RICHMOND, Va., Feb. 7,
2017 /PRNewswire/ -- George C. Freeman, III, Chairman,
President, and Chief Executive Officer of Universal Corporation
(NYSE: UVV), reported that net income for the nine months ended
December 31, 2016, was $73.4 million, or $2.63 per diluted share, compared with
$61.1 million, or $2.18 per diluted share for the same period last
year. Operating income for the nine months ended December 31, 2016, of $118.5 million increased by $17.3 million compared to the nine months ended
December 31, 2015. For the
third fiscal quarter ended December 31,
2016, net income was $53.6
million, or $1.92 per diluted
share, compared with net income for the prior year's third quarter
of $44.5 million, or $1.60 per diluted share. Operating income for the
quarter ended December 31, 2016,
increased by $14.0 million to
$83.2 million compared to the three
months ended December 31, 2015.
Segment operating income for the nine months ended December 31, 2016, was $128.0 million, an increase of $25.3 million, and for the quarter ended
December 31, 2016, was $87.9 million, an increase of $19.7 million, both compared to the same periods
last fiscal year. Those increases resulted from earnings
improvements in all segments in the nine months ended December 31, 2016, and in the Other Regions and
the Other Tobacco Operations segments, offset in part by a decline
in the North America segment, in
the three months ended December 31,
2016. Consolidated revenues increased by $104.8 million to $1.4
billion for the nine months ended December 31, 2016, and by $84.2 million to $668.8
million for the three months ended December 31, 2016, compared to the same periods
in the prior year, mostly as a result of higher volumes.
Mr. Freeman stated, "We are pleased with the performance of our
operations thus far this fiscal year, particularly in light of
difficult supply conditions, including the weather-related crop
reduction in Brazil. Despite these
headwinds, we have been able to secure some additional sales which
have helped to increase our volumes handled so far this fiscal
year. In addition, our third fiscal quarter this year benefited
from higher volumes mainly due to earlier shipping patterns than
those of the prior year. We expect our volumes for the fourth
quarter of fiscal year 2017 to be lower than those achieved in the
fourth quarter of the prior year, given our reduced buying program
in Brazil this fiscal year, and
some earlier shipments from other origins. Last fiscal year's
fourth quarter volumes were exceptionally strong for us and
included significant volumes from Brazil. However, we now believe our total
lamina volumes for fiscal year 2017 will be only modestly lower
than those volumes in fiscal year 2016.
"Our cash flows from operations were strong for the nine months
ended December 31, 2016, largely due
to our reduced working capital requirements this fiscal year on
fewer purchases in Brazil and
earlier shipment timing in some origins. As a result, our cash
balances have increased, and our seasonal borrowing requirements
have decreased this fiscal year. In addition, our uncommitted
inventory levels at December 31,
2016, remain within our target range and are approximately
$8 million below our December 31, 2015 levels.
"We continue to work to deliver value to our shareholders and
maintain our strong capital structure, which had included 6.75%
convertible preferred stock requiring dividend payments of about
$15 million per annum. In
December 2016, we received voluntary
conversion requests for about half of the outstanding shares of
preferred stock. We settled those requests by issuing approximately
2.5 million shares of common stock, which will be eligible for
common dividends, for those shares of preferred stock.
Subsequently, in our fourth fiscal quarter, we elected to exercise
a mandatory conversion of the remaining outstanding shares of our
preferred stock. This mandatory conversion was settled in cash
rather than shares of common stock at a cost of approximately
$178 million on January 31, 2017. By using cash on hand for the
mandatory conversion instead of issuing shares of common stock, we
believe that we increased the value of common shareholders'
investment in our Company while maintaining the strength of our
balance sheet."
FLUE-CURED AND BURLEY LEAF TOBACCO OPERATIONS:
OTHER REGIONS:
The Other Regions segment operating income increased by
$8.7 million to $96.4 million for the nine months, and by
$19.8 million to $81.1 million for the quarter ended December 31, 2016, compared to the same periods
in the prior fiscal year. Both periods benefited from strong
third quarter results, including higher sales volumes, lower
selling, general, and administrative expenses, and the receipt of
distributions from unconsolidated subsidiaries received during the
second fiscal quarter in the prior year. The third quarter volume
increases were mainly driven by the Africa region, with higher shipments due in
part to earlier shipment timing this year. Those volume
improvements were partly offset by declines in South America, on lower volumes and higher
factory unit costs as a result of the reduced buying program and
fewer third-party processing volumes there this year. Asia results were down for the nine months on
lower current crop sales despite stronger third quarter volumes.
