CONTACTS
|
|
Media
|
Investor
Relations
|
Mike
Martin -
585-218-3669
|
Lisa
Schnorr
- 585-218-3677
|
Kevin
Harwood
- 585-218-3666
|
Bob
Czudak -
585-218-3668
|
· |
Net
sales of $1.3 billion, up 17% over prior year
|
· |
Reported
net income up 12% to $109.0 million
|
· |
Reported
diluted EPS up 10% to $0.46
|
· |
Comparable
basis net income up 25% to $123.6 million
|
· |
Comparable
basis diluted EPS up 24% to $0.52
|
· |
Net
sales for wines segment up 19%
|
· |
Net
sales for imported beers up 16%
|
· |
Company
updates fiscal year 2006 EPS guidance, provides fourth quarter
EPS
guidance
|
Reported
Basis
|
Comparable
Basis
|
|||
FY06
Estimate
|
FY05
Actual
|
FY06
Estimate
|
FY05
Actual
|
|
Fourth
Quarter
Ending
Feb. 28
|
$0.29
-
$0.32
|
$0.20
|
$0.34
-
$0.37
|
$0.31
|
Fiscal
Year
Ending
Feb. 28
|
$1.40
-
$1.43
|
$1.19
|
$1.57
-
$1.60
|
$1.35
|
· |
Consolidated
net sales growth in the mid-teens, including the benefit of 10
additional
months of Robert Mondavi.
|
· |
Interest
expense in the range of $190-$195
million.
|
· |
Tax
rate of
approximately 33 percent on a reported basis, which includes a
benefit of
three percent as a result of adjustments to income tax accruals
in
connection with the completion of various income tax examinations,
and
approximately 36 percent on a comparable basis, which excludes
the
aforementioned three percent
benefit.
|
· |
Approximately
240 million weighted average diluted
shares.
|
· |
Cash
provided
by operating activities in the range of $380-$400
million.
|
· |
Capital
expenditures to approximate $140
million.
|
· |
Debt
of
approximately $2.9 billion at Feb. 28,
2006.
|
· |
Reported
and
comparable basis diluted earnings per share include approximately
$4.0
million of expenses associated with the company’s tender offer for Vincor
International Inc., to be recognized in the fourth quarter of fiscal
year
2006.
|
CONSTELLATION
BRANDS, INC. AND SUBSIDIARIES
|
|||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|||||||
(in
thousands)
|
|||||||
November
30, 2005
|
February
28, 2005
|
||||||
ASSETS
|
|||||||
CURRENT
ASSETS:
|
|||||||
Cash
and cash investments
|
$
|
26,374
|
$
|
17,635
|
|||
Accounts
receivable, net
|
969,528
|
849,642
|
|||||
Inventories
|
1,805,962
|
1,607,735
|
|||||
Prepaid
expenses and other
|
194,850
|
259,023
|
|||||
Total
current assets
|
2,996,714
|
2,734,035
|
|||||
PROPERTY,
PLANT AND EQUIPMENT, net
|
1,414,135
|
1,596,367
|
|||||
GOODWILL
|
2,184,486
|
2,182,669
|
|||||
INTANGIBLE
ASSETS, net
|
884,747
|
945,650
|
|||||
OTHER
ASSETS, net
|
222,423
|
345,451
|
|||||
Total
assets
|
$
|
7,702,505
|
$
|
7,804,172
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Notes
payable to banks
|
$
|
127,745
|
$
|
16,475
|
|||
Current
maturities of long-term debt
|
225,721
|
68,094
|
|||||
Accounts
payable
|
485,722
|
345,254
|
|||||
Accrued
excise taxes
|
78,691
|
74,356
|
|||||
Other
accrued expenses and liabilities
|
682,958
|
633,908
|
|||||
Total
current liabilities
|
1,600,837
|
1,138,087
|
|||||
LONG-TERM
DEBT, less current maturities
|
2,591,739
|
3,204,707
|
|||||
DEFERRED
INCOME TAXES
|
374,693
|
389,886
|
|||||
OTHER
LIABILITIES
|
228,515
|
291,579
|
|||||
STOCKHOLDERS'
EQUITY
|
2,906,721
|
2,779,913
|
|||||
Total
liabilities and stockholders' equity
|
$
|
7,702,505
|
$
|
7,804,172
|
CONSTELLATION
BRANDS, INC. AND SUBSIDIARIES
|
