RICHMOND, Va.,
HIGHLIGHTS
Six Months
Diluted earnings per share increased to
Revenues flat as pricing and mix offset effect of shipment delays.
Operating income up 33%, to
Quarter
Diluted earnings per share increased to
Revenues down 18% to
Operating income up 7%, to
For the second quarter of fiscal year 2010, net income was
Mr. Freeman stated, "We are very pleased with our performance so far this year. All of our operations continue to perform well, benefitting from continued cost controls and global coordination. Earlier shipments of Brazilian and European tobacco boosted results in our first fiscal quarter, so we expected lower volumes this period. In addition, some African shipments will be later this year than last. Our costs were lower this quarter, especially those related to currency movement, and that factor has offset the effect of reduced shipments.
"We do not foresee an oversupply of flue-cured tobacco in the coming year. In fact, rains in
"As we look ahead in the intermediate term, we will maintain our relationship with
FLUE-CURED AND BURLEY LEAF TOBACCO OPERATIONS:
First Six Months
Operating income for the flue-cured and burley tobacco operations, which comprise the
Second Quarter
In the second quarter of fiscal year 2010, operating income for flue-cured and burley operations increased by 5% to
OTHER TOBACCO OPERATIONS:
The Other Tobacco Operations segment performed well during the first six months of fiscal year 2010. The dark tobacco group saw an improved mix of business that more than offset slightly lower volumes and costs of rationalizing their U.S. operations. Despite an improvement in product mix that benefited current year results, the oriental tobacco joint venture earnings were flat due to the absence of currency gains in the first half of this year. For the second quarter of fiscal year 2010, the segment was flat. Improvement in the dark tobacco business volumes and margin were offset by lower results from the oriental tobacco group where currency gains last year were not repeated. Revenues for the segment were higher in both the quarter and the six months ended
OTHER ITEMS:
Cost of sales decreased by 21% to about
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; 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 Six Months Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- (Unaudited) (Unaudited) Sales and other operating revenues $647,918 $785,590 $1,264,030 $1,291,877 Costs and expenses Cost of goods sold 500,575 630,447 977,323 1,033,700 Selling, general and administrative expenses 71,478 83,948 141,070 148,795 ------ ------ ------- ------- Operating income 75,865 71,195 145,637 109,382 Equity in pretax earnings of unconsolidated affiliates 5,605 7,583 9,246 7,533 Interest income 231 417 796 1,367 Interest expense 6,694 10,113 14,849 17,779 ----- ------ ------ ------ Income before income taxes and other items 75,007 69,082 140,830 100,503 Income taxes 20,335 23,115 42,354 33,396 ------ ------ ------ ------ Net income 54,672 45,967 98,476 67,107 Less: net income attributable to noncontrolling interests in subsidiaries (2,157) (4,185) (2,216) (4,214) ------ ------ ------ ------ Net income attributable to Universal Corporation 52,515 41,782 96,260 62,893 Dividends onUniversal Corporation convertible perpetual preferred stock (3,713) (3,713) (7,425) (7,425) ------ ------ ------ ------ Earnings available to Universal Corporation common shareholders $48,802 $38,069 $88,835 $55,468 ======= ======= ======= ======= Earnings per share attributable to Universal Corporation common shareholders: Basic $1.97 $1.50 $3.57 $2.12 ===== ===== ===== ===== Diluted $1.77 $1.38 $3.23 $2.02 ===== ===== ===== ===== See accompanying notes.
UNIVERSAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands of dollars) September 30, September 30, March 31, 2009 2008 2009 ---- ---- ---- (Unaudited) (Unaudited) ASSETS Current Cash and cash equivalents $61,991 $40,765 $212,626 Short-term investments - 15,950 - Accounts receivable, net 293,985 284,107 263,383 Advances to suppliers, net 89,169 169,342 214,282 Accounts receivable - unconsolidated affiliates 39,199 34,403 20,371 Inventories - at lower of cost or market: Tobacco 919,842 778,053 586,136 Other 66,039 80,095 60,712 Prepaid income taxes 23,544 10,058 13,181 Deferred income taxes 48,503 32,979 68,264 Other current assets 74,236 90,503 64,964 ------ ------ ------ Total current assets 1,616,508 1,536,255 1,503,919 Property, plant and equipment Land 16,188 16,133 15,773 Buildings 259,596 255,875 251,875 Machinery and equipment 523,380 504,568 492,214 ------- ------- ------- 799,164 776,576 759,862 Less accumulated depreciation (476,256) (450,946) (447,575) -------- -------- -------- 322,908 325,630 312,287 Other assets Goodwill and other intangibles 106,036 106,267 106,097 Investments in unconsolidated affiliates 120,608 108,137 103,987 Deferred income taxes 15,080 33,512 17,376 Other noncurrent assets 115,342 96,767 94,510 ------- ------ ------ 357,066 344,683 321,970 ------- ------- ------- Total assets $2,296,482 $2,206,568 $2,138,176 ========== ========== ========== See accompanying notes. UNIVERSAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands of dollars) September 30, September 30, March 31, 2009 2008 2009 ---- ---- ---- (Unaudited) (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY Current Notes payable and overdrafts $301,376 $260,511 $168,608 Accounts payable and accrued expenses 214,729 205,166 236,837 Accounts payable - unconsolidated affiliates 6,988 320 19,191 Customer advances and deposits 70,089 60,326 14,162 Accrued compensation 22,581 17,632 24,710 Income taxes payable 11,574 9,891 6,867 Current portion of long-term obligations - 79,500 79,500 -- ------ ------ Total current liabilities 627,337 633,346 549,875 Long-term obligations 331,905 321,617 331,808 Pensions and other postretirement benefits 86,888 91,562 91,248 Other long-term liabilities 73,845 88,296 79,159 Deferred income taxes 55,035 35,335 52,842 ------ ------ ------ Total liabilities 1,175,010 1,170,156 1,104,932 Shareholders' equityUniversal 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, 5,000,000 shares authorized, 219,999 shares issued and outstanding (219,999 at September 30, 2008, and March 31, 2009) 213,023 213,023 213,023 Common stock, no par value, 100,000,000 shares authorized, 24,715,901 shares issued and outstanding (25,026,040 at September 30, 2008, and 24,999,127 at March 31, 2009) 195,227 193,643 194,037 Retained earnings 743,922 653,402 686,960 Accumulated other comprehensive loss (36,745) (30,944) (64,547) ------- ------- ------- Total Universal Corporation shareholders' equity 1,115,427 1,029,124 1,029,473 Noncontrolling interests in subsidiaries 6,045 7,288 3,771 ----- ----- ----- Total shareholders' equity 1,121,472 1,036,412 1,033,244 --------- --------- --------- Total liabilities and shareholders' equity $2,296,482 $2,206,568 $2,138,176 ========== ========== ========== See accompanying notes. UNIVERSAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of dollars) Six Months Ended September 30, ------------- 2009 2008 ---- ---- (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $98,476 $67,107 Adjustments to reconcile net income to net cash used by operating activities: Depreciation 20,524 20,451 Amortization 1,020 493 Provisions for losses on advances and guaranteed loans to suppliers 8,827 9,972 Remeasurement loss (gain), net 8,562 24,603 Other, net 8,562 10,006 Changes in operating assets and liabilities, net (279,720) (321,938) -------- -------- Net cash used by operating activities (133,749) (189,306) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (26,429) (21,748) Purchases of short-term investments - (9,658) Maturities and sales of short-term investments - 52,740 Proceeds from sale of property, plant and equipment, and other 2,134 14,298 ----- ------ Net cash provided (used) by investing activities (24,295) 35,632 ------- ------ CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of short-term debt, net 125,997 144,884 Repayment of long-term obligations (79,500) - Issuance of common stock 72 37 Repurchase of common stock (10,947) (105,689) Dividends paid on convertible perpetual preferred stock (7,425) (7,425) Dividends paid on common stock (22,950) (22,962) ------- ------- Net cash provided by financing activities 5,247 8,845 ----- ----- Effect of exchange rate changes on cash 2,162 (476) ----- ---- Net decrease in cash and cash equivalents (150,635) (145,305) Cash and cash equivalents at beginning of year 212,626 186,070 ------- ------- Cash and cash equivalents at end of period $61,991 $40,765 ======= ======= See accompanying notes.
