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): April 12, 2001
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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 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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 218-2169
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
Constellation Brands, Inc. released the following information on April 12, 2001:
CONSTELLATION REPORTS RECORD FOURTH QUARTER AND FISCAL 2001 RESULTS
Earnings Per Share Up 16% for the Quarter and 25% for the Year
Company Announces Stock Split
Fairport, New York, April 12, 2001 - Constellation Brands, Inc. (NYSE: STZ and
STZ.B), reported net income of $18 million for the three months ended February
28, 2001 ("Fourth Quarter 2001"), representing an 18 percent increase over net
income reported for the three months ended February 29, 2000 ("Fourth Quarter
2000"). Net income of $97 million for the twelve months ended February 28, 2001
("Fiscal 2001") increased 26 percent over net income reported for the twelve
months ended February 29, 2000 ("Fiscal 2000").
Earnings per share on a diluted basis for Fourth Quarter 2001 and Fiscal
2001 were $0.97 and $5.21, respectively, representing increases of 16 percent
and 25 percent, respectively, when compared to Fourth Quarter 2000 and Fiscal
2000 earnings per share. For comparative purposes, net income for Fiscal 2000
included pretax nonrecurring charges of $6 million, or the equivalent of $0.18
per share on a diluted basis.
The Company also announced that its Board of Directors has approved a
two-for-one stock split of both its Class A Common Stock and Class B Common
Stock to be distributed in the form of a stock dividend. Stockholders of record
on April 30, 2001, will receive an additional share of stock for each share held
with distribution of the additional shares expected to occur on May 14, 2001.
The financial statements included in this press release do not reflect the
effect of the stock split.
Richard Sands, Chairman, Chief Executive Officer and President of
Constellation said, "Once again, we demonstrated our commitment to stockholders
by delivering double-digit earnings growth for the twelfth consecutive quarter.
This performance was achieved with top-line growth in every part of our
business, particularly fine wine and imported beer. In addition, this year we
expanded the higher-margin, faster growing categories of our premium wine
business through the acquisitions of the Turner Road Vintners and Corus brands.
With the addition of these brands and Ravenswood, coupled with our existing
portfolio of leading brands, Constellation is positioned to deliver another year
of strong double-digit earnings per share growth."
Sands added, "After such a successful year and a positive outlook, we are
pleased to announce a two-for-one stock split. This action underscores our
confidence in the Company's ability to deliver strong performance, as well as
our desire to enable greater investor participation in our Company. By combining
top line growth with margin improvements and deleveraging initiatives,
Constellation is well-positioned to build on its track record of growing
earnings and increasing stockholder value."
CONSOLIDATED RESULTS
Net sales reached $544 million for Fourth Quarter 2001, a two percent
increase over Fourth Quarter 2000. After adjusting for foreign currency impact,
net sales for Fourth Quarter were five percent greater than Fourth Quarter 2000.
Sales increased across all businesses for Fourth Quarter 2001, on a
currency-adjusted basis, led by fine wine, imported beer and the U.K. wholesale
business. Net sales for Fiscal 2001 were $2.4 billion versus $2.3 billion for
Fiscal 2000, an increase of two percent. On a currency-adjusted basis, net sales
increased five percent versus Fiscal 2000 net sales driven by fine wine,
imported beer and the U.K. wholesale business.
Gross profit for Fourth Quarter 2001 was $165 million compared to $168
million in the prior period. On a currency-adjusted basis, gross profit
increased slightly for Fourth Quarter 2001 compared to the prior period as
increased sales more than offset a decline in gross margin. The decline in gross
margin was due primarily to higher energy costs impacting spirits and higher
tequila costs. Reported gross profit and gross margin for Fiscal 2001 increased
to $757 million and 31.6 percent, respectively, compared to $722 million and
30.9 percent, respectively, for Fiscal 2000. The margin improvements were driven
primarily by price increases in the fine wine business as well as cost
improvements in the Company's U.K. business, Matthew Clark.
Fourth Quarter 2001 selling, general and administrative expenses as a
percent of net sales were favorable by 150 basis points versus the comparable
quarter a year ago, declining from 21.2 percent to 19.7 percent. Selling,
general and administrative expenses were $107 million for Fourth Quarter 2001
compared to $114 million reported for the same period last year. The decrease is
primarily attributable to lower marketing costs and corporate expenses. For
Fiscal 2001, selling, general and administrative expenses as a percent of net
sales decreased to 20.3 percent compared to 20.6 percent for the prior year.
