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 Quarterly Period Ended December 31, 2004
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 |
804-359-9311 | |
| (Address of principal executive offices) | (Registrant’s telephone number) |
Indicate by “X” 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 by “X” mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes x No ¨
As of February 1, 2005, the total number of shares of common stock outstanding was 25,621,539.
FORM 10-Q
TABLE OF CONTENTS
2
UNIVERSAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
Three and Nine Months Ended December 31, 2004, and March 31, 2004
(In thousands of dollars, except share and per share data)
| THREE MONTHS |
NINE MONTHS |
||||||||||||||
| December 31, 2004 |
March 31, 2004 |
December 31, 2004 |
March 31, 2004 |
||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
| Sales and other operating revenues |
$ | 852,346 | $ | 683,540 | $ | 2,449,658 | $ | 2,271,152 | |||||||
| Costs and expenses |
|||||||||||||||
| Cost of goods sold |
705,758 | 541,318 | 2,016,485 | 1,829,219 | |||||||||||
| Selling, general and administrative expenses |
94,602 | 86,747 | 275,271 | 250,307 | |||||||||||
| European Commission fines |
— | — | 14,908 | — | |||||||||||
| Operating income |
51,986 | 55,475 | 142,994 | 191,626 | |||||||||||
| Equity in pretax earnings of unconsolidated affiliates |
8,917 | 4,148 | 9,838 | 6,044 | |||||||||||
| Interest expense |
15,721 | 11,758 | 42,484 | 35,032 | |||||||||||
| Income before income taxes and other items |
45,182 | 47,865 | 110,348 | 162,638 | |||||||||||
| Income taxes |
17,956 | 18,011 | 49,259 | 59,329 | |||||||||||
| Minority interests |
(681 | ) | 2,013 | (1,158 | ) | 3,673 | |||||||||
| Net income |
$ | 27,907 | $ | 27,841 | $ | 62,247 | $ | 99,636 | |||||||
| Earnings per common share - basic |
$ | 1.09 | $ | 1.10 | $ | 2.44 | $ | 3.97 | |||||||
| Earnings per common share - diluted |
$ | 1.08 | $ | 1.09 | $ | 2.42 | $ | 3.94 | |||||||
| Retained earnings - beginning of period |
$ | 679,202 | $ | 592,673 | |||||||||||
| Net income |
62,247 | 99,636 | |||||||||||||
| Net income of foreign subsidiaries for the three months ended March 31, 2004 (see Note 2) |
— | 18,854 | |||||||||||||
| Cash dividends declared ($1.20 for the nine months ended December 31, 2004, $1.14 for the nine months ended March 31, 2004) |
(30,671 | ) | (28,693 | ) | |||||||||||
| Purchase of common stock |
— | (3,268 | ) | ||||||||||||
| Retained earnings - end of period |
$ | 710,778 | $ | 679,202 | |||||||||||
See accompanying notes.
3
UNIVERSAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
| December 31, 2004 |
March 31, 2004 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current |
||||||||
| Cash and cash equivalents |
$ | 70,523 | $ | 39,310 | ||||
| Accounts receivable, net |
418,377 | 432,546 | ||||||
| Advances to suppliers, net |
147,506 | 140,758 | ||||||
| Accounts receivable - unconsolidated affiliates |
6,182 | 6,156 | ||||||
| Inventories - at lower of cost or market: |
||||||||
| Tobacco |
637,889 | 562,927 | ||||||
| Lumber and building products |
175,045 | 138,423 | ||||||
| Agri-products |
172,365 | 106,214 | ||||||
| Other |
48,623 | 35,071 | ||||||
| Prepaid income taxes |
19,650 | 9,635 | ||||||
| Deferred income taxes |
16,719 | 16,908 | ||||||
| Other current assets |
46,554 | 38,721 | ||||||
| Total current assets |
1,759,433 | 1,526,669 | ||||||
| Property, plant and equipment - at cost |
||||||||
| Land |
75,246 | 60,823 | ||||||
| Buildings |
403,596 | 364,948 | ||||||
| Machinery and equipment |
729,876 | 694,314 | ||||||
| 1,208,718 | 1,120,085 | |||||||
| Accumulated depreciation |
(602,078 | ) | (559,217 | ) | ||||
| 606,640 | 560,868 | |||||||
| Other assets |
||||||||
| Goodwill and other intangibles |
138,362 | 134,664 | ||||||
| Investments in unconsolidated affiliates |
94,000 | 94,460 | ||||||
| Deferred income taxes |
61,341 | 62,489 | ||||||
| Other noncurrent assets |
129,897 | 103,623 | ||||||
| 423,600 | 395,236 | |||||||
| Total assets |
$ | 2,789,673 | $ | 2,482,773 | ||||
See accompanying notes.
