UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED

~~SEPTEMBER~~DECEMBER 3031, 2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______________TO_______________

Commission File Number: 001-00652

UNIVERSAL CORPORATION

(Exact name of registrant as specified in its charter)


Virginia			54-0414210
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

9201 Forest Hill Avenue,	Richmond,	Virginia	23235
(Address of principal executive offices)			(Zip Code)

804-359-9311

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the ~~Exchange~~ Act:

Title of each class Trading Symbol(s) Name of each Exchange on which registered Common Stock, no par value UVV New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesþ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of ~~November~~February 34, ~~2025~~2026, the total number of shares of common stock outstanding was 24,~~921~~923,~~155~~496.

UNIVERSAL CORPORATION

FORM 10-Q

TABLE OF CONTENTS


Item No.		Page
	PART I - FINANCIAL INFORMATION
1.	Financial Statements	3
2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
3.	Quantitative and Qualitative Disclosures About Market Risk	34
4.	Controls and Procedures	34
	PART II - OTHER INFORMATION
1.	Legal Proceedings	36
1A.	Risk Factors	36
2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
5.	Other Information	36
6.	Exhibits	37

	Signatures	38

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UNIVERSAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(in thousands, except share and per share data)

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

2025

2024

2025

2024

(Unaudited)

Sales and other operating revenues

~~754~~861,~~177~~288

~~710~~937,~~762~~193

12,~~347~~209,~~939~~227

12,~~307~~245,~~812~~005

Costs and expenses

Cost of goods sold

~~614~~701,~~347~~700

~~567~~743,~~617~~605

1,~~093~~795,~~982~~682

1,~~068~~812,~~746~~351

Selling, general and administrative expenses

7276,~~181~~927

6389,~~836~~512

~~151~~228,~~373~~300

~~142~~232,~~532~~044

Restructuring and impairment costs

—711

~~10,573~~—

1,~~122~~833

10,573

Operating income

6781,~~649~~950

68104,~~736~~076

~~101~~183,~~462~~412

85190,~~961~~037

Equity in pretax earnings (loss) of unconsolidated affiliates

(21,~~561)~~257

~~(642)~~2,149

~~(126)~~1,131

~~(502)~~1,647

Other non-operating income (expense)

~~582~~584

~~461~~468

1,~~168~~752

~~925~~1,393

Interest income

~~778~~360

~~295~~623

1,~~425~~785

1,~~103~~726

Interest expense

2017,~~438~~260

2119,~~273~~303

3855,~~215~~475

4261,~~007~~310

Income (loss) before income taxes and other items

4666,~~010~~891

4788,~~577~~013

65132,~~714~~605

45133,~~480~~493

Income taxes

1125,~~207~~303

1320,~~608~~217

1641,~~544~~847

1434,~~335~~552

Net income (loss)

3441,~~803~~588

3367,~~969~~796

4990,~~170~~758

3198,~~145~~941

Less: net loss (income) attributable to noncontrolling interests in subsidiaries

(~~634~~8,339)

(8,~~029~~157)

(614,~~504~~843)

(513,~~075~~232)

Net income (loss) attributable to Universal Corporation

3433,~~169~~249

2559,~~940~~639

4275,~~666~~915

2685,~~070~~709

Earnings per share:

Basic

1.3633

12.0439

13.7103

13.0544

Diluted

1.3632

12.0337

13.7002

13.0441

Weighted average common shares outstanding:

Basic

25,~~035~~056,~~110~~517

24,~~946~~980,~~632~~792

25,~~017~~030,~~765~~798

24,~~911~~934,~~681~~786

Diluted

25,~~178~~188,~~546~~876

25,~~135~~142,~~973~~667

25,~~155~~166,~~627~~825

25,~~101~~115,~~295~~153

Total comprehensive income (loss), net of income taxes

3440,~~654~~449

3356,~~531~~974

5798,~~756~~205

2582,~~181~~155

Less: comprehensive (income) loss attributable to noncontrolling interests

(~~356~~8,198)

(87,~~026~~784)

(614,~~249~~447)

(412,~~682~~466)

Comprehensive income (loss) attributable to Universal Corporation

3432,~~298~~251

2549,~~505~~190

5183,~~507~~758

2069,~~499~~689

Dividends declared per common share

0.82

0.81

12.6446

12.6243

See accompanying notes.

UNIVERSAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands of dollars, except share data)

September 30,

March 31,

December 31,

March 31,

2025

2024

2025

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

8885,~~652~~227

80215,~~118~~108

260,115

Accounts receivable, net

~~445~~571,~~257~~511

~~537~~650,~~602~~021

625,876

Advances to suppliers, net

~~121~~168,~~569~~348

~~139~~156,~~766~~108

169,385

Accounts receivable—unconsolidated affiliates

~~114~~62,~~071~~390

~~66,646~~578

7,143

Inventories—at lower of cost or net realizable value:

Tobacco

1990,~~138,630~~638

1924,~~070,655~~684

806,332

Other

~~222~~212,~~505~~321

~~211~~189,~~476~~663

189,610

Prepaid income taxes

2316,~~066~~020

2010,~~771~~930

19,595

Other current assets

8576,~~928~~970

8468,~~884~~553

78,041

Total current assets

2,~~239~~183,~~678~~425

2,~~211~~215,~~918~~645

2,156,097

Property, plant and equipment

Land

26,~~285~~286

2526,~~972~~081

26,113

Buildings

~~335~~332,~~300~~864

~~330~~327,~~407~~376

333,398

Machinery and equipment

~~746~~756,~~284~~467

~~705~~709,~~246~~840

723,935

1,107,869

1,061,625

1,083,446

1,115,617

1,063,297

1,083,446

Less accumulated depreciation

(~~735~~740,~~473~~949)

(~~685~~689,~~883~~445)

(710,472)

372,396

375,742

372,974

374,668

373,852

372,974

Other assets

Operating lease right-of-use assets

3736,~~319~~906

3233,~~487~~982

34,260

Goodwill, net

213,~~815~~798

213,~~872~~819

213,840

Other intangibles, net

5250,~~650~~635

6360,~~263~~444

57,836

Investments in unconsolidated affiliates

8485,~~526~~137

7870,~~774~~351

79,317

Deferred income taxes

1815,~~238~~395

1517,~~526~~517

16,539

Pension asset

13,~~393~~580

12,~~293~~511

12,819

Other noncurrent assets

3843,~~424~~970

4142,~~711~~298

45,870

458,365

457,926

460,481

459,421

450,922

460,481

Total assets

3,~~070~~017,~~439~~514

3,~~045~~040,~~586~~419

2,989,552

See accompanying notes.

UNIVERSAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands of dollars, except share data)

September 30,

March 31,

December 31,

March 31,

2025

2024

2025

(Unaudited)

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities

Notes payable and overdrafts

~~539~~462,~~583~~248

~~579~~538,~~132~~526

455,039

Accounts payable

9982,~~599~~580

8778,~~106~~327

98,036

Accounts payable—unconsolidated affiliates

~~299~~2,708

~~174~~5,985

1,999

Customer advances and deposits

21,~~782~~667

63,~~837~~362

3,763

Accrued compensation

3027,~~776~~381

2932,~~266~~232

44,646

Income taxes payable

1419,~~573~~949

715,~~948~~341

12,586

Current portion of operating lease liabilities

11,~~809~~277

109,~~325~~835

10,742

Accrued expenses and other current liabilities

~~129~~143,~~210~~637

~~128~~135,~~634~~707

123,350

Current portion of long-term debt

—

Total current liabilities

~~828~~751,~~631~~447

~~849~~819,~~422~~315

750,161

Long-term debt

~~618~~616,~~196~~585

617,~~641~~780

617,918

Pensions and other postretirement benefits

36,~~490~~665

36,~~734~~485

35,336

Long-term operating lease liabilities

23,~~584~~570

1920,~~038~~408

20,608

Other long-term liabilities

26,~~228~~222

2818,~~425~~688

22,901

Deferred income taxes

3337,~~160~~851

3635,~~322~~831

42,090

Total liabilities

1,~~566~~492,~~289~~340

1,~~587~~548,~~582~~507

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 24,913,747 shares issued and outstanding at September 30, 2025 (24,715,625 at September 30, 2024 and 24,715,625 at March 31, 2025)

352,909

349,064

351,626

Common stock, no par value, 100,000,000 shares authorized 24,921,155 shares issued and outstanding at December 31, 2025 (24,715,625 at December 31, 2024 and 24,715,625 at March 31, 2025)

354,126

350,243

351,626

Retained earnings

1,~~188~~200,~~283~~890

1,~~158~~197,~~658~~972

1,186,981

Accumulated other comprehensive loss

(7172,~~210~~208)

(8797,~~156~~605)

(80,051)

Total Universal Corporation shareholders' equity

1,~~469~~482,~~982~~808

1,~~420~~450,~~566~~610

1,458,556

Noncontrolling interests in subsidiaries

3442,~~168~~366

3741,~~438~~302

41,982

Total shareholders' equity

1,~~504~~525,~~150~~174

1,~~458~~491,~~004~~912

1,500,538

Total liabilities and shareholders' equity

3,~~070~~017,~~439~~514

3,~~045~~040,~~586~~419

2,989,552

See accompanying notes.

UNIVERSAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of dollars)

Six Months Ended September 30,

Nine Months Ended December 31,

2025

2024

(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

4990,~~170~~758

3198,~~145~~941

Adjustments to reconcile net income (loss) to net cash used by operating activities:

Depreciation and amortization

2740,~~198~~206

2944,~~420~~554

Net provision for losses (recoveries) on advances to suppliers

(21,~~810)~~721

(~~5,562~~445)

Inventory writedowns

917,~~780~~326

56,~~231~~624

Stock-based compensation expense

89,~~481~~839

67,~~583~~458

Foreign currency remeasurement (gain) loss, net

14,~~195~~578

112,~~334~~183

Foreign currency exchange contracts

(2,~~531~~734)

3,~~225~~206

Deferred income taxes

(91,~~726~~546)

~~153~~(3,616)

Equity in net loss (income) of unconsolidated affiliates, net of dividends

~~991~~215

~~404~~2,767

Restructuring and impairment costs

1,~~122~~833

10,573

Restructuring payments

(2,~~774~~957)

(~~350~~892)

Other, net

37(1,374)

~~(217)~~3,087

Changes in operating assets and liabilities, net:

Accounts and notes receivable

~~123~~(5,~~321~~714)

(63130,~~420~~672)

Inventories

(~~367~~216,~~010~~035)

~~(21~~132,~~682)~~318

Other assets

26,~~199~~468

920,~~029~~097

Accounts payable

(318,~~262~~299)

(2223,~~066~~259)

Accrued expenses and other current liabilities

(49,~~426)~~938

(1917,~~970~~869)

Income taxes

(110,~~989)~~095

(116,~~238)~~306

Customer advances and deposits

(12,~~324~~357)

(1013,~~005~~133)

Net cash used by operating activities

(172,358)

(47,413)

Net cash provided (used) by operating activities

(58,039)

168,228

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property, plant and equipment

(2140,~~099~~303)

(3854,~~796~~885)

Proceeds from sale of property, plant and equipment

~~881~~6,601

12,~~412~~035

Net cash used by investing activities

(2033,~~218~~702)

(3752,~~384~~850)

CASH FLOWS FROM FINANCING ACTIVITIES:

Issuance of short-term debt, net

825,~~781~~049

~~161~~121,~~611~~094

Dividends paid to noncontrolling interests

(14,063)

(8,960)

Issuance of long-term debt

89,130

—

Dividends paid on common stock

(40,426)

(39,646)

Repayment of long-term debt

(89,130)

—

Other

(7,727)

(3,716)

Dividends paid to noncontrolling interests

(14,063)

(12,880)

Net cash provided by financing activities

20,565

109,289

Dividends paid on common stock

(60,862)

(59,666)

Effect of exchange rate changes on cash, restricted cash and cash equivalents

548

Settlement costs from termination of interest rate swap agreements

(988)

—

Net increase (decrease) in cash, restricted cash and cash equivalents

(171,463)

24,525

Other

(12,873)

(3,716)

Net cash provided (used) by financing activities

(83,737)

44,832

Effect of exchange rate changes on cash, restricted cash and cash equivalents

590

(695)

Net increase (decrease) in cash, restricted cash and cash equivalents

(174,888)

159,515

Cash, restricted cash and cash equivalents at beginning of year

260,115

55,593

Cash, restricted cash and cash equivalents at end of period

8885,~~652~~227

80215,~~118~~108

See accompanying notes.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

Universal Corporation, which together with its subsidiaries is referred to herein as “Universal” or the “Company,” is a global business-to-business agri-products supplier to consumer product manufacturers. The Company is the leading global leaf tobacco supplier and provides high-quality plant-based ingredients to food and beverage end markets. Because of the seasonal nature of the Company’s business, the results of operations for any fiscal quarter will not necessarily be indicative of results to be expected for other quarters or a full fiscal year. All adjustments necessary to state fairly the results for the period have been included and were of a normal recurring nature. This Quarterly Report on Form 10-Q should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025.

Accounting Pronouncements to be Adopted in Future Years

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires additional disclosures reconciling the rates of different categories of income tax (i.e. federal, state, foreign, etc.) and a disaggregation of taxes paid and refunded. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and for interim periods in fiscal years beginning after December 15, 2025, although early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its income tax disclosures.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses” (“ASU 2024-03”). ASU 2024-03 requires additional disclosures about certain types of costs and expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and for interim periods beginning after December 15, 2027, although early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

NOTE 2. RESTRUCTURING AND IMPAIRMENT COSTS

Universal regularly reviews its business for opportunities to realize efficiencies, reduce costs, and realign its operations in response to business changes. Restructuring and impairment costs are periodically incurred in connection with those activities.

Tobacco Operations

During the ~~six~~nine months ended ~~September~~December 3031, 2024, the Company began consolidating its European sheet tobacco operations into the Company's facility in the Netherlands, by initiating a wind-down of activities at its sheet facility in Germany, incurring $10.5 million of restructuring and impairment costs. During the ~~six~~nine months ended ~~September~~December 3031, 2025, the Company recognized an additional $0.7 million of restructuring costs and $1.0 million of impairment costs related to the consolidation of the sheet tobacco operations. The Company also incurred $0.1 million of termination and impairment costs in other areas of the Tobacco Operations segment in both the ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024.

A summary of the restructuring and impairment costs recorded for the three and ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024 was as follows:

	Three Months Ended September 30,				Six Months Ended September 30,
	Three Months Ended December 31,				Nine Months Ended December 31,
(in thousands)	2025		2024		2025		2024
Restructuring costs:
Employee termination benefits	$	—	$	~~4,342~~—	$	122	$	4,342
Other	—711		~~1,372~~—		—711		1,372
Total restructuring costs	—711		~~5,714~~—		~~122~~833		5,714
Impairment costs:
Property, plant and equipment	—		~~4,859~~—		1,000		4,859
Total impairment costs	—		~~4,859~~—		1,000		4,859
Total restructuring and impairment costs	$	—711	$	~~10,573~~—	$	1,~~122~~833	$	10,573

NOTE 3. REVENUE FROM CONTRACTS WITH CUSTOMERS

The majority of the Company’s consolidated revenue consists of sales of processed leaf tobacco to customers. The Company also earns revenue from processing leaf tobacco owned by customers and from various other services provided to customers. Additionally, the Company has fruit and vegetable processing operations, as well as flavor and extract services that provide customers with a range of food ingredient products. Payment terms with customers vary depending on customer creditworthiness, product types, services provided, and other factors. Contract durations and payment terms for all revenue categories generally do not exceed one year. Therefore, the Company has applied a practical expedient to not adjust the transaction price for the effects of financing components, as the Company expects that the period from the time the revenue for a transaction is recognized to the time the customer pays for the related good or service transferred will be one year or less. Below is a description of the major revenue-generating categories from contracts with customers.

