RICHMOND, Va., Nov. 5,
2015 /PRNewswire/ --
HIGHLIGHTS
Six Months
Operating income up $18 million, to $32
million
Revenues were flat, at $732
million
Dividend increase announced for the 45th consecutive
year
Second Quarter
Operating income up $15 million, to
$37 million
Net income up 50%, to $22.5
million
Diluted earnings per share of $0.81
George C. Freeman, III, Chairman,
President, and Chief Executive Officer of Universal Corporation
(NYSE: UVV), reported that net income for the first half of fiscal
year 2016, which ended on September 30,
2015, was $16.5 million, or
$0.40 per diluted share, compared
with $15.7 million, or $0.35 per diluted share for the same period last
year. Results for the six months ended September 30, 2015, included restructuring and
impairment costs of $2.4 million
($0.07 per diluted share). Last
year's results for the six months ended September 30, 2014, included an income tax
benefit of $8.0 million (or
$0.34 per diluted share), arising
from a subsidiary's payment of a portion of a fine following the
unsuccessful appeal of a long-running court case, and restructuring
costs of $3.4 million ($0.09 per diluted share). Excluding those items
in both years, net income for the six months increased $8.1 million ($0.37
per diluted share) compared to the same period last year. For the
second fiscal quarter ended September 30,
2015, net income was $22.5
million, or $0.81 per diluted
share, compared with net income for the prior year's second quarter
of $15.0 million, or $0.48 per diluted share.
Segment operating income for the first half of fiscal year 2016
was $34.6 million, an increase of
$13.7 million, and for the quarter
ended September 30, 2015, was
$38.1 million, an increase of
$9.6 million, both compared to the
same periods last fiscal year. Those increases resulted primarily
from earnings improvements in the Other Regions segment, offset in
part by declines in the Other Tobacco Operations segment.
Consolidated revenues decreased by 1% to $731.8 million for the first half of fiscal year
2016, and by 2% to $456.4 million for
the three months ended September 30,
2015, compared to the same periods in the prior year, mostly
as a result of higher volumes offset by lower average green prices,
as well as lower processing revenues.
Mr. Freeman stated, "We are pleased with the performance of our
operations in the first half of this year, which has progressed as
expected given the lingering effects of an oversupplied market. Our
results for the six months ended September
30, 2015, include higher sales volumes, lower overhead
costs, and better overall margins in our key operating regions, due
in part to efforts in recent years to improve efficiencies and
reduce costs in our business. We continue to support supply chain
efficiencies such as in Poland
where we recently announced an agreement to assume processing of
tobaccos in crop year 2015 for a major customer, giving rise to
improved processing efficiencies in that
country.
"We still anticipate that total lamina sales volumes from the
current year's crops will slightly exceed those of last year.
Similar to last year, we expect strong shipments in the second half
of the fiscal year, but this year we expect much heavier volumes
will ship in the fourth fiscal quarter. Due to this later timing,
and depending upon factors such as port and container availability,
some shipments may fall into the first fiscal quarter of 2017.
"We are monitoring weather conditions around the world that will
likely have a negative impact on 2016 crop quality and production
levels. As a result of the recent heavy rains and hail in southern
Brazil from an El Nino weather
pattern, we have reduced production projections for both flue-cured
and burley in that country by about 8%. The smaller crop sizes
could decrease our buying program there next year. The same weather
pattern may also affect Africa,
decreasing rainfall and impacting crop sizes and quality. We
believe that the combination of this weather pattern and reduced
plantings in some origins will bring markets largely into balance
in fiscal year 2017.
"Construction of the processing facility for our new food
ingredients business has been substantially completed, and we
expect to begin commercial production in our third fiscal quarter.
In addition, as we begin the second half of our fiscal year, we
believe we are well-positioned with low uncommitted inventories and
a strong balance sheet, and we continue to reward our shareholders
as evidenced by our 45th consecutive annual dividend
increase announced earlier today."
