HIGHLIGHTS
Fiscal Year 2012
Diluted earnings per share of
Segment operating income down 13%, to
Revenues down 5%, to
Fourth Fiscal Quarter
Diluted earnings per share of
Net income down
Revenues decreased 4%, to
For the fourth quarter of fiscal year 2012, net income was
The following table sets forth the unusual items included in reported results, none of which are included in segment results:
Three Months Ended |
Fiscal Year Ended | ||||||||
(in millions of dollars, except per share amounts) |
2012 |
2011 |
2012 |
2011 | |||||
(Charges) and gains |
|||||||||
(Charge for) reversal of |
$ — |
$ — |
$ (49.1) |
$ 7.4 | |||||
Restructuring and impairment costs, primarily in |
|||||||||
and |
(1.4) |
(7.5) |
(11.7) |
(21.5) | |||||
Gain on fire loss insurance settlement in |
— |
— |
9.6 |
— | |||||
Gain on sale of facility in |
— |
— |
11.1 |
— | |||||
Gain on assignment of farmer contracts and sale of related assets in |
— |
— |
— |
19.4 | |||||
Total effect on operating income |
$ (1.4) |
$ (7.5) |
$ (40.1) |
$ 5.3 | |||||
Total effect on net income |
$ (0.9) |
$ (4.8) |
$ (40.3) |
$ 3.3 | |||||
Total effect on diluted earnings per share |
$ (0.03) |
$ (0.17) |
$ (1.42) |
$ 0.12 | |||||
(1) |
Fiscal year 2012 - fines and accumulated interest related to the |
Fiscal year 2011 - the reversal of a portion of a | |
(2) |
Restructuring and impairment charges, primarily related to plant closures and workforce reductions in several areas. |
(3) |
Fire loss insurance settlement in |
(4) |
Sale of land and storage buildings in |
(5) |
Assignment of farmer production contracts and related assets in |
"Beyond the oversupplied markets, fiscal year 2012 offered many challenges. Our results included several unusual charges and benefits, including the charge for the
"As we move into fiscal year 2013, we are seeing crop sizes come down in most of the key sourcing areas for flue-cured and burley tobacco, and consequently, we expect that our overall sales volumes will decline. In the United States, crop levels should recover after last year's hurricane damage. However, we do not expect to benefit from the same level of sales of uncommitted inventories there, as those stocks have been depleted. These crop and inventory reductions reflect the cyclical nature of our business. With smaller crop sizes, global markets are beginning to strike a balance between supply and demand. Overall, green leaf prices have stabilized, and we are also seeing higher prices for certain types of tobacco such as quality flavor flue-cured and burley leaf, as well as oriental tobacco.
"Our entire organization continues to focus on delivering a consistent, compliant product that is valued by our customers, especially in today's increasingly regulated world. We are committed to strengthening the integrity of the leaf tobacco supply chain, which includes measureable efforts to promote sustainable production. We believe our global reach, our strong regional management teams, and our long-term focus on being a global quality leaf service provider will continue to differentiate us from the other suppliers and dealers in the industry."
