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Business Wire
3 days ago
- Business
- Business Wire
Universal Corporation Reports Fiscal Year and Fourth Quarter 2025 Results
RICHMOND, Va.--(BUSINESS WIRE)--Universal Corporation (NYSE:UVV) ('Universal' or the 'Company'), a global business-to-business agriproducts company, today announced financial results for the full fiscal year and fourth quarter ended March 31, 2025. Preston D. Wigner, Chairman, President, and Chief Executive Officer of Universal, stated, 'Fiscal year 2025 was an exceptional year for Universal. We executed against our business plan and increased revenue and operating income on a consolidated basis and for both of our operating segments. The improved results for our Tobacco Operations segment were driven by continued strong demand from our customers, successful global tobacco marketing and procurement efforts, as well as improved volumes and quality of burley tobacco crops in Africa. Our Ingredients Operations segment benefited from higher sales volumes, including increases in sales of value-added products, supported by increased capabilities from the growth in our sales, marketing, and product development teams, and the completion of the expansion project at our Lancaster, Pennsylvania facility. We are very encouraged by the interest we are seeing from customers in our newly produced and developed ingredient products. Mr. Wigner continued, "As I reflect on fiscal year 2025, I thank our employees, customers, shareholders, and other stakeholders for their support throughout the year. As we move into fiscal year 2026, we foresee continued strong demand for tobacco and larger tobacco crops shifting global markets to more balanced tobacco supply positions. We are also continuing our progress with Universal Ingredients and supporting existing and new customers with our platform resources and our expanded and enhanced ingredients facility. I am excited about our prospects for the year ahead as we seek to further maximize and optimize our tobacco business, grow our ingredients business, and strengthen our Company to drive increasing value for all Universal stakeholders." FINANCIAL HIGHLIGHTS Change Fiscal Year Ended March 31, Change Consolidated Results Sales and other operating revenue $ 702.3 $ 770.9 (9) % $ 2,947.3 $ 2,748.6 7 % Cost of goods sold 586.3 619.9 (5) % 2,398.6 2,212.5 8 % Gross profit margin 19.8 % 24.4 % -460 bps 18.6 % 19.5 % -90 bps Selling, general and administrative expenses 73.2 82.7 (11) % 305.3 310.6 (2) % Restructuring and impairment costs — — NA 10.6 3.5 200 % Operating income (as reported) 42.8 68.2 (37) % 232.8 222.0 5 % Adjusted operating income (Non-GAAP)* 42.8 73.0 (41) % 243.4 230.3 6 % Net income attributable to Universal Corporation 9.3 40.3 (77) % 95.0 119.6 (21) % Adjusted net income attributable to Universal Corporation (non-GAAP*) 20.2 44.8 (55) % 116.3 127.1 (8) % Diluted earnings per share (as reported) 0.37 1.61 (77) % 3.78 4.78 (21) % Adjusted diluted earnings per share (Non-GAAP)* 0.80 1.79 (55) % 4.63 5.08 (9) % Segment Results Tobacco operations sales and other operating revenues $ 612.6 $ 696.3 (12) % $ 2,608.7 $ 2,438.8 7 % Tobacco operations operating income 45.8 73.5 (38) % 240.2 222.4 8 % Ingredients operations sales and other operating revenues 89.7 74.6 20 % 338.6 309.8 9 % Ingredients operations operating income 4.4 (1.0) 527 % 12.3 3.9 212 % Expand *See Reconciliation of Certain Non-GAAP Financial Measures in Other Items below. Expand Fiscal Year 2025 Highlights Consolidated Results Revenues up 7% to $2.9 billion on higher tobacco sales prices. Operating income up 5% to $232.8 million on improved performance in both the Tobacco Operations and Ingredient Operations segments. Tobacco Operations Segment Revenues and operating income up 7% and 8%, respectively. Historically high green tobacco prices. Tobacco sales prices up 12% with slight decline in tobacco sales volumes of about 4%. Tobacco Operations segment results reflected: Strong customer demand; Successful tobacco procurement and marketing efforts; Higher quality, better yielding burley crops in Africa; Higher carryover crop sales; Weather-reduced crop sizes in Brazil and the United States; and Higher inventory write-downs. Outlook Flue-cured and burley tobacco crops grown outside of China are expected to increase by 20% and 30%, respectively, in fiscal year 2026. Crop purchases in Brazil in fiscal year 2026 are not following the accelerated patterns seen in fiscal year 2025. Ingredients Operations Segment Higher revenues and operating income on increased sales volumes. Cost of raw materials for certain traditional products were at extremely low levels. Continued high level of interest in value-added products, reflecting effectiveness of platform investments. Select Balance Sheet Items, Liquidity, and Debt Cash balance of $260.1 million at fiscal year-end. Total debt up $38.4 million at fiscal year-end. Net debt down $179.6 million at fiscal year-end on more normalized working capital requirements. Approximately $270 million available under revolving credit facility as of fiscal year-end. Additional Items Restructuring and impairment costs of $10.6 million related to previously announced consolidation of the Company's European sheet operations. Pension settlement charge of $14.1 million Fourth Quarter 2025 Highlights Consolidated Results Revenues and operating income down in the quarter on