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: May 4, 2000
(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 May 4, 2000 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 third quarter earnings.*
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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: May 8, 2000 By: /s/ George C. Freeman, III
--------------------------------------------
George C. Freeman, III
Assistant Secretary
<PAGE>
Exhibit Index
Exhibit
Number Document
- ------ --------
99 Press release announcing third quarter earnings.*
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*Filed Herewith
CONTACT: RELEASE:
KAREN M.L. WHELAN IMMEDIATELY
Phone: (804) 359-9311
Fax: (804) 254-3594
UNIVERSAL CORPORATION ANNOUNCES THIRD QUARTER EARNINGS
RICHMOND, VA, May 4, 2000 / PRNEWSWIRE
Net income for the third quarter which ended March 31, 2000, was $38.5
million, or $1.29 per diluted share, compared to $29.4, or $.88 per diluted
share, during the comparable period last year. For the nine months, net income
was $94.1 million, or $3.06 per diluted share, compared to $97.8 million, or
$2.90 per diluted share, in fiscal year 1999. Gross revenues for the quarter
were $1 billion compared to $1.2 billion last year, and for the nine months were
$2.8 billion compared to $3.4 billion a year ago.
Higher tobacco earnings in the quarter were due primarily to the
acceleration of shipments to customers, especially from Africa. Increased
volumes shipped from Brazil's larger crop, improved operations in Argentina and
Mexico, and a better product mix in the United States also contributed to the
positive result for the quarter.
For the nine months, tobacco earnings were comparable to the levels of
a year ago as the effect of the Company's strong international operations offset
lower volumes in the United States and in its dark air-cured tobacco operations.
U.S. volumes handled were significantly lower as both the flue-cured and burley
crops were reduced in response to decreased demand from both domestic and
foreign cigarette manufacturers. Domestic leaf use was down, reflecting a drop
in U.S. cigarette sales in the aftermath of the settlement between U.S.
cigarette manufacturers and the states, and foreign demand was lower due to
ongoing customer concerns about the price and quality of U.S. leaf. Dark tobacco
volumes were down due primarily to lower export demand by manufacturers and
lower yields on certain tobacco types from Indonesian operations. In addition,
both the quarter and the nine-month tobacco operations reflect the absence of
earnings from a joint venture that was sold in the first quarter of this fiscal
year.
Non-tobacco earnings were slightly below last year's levels for both
the three-month and nine-month periods. Universal's lumber and building products
operations performed well in both periods despite the continuing strength of the
U.S. dollar against the Dutch guilder. The building sector in Holland has
recovered strongly from last year's slow market when record rainfall caused
serious delays in construction activity. Agri-products results continued to lag
last year's excellent levels due to difficult markets for tea, natural rubber
and sunflower seeds.
-- M O R E --
<PAGE>
Market uncertainty and shipment timing issues have made quarterly
earnings comparisons extremely difficult this year. Notwithstanding the
volatility of quarterly earnings in the second and third fiscal quarters,
management continues to expect a good result for fiscal year 2000, in spite of
lingering world oversupply of leaf tobacco and the well-publicized problems in
the United States. The exceptional strength of the third fiscal quarter was due
in part to shipments to customers, which last year occurred in the fourth
quarter. While this suggests that the final quarter of the fiscal year could be
below last year's fourth quarter, the Company remains on track to achieve
earnings in the range of $3.45 to $3.65 per share for the fiscal year ending
June 30, 2000, after an estimated $7 million in pre-tax severance costs, which
will be recorded in the fourth quarter of fiscal year 2000. These costs are
related to U.S. plant closures announced earlier this year.
Universal's share repurchase program is continuing with a total of 7.3
million shares purchased to date at a total cost of $196 million out of the $300
million program authorized by the Board of Directors. As of this writing, about
28.2 million shares remain outstanding.
The Company cautions readers that any forward-looking statements
contained herein are based upon management's current knowledge and assumptions
about future events, including anticipated levels of demand for and supply of
the Company's products and services, costs incurred in providing these products
and services, timing of shipments to customers, and general economic, political,
market, and weather conditions. Lumber and building products earnings are also
affected by changes in exchange rates between the U.S. dollar and the Euro.
Actual results, therefore, could vary from those expected. For more details on
factors that could affect expectations, see the Management's Discussion and
Analysis section of 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 --
<PAGE>
<TABLE>
UNIVERSAL CORPORATION
UNAUDITED STATEMENTS OF INCOME
FOR THE QUARTERS ENDED MARCH 31, 2000 AND 1999
(Dollars in thousands, except per-share amounts)
<CAPTION>
Three Months
2000 1999
----- ----
<S> <C> <C>
Sales and other operating revenues $1,001,207 $1,222,814
Costs and expenses
Cost of goods sold 840,881 1,080,062
Selling, general and administrative 81,418 87,631
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Operating income 78,908 55,121
Equity in pretax earnings of unconsolidated affiliates 2,186 5,239
Interest expense 13,934 12,848
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Income before income taxes and other items 67,160 47,512
Income taxes 24,178 15,962
Minority interests 4,524 2,196
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Net income $ 38,458 $ 29,354
========== ==========
Earnings per share $ 1.29 $ 0.88
Diluted earnings per share $ 1.29 $ 0.88
Denominator for earnings per share (weighted average shares)
Basic 29,748,157 33,193,954
Diluted 29,749,409 33,206,198
</TABLE>
See accompanying notes.
