Net income for the fourth quarter ended
"Our segment operating income for the 2017 fiscal year was also improved, primarily attributable to a reduction in selling, general, and administrative costs and earlier receipt of distributions from unconsolidated subsidiaries. I believe that our success reflects our continuing efforts to bring efficiencies to the leaf tobacco supply chain. Through the hard work of our dedicated employees around the world, we have been able to expand services that we provide our customers and, despite continuing slow decline in demand for consumer tobacco products, maintain our volumes handled.
"We have also maintained our strong balance sheet this year, and our lower working capital requirements from smaller crops and prudent buying programs helped us to retain the necessary cash reserves to support our working capital needs in fiscal year 2018. In addition, in fiscal year 2017, we continued our focus on providing returns to our shareholders through completion of the conversion of our preferred stock, increasing the common dividend rate, and returning more than
"As we move into fiscal year 2018, we are forecasting that global flue-cured tobacco production outside of
FLUE-CURED AND BURLEY LEAF TOBACCO OPERATIONS:
OTHER REGIONS:
Operating income for the Other Regions segment for the fiscal year ended
Operating income for the Other Regions segment for the quarter ended
Operating income for the
Segment operating income for the quarter ended
OTHER TOBACCO OPERATIONS:
For the fiscal year ended
For the fourth quarter ended
OTHER ITEMS:
Cost of goods sold decreased by about 2% to
The consolidated effective income tax rates were approximately 34% and 35% for the fiscal year and quarter ended
In
Results for the year ended
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, 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
At
Headquartered in
| ||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(in thousands of dollars, except per share data) | ||||||||||||||||
Three Months Ended |
Fiscal Year Ended | |||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||
Sales and other operating revenues |
$ |
650,030 |
$ |
803,980 |
$ |
2,071,218 |
$ |
2,120,373 |
||||||||
Costs and expenses |
||||||||||||||||
Cost of goods sold |
530,845 |
663,038 |
1,676,539 |
1,713,042 |
||||||||||||
Selling, general and administrative expenses |
58,868 |
60,498 |
211,969 |
226,685 |
||||||||||||
Other income |
— |
— |
— |
(3,390) |
||||||||||||
Restructuring and impairment costs |
499 |
— |
4,359 |
2,389 |
||||||||||||
Operating income |
59,818 |
80,444 |
178,351 |
181,647 |
||||||||||||
Equity in pretax earnings of unconsolidated affiliates |
149 |
2,866 |
5,774 |
5,422 |
||||||||||||
Interest income |
281 |
282 |
1,397 |
1,178 |
||||||||||||
Interest expense |
3,844 |
3,936 |
16,284 |
15,669 |
||||||||||||
Income before income taxes |
56,404 |
79,656 |
169,238 |
172,578 |
||||||||||||
Income taxes |
19,954 |
27,062 |
56,732 |
54,430 |
||||||||||||
Net income |
36,450 |
52,594 |
112,506 |
118,148 |
||||||||||||
Less: net income attributable to noncontrolling interests in |
(3,581) |
(4,630) |
(6,202) |
(9,132) |
||||||||||||
Net income attributable to |
32,869 |
47,964 |
106,304 |
109,016 |
||||||||||||
Dividends on |
— |
(3,687) |
(11,061) |
(14,748) |
||||||||||||
Cost in excess of carrying value on conversion of convertible |
(74,353) |
— |
(74,353) |
— |
||||||||||||
Earnings (loss) available to |
$ |
(41,484) |
$ |
44,277 |
$ |
20,890 |
$ |
94,268 |
||||||||
Earnings (loss) per share attributable to |
||||||||||||||||
Basic |
$ |
(1.64) |
$ |
1.95 |
$ |
0.89 |
$ |
4.16 |
||||||||
Diluted |
$ |
(1.64) |
$ |
1.72 |
$ |
0.88 |
$ |
3.92 |
||||||||
See accompanying notes. |
| ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands of dollars) | ||||||||
| ||||||||
2017 |
2016 | |||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ |
283,993 |
$ |
319,447 |
||||
Accounts receivable, net |
439,288 |
428,659 |
||||||
Advances to suppliers, net |
103,750 |
101,890 |
||||||
Accounts receivable—unconsolidated affiliates |
2,373 |
2,316 |
||||||
Inventories—at lower of cost or market: |
||||||||
Tobacco |
565,943 |
637,132 |
||||||
Other |
68,087 |
60,888 |
||||||
Prepaid income taxes |
16,713 |
17,814 |
||||||
Other current assets |
81,252 |
70,400 |
||||||
Total current assets |
1,561,399 |
1,638,546 |
||||||
Property, plant and equipment |
||||||||
