What changed in this filing

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Item 1. Financial Statements

2026-08-05 compared with 2026-02-09 · 104 added, 194 removed, 635 unchanged (32% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended December 31, Nine Months Ended December 31,

2025 2024 2025 2024

(Unaudited) (Unaudited)

Three Months Ended June 30,

Sales and other operating revenues $ 523,779 $ 593,762

11 unchanged sentences

Net income (loss) ( 8,350 ) 14,367

net loss (income) attributable to noncontrolling interests in subsidiaries ( 8,339 ) ( 8,157 ) ( 14,843 ) ( 13,232 )

net (income) loss attributable to noncontrolling interests in subsidiaries 3,334 ( 5,870 )

Net income (loss) attributable to Universal Corporation $ ( 5,016 ) $ 8,497

13 unchanged sentences

(in thousands of dollars, except share data)

December 31, December 31, March 31,

June 30, June 30, March 31,

2026 2025 2026

31 unchanged sentences

(in thousands of dollars, except share data)

December 31, December 31, March 31,

June 30, June 30, March 31,

2026 2025 2026

10 unchanged sentences

Accrued expenses and other current liabilities 160,667 147,639 120,603

Current portion of long-term debt — — —

Total current liabilities 870,936 942,688 564,241

9 unchanged sentences

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 24,921,155 shares issued and outstanding at December 31, 2025 ( 24,715,625 at December 31, 2024 and 24,715,625 at March 31, 2025)

Common stock, no par value, 100,000,000 shares authorized 24,938,259 shares issued and outstanding at June 30, 2026 ( 24,807,613 at June 30, 2025 and 24,923,496 at March 31, 2026)

353,899 355,498 351,523

9 unchanged sentences

(in thousands of dollars)

Nine Months Ended December 31,

Three Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

20 unchanged sentences

Customer advances and deposits 247 478

Net cash provided (used) by operating activities ( 58,039 ) 168,228

Net cash used by operating activities ( 117,119 ) ( 205,103 )

CASH FLOWS FROM INVESTING ACTIVITIES:

4 unchanged sentences

Issuance of short-term debt, net 278,220 165,861

Issuance of long-term debt 89,130 —

Repayment of long-term debt ( 89,130 ) —

Dividends paid to noncontrolling interests ( 8,235 ) ( 7,203 )

Repurchase of common stock ( 2,746 ) —

Dividends paid on common stock ( 20,437 ) ( 20,020 )

Settlement costs from termination of interest rate swap agreements ( 988 ) —

Other ( 2,504 ) ( 4,016 )

Net cash provided (used) by financing activities ( 83,737 ) 44,832

Net cash provided by financing activities 244,298 134,622

Effect of exchange rate changes on cash, restricted cash and cash equivalents ( 119 ) 711

12 unchanged sentences

Accounting Pronouncements to be Adopted in Future Years

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures” (“ASU 2023-09”).

ASU 2023-09 requires additional disclosures reconciling the rates of different categories of income tax (i.e.

federal, state, foreign, etc.) and a disaggregation of taxes paid and refunded.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and for interim periods in fiscal years beginning after December 15, 2025, although early adoption is permitted.

The Company is currently evaluating the impact of adopting this standard on its income tax disclosures.

In November 2024, the FASB issued Accounting Standards Update No.

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update No.

2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses” (“ASU 2024-03”).

6 unchanged sentences

Tobacco Operations

During the nine months ended December 31, 2024, the Company began consolidating its European sheet tobacco operations into the Company's facility in the Netherlands, by initiating a wind-down of activities at its sheet facility in Germany, incurring $ 10.5 million of restructuring and impairment costs.

During the nine months ended December 31, 2025, the Company recognized an additional $ 0.7 million of restructuring costs and $ 1.0 million of impairment costs related to the consolidation of the sheet tobacco operations.

The Company also incurred $ 0.1 million of termination and impairment costs in other areas of the Tobacco Operations segment in both the nine months ended December 31, 2025 and 2024.

A summary of the restructuring and impairment costs recorded for the three and nine months ended December 31, 2025 and 2024 was as follows:

Three Months Ended December 31, Nine Months Ended December 31,

In fiscal year 2025, the Company began consolidating its European sheet tobacco operations into the Company's facility in the Netherlands, by initiating a wind-down of activities at its sheet facility in Germany.

During the three months ended June 30, 2025, the Company recognized $ 1 million of impairment costs related to the consolidation of the sheet tobacco operations.

The Company also incurred $ 0.1 million of termination and impairment costs in other areas of the Tobacco Operations segment in the three months ended June 30, 2025.

There were no restructuring and impairment costs recognized in the three months ended June 30, 2026.

A summary of the restructuring and impairment costs recorded for the three months ended June 30, 2025 follows:

Three Months Ended June 30,

(in thousands) 2025

1 unchanged sentence

Employee termination benefits $ 122

Other 711 — 711 1,372

Total restructuring costs 122

9 unchanged sentences

Contract durations and payment terms for all revenue categories generally do not exceed one year.