||||||||||
CONSOLIDATED
STATEMENTS OF INCOME
|
||||||||||
ON
A
REPORTED BASIS
|
||||||||||
(in
thousands,
except per share data)
|
||||||||||
For
the Three
|
For
the Three
|
|||||||||
Months
Ended
|
Months
Ended
|
Percent
|
||||||||
November
30,
2005
|
November
30,
2004
|
Change
|
||||||||
Sales
|
$
|
1,567,869
|
$
|
1,360,431
|
15
|
%
|
||||
Excise
taxes
|
(300,782
|
)
|
(274,720
|
)
|
9
|
%
|
||||
Net
sales
|
1,267,087
|
1,085,711
|
17
|
%
|
||||||
Cost
of
product sold
|
(882,866
|
)
|
(772,047
|
)
|
14
|
%
|
||||
Gross
profit
|
384,221
|
313,664
|
22
|
%
|
||||||
Selling,
general and administrative expenses
|
(156,978
|
)
|
(130,333
|
)
|
20
|
%
|
||||
Acquisition-related
integration costs
|
(1,625
|
)
|
-
|
N/A
|
||||||
Restructuring
and related charges
|
(4,265
|
)
|
(1,644
|
)
|
159
|
%
|
||||
Operating
income
|
221,353
|
181,687
|
22
|
%
|
||||||
Equity
in
earnings of equity method investees
|
6,516
|
359
|
1715
|
%
|
||||||
Interest
expense, net
|
(48,085
|
)
|
(30,651
|
)
|
57
|
%
|
||||
Income
before
income taxes
|
179,784
|
151,395
|
19
|
%
|
||||||
Provision
for
income taxes
|
(70,823
|
)
|
(54,502
|
)
|
30
|
%
|
||||
Net
income
|
108,961
|
96,893
|
12
|
%
|
||||||
Dividends
on
preferred stock
|
(2,451
|
)
|
(2,451
|
)
|
0
|
%
|
||||
Income
available to common stockholders
|
$
|
106,510
|
$
|
94,442
|
13
|
%
|
||||
Earnings
per
common share:
|
||||||||||
Basic
- Class
A Common Stock
|
$
|
0.49
|
$
|
0.44
|
11
|
%
|
||||
Basic
- Class
B Common Stock
|
$
|
0.44
|
$
|
0.40
|
10
|
%
|
||||
Diluted
|
$
|
0.46
|
$
|
0.42
|
10
|
%
|
||||
Weighted
average common shares outstanding:
|
||||||||||
Basic
- Class
A Common Stock
|
197,220
|
192,024
|
3
|
%
|
||||||
Basic
- Class
B Common Stock
|
23,888
|
23,995
|
0
|
%
|
||||||
Diluted
|
238,583
|
233,452
|
2
|
%
|
||||||
Segment
Information:
|
||||||||||
Net
sales:
|
||||||||||
Constellation
Wines
|
||||||||||
Branded
wine
|
$
|
672,196
|
$
|
509,520
|
32
|
%
|
||||
Wholesale
and
other
|
245,472
|
264,324
|
-7
|
%
|
||||||
Net
sales
|
$
|
917,668
|
$
|
773,844
|
19
|
%
|
||||
Constellation
Beers and Spirits
|
||||||||||
Imported
beers
|
$
|
262,800
|
$
|
225,846
|
16
|
%
|
||||
Spirits
|
86,619
|
86,021
|
1
|
%
|
||||||
Net
sales
|
$
|
349,419
|
$
|
311,867
|
12
|
%
|
||||
Consolidated
net sales
|
$
|
1,267,087
|
$
|
1,085,711
|
17
|
%
|
||||
Operating
income:
|
||||||||||
Constellation
Wines
|
$
|
184,410
|
$
|
127,700
|
44
|
%
|
||||
Constellation
Beers and Spirits
|
73,328
|
71,360
|
3
|
%
|
||||||
Corporate
Operations and Other
|
(15,346
|
)
|
(13,839
|
)
|
11
|
%
|
||||
Acquisition-related
integration costs, restructuring and
related charges, and unusual costs (a)
|
(21,039
|
)
|
(3,534
|
)
|
495
|
%
|
||||
Consolidated
operating income
|
$
|
221,353
|
$
|
181,687
|
22
|
%
|
||||
(a)
Acquisition-related integration costs, restructuring and related
charges,
and unusual costs for Third Quarter 2006 include
accelerated depreciation costs of $7,254 in connection with the
U.S. west
coast facility rationalization; the flow through
of adverse grape cost of $6,221, restructuring and related charges
of
$4,265, the flow through of inventory step-up
of $2,058, and acquisition-related integration costs of $1,625
associated
primarily with the Robert Mondavi acquisition;
and the reimbursement of Allied Domecq due diligence costs of
$384.