lower tobacco sales volumes due to earlier shipments in fiscal year 2025. Tobacco Operations Segment Tobacco Operations segment results reflected: Lower sales volumes of approximately 28% quarter-over-quarter on earlier timing of tobacco shipments in fiscal year 2025; Impact of weather-reduced crops from certain origins; and Higher inventory write-downs. Selling, general, and administrative expenses for the Tobacco Operations segment included favorable variances for foreign currency comparisons and the absence of a value-added tax settlement in the prior fiscal year. Ingredients Operations Segment Increased sales volumes for certain new products, particularly in the beverage category. Recent increases in raw material prices for certain traditional products. Some increased sales due to anticipated tariffs. Sustainability Update Mr. Wigner stated, 'As the largest global tobacco leaf merchant, sustainability has been deeply embedded in our DNA. We believe our commitment to setting high standards, promoting a sustainable supply chain, and providing transparency about our sustainability efforts is a strategic part of our business. I am proud of our accomplishments and advances in fiscal year 2025, and I am confident in our ability to leverage our expertise in this area to further strengthen our Company in fiscal year 2026. We believe sustainability is good for our business and represents our good stewardship in the communities in which we operate.' Universal released its 2024 Sustainability Report in December 2024, highlighting its efforts in strengthening supply chain resiliency, continuing to be a strong partner for its farming communities, and advancing energy efficiency. Universal's business strategy integrates responsible business practices, and the Company believes its commitment to sustainability is a competitive advantage in the global marketplace. As disclosed in the Company's 2024 Sustainability Report, Universal continues to support its supply chain sustainability goals and has substantially met its existing targets of zero child labor, appropriate labor accommodations, farm worker minimum wage payments, and personal protective equipment access. The Company's leaf technicians made over 1.8 million visits to more than 175,000 contracted farmers to maintain its visibility and traceability in the Company's supply chain. Universal also continues to enhance transparency and collaboration with its stakeholders by reporting to the Sustainable Tobacco Program. Universal has trained over 175,000 farmers on Good Agricultural Practices and Agricultural Labor Practices to advance environmental and human rights best practices throughout the Company's contracted farmer base. Other Items Reconciliation of Certain Non-GAAP Financial Measures References to adjusted operating income (loss), adjusted net income (loss) attributable to Universal Corporation, adjusted diluted earnings (loss) per share, and the total for segment operating income (loss) are references to non-GAAP financial measures. These measures are not financial measures calculated in accordance with generally accepted accounting principals ("GAAP") and should not be considered as substitutes for operating income (loss), net income (loss) attributable to Universal Corporation, diluted earnings (loss) per share, cash from operating activities or any other operating or financial performance measure calculated in accordance with GAAP, and may not be comparable to similarly-titled measures reported by other companies. Reconciliations of adjusted operating income (loss) to consolidated operating (income), adjusted net income (loss) attributable to Universal Corporation to consolidated net income (loss) attributable to Universal Corporation and adjusted diluted earnings (loss) per share to diluted earnings (loss) per share are provided below. In addition, a reconciliation of the total for segment operating income (loss) to consolidated operating income (loss) is provided in Note 3. "Segment Information" to the consolidated financial statements. Management evaluates the consolidated Company and segment performance excluding certain significant charges or credits. Management believes these non-GAAP financial measures, which exclude items that it believes are not indicative of its core operating results, can provide investors with important information that is useful in understanding its business results and trends. References to net debt, net capitalization, and net debt to net capitalization ratio are also references to non-GAAP financial measures. These measures are not financial measures calculated in accordance with GAAP and should not be considered substitutes for total debt, total capitalization, total debt to total capitalization ratio, or any other operating or financial performance measures calculated in accordance with GAAP, and may not be comparable to similarly-titled measures reported by other companies. Reconciliations of net debt to total debt and net capitalization to total capitalization are provided below to the extent these non-GAAP financial measures are referenced. Management believes these non-GAAP measures are meaningful indicators of liquidity and financial position. The following tables set forth certain non-recurring items included in reported results to reconcile adjusted operating income to consolidated operating income and adjusted net income to net income attributable to Universal Corporation