Therefore, the Company has applied a practical expedient to not adjust the transaction price for the effects of financing components, as the Company expects that the period from the time the revenue for a transaction is recognized to the time the customer pays for the related good or service transferred will be one year or less.

transaction is recognized to the time the customer pays for the related good or service transferred will be one year or less.

Below is a description of the major revenue-generating categories from contracts with customers.

30 unchanged sentences

The following table disaggregates the Company’s revenue by significant revenue-generating category:

Three Months Ended December 31, Nine Months Ended December 31,

Three Months Ended June 30,

(in thousands of dollars) 2026 2025

10 unchanged sentences

Other Contingent Liabilities (Letters of credit)

The Company had other contingent liabilities totaling approximately $ 1 million at December 31, 2025, primarily related to outstanding letters of credit.

Value-Added Tax Assessments in Brazil

The Company’s local operating subsidiaries pay significant amounts of value-added tax (“VAT”) in connection with their operations, which generate tax credits that they normally are entitled to recover through offset, refund, or sale to third parties.

In Brazil, VAT is assessed at the state level when green tobacco is transferred between states.

The Company’s Brazilian operating subsidiary pays VAT when tobaccos grown outside the state of Rio Grande do Sul are transferred to the factory for processing.

The subsidiary received assessments for additional VAT plus interest and penalties from tax authorities for the state of Parana based on audits of the subsidiary’s VAT filings for specified periods.

Management of the subsidiary and outside counsel challenged the Parana assessment claims.

In July 2025, a final and indisputable favorable ruling was issued by the Brazilian National Treasury Attorney's office declaring the Parana assessment without merit, requiring the state to withdraw and cancel all claims made against the Company's Brazilian operating subsidiary.

The Company had other contingent liabilities totaling approximately $ 1 million at June 30, 2026, primarily related to outstanding letters of credit.

Other Legal and Tax Matters

9 unchanged sentences

Both the current and the long-term portions of advances to suppliers are reported net of allowances recorded when the Company determines that amounts outstanding are not likely to be collected.

Short-term and long-term advances to suppliers totaled $ 180 million at December 31, 2025, $ 172 million at December 31, 2024, and $ 189 million at March 31, 2025.

The related valuation allowances totaled $ 11 million at December 31, 2025, $ 15 million at December 31, 2024, and $ 18 million at March 31, 2025, and were estimated based on the Company’s historical loss information and crop projections.

The allowances were increased by net provisions of $ 1.7 million in the nine-month period ended December 31, 2025 and

decreased by net recoveries of $ 0.4 million in the nine-month period December 31, 2024.

These net recoveries and provisions are included in selling, general, and administrative expenses in the consolidated statements of income.

Interest on advances is recognized in earnings upon the farmers’ delivery of tobacco in payment of principal and interest.

Short-term and long-term advances to suppliers totaled $ 120 million at June 30, 2026, $ 98 million at June 30, 2025, and $ 196 million at March 31, 2026.

The related valuation allowances totaled $ 16 million at June 30, 2026, $ 18 million at June 30, 2025, and $ 16 million at March 31, 2026, and were estimated based on the Company’s historical loss information and crop projections.

The allowances were increased by net provisions of $ 1.8 million and $ 0.1 million in the three-month periods ended June 30, 2026 and 2025, respectively.

These net provisions are included in selling, general, and administrative expenses in the consolidated statements of income.

Interest on advances is recognized in earnings as it is earned.

Recoverable Value-Added Tax Credits

In many foreign countries, the Company’s local operating subsidiaries pay significant amounts of VAT on purchases of unprocessed and processed tobacco, crop inputs, packing materials, and various other goods and services.

In many foreign countries, the Company’s local operating subsidiaries pay significant amounts of valued added tax (“VAT”) on purchases of unprocessed and processed tobacco, crop inputs, packing materials, and various other goods and services.

In some countries, VAT is a national tax, and in other countries it is assessed at the state level.

3 unchanged sentences

When tobacco is sold for export, VAT is normally not assessed.

In countries where tobacco sales are predominately for export markets, VAT collections generated on downstream sales are often not sufficient to fully offset the subsidiaries’ VAT payments.

In countries where tobacco sales are predominately for export markets, VAT collections

generated on downstream sales are often not sufficient to fully offset the subsidiaries’ VAT payments.

In those situations, unused VAT credits can accumulate.

3 unchanged sentences

The Company reviews these balances on a regular basis and records valuation allowances on the credits to reflect amounts that are not expected to be recovered, as well as discounts anticipated on credits that are expected to be sold or transferred.

At December 31, 2025, the aggregate balance of recoverable tax credits held by the Company’s subsidiaries totaled approximately $ 66 million ($ 62 million at December 31, 2024 and $ 64 million at March 31, 2025).

The related valuation allowances totaled approximately $ 22 million at December 31, 2025 and $ 21 million at December 31, 2024 and March 31, 2025.

