Universal Corporation Reports Third Quarter Results
"Our tobacco business continued to perform very well, driven by a favorable product mix and strong demand from our customers. Improved margins, larger crops in
"We continue to be encouraged by the solid progress the team is making to expand our ingredients business. The investments we have made to build out the research and development and corporate sales teams are starting to gain momentum and have positioned us for future growth. We are also pleased with the progress we are making on the expansion of our processing capabilities at our ingredients facility in
"Another important achievement in fiscal year 2024 has been the progress we made to advance Universal's global sustainability agenda. These include the
FINANCIAL HIGHLIGHTS |
|
|
|
|
|
|
|
||||||||||||||||
|
Nine Months Ended |
|
Change |
||||||||||||||||||||
(in millions of dollars, except per share data) |
2023 |
|
2022 |
|
$ |
|
% |
||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||
Consolidated Results |
|
|
|
|
|
|
|
||||||||||||||||
Sales and other operating revenue |
$ |
1,977.7 |
|
|
$ |
1,875.8 |
|
|
$ |
101.9 |
|
|
5 |
% |
|||||||||
Cost of goods sold |
$ |
1,592.5 |
|
|
$ |
1,540.4 |
|
|
$ |
52.2 |
|
|
3 |
% |
|||||||||
Gross Profit Margin |
19.5 |
% |
|
17.9 |
% |
|
|
|
160 bps |
||||||||||||||
Selling, general and administrative expenses |
$ |
227.8 |
|
|
$ |
206.8 |
|
|
$ |
21.0 |
|
|
10 |
% |
|||||||||
|
|
|
|
|
|
|
|
||||||||||||||||
Operating income (loss) |
$ |
153.8 |
|
|
$ |
128.7 |
|
|
$ |
25.1 |
|
|
20 |
% |
|||||||||
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings (loss) per share (as reported) |
$ |
3.17 |
|
|
$ |
2.82 |
|
|
$ |
0.35 |
|
|
12 |
% |
|||||||||
Adjusted diluted earnings (loss) per share (non-GAAP)* |
$ |
3.29 |
|
|
$ |
2.80 |
|
|
$ |
0.49 |
|
|
18 |
% |
|||||||||
Segment Results |
|
|
|
|
|
|
|
||||||||||||||||
Tobacco operations sales and other operating revenues |
$ |
1,742.5 |
|
|
$ |
1,642.7 |
|
|
$ |
99.8 |
|
|
6 |
% |
|||||||||
Tobacco operations operating income |
$ |
148.9 |
|
|
$ |
119.0 |
|
|
$ |
29.9 |
|
|
25 |
% |
|||||||||
Ingredients operations sales and other operating revenues |
$ |
235.2 |
|
|
$ |
233.2 |
|
|
$ |
2.1 |
|
|
1 |
% |
|||||||||
Ingredients operations operating income (loss) |
$ |
5.0 |
|
|
$ |
9.9 |
|
|
$ |
(4.9) |
|
|
(50) |
% |
|
*See Reconciliation of Certain Non-GAAP Financial Measures in Other Items below. |
Net income for the nine months ended
Net income for the quarter ended
Consolidated revenues increased by
TOBACCO OPERATIONS
Revenues for the Tobacco Operations segment were
Operating income for the Tobacco Operations segment increased by
INGREDIENTS OPERATIONS
Revenues for the Ingredients Operations segment of
Operating income for the Ingredients Operations segment was
In the quarter ended
Operating income for the nine months ended
OTHER ITEMS
Cost of goods sold in the nine months and quarter ended
For the nine months and quarter ended
Reconciliation of Certain Non-GAAP Financial Measures
The following table sets forth certain non-recurring items included in reported results to reconcile adjusted net income to net income attributable to
Adjusted Operating Income Reconciliation |
|
||||||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||
(in thousands) |
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||
As Reported: Consolidated operating income |
$ |
87,464 |
|
|
$ |