-- M O R E --
<PAGE>
<TABLE>
UNIVERSAL CORPORATION
UNAUDITED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999
(Dollars in thousands, except per-share amounts)
<CAPTION>
Nine Months
2000 1999
---- ----
<S> <C> <C>
Sales and other operating revenues $2,816,648 $3,399,818
Costs and expenses
Cost of goods sold 2,378,215 2,951,950
Selling, general and administrative 248,537 251,615
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Operating income 189,896 196,253
Equity in pretax earnings of unconsolidated affiliates 8,108 7,021
Interest expense 40,474 41,536
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Income before income taxes and other items 157,530 161,738
Income taxes 56,711 58,226
Minority interests 6,711 5,677
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Net income $ 94,108 $ 97,835
========== ==========
Earnings per share $ 3.06 $ 2.90
Diluted earnings per share $ 3.06 $ 2.90
Denominator for earnings per share (weighted average shares)
Basic 30,751,659 33,722,844
Diluted 30,759,137 33,772,047
</TABLE>
See accompanying notes.
-- M O R E --
<PAGE>
NOTES
1. Universal Corporation together with its subsidiaries is referred to as the
"Company" or "Universal." The Company's operations are seasonal; therefore,
the results of operations for the three- and nine-month periods ended March
31, 2000, 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's financial statements have been
reclassified to conform to the current year's presentation.
2. Contingencies: At March 31, 2000, total exposure under guarantees issued
for banking facilities of unconsolidated affiliates and suppliers was
approximately $55 million. Other contingent liabilities approximate $43
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
$25 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 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. The
Company has operations located in Zimbabwe and the performance of these
operations can materially affect the company's tobacco earnings. Zimbabwe
is currently experiencing significant civil unrest. Deliveries of tobacco
to the Zimbabwe auction market have been delayed due to continued
disruptions in the farming communities, fuel shortages, and an
exceptionally high official exchange rate for the country's currency. The
company continues to believe that the flue-cured crop, which is estimated
at 220 million kilograms, will be delivered to the market over time, but
currently, management cannot predict the outcome of the political
situation, and therefore is unable to forecast its impact on the company.
However, management believes that from a long-term point of view, if
production of tobacco were to permanently decline in Zimbabwe, it would be
replaced by production in other countries. The company has operations in
the major tobacco producing countries. Thus, management believes that it is
reasonable to expect any negative impact on operations from reduced
production in Zimbabwe to be short-lived.
3. Comprehensive Income
<TABLE>
<CAPTION>
Periods ended March 31 Three months Nine months
- ------------------------------------------------------------------------------------------------------------
(in thousands) 2000 1999 2000 1999
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income $38,458 $29,354 $94,108 $ 97,835
Foreign currency translation adjustment (10,207) (3,604) (14,045) 6,055
- ------------------------------------------------------------------------------------------------------------
Comprehensive income $28,251 $25,750 $80,063 $103,890
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4. Reportable Segment Data (in thousands)
<CAPTION>
Sales and other operating revenues Three Months Nine Months
- ------------------------------------------------------------------------------------------------------------
Periods ended March 31, 2000 1999 2000 1999
- ------------------------------------------------------------------------------------------------------------
Tobacco $ 728,976 $ 973,775 $2,006,674 $2,604,525
Lumber and building products 164,458 131,481 445,281 409,508
Agri-products 107,773 117,558 364,693 385,785
- ------------------------------------------------------------------------------------------------------------
Total $1,001,207 $1,222,814 $2,816,648 $3,399,818
============================================================================================================
<CAPTION>
Operating income Three Months Nine Months
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Periods ended March 31, 2000 1999 2000 1999
- ------------------------------------------------------------------------------------------------------------
Tobacco $77,084 $55,860 $181,039 $182,691
Lumber and building products 5,380 4,556 19,694 17,843
Agri-products 2,640 3,669 10,754 13,620
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Total 85,104 64,085 211,487 214,154
Less: Corporate expenses 4,010 3,725 13,483 10,880
Interest expense 13,934 12,848 40,474 41,536
- ------------------------------------------------------------------------------------------------------------
Income before income taxes and other items $67,160 $47,512 $157,530 $161,738
============================================================================================================
</TABLE>
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