At June 30, 2026, the aggregate balance of recoverable tax credits held by the Company’s subsidiaries totaled approximately $ 80 million, $ 78 million at June 30, 2025, and $ 66 million at March 31, 2026.

The related valuation allowances totaled approximately $ 23 million at June 30, 2026, $ 21 million at June 30, 2025, and $22 million at March 31, 2026.

The net balances are reported in other current assets and other noncurrent assets in the consolidated balance sheets.

1 unchanged sentence

On November 7, 2024, the Company's Board of Directors approved a stock repurchase program for the purchase of up to $ 100 million in common stock in open market or privately negotiated transactions at prices not exceeding prevailing market rates through November 15, 2026, subject to market conditions and other factors.

The program had $ 100 million of remaining capacity for repurchases of common stock at December 31, 2025.

The program had $ 97 million of remaining capacity for repurchases of common stock at June 30, 2026.

Trade Receivable Sales

During fiscal year 2026, the Company entered into an agreement to sell certain trade receivables, at its discretion, to a third-party financial institution at a discount.

During the second quarter of fiscal year 2026, the Company entered into an agreement to sell certain trade receivables, at its discretion, to a third-party financial institution at a discount.

The transactions have no recourse and qualify as a true sale, meaning upon receipt of the settlement amount, the associated receivable is removed from the balance sheet and the discount is recognized as an expense in selling, general, and administrative expense on the consolidated statements of income.

During the three and nine months ended December 31, 2025, the Company sold $ 78.6 million and $ 120.6 million of receivables and recorded discounts of $ 0.5 million and $ 0.9 , respectively.

New Bank Credit Agreement

On December 9, 2025, the Company entered into a new bank credit agreement that replaced its then existing bank credit agreement dated December 15, 2022.

In addition to extending the maturity dates of the underlying components of the facility, the new agreement includes a $ 780 million five-year revolving credit facility (expiring December 9, 2030), a $ 275 million five-year term loan (due December 9, 2030), and a $ 345 million seven-year term loan (due December 9, 2032).

At closing, the Company had a balance of $ 285 million outstanding under the revolving credit facility.

Both term loans were fully funded at closing, require no amortization, and are prepayable without penalty prior to maturity.

The new facility may be expanded to allow for additional borrowings of up to $ 300 million under certain conditions.

Borrowings under the revolving credit facility and the two term loans bear interest at a variable rate benchmarked to the Secured Overnight Financing Rate ("SOFR") plus a margin based on the Company’s credit measures.

The new credit agreement contains financial covenants that require the Company to maintain certain levels of tangible net worth and leverage.

Those covenants are substantially the same as the covenants in the prior bank credit agreement, and the Company was in compliance with the covenants at December 31, 2025.

During the three months ended December 31, 2025, the Company entered into two new receive-floating / pay-fixed interest rate swap agreements, hedging the variable interest payments on half of the principal value of each of the new term loans.

The swap agreements convert the variable benchmark rate to a fixed rate through December 9, 2030 for the five-year term loan, and through December 9, 2032 for the seven-year term loan.

With the swap agreements in place, the effective interest rates on the hedged portions of the $ 275 million five-year term loan and the $ 345 seven-year term loan were 5.47 % and 6.13 %, respectively,

at December 31, 2025.

Prior to the maturity of the swap agreements, those effective interest rates will change only if a change in the Company’s credit measures results in adjustments to the applicable credit spreads specified in the underlying loan agreement.

Compared to the prior credit agreement, there were only limited changes among the individual bank lenders participating in the new agreement.

Accordingly, under the applicable accounting guidance, a significant portion of the transaction was accounted for as a debt modification rather than a debt extinguishment.

As a result, only an immaterial amount of the unamortized debt issuance costs related to the prior credit agreement were charged to interest expense.

The remainder of those costs remained capitalized on the Company's consolidated balance sheet and will be amortized over the term of the new credit agreement.

Similarly, in the consolidated statement of cash flows, rather than presenting issuance of the entire $ 620 million of new term loans and repayment of $ 620 million of prior term loans, the amounts presented for the issuance and repayment of long-term debt reflect only the changes in the underlying principal positions among the participating bank lenders.

During the three months ended June 30, 2026, the Company sold $ 52.9 million of receivables and recorded discounts of $ 0.6 million.

EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:

Three Months Ended December 31, Nine Months Ended December 31,

The following table sets forth the computation of basic and diluted earnings (loss) per share:

Three Months Ended June 30,

(in thousands, except share and per share data) 2026 2025

16 unchanged sentences

Changes in tax laws, including modifications to dividend withholding tax laws, or the interpretation of tax laws can affect the Company’s earnings, as can the resolution of pending and contested tax issues.

The Company's consolidated effective income tax rate is affected by various factors, including the mix and timing of domestic and foreign earnings, discrete items, and the effect of exchange rate changes on taxes.