Selling, general and administrative expenses were $487 million, an increase of
one percent from Fiscal 2000.
Operating income for Fourth Quarter 2001 increased to $57 million from $54
million, an increase of seven percent versus the same period a year ago. Fiscal
2001 operating income of $271 million was $30 million, or 13 percent, higher
than Fiscal 2000, excluding pretax nonrecurring charges.
Net interest expense for Fourth Quarter 2001 decreased four percent to $27
million versus $28 million reported for the same period a year ago. The lower
interest expense was the result of lower average debt levels for Fourth Quarter
2001. For Fiscal 2001, net interest expense increased two percent to $109
million versus $106 million reported for Fiscal 2000. The increase in net
interest expense can be primarily attributed to higher average interest rates.
Net income and diluted earnings per share for Fourth Quarter 2001 were $18
million and $0.97, respectively, as compared to net income and diluted earnings
per share of $16 million and $0.84, respectively, reported for Fourth Quarter
2000. Fiscal 2001 net income grew 26 percent to reach $97 million versus net
income reported for Fiscal 2000 of $77 million. Diluted earnings per share for
Fiscal 2001 and Fiscal 2000 were $5.21 and $4.18, respectively, representing an
increase of 25 percent.
BARTON RESULTS
Barton net sales for Fourth Quarter 2001 were $182 million, an increase of
six percent versus the comparable quarter a year ago. The increase can be
attributed primarily to volume growth in imported beer and spirits offset by
slightly lower contract manufacturing sales. For Fiscal 2001, net sales grew 13
percent to $945 million driven by the following: volume growth and price
increases in the Mexican beer portfolio, volume growth in the spirits portfolio,
price increases on tequila products and the inclusion of brands acquired in the
Black Velvet acquisition for a full year. On a pro forma basis, net sales for
Fiscal 2001 increased 12 percent.
Operating income grew to $32 million for Fourth Quarter 2001, an increase
of 13 percent versus the comparable quarter last year. Sales gains in imported
beer and lower marketing spend on spirits, more than offset increased energy and
tequila costs associated with spirits. Fiscal 2001 and Fiscal 2000 operating
income was $168 million and $143 million, respectively, an increase of 17
percent. Volume growth and average selling price increases in imported beer and
volume growth in spirits accounted for the growth, partially offset by increased
selling and marketing expenses related to growth of imported beer.
CANANDAIGUA WINE RESULTS
Canandaigua Wine net sales for Fourth Quarter 2001 increased two percent to
$174 million. The net sales increase was driven by favorable volumes related to
Almaden, Arbor Mist and Paul Masson Grande Amber sales, partially offset by
slightly lower average prices. Additionally, nonbranded sales increased five
percent versus a year ago due to greater bulk wine sales. Fiscal 2001 and Fiscal
2000 net sales were $688 million and $712 million, respectively, representing a
three percent decrease. Volume increases in Almaden, Arbor Mist and Paul Masson
Grande Amber sales were more than offset by slightly lower average selling
prices and lower champagne sales during Fiscal 2001 compared to the prior year,
which included the impact of Millennium volume.
Operating income increased 34 percent for Fourth Quarter 2001 to $16
million due to favorable marketing and promotion costs. Excluding the pretax
nonrecurring charge of $3 million reported for Fiscal 2000, operating income was
$51 million for Fiscal 2001 compared to $49 million the prior year, an increase
of three percent, also due to lower marketing and promotions.
MATTHEW CLARK RESULTS
Net sales for Fourth Quarter 2001 decreased slightly to $172 million from
$175 million reported for Fourth Quarter 2000. On a currency-adjusted basis, net
sales improved eight percent compared to net sales reported for Fourth Quarter
2000. Branded sales increased five percent, primarily attributable to increases
in Stowells of Chelsea and California wines. Further, wholesale sales improved
ten percent, with the addition of Forth Wines contributing to more than half of
the increase. Net sales for Fiscal 2001 decreased five percent to $691 million
from $730 million reported for Fiscal 2000. Adjusting for the impact of foreign
currency, net sales for Fiscal 2001 were three percent higher. Increases in
branded table wine, packaged cider and the U.K. wholesale business were
partially offset by declines in draft cider sales and private label sales.
