RICHMOND, Va., Aug. 2, 2023
/PRNewswire/ -- George C. Freeman, III, Chairman, President,
and Chief Executive Officer of Universal Corporation (NYSE:UVV),
stated, "Our tobacco operations performed well and are off to a
good start for our fiscal year 2024. Segment operating income was
higher for our Tobacco Operations segment in the quarter ended
June 30, 2023, compared to the
quarter ended June 30, 2022, even
though we did not have the benefit of large shipments of carryover
tobacco from certain origins that we had in first quarter of fiscal
year 2023. Demand for leaf tobacco from our customers remains
strong, and our level of uncommitted tobacco inventory was 16% of
tobacco inventory at June 30, 2023.
We are forecasting increased leaf tobacco production in fiscal year
2024, compared to fiscal year 2023, and believe that even with that
increased production, leaf tobacco will remain in an undersupply
position.
"We are pleased with the ongoing progress we are making to
integrate our plant-based ingredients platform, and we continue to
execute on our strategy to invest in and expand the platform's
capabilities for future growth in existing and new products. For
the quarter ended June 30, 2023, the
platform faced soft demand, due to high customer inventory levels,
and our earnings for the platform were below our expectations. We
believe that many of our customers are continuing to draw down on
their raw materials inventories after building inventories to
protect against prior supply chain uncertainties. These inventory
challenges have been more extensive and persistent in duration than
we had forecasted. In addition, the expansion of the platform's
capabilities has added to our costs, while a sharp drop in certain
new crop raw material prices resulted in inventory write-downs in
the quarter ended June 30, 2023. We
continue to believe the inventory challenges are temporary and
expect excess inventory levels held by our customers to eventually
work down. One of the main objectives of our current investments in
our plant-based ingredients platform is to expand our portfolio to
include more value-added products for our customers. We believe
that we are well-positioned to capitalize on demand from our
customers, and that with the investments we are making, we are a
stronger partner for current and future customers due to the
expanded range of capabilities and products that we can offer them.
We are encouraged by ongoing customer engagements regarding
existing business and new business opportunities.
"Our costs, notably interest costs and prices for green leaf
tobacco, remained high in the quarter ended June 30, 2023, compared to the quarter ended
June 30, 2022. Interest costs were
more than double on higher interest rates in the first quarter of
fiscal year 2024, compared to the same quarter in fiscal year 2023.
Our debt balances, the sum of notes payable and overdrafts and
long-term obligations, were relatively flat in the quarter ended
June 30, 2023, compared to the same
quarter in the prior fiscal year, as working capital requirements
to fund larger tobacco crops and higher green tobacco prices were
partially offset by increased customer deposits.
"We continue to make transparency around our sustainability
efforts and goals a priority. We recently completed our annual
submission to the global non-profit organization CDP regarding
climate change, forestry, and water risk to provide more
information on our achievements in these areas to our stakeholders.
We continue to work with third parties to verify our emissions and
establish our pathway to net zero through the identification and
prioritization of high-impact projects throughout our
footprint."
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FINANCIAL HIGHLIGHTS
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Three Months Ended June 30,
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Change
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(in millions of dollars, except per share
data)
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2023
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2022
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$
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%
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Consolidated Results
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Sales and other
operating revenue
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$
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517.7
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$
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429.8
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$
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87.9
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20
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%
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Cost of goods
sold
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$
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431.2
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$
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350.1
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$
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81.1
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23
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%
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Gross Profit
Margin
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16.7
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%
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18.5
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%
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-183
bps
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Selling, general and
administrative expenses
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$
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75.5
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$
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66.5
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$
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9.0
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14
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%
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Operating income
(loss)
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$
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11.0
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$
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13.3
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$
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(2.2)
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(17)
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%
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Diluted earnings (loss)
per share (as reported)
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$
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(0.08)
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$
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0.27
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$
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(0.35)
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(130)
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%
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Adjusted diluted
earnings (loss) per share (non-GAAP)*
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$
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(0.08)
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$
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0.25
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$
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(0.33)
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(132)
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%
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Segment Results
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Tobacco operations
sales and other operating revenues
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$
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443.9
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$
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348.1
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$
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95.8
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28
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%
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Tobacco operations
operating income
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$
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8.9
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$
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8.1
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$
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0.8
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9
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%
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Ingredients operations
sales and other operating revenues
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$
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73.8
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$
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81.8
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$
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(7.9)
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(10)
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%
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Ingredient operations
operating income (loss)
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$
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(2.0)
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$
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4.6
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$
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(6.6)
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(144)
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%
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*See Reconciliation of
Certain Non-GAAP Financial Measures in Other Items
below.
