RICHMOND, Va., May 24, 2016 /PRNewswire/ --
HIGHLIGHTS
Fiscal Year 2016
Diluted earnings per share of
$3.92
Operating income up $14 million, to
$182 million
Improved margins on slightly higher volumes
Revenues of $2.1 billion, down 7% on
lower green prices
Fourth Quarter
Diluted earnings per share of
$1.72, up 5%
Operating income up 31%, to $80
million
Revenues up 3% to $804 million on
higher sales volumes
George C. Freeman, III, Chairman,
President, and Chief Executive Officer of Universal Corporation
(NYSE: UVV), announced that net income for the fiscal year ended
March 31, 2016, was $109.0 million, or $3.92 per diluted share, compared with last
year's net income of $114.6 million,
or $4.06 per diluted share. Those
results included certain non-recurring items, detailed in Other
Items below, which increased diluted earnings per share by
$0.02 and $0.46 for the years ended March 31, 2016 and 2015, respectively. Excluding
those items in both years, net income for the fiscal year increased
$6.8 million ($0.30 per diluted share) compared to the same
period last year. Segment operating income, which excludes those
items, was $186.1 million for fiscal
year 2016, an increase of $18.8
million, or 11%, from the prior year. That improvement was
primarily attributable to a reduction in selling, general, and
administrative costs, as well as improved gross margins on this
year's modestly higher sales volumes. Revenues of $2.1 billion for fiscal year 2016 declined 7%
compared with the previous year, driven mainly by lower green leaf
costs and lower processing revenues, partly mitigated by the
increase in volumes.
Net income for the fourth quarter ended March 31, 2016, was $48.0
million, or $1.72 per diluted
share, compared with net income for the prior year's fourth fiscal
quarter of $45.8 million, or
$1.64 per diluted share. The fiscal
year 2015 fourth quarter results also included certain
non-recurring items, detailed in Other Items below, which increased
diluted earnings per share by $0.29.
Excluding those items, net income for the quarter ended
March 31, 2016 increased $10.2 million ($0.37 per diluted share) compared to the same
period last year. Segment operating income for the period of
$83.3 million was up by $30.5 million, compared with the previous fiscal
year, on improved results in every segment as stronger sales
volumes and lower selling, general, and administrative costs led to
overall higher earnings for the quarter. Consolidated revenues for
the fourth fiscal quarter increased by 3% to $804.0 million, as higher sales volumes,
reflecting this year's later shipping patterns, were partially
offset by lower green leaf costs.
Mr. Freeman stated, "I am proud to report that we achieved
improved results in fiscal year 2016, after managing through this
second year of oversupplied market conditions. As anticipated, we
ended the year with strong fourth quarter volumes, primarily driven
by later timing of customer shipping orders in Brazil and Asia this year, and the positive change in
leaf supply arrangements in our North
America segment that we announced last year. We also
achieved modest growth in overall volumes for the full fiscal year
and improved our margins, and our selling, general, and
administrative costs were lower. Our inventories continue to be
well-managed, and uncommitted stocks have declined from last year's
level, in line with our target. In addition, we returned more than
$60 million in dividends to our
shareholders during the fiscal year, closed the year with higher
cash balances, which will support upcoming seasonal working capital
requirements in fiscal year 2017, and preserved our solid financial
position.
"As we move into the new fiscal year, global production
estimates have continued to decline. Plantings have been reduced in
some origins where farmers received lower green leaf prices this
fiscal year, and El Nino weather patterns have negatively impacted
some crops, particularly in Brazil. Consequently, and due to aggressive
green leaf market pricing, our crop purchase levels and sales
volumes, as well as third-party processing volumes from that
origin, will be lower in fiscal year 2017. However, we expect that
Brazilian crop levels and our volumes will recover next season.
"While we believe that total production levels have largely
moved into balance with anticipated demand, imbalances in certain
leaf quality styles or types remain, and our customers' inventory
composition and durations may also impact their near-term demand
requirements. We also believe that seasonality will continue to
influence our quarterly results, with some carryover crop
deliveries expected in the first fiscal quarter of 2017. Although
it is still early in the season, we currently anticipate that
customer-mandated shipment timing will continue to be weighted
toward the second half of the year.