Operating income for Fourth Quarter 2001 declined to $8 million from $14
million reported for Fourth Quarter 2000 due to increased investments in brand
building initiatives to gain market share. Fiscal 2001 operating income was up
slightly to $49 million. Excluding the pretax nonrecurring charge of $3 million
reported for Fiscal 2000, operating income was $49 million for Fiscal 2001
compared to $51 million for the prior year. On a currency-adjusted basis,
operating income increased four percent for the year.
FRANCISCAN RESULTS
Franciscan's net sales for Fourth Quarter 2001 increased 26 percent to
reach $22 million versus $18 million reported for Fourth Quarter 2000. The
increase is due to a combination of volume growth and selling price increases,
particularly for Franciscan Oakville Estate, Simi and Estancia. As a result of
the volume growth and selling price increases, operating income grew to $6
million, a 13 percent increase.
Net sales and operating income for Fiscal 2001 were $93 million and $24
million, respectively, an increase of 50 percent and 93 percent, respectively.
On a pro forma basis, net sales for Fiscal 2001 increased 15 percent driven
primarily by increases in pricing.
STOCK SPLIT DETAILS
The Company's Board of Directors has approved a two-for-one stock split of
both its Class A Common Stock and Class B Common Stock to be distributed in the
form of a stock dividend on or about May 14, 2001, to stockholders of record on
April 30, 2001. Pursuant to the terms of the stock dividend, each holder of
Class A Common Stock will receive one additional share of Class A stock for each
share of Class A stock held, and each holder of Class B Common Stock will
receive one additional share of Class B stock for each share of Class B stock
held.
PROPOSED TRANSACTION WITH RAVENSWOOD WINERY
Constellation and Ravenswood Winery, Inc. issued a press release on April
10, 2001, announcing that they entered into a merger agreement under which
Constellation will acquire Ravenswood, a leading premium wine producer based in
Sonoma, California. Please refer to this April 10, 2001, press release for
information regarding this merger transaction, including risk factors associated
with this transaction.
OUTLOOK
The following statements are management's current expectations for the
Company's three months ending May 31, 2001 ("First Quarter 2002") and the twelve
months ending February 28, 2002 ("Fiscal 2002"). These statements are made as of
the date of this press release and are forward-looking and do not reflect the
effect of the stock split. Actual results may differ materially from these
expectations due to a number of risks and uncertainties.
- Diluted earnings per share for First Quarter 2002 are expected to be within
a range of $1.06 to $1.12 versus $0.96 reported for First Quarter 2001.
- Diluted earnings per share for Fiscal 2002 are expected to be within a
range of $5.95 and $6.05 versus $5.21 reported for Fiscal 2001.
The Fiscal 2002 estimate includes the expected impact of the proposed
merger involving Constellation and Ravenswood Winery.
The Company anticipates holding a conference call to discuss its First
Quarter 2002 financial results and expectations for the remainder of Fiscal 2002
on Thursday, June 28, 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 May 18, 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,
June 28, 2001.
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 Brands, Inc., is the largest
single-source supplier of these products in the United States. With its broad
product portfolio, composed of brands in all major beverage alcohol categories,
Constellation believes it is distinctly positioned to satisfy an array of
consumer preferences. Leading brands in Constellation's portfolio include:
Franciscan Oakville Estate, Simi, Estancia, Almaden, Arbor Mist, Talus,
Vendange, Alice White, Black Velvet, Fleischmann's, Schenley, Ten High, Stowells
of Chelsea, Blackthorn, Modelo Especial, St. Pauli Girl, and the number one
imported beer, Corona Extra.
CONFERENCE CALL DETAILS
A conference call to discuss the quarterly results will be hosted by
Richard Sands, CEO, and Tom Summer, CFO, on Thursday, April 12, 2001, at 10:00
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 Info.
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If you are unable to participate in the conference call, there will be a
replay available on Constellation's web site.
