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STZ · Constellation Brands

40 filings

10-K

STZ 10-K Annual Reports

Constellation Brands - 40 annual reports

Filing record · 2016–202610-K1110-Q338-K237

2026
Constellation Brands Annual Report, Year Ended Feb 28, 2026
Constellation Brands, Inc. reported consolidated net sales of $9.14 billion for Fiscal 2026 (year ended February 28, 2026), down from $10.21 billion in Fiscal 2025, with Beer net sales of $8.32 billion and Wine and Spirits net sales of $823.8 million. Operating income rose to $2.72 billion from $354.9 million, largely because Fiscal 2025 included $2.80 billion of goodwill and intangible asset impairments, and net income attributable to CBI increased to $1.69 billion from a loss of $81.4 million. Beer shipments declined 3.8% to 415.4 million 24-pack, 12-ounce case equivalents, and Beer gross profit fell 4% on lower shipment volume and $58.3 million of tariffs, partially offset by $128.2 million of favorable pricing. The Wine and Spirits business was repositioned after the 2025 Wine Divestitures (June 2025, $845.9 million cash proceeds) and the SVEDKA Divestiture (January 2025). Organic Wine and Spirits net sales declined $133.9 million, and the company recorded a $31.9 million loss on sale of business in Fiscal 2026. Operating cash flow was $2.67 billion, capital expenditures were $875.0 million (mostly Brewery Projects), and the company expects approximately $800 million of Fiscal 2027 capital expenditures. Capital returns and balance sheet: the company paid $715.7 million in dividends and repurchased $924.1 million of Class A Stock in Fiscal 2026. Total debt was $10.57 billion at February 28, 2026, down $929.2 million. Remaining availability under the $4.0 billion 2025 Authorization was $2.98 billion as of April 17, 2026. Fiscal 2027 effective tax rate is expected to be 19% to 21%, and the company notes the OB3 Act is expected to negatively affect that rate. Nicholas Fink became President and Chief Executive Officer on April 13, 2026.
Apr 22, 2026
2025
Constellation Brands Annual Report, Year Ended Feb 28, 2025
Constellation Brands, Inc. reported a net loss attributable to CBI of $(81.4) million for Fiscal 2025 (year ended February 28, 2025), compared with net income of $1,727.4 million for Fiscal 2024. Net sales rose to $10,208.7 million from $9,961.8 million, driven by Beer net sales of $8,539.8 million, while Wine and Spirits net sales declined to $1,668.9 million from $1,799.2 million. The swing to a loss was driven primarily by Wine and Spirits impairments: a $2,740.7 million goodwill impairment (writing the segment's goodwill down to zero), a $57.0 million trademark impairment, and a $478.0 million assets held for sale impairment tied to the April 2025 wine divestiture. Operating income fell to $354.9 million from $3,169.7 million. The Beer segment remained the core earnings driver, with operating income of $3,394.4 million versus $3,094.4 million in the prior year, supported by pricing, shipment volume growth, and cost savings. Cash flow from operations was $3,152.2 million, and the company returned capital through $1,123.8 million of share repurchases and $731.8 million of dividends paid. Total debt was $11,497.7 million at February 28, 2025, and the company announced a $4.0 billion share repurchase authorization in April 2025. In April 2025 the company agreed to divest and, in certain instances, exclusively license a portion of its wine and spirits business, primarily its remaining mainstream wine brands, for $900 million, subject to adjustments and regulatory approval, with closing expected after the first quarter of Fiscal 2026. The company also launched a 2025 Restructuring Initiative expected to yield over $200 million in net annualized cost savings by Fiscal 2028, and plans roughly $2 billion of Mexico Beer Projects spending over Fiscal 2026 through Fiscal 2028.
Apr 23, 2025
2024
Constellation Brands Annual Report, Year Ended Feb 29, 2024
Constellation Brands, Inc. reported fiscal 2024 (year ended February 29, 2024) net sales of $9.96 billion, up from $9.45 billion in fiscal 2023, with operating income of $3.17 billion versus $2.84 billion. The Beer segment drove the results: net sales rose to $8.16 billion from $7.47 billion, with shipment volume growth of $564.5 million and $147.6 million of favorable pricing, while the company cut costs through efficiency initiatives that yielded nearly $205 million of net cost savings. Wine and Spirits net sales fell to $1.80 billion from $1.99 billion, driven by a decline in branded shipment volume and the divestiture of certain mainstream and premium wine brands, and management expects unfavorable U.S. wholesale wine trends to continue into Fiscal 2025. Net income attributable to CBI increased to $1.73 billion from a loss of $71.0 million, primarily because Canopy-related impairment and equity losses were much smaller than in fiscal 2023 (income from unconsolidated investments was a loss of $511.8 million versus $2.04 billion). Operating cash flow was $2.78 billion, while capital expenditures were $1.27 billion, largely for the Mexico Beer Projects, and the company expects to spend approximately $3 billion on those projects over Fiscal 2025 through Fiscal 2028. Total debt was $11.88 billion at year end, and the company repurchased $249.7 million of Class A Stock and declared dividends of $654.1 million in the year. The company also converted its Canopy common shares into Exchangeable Shares in April 2024, and it recognized a Canopy equity method investment carrying value of $170.6 million in total equity method investments at year end. Management's Fiscal 2025 capital expenditure guidance is $1.4 billion to $1.5 billion, and its expected effective tax rate is 17.5% to 19.5%.
