UNITED STATES 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): October 2, 2001 --------------- COMMISSION FILE NUMBER 001-08495 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 RAVENSWOOD WINERY, INC. 94-3026706 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 (IRS Employer jurisdiction of specified in its charter) Identification incorporation) No.) 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 AND REGULATION FD DISCLOSURE. ------- Constellation Brands, Inc. released the following information on October 2, 2001: CONSTELLATION ANNOUNCES 17 PERCENT INCREASE IN EARNINGS PER SHARE FOR SECOND QUARTER COMPANY MAINTAINS FULL-YEAR EARNINGS GUIDANCE FAIRPORT, NEW YORK, OCTOBER 2, 2001 - Constellation Brands, Inc. (NYSE: STZ and STZ.B) today reported earnings per share on a diluted basis of $0.82 for the three months ended August 31, 2001 ("Second Quarter 2002"), an increase of 17 percent over earnings per diluted share of $0.70 for the three months ended August 31, 2000 ("Second Quarter 2001"). Richard Sands, Chairman and Chief Executive Officer of Constellation, said, "Constellation's strong results reflect the continued execution of our proven strategy. We experienced growth across all of our business segments. Our primary growth drivers, imported beer, fine wine and the U.K. wholesale business, collectively achieved organic sales growth of 15 percent. Through our balanced approach of organic growth and growth through acquisitions, we are well positioned to continue our success." CONSOLIDATED RESULTS Net sales reached $742 million for Second Quarter 2002, a 16 percent increase over Second Quarter 2001. On a currency-adjusted basis, net sales increased 18 percent. Approximately half of the growth resulted from the inclusion of brands acquired in the Turner Road Vintners and Corus acquisitions in March 2001, including Vendange, Talus and Alice White, and from the Ravenswood brand, which was acquired in July 2001 (collectively, the "Acquisitions"). Excluding the Acquisitions, net sales increased a healthy 10 percent on a currency-adjusted basis, attributed primarily to growth in imported beer, fine wine and the U.K. wholesale business. Net sales for the six months ended August 31, 2001 ("Six Months 2002"), reached $1.4 billion, a 13 percent increase as compared to the six months ended August 31, 2000 ("Six Months 2001"). After adjusting for foreign currency impact, net sales for Six Months 2002 increased 15 percent compared to the prior year period. Gross profit rose to $238 million for Second Quarter 2002, an increase of 18 percent over Second Quarter 2001. The improvement in gross profit resulted from increased sales and a 60 basis point improvement in gross profit margin. The increase in gross profit margin to 32.1 percent resulted primarily from higher margin brands from the Acquisitions and lower grape costs, partially offset by higher spirits costs. Gross profit and gross profit margin for Six Months 2002 were $440 million and 31.8 percent, respectively, compared to $385 million and 31.4 percent for Six Months 2001. Selling, general and administrative expenses reached $149 million for Second Quarter 2002, a 15 percent increase from $130 million for Second Quarter 2001. The largest portion of the increase resulted from advertising and promotion costs associated with brands from the Acquisitions. Second Quarter 2002 selling, general and administrative expenses, as a percent of net sales, were 20.1 percent, a 30 basis point improvement over the same period a year ago. Selling, general and administrative expenses for Six Months 2002 increased to $281 million, representing 20.3 percent of net sales, from $256 million, representing 21.0 percent of net sales, for Six Months 2001. Operating income increased to $89 million for Second Quarter 2002 from $71 million for Second Quarter 2001, an increase of 26 percent. For Six Months 2002, operating income was $159 million compared to $128 million for Six Months 2001. Net interest expense reached $29 million, an increase of $2 million from Second Quarter 2001. The higher interest expense was the result of an increase in average borrowings primarily due to financing related to the Acquisitions, partially offset by a slightly lower average borrowing rate. Net interest expense for Six Months 2002 was $59 million, up from $55 million for Six Months 2001. As a result of these factors, net income reached $36 million for Second Quarter 2002, a 38 percent increase compared to net income of $26 million for Second Quarter 2001. Earnings per diluted share for Second Quarter 2002 were $0.82, a 17 percent increase over earnings per diluted share of $0.70 for Second Quarter 2001. Net income and earnings per diluted share for Six Months 2002 were $60 million and $1.39, respectively, versus $44 million and $1.18 for Six Months 2001. BARTON RESULTS Barton's Second Quarter 2002 net sales were $302 million, a six percent increase as compared to Second Quarter 2001. Beer sales increased