"Although oversupplied markets during the past two fiscal years
have been less than optimal, I am pleased with our solid
performance demonstrated throughout this period, particularly
during fiscal year 2016. We remain excited about our prospects and
look forward to continuing our leadership role in the industry, as
we work for and with our customers to improve efficiencies in our
markets and to provide a sustainable, compliant, and competitively
priced product, allowing us to fulfill their needs and to continue
to provide value to our shareholders."
FLUE-CURED AND BURLEY LEAF TOBACCO OPERATIONS:
OTHER REGIONS:
Operating income for the Other Regions segment for the fiscal
year ended March 31, 2016, was
$143.6 million, up 14% compared to
$125.8 million in the previous fiscal
year. Better margins, fewer inventory write-downs, and lower
selling, general, and administrative expenses drove the earnings
improvement. These positive factors outweighed lower margins in
Europe and the currency
translation effects of a stronger U.S. dollar which negatively
impacted results from that region. Strong volumes in most regions
were offset by declines in Africa
on smaller crop sizes in some origins compared to the prior year.
Selling, general, and administrative expenses for the segment were
down significantly for the fiscal year, largely on reductions in
local currency-denominated expenses from devaluation of foreign
currencies, mainly in South
America and Africa, and
lower incentive compensation costs. Revenues for the segment were
down about 12% to $1.5 billion,
driven mostly by lower average green leaf prices and the modestly
reduced volumes.
Operating income for the Other Regions segment for the quarter
ended March 31, 2016, increased by
56% to $55.9 million, compared with
the same period last year. The improved results reflected higher
total volumes as stronger fourth quarter shipments from later
shipping patterns this year, mainly in Asia and South
America, were partially offset by reduced volumes in
Africa from smaller crops and
earlier shipments as a result of processing efficiencies in
Mozambique. Selling, general, and
administrative expenses for the segment were also down for the
quarter, as lower benefit and incentive compensation accruals and
lower foreign currency and exchange remeasurement losses were
partly offset by unfavorable comparisons for value-added tax
reserves and customer bad debt provisions. Revenues for the segment
decreased by 6% to $529.8 million for
the fourth fiscal quarter compared to the prior year, on higher
volumes offset by lower green leaf prices.
NORTH AMERICA:
Operating income for the North
America segment for the fiscal year ended March 31, 2016, of $31.1
million was flat compared with the previous year. Earnings
improvements from sales volume increases, due in part to old crop
sales in the first fiscal quarter, and the previously announced
change in business with Philip Morris International, Inc. in
the United States from a toll
processing model to sales of processed tobacco, were offset by
lower margins and lower earnings from Guatemala and Mexico. In addition, processing volumes
declined significantly compared with the prior year as a result of
that change in business, and a portion of crop volumes sold under
this new arrangement will carry over as shipments in fiscal year
2017. Fiscal year 2016 revenues for the segment increased by 19% to
$361.8 million compared to the prior
fiscal year, on higher sales volumes at lower green leaf prices, a
less favorable product mix, and lower processing revenues.
Segment operating income for the quarter ended March 31, 2016, increased by $9.0 million to $18.2
million, compared with the same period last year. Those
results were primarily driven by significantly higher sales
volumes, due in large part to the change in business mentioned
above, as tobaccos purchased under the arrangement began to ship
during the quarter. Similarly, revenues for this segment for the
fourth fiscal quarter increased by $81.2
million to $182.4 million,
reflecting the higher volumes and a more favorable product mix.
Selling, general, and administrative costs for this segment were
relatively flat for both periods.
OTHER TOBACCO OPERATIONS:
For the fiscal year ended March 31,
2016, the Other Tobacco Operations segment operating income
increased by $1.0 million to
$11.3 million compared with the same
period last year. Earnings were up significantly for the dark
tobacco operations on higher volumes, better margins, and lower
selling, general, and administrative costs. That improvement was
partly offset by lower results from the oriental joint venture as
benefits from improved margins and lower overhead costs were
outweighed by higher currency remeasurement losses and tax
accruals. The special services group incurred losses for the year,
mainly from startup and production testing costs for the new food
ingredients business. Revenues for the segment were down by
$7.4 million to $219.6 million for
the year ended March 31, 2016, as the
higher volumes for the dark tobacco operations were more than
offset by reduced volumes at lower prices from the timing of
shipments of oriental tobaccos into the
United States compared to the previous year.
