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 RICHMOND, Va., Oct. 25 /PRNewswire/ -- At the annual meeting of stockholders of Universal Corporation (NYSE: UVV) held today, Henry H. Harrell, chairman and chief executive officer, reported that income before the cumulative effect of an accounting change for the first quarter ended Sept. 30, 1993, was $18.5 million or 52 cents per share, compared to $23.8 million or 72 cents per share for the same period last year. After a non-cash charge of $29.4 million or 83 cents per share in fiscal year 1994 resulting from required adoption this quarter of SFAS 106 "Employers Accounting for Postretirement Benefits Other Than Pensions," the company showed a loss of $10.9 million or 31 cents per share. Gross revenues were $691 million compared to $827 million last year.
 Orders for the current year's U.S. flue-cured crop are below those of last year due to the poor quality of the crop and inventory adjustments by manufacturers. In addition, the U.S. tobacco markets opened later this year. Accordingly, the total volume of U.S. flue- cured tobacco purchased and processed in the quarter was down over 30 percent and 14 percent, respectively, and the inferior crop resulted in increased processing costs. Shipments of current crop were below those of last year, and since last year's first quarter included hold-over shipments of prior crops, the quarterly comparison is further affected. On the favorable side, weaker demand for this crop has led to increased purchases by the Flue-Cured Stabilization Cooperative from which the company had received more processing business.
 Foreign tobacco earnings were down slightly compared to the prior year's quarter in spite of the positive contribution of Casalee's Brazilian operations. As previously reported, Casalee was acuired late during the prior fiscal year and has significant operations in Africa, Brazil and Europe. The current period reflects the first full quarter of Casalee results to be included in Universal's consolidated earnings. The modest decline in income from foreign tobacco operations was due to lower shipments. Further, earnings from dark tobacco operations were lower because of comparatively accelerated shipments last year. Generally, major foreign operations of the company continue to do well despite a world over-supply, which has caused inventory build-ups and depressed prices.
 Lumber and building products operations improved significantly over the same quarter last year. Both revenues and gross margins grew as the company benefited from stronger results from the professional and do-it- yourself markets, reflecting a combination of strong demand and price increases on hardwood, plywood and softwood. Window and door manufacturing operations also improved in the current quarter on increased demand. With the better economic outlook in Europe, lumber and building operations are expected to continue the positive trend for the fiscal year.
 Agri-products results in the current year were up slightly compared to last year as growing and marketing conditions in a number of products changed. Sunflower seed operations were able to maintain favorable results despite record rainfall, floods and the prospect of a reduction in crop size by as much as 50 percent in some Midwestern growing areas. Tea operations were up as the world crop level returned to normal following the severe droughts experienced last year. Coffee results were adversely affected by price volatility attributable to uncertainty in support prices and weather conditions in Brazil's coffee regions.
 Despite the increase in U.S. tax rates from 34 percent to 35 percent, the company expects that its overall effective tax rate for fiscal 1994 will be lower than the statutory rate due to the permanent reinvestment of foreign earnings.
 Fiscal year 1993 results were a record for the company and reflected favorable business conditions in most of the business segments. Current market conditions in the tobacco industry are less favorable, with the excess world supply of tobacco restraining margins and trading results in many areas, although sales in Africa and Brazil remain strong. The world surplus is being addressed on a region by region basis. In addition, management is aggressively pursuing consolidation and cost reduction benefits that the Casalee acquisition has made possible. Rapid expansion in Eastern Europe and China is positioning the company for long-term growth in these strategic areas.
 Consolidated Statements of Income
 Three Months Ended Sept. 30, 1993, and 1992
 SEPT. 30,
 1993 1992
 Sales and Other Operating Revenues $690,739 $826,581
 Cost and Expenses
 Cost of goods sold 575,280 707,864
 Selling, general and administrative
 expenses 73,727 69,425
 Interest 15,869 12,291
 Total 664,876 789,580
 Income before taxes and other items 25,863 37,001
 Income taxes 7,918 13,417
 Minority interests (87) 59
 Income from consolidated operations 18,032 23,525
 Equity in net income of unconsolidated
 affiliates 427 251
 Income before cumulative effect of
 change in accounting principle 18,459 23,776
 Cumulative effect of change in
 accounting principle (29,406) --
 Net income $ 10,947 $ 23,776
 Per Common share
 Income before cumulative effect of
 change in accounting principle $0.52 $0.72
 Cumulative effect of change in
 accounting principle (0.83) --
 Net Income $(0.31) $0.72
 Cash dividends declared $0.22 $0.20
 Average common shares outstanding 35,631,485 32,862,958
 NOTE: The results of operations for the three-month period ended Sept. 30, 1993, are not necessarily indicative of results to be expected for the year ending June 30, 1994. All adjustments necessary to fairly state the results for such period have been included and are of a normal recurring nature.
 -0- 10/25/93
 /CONTACT: O. Kemp Dozier of Universal Corporation, 804-359-9311/

CO: Universal Corporation ST: Virginia IN: TOB SU: ERN

IH-MH -- DC021 -- 6432 10/25/93 14:48 EDT
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Publication:PR Newswire
Date:Oct 25, 1993

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