and adjusted diluted earnings per share to diluted earnings per share: (1) In the fourth quarter of fiscal year 2024, the Company utilized a voluntary government- sponsored value-added tax program in Brazil to settle a previously contested assessment. The Company's participation in the settlement program eliminates any future litigation regarding the matter. (2) Restructuring and impairment costs are included in Consolidated operating income in the consolidated statements of income, but excluded for purposes of Adjusted operating income, Adjusted net income available to Universal Corporation, and Adjusted diluted earnings per share. (3) In March 2025, the Company completed a pension de-risking transaction or "pension lift-out" to transfer approximately $47 million of its qualified domestic pension plan obligations and assets to a third-party insurer through the purchase of a non-participating annuity. The obligations transferred to the third-party insurer covered the respective benefit obligations for a subset of retirees currently receiving benefit payments. The transaction triggered settlement accounting that required the Company to immediately recognize a portion of the accumulated comprehensive losses associated with the defined benefit pension plan. (4) The income tax effect of Non-GAAP adjustments was determined based on the timing and nature of the specific Non-GAAP adjustments and their relevant jurisdictional income tax rates (foreign, state, and local) and the applicable U.S. federal income tax rates. The Company considers current and deferred income tax rates to calculate the impact to income taxes for the Non-GAAP adjustments. Expand The following table reconciles total debt to net debt and net capitalization: Investor Conference Call At 5:00 p.m. (Eastern Time) on May 29, 2025, the Company will host a conference call to discuss these results. Those wishing to listen to the call may do so by visiting at that time. A replay of the webcast will be available at that site through August 29, 2025. A taped replay of the call will also be available through June 12, 2025, by dialing (800) 770-2030 (Playback ID: 5786366#). About Universal Corporation Universal Corporation (NYSE: UVV) is a global agricultural company with over 100 years of experience supplying products and innovative solutions to meet our customers' evolving needs and precise specifications. Through our diverse network of farmers and partners across more than 30 countries on five continents, we are a trusted provider of high-quality, traceable products. We leverage our extensive supply chain expertise, global reach, integrated processing capabilities, and commitment to sustainability to provide a range of products and services designed to drive efficiency and deliver value to our customers. For more information, visit CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION This release includes 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Among other things, these statements include statements made in Mr. Wigner's quotations, statements regarding expectations with respect to our fiscal year 2026 performance, our strategic plans, ingredients business, tobacco business, including expectations with respect to size, shipments and sales and purchases of tobacco crops. These forward-looking statements are generally identified by the use of words such as we 'expect,' 'believe,' 'anticipate,' 'could,' 'should,' 'may,' 'plan,' 'will,' 'predict,' 'estimate,' and similar expressions or words of similar import. These forward-looking statements are based upon management's current knowledge and assumptions about future events and involve risks and uncertainties that could cause actual results, performance, or achievements to be materially different from any anticipated results, prospects, performance, or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: product purchased not meeting quality and quantity requirements; reliance on a few large customers; anticipated levels of demand for and supply of our products and services; tobacco growing conditions and customer requirements; major shifts in customer requirements for leaf tobacco; higher inflation rates, tariffs and other pressures on costs; weather and other conditions; exposure to certain legal. regulatory and financial risks related to climate change; industry-specific risks related to our plant-based ingredients businesses; disruption of our supply chain for our plant-based ingredients; success in pursuing strategic investments or acquisitions and integration of new businesses and the impact of these new businesses on future results; our ability to maintain effective information technology systems and safeguard confidential information; our inability to attract, develop, retain, motivate, and maintain good relationships with our workforce; our dependence on a seasonal workforce; epidemics, pandemics or similar widespread public health concerns; government efforts to regulate the production and consumption of tobacco products; government actions on the sourcing of leaf tobacco; economic and political conditions in the countries in which we and our customers operate, including the ongoing impacts from international conflicts; sustainability considerations from governments and other stakeholders; changes in tax laws in the countries where we do business; material weaknesses in our internal control over financial reporting; our inability to use a Form S-3 registration statement; failure of our customers or suppliers to repay extensions of credit; changes in exchange rates; changes in interest rates; and low investment performance by our defined benefit pension plan assets and changes in pension plan valuation assumptions. Please also refer to the risks and uncertainties as discussed in Part I, Item 1A. 