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Get filing alertsStanding Risk Factors
- Goodwill Impairment (unchanged) — Company recorded $41.1M charge to fully write off Shank's goodwill in Q4 FY2026, reflecting slower-than-anticipated sales growth and persistent customer market headwinds.
- Material Weakness (improved) — Material weakness in tobacco inventory controls at one subsidiary was remediated during FY2026; auditor opinion changed from adverse to unqualified.
revenue $2.89B, net income $32.6M. Universal Corp operating income falls 28% on inventory write-downs and Shank's impairment
Filed June 1, 2026 · Period ending March 31, 2026 · Compared to 10-K May 30, 2025 · ~2 min read
Key Financials
SEC XBRL| Metric | PriorMar 31, 2025 | CurrentMar 31, 2026 | Δ |
|---|---|---|---|
| Revenue | $2.92B | $2.89B | ▼ -1.3% |
| Net income | $95.0M | $32.6M | ▼ -65.7% |
| Diluted EPS | $3.78 | $1.30 | ▼ -65.6% |
| Operating income | $232.8M | $168.5M | ▼ -27.6% |
| Cash & equivalents | $260.1M | $62.2M | ▼ -76.1% |
| Long-term debt (noncurrent) | $617.9M | $616.7M | ▼ -0.2% |
| Total assets | $2.99B | $2.77B | ▼ -7.5% |
As reported in XBRL by the filer · 10-K vs 10-K. Income figures cover the fiscal year; cash & assets are period-end balances. n/m = not meaningful (sign change; a % would mislead). about this table · verify on EDGAR →
Key Number Changes
Prior filing · verify on EDGAR →
We generated approximately $2,947.3 million in consolidated revenues and earned $232.8 million in total operating income and $252.5 million in total segment operating income in fiscal year 2025.
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We generated approximately $2.9 billion in consolidated revenues and earned $168.5 million in total operating income and $214.8 million in total segment operating income in fiscal year 2026.
Prior filing · verify on EDGAR →
As of March 31, 2025, we employed more than 28,500 employees, operating in over 30 different countries across five continents. Approximately 60% of our employees are seasonal and approximately 40% are full-time employees. Almost 50% of our employees are female and more than 20% of our managers are female. Globally, Universal has 13 collective bargaining agreements in place, covering approximately 40% of our workforce.
Current filing · verify on EDGAR →
As of March 31, 2026, we employed more than 25,000 employees, operating in over 30 different countries across five continents. Approximately 55% of our employees are seasonal and approximately 45% are full-time employees. Almost 42% of our employees are female and more than 23% of our managers are female. Globally, Universal has 13 collective bargaining agreements in place, covering approximately 30% of our workforce.
Key Changes
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high
Operating income declined 28% to $168.5M as tobacco inventory write-downs surged $24.7M to $43.4M (driven by soft demand for dark air-cured styles) and Ingredients segment recorded $8.6M in write-downs at Shank's.
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high
Company took $41.1M non-cash goodwill impairment charge to fully write off Shank's goodwill, citing slower-than-anticipated sales growth, high fixed costs from expansion investments, and persistent customer market headwinds including tariff impacts.
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high
Material weakness in tobacco inventory controls at one subsidiary remediated during FY2026; auditor opinion changed from adverse to unqualified, restoring effective internal control over financial reporting.
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medium
Uncommitted tobacco inventories rose to 27% of total (vs. 20% prior year), exceeding the 80%-committed target due to delayed customer purchase commitments; management expects return to target range during FY2027.
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medium
New $780M revolving credit facility (up from $530M) and two term loans totaling $620M provide substantially greater liquidity cushion; available committed credit increased to $730M from $270M.
Summary
Universal Corp's FY2026 results reflect operational headwinds across both segments. Operating income fell 28% to $168.5M as tobacco inventory write-downs surged to $43.4M (up $24.7M year-over-year), driven primarily by soft demand for non-wrapper dark air-cured tobacco and the longer sales cycles characteristic of that product.
The Ingredients segment took an additional $8.6M in write-downs and a $41.1M non-cash goodwill impairment to fully write off Shank's, citing slower-than-anticipated sales growth, high fixed costs from the Lancaster facility expansion, and persistent customer market headwinds including tariff impacts and softness in the consumer-packaged-goods sector.
Uncommitted tobacco inventories rose to 27% of total inventory (vs. 20% prior year), exceeding the company's 80%-committed target due to delayed customer purchase commitments; management expects levels to normalize during FY2027. On the positive side, the company remediated the material weakness in tobacco inventory controls at one subsidiary that had triggered an adverse auditor opinion in FY2025, restoring effective internal control over financial reporting. The company also refinanced its credit facilities in December 2025, securing a new $780M revolving facility (up from $530M) and two term loans totaling $620M, substantially increasing liquidity cushion. A long-standing Brazil VAT dispute was resolved favorably in July 2025, removing a contingent liability disclosed for over a decade. Watch for FY2027 whether uncommitted tobacco inventory levels return to the 80%-committed target range, whether Ingredients segment operating margins stabilize post-impairment, and whether the expanded credit facility supports working capital needs as tobacco purchasing patterns normalize. Full-year results not summarized above: revenue of $2.89B against $2.92B a year earlier, net income of $32.6M against $95.0M a year earlier, and diluted EPS of $1.30 against $3.78 a year earlier.
Section-by-Section Diff
Business
Business description largely unchanged; minor updates to subsidiary names, workforce figures, sustainability metrics, and health/safety language.
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We generated approximately $2,947.3 million in consolidated revenues and earned $232.8 million in total operating income and $252.5 million in total segment operating income in fiscal year 2025.
Current filing · verify on EDGAR →
We generated approximately $2.9 billion in consolidated revenues and earned $168.5 million in total operating income and $214.8 million in total segment operating income in fiscal year 2026.
Consolidated revenues declined slightly from $2,947.3 million to approximately $2.9 billion. Total operating income fell 28% from $232.8 million to $168.5 million, and total segment operating income declined from $252.5 million to $214.8 million. These are material year-over-year declines in profitability.
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As of March 31, 2025, we employed more than 28,500 employees, operating in over 30 different countries across five continents. Approximately 60% of our employees are seasonal and approximately 40% are full-time employees. Almost 50% of our employees are female and more than 20% of our managers are female. Globally, Universal has 13 collective bargaining agreements in place, covering approximately 40% of our workforce.
Current filing · verify on EDGAR →
As of March 31, 2026, we employed more than 25,000 employees, operating in over 30 different countries across five continents. Approximately 55% of our employees are seasonal and approximately 45% are full-time employees. Almost 42% of our employees are female and more than 23% of our managers are female. Globally, Universal has 13 collective bargaining agreements in place, covering approximately 30% of our workforce.
Total headcount declined from more than 28,500 to more than 25,000 employees. The seasonal/full-time mix shifted from 60%/40% to 55%/45%. Female representation among all employees declined from almost 50% to almost 42%, while female representation among managers increased from more than 20% to more than 23%. Collective bargaining coverage declined from approximately 40% to approximately 30% of the workforce. These changes reflect workforce composition shifts, likely driven by the seasonal nature of the business and operational adjustments.
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This fiscal year we created the role of Chief Human Resources Officer to further strengthen Universal’s organizational capabilities. Reporting directly to our Chief Executive Officer, the Chief Human Resources Officer provides strategic direction and oversight for our global human resources function and human capital management programs, supporting the development, engagement, and long-term success of our workforce.
The company created a new Chief Human Resources Officer role during fiscal 2026, reporting directly to the CEO. This is a new senior leadership position focused on global HR strategy and human capital management, signaling increased organizational focus on workforce development and engagement.
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Universal’s climate transition plan includes reducing fossil fuel use, purchasing renewable forms of electricity, and enhancing operational efficiencies throughout our operations and value chain. These actions support the Company’s goal of reaching net-zero greenhouse gas (“GHG”) emissions across the value chain by 2050. Universal is actively transitioning to cleaner fuels around the world. Diesel and coal fuels are being replaced with electricity and biomass where possible to reduce our GHG emissions footprint. Renewable energy plays a significant role in our journey to net-zero, so we have developed plans to purchase Renewable Energy Credits where possible and have signed a Virtual Power Purchase Agreement (“VPPA”) for solar-powered energy that we expect to reduce our total scope 1 and 2 emissions in North America by 45%.