Acquisition-related integration costs,
restructuring and related charges, and unusual costs for Third
Quarter
2005 include the flow through of inventory
step-up
associated with the Hardy acquisition of $1,890 and restructuring
and
related charges associated
with the Company's
realignment of business operations within the Company's wine
segment of
$1,644.
|
||||||||||
CONSTELLATION
BRANDS, INC. AND SUBSIDIARIES
|
||||||||||
CONSOLIDATED
STATEMENTS OF INCOME
|
||||||||||
ON
A
REPORTED BASIS
|
||||||||||
(in
thousands,
except per share data)
|
||||||||||
For
the Nine
|
For
the Nine
|
|||||||||
Months
Ended
|
Months
Ended
|
Percent
|
||||||||
November
30,
2005
|
November
30,
2004
|
Change
|
||||||||
Sales
|
$
|
4,402,843
|
$
|
3,834,988
|
15
|
%
|
||||
Excise
taxes
|
(847,262
|
)
|
(785,031
|
)
|
8
|
%
|
||||
Net
sales
|
3,555,581
|
3,049,957
|
17
|
%
|
||||||
Cost
of
product sold
|
(2,517,354
|
)
|
(2,196,148
|
)
|
15
|
%
|
||||
Gross
profit
|
1,038,227
|
853,809
|
22
|
%
|
||||||
Selling,
general and administrative expenses
|
(478,559
|
)
|
(401,116
|
)
|
19
|
%
|
||||
Acquisition-related
integration costs
|
(15,888
|
)
|
-
|
N/A
|
||||||
Restructuring
and related charges
|
(8,407
|
)
|
(4,426
|
)
|
90
|
%
|
||||
Operating
income
|
535,373
|
448,267
|
19
|
%
|
||||||
Equity
in
earnings of equity method investees
|
5,720
|
621
|
821
|
%
|
||||||
Interest
expense, net
|
(142,265
|
)
|
(91,332
|
)
|
56
|
%
|
||||
Income
before
income taxes
|
398,828
|
357,556
|
12
|
%
|
||||||
Provision
for
income taxes
|
(131,748
|
)
|
(128,720
|
)
|
2
|
%
|
||||
Net
income
|
267,080
|
228,836
|
17
|
%
|
||||||
Dividends
on
preferred stock
|
(7,353
|
)
|
(7,353
|
)
|
0
|
%
|
||||
Income
available to common stockholders
|
$
|
259,727
|
$
|
221,483
|
17
|
%
|
||||
Earnings
per
common share:
|
||||||||||
Basic
- Class
A Common Stock
|
$
|
1.19
|
$
|
1.04
|
14
|
%
|
||||
Basic
- Class
B Common Stock
|
$
|
1.08
|
$
|
0.95
|
14
|
%
|
||||
Diluted
|
$
|
1.12
|
$
|
0.99
|
13
|
%
|
||||
Weighted
average common shares outstanding:
|
||||||||||
Basic
- Class
A Common Stock
|
196,432
|
190,784
|
3
|
%
|
||||||
Basic
- Class
B Common Stock
|
23,916
|
24,070
|
-1
|
%
|
||||||
Diluted
|
238,669
|
232,011
|
3
|
%
|
||||||
Segment
Information:
|
||||||||||
Net
sales:
|
||||||||||
Constellation
Wines
|
||||||||||
Branded
wine
|
$
|
1,724,557
|
$
|
1,286,966
|
34
|
%
|
||||
Wholesale
and
other
|
743,913
|
769,720
|
-3
|
%
|
||||||
Net
sales
|
$
|
2,468,470
|
$
|
2,056,686
|
20
|
%
|
||||
Constellation
Beers and Spirits
|
||||||||||
Imported
beers
|
$
|
837,432
|
$
|
751,879
|
11
|
%
|
||||
Spirits
|
249,679
|
241,392
|
3
|
%
|
||||||
Net
sales
|
$
|
1,087,111
|
$
|
993,271
|
9
|
%
|
||||
Consolidated
net sales
|
$
|
3,555,581
|
$
|
3,049,957
|
17
|
%
|
||||
Operating
income:
|
||||||||||
Constellation
Wines
|
$
|
404,145
|
$
|
283,104
|
43
|
%
|
||||
Constellation
Beers and Spirits
|
236,903
|
223,023
|
6
|
%
|
||||||
Corporate
Operations and Other
|
(43,929
|
)
|
(38,964
|
)
|
13
|
%
|
||||
Acquisition-related
integration costs, restructuring and
related charges, and unusual costs (a)
|
(61,746
|
)
|
(18,896
|
)
|
227
|
%
|
||||
Consolidated
operating income
|
$
|
535,373
|
$
|
448,267
|
19
|
%
|
||||
(a) Acquisition-related