'Risk Factors' of Universal's Annual Report on Form 10-K for the fiscal year ended March 31, 2024 and in Part II, Item 1A. "Risk Factors" in Universal's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, and related disclosures in other filings that Universal files with the SEC and are available on the SEC's website at All risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking statements, and all of the forward-looking statements are expressly qualified by the cautionary statements contained or referred to herein and therein. Universal cautions investors not to place undue reliance on any forward-looking statements as these statements speak only as of the date when made, and it undertakes no obligation to update any forward-looking statements made, except as required by law. See accompanying notes. Expand UNIVERSAL CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands of dollars) March 31, 2025 2024 ASSETS Current assets Cash and cash equivalents $ 260,115 $ 55,593 Accounts receivable, net 625,876 525,262 Advances to suppliers, net 169,385 139,064 Accounts receivable—unconsolidated affiliates 7,143 5,385 Inventories—at lower of cost or net realizable value: Tobacco 806,332 1,070,580 Other 189,610 193,518 Prepaid income taxes 19,595 19,484 Other current assets 78,041 93,655 Total current assets 2,156,097 2,102,541 Property, plant and equipment Land 26,113 26,244 Buildings 333,398 323,969 Machinery and equipment 723,935 693,868 1,083,446 1,044,081 Less accumulated depreciation (710,472 ) (678,201 ) 372,974 365,880 Other assets Operating lease right-of-use assets 34,260 32,510 Goodwill, net 213,840 213,869 Other intangibles, net 57,836 68,883 Investments in unconsolidated affiliates 79,317 76,289 Deferred income taxes 16,539 15,181 Pension asset 12,819 11,857 Other noncurrent assets 45,870 50,229 460,481 468,818 Total assets $ 2,989,552 $ 2,937,239 Expand UNIVERSAL CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands of dollars) March 31, 2025 2024 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable and overdrafts $ 455,039 $ 417,217 Accounts payable 98,036 108,727 Accounts payable—unconsolidated affiliates 1,999 1,621 Customer advances and deposits 3,763 17,179 Accrued compensation 44,646 39,766 Income taxes payable 12,586 7,477 Current portion of operating lease liabilities 10,742 10,356 Accrued expenses and other current liabilities 123,350 109,015 Current portion of long-term debt — — Total current liabilities 750,161 711,358 Long-term debt 617,918 617,364 Pensions and other postretirement benefits 35,336 43,251 Long-term operating lease liabilities 20,608 19,302 Other long-term liabilities 22,901 27,902 Deferred income taxes 42,090 39,139 Total liabilities 1,489,014 1,458,316 Shareholders' equity Universal Corporation: Preferred stock: Series A Junior Participating Preferred Stock, no par value, 500,000 shares authorized, none issued or outstanding — — Common stock, no par value, 100,000,000 shares authorized, 24,715,625 shares issued and outstanding (24,573,408 at March 31, 2024) 351,626 345,596 Retained earnings 1,186,981 1,173,196 Accumulated other comprehensive loss (80,051 ) (81,585 ) Total Universal Corporation shareholders' equity 1,458,556 1,437,207 Noncontrolling interests in subsidiaries 41,982 41,716 Total shareholders' equity 1,500,538 1,478,923 Total liabilities and shareholders' equity $ 2,989,552 $ 2,937,239 Expand See accompanying notes. Expand UNIVERSAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of dollars) Fiscal Year Ended March 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 113,269 $ 132,971 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 59,773 58,326 Provision for losses (recoveries) on advances 1,938 14,090 Inventory write-downs 19,769 9,234 Stock-based compensation expense 8,531 12,063 Foreign currency remeasurement loss (gain), net 6,096 5,114 Foreign currency exchange contracts 916 (365 ) Deferred income taxes 1,083 (5,404 ) Equity in net income of unconsolidated affiliates, net of dividends (3,031 ) (1,239 ) Restructuring and impairment costs 10,573 3,523 Restructuring payments (1,568 ) (1,181 ) Pension settlement 14,101 — Other, net 1,406 1,001 Changes in operating assets and liabilities, net: 94,118 (302,765 ) Net cash provided (used) by operating activities 326,974 (74,632 ) Cash Flows From Investing Activities: Purchase of property, plant and equipment (62,601 ) (66,013 ) Proceeds from sale of business, less cash of businesses sold — 3,757 Proceeds from sale of property, plant and equipment 3,783 2,257 Net cash used by investing activities (58,818 ) (59,999 ) Cash Flows From Financing Activities: Issuance (repayment) of short-term debt, net 37,696 223,000 Dividends paid to noncontrolling interests in subsidiaries (17,530 ) (10,572 ) Repurchase of common stock — (4,744 ) Dividends paid on common stock (79,686 ) (78,402 ) Debt issuance costs and other (3,715 ) (3,607 ) Net cash provided (used) by financing activities (63,235 ) 125,675 Effect of exchange rate changes on cash (399 ) (141 ) Net increase (decrease) in cash and cash