Universal (UVV) investor relations material

Executive summary

• Operating income rose to $33.8M, nearly doubling year-over-year, driven by a 147% increase in Tobacco Operations segment income, despite a slight revenue decline to $594M.

• Tobacco Operations benefited from a favorable product mix and higher prices, offsetting lower sales volumes and reduced carryover shipments.

• Ingredients Operations revenue grew 5% to $89.1M with higher sales volumes, but segment income fell 42% due to less favorable mix, tariff impacts, and higher fixed costs.

• Net income attributable to shareholders was $8.5M ($0.34/share), up from $0.1M ($0.01/share) year-over-year; adjusted net income was $9.6M ($0.38/share).

• Uncommitted tobacco inventory remained low at 11% as of June 30, 2025, reflecting strong customer demand.

Financial highlights

• Sales and operating revenues were $593.8M, down $3.3M year-over-year, mainly from lower carryover crop tobacco sales.

• Gross profit margin improved to 19.2% from 16.1% year-over-year.

• Operating income was $33.8M, up from $17.2M year-over-year, driven by tobacco segment mix.

• Cost of goods sold decreased 4% to $479.6M, mainly due to lower sales volumes and product mix.

• Interest expense declined 14% to $17.8M, reflecting lower interest rates.

Outlook and guidance

• Flue-cured and burley tobacco crop sizes (excluding China) are expected to increase by 25% and 45%, respectively, in FY2026, leading to likely oversupply by year-end.

• Margin pressure anticipated in tobacco segment due to larger global crops and potential price declines, but higher volumes may offset per-unit costs.

• Focus remains on organic growth in Ingredients Operations and maximizing tobacco business performance for fiscal 2026.

• Capital expenditures expected to be $45–$55M over the next twelve months for maintenance and growth projects.

• Available capital resources are expected to exceed working capital and capital expenditure needs over the next year.