77,526 |
|
|
$ |
153,811 |
|
|
$ |
128,678 |
|
||||||||
Restructuring and impairment costs(1) |
924 |
|
|
— |
|
|
3,523 |
|
|
— |
|
||||||||||||
As Adjusted operating income (Non-GAAP) |
$ |
88,388 |
|
|
$ |
77,526 |
|
|
$ |
157,334 |
|
|
$ |
128,678 |
|
||||||||
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted Net Income Attributable to |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||
(in thousands except for per share amounts) |
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||
As Reported: Net income attributable to |
$ |
53,216 |
|
|
$ |
41,660 |
|
|
$ |
79,280 |
|
|
$ |
70,345 |
|
||||||||
Restructuring and impairment costs(1) |
924 |
|
|
— |
|
|
3,523 |
|
|
— |
|
||||||||||||
Interest expense reversal on uncertain tax position from sale of operations in |
— |
|
|
— |
|
|
— |
|
|
(1,816) |
|
||||||||||||
Total of Non-GAAP adjustments to income before income taxes |
924 |
|
|
— |
|
|
3,523 |
|
|
(1,816) |
|
||||||||||||
Non-GAAP adjustments to income taxes |
|
|
|
|
|
|
|
||||||||||||||||
Income tax benefit from restructuring and impairment costs |
(47) |
|
|
— |
|
|
(512) |
|
|
— |
|
||||||||||||
Income tax expense from sale of operations in |
— |
|
|
— |
|
|
— |
|
|
1,132 |
|
||||||||||||
Total of income tax impacts for Non-GAAP adjustments to income before income taxes |
(47) |
|
|
— |
|
|
(512) |
|
|
1,132 |
|
||||||||||||
As adjusted: Net income attributable to |
$ |
54,093 |
|
|
$ |
41,660 |
|
|
$ |
82,291 |
|
|
$ |
69,661 |
|
||||||||
As reported: Diluted earnings per share |
$ |
2.12 |
|
|
$ |
1.67 |
|
|
$ |
3.17 |
|
|
$ |
2.82 |
|
||||||||
As adjusted: Diluted earnings per share (Non-GAAP) |
$ |
2.16 |
|
|
$ |
1.67 |
|
|
$ |
3.29 |
|
|
$ |
2.80 |
|
|
(1) 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 |
SUSTAINABILITY
Universal is taking important steps to advance its sustainability agenda as Universal continues to monitor and address the environmental and social impacts of its businesses. In
Additional information
Amounts described as net income (loss) and earnings (loss) per diluted share in the previous discussion are attributable to
This release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The Company cautions readers that any statements contained herein regarding financial condition, results of operation, and future business plans, operations, opportunities, and prospects for its performance are forward-looking statements 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, 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; its ability to maintain effective information technology systems and safeguard confidential information; anticipated levels of demand for and supply of its 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, such as the conflict in
At
CONSOLIDATED STATEMENTS OF INCOME (in thousands of dollars, except per share data) |
|
|||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||||
|
|
(Unaudited) |
|
(Unaudited) |
||||||||||||||||||||||
Sales and other operating revenues |
|
$ |
821,507 |
|
|
$ |
795,039 |
|
|
$ |
1,977,713 |
|
|
$ |
1,875,845 |
|
||||||||||
Costs and expenses |
|
|
|
|
|
|
|
|
||||||||||||||||||
Cost of goods sold |
|
654,556 |
|
|
649,539 |
|
|
1,592,533 |
|
|
1,540,368 |
|
||||||||||||||
Selling, general and administrative expenses |
|
78,563 |
|
|
67,974 |
|
|
227,846 |
|
|
206,799 |
|
||||||||||||||
Restructuring and impairment costs |
|
924 |
|
|
— |
|
|
3,523 |
|
|
— |
|