Apr 23, 2024
2023
Constellation Brands Annual Report, Year Ended Feb 28, 2023
Constellation Brands, Inc. reported net sales of $9.45 billion for Fiscal 2023 (year ended February 28, 2023), up from $8.82 billion in Fiscal 2022, driven primarily by Beer net sales of $7.47 billion, which rose on shipment volume growth and favorable pricing in the Mexican beer portfolio. Operating income was $2.84 billion, but the company posted a net loss attributable to CBI of $71.0 million, compared with a net loss of $40.4 million in Fiscal 2022. The loss was driven by a $1.06 billion impairment of the Canopy Equity Method Investment and a $949.3 million equity loss from Canopy and related activities, which together produced a loss from unconsolidated investments of $2.04 billion. Cash flow from operations was $2.76 billion, and capital expenditures were $1.04 billion, largely for the Mexico Beer Projects. The company expects to spend an additional $4.0 billion to $4.5 billion on those projects over Fiscal 2024 through Fiscal 2026. Total debt rose to $12.46 billion, and the company paid $1.5 billion in cash to holders of Class B Stock in connection with the Reclassification, which was completed in November 2022. Share repurchases totaled $1.70 billion during the year, and the 2018 Authorization was fully utilized. Looking ahead, the company expects its reported effective tax rate for Fiscal 2024 to be between 18% and 20%. It also plans to return approximately $650 million to stockholders through dividends in Fiscal 2024, and it estimates its proportional share of Canopy's pre-tax loss at approximately C$145 million to C$180 million. A pending Canopy Transaction could change the accounting for the Canopy investment, and the company has agreed to sell its Daleville Facility.
Apr 20, 2023
2022
Constellation Brands Annual Report, Year Ended Feb 28, 2022
Constellation Brands, Inc. reported fiscal 2022 (year ended February 28, 2022) net sales of $8.82 billion, up from $8.61 billion in fiscal 2021, driven by Beer net sales of $6.75 billion. Beer net sales rose $677.0 million, reflecting $534.8 million of Mexican beer volume growth and $182.4 million of favorable pricing. Wine and Spirits net sales declined to $2.07 billion from $2.54 billion, largely due to divestitures. Operating income fell to $2.33 billion from $2.79 billion, reflecting a $665.9 million impairment of brewery construction in progress at the Mexicali Brewery and the decline in Wine and Spirits sales. Net income attributable to CBI was $(40.4) million, compared with $1.998.0 million in fiscal 2021, mainly due to a $1.64 billion unrealized net loss on the Canopy investment. Cash flow from operations was $2.71 billion, and capital expenditures were $1.03 billion, largely for the Mexico Beer Projects. The company expects to spend $5.0 billion to $5.5 billion on Beer capital projects over fiscal 2023 through 2026. Cash returned to stockholders included $573.0 million in dividends and $1.39 billion in share repurchases during the year. Total debt was $10.42 billion at February 28, 2022. In April 2022, the Sands family made a non-binding proposal to convert each Class B share into 1.35 Class A shares, which a Special Committee is evaluating.
Apr 21, 2022
2021
Constellation Brands Annual Report, Year Ended Feb 28, 2021
Constellation Brands, Inc. reported net sales of $8,614.9 million for the fiscal year ended February 28, 2021, up from $8,343.5 million in Fiscal 2020, with Beer net sales of $6,074.6 million and Wine and Spirits net sales of $2,540.3 million. Operating income rose to $2,791.1 million from $2,154.5 million, largely due to Fiscal 2020 charges tied to the business transformation strategy within Wine and Spirits and volume growth in Beer. Net income attributable to CBI was $1,998.0 million, compared with a net loss of $(11.8) million in Fiscal 2020, reflecting an unrealized net gain of $802.0 million on the Canopy investment in Fiscal 2021 versus an unrealized net loss in Fiscal 2020. The company completed several divestitures during the year, including the Wine and Spirits Divestitures for net cash proceeds of $538.4 million (with up to $250 million of contingent consideration) and the Paul Masson Divestiture for $267.4 million. Cash and cash equivalents rose to $460.6 million, and net cash provided by operating activities was $2,806.5 million. Total debt outstanding was $10,442.3 million at February 28, 2021, down $1,742.3 million from the prior year end. The company paid $575.0 million in dividends and expects to return approximately $580 million to stockholders in Fiscal 2022. The filing highlights significant forward-looking items for investors, including a expected long-lived asset impairment of approximately $650 million to $680 million in the first quarter of fiscal 2022 related to the Mexicali Brewery, capital expenditures of $1.0 billion to $1.1 billion planned for Fiscal 2022, and ongoing Mexico Beer Projects expected to be completed by Fiscal 2025. Investors should also weigh the volatility of the Canopy Growth investment, which is carried at a fair value of $1,816.0 million for the Canopy warrants and convertible debt securities, and the pending lawsuit over the use of the Corona brand name on Corona Hard Seltzer.