equivalents 204,522 (9,097 ) Cash, restricted cash and cash equivalents at beginning of year 55,593 64,690 Cash, Restricted Cash and Cash Equivalents at End of Year $ 260,115 $ 55,593 Expand See accompanying notes. Expand NOTE 1. BASIS OF PRESENTATION Universal Corporation, with its subsidiaries ('Universal' or the 'Company'), is a global business-to-business agriproducts supplier to consumer product manufacturers. The Company is the leading global leaf tobacco supplier and provides high-quality plant-based ingredients to food and beverage end markets. Because of the seasonal nature of the Company's business, the results of operations for any fiscal quarter will not necessarily be indicative of results to be expected for other quarters or a full fiscal year. All adjustments necessary to state fairly the results for the period have been included and were of a normal recurring nature. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025, which the Company expects to file with the SEC on May 30, 2025. The following table sets forth the computation of basic and diluted earnings per share: NOTE 3. SEGMENT INFORMATION Management regularly evaluates the Company's global business activities, including product and service offerings to its customers, as well as senior management's operational and financial responsibilities. Assessments include an analysis of how its Chief Operating Decision Maker ('CODM') measures business performance and allocates resources. As a result of this analysis, senior management has determined the Company conducts operations across two reportable operating segments, Tobacco Operations and Ingredients Operations. The Tobacco Operations segment activities involve contracting, procuring, processing, packing, storing, and shipping leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products throughout the world. Through various operating subsidiaries located in tobacco-growing countries around the world and significant ownership interests in unconsolidated affiliates, the Company processes and/or sells flue-cured and burley tobaccos, dark air-cured tobaccos, and oriental tobaccos. Flue-cured, burley, and oriental tobaccos are used principally in the manufacture of cigarettes, and dark air-cured tobaccos are used mainly in the manufacture of cigars, pipe tobacco, and smokeless tobacco products. Some of these tobacco types are also used in the manufacture of next generation tobacco products that are intended to provide consumers with an alternative to traditional combustible products. The Tobacco Operations segment also provides physical and chemical product testing for tobacco customers. A substantial portion of the Company's Tobacco Operations' revenues are derived from sales to a limited number of large, multinational cigarette and cigar manufacturers. The Ingredients Operations segment provides its customers with a broad variety of plant-based ingredients for both human and pet consumption. The Ingredients Operations segment utilizes a variety of value-added manufacturing processes converting raw materials into a wide spectrum of fruit and vegetable juices, concentrates, dehydrated products, botanical extracts, and flavorings. Customers for the Ingredients Operations segment include large multinational food and beverage companies, smaller independent manufacturers, and retail organizations. FruitSmart, Inc. ('FruitSmart'), Silva International, Inc. ('Silva'), and Shank's Extracts, LLC d/b/a Universal Ingredients-Shank's ('Universal Ingredients-Shank's') are the primary operations for the Ingredients Operations segment. FruitSmart supplies a broad set of juices, concentrates, pomaces, purees, fruit fibers, seeds, seed powders, and other value-added products to food, beverage, and flavor companies throughout the United States and internationally. Silva procures dehydrated vegetables, fruits, and herbs from around the world and specializes in processing natural materials into custom designed dehydrated vegetable and fruit-based ingredients for a variety of end products. Universal Ingredients-Shank's offers a diversified portfolio of botanical extracts, distillates, natural flavors, and color for industrial and private label customers worldwide, and is known for their significant vanilla expertise. Universal Ingredients - Shank's is also equipped to offer customers custom bottling and packaging for their products. Universal incurs corporate overhead expenses related to senior management, sales, finance, legal, and other functions that are centralized at its corporate headquarters, as well as functions performed at several sales and administrative offices around the world. These overhead expenses are currently allocated to the reportable operating segments, generally on the basis of projected annual financial and operational performance, including volumes planned to be purchased and/or processed. Management believes this method of allocation is currently representative of the value of the related services provided to the operating segments. The CODM, which has been identified as a group comprised of the Company's Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer, currently evaluates the performance of the operating segments based on operating income after allocated overhead expenses, plus equity in the pretax earnings of unconsolidated affiliates ("Segment Operating Income"). The CODM also uses Segment Operating Income for planning, forecasting, and