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): June 22, 2000
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COMMISSION FILE NUMBER 0-7570
DELAWARE CANANDAIGUA 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)
<PAGE>
ITEM 5. OTHER EVENTS
Canandaigua Brands, Inc. released the following information on June 22,
2000 regarding its first quarter 2001 results:
CANANDAIGUA BRANDS REPORTS RECORD FIRST QUARTER RESULTS
FAIRPORT, NEW YORK, JUNE 22, 2000 - Canandaigua Brands, Inc. (NYSE: CDB and
CDB.B), today reported net income of $18 million for the three months ended May
31, 2000 ("First Quarter 2001"), an increase of 26 percent over net income of
$14 million for the three months ended May 31, 1999 ("First Quarter 2000"),
excluding the after-tax impact of nonrecurring charges of approximately $3
million taken in First Quarter 2000. Earnings per share on a diluted basis grew
by 25 percent to $0.96 per share versus First Quarter 2000 earnings per share of
$0.77, excluding the after-tax impact of nonrecurring charges. Net income and
earnings per share including nonrecurring charges were $11 million and $0.59,
respectively, for First Quarter 2000.
Richard Sands, Chairman and Chief Executive Officer of Canandaigua Brands,
said, " We continue to deliver top line growth across multiple businesses which
is contributing positively to our performance. The success of our recent
acquisition strategy is clearly demonstrated in our results as we once again
reported record sales and profits. Industry dynamics continue to look favorable,
and in particular, demand for beer and fine wines is still strong after recent
price increases. Our healthy cash flow is further strengthening the balance
sheet, positioning the Company to continue our track record of double-digit
earnings growth."
CONSOLIDATED RESULTS
Net sales reached $586 million in First Quarter 2001, a 10 percent increase
over net sales of $530 million reported for First Quarter 2000. Net sales growth
was driven primarily by the inclusion of the Black Velvet and Franciscan Estates
(including Simi) acquisitions (completed in April 1999 and June 1999,
respectively) for the full quarter. Net sales increases in beer, Matthew Clark
wholesale and Barton's remaining spirits portfolio also contributed to the
growth in net sales.
Gross profit grew to $184 million in First Quarter 2001 from $156 million
in First Quarter 2000, an increase of $28 million, or 18 percent. The gross
profit improvement can be attributed primarily to the Black Velvet and
Franciscan Estates acquisitions, as well as increased beer sales. As a percent
of net sales, gross profit increased by 200 basis points to 31 percent from 29
percent in First Quarter 2000. The gross margin improvement was related to sales
of higher margin products, specifically Black Velvet and the Franciscan Estates
portfolio.
Selling, general and administrative expenses increased by 14 percent to
$126 million in First Quarter 2001 from $111 million in First Quarter 2000. The
increase was primarily related to the Black Velvet and Franciscan Estates
acquisitions.
Operating income in First Quarter 2001 grew to $57 million versus $46
million in First Quarter 2000, an increase of 26 percent, excluding the pretax
nonrecurring charges of approximately $6 million in First Quarter 2000.
Operating income for the First Quarter 2000 including nonrecurring charges was
$40 million.
<PAGE>
As a result of the above factors, net income increased by 26 percent to $18
million from $14 million (excluding the after-tax impact of nonrecurring
charges) in First Quarter 2000. Earnings per share on a fully diluted basis for
First Quarter 2001 were $0.96 compared with fully diluted earnings of $0.77 per
share (excluding the after-tax impact of nonrecurring charges) in First Quarter
2000. Including the after-tax impact of nonrecurring charges, fully diluted
earnings per share were $0.59 for First Quarter 2000.
BARTON
Barton's net sales for First Quarter 2001 grew by 17 percent to $236
million compared with First Quarter 2000 net sales of $201 million.
Specifically, spirits net sales, led by Black Velvet, grew 34 percent in First
Quarter 2001. On a pro forma basis, sales of branded products from the Black
Velvet acquisition grew 20 percent in First Quarter 2001. The spirits portfolio,
exclusive of the Black Velvet brands, grew by 6 percent while beer sales, led by
the Mexican beer brands, grew by 11 percent.
Operating income reached $39 million in First Quarter 2001 compared with
$31 million in First Quarter 2000, an increase of 23 percent. The increase can
be attributed to the inclusion of products related to the Black Velvet
acquisition for the full quarter along with volume increases in beer and
spirits.
CANANDAIGUA WINE
Canandaigua Wine's net sales for First Quarter 2001 were $162 million,
declining slightly from First Quarter 2000 net sales of $164 million. The
decline can be attributed to a decrease in grape juice concentrate sales, while
branded wine sales were unchanged against the comparable quarter last year.
Operating income for First Quarter 2001 was $8 million, virtually unchanged
versus the comparable quarter a year ago, excluding the pretax nonrecurring
charges of approximately $3 million recorded in First Quarter 2000. Operating
income for the First Quarter 2000 including nonrecurring charges was $6 million.
MATTHEW CLARK
Net sales for Matthew Clark grew by 2 percent to $170 million for First
Quarter 2001 versus $167 million in the comparable quarter a year ago. Increases
in Matthew Clark's wholesale business were partially offset by declines in
Matthew Clark's branded business.
Operating income of $10 million for First Quarter 2001, was essentially
unchanged versus the comparable quarter a year ago, excluding the pretax
nonrecurring charges of approximately $3 million reported in First Quarter 2000.