Apr 20, 2021
2020
Constellation Brands Annual Report, Year Ended Feb 29, 2020
Constellation Brands, Inc. reported Fiscal 2020 (year ended February 29, 2020) net sales of $8.34 billion, up from $8.12 billion in Fiscal 2019, driven by Beer net sales of $5.62 billion, which rose on $330.9 million of Mexican beer volume growth and a $118.4 million favorable pricing impact. Wine and Spirits net sales fell to $2.73 billion, reflecting a $193.0 million decline in branded volume and the Black Velvet divestiture. Net income attributable to CBI was $(11.8) million, down sharply from $3,435.9 million in Fiscal 2019, mainly because of an unrealized net loss of $2,126.4 million on Canopy investments, $575.9 million of equity losses from Canopy, and a $449.7 million impairment of assets held for sale tied to planned wine and spirits and Ballast Point divestitures. The company is restructuring its portfolio toward higher-margin, higher-growth brands. The Revised Wine and Spirits Transaction with E. & J. Gallo Winery has an adjusted price of approximately $843 million plus up to $250 million of contingent consideration, and the Nobilo Wine sale is $130 million; management intends to use proceeds primarily to reduce borrowings. The Ballast Point craft beer business was sold in March 2020. Total debt was $12,184.6 million at February 29, 2020, down $1,431.9 million from the prior year, and operating cash flow was $2,551.1 million. The filing also flags COVID-19 as a material uncertainty. Management said it cannot yet estimate the long-term impact, and it withheld capital expenditure guidance for Fiscal 2021. The company expects an effective tax rate of 17% to 19% for the next fiscal year, and it expects to return approximately $565 million to stockholders through dividends in Fiscal 2021.
Apr 21, 2020
2019
Constellation Brands Annual Report, Year Ended Feb 28, 2019
Constellation Brands, Inc. reported net sales of $8,116.0 million for fiscal 2019 (year ended February 28, 2019), up from $7,580.3 million in fiscal 2018, with Beer net sales of $5,202.1 million (64.1% of net sales) and Wine and Spirits net sales of $2,913.9 million (35.9%). Operating income rose to $2,412.2 million from $2,279.8 million. The largest driver of net income was the Canopy investment: income from unconsolidated investments was $2,101.6 million, including an unrealized net gain of $1,971.2 million on securities measured at fair value, and net income attributable to CBI increased to $3,435.9 million from $2,303.4 million. Diluted net income per Class A share was $17.57, compared with $11.47 in the prior year. The company is also reshaping its portfolio and balance sheet. In April 2019 it agreed to sell a portion of its wine and spirits business, including approximately 30 lower-margin, lower-growth brands, for approximately $1.7 billion, with proceeds primarily used to reduce borrowings. The November 2018 Canopy Transaction, for C$5,078.7 million (or $3,869.9 million), increased total debt to $13,616.5 million, up $3,429.8 million, and the company expects to return to its targeted leverage ratio within 24 months. Beer capacity expansion continues, with about $3.5 billion invested in the Mexico Beer Expansion Projects since June 2013 and fiscal 2020 capital expenditures planned at $800.0 million to $900.0 million. Investors should note that the Ballast Point craft beer trademark was impaired by $108.0 million in the fourth quarter of fiscal 2019, and that the Sands family holds a majority of combined voting power through Class B shares. The company also expects its fiscal 2020 effective tax rate to be in the range of 16% to 18%.
Apr 23, 2019
2018
Constellation Brands Annual Report, Year Ended Feb 28, 2018
Constellation Brands, Inc. reported net sales of $7,585.0 million for the fiscal year ended February 28, 2018, up from $7,331.5 million in Fiscal 2017. Beer net sales rose to $4,658.5 million, driven by volume growth in the Mexican beer portfolio, while Wine and Spirits net sales declined to $2,926.5 million, largely due to the Canadian Divestiture. Operating income was $2,284.5 million, compared with $2,399.4 million in the prior year, reflecting an unfavorable change in Comparable Adjustments. Net income attributable to CBI was $2,318.9 million, boosted by a $363.0 million provisional net income tax benefit from the TCJ Act and a $452.6 million unrealized gain on the Canopy Growth investment and warrants. Cash flow from operating activities was $1,931.4 million, and capital expenditures were $1,057.6 million, primarily for the Mexico Beer Expansion Projects. Long-term debt including current maturities was $9,439.9 million at year end. The company repurchased $1,038.5 million of treasury stock during the year, and the board authorized a new $3.0 billion repurchase program in January 2018. Dividends declared were $2.08 per Class A share, and a quarterly dividend increase to $0.74 per Class A share was declared in March 2018. The company also agreed in April 2018 to sell its remaining interest in its previously-owned Australian and European business for approximately $100 million, with an expected gain of about $85 million in the first quarter of Fiscal 2019. Management expects an effective tax rate of 18% to 20% for the next fiscal year.
