-----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, VCUnEAdMPa2uz1lDh4SD0BcwQ+vVJ8mQOOivkTKAQM9i0OGiuLCes8gbyvyGIqmQ BBaTMYPKk4p+/NTyIBHi3w== 0000916641-99-000069.txt : 19990209 0000916641-99-000069.hdr.sgml : 19990209 ACCESSION NUMBER: 0000916641-99-000069 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990208 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990208 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: 8-K SEC ACT: SEC FILE NUMBER: 001-00652 FILM NUMBER: 99523272 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 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: February 8, 1999 (Date of earliest event reported) UNIVERSAL CORPORATION (Exact Name of Registrant as Specified in its Charter) Virginia 1-652 54-0414210 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 1501 North Hamilton Street Richmond, Virginia 23230 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (804) 359-9311 Item 5. Other Events. The press releases issued by the Registrant on February 4, 1999 attached hereto as Exhibit 99.1 and 99.2 are incorporated herein by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. No. Description --- ----------- 99.1 Press Release announcing additional stock repurchase and quarterly dividend, dated February 4, 1999, issued by the Company.* 99.2 Press Release announcing earnings for the second quarter, dated February 4, 1999, issued by the Company.* - ------------- *Filed Herewith SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. UNIVERSAL CORPORATION (Registrant) Date: February 8, 1999 By: /s/ James M. White, III --------------------------------------- James M. White, III Vice President, General Counsel and Secretary Exhibit Index Exhibit Number Document - ------ -------- 99.1 Press Release announcing additional stock repurchase and quarterly dividend, dated February 4, 1999, issued by the Company.* 99.2 Press Release announcing earnings for the second quarter, dated February 4, 1999, issued by the Company.* - ------------- *Filed Herewith EX-99.1 2 PRESS RELEASE EXHIBIT 99.1 Contact: Release: KAREN M. L. WHELAN February 4, 1999 (804)359-9311 2:00 P.M. Eastern Time UNIVERSAL CORPORATION ANNOUNCES ADDITIONAL STOCK REPURCHASE AND QUARTERLY DIVIDEND RICHMOND,VA February 4, 1999/PRNEWSWIRE/---- Henry H. Harrell, Chairman and Chief Executive Officer of Universal Corporation announced that the company's Board of Directors has approved the additional repurchase of up to $100 million of Universal common stock. The authorization is in addition to the current $100 million program, under which, since May 1998, approximately 2.3 million shares have been purchased for about $81.1 million. Mr. Harrell explained that improving shareholder value is a continuing objective of the company and that this step is one of a number of actions that the company has taken in response to strong earnings and free cash flow. Other actions have included managing debt structure, increasing dividends, and significantly expanding the company's businesses. The authorized purchases may be made from time to time on the open market or in privately negotiated transactions at prices not exceeding prevailing market rates. Universal currently has approximately 33.25 million common shares outstanding. In other business, the Board declared a quarterly dividend of thirty cents ($.30) per share on the common shares of the Company, payable May 10, 1999, to common shareholders of record at the close of business on April 12, 1999. Universal Corporation is a diversified company with operations in tobacco, lumber, and agri-products. Its gross revenues for the fiscal year that ended on June 30, 1998, were approximately $4.3 billion. For more information, visit Universal's web site at www.universalcorp.com. EX-99.2 3 PRESS RELEASE EXHIBIT 99.2 Contact: Release: KAREN M.L. WHELAN Immediate Phone: (804) 359-9311 Fax: (804) 254-3594 email: investor@universalleaf.com UNIVERSAL CORPORATION ANNOUNCES INCREASED EARNINGS RICHMOND, VA, February 4, 1999 / PRNEWSWIRE Henry H. Harrell, Chairman and Chief Executive Officer of Universal Corporation, announced today that net income rose in the second quarter ended December 31, 1998, to $41.4 million or $1.23 per diluted share. On a per share basis, this is a 14 percent increase over the $38.1 million or $1.08 per share recorded in the second quarter last year. For the six months, net income totaled $68.5 million or $2.01 per share compared with $70.9 million or $2.00 per share earned in the six months ended December 31, 1997. Net income for the quarter and the six months benefited from a lower tax rate of 37 percent. Last year the effective tax rate was approximately 40 percent. Gross revenues were $1.3 billion for the quarter and $2.2 billion for the six months compared to $1.3 billion and $2.3 billion for the respective periods a year ago. The share repurchase program is continuing and as of December 31, 1998, approximately 2.2 million shares valued at $77.5 million had been purchased out of the total $100 million authorized. Several factors inhibited tobacco earnings growth in the second quarter. Brazilian results were off slightly due to lower volumes handled out of the much reduced 1998 crop, and a smaller U. S. flue-cured crop meant lower volumes of tobacco processed during the period. There were also quality problems with crops in Argentina and Kyrgyzstan, and some shipments of Oriental tobacco have been delayed until the second half of the year. The negative impact of these developments was partially offset by higher earnings in Africa and in the Far East, and lower corporate and interest expenses. For the six months, these factors, combined with shipment timing issues in the first quarter, held tobacco earnings for the period below last year's record pace. It should be noted that although recent news from Brazil has caused concern in world financial circles, the currency devaluation may well be favorable for the future export of Brazilian tobacco. Dark tobacco earnings were higher in the second quarter, reflecting the continued tight world market for wrapper leaf, and old crop shipments. For the six months, however, dark tobacco earnings were flat compared with the year-ago period. MORE Universal Corporation Page 2 Non-tobacco earnings were lower for the quarter and remain below those of last year for the six-month period. Lumber and building products results were negatively affected during the quarter by excessive rains in Holland that seriously disrupted construction activity and impacted revenues in the regional sales outlets. Wholesale results also declined due to margin pressures. However, industrial timber earnings were up due primarily to improved margins. Agri-products results were comparable to last year's good results for the quarter and higher for the six months after excluding earnings from the spice joint venture which was sold in fiscal year 1998. Tea continued to perform well with good volumes and margins. The leaf industry will continue to face uncertainties in the months ahead resulting from the aftermath of the tobacco settlement in the United States; from continued economic and financial turmoil in a number of areas of Southeast Asia, Latin America and the former Soviet Union; and from uncommitted inventories held in the trade. These factors, which affect the overall industry environment, have thus far not had a significant effect on Universal's operations and should not materially affect earnings for the year. Management remains confident about the company's strategic direction and continues to minimize unsold inventories. Consequently, despite the effect of adverse weather in some areas on tobacco production and on construction activity and lumber sales in Holland, the company still expects to achieve earnings for the year from continuing operations in line with its previous projections. The company cautions readers that the statements contained herein regarding expected earnings are forward-looking statements based upon management's current knowledge and assumptions about future events, including anticipated levels of demand for the company's products and services, costs incurred in providing these products and services, and timing of shipments to customers. Lumber earnings could also be affected by a number of factors, including currency translations and unusual weather conditions in the Netherlands. Actual results, therefore, could vary from those expected. For more details on factors that could affect expectations, see the company's Annual Report on Form 10-K for the year ended June 30, 1998, as filed with the Securities and Exchange Commission. Universal Corporation is a diversified company with operations in tobacco, lumber, and agri-products. Its gross revenues for the fiscal year that ended on June 30, 1998, were approximately $4.3 billion. For more information, visit Universal's web site at www.universalcorp.com. -- M O R E -- Universal Corporation Page 3 UNIVERSAL CORPORATION UNAUDITED STATEMENTS OF INCOME FOR THE QUARTERS ENDED DECEMBER 31, 1998 AND 1997 (Dollars in thousands, except per-share amounts)
Three Months 1998 1997 ----- ---- Sales and other operating revenues $1,297,719 $1,265,157 Costs and expenses Cost of goods sold 1,129,187 1,093,490 Selling, general and administrative 85,670 87,142 ---------- ---------- Operating income Equity in pretax earnings of unconsolidated affiliates 1,212 1,512 Interest expense 13,146 15,879 ---------- ---------- Income before income taxes and other items Income taxes 26,243 28,691 Minority interests 3,261 3,382 ---------- ---------- Net income $41,424 $38,085 ========== ========== Earnings per share $1.23 $1.08 Diluted earnings per share $1.23 $1.08 Denominator for earnings per share (weighted average shares) Basic 33,571,791 35,172,358 Diluted 33,614,623 35,390,125 See accompanying notes. -- M O R E -- Universal Corporation Page 4 UNIVERSAL CORPORATION UNAUDITED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997 (Dollars in thousands, except per-share amounts) Six Months 1998 1997 ---- ---- Sales and other operating revenues $2,177,004 $2,288,313 Costs and expenses Cost of goods sold 1,871,888 1,974,411 Selling, general and administrative 163,984 165,579 ---------- ---------- Operating income Equity in pretax earnings of unconsolidated affiliates 1,782 5,257 Interest expense 28,688 29,681 ---------- ---------- Income before income taxes and other items Income taxes 42,264 49,997 Minority interests 3,481 3,044 ---------- ---------- Net income $68,481 $70,858 ========== ========== Earnings per share $2.02 $2.02 Diluted earnings per share $2.01 $2.00 Denominator for earnings per share (weighted average shares) Basic 33,981,541 35,155,747 Diluted 34,049,234 35,359,860 See accompanying notes.
-- M O R E -- Universal Corporation Page 5 NOTES 1. The company's operations are seasonal; therefore, the results of operations for the three- and six-month periods ended December 31, 1998, are not necessarily indicative of results to be expected for the year ending June 30, 1999. All adjustments necessary to state fairly the results for such period have been included and were of a normal recurring nature. Certain amounts in prior year's financial statements have been reclassified to conform to current year's presentation. 2. Contingencies: At December 31, 1998, total exposure under guarantees issued for banking facilities of unconsolidated affiliates was approximately $11 million. Other contingent liabilities approximate $40 million and relate principally to performance bonds and Common Market guarantees. The company's Brazilian subsidiaries have been notified by the tax authorities of proposed adjustments to the income tax returns filed in prior years. The total proposed adjustments, including penalties and interest, approximate $40 million; however, recent currency fluctuations and possible interest rate changes could affect that amount. The company believes the Brazilian tax returns filed were in compliance with the applicable tax code. The numerous proposed adjustments vary in complexity and amounts. While it is not feasible to predict the precise amount or timing of each proposed adjustment, the company believes that the ultimate disposition will not have a material adverse effect on the company's consolidated financial position or results of operations. At December 31, 1998, the company had outstanding short-term loans of $29 million and long-term loans of $17.2 million to a farmer cooperative in Argentina. The loans are secured by tobacco and liens on real property, processing machinery and equipment and other assets of the cooperative. Upon export of the tobacco, which is usually in less than twelve months, the short-term loans should be recovered. The long-term loans are scheduled for repayment over the next nine years. Ultimate collection of the loans is contingent upon the ability of the farmers to produce competitively priced tobacco suitable for export, the financial management of the cooperative and the value of the assets pledged as security for the loans. 3. As of July 1, 1998, the company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income." (SFAS 130) The adoption of this statement had no impact on the company's net income or shareholders' equity. Amounts in prior year financial statements have been reclassified to conform to SFAS 130. The following table presents the calculation of comprehensive income as it applies to Universal: - -------------------------------------------------------------------------------- Periods ended December 31 Three months Six months - -------------------------------------------------------------------------------- (in millions) 1998 1997 1998 1997 - -------------------------------------------------------------------------------- Net income $41 $38 $68 $71 Foreign currency translation adjustment 8 2 10 (5) --- --- --- --- Comprehensive income $49 $40 $78 $66 4. The lower estimated effective tax rate in fiscal year 1999 is due to the anticipated mix of foreign and domestic earnings and management's current assessment of pending and contested tax issues. # # # -----END PRIVACY-ENHANCED MESSAGE-----