FLUE-CURED AND BURLEY LEAF TOBACCO
OPERATIONS:
OTHER REGIONS:
Operating income for the Other Regions segment increased by
$15.3 million to $26.4 million for the first half of fiscal year
2016, compared to the first half of the prior fiscal year. The
improvement was largely attributable to reduced selling, general,
and administrative costs, although higher sales volumes for the
segment and better overall margins in most regions also contributed
to the earnings increase. Sales from carryover crops in
Africa and higher volumes in
Asia helped mitigate declining
volumes and the effect of devaluation of local currencies on U.S.
dollar-translated results for the Europe region. The South America region saw positive cost
comparisons in the first half of the year from the suspension of
operations in Argentina last year.
Selling, general, and administrative expenses for the segment
improved on the absence of last year's large value-added tax
valuation provision, lower incentive compensation costs, and the
impact of a stronger U.S. dollar on local currency expenses. These
improvements were partially offset by higher net currency
remeasurement and exchange losses, mainly in Africa and Asia, and the costs incurred in the current
quarter to settle third party challenges to the property rights and
valuation of a large tract of forestry land.
Revenues for the Other Regions segment for the six months ended
September 30, 2015 were down about 4%
to $548.4 million, reflecting the
higher volumes at lower average green leaf prices for the segment
as a whole, as well as a decline in processing revenues.
Operating income for the Other Regions segment increased
$12.6 million to $34.2 million in the quarter ended September 30, 2015, compared with the quarter
ended September 30, 2014. A
combination of stronger sales volumes, lower inventory writedowns,
lower green leaf costs, a better product mix, and lower
local-currency factory overheads contributed to improved margins
for the segment. Selling, general, and administrative expenses
declined slightly for this segment in the second fiscal quarter as
lower incentive compensation costs and the positive effect of the
stronger U.S. dollar on other local currency-denominated overheads
were partly offset by the costs to settle third party challenges to
the property rights and valuation of a large tract of forestry
land. Revenues for the Other Regions segment declined slightly by
$0.6 million to $371.0 million in the quarter ended September 30, 2015, compared with the prior year,
on higher total volumes and a better mix, offset by lower average
green prices and processing revenues.
NORTH
AMERICA:
North
America segment operating income of $7.2 million for the six months ended
September 30, 2015, increased by
$1.2 million, compared with the same
period in the previous year. The improvement was driven by higher
domestic volumes, mainly from carryover crop sales in the first
fiscal quarter. Selling, general and administrative costs were
higher for the period, but were flat as a percentage of sales.
Segment revenues for the first half of fiscal year 2016 increased
by $13.0 million to $98.0 million on those higher volumes, offset by
modest declines in processing revenues and a less favorable product
mix.
Segment operating income for the second quarter of fiscal year
2016 of $3.8 million was down by
$0.5 million from last year's
comparable quarter. The earnings decline was mainly driven by
higher selling, general, and administrative costs, including
variances related to provisions for supplier advances and currency
remeasurement losses in Mexico.
Second quarter fiscal year 2016 revenues declined by about 7% to
$49.4 million for the segment, mainly
from lower sales and processing volumes.
OTHER TOBACCO OPERATIONS:
For the first half of fiscal
year 2016, the Other Tobacco Operations segment's operating income
decreased by $2.8 million to
$1.1 million from results for the
same period last fiscal year. Earnings improved for the dark
tobacco operations on higher volumes, as well as better margins and
lower compensation costs. That improvement was offset by reduced
earnings for the oriental joint venture due to lower volumes,
partly resulting from later shipments this fiscal year, and higher
currency remeasurement losses. In addition, the special services
group incurred losses primarily on continuing startup costs for the
new food ingredients business. Selling, general, and administrative
costs for the segment were flat for the first half of the current
fiscal year compared with the previous year. Revenues for the Other
Tobacco Operations segment increased by $4.0
million to $85.4 million for
the first half of fiscal year 2016, as the stronger volumes for the
dark tobacco operations were partly offset by volume declines due
to the timing of shipments of oriental tobaccos into the United States.
