Universal Corporation (NYSE:UVV) Q2 2024 Earnings Call Transcript

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Ann Gurkin: But a multiyear synergy — top line synergy target driving 10% growth — 10%, 20%, 30%? Give me a range.

Johan Kroner: Yes. No, we’re not talking. What — I can’t give you range to, and we’re not exactly talking about synergies as such, okay? This is really over and above the synergies amongst the groups are — is limited, and we told you that when we actually.

Ann Gurkin: Yes, with top line growth, so driving cross-selling opportunity?

Johan Kroner: Top line growth. Again, that’s certainly expected, else we wouldn’t have bought this, and that’s why we’re making all these investments. So I don’t know exactly what those numbers are, but certainly, we’re making significant investments. We’re making a $30 million investment that we announced in May this year at Shank’s. So we certainly expect.

Ann Gurkin: I don’t expect a return on that $30 million. I’m sure you’ve outlined that. Yes.

Johan Kroner: Yes, exactly. So that’s where — what we’re shooting for. We need to get our people out there now to market that, and then we go from there. So hopefully, in fiscal year 2025, we’ll be able to show you the results of that. And again, we’re really high on that.

Ann Gurkin: Great. And then SG&A was a little bit lower than I was looking for, for the whole company for the second quarter. Should I think of that number as a good run rate for the second half?

Johan Kroner: You know how that works. At the end of the day, depending on currency where it’s at. We were happy with it. We always look at opportunities to cut cost if we can. That’s certainly what we’re looking at. But inflation, air travel, all compensation, all of that is adding to the cost, but we look at that on a continuous basis and try to do the best we can there.

Ann Gurkin: Okay. And then Jennifer, do you have a worldwide uncommitted lease inventory number?

Jennifer Rowe: Yes. This is the quarter that we do not update that. But remember we have is $20 million as of the end of June. We believe it’s probably lower than that now.

Ann Gurkin: And then one more question. I’m sorry, interest expense, $17 million in the quarter, but with your debt paydown, I haven’t gone through what you’ve done in terms of rates. But can you help me think about that number for the back half?

Johan Kroner: As I said before, we hope to be able to reduce the net debt going forward. We have made some arrangements, as you could see that we have some additional customer advances. So we have made some arrangements with some customers to do that. It should help us as well going forward. So hopefully, those numbers will come down a bit.

Operator: There are no further questions at this time. Please proceed.

Ann Gurkin: Thank you all for joining us on our call today.

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