Apr 23, 2018
2017
Constellation Brands Annual Report, Year Ended Feb 28, 2017
Constellation Brands, Inc. reported Fiscal 2017 (year ended February 28, 2017) net sales of $7,331.5 million, up 12% from $6,548.4 million in Fiscal 2016, driven by strong consumer demand across both segments and net sales from the acquired Ballast Point, Meiomi and Prisoner brands. Operating income rose 36% to $2,399.4 million, aided by a $262.4 million gain on sale of business from the Canadian Divestiture, while net income attributable to CBI increased 46% to $1,535.1 million, also reflecting an income tax benefit tied to a change in the assertion on indefinite reinvestment of certain foreign earnings. The Beer segment was the main growth engine, with net sales of $4,229.3 million (up 17%) and Mexican beer volume growth of $404.4 million in net sales, while Wine and Spirits net sales rose 6% to $3,102.2 million. Balance sheet leverage increased as total debt reached $9,238.1 million, up $1,156.9 million, while the company repurchased $1,122.7 million of treasury stock and paid higher dividends. Management plans fiscal 2018 capital expenditures of $1.2 billion to $1.3 billion, largely for the Mexico Beer Expansion Projects, which are estimated at approximately $3.9 billion in total spend through fiscal 2021, of which about $2.1 billion has been invested. The company expects an effective tax rate of 21% to 23% for the next fiscal year and expects to return approximately $400 million to stockholders through dividends in Fiscal 2018. Key risks for investors include dependence on Mexican beer brands sourced from the Nava and Obregon breweries, which are sole sources of supply, concentration of U.S. wine production in a few facilities, exposure to tariffs and tax changes affecting beverage alcohol, and a Sands family majority of combined voting power.
Apr 27, 2017
2016
Constellation Brands Annual Report, Year Ended Feb 29, 2016
Constellation Brands, Inc. reported fiscal 2016 (year ended February 29, 2016) net sales of $6,548.4 million, up from $6,028.0 million in fiscal 2015, with the Beer segment net sales of $3,622.6 million and Wine and Spirits net sales of $2,925.8 million. Operating income rose to $1,765.1 million from $1,500.2 million, and net income attributable to CBI increased to $1,054.9 million from $839.3 million, supported by strong demand for the Mexican beer portfolio, benefits from the Meiomi and Ballast Point acquisitions, and lower cost of product sold. Diluted net income per Class A share was $5.18 versus $4.17 a year earlier. Cash flow from operations was $1,413.7 million, and capital expenditures were $891.3 million, largely for the Mexico Beer Expansion Projects, which the company estimates will total about $4.5 billion through fiscal 2021. Total debt outstanding was $8,081.2 million at February 29, 2016, up $784.7 million, and the company began a quarterly dividend program in fiscal 2016, declaring $0.40 per Class A share in April 2016 and expecting to return approximately $320 million to stockholders in fiscal 2017 through dividends. Key forward-looking items include the pending $285 million acquisition of The Prisoner Wine Company brand portfolio, a plan to evaluate an initial public offering of a portion of the Canadian wine business with a decision expected in calendar 2016, and reliance on a single Nava Brewery supplemented by an interim supply agreement with Anheuser-Busch InBev extended through June 2017. The Sands family controls a majority of the combined voting power.
Apr 25, 2016
2015
Constellation Brands Annual Report, Year Ended Feb 28, 2015
Constellation Brands, Inc. reported net sales of $6,028.0 million for the fiscal year ended February 28, 2015, up from $4,867.7 million in Fiscal 2014. The increase was driven primarily by $941.1 million of net sales from products acquired in the Beer Business Acquisition, which the company describes as having made it the third-largest brewer and seller of beer in the U.S. Beer segment net sales rose to $3,188.6 million, while Wine and Spirits net sales were $2,839.4 million, essentially flat. Gross profit rose to $2,578.6 million, and gross margin improved to 42.8% of net sales from 40.9%. Net income attributable to CBI declined to $839.3 million from $1,943.1 million, primarily because Fiscal 2014 included a nontaxable $1,642.0 million gain on remeasurement of the preexisting 50% interest in Crown Imports and a $300.9 million impairment charge is absent in Fiscal 2015. Diluted Class A EPS was $4.17 versus $9.83 a year earlier. Operating income fell to $1,500.2 million from $2,437.7 million for the same reasons. Operating cash flow was $1,081.0 million, and total debt stood at $7,348.0 million at February 28, 2015. The company initiated a quarterly cash dividend on April 8, 2015, declaring $0.31 per Class A share, and expects to return approximately $240 million to stockholders in Fiscal 2016. Capital expenditures were $719.4 million in Fiscal 2015, with Fiscal 2016 planned at $1.05 billion to $1.15 billion, largely for the Brewery and glass plant expansions. Key risks include reliance on the single Nava, Mexico brewery and an interim supply agreement that the DOJ must approve for extensions beyond three years.