The Other Tobacco Operations segment operating income declined
by $2.5 million to $0.1 million for the quarter ended September 30, 2015, compared with the same period
for the previous fiscal year. Results for the dark tobacco business
improved slightly for the second fiscal quarter, on better margins
and stronger service cutting volumes. Selling, general, and
administrative costs in the second fiscal quarter for the segment
were negatively impacted by higher costs for the special services
group and from higher currency remeasurement and exchange losses,
mainly in the dark tobacco operations. Results in the fiscal
quarter were down for the oriental joint venture on reduced
volumes, due in part to shipments delayed into the second half of
the fiscal year, and higher currency remeasurement losses, despite
lower administrative costs for the period. Revenues for the segment
declined by $3.2 million to
$35.9 million for the second fiscal
quarter as the improvements for the dark tobacco business were
outweighed by lower sales volumes due to the timing of shipments of
oriental tobaccos into the United
States, compared to the same period in the prior year.
OTHER ITEMS:
Cost of goods sold decreased by about 2%
to $585.3 million for the first half,
and by about 5% to $358.3 million for
the second quarter of fiscal year 2016. For both periods, the
reductions reflect the lower revenues in the respective periods,
from lower overall leaf prices, and improved margins. The second
fiscal quarter was also influenced by an improved product mix and
lower inventory writedowns.
Selling, general, and administrative costs decreased by
$11.5 million in the first half of
fiscal year 2016 and increased by $1.0
million for the second fiscal quarter compared with the same
periods in the prior fiscal year. In both periods, benefits were
achieved from a combination of items, including favorable
comparisons to last year's accruals for value-added tax reserves,
lower loss provisions on advances to suppliers, lower incentive
compensation costs, and reductions in local currency-denominated
expenses from devaluation of foreign currencies, mainly in
South America and Africa. Expense increases in the periods were
driven by larger currency remeasurement losses, mainly in
Africa and Asia, and the costs incurred in the current
quarter to settle third party challenges to the property rights and
valuation of a large tract of forestry land.
The consolidated effective income tax rates were approximately
27% and 24% for the quarters ended September
30, 2015 and 2014, respectively. The consolidated effective
tax rate for the six-month period ended September 30, 2015, was approximately 24%. Income
taxes for the first half of fiscal year 2015 were impacted by a
non-recurring benefit of $8.0 million
arising from the partial payment of the European Commission fine by
our Italian subsidiary in June 2014. Excluding that item, the
consolidated effective tax rate for the six months ended
September 30, 2014, was approximately
10%. The rates for all periods were lower than the 35% federal
statutory rate because of lower net effective tax rates on income
from certain foreign subsidiaries, as well as effects of changes in
local currency exchange rates on deferred income tax balances.
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 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, operating income, 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 to consolidated operating
income is 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 these 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; 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 March 31, 2015, 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, 2015.
At 5:00 p.m. (Eastern Time) on
November 5, 2015, 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 2, 2016. A taped
replay of the call will be available through November 19, 2015, by dialing (855) 859-2056. The
confirmation number to access the replay is 68333154.
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, 2015, were $2.3 billion.
For more information on Universal Corporation, visit its website at
www.universalcorp.com.
UNIVERSAL
CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
|
Six Months
Ended
September 30,
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
Sales and other
operating revenues
|
$
|
456,382
|
|
|
$
|
464,116
|
|
|
$
|
731,801
|
|
|
$
|
735,588
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
358,288
|
|
|
379,045
|
|
|
585,318
|
|
|
594,977
|
Selling, general and
administrative expenses
|
60,810
|
|
|
59,809
|
|
|
112,106
|
|
|
123,586
|
Restructuring and
impairment costs
|
-
|
|
|
3,350
|
|
|
2,389
|
|
|
3,350
|
Operating
income
|
37,284
|
|
|
21,912
|
|
|
31,988
|
|
|
13,675
|
Equity in pretax
earnings of unconsolidated affiliates
|
846
|
|
|
3,317
|
|
|
230
|
|
|
3,918
|
Interest
income
|
205
|
|
|
67
|
|
|
444
|
|
|
210
|
Interest
expense
|
3,912
|
|
|
4,852
|
|
|
7,796
|
|
|
8,872
|
Income before income
taxes
|
34,423
|
|
|
20,444
|
|
|
24,866
|
|
|
8,931
|
Income tax expense
(benefit)
|
9,359
|
|
|
4,960
|
|
|
5,927
|
|
|
(7,078)
|
Net income
|
25,064
|
|
|
15,484
|
|
|
18,939
|
|
|
16,009
|
Less: net income
attributable to noncontrolling interests in subsidiaries
|
(2,599)
|
|
|
(459)
|
|
|
(2,421)
|
|
|
(267)
|
Net income
attributable to Universal Corporation
|
22,465
|
|
|
15,025
|
|
|
16,518
|
|
|
15,742
|
Dividends on
Universal Corporation convertible perpetual preferred
stock
|
(3,687)
|
|
|
(3,713)
|
|
|
(7,374)
|
|
|
(7,425)
|
Earnings available to
Universal Corporation common shareholders
|
$
|
18,778
|
|
|
$
|
11,312
|
|
|
$
|
9,144
|
|
|
$
|
8,317
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Universal Corporation common
shareholders:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.83
|
|
|
$
|
0.49
|
|
|
$
|
0.40
|
|
|
$
|
0.36
|
Diluted
|
|
$
|
0.81
|
|
|
$
|
0.48
|
|
|
$
|
0.40
|
|
|
$
|
0.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes.