Numerous countries in which Company operates have enacted or are in the process of enacting legislation to adopt a global minimum effective tax rate described in the Global Anti-Base Erosion framework rules, or Pillar Two, issued by the Organization for Economic Co-operation and Development (“OECD”).

The Pillar Two legislation includes establishing a 15 % global minimum tax rate on a country-by-country basis and was effective for the Company's fiscal year 2025.

The Company performed an assessment of the potential impact on income taxes from enactment of the Pillar Two legislation.

Based on the assessment, the Company did not have a material impact to the consolidated financial statements from the Pillar Two legislation in fiscal year 2026.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), (Public Law 119-21), was signed into law.

The Company is still evaluating the potential impacts of the OBBBA;

however, the Company does not anticipate it will have a material impact on the Company’s financial statements.

Three and nine months ended December 31, 2025

The Company's consolidated effective income tax rates for the three and nine months ended December 31, 2025 was 37.8 % and 31.6 %, respectively.

The effective tax rate for the three and nine months ended December 31, 2025 was unfavorably impacted from a new 10 % withholding tax law in Brazil on dividends paid to nonresident shareholders.

Three and nine months ended December 31, 2024

The Company's consolidated effective income tax rates for the three and nine months ended December 31, 2024 was 23.0 % and 25.9 %, respectively.

In various countries in which the Company operates, legislation has been enacted incorporating the Organisation for Economic Co-operation and Development’s Global Anti-Base Erosion Pillar Two model rules establishing a 15 % global minimum tax.

The estimated tax impact of such legislation has been included in the provision for income taxes and is not material.

This is treated as a period cost and does not have any additional deferred taxes related to these new laws.

Three months ended June 30, 2026

The Company's consolidated effective income tax rate for the three months ended June 30, 2026 was 35.1 %.

Three months ended June 30, 2025

The Company's consolidated effective income tax rate for the three a months ended June 30, 2025 was 27.1 %.

The Company’s consolidated effective tax rate is affected by various factors, including the mix and timing of domestic and foreign earnings, discrete items, and the effect of exchange rate changes on taxes.

GOODWILL AND OTHER INTANGIBLES

The Company's changes in goodwill at December 31, 2025 and 2024 consisted of the following:

(in thousands of dollars) Nine Months Ended December 31,

The Company's changes in goodwill at June 30, 2026 and 2025 consisted of the following:

(in thousands of dollars) Three Months Ended June 30,

Balance at beginning of fiscal year $ 172,695 $ 213,840

Foreign currency translation adjustment

( 42 ) ( 50 )

Balance at end of period $ 172,679 $ 213,864

The Company's intangible assets primarily consist of capitalized customer-related intangibles, trade names, proprietary developed technology and noncompetition agreements.

The Company's intangible assets subject to amortization consisted of the following at December 31, 2025 and 2024 and at March 31, 2025:

(in thousands, except useful life) December 31, 2025

The Company's intangible assets subject to amortization consisted of the following at June 30, 2026 and 2025 and at March 31, 2026:

(in thousands, except useful life) June 30, 2026

Useful Life (years) Gross Carrying Value Accumulated Amortization Net Carrying Value

5 unchanged sentences

Total intangible assets $ 111,609 $ ( 65,016 ) $ 46,593

December 31, 2024

June 30, 2025

Useful Life (years) Gross Carrying Value Accumulated Amortization Net Carrying Value

14 unchanged sentences

Intangible assets are amortized on a straight-line basis over the asset's estimated useful economic life, as noted above.

The Company's amortization expense for intangible assets for the three and nine months ended December 31, 2025 and 2024 was:

(in thousands of dollars) Three Months Ended December 31, Nine Months Ended December 31,

2025 2024 2025 2024

The Company's amortization expense for intangible assets for the three months ended June 30, 2026 and 2025 was:

(in thousands of dollars) Three Months Ended June 30,

Amortization Expense $ 2,026 $ 2,663

1 unchanged sentence

The amortization expense for other intangible assets is recorded in selling, general, and administrative expenses in the consolidated statements of income.

As of December 31, 2025, the expected future amortization expense for intangible assets was as follows:

As of June 30, 2026, the expected future amortization expense for intangible assets was as follows:

Fiscal Year (in thousands of dollars)

2026 (excluding the nine months ended December 31, 2025)

2027 (excluding the three months ended June 30, 2026)

2031 and thereafter 16,249

8 unchanged sentences

Cash Flow Hedging Strategy for Interest Rate Risk

In December 2025, the Company entered into receive-floating/pay-fixed interest rate swap agreements that were designated and qualify as hedges of the exposure to changes in interest payment cash flows created by fluctuations in variable interest rates on two outstanding non-amortizing bank term loans that were funded as part of a new bank credit facility in December 2025 (see Note 4 for additional information).

Although no significant ineffectiveness is expected with this hedging strategy, the effectiveness of the interest rate swaps is evaluated on a quarterly basis.