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Net loss for the quarter ended June 30,
2023, was $(2.1) million, or
$(0.08) per diluted share, compared
with net income of $6.8 million, or
$0.27 per diluted share, for the
quarter ended June 30, 2022.
Excluding certain other non-recurring items, detailed in Other
Items below, net income and diluted earnings per share decreased by
$8.2 million and $0.33, respectively, for the quarter ended
June 30, 2023, compared to the
quarter ended June 30, 2022.
Operating income of $11.0 million for
the quarter ended June 30, 2023,
decreased by $2.2 million, compared
to operating income of $13.3 million
for the quarter ended June 30,
2022.
Consolidated revenues increased by $87.9
million to $517.7 million for
the three months ended June 30, 2023,
compared to the same period in fiscal year 2023, on higher tobacco
sales prices and a favorable product and geographic mix in our
Tobacco Operations segment.
TOBACCO OPERATIONS
The first fiscal quarter is historically a slow quarter for our
tobacco businesses. Operating income for the Tobacco Operations
segment increased by $0.8 million to
$8.9 million for the quarter ended
June 30, 2023, compared with the
quarter ended June 30, 2022. Although
tobacco sales volumes were down, Tobacco Operations segment
operating income was up largely on a more favorable product and
geographic mix in the quarter ended June 30,
2023, compared to the same quarter in the prior fiscal year,
when a large amount of carryover tobacco crops were shipped. Prices
for green leaf tobacco in the quarter ended June 30, 2023, were also higher than in the
quarter ended June 30, 2022.
Carryover crop shipments were significantly lower in Brazil in the quarter ended June 30, 2023, compared to the quarter ended
June 30, 2022. In Europe, sales volumes and revenues were up due
to shipment timing and a favorable product mix in the quarter ended
June 30, 2023, compared to the same
quarter in the prior fiscal year. Carryover crop shipments were up
in North America due to shipment
timing in the quarter ended June 30,
2023, compared to the quarter ended June 30, 2022. Results for our oriental tobacco
joint venture were down significantly in the quarter ended
June 30, 2023, compared to the
quarter ended June 30, 2022, on
unfavorable foreign currency comparisons and higher interest
expenses. Selling, general, and administrative expenses for the
Tobacco Operations segment were higher in the quarter ended
June 30, 2023, compared to
June 30, 2022, primarily on higher
compensation costs and higher provisions on advances to suppliers
following adverse weather conditions in Africa. Revenues for the Tobacco Operations
segment of $443.9 million for the
quarter ended June 30, 2023, were up
$95.8 million, compared to the same
period in the prior fiscal year, on higher tobacco sales prices and
a favorable product and geographic mix.
INGREDIENTS OPERATIONS
Operating loss for the Ingredients Operations segment was
$(2.0) million for the quarter ended
June 30, 2023, compared to operating
income of $4.6 million for the
quarter ended June 30, 2022. Sales
for all of our businesses in this segment were down in the quarter
ended June 30, 2023, compared to the
quarter ended June 30, 2022, on lower
demand due to our customers continuing to carry high inventory
levels. Prices for some key raw materials were down in the quarter
ended June 30, 2023, compared to the
quarter ended June 30, 2022.
