<PAGE>
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM 10-Q
--------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: September 30, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 000-23175
BERINGER WINE ESTATES HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 68-0370340
- ------------------------------------ --------------------------------
(State of Incorporation) (I.R.S. Employer Identification)
610 Airpark Road
P.O. Box 4500
Napa, California 94558
(Address of principal executive offices)
(707) 259-4500
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
As of October 31, 1999, the Registrant's Common Stock outstanding was:
Title Outstanding
----- -----------
Class A Common Stock 1,338,120
Class B Common Stock 18,252,075
=============================================================================
<PAGE>
INDEX
<TABLE>
<CAPTION>
Page
-----
<S> <C>
PART I: FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets at June 30, 1999 and September 30, 1998 and 1999 1
Consolidated Statements of Operations for the three month periods ended
September 30, 1998 and 1999 2
Consolidated Statements of Cash Flows for the three month periods ended
September 30, 1998 and 1999 3
Notes to Consolidated Financial Statements 4
Item 2 Management's Discussion and Analysis of Results of Operations and Financial Condition 5
PART II: OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 9
1. Exhibits:
27 Financial Data Schedule
2. Form 8-K:
No reports on Form 8-K were filed during the quarter ended September 30, 1999
</TABLE>
Beringer Wine Estates Holdings, Inc.
<PAGE>
Consolidated Balance Sheets
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
June 30, September 30, September 30,
1999 1998 1999
-------------- -------------- --------------
(unaudited) (unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash................................................................... $ 18 $ 18 $ 20
Accounts receivable, net of allowance of $255, $249 and $255........... 45,388 35,106 48,069
Inventories............................................................ 285,635 260,764 316,660
Deferred tax assets.................................................... 11,293 6,286 10,588
Prepaids and other current assets...................................... 2,768 3,598 5,841
-------- -------- --------
Total current assets................................................ 345,102 305,772 381,178
Property, plant and equipment, net of accumulated depreciation
of $35,779, $27,064 and $38,838......................................... 289,824 257,804 306,818
Other assets, net........................................................ 9,390 8,468 9,141
-------- -------- --------
Total assets........................................................ $644,316 $572,044 $697,137
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable....................................................... $ 23,301 $ 19,556 $ 39,933
Book overdraft......................................................... 3,416 3,188 7,823
Accrued trade discounts................................................ 9,258 5,570 10,674
Accrued payroll, bonuses and benefits.................................. 9,447 4,485 7,807
Accrued interest....................................................... 4,572 4,948 4,323
Other accrued expenses................................................. 7,597 4,849 6,064
Income taxes payable................................................... 2,270 4,132 5,703
Line of credit......................................................... 102,100 126,200 125,000
Current portion of long-term debt...................................... 2,695 4,493 2,750
-------- -------- --------
Total current liabilities........................................... 164,656 177,421 210,077
Long-term debt, less current portion..................................... 223,162 166,305 222,454
Deferred tax liabilities................................................. 36,065 34,165 36,680
Other liabilities........................................................ 2,333 3,833 1,833
-------- -------- --------
Total liabilities................................................... 426,216 381,724 471,044
-------- -------- --------
Stockholders' equity:
Class A Common Stock, $0.01 par value; 2,000,000 shares authorized;
1,312,326, 1,373,420 and 1,338,120 shares issued and outstanding..... 13 14 13
Class B Common Stock, $0.01 par value; 38,000,000 shares
authorized; 18,242,071, 18,060,625 and 18,251,275 shares issued
and outstanding........................................................ 182 180 183
Notes receivable from stockholders..................................... (306) (414) (273)
Additional paid-in-capital............................................. 191,192 189,102 191,460
Retained earnings...................................................... 27,019 1,438 34,710
-------- -------- --------
Total stockholders' equity.......................................... 218,100 190,320 226,093
-------- -------- --------
Total liabilities and stockholders' equity.......................... $644,316 $572,044 $697,137
======== ======== ========
</TABLE>
See notes to consolidated financial statements.
