Page 1 of 18
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 March 31, 1996
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 - 35,042,051 shares outstanding as of May 13, 1996
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Universal Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
Three and Nine Months Ended March 31, 1996 and 1995
<TABLE>
<CAPTION>
Three Months Nine Months
1996 1995 1996 1995
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
Sales and other operating revenues $942,587 $991,270 $2,817,870 $2,622,217
Costs and expenses
Cost of goods sold 803,056 867,411 2,425,009 2,267,385
Selling, general and administrative 85,925 76,329 242,682 237,500
Interest 19,474 20,541 51,786 55,216
-------------- ------------- -------------- --------------
908,455 964,281 2,719,477 2,560,101
-------------- ------------- -------------- --------------
Income before income taxes and other items 34,132 26,989 98,393 62,116
Income taxes 13,639 10,090 39,348 24,131
Minority interests 2,752 4,013 5,617 6,258
-------------- ------------- -------------- --------------
Income from consolidated operations 17,741 12,886 53,428 31,727
Equity in net income (loss) of
unconsolidated affiliates 686 (657) 2,591 (14)
-------------- ------------- -------------- --------------
Net income $18,427 $12,229 $56,019 $31,713
============== ============= ============== ==============
Earnings per common share
$.53 $.35 $1.60 $.91
============== ============= ============== ==============
Retained earnings - Beginning of period $323,595 $332,626
Net income 56,019 31,713
Cash dividends declared ($.76-1996; $.74-1995) (26,629) (25,918)
-------------- --------------
Retained earnings - End of period $352,985 $338,421
============== ==============
Average common shares outstanding 35,035,516 35,009,358
</TABLE>
2
Universal Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, June 30,
1996 1995
--------------- ---------------
ASSETS
<S> <C> <C>
Current
Cash and cash equivalents $175,305 $158,093
Accounts and notes receivable 530,864 392,797
Accounts receivable - unconsolidated affiliates 18,270 13,230
Inventories - at lower of cost or market:
Tobacco 494,580 458,964
Lumber and building products 109,174 122,613
Agri-products 67,320 72,908
Other 15,124 11,988
Prepaid income taxes 1,744 8,371
Deferred income taxes 6,000 5,625
Other current assets 10,365 17,764
--------------- ---------------
Total current assets 1,428,746 1,262,353
Real estate, plant and equipment - at cost
Land 33,148 35,631
Buildings 215,732 211,146
Machinery and equipment 421,214 405,029
--------------- ---------------
670,094 651,806
Less accumulated depreciation 341,505 317,365
--------------- ---------------
328,589 334,441
Other assets
Goodwill 123,743 127,501
Other intangibles 28,199 21,759
Investments in unconsolidated affiliates 28,352 23,433
Deferred income taxes 19,271 7,832
Other noncurrent assets 47,715 30,646
--------------- ---------------
247,280 211,171
--------------- ---------------
$2,004,615 $1,807,965
=============== ===============
</TABLE>
3
Universal Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, June 30,
1996 1995
--------------- ---------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
<S> <C> <C>
Notes payable and overdrafts 521,913 $651,140
Commercial paper 50,000
Accounts payable 247,770 221,574
Accounts payable - unconsolidated affiliates 7,890 6,976
Customer advances and deposits 182,117 46,443
Accrued compensation 13,312 18,286
Income taxes payable 23,936 21,745
Current portion long-term obligations 91,734 31,476
--------------- ---------------
Total current liabilities 1,138,672 997,640
Long - term obligations 313,445 284,948
Postretirement benefits other than pensions 46,885 48,007
Other long - term liabilities 49,984 52,962
Deferred income taxes 15,024 17,211
Minority interests 29,017 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 35,042,051 shares
(35,030,314 at June 30, 1995) 75,929 75,749
Retained earnings 352,985 323,595
Foreign currency translation adjustments (17,326) (9,385)
--------------- ---------------
Total shareholders' equity 411,588 389,959
--------------- ---------------
$2,004,615 $1,807,965
=============== ===============
</TABLE>
4
Universal Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended March 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $56,019 $31,713
Adjustments to reconcile net income to net cash provided
by operating activities 34,600 41,800
Changes in operating assets and liabilities net of effects from
purchase of businesses (21,257) (72,352)
------------ -------------
Net cash provided by operating activities 69,362 1,161
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (25,500) (22,900)
Purchase of businesses (net of cash acquired) (17,600) (60,800)
Other (2,100) 1,500
------------ -------------
Net cash used in investing activities (45,200) (82,200)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of short-term debt - net (80,300) (900)
Repayment of long-term debt (27,400)
Issuance of long-term debt 117,200 6,800
Proceeds from minority investment in a subsidiary 10,000
Issuance of common stock 50 200
Dividends paid (26,500) (25,600)
------------ -------------
Net cash used in financing activities (6,950) (19,500)
------------ -------------
Net increase (decrease) in cash and cash equivalents 17,212 (100,539)
Cash and cash equivalents at beginning of period 158,093 166,820
------------ -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $175,305 $66,281
============ =============
</TABLE>
5
<PAGE>
Universal Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996
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 nine-month period ended March 31, 1996 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 March 31,
1996, total exposure under guarantees issued for banking facilities of
unconsolidated affiliates was $3 million. Other contingent liabilities
approximate $53 million and relate principally to Common Market guarantees. The
Company considers the possibility of loss on any of these guarantees to be
remote.
