RICHMOND, Va., Aug. 3, 2022
/PRNewswire/ -- George C. Freeman,
III, Chairman, President, and Chief Executive Officer of
Universal Corporation (NYSE: UVV), stated, "We are pleased with our
start to fiscal year 2023. In the quarter ended June 30, 2022, we continued to effectively
navigate increased costs, particularly rising prices for green leaf
tobacco, and shipping constraints. We succeeded in getting a
significant amount of carryover tobacco shipped out of Brazil, and our plant-based ingredients
platform continued to exceed our expectations.
"Results for our Tobacco Operations segment were down modestly
in the quarter ended June 30, 2022,
compared to the quarter ended June 30,
2021, largely on unfavorable foreign currency comparisons
due to the strong U.S. dollar. Demand for leaf tobacco remains
strong, and flue-cured, burley, oriental, and wrapper tobacco
remain in an undersupply position. We are also anticipating a
reduction in African burley tobacco crop sizes due to weather
conditions there. While we were able to ship a greater amount of
carryover tobacco out of Brazil in
the quarter ended June 30, 2022,
compared to the quarter ended June 30,
2021, we continue to face a challenging logistical
environment. We are also continuing to see increased costs for leaf
tobacco across virtually all markets.
"Our Ingredients Operations segment performed well in the first
quarter of fiscal year 2023. Sales for all of our businesses in
this segment were up in the quarter ended June 30, 2022, compared to the quarter ended
June 30, 2021, with strong volumes
for both human and pet food product categories. In our Ingredients
Operations segment, we are also seeing rising costs for raw
materials and the impact of higher freight costs. Synergies
captured across the plant-based ingredients platform continue to
make good progress. Our businesses are working together on new
product development and strategies to serve the platform's diverse
customers which utilize our portfolio of plant-based ingredients
and botanical extracts and flavorings offerings. Results for the
Ingredients Operations segment for the quarter ended June 30, 2022, include our October 2021 purchase of Shank's Extracts, LLC
("Shank's").
"Our elevated borrowing levels reflect our acquisition of
Shank's as well as higher tobacco inventory levels, largely due to
higher green leaf tobacco prices and tobacco shipment timing. We
expect our seasonal borrowing levels to decrease in the second half
of our fiscal year in line with our tobacco crop shipments, which
are weighted to that period.
"At Universal, we are committed to providing transparency around
our sustainability efforts and goals. We recently completed our
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 are also excited to announce that we have engaged a third party
to aid in analyzing and communicating our climate change policy as
well as to provide independent, third party verification of our
results."
|
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
(in millions of dollars, except per share
data)
|
2022
|
|
2021
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
Consolidated Results
|
|
|
|
|
|
|
|
Sales and other
operating revenue
|
$
|
429.8
|
|
|
$
|
350.0
|
|
|
$
|
79.8
|
|
|
23
|
%
|
Cost of goods
sold
|
$
|
350.1
|
|
|
$
|
287.6
|
|
|
$
|
62.5
|
|
|
22
|
%
|
Gross Profit
Margin
|
18.5
|
%
|
|
17.8
|
%
|
|
|
|
70
bps
|
Selling, general and
administrative expenses
|
$
|
66.5
|
|
|
$
|
49.8
|
|
|
$
|
16.6
|
|
|
33
|
%
|
Restructuring and
impairment costs
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
(2.0)
|
|
|
(100)
|
%
|
Operating income (as
reported)
|
$
|
13.3
|
|
|
$
|
10.6
|
|
|
$
|
2.7
|
|
|
25
|
%
|
Adjusted operating
income (non-GAAP)*
|
$
|
13.3
|
|
|
$
|
12.6
|
|
|
$
|
0.6
|
|
|
5
|
%
|
Diluted earnings per
share (as reported)
|
$
|
0.27
|
|
|
$
|
0.26
|
|
|
$
|
0.01
|
|
|
4
|
%
|
Adjusted diluted
earnings per share (non-GAAP)*
|
$
|
0.25
|
|
|
$
|
0.30
|
|
|
$
|
(0.05)
|
|
|
(17)
|
%
|
Segment Results
|
|
|
|
|
|
|
|
Tobacco operations
sales and other operating revenues
|
$
|
348.1
|
|
|
$
|
293.8
|
|
|
$
|
54.2
|
|
|
18
|
%
|
Tobacco operations
operating income
|
$
|
8.1
|
|
|
$
|
8.9
|
|
|
$
|
(0.8)
|
|
|
(9)
|
%
|
Ingredients operations
sales and other operating revenues
|
$
|
81.8
|
|
|
$
|
56.2
|
|
|
$
|
25.6
|
|
|
46
|
%
|
Ingredient operations
operating income
|
$
|
4.6
|
|
|
$
|
4.3
|
|
|
$
|
0.2
|
|
|
6
|
%
|
*See Reconciliation of
Certain Non-GAAP Financial Measures in Other Items
below.