Inventory write-downs for the Ingredients Operations segment were
higher in the quarter ended June 30,
2023, compared to the same quarter in the prior fiscal year,
on the changes in customer demand and new crop raw material prices.
Selling, general, and administrative expenses for this segment
increased in the quarter ended June 30,
2023, compared to the same quarter in the prior fiscal year,
largely on higher labor costs and investments in product
development capabilities. Revenues for the Ingredients Operations
segment of $73.8 million for the
quarter ended June 30, 2023, were
down $7.9 million compared to the
quarter ended June 30, 2022, largely
on lower sales volumes.
OTHER ITEMS
Cost of goods sold in the quarter ended June 30, 2023, increased by 23% to $431.2 million, compared with the same period in
the prior fiscal year, largely due to higher green tobacco costs.
Selling, general, and administrative costs for the quarter ended
June 30, 2023, increased by
$9.0 million to $75.5 million, compared to the same period in the
prior fiscal year, primarily on weakening of the U.S. dollar,
increased compensation costs, and higher provisions on advances to
suppliers. Interest expense for the quarter ended June 30, 2023, increased by $8.8 million to $15.5
million on increased costs from higher interest rates.
For the three months ended June 30,
2023, our consolidated effective income tax rate on pre-tax
loss was a benefit of 21.6%. For the three months ended
June 30, 2022, our consolidated
effective income tax rate on pre-tax income was 54.6%. The
consolidated effective income tax rate for the three months ended
June 30, 2022, was affected by the
sale of our idled Tanzania
operations which resulted in $1.1
million of additional income taxes. Without this item, the
consolidated effective income tax rate for the three months ended
June 30, 2022, would have been
approximately 36.2%. Additionally, the sale of our idled
Tanzania operations resulted in a
$1.8 million reduction to
consolidated interest expense related to an uncertain tax
position.
Reconciliation of Certain Non-GAAP Financial Measures
The following table sets forth certain non-recurring items
included in reported results to reconcile adjusted net income to
net income attributable to Universal Corporation:
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Adjusted Net Income (Loss) and Adjusted Diluted
Earnings (Loss) Per Share Reconciliation
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(in thousands)
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Three Months Ended June 30,
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2023
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2022
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As Reported: Net income
(loss) available to Universal Corporation
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$
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(2,064)
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$
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6,830
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Interest expense
reversal on uncertain tax position and income tax from sale of
operations in Tanzania
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—
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(1,816)
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Total of Non-GAAP
adjustments to income (loss) before income taxes
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$
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—
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$
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(1,816)
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Non-GAAP adjustments to
income taxes
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Income tax expense from
sale of operations in Tanzania
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—
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1,132
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Total of income tax
impacts for Non-GAAP adjustments to income (loss) before income
taxes and
Non-GAAP adjustment to
income taxes
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—
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1,132
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As adjusted: Net income
(loss) attributable to Universal Corporation (Non-GAAP)
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$
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(2,064)
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$
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6,146
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As reported: Diluted
earnings (loss) per share
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$
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(0.08)
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$
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0.27
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As adjusted: Diluted
earnings (loss) per share
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$
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(0.08)
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$
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0.25
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Additional information
Amounts described as net income (loss) and earnings (loss) per
diluted share in the previous discussion are attributable to
Universal Corporation and exclude earnings related to
non-controlling interests in subsidiaries. Adjusted operating
income (loss), adjusted net income (loss) attributable to Universal
Corporation, adjusted diluted earnings (loss) per share, and the
total for segment operating income (loss) referred to in this
discussion are non-GAAP financial measures. These measures are not
financial measures calculated in accordance with GAAP and should
not be considered as substitutes for operating income (loss), net
income (loss) attributable to Universal Corporation, diluted
earnings (loss) per share, cash from operating activities or any
other operating or financial performance measure calculated in
accordance with GAAP, and may not be comparable to similarly-titled
measures reported by other companies. A reconciliation of adjusted
operating income (loss) to consolidated operating (income),
adjusted net income (loss) attributable to Universal Corporation to
consolidated net income (loss) attributable to Universal
Corporation and adjusted diluted earnings (loss) per share to
diluted earnings (loss) per share are provided in Other Items
above. In addition, we have provided a reconciliation of the
total for segment operating income (loss) to consolidated operating
income (loss) in Note 3 "Segment Information" to the consolidated
financial statements. Management evaluates the consolidated Company
and segment performance excluding certain significant charges or
credits. We believe these non-GAAP financial measures, which
exclude items that we believe are not indicative of our core
operating results, provide investors with important information
that is useful in understanding our business results and
trends.