Beringer Wine Estates Holdings, Inc. 1
<PAGE>
Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended
September 30,
-------------------------------
1998 1999
------------- -------------
<S> <C> <C>
Gross revenues........................................................................... $78,589 $94,562
Less excise taxes........................................................................ 3,569 4,105
------- -------
Net revenues............................................................................. 75,020 90,457
Cost of goods sold....................................................................... 40,642 45,977
------- -------
Gross profit............................................................................. 34,378 44,480
Selling, general and administrative expenses............................................. 23,456 26,312
------- -------
Operating income......................................................................... 10,922 18,168
Interest expense......................................................................... 5,034 5,837
Other expense (income), net.............................................................. (527) (226)
------- -------
Income before income taxes............................................................... 6,415 12,557
Provision for income taxes............................................................... 2,411 4,866
------- -------
Net income............................................................................. $ 4,004 $ 7,691
======= =======
Income per share:
Basic EPS.............................................................................. $ 0.21 $ 0.39
======= =======
Diluted EPS............................................................................ $ 0.20 $ 0.38
======= =======
Weighted average number of common shares and
equivalents outstanding:
Basic.................................................................................. 19,434 19,589
======= =======
Diluted................................................................................ 20,168 20,292
======= =======
</TABLE>
See notes to consolidated financial statements.
Beringer Wine Estates Holdings, Inc. 2
<PAGE>
Consolidated Statements of Cash Flows
(unaudited, in thousands)
<TABLE>
<CAPTION>
Three months ended
September 30,
-----------------------------------
1998 1999
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income............................................................................. $ 4,004 $ 7,691
Adjustments to reconcile net income to net cash (used in) provided by
operating activities:
Deferred taxes...................................................................... 101 1,320
Depreciation and amortization....................................................... 3,393 3,411
Other............................................................................... 27 22
Change in assets and liabilities:
Accounts receivable.............................................................. (4,582) (2,477)
Inventories...................................................................... (9,095) (23,295)
Prepaids and other assets........................................................ (602) (2,998)
Accounts payable................................................................. 2,100 16,553
Book overdraft................................................................... 1,981 4,407
Accrued trade discounts.......................................................... 1,043 1,416
Accrued payroll, bonuses and benefits............................................ (2,221) (1,640)
Accrued interest................................................................. 405 (249)
Other accrued expenses........................................................... (1,666) (1,533)
Income taxes payable............................................................. 2,446 3,433
Other liabilities................................................................ (500) (500)
-------- --------
Net cash (used in) provided by operating activities........................... (3,166) 5,561
-------- --------
Cash flows from investing activities:
Acquisitions of property, plant and equipment.......................................... (16,130) (13,503)
Business acquisitions.................................................................. -- (14,608)
Decrease (increase) in investments..................................................... (926) 25
-------- --------
Net cash used in investing activities......................................... (17,056) (28,086)
-------- --------
Cash flows from financing activities:
Net change in line of credit........................................................... 20,900 22,900
Repayments of long-term debt........................................................... (1,069) (653)
Issuance of common stock............................................................... 354 247
Proceeds from notes receivable from stockholders....................................... 34 33
-------- --------
Net cash provided by financing activities..................................... 20,219 22,527
-------- --------
Net (decrease) increase in cash.......................................................... (3) 2
Cash at beginning of the period.......................................................... 21 18
-------- --------
Cash at end of the period................................................................ $ 18 $ 20
======== ========
</TABLE>
See notes to consolidated financial statements.
Beringer Wine Estates Holdings, Inc.3
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1--Basis of Presentation
In our opinion, the accompanying unaudited consolidated financial statements
contain all adjustments necessary to present fairly our financial position at
June 30, 1999 and September 30, 1998 and 1999, and our results of operations and
cash flow for the three month periods ended September 30, 1998 and 1999. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. For further information, refer to our Form 10-K for the
year ended June 30, 1999. Operating results for the three month period ended
September 30, 1999 is not necessarily indicative of future results.
Note 2--Business Acquisition
On August 31, 1999, we completed the acquisition of substantially all of the
assets of St. Clement Vineyards, a division of Sapporo U.S.A., Inc. operating a
winery in St. Helena, California. We acquired assets consisting primarily of
inventories and property, plant and equipment. The acquisition has been
accounted for using the purchase method of accounting with the allocation of
purchase price to assets acquired made using estimated fair values at the date
of acquisition. The entire purchase price was assigned to tangible assets
acquired.