eight percent, led by volume increases in Corona Extra, Corona Light and Modelo Especial. Recent wholesaler beer depletion data reflects growth in the mid-teens. Spirit sales were flat while spirit volumes increased four percent. Operating income was $51 million for Second Quarter 2002, an increase of one percent compared to the prior year. Barton's net sales and operating income reached $556 million and $95 million, respectively, for Six Months 2002, increases of seven percent compared to the prior year. CANANDAIGUA WINE RESULTS Net sales for Canandaigua Wine for Second Quarter 2002 increased 29 percent to $218 million. Most of the increase resulted from the addition of sales from brands acquired in the Turner Road Vintners and Corus acquisitions. Excluding the acquired brands, branded net sales grew three percent driven by volume. Operating income more than doubled compared to the prior year to reach $24 million in Second Quarter 2002. The increase was the result of additional profits from the acquired brands and the positive impact of lower grape prices. Net sales and operating income for Six Months 2002 were $403 million and $39 million, respectively, compared to $332 million and $18 million for Six Months 2001. MATTHEW CLARK RESULTS Matthew Clark's net sales for Second Quarter 2002 were $198 million versus $170 million reported for the comparable quarter a year ago, an increase of 16 percent. After adjusting for foreign currency impact, net sales increased 23 percent. The increase is due to tremendous growth in the wholesale business and solid growth in the branded business. Operating income for Second Quarter 2002 reached $14 million, an increase of 14 percent when compared to $12 million reported for the comparable period last year. The growth in operating income is primarily related to increased sales in the wholesale business. Net sales for Six Months 2002 were $380 million versus $339 million reported for the same period last year, an increase of 12 percent. Net sales increased 20 percent adjusting for the impact of foreign currency fluctuations. Operating income for Six Months 2002 reached $22 million, which was relatively flat compared to last year. FRANCISCAN RESULTS Franciscan's net sales for Second Quarter 2002 were $32 million versus $21 million reported for the comparable quarter last year, an increase of 49 percent. Sales growth this quarter was impacted by the addition of Ravenswood, which was acquired in July 2001. Excluding Ravenswood, net sales increased 24 percent. This growth was primarily due to volume increases, particularly on Estancia, Franciscan Oakville Estate and Veramonte. Driven by greater volume and the addition of Ravenswood, operating income nearly doubled compared to the same quarter a year ago, reaching $8 million. Net sales and operating income for Six Months 2002 were $58 million and $15 million, respectively, an increase of 35 percent and 57 percent compared to Six Months 2001. OUTLOOK The following statements are management's current expectations for the Company's three months ending November 30, 2001 ("Third Quarter 2002"), and fiscal year ending February 28, 2002 ("Fiscal 2002"). These statements are made as of the date of this press release and are forward-looking. Actual results may differ materially from these expectations due to a number of risks and uncertainties. The following statements include the anticipated impact of the recently announced acquisition of the Blackstone wine business by Pacific Wine Partners, the Company's joint venture with BRL Hardy. - Diluted earnings per share for Third Quarter 2002 are expected to be within a range of $1.08 to $1.12 versus $0.93 reported for Third Quarter 2001. - Diluted earnings per share for Fiscal 2002 are expected to be within a range of $3.03 to $3.08 versus $2.60 reported for Fiscal 2001. The Company's earnings expectations reflect the impact of Statement of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets," as it relates to goodwill and intangible assets acquired after June 30, 2001. With respect to goodwill and intangible assets acquired prior to July 1, 2001, the Company will adopt the new accounting rules beginning March 1, 2002. The Company is currently assessing the financial impact of SFAS 142 on its financial statements. All share and per share amounts in this press release, including within the financial statements, reflect the two-for-one stock split of both the Company's Class A and Class B common stock, which was distributed in the form of a stock dividend on May 14, 2001. STATUS OF BUSINESS OUTLOOK AND RELATED RISK FACTORS STATEMENTS During the quarter, Constellation may reiterate the estimates set forth above under the heading Outlook (collectively, the "Outlook"). Prior to the start of the Quiet Period (described below), the public can continue to rely on the Outlook as still being Constellation's current expectations on the matters covered, unless Constellation publishes a notice stating otherwise. Beginning