integration costs, restructuring and related charges, and unusual
costs
for Nine Months 2006
include
the
flow through of adverse grape cost of $20,161, acquisition-related
integration costs of $15,888, and
restructuring
and related charges of $8,407 associated primarily with the
Robert Mondavi
acquisition; accelerated
depreciation
costs of $7,254 in connection with the U.S. west coast facility
rationalization; the flow through of
inventory
step-up of $6,628 associated with the Robert Mondavi acquisition;
and
Allied Domecq due diligence
costs
of
$3,408. Acquisition-related integration costs, restructuring
and related
charges, and unusual costs for
Nine
Months
2005 include financing costs associated with the Company's
redemption of
senior notes of $10,313,
restructuring
and related charges associated with the Company's realignment
of business
operations within the
Company's
wine
segment of $4,426, and the flow through of inventory step-up
associated
with the Hardy
acquisition
of
$4,157.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||||||
(in
thousands)
|
|||||||
For
the Nine
|
For
the Nine
|
||||||
Months
Ended
|
Months
Ended
|
||||||
November
30, 2005
|
November
30, 2004
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net
income
|
$
|
267,080
|
$
|
228,836
|
|||
Adjustments
to reconcile net income to net cash provided by
(used in) operating activities:
|
|||||||
Depreciation
of property, plant and equipment
|
86,331
|
65,121
|
|||||
Proceeds
from early termination of derivative contracts
|
42,891
|
-
|
|||||
Deferred
tax provision
|
38,833
|
33,524
|
|||||
Amortization
of intangible and other assets
|
5,978
|
8,491
|
|||||
Loss
on disposal of assets
|
1,897
|
4,225
|
|||||
Stock-based
compensation expense
|
152
|
69
|
|||||
Amortization
of discount on long-term debt
|
58
|
53
|
|||||
Equity
in earnings of equity method investees
|
(5,720
|
)
|
(621
|
)
|
|||
Noncash
portion of loss on extinguishment of debt
|
-
|
1,799
|
|||||
Change
in operating assets and liabilities, net of effects
from purchases and sales of businesses:
|
|||||||
Accounts
receivable, net
|
(161,475
|
)
|
(258,052
|
)
|
|||
Inventories
|
(255,461
|
)
|
(189,406
|
)
|
|||
Prepaid
expenses and other current assets
|
7,254
|
(3,400
|
)
|
||||
Accounts
payable
|
172,594
|
108,358
|
|||||
Accrued
excise taxes
|
6,900
|
24,103
|
|||||
Other
accrued expenses and liabilities
|
85,791
|
59,966
|
|||||
Other,
net
|
(10,823
|
)
|
(1,644
|
)
|
|||
Total
adjustments
|
15,200
|
(147,414
|
)
|
||||
Net
cash provided by operating activities
|
282,280
|
81,422
|
|||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Proceeds
from sales of assets
|
119,081
|
1,225
|
|||||
Proceeds
from sale of equity method investment
|
35,953
|
-
|
|||||
Proceeds
from sales of businesses
|
17,861
|
-
|
|||||
Purchases
of property, plant and equipment
|
(91,628
|
)
|
(78,356
|
)
|
|||
Purchases
of businesses, net of cash acquired
|
(45,816
|
)
|
(8,899
|
)
|
|||
Payment
of accrued earn-out amount
|
(3,089
|
)
|
(2,617
|
)
|
|||
Investment
in equity method investee
|
(2,723
|
)
|
-
|
||||
Other
investing activities
|
(4,842
|
)
|
-
|
||||
Net
cash provided by (used in) investing activities
|
24,797
|
(88,647
|
)
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Principal