Selling, general, and administrative costs for the nine months
ended December 31, 2016, were
significantly lower, primarily from the reversal of value-added tax
reserves, and favorable comparison to costs incurred in fiscal year
2016 to settle third party challenges to the property rights and
valuation of land. Selling, general, and administrative expenses
decreased slightly for the third fiscal quarter compared to the
prior year from recoveries on customer receivables, partially
offset by higher currency remeasurement and exchange losses.
Revenues for the Other Regions segment for the nine months ended
December 31, 2016, were down by
$16.6 million to $992.6 million
compared to the same period last year, as slightly higher volumes
were more than offset by lower green prices and reduced processing
revenue. For the third quarter of fiscal year 2017, revenues
increased by $35.3 million to
$496.0 million driven by the higher
sales volumes, offset in part by lower overall green leaf prices,
as well as the receipt of distributions from unconsolidated
subsidiaries.
NORTH AMERICA:
North America segment operating
income of $21.4 million for the nine
months ended December 31, 2016,
increased by $8.5 million, compared
with the same period in the previous year, reflecting higher
volumes. Segment operating income of $1.0
million for the third fiscal quarter of 2017 declined by
$4.7 million compared with the prior
year. Despite higher volumes, results for the quarter were hampered
by reduced factory yields and inventory writedowns from
weather-affected U.S. crops, a less favorable product mix, as well
as negative comparisons from the timing of export sales in
Guatemala and Mexico, which fell into the second fiscal
quarter this year. Selling, general and administrative costs were
relatively flat for both the three- and nine-month comparative
periods. Segment revenues increased by $67.2
million to $246.7 million for
the nine months and by $11.7 million
to $93.2 million for the third
quarter of fiscal year 2017, compared with the same periods in
fiscal year 2016, on those higher volumes, partly offset by lower
average green leaf prices and a less favorable product mix.
OTHER TOBACCO OPERATIONS:
The Other Tobacco Operations segment's operating income
increased by $8.1 million to
$10.2 million for the nine months and
by $4.7 million to $5.8 million for the third fiscal quarter ended
December 31, 2016, compared with the
same periods last fiscal year. In both periods, earnings improved
for the dark tobacco operations on higher volumes, due in part to
recovery in Indonesia where
certain crops had been damaged by volcanic ash last year. Earnings
for the oriental joint venture increased on a better sales mix for
the nine months and higher volumes from some earlier shipment
timing for the third fiscal quarter, as well as favorable
comparisons to tax accruals in the prior year for both periods. For
the nine months ended December 31,
2016, the special services group saw higher losses primarily
for the new food ingredients business, compared with the prior
year. Selling, general, and administrative costs for the segment
were relatively flat for both the nine months and third fiscal
quarter of the current year compared with the previous year.
Revenues for the Other Tobacco Operations segment were up by
$54.2 million to $181.9 million for
the nine months, and by $37.2 million to
$79.6 million for the third fiscal quarter ended
December 31, 2016, mostly due to
increased volumes and the timing of shipments of oriental tobaccos
into the United States, as well as
the higher volumes for the dark tobacco operations, compared to the
same periods in the prior year.
OTHER ITEMS:
Cost of goods sold increased by about 9% to $1.1 billion for the nine months ended
December 31, 2016, and by about 15%
to $533.3 million for the third
quarter of fiscal year 2017 compared with the same periods in
fiscal year 2016. For both periods, the increase reflected higher
leaf sales volumes. Selling, general, and administrative costs
declined by $13.1 million in the nine
months ended December 31, 2016, and
by $2.0 million for the third fiscal
quarter compared with the same periods in the prior fiscal year. In
the nine months ended December 31,
2016, benefits were achieved from a combination of items,
including a favorable comparison to costs incurred in the second
quarter of fiscal year 2016 to settle third party challenges to the
property rights and valuation of a large tract of forestry land,
and the reversal in the second quarter of fiscal year 2017 of
value-added tax reserves. In the third fiscal quarter of 2017,
selling, general, and administrative expenses decreased on
recoveries on customer receivables and lower compensation costs,
partially offset by higher currency remeasurement and exchange
losses, mainly in Africa and
Europe.
