311 ~ Fax: (804) 254-3584
______________________________________________________________________________________________________
P R E S S R E L E A S E
CONTACT:
Candace C. Formacek
RELEASE:
4:15 p.m. ET
 
Phone: (804) 359-9311
 
 
 
Fax: (804) 254-3584
 
 
 
Email: investor@universalleaf.com
 
 
Universal Corporation Reports Improved Six-Month Results
Richmond, VA November 7, 2017 / PRNEWSWIRE
___________________________________________________________________________________

George C. Freeman, III, Chairman, President, and Chief Executive Officer of Universal Corporation (NYSE:UVV), reported that net income for the six months ended September 30, 2017, was $29.7 million, or $1.16 per diluted share, compared with $19.8 million, or $0.54 per diluted share for the same period of the prior fiscal year.  Operating income for the six months ended September 30, 2017, of $51.5 million, increased by $16.2 million compared to the first half of the prior fiscal year.  For the second fiscal quarter ended September 30, 2017, net income was $26.2 million, or $1.02 per diluted share, compared with net income for the prior year’s second quarter of $25.3 million, or $0.90 per diluted share. Operating income for the second quarter of fiscal year 2018 increased to $45.0 million from $43.3 million for the three months ended September 30, 2016. Segment operating income, which excludes the restructuring and impairment costs mentioned in Other Items below, was $51.8 million for the first half of fiscal year 2018, an increase of $11.6 million, and for the quarter ended September 30, 2017, was $45.6 million, a decrease of $2.6 million, both compared to the same periods last fiscal year.  Results in both periods reflected earnings improvements in the Other Regions segment coupled with declines in the North America and the Other Tobacco Operations segments. Consolidated revenues increased by $20.5 million to $772.9 million for the first half of fiscal year 2018, and by $31.3 million to $488.2 million for the three months ended September 30, 2017, compared to the same periods in the prior year. Those increases were primarily a result of slightly higher sales volumes, as well as higher processing and other revenues. Revenues for the six months ended September 30, 2017, also included benefits from the timing of receipt of dividend income from unconsolidated subsidiaries in the first fiscal quarter of 2018.

Mr. Freeman stated, “Our results for the six months ended September 30, 2017, were in line with our expectations and reflected slightly higher total sales volumes and lower selling, general, and administrative

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Universal Corporation
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costs. In our second fiscal quarter, we continued to see the benefits of higher current crop sales and processing volumes and lower factory unit costs from the recovery in leaf production volumes this year in Brazil.
  
“As expected, the recovery of Brazilian crop levels and some earlier shipment timing in certain regions increased our working capital needs in the first half of this fiscal year, modestly increasing our seasonal borrowing requirements. This shift, as well as the funds utilized in the fourth fiscal quarter of 2017 to redeem the remaining shares of our preferred stock, reduced our cash reserves to our more typical mid-year seasonal levels.  Despite those requirements, we have continued to maintain our strong balance sheet as evidenced by a credit ratings upgrade announced in October 2017 by S&P Global Ratings. Our uncommitted inventories have been prudently managed, remaining within our target range at 14% for the end of the second fiscal quarter.
 
“Looking to the second half of our current fiscal year, the reduced burley leaf production volumes in Africa will impact our total volumes sold for that region, which mainly ship in the third and fourth fiscal quarters. Less African burley leaf was grown this fiscal year due to excess production and low grower prices in fiscal year 2017 and unfavorable weather conditions this fiscal year. Although we still expect our total shipments to be weighted to the second half of the fiscal year, we currently anticipate modestly lower total lamina sales volumes for fiscal year 2018. We are estimating that this fiscal year’s global burley production declines will recover in next year’s crop.

“Despite supply constraints in certain important origins over the last two fiscal years, we have been pleased with additional business opportunities that we have gained from our customers. We believe that we have increased our market share and that we continue to bring efficiencies to the leaf tobacco supply chain while meeting our customers’ current and evolving product needs.
    
“We also remain focused on providing value to our shareholders. During the first half of fiscal 2018 we have returned nearly $40.0 million to our shareholders in dividends and common stock repurchases and are pleased today to have announced an annual dividend increase for the 47 th consecutive year.”