Land |
22,852 |
22,987 |
||||||
Buildings |
266,802 |
264,838 |
||||||
Machinery and equipment |
597,213 |
591,327 |
||||||
886,867 |
879,152 |
|||||||
Less: accumulated depreciation |
(569,527) |
(553,265) |
||||||
317,340 |
325,887 |
|||||||
Other assets |
||||||||
|
98,888 |
99,071 |
||||||
Investments in unconsolidated affiliates |
78,457 |
82,441 |
||||||
Deferred income taxes |
25,422 |
23,853 |
||||||
Other noncurrent assets |
41,899 |
61,379 |
||||||
244,666 |
266,744 |
|||||||
Total assets |
$ |
2,123,405 |
$ |
2,231,177 |
||||
See accompanying notes. |
| ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands of dollars) | ||||||||
| ||||||||
2017 |
2016 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Current liabilities |
||||||||
Notes payable and overdrafts |
$ |
59,133 |
$ |
66,179 |
||||
Accounts payable and accrued expenses |
153,515 |
120,527 |
||||||
Accounts payable—unconsolidated affiliates |
7,231 |
8,343 |
||||||
Customer advances and deposits |
11,007 |
16,438 |
||||||
Accrued compensation |
32,007 |
27,593 |
||||||
Income taxes payable |
5,103 |
7,190 |
||||||
Current portion of long-term debt |
— |
— |
||||||
Total current liabilities |
267,996 |
246,270 |
||||||
Long-term debt |
368,733 |
368,380 |
||||||
Pensions and other postretirement benefits |
80,689 |
92,177 |
||||||
Other long-term liabilities |
31,424 |
41,794 |
||||||
Deferred income taxes |
47,985 |
29,494 |
||||||
Total liabilities |
796,827 |
778,115 |
||||||
Shareholders' equity |
||||||||
|
||||||||
Preferred stock: |
||||||||
Series A Junior Participating Preferred Stock, no par value, 500,000 shares |
— |
— |
||||||
Series B 6.75% Convertible Perpetual Preferred Stock, no par value, |
— |
211,562 |
||||||
Common stock, no par value, 100,000,000 shares authorized, 25,274,506 |
321,207 |
208,946 |
||||||
Retained earnings |
1,034,841 |
1,066,064 |
||||||
Accumulated other comprehensive loss |
(69,559) |
(72,350) |
||||||
|
1,286,489 |
1,414,222 |
||||||
Noncontrolling interests in subsidiaries |
40,089 |
38,840 |
||||||
Total shareholders' equity |
1,326,578 |
1,453,062 |
||||||
Total liabilities and shareholders' equity |
$ |
2,123,405 |
$ |
2,231,177 |
||||
See accompanying notes. |
| ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(in thousands of dollars) | ||||||||
Fiscal Year Ended | ||||||||
2017 |
2016 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net income |
$ |
112,506 |
$ |
118,148 |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation |
35,911 |
36,754 |
||||||
Provision for losses on advances and guaranteed loans to suppliers |
(857) |
815 |
||||||
Inventory write-downs |
10,866 |
11,899 |
||||||
Stock-based compensation expense |
6,475 |
5,206 |
||||||
Foreign currency remeasurement loss (gain), net |
9,269 |
22,517 |
||||||
Deferred income taxes |
16,626 |
15,046 |
||||||
Equity in net income of unconsolidated affiliates, net of dividends |
396 |
156 |
||||||
Fair value gain upon acquisition of partner's interest in joint venture |
— |
(3,390) |
||||||
Restructuring and impairment costs |
4,359 |
2,389 |
||||||
Other, net |
(4,463) |
13,204 |
||||||
Changes in operating assets and liabilities, net |
59,227 |
(36,213) |
||||||
Net cash provided by operating activities |
250,315 |
186,531 |
||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Purchase of property, plant and equipment |
(35,630) |
(47,153) |
||||||
Purchase of partner's interest in joint venture, net of cash held by the business |
— |
(5,964) |
||||||
Proceeds from sale of property, plant and equipment |
2,174 |
2,982 |
||||||
Other, net |
(398) |
(796) |
||||||
Net cash used by investing activities |
(33,854) |
(50,931) |
||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Issuance (repayment) of short-term debt, net |
(5,349) |
4,880 |
||||||
Dividends paid to noncontrolling interests |
(4,200) |
(4,449) |
||||||
Conversion of convertible perpetual preferred stock |
(178,365) |
— |
||||||
Dividends paid on convertible perpetual preferred stock |
(11,061) |
(14,748) |
||||||
Dividends paid on common stock |
(49,828) |
(47,389) |
||||||
Other |
(2,441) |
(2,940) |
||||||
Net cash used by financing activities |
(251,244) |
(64,646) |
||||||
Effect of exchange rate changes on cash |
(671) |
(290) |
||||||
Net (decrease) increase in cash and cash equivalents |
(35,454) |
70,664 |
||||||
Cash and cash equivalents at beginning of year |
319,447 |
248,783 |
||||||