3) 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 third quarter and nine months
has been restated to reflect the consolidation. Before the effects of the
consolidation, reported consolidated net income for the quarter and nine months
ended March 31, 1995 was $10.3 million or $.29 per share and $31.1 million or
$.89 per share, respectively.
4) 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 March 31, 1996, cash
payments of approximately $7.5 million had been made, $3.3 million of which was
for the termination of leases and the balance to cover severance costs of 170
employees.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Working capital at March 31, 1996, was $290 million compared to $265
million at June 30, 1995. The increase in working capital was accounted for by
increases in current assets of $166 million and an increase in current
liabilities of $141 million. The most significant increases were accounted for
by accounts and notes receivable (up $138 million) and customer advances (up
$136 million). These increases primarily relate to the Company's tobacco
operations. Within the U.S., tobacco working capital needs are normally at their
lowest point at June 30, while the third quarter of the fiscal year includes
working capital requirements related to finalization of the current year's
flue-cured and burley crops. In addition, foreign tobacco operations have
advanced funds to farmers for fertilizer and seeds. The increase in customer
advances at March 31 reflects domestic tobacco customer prepayments for the
purchase of tobacco to be shipped in the near term. The Company has continued to
invest advances for the purchase of the Brazilian crop as described in the
Company's 1995 Annual Report to Shareholders. The consolidated balance sheet at
March 31, 1996 includes approximately $100 million of such investments. Earnings
from such investment vehicles has been less than 7% of consolidated pre-tax
earnings for the nine months ended March 31, 1996. At June 30, 1996, the Company
expects that all such funds will have been utilized for crop purchases.
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 March 31, 1996
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 have led to increased efficiency and
streamlined operations. Through the nine months ended March 31, 1996,
approximately $4.4 million of severance payments related to the fiscal year 1995
restructuring had been paid.
In the first quarter of fiscal 1996, the Company made some minor
structural changes in its U.S. tobacco operations. The $10 million of "Proceeds
from minority investment in a subsidiary" in the Statement of Cash Flows
represents cash proceeds from the issuance of stock in a newly formed
subsidiary. The Company treated the issuance of these shares as an equity
transaction and no gain or loss was recognized.
In February 1996 the Company sold $100 million of 6.5% ten-year notes,
in the public market, to provide long-term funding to repay long-term debt, as
it matures over the next 12 - 15 months. The net proceeds were used initially to
repay a portion of the Company's short-term bank debt and commercial paper.
7
Results of Operations
'Sales and Other Operating Revenues' decreased $49 million or 5% in the
quarter and increased $196 million or 7.5% year-to-date. In the quarter, tobacco
operations accounted for the majority of the decline as the U.S. burley crop was
greatly reduced by adverse weather. For the nine-month period, tobacco revenues
accounted for $106 million of the consolidated increase. The balance can be
attributed to lumber and building product operations which were up $87 million.
The revenue increase year-to-date related to lumber & building products was due
to a combination of a stronger Dutch guilder vis-a-vis the U.S. dollar, and the
inclusion of Heuvelman, a softwood distributor acquired last year, for the
entire current year period versus four months reported in the prior fiscal year.
