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 11, 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.
jurisdiction of specified in its charter) Employer
incorporation or Identification
organization) No.)
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 April 11,
2000 regarding its fourth quarter and fiscal 2000 results:
CANANDAIGUA BRANDS REPORTS RECORD FOURTH QUARTER AND FISCAL 2000 RESULTS
FAIRPORT, NEW YORK, APRIL 11, 2000 - 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."
<PAGE>
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.
<PAGE>
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.
<PAGE>
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 www.cbrands.com.
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CONSOLIDATED FINANCIAL STATEMENTS FOLLOW
<PAGE>
CANANDAIGUA BRANDS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
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
========== ==========
<PAGE>
<TABLE>
CANANDAIGUA BRANDS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
<CAPTION>
Three Months Three Months
Ended Ended Percent
February 29, 2000 February 28, 1999 Change
----------------- ----------------- -------
<S> <C> <C> <C>
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%
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%
========= =========
</TABLE>
<PAGE>
<TABLE>
CANANDAIGUA BRANDS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
<CAPTION>
Twelve Twelve
Months Ended Months Ended Percent
February 29, 2000 February 28, 1999 Change
----------------- ----------------- -------
<S> <C> <C> <C>
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%
=========== ===========
</TABLE>
<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: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Executive Vice
President and Chief Financial
Officer
SUBSIDIARIES
BATAVIA WINE CELLARS, INC.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA WINE COMPANY, INC.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA EUROPE LIMITED
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA LIMITED
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Finance Director
(Principal Financial Officer and
Principal Accounting Officer)
POLYPHENOLICS, INC.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
ROBERTS TRADING CORP.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, President and
Treasurer
<PAGE>
CANANDAIGUA B.V.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Authorized
Representative
FRANCISCAN VINEYARDS, INC.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
ALLBERRY, INC.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
CLOUD PEAK CORPORATION
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
M.J. LEWIS CORP.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
MT. VEEDER CORPORATION
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
BARTON INCORPORATED
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
<PAGE>
BARTON BRANDS, LTD.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BEERS, LTD.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BRANDS OF CALIFORNIA, INC.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BRANDS OF GEORGIA, INC.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON CANADA, LTD.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON DISTILLERS IMPORT CORP.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON FINANCIAL CORPORATION
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
STEVENS POINT BEVERAGE CO.
Dated: April 11, 2000 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
MONARCH IMPORT COMPANY
Dated: April 11, 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