Apr 28, 2015
2014
Constellation Brands Annual Report, Year Ended Feb 28, 2014
Constellation Brands, Inc. (STZ) reported fiscal 2014 (year ended February 28, 2014) net sales of $4,867.7 million, up from $2,796.1 million in fiscal 2013, driven primarily by the Beer Business Acquisition completed June 7, 2013, which contributed $2,022.2 million of net sales. Net sales increased 74%. Net income rose to $1,943.1 million from $387.8 million, largely due to a nontaxable $1,642.0 million gain on remeasurement of the company's preexisting 50% interest in Crown Imports, partially offset by a $300.9 million impairment of goodwill and intangible assets in the Wine and Spirits segment's Canadian business. Diluted Class A earnings per share were $9.83, versus $2.04 a year earlier. The Beer Business Acquisition had an aggregate purchase price of $5,226.4 million and made the company the third-largest U.S. beer brewer and the largest multi-category supplier of beverage alcohol in the U.S. The filing notes a required Brewery expansion to 20 million hectoliters by December 31, 2016, with total spend estimated at $900 million to $1.1 billion, and a three-year interim supply agreement with Anheuser-Busch InBev whose extension beyond three years requires U.S. Department of Justice approval. Total debt rose to $7,020.5 million from roughly $3,305 million a year earlier, funded largely by new senior notes and term loans, and cash and cash investments fell to $63.9 million. The filing also indicates an expected effective tax rate of 30% to 32% for each of the next three fiscal years, and a Wine and Spirits net sales outlook for the first quarter of fiscal 2015 calling for a low-to-mid single-digit percent decrease as a distributor reduces inventory.
Apr 29, 2014
2013-A
Constellation Brands Annual Report (Amendment), Year Ended Feb 28, 2013
This amendment to Constellation Brands, Inc.'s annual report for the fiscal year ended February 28, 2013, was signed by Robert Ryder, Executive Vice President and Chief Financial Officer, and dated September 13, 2013. It revises the exhibit index and adds Exhibit 99.5, a Professional Services Contract with Achieve Brand Integrity, LLC. The filing states that the consolidated financial statements, the Crown Imports LLC financial statements (for Constellation's 50 percent owned joint venture), and other exhibits were previously submitted with the original Annual Report on Form 10-K, so they are not restated here. The filing's substantive content is its exhibit list, which documents major transactions and financing arrangements. It references the Membership Interest Purchase Agreement and Stock Purchase Agreement with Anheuser-Busch InBev SA/NV, dated June 28, 2012 and amended and restated on February 13, 2013, along with a First Amendment dated April 19, 2013. It also lists the April 19, 2013 Stipulation and Order and Proposed Final Judgment involving Constellation, Anheuser-Busch InBev, Grupo Modelo, and the U.S. Department of Justice Antitrust Division. The exhibit index further lists bank credit agreements with Bank of America, N.A. (including a May 3, 2012 Credit Agreement and an August 8, 2012 Amended and Restated Credit Agreement), senior note indentures, and management compensation plans. The only new contract in Exhibit 99.5 is a recognition-program engagement effective February 12, 2013. The filing sets the planned investment at $150,000, a fixed fee of $80,000 payable upon signing, a $70,000 fixed fee for the 12-month management period, and an estimated annual license fee of approximately $70,000 beginning around April 2014. The agreement specifies a 99.5 percent monthly availability target for the hosted platform.
Sep 13, 2013
2013
Constellation Brands Annual Report, Year Ended Feb 28, 2013
Constellation Brands, Inc. reported net sales of $2.80 billion for fiscal 2013 (year ended February 28, 2013), up from $2.65 billion in fiscal 2012, with net income of $387.8 million versus $445.0 million a year earlier. Net sales of the Constellation Wines and Spirits segment rose to $2,796.1 million, driven by U.S. base branded wine and spirits volume growth, $55.5 million of net sales from the acquired Mark West and Ruffino brands, and favorable product mix, partly offset by higher promotional spend. Operating income increased to $522.9 million from $486.5 million, while interest expense, net, rose to $227.1 million from $181.0 million as borrowings increased ahead of the pending acquisition. The dominant item in the filing is the pending Beer Business Acquisition, a combined purchase of the remaining 50% of Crown Imports LLC (about $1.85 billion) and the Piedras Negras brewery and perpetual Modelo brand rights (about $2.9 billion), totaling roughly $4.75 billion. The company expects to fund it with new debt, including a committed $675.0 million U.S. term loan and $1.5 billion of term loans to a Luxembourg subsidiary, and expects to complete it around the end of its first fiscal quarter of 2014 or shortly thereafter. Completion is subject to regulatory approvals and to transactions between Anheuser-Busch InBev and Grupo Modelo. The U.S. Department of Justice action, the April 2013 amendments requiring the Brewery to reach 20 million hectoliters of capacity by December 31, 2016, and a 60-day public comment period remain key open items. At year end, total debt was $3,305.4 million, up $175.9 million, and total stockholders' equity was $2,860.3 million. The company repurchased $383.0 million of treasury stock during the year, and the Sands family controls a majority of voting power through its Class B stock.