FLUE-CURED AND BURLEY LEAF TOBACCO OPERATIONS:
Fiscal Year 2012
For the fiscal year ended
Operating income of
Operating income for the
Fourth Quarter
Operating income for the fourth quarter ended
Operating earnings for the quarter in the Other Regions segment were up 8% to
Operating earnings for the
OTHER TOBACCO OPERATIONS:
In the Other Tobacco Operations segment, operating income for fiscal year 2012 declined by
Revenues for this segment for fiscal year 2012 decreased by
OTHER ITEMS:
Cost of goods sold decreased by about 4% to
Interest expense was down 1% to
The consolidated effective income tax rates on pretax earnings were approximately 29% and 38% for the quarter and fiscal year ended
In
In
Additional information
Amounts included in the previous discussion are attributable to
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
At
Headquartered in
UNIVERSAL CORPORATION AND SUBSIDIARIES |
||||||||
CONSOLIDATED STATEMENTS OF INCOME |
||||||||
(In thousands of dollars, except per share data) |
||||||||
Three Months Ended |
Fiscal Year Ended | |||||||
2012 |
2011 |
2012 |
2011 | |||||
Sales and other operating revenues |
$ 653,966 |
$ 680,215 |
|
| ||||
Costs and expenses |
||||||||
Cost of goods sold |
542,863 |
561,437 |
1,974,885 |
2,063,194 | ||||
Selling, general and administrative expenses |
67,654 |
64,939 |
251,639 |
259,042 | ||||
Other income |
— |
— |
(20,703) |
(19,368) | ||||
Restructuring and impairment costs |
1,441 |
7,540 |
11,661 |
21,504 | ||||
Charge for (reversal of) |
— |
— |
49,091 |
(7,445) | ||||
Operating income |
42,008 |
46,299 |
180,304 |
254,600 | ||||
Equity in pretax earnings (loss) of unconsolidated affiliates |
5,459 |
7,681 |
3,195 |
8,634 | ||||
Interest income |
74 |
109 |
1,314 |
2,723 | ||||
Interest expense |
5,462 |
5,813 |
22,835 |
23,058 | ||||
Income before income taxes and other items |
42,079 |
48,276 |
161,978 |
242,899 | ||||
Income taxes |
12,187 |
19,512 |
61,159 |
78,349 | ||||
Net income |
29,892 |
28,764 |
100,819 |
164,550 | ||||
Less: net (income) loss attributable to noncontrolling interests in subsidiaries |
(4,137) |
(1,648) |
(8,762) |
(7,985) | ||||
Net income attributable to |
25,755 |
27,116 |
92,057 |
156,565 | ||||
Dividends on |
(3,713) |
(3,713) |
(14,850) |
(14,850) | ||||
Earnings available to |
$ 22,042 |
$ 23,403 |
$ 77,207 |
$ 141,715 | ||||
Earnings per share attributable to |
||||||||
|
$ 0.95 |
$ 1.00 |
$ 3.32 |
$ 5.94 | ||||
Diluted |
$ 0.91 |
$ 0.95 |
$ 3.25 |
$ 5.42 | ||||
See accompanying notes |
UNIVERSAL CORPORATION AND SUBSIDIARIES | ||||
CONSOLIDATED BALANCE SHEETS | ||||
(In thousands of dollars) | ||||
March 31, |
March 31, | |||
ASSETS |
||||
Current |
||||
Cash and cash equivalents |
$ 261,699 |
$ 141,007 | ||
Accounts receivable, net |
390,790 |
335,575 | ||
Advances to suppliers, net |
135,317 |
160,616 | ||
Accounts receivable - unconsolidated affiliates |
7,370 |
10,433 | ||
Inventories - at lower of cost or market: |
||||
Tobacco |
682,095 |
742,422 | ||
Other |
53,197 |
48,647 | ||
Prepaid income taxes |
20,819 |
18,661 | ||
Deferred income taxes |
51,025 |
47,009 | ||
Other current assets |
88,317 |
73,864 | ||
Total current assets |
1,690,629 |
1,578,234 | ||
Property, plant and equipment |
||||
Land |
17,087 |
14,851 | ||
Buildings |
228,982 |
257,380 | ||
Machinery and equipment |
537,031 |
555,316 | ||
783,100 |
827,547 | |||
Less accumulated depreciation |
(479,908) |
(510,844) | ||
303,192 |
316,703 | |||
Other assets |
||||
Goodwill and other intangibles |
99,266 |
99,546 | ||
Investments in unconsolidated affiliates |
93,312 |
115,478 | ||
Deferred income taxes |
23,634 |
18,177 | ||
Other noncurrent assets |
56,886 |
99,729 | ||
273,098 |
332,930 | |||
Total assets |
$ 2,266,919 |
$ 2,227,867 | ||
See accompanying notes |