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Universal’s climate transition plan includes reducing fossil fuel use, purchasing renewable forms of electricity, and enhancing operational efficiencies throughout our operations and value chain. To align our carbon reduction strategy with industry standards, we updated our emissions reduction goals and received approval of near-term, long-term and net zero ... emissions targets from the Science Based Target Initiative (SBTI) during 2025. These actions support the Company’s goal of reaching net-zero greenhouse gas emissions across the value chain by 2050.
The SBTI approval is a new disclosure; the removal of the VPPA and fuel-switching details is consistent with lifecycle removal of completed initiatives that are now part of the operating run-rate.
Show 20 minor / wording changes
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strengthening our organization
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strengthening our Company for the future
The third strategic pillar was reworded from "strengthening our organization" to "strengthening our Company for the future." The current filing also adds "including artificial intelligence ("AI")" to the list of technology initiatives under this pillar. These are descriptive updates to the strategy narrative, not announcements of new strategic actions or capital allocations.
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Universal Global Ventures, Incorporated
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Universal Ingredients, Inc. (“Universal Ingredients”) (formerly Universal Global Ventures, Incorporated)
The Ingredients Operations subsidiary was renamed from Universal Global Ventures, Incorporated to Universal Ingredients, Inc. The filing notes the former name parenthetically. This is a corporate housekeeping change reflecting the platform branding.
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We contract directly with farmers and farmer organizations in many of the countries in which we operate.
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We contract directly with farmers and farmer organizations in most of the countries in which we operate.
The description of farmer contracting was broadened from "many" to "most" countries. This is a descriptive update to the geographic scope of direct contracting, not a disclosure of a new contracting initiative or expansion.
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We strategically invested in established companies with strong financial records. These businesses operate in different markets (fruits, vegetables, and flavors) and offer value-added services that can apply broadly to multiple parts of our Ingredients Operations to better meet our customers’ needs for unique, plant-based ingredients. By diversifying our portfolio in the ingredients space through the acquisitions of FruitSmart, Inc. (“FruitSmart”), Silva International, Inc. (“Silva”), and Shank’s Extracts, LLC d/b/a Universal Ingredients–Shank’s (“Universal Ingredients–Shank’s”), we are positioned to deliver customizable products and solutions to our customers.
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The Universal Ingredients platform has been built through strategic investments in established businesses with strong operating histories and complementary capabilities across fruits, vegetables, and flavorings. Our primary subsidiaries – FruitSmart, Inc. (“FruitSmart”), Silva International, Inc. (“Silva”), and Shank’s Extracts, LLC d/b/a Universal Ingredients–Shank's (“Universal Ingredients–Shank’s”) – operate in distinct but highly complementary categories. Collectively, these businesses enable the delivery of integrated, customized solutions that leverage sourcing, processing, and product development capabilities across the platform.
The Ingredients Operations overview was rewritten to emphasize "strong operating histories and complementary capabilities" rather than "strong financial records" and "diversifying our portfolio." The new language frames the platform as delivering "integrated, customized solutions" across sourcing, processing, and product development. This is a descriptive update to how the platform is characterized, not a disclosure of new operational integration or strategic repositioning.
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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. Its top products are not-from-concentrate apple juice as well as apple, blueberry, concord grape, and raspberry juice concentrates. We believe that FruitSmart is well positioned to benefit from growing consumer preferences for better-for-you premium ingredients, including custom blends, not-from-concentrate and dry products, and strong growth in targeted end markets including ciders, purees and nutraceuticals. FruitSmart is headquartered in the Yakima Valley in Washington State and has approximately 200 employees. FruitSmart operates two separate manufacturing facilities: one that produces liquid products and one that produces dry products. In fiscal year 2025, FruitSmart embarked on several automation projects that utilize robotics to increase efficiency, enhance capacity, and increase health and safety protocols.
Current filing · verify on EDGAR →
FruitSmart supplies a diversified portfolio of fruit- and vegetable-based ingredients to customers in the United States and international markets, including juices, concentrates, essences, purees, pomaces, fibers, seeds, and seed-based products. Core offerings include not-from-concentrate apple juice and a range of juice concentrates, including apple, blueberry, Concord grape, and raspberry. Headquartered in the Yakima Valley in Washington State, FruitSmart operates separate liquid and dry production facilities. The business focuses on operational efficiency, capacity utilization, and health and safety initiatives, while positioning its portfolio of products to benefit from increasing demand for premium, better-for-you, and functional ingredients.
The FruitSmart description was updated to remove the employee count (approximately 200) and the reference to fiscal 2025 automation/robotics projects. The new text emphasizes "operational efficiency, capacity utilization, and health and safety initiatives" and "increasing demand for premium, better-for-you, and functional ingredients" in more general terms. The prior-year automation projects are no longer mentioned, consistent with lifecycle removal of completed initiatives.
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Silva procures over 60 types of dehydrated vegetables, fruits, and herbs from over 20 countries around the world and specializes in processing natural materials into custom designed dehydrated vegetable and fruit-based ingredients for a variety of end products.
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Silva procures over 70 types of dehydrated vegetables, fruits, and herbs and spices from over 20 countries around the world and specializes in processing natural materials into dehydrated vegetable- and fruit-based ingredients tailored for a range of food applications.
Silva's product sourcing was updated from "over 60 types" to "over 70 types," and the category was expanded from "herbs" to "herbs and spices." The description of output changed from "custom designed" ingredients "for a variety of end products" to ingredients "tailored for a range of food applications." These are descriptive updates reflecting portfolio breadth, not announcements of new product lines or strategic shifts.
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Headquartered in Momence, Illinois, Silva employs over 200 people and has a 380,000 square foot manufacturing facility. Silva has established a reputation as the go-to provider of clean, natural, specialty dehydrated vegetable and fruit-based ingredients due to its unique competencies and significant capacity to source, process, and manufacture materials. Silva also has longstanding relationships with suppliers and their farmers around the world and maintains strong quality control procedures to ensure a consistent, high-quality supply of ingredients.
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Headquartered in Momence, Illinois, Silva operates a large-scale manufacturing facility and maintains strong supplier relationships and quality control processes to support consistent, high-quality supply of ingredients. Silva has established a strong position in clean-label, natural, and specialty dehydrated ingredients, providing solutions for diverse applications in the human food industry as well as the pet food market.
The Silva facility description was updated to remove the employee count (over 200) and the specific square footage (380,000 sq ft), replacing them with "large-scale manufacturing facility." The characterization of market position changed from "reputation as the go-to provider" to "established a strong position," and the reference to "unique competencies and significant capacity" was replaced with "strong supplier relationships and quality control processes." These are descriptive edits, not disclosures of operational changes.
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Universal Ingredients–Shank’s offers a diversified portfolio of over 2,400 botanical extracts, distillates, natural flavors, and colors for industrial and private label customers worldwide, and is known for significant vanilla expertise. Universal Ingredients–Shank’s is also equipped to offer customers custom bottling and packaging for their products. Universal Ingredients–Shank’s employs more than 300 people at their 194,000 square foot manufacturing campus in Lancaster, Pennsylvania. In fiscal year 2025, Universal completed a major expansion project at the Lancaster, Pennsylvania facility. The project added an industry-leading combination of extraction, blending, and aseptic packaging. The investment also added refrigerated storage and enhanced capabilities to support additional customer demand and growth into new product categories and markets.
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Universal Ingredients–Shank’s provides a diversified portfolio of botanical extracts, distillates, natural and artificial flavors, and colors for industrial and private label customers worldwide, with particular expertise in vanilla. The business also offers custom formulation, bottling, and packaging services. The manufacturing campus in Lancaster, Pennsylvania includes extraction, blending, and aseptic processing and packaging capabilities, supported by refrigerated storage and expanded production capacity. Recent investments in this facility have enhanced the business’s ability to serve growth categories, including beverages, food service, and specialty applications, while enabling greater innovation and speed to market.
The Shank's description was updated to remove the product count (over 2,400), employee count (more than 300), and facility square footage (194,000 sq ft). The reference to the fiscal 2025 expansion project was replaced with "Recent investments in this facility have enhanced..." in more general terms. The completed expansion is no longer described as a discrete event, consistent with lifecycle removal of completed capital projects.
