FAIRPORT, N.Y., April 11 /PRNewswire/ -- Canandaigua Brands, Inc. (NYSE: CDB and CDB.B), reported net income of $16 million for the three months ended February 29, 2000 ("Fourth Quarter 2000"), representing a 30 percent increase over net income before extraordinary items reported for the three months ended February 28, 1999 ("Fourth Quarter 1999"). Net income of $77 million for the twelve months ended February 29, 2000 ("Fiscal 2000"), represented an increase of 25 percent over net income before extraordinary items, reported for the twelve months ended February 28, 1999 ("Fiscal 1999"). Earnings per share on a diluted basis for Fourth Quarter 2000 and for Fiscal 2000 were $0.84 and $4.18, respectively, representing increases of 29 percent and 27 percent, respectively, as compared to Fourth Quarter 1999 and Fiscal 1999 earnings before extraordinary items.
For comparison purposes, net income for Fiscal 2000 includes pretax nonrecurring charges of approximately $6 million, or the equivalent of $0.18 per share on a diluted basis. Fourth Quarter 1999 and Fiscal 1999 net income include pretax nonrecurring charges of approximately $3 million, or the equivalent of $0.08 per share on a diluted basis.
Richard Sands, Chairman and Chief Executive Officer of Canandaigua Brands, said, "This has been an exceptional year for our Company. We have successfully managed the seamless integration of four acquisitions which have contributed to the continued growth and outstanding performance of the Company. Our Franciscan Estates acquisition has enhanced the Company's portfolio, providing diversity as well as opportunities to expand our presence in the fine wine category. The Black Velvet and Franciscan Estates portfolios exceeded our expectations in Fiscal 2000, a tribute to our experienced management team at Barton and Franciscan. Matthew Clark's initiatives to grow market share in cider and wine and to capitalize on opportunities in the growing independent wholesale market are already showing positive results."
Mr. Sands added, "Canandaigua's base business also performed very well in Fiscal 2000. We continue to experience strong growth in our Mexican beer portfolio with year-over-year volume increasing by 17 percent despite implementing the first price increase in over eight years. Arbor Mist continues to lead the fruit-flavored varietal wine category, setting the pace for further growth and profits. We will be introducing new products in several categories in Fiscal 2001, including wine, spirits, cider and bottled water, to lay the groundwork for future growth. I am very pleased that we are entering the new millennium with a solid foundation for increasing shareholder value."
Consolidated Results
Net sales reached $527 million in Fourth Quarter 2000, a 15 percent increase over Fourth Quarter 1999. The sales increase can be attributed primarily to the growth in the beer portfolio and Matthew Clark wholesale business as well as the acquisition of the Black Velvet and Franciscan Estates portfolios, which were not included in Fourth Quarter 1999 net sales. For Fiscal 2000, net sales grew by over 56 percent to $2.3 billion from $1.5 billion for Fiscal 1999. Approximately $700 million of the increase in net sales was related to the acquisitions completed since December 1998. Net sales growth of over 19 percent in the beer portfolio led the Company's 9 percent increase in net sales for the year, exclusive of acquisitions. Gross profit increased by 22 percent to $168 million in Fourth Quarter 2000 from $137 million reported a year ago. For Fiscal 2000, gross profit reached $722 million, an increase of over $274 million or 61% from Fiscal 1999. The increased sales and higher gross profit margins from the acquisitions accounted for the significant increase in gross profit.
Selling, general and administrative expenses increased by 17 percent to $114 million in Fourth Quarter 2000. The increase in the quarter can be attributed primarily to the acquisitions that occurred after Fourth Quarter 1999. Selling, general and administrative expenses for Fiscal 2000 were $182 million higher than in Fiscal 1999 for the same reason.
Operating income for Fourth Quarter 2000 increased 34 percent to $54 million from $40 million (excluding the pretax nonrecurring charge of approximately $3 million reported in Fourth Quarter 1999). Fiscal 2000 and Fiscal 1999 operating income were $241 million and $149 million, respectively, excluding pretax nonrecurring charges of approximately $6 million and approximately $3 million, respectively.
Net interest expense increased to $28 million in Fourth Quarter 2000 from $18 million reported in Fourth Quarter 1999. For Fiscal 2000, net interest expense grew to $106 million from $41 million in Fiscal 1999. The increases in Fourth Quarter 2000 and Fiscal 2000 can be attributed to increased debt to fund the acquisitions made since December 1998.
Net income and fully diluted earnings per share in Fourth Quarter 2000 were $16 million and $0.84, respectively, as compared to net income and fully diluted earnings per share before extraordinary items of $12 million and $0.65, respectively, reported in Fourth Quarter 1999. The Company incurred an extraordinary charge of approximately $11 million after income taxes in Fourth Quarter 1999. This charge resulted from fees related to the replacement of the Company's bank credit facility. For Fiscal 2000, net income and fully diluted earnings per share were $77 million and $4.18, respectively. Net income and fully diluted earnings per share before extraordinary items in Fiscal 1999 were $62 million and $3.30, respectively.