For the fourth quarter ended March 31,
2016, the segment's operating income improved by
$1.4 million to $9.2 million,
compared to the same period last year. Results for the dark tobacco
operations improved for the quarter on a more favorable product mix
from higher wrapper volumes and lower selling, general, and
administrative costs. Segment results were negatively affected by
later timing of oriental tobaccos shipped into the United States and the continuation of
start-up costs in the special services group. Revenues for this
segment in the fourth fiscal quarter decreased by $18.7 million to $91.8
million, compared with the same period last year, on lower
total sales volumes for the dark tobacco operations as well as
lower volumes and prices for oriental tobacco shipments into
the United States.
OTHER ITEMS:
Cost of goods sold decreased by about 8% to $1.7 billion for the fiscal year ended
March 31, 2016, primarily due to
lower green leaf prices and the effects of local-currency
devaluations on factory costs compared with the previous year. For
the quarter ended March 31, 2016,
cost of goods sold increased by about 1%, to $663.0 million, on higher sales volumes at lower
leaf prices. Selling, general, and administrative costs decreased
by $23.5 million for the fiscal year
and $12.6 million for the three
months ended March 31, 2016, compared
with the respective prior year periods. The decline for the fiscal
year was mainly driven by reductions in local currency-denominated
expenses from devaluation of foreign currencies in South America and Africa, and lower incentive compensation
costs, reduced in part by higher net currency and exchange losses
in Asia as well as costs to settle
challenges regarding property rights and valuation in South America. The decrease for the fourth
fiscal quarter was mostly attributable to lower benefit and
incentive compensation accruals and lower foreign currency and
exchange remeasurement losses, offset in part by an unfavorable
comparison for value-added tax reserves and customer bad debt
provisions.
Interest expense of $15.7 million
for the fiscal year ended March 31,
2016, declined by about 8% compared to the prior fiscal
year. The reduction was mostly due to lower average short-term
borrowings for seasonal working capital, offset in part by higher
effective interest rates on long-term bank loans from fixed
interest rate swaps entered on those loans in the fourth quarter of
fiscal 2015. In the fourth fiscal quarter of 2016, interest expense
increased slightly as a result of those higher effective long-term
loan rates compared with the same period in the previous year. The
consolidated effective tax rate for the fiscal year ended
March 31, 2016, was approximately 32%
compared to about 24% for the prior year comparable period. Income
taxes for fiscal year 2015 were reduced 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. In both
years, the decrease from the 35% U.S. statutory rate was also
influenced by lower net effective tax rates on income from certain
foreign subsidiaries, as well as the effects of changes in local
currency exchange rates on deferred income tax balances. The
consolidated effective income tax rates were approximately 34% and
25% for the quarters ended March 31,
2016 and 2015, respectively. In the fourth quarter of 2015,
rates were lower than the federal statutory rates due to the
favorable impact of local currency devaluation on deferred income
taxes in certain foreign operations, mainly in Brazil.
Results for the year ended March 31,
2016, included restructuring and impairment costs of
$2.4 million ($0.06 per diluted share) and a gain of
$3.4 million ($0.08 per diluted share) on remeasuring the
Company's interest in a tobacco processing joint venture to fair
value upon acquiring our partner's 50% ownership in the third
fiscal quarter. Results for the year ended March 31, 2015, included an income tax benefit of
$8.0 million ($0.28 per diluted share) arising from a
subsidiary's payment of a portion of a fine, restructuring costs of
$4.9 million ($0.11 per diluted share), and a gain of
$12.7 million ($0.29 per diluted share), from updated
projections related to the favorable outcome in fiscal year 2014 of
litigation in Brazil regarding
previous years' excise tax credits. Results for the three months
ended March 31, 2016, did not include
any significant non-recurring items. For the three months ended
March 31, 2015, results included the
$12.7 million gain mentioned above,
and restructuring costs of $0.4
million ($0.01 per diluted
share).
