SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 27, 2000
------------------
COMMISSION FILE NUMBER 0-7570
DELAWARE CONSTELLATION BRANDS, INC. 16-0716709
and its subsidiaries:
NEW YORK BATAVIA WINE CELLARS, INC. 16-1222994
NEW YORK CANANDAIGUA WINE COMPANY, INC. 16-1462887
NEW YORK CANANDAIGUA EUROPE LIMITED 16-1195581
ENGLAND AND WALES CANANDAIGUA LIMITED 98-0198402
NEW YORK POLYPHENOLICS, INC. 16-1546354
NEW YORK ROBERTS TRADING CORP. 16-0865491
NETHERLANDS CANANDAIGUA B.V. 98-0205132
DELAWARE FRANCISCAN VINEYARDS, INC. 94-2602962
CALIFORNIA ALLBERRY, INC. 68-0324763
CALIFORNIA CLOUD PEAK CORPORATION 68-0324762
CALIFORNIA M.J. LEWIS CORP. 94-3065450
CALIFORNIA MT. VEEDER CORPORATION 94-2862667
DELAWARE BARTON INCORPORATED 36-3500366
DELAWARE BARTON BRANDS, LTD. 36-3185921
MARYLAND BARTON BEERS, LTD. 36-2855879
CONNECTICUT BARTON BRANDS OF CALIFORNIA, INC. 06-1048198
GEORGIA BARTON BRANDS OF GEORGIA, INC. 58-1215938
ILLINOIS BARTON CANADA, LTD. 36-4283446
NEW YORK BARTON DISTILLERS IMPORT CORP. 13-1794441
DELAWARE BARTON FINANCIAL CORPORATION 51-0311795
WISCONSIN STEVENS POINT BEVERAGE CO. 39-0638900
ILLINOIS MONARCH IMPORT COMPANY 36-3539106
(State or other (Exact name of registrant as (I.R.S. Employer
jurisdiction of specified in its charter) Identification
incorporation or No.)
organization)
300 WillowBrook Office Park, Fairport, New York 14450
----------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 218-2169
--------------
-------------------------------------------------------------
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
Constellation Brands, Inc. released the following information on September
27, 2000 regarding its second quarter 2001 results:
CONSTELLATION REPORTS 23% INCREASE IN SECOND QUARTER EARNINGS PER SHARE
WINE AND BEER LEAD GROWTH
FAIRPORT, NEW YORK, SEPTEMBER 27, 2000 - Constellation Brands, Inc. (NYSE: STZ
and STZ.B), today reported record results for the three months ended August 31,
2000 ("Second Quarter 2001"). Net income of $26 million represents an increase
of 24 percent over net income of $21 million for the three months ended August
31, 1999 ("Second Quarter 2000"). Earnings per share on a diluted basis were
$1.40 for Second Quarter 2001, versus $1.14 for the comparable quarter a year
ago, an increase of 23 percent.
Richard Sands, Chairman, Chief Executive Officer and President of
Constellation said, " We are very pleased with the results reported for the
quarter and for the first six months of this fiscal year. Led by our North
American businesses, we continue to drive sales and earnings growth,
particularly in our beer and fine wine portfolio, which outperformed their
respective industries. Net sales and operating income for our North American
businesses grew eight percent and 21 percent, respectively. Additionally, our
free cash flow exceeded earnings and we continue to pay down debt, thereby
creating greater financial flexibility as we build a foundation for future
growth."
CONSOLIDATED RESULTS
Net sales reached $637 million for Second Quarter 2001, an increase of
three percent over net sales of $622 million reported in Second Quarter 2000.
The net sales growth is attributed primarily to increases in beer and fine wine
sales in the U.S. and table wine sales in the U.K. For the six months ended
August 31, 2000 ("Six Months 2001"), net sales grew by six percent to reach
$1.22 billion versus net sales of $1.15 billion reported for the six months
ended August 31, 1999 ("Six Months 2000"). Increases in beer sales in the U.S.
and table wine sales in the U.K., as well as the inclusion of products from the
Black Velvet and Franciscan acquisitions for a full six months, accounted for
most of the increase. On a pro forma basis, sales increased four percent year to
date. After adjusting for an adverse foreign currency impact, sales for the
quarter and for the fiscal year to date period, increased four percent and eight
percent, respectively.