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To support Universal Ingredients, we have invested in building out our sales, marketing and product development teams focused on creating value across the entire platform. This platform-level support enables us to deliver unique, custom products to our customers. Our research and development function includes highly trained food scientists and professionals who are skilled in the creation of various food and beverages to showcase the value of our ingredients. Some examples of the concepts developed by our research and development group include ready-to-drink teas and coffees, carbonated soft drinks, nutritional smoothies, and bakery items. The commercial sales team consists of seasoned sales professionals who work closely with the research and development team. This platform team is tasked with becoming subject matter experts on the entire suite of products to help leverage the full potential of the ingredients portfolio and drive earnings growth. Longer term, we believe we will be able to enhance our overall product offerings and achieve significant operational synergies by leveraging Universal’s existing global sourcing capabilities, strong relationships with our farmer base, and agronomic expertise.
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To support the continued growth of Universal Ingredients, we have made investments in centralized sales, marketing, and product development capabilities that operate across the platform. Our research and development team, including our product development lab in Lancaster, Pennsylvania, is staffed with food scientists and technical professionals who collaborate with customers to develop and commercialize new products. These capabilities support a wide range of applications, including ready-to-drink beverages, coffees, teas, carbonated beverages, nutritional products, and bakery items. Our teams work closely with our research and development professionals to provide integrated solutions and to leverage the full breadth of the platform’s capabilities in bringing products to market.
The R&D and sales description was rewritten to emphasize "centralized" capabilities and "collaborate with customers to develop and commercialize new products" rather than "building out" teams and "drive earnings growth." The forward-looking statement about achieving "significant operational synergies" was removed. These are descriptive updates to how the platform's capabilities are characterized, not disclosures of new organizational structures or synergy targets.
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Our Ingredients Operations primarily service the food and beverage industry, which is diverse and encompasses a variety of companies that cater to different market segments. These companies can range from small, privately held regional food and beverage brands to multinational food and beverage companies. The food and beverage market is segmented into many different categories including retailers, food service providers, consumer packaged goods companies, and beverage companies. Silva also has a large presence in the pet food market. With our most recent investments in our Lancaster, Pennsylvania facility, we will be focusing heavily on the food service, beverage and casual dining markets. Our investment in the research and development function in Lancaster, Pennsylvania, supports our ability to meet the demands of such a large and diverse group of customers.
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Our Ingredients Operations primarily serve the food and beverage industry, including multinational consumer packaged goods companies, food service providers, beverage manufacturers, and retailers, as well as regional and specialty brands. These customers operate across diverse end-markets and applications, spanning a wide range of distribution channels. Many customers across these end-markets place value on research and development, application expertise, and collaborative product innovation. To support these needs and anticipated growth, our recent investments, particularly in the Lancaster, Pennsylvania facility, have expanded our research and development and application capabilities, as well as production capacity in beverage, food service, and related channels. These investments enhance the platform’s ability to support customized formulations, rapid product development, and reinforce readiness to meet evolving customer demand over time.
The customer base description was rewritten to emphasize "multinational consumer packaged goods companies, food service providers, beverage manufacturers, and retailers" and "diverse end-markets and applications." The reference to Silva's "large presence in the pet food market" was moved to the Silva-specific section. The forward-looking statement "we will be focusing heavily on the food service, beverage and casual dining markets" was replaced with "recent investments... have expanded our research and development and application capabilities." These are descriptive updates, not announcements of new customer wins or market-entry strategies.
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Only around 4.8% of our employees are located in the United States.
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Less than 5% of our employees are located in the United States.
The U.S. employee percentage was updated from "around 4.8%" to "Less than 5%." This is a rounding/presentation change, not a material shift in geographic workforce distribution.
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The Compensation and Human Resources Committee oversees administration of the Company’s human resource programs and has oversight of compensation, benefits, and retention and development processes of senior management, including an annual review of the Company’s succession planning and leadership development program.
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The Compensation and Human Resources Committee oversees administration of the Company’s human resource programs, including with respect to talent management, succession planning, and performance management.
The description of the Compensation and Human Resources Committee's scope was streamlined to emphasize "talent management, succession planning, and performance management" rather than the more detailed list of "compensation, benefits, and retention and development processes of senior management, including an annual review of the Company's succession planning and leadership development program." This is a descriptive update to how the committee's role is characterized, not a change in committee charter or responsibilities.
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The Code and Manual have been translated into 16 languages and apply directly to all officers, directors, and non-seasonal employees in the Universal family of companies.
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The Code and Manual have been translated into 16 languages and apply directly to all officers, directors, and employees in the Universal family of companies.
The Code of Conduct and Anti-Corruption Compliance Manual now apply to "all officers, directors, and employees" rather than "all officers, directors, and non-seasonal employees." This expands the explicit applicability to include seasonal employees, reflecting broader compliance coverage.
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an anonymous compliance hotline that we maintain globally. Our compliance hotline is available to all our employees and any other interested parties 24 hours a day, 7 days a week, by internet or phone.
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an anonymous compliance line that we maintain globally. Our compliance line is available to all our employees and any other interested parties 24 hours a day, 7 days a week, by internet or phone.
The term "compliance hotline" was changed to "compliance line" throughout. This is a terminology update, not a change in the compliance reporting mechanism or its availability.
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Our Board of Directors believes that human capital management is an important component of our continued growth and success ... The Board of Directors oversees our global compliance program and receives reports from our Chief Compliance Officer at each quarterly Board of Directors meeting.
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Our Board of Directors (“Board”) believes that human capital management is an important component of our continued growth and success ... The Board oversees our global compliance program and receives reports from our Chief Compliance Officer at each quarterly Board meeting.
The filing now uses the defined term "Board" consistently after the first reference, rather than repeating "Board of Directors" throughout. This is a stylistic update for readability, not a governance change.
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The health and safety of our employees is at the forefront of our business efforts. We are committed to the prevention of injury and illness in the workplace through strong health and safety management, employee empowerment and accountability, and strict compliance with health and safety regulations. Our programs are designed to influence our Company’s culture through employee engagement and leadership behavior. We pair our health and safety management system with a strong database reporting tool to allow all Universal facilities to track their local occupational health and safety performance and that of the entire company. These reports allow our global teams to analyze the insights collected from our health and safety system immediately to support compliance and promote continuous improvement.
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The health and safety of our employees, contractors, and visitors is a core business priority and a fundamental component of Universal’s risk management framework. Universal is committed to preventing work-related injuries and illnesses through a structured health and safety management system that emphasizes leadership accountability, employee participation, and compliance with applicable laws and requirements. Health and safety expectations are embedded into operational decision-making and reinforced through governance, performance monitoring, and continual improvement processes. Our health and safety management system is designed to strengthen organizational safety culture by establishing clear expectations for leadership behavior, empowering employees to identify and address hazards, and reinforcing accountability at all levels of the organization. Standardized reporting and performance tracking tools enable facilities to monitor local performance while providing corporate leadership with timely, comparable insights across operations. This approach supports the identification of emerging risks, prioritization of corrective actions, and effective allocation of resources to reduce exposure and prevent harm.
The health and safety section was significantly expanded and rewritten to emphasize "core business priority," "risk management framework," "leadership accountability," and "governance, performance monitoring, and continual improvement processes." The new language is more formal and structured, framing health and safety as a management system rather than a set of programs. The scope was also expanded to include "contractors, and visitors" in addition to employees. These are descriptive updates to how the health and safety program is characterized, not disclosures of new policies or incidents.
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Additionally, we utilize other health and safety initiatives to ensure our facilities remain safe for our employees. We established health and safety metrics across our tobacco factory and agronomy operations. Each factory carries out an in-depth data analysis of prior data and implements health and safety metrics for improvement and monitoring. By giving employees a goal to achieve and monitor, they will be more engaged in what they do and better able to help us succeed. Our “fresh eyes” approach to workplace safety involves inviting colleagues from different facilities to share in cross-auditing tasks. In addition to corporate audits, we encourage this regional cross-auditing to promote a collaborative framework and drive our employee safety programs forward.
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To support continuous improvement, key health and safety performance measures have been established across our tobacco processing and agronomy operations. We regularly evaluate historical performance, identify site-specific risk drivers, and implement measurable objectives. These measures are designed to support informed decision-making, strengthen prevention efforts, and promote accountability and long-term risk reduction. Performance is reviewed through established governance processes to ensure alignment with corporate expectations and to inform ongoing improvement planning. Assurance and shared learning are reinforced through corporate audits and regional cross-auditing initiatives. Our “fresh eyes” approach brings together employees from different locations to participate in peer reviews, promoting consistency, collaboration, and the exchange of best practices. This approach complements formal audits, broadens organizational perspective, and reinforces shared responsibility for safety performance across the organization.