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, 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 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
May 24, 2016, 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 August 4, 2016. A taped
replay of the call will be available through June 6, 2016, by dialing (855) 859-2056. The
confirmation number to access the replay is 8549813.
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, 2016, were $2.1 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
March 31,
|
|
Fiscal Year
Ended
March 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Sales and other
operating revenues
|
|
$
|
803,980
|
|
|
$
|
778,159
|
|
|
$
|
2,120,373
|
|
|
$
|
2,271,801
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
663,038
|
|
|
656,068
|
|
|
1,713,042
|
|
|
1,861,527
|
|
Selling, general and
administrative expenses
|
|
60,498
|
|
|
73,061
|
|
|
226,685
|
|
|
250,186
|
|
Other
income
|
|
—
|
|
|
(12,676)
|
|
|
(3,390)
|
|
|
(12,676)
|
|
Restructuring and
impairment costs
|
|
—
|
|
|
397
|
|
|
2,389
|
|
|
4,890
|
|
Operating
income
|
|
80,444
|
|
|
61,309
|
|
|
181,647
|
|
|
167,874
|
|
Equity in pretax
earnings of unconsolidated affiliates
|
|
2,866
|
|
|
3,746
|
|
|
5,422
|
|
|
7,137
|
|
Interest
income
|
|
282
|
|
|
218
|
|
|
1,178
|
|
|
576
|
|
Interest
expense
|
|
3,936
|
|
|
3,611
|
|
|
15,669
|
|
|
17,120
|
|
Income before income
taxes
|
|
79,656
|
|
|
61,662
|
|
|
172,578
|
|
|
158,467
|
|
Income
taxes
|
|
27,062
|
|
|
15,287
|
|
|
54,430
|
|
|
38,006
|
|
Net income
|
|
52,594
|
|
|
46,375
|
|
|
118,148
|
|
|
120,461
|
|
Less: net income
attributable to noncontrolling interests in subsidiaries
|
|
(4,630)
|
|
|
(548)
|
|
|
(9,132)
|
|
|
(5,853)
|
|
Net income
attributable to Universal Corporation
|
|
47,964
|
|
|
45,827
|
|
|
109,016
|
|
|
114,608
|
|
Dividends on
Universal Corporation convertible perpetual preferred
stock
|
|
(3,687)
|
|
|
(3,687)
|
|
|
(14,748)
|
|
|
(14,824)
|
|
Cost in excess of
carrying value on repurchase of convertible perpetual preferred
stock
|
|
—
|
|
|
(18)
|
|
|
—
|
|
|
(36)
|
|
Earnings available to
Universal Corporation common shareholders
|
|
$
|
44,277
|
|
|
$
|
42,122
|
|
|
$
|
94,268
|
|
|
$
|
99,748
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Universal Corporation common
shareholders:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.95
|
|
|
$
|
1.86
|
|
|
$
|
4.16
|
|
|
$
|
4.33
|
|
Diluted
|
|
$
|
1.72
|
|
|
$
|
1.64
|
|
|
$
|
3.92
|
|
|
$
|
4.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes.
|
|
|
|
|
|
|
|
UNIVERSAL
CORPORATION
CONSOLIDATED
BALANCE SHEETS
(in thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
319,447
|
|
|
$
|
248,783
|
|
Accounts receivable,
net
|
|
428,659
|
|
|
434,362
|
|
Advances to
suppliers, net
|
|
101,890
|
|
|
114,883
|
|
Accounts
receivable—unconsolidated affiliates
|
|
2,316
|
|
|
1,907
|
|
Inventories—at lower
of cost or market:
|
|
|
|
|
Tobacco
|
|
637,132
|
|
|
636,488
|
|
Other
|
|
60,888
|
|
|
62,195
|
|
Prepaid income
taxes
|
|
17,814
|
|
|
17,811
|
|
Other current
assets
|
|
70,400
|
|
|
81,570
|
|
Total current
assets
|
|
1,638,546
|
|
|
1,597,999
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
|
|
Land
|
|
22,987
|
|
|
16,790
|
|
Buildings
|
|
264,838
|
|
|
238,372
|
|
Machinery and
equipment
|
|
591,327
|
|
|
576,010
|
|
|
|
879,152
|
|
|
831,172
|
|
Less:
accumulated depreciation
|
|
(553,265)
|
|
|
(525,783)
|
|
|
|
325,887
|
|
|
305,389
|
|
Other
assets
|
|
|
|
|
Goodwill and other
intangibles
|
|
99,071
|
|
|
99,146
|
|
Investments in
unconsolidated affiliates
|
|
82,441
|
|
|
76,512
|
|
Deferred income
taxes
|
|
23,853
|
|
|
32,888
|
|
Other noncurrent
assets
|
|
62,999
|
|
|
76,515
|
|
|
|
268,364
|
|
|
285,061
|
|
|
|
|
|
|
Total
assets
|
|
$
|
2,232,797
|
|
|
$
|
2,188,449
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes.