This release 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 financial condition, results of operation, and future
business plans, operations, opportunities, and prospects for its
performance are forward-looking statements based upon management's
current knowledge and assumptions about future events, and involve
risks and uncertainties that could cause actual results,
performance, or achievements to be materially different from any
anticipated results, prospects, performance, or achievements
expressed or implied by such forward-looking statements. Such
risks and uncertainties include, but are not limited to, impacts of
the COVID-19 pandemic and subvariants; success in pursuing
strategic investments or acquisitions and integration of new
businesses and the impact of these new businesses on future
results; product purchased not meeting quality and quantity
requirements; our reliance on a few large customers; its ability to
maintain effective information technology systems and safeguard
confidential information; anticipated levels of demand for and
supply of its products and services; costs incurred in providing
these products and services including increased transportation
costs and delays attributed to global supply chain challenges;
timing of shipments to customers; higher inflation rates; changes
in market structure; government regulation and other stakeholder
expectations; economic and political conditions in the countries in
which we and our customers operate, including the ongoing impacts
from the conflict in Ukraine;
product taxation; industry consolidation and evolution; changes in
exchange rates and interest rates; impacts of regulation and
litigation on its customers; industry-specific risks related to its
plant-based ingredient businesses; exposure to certain regulatory
and financial risks related to climate change; changes in estimates
and assumptions underlying its critical accounting policies; the
promulgation and adoption of new accounting standards, new
government regulations and interpretation of existing standards and
regulations; 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, 2023, 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 years ended March
31, 2023. The Company cautions investors not to place
undue reliance on any forward-looking statements as these
statements speak only as of the date when made, and it undertakes
no obligation to update any forward-looking statements made.
At 5:00 p.m. (Eastern Time) on
August 2, 2023, 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 November 2, 2023. A
taped replay of the call will be available through August 16, 2023, by dialing (877)
674-7070. The confirmation number to access the replay is
239241.
Universal Corporation (NYSE: UVV), headquartered in Richmond, Virginia, is a global
business-to-business agri-products supplier to consumer product
manufacturers, operating in over 30 countries on five
continents. We strive to be the supplier of choice for our
customers by leveraging our farmer base, our commitment to a
sustainable supply chain, and our ability to provide high-quality,
customized, traceable, value-added agri-products essential for our
customers' requirements. We find innovative solutions to serve
our customers and have been meeting their agri-product needs for
more than 100 years. Our principal focus since our founding in
1918 has been tobacco, and we are the leading global leaf tobacco
supplier. Through our plant-based ingredients platform, we provide
a variety of value-added manufacturing processes to produce
high-quality, specialty vegetable- and fruit-based ingredients as
well as botanical extracts and flavorings for the food and beverage
end markets. For more information, visit www.universalcorp.com.