|
Net income for the quarter ended June 30,
2022, was $6.8 million, or
$0.27 per diluted share, compared
with $6.4 million, or $0.26 per diluted share, for the quarter ended
June 30, 2021. Excluding
restructuring and impairment costs and certain other non-recurring
items, detailed in Other Items below, net income and diluted
earnings per share decreased by $1.2
million and $0.05,
respectively, for the quarter ended June 30,
2022, compared to the quarter ended June 30, 2021. Operating income of $13.3 million for the quarter ended June 30, 2022, increased by $2.7 million, compared to operating income of
$10.6 million for the quarter ended
June 30, 2021. Adjusted operating
income, detailed in Other Items below, of $13.3 million increased by $0.6 million for the first quarter of fiscal year
2023, compared to adjusted operating income of $12.6 million for the first quarter of fiscal
year 2022.
Consolidated revenues increased by $79.8
million to $429.8 million for
the three months ended June 30, 2022,
compared to the same period in fiscal year 2022, on higher
carryover tobacco sales volumes and prices as well as the addition
of Shank's in October 2021 in the
Ingredients Operations segment.
TOBACCO OPERATIONS
The first fiscal quarter is historically a slow quarter for our
tobacco businesses. Operating income for the Tobacco Operations
segment decreased by $0.8 million to
$8.1 million for the quarter ended
June 30, 2022, compared with the
quarter ended June 30, 2021. Although
tobacco sales volumes were up modestly, Tobacco Operations segment
results were down largely on unfavorable foreign currency
comparisons due to the strong U.S. dollar in the quarter ended
June 30, 2022, compared to the same
quarter in the prior fiscal year. Carryover crop shipments were
higher in Brazil in the quarter
ended June 30, 2022, compared to the
same quarter in the prior fiscal year, largely due to increased
shipping availability. In Africa,
carryover shipments were down in the quarter ended June 30, 2022, compared to the quarter ended
June 30, 2021, on smaller crops grown
in fiscal year 2022. Selling, general, and administrative expenses
for the Tobacco Operations segment were higher in the quarter ended
June 30, 2022, compared to
June 30, 2021, primarily on
unfavorable foreign currency comparisons. Revenues for the Tobacco
Operations segment of $348.1 million
for the quarter ended June 30, 2022,
were up $54.2 million, compared to
the same period in the prior fiscal year, on higher tobacco sales
volumes and prices.
INGREDIENTS OPERATIONS
Operating income for the Ingredients Operations segment was
$4.6 million for the quarter ended
June 30, 2022, compared to
$4.3 million for the quarter ended
June 30, 2021. Results for the
segment improved year-over-year on the inclusion of the
October 2021 Shank's acquisition.
Sales for all of our businesses in this segment were up in the
quarter ended June 30, 2022, compared
to the quarter ended June 30, 2021,
with continued strong volumes for both human and pet food product
categories. Selling, general, and administrative expenses for this
segment increased in the quarter ended June
30, 2022, compared to the same quarter in the prior fiscal
year, on the addition of Shank's as well as higher labor costs. In
the quarter ended June 30, 2022, the
allocation of corporate overhead charges to the Ingredients
Operations segment was also up, compared to the quarter ended
June 30, 2021. Revenues for the
Ingredients Operations segment of $81.8
million for the quarter ended June
30, 2022, were up $25.6
million compared to the quarter ended June 30, 2021, largely on the addition of the
revenues for Shank's as well as higher sales volumes and
prices.