Tobacco Sales

The majority of the Company’s business involves purchasing leaf tobacco from farmers in the regions where it is grown, processing and packing the tobacco in its factories, and then transferring ownership and control of the tobacco to customers. On a much smaller basis, the Company also sources processed tobacco from third-party suppliers for resale to customers. The contracts for tobacco sales with customers create a performance obligation to transfer tobacco to the customer. Transaction prices for the sale of tobacco are primarily based on negotiated fixed prices, but the Company does have a small number of cost-plus contracts with certain customers. Cost-plus arrangements provide the Company reimbursement of the cost to purchase and process the tobacco, plus a contractually agreed-upon profit margin. The Company utilizes the most likely amount methodology under the accounting guidance to recognize revenue for cost-plus arrangements with customers. Shipping and handling costs under tobacco sales contracts with customers are treated as fulfillment costs and included in the transaction price. Under agreements with certain customers, the Company will act as the importer of record, incurring various additional costs associated with the import activity, including tariffs, and applying for drawback of those costs when possible. When the agreement with the customer provides for the reimbursement of those fees, the reimbursement is included in the transaction price. Taxes assessed by government authorities on the sale of leaf tobacco products are excluded from the transaction price. At the point in time that the customer obtains control over the tobacco, which is typically aligned with physical shipment under the contractual terms with the customer, the Company completes its performance obligation and recognizes the revenue for the sale.

Ingredient Sales

The Company has diversified operations through acquisition of established companies that offer customers a wide range of both liquid and dehydrated fruit and vegetable ingredient products, flavors, and botanical extracts. These operations procure raw materials from domestic and international growers and suppliers and through a variety of processing steps including sorting, cleaning, pressing, mixing, extracting, and blending to manufacture finished goods utilized in both human and pet food. The contracts for food ingredients with customers create a performance obligation to transfer the manufactured finished goods to the customer. Transaction prices for the sale of food ingredients are primarily based on negotiated fixed prices, but the Company does have cost-plus contracts with certain customers. The Company utilizes the most likely amount methodology under the accounting guidance to recognize revenue for cost-plus arrangements with customers. At the point in time that the customer obtains control over the finished product, which is typically aligned with physical shipment under the contractual terms with the customer, the Company completes its performance obligation and recognizes the revenue for the sale.

Processing Revenue

Processing and packing of customer-owned tobacco and ingredients is a short-duration process. Processing charges are primarily based on negotiated fixed prices per unit of weight processed. Under normal operating conditions, customer-owned raw materials that are placed into the production line exits as processed and packed product and is then later transported to customer-designated transfer locations. The revenue for these services is recognized when the performance obligation is satisfied, which is generally when processing is completed. The Company’s operating history and contract analyses indicate that customer requirements for processed tobacco and food ingredients products are consistently met upon completion of processing.

Other Sales and Revenue from Contracts with Customers

From time to time, the Company enters into various arrangements with customers to provide other value-added services that may include blending, chemical and physical testing of products, storage, logistics, sorting, and tobacco cutting services for select manufacturers. These other arrangements and operations are a much smaller portion of the Company’s business, and are separate and distinct contractual agreements from the Company’s tobacco and food ingredients sales or third-party processing arrangements with customers. The transaction prices and timing of revenue recognition of these items are determined by the specifics of each contract.

Disaggregation of Revenue from Contracts with Customers

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

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

(in thousands of dollars)

2025

2024

2025

2024

Tobacco sales

~~622~~719,~~613~~882

~~601~~811,~~590~~743

1,~~080~~800,~~486~~368

1,~~089~~901,~~821~~564

Ingredient sales

8877,~~837~~891

7678,~~543~~705

~~173~~251,~~780~~671

~~157~~235,~~237~~942

Processing revenue

2336,~~964~~717

1421,~~080~~128

5491,~~732~~449

2849,~~749~~877

Other sales and revenue from contracts with customers

1418,~~014~~665

16,~~155~~405

3351,~~071~~736

2845,~~964~~369

Total revenue from contracts with customers

~~749~~853,~~428~~155

~~708~~927,~~368~~981

12,~~342~~195,~~069~~224

12,~~304~~232,~~771~~752

Other operating sales and revenues

48,~~749~~133

29,~~394~~212

514,~~870~~003

312,~~041~~253

Consolidated sales and other operating revenues

~~754~~861,~~177~~288

~~710~~937,~~762~~193

12,~~347~~209,~~939~~227

12,~~307~~245,~~812~~005

Other operating sales and revenue consists principally of interest on advances to tobacco suppliers and dividend income from unconsolidated affiliates.

NOTE 4. OTHER CONTINGENT LIABILITIES AND OTHER MATTERS

Other Contingent Liabilities

Other Contingent Liabilities (Letters of credit)

The Company had other contingent liabilities totaling approximately $1 million at ~~September~~December 3031, 2025, primarily related to outstanding letters of credit.

Value-Added Tax Assessments in Brazil

The Company’s local operating subsidiaries pay significant amounts of value-added tax (“VAT”) in connection with their operations, which generate tax credits that they normally are entitled to recover through offset, refund, or sale to third parties. In Brazil, VAT is assessed at the state level when green tobacco is transferred between states. The Company’s Brazilian operating subsidiary pays VAT when tobaccos grown outside the state of Rio Grande do Sul are transferred to the factory for processing. The subsidiary received assessments for additional VAT plus interest and penalties from tax authorities for the state of Parana based on audits of the subsidiary’s VAT filings for specified periods. Management of the subsidiary and outside counsel challenged the Parana assessment claims. In July 2025, a final and indisputable favorable ruling was issued by the Brazilian National Treasury Attorney's office declaring the Parana assessment without merit, requiring the state to withdraw and cancel all claims made against the Company's Brazilian operating subsidiary.

Other Legal and Tax Matters

Various subsidiaries of the Company are involved in litigation and tax examinations incidental to their business activities. While the outcome of these matters cannot be predicted with certainty, management is vigorously defending the matters and does not currently expect that any of them will have a material adverse effect on the Company’s business, results of operations, or financial position. However, should one or more of these matters be resolved in a manner adverse to management’s current expectation, the effect on the Company’s results of operations for a particular fiscal reporting period could be material.

Advances to Suppliers

In many sourcing regions where the Company operates, it provides agronomy services and seasonal advances of seed, seedlings, fertilizer, and other supplies to tobacco farmers for crop production, or makes seasonal cash advances to farmers for the procurement of those inputs. These advances are short term, are repaid upon delivery of tobacco to the Company, and are reported in advances to suppliers in the consolidated balance sheets. In several regions, the Company has made long-term advances to tobacco farmers to finance curing barns and other farm infrastructure. In some years, due to low crop yields and other factors, individual farmers may not deliver sufficient volumes of tobacco to fully repay their seasonal advances, and the Company may extend repayment of those advances into future crop years. The long-term portion of advances is included in other noncurrent assets in the consolidated balance sheets. Both the current and the long-term portions of advances to suppliers are reported net of allowances recorded when the Company determines that amounts outstanding are not likely to be collected. Short-term and long-term advances to suppliers totaled $~~135~~180 million at ~~September~~December 3031, 2025, $~~151~~172 million at ~~September~~December 3031, 2024, and $189 million at March 31, 2025. The related valuation allowances totaled $1311 million at ~~September~~December 3031, 2025, $1115 million at ~~September~~December 3031, 2024, and $18 million at March 31, 2025, and were estimated based on the Company’s historical loss information and crop projections. The allowances were ~~decreased~~increased by net ~~recoveries~~provisions of $21.87 million ~~and $5.6 million~~ in the ~~six~~nine-month ~~periods~~period ended ~~September~~December 3031, 2025 and

~~2025~~decreased ~~and~~by ~~2024~~net recoveries of $0.4 million in the nine-month period December 31, ~~respectively~~2024. These net recoveries and provisions are included in selling, general, and administrative expenses in the consolidated statements of income. Interest on advances is recognized in earnings upon the farmers’ delivery of tobacco in payment of principal and interest.

Recoverable Value-Added Tax Credits

In many foreign countries, the Company’s local operating subsidiaries pay significant amounts of VAT on purchases of unprocessed and processed tobacco, crop inputs, packing materials, and various other goods and services. In some countries, VAT is a national tax, and in other countries it is assessed at the state level. Items subject to VAT vary from jurisdiction to jurisdiction, as do the rates at which the tax is assessed. When tobacco is sold to customers in the country of origin, the operating subsidiaries generally collect VAT on those sales. The subsidiaries are normally permitted to offset their VAT payments against the collections and remit only the incremental VAT collections to the tax authorities. When tobacco is sold for export, VAT is normally not assessed. In countries where tobacco sales are predominately for export markets, VAT collections generated on downstream sales are often not sufficient to fully offset the subsidiaries’ VAT payments. In those situations, unused VAT credits can accumulate. Some jurisdictions have procedures that allow companies to apply for refunds of unused VAT credits from the tax authorities, but the refund process often takes an extended period of time and it is not uncommon for refund applications to be challenged or rejected in part on technical grounds. Other jurisdictions may permit companies to sell or transfer unused VAT credits to third parties in private transactions, although approval for such transactions must normally be obtained from the tax authorities, limits on the amounts that can be transferred may be imposed, and the proceeds realized may be heavily discounted from the face value of the credits. Due to these factors, local operating subsidiaries in some countries can accumulate significant balances of VAT credits over time. The Company reviews these balances on a regular basis and records valuation allowances on the credits to reflect amounts that are not expected to be recovered, as well as discounts anticipated on credits that are expected to be sold or transferred. At ~~September~~December 3031, 2025, the aggregate balance of recoverable tax credits held by the Company’s subsidiaries totaled approximately $6566 million ($6362 million at ~~September~~December 3031, 2024 and $64 million at March 31, 2025). The related valuation allowances totaled approximately $22 million at ~~September~~December 3031, 2025 and $21 million at ~~September~~December 3031, 2024 and March 31, 2025. The net balances are reported in other current assets and other noncurrent assets in the consolidated balance sheets.

Stock Repurchase Program

On November 7, 2024, the Company's Board of Directors approved a stock repurchase program for the purchase of up to $100 million in common stock in open market or privately negotiated transactions at prices not exceeding prevailing market rates through November 15, 2026, subject to market conditions and other factors. The program had $100 million of remaining capacity for repurchases of common stock at ~~September~~December 3031, 2025.

Trade Receivable Sales

During fiscal year 2026, the Company entered into an agreement to sell certain trade receivables, at its discretion, to a third-party financial institution at a discount. The transactions have no recourse and qualify as a true sale, meaning upon receipt of the settlement amount, the associated receivable is removed from the balance sheet and the discount is recognized as an expense in selling, general, and administrative expense on the consolidated statements of income. During the three and nine months ended ~~September~~December 3031, 2025, the Company sold $4278.06 million and $120.6 million of receivables and recorded adiscounts ~~loss~~ of $0.45 million and $0.9, respectively.

New Bank Credit Agreement

On December 9, 2025, the Company entered into a new bank credit agreement that replaced its then existing bank credit agreement dated December 15, 2022. In addition to extending the maturity dates of the underlying components of the facility, the new agreement includes a $780 million five-year revolving credit facility (expiring December 9, 2030), a $275 million five-year term loan (due December 9, 2030), and a $345 million seven-year term loan (due December 9, 2032). At closing, the Company had a balance of $285 million outstanding under the revolving credit facility. Both term loans were fully funded at closing, require no amortization, and are prepayable without penalty prior to maturity. The new facility may be expanded to allow for additional borrowings of up to $300 million under certain conditions. Borrowings under the revolving credit facility and the two term loans bear interest at a variable rate benchmarked to the Secured Overnight Financing Rate ("SOFR") plus a margin based on the Company’s credit measures. The new credit agreement contains financial covenants that require the Company to maintain certain levels of tangible net worth and leverage. Those covenants are substantially the same as the covenants in the prior bank credit agreement, and the Company was in compliance with the covenants at December 31, 2025.

During the three months ended December 31, 2025, the Company entered into two new receive-floating / pay-fixed interest rate swap agreements, hedging the variable interest payments on half of the principal value of each of the new term loans. The swap agreements convert the variable benchmark rate to a fixed rate through December 9, 2030 for the five-year term loan, and through December 9, 2032 for the seven-year term loan. With the swap agreements in place, the effective interest rates on the hedged portions of the $275 million five-year term loan and the $345 seven-year term loan were 5.47% and 6.13%, respectively,

at December 31, 2025. Prior to the maturity of the swap agreements, those effective interest rates will change only if a change in the Company’s credit measures results in adjustments to the applicable credit spreads specified in the underlying loan agreement.

Compared to the prior credit agreement, there were only limited changes among the individual bank lenders participating in the new agreement. Accordingly, under the applicable accounting guidance, a significant portion of the transaction was accounted for as a debt modification rather than a debt extinguishment. As a result, only an immaterial amount of the unamortized debt issuance costs related to the prior credit agreement were charged to interest expense. The remainder of those costs remained capitalized on the Company's consolidated balance sheet and will be amortized over the term of the new credit agreement. Similarly, in the consolidated statement of cash flows, rather than presenting issuance of the entire $620 million of new term loans and repayment of $620 million of prior term loans, the amounts presented for the issuance and repayment of long-term debt reflect only the changes in the underlying principal positions among the participating bank lenders.

NOTE 5. EARNINGS PER SHARE

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

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

(in thousands, except share and per share data)

2025

2024

2025

2024

Basic Earnings (Loss) Per Share

Numerator for basic earnings (loss) per share

Net income (loss) attributable to Universal Corporation

3433,~~169~~249

2559,~~940~~639

4275,~~666~~915

2685,~~070~~709

Denominator for basic earnings (loss) per share

Weighted average shares outstanding

25,~~035~~056,~~110~~517

24,~~946~~980,~~632~~792

25,~~017~~030,~~765~~798

24,~~911~~934,~~681~~786

Basic earnings (loss) per share

1.3633

12.0439

13.7103

13.0544

Diluted Earnings (Loss) Per Share

Numerator for diluted earnings (loss) per share

Net income (loss) attributable to Universal Corporation

3433,~~169~~249

2559,~~940~~639

4275,~~666~~915

2685,~~070~~709

Denominator for diluted earnings (loss) per share:

Weighted average shares outstanding

25,~~035~~056,~~110~~517

24,~~946~~980,~~632~~792

25,~~017~~030,~~765~~798

24,~~911~~934,~~681~~786

Effect of dilutive securities

Employee and outside director share-based awards

~~143~~132,~~436~~359

~~189~~161,~~341~~875

~~137~~136,~~862~~027

~~189~~180,~~614~~367

Denominator for diluted earnings (loss) per share

25,~~178~~188,~~546~~876

25,~~135~~142,~~973~~667

25,~~155~~166,~~627~~825

25,~~101~~115,~~295~~153

Diluted earnings (loss) per share

1.3632

12.0337

13.7002

13.0441

NOTE 6. INCOME TAXES

The Company operates in the United States and many foreign countries and is subject to the tax laws of many jurisdictions. Changes in tax laws, including modifications to dividend withholding tax laws, or the interpretation of tax laws can affect the Company’s earnings, as can the resolution of pending and contested tax issues. The Company's consolidated effective income tax rate is affected by various factors, including the mix and timing of domestic and foreign earnings, discrete items, and the effect of exchange rate changes on taxes.

Numerous countries in which Company operates have enacted or are in the process of enacting legislation to adopt a global minimum effective tax rate described in the Global Anti-Base Erosion framework rules, or Pillar Two, issued by the Organization for Economic Co-operation and Development (“OECD”). The Pillar Two legislation includes establishing a 15% global minimum tax rate on a country-by-country basis and was effective for the Company's fiscal year 2025. The Company performed an assessment of the potential impact on income taxes from enactment of the Pillar Two legislation. Based on the assessment, the Company ~~does~~did not ~~anticipate~~have a material impact to the consolidated financial statements from the Pillar Two legislation in fiscal year 2026.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), (Public Law 119-21), was signed into law. The Company is still evaluating the potential impacts of the OBBBA; however, the Company does not anticipate it will have a material impact on the Company’s financial statements.