allocating capital and other resources to the operating segments. Operating results for the Company's reportable segments for each period presented in the consolidated statements of income were as follows: Fiscal Year Ended March 31, 2025 Fiscal Year Ended March 31, 2024 (in thousands of dollars) Tobacco Operations Ingredients Operations Consolidated Tobacco Operations Ingredients Operations Consolidated Sales and other operating revenues $ 2,608,675 $ 338,609 $ 2,947,284 $ 2,438,775 $ 309,798 $ 2,748,573 Cost of goods sold (2,133,063 ) (265,564 ) (2,398,627 ) (1,975,955 ) (236,520 ) (2,212,475 ) Selling, general and administrative expenses (179,340 ) (48,610 ) (227,950 ) (179,569 ) (56,624 ) (236,193 ) Corporate overhead allocated to the segments (65,195 ) (12,142 ) (77,337 ) (61,655 ) (12,718 ) (74,373 ) Equity in pretax earnings (loss) of unconsolidated affiliates (1) 9,103 — 9,103 756 — 756 Segment operating income 240,180 12,293 252,473 222,352 3,936 226,288 Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates (1) (9,103 ) (756 ) Restructuring and impairment costs (2) (10,573 ) (3,523 ) Consolidated operating income $ 232,797 $ 222,009 Expand (1) Equity in pretax earnings of unconsolidated affiliates is included in reportable segment operating income, but is reported below consolidated operating income and excluded from that total in the consolidated statements of income. (2) Expand
Yahoo
10-02-2025
- Business
- Yahoo
Universal Corporation Provides Third Quarter Fiscal Year 2025 Financial and Operational Update
Reports Preliminary Third Quarter Fiscal Year 2025 Results Highlights Continued Strong Operational Performance Files Form 12b-25, Delays Third Quarter 2025 Earnings Release and Conference Call RICHMOND, Va., February 10, 2025--(BUSINESS WIRE)--Universal Corporation (NYSE:UVV) ("Universal" or the "Company"), a global business-to-business agriproducts company, today is providing a financial and operational update for the third quarter of fiscal year 2025, including preliminary results for the quarter. Preston D. Wigner, Chairman, President, and Chief Executive Officer of Universal Corporation, stated, "Universal achieved solid results for the third quarter of fiscal year 2025, primarily driven by the strength of our Tobacco Operations segment. Demand from our tobacco customers remained robust, and our global procurement efforts have been successful in securing the tobacco to meet this need. Our Ingredients Operations segment also continued to perform in line with our strategic plans, with sales of newly produced and developed value-added products largely offsetting market-driven pricing pressures experienced by certain of our traditional product lines. The progress we are making in our ingredients business is a direct result of the investments we have made over the last two fiscal years, including in our enhanced ingredients facility. Mr. Wigner continued, "Looking ahead, we are confident that Universal is well positioned to finish fiscal year 2025 on a strong footing. We will continue to maximize and optimize our tobacco business, expand our ingredients business, and seek possible opportunities in the future for both segments to work together and provide even more value for our customers and shareholders." Preliminary Unaudited Financial Results (in millions of dollars, except per share data) Three Months Ended December 31, 2024 Consolidated Results Sales and other operating revenue $ 937.2 Operating income 100.7 Net Income attributable to Universal Corporation 57.1 Basic earnings per share 2.28 Diluted earnings per share 2.27 Segment Results Tobacco operations sales and other operating revenues $ 854.8 Tobacco operations operating income 99.2 Ingredients operations sales and other operating revenues 83.3 Ingredients operations operating income 3.7 Highlights of the Quarter Consolidated Results Revenues and operating income driven by increased tobacco and ingredients sales volumes. Tobacco Operations Segment Tobacco Operations segment results benefited from: Positive momentum due to increased customer demand and successful tobacco procurement and marketing efforts; Higher quality, better yielding crops in Africa; Strong trading volumes combined with higher shipment volumes and better-quality crops in Asia; and Accelerated shipment timing in the United States per certain customers' requests. Selling, general, and administrative expenses for the Tobacco Operations segment included approximately $11 million in currency remeasurement losses. Uncommitted tobacco inventory levels remained low at about 10% at quarter end. Ingredients Operations Segment Higher revenues on increased sales volumes. Margins for certain traditional products were strained by high raw material costs and inflation-driven increases in consumer food prices. Continued high level of interest in value-added products, reflecting effectiveness of platform investments. Select Balance Sheet Items, Liquidity, and Debt Cash and cash equivalents were approximately $215 million, accounts receivable were approximately $651 million, total inventories were approximately $1.1 billion, notes payable and overdrafts were approximately $539 million, and long-term debt (including any current portion) was approximately $618 million at quarter end. Approximately $270 million was available under revolving credit facility as of quarter end. Given strong leaf tobacco demand, tobacco shipments are