Including nonrecurring charges, First Quarter 2000 operating income was $7
million.
<PAGE>
FRANCISCAN
Net sales and operating income for First Quarter 2001 were $22 million and
$5 million, respectively. Net sales for First Quarter 2001 grew by 15 percent
when compared with pro forma net sales for First Quarter 2000. The Franciscan
acquisition and Simi acquisition, both of which are being managed and reported
together as the Franciscan Estates division of the Company, were completed in
June 1999. Therefore, Franciscan Estates' results for First Quarter 2001 are all
incremental when compared with First Quarter 2000.
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 185 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 www.cbrands.com.
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CONSOLIDATED FINANCIAL STATEMENTS FOLLOW
<PAGE>
CANANDAIGUA BRANDS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
May 31, 2000 February 29, 2000
(unaudited) (audited)
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ASSETS
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CURRENT ASSETS:
Cash and cash investments $ 14,024 $ 34,308
Accounts receivable, net 334,731 291,108
Inventories, net 601,733 615,700
Prepaid expenses and other current assets 52,106 54,881
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Total current assets 1,002,594 995,997
PROPERTY, PLANT AND EQUIPMENT, net 530,991 542,971
OTHER ASSETS 793,515 809,823
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Total assets $2,327,100 $2,348,791
LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
Notes payable $ 10,000 $ 26,800
Current maturities of long-term debt 56,508 53,987
Accounts payable 129,376 122,213
Accrued excise taxes 41,212 30,446
Other accrued expenses and liabilities 207,052 204,771
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Total current liabilities 444,148 438,217
LONG-TERM DEBT, less current maturities 1,205,705 1,237,135
DEFERRED INCOME TAXES 115,337 116,447
OTHER LIABILITIES 32,366 36,152
STOCKHOLDERS' EQUITY 529,544 520,840
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Total liabilities and stockholders' equity $2,327,100 $2,348,791
<PAGE>
CANANDAIGUA BRANDS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Three Months
Ended Ended
May 31, 2000 May 31, 1999 Percent
(unaudited) (unaudited) Change
------------ ------------ -------
Gross sales $ 774,522 $ 704,990 10%
Net sales $ 585,580 $ 530,169 10%
Cost of product sold (401,707) (374,046) 7%
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Gross profit 183,873 156,123 18%
Selling, general and administrative
expenses (126,409) (110,502) 14%
Nonrecurring charges - (5,510) N/A
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Operating income 57,464 40,111 43%
Interest expense, net (27,627) (22,034) 25%
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Income before income taxes 29,837 18,077 65%
Provision for income taxes (11,935) (7,231) 65%
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Net income $ 17,902 $ 10,846 65%
Earnings per common share:
Basic $ 0.98 $ 0.60 63%
Diluted $ 0.96 $ 0.59 63%
Weighted average common shares
outstanding:
Basic 18,230 17,977 1%
Diluted 18,598 18,447 1%
Segment Information:
Net sales:
Barton
Beer $ 163,134 $ 146,611 11%
Spirits 72,546 54,139 34%
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Net sales $ 235,680 $ 200,750 17%
Canandaigua Wine
Branded $ 144,566 $ 144,391 0%
Other 17,812 19,168 -7%
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Net sales $ 162,378 $ 163,559 -1%
Matthew Clark
Branded $ 69,615 $ 74,375 -6%
Wholesale 99,923 92,422 8%
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Net sales $ 169,538 $ 166,797 2%
Franciscan $ 21,889 $ - N/A
Corporate Operations and Other $ 1,085 $ 885 23%
Intersegment eliminations $ (4,990) $ (1,822) 174%
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Consolidated net sales $ 585,580 $ 530,169 10%
Operating Income:
Barton $ 38,835 $ 31,497 23%
Canandaigua Wine 7,981 5,607 42%
Matthew Clark 10,374 7,330 42%
Franciscan 5,416 - N/A
Corporate Operations and Other (5,142) (4,323) 19%
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Consolidated operating income $ 57,464 $ 40,111 43%
<PAGE>
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.
CANANDAIGUA BRANDS, INC.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
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Thomas S. Summer, Executive Vice
President and Chief Financial
Officer
SUBSIDIARIES
BATAVIA WINE CELLARS, INC.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA WINE COMPANY, INC.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
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Thomas S. Summer, Treasurer
CANANDAIGUA EUROPE LIMITED
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA LIMITED
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Finance Director
(Principal Financial Officer and
Principal Accounting Officer)
POLYPHENOLICS, INC.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
ROBERTS TRADING CORP.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, President and
Treasurer
<PAGE>
CANANDAIGUA B.V.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Authorized
Representative
FRANCISCAN VINEYARDS, INC.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
ALLBERRY, INC.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
CLOUD PEAK CORPORATION
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
M.J. LEWIS CORP.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
MT. VEEDER CORPORATION
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
BARTON INCORPORATED
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
<PAGE>
BARTON BRANDS, LTD.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BEERS, LTD.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BRANDS OF CALIFORNIA, INC.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BRANDS OF GEORGIA, INC.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON CANADA, LTD.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON DISTILLERS IMPORT CORP.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON FINANCIAL CORPORATION
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
STEVENS POINT BEVERAGE CO.
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
MONARCH IMPORT COMPANY
Dated: June 22, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
<PAGE>
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