Note 3--Inventories
We utilize the "first in, first out" (FIFO) method of accounting for all
inventories. Inventories at June 30, 1999 and September 30, 1998 and 1999 are as
follows:
<TABLE>
<CAPTION>
June 30, September 30, September 30,
(in thousands) 1999 1998 1999
----------- ------------ ------------
<S> <C> <C> <C>
Bulk wine........................................................... $124,105 $ 73,861 $125,183
Cased goods and retail.............................................. 135,429 157,883 164,105
Crop costs and supplies............................................. 26,101 29,020 27,372
-------- -------- --------
Total............................................................ $285,635 $260,764 $316,660
======== ======== ========
</TABLE>
Included in inventory at June 30, 1999 and September 30, 1998 and 1999 were
$3.2 million, $14.7 million and $6.4 million, respectively, of inventory cost
step-up remaining from applying purchase accounting to the acquisitions of
Beringer Wine Estates Company, Chateau St. Jean, Stags' Leap Winery and St.
Clement Vineyards.
Note 4--Earnings Per Share Computation
The table below presents the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Three months ended
(in thousands, except per share data) September 30,
-----------------------------
1998 1999
------------ ------------
<S> <C> <C>
Numerator--Income
Net income........................................................................... $ 4,004 $ 7,691
======= =======
Denominator--Basic shares
Average common shares outstanding.................................................... 19,434 19,589
------- -------
Basic EPS............................................................................ $ 0.21 $ 0.39
======= =======
Denominator--Diluted shares
Average common shares outstanding.................................................... 19,434 19,589
Dilutive effect of common stock equivalents.......................................... 734 703
------- -------
Total diluted shares.............................................................. 20,168 20,292
------- -------
Diluted EPS.......................................................................... $ 0.20 $ 0.38
======= =======
</TABLE>
Beringer Wine Estates Holdings, Inc. 4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Summary
First quarter fiscal 2000 operating results reflect continued sales volume
growth and increasing average unit revenue compared to first quarter of the
prior year. During the first quarter ended September 30, 1999, sales volume grew
15% and net revenues rose 21% driven primarily by growth in the Beringer
Vineyards and Meridian Vineyards brands. Gross profit expanded 29% and operating
profit increased 66% over the same period in the prior fiscal year. Net income
and diluted earnings per share increased significantly over the first quarter of
fiscal 1999 to $7.7 million and $0.38, respectively. Adjusted gross profit
increased 17% and adjusted operating profit increased 23% over the same period
in the prior fiscal year. Adjusted net income and adjusted diluted earnings per
share increased 21% and 20%, respectively, over the first quarter of fiscal
1999. Our success as a leading producer of premium varietal wines is due to an
emphasis on quality products, brand strength and consumer focused marketing.
The following table shows net income per share for the first quarter of fiscal
2000 and for each of the quarters in fiscal 1999. Adjusted net income excludes
the non-cash charge related to inventory step-up.
Net Income and Per Share Amounts
<TABLE>
<CAPTION>
Three months ended
(in thousands, except per share data) September 30, December 31, March 31, June 30, September 30,
1998 1998 1999 1999 1999
----------- ----------- --------- -------- -----------
<S> <C> <C> <C> <C> <C>
As Reported
Net income............................................. $4,004 $ 8,359 $7,635 $ 9,587 $7,691
Diluted EPS............................................ 0.20 0.41 0.38 0.47 0.38
Adjusted (1)
Net income............................................. $7,017 $12,203 $9,867 $10,239 $8,482
Diluted EPS............................................ 0.35 0.60 0.49 0.50 0.42
</TABLE>
________
(1) Net income available to common stockholders is adjusted to exclude the
after-tax effect of the non-cash charge related to inventory step-up.
Net income in the first quarter of fiscal 2000 increased to $7.7 million
from $4.0 million in the first quarter of the prior year. First quarter fiscal
2000 diluted earnings per share grew to $0.38 from $0.20 in the first quarter of
the prior year. Adjusted net income for the quarter ended September 30, 1999
increased $1.5 million, or 21%, to $8.5 million from $7.0 million in the same
period in the prior year. Adjusted earnings per share in the first quarter rose
20% over first quarter fiscal 1999 adjusted earnings per share to $0.42.