currently progressing in line with the Company's expectations. Additionally, the Company expects larger flue-cured and burley tobacco crops, as compared to last year in certain key origins, particularly in Brazil, and therefore is not seeing the early, accelerated green tobacco purchasing it saw in the prior season. Cash collection from tobacco shipments and more normalized working capital requirements support the Company's intention to reduce net debt levels. The preliminary unaudited financial results for the quarter ended December 31, 2024, included in this press release represent the most current information available to management and are not a comprehensive statement of the financial results for this period. Consequently, the preliminary unaudited financial results do not present all necessary information for a complete understanding of the Company's financial condition as of December 31, 2024, or its results of operations for the quarter ended December 31, 2024. Actual results may differ from these preliminary unaudited results due to developments that may arise between the date of this press release and the time that financial results for the quarter ended December 31, 2024 are finalized. Sustainability Update On December 19, 2024, Universal released its 2024 Sustainability Report (the "Report"), highlighting its efforts in advancing energy efficiency, strengthening supply chain resiliency and continuing to be a strong partner for its farming communities. Responsible business practices are integrated into Universal's business strategy, allowing the Company to cultivate sustainable growth as good stewards of the environment. As a result of the Company's transition to cleaner fuels for its operations, 93.5% of the tobacco Universal processes is coal-free as of 2024. This positive change supports the Company's goal of reducing its greenhouse gas (GHG) emissions by 30% by 2030 from its 2020 baseline year. In 2024, the Company also trained over 175,000 farmers on Good Agricultural Practices and Agricultural Labor Practices to advance human rights standards throughout its supply chain. Universal also adopted a Behavior-Based Safety program to cultivate a proactive safety culture in its operations. The Report, with additional details related to the Company's responsible operations, can be found on Universal's website, Other Corporate Developments The Company has filed a Form 12b-25, Notification of Late Filing, with the U.S. Securities and Exchange Commission ("SEC") in connection with its inability to timely file the Form 10-Q for its third quarter of fiscal year 2025 ended December 31, 2024. In August 2024, shortly before filing the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, the Company's management was made aware of embezzlement by a former senior finance employee at the Company's Mozambique subsidiary, Mozambique Leaf Tobacco Ltda. ("MLT"). The Company promptly commenced an internal investigation regarding these allegations and related matters. As previously reported, with the assistance of outside advisors, the Company's internal investigation identified approximately $7 million in the aggregate of unauthorized payments during fiscal years 2022 through 2025. In total, the Company has identified approximately $16.7 million in the aggregate of unauthorized payments during fiscal years 2016 through 2025. With the assistance of outside advisors, the Company continues to work diligently to complete the investigation, including a review of the circumstances and timing around the discovery of the embezzlement, as soon as possible. The Company is currently unable to predict the outcome or time frame for completion of the investigation. As of the date of this press release, the Company does not believe material adjustments to its previously issued financial statements will be necessary or that the investigation will have a material impact on its financial results for fiscal year 2025. The Company is pursuing sources of recovery, including insurance. As a result of the ongoing investigation, the process of finalizing financial statements for the second and third quarters of fiscal year 2025 could not be completed on a timely basis. The Company intends to file all required reports as soon as practicable after the conclusion of the investigation. As part of the investigation, management is evaluating its design and effectiveness of internal control over financial reporting. The Company expects to report one or more material weaknesses in its internal control over financial reporting, and the status of its related remediation plan, in its filings to be made after the completion of the investigation. On February 10, 2025, the Company entered into a further consent with respect to its revolving credit agreement that provided for, among other things, an extension until June 16, 2025, for delivery by the Company to the lenders of its quarterly financial statements for the quarter ended September 30, 2024, and its quarterly financial statements for the quarter ended December 31, 2024. Earnings Release and Investor Conference Call The Company is postponing its third quarter earnings release and conference call to allow additional time to complete the Form 10-Q for its third quarter of fiscal year 2025 ended December 31, 2024. The Company intends to make a subsequent announcement to schedule a date and time to discuss its quarterly earnings reports for the second and third