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: February 3, 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 releases issued by the Registrant on February 3, 2000
attached hereto as Exhibit 99.1 and Exhibit 99.2 is incorporated
herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
No. Description
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99.1 Press Release Announcing Dividend.*
99.2 Press Release Announcing Second 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: February 3, 2000 By: /s/ James M. White, III
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James M. White, III
Vice President, General Counsel & Secretary
<PAGE>
Exhibit Index
Exhibit
Number Document
- ------ --------
99.1 Press Release Announcing Dividend.
99.2 Press Release Announcing Second Quarter Earnings.
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*Filed Herewith
Contact: Release:
KAREN M. L. WHELAN February 3, 2000
(804)359-9311 Immediately
UNIVERSAL CORPORATION ANNOUNCES QUARTERLY DIVIDEND
RICHMOND,VA February 3, 2000/PRNEWSWIRE/----
Henry H. Harrell, Chairman and Chief Executive Officer of Universal
Corporation announced that the company's Board of Directors has declared a
quarterly dividend of thirty-one cents ($.31) per share on the common shares of
the Company, payable May 8, 2000, to common shareholders of record at the close
of business on April 10, 2000.
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.
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Contact: Release:
KAREN M.L. WHELAN Immediate
Phone: (804) 359-9311
Fax: (804) 254-3594
email: [email protected]
UNIVERSAL CORPORATION ANNOUNCES SECOND QUARTER EARNINGS
RICHMOND, VA, February 3, 2000 / PRNEWSWIRE
Henry H. Harrell, Chairman and Chief Executive Officer of Universal
Corporation, announced today that earnings declined in the second quarter
primarily reflecting a reduction in the volume of leaf tobacco handled and
processed during the period. Net income for the three-month period ended
December 31, 1999, was $26.1 million, or $.85 per diluted share, compared to
$41.4 million, or $1.23 per share, in last year's second quarter. For the six
months, net income was $55.7 million, or $1.78 per share, compared to $68.5
million, or $2.01 per share, in fiscal year 1999. Gross revenues also declined
mainly as a result of the lower tobacco volumes and prices to $1 billion in the
quarter and $1.8 billion in the six months compared to $1.3 billion for the
three months and $2.2 billion for the six months last year.
The company's tobacco operations performed well under the difficult
conditions that have characterized world tobacco markets in recent months. The
volume of tobacco purchased and processed in the United States was down
significantly in the quarter and the six months in response to much smaller U.
S. flue-cured and burley crops. Flue-cured marketings for 1999 totaled 653
million pounds compared to 814 million pounds a year ago, a decline of almost 20
percent. The burley markets are currently winding down and it now appears that
the volume of marketings could be as much as 10 percent below last year's level
and, due to adverse weather and curing conditions, the quality of the crop is
much lower than normal. In addition, the one-week delay in the opening of U. S.
burley markets has shifted some processing revenues into the third quarter. The
company's results for the quarter were also negatively affected by a significant
crop shortfall in Tanzania and costs associated with the establishment of an
international customer service office in Europe. In addition, the company's
earnings suffered in the quarter due to reduced shipments out of a poor quality
dark tobacco crop in Indonesia and lower sales of cigar leaf from the Dominican
Republic. This was partially offset by benefits in the quarter and six months
from shipments of oriental leaf that were delayed from last year into the
current year.
Non-tobacco earnings were off slightly in the quarter but remain ahead
of last year's pace for the six months. Results in lumber and building products
distribution continue to demonstrate good growth due to improved volumes despite
the continued impact of a strong U. S. dollar on both revenues and earnings of
these guilder-based operations. Agri-products results lagged last year's
excellent performance because of the continuation of adverse conditions in world
markets for tea and rubber, which affected both volumes and margins. This was
partially offset by good results in nuts and in canned and frozen foods.
-- M O R E --
<PAGE>
Mr. Harrell stated, "The uncertain environment in world tobacco markets
has negatively impacted results in the quarter and for the first six months.
Sales of both manufacturers and leaf merchants have suffered in response to the
continuing economic difficulties in parts of Asia and the former Soviet Union
and higher cigarette prices and excise taxes in the United States. While these
developments have clearly had an effect on our performance during the first six
months of the year, Universal has performed well under these circumstances. We
believe that our strategy is working and we expect to achieve satisfactory
results for the remainder of the year."