Apr 29, 2013
2012
Constellation Brands Annual Report, Year Ended Feb 29, 2012
Constellation Brands, Inc. (STZ) reported net sales of $2,654.3 million for the fiscal year ended February 29, 2012 (Fiscal 2012), down from $3,332.0 million in Fiscal 2011, primarily due to the January 2011 sale of 80.1% of its Australian and U.K. business (the CWAE Divestiture), which accounted for a $680.3 million decrease. Net sales for Constellation Wines North America (CWNA) rose to $2,654.3 million from $2,557.3 million. Operating income declined to $486.5 million from $502.5 million, and net income fell to $445.0 million from $559.5 million, which the company attributed to lower U.S. base branded wine volumes, higher restructuring charges and unusual items, and a higher provision for income taxes. Diluted Class A EPS was $2.13 versus $2.62 in the prior year. The balance sheet and cash flow picture shows operating cash flow of $784.1 million, capital expenditures of $68.4 million, and treasury stock purchases of $413.7 million. Total debt outstanding was $3,129.5 million at year-end, down $106.8 million. The company completed its $500.0 million 2012 share repurchase authorization and, in April 2012, authorized a new $1.0 billion program expected to be executed over two years, with approximately $500.0 million planned for Fiscal 2013. In April 2012 it issued $600.0 million of 6% Senior Notes due 2022, and it is considering refinancing its 2006 Credit Agreement, which has a revolving portion maturing in June 2013. Key risks highlighted in the filing include the refinancing of the senior credit facility, dependence on U.S. wholesale distributors and government agencies, grape and glass supply concentration, the Crown Imports joint venture with Grupo Modelo, and ongoing Project Fusion systems implementation. The company also disclosed a $38.1 million impairment of Canadian trademarks in Fiscal 2012.
Apr 30, 2012
2011
Constellation Brands Annual Report, Year Ended Feb 28, 2011
Constellation Brands, Inc. reported net sales of $3,332.0 million for the fiscal year ended February 28, 2011 (Fiscal 2011), down from $3,364.8 million in Fiscal 2010, driven mainly by the divestitures of the U.K. cider business and the 80.1% sale of its Australian and U.K. business (CWAE Divestiture) completed January 31, 2011. Excluding these, U.S. base branded wine net sales rose $85.9 million and Constellation Wines North America (CWNA) net sales increased to $2,557.3 million from $2,434.7 million. Operating income increased to $502.5 million from $311.5 million, largely because restructuring charges and unusual items fell to $31.2 million from $248.7 million. Net income rose to $559.5 million, or $2.62 per diluted Class A share, from $99.3 million, helped by a $207.0 million tax benefit tied to the CWAE Divestiture and lower interest expense of $195.3 million. The balance sheet strengthened over the year. Total debt fell to $3,236.3 million at February 28, 2011, a decrease of $599.2 million, and the company repurchased 17,223,404 Class A shares for $300.0 million under an accelerated stock buyback. Operating cash flow was $619.3 million and capital expenditures were $89.1 million. In April 2011 the Board authorized up to $500.0 million in additional share repurchases, with none executed as of April 28, 2011. The company retained a 19.9% interest in the divested business, now Accolade Wines. Risks noted in the filing include a Ruffino put-option loss of $60.0 million recognized in Q4, goodwill and trademark impairments of $23.6 million, dependence on a few distributors (the largest customer, Southern Wine and Spirits, was 19.5% of sales), a potential Woodbridge Winery EPA penalty of $226,000, and a contingent loss of up to $55 million related to an early-terminated agreement with an equity method investee.
Apr 29, 2011
2010-A2
Constellation Brands Annual Report (Amendment), Year Ended Feb 28, 2010
This Amendment No. 2 to Constellation Brands, Inc.'s Form 10-K for the fiscal year ended February 28, 2010 is limited to Part III and Part IV. It identifies the registrant's aggregate market value of voting common equity held by non-affiliates as $2,821,351,237 as of the last business day of the second fiscal quarter, and reports 189,389,474 Class A and 23,728,837 Class B shares outstanding as of April 21, 2010. The proxy statement for the Annual Meeting expected on July 22, 2010 is incorporated by reference for Part III. The consolidated financial statements for the fiscal year are stated to have been previously submitted with the original Annual Report, and the financial statements of the 50 percent owned joint ventures Crown Imports LLC and Matthew Clark (Holdings) Limited were previously included under Rule 3-09. The principal new content is the consolidated financial statements of Ruffino S.r.l. and subsidiary, a 40 percent owned joint venture, for the three years ended December 31, 2009, filed as Exhibit 99.4. Ruffino reported sales of EUR 49,056 thousand in 2009, EUR 55,519 thousand in 2008 and EUR 59,766 thousand in 2007, and a net loss of EUR 2,221 thousand for 2008. Total assets were EUR 140,896 thousand at December 31, 2009, against total liabilities of EUR 96,873 thousand, leaving quotaholders' equity of EUR 44,023 thousand. Net cash provided by operating activities was EUR 7,276 thousand in 2009. The statements are prepared under Italian Accounting Principles, with a reconciliation to U.S. GAAP in Note 18. The Ruffino statements carry a going-concern discussion. Ruffino's management plan, submitted to its banks in January 2010, targets halving financial debt by 2014. The financial maneuver includes a 24-month suspension of capital installments, reimbursement of certain medium-term finance in 13 monthly installments starting February 14, 2012, and maintenance of existing short-term credit lines until December 31, 2012. The filing also discloses that M.P.F. International S.A. may exercise a put option to sell its majority interest through December 31, 2010, and that on May 18, 2010 CB International Finance S.A.R.L. acquired the 9.9% stake held by World Beverage Company S.A., leaving ownership at 50.1% M.P.F. International S.A. and 49.9% CB International Finance S.A.R.L.