Gross profits in the quarter increased $15.6 million to $140 million
and increased year-to-date $38.1 million to $393 million. The majority of the
gross profit improvement in both periods was realized in tobacco operations. In
the United States the volumes of flue-cured tobacco bought and processed were up
year-to-date. In addition, foreign tobacco gross profits for the nine months
improved. Fiscal 1995 results included writedowns of $3.9 million related to
dark tobacco operations, in the quarter and an additional $2.7 million
year-to-date as a result of sharply depressed economic conditions in Eastern
Europe which led to reduced sales activity in the region. Year-to-date lumber
and building product gross profits benefited from the inclusion of Heuvelman for
the full period, while gross profits in the quarter improved slightly. Late last
year softwood prices began to decline due to over production in supplying
countries and high inventory levels in Western European markets. This led to
increasing pressure on prices and reduced margins. Margins remained depressed
due to a sharp decline in European construction activity caused by severe winter
weather. Lower purchase prices for raw lumber, and the advent of spring are
expected to lead to increased construction activity and an improvement in
softwood margins in fiscal 1997. Agri-product gross profits were down slightly
in the quarter and nine-month periods.
'Selling and General and Administrative Expenses' in the quarter
increased 12.5% in the quarter due to higher costs related to lumber and
building products related to a stronger guilder and costs of servicing tobacco
contracts. The increase was partially offset in the nine months due to the
inclusion of a $3.8 million provision related to Eastern European customers last
year. Interest expense was down in the current year due to lower average
borrowing rates.
The outlook for the remainder of the year is positive and prospects for
next year appear favorable. The Brazilian market has opened and even though the
operating environment remains difficult, the current crop is selling well and
better results are expected. The African markets are just opening and good
demand and larger volumes are expected. Planting has begun in the United States
and, if weather conditions are favorable, larger leaf volumes are expected to be
handled in the upcoming fiscal year. The improvement in overall market
conditions and the increased operating efficiencies achieved should continue to
benefit the Company. 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. The Brazilian government
has reduced inflation rates to 20-year lows through fiscal policies included in
its Plano Real economic plan, which entails financial control of items such as
interest rates and exchange rates. In addition, the Brazilian government
exercises control over taxation, trade policies, foreign investment and banking.
Although there have been benefits realized from enacting the Plano Real, the
long-term viability of the government's plan is dependent on various factors,
including whether the current administration can continue to hold office, the
level of foreign currency reserves, and the confidence of the Brazilian business
sector. There were no significant changes in Brazil's fiscal policies during the
quarter ended March 31, 1996, and none have been announced that would lead the
Company to believe there would be a significant impact for the Company's fiscal
year ending June 30, 1996.
8
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.2 By-laws as amended February 13, 1996
12 Ratio of Earnings to Fixed Charges
(b) Reports on Form 8-K
Form 8-K filed on February 20, 1996. The form describes an event on
February 14, 1996, in which Universal Corporation entered into an Underwriting
Agreement and a Terms Agreement with Dillon, Read & Co. Inc. and Wheat, First
Securities, Inc. for the public offering of $100,000,000 aggregate principal
amount of its 6 1/2% Notes Due February 15, 2006. On February 20, 1996, the 6
1/2% Notes were issued pursuant to an Indenture dated as of February 1, 1991
between Universal Corporation and Chemical Bank, as Trustee, and an Officers'
Certificate dated as of February 20, 1996.
9
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: May 13, 1996 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)
EXHIBIT 3.2
February 13, 1996
BYLAWS
of
UNIVERSAL CORPORATION
******
ARTICLE I
Shareholders
Section 1. Shareholders shall be those persons in whose names shares of
the Company are registered in its share transfer records, and a listing of the
names drawn from such records as of a record date shall serve as conclusive
evidence as to those shareholders eligible to vote their shares at any meeting
of the shareholders.
Section 2. Certificates evidencing shares of the Company shall only be
issued for one or more full shares. Such shares shall only be transferable on
the share transfer records of the Company by the owner in person, or by his
attorney or legal representative, whose written evidence of authority shall be
filed with the Company or its transfer agent.
Section 3. The share transfer records of the Company shall not be
closed following the declaration of a dividend on either the preferred or common
shares. A record date shall be established in the resolution declaring such
dividend or dividends and the transfer agent shall prepare a listing of the
names of all the shareholders entitled to such dividend without actually closing
the share transfer records for the transfer of shares.