UNIVERSAL CORPORATION AND SUBSIDIARIES | ||||
CONSOLIDATED BALANCE SHEETS | ||||
(In thousands of dollars) | ||||
March 31, |
March 31, | |||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||
Current |
||||
Notes payable and overdrafts |
$ 128,016 |
$ 149,291 | ||
Accounts payable and accrued expenses |
187,790 |
213,014 | ||
Accounts payable - unconsolidated affiliates |
295 |
4,154 | ||
Customer advances and deposits |
16,832 |
8,426 | ||
Accrued compensation |
30,659 |
30,201 | ||
Income taxes payable |
12,866 |
12,265 | ||
Current portion of long-term obligations |
16,250 |
95,000 | ||
Total current liabilities |
392,708 |
512,351 | ||
Long-term obligations |
392,500 |
320,193 | ||
Pensions and other postretirement benefits |
140,529 |
102,858 | ||
Other long-term liabilities |
90,609 |
50,213 | ||
Deferred income taxes |
44,583 |
42,847 | ||
Total liabilities |
1,060,929 |
1,028,462 | ||
Shareholders' equity |
||||
|
||||
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, |
||||
5,000,000 shares authorized, 219,999 shares issued and outstanding |
||||
(219,999 at |
213,023 |
213,023 | ||
Common stock, no par value, 100,000,000 shares authorized, 23,257,175 |
||||
shares issued and outstanding (23,240,503 at |
196,135 |
191,608 | ||
Retained earnings |
854,654 |
825,751 | ||
Accumulated other comprehensive loss |
(80,361) |
(44,776) | ||
|
1,183,451 |
1,185,606 | ||
Noncontrolling interests in subsidiaries |
22,539 |
13,799 | ||
Total shareholders' equity |
1,205,990 |
1,199,405 | ||
Total liabilities and shareholders' equity |
$ 2,266,919 |
$ 2,227,867 | ||
See accompanying notes. |
UNIVERSAL CORPORATION AND SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(In thousands of dollars) | ||||
Fiscal Year Ended | ||||
2012 |
2011 | |||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||
Net income |
$ 100,819 |
$ 164,550 | ||
Adjustments to reconcile net income to net cash used by operating activities: |
||||
Depreciation |
42,158 |
43,654 | ||
Amortization |
1,708 |
1,618 | ||
Provisions for losses on advances and guaranteed loans to suppliers |
11,930 |
18,666 | ||
Inventory write-downs |
8,324 |
8,539 | ||
Stock-based compensation expense |
5,987 |
5,893 | ||
Foreign currency remeasurement loss (gain), net |
2,253 |
(4,424) | ||
Gain on fire loss insurance settlement |
(9,592) |
— | ||
Gain on sale of property in |
(11,111) |
— | ||
Gain on assignment of farmer contracts and sale of related assets |
— |
(19,368) | ||
Restructuring and impairment costs |
11,661 |
21,504 | ||
Charge for (reversal of) |
49,091 |
(7,445) | ||
Other, net |
23,147 |
(2,394) | ||
Changes in operating assets and liabilities, net |
(36,589) |
(176,575) | ||
Net cash provided by operating activities |
199,786 |
54,218 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||
Purchase of property, plant and equipment |
(38,174) |
(39,129) | ||
Proceeds from assignment of farmer contracts and sale of related assets |
— |
34,946 | ||
Proceeds from sale of property, plant and equipment, and other |
18,366 |
5,575 | ||
Proceeds from fire loss insurance settlement |
9,933 |
— | ||
Other, net |
— |
260 | ||
Net cash provided (used) by investing activities |
(9,875) |
1,652 | ||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||
Issuance (repayment) of short-term debt, net |
(17,388) |
(39,350) | ||
Issuance of long-term obligations |
100,000 |
— | ||
Repayment of long-term obligations |
(96,250) |
(15,000) | ||
Dividends paid to noncontrolling interests |
(103) |
(100) | ||
Issuance of common stock |
134 |
— | ||
Repurchase of common stock |
(4,004) |
(46,929) | ||
Dividends paid on convertible perpetual preferred stock |
(14,850) |
(14,850) | ||
Dividends paid on common stock |
(44,711) |
(45,321) | ||
Proceeds from termination of interest rate swap agreements |
13,388 |
— | ||