UNIVERSAL
CORPORATION
CONSOLIDATED
STATEMENTS OF INCOME
(in thousands of
dollars, except per share data)
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Three Months Ended June 30,
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2023
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2022
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(Unaudited)
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Sales and other
operating revenues
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$
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517,722
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$
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429,822
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Costs and
expenses
|
|
|
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Cost of goods
sold
|
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431,210
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350,104
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Selling, general and
administrative expenses
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75,477
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66,452
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Operating
income
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11,035
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13,266
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Equity in pretax
earnings (loss) of unconsolidated affiliates
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(4,166)
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(553)
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Other non-operating
income (expense)
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725
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(62)
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Interest
income
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1,365
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237
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Interest
expense
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15,543
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6,724
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Income (loss) before
income taxes and other items
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(6,584)
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6,164
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Income taxes
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(1,423)
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3,363
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Net income
(loss)
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(5,161)
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2,801
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Less: net loss (income)
attributable to noncontrolling interests in subsidiaries
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3,097
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4,029
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Net income (loss) attributable to Universal
Corporation
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$
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(2,064)
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$
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6,830
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Earnings (loss) per
share:
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Basic
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$
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(0.08)
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$
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0.28
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Diluted
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$
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(0.08)
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$
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0.27
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UNIVERSAL
CORPORATION
CONSOLIDATED BALANCE
SHEETS
(in thousands of
dollars)
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June 30,
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June 30,
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March 31,
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2023
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2022
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2023
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(Unaudited)
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(Unaudited)
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ASSETS
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Current
assets
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Cash and cash
equivalents
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$
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80,518
