Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Common Equity
Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “UVV.”
Our current dividend policy anticipates the payment of quarterly dividends in the future. However, the declaration and payment of dividends to holders of common stock is at the discretion of the Board of Directors and will be dependent upon our future earnings, financial condition, and capital requirements. Under certain of our credit facilities, we must meet financial covenants relating to minimum tangible net worth and maximum levels of debt. If we were not in compliance with them, these financial covenants could restrict our ability to pay dividends. We were in compliance with all such covenants at March 31, 2022. At May 24, 2022, there were 919 holders of record of our common stock. See Notes 9 and 14 to the consolidated financial statements in Item 8 for more information on debt covenants and equity securities.
Purchases of Equity Securities
As indicated in the following table, we repurchased shares of our common stock during the three-month period ended March 31, 2022.
Common Stock
Period (1)
Total Number of Shares Repurchased Average Price Paid Per Share (2)
Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs (3)
Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3)
January 1-31, 2022 — $ — — $ 100,000,000
February 1-28, 2022 58,264 52.41 58,264 96,946,661
March 1-31, 2022 — — — 96,946,661
Total 58,264 $ — 58,264 $ 96,946,661
(1) Repurchases are based on the date the shares were traded. This presentation differs from the consolidated statement of cash flows, where the cost of share repurchases is based on the date the transactions were settled.
(2) Amounts listed for average price paid per share include broker commissions paid in the transactions.
(3) A stock repurchase plan, which was authorized by our Board of Directors, became effective and was publicly announced on November 5, 2020. This stock repurchase plan authorizes the purchase of up to $100 million in common and/or preferred stock in open market or privately negotiated transactions through November 15, 2022 or when we have exhausted the funds authorized for the program, subject to market conditions and other factors.
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Item 6. Selected Financial Data
Fiscal Year Ended March 31,
2022 2021 2020 2019 2018
(in thousands, except share and per share data, ratios, and number of shareholders)
Summary of Operations
Sales and other operating revenues $ 2,103,601 $ 1,983,357 $ 1,909,979 $ 2,227,153 $ 2,033,947
Operating income $ 160,315 $ 147,810 $ 126,367 $ 161,169 $ 170,825
Segment operating income (1)
$ 174,335 $ 169,199 $ 138,121 $ 186,772 $ 179,950
Net income $ 103,604 $ 96,314 $ 78,003 $ 110,134 $ 116,168
Net income attributable to Universal Corporation (2)
$ 86,577 $ 87,410 $ 71,680 $ 104,121 $ 105,662
Earnings available to Universal Corporation common shareholders $ 86,577 $ 87,410 $ 71,680 $ 104,121 $ 105,662
Return on beginning common shareholders’ equity 6.6 % 7.0 % 5.4 % 7.8 % 8.2 %
Earnings per share attributable to
Universal Corporation common shareholders:
Basic $ 3.50 $ 3.55 $ 2.87 $ 4.14 $ 4.18
Diluted $ 3.47 $ 3.53 $ 2.86 $ 4.11 $ 4.14
Financial Position at Year End
Current ratio 3.37 5.31 5.53 6.26 5.94
Total assets $ 2,586,345 $ 2,341,924 $ 2,120,921 $ 2,133,184 $ 2,168,632
Long-term debt $ 518,547 $ 518,172 $ 368,764 $ 368,503 $ 369,086
Working capital $ 1,229,287 $ 1,262,201 $ 1,212,218 $ 1,334,397 $ 1,321,323
Total Universal Corporation shareholders’ equity $ 1,340,543 $ 1,307,299 $ 1,246,665 $ 1,337,087 $ 1,342,429
General
Number of common shareholders 928 962 1,000 1,028 1,131
Weighted average common shares outstanding:
Basic 24,764,177 24,656,009 24,982,259 25,129,192 25,274,975
Diluted 24,922,896 24,788,566 25,106,351 25,330,437 25,508,144
Dividends per share of common stock (annual) $ 3.12 $ 3.08 $ 3.04 $ 3.00 $ 2.18
Book value per common share $ 54.60 $ 53.33 $ 51.05 $ 53.50 $ 53.85
(1) We evaluate the performance of our segments based on segment operating income, which is operating income after allocated overhead expenses (excluding significant non-recurring charges or credits), plus equity in the pretax earnings of unconsolidated affiliates. Segment operating income is a non-GAAP measure. See Note 17 to the consolidated financial statements in Item 8 of this Annual Report for information on reportable operating segments.