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CONSOLIDATED FINANCIAL STATEMENTS FOLLOW
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
February 28, February 29,
2001 2000
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ASSETS
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CURRENT ASSETS:
Cash and cash investments $ 145,672 $ 34,308
Accounts receivable, net 314,262 291,108
Inventories, net 670,018 615,700
Prepaid expenses and other current assets 61,037 54,881
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Total current assets $ 1,190,989 $ 995,997
PROPERTY, PLANT AND EQUIPMENT, net 548,614 542,971
OTHER ASSETS 772,566 809,823
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Total assets $ 2,512,169 $ 2,348,791
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
Notes payable $ 4,184 $ 28,134
Current maturities of long-term debt 54,176 52,653
Accounts payable 114,793 122,213
Accrued excise taxes 55,954 30,446
Other accrued expenses and liabilities 198,053 204,771
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Total current liabilities $ 427,160 $ 438,217
LONG-TERM DEBT, less current maturities 1,307,437 1,237,135
DEFERRED INCOME TAXES 131,974 116,447
OTHER LIABILITIES 29,330 36,152
STOCKHOLDERS' EQUITY 616,268 520,840
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Total liabilities and stockholders' equity $ 2,512,169 $ 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 Percent
February 28, 2001 February 29, 2000 Change
----------------- ----------------- -------
Gross sales $ 717,657 $ 704,790 1.8%
Net sales $ 544,038 $ 535,751 1.5%
Cost of product sold (379,148) (368,228) 3.0%
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Gross profit 164,890 167,523 -1.6%
Selling, general and administrative expenses (107,428) (113,779) -5.6%
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Operating income 57,462 53,744 6.9%
Interest expense, net (26,834) (27,863) -3.7%
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Income before income taxes 30,628 25,881 18.3%
Provision for income taxes (12,251) (10,353) 18.3%
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Net income $ 18,377 $ 15,528 18.3%
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Earnings per common share:
Basic $ 0.99 $ 0.86 15.1%
Diluted $ 0.97 $ 0.84 15.5%
Weighted average common shares outstanding:
Basic 18,527 18,148 2.1%
Diluted 19,020 18,566 2.4%
Segment Information:
Net sales:
Barton
Beer $ 120,786 $ 112,419 7.4%
Spirits 61,540 60,065 2.5%
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Net sales $ 182,326 $ 172,484 5.7%
Canandaigua Wine
Branded $ 154,449 $ 151,959 1.6%
Other 19,960 19,047 4.8%
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Net sales $ 174,409 $ 171,006 2.0%
Matthew Clark
Branded $ 61,572 $ 64,691 -4.8%
Wholesale 110,251 109,842 0.4%
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Net sales $ 171,823 $ 174,533 -1.6%
Franciscan $ 22,015 $ 17,509 25.7%
Corporate Operations and Other $ 634 $ 1,250 -49.3%
Intersegment eliminations $ (7,169) $ (1,031) 595.3%
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Consolidated net sales $ 544,038 $ 535,751 1.5%
=========== ===========
Operating income:
Barton $ 31,862 $ 28,092 13.4%
Canandaigua Wine 15,940 11,909 33.8%
Matthew Clark 7,934 13,970 -43.2%
Franciscan 5,836 5,146 13.4%
Corporate Operations and Other (4,110) (5,373) -23.5%
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Consolidated operating income $ 57,462 $ 53,744 6.9%
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CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Twelve Twelve
Months Ended Months Ended Percent
February 28, 2001 February 29, 2000 Change
----------------- ----------------- -------
Gross sales $ 3,154,294 $ 3,088,699 2.1%
Net sales $ 2,396,685 $ 2,340,469 2.4%
Cost of product sold (1,639,230) (1,618,009) 1.3%
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Gross profit 757,455 722,460 4.8%
Selling, general and administrative expenses (486,587) (481,909) 1.0%
Nonrecurring charges - (5,510) N/A
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Operating income 270,868 235,041 15.2%
Interest expense, net (108,631) (106,082) 2.4%
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Income before income taxes 162,237 128,959 25.8%
Provision for income taxes (64,895) (51,584) 25.8%
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Net income $ 97,342 $ 77,375 25.8%
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Earnings per common share:
Basic $ 5.30 $ 4.29 23.5%
Diluted $ 5.21 $ 4.18 24.6%
Weighted average common shares outstanding:
Basic 18,362 18,054 1.7%
Diluted 18,688 18,499 1.0%
Segment Information:
Net sales:
Barton
Beer $ 659,371 $ 570,380 15.6%
Spirits 285,743 267,762 6.7%
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Net sales $ 945,114 $ 838,142 12.8%
Canandaigua Wine
Branded $ 610,399 $ 629,320 -3.0%
