UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ x ] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
For the Period Ended December 31, 2002
OR
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
For the Transition Period From to
Commission file number 1-652
UNIVERSAL CORPORATION
(Exact name of Registrant as specified in its charter)
| VIRGINIA |
54-0414210 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
| 1501 North Hamilton Street, Richmond, Virginia |
23230 | |
| (Address of principal executive offices) |
(Zip code) |
Registrant’s telephone number, including area code – (804) 359-9311
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the Registrant’s classes of Common Stock as of the latest practicable date:
Common Stock, no par value – 25,200,417 shares outstanding as of February 6, 2003
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Universal Corporation and Subsidiaries
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
Three and Six Months Ended December 31, 2002 and 2001
(In thousands of dollars, except per share data)
| Three Months |
Six Months |
||||||||||||||
| 2002 |
2001 |
2002 |
2001 |
||||||||||||
| Sales and other operating revenues |
$ |
708,578 |
|
$ |
744,275 |
$ |
1,365,854 |
|
$ |
1,360,652 |
| ||||
| Costs and expenses |
|||||||||||||||
| Cost of goods sold |
|
576,644 |
|
|
609,252 |
|
1,102,215 |
|
|
1,109,163 |
| ||||
| Selling, general and administrative expenses |
|
74,942 |
|
|
74,700 |
|
142,141 |
|
|
136,344 |
| ||||
| Restructuring costs |
|
0 |
|
|
0 |
|
13,498 |
|
|
0 |
| ||||
| Operating Income |
|
56,992 |
|
|
60,323 |
|
108,000 |
|
|
115,145 |
| ||||
| Equity in pretax earnings of unconsolidated affiliates |
|
(1,448 |
) |
|
230 |
|
94 |
|
|
1,543 |
| ||||
| Interest expense |
|
11,798 |
|
|
12,359 |
|
22,282 |
|
|
25,918 |
| ||||
| Income before income taxes and other items |
|
43,746 |
|
|
48,194 |
|
85,812 |
|
|
90,770 |
| ||||
| Income taxes |
|
15,528 |
|
|
16,868 |
|
30,463 |
|
|
31,770 |
| ||||
| Minority interests |
|
1,475 |
|
|
2,235 |
|
129 |
|
|
1,580 |
| ||||
| Net Income |
$ |
26,743 |
|
$ |
29,091 |
$ |
55,220 |
|
$ |
57,420 |
| ||||
| Earnings per common share |
$ |
1.04 |
|
$ |
1.09 |
$ |
2.14 |
|
$ |
2.14 |
| ||||
| Diluted earnings per share |
$ |
1.04 |
|
$ |
1.09 |
$ |
2.13 |
|
$ |
2.13 |
| ||||
| Retained earnings—beginning of period |
$ |
569,059 |
|
$ |
540,546 |
| |||||||||
| Net income |
|
55,220 |
|
|
57,420 |
| |||||||||
| Cash dividends declared ($.70—2002, $.66—2001) |
|
(17,891 |
) |
|
(17,597 |
) | |||||||||
| Purchase of common stock, net of shares issued |
|
(31,591 |
) |
|
(28,543 |
) | |||||||||
| Retained earnings—end of period |
$ |
574,797 |
|
$ |
551,826 |
| |||||||||
See accompanying notes.
1
Universal Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
| December 31, |
December 31, |
June 30, | |||||||
| 2002 |
2001 |
2002 | |||||||
| ASSETS |
|||||||||
| Current |
|||||||||
| Cash and cash equivalents |
$ |
149,477 |
$ |
71,739 |
$ |
58,003 | |||
| Accounts receivable |
|
222,338 |
|
258,754 |
|
301,197 | |||
| Advances to suppliers |
|
121,609 |
|
87,964 |
|
53,684 | |||
| Accounts receivable—unconsolidated affiliates |
|
4,243 |
|
3,987 |
|
5,647 | |||
| Inventories—at lower of cost or market: |
|||||||||
| Tobacco |
|
548,391 |
|
577,881 |
|
453,417 | |||
| Lumber and building products |
|
84,913 |
|
79,230 |
|
80,848 | |||
| Agri-products |
|
66,574 |
|
76,409 |
|
83,634 | |||
| Other |
|
28,973 |
|
27,807 |
|
32,103 | |||
| Prepaid income taxes |
|
18,109 |
|
19,124 |
|
6,297 | |||
| Deferred income taxes |
|
6,637 |
|
8,156 |
|
5,945 | |||
| Other current assets |
|
20,727 |
|
19,504 |
|
24,262 | |||
| Total current assets |
|
1,271,991 |
|
1,230,555 |
|
1,105,037 | |||
| Property, plant and equipment—at cost |
|||||||||
| Land |
|
28,431 |
|
26,970 |
|
27,214 | |||
| Buildings |
|
260,025 |
|
249,205 |
|
252,831 | |||
| Machinery and equipment |
|
613,523 |
|
523,595 |
|
565,414 | |||
|
|
901,979 |
|
799,770 |
|
845,459 | ||||
| Less accumulated depreciation |
|
466,360 |
|
435,678 |
|
452,963 | |||
|
|
435,619 |
|
364,092 |
|
392,496 | ||||
| Other assets |
|||||||||
| Goodwill |
|
119,674 |
|
117,863 |
|
117,939 | |||
| Other intangibles |
|
5,955 |
|
10,694 |
|
7,330 | |||
| Investments in unconsolidated affiliates |
|
82,722 |
|
80,127 |
|
89,762 | |||
| Deferred income taxes |
|
47,085 |
|
37,124 |
|
45,346 | |||
| Other noncurrent assets |
|
89,835 |
|
87,821 |
|
86,505 | |||
|
|
345,271 |
|
333,629 |
|
346,882 | ||||
| $ |
2,052,881 |
$ |
1,928,276 |
$ |
1,844,415 | ||||
See accompanying notes.
2
Universal Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
| December 31, |
December 31, |
June 30, |
||||||||||
| 2002 |
2001 |
2002 |
||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
| Current |
||||||||||||
| Notes payable and overdrafts |
$ |
124,656 |
|
$ |
167,073 |
|
$ |
126,798 |
| |||
| Accounts payable |
|
307,430 |
|
|
276,497 |
|
|
288,741 |
| |||
| Accounts payable—unconsolidated affiliates |
|
4,159 |
|
|
2,616 |
|
|
10,153 |
| |||
| Customer advances and deposits |
|
109,180 |
|
|
173,135 |
|
|
83,528 |
| |||
| Accrued compensation |
|
17,730 |
|
|
17,456 |
|
|
24,444 |
| |||
| Income taxes payable |
|
25,673 |
|
|
33,958 |
|
|
15,353 |
| |||
| Current portion of long-term obligations |
|
183,365 |
|
|
2,392 |
|
|
124,414 |
| |||
| Total current liabilities |
|
772,193 |
|
|
673,127 |
|
|
673,431 |
| |||
| Long-term obligations |
|
514,527 |
|
|
553,537 |
|
|
435,592 |
| |||
| Postretirement benefits other than pensions |
|
39,335 |
|
|
39,077 |
|
|
38,666 |
| |||
| Other long-term liabilities |
||||||||||||