Jun 30, 2010
2010-A
Constellation Brands Annual Report (Amendment), Year Ended Feb 28, 2010
This filing by Constellation Brands, Inc. consists of Part IV exhibit materials, a signature page dated May 28, 2010 signed by Robert Ryder, Executive Vice President and Chief Financial Officer, and a revised index to exhibits. Its principal new content is the audited consolidated financial statements of Matthew Clark (Holdings) Limited for the year ended February 28, 2010, a 50 percent owned joint venture with Punch Taverns plc. The filing states that Constellation's own financial statements for the fiscal years ended February 28, 2010, 2009 and February 29, 2008 were previously submitted with its Annual Report on Form 10-K, and that Crown Imports LLC, its 50 percent owned joint venture, had its financial statements previously included under Rule 3-09 of Regulation S-X. The Matthew Clark joint venture is a wholesale wine and spirits merchant serving the UK on-trade. For fiscal 2010 it reported turnover of 637.8 million, gross profit of 83.0 million, operating profit of 10.3 million and profit for the financial year of 5.1 million, compared with a loss of 27.3 million in fiscal 2009. The fiscal 2009 loss reflected a goodwill impairment of 29.6 million under UK GAAP. The filing states that gross profit growth of 3.8% was offset by higher distribution and selling expenses, and that the group repaid 15 million of debt over the year. Under US GAAP reconciliation, net income for fiscal 2010 is 6.6 million and shareholders' equity is 41.8 million. The filing also details the joint venture's pension arrangement, under which Matthew Clark Wholesale Limited and Forth Wines Limited pay 1.25 million per year for 10 years to the Constellation Europe Group Pension Plan Trustees, with Hertford Cellars Limited, a Constellation subsidiary, bearing any excess amounts requested by the trustees.
May 28, 2010
2010
Constellation Brands Annual Report, Year Ended Feb 28, 2010
Constellation Brands, Inc. (STZ) reported net sales of $3,364.8 million for the fiscal year ended February 28, 2010 (Fiscal 2010), down from $3,654.6 million in Fiscal 2009, a decrease of $289.8 million, or (8%). The decline was driven mainly by the divestiture of the value spirits business, a decrease in U.S. branded wine net sales of $87.2 million tied to a fourth-quarter decision to reduce distributor inventory levels, and an unfavorable foreign currency translation impact of $74.1 million. Operating income rose to $311.5 million from $29.6 million, primarily because unusual items fell, including lower impairment losses ($103.2 million versus $300.4 million). Net income improved to $99.3 million from a net loss of $301.4 million in the prior year. Balance sheet deleveraging was a key theme. Total debt outstanding fell to $3,835.5 million, a decrease of $598.1 million, and the debt-to-total-capitalization ratio dropped to 59.8% from 69.9%. Net cash provided by operating activities was $402.5 million, and the company repaid $781.3 million of long-term debt. Management also flagged continuing pressure in the U.K. and Australian businesses, where a surplus of Australian bulk wine and retail consolidation have contributed to declining gross margins. In April 2010, the Board authorized up to $300.0 million in share repurchases, and the company entered into a collared accelerated stock buyback for $300.0 million. The company's Crown Imports joint venture with Modelo continued to be a significant contributor, with cash distributions of $191.7 million received in Fiscal 2010. Management noted that the wine and spirits business is positioned around premium brands and that it expects to consolidate its U.S. distributor network and implement a new go-to-market strategy in Fiscal 2011, with capital expenditures planned between $110 million and $130 million.