OTHER ITEMS
Cost of goods sold in the quarter ended June 30, 2022, increased by 22% to $350.1 million, compared with the same period in
the prior fiscal year, consistent with the similar percentage
increase in revenues for the current period. Selling, general, and
administrative costs for the quarter ended June 30, 2022, increased by $16.6 million to $66.5
million, compared to the same period in the prior fiscal
year, primarily on additional costs from the acquisition of Shank's
in the Ingredients Operations segment and unfavorable foreign
currency comparisons as well as inflationary increases in
compensation and travel costs. Unfavorable foreign currency
comparisons were approximately $6.6
million in the quarter ended June 30,
2022, compared to the quarter ended June 30, 2021. Interest expense for the quarter
ended June 30, 2022, increased by
$0.5 million to $6.7 million on increased costs from higher debt
balances and interest rates, partially offset by a $1.8 million interest expense accrual reversal
related to the sale of our previously idled operations in
Tanzania.
For the three months ended June 30,
2022, the Company's 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.
For the three months ended June 30,
2021, the Company's effective tax rate on pre-tax income was
23.7%.
Reconciliation of Certain Non-GAAP Financial Measures
The following tables set forth certain non-recurring items
included in reported results to reconcile adjusted operating income
to consolidated operating income and adjusted net income to net
income attributable to Universal Corporation:
|
Adjusted Operating Income
Reconciliation
|
|
|
Three Months Ended June 30,
|
(in thousands)
|
2022
|
|
2021
|
As Reported:
Consolidated operating income
|
$
|
13,266
|
|
|
$
|
10,605
|
|
Restructuring and
impairment costs(1)
|
—
|
|
|
2,024
|
|
Adjusted operating
income
|
$
|
13,266
|
|
|
$
|
12,629
|
|
|
|
|
|
Adjusted Net Income and Diluted Earnings Per
Share
|
|
|
|
(in thousands and reported net of income
taxes)
|
Three Months Ended June 30,
|
|
2022
|
|
2021
|
As Reported: Net income
available to Universal Corporation
|
$
|
6,830
|
|
|
$
|
6,357
|
|
Restructuring and
impairment costs(1)
|
—
|
|
|
1,005
|
|
Interest expense
reversal on uncertain tax position and income tax from sale of
operations in Tanzania
|
(684)
|
|
|
—
|
|
Adjusted net income
available to Universal Corporation
|
$
|
6,146
|
|
|
$
|
7,362
|
|
|
|
|
|
As reported: Diluted
earnings per share
|
$
|
0.27
|
|
|
$
|
0.26
|
|
As adjusted: Diluted
earnings per share
|
$
|
0.25
|
|
|
$
|
0.30
|
|
(1)
|
Restructuring and
impairment costs are included in Consolidated operating income in
the consolidated statements of income, but excluded for purposes of
Adjusted operating income, Adjusted net income available to
Universal Corporation, and Adjusted diluted earnings per
share.
|
COVID-19 PANDEMIC IMPACT
On March 11, 2020, the World
Health Organization declared the coronavirus ("COVID-19") a
pandemic. Foreign governmental organizations and governmental
organizations in the United States
have taken various actions to combat the spread of COVID-19 and its
subsequent variants, including imposing stay-at-home orders,
closing "non-essential" businesses and their operations, and
restricting international travel. We continue to closely monitor
developments related to the COVID-19 pandemic and have taken and
continue to take steps intended to mitigate the potential risks and
impacts to us. It is paramount that our employees who operate our
businesses are safe and informed. We have assessed and regularly
update our existing business continuity plans for our business in
the context of this pandemic. For example, we took precautions
during the pandemic with regard to employee and facility hygiene,
imposed travel limitations on our employees, implemented
work-from-home procedures, and we continue to assess and reevaluate
protocols designed to protect our employees, customers and the
public.
We continue to work with our suppliers to mitigate the impacts
to our supply chain due to the pandemic. To date, we have not
experienced a material impact to our supply chain, although the
COVID-19 pandemic resulted in delays in certain operations during
fiscal year 2021. Since March 2020,
we have at times also experienced increased volatility in foreign
currency exchange rates, which we believe has in part related to
the uncertainties from COVID-19, as well as actions taken by
governments and central banks in response to COVID-19. We are
currently seeing and monitoring some logistical constraints around
worldwide vessel and container availability and increased costs
stemming from the COVID-19 pandemic.