4
UNIVERSAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
| December 31, 2004 |
March 31, 2004 |
|||||||
| (Unaudited) | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current |
||||||||
| Notes payable and overdrafts |
$ | 353,141 | $ | 244,031 | ||||
| Accounts payable |
313,839 | 331,963 | ||||||
| Accounts payable - unconsolidated affiliates |
185 | 2,571 | ||||||
| Customer advances and deposits |
125,107 | 59,894 | ||||||
| Accrued compensation |
27,866 | 32,703 | ||||||
| Income taxes payable |
32,440 | 22,007 | ||||||
| Current portion of long-term obligations |
130,035 | 45,941 | ||||||
| Total current liabilities |
982,613 | 739,110 | ||||||
| Long-term obligations |
741,519 | 770,296 | ||||||
| Postretirement benefits other than pensions |
42,643 | 41,721 | ||||||
| Other long-term liabilities |
139,276 | 93,739 | ||||||
| Deferred income taxes |
50,982 | 43,691 | ||||||
| Total liabilities |
1,957,033 | 1,688,557 | ||||||
| Minority interests |
32,029 | 34,383 | ||||||
| Shareholders’ equity |
||||||||
| Preferred stock, no par value, authorized 5,000,000 shares, none issued or outstanding |
||||||||
| Common stock, no par value, authorized 100,000,000 shares, 25,621,539 issued and outstanding shares (25,446,975 at March 31, 2004) |
112,914 | 112,505 | ||||||
| Retained earnings |
710,778 | 679,202 | ||||||
| Accumulated other comprehensive income (loss) |
(23,081 | ) | (31,874 | ) | ||||
| Total shareholders’ equity |
800,611 | 759,833 | ||||||
| Total liabilities and shareholders’ equity |
$ | 2,789,673 | $ | 2,482,773 | ||||
See accompanying notes.
5
UNIVERSAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended December 31, 2004, and March 31, 2004
(In thousands of dollars)
| NINE MONTHS |
||||||||
| December 31, 2004 |
March 31, 2004 |
|||||||
| (Unaudited) | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income |
$ | 62,247 | $ | 99,636 | ||||
| Depreciation |
51,913 | 45,519 | ||||||
| Amortization |
2,641 | 3,348 | ||||||
| Other adjustments to reconcile net income to net cash provided by operating activities |
(9,711 | ) | (10,756 | ) | ||||
| Changes in operating assets and liabilities |
(106,509 | ) | (163,913 | ) | ||||
| Accrued liability for European Commission fines |
14,908 | — | ||||||
| Net cash provided (used) by operating activities |
15,489 | (26,166 | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property, plant and equipment |
(67,108 | ) | (63,243 | ) | ||||
| Purchase of businesses, net of cash acquired |
(15,934 | ) | — | |||||
| Sales of property, plant and equipment, and other |
3,711 | 2,837 | ||||||
| Net cash used in investing activities |
(79,331 | ) | (60,406 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Issuance (repayment) of short-term debt, net |
79,421 | (607 | ) | |||||
| Issuance of long-term debt |
95,000 | 202,967 | ||||||
| Repayment of long-term debt |
(52,269 | ) | (96,008 | ) | ||||
| Issuance of common stock |
2,930 | 22,028 | ||||||
| Purchases of common stock |
— | (3,456 | ) | |||||
| Dividends paid |
(30,671 | ) | (28,693 | ) | ||||
| Other |
— | (162 | ) | |||||
| Net cash provided by financing activities |
94,411 | 96,069 | ||||||
| Effect of exchange rate changes on cash |
644 | 732 | ||||||