The consolidated effective income tax rates were approximately
32% and 33% for the quarter and nine months ended December 31, 2016, respectively, and for the
quarter and nine-month periods ended December 31, 2015, were approximately 32% and
29%, respectively. Income taxes for those periods in
both fiscal years were lower than the 35% federal statutory rate on
a combination of lower net effective tax rates on income from
certain foreign subsidiaries, and effects of changes in local
currency exchange rates on deferred income tax balances.
Results for the nine months and third fiscal quarter ended
December 31, 2016 included
restructuring and impairment costs of $3.9
million ($0.09 per diluted
share) and $0.2 million
($0.00 per diluted share),
respectively. Results for the nine months ended December 31, 2015, included restructuring and
impairment costs of $2.4 million
($0.07 per diluted share) and a gain
of $3.4 million 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 ($0.10 for the nine
months and $0.08 for the quarter 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 (loss) 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 (loss), operating income (loss), 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 (loss) to consolidated operating income (loss) is provided
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 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, 2016, 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, 2016.
At 5:00 p.m. (Eastern Time) on
February 7, 2017, 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 May 6, 2017. A taped replay
of the call will be available through February 21, 2017, by dialing (855) 859-2056. The
confirmation number to access the replay is 63971570.
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
December 31,
|
|
Nine Months
Ended
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Sales and other
operating revenues
|
$
|
668,771
|
|
$
|
584,592
|
|
$
|
1,421,188
|
|
$
|
1,316,393
|
Costs and
expenses
|
|
|
|
|
|
|
|
Cost of goods
sold
|
533,318
|
|
464,686
|
|
1,145,694
|
|
1,050,004
|
Selling, general and
administrative expenses
|
52,068
|
|
54,081
|
|
153,101
|
|
166,187
|
Other
income
|
|
—
|
|
(3,390)
|
|
—
|
|
(3,390)
|
Restructuring and
impairment costs
|
178
|
|
—
|
|
3,860
|
|
2,389
|
Operating
income
|
|
83,207
|
|
69,215
|
|
118,533
|
|
101,203
|
Equity in pretax
earnings of unconsolidated affiliates
|
4,495
|
|
2,326
|
|
5,625
|
|
2,556
|
Interest
income
|
|
482
|
|
452
|
|
1,116
|
|
896
|
Interest
expense
|
4,051
|
|
3,937
|
|
12,440
|
|
11,733
|
Income before income
taxes
|
84,133
|
|
68,056
|
|
112,834
|
|
92,922
|
Income tax
expense
|
27,071
|
|
21,441
|
|
36,778
|
|
27,368
|
Net income
|
|
57,062
|
|
46,615
|
|
76,056
|
|
65,554
|
Less: net income
attributable to noncontrolling interests in subsidiaries
|
(3,415)
|
|
(2,081)
|
|
(2,621)
|
|
(4,502)
|
Net income
attributable to Universal Corporation
|
53,647
|
|
44,534
|
|
73,435
|
|
61,052
|
Dividends on
Universal Corporation convertible perpetual preferred
stock
|
(3,687)
|
|
(3,687)
|
|
(11,061)
|
|
(11,061)
|
Earnings available to
Universal Corporation common shareholders
|
$
|
49,960
|
|
$
|
40,847
|
|
$
|
62,374
|
|
$
|
49,991
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Universal Corporation common
shareholders:
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.17
|
|
$
|
1.80
|
|
$
|
2.73
|
|
$
|
2.20
|
Diluted
|
|
$
|
1.92
|
|
$
|
1.60
|
|
$
|
2.63
|
|
$
|
2.18
|
See accompanying notes.