Other 78,042 82,588 -5.5%
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Net sales $ 688,441 $ 711,908 -3.3%
Matthew Clark
Branded $ 286,910 $ 313,102 -8.4%
Wholesale 404,209 416,644 -3.0%
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Net sales $ 691,119 $ 729,746 -5.3%
Franciscan $ 93,115 $ 62,119 49.9%
Corporate Operations and Other $ 3,319 $ 5,372 -38.2%
Intersegment eliminations $ (24,423) $ (6,818) 258.2%
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Consolidated net sales $ 2,396,685 $ 2,340,469 2.4%
=========== ===========
Operating income:
Barton $ 167,680 $ 142,931 17.3%
Canandaigua Wine 50,789 46,778 8.6%
Matthew Clark 48,961 48,473 1.0%
Franciscan 24,495 12,708 92.8%
Corporate Operations and Other (21,057) (15,849) 32.9%
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Consolidated operating income $ 270,868 $ 235,041 15.2%
=========== ===========
ATTACHMENT A
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SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The Company makes forward-looking statements from time to time and desires
to take advantage of the "safe harbor" which is afforded such statements under
the Private Securities Litigation Reform Act of 1995 when they are accompanied
by meaningful cautionary statements identifying important factors that could
cause actual results to differ materially from those in the forward-looking
statements.
The statements set forth in this press release, which are not historical
facts, are forward-looking statements that involve risks and uncertainties that
could cause actual results to differ materially from those set forth in the
forward-looking statements. Any projections of future results of operations, and
in particular, (i) the Company's estimated diluted earnings per share for the
quarter ending May 31, 2001, and (ii) the Company's estimated diluted earnings
per share for the twelve months ending February 28, 2002, (which estimates are
set forth above under the heading "Outlook"), should not be construed in any
manner as a guarantee that such results will in fact occur. There can be no
assurance that any forward-looking statement in this press release will be
realized or that actual results will not be significantly higher or lower than
set forth in or implied by such forward-looking statement. In addition to the
risks and uncertainties of ordinary business operations, the forward-looking
statements of the Company contained in this press release are also subject to
the following risks and uncertainties:
RECENT ACQUISITIONS AND PROPOSED MERGER WITH RAVENSWOOD WINERY
o Projections of future results of operations include Constellation's
expectations with respect to future performance of recently acquired
businesses and the expected impact of the proposed merger with Ravenswood.
These expectations are based upon acquired businesses achieving certain
sales projections, meeting certain cost targets and being successfully
integrated with Constellation's operations.
PERFORMANCE OF WHOLESALE DISTRIBUTORS
o In the United States, we sell our products principally to wholesalers for
resale to retail outlets, including grocery stores, package liquor stores,
club and discount stores and restaurants. The replacement or poor
performance of our major wholesalers or our inability to collect accounts
receivable from our major wholesalers could materially and adversely affect
our results of operations and financial condition. Distribution channels
for beverage alcohol products have been characterized in recent years by
rapid change, including consolidations of certain wholesalers. In addition,
wholesalers and retailers of our products offer products, which compete
directly with our products for retail shelf space and consumer purchases.
Accordingly, there is a risk that these wholesalers or retailers may give
higher priority to products of our competitors. In the future, our
wholesalers and retailers may not continue to purchase our products or
provide our products with adequate levels of promotional support.
SUPPLIERS, RAW MATERIALS AND PRICE FLUCTUATIONS
o Our business is heavily dependent upon raw materials, such as grapes, grape
juice concentrate, grains, and alcohol from third-party suppliers and
packaging materials. We could experience raw material supply, production or
shipment difficulties, which could adversely affect our ability to supply
goods to our customers. We are also directly affected by increases in the
costs of such raw materials. Although we believe we have adequate sources
of grape supplies, in the event demand for certain wine products exceeds
expectations, we could experience shortages. In addition, one of our
largest components of cost of goods sold is that of glass bottles, which
have only a small number of producers. The inability of any of our glass
bottle suppliers to satisfy our requirements could adversely affect our
business.
