-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I0ObupUjbKHw3YBewYG72Ev9636+63CXHQS7Jj5OTZ2AcSUdVOn0MOYT+TWJXF6r 5Vtx55//T9PlqllvV0yGNw== 0000916641-95-000386.txt : 19951119 0000916641-95-000386.hdr.sgml : 19951119 ACCESSION NUMBER: 0000916641-95-000386 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSAL CORP /VA/ CENTRAL INDEX KEY: 0000102037 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-FARM PRODUCT RAW MATERIALS [5150] IRS NUMBER: 540414210 STATE OF INCORPORATION: VA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00652 FILM NUMBER: 95589239 BUSINESS ADDRESS: STREET 1: P O BOX 25099 STREET 2: 1501 N HAMILTON ST CITY: RICHMOND STATE: VA ZIP: 23230 BUSINESS PHONE: 8043599311 MAIL ADDRESS: STREET 1: PO BOX 25099 CITY: RICHMOND STATE: VA ZIP: 23260 FORMER COMPANY: FORMER CONFORMED NAME: UNIVERSAL LEAF TOBACCO CO INC DATE OF NAME CHANGE: 19880314 10-Q 1 FORM 10-Q Page 1 of 10 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [ x ] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the Period Ended September 30, 1995 OR [ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the Transition Period From to Commission file number 1-652 UNIVERSAL CORPORATION (Exact name of Registrant as specified in its charter) VIRGINIA 54-0414210 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1501 North Hamilton Street, Richmond, Virginia 23230 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code - (804) 359-9311 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Common Stock, No par value - 35,031,714 shares outstanding as of November 9, 1995 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Universal Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS Three Months Ended September 30, 1995 and 1994
1995 1994 --------------- --------------- Sales and other operating revenues $842,454 $661,415 Costs and expenses Cost of goods sold 738,825 567,036 Selling, general and administrative 71,127 70,468 Interest 17,225 17,244 --------------- --------------- 827,177 654,748 --------------- --------------- Income before income taxes and other items 15,277 6,667 Income taxes 5,806 3,299 Minority interests 181 59 --------------- --------------- Income from consolidated operations 9,290 3,309 Equity in net income of unconsolidated affiliates 899 670 --------------- --------------- Net income $10,189 $3,979 ============== ============== Earnings per common share $ .29 $ .11 ============== ============== Retained earnings - Beginning of period $323,595 $332,626 Net income 10,189 3,979 Cash dividends declared ($.25-1995; $.24-1994) (8,758) (8,401) --------------- --------------- Retained earnings - End of period $325,026 $328,204 ============== ============== Average common shares outstanding 35,030,314 35,003,055
Universal Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS
September 30, June 30, 1995 1995 --------------- --------------- ASSETS Current Cash and cash equivalents $80,121 $158,093 Accounts and notes receivable 444,259 392,797 Accounts receivable - unconsolidated affiliates 7,606 13,230 Inventories - at lower of cost or market: Tobacco 635,543 458,964 Lumber and building products 118,247 122,613 Agri-products 69,166 72,908 Other 14,644 11,988 Prepaid income taxes 11,154 8,371 Deferred income taxes 6,433 5,625 Other current assets 19,293 17,764 --------------- --------------- Total current assets 1,406,466 1,262,353 Real estate, plant and equipment - at cost Land 35,355 35,631 Buildings 213,940 211,146 Machinery and equipment 414,467 405,029 --------------- --------------- 663,762 651,806 Less accumulated depreciation 326,955 317,365 --------------- --------------- 336,807 334,441 Other assets Goodwill 126,418 127,501 Other intangibles 20,914 21,759 Investments in unconsolidated affiliates 23,295 23,433 Deferred income taxes 10,617 7,832 Other noncurrent assets 30,600 30,646 --------------- --------------- 211,844 211,171 --------------- --------------- $1,955,117 $1,807,965 =============== ==============
Universal Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS
September 30, June 30, 1995 1995 --------------- --------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Notes payable and overdrafts $670,808 $651,140 Accounts payable 226,280 221,574 Accounts payable - unconsolidated affiliates 7,970 6,976 Customer advances and deposits 190,673 46,443 Accrued compensation 13,227 18,286 Income taxes payable 19,204 21,745 Current portion long-term obligations 33,663 31,476 --------------- --------------- Total current liabilities 1,161,825 997,640 Long - term obligations 260,677 284,948 Postretirement benefits other than pensions 47,633 48,007 Other long - term liabilities 51,364 52,962 Deferred income taxes 15,946 17,211 Minority interests 27,183 17,238 Shareholders' equity Preferred stock $100 par, 8% cumulative, authorized 75,000 shares, issued and outstanding 4 shares Additional preferred stock, no par value, authorized 5,000,000 shares, none issued or outstanding Common stock, no par value, authorized 50,000,000 shares, issued and outstanding 35,030,314 shares (35,030,314 at June 30, 1995) 75,749 75,749 Retained earnings 325,026 323,595 Foreign currency translation adjustments (10,286) (9,385) --------------- --------------- Total shareholders' equity 390,489 389,959 --------------- --------------- $1,955,117 $1,807,965 =============== ==============