payments of long-term debt
|
(425,308
|
)
|
(254,606
|
)
|
|||
Payment
of preferred stock dividends
|
(7,353
|
)
|
(7,353
|
)
|
|||
Net
proceeds from notes payable
|
111,092
|
219,953
|
|||||
Exercise
of employee stock options
|
20,967
|
25,257
|
|||||
Proceeds
from employee stock purchases
|
3,091
|
2,441
|
|||||
Payment
of issuance costs of long-term debt
|
-
|
(901
|
)
|
||||
Net
cash used in financing activities
|
(297,511
|
)
|
(15,209
|
)
|
|||
Effect
of exchange rate changes on cash and cash investments
|
(827
|
)
|
(1,948
|
)
|
|||
NET
INCREASE (DECREASE) IN CASH AND CASH INVESTMENTS
|
8,739
|
(24,382
|
)
|
||||
CASH
AND CASH INVESTMENTS, beginning of period
|
17,635
|
37,136
|
|||||
CASH
AND CASH INVESTMENTS, end of period
|
$
|
26,374
|
$
|
12,754
|
RECONCILIATION
OF REPORTED AND COMPARABLE INFORMATION
|
|||||||||||||||||||||||||
(in
thousands,
except per share data)
|
|||||||||||||||||||||||||
Comparable
measures are provided because management uses this information
in
evaluating the results of the continuing operations of the
Company
and
internal goal setting. In addition, the Company believes this
information
provides investors better insight on underlying business
trends
and
results in order to evaluate year over year financial performance.
As
such, the following items, when appropriate, are excluded
from
comparable
results: the flow through of adverse grape cost associated with
the Robert
Mondavi acquisition; the flow through of inventory
step-up
associated with acquisitions and investments in equity method
investees;
accelerated depreciation costs in connection with the U.S.
West
Coast
facility
rationalization; financing costs associated with the Company's
redemption
of senior notes and repayment of the Company's prior
credit
agreement; due diligence costs associated with the Company's
evaluation of
a potential offer for Allied Domecq; net gain on the sale of
non-strategic
assets; gain on transaction termination; acquisition-related
integration
costs associated with the Robert Mondavi acquisition;
restructuring
and related charges associated with the Company's realignment
of business
operations within the Company's wine segment, the
Robert
Mondavi
acquisition and the U.S. West Coast facility rationalization;
and the
income tax adjustment in connection with the reversal of an
income
tax
accrual related to the completion of various income tax examinations.
You
may also visit the Company's website at www.cbrands.com
under
Investors/Financial Information/Financial Reports for a historical
reconciliation between reported and comparable
information.
|
|||||||||||||||||||||||||
For
the Three
|
For
the Three
|
For
the Nine
|
For
the Nine
|
||||||||||||||||||||||
Months
Ended
|
Months
Ended
|
Months
Ended
|
Months
Ended
|
||||||||||||||||||||||
November
30,
2005
|
Margin
|
November
30,
2004
|
Margin
|
November
30,
2005
|
Margin
|
November
30,
2004
|
Margin
|
||||||||||||||||||
Reported
net
sales
|
$
|
1,267,087
|
100.0
|
%
|
$
|
1,085,711
|
100.0
|
%
|
$
|
3,555,581
|
100.0
|
%
|
$
|
3,049,957
|
100.0
|
%
|
|||||||||
Reported
gross
profit
|
$
|
384,221
|
30.3
|
%
|
$
|
313,664
|
28.9
|
%
|
$
|
1,038,227
|
29.2
|
%
|
$
|
853,809
|
28.0
|
%
|
|||||||||
U.S.