Barton Results
Barton net sales for Fourth Quarter 2000 were $172 million, an increase of 30 percent from the $132 million reported for Fourth Quarter 1999. The increase can be attributed to selling price increases and volume growth in the Mexican beer portfolio as well as sales from the Black Velvet acquisition. For Fiscal 2000, net sales grew to $838 million from $665 million, representing an increase of 26 percent versus a year ago for the same reasons indicated.
Operating income grew to $28 million in Fourth Quarter 2000, an increase of 38 percent versus a year ago. Fiscal 2000 and Fiscal 1999 operating income were $143 million and $103 million, respectively, an increase of 39 percent. The volume and sales growth generated by the beer portfolio, coupled with the Black Velvet acquisition, accounted for the increase in operating income for Fourth Quarter 2000 and for Fiscal 2000, partially offset by increased selling and marketing expenses related to the growth of the Mexican beer portfolio.
Canandaigua Wine Results
Canandaigua Wine net sales for Fourth Quarter 2000 increased 3 percent to $171 million. Fiscal 2000 and Fiscal 1999 net sales were $712 million and $669 million, respectively, representing a 6% increase. The net sales growth can be attributed to the impact of favorable volume and mix primarily related to Arbor Mist sales. Additionally, grape juice concentrate and bulk wine sales increased 15 percent in Fourth Quarter 2000 and 17 percent for Fiscal 2000 versus a year ago.
Operating income increased 17 percent in Fourth Quarter 2000 to $12 million driven by modestly higher net sales and cost structure improvements. The impact of favorable volume and lower marketing costs was partially offset by slightly lower average prices. For Fiscal 2000, excluding a nonrecurring charge of approximately $3 million, operating income grew to $49 million, an increase of 7 percent versus a year ago, primarily related to increased net sales.
Matthew Clark Results
Net sales in Fourth Quarter 2000 increased 5 percent to reach $166 million driven primarily by growth in the wholesale business. The Company acquired control of Matthew Clark during Fourth Quarter 1999. Net sales for Fiscal 2000 were $730 million, an increase of $571 million from Fiscal 1999, most of which reflects the timing of the acquisition. Matthew Clark net sales increased 9 percent for Fiscal 2000 as compared to pro forma net sales for the previous twelve months.
Operating income grew to $14 million in Fourth Quarter 2000, an increase of 20 percent as compared to Fourth Quarter 1999 operating income, excluding the pretax nonrecurring charge of approximately $3 million in Fourth Quarter 1999. The increase can be attributed primarily to higher net sales and reduced marketing costs. For Fiscal 2000, operating income, excluding a nonrecurring charge of approximately $3 million, grew to $51 million, approximately $40 million higher than Fiscal 1999, which only included Matthew Clark's results during Fourth Quarter 1999.
Franciscan Results
The Company completed the acquisitions of Franciscan Estates and Simi Winery in June 1999, both of which are being managed and reported together as the Franciscan Estates division of the Company. Net sales and operating income in Fourth Quarter 2000 were $18 million and $5 million, respectively. Fiscal 2000 net sales and operating income were $62 million and $13 million, respectively, representing 9 months of operations. On a pro forma basis, net sales for Fiscal 2000 increased by 24 percent versus the comparable year-ago period.
Canandaigua 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 more than 180 premier brands, including imported beers, wines, spirits, cider and bottled water, and is a leading drinks wholesaler in the United Kingdom. Canandaigua Brands can be found on the Internet at http://www.cbrands.com.
CONFERENCE CALL DETAILS
A conference call to discuss the quarterly results will be hosted by Richard Sands, CEO, and Tom Summer, CFO, of Canandaigua Brands on Tuesday, April 11, 2000 at 10:00 a.m. EDT. The conference call can be accessed by dialing 412-858-4600. A live listen-only webcast of the conference call is available free of charge at the Canandaigua Brands web site: http://www.cbrands.com under Investor Info.
If you are unable to participate in the conference call, there will be a replay available at the Canandaigua Brands web site.