The health and safety metrics and auditing description was rewritten to emphasize "continuous improvement," "measurable objectives," "governance processes," and "shared responsibility" rather than "giving employees a goal to achieve and monitor" and "help us succeed." The "fresh eyes" approach is now described as bringing together employees for "peer reviews" that "complement formal audits" and "broaden organizational perspective." These are descriptive updates to how the health and safety program is characterized, not disclosures of new metrics or audit findings.
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Legal compliance is a fundamental aspect of our health and safety practices. Universal companies seek to adhere to full compliance with health and safety laws and regulations and cooperate with local authorities to maintain strong health and safety programs. As part of our commitment to a robust supply chain, our policies require our suppliers and partners to uphold healthy and safe work environments in compliance with all relevant regulations.
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Legal compliance remains a foundational requirement of our health and safety program. Universal companies are expected to comply with applicable occupational health and safety laws and regulations and to cooperate with regulatory authorities in maintaining effective and compliant programs. As part of our broader commitment to a responsible and resilient supply chain, our policies require suppliers and business partners to provide healthy and safe working environments and to meet applicable legal and contractual health and safety requirements. Through governance, monitoring, and engagement, we seek to apply health and safety expectations consistently across our operations and supply chain, supporting sustained improvement and long-term value creation.
The legal compliance and supply chain language was updated to emphasize "foundational requirement," "expected to comply," "responsible and resilient supply chain," and "governance, monitoring, and engagement" rather than "seek to adhere to full compliance" and "robust supply chain." The new language is more formal and structured, framing compliance as an expectation rather than an aspiration. These are descriptive updates to how the health and safety program is characterized, not disclosures of new compliance issues or supply chain incidents.
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Universal released our 2024 Sustainability Report in December 2024, highlighting our efforts in strengthening supply chain resiliency, maintaining our strong partnerships with our farming communities, and advancing energy efficiency. Responsible business practices are integrated into Universal’s business strategy. As disclosed in our 2024 Sustainability Report, we continued to support our supply chain sustainability goals and substantially met our existing targets of zero child labor, appropriate labor accommodations, farm worker minimum wage payments, and personal protective equipment access. Our leaf technicians made over 1.8 million visits to more than 175,000 contracted farmers to maintain our visibility and traceability in our supply chain. Our operations continue to enhance transparency and collaboration with our stakeholders by reporting to the Sustainable Tobacco Program and training over 175,000 farmers on GAP and ALP to advance environmental and human rights best practices throughout our contracted farmer base.
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Universal released our 2025 Sustainability Report in January 2026, highlighting our efforts in reducing emissions, conserving resources, advancing fair labor practices, and improving farmer livelihoods. Responsible business practices are integrated into Universal’s business strategy. As disclosed in our 2025 Sustainability Report, we continued to support our supply chain sustainability goals and achieve measurable results across key environmental and social priorities. Our leaf technicians made over 2 million visits to more than 200,000 contracted farmers to maintain our visibility and traceability in our supply chain. Our operations continue to enhance transparency and collaboration with our stakeholders by reporting to the Sustainable Tobacco Program and training over 200,000 farmers on GAP and ALP to advance environmental and human rights best practices throughout our contracted farmer base.
The 2025 Sustainability Report (released January 2026) replaced the 2024 report (released December 2024). Leaf technician visits increased from over 1.8 million to over 2 million, and contracted farmers increased from more than 175,000 to more than 200,000. Farmers trained on GAP and ALP increased from over 175,000 to over 200,000. The reference to "substantially met our existing targets of zero child labor, appropriate labor accommodations, farm worker minimum wage payments, and personal protective equipment access" was removed. These are annual sustainability metric updates, consistent with the reporting cycle.
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Our balance sheet at our fiscal year end reflects seasonal expansions in working capital in South America and Central America.
The sentence "Our balance sheet at our fiscal year end reflects seasonal expansions in working capital in South America and Central America" was removed from the Seasonality section. This is a descriptive detail about the timing of working capital peaks; its removal does not indicate a change in the underlying seasonal pattern, which is still described in the surrounding text.
Controls
Material weakness in inventory controls at tobacco subsidiary remediated; disclosure controls now effective after prior-year adverse opinion.
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Based on this evaluation, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, concluded that, as a result of the material weakness in the Company’s internal control over financial reporting described below, the Company’s disclosure controls and procedures were not effective as of March 31, 2025.
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Based on this evaluation, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2026.
Management concluded disclosure controls were effective as of March 31, 2026, reversing the prior-year ineffective conclusion. The baseline filing stated controls were not effective due to the material weakness in inventory controls at a tobacco subsidiary.
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Based on this assessment, the Company’s management concluded that the Company’s internal control over financial reporting was not effective at the reasonable assurance level as of March 31, 2025, due to the material weakness described under “New Material Weakness” below.
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Based on this assessment, the Company’s management concluded that the Company’s internal control over financial reporting was effective at the reasonable assurance level as of March 31, 2026.
Management concluded internal control over financial reporting was effective as of March 31, 2026, reversing the prior-year ineffective conclusion. The baseline filing stated controls were not effective due to a material weakness in inventory controls at a tobacco subsidiary.
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To remediate the material weakness described above, the Company successfully implemented the following remediation steps at the tobacco subsidiary: 1.Required enhanced documentation associated with management review controls and validation of the completeness and accuracy of key reports used across the inventory process, including physical inventory counts. 2.Designed and implemented additional reports to be utilized in inventory reconciliation controls at the subsidiary. Based on management’s evaluation of the effectiveness of the Company’s internal controls as of March 31, 2026, management concluded that the previously identified material weakness had been successfully remediated as of March 31, 2026.
The company successfully remediated the material weakness in inventory controls at a tobacco subsidiary during fiscal 2026. Remediation included enhanced documentation of management review controls and implementation of additional inventory reconciliation reports. The baseline filing had disclosed a remediation plan but had not yet completed it.
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The Company’s independent registered public accounting firm, Ernst & Young LLP, audited the Company’s internal control over financial reporting as of March 31, 2025. The material weakness identified by the Company’s management resulted in Ernst & Young LLP issuing an adverse opinion on the effectiveness of the Company’s internal control over financial reporting as of March 31, 2025.
The baseline filing disclosed that Ernst & Young issued an adverse opinion on internal control effectiveness as of March 31, 2025 due to the material weakness. The current filing no longer contains adverse-opinion language, consistent with the remediation of the material weakness.
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New Material Weakness As noted above, the Company’s management concluded that the Company’s internal control over financial reporting was not effective as of March 31, 2025 as a result of certain control deficiencies that were determined to constitute a material weakness in its internal control over financial reporting. Specifically, the Company’s management determined that the internal controls at one of the Company’s tobacco subsidiaries were not effectively documented and executed to ensure that the existence of all dark air-cured tobacco inventories subject to physical inventory counts were appropriately counted, and that the controls related to the compilation and reconciliation of the related inventory to ensure complete and accurate reporting of inventory in the consolidated financial statements were not effective.
The baseline filing contained a "New Material Weakness" section describing inventory control deficiencies at a tobacco subsidiary. This section is absent from the current filing because the weakness was remediated during fiscal 2026.
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Remediation Plan for New Material Weakness To remediate the new material weakness described above, the Company will implement the following remediation steps at the tobacco subsidiary: 1.Require enhanced documentation associated with management review controls and validation of the completeness and accuracy of key reports used across the inventory process, including physical inventory counts. 2.Design and implement additional reports to be utilized in inventory reconciliation controls at the subsidiary. The Company believes these measures, once they have operated effectively for a sufficient period of time, will remediate the control deficiencies identified and strengthen its internal control over financial reporting. However, there may not be sufficient time for the Company to remediate the material weakness or, if remediated, to test the operating effectiveness of the remediated controls as of the Company’s next fiscal year end.
The baseline filing contained a forward-looking remediation plan for the inventory control material weakness. The current filing replaces this with a completed-remediation disclosure, confirming the plan was executed and the weakness was cured.
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Remediation of Previously Disclosed Material Weakness As previously disclosed under “Item 9A – Controls and Procedures” in Amendment No. 1 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended March 31, 2024, in August 2024, shortly before filing the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, the Company’s management was made aware of embezzlement by a former senior finance employee at the Company’s Mozambique subsidiary, Mozambique Leaf Tobacco Ltda. (“MLT”). The Company promptly commenced an internal investigation regarding these allegations and related matters. With the assistance of outside advisors, the Company’s internal investigation identified approximately $7 million in the aggregate of unauthorized payments during fiscal years 2022 through 2025. The Company has identified approximately $16.7 million in the aggregate of unauthorized payments during fiscal years 2016 through 2025.