Other |
(3,539) |
— | ||
Net cash used by financing activities |
(67,323) |
(161,550) | ||
Effect of exchange rate changes on cash |
(1,896) |
734 | ||
Net increase (decrease) in cash and cash equivalents |
120,692 |
(104,946) | ||
Cash and cash equivalents at beginning of year |
141,007 |
245,953 | ||
Cash and cash equivalents at end of year |
$ 261,699 |
$ 141,007 | ||
See accompanying notes |
NOTE 1. BASIS OF PRESENTATION
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
NOTE 3. 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 |
Fiscal Year Ended | |||||||
(in thousands, except per share data) |
2012 |
2011 |
2012 |
2011 | ||||
Basic Earnings Per Share |
||||||||
Numerator for basic earnings per share |
||||||||
Net income attributable to |
$ 25,755 |
$ 27,116 |
$ 92,057 |
$ 156,565 | ||||
Less: Dividends on convertible perpetual preferred stock |
(3,713) |
(3,713) |
(14,850) |
(14,850) | ||||
Earnings available to |
||||||||
for calculation of basic earnings per share |
$ 22,042 |
$ 23,403 |
$ 77,207 |
$ 141,715 | ||||
Denominator for basic earnings per share |
||||||||
Weighted average shares outstanding |
23,251 |
23,400 |
23,228 |
23,859 | ||||
Basic earnings per share |
$ 0.95 |
$ 1.00 |
$ 3.32 |
$ 5.94 | ||||
Diluted Earnings Per Share |
||||||||
Numerator for diluted earnings per share |
||||||||
Earnings available to |
$ 22,042 |
$ 23,403 |
$ 77,207 |
$ 141,715 | ||||
Add: Dividends on convertible perpetual preferred stock (if |
||||||||
conversion assumed) |
3,713 |
3,713 |
14,850 |
14,850 | ||||
Earnings available to |
||||||||
for calculation of diluted earnings per share |
$ 25,755 |
$ 27,116 |
$ 92,057 |
$ 156,565 | ||||
Denominator for diluted earnings per share: |
||||||||
Weighted average shares outstanding |
23,251 |
23,400 |
23,228 |
23,859 | ||||
Effect of dilutive securities (if conversion or exercise assumed) |
||||||||
Convertible perpetual preferred stock |
4,782 |
4,758 |
4,772 |
4,750 | ||||
Employee share-based awards |
397 |
327 |
339 |
279 | ||||
Denominator for diluted earnings per share |
28,430 |
28,484 |
28,339 |
28,888 | ||||
Diluted earnings per share |
$ 0.91 |
$ 0.95 |
$ 3.25 |
$ 5.42 | ||||
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 | |||||||
(in thousands of dollars) |
2012 |
2011 |
2012 |
2011 | ||||
SALES AND OTHER OPERATING REVENUES |
||||||||
Flue-cured and burley leaf tobacco operations: |
||||||||
|
$ 78,147 |
$ 96,376 |
$ 314,248 |
$ 340,366 | ||||
Other regions (1) |
470,113 |
476,084 |
1,893,388 |
1,944,410 | ||||
Subtotal |
548,260 |
572,460 |
2,207,636 |
2,284,776 | ||||
Other tobacco operations (2) |
105,706 |
107,755 |
239,241 |
286,751 | ||||
Consolidated sales and other operating revenues |
$ 653,966 |
$ 680,215 |
$ 2,446,877 |
$ 2,571,527 | ||||
OPERATING INCOME |
||||||||
Flue-cured and burley leaf tobacco operations: |
||||||||
|
$ 6,173 |
$ 16,895 |
$ 30,037 |
$ 59,278 | ||||
Other regions (1) |
33,938 |
31,459 |
180,670 |
169,989 | ||||
Subtotal |
40,111 |
48,354 |
210,707 |
229,267 | ||||
Other tobacco operations (2) |
8,797 |
13,166 |
12,841 |
28,658 | ||||
Segment operating income |
48,908 |
61,520 |
223,548 |
257,925 | ||||
Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates (3) |
(5,459) |
(7,681) |
(3,195) |
(8,634) | ||||
Restructuring and impairment costs (4) |
(1,441) |
(7,540) |
(11,661) |
(21,504) | ||||
Charge for (reversal of) |
||||||||
in |
— |
— |
(49,091) |
7,445 | ||||
Add: Other income (4) |
— |
— |
20,703 |
19,368 | ||||
Consolidated operating income |
$ 42,008 |
$ 46,299 |
$ 180,304 |
$ 254,600 | ||||
(1) |
Includes |
(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. |
(4) |
Item is not included in segment operating income, but is included in consolidated operating income. |
SOURCE
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