8-K: Current report filing
Published on August 3, 2006
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) August 2,
2006
CONSTELLATION
BRANDS, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-08495
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16-0716709
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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370 Woodcliff Drive, Suite 300, Fairport, NY
14450
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant's
telephone number, including area code
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(585)
218-3600
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Not
Applicable
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(Former
name or former address, if changed since last
report)
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Check
the appropriate box below if the Form 8-K filing is intended
to
simultaneously satisfy the filing obligation of the registrant
under
any
of
the following
provisions
(see
General Instruction A.2. below):
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| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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ITEM
2.05
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COSTS ASSOCIATED WITH EXIT OR DISPOSAL
ACTIVITIES.
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On
August
2, 2006, Constellation Brands, Inc. (the “Company”) committed to the principal
features of a plan to invest in new distribution and bottling facilities
in the
United Kingdom (“UK”) and to streamline certain of its Australian operations
(collectively, the “Fiscal 2007 Wine Plan”). The initiatives are part of the
Company’s ongoing efforts to maximize asset utilization, further reduce costs
and improve long-term return on invested capital throughout its international
operations. The UK portion of the plan includes new investments in property,
plant and equipment and certain disposals of property, plant and equipment
and
is expected to increase wine bottling capacity and efficiency and reduce
costs
of transport, production and distribution. The UK portion of the plan also
includes costs for employee terminations. The Australian portion of the
plan
includes the buy-out of certain grape supply and processing contracts and
the
sale of certain property, plant and equipment. The actions under the Fiscal
2007
Wine Plan are expected to commence by August 31, 2006, and the Company
currently
expects the Australian portion of the plan to be complete by the end of
the
Company’s current fiscal year, which ends on February 28, 2007 (“Fiscal 2007”)
and the UK portion of the plan to be complete by the end of the fiscal
year
which ends on February 28, 2009 (“Fiscal 2009”).
As
further detailed in the table below, the Company expects to incur approximately
$33 million of restructuring charges in connection with the Fiscal 2007
Wine
Plan and approximately $7 million of other related costs, all of which
charges
and costs will be recorded in the Company’s results of operations during Fiscal
2007, the fiscal year ending February 29, 2008 (“Fiscal 2008”) and Fiscal 2009.
Additionally, the Company expects to record accelerated depreciation of
approximately $10 million for the disposals of certain property, plant
and
equipment in the UK, primarily during Fiscal 2007 and Fiscal 2008. The
Company
also concluded on August 2, 2006, that the expected sale of certain property,
plant and equipment in Australia will result in an impairment charge of
approximately $10 million during Fiscal 2007 which impairment charge is
not
expected to result in any future cash expenditures. In connection with
the
Fiscal 2007 Wine Plan, the Company expects to incur aggregate cash expenditures
of approximately $40 million, primarily during Fiscal 2007, and an aggregate
of
approximately $20 million of non-cash charges, primarily during Fiscal
2007. The
following table sets forth the Company’s current expectations related to the
Fiscal 2007 Wine Plan:
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Estimated
Pretax
Charges
During
Fiscal
2007
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Estimated
Pretax
Charges
During
Fiscal
2008
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Estimated
Pretax
Charges
During
Fiscal
2009
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Estimated
Total
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(in
millions)
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Restructuring
charges:
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Employee
termination costs
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$
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3
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$
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-
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$
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-
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$
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3
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Contract
termination costs
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25
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-
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-
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25
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Other
associated costs
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-
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5
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-
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5
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Total
restructuring charges
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28
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5
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-
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33
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Other
related costs
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2
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3
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2
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7
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Total
cash costs
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30
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8
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2
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40
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Accelerated
depreciation
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4
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5
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1
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10
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Impairment
charge on assets to be sold
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10
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-
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-
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10
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Total
non-cash costs
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14
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5
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1
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20
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Total
cash and non-cash costs
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$
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44
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$
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13
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$
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3
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$
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60
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This
Current Report on Form 8-K contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the
Securities Exchange Act of 1934. These forward-looking statements are
subject to
a number of risks and uncertainties, many of which are beyond the Company’s
control, which could cause actual results to differ materially from those
set
forth in, or implied by, such forward-looking statements. All statements
other
than statements of historical facts included in this Current Report on
Form 8-K,
including statements regarding the Company’s expected restructuring charges,
other related costs, accelerated depreciation and impairment charge on
assets to
be sold, all of which are in connection with the Fiscal 2007 Wine Plan,
are
forward-looking statements. All forward-looking statements speak only
as of the
date of this Current Report on Form 8-K. The Company undertakes no obligation
to
update or revise any forward-looking statements, whether as a result
of new
information, future events or otherwise. In addition to the risks and
uncertainties of ordinary business operations and conditions in the general
economy and the markets in which the Company competes, the forward-looking
statements of the Company contained in this Current Report on Form 8-K
are also
subject to the following risks and uncertainties: the Company’s restructuring
charges, other related costs, accelerated depreciation and impairment
charge on
assets to be sold, all of which are in connection with the Fiscal 2007
Wine
Plan, vary materially from management’s current estimates of these charges and
costs due to variations in anticipated headcount reductions, contract
terminations, and proceeds from the sale of assets identified for sale;
and
other risks and uncertainties described in the Company’s Annual Report on Form
10-K for the fiscal year ended February 28, 2006, and other Securities
and
Exchange Commission filings.