We believe we currently have sufficient liquidity to meet our
current obligations and our business operations remain
fundamentally unchanged other than shipping delays, which could
continue to impact quarterly comparisons. This remains, however, a
rapidly evolving situation, and we cannot predict the extent,
resurgence, or duration of the COVID-19 pandemic, the effects of it
on the global, national or local economy, including the impacts on
our ability to access capital, or its effects on our business,
financial position, results of operations, and cash flows. We
continue to monitor developments affecting our employees, customers
and operations. We will take additional steps and reevaluate
current protocols to address the spread of COVID-19 and its
impacts, as necessary, and remain thankful for the hard work of our
employees and the continued support of our customers, growers, and
other partners during these challenging times.
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; 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; 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; timing of
shipments to customers; 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, 2022, 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 year ended March
31, 2022. 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 3, 2022, 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 3, 2022. A
taped replay of the call will be available through August 16, 2022, by dialing (866)
813-9403. The confirmation number to access the replay is
516295.
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
2022
|
|
2021
|
|
|
(Unaudited)
|
Sales and other
operating revenues
|
|
$
|
429,822
|
|
|
$
|
350,029
|
|
Costs and
expenses
|
|
|
|
|
Cost of goods
sold
|
|
350,104
|
|
|
287,556
|
|
Selling, general and
administrative expenses
|
|
66,452
|
|
|
49,844
|
|
Restructuring and
impairment costs
|
|
—
|
|
|
2,024
|
|
Operating
income
|
|
13,266
|
|
|
10,605
|
|
Equity in pretax
earnings (loss) of unconsolidated affiliates
|
|
(553)
|
|
|
609
|
|
Other non-operating
income (expense)
|
|
(62)
|
|
|
48
|
|
Interest
income
|
|
237
|
|
|
73
|
|
Interest
expense
|
|
6,724
|
|
|
6,208
|
|
Income before income
taxes and other items
|
|
6,164
|
|
|
5,127
|
|
Income taxes
|
|
3,363
|
|
|
1,215
|
|
Net income
|
|
2,801
|
|
|
3,912
|
|
Less: net loss (income)
attributable to noncontrolling interests in subsidiaries
|
|
4,029
|
|
|
2,445
|
|
Net income attributable to Universal
Corporation
|
|
$
|
6,830
|
|
|
$
|
6,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
Basic
|
|
$
|
0.28
|
|
|
$
|
0.26
|
|
Diluted
|
|
$
|
0.27
|
|
|
$
|
0.26
|
|
|
UNIVERSAL
CORPORATION
|
CONSOLIDATED BALANCE
SHEETS
|
(in thousands of
dollars)
|
|
|
|
June 30,
|
|
June 30,
|
|
March 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
86,566
|
|
|
$
|
84,688
|
|
|
$
|
81,648
|
|
Accounts receivable,
net
|
|
319,114
|
|
|
279,900
|
|
|
385,437
|
|
Advances to suppliers,
net
|
|
99,875
|
|
|
70,377
|
|
|
129,838
|
|
Accounts
receivable—unconsolidated affiliates
|
|
48,512
|
|
|
52,047
|
|
|
4,540
|
|
Inventories—at lower of
cost or net realizable value:
|
|
|
|
|
|
|
Tobacco
|
|
1,080,362
|
|
|
874,381
|
|
|
822,513
|
|
Other
|
|
198,966
|
|
|
140,249
|
|
|
194,161
|
|
Prepaid income
taxes
|
|
11,370
|
|
|
17,804
|
|
|
13,095
|
|
Other current
assets
|
|
90,380
|
|
|
85,016
|
|
|
116,779
|
|
Total current
assets
|
|
1,935,145
|
|
|
1,604,462
|
|
|
1,748,011
|
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
|
|
|
|
Land
|
|
23,872
|
|
|
23,439
|
|
|
23,959
|
|
Buildings
|
|
294,179
|
|
|
293,734
|
|
|
293,935
|
|
Machinery and
equipment
|
|
669,967
|
|