Gross profit grew to $201 million in Second Quarter 2001 from $189 million
reported a year ago, an increase of $12 million or six percent. The improvement
in gross profit is attributed primarily to increases in volume and pricing on
beer and fine wine. As a percent of net sales, gross profit increased 110 basis
points to 31.5 percent in Second Quarter 2001 from 30.4 percent in Second
Quarter 2000. For Six Months 2001, gross profit was $385 million versus $345
million reported for Six Months 2000. As a percent of net sales, gross profit
increased 140 basis points for Six Months 2001 to 31.4 percent. The gross profit
and gross margin improvements for Six Months 2001 can be attributed primarily to
the Black Velvet and Franciscan acquisitions, as well as increased beer sales.
Selling, general and administrative expenses increased four percent for
Second Quarter 2001 to $130 million from $125 million reported a year ago.
Increased corporate expenses accounted for most of the increase. Excluding
Corporate expenses, selling, general and administrative costs declined by 40
basis points as a percent of net sales. For Six Months 2001, selling, general
and administrative expenses reached $256 million, an increase of $21 million, or
nine percent. The inclusion of selling expenses related to brands acquired in
the Black Velvet and Franciscan acquisitions and an increase in Corporate
expenses, accounted for most of the increase.
Operating income in Second Quarter 2001 grew to $71 million versus $64
million in Second Quarter 2000, an increase of 11 percent. For Six Months 2001,
operating income increased 17 percent to $128 million from $109 million reported
for Second Quarter 2000, excluding the pretax impact of nonrecurring charges
reported in Second Quarter 2000.
Despite higher average borrowing costs, net interest expense for Second
Quarter 2001 decreased $2 million, or five percent, to $27 million from $29
million reported for Second Quarter 2000. The decline in interest expense is a
direct result of lower average borrowings for the period as the Company used
free cash flow to pay down debt. For Six Months 2001, net interest expense
increased eight percent from $51 million to $55 million, primarily due to higher
debt levels for the full period related to financing the Franciscan and Simi
acquisitions.
As a result of the above factors, net income for Second Quarter 2001
increased 24 percent to $26 million from $21 million for Second Quarter 2000.
Earnings per share on a fully diluted basis for Second Quarter 2001 grew by 23
percent to $1.40 from $1.14 reported in Second Quarter 2000. For Six Months
2001, net income grew 25 percent to $44 million from $35 million reported in Six
Months 2000, excluding the after-tax impact of nonrecurring charges reported in
Six Months 2000.
BARTON
Barton's net sales for Second Quarter 2001 grew by 14 percent to reach $285
million. Beer sales grew 20 percent for the quarter, of which approximately four
percent related to pricing. Spirits sales were down slightly due to the loss of
contract production sales. Excluding contract production, spirits sales
increased five percent, primarily from price increases on tequila products.
Operating income grew 21 percent to reach $51 million for Second Quarter
2001 from $42 million reported a year ago. The increase is attributed primarily
to growth in beer sales and the reduction of operating expenses as a percent of
sales.
Net sales and operating income for Six Months 2001 increased to $520
million and $89 million, respectively. Net sales and operating income increased
15 percent and 22 percent, respectively, primarily due to the inclusion of
products from the Black Velvet acquisition for the full six months. On a pro
forma basis, net sales and operating income increased 13 percent and 17 percent,
respectively.
CANANDAIGUA WINE
Canandaigua Wine's net sales for Second Quarter 2001 were $168 million,
decreasing slightly from Second Quarter 2000 net sales of $170 million. The
decrease is due to lower concentrate sales and lower international sales.
Operating income for Second Quarter 2001 remained virtually unchanged when
compared with Second Quarter 2000.
Net sales for Six Months 2001 of $330 million decreased one percent when
compared to a year ago. Operating income for Six Months 2001 remained virtually
unchanged compared to Six Months 2000, excluding the pretax impact of
nonrecurring charges reported for Six Months 2000.
MATTHEW CLARK
Net sales for Matthew Clark were $170 million for Second Quarter 2001
versus $183 million reported for the comparable quarter a year ago, a decrease
of seven percent. The majority of the decline, or $10 million, relates to an
adverse foreign currency impact. The remaining difference is attributed to a
decrease in draft cider sales, partially offset by growth in wine, packaged
cider and wholesale sales.
Despite the decline in net sales, operating income for Second Quarter 2001
grew to $12 million, an increase of two percent versus the comparable quarter a
year ago. The increase was due primarily to improved operating efficiencies from
the consolidation of cider production. Additionally, Matthew Clark Wholesale
continues to focus on depot rationalization as the number of depots were reduced
from 13 to 11.