Section 4. Every shareholder of the Company shall be entitled to a
stock certificate, signed by the Chairman of the Board, the President, or a Vice
President of the Company and by its Secretary, or by any two officers duly
authorized to perform this function by the Board of Directors. Where any such
certificate is countersigned by its transfer agent and registered by its
registrar, the signatures of any of the Company's officers, and the seal of the
Company upon such stock certificate, may be facsimiles, engraved or printed, as
may be authorized from time to time by the Board of Directors of the Company.
Section 5. The annual meeting of the shareholders of the Company shall
be held at its principal office located in Richmond, Virginia, or at such other
place within or without the Commonwealth of Virginia as may from time to time be
designated by the Board of Directors, on the 1fourth Tuesday in October of each
year, for the purpose of electing Directors and for the transaction of such
other business as may properly come before the meeting.
In order for business to be properly brought before an annual meeting
of shareholders, it must be (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (b)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (c) otherwise properly brought before the meeting by a
shareholder. For business to be properly brought before an annual meeting by a
shareholder, the shareholder must have given timely notice thereof in writing to
the Secretary of the Company. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal office of the Company, not
less than 60 days nor more than 90 days prior to the meeting. A shareholder's
notice to the Secretary shall set forth as to each matter the shareholder
proposes to bring before the annual meeting (i) a brief description of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (ii) the name and address, as
they appear on the Company's share transfer records, of the shareholder
proposing such business, (iii) the class and number of shares of the Company
which are beneficially owned by the shareholder,
- --------
1 At a meeting of the Board of Directors held on August 5, 1993, the
Board amended the bylaws to cause the Annual Shareholders Meeting for the year
ended June 30, 1993 to be held on the fourth Monday, instead of Tuesday, of
October. Following this year, the bylaws shall remain in effect as of the fourth
Tuesday of October.
and (iv) any material interest of the shareholder in such business.
Notwithstanding anything in these Bylaws to the contrary, no business shall be
conducted at an annual meeting except in accordance with the procedures set
forth in this Section 5. The Chairman of an annual meeting shall, if the facts
warrant, determine and declare to the meeting that an item of business was not
properly brought before the meeting in accordance with the provisions of this
Section 5, and shall not be transacted.
Notwithstanding the foregoing provisions of this Section 5, a
shareholder shall also comply with all applicable requirements of the Securities
Exchange Act of l934, as amended, and the rules and regulations thereunder with
respect to the matters set forth in this Section 5.
Section 6. At the call of the Chairman of the Board, the President, or
by order of the Board of Directors, a special meeting of the shareholders of the
Company may be held at such time and place as shall be designated in the notice
of the meeting.
Section 7. Written notice of an annual or special meeting of the
shareholders shall be mailed to each shareholder of record entitled to vote
under the provisions of the Articles of Incorporation of the Company as now in
existence or as may be subsequently amended, at the address as it appears on the
share transfer records of the Company, not less than ten nor more than sixty
days before the meeting date, except as may otherwise be required by law. Notice
of a special meeting shall state the purpose or purposes for which the meeting
is called. Notice of any meeting of shareholders may be waived in writing or by
attendance at the meeting in person or by proxy.
Section 8. At all meetings of the shareholders, a majority of the
shares entitled to vote at the record date for such meeting, represented in
person or by proxy, shall constitute a quorum, provided that when a specified
item of business is required to be voted on by one or more classes of shares,
voting as a class, the holders of a majority of the shares of each such class
shall constitute a quorum for the transaction of such specified item of
business. If no quorum shall be present, the meeting may, without further
notice, be adjourned from time to time until a quorum shall be present. All
proxies must be in writing, signed by the shareholders and filed with the
Secretary of the meeting.
Section 9. The Chairman of the Board shall preside at all meetings of
the shareholders and, in his absence, the President shall preside. All meetings
of the shareholders shall be attended by the Secretary of the Company, and he
shall, ex officio be the Secretary of such meetings. In his absence, a Secretary
pro tempore may be appointed.
ARTICLE II
Board of Directors
Section l. Only persons who are nominated in accordance with the
procedures set forth in this Section l shall be eligible to serve as Directors.