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ITEM
2.06
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MATERIAL
IMPAIRMENTS.
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The
information set forth in Item 2.05 above is hereby incorporated by reference
into this Item 2.06.
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ITEM
7.01
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REGULATION FD DISCLOSURE.
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On
August
2, 2006, the Company issued a press release, a copy of which is furnished
herewith as Exhibit
99.1 and
is incorporated herein by reference. The
release provided information about, among other items, the Company’s updated
financial guidance for its second quarter ending August 31, 2006 and
fiscal year
ending February 28, 2007, and its plans to invest in new distribution
and
bottling facilities in the United Kingdom and to streamline certain of
its
Australian operations. The projections constituting the guidance included
in the
release involve risks and uncertainties, the outcome of which cannot
be foreseen
at this time and, therefore, actual results may vary materially from
these
forecasts. In this regard, see the information included in the release
under the
caption “Forward-Looking Statements.”
References
to the Company’s website in the release do not incorporate by reference the
information on such website into this Current Report on Form 8-K and
the Company
disclaims any such incorporation by reference. The information included
in this
Current Report on Form 8-K, including the press release attached as Exhibit
99.1, is incorporated by reference into this Item 7.01 in satisfaction
of the
public disclosure requirements of Regulation FD. This information is
“furnished”
and not “filed” for purposes of Section 18 of the Securities Exchange Act of
1934, or otherwise subject to the liabilities of that section. It may
only be
incorporated by reference in another filing under the Securities Exchange
Act of
1934 or the Securities Act of 1933 only if and to the extent such subsequent
filing specifically references the information incorporated by reference
herein.
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ITEM
9.01
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FINANCIAL STATEMENTS AND
EXHIBITS.
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(a)
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Financial
statements of businesses acquired.
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Not
applicable.
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(b)
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Pro
forma financial information.
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Not
applicable.
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(c)
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Shell
company transactions.
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Not
applicable.
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(d)
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Exhibits.
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The
following exhibit is furnished as part of this Current Report
on Form
8-K:
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Exhibit No.
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Description
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99.1
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Press
Release of the Company dated August 2,
2006.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
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CONSTELLATION
BRANDS, INC.
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Date: August
2, 2006
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By:
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/s/
Thomas S. Summer
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Thomas
S. Summer,
Executive
Vice
President
and
Chief
Financial Officer
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INDEX
TO EXHIBITS
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Exhibit
Number
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Description
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(1)
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UNDERWRITING
AGREEMENT
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Not
Applicable.
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(2)
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PLAN
OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR
SUCCESSION
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Not
Applicable.
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(3)
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ARTICLES
OF INCORPORATION AND BYLAWS
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Not
Applicable.
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(4)
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INSTRUMENTS
DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES
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Not
Applicable.
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(7)
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CORRESPONDENCE
FROM AN INDEPENDENT ACCOUNTANT REGARDING NON-RELIANCE ON A PREVIOUSLY
ISSUED AUDIT REPORT OR COMPLETED INTERIM REVIEW
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Not
Applicable.
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(14)
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CODE
OF ETHICS
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Not
Applicable.
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(16)
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LETTER
RE CHANGE IN CERTIFYING ACCOUNTANT
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Not
Applicable.
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(17)
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CORRESPONDENCE
ON DEPARTURE OF DIRECTOR
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Not
Applicable.
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(20)
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OTHER
DOCUMENTS OR STATEMENTS TO SECURITY HOLDERS
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Not
Applicable.
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(23)
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CONSENTS
OF EXPERTS AND COUNSEL
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Not
Applicable.
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(24)
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POWER
OF ATTORNEY
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Not
Applicable.
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(99)
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ADDITIONAL
EXHIBITS
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(99.1)
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Press
Release of Constellation Brands, Inc. dated August 2,
2006.
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(100)
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XBRL-RELATED
DOCUMENTS
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Not
Applicable.
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