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: October 26, 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
<PAGE>
Item 5. Other Events.
The press release issued by the Registrant on October 26, 1999
attached hereto as Exhibit 99 is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
No. Description
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99 Press Release Announcing First Quarter Results.*
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*Filed Herewith
<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: October 26, 1999 By: /s/ James M. White, III
--------------------------------------------
James M. White, III
Vice President, General Counsel & Secretary
<PAGE>
Exhibit Index
Exhibit
Number Document
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99 Press Release Announcing First Quarter Results
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*Filed Herewith
Universal Corporation
Page 5
Contact: Release:
KAREN M.L. WHELAN 2:15 p.m. Eastern Time
Phone: (804) 359-9311
Fax: (804) 254-3594
email: [email protected]
UNIVERSAL CORPORATION ANNOUNCES FIRST QUARTER RESULTS
RICHMOND, VA, OCTOBER 26, 1999 / PRNEWSWIRE
Henry H. Harrell, Chairman and Chief Executive Officer of Universal
Corporation, said today that the company's net income for the quarter ended
September 30, 1999, was $29.5 million, or $.93 per share, which was
significantly above the $27.1 million, or $.78 per share, reported in the first
quarter of fiscal year 1999. Timing of tobacco shipments and a one-time gain
from the sale of the company's interest in a tobacco joint venture were major
factors in the earnings increase. Revenues were $783 million compared to $879
million in the first quarter of fiscal year 1999. The lower revenues were
anticipated as a result of the smaller flue-cured crop in the United States and
lower tobacco prices in Brazil caused by lower currency values.
Excluding the one-time gain, operating earnings for tobacco were down.
One factor in those results was the reduction of the U.S. flue-cured crop in
response to increased U.S. stabilization inventories and lower demand by
manufacturers, and, although the effect of flooding from Hurricane Floyd has not
yet been fully tallied, management does not believe that it caused any
significant further reduction in current marketings. Volumes of Brazilian
tobacco shipped were also lower than those of the first quarter of fiscal year
1999, despite the large Brazilian crop, because of benefits from shipment timing
last year. However, shipments of African tobacco and dark tobaccos were higher
in the quarter, reflecting shipments that customers delayed from fiscal year
1999, and earnings from the company's oriental tobacco joint venture improved
significantly due to similar shipment timing changes.
During the quarter, the company recognized a gain on the sale of its
interest in a tobacco joint venture. The after-tax gain recorded in this quarter
was about $2.6 million, or $.08 per share.
Despite the adverse effect of the stronger U.S. dollar, the company's
Netherlands-based lumber products distribution business reported increased
revenues and operating income on translation of guilder results. Improved
weather led to a high level of activity in the construction sector after a
protracted period of poor conditions. Higher world prices for hardwood further
benefited margins. Results for the agri-products business were slightly down as
strong results from rubber, nuts, and canned and frozen foods partially
mitigated the effects of weather and economic difficulties in tea markets.
<PAGE>
The company continues its share purchase programs, which have been in
progress since May 6, 1998, and to date has purchased 4.5 million shares of
Universal common stock at a total price of approximately $143 million. The
programs provide for purchases of up to $200 million. Currently, about 31
million common shares are outstanding.
Mr. Harrell stated, "As Universal begins fiscal year 2000, we believe
that our strategy is proving itself in the face of what have been, and continue
to be, very difficult market conditions. We expect that uncommitted flue-cured
and burley tobacco inventories in the hands of the trade and the U.S.
stabilization cooperatives will continue to increase during the year from the
current levels, which we estimate at about 270 thousand tons. However, we expect
that inventory levels will begin to moderate during fiscal year 2001 as crops
are further reduced. Although we will be affected by this period of market
imbalance, we believe that Universal will continue to show strong performance,
underlining the fundamental strength of our strategy, and we look forward to the
market recovery we foresee."
Allen B. King, President and Chief Operating Officer of Universal
Corporation noted, "During this quarter, our U.S. employees suffered from the
effects of flooding caused by Hurricane Floyd. Our processing facility at Rocky
Mount was severely damaged, and the disruption to the lives of our employees was
also severe. While we have flood and other insurance on our plant, many of our
employees have lost a great deal, and I applaud the efforts of the Universal
family to provide disaster relief. In addition to its contributions to the Red
Cross for immediate assistance, Universal is matching generous contributions
from employees, customers, and suppliers to a foundation that it has formed for
this relief. We are fortunate that none of our employees was severely injured in
this disaster, and we are extremely proud of the outpouring of help from the
entire Universal family."
The company cautions readers that the statements contained herein
regarding expected earnings and expectations for the company's performance 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, 1999, 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, 1999, were approximately $4 billion. For more information,
visit Universal's web site at www.universalcorp.com.
M O R E
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<TABLE>
UNIVERSAL CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended September 30,
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<CAPTION>
(In thousands of dollars, except per share data) 1999 1998
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<S> <C> <C>
Sales and other operating revenues $782,988 $879,285
Costs and expenses
Cost of goods sold 653,529 742,701
Selling, general and administrative expenses 77,878 78,314
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Operating income 51,581 58,270
Equity in pretax earnings of unconsolidated affiliates 6,596 570
Interest expense 11,776 15,542
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Income before income taxes and other items 46,401 43,298
Income taxes 16,704 16,021
Minority interests 195 220
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Net income $29,502 $27,057
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Earnings per share $ .93 $ . 79
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Diluted earnings per share $ .93 $ . 78
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Common shares for diluted earnings per share 31,707,944 34,483,843
</TABLE>
M O R E
<PAGE>
NOTES:
1. Universal Corporation has seasonal operations in domestic and foreign
tobacco, lumber and building products, and agri-products. Therefore, the
results of operations for the period ended September 30, 1999 are not
necessarily indicative of results to be expected for the year ending June
30, 2000. 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 September 30, 1999, total exposure under guarantees
issued for banking facilities of unconsolidated affiliates and suppliers
was approximately $39 million. Other contingent liabilities approximate $33
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
$30 million. The company believes the Brazilian tax returns filed were in
compliance with the applicable tax code. The numerous proposed adjustments
vary in complexity and amount. 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
September 30, 1999, the company had outstanding approximately $23 million
of loans 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. Although management expects to recover
amounts represented by these loans, ultimate collection is contingent upon
the ability of the farmers to produce competitively priced tobacco suitable
for export, the financial condition and management of the cooperative, and
the value of the assets pledged as security for the loans.
3. Comprehensive Income:
<TABLE>
<CAPTION>
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Three months ended September 30. 1999 1998
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(in thousands)
<S> <C> <C>
Net income $29,502 $27,057
Foreign currency translation adjustment 821 1,514
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Comprehensive income $30,323 $28,571
</TABLE>
M O R E
<PAGE>
<TABLE>
4. Reportable Segment Data
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Sales and other operating revenues
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<CAPTION>
Three months ended September 30, 1999 1998
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(in thousands)
<S> <C> <C>
Tobacco $509,755 $606,402
Lumber and building products 142,021 139,264
Agri-products 131,212 133,619
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Total $782,988 $879,285
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Operating income
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<CAPTION>
Three months ended September 30, 1999 1998
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(in thousands)
Tobacco $48,606 $49,463
Lumber and building products 8,810 7,816
Agri-products 5,058 5,197
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Total segments 62,474 62,476
Corporate expenses 4,297 3,636
Interest expense 11,776 15,542
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Income before income taxes and other items $46,401 $43,298
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</TABLE>
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