FLUE-CURED AND BURLEY LEAF TOBACCO OPERATIONS:
OTHER REGIONS:

Operating income for the Other Regions segment improved by $26.3 million to $41.6 million for the first half of fiscal year 2018, compared to the first half of the prior fiscal year. The improvements were driven by a combination of higher sales volumes, processing and other revenues, and lower selling, general, and administrative expenses. In South America, total volumes declined slightly given larger sales volumes of carryover crops in fiscal year 2017’s first six months, but earnings were lifted by increased sales and processing volumes and better factory unit costs on higher current year crop volumes. In Africa, volumes for the first half of the fiscal year were slightly higher on earlier shipment timing in some origins. Europe region results improved on stronger sales, due in part to earlier shipment timing, and a gain on the sale of a former processing facility in Hungary, while Asia results benefited from an increase in trading volumes in some origins. Selling, general, and administrative costs for the segment were lower for the six-month period, largely from net foreign currency remeasurement gains in the first quarter of fiscal year 2018, compared with losses in the first quarter of the prior year, mainly in Africa. That benefit was partially offset by unfavorable comparisons to the reversal of value-added tax reserves in the second quarter of fiscal year 2017.

Segment operating income for the Other Regions segment for the quarter ended September 30, 2017, increased by $5.2 million to $37.5 million, compared with the second quarter of fiscal year 2017. Although segment sales volumes were higher for the quarter, results were hampered by higher selling, general, and

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Universal Corporation
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administrative costs. Revenues for the Other Regions segment for the six months and quarter ended September 30, 2017, were up by $69.0 million to $565.6 million and by $62.6 million to $381.2 million, respectively, compared with the same periods in the prior year. Those results reflected higher sales volumes at slightly higher overall green leaf prices, as well as increased processing and other revenues.

NORTH AMERICA:
North America segment operating income of $10.3 million for the six months, and $7.9 million for the quarter ended September 30, 2017, was down by $10.1 million and $5.6 million, respectively, compared with the same periods in the previous year. The declines in both periods were driven by lower sales volumes shipped during the first half of fiscal year 2018. Volume comparisons in the United States were primarily impacted by large prior crop carryover sales last year, while offshore origin results were affected by lower volumes from later shipment timing in the current fiscal year and less favorable margins. Those declines were partly mitigated by reduced selling, general and administrative costs, mainly from lower incentive compensation accruals. Segment revenues were also down, by $41.5 million to $112.0 million for the first half, and by $22.1 million to $58.7 million for the second quarter of fiscal year 2018, compared with the same periods in the prior fiscal year, on those lower volumes at lower average green leaf prices.

OTHER TOBACCO OPERATIONS:
The Other Tobacco Operations segment operating loss of $0.1 million for the six months and segment operating income of $0.2 million for the three months ended September 30, 2017, declined by $4.5 million and $2.2 million, respectively, compared with the same periods last fiscal year. In both periods, earnings were lower for the dark tobacco operations largely due to negative currency remeasurement variances, a value-added tax charge, and an unfavorable product mix in Indonesia due to a lack of wrapper tobacco availability. Earnings improvements for the oriental joint venture in the quarter and six months ended September 30, 2017, on increased volumes, were more than offset by declines due to delays in the delivery of shipments of oriental tobaccos into the United States. Operating results for the Special Services group were up slightly for both the first half and second fiscal quarter of fiscal year 2018 compared with fiscal year 2017. Selling, general, and administrative costs for the segment were higher for both the first half and second fiscal quarter of fiscal year 2018 compared with fiscal year 2017 principally on negative currency remeasurement variances and a value-added tax charge. Revenues for the Other Tobacco Operations segment decreased by $7.1 million to $95.3 million for the first half, and by $9.2 million to $48.4 million for the second quarter of fiscal year 2018, mainly due to lower sales volumes from the timing of shipments of oriental tobaccos into the United States, compared to the same periods in the prior year.

OTHER ITEMS:
Cost of goods sold increased by about 2% to $625.9 million for the first half, and by about 7% to $395.2 million for the second quarter of fiscal year 2018 compared with the same periods in fiscal year 2017. For both periods, the increase reflected modestly higher leaf sales volumes. Selling, general, and administrative costs decreased by $5.6 million in the six months ended September 30, 2017, compared to the six months ended September 30, 2016. The decrease was largely driven by net foreign currency remeasurement and exchange gains in the current fiscal period compared with losses incurred in the prior fiscal year comparable period, mainly in Africa and the Philippines, partially offset by the absence of the reversal in the second quarter of fiscal year 2017 of value-added tax reserves. Selling, general, and administrative costs were up $7.3 million in the three months ended September 30, 2017, compared to the prior year on the absence of the reversal of value-added tax reserves.