Three and six months ended September 30, 2025

The Company's consolidated effective income tax rates for the three and six months ended September 30, 2025 was 24.4% and 25.2%, respectively.

Three and six months ended September 30, 2024

The Company's consolidated effective income tax rates for the three and six months ended September 30, 2024 was 28.6% and 31.5%, respectively.

Three and nine months ended December 31, 2025

The Company's consolidated effective income tax rates for the three and nine months ended December 31, 2025 was 37.8% and 31.6%, respectively. The effective tax rate for the three and nine months ended December 31, 2025 was unfavorably impacted from a new 10% withholding tax law in Brazil on dividends paid to nonresident shareholders.

Three and nine months ended December 31, 2024

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

NOTE 7. GOODWILL AND OTHER INTANGIBLES

The Company's changes in goodwill at ~~September~~December 3031, 2025 and 2024 consisted of the following:

(in thousands of dollars)	~~Six~~Nine Months Ended ~~September~~December 3031,
	2025		2024
Balance at beginning of fiscal year	$	213,840	$	213,869
Foreign currency translation adjustment	(2542)		3(50)
Balance at end of period	$	213,~~815~~798	$	213,~~872~~819

The Company's intangible assets primarily consist of capitalized customer-related intangibles, trade names, proprietary developed technology and noncompetition agreements. The Company's intangible assets subject to amortization consisted of the following at ~~September~~December 3031, 2025 and 2024 and at March 31, 2025:

(in thousands, except useful life)				~~September~~December 3031, 2025
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	11	—	13	$	86,500	$	(3738,~~020~~953)	$	4947,~~480~~547
Trade names		5		11,100		(11,100)		—
Developed technology		13		9,300		(6,~~185~~271)		3,~~115~~029
Noncompetition agreements		4		4,000		(4,000)		—
Other		5		~~880~~712		(~~825~~653)		5559
Total intangible assets				$	111,~~780~~612	$	(5960,~~130~~977)	$	5250,~~650~~635

				September 30, 2024
				December 31, 2024
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	11	—	13	$	86,500	$	(2931,~~289~~222)	$	5755,~~211~~278
Trade names		5		11,100		(9,~~375~~930)		1,~~725~~170
Developed technology		13		9,300		(5,~~838~~925)		3,~~462~~375
Noncompetition agreements	4	—	5	4,000		(3,~~200~~437)		~~800~~563
Other		5		~~826~~772		(~~761~~714)		6558
Total intangible assets				$	111,~~726~~672	$	(4851,~~463~~228)	$	6360,~~263~~444


				March 31, 2025
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	11	—	13	$	86,500	$	(33,155)	$	53,345
Trade names		5		11,100		(10,320)		780
Developed technology		13		9,300		(6,012)		3,288
Noncompetition agreements	4	—	5	4,000		(3,625)		375
Other		5		802		(754)		48
Total intangible assets				$	111,702	$	(53,866)	$	57,836

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

The Company's amortization expense for intangible assets for the ~~six~~three and nine months ended ~~September~~December 3031, 2025 and 2024 was:

(in thousands of dollars)	Three Months Ended ~~September~~December 3031,				~~Six~~Nine Months Ended ~~September~~December 3031,
	2025		2024		2025		2024
Amortization Expense	$	21,~~601~~847	$	2,~~852~~765	$	57,~~264~~111	$	58,~~664~~429

Amortization expense for the developed technology intangible asset is recorded in cost of goods sold in the consolidated statements of income. The amortization expense for other intangible assets is recorded in selling, general, and administrative expenses in the consolidated statements of income.

As of ~~September~~December 3031, 2025, the expected future amortization expense for intangible assets was as follows:

Fiscal Year (in thousands of dollars)
2026 (excluding the six months ended September 30, 2025)	$	4,057
2026 (excluding the nine months ended December 31, 2025)	$	2,031
2027	8,~~113~~124
2028	8,077
2029	7,494
2030 and thereafter	24,909
Total expected future amortization expense	$	5250,~~650~~635

NOTE 8. DERIVATIVES AND HEDGING ACTIVITIES

Universal is exposed to various risks in its worldwide operations and uses derivative financial instruments to manage two specific types of risks – interest rate risk and foreign currency exchange rate risk. Interest rate risk has been managed by entering into interest rate swap agreements, and foreign currency exchange rate risk has been managed by entering into forward and option foreign currency exchange contracts. However, the Company’s policy also permits other types of derivative instruments. In addition, foreign currency exchange rate risk is also managed through strategies that do not involve derivative instruments, such as using local borrowings and other approaches to minimize net monetary positions in non-functional currencies. The disclosures below provide additional information about the Company’s hedging strategies, the derivative instruments used, and the effects of these activities on the consolidated statements of income and comprehensive income and the consolidated balance sheets. In the consolidated statements of cash flows, the cash flows associated with all of these activities are reported in net cash provided (used) by operating activities.

Cash Flow Hedging Strategy for Interest Rate Risk

In December ~~2022~~2025, the Company entered into receive-floating/pay-fixed interest rate swap agreements that were designated and qualify as hedges of the exposure to changes in interest payment cash flows created by fluctuations in variable interest rates on two outstanding non-amortizing bank term loans that were funded as part of a new bank credit facility in December ~~2022~~2025 (see Note 4 for additional information). Although no significant ineffectiveness is expected with this hedging strategy, the effectiveness of the interest rate swaps is evaluated on a quarterly basis. At ~~September~~December 3031, 2025, the total notional amount of the interest rate swaps was $310 million, which corresponded to a portion of the aggregate outstanding balance of the term loans.

Previously, the Company had receive-floating/pay-fixed interest rate swap agreements that were designated and qualified as cash flow hedges for two non-amortizing bank loans that were repaid concurrent with the entry into the Company's bank credit facility in December 2022. Those swap agreements, which had an aggregate notional amount of $370 million corresponding to a portion of the principal balance on the repaid loans, were terminated concurrent with the inception of the new swap agreements. The fair value of the previous swap agreements, approximately $11.8 million, was received from the counterparties upon termination and is being amortized from accumulated other comprehensive loss into earnings as a reduction of interest expense through the original maturity dates of those agreements. As of September 30, 2025, $0.7 million remained in accumulated other comprehensive loss to be amortized through December 31, 2025.13

Previously, the Company entered into receive-floating/pay-fixed interest rate swap agreements in December 2022 that were designated and qualified as cash flow hedges for two non-amortizing bank loans that were repaid concurrent with the entry into the Company's new bank credit facility in December 2025. Those swap agreements, which had an aggregate notional amount of $310 million, corresponding to a portion of the principal balance on the repaid loans, were terminated concurrent with the inception of the new swap agreements. The fair value of the previous swap agreements, approximately $1.0 million, was paid to the counterparties in December 2025 upon termination and is being amortized from accumulated other comprehensive loss into earnings as interest expense through the original maturity dates of those agreements.

Cash Flow Hedging Strategy for Foreign Currency Exchange Rate Risk Related to Sales of Crop Inputs, Forecast Purchases of Tobacco, and Related Processing Costs

The majority of the tobacco production in most countries outside the United States where Universal operates is sold in export markets at prices denominated in U.S. dollars. However, sales of crop inputs (such as seeds and fertilizers) to farmers, purchases of tobacco from farmers, and most processing costs (such as labor and energy) in those countries are usually denominated in the local currency. Changes in exchange rates between the U.S. dollar and the local currencies where tobacco is grown and processed affect the ultimate U.S. dollar sales of crop inputs and cost of processed tobacco. From time to time, the Company enters into forward and option contracts to buy U.S. dollars and sell the local currency at future dates that coincide with the sale of crop inputs to farmers. In the case of forecast purchases of tobacco and the related processing costs, the Company enters into forward and option contracts to sell U.S. dollars and buy the local currency at future dates that coincide with the expected timing of a portion of the tobacco purchases and processing costs. These strategies offset the variability of future U.S. dollar cash flows for sales of crop inputs, tobacco purchases, and processing costs for the foreign currency notional amount hedged. These hedging strategies have been used mainly for tobacco purchases, processing costs, and sales of crop inputs in Brazil. Additionally, the Company from time to time hedges a portion of the forecasted local currency-denominated operating costs in Brazil and Mexico by entering into derivative contracts to buy the local currencies and sell the U.S. dollar.

13The aggregate U.S. dollar notional amounts of forward and option contracts entered into for these purposes during the nine-month periods in fiscal years 2026 and 2025 was as follows:

The aggregate U.S. dollar notional amounts of forward and option contracts entered into for these purposes during the six-month periods in fiscal years 2026 and 2025 was as follows:


	Nine Months Ended December 31,
(in millions of dollars)	2025		2024

Tobacco purchases	$	42.2	$	101.4
Processing costs	8.3		15.7

Operating costs	21.9		28.9
Total	$	72.4	$	146.0

	Six Months Ended September 30,
(in millions of dollars)	2025		2024
Tobacco purchases	$	42.2	$	97.0
Processing costs	8.3		15.2
Operating costs	16.1		28.9
Total	$	66.6	$	141.1

Fluctuations in exchange rates and in the amount and timing of fixed-price orders from customers for their purchases from individual crop years routinely cause variations in the U.S. dollar notional amount of forward contracts entered into from one year to the next. Contracts related to tobacco purchases and crop input sales were designated and qualified as hedges of the future cash flows associated with the forecast purchases of tobacco. As a result, changes in fair values of the forward contracts have been recognized in comprehensive income as they occurred, but only recognized in earnings as a component of cost of goods sold upon sale of the related tobacco to third-party customers. The Company de-designates ineffective tobacco purchases and crop input sales hedges to selling, general, and administrative expense when the forecasted tobacco purchases or crop input sales are no longer expected to occur.

The table below presents the expected timing of when the remaining accumulated other comprehensive gains and losses as of ~~September~~December 3031, 2025 for cash flows hedges of tobacco purchases and crop input sales are expected to be recognized in earnings.

Hedging Program	Crop Year	Geographic Location(s)	Fiscal Year Earnings
Tobacco purchases	2026	Brazil	2027
Tobacco purchases	2025	Brazil	2026
Crop input sales	2026	Brazil	2027
Crop input sales	2025	Brazil	2026

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

Hedging Strategy for Foreign Currency Exchange Rate Risk Related to Net Local Currency Monetary Assets and Liabilities of Foreign Subsidiaries

Most of the Company’s foreign subsidiaries transact the majority of their sales in U.S. dollars and finance the majority of their operating requirements with U.S. dollar borrowings, and therefore use the U.S. dollar as their functional currency. These subsidiaries normally have certain monetary assets and liabilities on their balance sheets that are denominated in the local currency. Those assets and liabilities can include cash and cash equivalents, accounts receivable and accounts payable, advances to farmers and suppliers, deferred income tax assets and liabilities, recoverable value-added taxes, operating lease liabilities, and other items. Net monetary assets and liabilities denominated in the local currency are remeasured into U.S. dollars each reporting period, generating gains and losses that the Company records in earnings as a component of selling, general, and administrative expenses. The level of net monetary assets or liabilities denominated in the local currency normally fluctuates throughout the year based on the operating cycle, but it is most common for monetary assets to exceed monetary liabilities, sometimes by a significant amount. When this situation exists and the local currency weakens against the U.S. dollar, remeasurement losses are generated. Conversely, remeasurement gains are generated on a net monetary asset position when the local currency strengthens against the U.S. dollar. To manage a portion of its exposure to currency remeasurement gains and losses, the Company enters into forward contracts to buy or sell the local currency at future dates coinciding with expected changes in the overall net local currency monetary asset position of the subsidiary. Gains and losses on the forward contracts are recorded in earnings as a component of selling, general, and administrative expenses for each reporting period as they occur, and thus directly offset the related remeasurement losses or gains in the consolidated statements of income for the notional amount hedged. The Company does not designate these contracts as hedges for accounting purposes. The contracts are generally arranged to hedge the subsidiary's projected exposure to currency remeasurement risk for specified periods of time, and new contracts are entered as necessary throughout the year to replace previous contracts as they mature. The Company is currently using forward currency contracts to manage its exposure to currency remeasurement risk in Brazil. The total notional amounts of contracts outstanding at September 30, 2025 and 2024, and March 31, 2025, were approximately $58.4 million, $88.5 million, and $17.7 million, respectively. To further mitigate currency remeasurement exposure, the Company’s foreign subsidiaries may utilize short-term

subsidiaries normally have certain monetary assets and liabilities on their balance sheets that are denominated in the local currency. Those assets and liabilities can include cash and cash equivalents, accounts receivable and accounts payable, advances to farmers and suppliers, deferred income tax assets and liabilities, recoverable value-added taxes, operating lease liabilities, and other items. Net monetary assets and liabilities denominated in the local currency are remeasured into U.S. dollars each reporting period, generating gains and losses that the Company records in earnings as a component of selling, general, and administrative expenses. The level of net monetary assets or liabilities denominated in the local currency normally fluctuates throughout the year based on the operating cycle, but it is most common for monetary assets to exceed monetary liabilities, sometimes by a significant amount. When this situation exists and the local currency weakens against the U.S. dollar, remeasurement losses are generated. Conversely, remeasurement gains are generated on a net monetary asset position when the local currency strengthens against the U.S. dollar. To manage a portion of its exposure to currency remeasurement gains and losses, the Company enters into forward contracts to buy or sell the local currency at future dates coinciding with expected changes in the overall net local currency monetary asset position of the subsidiary. Gains and losses on the forward contracts are recorded in earnings as a component of selling, general, and administrative expenses for each reporting period as they occur, and thus directly offset the related remeasurement losses or gains in the consolidated statements of income for the notional amount hedged. The Company does not designate these contracts as hedges for accounting purposes. The contracts are generally arranged to hedge the subsidiary's projected exposure to currency remeasurement risk for specified periods of time, and new contracts are entered as necessary throughout the year to replace previous contracts as they mature. The Company is currently using forward currency contracts to manage its exposure to currency remeasurement risk in Brazil. The total notional amounts of contracts outstanding at December 31, 2025 and 2024, and March 31, 2025, were approximately $64.4 million, $66.7 million, and $17.7 million, respectively. To further mitigate currency remeasurement exposure, the Company’s foreign subsidiaries may utilize short-term local currency financing during certain periods. This strategy, while not involving the use of derivative instruments, is intended to minimize the subsidiary’s net monetary position by financing a portion of the local currency monetary assets with local currency monetary liabilities, thus hedging a portion of the overall position.

Several of the Company’s foreign subsidiaries transact the majority of their sales and finance the majority of their operating requirements in their local currency, and therefore use their respective local currencies as the functional currency for reporting purposes. From time to time, these subsidiaries sell tobacco to customers in transactions that are not denominated in the functional currency. In those situations, the subsidiaries routinely enter into forward exchange contracts to offset currency risk for the period of time that a fixed-price order and the related trade account receivable are outstanding with the customer. The contracts are not designated as hedges for accounting purposes.