UNIVERSAL
CORPORATION
CONSOLIDATED
BALANCE SHEETS
(in thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
March 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
411,507
|
|
$
|
167,625
|
|
$
|
319,447
|
Accounts receivable,
net
|
|
280,978
|
|
267,632
|
|
428,659
|
Advances to
suppliers, net
|
|
93,175
|
|
84,905
|
|
101,890
|
Accounts
receivable—unconsolidated affiliates
|
2,073
|
|
762
|
|
2,316
|
Inventories—at lower
of cost or market:
|
|
|
|
|
|
Tobacco
|
|
736,368
|
|
965,917
|
|
637,132
|
Other
|
|
67,638
|
|
65,123
|
|
60,888
|
Prepaid income
taxes
|
|
11,419
|
|
16,359
|
|
17,814
|
Other current
assets
|
|
61,856
|
|
67,456
|
|
70,400
|
Total current
assets
|
|
1,665,014
|
|
1,635,779
|
|
1,638,546
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
|
|
|
|
Land
|
|
22,760
|
|
22,870
|
|
22,987
|
Buildings
|
|
264,485
|
|
256,970
|
|
264,838
|
Machinery and
equipment
|
|
603,860
|
|
591,292
|
|
591,327
|
|
|
891,105
|
|
871,132
|
|
879,152
|
Less: accumulated
depreciation
|
(569,697)
|
|
(545,518)
|
|
(553,265)
|
|
|
321,408
|
|
325,614
|
|
325,887
|
Other
assets
|
|
|
|
|
|
|
Goodwill and other
intangibles
|
|
98,869
|
|
99,035
|
|
99,071
|
Investments in
unconsolidated affiliates
|
75,574
|
|
75,351
|
|
82,441
|
Deferred income
taxes
|
|
24,266
|
|
38,750
|
|
23,853
|
Other noncurrent
assets
|
|
41,798
|
|
52,245
|
|
61,379
|
|
|
240,507
|
|
265,381
|
|
266,744
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
2,226,929
|
|
$
|
2,226,774
|
|
$
|
2,231,177
|
See accompanying notes.
UNIVERSAL
CORPORATION
CONSOLIDATED
BALANCE SHEETS
(in thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
March 31,
|
|
2016
|
|
2015
|
|
2016
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Notes payable and
overdrafts
|
$
|
52,052
|
|
$
|
65,894
|
|
$
|
66,179
|
Accounts payable and
accrued expenses
|
131,925
|
|
132,572
|
|
120,527
|
Accounts
payable—unconsolidated affiliates
|
10,522
|
|
21,768
|
|
8,343
|
Customer advances and
deposits
|
14,201
|
|
41,209
|
|
16,438
|
Accrued
compensation
|
22,800
|
|
20,681
|
|
27,593
|
Income taxes
payable
|
7,239
|
|
5,893
|
|
7,190
|
Current portion of
long-term debt
|
—
|
|
—
|
|
—
|
Total current
liabilities
|
238,739
|
|
288,017
|
|
246,270
|
|
|
|
|
|
|
Long-term
debt
|
368,645
|
|
368,292
|
|
368,380
|
Pensions and other
postretirement benefits
|
78,930
|
|
90,643
|
|
92,177
|
Other long-term
liabilities
|
30,038
|
|
33,179
|
|
41,794
|
Deferred income
taxes
|
29,075
|
|
27,447
|
|
29,494
|
Total
liabilities
|
745,427
|
|
807,578
|
|
778,115
|
|
|
|
|
|
|
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, 107,418 shares issued and
outstanding
(218,490 at December 31, 2015 and March 31, 2016)
|
104,012
|
|
211,562
|
|
211,562
|
Common
stock, no par value, 100,000,000 shares authorized, 25,270,976
shares issued and outstanding (22,717,448 at December
31, 2015, and
22,717,735 at March 31, 2016)
|
319,509
|
|
206,941
|
|
208,946
|
Retained
earnings
|
1,090,148
|
|
1,033,986
|
|
1,066,064
|
Accumulated other
comprehensive loss
|
(71,723)
|
|
(70,439)
|
|
(72,350)
|
Total Universal
Corporation shareholders' equity
|
1,441,946
|
|
1,382,050
|
|
1,414,222
|
Noncontrolling
interests in subsidiaries
|
39,556
|
|
37,146
|
|
38,840
|
Total shareholders'
equity
|
1,481,502
|
|
1,419,196
|
|
1,453,062
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
2,226,929
|
|
$
|
2,226,774
|
|
$
|
2,231,177
|
See accompanying notes.