November 19, 2001, Constellation will observe a "Quiet Period" during which the Outlook no longer constitutes the Company's current expectations. During the Quiet Period, the Outlook should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to update by the Company. During the Quiet Period, Constellation's representatives will not comment concerning the Outlook or Constellation's financial results or expectations. The Quiet Period will extend until the day when Constellation's next quarterly Earnings Release is published, presently scheduled for Thursday, January 3, 2002. The statements made under the heading Outlook are forward-looking statements. Unless otherwise noted, these forward-looking statements do not take into account the impact of any future acquisition, merger or any other business combination, divestiture or financing that may be completed after the date of this release. Further, these statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. For a detailed list of the risk factors that may adversely impact these forward-looking statements, please refer to Attachment A set forth below in this press release; please also refer to our Company's Securities and Exchange Commission filings. ABOUT CONSTELLATION Constellation Brands, Inc. is a leader in the production and marketing of beverage alcohol brands in North America and the United Kingdom and is a leading independent drinks wholesaler in the United Kingdom. As the second largest supplier of wine, the second largest importer of beer and the fourth largest supplier of distilled spirits, Constellation is the largest single-source supplier of these products in the United States. In the United Kingdom, Constellation is a leading marketer of wine and the second largest producer and marketer of cider. With its broad product portfolio, Constellation believes it is distinctly positioned to satisfy an array of consumer preferences across all beverage alcohol categories. Leading brands in Constellation's portfolio include: Franciscan Oakville Estate, Simi, Estancia, Ravenswood, Corona Extra, Modelo Especial, St. Pauli Girl, Almaden, Arbor Mist, Talus, Vendange, Alice White, Black Velvet, Fleischmann's, Schenley, Ten High, Stowells of Chelsea, Blackthorn and K. CONFERENCE CALL DETAILS A conference call to discuss the quarterly results will be hosted by Richard Sands, Chairman and CEO, and Tom Summer, Executive Vice President and CFO, on Tuesday, October 2, 2001, at 11:00 a.m. EDT. The conference call can be accessed by dialing (800) 860-2442. A live listen-only web cast of the conference call is available on the Internet at Constellation's web site: www.cbrands.com under "Investor Information." If you are unable to participate in the conference call, there will be a replay available on Constellation's web site or by dialing (877) 344-7529 from approximately 1:30 p.m. EDT on Tuesday, October 2, 2001, through 12:00 a.m. EDT on Wednesday, October 10, 2001. Digital Playback Instructions - Courtesy of ChorusCall 1. Dial 877-DIG-PLAY (877-344-7529) or 412-858-1440. 2. Enter '136' when prompted for your account number followed by the # sign. 3. Please press '1' to play a recorded conference. 4. Please enter '252819' when prompted to enter the conference number followed by the # sign. 5. Please clearly state your name and company name when prompted to do so followed by any key. 6. Please press '1' to begin the conference playback. Note: You may press '0' at anytime during the conference to hear the Detailed Instructions Menu. You may press '2' at anytime during the conference to stop the playback entirely. You will be placed in the Introduction Menu. -------------------------------------------------------------------------------- CONSOLIDATED FINANCIAL STATEMENTS FOLLOW CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) August 31, 2001 February 28, 2001 --------------- ----------------- ASSETS ------ CURRENT ASSETS: Cash and cash investments $ 6,768 $ 145,672 Accounts receivable, net 406,929 314,262 Inventories, net 769,117 670,018 Prepaid expenses and other current assets 70,987 61,037 --------------- ----------------- Total current assets 1,253,801 1,190,989 PROPERTY, PLANT AND EQUIPMENT, net 560,452 548,614 OTHER ASSETS 1,092,458 772,566 --------------- ----------------- Total assets $ 2,906,711 $ 2,512,169 =============== ================= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Notes payable $ 88,991 $ 4,184 Current maturities of long-term debt 75,854 54,176 Accounts payable 149,481 114,793 Accrued excise taxes 45,496 55,954 Other accrued expenses and liabilities 256,953 198,053 --------------- ----------------- Total current liabilities 616,775 427,160 LONG-TERM DEBT, less current maturities 1,284,120 1,307,437 DEFERRED INCOME TAXES 132,521 131,974 OTHER LIABILITIES 33,238 29,330 STOCKHOLDERS' EQUITY 840,057 616,268 --------------- ----------------- Total liabilities and stockholders' equity $ 2,906,711 $ 2,512,169 =============== =================