West
Coast facility rationalization
|
7,254
|
0.6
|
%
|
-
|
0.0
|
%
|
7,254
|
0.2
|
%
|
-
|
0.0
|
%
|
|||||||||||||
Adverse
grape
cost
|
6,221
|
0.5
|
%
|
-
|
0.0
|
%
|
20,161
|
0.6
|
%
|
-
|
0.0
|
%
|
|||||||||||||
Inventory
step-up
|
2,058
|
0.2
|
%
|
1,890
|
0.2
|
%
|
6,628
|
0.2
|
%
|
4,157
|
0.1
|
%
|
|||||||||||||
Comparable
gross profit
|
$
|
399,754
|
31.5
|
%
|
$
|
315,554
|
29.1
|
%
|
$
|
1,072,270
|
30.2
|
%
|
$
|
857,966
|
28.1
|
%
|
|||||||||
Reported
operating income
|
$
|
221,353
|
17.5
|
%
|
$
|
181,687
|
16.7
|
%
|
$
|
535,373
|
15.1
|
%
|
$
|
448,267
|
14.7
|
%
|
|||||||||
U.S.
West
Coast facility rationalization
|
7,254
|
0.6
|
%
|
-
|
0.0
|
%
|
7,254
|
0.2
|
%
|
-
|
0.0
|
%
|
|||||||||||||
Adverse
grape
cost
|
6,221
|
0.5
|
%
|
-
|
0.0
|
%
|
20,161
|
0.6
|
%
|
-
|
0.0
|
%
|
|||||||||||||
Restructuring
and related charges
|
4,265
|
0.3
|
%
|
1,644
|
0.2
|
%
|
8,407
|
0.2
|
%
|
4,426
|
0.1
|
%
|
|||||||||||||
Inventory
step-up
|
2,058
|
0.2
|
%
|
1,890
|
0.2
|
%
|
6,628
|
0.2
|
%
|
4,157
|
0.1
|
%
|
|||||||||||||
Acquisition-related
integration costs
|
1,625
|
0.1
|
%
|
-
|
0.0
|
%
|
15,888
|
0.4
|
%
|
-
|
0.0
|
%
|
|||||||||||||
Allied
Domecq
due diligence costs
|
(384
|
)
|
0.0
|
%
|
-
|
0.0
|
%
|
3,408
|
0.1
|
%
|
-
|
0.0
|
%
|
||||||||||||
Financing
costs
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
10,313
|
0.3
|
%
|
|||||||||||||
Comparable
operating income
|
$
|
242,392
|
19.1
|
%
|
$
|
185,221
|
17.1
|
%
|
$
|
597,119
|
16.8
|
%
|
$
|
467,163
|
15.3
|
%
|
|||||||||
Reported
net
income
|
$
|
108,961
|
8.6
|
%
|
$
|
96,893
|
8.9
|
%
|
$
|
267,080
|
7.5
|
%
|
$
|
228,836
|
7.5
|
%
|
|||||||||
Income
tax
adjustment
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
(16,208
|
)
|
-0.5
|
%
|
-
|
0.0
|
%
|
||||||||||||
U.S.
West
Coast facility rationalization
|
4,397
|
0.3
|
%
|
-
|
0.0
|
%
|
4,397
|
0.1
|
%
|
-
|
0.0
|
%
|
|||||||||||||
Adverse
grape
cost
|
3,771
|
0.3
|
%
|
-
|
0.0
|
%
|
12,531
|
0.4
|
%
|
-
|
0.0
|
%
|
|||||||||||||
Restructuring
and related charges
|
2,585
|
0.2
|
%
|
1,052
|
0.1
|
%
|
5,202
|
0.1
|
%
|
2,833
|
0.1
|
%
|
|||||||||||||
Inventory
step-up
|
3,135
|
0.2
|
%
|
1,210
|
0.1
|
%
|
7,669
|
0.2
|
%
|
2,660
|
0.1
|
%
|
|||||||||||||
Acquisition-related
integration costs
|
985
|
0.1
|
%
|
-
|
0.0
|
%
|
9,994
|
0.3
|
%
|
-
|
0.0
|
%
|
|||||||||||||
Allied
Domecq
due diligence costs
|
(233
|
)
|
0.0
|
%
|
-
|
0.0
|
%
|
2,227
|
0.1
|
%
|
-
|
0.0
|
%
|
||||||||||||
Financing
costs
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
6,600
|
0.2
|
%
|
|||||||||||||
Comparable
net
income
|
$
|
123,601
|
9.8
|
%
|
$
|
99,155
|
9.1
|
%
|
$
|
292,892
|
8.2
|
%
|
$
|
240,929
|
7.9
|
%
|
|||||||||
Reported
diluted earnings per share
|
$
|
0.46
|
$
|
0.42
|
$
|
1.12
|
$
|
0.99
|
|||||||||||||||||
Income
tax
adjustment
|
-
|
-
|
(0.07
|
)
|
-
|
||||||||||||||||||||
U.S.