COMPETITION
o We are in a highly competitive industry and the dollar amount, and unit
volume, of our sales could be negatively affected by our inability to
maintain or increase prices, changes in geographic or product mix, a
general decline in beverage alcohol consumption or the decision of our
wholesale customers, retailers or consumers to purchase competitive
products instead of our products. Wholesaler, retailer and consumer
purchasing decisions are influenced by, among other things, the perceived
absolute or relative overall value of our products, including their quality
or pricing, compared to competitive products. Unit volume and dollar sales
could also be affected by pricing, purchasing, financing, operational,
advertising or promotional decisions made by wholesalers and retailers
which could affect their supply of, or consumer demand for, our products.
We could also experience higher than expected selling, general and
administrative expenses if we find it necessary to increase the number of
our personnel or our advertising or promotional expenditures to maintain
our competitive position or for other reasons.
CONSUMPTION OF PRODUCTS WE SELL
Consumer purchasing patterns and preferences may impact the consumption of
the products we sell. There are a variety of factors that may cause consumers to
decrease the amount and type of alcohol products purchased, including but not
limited to the following:
o concerns about the health consequences of consuming beverage alcohol
products and about drinking and driving;
o a trend toward a healthier diet including lighter, lower calorie beverages
such as diet soft drinks, juices and sparkling water products; and
o activities of anti-alcohol consumer groups.
EXCISE TAXES AND GOVERNMENT RESTRICTIONS
o In the United States, the federal government and individual states impose
excise taxes on beverage alcohol products in varying amounts, which have
been subject to change. Increases in excise taxes on beverage alcohol
products, if enacted, could materially and adversely affect our financial
condition or results of operations. In addition, the beverage alcohol
products industry is subject to extensive regulation by state and federal
agencies. The federal Bureau of Alcohol, Tobacco and Firearms and various
state liquor authorities regulate such matters as licensing requirements,
trade and pricing practices, permitted and required labeling, advertising
and relations with wholesalers and retailers. In recent years, federal and
state regulators have required warning labels and signage. In the United
Kingdom, Matthew Clark carries on its excise trade under a Customs and
Excise License. Licenses are required for all premises where wine is
produced. Matthew Clark holds a license to act as an excise warehouse
operator and registrations have been secured for the production of cider
and bottled water. New or revised regulations or increased licensing fees
and requirements could have a material adverse effect on our financial
condition or results of operations.
CURRENCY RATE FLUCTUATIONS/FOREIGN OPERATIONS
The Company has operations in different countries and, therefore, is
subject to the risks associated with currency fluctuations. The Company could
experience changes in its ability to obtain or hedge against foreign currency,
foreign exchange rates and fluctuations in those rates. The Company could also
be affected by nationalizations or unstable governments or legal systems or
intergovernmental disputes. These currency, economic and political uncertainties
may affect the Company's results, especially to the extent these matters, or the
decisions, policies or economic strength of the Company's suppliers, affect the
Company's foreign operations or imported beer products.
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: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Executive Vice
President and Chief Financial
Officer
SUBSIDIARIES
BATAVIA WINE CELLARS, INC.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA WINE COMPANY, INC.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA EUROPE LIMITED
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA LIMITED
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Finance Director
(Principal Financial Officer and
Principal Accounting Officer)
POLYPHENOLICS, INC.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
ROBERTS TRADING CORP.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, President and
Treasurer
CANANDAIGUA B.V.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Chief
Financial Officer
FRANCISCAN VINEYARDS, INC.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
ALLBERRY, INC.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
CLOUD PEAK CORPORATION
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
M.J. LEWIS CORP.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
MT. VEEDER CORPORATION
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
BARTON INCORPORATED
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BRANDS, LTD.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BEERS, LTD.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BRANDS OF CALIFORNIA, INC.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BRANDS OF GEORGIA, INC.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON CANADA, LTD.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON DISTILLERS IMPORT CORP.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON FINANCIAL CORPORATION
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
STEVENS POINT BEVERAGE CO.
Dated: April 12, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
MONARCH IMPORT COMPANY
Dated: April 12, 2001 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