||||||||||||||
Operating income |
|
87,464 |
|
|
77,526 |
|
|
153,811 |
|
|
128,678 |
|
||||||||||||||
Equity in pretax earnings (loss) of unconsolidated affiliates |
|
1,384 |
|
|
345 |
|
|
(3,495) |
|
|
208 |
|
||||||||||||||
Other non-operating income (expense) |
|
726 |
|
|
(69) |
|
|
2,179 |
|
|
(208) |
|
||||||||||||||
Interest income |
|
1,720 |
|
|
77 |
|
|
4,038 |
|
|
407 |
|
||||||||||||||
Interest expense |
|
15,525 |
|
|
14,265 |
|
|
48,121 |
|
|
33,259 |
|
||||||||||||||
Income before income taxes and other items |
|
75,769 |
|
|
63,614 |
|
|
108,412 |
|
|
95,826 |
|
||||||||||||||
Income taxes |
|
14,482 |
|
|
12,253 |
|
|
21,498 |
|
|
22,258 |
|
||||||||||||||
Net income |
|
61,287 |
|
|
51,361 |
|
|
86,914 |
|
|
73,568 |
|
||||||||||||||
Less: net loss (income) attributable to noncontrolling interests in subsidiaries |
|
(8,071) |
|
|
(9,701) |
|
|
(7,634) |
|
|
(3,223) |
|
||||||||||||||
Net income attributable to |
|
$ |
53,216 |
|
|
$ |
41,660 |
|
|
$ |
79,280 |
|
|
$ |
70,345 |
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
||||||||||||||||||
Basic |
|
$ |
2.14 |
|
|
$ |
1.68 |
|
|
$ |
3.19 |
|
|
$ |
2.84 |
|
||||||||||
Diluted |
|
$ |
2.12 |
|
|
$ |
1.67 |
|
|
$ |
3.17 |
|
|
$ |
2.82 |
|
|
See accompanying notes. |
CONSOLIDATED BALANCE SHEETS (in thousands of dollars) |
||||||||||||||||||||
|
||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
||||||||||||||
|
|
(Unaudited) |
|
(Unaudited) |
|
|
||||||||||||||
ASSETS |
|
|
|
|
|
|
||||||||||||||
Current assets |
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents |
|
$ |
74,102 |
|
|
$ |
71,283 |
|
|
$ |
64,690 |
|
||||||||
Accounts receivable, net |
|
435,306 |
|
|
536,650 |
|
|
402,073 |
|
|||||||||||
Advances to suppliers, net |
|
159,481 |
|
|
163,237 |
|
|
170,801 |
|
|||||||||||
Accounts receivable—unconsolidated affiliates |
|
33,109 |
|
|
5,920 |
|
|
12,210 |
|
|||||||||||
Inventories—at lower of cost or net realizable value: |
|
|
|
|
|
|
||||||||||||||
Tobacco |
|
1,009,030 |
|
|
866,380 |
|
|
833,876 |
|
|||||||||||
Other |
|
196,246 |
|
|
211,561 |
|
|
202,907 |
|
|||||||||||
Prepaid income taxes |
|
18,304 |
|
|
17,363 |
|
|
16,493 |
|
|||||||||||
Other current assets |
|
88,051 |
|
|
79,495 |
|
|
99,840 |
|
|||||||||||
Total current assets |
|
2,013,629 |
|
|
1,951,889 |
|
|
1,802,890 |
|
|||||||||||
|
|
|
|
|
|
|
||||||||||||||
Property, plant and equipment |
|
|
|
|
|
|
||||||||||||||
Land |
|
26,516 |
|
|
24,142 |
|
|
24,926 |
|
|||||||||||
Buildings |
|
319,740 |
|
|
305,215 |
|
|
311,138 |
|
|||||||||||
Machinery and equipment |
|
720,816 |
|
|
679,970 |
|
|
689,220 |
|
|||||||||||
|
|
1,067,072 |
|
|
1,009,327 |
|
|
1,025,284 |
|
|||||||||||
Less accumulated depreciation |
|
(706,642) |
|
|
(663,333) |
|
|
(674,122) |
|
|||||||||||
|
|
360,430 |
|
|
345,994 |
|
|
351,162 |
|
|||||||||||
Other assets |
|
|
|
|
|
|
||||||||||||||
Operating lease right-of-use assets |
|
34,913 |
|
|
42,337 |
|
|
40,505 |
|
|||||||||||
|
|
213,891 |
|
|
213,881 |
|
|
213,922 |
|
|||||||||||
Other intangibles, net |
|
71,697 |
|
|
82,917 |
|
|
80,101 |
|
|||||||||||
Investments in unconsolidated affiliates |
|
75,335 |
|
|
72,565 |
|
|
76,184 |
|
|||||||||||
Deferred income taxes |
|
14,855 |
|
|
10,005 |
|
|
13,091 |
|
|||||||||||
Pension asset |
|
11,586 |
|
|
12,740 |
|
|
9,984 |
|
|||||||||||
Other noncurrent assets |
|
37,538 |
|
|
32,575 |
|
|
51,343 |
|
|||||||||||
|
|
459,815 |
|
|
467,020 |
|