quarters of fiscal year 2025, once the filing date of its Forms 10-Q is confirmed. About Universal Corporation Universal Corporation (NYSE: UVV) is a global agricultural company with over 100 years of experience supplying products and innovative solutions to meet our customers' evolving needs and precise specifications. Through our diverse network of farmers and partners across more than 30 countries on five continents, we are a trusted provider of high-quality, traceable products. We leverage our extensive supply chain expertise, global reach, integrated processing capabilities, and commitment to sustainability to provide a range of products and services designed to drive efficiency and deliver value to our customers. For more information, visit CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Among other things, these statements include statements made in Mr. Wigner's quotations, statements regarding expectations with respect to our fiscal year 2025 performance, our strategic plans, ingredients business, tobacco business, including expectations with respect to shipments and sales and purchases of tobacco crops, the ongoing internal investigation including descriptions of its scope, duration and impact, expectations about the Company's reporting of its results and filing its Forms 10-Q for the quarters ended September 30, 2024 and December 31, 2024, the potential financial statement impact of the investigated matter, and the preliminary unaudited financial information for the quarters ending September 30, 2024 and December 31, 2024. These forward-looking statements are generally identified by the use of words such as we "expect," "believe," "anticipate," "could," "should," "may," "plan," "will," "predict," "estimate," and similar expressions or words of similar import. These forward-looking statements are based upon management's current knowledge and assumptions about future events and involve risks and uncertainties that could cause actual results, performance, or achievements to be materially different from any anticipated results, prospects, performance, or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the uncertainty of the ultimate findings of the ongoing internal investigation, as well as the timing of its completion and costs and expenses arising out of the ongoing internal investigation process and its results; the impact of the ongoing internal investigation on us, our management and operations, including financial impact as well as any litigation or regulatory action that may arise from the ongoing internal investigation; the impact of the internal investigation on our conclusions regarding the design and effectiveness of our internal control over financial reporting and our disclosure controls and procedures; our ability to timely and adequately remediate any internal control failures identified from the results of the internal investigation; our ability to regain compliance with New York Stock Exchange listing requirements; success in pursuing strategic investments or acquisitions and integration of new businesses and the impact of these new businesses on future results; product purchased not meeting quality and quantity requirements; our reliance on a few large customers; our ability to maintain effective information technology systems and safeguard confidential information; anticipated levels of demand for and supply of our products and services; costs incurred in providing these products and services including increased transportation costs and delays attributed to global supply chain challenges; timing of shipments to customers; higher inflation rates; changes in market structure; government regulation and other stakeholder expectations; economic and political conditions in the countries in which we and our customers operate, including the ongoing impacts from international conflicts; product taxation; industry consolidation and evolution; changes in exchange rates and interest rates; impacts of regulation and litigation on its customers; industry-specific risks related to its plant-based ingredient businesses; exposure to certain regulatory and financial risks related to climate change; changes in estimates and assumptions underlying our critical accounting policies; the promulgation and adoption of new accounting standards, new government regulations and interpretation of existing standards and regulations; and general economic, political, market, and weather conditions. Actual results, therefore, could vary from those expected. Please also refer to such other factors as discussed in Part I, Item 1A. "Risk Factors" of Universal's Annual Report on Form 10-K for the fiscal year ended March 31, 2024, and related disclosures in other filings which have been filed with the SEC and are available on the SEC's website at All risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking statements, and all of the forward-looking statements are expressly qualified by the cautionary statements contained or referred to herein and therein. Universal cautions investors not to place undue reliance on any forward-looking statements as these statements speak only as of the date when made, and it undertakes no obligation to update any forward-looking statements made, except as required by law. View source version on Contacts Universal Corporation Investor RelationsPhone: (804) 359-9311Fax: (804) 254-3584Email: investor@ Sign in to access your portfolio