|
|
|
|
|
|
|
|
|
|
|
|
|
UNIVERSAL
CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
March 31,
|
|
2015
|
|
2014
|
|
2015
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
68,970
|
|
$
|
29,567
|
|
$
|
248,783
|
Accounts receivable,
net
|
303,963
|
|
290,162
|
|
434,362
|
Advances to
suppliers, net
|
40,627
|
|
70,296
|
|
114,883
|
Accounts receivable -
unconsolidated affiliates
|
59,370
|
|
98,707
|
|
1,907
|
Inventories - at
lower of cost or market:
|
|
|
|
|
|
Tobacco
|
999,312
|
|
1,164,293
|
|
636,488
|
Other
|
85,222
|
|
100,516
|
|
62,195
|
Prepaid income
taxes
|
19,779
|
|
28,138
|
|
17,811
|
Deferred income
taxes
|
31,491
|
|
34,560
|
|
36,611
|
Other current
assets
|
75,122
|
|
83,754
|
|
81,570
|
Total current
assets
|
1,683,856
|
|
1,899,993
|
|
1,634,610
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
|
|
|
Land
|
16,583
|
|
17,022
|
|
16,790
|
Buildings
|
252,153
|
|
239,568
|
|
238,372
|
Machinery and
equipment
|
585,466
|
|
577,064
|
|
576,010
|
|
854,202
|
|
833,654
|
|
831,172
|
Less: accumulated
depreciation
|
(539,749)
|
|
(528,722)
|
|
(525,783)
|
|
314,453
|
|
304,932
|
|
305,389
|
Other
assets
|
|
|
|
|
|
Goodwill and other
intangibles
|
99,049
|
|
99,291
|
|
99,146
|
Investments in
unconsolidated affiliates
|
79,995
|
|
88,841
|
|
76,512
|
Deferred income
taxes
|
20,661
|
|
18,861
|
|
6,301
|
Other noncurrent
assets
|
55,976
|
|
68,973
|
|
76,515
|
|
255,681
|
|
275,966
|
|
258,474
|
|
|
|
|
|
|
Total
assets
|
$
|
2,253,990
|
|
$
|
2,480,891
|
|
$
|
2,198,473
|
|
|
|
|
|
|
|
|
|
See accompanying
notes.