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$
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86,566
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$
|
64,690
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Accounts receivable,
net
|
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375,564
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|
|
319,114
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402,073
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Advances to suppliers,
net
|
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111,176
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|
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99,875
|
|
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170,801
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Accounts
receivable—unconsolidated affiliates
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73,286
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48,512
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12,210
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Inventories—at lower of
cost or net realizable value:
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Tobacco
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1,100,722
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1,080,362
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833,876
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Other
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198,730
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|
|
198,966
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202,907
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Prepaid income
taxes
|
|
21,640
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|
|
11,370
|
|
|
16,493
|
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Other current
assets
|
|
93,153
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|
|
90,380
|
|
|
99,840
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Total current
assets
|
|
2,054,789
|
|
|
1,935,145
|
|
|
1,802,890
|
|
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|
|
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Property, plant and
equipment
|
|
|
|
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Land
|
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24,930
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|
|
23,872
|
|
|
24,926
|
|
Buildings
|
|
312,014
|
|
|
294,179
|
|
|
311,138
|
|
Machinery and
equipment
|
|
705,045
|
|
|
669,967
|
|
|
689,220
|
|
|
|
1,041,989
|
|
|
988,018
|
|
|
1,025,284
|
|
Less accumulated
depreciation
|
|
(685,042)
|
|
|
(642,918)
|
|
|
(674,122)
|
|
|
|
356,947
|
|
|
345,100
|
|
|
351,162
|
|
Other assets
|
|
|
|
|
|
|
Operating lease
right-of-use assets
|
|
36,890
|
|
|
41,099
|
|
|
40,505
|
|
Goodwill,
net
|
|
213,893
|
|
|
213,902
|
|
|
213,922
|
|
Other intangibles,
net
|
|
77,290
|
|
|
89,352
|
|
|
80,101
|
|
Investments in
unconsolidated affiliates
|
|
73,466
|
|
|
75,188
|
|
|
76,184
|
|
Deferred income
taxes
|
|
15,187
|
|
|
14,532
|
|
|
13,091
|
|
Pension
asset
|
|
10,516
|
|
|
12,704
|
|
|
9,984
|
|
Other noncurrent
assets
|
|
48,681
|
|
|
52,356
|
|
|
51,343
|
|
|
|
475,923
|
|
|
499,133
|
|
|
485,130
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,887,659
|
|
|
$
|
2,779,378
|
|
|
$
|
2,639,182
|
|
UNIVERSAL
CORPORATION
CONSOLIDATED BALANCE
SHEETS
(in thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
March 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Notes payable and
overdrafts
|
|
$
|
359,832
|
|
|
$
|
454,659
|
|
|
$
|
195,564
|
|
Accounts
payable
|
|
88,362
|
|
|
121,702
|
|
|
83,213
|
|
Accounts
payable—unconsolidated affiliates
|
|
1,495
|
|
|
88
|
|
|
5,830
|
|
Customer advances and
deposits
|
|
103,436
|
|
|
19,438
|
|
|
3,061
|
|
Accrued
compensation
|
|
20,890
|
|
|
15,933
|
|
|
33,108
|
|
Income taxes
payable
|
|
5,620
|
|
|
5,708
|
|
|
3,274
|
|
Current portion of
operating lease liabilities
|
|
10,673
|
|
|
10,568
|
|
|
11,404
|
|
Accrued expenses and
other current liabilities
|
|
127,564
|
|
|
113,916
|
|
|
106,533
|
|
Current portion of
long-term debt
|
|
—
|
|
|
—
|
|
|
—
|
|
Total current
liabilities
|
|
717,872
|
|
|
742,012
|
|
|
441,987
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
616,948
|
|
|
518,798
|
|
|
616,809
|
|
Pensions and other
postretirement benefits
|
|
42,725
|
|
|
51,528
|
|
|
42,769
|
|
Long-term operating
lease liabilities
|
|
23,343
|
|
|
28,727
|
|
|
25,540
|
|
Other long-term
liabilities
|
|
29,160
|
|
|
30,024
|
|
|
32,512
|
|
Deferred income
taxes
|
|
44,432
|
|
|
48,230
|
|
|
42,613
|
|
Total
liabilities
|
|
1,474,480
|
|
|
1,419,319
|
|
|
1,202,230
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
Universal
Corporation:
|
|
|
|
|
|
|
Preferred
stock:
|
|
|
|
|
|
|
Series A Junior
Participating Preferred Stock, no par value, 500,000 shares
authorized, none
issued or
outstanding
|
|
—
|
|
|
—
|
|
|
—
|
|
Common stock, no par
