SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 5, 1998
(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 23230
Richmond, Virginia (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code:
(804) 359-9311
<PAGE>
Item 5. Other Events.
The Company issued a press release announcing its earnings for the
1998 fiscal year and the fourth quarter.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99 Press release issued by the Registrant on August 5, 1998.
<PAGE>
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: August 10, 1998 By: /s/ William J. Coronado
-------------------------------
William J. Coronado
Controller
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Exhibit Index
Number Document
- - ------ --------
99 Press release issued by the Registrant on August 5, 1998.
KAREN M.L. WHELAN AUGUST 5, 1998
Phone: (804) 359-9311 6:30 P.M. EDT
Fax: (804) 254-3594
UNIVERSAL CORPORATION POSTS RECORD EARNINGS
RICHMOND, VA, August 5, 1998 / PRNEWSWIRE
Henry H. Harrell, Chairman and Chief Executive Officer of Universal Corporation,
announced today that for the fiscal year that ended on June 30, 1998, the
company earned $141.3 million or $3.99 per share on a diluted basis. This
represents an increase of about 40% over net income reported last year. Gross
revenues for the year increased by 4.2% to $4.3 billion. Fourth quarter results
were also sharply higher than last year's fourth quarter. Net income for the
quarter was $38.9 million or $1.10 per diluted share compared to $21.8 million
or $.62 per share last year, an increase of approximately 77%. Fourth quarter
results included an after tax gain of about $11 million or $.31 per diluted
share on the sale of Universal's minority interest in a Dutch joint venture in
spices. Excluding the gain, earnings for the year would have been $130.4 million
or $3.68 per share on a diluted basis for an increase of more than 29%.
For the fiscal year, international tobacco results were well above those of last
year, with particularly strong improvement in Brazil, Africa, and Europe, as
well as in the company's oriental tobacco business. International sales
continued to be strong, and margins improved due to higher volumes. Domestic
earnings were up significantly during the year, reflecting the large crops in
the United States. Dark tobacco results also improved substantially. Although
supplies of filler and binder are now adequate to meet demand, cigar wrapper
continues to be in short supply. For the quarter, revenues were down, reflecting
differences in shipment timing and lower auction prices in Africa, but earnings
improved based on a favorable business mix.
Lumber and building products earnings were down substantially for the year due
to the impact of the stronger U.S dollar as well as difficult market conditions.
The prices of hardwood, softwood, and plywood declined during the year causing
customers to delay purchases. In addition, cost of sales reflected the sale of
older, higher cost inventory. Earnings for the agri-products business were up
strongly based on record performance from tea operations and a strong showing
from rubber trading and dried fruit and nut imports.
During the fourth quarter, the company completed the formation of its oriental
tobacco joint venture, Socotab, L.L.C., to create the world's leading oriental
tobacco leaf merchant. In May, Universal also announced the approval of a $100
million share repurchase. By July 31, 1998, the approved repurchase program was
about 32% complete.
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Universal Corporation
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Mr. Harrell said, " Universal's strong performance this year is the result of
hard work and a sound strategy. The company's strategy, which emphasizes
strategic alliances with its customers as well as `right-sizing' its tobacco
inventory levels, is working. Despite some oversupply in certain tobacco
markets, the well-known uncertainties in the United States political and legal
arenas, and the continuing problems in Asia, we are optimistic about fiscal year
1999 as well." He continued, "Our optimism for fiscal year 1999 is based on our
faith in our strategy, our strong customer relationships, and the continued
efforts of our employees around the world. We expect more pronounced quarterly
variability in earnings in fiscal year 1999 due to changes in the relative
earnings contributions of our operating territories. Although the year has just
begun, and market conditions can be strongly affected by outside factors, we are
confident at this writing that Universal can achieve further earnings growth
from on-going operations in fiscal year 1999. "
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 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, 1997, as filed with the
Securities and Exchange Commission.
Universal Corporation is a diversified company with operations in leaf tobacco,
lumber products distribution, and agri-products.
-- M O R E --
Universal Corporation
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<TABLE>
UNIVERSAL CORPORATION
UNAUDITED STATEMENTS OF INCOME
FOR THE QUARTERS ENDED JUNE 30, 1998 AND 1997
(Dollars in thousands, except per-share amounts)
<CAPTION>
<S> <C>
Three Months
1998 1997
----- ----
Sales and other operating revenues $846,195 $940,899
Costs and expenses
Cost of goods sold 692,198 802,369
Selling, general and administrative 90,379 84,543
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Operating income 63,618 53,987
Equity in pretax earnings of unconsolidated affiliates 6,045 5,477
Gain on sale of investment 16,718
Interest expense (17,708) (15,388)
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Income before income taxes and other items 68,673 44,076
Income taxes 27,470 18,897
Minority interests 2,349 3,344
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Net income $ 38,854 $ 21,835
======== ========
Earnings per share $1.10 $.62
Diluted earnings per share $1.10 $.62
Notes:
1. Amounts in the prior year's statement have been reclassified to be
reported on a consistent basis with the current year's presentation.
2. In the final quarter of fiscal year 1998, the company recorded charges for
normal year-end inventory adjustments totaling approximately $7 million
after taxes.
-- M O R E --
Universal Corporation
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UNIVERSAL CORPORATION
UNAUDITED STATEMENTS OF INCOME
FOR THE YEAR ENDED JUNE 30, 1998 AND 1997
(Dollars in thousands, except per-share amounts)
<CAPTION>
Year
----
1998 1997
---- ----
Sales and other operating revenues $4,287,204 $4,112,675
Costs and expenses
Cost of goods sold 3,673,600 3,559,647
Selling, general and administrative 335,210 316,201
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Operating income 278,394 236,827
Equity in pretax earnings of unconsolidated affiliates 16,901 11,864
Gain on sale of investment 16,718
Interest expense (63,974) (64,886)
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Income before income taxes and other items 248,039 183,805
Income taxes 98,659 73,945
Minority interests 8,122 8,987
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Net income $ 141,258 $ 100,873
========== ==========
Earnings per share
$4.01 $2.88
Diluted earnings per share $3.99 $2.87
</TABLE>
Amounts in the prior year's statement have been reclassified to be reported on a
consistent basis with the current year's presentation.
# # #
Universal Corporation
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