Universal Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended September 30, 1995 and 1994
1995 1994 ------------ ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $10,189 $3,979 Adjustments to reconcile net income to net cash provided by operating activities 4,700 8,600 Changes in operating assets and liabilities net of effects from purchase of businesses (82,861) (172,516) ------------ ------------- Net cash used in operating activities (67,972) (159,937) ------------ ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (9,500) (7,700) Other 700 1,800 ------------ ------------- Net cash used in investing activities (8,800) (5,900) ------------ ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of short-term debt - net 12,600 73,900 Issuance (repayment) of long-term debt (15,000) 5,600 Proceeds from minority investment in a subsidiary 10,000 Dividends paid (8,800) (8,400) ------------ ------------- Net cash provided by (used in) financing activities (1,200) 71,100 ------------ ------------- Net decrease in cash and cash equivalents (77,972) (94,737) Cash and cash equivalents at beginning of period 158,093 166,820 ------------ ------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $80,121 $72,083 ============ ===========
Universal Corporation and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 1995 All figures contained herein are unaudited and stated in thousands of dollars 1) The Company's operating segments of domestic and foreign tobacco, lumber and building products and agri-products are seasonal by nature. Therefore, the results of operations for the three-month period ended September 30, 1995 are not necessarily indicative of results to be expected for the year ending June 30, 1996. All adjustments necessary to fairly state the results for such period have been included and were of a normal recurring nature. 2) The Company provides guarantees for seasonal pre-export crop financing for some of its subsidiaries and unconsolidated affiliates. In addition, certain subsidiaries provide guarantees that ensure that Common Market subsidies and value-added taxes will be repaid if the crops are not exported or if the subsidies are not properly distributed to Common Market farmers. At September 30, 1995, total exposure under guarantees issued for banking facilities of unconsolidated affiliates was $3 million. Other contingent liabilities approximate $55 million and relate principally to Common Market guarantees. The Company considers the possibility of loss on any of these guarantees to be remote. 3) Last year's effective tax rate in the quarter was significantly greater than the Federal statutory tax rate due to the lack of tax benefits on certain foreign subsidiaries' losses. 4) Effective in fiscal year 1995, the Company consolidated the results of African operations previously accounted for under the equity or cost methods of accounting. Financial data for the prior year's quarter has been restated to reflect the consolidation. Before the effects of the consolidation, reported consolidated net income for the quarter ended September 30, 1994 was $5.9 million or $.17 per share. 5) The Company recognized in June 1995 a pre-tax restructuring charge of $15.6 million related to the consolidation of certain tobacco operations and a reduction in the number of employees. The charge included $7.2 million for the expected costs of severance payments related to approximately 200 employees throughout the Company. The non-severance portion of the charge was for the write-down of fixed assets in operations consolidated ($3.7 million), and other nonoperating restructuring costs ($1.7 million). As of September 30, 1995, cash payments of $5 million had been made, approximately half of which was for the termination of leases and the balance to cover severance costs of 50 employees. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources Working capital at September 30, 1995, was $245 million compared to $265 million at June 30, 1995. The 7.5% decline in working capital was accounted for by increases in current assets of $144 million offset by an increase in current liabilities of $164 million. The most significant increases were accounted for by tobacco inventory (up $177 million) and customer advances (up $144 million). These increases primarily relate to the Company's domestic tobacco operations. Within the U.S., tobacco working capital needs are normally at their lowest point at June 30. In mid to late July the U.S. flue-cured tobacco markets open and the Company's working capital needs increase. As tobacco is purchased and shipped to factories for processing, inventories generally rise. This increase in inventories is offset by increases in notes payable and/or customer advances. The