Results of Operations
Net Revenues
<TABLE>
<CAPTION>
Three months ended September 30, December 31, March 31, June 30, September 30,
(dollars and volume in thousands) 1998 1998 1999 1999 1999
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Beringer Vineyards......................................... $42,786 $ 68,568 $54,818 $58,106 $54,456
Meridian Vineyards......................................... 14,085 21,552 17,773 16,571 16,975
All Other California Brands................................ 14,505 17,498 16,029 15,975 15,153
Imports.................................................... 3,644 4,955 4,584 4,705 3,873
------- -------- ------- ------- -------
Total Net Revenues........................................ $75,020 $112,573 $93,204 $95,357 $90,457
======= ======== ======= ======= =======
Volume (total 9-liter case equivalents).................... 1,328 2,073 1,685 1,701 1,532
Net Revenue Per Case....................................... $ 56.49 $ 54.30 $ 55.31 $ 56.06 $ 59.05
</TABLE>
Net revenues for the first quarter ended September 30, 1999 grew 27% for
Beringer Vineyards and 21% for Meridian Vineyards. We shipped 1.5 million nine-
liter case equivalents during the first quarter of fiscal 2000, 15% higher than
the 1.3 million cases shipped in the first quarter of the prior fiscal year.
Volume growth continues to be driven primarily by the Beringer Vineyards brand
with the Beringer Founders' Estate product line and the continued expansion of
Meridian Vineyards.
Beringer Wine Estates Holdings, Inc. 5
<PAGE>
The average net revenue per nine-liter case increased 5% to $59.05 per case
from $56.49 per case in the first quarter of fiscal 1999. This increase
primarily reflects the positive mix change resulting from increased Beringer
Founders' Estate and Meridian Vineyards sales volume at higher than company
average per case revenue. We expect this trend of increasing unit revenue to
continue as we pursue the opportunities in the $7.00 to $10.00 per bottle retail
price category with Beringer Founders' Estate and Meridian Vineyards.
Based on the growth of Beringer Founders' Estate within the Beringer
Vineyards brand and continued growth of Meridian Vineyards, Beringer White
Zinfandel continues to represent less of our total net revenues declining to 25%
from 30% in the first quarter of the prior fiscal year.
Gross Profit
<TABLE>
<CAPTION>
Three months ended (in thousands) September 30, December 31, March 31, June 30, September 30,
1998 1998 1999 1999 1999
------------- ------------ --------- -------- -------------
<S> <C> <C> <C> <C> <C>
Net Revenues............................................ $75,020 $112,573 $93,204 $95,357 $90,457
Cost of Goods Sold...................................... 40,642 59,896 49,252 48,240 45,977
------- -------- ------- ------- -------
Gross Profit............................................ 34,378 52,677 43,952 47,117 44,480
Inventory Step-up....................................... 4,939 6,473 3,820 1,216 1,312
------- -------- ------- ------- -------
Adjusted Gross Profit................................... $39,317 $ 59,150 $47,772 $48,333 $45,792
======= ======== ======= ======= =======
</TABLE>
First quarter cost of goods sold increased $5.3 million or 13% over the
same period in the prior fiscal year to $46.0 million. Our first quarter cost of
goods sold included $1.3 million of non-cash charges resulting from inventory
step-up, compared to $4.9 million for the same period in fiscal 1999. Our
adjusted first quarter cost of goods sold increased $9.0 million or 25% over the
same period in the prior fiscal year to $44.7 million. First quarter average
cost per nine-liter case, excluding inventory step-up, increased $2.27 or 8% to
$29.15 over the same period in the prior fiscal year. These changes are
primarily due to changes in product mix sold and changes in raw materials costs,
particularly as new vintages are introduced.
Gross profit for the first fiscal quarter ended September 30, 1999 grew by
$10.1 million or 29%, over the same period in the prior fiscal year to $44.5
million. First quarter adjusted gross profit, excluding the inventory step-up,
rose $6.5 million or 17% over the same period in the last fiscal year to $45.8
million.
Gross Margin
<TABLE>
<CAPTION>
Three months ended September 30, December 31, March 31, June 30, September 30,
1998 1998 1999 1999 1999
------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Revenues........................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Goods Sold..................................... 54.2 53.2 52.8 50.6 50.8
----- ----- ----- ----- -----
Gross Margin........................................... 45.8 46.8 47.2 49.4 49.2
Inventory Step-up...................................... 6.6 5.7 4.1 1.3 1.4
----- ----- ----- ----- -----
Adjusted Gross Margin.................................. 52.4% 52.5% 51.3% 50.7% 50.6%
===== ===== ===== ===== =====
</TABLE>
Gross margin for the first quarter grew to 49.2% from 45.8% in the same
period in the last fiscal year. First quarter adjusted gross margin was 50.6%
compared to 52.4% for the same period in the last fiscal year.