Effect of Derivative Financial Instruments on the Consolidated Statements of Income

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

	Three Months Ended September 30,				Six Months Ended September 30,
	Three Months Ended December 31,				Nine Months Ended December 31,
(in thousands of dollars)	2025		2024		2025		2024
Cash Flow Hedges - Interest Rate Swap Agreements
Derivative
Effective Portion of Hedge
Gain (loss) recorded in accumulated other comprehensive loss	$	~~273~~(771)	$	(89,~~969)~~936	$	(12,~~420~~191)	$	(63,~~346)~~590
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	~~706~~453	$	~~1,514~~997	$	1,~~398~~851	$	23,~~989~~986
Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings	$	~~689~~688	$	688	$	12,~~377~~065	$	12,~~377~~065
Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings	Interest expense
Ineffective Portion of Hedge
Gain (loss) recognized in earnings	$	—	$	—	$	—	$	—
Location of gain (loss) recognized in earnings	Selling, general and administrative expenses
Hedged Item
Description of hedged item	Floating rate interest payments on term loans
Cash Flow Hedges - Foreign Currency Exchange Contracts
Derivative
Effective Portion of Hedge
Gain (loss) recorded in accumulated other comprehensive loss	$	~~151~~(18)	$	2(10,~~685~~217)	$	1,~~103~~085	$	(212,~~552~~769)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	(~~2,365~~942)	$	12(142)	$	(23,~~577~~519)	$	~~604~~462
Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings	Cost of goods sold
Ineffective Portion and Early De-designation of Hedges
Gain (loss) recognized in earnings	$	—	$	—	$	—	$	—
Location of gain (loss) recognized in earnings	Selling, general and administrative expenses
Hedged Item
Description of hedged item	Forecast purchases of tobacco and sales of crop inputs in Brazil
Derivatives Not Designated as Hedges - Foreign Currency Exchange Contracts
Gain (loss) recognized in earnings	$	~~(1,156)~~758	$	(21,~~352)~~127	$	~~(326)~~432	$	~~(589)~~538
Location of gain (loss) recognized in earnings	Selling, general and administrative expenses

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

For the forward foreign currency exchange contracts designated as cash flow hedges of tobacco purchases and the crop input sales in Brazil, a net hedge loss of approximately $21.34 million remained in accumulated other comprehensive loss at ~~September~~December 3031, 2025. That balance reflects gains and losses on contracts related to the 2026 ~~and 2025~~ Brazil crop, and the 2026 ~~and 2025~~ Brazil crop input sales, less the amounts reclassified to earnings related to tobacco sold through ~~September~~December 3031, 2025. Based on the hedging strategy, as the gain or loss is recognized in earnings, it is expected to be offset by a change in the direct cost for the tobacco or by

~~cost for the tobacco or by~~ a change in sales prices if the strategy has been mandated by the customer. Generally, margins on the sale of the tobacco will not be significantly affected.

Effect of Derivative Financial Instruments on the Consolidated Balance Sheets

The table below outlines the effects of the Company’s derivative financial instruments on the consolidated balance sheets at ~~September~~December 3031, 2025 and 2024, and March 31, 2025:

	Derivatives in a Fair Value Asset Position							Derivatives in a Fair Value Liability Position
	Balance Sheet Location	Fair Value as of						Balance Sheet Location	Fair Value as of
(in thousands of dollars)		~~September~~December 3031, 2025		~~September~~December 3031, 2024		March 31, 2025			~~September~~December 3031, 2025		~~September~~December 3031, 2024		March 31, 2025
Derivatives Designated as Hedging Instruments
Interest rate swap agreements	Othernon-currentassets	$	—	$	—6,310	$	1,783	Otherlong-termliabilities	$	1,~~035~~271	$	~~2,629~~—	$	—
Foreign currency exchange contracts	Othercurrentassets	~~224~~206		—		11		Accountspayable andaccruedexpenses	—		313,~~626~~843		5,228
Total		$	~~224~~206	$	—6,310	$	1,794		$	1,~~035~~271	$	613,~~255~~843	$	5,228
Derivatives Not Designated as Hedging Instruments
Foreign currency exchange contracts	Othercurrentassets	$	~~436~~1,010	$	~~144~~628	$	291	Accountspayable andaccruedexpenses	$	~~819~~185	$	3,~~344~~392	$	1,440
Total		$	~~436~~1,010	$	~~144~~628	$	291		$	~~819~~185	$	3,~~344~~392	$	1,440

Substantially all of the Company's foreign exchange derivative instruments are subject to master netting arrangements whereby the right to offset occurs in the event of default by a participating party. The Company has elected to present these contracts on a gross basis in the consolidated balance sheets.

NOTE 9. FAIR VALUE MEASUREMENTS

Universal measures certain financial and nonfinancial assets and liabilities at fair value based on applicable accounting guidance. The financial assets and liabilities measured at fair value include money market funds, trading securities associated with deferred compensation plans, interest rate swap agreements, and forward foreign currency exchange contracts. The application of the fair value guidance to nonfinancial assets and liabilities primarily includes the determination of fair values for goodwill and long-lived assets when indicators of potential impairment are present.

Under the accounting guidance, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The framework for measuring fair value is based on a fair value hierarchy that distinguishes between observable inputs and unobservable inputs. Observable inputs are based on market data obtained from independent sources. Unobservable inputs require the Company to make its own assumptions about the value placed on an asset or liability by market participants because little or no market data exists.

There are three levels within the fair value hierarchy:


Level						Description

1						quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date;

2						quoted prices in active markets for similar assets or liabilities, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability; and

3						unobservable inputs for the asset or liability.

As permitted under the accounting guidance, the Company uses net asset value per share ("NAV") as a practical expedient to measure the fair value of its money market funds. The fair values for those funds are presented under the heading "NAV" in the tables that follow in this disclosure. In measuring the fair value of liabilities, the Company considers the risk of

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

Recurring Fair Value Measurements

At ~~September~~December 3031, 2025 and 2024, and at March 31, 2025, the Company had certain financial assets and financial liabilities that were required to be measured and reported at fair value on a recurring basis. These assets and liabilities are listed in the tables below and are classified based on how their values were determined under the fair value hierarchy or the NAV practical expedient:

	September 30, 2025
	December 31, 2025
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	149	$	—	$	—	$	—	$	149
Trading securities associated with deferred compensation plans	—		12,~~303~~191		—		—		12,~~303~~191
Foreign currency exchange contracts	—		—		~~660~~1,216		—		~~660~~1,216
Total financial assets measured and reported at fair value	$	149	$	12,~~303~~191	$	~~660~~1,216	$	—	$	13,~~112~~556
Liabilities
Interest rate swap agreements	$	—	$	—	$	1,~~035~~271	$	—	$	1,~~035~~271
Foreign currency exchange contracts	—		—		~~819~~185		—		~~819~~185
Total financial liabilities measured and reported at fair value	$	—	$	—	$	1,~~854~~456	$	—	$	1,~~854~~456

	September 30, 2024
	December 31, 2024
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	~~148~~149	$	—	$	—	$	—	$	~~148~~149
Trading securities associated with deferred compensation plans	—		1211,~~376~~930		—		—		1211,~~376~~930
Foreign currency exchange contracts	—		—		144		—		144
Interest rate swap agreements	—		—		6,310		—		6,310
Total financial assets measured and reported at fair value	$	148	$	12,376	$	144	$	—	$	12,668
Foreign currency exchange contracts	—		—		628		—		628
Total financial assets measured and reported at fair value	$	149	$	11,930	$	6,938	$	—	$	19,017
Liabilities
Interest rate swap agreements	$	—	$	—	$	2,629	$	—	$	2,629
Foreign currency exchange contracts	$	—	$	—	$	17,235	$	—	$	17,235
Foreign currency exchange contracts	—		—		6,970		—		6,970
Total financial liabilities measured and reported at fair value	$	—	$	—	$	17,235	$	—	$	17,235
Total financial liabilities measured and reported at fair value	$	—	$	—	$	9,599	$	—	$	9,599


	March 31, 2025
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total

Assets
Money market funds	$	149	$	—	$	—	$	—	$	149
Trading securities associated with deferred compensation plans	—		11,313		—		—		11,313
Interest rate swap agreements	—		—		1,783		—		1,783
Foreign currency exchange contracts	—		—		302		—		302
Total financial assets measured and reported at fair value	$	149	$	11,313	$	2,085	$	—	$	13,547

Liabilities




Foreign currency exchange contracts	$	—	$	—	$	6,668	$	—	$	6,668
Total financial liabilities measured and reported at fair value	$	—	$	—	$	6,668	$	—	$	6,668

Money market funds

The fair value of money market funds, which are reported in cash and cash equivalents in the consolidated balance sheets, is based on NAV, which is the amount at which the funds are redeemable and is used as a practical expedient for fair value. These funds are not classified in the fair value hierarchy, but are disclosed as part of the fair value table above.

Trading securities associated with deferred compensation plans

Trading securities represent mutual fund investments that are matched to employee deferred compensation obligations. These investments are bought and sold as employees defer compensation, receive distributions, or make changes in the funds underlying their accounts. Quoted market prices (Level 1) are used to determine the fair values of the mutual funds.

Interest rate swap agreements

The fair values of interest rate swap agreements are determined based on dealer quotes using a discounted cash flow model matched to the contractual terms of each instrument. Since inputs to the model are observable and significant judgment is not required in determining the fair values, interest rate swaps are classified within Level 2 of the fair value hierarchy.

Foreign currency exchange contracts

The fair values of forward and option foreign currency exchange contracts are also determined based on dealer quotes using a discounted cash flow model matched to the contractual terms of each instrument. Since inputs to the model are observable and significant judgment is not required in determining the fair values, forward and option foreign currency exchange contracts are classified within Level 2 of the fair value hierarchy.

Long-term Debt

The following table summarizes the fair and carrying value of the Company’s long-term debt, and if applicable any current portion, at each of the balance sheet dates ~~September~~December 3031, 2025, and 2024 and March 31, 2025:

(in millions of dollars)	~~September~~December 3031, 2025		~~September~~December 3031, 2024		March 31, 2025
Fair market value of long term obligations	$	~~619~~615	$	~~615~~618	$	616
Carrying value of long term obligations	$	620	$	620	$	620

The Company estimates the fair value of its long-term debt using Level 2 inputs which are based upon quoted market prices for the same or similar obligations or on calculations that are based on the current interest rates available to the Company for debt of similar terms and maturities.

Nonrecurring Fair Value Measurements

Assets and liabilities that are measured at fair value on a nonrecurring basis primarily relate to long-lived assets, right-of-use operating lease assets and liabilities, goodwill and intangibles, and other current and noncurrent assets. These assets and liabilities fair values are also evaluated for impairment when potential indicators of impairment exist. Accordingly, the nonrecurring measurement of the fair value of these assets and liabilities are classified within Level 3 of the fair value hierarchy.

Long-Lived Assets

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

Consolidation of tobacco sheet operations

As discussed in Note 2, the Company initiated a plan to consolidate the European Sheet tobacco operations into the Company's facility in the Netherlands. The Company is in the process of winding down its operations in Germany, ~~resulting~~that resulted in an impairment charge of $4.9 million for the long-lived assets in fiscal year 2025, to reduce their carrying value to fair value. The long-lived assets primarily consist of a processing facility, machinery and equipment, and administrative offices. After reassessing the fair value of the long-lived assets associated with the operations in Germany, an additional $1.0 million impairment charge was recognized during three-month period ended June 30, 2025

NOTE 10. PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The Company sponsors several defined benefit pension plans covering eligible U.S. salaried employees and certain foreign and other employee groups. These plans provide retirement benefits based primarily on employee compensation and years of service. The Company also sponsors defined benefit plans that provide postretirement health and life insurance benefits for eligible U.S. employees attaining specific age and service levels, although postretirement life insurance is no longer provided for active employees.

The components of the Company’s net periodic benefit cost were as follows:

	Pension Benefits				Other Postretirement Benefits
	Three Months Ended September 30,				Three Months Ended September 30,
	Three Months Ended December 31,				Three Months Ended December 31,
(in thousands of dollars)	2025		2024		2025		2024
Service cost	$	1,~~259~~260	$	1,~~319~~315	$	1718	$	2322
Interest cost	2,~~268~~261		2,~~882~~875		266		~~264~~259
Expected return on plan assets	(3,~~027~~026)		(3,~~607~~606)		(1110)		(1413)
Net amortization and deferral	8384		174		(~~161~~159)		(~~160~~157)
Net periodic benefit cost	$	~~583~~579	$	~~768~~758	$	~~111~~115	$	~~113~~111

Pension Benefits

Other Postretirement Benefits

Six Months Ended September 30,

Nine Months Ended December 31,

(in thousands of dollars)

2025

2024

2025

2024

Service cost

23,~~511~~771

23,~~641~~956

3452

4769

Interest cost

46,~~535~~796

58,~~754~~629

~~528~~794

~~535~~794

Expected return on plan assets

(69,~~054~~080)

(710,~~214~~820)

(2232)

(2841)

Net amortization and deferral

~~166~~250

~~348~~522

(~~321~~480)

(~~320~~477)

Net periodic benefit cost

1,~~158~~737

12,~~529~~287

~~219~~334

~~234~~345

During the ~~six~~nine months ended ~~September~~December 3031, 2025, the Company made contributions of approximately $10.05 million to its pension plans. Additional contributions of $1.60 million are expected during the remaining ~~six~~three months of fiscal year 2026.

NOTE 11. STOCK-BASED COMPENSATION

The Company's shareholders approved the Universal Corporation 2023 Stock Incentive Plan (“Plan”) under which officers, directors, and employees of the Company may receive grants and awards of common stock, restricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”), stock appreciation rights, incentive stock options, and non-qualified stock options. With the exception of new hires and promotions, the Company’s practice is to award grants of stock-based compensation to officers on an annual basis at the first regularly-scheduled meeting of the Compensation Committee of the Board of Directors (the “Compensation Committee”) in the fiscal year following the public release of the Company’s financial results for the prior fiscal year. The Compensation Committee administers the Plan consistently, following previously defined guidelines.

In recent years, the Compensation Committee has awarded only grants of RSUs and PSUs. Awards of restricted stock, RSUs, and PSUs are currently outstanding.

RSUs awarded to officers and employees generally vest 3 years after the grant date. After vesting RSUs are paid out in shares of common stock. Under the terms of the RSU awards, grantees receive dividend equivalents in the form of additional RSUs that vest and are paid out on the same date as the original RSU grant. The PSUs vest at the end of a performance period of 3 years that begins with the year of the grant, are paid out in shares of common stock shortly after the vesting date, and do not carry rights to dividends or dividend equivalents prior to vesting. Shares ultimately paid out under PSU grants are dependent on the achievement of predetermined performance measures established by the Compensation Committee and can range from zero to 150% of the stated award. The Company’s outside directors receive RSUs following the annual meeting of shareholders. RSUs awarded to outside directors vest 1 year after the grant date. Restricted shares vest upon the individual’s retirement from service as a director.

During the ~~six~~nine-month periods ended ~~September~~December 3031, 2025 and 2024, the Company issued the following stock-based awards, representing the regular annual grants to officers and outside directors of the Company:

	Six Months Ended September 30,
	Nine Months Ended December 31,
	2025		2024
RSUs:
Number granted	~~114~~116,~~440~~360		96134,~~230~~360
Grant date fair value	$	62.7761	$	4749.8108
PSUs:
Number granted	51,215		62,085
Grant date fair value	$	55.89	$	38.23

Fair value expense for stock-based compensation is recognized ratably over the period from grant date to the earlier of (1) the vesting date of the award or (2) the date the grantee is eligible to retire without forfeiting the award. For employees who are already eligible to retire at the date an award is granted, the total fair value of the award is recognized as expense at the date of grant. The Company accounts for forfeitures of stock-based awards as they occur. For the ~~six~~nine-month periods ended ~~September~~December 3031, 2025 and 2024, the Company recorded total stock-based compensation expense of approximately $89.59 million and $67.65 million, respectively. The Company expects to recognize stock-based compensation expense of approximately $10.67 million during the remaining ~~six~~three months of fiscal year 2026.

NOTE 12. OPERATING SEGMENTS

Management regularly evaluates the Company’s global business activities, including product and service offerings to its customers, as well as senior management’s operational and financial responsibilities. Assessments include an analysis of how its Chief Operating Decision Maker (“CODM”) measures business performance and allocates resources. As a result of this analysis, senior management has determined the Company conducts operations across two reportable operating segments, Tobacco Operations and Ingredients Operations.

The Tobacco Operations segment activities involve contracting, procuring, processing, packing, storing, and shipping leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products throughout the world. Through various operating subsidiaries located in tobacco-growing countries around the world and significant ownership interests in unconsolidated affiliates, the Company processes and/or sells flue-cured and burley tobaccos, dark air-cured tobaccos, and oriental tobaccos. Flue-cured, burley, and oriental tobaccos are used principally in the manufacture of cigarettes, and dark air-cured tobaccos are used mainly in the manufacture of cigars, pipe tobacco, and smokeless tobacco products. Some of these tobacco types are also used in the manufacture of next generation tobacco products that are intended to provide consumers with an alternative to traditional combustible products. The Tobacco Operations segment also provides physical and chemical product testing for tobacco customers. A substantial portion of the Company’s Tobacco Operations’ revenues are derived from sales to a limited number of large, multinational cigarette and cigar manufacturers.