mix of notes payable and customer advances is dependent on both the Company's and its customers' borrowing capabilities, interest rates and exchange rates. The Company does not purchase tobacco in the United States on a speculative basis; thus the increase in inventory represents tobacco that has been committed to customers. Generally the Company's international tobacco operations conduct business in U.S. dollars, thereby limiting foreign exchange risk to local production and overhead costs. Agri-product and lumber operations enter into foreign exchange contracts to hedge firm purchase and sales commitments for terms of less than six months. Interest rate risk is limited because customers in the tobacco business usually pre-finance purchases or pay market rates of interest for inventory purchased for their accounts. The liquidity and capital resources of the Company at September 30, 1995 remain adequate. Over the past two years the Company has announced restructuring plans related to the consolidation of certain tobacco operations and a reduction in the number of employees. These efforts will lead to increased efficiency and streamlined operations. Through the quarter ended September 30, 1995, approximately $2.2 million of severance payments related to the fiscal year 1995 restructuring had been paid. Results of Operations 'Sales and Other Operating Revenues' increased $181 million or 27% in the quarter. Tobacco operations accounted for $159 million of the increases primarily due to increased domestic flue-cured and dark tobacco orders. The balance of the increase was attributable to the inclusion of Heuvelmann, which was acquired in the second quarter last year, in lumber and building product operations. Gross profits in the quarter increased almost 10% to $104 million due to the acquisition of Heuvelmann plus improvements realized in domestic and dark tobacco operations. In the quarter the total volume of domestic tobacco purchased and processed was up over 40% primarily due to larger flue-cured marketings and increased orders from domestic and export customers; however, as expected, processing volumes for the Flue-cured Stabilization Cooperative were down in the quarter, as crop surpluses have been reduced in the past year. Foreign tobacco profits improved in the quarter principally due to improved contributions from Central American and European operations. African tobacco results were lower due to old crop shipments carried over into the first quarter of last year. Similarly, Brazilian results were down in the quarter due to shipments delayed to subsequent quarters in the current fiscal year. Profits in dark air-cured tobacco rose on strong sales to the U.S. cigar industry, as worldwide consumption of cigars, and resulting demand for leaf, continues to increase. Lumber and building product results benefited from the inclusion of Heuvelmann, while some erosion of margins and volumes in regional outlets was more than offset by increased sales to the wholesale and professional markets. Agri-product results in fiscal year 1996 benefited from improved market conditions for both tea and confectionery sunflower seeds. 'Selling and General and Administrative Expenses' in the quarter increased by 1% compared to last year, reflecting the realization of benefits from restructuring efforts of the past two years. Interest expense was flat year-to-year as increased borrowing requirements related to higher volumes were offset by reductions in inventory carried over from the prior fiscal year. The higher effective tax rate in the prior fiscal year's first quarter was due to the lack of tax benefits on certain foreign subsidiaries' losses. The improved tobacco world supply and demand relationship is expected to lead to better results for the current fiscal year. Although there are factors beyond management's control, such as fiscal policies in Brazil, the Company's balance and strength in the major tobacco origins provides a firm base for growth. Lumber and agri-products activities continue to perform well and have good potential for the future. As reported in the 1995 annual report to shareholders, the Company adopted a restructuring plan for its tobacco operations. As of the date of this report there have been no material changes to the plan or its underlying assumptions. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: November 9, 1995 UNIVERSAL CORPORATION ------------------------------- (Registrant) / s / Hartwell H. Roper -------------------------------- Hartwell H. Roper, Vice President and Chief Financial Officer / s / William J. Coronado --------------------------------- William J. Coronado, Controller (Principal Accounting Officer) EX-27 2 FINANCIAL DATA SCHEDULE
5 0000102037 UNIVERSAL CORPORATION 1,000 3-MOS JUN-30-1996 SEP-30-1995 80,121 0 451,865 0 837,600 1,406,466 663,762 326,955 1,955,117 1,161,825 260,677 75,749 0 0 314,740 1,955,117 842,454 842,454 738,825 738,825 71,127 0 17,225 15,277 5,806 10,189 0 0 0 10,189 .29 0
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