At December 31, 2025, the total notional amount of the interest rate swaps was $ 310 million, which corresponded to a portion of the aggregate outstanding balance of the term loans.

At June 30, 2026, the total notional amount of the interest rate swaps was $ 310 million, which corresponded to a portion of the aggregate outstanding balance of the term loans.

Previously, the Company entered into receive-floating/pay-fixed interest rate swap agreements in December 2022 that were designated and qualified as cash flow hedges for two non-amortizing bank loans that were repaid concurrent with the entry into the Company's new bank credit facility in December 2025.

16 unchanged sentences

The aggregate U.S.

dollar notional amounts of forward and option contracts entered into for these purposes during the nine-month periods in fiscal years 2026 and 2025 was as follows:

Nine Months Ended December 31,

dollar notional amounts of forward and option contracts entered into for these purposes during the three-month periods in fiscal years 2027 and 2026 was as follows:

Three Months Ended June 30,

(in millions of dollars) 2026 2025

8 unchanged sentences

The Company de-designates ineffective tobacco purchases and crop input sales hedges to selling, general, and administrative expense when the forecasted tobacco purchases or crop input sales are no longer expected to occur.

The table below presents the expected timing of when the remaining accumulated other comprehensive gains and losses as of December 31, 2025 for cash flows hedges of tobacco purchases and crop input sales are expected to be recognized in earnings.

The table below presents the expected timing of when the remaining accumulated other comprehensive gains and losses as of June 30, 2026 for cash flows hedges of tobacco purchases and crop input sales are expected to be recognized in earnings.

Hedging Program Crop Year Geographic Location(s) Fiscal Year Earnings

Tobacco purchases 2027 Brazil 2028

Tobacco purchases 2026 Brazil 2027

Crop input sales 2027 Brazil 2028

Crop input sales 2026 Brazil 2027

Forward contracts related to processing and operating costs have not been designated as hedges, and gains and losses on those contracts have been recognized in earnings on a mark-to-market basis.

4 unchanged sentences

dollar as their functional currency.

subsidiaries normally have certain monetary assets and liabilities on their balance sheets that are denominated in the local currency.

These subsidiaries normally have certain monetary assets and liabilities on their balance sheets that are denominated in the local currency.

Those assets and liabilities can include cash and cash equivalents, accounts receivable and accounts payable, advances to farmers and suppliers, deferred income tax assets and liabilities, recoverable value-added taxes, operating lease liabilities, and other items.

10 unchanged sentences

The Company is currently using forward currency contracts to manage its exposure to currency remeasurement risk in Brazil.

The total notional amounts of contracts outstanding at December 31, 2025 and 2024, and March 31, 2025, were approximately $ 64.4 million, $ 66.7 million, and $ 17.7 million, respectively.

The total notional amounts of contracts outstanding at June 30, 2026 and 2025, and March 31, 2026, were approximately $ 31.4 million, $ 29.1 million, and $ 24.2 million, respectively.

To further mitigate currency remeasurement exposure, the Company’s foreign subsidiaries may utilize short-term local currency financing during certain periods.

This strategy, while not involving the use of derivative instruments, is intended to minimize the subsidiary’s net monetary position by financing a portion of the local currency monetary assets with local currency monetary liabilities, thus hedging a portion of the overall position.

This strategy, while not involving the use of derivative instruments, is intended to minimize the

subsidiary’s net monetary position by financing a portion of the local currency monetary assets with local currency monetary liabilities, thus hedging a portion of the overall position.

Several of the Company’s foreign subsidiaries transact the majority of their sales and finance the majority of their operating requirements in their local currency, and therefore use their respective local currencies as the functional currency for reporting purposes.

4 unchanged sentences

The table below outlines the effects of the Company’s use of derivative financial instruments on the consolidated statements of income:

Three Months Ended December 31, Nine Months Ended December 31,

Three Months Ended June 30,

(in thousands of dollars) 2026 2025

3 unchanged sentences

Gain (loss) reclassified from accumulated other comprehensive loss into earnings

$ 453 $ 997 $ 1,851 $ 3,986

Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings

22 unchanged sentences

For the interest rate swap agreements, the effective portion of the gain or loss on the derivative is recorded in accumulated other comprehensive loss and any ineffective portion is recorded in selling, general and administrative expenses.

For the forward foreign currency exchange contracts designated as cash flow hedges of tobacco purchases and the crop input sales in Brazil, a net hedge loss of approximately $ 1.4 million remained in accumulated other comprehensive loss at December 31, 2025.

That balance reflects gains and losses on contracts related to the 2026 Brazil crop, and the 2026 Brazil crop input sales, less the amounts reclassified to earnings related to tobacco sold through December 31, 2025.

Based on the hedging strategy, as the gain or loss is recognized in earnings, it is expected to be offset by a change in the direct cost for the tobacco or by

a change in sales prices if the strategy has been mandated by the customer.