West
Coast facility rationalization
|
0.02
|
-
|
0.02
|
-
|
|||||||||||||||||||||
Adverse
grape
cost
|
0.02
|
-
|
0.05
|
-
|
|||||||||||||||||||||
Restructuring
and related charges
|
0.01
|
-
|
0.02
|
0.01
|
|||||||||||||||||||||
Inventory
step-up
|
0.01
|
0.01
|
0.03
|
0.01
|
|||||||||||||||||||||
Acquisition-related
integration costs
|
-
|
-
|
0.04
|
-
|
|||||||||||||||||||||
Allied
Domecq
due diligence costs
|
-
|
-
|
0.01
|
-
|
|||||||||||||||||||||
Financing
costs
|
-
|
-
|
-
|
0.03
|
|||||||||||||||||||||
Comparable
diluted earnings per share (1)
|
$
|
0.52
|
$
|
0.42
|
$
|
1.23
|
$
|
1.04
|
|||||||||||||||||
(1)
May not sum due to rounding as each item is computed
independently.
|
RECONCILIATION
OF REPORTED AND COMPARABLE DILUTED EARNINGS PER SHARE GUIDANCE
|
|||||||||||||||||||
Range
for the
Quarter
Ending
February 28, 2006
|
Range
for the
Year
Ending
February 28, 2006
|
||||||||||||||||||
Forecasted
reported diluted earnings per share
|
$
|
0.29
|
$
|
0.32
|
$
|
1.40
|
$
|
1.43
|
|||||||||||
Adverse
grape
cost
|
0.01
|
0.01
|
0.07
|
0.07
|
|||||||||||||||
Inventory
step-up
|
0.01
|
0.01
|
0.04
|
0.04
|
|||||||||||||||
U.S.
West
Coast facility rationalization
|
0.02
|
0.02
|
0.04
|
0.04
|
|||||||||||||||
Acquisition-related
integration costs
|
-
|
-
|
0.05
|
0.05
|
|||||||||||||||
Restructuring
and related charges
|
0.01
|
0.01
|
0.03
|
0.03
|
|||||||||||||||
Allied
Domecq
due diligence costs
|
-
|
-
|
0.01
|
0.01
|
|||||||||||||||
Income
tax
adjustment
|
-
|
-
|
(0.07
|
)
|
(0.07
|
)
|
|||||||||||||
Forecasted
comparable diluted earnings per share
|
$
|
0.34
|
$
|
0.37
|
$
|
1.57
|
$
|
1.60
|
|||||||||||
Actual
For
the
Three
Months
Ended
February
28,
2005
|
Actual
For
the Year
Ended
February
28,
2005
|
||||||||||||||||||
Reported
diluted earnings per share
|
$
|
0.20
|
$
|
1.19
|
|||||||||||||||
Financing
costs
|
0.06
|
0.09
|
|||||||||||||||||
Adverse
grape
cost
|
0.03
|
0.03
|
|||||||||||||||||
Acquisition-related
integration costs
|
0.03
|
0.03
|
|||||||||||||||||
Restructuring
and related charges
|
0.01
|
0.02
|
|||||||||||||||||
Inventory
step-up
|
0.01
|
0.02
|
|||||||||||||||||
Net
gain on
sale of non-strategic assets
|
(0.01
|
)
|
(0.01
|
)
|
|||||||||||||||
Gain
on
transaction termination fee
|
(0.01
|
)
|
(0.01
|
)
|
|||||||||||||||
Comparable
diluted earnings per share (1)
|
$
|
0.31
|
$
|
1.35
|
|||||||||||||||
(1)
May not sum due to rounding as each item is computed
independently.
|
|||||||||||||||||||
RECONCILIATION
OF REPORTED AND PRO FORMA NET SALES
|
|||||||||||||||||||
(in
thousands)
|
|||||||||||||||||||
Pro
forma net
sales are provided because management believes this information
provides
investors better insight on underlying business trends
and
results in
order to evaluate year over year financial performance. As such,
pro forma
net sales for the three months ended November 30, 2004,
present
net
sales after giving effect to the Robert Mondavi acquisition as
if it had
occurred as of March 1, 2004. You may also visit the
Company's
website
at
www.cbrands.com under Investors/Financial Information/Financial
Reports
for a reconciliation of reported net sales to pro forma net
sales.