The consolidated effective tax rates for the quarter and six-month periods ended September 30, 2017, were approximately 33% and 30%, respectively. Income taxes for the first half of fiscal year 2018 were lower than the 35% federal statutory rate because of the effect of exchange rate changes on deferred tax

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assets and liabilities of foreign subsidiaries, as well as additional non-recurring discrete tax adjustments for both the quarter and six months that reduced consolidated tax expense by about $2.0 million for the six-month period. Without these items, the effective tax rates for the second quarter and first six months of fiscal 2018 would be comparable to those of the prior year. The consolidated effective income tax rates were approximately 35% and 34% for the quarter and six months ended September 30, 2016, respectively, which approximate the U.S. statutory rate.

Results for the second fiscal quarter and six months ended September 30, 2016, included restructuring and impairment costs of $3.7 million ($0.09 per diluted share for the quarter or $0.10 for the six months).




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Universal Corporation
Page 5

Additional information

Amounts included in the previous discussion are attributable to Universal Corporation and exclude earnings related to non-controlling interests in subsidiaries. In addition, the total for segment operating income (loss) referred to in this discussion is a non-GAAP measure. This measure is not a financial measure calculated in accordance with GAAP and should not be considered as a substitute for net income (loss), operating income (loss), cash from operating activities or any other operating performance measure calculated in accordance with GAAP, and it may not be comparable to similarly titled measures reported by other companies. A reconciliation of the total for segment operating income (loss) to consolidated operating income (loss) is provided in Note 3. Segment Information, included in this earnings release. The Company evaluates its segment performance excluding certain significant charges or credits. The Company believes this measure, which excludes items that it believes are not indicative of its core operating results, provides investors with important information that is useful in understanding its business results and trends.

This 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, including the impact of regulations on tobacco products; product taxation; industry consolidation and evolution; changes in global supply and demand positions for tobacco products; 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, 2017, 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, 2017.

At 5:00 p.m. (Eastern Time) on November 7, 2017, 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, 2018. A taped replay of the call will be available through November 20, 2017, by dialing (855) 859-2056. The confirmation number to access the replay is 5697004.

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, 2017, were $2.1 billion. For more information on Universal Corporation, visit its website at www.universalcorp.com.




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Universal Corporation
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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,
 
 
2017
 
2016
 
2017
 
2016
 
 
(Unaudited)
 
(Unaudited)
Sales and other operating revenues
 
$
488,248

 
$
456,942

 
$
772,870

 
$
752,417

Costs and expenses
 
 
 
 
 
 
 
 
Cost of goods sold
 
395,172

 
369,098

 
625,937

 
612,376

Selling, general and administrative expenses
 
48,101

 
40,834

 
95,403

 
101,033

Restructuring and impairment costs
 

 
3,682

 

 
3,682

Operating income
 
44,975

 
43,328

 
51,530

 
35,326

Equity in pretax earnings of unconsolidated affiliates
 
667

 
1,260

 
232

 
1,130

Interest income
 
526

 
271

 
1,196

 
634

Interest expense
 
3,964

 
4,335

 
7,896

 
8,389

Income before income taxes and other items
 
42,204

 
40,524

 
45,062

 
28,701

Income taxes
 
13,898

 
14,026

 
13,435

 
9,707

Net income
 
28,306

 
26,498

 
31,627

 
18,994

Less: net (income) loss attributable to noncontrolling interests in subsidiaries
 
(2,139
)
 
(1,234
)
 
(1,883
)
 
794

Net income attributable to Universal Corporation
 
26,167

 
25,264

 
29,744

 
19,788

Dividends on Universal Corporation convertible perpetual preferred stock
 

 
(3,687
)
 

 
(7,374
)
Earnings available to Universal Corporation common shareholders
 
$
26,167

 
$
21,577

 
$
29,744

 
$
12,414

 
 
 
 
 
 
 
 
 
Earnings per share attributable to Universal Corporation common shareholders:
 
 
 
 
 
 
 
 
Basic
 
$
1.03

 
$
0.95

 
$
1.17

 
$
0.55

Diluted
 
$
1.02

 
$
0.90

 
$
1.16

 
$
0.54


See accompanying notes.