For the forward foreign currency exchange contracts designated as cash flow hedges of tobacco purchases and the crop input sales in Brazil, a net hedge loss of approximately $ 4.1 million remained in accumulated other comprehensive loss at June 30, 2026.

That balance reflects gains and losses on contracts related to the 2027 and 2026 Brazil crop, and the 2027 and 2026 Brazil crop input sales, less the amounts reclassified to earnings related to tobacco sold through June 30, 2026.

Based on the hedging strategy, as the gain or loss is recognized in earnings, it is expected to be offset by a change in the direct cost for the tobacco or by a change in sales prices if the strategy has been mandated by the customer.

Generally, margins on the sale of the tobacco will not be significantly affected.

Effect of Derivative Financial Instruments on the Consolidated Balance Sheets

The table below outlines the effects of the Company’s derivative financial instruments on the consolidated balance sheets at December 31, 2025 and 2024, and March 31, 2025:

The table below outlines the effects of the Company’s derivative financial instruments on the consolidated balance sheets at June 30, 2026 and 2025, and March 31, 2026:

Derivatives in a Fair Value Asset Position Derivatives in a Fair Value Liability Position

1 unchanged sentence

Location Fair Value as of

(in thousands of dollars) December 31, 2025 December 31, 2024 March 31, 2025 December 31, 2025 December 31, 2024 March 31, 2025

(in thousands of dollars) June 30, 2026 June 30, 2025 March 31, 2026 June 30, 2026 June 30, 2025 March 31, 2026

Derivatives Designated as Hedging Instruments

28 unchanged sentences

The fair values for those funds are presented under the heading "NAV" in the tables that follow in this disclosure.

In measuring the fair value of liabilities, the Company considers the risk of

non-performance in determining fair value.

In measuring the fair value of liabilities, the Company considers the risk of non-performance in determining fair value.

Universal has not elected to report at fair value any financial instruments or any other assets or liabilities that are not required to be reported at fair value under current accounting guidance.

Recurring Fair Value Measurements

At December 31, 2025 and 2024, and at March 31, 2025, the Company had certain financial assets and financial liabilities that were required to be measured and reported at fair value on a recurring basis.

At June 30, 2026 and 2025, and at March 31, 2026, the Company had certain financial assets and financial liabilities that were required to be measured and reported at fair value on a recurring basis.

These assets and liabilities are listed in the tables below and are classified based on how their values were determined under the fair value hierarchy or the NAV practical expedient:

December 31, 2025

June 30, 2026

Fair Value Hierarchy

4 unchanged sentences

— 13,007 — — 13,007

Interest rate swap agreements

— — 5,014 — 5,014

Foreign currency exchange contracts

2 unchanged sentences

$ 13 $ 13,007 $ 5,158 $ — $ 18,178

Interest rate swap agreements

$ — $ — $ 1,271 $ — $ 1,271

Foreign currency exchange contracts

2 unchanged sentences

$ — $ — $ 4,222 $ — $ 4,222

December 31, 2024

June 30, 2025

Fair Value Hierarchy

4 unchanged sentences

— 12,078 — — 12,078

Interest rate swap agreements

— — 6,310 — 6,310

Foreign currency exchange contracts

2 unchanged sentences

$ 149 $ 12,078 $ 2,787 $ — $ 15,014

Interest rate swap agreements

$ — $ — $ 602 $ — $ 602

Foreign currency exchange contracts

33 unchanged sentences

Long-term Debt

The following table summarizes the fair and carrying value of the Company’s long-term debt, and if applicable any current portion, at each of the balance sheet dates December 31, 2025, and 2024 and March 31, 2025:

(in millions of dollars) December 31, 2025 December 31, 2024 March 31, 2025

The following table summarizes the fair and carrying value of the Company’s long-term debt, and if applicable any current portion, at each of the balance sheet dates June 30, 2026, and 2025 and March 31, 2026:

(in millions of dollars) June 30, 2026 June 30, 2025 March 31, 2026

Fair market value of long term obligations $ 613 $ 618 $ 615

7 unchanged sentences

The Company reviews long-lived assets for impairment whenever events, changes in business conditions, or other circumstances provide an indication that such assets may be impaired.

Consolidation of tobacco sheet operations

As discussed in Note 2, the Company initiated a plan to consolidate the European Sheet tobacco operations into the Company's facility in the Netherlands.

The Company is in the process of winding down its operations in Germany, that resulted in an impairment charge of $ 4.9 million for the long-lived assets in fiscal year 2025, to reduce their carrying value to fair value.

The long-lived assets primarily consist of a processing facility, machinery and equipment, and administrative offices.