(2) We hold less than a 100% financial interest in certain consolidated subsidiaries, and a portion of net income is attributable to the noncontrolling interests in
Significant items included in the operating results in the above table are as follows:
• Fiscal Year 2022 – $10.5 million of restructuring and impairment costs, primarily related to the impairment of assets in Tanzania as well as other restructurings in the Tobacco operations segment. The restructuring and impairment costs reduced net income by $7.9 million, or $0.32 per diluted share. We incurred $2.3 million of transaction costs associated with the acquisition of Shank's that were only partially tax-deductible, reducing net income by $2.2 million and diluted earnings per share by $0.09. We recognized a $3.1 million expense in cost of goods sold relating to the expensing of a fair value adjustment to inventory associated with the initial acquisition accounting for Shank's that reduced diluted earnings per share by $0.10. We reversed a portion of the contingent consideration liability for the FruitSmart acquisition, as a result of certain performance metrics that did not meet the required threshold stipulated in the purchase agreement that increased net income by $2.5 million, or $0.10 per diluted share. We recognized a benefit from a final income tax ruling as at a foreign subsidiary that increased interest income by $0.5 million and decreased income taxes by $1.7 million, respectively. The increase in interest income and reduction in income tax expense for the final income tax ruling at a foreign subsidiary increased diluted earnings per share by $0.09. On a combined basis, the net effect of these items decreased net income by $7.8 million, or $0.32 per diluted share.
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• Fiscal Year 2021 – $22.6 million of restructuring and impairment costs, primarily related to the termination of operations at CIFI, as well as other restructurings and impairments in the Tobacco operations segment. The restructuring and impairment costs included employee termination benefits, as well as impairment charges related to certain property, plant, equipment, as well as other current and noncurrent assets. The restructuring and impairment costs reduced net income by $17.8 million, or $0.72 per diluted share. We incurred $3.9 million of non-tax deductible transaction costs associated with the acquisition of Silva that reduced diluted earnings per share by $0.16. We recognized a $2.8 million expense in cost of goods sold relating to the expensing of a fair value adjustment to inventory associated with the initial acquisition accounting for Silva that reduced diluted earnings per share by $0.11. We reversed a portion of the contingent consideration liability for the FruitSmart acquisition, as a result of certain performance metrics that did not meet the required threshold stipulated in the purchase agreement that increased net income by $4.2 million, or $0.17 per diluted share. We recognized an income tax settlement charge related to operations at a foreign subsidiary that reduced net income by $1.8 million, or $0.08 per diluted share. In addition, we benefited from an income tax benefit of $4.4 million related to final U.S. tax regulations on certain dividends paid by foreign subsidiaries. The reduction in income tax expense increased diluted earnings per share by $0.18. On a combined basis, the net effect of these items decreased net income by $17.8 million, or $0.72 per diluted share.
• Fiscal Year 2020 – $7.5 million of restructuring and impairment costs, primarily related to our tobacco operations in North Carolina and Africa. The restructuring and impairment costs included employee termination benefits, as well as impairment charges related to certain property, plant, equipment, and noncurrent assets. The restructuring and impairment costs reduced net income by $6.3 million, or $0.25 per diluted share. We incurred $4.7 million of non-tax deductible transaction costs associated with the acquisition of FruitSmart that reduced diluted earnings per share by $0.19. We recognized a $2.7 million expense in cost of goods sold relating to the expensing of a fair value adjustment to inventory associated with the initial acquisition accounting for FruitSmart, that reduced net income by $2.1 million, or $0.08 per diluted share. Additionally, income tax expense included $2.8 million for the settlement of an income tax matter related to a foreign subsidiary that reduced diluted earnings per share by $0.11. On a combined basis, the net effect of these items decreased net income by $15.9 million, or $0.63 per diluted share.
• Fiscal Year 2019 – $20.3 million of restructuring and impairment costs, primarily related to our operations in Tanzania. The restructuring and impairment costs included employee termination benefits, as well as impairment charges related to certain property, plant, equipment, and goodwill. The restructuring and impairment costs reduced net income by $16.5 million, or $0.64 per diluted share. In addition, we benefited from a $7.8 million reduction in income tax expense for the reversal of amounts previously recorded for dividend withholding taxes on distributed and undistributed retained earnings of a foreign subsidiary following the resolution of uncertainties with the local country taxing authorities with respect to the inclusion of the tax under a tax holiday applicable to the subsidiary. The reduction of income tax expense increased diluted earnings per share by $0.30. On a combined basis, the net effect of these items decreased net income by $8.7 million, or $0.34 per diluted share.
• Fiscal Year 2018 – a $4.5 million reduction of income tax expense from the enactment of the Tax Cuts and Jobs Act in December 2017. The reduction in income tax expense increased diluted earnings per share by $0.18.
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