The Ingredients Operations segment provides its customers with a broad variety of plant-based ingredients for both human and pet consumption. The Ingredients Operations segment utilizes a variety of value-added manufacturing processes converting raw materials into a wide spectrum of fruit and vegetable juices, concentrates, dehydrated products, botanical extracts, and flavorings. Customers for the Ingredients Operations segment include large multinational food and beverage companies, smaller independent manufacturers, and retail organizations. FruitSmart, Inc. (“FruitSmart”), Silva International, Inc. (“Silva”),

and Shank’s Extracts, LLC d/b/a Universal Ingredients–Shank’s (“Universal Ingredients–Shank’s”) are the primary operations for the Ingredients Operations segment. FruitSmart supplies a broad set of juices, concentrates, pomaces, purees, fruit fibers, seeds, seed powders, and other value-added products to food, beverage, and flavor companies throughout the United States and internationally. Silva procures dehydrated vegetables, fruits, and herbs from around the world and specializes in processing natural materials into custom designed dehydrated vegetable and fruit-based ingredients for a variety of end products. Universal Ingredients–Shank’s offers a diversified portfolio of botanical extracts, distillates, natural flavors, and color for industrial and private label customers worldwide, and is known for their significant vanilla expertise. Universal Ingredients–Shank’s is also equipped to offer customers custom bottling and packaging for their products.

Universal incurs corporate overhead expenses related to senior management, sales, finance, legal, and other functions that are centralized at its corporate headquarters, as well as functions performed at several sales and administrative offices around the world. These overhead expenses are currently allocated to the reportable operating segments, generally on the basis of projected annual financial and operational performance, including volumes planned to be purchased and/or processed. Management believes this method of allocation is currently representative of the value of the related services provided to the operating segments. The CODM, which has been identified as a group comprised of the Company’s Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer, currently evaluates the performance of the operating segments based on operating income after allocated overhead expenses, plus equity in the pretax earnings of unconsolidated affiliates (“Segment Operating Income”). The CODM also uses Segment Operating Income for planning, forecasting, and allocating capital and other resources to the operating segments.

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

Three Months Ended September 30, 2025

Three Months Ended September 30, 2024

Three Months Ended December 31, 2025

Three Months Ended December 31, 2024

Tobacco Operations

Ingredients Operations

Consolidated

Tobacco Operations

Ingredients Operations

Consolidated

Sales and other operating revenues

~~659~~779,~~423~~946

9481,~~754~~342

~~754~~861,~~177~~288

~~630~~853,~~212~~884

8083,~~550~~309

~~710~~937,~~762~~193

Cost of goods sold

(~~534~~634,~~668~~173)

(7967,~~679~~527)

(~~614~~701,~~347~~700)

(~~503~~678,~~147~~885)

(64,~~470~~720)

(~~567~~743,~~617~~605)

Selling, general and administrative expenses

(4048,~~057~~583)

(1211,~~041~~218)

(5259,~~098~~801)

(3358,~~657~~178)

(11,~~873~~875)

(4570,~~530~~053)

Corporate overhead allocated to the segments

(1614,~~889~~403)

(32,~~194~~723)

(2017,~~083~~126)

(1516,~~432~~404)

(23,~~874~~055)

(1819,~~306~~459)

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

(21,~~561)~~257

—

(21,~~561)~~257

~~(642)~~2,149

—

~~(642)~~2,149

Segment operating income

6584,~~248~~044

(~~160~~126)

6583,~~088~~918

77102,~~334~~566

13,~~333~~659

78106,~~667~~225

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

2(1,~~561~~257)

~~642~~(2,149)

Restructuring and impairment costs (2)

—(711)

~~(10,573)~~—

Consolidated total

6781,~~649~~950

68104,~~736~~076

Six Months Ended September 30, 2025

Six Months Ended September 30, 2024

Nine Months Ended December 31, 2025

Nine Months Ended December 31, 2024

Tobacco Operations

Ingredients Operations

Consolidated

Tobacco Operations

Ingredients Operations

Consolidated

Sales and other operating revenues

1,~~164~~944,~~119~~065

~~183~~265,~~820~~162

12,~~347~~209,~~939~~227

1,~~142~~996,~~167~~051

~~165~~248,~~645~~954

12,~~307~~245,~~812~~005

Cost of goods sold

(~~942~~1,~~535~~576,708)

(~~151~~218,~~447~~974)

(1,~~093~~795,~~982~~682)

(~~937~~1,~~912~~616,797)

(~~130~~195,~~834~~554)

(1,~~068~~812,~~746~~351)

Selling, general and administrative expenses

(84133,~~811~~394)

(2435,~~078~~296)

(~~108~~168,~~889~~690)

(80138,~~205~~383)

(2436,~~652~~527)

(~~104~~174,~~857~~910)

Corporate overhead allocated to the segments

(3550,~~729~~132)

(69,~~755~~478)

(4259,~~484~~610)

(3148,~~760~~164)

(58,~~915~~970)

(3757,~~675~~134)

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

~~(126)~~1,131

—

~~(126)~~1,131

~~(502)~~1,647

—

~~(502)~~1,647

Segment operating income

~~100~~184,~~918~~962

1,~~540~~414

~~102~~186,~~458~~376

91194,~~788~~354

47,~~244~~903

96202,~~032~~257

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

~~126~~(1,131)

~~502~~(1,647)

Restructuring and impairment costs (2)

(1,~~122~~833)

(10,573)

Consolidated operating income

~~101~~183,~~462~~412

85190,~~961~~037

(1)Equity in pretax earnings (loss) of unconsolidated affiliates is included in segment operating income (Tobacco Operations), but is reported below consolidated operating income and excluded from that total in the consolidated statements of income and comprehensive income.

(2)Restructuring and impairment costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income and comprehensive income. See Note 2 for additional information.

	Segment Assets						Accounts Receivable, net
	September 30,2025		September 30,2024		March 31,2025		September 30,2025		September 30,2024		March 31,2025
	December 31,2025		December 31,2024		March 31,2025		December 31,2025		December 31,2024		March 31,2025
Tobacco Operations	$	2,~~555~~498,~~801~~015	$	2,~~533~~517,~~062~~063	$	2,436,416	$	~~383~~517,~~623~~732	$	~~477~~590,~~855~~731	$	566,755
Ingredients Operations	~~514~~519,~~638~~499		~~512~~523,~~524~~356		553,136		6153,~~634~~779		59,~~747~~290		59,121
Consolidated total	$	3,~~070~~017,~~439~~514	$	3,~~045~~040,~~586~~419	$	2,989,552	$	~~445~~571,~~257~~511	$	~~537~~650,~~602~~021	$	625,876
	Goodwill, net						Intangibles, net
	September 30,2025		September 30,2024		March 31,2025		September 30,2025		September 30,2024		March 31,2025
	December 31,2025		December 31,2024		March 31,2025		December 31,2025		December 31,2024		March 31,2025
Tobacco Operations	$	97,~~747~~730	$	97,~~804~~751	$	97,772	$	5559	$	6658	$	47
Ingredients Operations	116,068		116,068		116,068		5250,~~595~~576		6360,~~197~~386		57,789
Consolidated total	$	213,~~815~~798	$	213,~~872~~819	$	213,840	$	5250,~~650~~635	$	6360,~~263~~444	$	57,836
					Capital Expenditures				Depreciation and Amortization
					Six Months Ended September 30,				Six Months Ended September 30,
					Nine Months Ended December 31,				Nine Months Ended December 31,
					2025		2024		2025		2024
Tobacco Operations					$	1324,~~711~~673	$	1830,~~781~~127	$	1624,~~378~~505	$	1929,~~835~~603
Ingredients Operations					715,~~388~~630		2024,~~015~~758		1015,~~820~~701		914,~~585~~951
Consolidated total					$	2140,~~099~~303	$	3854,~~796~~885	$	2740,~~198~~206	$	2944,~~420~~554

NOTE 13. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) attributable to the Company for the ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024:

	Six Months Ended September 30,
	Nine Months Ended December 31,
(in thousands of dollars)	2025		2024
Foreign currency translation:
Balance at beginning of year	$	(42,639)	$	(44,815)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on foreign currency translation	7,~~954~~885		(3,~~933~~014)
Less: Net (gain) loss on foreign currency translation attributable to noncontrolling interests	~~255~~396		~~393~~766
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	8,~~209~~281		4(2,~~326~~248)
Balance at end of period	$	(34,~~430~~358)	$	(4047,~~489~~063)
Foreign currency hedge:
Balance at beginning of year	$	(4,914)	$	(616)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(479) and $515)	3,254		(911)
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(447) and $3,000)	3,155		(11,414)
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(442) and $145) (1)	971		(507)
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(640) and $55) (1)	1,572		(10)
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	4,~~225~~727		(111,~~418~~424)
Balance at end of period	$	(~~689~~187)	$	(212,~~034~~040)
Interest rate hedge:
Balance at beginning of year	$	2,834	$	8,488
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $374 and $1,779)	(1,047)		(4,567)
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $577 and $(1,475))	(1,614)		2,115
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $730 and $1,224) (2)	(2,044)		(3,142)
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $1,030 and $2,486) (2)	(2,886)		(3,565)
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	(34,~~091~~500)		(71,~~709~~450)
Balance at end of period	$	(~~257~~1,666)	$	~~779~~7,038
Pension and other postretirement benefit plans:
Balance at beginning of year	$	(35,332)	$	(44,642)
Other comprehensive income (loss) attributable to Universal Corporation:
Amortization included in earnings (net of tax expense (benefit) of $67 and $0)(3)	(502)		(770)
Amortization included in earnings (net of tax expense (benefit) of $82 and $(30))(3)	(665)		(898)
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	(~~502~~665)		(~~770~~898)
Balance at end of period	$	(35,~~834~~997)	$	(45,~~412~~540)
Total accumulated other comprehensive loss at end of period	$	(7172,~~210~~208)	$	(8797,~~156~~605)

(1) Gain (loss) on foreign currency cash flow hedges related to forecast purchases of tobacco and crop input sales is reclassified from accumulated other comprehensive income (loss) to cost of goods sold when the tobacco is sold to customers. See Note 8 for additional information.

(2) Gain (loss) on interest rate cash flow hedges is reclassified from accumulated other comprehensive income (loss) to interest expense when the related interest payments are made on the underlying debt, or as amortized to interest expense over the period to original maturity for terminated swap agreements. See Note 8 for additional information.

(3) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 10 for additional information.

NOTE 14. CHANGES IN SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS IN SUBSIDIARIES

A reconciliation of the changes in Universal Corporation shareholders’ equity and noncontrolling interests in subsidiaries for the three and ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024 is as follows:

Three Months Ended September 30, 2025

Three Months Ended September 30, 2024

Three Months Ended December 31, 2025

Three Months Ended December 31, 2024

(in thousands of dollars)

Universal Corporation

Non-controlling Interests

Total

Universal Corporation

Non-controlling Interests

Total

Balance at beginning of three-month period

1,~~458~~469,~~917~~982

4034,~~672~~168

1,~~499~~504,~~589~~150

1,~~413~~420,~~457~~566

3037,~~042~~438

1,~~443~~458,~~499~~004

Changes in common stock

Accrual of stock-based compensation

~~906~~1,358

—

~~906~~1,358

~~1,942~~874

—

~~1,942~~874

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

(~~3,710~~340)

—

(~~3,710~~340)

~~(318)~~—

—

~~(318)~~—

Dividend equivalents on RSUs

~~215~~199

—

~~215~~199

~~288~~305

—

~~288~~305

Changes in retained earnings

Net income (loss)

3433,~~169~~249

~~634~~8,339

3441,~~803~~588

2559,~~940~~639

8,~~029~~157

3367,~~969~~796

Cash dividends declared

Common stock

(20,~~429~~443)

—

(20,~~429~~443)

(20,020)

—

(20,020)

Dividend equivalents on RSUs

(~~215~~199)

—

(~~215~~199)

(~~288~~305)

—

(~~288~~305)

Other comprehensive income (loss)

~~129~~(998)

(~~278~~141)

(~~149~~1,139)

(~~435~~10,449)

(3373)

(~~438~~10,822)

Other changes in noncontrolling interests

Dividends paid to noncontrolling shareholders

—

~~(6,860)~~—

—

(~~630~~3,920)

Balance at end of period

1,~~469~~482,~~982~~808

3442,~~168~~366

1,~~504~~525,~~150~~174

1,~~420~~450,~~566~~610

3741,~~438~~302

1,~~458~~491,~~004~~912

Six Months Ended September 30, 2025

Six Months Ended September 30, 2024

Nine Months Ended December 31, 2025

Nine Months Ended December 31, 2024

(in thousands of dollars)

Universal Corporation

Non-controlling Interests

Total

Universal Corporation

Non-controlling Interests

Total

Balance at beginning of year

1,458,556

41,982

1,500,538

1,437,207

41,716

1,478,923

Changes in common stock

Accrual of stock-based compensation

89,~~481~~839

—

89,~~481~~839

67,~~583~~457

—

67,~~583~~457

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

(78,~~727~~067)

—

(78,~~727~~067)

(3,715)

—

(3,715)

Dividend equivalents on RSUs

~~529~~728

—

~~529~~728

~~600~~905

—

~~600~~905

Changes in retained earnings

Net income

4275,~~666~~915

614,~~504~~843

4990,~~170~~758

2685,~~070~~709

513,~~075~~232

3198,~~145~~941

Cash dividends declared

Common stock

(4061,~~835~~278)

—

(4061,~~835~~278)

(4060,~~008~~028)

—

(4060,~~008~~028)

Dividend equivalents on RSUs

(~~529~~728)

—

(~~529~~728)

(~~600~~905)

—

(~~600~~905)

Other comprehensive income (loss)

87,~~841~~843

(~~255~~396)

87,~~586~~447

(516,~~571~~020)

(~~393~~766)

(516,~~964~~786)

Other changes in noncontrolling interests

Dividends paid to noncontrolling shareholders

—

(14,063)

—

(812,~~960~~880)

Balance at end of period

1,~~469~~482,~~982~~808

3442,~~168~~366

1,~~504~~525,~~150~~174

1,~~420~~450,~~566~~610

3741,~~438~~302

1,~~458~~491,~~004~~912

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless the context otherwise requires, the terms “we,” “our,” “us,” or “Universal” or the “Company” refer to Universal Corporation together with its subsidiaries. This Quarterly Report on Form 10-Q ("Form 10-Q") and the following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Among other things, these statements relate to the Company’s financial condition, results of operation, and future business plans, operations, opportunities, and prospects. In addition, the Company and its representatives may from time to time make written or oral forward-looking statements, including statements contained in other filings with the Securities and Exchange Commission (the "SEC") and in reports to shareholders. These forward-looking statements are generally identified by the use of words such as we “expect,” “believe,” “anticipate,” “could,” “should,” “may,” “plan,” “will,” “predict,” “estimate,” and similar expressions or words of similar import. These forward-looking statements are based upon management’s current knowledge and assumptions about future events and involve risks and uncertainties that could cause actual results, performance, or achievements to be materially different from any anticipated results, prospects, performance, or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: product purchased not meeting quality and quantity requirements; reliance on a few large customers; anticipated levels of demand for and supply of our products and services; tobacco growing conditions and customer requirements; major shifts in customer requirements for leaf tobacco; higher inflation rates, tariffs and other pressures on costs; weather and other conditions; exposure to certain legal, regulatory and financial risks related to climate change; industry-specific risks related to our plant-based ingredients businesses; disruption of our supply chain for our plant-based ingredients; success in pursuing strategic investments or acquisitions and integration of new businesses and the impact of these new businesses on future results; our ability to maintain effective information technology systems and safeguard confidential information; our inability to attract, develop, retain, motivate, and maintain good relationships with our workforce; our dependence on a seasonal workforce; epidemics, pandemics or similar widespread public health concerns; government efforts to regulate the production and consumption of tobacco products; government actions on the sourcing of leaf tobacco; economic and political conditions in the countries in which we and our customers operate, including the ongoing impacts from international conflicts; sustainability considerations from governments and other stakeholders; changes in tax laws in the countries where we do business; material weaknesses in our internal control over financial reporting; our inability to use a Form S-3 registration statement; failure of our customers or suppliers to repay extensions of credit; changes in exchange rates; changes in interest rates; and low investment performance by our defined benefit pension plan assets and changes in pension plan valuation assumptions. For a further description of factors that may cause actual results to differ materially from such forward-looking statements, see Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (the "2025 Form 10-K"). We caution investors not to place undue reliance on any forward-looking statements as these statements speak only as of the date when made, and we undertake no obligation to update any forward-looking statements made in this report, except as required by law. This Form 10-Q should be read in conjunction with our 2025 Form 10-K.