The baseline filing contained detailed disclosure about embezzlement at the Mozambique subsidiary and the related material weakness, which was remediated as of March 31, 2025. The current filing no longer repeats this detail because the remediation was completed in the prior year.
MD&A
Removed FY2025 segment performance commentary and strategic positioning language; now presents only generic business description.
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We have positioned our Company for long-term success by maximizing opportunities in the leaf tobacco business and investing in the growth of our plant-based ingredients platform. In fiscal year 2025, we continued to enhance and increase the capabilities across our two segments: Tobacco Operations and Ingredients Operations.
The baseline filing included forward-looking language about positioning the company for long-term success and investing in the ingredients platform. This strategic framing is absent from the current filing, which opens with only a generic business description. This is a lifecycle removal — the FY2025 strategic narrative was current news in the prior 10-K and naturally drops once integrated into operations.
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Our Tobacco Operations segment delivered very strong results in fiscal year 2025 and maintained its position as the leading global leaf tobacco supplier. This segment primarily focuses on procuring and processing flue-cured, burley, dark air-cured, and oriental leaf tobacco for consumer product manufacturers.
The baseline highlighted "very strong results" for Tobacco Operations in FY2025 and affirmed the segment's leading market position. The current filing removes this performance commentary and retains only the operational description. This is a lifecycle removal — the FY2025 results announcement naturally drops from the FY2026 overview.
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Our Ingredients Operations segment specializes in sourcing and processing vegetable and fruit ingredients, flavorings, and botanical extracts for consumer packaged goods manufacturers, retailers, and food and beverage companies. In fiscal year 2025, this segment continued to increase its capabilities through the growth of its sales, marketing, and product development teams and the completion of a major expansion project that furthers our ability to deliver innovative, custom products to our customers.
The baseline described FY2025 capability-building actions — team growth and a major expansion project completion. The current filing removes this narrative and provides only a generic product-portfolio description. This is a lifecycle removal — the expansion project completion was FY2025 news and naturally drops once integrated.
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Our Ingredients Operations segment specializes in sourcing and processing vegetable and fruit ingredients, flavorings, and botanical extracts for consumer packaged goods manufacturers, retailers, and food and beverage companies.
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Our Ingredients Operations segment, through the Universal Ingredients platform, produces and supplies a broad portfolio of products, including fruit and vegetable juices and concentrates, purees, dehydrated products, botanical extracts, flavorings, colorings, and other customized, value-added ingredient solutions to the food and beverage industry.
The current filing expands the Ingredients segment description to name the Universal Ingredients platform and enumerate a broader product portfolio (juices, concentrates, purees, dehydrated products, colorings) and customer base (food and beverage industry). The baseline used narrower language (sourcing/processing, three product categories, three customer types). This is a disclosure broadening with no concrete action behind it.
Notes
FY2026 notes reflect $41M goodwill impairment at Shank's, increased inventory write-downs, new credit facility, and resolution of Brazil VAT dispute.
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A non-cash, goodwill impairment charge of $41.1 million was recognized in fiscal year 2026.
Company recorded a $41.1 million non-cash goodwill impairment charge in FY2026 to write off the full goodwill balance associated with Shank's, a component of the Ingredients Operations segment. The impairment reflects slower-than-anticipated sales growth, high fixed costs from expansion investments, and persistent customer market headwinds including tariff impacts and softness in the consumer-packaged-goods sector.
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Tobacco Operations segment results reflected larger, higher quality, better yielding crops from Africa; higher sales of carryover crops; weather-reduced crop sizes in Brazil and the United States in fiscal year 2025; and $13.4 million of higher tobacco inventory write-downs, compared to fiscal year 2024.
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Fiscal year 2026 results were negatively impacted by a non-cash, goodwill impairment charge related to our Shank's operation, as well as increased tobacco inventory write-downs, primarily for non-wrapper, dark air-cured tobacco. ... Tobacco inventory write-downs of $43.4 million in fiscal year 2026, were up $24.7 million, compared to fiscal year 2025. Softer than anticipated customer demand for certain styles of dark air-cured tobacco coupled with longer sales and inventory cycles characteristic of this type of tobacco drove the lower sales as well as the inventory write-downs of non-wrapper, dark air-cured tobacco in fiscal year 2026.
Tobacco inventory write-downs increased to $24.7 million in FY2026, up $24.7 million from FY2025, driven primarily by non-wrapper, dark air-cured tobacco. The write-downs reflect softer-than-anticipated customer demand for certain dark air-cured styles and the longer sales and inventory cycles characteristic of this tobacco type. Total inventory write-downs (tobacco plus ingredients) increased $32.2 million year-over-year.
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Results for fiscal year 2025 for the Ingredients Operations segment reflected increased sales of new products, higher sales in the fourth fiscal quarter due to anticipated tariffs, as well as lower inventory write-downs of $2.8 million, compared to fiscal year 2024.
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Operating income for the segment decreased by 73%, or $ 9.1 million, in fiscal year 2026, compared to fiscal year 2025, due to product mix, high fixed costs, including additional depreciation from our expanded production facility, as well as inventory write-downs of $8.6 million. Steady performance across much of our ingredients business was offset by slower than anticipated sales growth, high fixed costs related to our expansion investments, and inventory write-downs, at our Shank's operation.
Ingredients Operations segment operating income fell 73% ($9.1 million) in FY2026, driven by $8.6 million in inventory write-downs (versus lower write-downs in FY2025), product mix challenges, and high fixed costs including additional depreciation from the expanded Lancaster facility. Shank's operation specifically faced slower-than-anticipated sales growth and persistent customer market headwinds including tariff impacts and softness in the consumer-packaged-goods sector.
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On December 9, 2025, we entered into a new bank credit agreement that replaced our then-existing bank credit agreement. The new unsecured bank credit agreement established a funded $275 million five-year term loan, a funded $345 million seven-year term loan, and a five-year committed revolving loan facility of $780 million. Both term loans were fully funded at closing, require no amortization, and are prepayable without penalty prior to maturity. ... A $275 million five-year term loan and a $530 million revolving credit facility, both of which would have matured in December 2027, as well as a $375 million seven-year term loan, which would have matured in December 2029, were terminated and replaced in conjunction with the execution of the new bank credit agreement.
Company entered into a new bank credit agreement on December 9, 2025, replacing the prior facility. The new agreement provides a $275 million five-year term loan, a $345 million seven-year term loan, and a $780 million five-year revolving credit facility (up from $530 million previously). Both term loans were fully funded at closing, require no amortization, and are prepayable without penalty. The revolving facility matures in December 2030 (versus December 2027 for the prior facility).
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As of March 31, 2025, we had $270 million available under the committed revolving credit facility that will mature in December 2027, and we, together with our consolidated affiliates, had approximately $466 million in uncommitted lines of credit, of which approximately $271 million were unused and available to support seasonal working capital needs.
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As of March 31, 2026, we had $730 million available under the committed revolving credit facility that will mature in December 2030, and we, together with our consolidated affiliates, had approximately $702 million in uncommitted lines of credit, of which approximately $465 million were unused and available to support seasonal working capital needs.
Available committed revolving credit increased to $730 million at March 31, 2026 (from $270 million at March 31, 2025), reflecting the new $780 million facility and lower utilization. Uncommitted lines increased to $702 million total ($465 million unused) from $466 million total ($271 million unused), providing substantially greater liquidity cushion for seasonal working capital needs.
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Our uncommitted tobacco inventories decreased by approximately $17.2 million to $164.0 million, or about 20% of tobacco inventory, at March 31, 2025, compared to March 31, 2024 levels. Uncommitted inventories at March 31, 2024, were $181.1 million, which represented 17% of tobacco inventory. While we target committed tobacco inventory levels of 80% or more of total tobacco inventory, the level of these uncommitted inventories is influenced by timing of farmer deliveries and purchases of new crops, as well as the receipt of customer orders.