UNIVERSAL
CORPORATION
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
December 31,
|
|
2016
|
|
2015
|
|
(Unaudited)
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net income
|
$
|
76,056
|
|
$
|
65,554
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation
|
26,107
|
|
27,221
|
Net provision
for losses (recoveries) on advances and guaranteed loans to
suppliers
|
414
|
|
(1,026)
|
Foreign
currency remeasurement loss (gain), net
|
12,493
|
|
21,492
|
Fair value
gain upon acquisition of partner's interest in joint
venture
|
—
|
|
(3,390)
|
Restructuring
and impairment costs
|
3,860
|
|
2,389
|
Other, net
|
7,290
|
|
18,004
|
Changes in operating
assets and liabilities, net
|
56,533
|
|
(120,045)
|
Net cash provided by operating activities
|
182,753
|
|
10,199
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchase of property,
plant and equipment
|
(28,544)
|
|
(38,504)
|
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
|
665
|
|
1,380
|
Other
|
—
|
|
(398)
|
Net cash used by
investing activities
|
(27,879)
|
|
(43,486)
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Issuance (repayment)
of short-term debt, net
|
(11,299)
|
|
4,168
|
Dividends paid to
noncontrolling interests
|
(1,260)
|
|
(1,260)
|
Dividends paid on
convertible perpetual preferred stock
|
(11,061)
|
|
(11,061)
|
Dividends paid on
common stock
|
(36,181)
|
|
(35,349)
|
Other
|
(2,256)
|
|
(3,736)
|
Net cash used by
financing activities
|
(62,057)
|
|
(47,238)
|
|
|
|
|
Effect of exchange
rate changes on cash
|
(757)
|
|
(633)
|
Net increase
(decrease) in cash and cash equivalents
|
92,060
|
|
(81,158)
|
Cash and cash
equivalents at beginning of year
|
319,447
|
|
248,783
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$
|
411,507
|
|
$
|
167,625
|
Non-cash Financing Transaction - The consolidated financial
statements for the nine months ended December 31, 2016 include a non-cash
reclassification of $107.6 million
from preferred stock to common stock to reflect the conversion of
111,072 shares of the Company's outstanding Series B 6.75%
Convertible Perpetual Preferred Stock into common stock.
See accompanying notes.
NOTE 1. BASIS OF PRESENTATION
Universal Corporation, which together with its subsidiaries is
referred to herein as "Universal" or the "Company," is the leading
global leaf tobacco supplier. Because of the seasonal nature of the
Company's business, the results of operations for any fiscal
quarter will not necessarily be indicative of results to be
expected for other quarters or a full fiscal year. All adjustments
necessary to state fairly the results for the period have been
included and were of a normal recurring nature. Certain amounts in
prior year statements have been reclassified to conform to the
current year presentation. This Form 10-Q should be read in
conjunction with the financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 2016.
NOTE 2. EARNINGS PER SHARE
The following table sets forth the computation of basic and
diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Nine Months
Ended
December 31,
|
(in thousands,
except share and per share data)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
|
|
|
|
|
|
|
Numerator for
basic earnings per share
|
|
|
|
|
|
|
|
Net income
attributable to Universal Corporation
|
$
|
53,647
|
|
$
|
44,534
|
|
$
|
73,435
|
|
$
|
61,052
|
Less: Dividends on
convertible perpetual preferred stock
|
(3,687)
|
|
(3,687)
|
|
(11,061)
|
|
(11,061)
|
Earnings available to
Universal Corporation common shareholders
for calculation of basic earnings per share
|
49,960
|
|
40,847
|
|
62,374
|
|
49,991
|
|
|
|
|
|
|
|
|
|
Denominator for
basic earnings per share
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
22,982,473
|
|
22,717,043
|
|
22,831,717
|
|
22,671,943
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
|
2.17
|
|
$
|
1.80
|
|
$
|
2.73
|
|
$
|
2.20
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share
|
|
|
|
|
|
|
|
Numerator for
diluted earnings per share
|
|
|
|
|
|
|
|
Earnings available to
Universal Corporation common shareholders
|
$
|
49,960
|
|
$
|
40,847
|
|
$
|
62,374
|
|
$
|
49,991
|
Add: Dividends on
convertible perpetual preferred stock (if conversion
assumed)
|
3,687
|
|
3,687
|
|
11,061
|
|
—
|
Earnings available to
Universal Corporation common shareholders for
calculation of diluted earnings per share
|
53,647
|
|
44,534
|
|
73,435
|
|
49,991
|
|
|
|
|
|
|
|
|
|
Denominator for
diluted earnings per share
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
22,982,473
|
|
22,717,043
|
|
22,831,717
|
|
22,671,943
|
Effect of dilutive
securities (if conversion or exercise assumed)
|
|
|
|
|
|
|
|
Convertible perpetual
preferred stock
|
4,693,155
|
|
4,857,262
|
|
4,816,904
|
|
—
|
Employee share-based
awards
|
320,955
|
|
280,603
|
|
318,594
|
|
285,107
|
Denominator for
diluted earnings per share
|
27,996,583
|
|
27,854,908
|
|
27,967,215
|
|
22,957,050
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share
|
$
|
1.92
|
|
$
|
1.60
|
|
$
|
2.63
|
|
$
|
2.18
|
In December 2016, 111,072 shares
of the Company's Series B 6.75% Convertible Perpetual Preferred
Stock were converted into approximately 2.5 million of the
Company's common stock. The effect from the conversion on the
computation of basic and diluted earnings per share for the three
and nine months ended December 31, 2016, is included in the
table above.