value, 100,000,000 shares authorized 24,636,600 shares
issued
and outstanding at June
30, 2023 (24,605,889 at June 30, 2022 and 24,555,361 at March 31,
2023)
|
|
338,445
|
|
|
332,520
|
|
|
337,247
|
|
Retained
earnings
|
|
1,114,822
|
|
|
1,081,309
|
|
|
1,136,898
|
|
Accumulated other
comprehensive loss
|
|
(72,547)
|
|
|
(88,066)
|
|
|
(77,057)
|
|
Total Universal
Corporation shareholders' equity
|
|
1,380,720
|
|
|
1,325,763
|
|
|
1,397,088
|
|
Noncontrolling
interests in subsidiaries
|
|
32,459
|
|
|
34,296
|
|
|
39,864
|
|
Total shareholders'
equity
|
|
1,413,179
|
|
|
1,360,059
|
|
|
1,436,952
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
$
|
2,887,659
|
|
|
$
|
2,779,378
|
|
|
$
|
2,639,182
|
|
UNIVERSAL
CORPORATION
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
2023
|
|
2022
|
|
|
(Unaudited)
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
|
|
Net income
(loss)
|
|
$
|
(5,161)
|
|
|
$
|
2,801
|
|
Adjustments to
reconcile net income (loss) to net cash used by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
14,754
|
|
|
14,129
|
|
Net provision for
losses (recoveries) on advances to suppliers
|
|
1,382
|
|
|
(42)
|
|
Inventory
writedowns
|
|
2,327
|
|
|
4,853
|
|
Stock-based
compensation expense
|
|
3,859
|
|
|
3,682
|
|
Foreign currency
remeasurement (gain) loss, net
|
|
1,530
|
|
|
(968)
|
|
Foreign currency
exchange contracts
|
|
7,803
|
|
|
9,920
|
|
Deferred income
taxes
|
|
(2,406)
|
|
|
(3,377)
|
|
Equity in net loss
(income) of unconsolidated affiliates, net of dividends
|
|
2,630
|
|
|
443
|
|
Other, net
|
|
5
|
|
|
1,400
|
|
Changes in operating
assets and liabilities, net:
|
|
(130,614)
|
|
|
(258,612)
|
|
Net cash used by operating
activities
|
|
(103,891)
|
|
|
(225,771)
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(17,960)
|
|
|
(15,070)
|
|
Proceeds from sale of
business, net of cash held by the business
|
|
—
|
|
|
1,168
|
|
Proceeds from sale of
property, plant and equipment
|
|
326
|
|
|
292
|
|
Net cash used by investing
activities
|
|
(17,634)
|
|
|
(13,610)
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
|
|
|
|
Issuance of short-term
debt, net
|
|
163,804
|
|
|
271,663
|
|
Dividends paid to
noncontrolling interests
|
|
(4,164)
|
|
|
(5,145)
|
|
Dividends paid on
common stock
|
|
(19,398)
|
|
|
(19,155)
|
|
Other
|
|
(2,893)
|
|
|
(1,892)
|
|
Net cash provided (used) by financing
activities
|
|
137,349
|
|
|
245,471
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash, restricted cash and cash equivalents
|
|
4
|
|
|
(1,172)
|
|
Net increase (decrease)
in cash, restricted cash and cash equivalents
|
|
15,828
|
|
|
4,918
|
|
Cash, restricted cash
and cash equivalents at beginning of year
|
|
64,690
|
|
|
87,648
|
|
|
|
|
|
|
Cash, restricted cash and cash equivalents at end of
period
|
|
$
|
80,518
|
|
|
$
|
92,566
|
|
|
|
|
|
|
Supplemental Information:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
80,518
|
|
|
$
|
86,566
|
|
Restricted cash (Other
noncurrent assets)
|
|
—
|
|
|
6,000
|
|
Total cash, restricted
cash and cash equivalents
|
|
$
|
80,518
|
|
|
$
|
92,566
|
|
NOTE 1. BASIS OF PRESENTATION
Universal Corporation, which together with its subsidiaries is
referred to herein as "Universal" or the "Company," is a global
business-to-business agri-products supplier to consumer product
manufacturers. The Company is the leading global leaf tobacco
supplier and provides high-quality plant-based ingredients to food
and beverage end markets. 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, 2023 (the "2023 Annual Report on Form
10-K").
NOTE 2. EARNINGS PER SHARE
The following table sets forth the computation of basic and
diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
(in thousands, except share and per share
data)
|
|
2023
|
|
2022
|
|
|
|
|
|
Basic Earnings (Loss) Per Share
|
|
|
|
|
Numerator for basic earnings (loss) per
share
|
|
|
|
|
Net income (loss)
attributable to Universal Corporation
|
|
$
|
(2,064)
|
|
|
$
|
6,830
|
|
|
|
|
|
|
Denominator for basic earnings (loss) per
share
|
|
|
|
|
Weighted average shares
outstanding
|
|
24,842,171
|
|
|
24,769,015
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
$
|
(0.08)
|
|
|
$
|
0.28
|
|
|
|
|
|
|
Diluted Earnings (Loss) Per
Share
|
|
|
|
|
Numerator for diluted earnings (loss) per
share
|
|
|
|
|
Net income (loss)
attributable to Universal Corporation
|
|
$
|
(2,064)
|
|
|
$
|
6,830
|
|
|
|
|
|
|
Denominator for diluted earnings (loss) per
share:
|
|
|
|
|
Weighted average shares
outstanding
|
|
24,842,171
|
|
|
24,769,015
|
|
Effect of dilutive
securities
|
|
|
|
|
Employee and outside
director share-based awards
|
|
—
|
|
|
166,539
|
|
Denominator for diluted
earnings per share
|
|
24,842,171
|
|
|
24,935,554
|
|
|
|
|
|
|
Diluted earnings (loss) per
share
|
|
$
|
(0.08)
|
|
|
$
|
0.27
|
|
NOTE 3. SEGMENT INFORMATION
The Company conducts operations across two reportable operating
segments, Tobacco Operations and Ingredients Operations.