|
661,753
|
|
|
668,451
|
|
|
|
988,018
|
|
|
978,926
|
|
|
986,345
|
|
Less accumulated
depreciation
|
|
(642,918)
|
|
|
(627,279)
|
|
|
(641,227)
|
|
|
|
345,100
|
|
|
351,647
|
|
|
345,118
|
|
Other assets
|
|
|
|
|
|
|
Operating lease
right-of-use assets
|
|
41,099
|
|
|
31,281
|
|
|
40,243
|
|
Goodwill,
net
|
|
213,902
|
|
|
173,041
|
|
|
213,998
|
|
Other intangibles,
net
|
|
89,352
|
|
|
69,905
|
|
|
92,571
|
|
Investments in
unconsolidated affiliates
|
|
75,188
|
|
|
85,064
|
|
|
81,006
|
|
Deferred income
taxes
|
|
14,532
|
|
|
18,013
|
|
|
11,616
|
|
Pension
asset
|
|
12,704
|
|
|
11,764
|
|
|
12,667
|
|
Other noncurrent
assets
|
|
52,356
|
|
|
50,916
|
|
|
41,115
|
|
|
|
499,133
|
|
|
439,984
|
|
|
493,216
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,779,378
|
|
|
$
|
2,396,093
|
|
|
$
|
2,586,345
|
|
|
UNIVERSAL
CORPORATION
|
CONSOLIDATED BALANCE
SHEETS
|
(in thousands of
dollars)
|
|
|
|
June 30,
|
|
June 30,
|
|
March 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Notes payable and
overdrafts
|
|
$
|
454,659
|
|
|
$
|
153,337
|
|
|
$
|
182,639
|
|
Accounts payable and
accrued expenses
|
|
235,618
|
|
|
158,013
|
|
|
272,042
|
|
Accounts
payable—unconsolidated affiliates
|
|
88
|
|
|
18
|
|
|
5,308
|
|
Customer advances and
deposits
|
|
19,438
|
|
|
9,307
|
|
|
13,724
|
|
Accrued
compensation
|
|
15,933
|
|
|
18,576
|
|
|
27,281
|
|
Income taxes
payable
|
|
5,708
|
|
|
5,919
|
|
|
7,427
|
|
Current portion of
operating lease liabilities
|
|
10,568
|
|
|
7,998
|
|
|
10,303
|
|
Current portion of
long-term debt
|
|
—
|
|
|
—
|
|
|
—
|
|
Total current
liabilities
|
|
742,012
|
|
|
353,168
|
|
|
518,724
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
518,798
|
|
|
518,297
|
|
|
518,547
|
|
Pensions and other
postretirement benefits
|
|
51,528
|
|
|
55,622
|
|
|
52,890
|
|
Long-term operating
lease liabilities
|
|
28,727
|
|
|
20,826
|
|
|
29,617
|
|
Other long-term
liabilities
|
|
30,024
|
|
|
59,815
|
|
|
34,464
|
|
Deferred income
taxes
|
|
48,230
|
|
|
46,810
|
|
|
47,334
|
|
Total
liabilities
|
|
1,419,319
|
|
|
1,054,538
|
|
|
1,201,576
|
|
|
|
|
|
|
|
|
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 24,605,889 shares issued and
outstanding at June 30,
2022 (24,577,254 at June 30, 2021 and 24,550,019 at
March 31, 2022)
|
|
332,520
|
|
|
327,471
|
|
|
330,662
|
|
Retained
earnings
|
|
1,081,309
|
|
|
1,074,586
|
|
|
1,094,192
|
|
Accumulated other
comprehensive loss
|
|
(88,066)
|
|
|
(98,232)
|
|
|
(84,311)
|
|
Total Universal
Corporation shareholders' equity
|
|
1,325,763
|
|
|
1,303,825
|
|
|
1,340,543
|
|
Noncontrolling
interests in subsidiaries
|
|
34,296
|
|
|
37,730
|
|
|
44,226
|
|
Total shareholders'
equity
|
|
1,360,059
|
|
|
1,341,555
|
|
|
1,384,769
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
$
|
2,779,378
|
|
|
$
|
2,396,093
|
|
|
$
|
2,586,345
|
|
|
UNIVERSAL
CORPORATION
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in thousands of
dollars)
|
|
|
|
Three Months Ended June 30,
|
|
|
2022
|
|
2021
|
|
|
(Unaudited)
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
|
|
Net income
|
|
$
|
2,801
|
|
|
$
|
3,912
|
|
Adjustments to
reconcile net income to net cash used by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
14,129
|
|
|
12,058
|
|
Net provision for
losses (recoveries) on advances to suppliers
|
|
(42)
|
|
|
(328)
|
|
Foreign currency
remeasurement (gain) loss, net
|
|
(968)
|
|
|
506
|
|
Foreign currency
exchange contracts
|
|
9,920
|
|
|
1,127
|
|
Restructuring and
impairment costs
|
|
—
|
|
|
2,024
|
|
Restructuring
payments
|
|
—
|
|
|
(1,776)
|
|
Other, net
|
|
7,001
|
|
|
(2,726)
|
|
Changes in operating