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Our uncommitted tobacco inventories increased by approximately $58.3 million to $222.3 million, or about 27% of tobacco inventory, at March 31, 2026, compared to March 31, 2025 levels. Uncommitted inventories at March 31, 2025, were $164.0 million, which represented 20% of tobacco inventory. While we target committed tobacco inventory levels of 80% or more of total tobacco inventory, the level of these uncommitted inventories is influenced by timing of farmer deliveries and purchases of new crops, as well as the receipt of customer orders. Uncommitted tobacco levels were outside our target range at March 31, 2026, due to delayed customer purchase commitments, but we expect them to be within our range during fiscal year 2027.
Uncommitted tobacco inventories increased $58.3 million to $222.3 million (27% of total tobacco inventory) at March 31, 2026, exceeding the company's 80%-committed target range. Management attributes the increase to delayed customer purchase commitments and expects levels to return to target during FY2027. This compares to 20% uncommitted at March 31, 2025 and 17% at March 31, 2024.
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Our operations generated about $327.0 million in operating cash flows in fiscal year 2025. That amount was about $401.6 million higher than the $74.6 million we used in fiscal year 2024, primarily on lower working capital requirements in fiscal year 2025, due to accelerated tobacco purchasing in Brazil in fiscal year 2024.
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Our operations generated about $129.1 million in operating cash flows in fiscal year 2026. That amount was about $197.9 million lower than the $327.0 million we generated in fiscal year 2025, primarily on lower working capital requirements in fiscal year 2025, due to certain tobacco purchases that would have typically been made in fiscal year 2025 having been made in fiscal year 2024.
Operating cash flow declined to $197.9 million in FY2026 from $401.6 million in FY2025, a decrease of $197.9 million. The decline reflects normalization of working capital after FY2025 benefited from accelerated tobacco purchases in Brazil during FY2024 that reduced FY2025 working capital needs. FY2026 represents a return to more typical seasonal working capital patterns.
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Net debt decreased by $179.6 million to $816.6 million during the fiscal year ended March 31, 2025. The decrease in net debt reflects lower working capital requirements. Net debt as a percentage of net capitalization was 36% at March 31, 2025, down from 41% at March 31, 2024.
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Net debt increased by $28.9 million to $845.5 million during the fiscal year ended March 31, 2026. The increase in net debt reflects higher working capital requirements. Net debt as a percentage of net capitalization was 37% at March 31, 2026, up from 36% at March 31, 2025.
Net debt increased $28.9 million to $845.5 million at March 31, 2026, reflecting higher working capital requirements as tobacco purchasing patterns normalized. Net debt to net capitalization ratio increased to 37% from 36%, remaining within a moderate range. This reverses the FY2025 trend when net debt declined $179.6 million due to lower working capital needs from accelerated FY2024 tobacco purchases.
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In September 2014, tax authorities for the state of Parana issued an assessment for tax, interest, and penalties for periods from 2009 through 2014 totaling approximately $10 million. These amounts are based on the exchange rate for the Brazilian currency at March 31, 2025. Management of the operating subsidiary and outside counsel believe that errors were made by the tax authorities for the state of Parana in determining all or significant portions of this assessment and that various defenses support the subsidiary’s position. ... In December 2015, the Parana tax authorities withdrew the initial claim and subsequently issued a new assessment covering the same tax periods. The new assessment totaled approximately $3 million at the March 31, 2025 exchange rate, reflecting a substantial reduction from the original $10 million assessment. Notwithstanding the reduction, management and outside counsel continue to believe that the new assessment is not supported by the underlying statutes and relevant case law and have challenged the full amount of the claim. The range of reasonably possible loss is considered to be zero up to the full $3 million assessment. However, based on the strength of the subsidiary’s defenses, no loss within that range is considered probable at this time and no liability has been recorded at March 31, 2025.
The long-standing Brazil VAT assessment from Parana state (originally $10 million in 2014, reduced to $3 million in 2015) was resolved favorably in July 2025. The FY2026 filing states: "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." This removes a contingent liability that had been disclosed for over a decade.
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Critical Audit Matters ... Allowance for Advances to Tobacco Suppliers ... Allowance for Recoverable Value-Added Tax (“VAT”) Credits
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Critical Audit Matters ... Allowance for Advances to Tobacco Suppliers ... Allowance for Recoverable Value-Added Tax (“VAT”) Credits ... Excess and Obsolete Inventory – Tobacco
Auditor added a third critical audit matter in FY2026: "Excess and Obsolete Inventory – Tobacco," specifically focused on dark air-cured tobacco. The new CAM reflects the $43.4 million in tobacco inventory write-downs (up $24.7 million year-over-year), primarily for non-wrapper, dark air-cured tobacco. The auditor noted that estimating net realizable value for this inventory "involved a higher degree of auditor judgment as the estimate is dependent on expectations about current and expected market trends and economic conditions."
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We currently plan to spend approximately $45 to $55 million in fiscal year 2026 on capital projects for maintenance of our facilities and other investments to grow and improve our businesses.
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We currently plan to spend approximately $55 to $65 million in fiscal year 2027 on capital projects for maintenance of our facilities and other investments to grow and improve our businesses.
Company raised its FY2027 capital expenditure guidance to $55-65 million from the $45-55 million range provided for FY2026. Actual FY2026 capex was $53.5 million (within the prior guidance range). The increase suggests continued investment in facilities and growth initiatives, though the company notes typical maintenance capex is less than $30 million per year.
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With the swap agreements in place, the effective interest rates on $275 million of the five-year term loan and $345 million of the seven-year term loan were 5.96% and 6.16%, respectively, as of March 31, 2025.
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With the swap agreements in place, the effective interest rates on the $275 million five-year term loan and the $345 million seven-year term loan were 5.57% and 6.15%, respectively, as of March 31, 2026.
Effective interest rates on the swapped term loans changed to 5.57% (five-year) and 6.15% (seven-year) at March 31, 2026, from 5.96% and 6.16% respectively at March 31, 2025. The five-year rate declined 39 basis points while the seven-year rate declined 1 basis point, reflecting the new credit agreement executed in December 2025 and changes in the underlying SOFR benchmark and swap pricing.
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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, botanical extracts, and flavorings.
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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, botanical extracts, flavorings, and colorings.
Company added "colorings" to the list of ingredients products in the segment description, reflecting an expansion or clarification of the product portfolio. This is consistent with the Shank's operation description which notes the business "offers a diversified portfolio of botanical extracts, distillates, natural flavors, and color for industrial and private label customers worldwide."
Risk Factors
Material weakness remediated; tariff/geopolitical disclosures expanded; AI-cybersecurity and illicit-trade risks added; Form S-3 ineligibility removed.
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We are not currently eligible to use a Form S-3 registration statement, which could impair our capital-raising activities. As a result of our failure to timely file our Form 10-Q for the quarter ended September 30, 2024, and the Form 10-Q for the quarter ended December 31, 2024 with the SEC, we are not currently eligible to use a Form S-3 registration statement. Further, as a result of the late Form 10-Q filing for the quarter ended September 30, 2024 and the late Form 10-Q filing for the quarter ended December 31, 2024, we are also not currently a “well-known seasoned issuer,” as such term is used in the SEC’s regulations, which otherwise would allow us to, among other things, file automatically effective Form S-3 registration statements. Our eligibility to use a Form S-3 registration statement may not be restored until March 1, 2026, and then only if we have not had any other filing delinquency that would preclude Form S-3 eligibility and satisfies all other requirements for Form S-3 eligibility. During any period when we are not eligible to use Form S-3 or qualify as a “well-known seasoned issuer,” our capital-raising ability may be impaired. Under these circumstances, we would be required to conduct our offering on an exempt basis, such as in accordance with Rule 144A, or file a registration statement on Form S-1. Using a Form S-1 registration statement for a public offering would likely take significantly longer than using a registration statement on Form S-3 and increase our transaction costs, and could, to the extent we are not able to conduct offerings using alternative methods, adversely impact our ability to raise capital or complete acquisitions of other companies in a timely manner.
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These factors could also limit the ability to accurately forecast our future performance and increase the risk of an investment in our common stock or other securities. Our financial results, particularly our year-over-year quarterly comparisons, may be significantly affected by variations in tobacco growing seasons and fluctuations in crop sizes.
The Form S-3 ineligibility risk factor language was retained and updated (reorganized/edited, not rescinded).
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Recently, the U.S. has announced or implemented significant new tariffs on imports from a wide range of countries, which has prompted retaliatory tariffs by a number of countries and a cycle of retaliatory tariffs by both the United States and other countries. In early April 2025, actions were taken by the United States and certain other countries to delay the effective date of certain of these tariffs; however, as of the date of this Annual Report a number of new tariffs remain in place. These actions have resulted in, and are expected to continue to result in, retaliatory measures on U.S. goods.