On December 2, 1999, Universal announced that its Board of Directors
had increased the authorization to repurchase the company's common stock to a
total of $300 million. To date, nearly 5.5 million shares have been purchased at
a total cost of approximately $167 million, leaving about 30 million common
shares outstanding. In addition, the dividend was increased for the 29th
consecutive year to an annualized rate of $1.24 per share.
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 DECEMBER 31, 1999 AND 1998
(Dollars in thousands, except per-share amounts)
<CAPTION>
Three Months
1999 1998
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<S> <C> <C>
Sales and other operating revenues $1,032,453 $1,297,719
Costs and expenses
Cost of goods sold 883,805 1,129,187
Selling, general and administrative 89,241 85,670
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Operating income 59,407 82,862
Equity in pretax earnings of unconsolidated affiliates (674) 1,212
Interest expense 14,764 13,146
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Income before income taxes and other items 43,969 70,928
Income taxes 15,829 26,243
Minority interests 1,992 3,261
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Net income $26,148 $41,424
========== ==========
Earnings per share $.85 $1.23
Diluted earnings per share $.85 $1.23
Denominator for earnings per share (weighted average shares)
Basic 30,803,630 33,571,791
Diluted 30,809,151 33,614,623
</TABLE>
See accompanying notes.
-- M O R E --
<PAGE>
<TABLE>
UNIVERSAL CORPORATION
UNAUDITED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998
(Dollars in thousands, except per-share amounts)
<CAPTION>
Six Months
1999 1998
---- ----
<S> <C> <C>
Sales and other operating revenues $1,815,441 $2,177,004
Costs and expenses
Cost of goods sold 1,537,334 1,871,888
Selling, general and administrative 167,119 163,984
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Operating income 110,988 141,132
Equity in pretax earnings of unconsolidated affiliates 5,922 1,782
Interest expense 26,540 28,688
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Income before income taxes and other items 90,370 114,226
Income taxes 32,533 42,264
Minority interests 2,187 3,481
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Net income $55,650 $68,481
========== ==========
Earnings per share $1.78 $2.02
Diluted earnings per share $1.78 $2.01
Denominator for earnings per share (weighted average shares)
Basic 31,247,956 33,981,541
Diluted 31,258,548 34,049,234
</TABLE>
See accompanying notes.
-- M O R E --
<PAGE>
NOTES
1. The company's operations are seasonal; therefore, the results of operations
for the three- and six-month periods ended December 31, 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's financial statements have been reclassified to
conform to the current year's presentation.
2. Contingencies: At December 31, 1999, total exposure under guarantees issued
for banking facilities of unconsolidated affiliates and suppliers was
approximately $56 million. Other contingent liabilities approximate $29
million and relate principally to performance bonds and Common Market
guarantees. 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.
3. Comprehensive Income
<TABLE>
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Periods ended December 31 Three months Six months
- ------------------------------------------------------------------------------------------------------------
(in thousands) 1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Net income $26,148 $41,424 $55,650 $68,481
Foreign currency translation adjustment (4,661) 8,145 (3,838) 9,659
- ------------------------------------------------------------------------------------------------------------
Comprehensive income $21,487 $49,569 $51,812 $78,140
============================================================================================================
4. Reportable Segment Data (in thousands)
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Sales and other operating revenues Three Months Six Months
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Periods ended December 31, 1999 1998 1999 1998
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Tobacco $ 767,945 $1,024,350 $1,277,700 $1,630,754
Lumber and building products 138,801 138,762 280,822 278,026
Agri-products 125,707 134,607 256,919 268,225
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Total $1,032,453 $1,297,719 $1,815,441 $2,177,005
============================================================================================================
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Operating income Three Months Six Months
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Periods ended December 31, 1999 1998 1999 1998
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Tobacco $52,964 $78,323 $102,213 $126,031
Lumber and building products 6,724 6,215 15,533 14,031
Agri-products 3,578 4,773 8,636 9,971
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Total
Less: Corporate expenses 4,533 5,237 9,472 7,119
Interest expense 14,764 13,146 26,540 28,688
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Income before income taxes and other items $43,969 $70,928 $90,370 $114,226
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</TABLE>
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