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Universal Corporation
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UNIVERSAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)

 
 
September 30,
 
September 30,
 
March 31,
 
 
2017
  
2016
 
2017
 
 
(Unaudited)
 
(Unaudited)
 
 
ASSETS
 
 
 
 
 
 
Current assets
 
 
  
 
 
 
Cash and cash equivalents
 
$
41,203

  
$
294,894

 
$
283,993

Accounts receivable, net
 
338,700

  
251,805

 
439,288

Advances to suppliers, net
 
66,580

  
47,841

 
103,750

Accounts receivable—unconsolidated affiliates
 
50,533

  
51,558

 
2,373

Inventories—at lower of cost or net realizable value:
 
 
  
 
 
 
Tobacco
 
869,325

  
827,936

 
565,943

Other
 
90,108

  
86,472

 
68,087

Prepaid income taxes
 
21,110

  
24,448

 
16,713

Other current assets
 
94,294

  
56,026

 
81,252

Total current assets
 
1,571,853

  
1,640,980

 
1,561,399

 
 
 
 
 
 
 
Property, plant and equipment
 
 
  
 
 
 
Land
 
22,822

  
22,914

 
22,852

Buildings
 
268,702

  
266,107

 
266,802

Machinery and equipment
 
612,722

  
599,897

 
597,213

 
 
904,246

  
888,918

 
886,867

Less accumulated depreciation
 
(587,465
)
  
(566,686
)

(569,527
)
 
 
316,781

  
322,232

 
317,340

Other assets
 
 
  
 
 
 
Goodwill and other intangibles
 
99,059

  
99,033

 
98,888

Investments in unconsolidated affiliates
 
86,247

  
81,441

 
78,457

Deferred income taxes
 
23,136

  
25,720

 
25,422

Other noncurrent assets
 
42,434

  
49,107

 
41,899

 
 
250,876

  
255,301

 
244,666

 
 
 
 
 
 
 
Total assets
 
$
2,139,510

  
$
2,218,513

 
$
2,123,405


See accompanying notes.






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Universal Corporation
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UNIVERSAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)

 
 
September 30,
 
September 30,
 
March 31,
 
 
2017
  
2016
 
2017
 
 
(Unaudited)
  
(Unaudited)
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
Current liabilities
 
 
  
 
 
 
Notes payable and overdrafts
 
$
98,268

 
$
71,002

 
$
59,133

Accounts payable and accrued expenses
 
142,337

 
133,133

 
153,515

Accounts payable—unconsolidated affiliates
 
56

 

 
7,231

Customer advances and deposits
 
16,807

 
37,334

 
11,007

Accrued compensation
 
19,509

 
18,885

 
32,007

Income taxes payable
 
3,935

 
1,240

 
5,103

Current portion of long-term debt
 

 

 

Total current liabilities
 
280,912

  
261,594

 
267,996

 
 
 
 
 
 
 
Long-term debt
 
368,909

 
368,556

 
368,733

Pensions and other postretirement benefits
 
74,636

 
80,005

 
80,689

Other long-term liabilities
 
31,338

 
41,413

 
31,424

Deferred income taxes
 
54,733

 
28,047

 
47,985

Total liabilities
 
810,528

 
779,615

 
796,827

 
 
 
 
 
 
 
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, no shares outstanding (218,490 at September 30, 2016, and none at March 31, 2017)
 

  
211,562

 

Common stock, no par value, 100,000,000 shares authorized 25,114,349 shares issued and outstanding (22,783,633 at September 30, 2016, and 25,274,506 at March 31, 2017)
 
320,121

 
210,569

 
321,207

Retained earnings
 
1,027,147

  
1,054,004

 
1,034,841

Accumulated other comprehensive loss
 
(58,887
)
  
(73,579
)
 
(69,559
)
Total Universal Corporation shareholders' equity
 
1,288,381

  
1,402,556

 
1,286,489

Noncontrolling interests in subsidiaries
 
40,601

 
36,342

 
40,089

Total shareholders' equity
 
1,328,982

 
1,438,898

 
1,326,578

 
 
 
 
 
 
 
Total liabilities and shareholders' equity
 
$
2,139,510

  
$
2,218,513

 
$
2,123,405


See accompanying notes.