Net sales of $339 million for Six Months 2001 were down from the $350
million reported for the comparable period a year ago. Excluding the pretax
nonrecurring charges reported in Six Months 2000, operating income for Six
Months 2001 increased two percent to reach $23 million. Excluding an adverse
foreign currency impact and the pretax nonrecurring charges, net sales and
operating income would have increased two percent and seven percent,
respectively.
FRANCISCAN
Franciscan's net sales for Second Quarter 2001 increased 25 percent to
reach $21 million from $17 million reported for Second Quarter 2000, driven by
increases in pricing and volume. Operating income more than doubled to reach $4
million, also driven by pricing and volume increases.
Net sales and operating income for Six Months 2001 were $43 million and $10
million, respectively. On a pro forma basis, net sales for Six Months 2001
increased 19%.
Constellation Brands, Inc., headquartered in Fairport, New York, is a
leader in the production, marketing and distribution of beverage alcohol
products in North America and the United Kingdom. The Company markets leading
brands, including imported beers, wines, spirits, cider and bottled water, and
is a leading drinks wholesaler in the United Kingdom. Constellation can be found
on the Internet at www.cbrands.com.
CONSOLIDATED FINANCIAL STATEMENTS FOLLOW
CONSTELLATION BRANDS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
August 31, 2000 February 29, 2000
(unaudited) (audited)
--------------- -----------------
ASSETS
- ------
CURRENT ASSETS:
Cash and cash investments $ 4,150 $ 34,308
Accounts receivable, net 358,297 291,108
Inventories, net 604,346 615,700
Prepaid expenses and other current assets 64,723 54,881
--------------- ---------------
Total current assets 1,031,516 995,997
PROPERTY, PLANT AND EQUIPMENT, net 530,069 542,971
OTHER ASSETS 778,474 809,823
--------------- ---------------
Total assets $ 2,340,059 $ 2,348,791
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Notes payable $ 43,300 $ 26,800
Current maturities of long-term debt 20,775 53,987
Accounts payable 137,717 122,213
Accrued excise taxes 43,530 30,446
Other accrued expenses and liabilities 250,964 204,771
--------------- ---------------
Total current liabilities 496,286 438,217
LONG-TERM DEBT, less current maturities 1,144,984 1,237,135
DEFERRED INCOME TAXES 116,918 116,447
OTHER LIABILITIES 31,836 36,152
STOCKHOLDERS' EQUITY 550,035 520,840
--------------- ---------------
Total liabilities and stockholders' equity $ 2,340,059 $ 2,348,791
=============== ===============
CONSTELLATION BRANDS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Three Months
Ended Ended
August 31, 2000 August 31, 1999 Percent
(unaudited) (unaudited) Change
--------------- --------------- -------
Gross sales $ 828,668 $ 814,845 2%
Net sales $ 637,490 $ 621,580 3%
Cost of product sold (436,851) (432,452) 1%
--------------- ---------------
Gross profit $ 200,639 $ 189,128 6%
Selling, general and administrative expenses (129,935) (125,320) 4%
Operating income 70,704 63,808 11%
--------------- ---------------
Interest expense, net (27,187) (28,640) -5%
--------------- ---------------
Income before taxes 43,517 35,168 24%
Provision for income taxes (17,407) (14,067) 24%
--------------- ---------------
Net income $ 26,110 $ 21,101 24%
=============== ===============
Earnings per common share:
Basic $ 1.43 $ 1.17 22%
Diluted $ 1.40 $ 1.14 23%
Weighted average common shares outstanding:
Basic 18,300 18,010 2%
Diluted 18,675 18,499 1%
Segment Information:
Net sales:
Barton
Beer $ 212,159 $ 177,195 20%
Spirits 72,561 73,010 -1%
--------------- ---------------
Net sales $ 284,720 $ 250,205 14%
Canandaigua Wine
Branded $ 149,272 $ 150,779 -1%
Other 18,786 19,449 -3%
--------------- ---------------
Net sales $ 168,058 $ 170,228 -1%
Matthew Clark
Branded $ 76,368 $ 80,879 -6%
Wholesale 93,310 102,331 -9%
--------------- ---------------
Net sales $ 169,678 $ 183,210 -7%
Franciscan $ 21,393 $ 17,137 25%
Corporate Operations and Other $ 774 $ 2,004 -61%
Intersegment eliminations $ (7,133) $ (1,204) 492%
--------------- ---------------
Consolidated net sales $ 637,490 $ 621,580 3%
=============== ===============
Operating income:
Barton $ 50,613 $ 41,962 21%
Canandaigua Wine 10,415 10,412 0%
Matthew Clark 12,222 11,980 2%
Franciscan 4,242 1,571 170%
Corporate Operations and Other (6,788) (2,117) 221%
--------------- ---------------
Consolidated operating income $ 70,704 $ 63,808 11%
=============== ===============