|
|||||||||||||||||||
|
For
the
Three
Months
Ended
November
30,
2005
|
For
the
Three
Months
Ended
November
30,
2004
|
Growth
|
For
the
Nine
Months
Ended
November
30,
2005
|
For
the
Nine
Months
Ended
November
30,
2004
|
Growth
|
|||||||||||||
CONSOLIDATED
NET SALES
|
|||||||||||||||||||
Reported
net
sales
|
$
|
1,267,087
|
$
|
1,085,711
|
17
|
%
|
$
|
3,555,581
|
$
|
3,049,957
|
17
|
%
|
|||||||
Prior
year
Robert Mondavi net sales of retained brands (1)
|
-
|
132,500
|
-
|
327,100
|
|||||||||||||||
1,267,087
|
1,218,211
|
4
|
%
|
3,555,581
|
3,377,057
|
5
|
%
|
||||||||||||
Prior
year
Robert Mondavi sales of disposed brands (1)
|
-
|
11,200
|
-
|
35,900
|
|||||||||||||||
Pro
forma net
sales
|
$
|
1,267,087
|
$
|
1,229,411
|
3
|
%
|
$
|
3,555,581
|
$
|
3,412,957
|
4
|
%
|
|||||||
CONSTELLATION
WINES SEGMENT NET SALES
|
|||||||||||||||||||
Reported
net
sales
|
$
|
917,668
|
$
|
773,844
|
19
|
%
|
$
|
2,468,470
|
$
|
2,056,686
|
20
|
%
|
|||||||
Prior
year
Robert Mondavi net sales of retained brands (1)
|
-
|
132,500
|
-
|
327,100
|
|||||||||||||||
917,668
|
906,344
|
1
|
%
|
2,468,470
|
2,383,786
|
4
|
%
|
||||||||||||
Prior
year
Robert Mondavi sales of disposed brands (1)
|
-
|
11,200
|
-
|
35,900
|
|||||||||||||||
Pro
forma net
sales
|
$
|
917,668
|
$
|
917,544
|
0
|
%
|
$
|
2,468,470
|
$
|
2,419,686
|
2
|
%
|
|||||||
BRANDED
WINE NET SALES
|
|||||||||||||||||||
Reported
net
sales
|
$
|
672,196
|
$
|
509,520
|
32
|
%
|
$
|
1,724,557
|
$
|
1,286,966
|
34
|
%
|
|||||||
Prior
year
Robert Mondavi net sales of retained brands (1)
|
-
|
127,100
|
-
|
319,100
|
|||||||||||||||
672,196
|
636,620
|
6
|
%
|
1,724,557
|
1,606,066
|
7
|
%
|
||||||||||||
Prior
year
Robert Mondavi sales of disposed brands (1)
|
-
|
11,200
|
-
|
35,900
|
|||||||||||||||
Pro
forma net
sales
|
$
|
672,196
|
$
|
647,820
|
4
|
%
|
$
|
1,724,557
|
$
|
1,641,966
|
5
|
%
|
|||||||
(1)
For the period September 1, 2004, through November 30, 2004,
and March 1,
2004, through November 30, 2004, respectively.
|
RECONCILIATION
OF FREE CASH FLOW GUIDANCE
|
|||||||
(in
millions)
|
|||||||
"Free
cash
flow" as used by the Company means the Company's net cash flow
from
operating activities prepared in accordance with generally
accepted
accounting principles in the U.S. ("GAAP") less capital expenditures
for
property, plant and equipment. Free cash flow is considered
a
liquidity
measure and provides useful information to investors about the
amount of
cash generated after such capital expenditures, which can
then
be used,
after required debt service and dividend payments, for other
general
corporate purposes. A limitation of free cash flow is that it
does
not
represent the total increase or decrease in the cash balance
for the
period. Free cash flow should be considered in addition to, not
as
a
substitute
for, or superior to, cash flow from operating activities prepared
in
accordance with GAAP.
|
|||||||
Range
for the
Year
Ending
February 28, 2006
|
|||||||
Net
cash
provided by operating activities
|
$
|
380
|
$
|
400
|
|||
Purchases
of
property, plant and equipment
|
(140
|
)
|
(140
|
)
|
|||
Free
cash
flow
|
$
|
240
|
$
|
260
|