Cash and Cash Equivalents at End of Year |
$ |
283,993 |
$ |
319,447 |
||||
Non-cash Financing Transaction - The consolidated financial statements for the fiscal year ended | ||||||||
See accompanying notes. |
NOTE 1. BASIS OF PRESENTATION
NOTE 2. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings (loss) per share:
Three Months Ended |
Fiscal Year Ended | |||||||||||||||
(in thousands, except per share data) |
2017 |
2016 |
2017 |
2016 | ||||||||||||
Basic Earnings (Loss) Per Share |
||||||||||||||||
Numerator for basic earnings (loss) per share |
||||||||||||||||
Net income attributable to |
$ |
32,869 |
$ |
47,964 |
$ |
106,304 |
$ |
109,016 |
||||||||
Less: Dividends on convertible perpetual preferred stock |
— |
(3,687) |
(11,061) |
(14,748) |
||||||||||||
Less: Cost in excess of carrying value on conversion of convertible |
(74,353) |
— |
(74,353) |
— |
||||||||||||
Earnings (loss) available to |
$ |
(41,484) |
$ |
44,277 |
$ |
20,890 |
$ |
94,268 |
||||||||
Denominator for basic earnings (loss) per share |
||||||||||||||||
Weighted average shares outstanding |
25,273,741 |
22,717,580 |
23,433,860 |
22,683,290 |
||||||||||||
Basic earnings (loss) per share |
$ |
(1.64) |
$ |
1.95 |
$ |
0.89 |
$ |
4.16 |
||||||||
Diluted Earnings (Loss) Per Share |
||||||||||||||||
Numerator for diluted earnings (loss) per share |
||||||||||||||||
Earnings (loss) available to |
$ |
(41,484) |
$ |
44,277 |
$ |
20,890 |
$ |
94,268 |
||||||||
Add: Dividends on convertible perpetual preferred stock (if |
— |
3,687 |
— |
14,748 |
||||||||||||
Earnings (loss) available to |
$ |
(41,484) |
$ |
47,964 |
$ |
20,890 |
$ |
109,016 |
||||||||
Denominator for diluted earnings (loss) per share |
||||||||||||||||
Weighted average shares outstanding |
25,273,741 |
22,717,580 |
23,433,860 |
22,683,290 |
||||||||||||
Effect of dilutive securities (if conversion or exercise assumed) |
||||||||||||||||
Convertible perpetual preferred stock |
— |
4,866,152 |
— |
4,853,268 |
||||||||||||
Employee share-based awards |
— |
300,406 |
336,228 |
288,933 |
||||||||||||
Denominator for diluted earnings (loss) per share |
25,273,741 |
27,884,138 |
23,770,088 |
27,825,491 |
||||||||||||
Diluted earnings (loss) per share |
$ |
(1.64) |
$ |
1.72 |
$ |
0.88 |
$ |
3.92 |
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 after allocated overhead expenses, plus equity in the 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) |
2017 |
2016 |
2017 |
2016 | ||||||||||||
SALES AND OTHER OPERATING REVENUES |
||||||||||||||||
Flue-cured and burley leaf tobacco operations: |
||||||||||||||||
|
$ |
169,769 |
$ |
182,371 |
$ |
416,438 |
$ |
361,827 |
||||||||
Other regions (1) |
430,417 |
529,809 |
1,422,991 |
1,538,971 |
||||||||||||
Subtotal |
600,186 |
712,180 |
1,839,429 |
1,900,798 |
||||||||||||
Other tobacco operations (2) |
49,844 |
91,800 |
231,789 |
219,575 |
||||||||||||
Consolidated sales and other operating revenues |
$ |
650,030 |
$ |
803,980 |
$ |
2,071,218 |
$ |
2,120,373 |
||||||||
OPERATING INCOME |
||||||||||||||||
Flue-cured and burley leaf tobacco operations: |
||||||||||||||||
|
$ |
13,747 |
$ |
18,198 |
$ |
35,151 |
$ |
31,147 |
||||||||
Other regions (1) |
46,950 |
55,923 |
143,349 |
143,596 |
||||||||||||
Subtotal |
60,697 |
74,121 |
178,500 |
174,743 |
||||||||||||
Other tobacco operations (2) |
(231) |
9,189 |
9,984 |
11,325 |
||||||||||||
Segment operating income |
60,466 |
83,310 |
188,484 |
186,068 |
||||||||||||
Deduct: Equity in pretax earnings of unconsolidated affiliates (3) |
(149) |
(2,866) |
(5,774) |
(5,422) |
||||||||||||
Restructuring and impairment costs (4) |
(499) |
— |
(4,359) |
(2,389) |
||||||||||||
Add: Other income (5) |
— |
— |
— |
3,390 |
||||||||||||
Consolidated operating income |
$ |
59,818 |
$ |
80,444 |
$ |
178,351 |
$ |
181,647 |
(1) |
Includes |
(2) |
Includes Dark Air-Cured, Special Services, and Oriental, as well as intercompany 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 the 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. |
(4) |
Restructuring and impairment costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income. |
(5) |
Other income in fiscal year 2016 represents a gain from remeasuring to fair value the Company's original 50% ownership interest in |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/universal-corporation-reports-annual-results-300462599.html
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