Press Release
<< Back
Universal Corporation Reports Improved Six Month Results
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 on
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' equity
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 to
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) Includes
SOURCE
Karen M. L. Whelan of Universal Corporation, +1-804-359-9311, Fax, +1-804-254-3584, investor@universalleaf.com