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
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 Six Months Ended September 30, September 30, ------------- ------------- (in thousands, except per share data) 2009 2008 2009 2008 ------------------------------------- ---- ---- ---- ---- Basic Earnings Per Share ------------------------ Numerator for basic earnings per share Net income attributable to Universal Corporation $52,515 $41,782 $96,260 $62,893 Less: Dividends on convertible perpetual preferred stock (3,713) (3,713) (7,425) (7,425) ------ ------ ------ ------ Earnings available toUniversal Corporation common shareholders for calculation of basic earnings per share 48,802 38,069 88,835 55,468 ------ ------ ------ ------ Denominator for basic earnings per share Weighted average shares outstanding 24,801 25,404 24,892 26,146 ------ ------ ------ ------ Basic earnings per share $1.97 $1.50 $3.57 $2.12 ===== ===== ===== ===== Diluted Earnings Per Share -------------------------- Numerator for diluted earnings per share Earnings available to Universal Corporation common shareholders $48,802 $38,069 $88,835 $55,468 Add: Dividends on convertible perpetual preferred stock (if conversion assumed) 3,713 3,713 7,425 7,425 ----- ----- ----- ----- Earnings available to Universal Corporation common shareholders for calculation of diluted earnings per share 52,515 41,782 96,260 62,893 ------ ------ ------ ------ Denominator for diluted earnings per share: Weighted average shares outstanding 24,801 25,404 24,892 26,146 Effect of dilutive securities (if conversion or exercise assumed) Convertible perpetual preferred stock 4,732 4,716 4,730 4,715 Employee share-based awards 162 229 147 224 --- --- --- --- Denominator for diluted earnings per share 29,695 30,349 29,769 31,085 ------ ------ ------ ------ Diluted earnings per share $1.77 $1.38 $3.23 $2.02 ===== ===== ===== =====
For the three- and six-month periods 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 Six Months Ended September 30, September 30, ------------- ------------- (in thousands of dollars) 2009 2008 2009 2008 ---- ---- ---- ---- SALES AND OTHER OPERATING REVENUES Flue-cured and burley leaf tobacco operations: North America $49,874 $54,866 $86,006 $103,293 Other regions (1) 547,177 686,276 1,068,349 1,087,761 ------- ------- --------- --------- Subtotal 597,051 741,142 1,154,355 1,191,054 Other tobacco operations (2) 50,867 44,448 109,675 100,823 ------ ------ ------- ------- Consolidated sales and other operating revenues $647,918 $785,590 $1,264,030 $1,291,877 ======== ======== ========== ========== OPERATING INCOME Flue-cured and burley leaf tobacco operations: North America $7,948 $3,750 $8,254 $3,324 Other regions (1) 61,477 62,453 125,386 97,638 ------ ------ ------- ------ Subtotal 69,425 66,203 133,640 100,962 Other tobacco operations (2) 12,045 12,575 21,243 15,953 ------ ------ ------ ------ Segment operating income 81,470 78,778 154,883 116,915 Less: Equity in pretax earnings of unconsolidated affiliates (3) 5,605 7,583 9,246 7,533 ----- ----- ----- ----- Consolidated operating income $75,865 $71,195 $145,637 $109,382 ======= ======= ======== ======== (1) IncludesSouth 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.
SOURCE
Karen M. L. Whelan of Universal Corporation, +1-804-359-9311, Fax, +1-804-254-3584, investor@universalleaf.com