Operating Expenses, Operating Income and Interest Expense
Operating Income
<TABLE>
<CAPTION>
Three months ended (in thousands) September 30, December 31, March 31, June 30, September 30,
1998 1998 1999 1999 1999
------------ ------------ --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Operating Income......................................... $10,922 $17,559 $17,347 $20,704 $18,168
Add back Inventory Step-up............................... 4,939 6,473 3,820 1,216 1,312
------- ------- ------- ------- -------
Adjusted Operating Income................................ $15,861 $24,032 $21,167 $21,920 $19,480
======= ======= ======= ======= =======
Operating Margin......................................... 14.6% 15.6% 18.6% 21.7% 20.1%
Adjusted Operating Margin................................ 21.1% 21.3% 22.7% 23.0% 21.5%
</TABLE>
Beringer Wine Estates Holdings, Inc. 6
<PAGE>
First quarter operating expenses increased to $26.3 million, an increase of
$2.9 million or 12% over the same period in the prior fiscal year. This increase
reflects additional spending on advertising, merchandising, other direct product
promotional activities offset partially by a decrease in non-product specific
expenses. Marketing support, such as Beringer White Zinfandel radio adverstising
campaigns, accounted for the largest increase in promotional spending during
this period. Operating expenses represented 29.1% of net revenues for the first
quarter compared to 31.3% for the same period in the last fiscal year.
First quarter operating income rose $7.2 million over the same period in
the prior fiscal year to $18.2 million. Adjusted operating income for the first
quarter increased $3.6 million or 23% over the same period in the prior fiscal
year to $19.5 million.
First quarter interest expense increased $0.8 million from first quarter of
fiscal 1999, due primarily to increased debt needed to fund the acquisition of
St. Clement Vineyards, increased working capital needs, and investment in
vineyard development and winery infrastructure required to support anticipated
growth.
Acquisition of St. Clement Vineyards
On August 31, 1999 we completed the acquisition of substantially all of the
assets of St. Clement Vineyards, a division of Sapporo U.S.A. Inc. operating an
ultra-premium winery in St. Helena, California. We acquired assets consisting
primarily of inventories and property, plant and equipment. St. Clement
Vineyards Napa Valley appellation wines are an excellent addition to our current
ultra-premium wine portfolio.
Financial Condition
Assets Total assets increased $52.8 million or 8% from June 30, 1999 to $697.1
million on September 30, 1999. Inventory grew $31.0 million from June 30, 1999
to $316.7 million on September 30, 1999. This growth primarily reflects an
increase in inventory quantities on hand, including inventory acquired through
the acquisition of St. Clement Vineyards. Although inventory and receivable
levels will be impacted by seasonal patterns, we expect total assets to continue
to increase as inventory and property, plant and equipment expand to support
anticipated future growth.
Liabilities Total liabilities increased $44.8 million or 11% from June 30,
1999 to $471.0 million at September 30, 1999. We had outstanding $225.2 million
of long-term debt, of which $2.8 million is payable in the next twelve months.
In addition, we had outstanding $125 million on our revolving line of credit. At
September 30, 1999, $122.0 million was available under the terms of our credit
agreement.
Liquidity and Capital Resources
Operating activities provided $5.6 million of cash during the first quarter of
fiscal 2000. First quarter net cash used in investing activities of $28.1
million consisted of expenditures for property, plant and equipment and the
acquisition of St. Clement Vineyards. Financing activities provided net cash of
$22.2 million, primarily from our bank credit agreement. We expect to continue
to have significant cash requirements for the remainder of the year to fund
capital spending on vineyards and winery facilities.
We anticipate that current capital, combined with cash from operations and the
availability of cash from additional financing under our credit facilities, will
be sufficient to meet our liquidity and capital expenditures requirements for
the next twelve months. However, as a result of our expected growth and planned
capital investments, we expect to increase the utilization of our credit
facilities and potentially access alternative financing sources in the future.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk from changes in interest rates. To manage this
exposure, we enter into interest rate swap agreements. We do not use financial
instruments for trading purposes and we are not a party to any leveraged
derivatives.