Amounts described as net income (loss) and earnings (loss) per diluted share in the following discussion are attributable to Universal Corporation and exclude earnings related to non-controlling interests in subsidiaries. Any references to adjusted operating income (loss), adjusted net income (loss) attributable to Universal Corporation, adjusted diluted earnings (loss) per share, and the total for segment operating income (loss) are references to non-GAAP financial measures. These measures are not financial measures calculated in accordance with generally accepted accounting principles ("GAAP") and should not be considered as substitutes for operating income (loss), net income (loss) attributable to Universal Corporation, diluted earnings (loss) per share, cash from operating activities or any other operating or financial performance measure calculated in accordance with GAAP, and may not be comparable to similarly-titled measures reported by other companies. Reconciliations of adjusted operating income (loss) to consolidated operating (income), adjusted net income (loss) attributable to Universal Corporation to consolidated net income (loss) attributable to Universal Corporation and adjusted diluted earnings (loss) per share to diluted earnings (loss) per share are provided in Other Items below ~~to the extent these non-GAAP financial measures are referenced~~. In addition, we have provided a reconciliation of the total for segment operating income (loss) to consolidated operating income (loss) in Note 12. "Operating Segments" to the consolidated financial statements. Management evaluates the consolidated Company and segment performance excluding certain significant charges or credits. We believe these non-GAAP financial measures, which exclude items that we believe are not indicative of our core operating results, can provide investors with important information that is useful in understanding our business results and trends. References to net debt, net capitalization, and net debt to net capitalization ratio are also references to non-GAAP financial measures. These measures are not financial measures calculated in accordance with GAAP and should not be considered substitutes for total debt, total capitalization, total debt to total capitalization ratio, or any other operating or financial performance measures calculated in accordance with GAAP, and may not be comparable to similarly-titled measures reported by other companies. Reconciliations of net debt to total debt and net capitalization to total capitalization are provided in Other Items below. We believe these non-GAAP measures are meaningful indicators of liquidity and financial position.

Results of Operations

Overview

Universal delivered solid performance in the quarter and nine months ended December 31, 2025. Revenue was updown 32% and 68% and operating income was updown 183% and ~~down 2~~21%, respectively, in the ~~six~~nine months and quarter ended ~~September~~December 3031, 2025, ~~compared~~on challenging comparisons to very strong tobacco operations performance in the same periods in the prior fiscal year ~~2025~~. Our ~~Tobacco~~tobacco ~~Operations~~operations generated segment ~~achieved~~operating ~~solid~~income ~~results~~of in$185.0 ~~the~~million ~~six months~~ and ~~quarter~~$84.0 ~~Customer~~million, ~~demand~~respectively, ~~has~~for ~~remained~~the ~~firm~~nine ~~following~~months ~~several~~and ~~years~~quarter ofended ~~undersupply~~December 31, ~~despite~~2025. ~~significantly~~Tobacco ~~larger~~shipments ~~tobacco~~progressed ~~crops.~~smoothly, ~~Tobacco~~and ~~buying~~customer ~~has~~demand ~~been~~remained ~~completed~~firm in ~~most~~the ~~key~~nine ~~growing~~months ~~regions,~~ and ~~green~~quarter ~~tobacco~~ended ~~prices~~December ~~have~~31, ~~softened~~2025, infor ~~certain~~most ~~regions~~tobacco ~~compared~~styles. toAs ~~fiscal~~tobacco ~~year~~market ~~2025.~~dynamics ~~Shipments~~evolve ~~are~~toward ~~progressing smoothly~~oversupply, ~~and~~we ~~current~~believe ~~crop~~our ~~tobacco~~long istrack ~~being~~record ~~shipped~~in ~~earlier~~sourcing ~~than~~and local expertise in ~~fiscal~~our ~~year~~operating ~~2025.~~regions ~~Overall,~~position weus ~~believe~~well ~~the~~to ~~segment~~navigate ~~has~~the ~~once~~environment ~~again~~effectively ~~demonstrated~~and ~~effective~~optimize ~~management~~results inunder ~~navigating~~a ~~market~~range ~~dynamics~~of conditions.

~~Our~~In ~~Ingredients~~our ~~Operations~~Universal ~~segment~~Ingredients ~~maintained positive momentum~~business, ~~achieving~~we ~~higher~~maintained ~~sales~~revenue ~~and~~growth ~~volume~~for ~~in both~~ the ~~quarter~~nine ~~and six~~ months ended ~~September~~December 3031, 2025, asin ~~compared to~~ the ~~respective~~face ~~prior~~of ~~fiscal~~challenging ~~year~~market ~~periods.~~conditions ~~Continued~~with ~~interest~~softer incustomer ~~new~~demand ~~value-added products has translated into an active pipeline, supported by Universal Ingredients' enhanced production~~ and ~~operational~~tariff ~~capabilities~~impacts. ~~Demand~~Results for ~~our~~the ~~new~~quarter ~~products~~ended ~~remains~~December ~~solid~~31, ~~while fixed costs~~2025, ~~product~~reflected ~~mix,~~market headwinds and ~~market~~higher ~~challenges,~~fixed ~~including~~costs ~~weakness~~from in the ~~consumer-packaged~~significant ~~goods~~investments ~~industry~~we ~~and~~have ~~tariff uncertainty, had a negative impact on earnings~~made. ~~The~~We ~~segment’s~~remain ~~proactive~~focused ~~approach to meeting customers’ strategic needs, focusing~~ on ~~organic growth, and~~ converting customer interest into sales ~~is helping to build scale~~ and ~~generate~~advancing ~~returns on our investments. We believe~~ the ~~segment~~growth ~~continues~~of toour ~~be well~~solutions-~~positioned~~based ~~to capitalize on its investments and drive future growth~~portfolio.

FINANCIAL HIGHLIGHTS
	Three Months Ended September 30,						Change		Six Months Ended September 30,						Change
(in millions of dollars, except per share data)	2025			2024			%		2025			2024			%
Consolidated Results
Sales and other operating revenue	$	754.2		$	710.8		6	%	$	1,347.9		$	1,307.8		3	%
Cost of goods sold	$	614.3		$	567.6		8	%	$	1,094.0		$	1,068.7		2	%
Gross profit margin percentage	18.5		%	20.1		%	-160 bps		18.8		%	18.3		%	50 bps
Selling, general and administrative expenses	$	72.2		$	63.8		13	%	$	151.4		$	142.5		6	%
Restructuring and impairment costs	$	—		$	10.6		(100)	%	$	1.1		$	10.6		(89)	%
Operating income	$	67.6		$	68.7		(2)	%	$	101.5		$	86.0		18	%
Adjusted operating income (non-GAAP)*	$	67.6		$	79.3		(15)	%	$	102.6		$	96.5		6	%
Net income attributable to Universal Corporation	$	34.2		$	25.9		32	%	$	42.7		$	26.1		64	%
Adjusted net income attributable to Universal Corporation (non-GAAP)*	$	34.2		$	36.4		(6)	%	$	43.8		$	36.5		20	%
Diluted earnings (loss) per share	$	1.36		$	1.03		32	%	$	1.70		$	1.04		63	%
Adjusted diluted earnings (loss) per share (non-GAAP)*	$	1.36		$	1.45		(6)	%	$	1.74		$	1.46		19	%
Segment Results
Tobacco operations sales and other operating revenues	$	659.4		$	630.2		5	%	$	1,164.1		$	1,142.2		2	%
Tobacco operations operating income	$	65.2		$	77.3		(16)	%	$	100.9		$	91.8		10	%
Ingredients operations sales and other operating revenues	$	94.8		$	80.6		18	%	$	183.8		$	165.6		11	%
Ingredients operations operating income (loss)	$	(0.2)		$	1.3		(112)	%	$	1.5		$	4.2		(64)	%
*See Reconciliation of Certain non-GAAP Financial Measures in Other Items below.

During the quarter ended December 31, 2025, we also refinanced, extended the maturity of, and upsized our credit facility by $250 million, enhancing liquidity and financial flexibility to advance our strategic priorities.

Quarter Ended September 30, 2025, compared to Quarter Ended September 30, 2024


FINANCIAL HIGHLIGHTS
	Three Months Ended December 31,						Change		Nine Months Ended December 31,						Change
(in millions of dollars, except per share data)	2025			2024			%		2025			2024			%

Consolidated Results
Sales and other operating revenue	$	861.3		$	937.2		(8)	%	$	2,209.2		$	2,245.0		(2)	%
Cost of goods sold	$	701.7		$	743.6		(6)	%	$	1,795.7		$	1,812.4		(1)	%
Gross profit margin percentage	18.5		%	20.7		%	-220 bps		18.7		%	19.3		%	-60 bps
Selling, general and administrative expenses	$	76.9		$	89.5		(14)	%	$	228.3		$	232.0		(2)	%
Restructuring and impairment costs	$	0.7		$	—		100	%	$	1.8		$	10.6		(83)	%
Operating income	$	82.0		$	104.1		(21)	%	$	183.4		$	190.0		(3)	%
Adjusted operating income (non-GAAP)*	$	82.7		$	104.1		(21)	%	$	185.2		$	200.6		(8)	%
Net income attributable to Universal Corporation	$	33.2		$	59.6		(44)	%	$	75.9		$	85.7		(11)	%
Adjusted net income attributable to Universal Corporation (non-GAAP)*	$	34.0		$	59.6		(43)	%	$	77.7		$	96.2		(19)	%
Diluted earnings (loss) per share	$	1.32		$	2.37		(44)	%	$	3.02		$	3.41		(11)	%
Adjusted diluted earnings (loss) per share (non-GAAP)*	$	1.35		$	2.37		(43)	%	$	3.09		$	3.83		(19)	%
Segment Results
Tobacco operations sales and other operating revenues	$	779.9		$	853.9		(9)	%	$	1,944.1		$	1,996.1		(3)	%
Tobacco operations operating income	$	84.0		$	102.6		(18)	%	$	185.0		$	194.4		(5)	%
Ingredients operations sales and other operating revenues	$	81.3		$	83.3		(2)	%	$	265.2		$	249.0		7	%
Ingredients operations operating income (loss)	$	(0.1)		$	3.7		(103)	%	$	1.4		$	7.9		(82)	%
*See Reconciliation of Certain Non-GAAP Financial Measures in Other Items below.

Quarter Ended December 31, 2025, compared to Quarter Ended December 31, 2024

Consolidated Results

Revenue ~~increased~~decreased by 68%, or $4375.49 million, compared to the quarter ended ~~September~~December 3031, 2024, primarily driven by ~~higher~~lower tobacco sales volumes and prices as well as ingredients ~~sales~~product ~~volumes~~mix.

Operating income decreased by 221%, or $122.1 million, in the quarter ended ~~September~~December 3031, 2025, compared to the quarter ended ~~September~~December 3031, 2024, ~~due~~on toa 8% decrease in tobacco sales volumes and higher inventory write-downs ~~of $7.5 million~~, ~~unfavorable~~primarily ~~foreign~~with ~~currency~~respect ~~comparisons of~~

~~$5.1~~to ~~million,~~dark ~~and~~air-cured ~~higher~~tobacco, ~~provisions for farmer advances~~ of $26.02 million, ~~but~~ partially offset by afavorable 3%foreign ~~increase~~currency incomparisons ~~tobacco~~of ~~sales~~$7.9 ~~volumes~~million ~~coupled~~and ~~with~~ lower sales commissions of $12.17 million.

Selling, general, and administrative expenses were updown by 1314%, or $812.36 million, primarily due to ~~unfavorable~~favorable foreign currency comparisons of $57.19 million, ~~and~~lower ~~higher~~sales ~~provisions~~commissions ~~for~~of ~~farmer~~$2.7 ~~advances~~million, and lower compensation costs of $23.03 million in the quarter ended ~~September~~December 3031, 2025, compared to the quarter ended ~~September~~December 3031, 2024.

Adjusted operating income was down by $1121.74 million and adjusted net income attributable to Universal Corporation was down by $225.27 million, in the quarter ended ~~September~~December 3031, 2025, compared to the quarter ended ~~September~~December 3031, 2024, largely on ~~unfavorable~~lower ~~foreign~~tobacco ~~currency~~sales ~~comparisons,~~volumes and higher inventory write-downs, ~~and~~partially ~~higher~~offset ~~provisions~~by ~~for~~favorable ~~farmer~~foreign ~~advances~~currency comparisons.

Tobacco Operations Segment

Revenue ~~increased~~decreased by 59%, or $2973.29 million, for the quarter ended ~~September~~December 3031, 2025, compared to the quarter ended ~~September~~December 3031, 2024, primarily on aan 38% ~~increase~~decrease in tobacco sales volumes due to lower sales of certain types of tobacco as well as the timing of tobacco shipments. Operating income for the Tobacco Operations segment decreased by 1618%, or $1218.15 million, for the ~~second~~third quarter of fiscal year 2026, compared to ~~second~~third quarter of fiscal year 2025, on ~~unfavorable~~lower ~~foreign~~tobacco ~~currency~~sales ~~comparisons~~volumes ofand ~~$5.1 million,~~ higher tobacco inventory write-downs ~~of $4.0 million~~, ~~and~~primarily ~~higher~~dark ~~provisions~~air-cured ~~for~~tobacco, ~~farmer advances~~ of $26.01 million. Selling, general, and administrative expenses were ~~higher~~lower by $69.46 million for the segment mainly due to ~~unfavorable~~favorable foreign currency comparisons of $57.18 million and ~~higher~~lower ~~provisions~~sales ~~for~~commissions ~~farmer advances~~ of $2.06 million in the quarter ended ~~September~~December 3031, 2025, compared to the quarter ended ~~September~~December 3031, 2024.

Ingredients Operations Segment

Revenue for the Ingredients Operations segment ~~increased~~decreased by 182%, or $~~14.~~2.0 million, for the quarter ended ~~September~~December 3031, 2025, compared to the quarter ended ~~September~~December 3031, 2024, on ~~higher~~product ~~sales~~mix ~~volumes.~~and ~~Operating~~market ~~income~~headwinds, ~~for~~including ~~the~~weakness ~~segment~~in ~~decreased~~the byconsumer-package-goods ~~112%,~~sector orand $1tariff impacts.5 ~~million,~~Operating asincome ~~higher~~for ~~sales~~the ~~volumes~~segment ~~were~~decreased ~~offset~~ by ~~product mix~~103%, ~~higher~~or ~~inventory write-downs of~~ $3.58 million, ~~and~~on higher fixed costs, including depreciation from our ~~recently~~ expanded Universal Ingredients production facility., ~~Weakness~~market inheadwinds, ~~the~~product ~~consumer-packaged~~mix, ~~good industry~~ and ~~tariff~~higher ~~uncertainty~~inventory ~~also impacted results for the segment in the quarter ended September 30, 2025~~write-downs.

Additional Items

Cost of goods sold ~~increased~~decreased by 86%, or $4641.79 million, in the quarter ended ~~September~~December 3031, 2025, compared to the quarter ended ~~September~~December 3031, 2024, largely on ~~higher~~lower tobacco sales volumes and ingredients product mix.

