Universal Corporation

to the Universal Corporation First Quarter Fiscal Year 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to majority question again, press the star 1. I would now like to turn the conference over to Wu Shuangma, Vice President and Treasurer. You may begin.

Good morning and thank you for joining us. With me today are President Wigner, our Chairman, President and CEO, and Johan Kroener, our Chief Financial Officer. During the course of this call, we will be making forward-looking statements that are based on our current knowledge and some assumptions by the future. They are representative as of today only. Actual results, performance or achievements could differ materially from the anticipated results. Prospects, performance or achievements expressed or implied by such forward-looking statements. And we assume no obligation to update any forward-looking statements except as required by law. For information on some of the risks and uncertainties related to these forward-looking statements, please refer to our reports we filed with the ICC and under cautionary statements regarding forward-looking statements in our current earnings price release. Finally, some of the information we have for you today may be based on unaudited allocations and may be subject to reclassification. Our comments may also include certain non-GAAP financial measures. For details regarding these measures, including reconciliation of these non-GAAP measures to the most comparable GAAP measures, please refer to our current earnings price release and other public materials. This call is being webcast live and will be available for replay on our website through November 7, 2025 and via telephone through August 21, 2025. This call is copyrighted and may not be used without our permission. Other than the reference to the replay, we have not authorized and disclaimed responsibility for any recording, replay or distribution of any transcription of this call. I would like to now turn the call over to Preston.

Thank you, Housh. Good morning, everyone. Thank you for joining us today. We are off to a good start to our fiscal year. On a consolidated basis, operating income increased $17 million to $34 million for the first fiscal quarter, while revenue was down slightly to $594 million for the quarter. Our tobacco operations segment delivered improved results, driven primarily by a favorable product which offset lowered tobacco sales volumes. Seasonally, our first fiscal quarter tends to be our smaller quarter. Tobacco sales volumes in the first quarter are generally driven by shipments of carryover tobacco from the prior fiscal year. Given strong customer demand last fiscal year, we shipped significant volumes of tobacco earlier in the prior year. As a result, carryover tobacco shipments and tobacco sales volumes were lower in the first quarter of the current fiscal year compared to the same quarter last year. Flu-curated and burly crop sizes are significantly larger this fiscal year, and green tobacco purchases are largely completed in Brazil and Africa. Although it is still early, we expect that flu-curated and burly tobacco will move to more balanced supply positions during the fiscal year. Given the current expected crop sizes, we believe it is likely that flu-curated and burly tobacco will be in oversupply positions by the end of the fiscal year. Customer demand has remained firm despite larger crops, and we believe this is a result of several years of short tobacco supply. At the end of June, our uncommitted tobacco inventories were low, at about 11 percent of total tobacco inventory. Turning to our ingredients operations segment, we maintained positive momentum in the first quarter of the fiscal year 2026, with revenues and sales volumes both up in the quarter. Operating income was lower in the quarter. Segment results were impacted by a less favorable product mix, tariff uncertainty impacts on demand, and higher fixed costs associated with our recently expanded production facility. As we work to fill our new facility, we continue to see interest in our new value-added products. Supported by a foundational customer for our expanded facility, we are focused on converting additional interest from both new and existing customers into increased volumes and margins. I will now hand it over to Johan to provide details of our financial and operational performance. After which, I will offer additional thoughts and open the call for questions.