Good afternoon my name is Jason and I will be your conference operator today. At this time, I would like to welcome everyone to the Universal Corporation First Quarter Fiscal Year 2016 Earnings Call. [Operator Instructions]. Thank you. I would now like to turn the call over to your Candace Formacek, Vice President and Treasured. Ma'am you may begin your conference.

Thank you, Jason and thank you for joining us. George Freeman, our Chairman, President and CEO; and David Moore, our Chief Financial Officer are here with me today and they will join me in answering questions after these brief remarks. This call is being webcast live and will be available on our website and on telephone taped replay. It will remain on our website through November 4, 2015. If you are listening to this call after that date or if you are reading a transcription, we have not authorized such recording or transcription. It has been made available to you without our permission, review or approval. We take no responsibility for such presentation. Any transcription, inaccuracies or omissions or failures to present available updates are the responsibility of the party who is providing it to you. Before I begin to discuss our results, I caution you that we will be making forward-looking statements that are based on our current knowledge and some assumptions about the future. For information on some of the factors that can affect our estimates, I urge you to read our 10-K for the year ended March 31, 2015, as well as our Form 10-Q for the first fiscal quarter of 2016 which was filed today. The factors that can affect our estimates include such things as customer-mandated timing of shipments, weather conditions, political and economic environment, changes in currency, industry consolidation and evolution and changes in market structure or sources. Finally, some of the information I have for you today is based on unaudited allocations and is subject to reclassification. In an effort to provide useful information to investors, our comments today may include non-GAAP financial measures. For details on these measures including reconciliations to the most comparable GAAP measures, please refer to our current earnings…

[Operator Instructions]. And your first question comes from Ann Gurkin. Ms. Gurkin, please go ahead with your question.

I want to start if I may with your outlook for customer demand given that a lot of the end markets have strengthened for cigarette sales I was wondering if you can just comment kind of your outlook for demand from your customers over the next couple of years.

Well you know I think kind of like what I had explained is two days ago this year it is come back and it is not as I would say depressed as it was last year. So sort of in-line with expectation.

Yes, and we’re saying Ann, as we mentioned that we expect higher vendor volumes this year than last year.

I was wondering if you talk about opportunities you see to increase your business whether it's gaining market share or capitalizing on sustainability or leaf tracking ability, etcetera, I want you to just touch on that.

Well I think again reducing sourcing complexity you know does -- I forget how many countries [indiscernible] and I think we’re seeing continued decline in the production in these marginal market and some for tax reasons you know have to -- it will just exist because they can't afford to bring it [indiscernible] but again I think that’s going to favor global suppliers. The other thing is I think global leaf suppliers do have systems that allow us to for last [indiscernible] at least and some of the smaller regional dealers does so again that trend is going to work in our favor.

Well I think that’s the main points, you know I think we have announced again you know of the minutes per changes and some of the supply chain services that we provide and you see this opportunity at the time that plot changes ranges every single origin so it typically could involve while to see what really makes sense efficiency but it's going to benefit all the stakeholders we continue to work on that.

And then can you talk about I guess the movement of the real in the quarter, can you talk about your hedge positions and how should I think about how those flow through in the back half?

Well we’re trying to apply our hedge positions as we sell, make the sale in our revenue so we tend to use hedging program to lock in arrangements that we made with customers that type of order. So you will typically see those at the end of the same time as you see the revenue.

Okay, with the change in your COO position, any changes besides Zambia that we should look for?

No we’re not announcing any other changes but it is a good example of places where we see more efficient and minimize expanding into areas that are unnecessary potentially for where our customers and need to -- and we’re still able to source from that contract.

Yes that’s a classic example of reduction or sourcing.

Okay, and then if you can update for me the tax rate for this year? Always ask for that--

It's going to be about 35%.

And Candace, do you have worldwide uncommitted lease numbers?

Our worldwide uncommitted estimates is this is as of March, 131 million so we don’t get those updated quite frankly we should have it update later in the next quarter.

[Operator Instructions]. And your next question comes from Bryan Hunt.

I was wondering if you could talk about there are several announcements where you all won business in Mexico, the United States, Brazil as cigarette manufactures did you consulted the value chain, can you give us an idea of when you will begin shipping those initial volumes under those new agreements?

Next crop year but let's see--

Bryan, we’re going to be later in this year that will affect but depending on the lease term of the [indiscernible] is more likely to fall into probably fiscal year -- it's a mixture. We have put specific numbers out on that but we do expect that to begin to come in later this year.

And this is kind of the end of the -- we can split it between.

Yes so we don’t expect to see a full year's of that.

And my next question is, you know last year your customers whether it was a combination of slow consumption patterns or heavy inventory as well as the oversupply of leaf, there weren't too aggressive with their patterns to say the least but now we have got weather damage in Kentucky and Tennessee on the domestic barley crop, the Chinese crop I think is down high single digits on the [indiscernible] side. Can you talk about whether you’re seeing -- and you said normalized or at least more normalized order patterns. Do you see any potential anxiousness from your customers looking to secure tobacco orders more rapidly this year than they have in I guess normal periods, have you?

There is a still a lot of tobacco out there. Now granted the domestics U.S. barley [ph] it's early three much in balance it could be continues -- the crop continues to come down it got some of the domestics perhaps exited year in this early market I haven't really seen much change. It's normal but there is still delay and they are still a lot of tobacco down there.

And given that they are still want of tobacco, do you see any problem meeting any of the great specifications that you have in terms of orders either with old crop of new crop?

While we do I mean we -- in certain grades or regions it's hard we can't -- if we did some work we could get more out of the crop but this is not there. So I wouldn’t say that we have had huge issues [Technical Difficulty].

Okay and then my last question is, in the fourth quarter you all took a hit on earnings and startup cost, is there a way you can quantify the startup cost associated with the new foods business which you’re looking for this fiscal year?

We haven't put that out Bryan and we’re really not looking to start production when we look at later this year, I think improvement -- really having conversation about it.

And there is a big [indiscernible] we startup in October, takes a lot time to qualify with these beverage makers so there is a switch and inherent lag in that portion of this business. I think the in that size you can start selling that pretty much out of the gate.

We think it's going to be a good opportunity later, it's just really kind of premature we will be giving you update on that. Most of the investments so far has been capitalized as per the plan and that’s come along nicely but there are obviously we have people who have been hired, there is work going on, there have been purchases that really add up to the part of the startup, so it's inevitably. One team left for financial before we have the incomes.

And then my last question is with the decline in the crop size in China, I mean do you see an accelerating opportunity to grow your business in Asia overall?

I see a decline in China, the amount of stocks in China is still vastly exceeds the decrease in their crops. So, I don’t think it's really effective much.

[Operator Instructions]. And I'm showing at this time that there are no further questions.

Okay. Have a nice season.