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UNIVERSAL CORPORATION     
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
 
 
Six Months Ended September 30,
 
 
2017
 
2016
 
 
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
Net income
 
$
31,627

 
$
18,994

Adjustments to reconcile net income to net cash provided (used) by operating activities:
 
 
 
 
Depreciation
 
17,485

 
17,324

Net provision for losses (recoveries) on advances and guaranteed loans to suppliers
 
937

 
(2,038
)
Foreign currency remeasurement (gain) loss, net
 
(3,944
)
 
11,119

Restructuring and impairment costs
 

 
3,682

Other, net
 
8,610

 
(1,108
)
Changes in operating assets and liabilities, net
 
(278,560
)
 
(25,548
)
Net cash provided (used) by operating activities
 
(223,845
)
 
22,425

 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
Purchase of property, plant and equipment
 
(14,769
)
 
(17,567
)
Proceeds from sale of property, plant and equipment
 
3,273

 
447

Net cash used by investing activities
 
(11,496
)
 
(17,120
)
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
Issuance (repayment) of short-term debt, net
 
36,085

 
5,210

Dividends paid to noncontrolling interests
 
(1,260
)
 
(1,260
)
Repurchase of common stock
 
(12,639
)
 

Dividends paid on convertible perpetual preferred stock
 

 
(7,374
)
Dividends paid on common stock
 
(27,324
)
 
(24,106
)
Other
 
(2,828
)
 
(2,245
)
Net cash used by financing activities
 
(7,966
)
 
(29,775
)
 
 
 
 
 
Effect of exchange rate changes on cash
 
517

 
(83
)
Net decrease in cash and cash equivalents
 
(242,790
)
 
(24,553
)
Cash and cash equivalents at beginning of year
 
283,993

 
319,447

 
 
 
 
 
Cash and cash equivalents at end of period
 
$
41,203

 
$
294,894

See accompanying notes.

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NOTE 1. BASIS OF PRESENTATION

Universal Corporation, which together with its subsidiaries is referred to herein as “Universal” or the “Company,” is the leading global leaf tobacco supplier. Because of the seasonal nature of the Company’s business, the results of operations for any fiscal quarter will not necessarily be indicative of results to be expected for other quarters or a full fiscal year. All adjustments necessary to state fairly the results for the period have been included and were of a normal recurring nature. Certain amounts in prior year statements have been reclassified to conform to the current year presentation. This Form 10-Q should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017.

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)
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
Basic Earnings Per Share
 
 
 
 
 
 
 
 
Numerator for basic earnings per share
 
 
 
 
 
 
 
 
Net income attributable to Universal Corporation
 
$
26,167

 
$
25,264

 
$
29,744

 
$
19,788

Less: Dividends on convertible perpetual preferred stock
 

 
(3,687
)
 

 
(7,374
)
Earnings available to Universal Corporation common shareholders for calculation of basic earnings per share
 
26,167

 
21,577

 
29,744

 
12,414

 
 
 
 
 
 
 
 
 
Denominator for basic earnings per share
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
25,334,661

 
22,777,394

 
25,370,783

 
22,755,927

 
 
 
 
 
 
 
 
 
Basic earnings per share
 
$
1.03

 
$
0.95

 
$
1.17

 
$
0.55

 
 
 
 
 
 
 
 
 
Diluted Earnings Per Share
 
 
 
 
 
 
 
 
Numerator for diluted earnings per share
 
 
 
 
 
 
 
 
Earnings available to Universal Corporation common shareholders
 
$
26,167

 
$
21,577

 
$
29,744

 
$
12,414

Add: Dividends on convertible perpetual preferred stock (if conversion assumed)
 

 
3,687

 

 

Earnings available to Universal Corporation common shareholders for calculation of diluted earnings per share
 
26,167

 
25,264

 
29,744

 
12,414

 
 
 
 
 
 
 
 
 
Denominator for diluted earnings per share:
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
25,334,661

 
22,777,394

 
25,370,783

 
22,755,927

Effect of dilutive securities (if conversion or exercise assumed)
 
 
 
 
 
 
 
 
Convertible perpetual preferred stock
 

 
4,883,372

 

 

Employee share-based awards
 
211,885

 
307,390

 
218,375

 
317,414

Denominator for diluted earnings per share
 
25,546,546

 
27,968,156

 
25,589,158

 
23,073,341

 
 
 
 
 
 
 
 
 
Diluted earnings per share
 
$
1.02

 
$
0.90

 
$
1.16

 
$
0.54



-- M O R E --


Universal Corporation
Page 11

NOTE 3. SEGMENT INFORMATION

The principal approach used by management to evaluate the Company’s performance is by geographic region, although the dark air-cured and oriental tobacco businesses are each evaluated on the basis of their worldwide operations. The Company evaluates the performance of its segments based on operating income (loss) after allocated overhead expenses (excluding significant non-recurring charges or credits), plus equity in the pretax earnings (loss) of unconsolidated affiliates.