After reassessing the fair value of the long-lived assets associated with the operations in Germany, an additional $ 1.0 million impairment charge was recognized during three-month period ended June 30, 2025

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

6 unchanged sentences

Pension Benefits Other Postretirement Benefits

Three Months Ended December 31, Three Months Ended December 31,

(in thousands of dollars) 2025 2024 2025 2024

Service cost $ 1,260 $ 1,315 $ 18 $ 22

Interest cost 2,261 2,875 266 259

Expected return on plan assets ( 3,026 ) ( 3,606 ) ( 10 ) ( 13 )

Net amortization and deferral 84 174 ( 159 ) ( 157 )

Net periodic benefit cost

$ 579 $ 758 $ 115 $ 111

Pension Benefits Other Postretirement Benefits

Nine Months Ended December 31, Nine Months Ended December 31,

Three Months Ended June 30, Three Months Ended June 30,

(in thousands of dollars) 2026 2025 2026 2025

5 unchanged sentences

$ 1,205 $ 575 $ 123 $ 108

During the nine months ended December 31, 2025, the Company made contributions of approximately $ 10.5 million to its pension plans.

Additional contributions of $ 1.0 million are expected during the remaining three months of fiscal year 2026.

During the three months ended June 30, 2026, the Company made contributions of approximately $ 0.6 million to its pension plans.

Additional contributions of $ 2.8 million are expected during the remaining nine months of fiscal year 2027.

STOCK-BASED COMPENSATION

The Company's shareholders approved the Universal Corporation 2023 Stock Incentive Plan (“Plan”) under which officers, directors, and employees of the Company may receive grants and awards of common stock, restricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”), stock appreciation rights, incentive stock options, and non-qualified stock options.

With the exception of new hires and promotions, the Company’s practice is to award grants of stock-based compensation to officers on an annual basis at the first regularly-scheduled meeting of the Compensation Committee of the Board of Directors (the “Compensation Committee”) in the fiscal year following the public release of the Company’s financial results for the prior fiscal year.

The Compensation Committee administers the Plan consistently, following previously defined guidelines.

Under the Company’s 2023 Stock Incentive Plan (“Plan”) directors, officers, and employees of the Company may receive grants and awards of common stock, restricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”), stock appreciation rights, incentive stock options, and non-qualified stock options.

With the exception of new hires and promotions, the Company’s practice is to award grants of stock-based compensation to officers on an annual basis at the first regularly-scheduled meeting of the Compensation and Human Resources Committee of the Board of Directors (the “Compensation Committee”) in the fiscal year following the public release of the Company’s financial results for the prior fiscal year.

In recent years, the Compensation Committee has awarded only grants of RSUs and PSUs.

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Restricted shares vest upon the individual’s retirement from service as a director.

During the nine-month periods ended December 31, 2025 and 2024, the Company issued the following stock-based awards, representing the regular annual grants to officers and outside directors of the Company:

Nine Months Ended December 31,

During the three-month periods ended June 30, 2026 and 2025, the Company issued the following stock-based awards, representing the regular annual grants to officers and outside directors of the Company:

Three Months Ended June 30,

Number granted 93,352 83,795

5 unchanged sentences

The Company accounts for forfeitures of stock-based awards as they occur.

For the nine-month periods ended December 31, 2025 and 2024, the Company recorded total stock-based compensation expense of approximately $ 9.9 million and $ 7.5 million, respectively.

The Company expects to recognize stock-based compensation expense of approximately $ 0.7 million during the remaining three months of fiscal year 2026.

For the three-month periods ended June 30, 2026 and 2025, the Company recorded total stock-based compensation expense of approximately $ 5.4 million and $ 7.6 million, respectively.

The Company expects to recognize stock-based compensation expense of approximately $ 2.6 million during the remaining nine months of fiscal year 2027.

OPERATING SEGMENTS

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(“FruitSmart”), Silva International, Inc.

and Shank’s Extracts, LLC d/b/a Universal Ingredients–Shank’s (“Universal Ingredients–Shank’s”) are the primary operations for the Ingredients Operations segment.

(“Silva”), and Shank’s Extracts, LLC d/b/a Universal Ingredients–Shank’s (“Universal Ingredients–Shank’s”) are the primary operations for the Ingredients Operations segment.

FruitSmart supplies a broad set of juices, concentrates, pomaces, purees, fruit fibers, seeds, seed powders, and other value-added products to food, beverage, and flavor companies throughout the United States and internationally.

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Reportable segment data as of, or for, each period presented in the consolidated statements of income and comprehensive income, the consolidated balance sheets, and the consolidated statements of cash flows is as follows:

Three Months Ended December 31, 2025 Three Months Ended December 31, 2024

Tobacco Operations Ingredients Operations Consolidated Tobacco Operations Ingredients Operations Consolidated

Sales and other operating revenues $ 779,946 $ 81,342 $ 861,288 $ 853,884 $ 83,309 $ 937,193

Cost of goods sold ( 634,173 ) ( 67,527 ) ( 701,700 ) ( 678,885 ) ( 64,720 ) ( 743,605 )

Selling, general and administrative expenses ( 48,583 ) ( 11,218 ) ( 59,801 ) ( 58,178 ) ( 11,875 ) ( 70,053 )