|
485,130 |
|
|||||||||||
|
|
|
|
|
|
|
||||||||||||||
Total assets |
|
$ |
2,833,874 |
|
|
$ |
2,764,903 |
|
|
$ |
2,639,182 |
|
|
See accompanying notes. |
CONSOLIDATED BALANCE SHEETS (in thousands of dollars) |
||||||||||||||||||||
|
||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
||||||||||||||
|
|
(Unaudited) |
|
(Unaudited) |
|
|
||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
||||||||||||||
Current liabilities |
|
|
|
|
|
|
||||||||||||||
Notes payable and overdrafts |
|
$ |
365,327 |
|
|
$ |
348,073 |
|
|
$ |
195,564 |
|
||||||||
Accounts payable |
|
89,301 |
|
|
92,305 |
|
|
83,213 |
|
|||||||||||
Accounts payable—unconsolidated affiliates |
|
122 |
|
|
57 |
|
|
5,830 |
|
|||||||||||
Customer advances and deposits |
|
19,620 |
|
|
5,365 |
|
|
3,061 |
|
|||||||||||
Accrued compensation |
|
27,967 |
|
|
21,670 |
|
|
33,108 |
|
|||||||||||
Income taxes payable |
|
5,499 |
|
|
3,715 |
|
|
3,274 |
|
|||||||||||
Current portion of operating lease liabilities |
|
10,403 |
|
|
11,160 |
|
|
11,404 |
|
|||||||||||
Accrued expenses and other current liabilities |
|
106,635 |
|
|
115,882 |
|
|
106,533 |
|
|||||||||||
Current portion of long-term debt |
|
— |
|
|
— |
|
|
— |
|
|||||||||||
Total current liabilities |
|
624,874 |
|
|
598,227 |
|
|
441,987 |
|
|||||||||||
|
|
|
|
|
|
|
||||||||||||||
Long-term debt |
|
617,225 |
|
|
616,750 |
|
|
616,809 |
|
|||||||||||
Pensions and other postretirement benefits |
|
43,301 |
|
|
50,773 |
|
|
42,769 |
|
|||||||||||
Long-term operating lease liabilities |
|
22,050 |
|
|
27,030 |
|
|
25,540 |
|
|||||||||||
Other long-term liabilities |
|
26,609 |
|
|
22,797 |
|
|
32,512 |
|
|||||||||||
Deferred income taxes |
|
41,165 |
|
|
48,584 |
|
|
42,613 |
|
|||||||||||
Total liabilities |
|
1,375,224 |
|
|
1,364,161 |
|
|
1,202,230 |
|
|||||||||||
|
|
|
|
|
|
|
||||||||||||||
Shareholders' equity |
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
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 24,559,181 shares issued
and outstanding at
at |
|
344,467 |
|
|
335,160 |
|
|
337,247 |
|
|||||||||||
Retained earnings |
|
1,152,863 |
|
|
1,102,887 |
|
|
1,136,898 |
|
|||||||||||
Accumulated other comprehensive loss |
|
(80,254) |
|
|
(77,255) |
|
|
(77,057) |
|
|||||||||||
|
|
1,417,076 |
|
|
1,360,792 |
|
|
1,397,088 |
|
|||||||||||
Noncontrolling interests in subsidiaries |
|
41,574 |
|
|
39,950 |
|
|
39,864 |
|
|||||||||||
Total shareholders' equity |
|
1,458,650 |
|
|
1,400,742 |
|
|
1,436,952 |
|
|||||||||||
|
|
|
|
|
|
|
||||||||||||||
Total liabilities and shareholders' equity |
|
$ |
2,833,874 |
|
|
$ |
2,764,903 |
|
|
$ |
2,639,182 |
|
|
See accompanying notes. |
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of dollars) |
|
|
||||||||||||
|
|
|
||||||||||||
|
|
Nine Months Ended |
||||||||||||
|
|
2023 |
|
2022 |
||||||||||
|
|
(Unaudited) |
||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
||||||||||
Net income |
|
$ |
86,914 |
|
|
$ |
73,568 |
|
||||||
Adjustments to reconcile net income (loss) to net cash used by operating activities: |
|
|
|
|
||||||||||
Depreciation and amortization |
|
43,843 |
|
|
42,844 |
|
||||||||
Net provision for losses (recoveries) on advances to suppliers |
|
9,950 |
|
|
6,127 |
|
||||||||
Inventory writedowns |
|
4,813 |
|
|
10,782 |
|
||||||||
Stock-based compensation expense |
|
10,625 |
|
|
6,630 |
|
||||||||
Foreign currency remeasurement (gain) loss, net |
|
3,227 |
|
|