Nominations of persons for election to the Board of Directors of the Company may
be made at an annual meeting of the shareholders (a) by or at the direction of
the Board of Directors or (b) by any shareholder of the Company who is a
shareholder of record at the time of giving notice provided for in this Section
l, who shall be entitled to vote for the election of Directors at the meeting
and who complies with the notice procedures set forth in this Section l. Such
nominations, other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to the Secretary
of the Company. To be timely, a shareholder's notice shall be delivered to or
mailed and received at the principal office of the Company not less than 60 days
nor more than 90 days prior to the meeting. Such shareholder's notice shall set
forth (a) as to each person whom the shareholder proposes to nominate for
election or re-election as a Director, all information relating to such person
that is required to be disclosed in the solicitation of proxies for election of
Directors, or is otherwise required, in each case pursuant to Regulation 14A of
the Securities Exchange Act of 1934, as amended (including such person's written
consent to being named in the proxy statement as a nominee and to serving as a
Director if elected); and (b) as to the shareholder giving the notice (i) the
name and address, as they appear on the Company's share transfer records, of
such shareholder and (ii) the class and number of shares of the Company which
are beneficially owned by such shareholder. At the request of the Board of
Directors, any person nominated by the Board of Directors for election as a
Director shall furnish to the Secretary of the Company that information required
to be set forth in a shareholder's notice of nomination which pertains to the
nominee. No person shall be eligible for election as a Director of the Company
unless nominated in accordance with the procedures set forth in this Section l.
The Chairman of the meeting shall, if the facts warrant, determine and declare
to the meeting that a nomination was not made in accordance with the provisions
of this Section l and the defective nomination shall be disregarded.
Notwithstanding the foregoing provisions of this Section l, a shareholder shall
also comply with all applicable requirements of the Securities Exchange Act of
l934, as amended, and the rules and regulations thereunder with respect to the
matters set forth in this Section l.
Section 2. The Board of Directors shall hold its meetings at such times
and at such places within or without the Commonwealth of Virginia as it may from
time to time designate, or if the Board has fixed no place, then at the
principal office of the Company located in the City of Richmond, Virginia. A
meeting may be called at any time by the Chairman, the President or by any three
Directors. Meetings of the Board of Directors shall be held at least quarterly.
Section 3. Immediately following the annual meeting of the shareholders
at which the Directors are elected, an organizational meeting of the Board of
Directors shall be held for the purpose of electing the officers of the Company
and for the transaction of any other business which may be brought before it
relating to the management of the business and affairs of the Company. No notice
other than this Bylaw provision shall be required for the holding of this
organizational meeting and for the transaction of business at such meeting or
any adjournment thereof.
Regular meetings of the Board of Directors may be held at such
designated times and places as may be determined by the Board of Directors, and
the notices of such regular meetings shall be in such form as may be prescribed
by the Board of Directors.
Notice of the time and place of special meetings of the Board of
Directors shall be given to each Director by the Secretary of the Company or in
his absence or inability to act, by the President, or by the Treasurer or by
such other officer as may be designated by the Executive Committee, orally or in
writing, in person or by mail, private courier, telephone, telegraph, teletype,
or other similar form of wire or wireless communication.
Notice of any meeting, regular or special, shall be deemed to have been
duly given if delivered in whatever form and in sufficient time to permit the
Director to whom the notice is given and received to attend the meeting using
the ordinary and usual means of transportation normally available to the
Director.
If upon the request of any three Directors, the Secretary or other
designated officer of the Company shall fail or refuse to call a meeting of the
Board of Directors, then the call may be given provided it is in writing and
signed by the three Directors requesting the meeting. Such notice, when so given
to each other member of the Board of Directors, shall be deemed to be proper
notice of the meeting.
Section 4. A majority of the number of Directors fixed by the Bylaws
shall constitute a quorum, but if upon a call for a meeting, there shall not be
a quorum present, the Directors present may adjourn the meeting from time to
time until a quorum is present. All questions coming before the Board of
Directors shall be determined by the majority vote of the Directors present.
ARTICLE III
Committees
Section 1. The Board of Directors may designate three or more of their
number, of whom the Chief Executive Officer shall ex officio be a member, to
constitute an Executive Committee, which shall have and exercise all the powers
of the Board that may be lawfully delegated, including the power to authorize
the seal of the Company to be affixed to such documents as may require it. The
acts and records of the Executive Committee shall at all times be subject to the
supervision and control of the Board of Directors when in session. A majority of
the number of members of the Executive Committee shall constitute a quorum, and
all questions coming before the Executive Committee shall be determined by the
majority vote of the members of the Committee.