|
|
|
UNIVERSAL
CORPORATION
CONSOLIDATED
BALANCE SHEETS
(in thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Notes payable and
overdrafts
|
|
$
|
66,179
|
|
|
$
|
59,862
|
|
Accounts payable and
accrued expenses
|
|
120,527
|
|
|
140,112
|
|
Accounts
payable—unconsolidated affiliates
|
|
8,343
|
|
|
3,281
|
|
Customer advances and
deposits
|
|
16,438
|
|
|
30,183
|
|
Accrued
compensation
|
|
27,593
|
|
|
28,232
|
|
Income taxes
payable
|
|
7,190
|
|
|
6,559
|
|
Current portion of
long-term debt
|
|
—
|
|
|
—
|
|
Total current
liabilities
|
|
246,270
|
|
|
268,229
|
|
|
|
|
|
|
Long-term
debt
|
|
370,000
|
|
|
370,000
|
|
Pensions and other
postretirement benefits
|
|
92,177
|
|
|
97,048
|
|
Other long-term
liabilities
|
|
41,794
|
|
|
36,790
|
|
Deferred income
taxes
|
|
29,494
|
|
|
19,288
|
|
Total
liabilities
|
|
779,735
|
|
|
791,355
|
|
|
|
|
|
|
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 (218,490 at March
31, 2015)
|
|
211,562
|
|
|
211,562
|
|
Common stock, no par
value, 100,000,000 shares authorized, 22,717,735 shares issued and
outstanding (22,593,266 at March 31, 2015)
|
|
208,946
|
|
|
206,002
|
|
Retained
earnings
|
|
1,066,064
|
|
|
1,020,155
|
|
Accumulated other
comprehensive loss
|
|
(72,350)
|
|
|
(74,994)
|
|
Total Universal
Corporation shareholders' equity
|
|
1,414,222
|
|
|
1,362,725
|
|
Noncontrolling
interests in subsidiaries
|
|
38,840
|
|
|
34,369
|
|
Total shareholders'
equity
|
|
1,453,062
|
|
|
1,397,094
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
$
|
2,232,797
|
|
|
$
|
2,188,449
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes.
|
|
|
|
|
|
|
|
|
UNIVERSAL
CORPORATION
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
March 31,
|
|
|
2016
|
|
2015
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net income
|
|
$
|
118,148
|
|
|
$
|
120,461
|
|
Adjustments to
reconcile net income to net cash (used) provided by operating
activities:
|
|
|
|
|
Depreciation
|
|
36,754
|
|
|
35,394
|
|
Amortization
|
|
890
|
|
|
1,930
|
|
Provision for losses
on advances and guaranteed loans to suppliers
|
|
815
|
|
|
3,734
|
|
Inventory
write-downs
|
|
11,899
|
|
|
18,612
|
|
Stock-based
compensation expense
|
|
5,206
|
|
|
6,230
|
|
Foreign currency
remeasurement loss (gain), net
|
|
22,517
|
|
|
28,836
|
|
Deferred income
taxes
|
|
15,046
|
|
|
(13,662)
|
|
Equity in net income
of unconsolidated affiliates, net of dividends
|
|
156
|
|
|
(1,075)
|
|
Gain on
favorable outcome of excise tax case in Brazil
|
|
—
|
|
|
(12,676)
|
|
Fair value gain upon
acquisition of partner's interest in joint venture
|
|
(3,390)
|
|
|
—
|
|
Restructuring and
impairment costs
|
|
2,389
|
|
|
4,890
|
|
Other, net
|
|
12,314
|
|
|
(9,272)
|
|
Changes in
operating assets and liabilities, net
|
|
(39,153)
|
|
|
43,095
|
|
Net cash provided
by operating activities
|
|
183,591
|
|
|
226,497
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(47,153)
|
|
|
(58,385)
|
|
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
|
|
2,982
|
|
|
4,522
|
|
Other, net
|
|
(796)
|
|
|
(141)
|
|
Net cash