|
|
|
|
|
|
|
|
|
UNIVERSAL
CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
March 31,
|
|
2015
|
|
2014
|
|
2015
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Notes payable and
overdrafts
|
$
|
86,095
|
|
$
|
359,349
|
|
$
|
59,862
|
Accounts payable and
accrued expenses
|
155,824
|
|
154,826
|
|
140,112
|
Accounts
payable-unconsolidated affiliates
|
98
|
|
1,150
|
|
3,281
|
Customer advances and
deposits
|
67,100
|
|
57,723
|
|
30,183
|
Accrued
compensation
|
18,423
|
|
20,272
|
|
28,232
|
Income taxes
payable
|
5,612
|
|
11,164
|
|
9,243
|
Current portion of
long-term obligations
|
-
|
|
118,750
|
|
-
|
Total current
liabilities
|
333,152
|
|
723,234
|
|
270,913
|
|
|
|
|
|
|
Long-term
obligations
|
370,000
|
|
230,000
|
|
370,000
|
Pensions and other
postretirement benefits
|
93,588
|
|
74,975
|
|
97,048
|
Other long-term
liabilities
|
37,472
|
|
34,567
|
|
36,790
|
Deferred income
taxes
|
32,067
|
|
39,235
|
|
26,628
|
Total
liabilities
|
866,279
|
|
1,102,011
|
|
801,379
|
|
|
|
|
|
|
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, 218,490 shares issued and outstanding (219,999 at
September 30, 2014, and 218,490 at March 31, 2015)
|
211,562
|
|
213,023
|
|
211,562
|
Common stock, no par
value, 100,000,000 shares authorized, 22,680,233 shares issued and
outstanding (23,183,259 at September 30, 2014, and 22,593,266 at
March 31, 2015)
|
207,349
|
|
207,552
|
|
206,002
|
Retained
earnings
|
1,005,353
|
|
971,391
|
|
1,020,155
|
Accumulated other
comprehensive loss
|
(71,657)
|
|
(44,001)
|
|
(74,994)
|
Total Universal
Corporation shareholders' equity
|
1,352,607
|
|
1,347,965
|
|
1,362,725
|
Noncontrolling
interests in subsidiaries
|
35,104
|
|
30,915
|
|
34,369
|
Total shareholders'
equity
|
1,387,711
|
|
1,378,880
|
|
1,397,094
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
2,253,990
|
|
$
|
2,480,891
|
|
$
|
2,198,473
|
|
|
|
|
|
|
|
|
|
See accompanying
notes.
|
|
|
|
|
|
|
|
|
UNIVERSAL
CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
September 30,
|
|
2015
|
|
2014
|
|
(Unaudited)
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
|
$
|
18,939
|
|
|
$
|
16,009
|
Adjustments to
reconcile net income to net cash used by operating
activities:
|
|
|
|
Depreciation
|
18,362
|
|
|
17,298
|
Amortization
|
446
|
|
|
816
|
Net provision for
losses (recoveries) on advances and guaranteed loans to
suppliers
|
(4,354)
|
|
|
(2,497)
|
Foreign currency
remeasurement loss (gain), net
|
21,981
|
|
|
7,156
|
Restructuring and
impairment costs
|
2,389
|
|
|
3,350
|
Other, net
|
481
|
|
|
(9,470)
|
Changes in operating
assets and liabilities, net
|
(202,046)
|
|
|
(386,404)
|
Net cash used by
operating activities
|
(143,802)
|
|
|
(353,742)
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchase of property,
plant and equipment
|
(28,457)
|
|
|
(30,571)
|
Proceeds from sale of
property, plant and equipment
|
1,155
|
|
|
983
|
Net cash used by
investing activities
|
(27,302)
|
|
|
(29,588)
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Issuance (repayment)
of short-term debt, net
|
23,826
|
|
|
297,507
|
Repayment of
long-term obligations
|
-
|
|
|
(7,500)
|
Dividends paid to
noncontrolling interests
|
(1,260)
|
|
|
(1,977)
|
Issuance of common
stock
|
-
|
|
|
187
|
Repurchase of common
stock
|
-
|
|
|
(7,202)
|
Dividends paid on
convertible perpetual preferred stock
|
(7,374)
|
|
|
(7,425)
|
Dividends paid on
common stock
|
(23,536)
|
|
|
(23,661)
|
Net cash provided
(used) by financing activities
|
(8,344)
|
|
|
249,929
|
|
|
|
|
Effect of exchange
rate changes on cash
|
(365)
|
|
|
(564)
|
Net decrease in cash
and cash equivalents
|
(179,813)
|
|
|
(133,965)
|
Cash and cash
equivalents at beginning of year
|
248,783
|
|
|
163,532
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$
|
68,970
|
|
|
$
|
29,567
|
|
|
|
|
|
|
|
See accompanying
notes.
|
|
|
|
|
|
|
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, 2015.