Section 2. The Board of Directors may elect from their number a Finance
Committee, consisting of not less than three members. The Chief Executive
Officer shall ex officio be a member of the Committee. The Treasurer, who shall
be under the control and supervision of the Committee, shall ex officio be
entitled to attend all meetings of the Committee.
The Finance Committee shall, subject at all times to the control of the
Board of Directors, have general and special charge and control of all the
financial affairs of the Company and shall have and exercise all of the powers
of the Board of Directors in such financial matters when the latter is not in
session.
Section 3. The Board of Directors may elect from their number an Audit
Committee, independent of management, consisting of not less than three of its
members. The Audit Committee shall have the following duties and
responsibilities:
A. Review the proposed scope and general extent of the audit
and the audit procedures which will be followed;
B. Review with the Company's independent accountants and
Company financial officers, upon completion of the audit, any report or opinion
proposed to be rendered in connection therewith, the audited financial
statements, any significant changes in accounting principles, and, in general,
the results of the audit;
C. Review with the Company's independent accountants and
Company financial officers any significant recommendations which the independent
accountants may have suggested to the Company with respect to improving internal
financial and accounting controls, choice of accounting principles, or
management reporting systems; such review to take place after receiving the
responses of Company financial officers to the audit comments;
D. Review with the Company's independent accountants, Company
financial officers and the internal auditors the general policies and procedures
utilized by the Company with respect to the adequacy of internal auditing and
accounting controls;
E. Review the activities of the Directors, officers, and
employees of the Company with respect to conflicts of interest and unusual or
questionable payments;
F. Report to the Board of Directors upon any item which the
Committee feels is significant enough to warrant Board attention;
G. Present to the Board of Directors its recommendations with
respect to the selection of the independent accountants for the ensuing year;
and
H. Undertake any other review and responsibilities as may be
requested by the Board of Directors.
Section 4. The Board of Directors may elect from their number an
Executive Compensation Committee, consisting of not less than three of its
members, a majority of whom shall be independent of management. The Executive
Compensation Committee shall receive recommendations from the Chief Executive
Officer with respect to the compensation of all officers and then fix such
compensation. The Committee shall also review recommendations of the Chief
Executive Officer regarding the Management Performance Plan or any similar plan,
and make the appropriate allocations among eligible participants.
2Section 5. The Board of Directors may elect from their number a
Pension Investment Committee, consisting of not less than three members. The
- -----------
2 At a meeting of the Board of Directors held on February 13, 1996, the
Board amended the bylaws to cause a new Article III, Section 5 to define the
responsibilities of the Pension Investment Committee and a renumbering of the
old Article III, Section 5 to Article III, Section 6.
Pension Investment Committee shall establish pension investment policies, select
investment advisors and monitor the performance of pension investments with
respect to the following qualified plans: Employee's Retirement Plan of
Universal Leaf Tobacco Company, Incorporated and Designated Affiliated
Companies, Hourly Employees' Pension Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affiliated Companies, Hourly Employees' Retirement
Plan of Universal Leaf Tobacco Company, Incorporated and Designated Affiliated
Companies, Employee's 401(k) Savings Plan of Universal Leaf Tobacco Company,
Incorporated and Designated Affil iated Companies and such other qualified
employee benefit plans as may be added from time to time. This authority shall
not cause the Pension Investment Committee to assume the role of "plan
administrator," "trustee" or "custodian" for any employee benefit plan.
Section 6. The Board of Directors may establish and charge with
appropriate duties such other committees as it may deem necessary or desirable.
ARTICLE IV
Officers
Section 1. The Board of Directors, at the organizational meeting
following the annual meeting of the shareholders, shall elect the Chief
Executive Officer, such officers as may be required by law, and such other
officers as they may deem proper. From time to time and as necessary, additional
officers may be elected by the Board of Directors.
Section 2. The term of office of all officers shall be one year and
until their respective successors are elected. Any officer may be removed from
office by the Board of Directors at any time and with or without cause, unless
otherwise stated by agreement in writing duly authorized by the Board of
Directors. The officers of the Company shall have such duties as generally
pertain to their respective offices, as well as such powers and duties as from
time to time shall be conferred upon them by the Board of Directors.
Section 3. In case of the absence or inability to act or
disqualification of any officer, his duties shall be discharged by his associate
or assistant officer, and if there be none and no other provision has been made
therefor, the Board of Directors shall delegate his powers and duties to another
officer or shall appoint some other person to act in his stead.