Interest expense was down by 411%, or $02.80 million, in the quarter ended ~~September~~December 3031, 2025, compared to the quarter ended ~~September~~December 3031, 2024, on lower interest rates and debt balances.

Restructuring and impairment costs of $100.67 million in the quarter ended ~~September~~December 3031, ~~2024, were primarily related to the consolidation of the Company’s European tobacco sheet operations~~2025.

The consolidated effective tax rate for the three months ended ~~September~~December 3031, 2025, was 2437.48%. The consolidated tax rate for the three months ended ~~September~~December 3031, 2024, was 2823.60%. The consolidated effective tax rate for the three months ended December 31, 2025, was higher than the consolidated tax rate for the three months ended December 31, 2024, due to the impact of certain withholding taxes on dividends from foreign subsidiaries and the mix of domestic and foreign earnings.

~~Six~~Nine Months Ended ~~September~~December 3031, 2025, compared to ~~Six~~Nine Months Ended ~~September~~December 3031, 2024

Consolidated Results

Revenue ~~increased~~decreased by 32%, or $4035.18 million, in the ~~six~~nine months ended ~~September~~December 3031, 2025, compared to the ~~six~~nine months ended ~~September~~December 3031, 2024, on lower tobacco sales volumes, partially offset by higher third-party tobacco processing volumes ~~and accelerated shipments~~ in our Tobacco Operations segment and ~~higher~~a ~~sales~~favorable ~~volumes~~product mix in our Ingredients Operations segment.

Operating income ~~increased~~decreased by 183%, or $156.56 million, in the ~~six~~nine months ended ~~September~~December 3031, 2025, compared to the ~~six~~nine months ended ~~September~~December 3031, 2024, ~~primarily~~on ~~driven~~lower bysales avolumes ~~favorable~~in ~~product~~our ~~mix~~Tobacco Operations segment and higher fixed costs and market headwinds, including broader softness in the consumer-packaged-goods sector, in our ~~Tobacco~~Ingredients Operations segment, partially offset by favorable foreign currency comparisons.

Selling, general, and administrative expenses were up by 6%, or $8.8 million, primarily due to higher compensation costs of $6.1 million, legal and professional fees of $5.0 million, and provisions for farmer advances of $2.8 million, which were

~~partially~~Selling, ~~offset~~general, byand administrative expenses were down 2%, or $3.7 million, primarily due to favorable foreign currency comparisons of $10.0 million and lower tobacco sales commissions of $36.96 million partially offset by higher compensation costs of $2.8 million, legal and ~~favorable~~professional ~~foreign~~fees ~~currency~~of ~~comparisons~~$4.1 million, and provisions for farmer advances of $2.2 million in the ~~six~~nine months ended ~~September~~December 3031, 2025, compared to the ~~six~~nine months ended ~~September~~December 3031, 2024.

Adjusted operating income ~~was up by $6.1 million~~ and adjusted net income attributable to Universal Corporation ~~was~~were updown by $715.24 million and $18.4 million, respectively, in the ~~first~~nine ~~half~~months ofended ~~fiscal~~December ~~year~~31, ~~2026~~2025, compared to the ~~same~~nine ~~period~~months inended ~~the~~December ~~prior~~31, ~~fiscal year~~2024, on alower ~~favorable~~sales ~~product~~volumes ~~mix~~in our Tobacco Operations segment and higher fixed costs and market headwinds, including broader softness in the ~~Tobacco~~consumer-packaged-goods sector, in our Ingredients Operations segment, partially offset by favorable foreign currency comparisons.

Tobacco Operations Segment

Revenue ~~increased~~decreased by 23%, or $2252.0 million, for the ~~six~~nine months ended ~~September~~December 3031, 2025, compared to the ~~six~~nine months ended ~~September~~December 3031, 2024, ason ~~increased third-party tobacco processing revenue offset~~ a 14% decline in tobacco sales volumes. ~~Higher~~on ~~sales and earlier shipments of current crop tobacco largely offset~~ lower sales of ~~carryover~~certain ~~tobacco~~types ~~in the first half~~ of ~~fiscal year 2026~~tobacco, ~~compared~~partially tooffset ~~the~~by ~~first~~increased ~~half~~third-party oftobacco ~~fiscal~~processing ~~year 2025~~revenue. Operating income for the Tobacco Operations segment ~~increased~~decreased by 105%, or $9.14 million, for the ~~first~~nine ~~half~~months ofended ~~fiscal~~December ~~year~~31, ~~2026~~2025, compared to ~~first~~the ~~half~~nine ofmonths ~~fiscal~~ended ~~year~~December ~~2025~~31, 2024, largely on alower ~~favorable~~tobacco ~~product~~sales ~~mix~~volumes due to lower sales of certain types of tobacco. Selling, general, and administrative expenses were ~~higher~~lower by approximately $45.60 million for the segment mainly due to ~~higher~~favorable ~~compensation~~foreign ~~costs~~currency ofcomparisons ~~$4.3 million, legal and professional fees~~ of $39.15 million, and ~~provisions~~lower ~~for~~tobacco ~~farmer~~sales ~~advances~~commissions of $26.85 million, which were partially offset by ~~lower~~higher ~~tobacco~~compensation ~~sales~~costs ~~commissions~~ of $4.3 million, legal and professional fees of $1.96 million, and ~~favorable~~provisions ~~foreign~~for ~~currency~~farmer ~~comparisons~~advances of $12.72 million in the ~~six~~nine months ended ~~September~~December 3031, 2025, compared to the ~~six~~nine months ended ~~September~~December 3031, 2024. Uncommitted tobacco inventory levels remained ~~low~~in our target range at about 1317% of total tobacco inventory as of ~~September~~December 3031, 2025.

Ingredients Operations Segment

Revenue for the Ingredients Operations segment increased by 117%, or $1816.2 million, for the ~~six~~nine months ended ~~September~~December 3031, 2025, compared to the ~~six~~nine months ended ~~September~~December 3031, 2024, on ~~higher~~increased sales ~~volumes~~driven by organic growth. Operating income for the segment decreased by 6482%, or $26.75 million, asdue ~~higher~~to ~~sales volumes were offset by~~ product mix, and higher fixed costs, including depreciation from our ~~recently~~ expanded Universal Ingredients production facility, ~~and~~as ~~higher~~well an increase in inventory write-downs of $3.89 million. Market ~~Weakness~~headwinds, including broader softness in the consumer-packaged-goods ~~good~~sector ~~industry~~ and tariff ~~uncertainty~~impacts, also impacted the segment in the ~~six~~nine months ended ~~September~~December 3031, 2025.

Additional Items

Cost of goods sold ~~increased~~decreased by 21%, or $2516.27 million, in the ~~six~~nine months ended ~~September~~December 3031, 2025, compared to the ~~six~~nine months ended ~~September~~December 3031, 2024, largely due to ~~product~~lower ~~mix~~sales volumes in our Tobacco Operations segment.

Interest expense was down by 910%, or $35.8 million, in the ~~six~~nine months ended ~~September~~December 3031, 2025, compared to the ~~six~~nine months ended ~~September~~December 3031, 2024, on lower interest rates and debt balances.

Restructuring and impairment costs of $1.18 million in the ~~six~~nine months ended ~~September~~December 3031, 2025, ~~and~~compared to $10.6 million in the ~~six~~nine months ended ~~September~~December 3031, 2024, were primarily related to the consolidation of the Company’s European tobacco sheet operations.

The consolidated effective tax rate for the ~~six~~nine months ended ~~September~~December 3031, 2025, was 2531.26%. The consolidated tax rate for the ~~six~~nine months ended ~~September~~December 3031, 2024, was 3125.59%. The consolidated effective tax rate for the ~~six~~nine months ended ~~September~~December 3031, ~~2024~~2025, was higher than the consolidated tax rate for the ~~six~~nine months ended ~~September~~December 3031, ~~2025~~2024, due to ~~limitation~~the impact of ~~deductibility~~certain withholding taxes on dividends from foreign subsidiaries and the mix of ~~certain~~domestic ~~compensation~~and ~~amounts~~foreign earnings.

Sustainability

~~Universal~~During ~~Corporation~~the ~~continues~~quarter toended ~~make~~December ~~meaningful~~31, ~~progress~~2025, inUniversal published its ~~transition~~Fiscal toYear ~~renewable~~2025 ~~and~~Sustainability ~~lower~~Report, ~~emission~~highlighting ~~energy~~progress ~~sources.~~across ~~The~~key ~~Company~~environmental ~~has~~and ~~significantly~~supply ~~expanded~~chain ~~its~~priorities. ~~use~~In offiscal ~~clean~~year ~~electricity~~2025, asthe anCompany ~~important~~increased ~~element~~renewable ofelectricity ~~its~~consumption ~~carbon~~nearly ~~transition~~sixfold ~~plan.~~year ~~Expanded~~over ~~solar~~year, ~~capacity~~with ~~has~~17.7% ~~played~~of aglobal ~~central~~electricity ~~role~~sourced infrom ~~this~~renewable ~~progress.~~energy, ~~On-site~~supporting ~~solar~~its ~~installations~~science-based inemissions ~~Italy,~~targets ~~the~~and ~~Dominican~~commitment ~~Republic,~~to ~~and~~achieve ~~the~~net-zero ~~Philippines~~greenhouse ~~have~~gas ~~further~~emissions ~~strengthened~~across ~~Universal’s~~the ~~clean~~value ~~energy~~chain ~~footprint~~by 2050.

The Company also continued to enhance supply chain transparency and farmer engagement through MobiLeafTM, its digital farm data platform, and maintained direct relationships with more than 200,000 contracted farmers worldwide.

Other Items

Reconciliation of Certain Non-GAAP Financial Measures:

The following tables set forth certain non-recurring items included in reported results to reconcile adjusted operating income to consolidated operating income and adjusted net income to net income attributable to Universal Corporation:

Adjusted Operating Income Reconciliation
	Three Months Ended September 30,				Six Months Ended September 30,
	Three Months Ended December 31,				Nine Months Ended December 31,
(in thousands)	2025		2024		2025		2024
As Reported: Consolidated operating income	$	6781,~~649~~950	$	68104,~~736~~076	$	~~101~~183,~~462~~412	$	85190,~~961~~037
Restructuring and impairment costs(1)	—711		~~10,573~~—		1,~~122~~833		10,573
As Adjusted operating income (non-GAAP)	$	6782,~~649~~661	$	79104,~~309~~076	$	~~102~~185,~~584~~245	$	96200,~~534~~610
Adjusted Net Income Attributable to Universal Corporation and Adjusted Diluted Earnings Per Share Reconciliation
(in thousands except for per share amounts)	Three Months Ended ~~September~~December 3031,				~~Six~~Nine Months Ended ~~September~~December 3031,
	2025		2024		2025		2024
As Reported: Net income attributable to Universal Corporation	$	3433,~~169~~249	$	2559,~~940~~639	$	4275,~~666~~915	$	2685,~~070~~709
Restructuring and impairment costs(1)	—711		~~10,573~~—		1,~~122~~833		10,573
Total of non-GAAP adjustments to income before income taxes	—711		~~10,573~~—		1,~~122~~833		10,573
Non-GAAP adjustments to income taxes
Income tax benefit from restructuring and impairment costs(2)	—		(132)		(35)		(132)
Income tax benefit from restructuring and impairment costs(1)(2)	—		—		(35)		(132)
Total of income tax impacts for non-GAAP adjustments to income before income taxes	—		~~(132)~~—		(35)		(132)
As adjusted: Net income attributable to Universal Corporation (non-GAAP)	$	3433,~~169~~960	$	3659,~~381~~639	$	4377,~~753~~713	$	3696,~~511~~150
As reported: Diluted earnings per share	$	1.3632	$	12.0337	$	13.7002	$	13.0441
As adjusted: Diluted earnings per share (non-GAAP)	$	1.3635	$	12.4537	$	13.7409	$	13.4683

(1) Restructuring and impairment costs are included in Consolidated operating income in the consolidated statements of income, but excluded for purposes of Adjusted operating income, Adjusted net income available to Universal Corporation, and Adjusted diluted earnings per share.

(2) The income tax effect of non-GAAP adjustments was determined based on the timing and nature of the specific non-GAAP adjustments and their relevant jurisdictional income tax rates (foreign, state, and local) and the applicable U.S. federal income tax rates. The Company considers current and deferred income tax rates to calculate the impact to income taxes for the non-GAAP adjustments.

The following table reconciles total debt to net debt and net capitalization:

Net Debt and Net Capitalization Reconciliation
	September 30,			September 30,			March 31,
	December 31,			December 31,			March 31,
(in thousands)	2025			2024			2025
Add: Notes payable and overdrafts	$	~~539~~462,~~583~~248		$	~~579~~538,~~132~~526		$	455,039
Add: Long-term obligations	~~618~~616,~~196~~585			617,~~641~~780			617,918
Add: Current portion of long-term obligations	—			—			—
Total Debt	1,~~157~~078,~~779~~833			1,~~196~~156,~~773~~306			1,072,957
Add: Customer advances and deposits	21,~~782~~667			63,~~837~~362			3,763
Less: Cash and cash equivalents	8885,~~652~~227			80215,~~118~~108			260,115
Net Debt (non-GAAP)	$	1995,~~071,909~~273		$	1944,~~123,492~~560		$	816,605
Add: Total Universal Corporation shareholders' equity	1,~~469~~482,~~982~~808			1,~~420~~450,~~566~~610			1,458,556
Net Capitalization (non-GAAP)	$	2,~~541~~478,~~891~~081		$	2,~~544~~395,~~058~~170		$	2,275,161
Net Debt/Net Capitalization (non-GAAP)	4240		%	4439		%	36		%

Liquidity and Capital Resources

Overview

Our liquidity and operating capital resource requirements are predominantly short term in nature and primarily relate to working capital for tobacco crop purchases. Working capital needs are seasonal within each geographic region. The geographic dispersion and the timing of working capital needs permit us to predict our general level of cash requirements, although tobacco crop sizes, prices paid to farmers, shipment and delivery timing, and currency fluctuations affect requirements each year. Peak working capital requirements are generally reached during the first and second fiscal quarters. Each geographic area follows a cycle of buying, processing, and shipping tobacco to customers, and in many regions, we also provide agricultural materials to farmers during the growing season. The timing of the elements of each cycle is influenced by such factors as local weather conditions and individual customer shipping requirements, which may change the level or the duration of crop financing. Despite a predominance of short-term needs, we maintain a portion of our total debt as long-term to reduce liquidity risk. We also periodically have large cash balances that we utilize to meet our working capital requirements.

~~The~~After significant seasonal working capital investment in our tobacco operations in the first half of our fiscal year, iswe ~~usually~~generally asee ~~period~~tobacco ofinventory ~~significant~~levels and other working capital ~~investment~~items decrease in the second half of the fiscal year as tobacco crops in Africa, South America, and the United States ~~as tobacco crops~~ are ~~delivered~~being ~~by farmers~~shipped. Our working capital needs followed this pattern in the ~~six~~nine months ended ~~September~~December 3031, 2025, and we funded these working capital needs using a combination of cash on hand, short-term borrowings, customer advances, account receivables factoring, and operating cash flows. In contrast, in the ~~six~~nine months ended ~~September~~December 3031, 2024, certain tobacco purchases that would have typically been made in ~~the first half of~~ fiscal year 2025 had been made ~~earlier~~in fiscal year 2024 due to market conditions, which reduced required working capital investments in the ~~six~~nine months ended ~~September~~December 3031, 2024.