used by investing activities
|
|
(50,931)
|
|
|
(54,004)
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Issuance (repayment)
of short-term debt, net
|
|
4,880
|
|
|
2,618
|
|
Issuance of long-term
debt
|
|
—
|
|
|
370,000
|
|
Repayment of
long-term debt
|
|
—
|
|
|
(356,250)
|
|
Dividends paid to
noncontrolling interests
|
|
(4,449)
|
|
|
(4,183)
|
|
Issuance of common
stock
|
|
—
|
|
|
187
|
|
Repurchase of
convertible perpetual preferred stock
|
|
—
|
|
|
(1,497)
|
|
Repurchase of common
stock
|
|
—
|
|
|
(31,227)
|
|
Dividends paid on
convertible perpetual preferred stock
|
|
(14,748)
|
|
|
(14,824)
|
|
Dividends paid on
common stock
|
|
(47,389)
|
|
|
(47,337)
|
|
Debt issuance costs
and other
|
|
—
|
|
|
(3,621)
|
|
Net cash
used by financing activities
|
|
(61,706)
|
|
|
(86,134)
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
|
(290)
|
|
|
(1,108)
|
|
Net increase in cash
and cash equivalents
|
|
70,664
|
|
|
85,251
|
|
Cash and cash
equivalents at beginning of year
|
|
248,783
|
|
|
163,532
|
|
Cash and cash
equivalents at end of year
|
|
$
|
319,447
|
|
|
$
|
248,783
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes.
|
|
|
|
|
|
|
|
|
NOTE 1. BASIS OF PRESENTATION
Universal Corporation, with its subsidiaries ("Universal" or the
"Company"), is the leading global leaf 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. These financial statements 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
March 31,
|
|
Fiscal Year
Ended
March 31,
|
(in thousands,
except per share data)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
|
|
|
|
|
|
|
|
Numerator for
basic earnings per share
|
|
|
|
|
|
|
|
|
Net income
attributable to Universal Corporation
|
|
$
|
47,964
|
|
|
$
|
45,827
|
|
|
$
|
109,016
|
|
|
$
|
114,608
|
|
Less: Dividends on
convertible perpetual preferred stock
|
|
(3,687)
|
|
|
(3,687)
|
|
|
(14,748)
|
|
|
(14,824)
|
|
Less: Cost in excess
of carrying value on repurchases of convertible perpetual preferred
stock
|
|
—
|
|
|
(18)
|
|
|
—
|
|
|
(36)
|
|
Earnings available to
Universal Corporation common shareholders for calculation of basic
earnings per share
|
|
$
|
44,277
|
|
|
$
|
42,122
|
|
|
$
|
94,268
|
|
|
$
|
99,748
|
|
|
|
|
|
|
|
|
|
|
Denominator
for basic earnings per share
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
22,717,580
|
|
|
22,639,821
|
|
|
22,683,290
|
|
|
23,035,920
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
|
$
|
1.95
|
|
|
$
|
1.86
|
|
|
$
|
4.16
|
|
|
$
|
4.33
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share
|
|
|
|
|
|
|
|
|
Numerator for
diluted earnings per share
|
|
|
|
|
|
|
|
|
Earnings available to
Universal Corporation common shareholders
|
|
$
|
44,277
|
|
|
$
|
42,122
|
|
|
$
|
94,268
|
|
|
$
|
99,748
|
|
Add: Dividends on
convertible perpetual preferred stock (if conversion
assumed)
|
|
3,687
|
|
|
3,687
|
|
|
14,748
|
|
|
14,824
|
|
Add: Cost in excess
of carrying value on repurchases of convertible perpetual preferred
stock
|
|
—
|
|
|
18
|
|
|
—
|
|
|
36
|
|
Earnings available to