NOTE 3. SEGMENT INFORMATION
The principal approach used by management to evaluate the
Company's performance is by geographic region, although the dark
air-cured and oriental tobacco businesses are each evaluated on the
basis of their worldwide operations. The Company evaluates the
performance of its segments based on operating income after
allocated overhead expenses (excluding significant non-recurring
charges or credits), plus equity in the pretax earnings of
unconsolidated affiliates.
Operating results for the Company's reportable segments for each
period presented in the consolidated statements of income were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Nine Months
Ended
December 31,
|
(in thousands of
dollars)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
SALES AND OTHER
OPERATING REVENUES
|
|
|
|
|
|
|
|
Flue-Cured and Burley
Leaf Tobacco Operations:
|
|
|
|
|
|
|
|
North
America
|
$
|
93,198
|
|
$
|
81,463
|
|
$
|
246,669
|
|
$
|
179,456
|
Other
Regions (1)
|
495,982
|
|
460,729
|
|
992,574
|
|
1,009,162
|
Subtotal
|
|
589,180
|
|
542,192
|
|
1,239,243
|
|
1,188,618
|
Other Tobacco
Operations (2)
|
79,591
|
|
42,400
|
|
181,945
|
|
127,775
|
Consolidated sales
and other operating revenues
|
$
|
668,771
|
|
$
|
584,592
|
|
$
|
1,421,188
|
|
$
|
1,316,393
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
|
|
|
|
|
Flue-Cured and Burley
Leaf Tobacco Operations:
|
|
|
|
|
|
|
|
North
America
|
|
$
|
1,025
|
|
$
|
5,750
|
|
$
|
21,404
|
|
$
|
12,949
|
Other
Regions (1)
|
81,074
|
|
61,318
|
|
96,399
|
|
87,673
|
Subtotal
|
|
82,099
|
|
67,068
|
|
117,803
|
|
100,622
|
Other Tobacco
Operations (2)
|
5,781
|
|
1,083
|
|
10,215
|
|
2,136
|
Segment operating
income
|
87,880
|
|
68,151
|
|
128,018
|
|
102,758
|
Deduct: Equity
in pretax earnings of unconsolidated affiliates
(3)
|
(4,495)
|
|
(2,326)
|
|
(5,625)
|
|
(2,556)
|
Restructuring and
impairment costs (4)
|
(178)
|
|
—
|
|
(3,860)
|
|
(2,389)
|
Add: Other income
(5)
|
—
|
|
3,390
|
|
—
|
|
3,390
|
Consolidated
operating income
|
$
|
83,207
|
|
$
|
69,215
|
|
$
|
118,533
|
|
$
|
101,203
|
|
|
(1)
|
Includes South
America, Africa, Europe, and Asia regions, as well as inter-region
eliminations.
|
|
|
(2)
|
Includes Dark
Air-Cured, Special Services, and Oriental, as well as inter-company
eliminations. Sales and other operating revenues for this
reportable segment include limited amounts for Oriental because its
financial results consist principally of equity in the pretax
earnings of an unconsolidated affiliate.
|
|
|
(3)
|
Equity in pretax
earnings of unconsolidated affiliates is included in segment
operating income (Other Tobacco Operations segment), but is
reported below consolidated operating income and excluded from that
total in the consolidated statements of income and comprehensive
income.
|
|
|
(4)
|
Restructuring and
impairment costs are excluded from segment operating income, but
are included in consolidated operating income in the consolidated
statements of income and comprehensive income.
|
|
|
(5)
|
Other income
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. This item
is excluded from segment operating income, but is included in
consolidated operating income in the consolidated statements of
income and comprehensive income.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/universal-corporation-reports-improved-nine-month-and-third-quarter-results-300403554.html
SOURCE Universal Corporation