assets and liabilities, net
|
|
(258,612)
|
|
|
(141,720)
|
|
Net cash provided (used) by operating
activities
|
|
(225,771)
|
|
|
(126,923)
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(15,070)
|
|
|
(14,428)
|
|
Proceeds from sale of
business, net of cash held by the business
|
|
1,168
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of
property, plant and equipment
|
|
292
|
|
|
1,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used by investing
activities
|
|
(13,610)
|
|
|
(12,839)
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
|
|
|
|
Issuance of short-term
debt, net
|
|
271,663
|
|
|
49,439
|
|
Dividends paid to
noncontrolling interests
|
|
(5,145)
|
|
|
(980)
|
|
Dividends paid on
common stock
|
|
(19,155)
|
|
|
(18,876)
|
|
Other
|
|
(1,892)
|
|
|
(2,432)
|
|
Net cash provided (used) by financing
activities
|
|
245,471
|
|
|
27,151
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash, restricted cash and cash equivalents
|
|
(1,172)
|
|
|
78
|
|
Net decrease in cash,
restricted cash and cash equivalents
|
|
4,918
|
|
|
(112,533)
|
|
Cash, restricted cash
and cash equivalents at beginning of year
|
|
87,648
|
|
|
203,221
|
|
|
|
|
|
|
Cash, restricted cash and cash equivalents at end of
period
|
|
$
|
92,566
|
|
|
$
|
90,688
|
|
|
|
|
|
|
Supplemental Information:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
86,566
|
|
|
$
|
84,688
|
|
Restricted cash (Other
noncurrent assets)
|
|
6,000
|
|
|
6,000
|
|
Total cash, restricted
cash and cash equivalents
|
|
$
|
92,566
|
|
|
$
|
90,688
|
|
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, 2022.
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)
|
|
2022
|
|
2021
|
|
|
|
|
|
Basic Earnings Per Share
|
|
|
|
|
Numerator for basic earnings per
share
|
|
|
|
|
Net income attributable
to Universal Corporation
|
|
$
|
6,830
|
|
|
$
|
6,357
|
|
|
|
|
|
|
Denominator for basic earnings per
share
|
|
|
|
|
Weighted average shares
outstanding
|
|
24,769,015
|
|
|
24,694,489
|
|
|
|
|
|
|
Basic earnings per share
|
|
$
|
0.28
|
|
|
$
|
0.26
|
|
|
|
|
|
|
Diluted Earnings Per Share
|
|
|
|
|
Numerator for diluted earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Universal Corporation
|
|
$
|
6,830
|
|
|
$
|
6,357
|
|
|
|
|
|
|
Denominator for diluted earnings per
share:
|
|
|
|
|
Weighted average shares
outstanding
|
|
24,769,015
|
|
|
24,694,489
|
|
Effect of dilutive
securities
|
|
|
|
|
Employee and outside
director share-based awards
|
|
166,539
|
|
|
157,662
|
|
Denominator for diluted
earnings per share
|
|
24,935,554
|
|
|
24,852,151
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$
|
0.27
|
|
|
$
|
0.26
|
|
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 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 and
comprehensive income were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
(in thousands of dollars)
|
|
2022
|
|
2021
|
|
|
|
|
|
SALES AND OTHER OPERATING
REVENUES
|
|
|
|
|
Tobacco Operations
|
|
$
|
348,063
|
|
|
$
|
293,843
|
|
Ingredients Operations
|
|
81,759
|
|
|
56,186
|
|
Consolidated sales and
other operating revenues
|
|
$
|
429,822
|
|
|
$
|
350,029
|
|
|
|
|
|
|
OPERATING INCOME
|
|
|
|
|
Tobacco Operations
|
|
$
|
8,116
|
|
|
$
|
8,889
|
|
Ingredients Operations
|
|
4,597
|
|
|
4,349
|
|
Segment operating
income
|
|
12,713
|
|
|
13,238
|
|
Deduct: Equity in
pretax (earnings) loss of unconsolidated
affiliates (1)
|
|
553
|
|
|
(609)
|
|
Restructuring
and impairment costs (2)
|
|
—
|
|
|
(2,024)
|
|
Consolidated operating
income
|
|
$
|
13,266
|
|
|
$
|
10,605
|
|
(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.
|
(2)
|
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