Universal Corporation common shareholders for calculation of
diluted earnings per share
|
|
$
|
47,964
|
|
|
$
|
45,827
|
|
|
$
|
109,016
|
|
|
$
|
114,608
|
|
|
|
|
|
|
|
|
|
|
Denominator for
diluted earnings per share
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
22,717,580
|
|
|
22,639,821
|
|
|
22,683,290
|
|
|
23,035,920
|
|
Effect of dilutive
securities (if conversion or exercise assumed)
|
|
|
|
|
|
|
|
|
Convertible perpetual
preferred stock
|
|
4,866,152
|
|
|
4,835,644
|
|
|
4,853,268
|
|
|
4,843,309
|
|
Employee share-based
awards
|
|
300,406
|
|
|
383,962
|
|
|
288,933
|
|
|
342,035
|
|
Denominator for
diluted earnings per share
|
|
27,884,138
|
|
|
27,859,427
|
|
|
27,825,491
|
|
|
28,221,264
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share
|
|
$
|
1.72
|
|
|
$
|
1.64
|
|
|
$
|
3.92
|
|
|
$
|
4.06
|
|
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
March 31,
|
|
Fiscal Year
Ended
March 31,
|
(in thousands of
dollars)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
SALES AND OTHER
OPERATING REVENUES
|
|
|
|
|
|
|
|
|
Flue-cured and burley
leaf tobacco operations:
|
|
|
|
|
|
|
|
|
North America
|
|
$
|
182,371
|
|
|
$
|
101,178
|
|
|
$
|
361,827
|
|
|
$
|
305,028
|
|
Other regions (1)
|
|
529,809
|
|
|
566,439
|
|
|
1,538,971
|
|
|
1,739,781
|
|
Subtotal
|
|
712,180
|
|
|
667,617
|
|
|
1,900,798
|
|
|
2,044,809
|
|
Other tobacco
operations (2)
|
|
91,800
|
|
|
110,542
|
|
|
219,575
|
|
|
226,992
|
|
Consolidated sales
and other operating revenues
|
|
$
|
803,980
|
|
|
$
|
778,159
|
|
|
$
|
2,120,373
|
|
|
$
|
2,271,801
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
|
|
|
|
|
|
Flue-cured and burley
leaf tobacco operations:
|
|
|
|
|
|
|
|
|
North America
|
|
$
|
18,198
|
|
|
$
|
9,239
|
|
|
$
|
31,147
|
|
|
$
|
31,060
|
|
Other regions (1)
|
|
55,923
|
|
|
35,795
|
|
|
143,596
|
|
|
125,839
|
|
Subtotal
|
|
74,121
|
|
|
45,034
|
|
|
174,743
|
|
|
156,899
|
|
Other tobacco
operations (2)
|
|
9,189
|
|
|
7,742
|
|
|
11,325
|
|
|
10,326
|
|
Segment operating
income
|
|
83,310
|
|
|
52,776
|
|
|
186,068
|
|
|
167,225
|
|
Deduct: Equity in pretax earnings of unconsolidated affiliates
(3)
|
|
(2,866)
|
|
|
(3,746)
|
|
|
(5,422)
|
|
|
(7,137)
|
|
Restructuring and impairment costs (4)
|
|
—
|
|
|
(397)
|
|
|
(2,389)
|
|
|
(4,890)
|
|
Add: Other income (5)
|
|
—
|
|
|
12,676
|
|
|
3,390
|
|
|
12,676
|
|
Consolidated
operating income
|
|
$
|
80,444
|
|
|
$
|
61,309
|
|
|
$
|
181,647
|
|
|
$
|
167,874
|
|
(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) loss 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 Procesadora
Unitab, S.A., a tobacco processing joint venture in Guatemala, upon
acquiring the 50% interest held by the Company's joint venture
partner. Other income in fiscal year 2015 represents the reversal
of a valuation allowance on IPI excise tax credits in Brazil. These
items are excluded from segment operating income, but are included
in consolidated operating income in the consolidated statements of
income.
|
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SOURCE Universal Corporation