(1,335) |
|
||||||||
Foreign currency exchange contracts |
|
2,655 |
|
|
14,600 |
|
||||||||
Deferred income taxes |
|
(2,078) |
|
|
470 |
|
||||||||
Equity in net loss (income) of unconsolidated affiliates, net of dividends |
|
2,055 |
|
|
5,717 |
|
||||||||
Restructuring and impairment costs |
|
3,523 |
|
|
— |
|
||||||||
Restructuring payments |
|
(999) |
|
|
— |
|
||||||||
Other, net |
|
734 |
|
|
(4,967) |
|
||||||||
Changes in operating assets and liabilities, net: |
|
(211,999) |
|
|
(338,286) |
|
||||||||
Net cash provided (used) by operating activities |
|
(46,737) |
|
|
(183,850) |
|
||||||||
|
|
|
|
|
||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
||||||||||
Purchase of property, plant and equipment |
|
(47,732) |
|
|
(39,430) |
|
||||||||
Proceeds from sale of business, net of cash held by the business |
|
3,757 |
|
|
3,245 |
|
||||||||
Proceeds from sale of property, plant and equipment |
|
1,932 |
|
|
1,634 |
|
||||||||
Net cash used by investing activities |
|
(42,043) |
|
|
(34,551) |
|
||||||||
|
|
|
|
|
||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
||||||||||
Issuance of short-term debt, net |
|
170,433 |
|
|
166,109 |
|
||||||||
Issuance of long-term debt |
|
— |
|
|
123,481 |
|
||||||||
Repayment of long-term debt |
|
— |
|
|
(23,481) |
|
||||||||
Dividends paid to noncontrolling interests |
|
(5,845) |
|
|
(6,825) |
|
||||||||
Repurchase of common stock |
|
(4,744) |
|
|
(3,448) |
|
||||||||
Dividends paid on common stock |
|
(58,755) |
|
|
(57,993) |
|
||||||||
Proceeds from termination of interest rate swap agreements |
|
— |
|
|
11,786 |
|
||||||||
Other |
|
(2,973) |
|
|
(6,337) |
|
||||||||
Net cash provided (used) by financing activities |
|
98,116 |
|
|
203,292 |
|
||||||||
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash, restricted cash and cash equivalents |
|
76 |
|
|
(1,256) |
|
||||||||
Net increase (decrease) in cash, restricted cash and cash equivalents |
|
9,412 |
|
|
(16,365) |
|
||||||||
Cash, restricted cash and cash equivalents at beginning of year |
|
64,690 |
|
|
87,648 |
|
||||||||
|
|
|
|
|
||||||||||
Cash, restricted cash and cash equivalents at end of period |
|
$ |
74,102 |
|
|
$ |
71,283 |
|
|
See accompanying notes. |
NOTE 1. BASIS OF PRESENTATION
NOTE 2. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||||
(in thousands, except share and per share data) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Basic Earnings Per Share |
|
|
|
|
|
|
|
|
||||||||||||||||||
Numerator for basic earnings per share |
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income attributable to |
|
$ |
53,216 |
|
|
$ |
41,660 |
|
|
$ |
79,280 |
|
|
$ |
70,345 |
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Denominator for basic earnings per share |
|
|
|
|
|
|
|
|
||||||||||||||||||
Weighted average shares outstanding |
|
24,849,498 |
|
|
24,770,294 |
|
|
24,853,774 |
|
|
24,772,827 |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Basic earnings per share |
|
$ |
2.14 |
|
|
$ |
1.68 |
|
|
$ |
3.19 |
|
|
$ |
2.84 |
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Diluted Earnings Per Share |
|
|
|
|
|
|
|
|
||||||||||||||||||
Numerator for diluted earnings per share |
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income attributable to |
|
$ |
53,216 |
|
|
$ |
41,660 |
|
|
$ |
79,280 |
|
|
$ |
70,345 |
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Denominator for diluted earnings per share: |