The Tobacco Operations segment activities involve
selecting, procuring, processing, packing, storing, shipping, and
financing leaf tobacco for sale to, or for the account of,
manufacturers of consumer tobacco products throughout the world.
Through various operating subsidiaries located in tobacco-growing
countries around the world and significant ownership interests in
unconsolidated affiliates, the Company processes and/or sells
flue-cured and burley tobaccos, dark air-cured tobaccos, and
oriental tobaccos. Flue-cured, burley, and oriental tobaccos are
used principally in the manufacture of cigarettes, and dark
air-cured tobaccos are used mainly in the manufacture of cigars,
pipe tobacco, and smokeless tobacco products. Some of these tobacco
types are also increasingly used in the manufacture of
non-combustible tobacco products that are intended to provide
consumers with an alternative to traditional combustible products.
The Tobacco Operations segment also provides physical and chemical
product testing and smoke testing for tobacco customers. A
substantial portion of the Company's Tobacco Operations' revenues
are derived from sales to a limited number of large, multinational
cigarette and cigar manufacturers.
The Ingredients Operations segment provides its customers with a
broad variety of plant-based ingredients for both human and pet
consumption. The Ingredients Operations segment utilizes a variety
of value-added manufacturing processes converting raw materials
into a wide spectrum of fruit and vegetable juices, concentrates,
dehydrated products, flavors, and botanical extracts. Customers for
the Ingredients Operations segment include large multinational food
and beverage companies, smaller independent manufacturers, and
retail organizations. FruitSmart, Silva, and Shank's are the
primary operations for the Ingredients Operations segment.
FruitSmart manufactures fruit and vegetable juices, purees,
concentrates, essences, fibers, seeds, seed oils, and seed powders.
Silva is primarily a dehydrated product manufacturer of fruit and
vegetable based flakes, dices, granules, powders, and blends.
Shank's manufactures flavors and botanical extracts and also offers
bottling and custom packaging for customers.
The Company currently evaluates the performance of its segments
based on operating income (loss) after allocated overhead expenses,
plus equity in the pretax earnings (loss) of unconsolidated
affiliates. Operating results for the Company's reportable segments
for each period presented in the consolidated statements of income
and comprehensive income were as follows.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
(in thousands of dollars)
|
|
2023
|
|
2022
|
|
|
|
|
|
SALES AND OTHER OPERATING
REVENUES
|
|
|
|
|
Tobacco Operations
|
|
$
|
443,908
|
|
|
$
|
348,063
|
|
Ingredients Operations
|
|
73,814
|
|
|
81,759
|
|
Consolidated sales and
other operating revenues
|
|
$
|
517,722
|
|
|
$
|
429,822
|
|
|
|
|
|
|
OPERATING INCOME (LOSS)
|
|
|
|
|
Tobacco Operations
|
|
$
|
8,883
|
|
|
$
|
8,116
|
|
Ingredients Operations
|
|
(2,014)
|
|
|
4,597
|
|
Segment operating
income
|
|
6,869
|
|
|
12,713
|
|
Deduct: Equity in
pretax (earnings) loss of unconsolidated
affiliates (1)
|
|
4,166
|
|
|
553
|
|
Consolidated operating
income
|
|
$
|
11,035
|
|
|
$
|
13,266
|
|
|
|
(1)
|
Equity in pretax
earnings (loss) of unconsolidated affiliates is included in segment
operating income (Tobacco Operations), but is reported below
consolidated operating income and excluded from that total in the
consolidated statements of income and comprehensive
income.
|
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SOURCE Universal Corporation