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In 2025, the U.S. implemented significant new tariffs on imports from a wide range of countries, which prompted retaliatory tariffs by a number of countries and a cycle of retaliatory tariffs by both the United States and other countries. On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). Following the Supreme Court’s decision, the U.S. presidential administration announced its intention to invoke other methods to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. Global trade policy continues to evolve and there remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on our business.
The tariff disclosure now includes the February 2026 Supreme Court ruling striking down certain IEEPA-based tariffs, the administration's response announcing new tariffs on all countries, and expanded language on ongoing uncertainty regarding tariff duration, levels, and potential modifications. The baseline described April 2025 delays; the current filing reflects a more complex and uncertain tariff environment post-Supreme Court intervention.
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Additionally, the recent armed conflict involving Iran and related regional hostilities have contributed to heightened volatility and increases in logistical and supply chain costs, including fertilizer prices and fuel costs.
The FY2026 filing adds disclosure of armed conflict involving Iran and regional hostilities as a new driver of supply chain cost volatility, specifically citing impacts on fertilizer and fuel costs. This geopolitical development was not mentioned in the FY2025 filing.
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However, technology is increasingly complex and cyber-attacks are increasingly sophisticated and frequent. For example, the rapid evolution and increased adoption of AI technologies may intensify cybersecurity risks for us and our service providers, key suppliers, and customers. Bad actors use increasingly advanced methods, including AI-enabled social engineering and deepfakes, automated credential‑stuffing, and other techniques, to attempt to compromise systems and to steal or misuse personal information, confidential information and intellectual property. If we are unable to prevent physical and electronic break-ins, cyber-attacks and other information security breaches, we could suffer financial and reputational damage, be subject to litigation, or incur remediation costs or penalties because of the unauthorized disclosure of confidential information belonging to us or to our partners, customers, suppliers, or employees. Additionally, outsourcing certain functions and implementing new technologies may increase exposure to risks such as data breaches or internal control failures. Our vendors and other third‑party partners may incorporate AI tools into their offerings with or without disclosing this use to us. The providers of these AI tools may not meet existing—or rapidly evolving—regulatory or industry standards concerning privacy, data protection, security and responsible AI, which could increase the risk of unauthorized disclosure or loss of confidential information or intellectual property, negatively affect the accuracy or availability of systems we use, or otherwise harm our reputation and the perceived effectiveness of our security measures. We have invested and expect to continue to invest in technology security initiatives, information technology risk management, and disaster recovery plans. As we adopt and integrate emerging technologies, we invest in protective capabilities and monitoring to address the new risks those technologies may create and the ways they may change our threat landscape. The cost and operational consequences of implementing, maintaining, and enhancing further data or system protection measures could increase significantly to overcome increasingly frequent, complex, and sophisticated cyber threats. Our efforts to deter, identify, mitigate, or eliminate future cyber threats could require us to incur significant additional expense and may not be successful.
The FY2026 filing adds extensive new disclosure on AI-related cybersecurity risks, including AI-enabled social engineering, deepfakes, automated credential-stuffing, and risks from third-party vendors incorporating undisclosed AI tools. The baseline cybersecurity risk factor contained no AI-specific language. The new disclosure also addresses evolving regulatory standards for responsible AI and the company's investments in protective capabilities for emerging technologies.
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For example, multiple countries in which we operate have enacted or are in the process of enacting legislation to adopt the Global Anti-Base Erosion Model Rules (Pillar Two) issued by the Organization for Economic Co-operation and Development (the “OECD”). For those jurisdictions that have legislation with an effective enactment date of January 1, 2024, these rules apply beginning with the current fiscal reporting year. We continue to evaluate, interpret, and apply the new rules and will review any subsequent changes that may be retroactive. We will continue to monitor potential and enacted tax changes in the jurisdictions in which we operate.
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For example, multiple countries in which we operate have enacted or are in the process of enacting legislation to adopt the Global Anti-Base Erosion Model Rules (“Pillar Two”) issued by the Organisation for Economic Co-operation and Development. Based on our current analysis, we anticipate some exposure to a global minimum tax under Pillar Two, with transitional safe-harbor provisions limiting the impact in certain jurisdictions. We will continue to monitor potential and enacted tax changes in the jurisdictions in which we operate.
The FY2026 filing updates the Pillar Two disclosure to reflect the company's current analysis, stating it anticipates "some exposure" to the global minimum tax with transitional safe-harbor provisions limiting impact. The baseline described the rules as applying beginning with the current fiscal year and noted ongoing evaluation. The update provides a more specific assessment of expected impact.
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We have identified a material weakness in our internal control over financial reporting and, if we are not able to remediate the material weakness, or if we identify additional material weaknesses in the future or otherwise fail to design and maintain effective internal control over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent misstatements due to fraud or error. Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2025. Based on this assessment, our management concluded that our internal control over financial reporting was not effective as of March 31, 2025 as a result of certain deficiencies that were determined to constitute a material weakness in our internal control over financial reporting. Specifically, we determined that the internal controls at one of our tobacco subsidiaries were not effectively documented and executed to ensure that the existence of all dark air-cured tobacco inventories subject to physical inventory counts were appropriately counted, and that the controls related to the compilation and reconciliation of the related inventory to ensure complete and accurate reporting of inventory in the consolidated financial statements were not effective.
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These may lead to increased expenditures for environmental controls, land use restrictions, reporting, and other conditions which could have a material adverse effect on our business and results of operations. In addition, a number of governments are considering due diligence procedures to ensure strict compliance with environmental, labor, and government regulations.
The material weakness in internal controls risk factor language was retained and updated (reorganized/edited, not rescinded).
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•illicit trade in tobacco products, and
The FY2026 filing adds "illicit trade in tobacco products" as a new factor influencing customer demand for leaf tobacco. This was not listed in the FY2025 supply-and-demand risk factor.
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Certain recommendations by the WHO, through the FCTC, could also cause shifts in customer usage of certain styles of tobacco. In countries such as Canada and Brazil and in the European Union, efforts have been taken to eliminate certain ingredients from the manufacturing process for tobacco products. The FCTC and national governments have also discussed formulating a strategy to place limitations on the level of nicotine allowed in tobacco and tobacco smoke.
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Certain recommendations by the WHO, through the FCTC, could also cause shifts in customer usage of certain styles of tobacco. The FCTC, national governments, and regional blocs, such as the European Union, have discussed formulating strategies to place limitations on the level of nicotine allowed in tobacco and tobacco smoke and eliminate certain ingredients from the manufacturing process for tobacco products.
The FY2026 filing removes specific country examples (Canada, Brazil) and consolidates the discussion of ingredient elimination and nicotine limitations into a single sentence. The underlying risk—that regulatory actions could shift customer demand for certain tobacco styles—remains unchanged.
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In addition, a number of governments are considering due diligence procedures to ensure strict compliance with environmental, labor, and government regulations. The European Union has recently adopted broad due diligence reporting requirements for all industries operating within Europe. The United States has called for a broader and more robust approach to labor compliance in foreign jurisdictions, which could include some of our strategic origins. Due to general uncertainty regarding the timing, content, and extent of any such regulatory changes in the United States or abroad, we cannot predict the impact, if any, that these changes could have to our business, financial condition, and results of operations.
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In addition, a number of governments are considering due diligence procedures to ensure strict compliance with environmental, labor, and government regulations. Due to general uncertainty regarding the timing, content, and extent of any such regulatory changes in the United States or abroad, we cannot predict the impact, if any, that these changes could have to our business, financial condition, and results of operations.
The FY2026 filing removes specific references to the European Union's recently adopted due diligence reporting requirements and U.S. calls for broader labor compliance in foreign jurisdictions. The general risk of due diligence procedures remains disclosed, but the specific regulatory developments cited in FY2025 are no longer mentioned.
Financial Statements
Primary statements as printed on the EDGAR filing (iXBRL face). Companyfacts is used only when a statement is not on the HTML face. Not generated by the model.