February 29, February 28, 2000 1999 ASSETS CURRENT ASSETS: Cash and cash investments $34,308 $27,645 Accounts receivable, net 291,108 260,433 Inventories, net 615,700 508,571 Prepaid expenses and other current assets 54,881 59,090 Total current assets 995,997 855,739 PROPERTY, PLANT AND EQUIPMENT, net 542,971 428,803 OTHER ASSETS 809,823 509,234 Total assets $2,348,791 $1,793,776 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable $26,800 $87,728 Current maturities of long-term debt 53,987 6,005 Accounts payable 122,213 122,746 Accrued excise taxes 30,446 49,342 Other accrued expenses and liabilities 204,771 149,451 Total current liabilities 438,217 415,272 LONG-TERM DEBT, less current maturities 1,237,135 831,689 DEFERRED INCOME TAXES 116,447 88,179 OTHER LIABILITIES 36,152 23,364 STOCKHOLDERS' EQUITY 520,840 435,272 Total liabilities and stockholders' equity $2,348,791 $1,793,776 CANANDAIGUA BRANDS, INC., AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data)
Three Months Three Months Percent Ended Ended Change February 29, 2000 February 28, 1999 Gross sales $704,790 $610,618 15.4% Net sales $527,200 $459,443 14.7% Cost of product sold (359,677) (322,401) 11.6% Gross profit 167,523 137,042 22.2% Selling, general and administrative expenses (113,779) (96,965) 17.3% Other Nonrecurring charges -- (2,616) N/A Operating income 53,744 37,461 43.5% Interest expense, net (27,863) (17,762) 56.9% Income before taxes and extraordinary item 25,881 19,699 31.4% Provision for income taxes (10,353) (7,781) 33.1% Income before extraordinary item 15,528 11,918 30.3% Extraordinary item, net of taxes -- (11,437) N/A Net income $15,528 $481 3128.3% Earnings per common share: Basic: Income before extraordinary item $0.86 $0.67 28.4% Extraordinary item -- (0.64) N/A Earnings per common share - basic $0.86 $0.03 2766.7% Diluted: Income before extraordinary item $0.84 $0.65 29.2% Extraordinary item -- (0.62) N/A Earnings per common share - diluted $0.84 $0.03 2700.0% Weighted average common shares outstanding: Basic 18,148 17,932 1.2% Diluted 18,566 18,475 0.5% Segment Information: Net sales: Barton Beer $112,419 $89,872 25.1% Spirits 60,065 42,512 41.3% Net sales $172,484 $132,384 30.3% Canandaigua Wine Branded $151,959 $149,746 1.5% Other 19,047 16,630 14.5% Net sales $171,006 $166,376 2.8% Matthew Clark Branded $56,140 $64,879 -13.5% Wholesale 109,842 93,881 17.0% Net sales $165,982 $158,760 4.5% Franciscan $17,509 $-- N/A Corporate Operations and Other $1,250 $1,923 -35.0% Intersegment eliminations $(1,031) $-- N/A Consolidated net sales $527,200 $459,443 14.7% Operating Income: Barton $28,092 $20,337 38.1% Canandaigua Wine 11,909 10,189 16.9% Matthew Clark 13,970 8,998 55.3% Franciscan 5,146 -- N/A Corporate Operations and Other (5,373) (2,063) 160.4% Consolidated operating income $53,744 $37,461 43.5% CANANDAIGUA BRANDS, INC., AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data)
Twelve Twelve Percent Months Ended Months Ended Change February 29, 2000 February 28, 1999
Gross sales $3,088,699 $1,984,801 55.6% Net sales $2,340,469 $1,497,343 56.3% Cost of product sold (1,618,009) (1,049,309) 54.2% Gross profit 722,460 448,034 61.3% Selling, general and administrative expenses (481,909) (299,526) 60.9% Nonrecurring charges (5,510) (2,616) 110.6% Operating income 235,041 145,892 61.1% Interest expense, net (106,082) (41,462) 155.9% Income before taxes and extraordinary item 128,959 104,430 23.5% Provision for income taxes (51,584) (42,521) 21.3% Income before extraordinary item 77,375 61,909 25.0% Extraordinary item, net of taxes -- (11,437) N/A Net Income $77,375 $50,472 53.3% Earnings per common share: Basic: Income before extraordinary item $4.29 $3.38 26.9% Extraordinary item -- (0.62) N/A Earnings per common share - basic $4.29 $2.76 55.4% Diluted: Income before extraordinary item $4.18 $3.30 26.7% Extraordinary item -- (0.61) N/A Earnings per common share - diluted $4.18 $2.69 55.4% Weighted average common shares outstanding: Basic 18,054 18,293 -1.3% Diluted 18,499 18,754 -1.4% Segment Information: Net sales: Barton Beer $570,380 $478,611 19.2% Spirits 267,762 185,938 44.0% Net sales $838,142 $664,549 26.1% Canandaigua Wine Branded $629,320 $598,782 5.1% Other 82,588 70,711 16.8% Net sales $711,908 $669,493 6.3% Matthew Clark Branded $313,102 $64,879 382.6% Wholesale 416,644 93,881 343.8% Net sales $729,746 $158,760 359.7% Franciscan $62,119 $-- N/A Corporate Operations and Other $5,372 $4,541 18.3% Intersegment eliminations $(6,818) $-- N/A Consolidated net sales $2,340,469 $1,497,343 56.3% Operating Income: Barton $142,931 $102,624 39.3% Canandaigua Wine 46,778 46,283 1.1% Matthew Clark 48,473 8,998 438.7% Franciscan 12,708 -- N/A Corporate Operations and Other (15,849) (12,013) 31.9% Consolidated operating income $235,041 $145,892 61.1%
SOURCE Canandaigua Brands, Inc.
CONTACT: Kristen Jenks, Vice President -Investor Relations of Canandaigua Brands, Inc., 716-218-2169/