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)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
|
|
|
|
|
|
|
Numerator for
basic earnings per share
|
|
|
|
|
|
|
|
Net income
attributable to Universal Corporation
|
$
|
22,465
|
|
$
|
15,025
|
|
$
|
16,518
|
|
$
|
15,742
|
Less: Dividends on
convertible perpetual preferred stock
|
(3,687)
|
|
(3,713)
|
|
(7,374)
|
|
(7,425)
|
Earnings available to
Universal Corporation common
shareholders for calculation of basic earnings per
share
|
18,778
|
|
11,312
|
|
9,144
|
|
8,317
|
|
|
|
|
|
|
|
|
|
Denominator for
basic earnings per share
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
22,675,323
|
|
23,178,082
|
|
22,649,270
|
|
23,200,589
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
|
0.83
|
|
$
|
0.49
|
|
$
|
0.40
|
|
$
|
0.36
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share
|
|
|
|
|
|
|
|
Numerator for
diluted earnings per share
|
|
|
|
|
|
|
|
Earnings available to Universal Corporation common
shareholders
|
$
|
18,778
|
|
$
|
11,312
|
|
$
|
9,144
|
|
$
|
8,317
|
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
|
22,465
|
|
11,312
|
|
9,144
|
|
8,317
|
|
|
|
|
|
|
|
|
|
Denominator for
diluted earnings per share
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
22,675,323
|
|
23,178,082
|
|
22,649,270
|
|
23,200,589
|
Effect of dilutive
securities (if conversion or exercise assumed)
|
|
|
|
|
|
|
|
Convertible perpetual
preferred stock
|
4,848,766
|
|
-
|
|
-
|
|
-
|
Employee share-based
awards
|
326,539
|
|
330,445
|
|
287,361
|
|
320,982
|
Denominator for
diluted earnings per share
|
27,850,628
|
|
23,508,527
|
|
22,936,631
|
|
23,521,571
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share
|
$
|
0.81
|
|
$
|
0.48
|
|
$
|
0.40
|
|
$
|
0.35
|
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 (excluding significant non-recurring
charges or credits), 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
September 30,
|
|
Six Months
Ended
September 30,
|
(in thousands of
dollars)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
SALES AND OTHER
OPERATING REVENUES
|
|
|
|
|
|
|
|
Flue-cured and burley
leaf tobacco operations:
|
|
|
|
|
|
|
|
North
America
|
$
|
49,421
|
|
$
|
53,308
|
|
$
|
97,993
|
|
$
|
85,006
|
Other
regions (1)
|
371,032
|
|
371,669
|
|
548,433
|
|
569,241
|
Subtotal
|
420,453
|
|
424,977
|
|
646,426
|
|
654,247
|
Other tobacco
operations (2)
|
35,929
|
|
39,139
|
|
85,375
|
|
81,341
|
Consolidated sales
and other operating revenues
|
$
|
456,382
|
|
$
|
464,116
|
|
$
|
731,801
|
|
$
|
735,588
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
|
|
|
|
|
Flue-cured and burley
leaf tobacco operations:
|
|
|
|
|
|
|
|
North
America
|
$
|
3,783
|
|
$
|
4,278
|
|
$
|
7,199
|
|
$
|
5,957
|
Other
regions (1)
|
34,202
|
|
21,661
|
|
26,355
|
|
11,086
|
Subtotal
|
37,985
|
|
25,939
|
|
33,554
|
|
17,043
|
Other tobacco
operations (2)
|
145
|
|
2,640
|
|
1,053
|
|
3,900
|
Segment operating
income
|
38,130
|
|
28,579
|
|
34,607
|
|
20,943
|
Deduct: Equity in
pretax earnings of unconsolidated affiliates
(3)
|
(846)
|
|
(3,317)
|
|
(230)
|
|
(3,918)
|
Restructuring and
impairment costs (4)
|
-
|
|
(3,350)
|
|
(2,389)
|
|
(3,350)
|
Consolidated
operating income
|
$
|
37,284
|
|
$
|
21,912
|
|
$
|
31,988
|
|
$
|
13,675
|
(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 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.
|
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SOURCE Universal Corporation