Consolidated Statements of Income
(in thousands of dollars, except share and per share data)
| Description | Fiscal year ended March 31, 2026 | Fiscal year ended March 31, 2025 | Fiscal year ended March 31, 2024 |
|---|---|---|---|
| Sales and other operating revenues | 2,924,470 | 2,947,284 | 2,748,573 |
| Costs and expenses | |||
| Cost of goods sold | 2,412,454 | 2,398,627 | 2,212,475 |
| Selling, general and administrative expenses | 300,671 | 305,287 | 310,566 |
| Restructuring and impairment costs | 1,833 | 10,573 | 3,523 |
| Goodwill impairment | 41,061 | — | — |
| Operating income | 168,451 | 232,797 | 222,009 |
| Equity in pretax earnings of unconsolidated affiliates | 3,430 | 9,103 | 756 |
| Pension settlement charge | — | 14,101 | — |
| Other non-operating income | 2,847 | 2,569 | 3,084 |
| Interest income | 1,964 | 3,483 | 4,504 |
| Interest expense | 74,040 | 79,636 | 66,273 |
| Income before income taxes | 102,652 | 154,215 | 164,080 |
| Income taxes | 46,657 | 40,946 | 31,109 |
| Net income | 55,995 | 113,269 | 132,971 |
| Less: net income attributable to noncontrolling interests in subsidiaries | (23,358) | (18,222) | (13,373) |
| Net income attributable to Universal Corporation | 32,637 | 95,047 | 119,598 |
| Earnings per share: | |||
| Basic | 1.30 | 3.81 | 4.81 |
| Diluted | 1.30 | 3.78 | 4.78 |
| Weighted average common shares outstanding: | |||
| Basic | 25,037,983 | 24,947,208 | 24,851,858 |
| Diluted | 25,171,162 | 25,127,356 | 25,040,914 |
Consolidated Balance Sheets
(in thousands of dollars)
| Description | March 31, 2026 | March 31, 2025 |
|---|---|---|
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 62,178 | 260,115 |
| Accounts receivable, net | 563,864 | 625,876 |
| Advances to suppliers, net | 177,222 | 169,385 |
| Accounts receivable—unconsolidated affiliates | 12,300 | 7,143 |
| Inventories—at lower of cost or net realizable value: | ||
| Tobacco | 832,360 | 806,332 |
| Other | 203,537 | 189,610 |
| Prepaid income taxes | 22,958 | 19,595 |
| Other current assets | 97,278 | 78,041 |
| Total current assets | 1,971,697 | 2,156,097 |
| Property, plant and equipment | ||
| Land | 26,249 | 26,113 |
| Buildings | 333,416 | 333,398 |
| Machinery and equipment | 759,654 | 723,935 |
| 1,119,319 | 1,083,446 | |
| Less accumulated depreciation | (746,365) | (710,472) |
| 372,954 | 372,974 | |
| Other assets | ||
| Operating lease right-of-use assets | 37,272 | 34,260 |
| Goodwill, net | 172,695 | 213,840 |
| Other intangibles, net | 48,604 | 57,836 |
| Investments in unconsolidated affiliates | 82,287 | 79,317 |
| Deferred income taxes | 15,636 | 16,539 |
| Pension asset | 16,542 | 12,819 |
| Other noncurrent assets | 49,080 | 45,870 |
| 422,116 | 460,481 | |
| Total assets | 2,766,767 | 2,989,552 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
| Current liabilities | ||
| Notes payable and overdrafts | 287,564 | 455,039 |
| Accounts payable | 90,139 | 98,036 |
| Accounts payable—unconsolidated affiliates | 510 | 1,999 |
| Customer advances and deposits | 3,376 | 3,763 |
| Accrued compensation | 33,234 | 44,646 |
| Income taxes payable | 17,643 | 12,586 |
| Current portion of operating lease liabilities | 11,172 | 10,742 |
| Accrued expenses and other current liabilities | 120,603 | 123,350 |
| Current portion of long-term debt | — | — |
| Total current liabilities | 564,241 | 750,161 |
| Long-term debt | 616,727 | 617,918 |
| Pensions and other postretirement benefits | 35,471 | 35,336 |
| Long-term operating lease liabilities | 24,359 | 20,608 |
| Other long-term liabilities | 24,925 | 22,901 |
| Deferred income taxes | 39,920 | 42,090 |
| Total liabilities | 1,305,643 | 1,489,014 |
| Shareholders’ equity | ||
| Universal Corporation: | ||
| 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, 24,923,496 shares issued and outstanding (24,715,625 at March 31, 2025) | 351,523 | 351,626 |
| Retained earnings | 1,136,989 | 1,186,981 |
| Accumulated other comprehensive loss | (73,112) | (80,051) |
| Total Universal Corporation shareholders' equity | 1,415,400 | 1,458,556 |
| Noncontrolling interests in subsidiaries | 45,724 | 41,982 |
| Total shareholders' equity | 1,461,124 | 1,500,538 |
| Total liabilities and shareholders' equity | 2,766,767 | 2,989,552 |
Consolidated Statements of Cash Flows
(in thousands of dollars)
| Description | Fiscal year ended March 31, 2026 | Fiscal year ended March 31, 2025 | Fiscal year ended March 31, 2024 |
|---|---|---|---|
| Cash Flows From Operating Activities: | |||
| Net income | 55,995 | 113,269 | 132,971 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation and amortization | 53,437 | 59,773 | 58,326 |
| Provision for losses (recoveries) on advances | 6,258 | 1,938 | 14,090 |
| Inventory write-downs | 51,988 | 19,769 | 9,234 |
| Stock-based compensation expense | 7,115 | 8,531 | 12,063 |
| Foreign currency remeasurement loss (gain), net | 6,708 | 6,096 | 5,114 |
| Foreign currency exchange contracts | (2,235) | 916 | (365) |
| Deferred income taxes | (961) | 1,083 | (5,404) |
| Equity in net income of unconsolidated affiliates, net of dividends | 245 | (3,031) | (1,239) |
| Goodwill impairment | 41,061 | — | — |
| Restructuring and impairment costs | 1,833 | 10,573 | 3,523 |
| Restructuring payments | (3,308) | (1,568) | (1,181) |
| Pension settlement | — | 14,101 | — |
| Other, net | 106 | 1,406 | 1,001 |
| Changes in operating assets and liabilities, net: | |||
| Accounts receivable | 39,161 | (129,988) | (109,681) |
| Inventories | (89,521) | 244,732 | (236,243) |
| Other assets | (21,241) | 9,187 | (768) |
| Accounts payable | (12,618) | (8,700) | 20,806 |
| Accrued expenses and other current liabilities | (5,187) | (10,269) | 8,414 |
| Income taxes | 971 | 2,003 | 342 |
| Customer advances and deposits | (707) | (12,847) | 14,365 |
| Net cash provided (used) by operating activities | 129,100 | 326,974 | (74,632) |
| Cash Flows From Investing Activities: | |||
| Purchase of property, plant and equipment | (48,829) | (62,601) | (66,013) |
| Proceeds from sale of business, less cash of businesses sold | — | — | 3,757 |
| Proceeds from sale of property, plant and equipment | 5,873 | 3,783 | 2,257 |
| Net cash used by investing activities | (42,956) | (58,818) | (59,999) |
| Cash Flows From Financing Activities: | |||
| Issuance (repayment) of short-term debt, net | (170,069) | 37,696 | 223,000 |
| Issuance of long-term debt | 89,130 | — | — |
| Repayment of long-term debt | (89,130) | — | — |
| Dividends paid to noncontrolling interests in subsidiaries | (19,046) | (17,530) | (10,572) |
| Repurchase of common stock | — | — | (4,744) |
| Dividends paid on common stock | (81,299) | (79,686) | (78,402) |
| Settlement costs from termination of interest rate swap agreements | (988) | — | — |
| Debt issuance costs and other | (12,941) | (3,715) | (3,607) |
| Net cash provided (used) by financing activities | (284,343) | (63,235) | 125,675 |
| Effect of exchange rate changes on cash | 262 | (399) | (141) |
| Net increase (decrease) in cash and cash equivalents | (197,937) | 204,522 | (9,097) |
| Cash, restricted cash and cash equivalents at beginning of year | 260,115 | 55,593 | 64,690 |
| Cash, Restricted Cash and Cash Equivalents at End of Year | 62,178 | 260,115 | 55,593 |
| Supplemental information—cash paid for: | |||
| Interest | 71,758 | 75,285 | 61,084 |
| Income taxes, net of refunds | 43,117 | 38,358 | 38,084 |
Amounts as printed on the EDGAR/iXBRL face — (in thousands of dollars, except share and per share data); (in thousands of dollars). Labels, columns, and figures are the filing face, not a GAAP stencil. Interactive statements & notes on EDGAR ↗
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