Beringer Wine Estates Holdings, Inc. 7
<PAGE>
At September 30, 1999, our total debt was $350.2 million, of which $111.1
million will re-price during the next twelve months. At September 30, 1999, we
had interest rate swap agreements that converted a notional amount of $90
million of LIBOR based variable-rate debt to a fixed rate.
Assuming a 1% increase in interest rates, annual interest expense would be
expected to increase approximately $1.0 million. Our credit exposure under these
agreements is limited to the cost of replacing an agreement in the event of non-
performance by our counterparty. To minimize this risk, we select high credit
quality counterparties.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." SFAS No. 133, which was deferred from its original
effective date, is now effective for years beginning after June 15, 2000. The
statement requires all derivative securities to be recorded on the balance sheet
at fair value and establishes "special accounting" for the different types of
hedges. We plan to adopt this statement in fiscal 2001. Had we adopted the
statement at September 30, 1999, we would have recorded a $380,000 charge to
other comprehensive income for the fair value, after-tax, of our swap
agreements, determined as the estimated receipt or payment that would be made to
terminate the agreements.
We may be affected by the Year 2000 problem
Many computer programs have been written using two digits for the year
fields rather than four. Time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. Therefore, the performance of
our computer processes and systems, and those of our suppliers and customers, in
the year 2000 is uncertain. This could result in one or more failures of our
computer systems that would disrupt our operations. These disruptions could
include, among other things, a temporary inability to process transactions, send
invoices, or engage in similar normal business activities.
We do not know if the systems of companies with which we have material
outside business relationships will be timely converted. We have completed
contingency plans to minimize disruption in our operations caused by failure to
achieve year 2000 compliance.
We have not formulated a reasonably likely worst case scenario with regard
to year 2000 failures. If ours, or others', year 2000 compliance is not
completed by December 31, 1999 our business could be materially and adversely
affected.
Forward-Looking Statements
This Form 10-Q and other information provided from time to time by the
Company contains historical information as well as forward-looking statements
about the Company, the premium wine industry and general economic conditions.
Actual results may differ materially from the Company's current projections. A
shift in consumer preferences and demand for premium wine, competition from
other premium wine companies, and agricultural risks, among other conditions,
may adversely affect the Company's operating results.
For additional cautionary statements and risks which could cause results to
differ materially from the Company's forward-looking statements, please refer to
the Company's Annual Report and Form 10-K for the year ended June 30, 1999.
These forward-looking statements speak only as of the date of this Form 10-Q.
The Company expressly disclaims any obligation to publicly release any updates
or revisions of any such forward-looking statements to reflect any changes in
the Company's expectations or any change in events, conditions or circumstances
on which any such statement is based.
Beringer Wine Estates Holdings, Inc. 8
<PAGE>
PART II
ITEM 1 through 5. OTHER INFORMATION
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
1) Exhibits:
27 Financial Data Schedule
2) Form 8-K:
No reports on Form 8-K were filed during the quarter ended September 30,
1999.
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, thereunto duly authorized.
Beringer Wine Estates Holdings, Inc.
November 11, 1999
By: Peter F. Scott
Peter F. Scott, Executive Vice President,
Chief Financial and Administrative Officer
Beringer Wine Estates Holdings, Inc. 9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 20
<SECURITIES> 0
<RECEIVABLES> 48,324
<ALLOWANCES> (255)
<INVENTORY> 316,660
<CURRENT-ASSETS> 381,178
<PP&E> 345,656
<DEPRECIATION> (38,838)
<TOTAL-ASSETS> 697,137
<CURRENT-LIABILITIES> 210,077
<BONDS> 350,204
0
0
<COMMON> 196
<OTHER-SE> 225,897
<TOTAL-LIABILITY-AND-EQUITY> 697,137
<SALES> 90,457
<TOTAL-REVENUES> 90,457
<CGS> 45,977
<TOTAL-COSTS> 45,977
<OTHER-EXPENSES> 26,312
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<INCOME-TAX> 4,866
<INCOME-CONTINUING> 7,691
<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> 7,691
<EPS-BASIC> 0.39
<EPS-DILUTED> 0.38
</TABLE>