|
|
|
|
|
|
|
|
||||||||||||||||||
Weighted average shares outstanding |
|
24,849,498 |
|
|
24,770,294 |
|
|
24,853,774 |
|
|
24,772,827 |
|
||||||||||||||
Effect of dilutive securities |
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee and outside director share-based awards |
|
206,331 |
|
|
158,132 |
|
|
163,393 |
|
|
161,620 |
|
||||||||||||||
Denominator for diluted earnings per share |
|
25,055,829 |
|
|
24,928,426 |
|
|
25,017,167 |
|
|
24,934,447 |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Diluted earnings per share |
|
$ |
2.12 |
|
|
$ |
1.67 |
|
|
$ |
3.17 |
|
|
$ |
2.82 |
|
NOTE 3. SEGMENT INFORMATION
The Company conducts operations across two reportable operating segments, Tobacco Operations and Ingredients Operations.
The Tobacco Operations segment activities involve selecting, procuring, processing, packing, storing, shipping, and financing 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 increasingly used in the manufacture of non-combustible 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 and smoke 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, flavors, and botanical extracts. Customers for the Ingredients Operations segment include large multinational food and beverage companies, smaller independent manufacturers, and retail organizations.
The Company currently evaluates the performance of its segments based on operating income after allocated overhead expenses, plus equity in the pretax earnings (loss) of unconsolidated affiliates. Operating results for the Company's reportable segments for each period presented in the consolidated statements of income and comprehensive income were as follows.
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||||
(in thousands of dollars) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||
SALES AND OTHER OPERATING REVENUES |
|
|
|
|
|
|
|
|
||||||||||||||||||
Tobacco Operations |
|
$ |
743,933 |
|
|
$ |
724,589 |
|
|
$ |
1,742,494 |
|
|
$ |
1,642,682 |
|
||||||||||
Ingredients Operations |
|
77,574 |
|
|
70,450 |
|
|
235,219 |
|
|
233,163 |
|
||||||||||||||
Consolidated sales and other operating revenues |
|
$ |
821,507 |
|
|
$ |
795,039 |
|
|
$ |
1,977,713 |
|
|
$ |
1,875,845 |
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||
OPERATING INCOME |
|
|
|
|
|
|
|
|
||||||||||||||||||
Tobacco Operations |
|
$ |
87,605 |
|
|
$ |
77,104 |
|
|
$ |
148,875 |
|
|
$ |
119,010 |
|
||||||||||
Ingredients Operations |
|
2,167 |
|
|
767 |
|
|
4,964 |
|
|
9,876 |
|
||||||||||||||
Segment operating income |
|
89,772 |
|
|
77,871 |
|
|
153,839 |
|
|
128,886 |
|
||||||||||||||
Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates (1) |
|
(1,384) |
|
|
(345) |
|
|
3,495 |
|
|
(208) |
|
||||||||||||||
Restructuring and impairment costs (2) |
|
(924) |
|
|
— |
|
|
(3,523) |
|
|
— |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Consolidated operating income |
|
$ |
87,464 |
|
|
$ |
77,526 |
|
|
$ |
153,811 |
|
|
$ |
128,678 |
|
|
|
(1) |
Equity in pretax earnings (loss) of unconsolidated affiliates is included in segment operating income (Tobacco Operations), but is reported below consolidated operating income and excluded from that total in the consolidated statements of income and comprehensive income. |
(2) |
Restructuring and impairment costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income and comprehensive income. |
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