Operating Activities

Net cash used by our operations was $~~172~~58.40 million during the ~~six~~nine months ended ~~September~~December 3031, 2025. That amount was $~~124~~226.93 million higher than during the same period in fiscal year 2025, primarily on lower working capital requirements in the ~~six~~nine months ended ~~September~~December 3031, 2024. Tobacco inventory levels ~~increased~~at byDecember ~~$332.3 million from March~~ 31, 2025 ~~levels to $1.1 billion at September 30~~, ~~2025, on seasonal leaf tobacco purchases. Tobacco inventory levels at September 30, 2025,~~ were up $6866.0 million, compared to ~~September~~December 3031, 2024 levels, on larger crop sizes ~~partially offset by some earlier tobacco shipments in fiscal year 2026~~. We generally do not purchase material quantities of tobacco on a speculative basis, and we target committed inventory levels of 80% or more of total tobacco inventory. Our level of committed inventory percentages is influenced by timing of farmer deliveries of new crops, as well as the receipt of customer orders. In addition, when we contract directly with tobacco farmers, we are often obligated to buy all stalk positions, which may contain less marketable leaf styles. As of ~~September~~December 3031, 2025, our uncommitted tobacco inventories were $~~144~~165.29 million, or about 1317% of total tobacco inventory, compared to $164.0 million, or about 20% of our tobacco inventory as of March 31, 2025, and $~~108~~94.03 million, or about 10% of our tobacco inventory as of ~~September~~December 3031, 2024.

Our balance sheet accounts reflected seasonal patterns in the nine months ended December 31, 2025, on deliveries of tobacco crops by farmers in Africa, South America, and the United States. Cash and cash equivalents were down $174.9 million

Our balance sheet accounts reflected seasonal patterns in the six months ended September 30, 2025, on deliveries of tobacco crops by farmers in Africa, South America, and the United States. Accounts receivable decreased by $180.6 million from March 31, 2025 levels, on ~~collections~~seasonal onworking ~~receivables~~capital ~~offset in part by tobacco crop shipments~~needs. ~~Advances~~Accounts toreceivable ~~suppliers~~ were ~~$121.6~~down ~~million at September 30, 2025, a reduction of~~ $4754.84 million from March 31, 2025, aslevels ~~tobacco~~largely ~~crops were delivered in payment~~ on ~~some~~the oftiming ~~those balances, net~~ of ~~new~~collections ~~balances~~on ~~for upcoming tobacco crops~~receivables. Accounts receivable--unconsolidated affiliates ~~were~~increased ~~$106.9~~by ~~million higher as of September 30, 2025, compared to March 31, 2025, on larger tobacco crops. Notes payable and overdrafts were up~~ $8455.52 million from March 31, 2025 levels, on ~~seasonal~~larger ~~working~~tobacco ~~capital~~crop ~~needs~~sizes.

Accounts receivable and notes payable and overdrafts were down $9278.5 million and $76.3 million, ~~lower~~respectively, as of ~~September~~December 3031, 2025, compared to ~~September~~December 3031, 2024, onlargely ~~customer~~due ~~mix~~to accounts receivable factoring. Accounts receivable--unconsolidated affiliates were $4761.48 million higher as of ~~September~~December 3031, 2025, compared to the same period in the prior fiscal year, on larger tobacco crop sizes. ~~Notes~~Cash ~~payable~~ and ~~overdrafts~~cash equivalents were down $39129.59 million as of ~~September~~December 3031, 2025, compared to ~~September~~December 3031, 2024, due to ~~earlier~~a ~~crop~~higher of ~~shipments,~~use ~~collections~~of oncash ~~accounts~~and ~~receivable,~~cash ~~and~~equivalents ~~accounts~~to ~~receivable~~fund ~~factoring.~~working capital needs in fiscal year 2026.

Investing Activities

Our capital allocation strategy focuses on four strategic priorities: strengthening and investing for growth in our leaf tobacco business; increasing our strong dividend; exploring growth opportunities for our ingredients business; and returning excess capital to our shareholders. In deciding where to invest capital resources, we look for opportunities where we believe we can earn an adequate return as well as leverage our assets and expertise or enhance our farmer base. Our capital expenditures are generally limited to those that add value, replace or maintain equipment, increase efficiency, or position us for future growth. During the ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024, we invested approximately $2140.13 million and $3854.89 million, respectively, in our property, plant and equipment. Depreciation expense was approximately $2233.0 million and $2336.81 million for the ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024, respectively. Typically, our capital expenditures for maintenance projects are less than $30 million per fiscal year. In addition, from time to time, we undertake projects that require capital expenditures when we identify opportunities to improve efficiencies, invest in sustainability projects, add value for our customers, and position ourselves for future growth. We currently expect to spend approximately $45 to $55 million over the next twelve months on capital projects for maintenance of our facilities and other investments to grow and improve our businesses.

Our Board of Directors approved our current share repurchase program in November 2024. The program authorizes the purchase of up to $100 million of our common stock through November 15, 2026. Under the current authorization, we may purchase shares from time to time on the open market or in privately negotiated transactions at prices not exceeding prevailing market rates. Repurchases of shares under the repurchase program may vary based on management discretion, as well as changes in cash flow generation and availability. During the three months ended ~~September~~December 3031, 2025, we did not purchase any shares of common stock. As of ~~September~~December 3031, 2025, our available authorization under our current share repurchase program was $100 million.

Financing Activities

At ~~September~~December 3031, 2025, we had $1.21 billion in total debt outstanding, a decrease of $3977.05 million compared to ~~September~~December 3031, 2024. We consider the sum of notes payable and overdrafts, long-term debt (including any current portion), and customer advances and deposits, less cash, cash equivalents, and short-term investments on our balance sheet to be our net debt. We also consider our net debt plus shareholders' equity to be our net capitalization. Net debt ~~decreased~~increased by $5150.67 million to $1995.13 ~~billion~~million at ~~September~~December 3031, 2025, compared to ~~September~~December 3031, 2024. Net debt as a percentage of net capitalization was 4240% at ~~September~~December 3031, 2025, ~~down~~up from 4439% at ~~September~~December 3031, 2024, and up from 36% at March 31, 2025.

AsOn ofDecember ~~September 30~~9, 2025, we ~~had~~entered ~~$88~~into a new bank credit agreement that replaced our then-existing bank credit agreement dated December 15, 2022.7 The new unsecured bank credit agreement established a funded $275 million infive-year ~~cash~~term loan, a funded $345 million seven-year term loan, and ~~cash~~a ~~equivalents~~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 $~~340~~275 million ~~available~~term ~~under~~five-year ~~our~~term ~~committed~~loan and a $530 million revolving credit facility, ~~that~~both ~~will~~of ~~mature~~which would have matured in December 2027, ~~and~~as ~~we,~~well ~~together~~as ~~with~~a ~~our~~$375 ~~consolidated~~million ~~affiliates~~seven-year term loan, ~~had~~which ~~approximately~~would ~~$166~~have ~~million~~matured in ~~available~~December 2029, ~~uncommitted~~were terminated and replaced in conjunction with the execution of the new bank credit ~~lines~~agreement. Our obligations under the new bank credit agreement are guaranteed by our subsidiary, Universal Ingredients, Inc. The financial covenants under ~~our~~the ~~committed~~new ~~revolving~~bank credit ~~facility~~agreement require us to maintain certain levels of tangible net worth and observe restrictions on debt levels. ~~Based~~Under onapplicable ~~our~~accounting ~~September 30~~guidance, ~~2025~~a ~~financial~~significant ~~statements,~~portion weof ~~were~~the inreplacement ~~compliance~~of ~~with~~the ~~all~~term ~~financial~~loans ~~covenants~~was ofaccounted ~~our~~for ~~debt agreements~~ as ofa ~~September~~debt ~~30,~~modification ~~2025.~~rather Wethan ~~have~~a ~~no long-term~~ debt ~~maturing until fiscal year 2028~~extinguishment.

~~Our~~As ~~seasonal~~of ~~working~~December ~~capital~~31, ~~requirements~~2025, ~~for~~we ~~our~~had ~~tobacco~~$85.2 ~~business~~million ~~typically~~in ~~increase~~cash ~~significantly~~and ~~between~~cash ~~March~~equivalents, ~~and~~$595 ~~September~~million ~~and~~available ~~decline~~under ~~after~~our ~~mid-fiscal~~committed ~~year.~~revolving ~~Available~~credit ~~capital~~facility ~~resources~~that ~~from~~will ~~our~~mature ~~cash~~in ~~balances~~December 2030, ~~committed~~and ~~revolving~~we, ~~credit~~together ~~facility~~with our consolidated affiliates, ~~and~~had approximately $237 million in available, uncommitted credit lines. ~~are~~The ~~expected~~financial tocovenants ~~exceed~~under our ~~normal~~committed ~~working~~revolving ~~capital~~credit ~~needs~~facility ~~and~~require ~~currently~~us ~~anticipated~~to ~~capital~~maintain ~~expenditure~~certain ~~requirements~~levels ~~over~~of ~~the~~tangible ~~next~~net ~~twelve~~worth ~~months~~ and ~~beyond~~observe restrictions on debt levels. Based on our December

31, 2025 financial statements, we were in compliance with all financial covenants of our debt agreements as of December 31, 2025. We have no long-term debt maturing until fiscal year 2031.

Our seasonal working capital requirements for our tobacco business typically increase significantly between March and September and decline after mid-fiscal year. Available capital resources from our cash balances, committed revolving credit facility, and uncommitted credit lines are expected to exceed our normal working capital needs and currently anticipated capital expenditure requirements over the next twelve months and beyond.

Derivatives

From time to time, we use interest rate swap agreements to manage our exposure to changes in interest rates. At ~~September~~December 3031, 2025, the fair value of our outstanding interest rate swap agreements was a liability of about $1.03 million, and the notional amount swapped was $310 million. We entered into these agreements to eliminate the variability of cash flows in the interest payments on a portion of our variable-rate term loans. Under the swap agreements we receive variable rate interest and pay fixed rate interest. The swaps are accounted for as cash flow hedges.

We also use derivative instruments from time to time to hedge certain foreign currency exposures, primarily related to forecasted purchases of tobacco, related processing costs, and crop input sales, as well as our net monetary balance sheet exposures in local currency. We generally account for our hedges of forecasted tobacco purchases as cash flow hedges. As of ~~September~~December 3031, 2025, the fair value of our open hedges for forecasted tobacco purchases and crop inputs was a net asset of approximately $0.2 million. We had forward contracts outstanding that were not designated as hedges, and the fair value of those contracts was a net ~~liability~~asset of approximately $0.48 million as of ~~September~~December 3031, 2025.

Critical Accounting Estimates

A summary of our critical accounting policies is included in Part II, Item 7., "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2025 Form 10-K. Our critical accounting policies have not changed from those reported in the 2025 Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to the Company's market risk during the ~~three~~nine months ended ~~September~~December 3031, 2025. For a discussion of the Company's exposure to market risk, refer to the Company's market risk disclosures set forth in Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" of the 2025 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed by the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. The Company’s Chief Executive Officer and Chief Financial Officer evaluated, with the participation of the Company’s management, the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)), as of the end of the period covered by this Form 10-Q. 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.

Management’s Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance to management and the Board of Directors regarding the preparation and fair presentation of the consolidated financial statements. Due to inherent limitations, internal control over financial reporting may not prevent or detect all errors or misstatements in the financial statements, and even control procedures that are determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions.

As required by Exchange Act Rule 13a-15(c), the Company’s Chief Executive Officer and Chief Financial Officer, with the participation of other members of management, assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2025. The evaluation was based on the criteria set forth in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “2013 COSO Framework”). Based on its 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 below.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis.

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 management determined 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.

While the material weakness did not result in a material misstatement of the Company’s consolidated financial statements for the fiscal year ended March 31, 2025 or the quarter ended ~~September~~December 3031, 2025, there is a reasonable possibility that these deficiencies could have resulted in a material misstatement of the Company’s annual or interim consolidated financial statements that would not be prevented or detected on a timely basis.

Notwithstanding the material weakness, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s consolidated financial statements included in the 2025 Form 10-K were fairly stated in all material respects in accordance with generally accepted accounting principles in the United States of America for each of the periods presented. Therefore, no restatement of any prior period financial statements was required.

Remediation Plan

To remediate the material weakness described above, the Company is in the process of implementing 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. As the Company continues to evaluate, and works to improve, its internal control over financial reporting, management may determine that additional measures to address control deficiencies or modifications to the remediation plan are necessary. The Company cannot assure you, however, when it will remediate such weakness, nor can it be certain whether additional actions will be required or the costs of any such actions. Moreover, the Company cannot assure you that additional material weaknesses will not arise in the future.

Changes in Internal Control Over Financial Reporting

Except for the material weakness and implementation of the remediation plan described above, there were no changes in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended ~~September~~December 3031, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Other Legal Matters

Some of our subsidiaries are involved in litigation or legal matters incidental to their business activities. While the outcome of these matters cannot be predicted with certainty, we are vigorously defending them and do not currently expect that any of them will have a material adverse effect on our business or financial position. However, should one or more of these matters be resolved in a manner adverse to our current expectation, the effect on our results of operations for a particular fiscal reporting period could be material.

ITEM 1A. RISK FACTORS

There are no material changes to the risk factors previously disclosed in our 2025 Form 10-K. In evaluating our risks, readers should carefully consider the risk factors discussed in our 2025 Form 10-K, which could materially affect our business, financial condition or operating results, in addition to the other information set forth in this Form 10-Q and in our other filings with the SEC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY

The following table sets forth repurchased shares of our common stock during the three-month period ended ~~September~~December 3031, 2025:

Period (1)	Total Number of Shares Repurchased	Average Price Paid Per Share (2)		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs (3)	Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3)
July 1-31, 2025	—	$	—	—	$	100,000,000
October 1-31, 2025	—	$	—	—	$	100,000,000
August 1-31, 2025	—	—		—	100,000,000
November 1-30, 2025	—	—		—	100,000,000
September 1-30, 2025	—	—		—	100,000,000
December 1-31, 2025	—	—		—	100,000,000
Total	—	$	—	—	$	100,000,000

(1)Repurchases are based on the date the shares were traded. This presentation differs from the consolidated statement of cash flows, where the cost of share repurchases is based on the date the transactions were settled.

(2)Amounts listed for average price paid per share include broker commissions paid in the transactions.

(3)On November 7, 2024, the Company's Board of Directors, approved a stock repurchase program for the purchase of up to $100 million in common stock in open market or privately negotiated transactions through November 15, 2026, subject to market conditions and other factors. The program had $100 million of remaining capacity for repurchases of common stock at ~~September~~December 3031, 2025.

Our current dividend policy anticipates the payment of quarterly dividends in the future. However, the declaration and payment of dividends to holders of common stock is at the discretion of the Board of Directors and will be dependent upon our future earnings, financial condition, and capital requirements. Under certain provisions of our credit facilities, we must meet financial covenants relating to minimum tangible net worth and maximum levels of debt. If we were not in compliance with them, these financial covenants could restrict our ability to pay dividends. We were in compliance with all such covenants at ~~September~~December 3031, 2025.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Arrangements

During the three months ended ~~September~~December 3031, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted or terminated a Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended).

ITEM 6. EXHIBITS

10.1†						Restricted Stock Units Award Agreement, dated July 11, 2025, between Universal Corporation and Johan C. Kroner (incorporated by reference to the Registrant’s Current Report on Form 8-K, dated July 11, 2025, File No. 001-00652).
10.1						Credit Agreement, dated December 9, 2025, among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent, Truist Bank and AgFirst Farm Credit Bank, as Co-Syndication Agents, and First Horizon Bank, KeyBank National Association, CitiBank, N.A., Bank Of America, N.A., UBS Switzerland AG, Atlantic Union Bank, and Capital One, N.A., as Co-Documentation Agents (incorporated herein by reference to the Registrant's Current Report on Form 8-K dated December 9, 2025, File No. 001-000652).
31.1						Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2						Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1						Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.*
32.2						Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.*
101						Interactive Data File (submitted electronically herewith).*
						101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section and shall not be part of any registration or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

__________

*Filed herewith

† Management contract or compensatory plan or arrangement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		UNIVERSAL CORPORATION
		(Registrant)
Date:	~~November~~February 59, ~~2025~~2026	/s/ Johan C. Kroner
		Johan C. Kroner, Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)
Date:	~~November~~February 59, ~~2025~~2026	/s/ Scott J. Bleicher
		Scott J. Bleicher, Vice President and Controller
		(Principal Accounting Officer)

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