Corporate overhead allocated to the segments ( 14,403 ) ( 2,723 ) ( 17,126 ) ( 16,404 ) ( 3,055 ) ( 19,459 )

Equity in pretax earnings (loss) of unconsolidated affiliates (1)

1,257 — 1,257 2,149 — 2,149

Segment operating income 84,044 ( 126 ) 83,918 102,566 3,659 106,225

Equity in pretax (earnings) loss of unconsolidated affiliates (1)

( 1,257 ) ( 2,149 )

Restructuring and impairment costs (2)

Consolidated total $ 81,950 $ 104,076

Nine Months Ended December 31, 2025 Nine Months Ended December 31, 2024

Three Months Ended June 30, 2026 Three Months Ended June 30, 2025

Tobacco Operations Ingredients Operations Consolidated Tobacco Operations Ingredients Operations Consolidated

5 unchanged sentences

510 — 510 2,435 — 2,435

Segment operating income 184,962 1,414 186,376 194,354 7,903 202,257

Segment operating income (loss) 3,466 ( 660 ) 2,806 35,670 1,700 37,370

Equity in pretax (earnings) loss of unconsolidated affiliates (1)

1 unchanged sentence

Restructuring and impairment costs (2)

( 1,833 ) ( 10,573 )

Consolidated operating income $ 2,296 $ 33,813

3 unchanged sentences

Segment Assets Accounts Receivable, net

2025 December 31,

2026 June 30,

2025 March 31,

2025 December 31,

2026 June 30,

2025 March 31,

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Goodwill, net Intangibles, net

2025 December 31,

2026 June 30,

2025 March 31,

2025 December 31,

2026 June 30,

2025 March 31,

3 unchanged sentences

Capital Expenditures Depreciation and Amortization

Nine Months Ended December 31, Nine Months Ended December 31,

Three Months Ended June 30, Three Months Ended June 30,

2026 2025 2026 2025

3 unchanged sentences

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) attributable to the Company for the nine months ended December 31, 2025 and 2024:

Nine Months Ended December 31,

Three Months Ended June 30,

(in thousands of dollars) 2026 2025

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Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $( 7 ) and $ 363 ) (2)

( 2,886 ) ( 3,565 )

Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes 3,064 ( 2,264 )

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Amortization included in earnings (net of tax expense (benefit) of $( 44 ) and $ 38 ) (3)

( 665 ) ( 898 )

Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes 113 ( 361 )

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CHANGES IN SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS IN SUBSIDIARIES

A reconciliation of the changes in Universal Corporation shareholders’ equity and noncontrolling interests in subsidiaries for the three and nine months ended December 31, 2025 and 2024 is as follows:

Three Months Ended December 31, 2025 Three Months Ended December 31, 2024

A reconciliation of the changes in Universal Corporation shareholders’ equity and noncontrolling interests in subsidiaries for the three months ended June 30, 2026 and 2025 is as follows:

Three Months Ended June 30, 2026 Three Months Ended June 30, 2025

(in thousands of dollars) Universal Corporation Non-controlling Interests Total Universal Corporation Non-controlling Interests Total

1 unchanged sentence

Changes in common stock

Repurchase of common stock ( 723 ) — ( 723 ) — — —

Accrual of stock-based compensation 5,378 — 5,378 7,575 — 7,575

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Common stock ( 20,699 ) — ( 20,699 ) ( 20,406 ) — ( 20,406 )

Dividend equivalents on RSUs ( 199 ) — ( 199 ) ( 305 ) — ( 305 )

Other comprehensive income (loss) ( 998 ) ( 141 ) ( 1,139 ) ( 10,449 ) ( 373 ) ( 10,822 )

Other changes in noncontrolling interests

Dividends paid to noncontrolling shareholders

— — — — ( 3,920 ) ( 3,920 )

Balance at end of period $ 1,482,808 $ 42,366 $ 1,525,174 $ 1,450,610 $ 41,302 $ 1,491,912

Nine Months Ended December 31, 2025 Nine Months Ended December 31, 2024

(in thousands of dollars) Universal Corporation Non-controlling Interests Total Universal Corporation Non-controlling Interests Total

Balance at beginning of year $ 1,458,556 $ 41,982 $ 1,500,538 $ 1,437,207 $ 41,716 $ 1,478,923

Changes in common stock

Accrual of stock-based compensation 9,839 — 9,839 7,457 — 7,457

Withholding of shares from stock-based compensation for grantee income taxes

( 8,067 ) — ( 8,067 ) ( 3,715 ) — ( 3,715 )

Dividend equivalents on RSUs 728 — 728 905 — 905

Changes in retained earnings

Net income 75,915 14,843 90,758 85,709 13,232 98,941

Cash dividends declared

( 61,278 ) — ( 61,278 ) ( 60,028 ) — ( 60,028 )

Repurchase of common stock ( 2,023 ) — ( 2,023 ) — — —

Dividend equivalents on RSUs ( 225 ) — ( 225 ) ( 314 ) — ( 314 )

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements