-----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, GPcJn6zfc/lRpGJV4ANiBwwaQ3MZld+7CncejciVtKCZGFkwOqmZ92fwbNgXWnzz dRH410x1yX5vFnnYwjDAYA== 0000916641-99-000389.txt : 19990507 0000916641-99-000389.hdr.sgml : 19990507 ACCESSION NUMBER: 0000916641-99-000389 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990505 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990506 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: 99611850 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: May 5, 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 release issued by the Registrant on May 5, 1999 attached hereto as Exhibit 99.1 is incorporated herein by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. No. Description --- ----------- 99.1 Press Release announcing third quarter earnings. - ------------- *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: May 6, 1999 By: /s/ William J. Coronado --------------------------------------- William J. Coronado Controller and Vice President Exhibit Index Exhibit Number Document - ------ -------- 99.1 Press Release announcing third quarter earnings. - ------------- *Filed Herewith EX-99.1 2 PRESS RELEASE EXHIBIT 99.1 Contact: Release: KAREN M.L. WHELAN MAY 5, 1999 Phone: (804) 359-9311 4:00 P.M. Eastern Time Fax: (804) 254-3594 UNIVERSAL CORPORATION ANNOUNCES EARNINGS RICHMOND, VA, May 5, 1999 / PRNEWSWIRE Henry H. Harrell, Chairman and Chief Executive Officer of Universal Corporation, announced today that the company's earnings remain on course for the year although, on a comparative basis, results for the quarter ended March 31, 1999, are slightly lower. Net income for the three-month period ended March 31, 1999, was $29.4 million, or 88 cents per diluted share, compared to $31.5 million, or 89 cents per diluted share, for 1998's third quarter. For the nine months, net income was $97.8 million, or $2.90 per share, compared to $102.4 million, or $2.89 per share, in fiscal year 1998. Gross revenues for the quarter were higher at $1.22 billion compared to $1.15 billion last year, and for the nine months were $3.40 billion versus $3.44 billion a year ago. During both the quarter and the nine-month period, tobacco earnings comparisons were negatively impacted by a number of factors including lower volumes handled in Brazil out of the smaller 1998 flue-cured and burley crops and quality issues in Argentina. Timing of shipments was also a factor in a number of regions. Earnings were higher in the United States for the quarter due to larger volumes processed and increased export shipments. For the nine months, however, U. S. earnings declined, despite larger volumes handled, due to the mix of business including lower export shipments and a reduction in the quantity of tobacco processed for the stabilization pools. Differences in the timing of shipments reduced quarterly earnings from Africa and delayed recognition of Oriental leaf sales from a number of origins. Dark tobacco results were down for the quarter and for the nine months reflecting a slowdown in filler and binder sales and leaf quality problems in Indonesia and Brazil due to adverse weather. Shipment delays also impacted these operations in the quarter. Non-tobacco earnings were up for both the quarter and the nine months due primarily to improving lumber and building products margins and higher plywood and hardwood prices. Last year, lumber results were adversely impacted by simultaneous declines in softwood, hardwood and plywood prices. Sales volumes continued to be below levels for the comparable periods a year ago due to the disruption of construction activity in Holland caused by excessive rains over the past six months. The performance of on-going agri-products operations was comparable to last year's good results . -- M O R E -- The company's earnings for the quarter and the nine months also benefited from lower borrowing levels, which reduced interest expense, and a lower tax rate. As of March 31, 1999, total debt, excluding customer advances, had declined by about $170 million compared to March 31, 1998. The effective tax rate was 34 percent in the quarter and 36 percent for the nine months reflecting the expected mix of foreign and domestic earnings, the realization of tax benefits and management's continuing assessment of outstanding tax issues. The company's effective tax rate in fiscal year 1998 was approximately 40 percent. On April 27, 1999, a subsidiary of Universal announced the rationalization and consolidation of several operations in the United States. The actions are expected to provide greater efficiency and yield annual savings that are at least equal to their cost. The cost of the consolidation is estimated to be between $3 million and $4 million before taxes. The Company believes that it will recognize those costs primarily in its fourth fiscal quarter. For the year to date, the company has continued to perform well despite considerable market uncertainty. Margins in some areas have been pressured by excess leaf supply, occasioned by financial and economic conditions in Southeast Asia and the former Soviet Union, declining consumption in the United States and a general buildup in uncommitted inventories. However, management believes that as a result of its "right sizing" policy, the company has held its inventories to appropriate levels and has not been forced to take significant write-downs in order to dispose of excess stocks or to reflect the current market values of those stocks. At the same time, management has continued efforts to reduce costs, improve efficiency, and strengthen strategic partnerships. As a result of the success of these efforts, management continues to expect that 1999 will be a good year for the company and that it will achieve earnings from ongoing operations in line with management's current projections. Through April 15, 1999, Universal had purchased 2,756,875 shares of the company's stock for $94.7 million pursuant to a share repurchase program first announced in May 1998. A total of $200 million has been authorized for that program. 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 the translation effects of currency rate changes 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 UNAUDITED STATEMENTS OF INCOME FOR THE QUARTERS ENDED MARCH 31, 1999 AND 1998 (Dollars in thousands, except per-share amounts) Three Months 1999 1998 ---- ---- Sales and other operating revenues $1,222,814 $1,152,696 Costs and expenses Cost of goods sold 1,080,062 995,291 Selling, general and administrative 87,631 90,952 ---------- ---------- Operating income Equity in pretax earnings of unconsolidated affiliates 5,239 5,599 Interest expense 12,848 16,585 ---------- ---------- Income before income taxes and other items Income taxes 15,962 21,192 Minority interests 2,196 2,729 ---------- ---------- Net income $ 29,354 $ 31,546 ========== ========== Earnings per share $.88 $.89 Diluted earnings per share $.88 $.89 Denominator for earnings per share (weighted average shares) Basic 33,193,954 35,298,742 Diluted 33,206,198 35,568,970
See accompanying notes. -- M O R E -- UNIVERSAL CORPORATION UNAUDITED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED MARCH 31, 1999 AND 1998 (Dollars in thousands, except per-share amounts)
Nine Months 1999 1998 ---- ---- Sales and other operating revenues $3,399,818 $3,441,009 Costs and expenses Cost of goods sold 2,951,950 2,969,702 Selling, general and administrative 251,615 256,531 ---------- ---------- Operating income Equity in pretax earnings of unconsolidated affiliates 7,021 10,856 Interest expense 41,536 46,266 ---------- ---------- Income before income taxes and other items Income taxes 58,226 71,189 Minority interests 5,677 5,773 ---------- ---------- Net income $ 97,835 $ 102,404 ========== ========== Earnings per share $2.90 $2.91 Diluted earnings per share $2.90 $2.89 Denominator for earnings per share (weighted average shares) Basic 33,722,844 35,202,716 Diluted 33,772,047 35,428,867
See accompanying notes. -- M O R E -- NOTES 1.) The operations of domestic and foreign tobacco, lumber and building products, and agri-products are seasonal. Therefore, the results of operations for the periods ended March 31, 1999, 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 statements have been reclassified to conform to current year's presentation. 2.)Contingencies: At March 31, 1999, total exposure under guarantees issued for banking facilities of unconsolidated affiliates was approximately $14 million. Other contingent liabilities approximate $41 million and relate principally to performance bonds, Common Market guarantees, and accounts receivable sold with recourse. 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 March 31, 1999, the company had outstanding short-term loans of $43 million and long-term loans of $17 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. SFAS 130 establishes new rules for the reporting and display of comprehensive income and its components. SFAS 130 requires foreign currency translation adjustments to be included in other comprehensive income. Amounts in prior year financial statements have been reclassified to conform to SFAS 130. Three Months Nine Months Periods ended March 31, 1999 1998 1999 1998 ---- ---- ---- ---- (in millions) Net income $29 $32 $97 $102 Foreign currency translation adjustment (4) (7) 6 (13) --- --- - ---- Comprehensive income $25 $25 $103 $89 4) The lower estimated effective tax rate in fiscal year 1999 is due to the anticipated mix of foreign and domestic earnings, realization of tax benefits, and management's current assessment of pending and contested tax issues. # # # -----END PRIVACY-ENHANCED MESSAGE-----