Operating results for the Company’s reportable segments for each period presented in the consolidated statements of income and comprehensive income were as follows:

 
 
Three Months Ended September 30,
 
Six Months Ended September 30,
(in thousands of dollars)
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
SALES AND OTHER OPERATING REVENUES
 
 
 
 
 
 
 
 
Flue-Cured and Burley Leaf Tobacco Operations:
 
 
 
 
 
 
 
 
   North America
 
$
58,668

   
$
80,789

   
$
111,992

   
$
153,471

   Other Regions (1)
 
381,164

   
318,576

   
565,576

   
496,592

      Subtotal
 
439,832

 
399,365

 
677,568

 
650,063

Other Tobacco Operations (2)
 
48,416

   
57,577

   
95,302

   
102,354

Consolidated sales and other operating revenue
 
$
488,248

 
$
456,942

 
$
772,870

 
$
752,417

 
 
 
 
 
 
 
 
 
OPERATING INCOME (LOSS)
 
 
 
 
 
 
 
 
Flue-Cured and Burley Leaf Tobacco Operations:
 
 
 
 
 
 
 
 
   North America
 
$
7,899

   
$
13,531

   
$
10,264

   
$
20,379

   Other Regions (1)
 
37,516

   
32,342

   
41,593

   
15,325

      Subtotal
 
45,415

 
45,873

 
51,857

 
35,704

Other Tobacco Operations (2)
 
227

   
2,397

   
(95
)
   
4,434

Segment operating income
 
45,642

 
48,270

 
51,762

 
40,138

 Deduct: Equity in pretax earnings of unconsolidated affiliates (3)
 
(667
)
 
(1,260
)
 
(232
)
 
(1,130
)
   Restructuring and impairment costs (4)
 

 
(3,682
)
 

 
(3,682
)
Consolidated operating income
 
$
44,975

 
$
43,328

 
$
51,530

 
$
35,326


(1)  
Includes South America, Africa, Europe, and Asia regions, as well as inter-region eliminations.
(2)  
Includes Dark Air-Cured, Special Services, and Oriental, as well as inter-company eliminations. Sales and other operating revenues for this reportable segment include limited amounts for Oriental because the business is accounted for on the equity method and its financial results consist principally of equity in the pretax earnings of an unconsolidated affiliate.
(3)  
Equity in pretax earnings of unconsolidated affiliates is included in segment operating income (Other Tobacco Operations segment), but is reported below consolidated operating income and excluded from that total in the consolidated statements of income and comprehensive income.
(4)  
Restructuring and impairment costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income and comprehensive income.




###


Exhibit 99.2
UNIVERSALCORPBLUEA05.JPG
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: investor@universalleaf.com
 
 

Universal Corporation Announces 47th Annual Dividend Increase and
Share Repurchase Program
Richmond, VA November 7, 2017 / PRNEWSWIRE

George C. Freeman, III, Chairman, President, and Chief Executive Officer of Universal Corporation (NYSE:UVV), announced today that the Company's Board of Directors declared a quarterly dividend of fifty-five cents ($0.55) per share on the common shares of the Company, payable February 5, 2018, to common shareholders of record at the close of business on January 8, 2018. This increase indicates an annualized rate of $2.20 per common share and a yield of approximately 3.8% based on the $57.90 closing price on November 6, 2017.

Mr. Freeman noted, “As we approach our 100th anniversary, we are proud to continue to deliver value to our shareholders, and dividends are one of the main ways we accomplish that. Today’s increase is our 47 th consecutive annual common dividend increase. We have raised our common dividend every year since 1971."

In addition, Mr. Freeman announced that the Company’s Board of Directors has approved a program for the repurchase of up to $100 million of Universal Corporation shares of common stock. The authorized purchases may be made from time to time on the open market or in privately negotiated transactions at prices not exceeding prevailing market rates. Universal currently has approximately 25.1 million common shares outstanding.

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, 2017, were $2.1 billion. For more information on Universal Corporation, visit its website at www.universalcorp.com.


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