ARTICLE V
Emergency Provisions
Section 1. The provisions of this Article shall be effective only in
the event of and during the period of an emergency. An emergency exists for
purposes of this Article if a quorum of the Board of Directors cannot be readily
assembled because of some catastrophic event.
Section 2. The officers and employees of the Company shall continue to
conduct the affairs of the Company under such guidance from the Directors as may
be available, except as to matters which by statute, notwithstanding the
existence of the emergency, require approval of the Board of Directors and
subject to conformance with any governmental directive during the emergency.
Section 3. Any senior officer or Director may call a meeting of the
Board of Directors, and those who are present at the meeting shall constitute a
quorum of the Board for the full conduct and management of the business and
affairs of the Company. Notice of the meeting given to those Directors, to whom
it may readily be given under the existing circumstances, shall be sufficient
and may be given by such means as it is feasible at the time, including by
publication or by radio.
Section 4. In the absence, disability or refusal to act of any officer,
the Board of Directors may delegate such officer's powers to any other officer,
or to any Director for the time being.
ARTICLE VI
Checks and Notes
Section 1. All checks given by the Company in the course of its
business shall be signed in such manner as prescribed from time to time by the
Finance Committee.
Section 2. All notes and bonds given by the Company in the course of
its business shall be signed by any one of the Treasurer, Secretary, an
Assistant Treasurer, or an Assistant Secretary, jointly together with any one of
the Chairman, Vice Chairman, President, a Vice President, or by such other
persons and in such manner as may be prescribed from time to time by the Finance
Committee of the Board of Directors.
ARTICLE VII
Corporate Seal
The corporate seal of the Company shall consist of two concentric
circles, around the inner edge of which shall be engraved the words "UNIVERSAL
CORPORATION, RICHMOND, VA." and across the center thereof the word "SEAL" and
the figures "1918."
ARTICLE VIII
Use of Masculine
Whenever a masculine term is used in these Bylaws, it shall be deemed
to include the feminine.
ARTICLE IX
Dividends
The Board of Directors may, subject to the provisions of the Articles
of Incorporation of the Company, annually, semi-annually, quarterly or monthly,
declare dividends as it may deem prudent.
ARTICLE X
Amendments
These Bylaws may be altered, amended or repealed by vote of the
majority of the whole number of Directors at any meeting of the Board of
Directors, or by the shareholders at any annual meeting of the shareholders of
the Company, or at any special meeting when due notice of such proposed
amendment has been given, subject to the provisions of the Articles of
Incorporation of the Company.
EXHIBIT 12.
Universal Corporation and Subsidiaries
RATIO OF EARNINGS TO FIXED CHARGES
Nine Months Ended March 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------------- --------------
<S> <C> <C>
Pretax income from continuing operations $98,393 $62,116
Pretax income of unconsolidated affiliates 3,875 874
Fixed charges 52,454 55,853
------------- --------------
Earnings $154,722 $118,843
============= ==============
Interest $51,786 $55,216
Interest of unconsolidated affiliates 493 462
Debt discount amortization 175 175
------------- --------------
Fixed Charges $52,454 $55,853
============= ==============
Ratio of Earnings to Fixed Charges 2.9 2.1
============= ==============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000102037
<NAME> UNIVERSAL CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 175,305
<SECURITIES> 0
<RECEIVABLES> 549,134
<ALLOWANCES> 0
<INVENTORY> 686,198
<CURRENT-ASSETS> 1,428,746
<PP&E> 670,094
<DEPRECIATION> 341,505
<TOTAL-ASSETS> 2,004,615
<CURRENT-LIABILITIES> 1,138,672
<BONDS> 313,445
<COMMON> 75,929
0
0
<OTHER-SE> 335,659
<TOTAL-LIABILITY-AND-EQUITY> 2,004,615
<SALES> 2,817,870
<TOTAL-REVENUES> 2,817,870
<CGS> 2,425,009
<TOTAL-COSTS> 2,425,009
<OTHER-EXPENSES> 242,682
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51,786
<INCOME-PRETAX> 98,393
<INCOME-TAX> 39,348
<INCOME-CONTINUING> 56,019
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 56,019
<EPS-PRIMARY> 1.60
<EPS-DILUTED> 0
</TABLE>