CONSTELLATION BRANDS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Six Months Six Months
Ended Ended
August 31, 2000 August 31, 1999 Percent
(unaudited) (unaudited) Change
--------------- --------------- -------
Gross sales $ 1,603,190 $ 1,519,834 5%
Net sales $ 1,223,070 $ 1,151,749 6%
Cost of product sold (838,558) (806,499) 4%
--------------- ---------------
Gross profit $ 384,512 $ 345,250 11%
Selling, general and administrative expenses (256,344) (235,821) 9%
Other nonrecurring charges - (5,510) N/A
--------------- ---------------
Operating income $ 128,168 $ 103,919 23%
Interest expense, net (54,814) (50,675) 8%
--------------- ---------------
Income before taxes 73,354 53,244 38%
Provision for income taxes (29,342) (21,297) 38%
--------------- ---------------
Net income $ 44,012 $ 31,947 38%
=============== ===============
Earnings per common share:
Basic $ 2.41 $ 1.78 35%
Diluted $ 2.36 $ 1.73 36%
Weighted average common shares outstanding:
Basic 18,265 17,994 2%
Diluted 18,627 18,459 1%
Segment Information:
Net sales:
Barton
Beer $ 375,293 $ 323,806 16%
Spirits 145,107 127,149 14%
--------------- ---------------
Net sales $ 520,400 $ 450,955 15%
Canandaigua Wine
Branded $ 293,838 $ 295,171 0%
Other 36,598 38,616 -5%
--------------- ---------------
Net sales $ 330,436 $ 333,787 -1%
Matthew Clark
Branded $ 145,983 $ 155,254 -6%
Wholesale 193,233 194,753 -1%
--------------- ---------------
Net sales $ 339,216 $ 350,007 -3%
Franciscan $ 43,282 $ 17,137 153%
Corporate Operations and Other $ 1,859 $ 2,889 -36%
Intersegment eliminations $ (12,123) $ (3,026) 301%
--------------- ---------------
Consolidated net sales $ 1,223,070 $ 1,151,749 6%
=============== ===============
Operating income:
Barton $ 89,448 $ 73,459 22%
Canandaigua Wine 18,396 16,019 15%
Matthew Clark 22,596 19,310 17%
Franciscan 9,658 1,571 515%
Corporate Operations and Other (11,930) (6,440) 85%
--------------- ---------------
Consolidated operating income $ 128,168 $ 103,919 23%
=============== ===============
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONSTELLATION BRANDS, INC.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Executive Vice
President and Chief Financial
Officer
SUBSIDIARIES
BATAVIA WINE CELLARS, INC.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA WINE COMPANY, INC.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA EUROPE LIMITED
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA LIMITED
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Finance Director
(Principal Financial Officer and
Principal Accounting Officer)
POLYPHENOLICS, INC.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
ROBERTS TRADING CORP.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, President and
Treasurer
CANANDAIGUA B.V.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Chief
Financial Officer
FRANCISCAN VINEYARDS, INC.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
ALLBERRY, INC.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
CLOUD PEAK CORPORATION
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
M.J. LEWIS CORP.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
MT. VEEDER CORPORATION
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
BARTON INCORPORATED
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BRANDS, LTD.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BEERS, LTD.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BRANDS OF CALIFORNIA, INC.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BRANDS OF GEORGIA, INC.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON CANADA, LTD.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON DISTILLERS IMPORT CORP.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON FINANCIAL CORPORATION
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
STEVENS POINT BEVERAGE CO.
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
MONARCH IMPORT COMPANY
Dated: September 27, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
INDEX TO EXHIBITS
(1) UNDERWRITING AGREEMENT
Not Applicable.
(2) PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR SUCCESSION
Not Applicable.
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES
Not Applicable.
(16) LETTER RE CHANGE IN CERTIFYING ACCOUNTANT
Not Applicable.
(17) LETTER RE DIRECTOR RESIGNATION
Not Applicable.
(20) OTHER DOCUMENTS OR STATEMENTS TO SECURITY HOLDERS
Not Applicable.
(23) CONSENTS OF EXPERTS AND COUNSEL
Not Applicable.
(24) POWER OF ATTORNEY
Not Applicable.
(27) FINANCIAL DATA SCHEDULE
Not Applicable.
(99) ADDITIONAL EXHIBITS
None