Apr 29, 2010
2009-A2
Constellation Brands Annual Report (Amendment), Year Ended Feb 28, 2009
This is Amendment No. 2 to Constellation Brands, Inc.'s Annual Report on Form 10-K for the fiscal year ended February 28, 2009. The filing states that the aggregate market value of voting common equity held by non-affiliates, based on New York Stock Exchange closing prices as of the last business day of the second fiscal quarter, was $3,972,797,456 (about $3.97 billion). As of April 20, 2009, there were 197,253,230 shares of Class A Common Stock and 23,743,494 shares of Class B Common Stock outstanding, and no Class 1 Common Stock. Part III information is incorporated by reference from the proxy statement for the Annual Meeting of Stockholders, expected to be held July 23, 2009. The amendment's substance is in Part IV. It states that the company's consolidated financial statements for the years ended February 28, 2009, February 29, 2008, and February 28, 2007 were previously submitted with the Annual Report. This amendment adds Rule 3-09 financial statements of the 40 percent owned joint venture Ruffino S.r.l. for the year ended December 31, 2008, and files the related KPMG S.p.A. consent (Exhibit 23.4) and certifications (Exhibits 31.5, 31.6, 32.5, 32.6). The filing also references prior Rule 3-09 statements for the 50 percent owned joint ventures Crown Imports LLC and Matthew Clark (Holdings) Limited. The exhibit index lists the company's debt and credit instruments, including its Credit Agreement dated June 5, 2006 with JPMorgan Chase Bank, N.A. as Administrative Agent, and several senior note indentures, including 8 1/2% Senior Notes due 2009, 8 3/8% Senior Notes due 2014, 7.25% Senior Notes due 2016, and 7.25% Senior Notes due May 2017. It also lists compensation plans and executive employment agreements.
Jun 30, 2009
2009-A
Constellation Brands Annual Report (Amendment), Year Ended Feb 28, 2009
Constellation Brands, Inc. filed this amendment to its Annual Report on Form 10-K for the fiscal year ended February 28, 2009, which it describes as Amendment No. 1. The filing reports that the aggregate market value of voting common equity held by non-affiliates was $3,972,797,456, based on closing prices of the Class A and Class B Common Stock on the New York Stock Exchange as of the last business day of the second fiscal quarter. As of April 20, 2009, the company had 197,253,230 shares of Class A Common Stock and 23,743,494 shares of Class B Common Stock outstanding, and no Class 1 Common Stock. The company's consolidated financial statements for the years ended February 28, 2009, February 29, 2008, and February 28, 2007, along with the related KPMG LLP audit reports, were previously submitted with the original Annual Report on Form 10-K. This amendment adds the consolidated financial statements of Matthew Clark (Holdings) Limited, a 50 percent owned joint venture, for the year ended February 28, 2009, filed under Rule 3-09 of Regulation S-X, together with a KPMG LLP consent related to that entity and updated certifications from the Chief Executive Officer and Chief Financial Officer. Part III information, including executive compensation and governance matters, is incorporated by reference from the proxy statement for the Annual Meeting of Stockholders expected to be held July 23, 2009.
May 29, 2009
2009
Constellation Brands Annual Report, Year Ended Feb 28, 2009
Constellation Brands, Inc. (STZ) reported net sales of $3,654.6 million for fiscal 2009 (year ended February 28, 2009), down from $3,773.0 million in fiscal 2008, and a net loss of $301.4 million, compared with a net loss of $613.3 million in fiscal 2008. The improvement in the loss was driven mainly by lower impairment charges, which totaled $300.4 million in fiscal 2009 versus $812.2 million in fiscal 2008, along with the benefit of the BWE acquisition. Operating income was $23.0 million, compared with an operating loss of $356.7 million the prior year. Impairments were concentrated in the U.K. business, including a $252.7 million goodwill impairment in the Constellation Wines segment's U.K. reporting unit, and Australian and U.K. business deterioration weighed on results. Equity in earnings of equity method investees fell to $186.6 million from $257.9 million, reflecting $79.2 million of impairments on Matthew Clark and Ruffino. The company sold its value spirits business in March 2009 for $330.5 million, net of direct costs to sell, and used proceeds to prepay $260.0 million of term loans after year end. Total debt was $4,433.6 million at February 28, 2009, down $823.9 million, though the debt-to-total-capitalization ratio rose to 69.9% from 65.5%. Cash flow from operations was $506.9 million and capital expenditures were $128.6 million. The company disclosed a material weakness in internal control over financial reporting related to inventory reconciliation at its Australian operations, and KPMG issued an adverse opinion on internal control as a result. Management also announced a Fiscal 2010 Global Initiative on April 7, 2009, which includes eliminating about five percent of the global workforce.
Apr 29, 2009
2008
Constellation Brands Annual Report, Year Ended Feb 29, 2008
Constellation Brands, Inc. reported a net loss of $613.3 million for Fiscal 2008 (year ended February 29, 2008), compared with net income of $331.9 million in Fiscal 2007. Net sales fell 28% to $3,773.0 million from $5,216.4 million, primarily because the Crown Imports and Matthew Clark investments are now accounted for under the equity method, partially offset by acquired products from Vincor, Svedka and the Fortune Brands U.S. wine business (BWE Acquisition). The decline in profitability was driven by $812.2 million of impairment losses on goodwill and intangible assets, mainly in the Australian and U.K. businesses of the Constellation Wines segment, along with an operating loss of $356.7 million. Interest expense, net rose to $341.8 million, and the company's total debt reached $5,257.5 million, with a debt-to-total-capitalization ratio of 65.5%, up from 55.1%. The filing shows the company's Crown Imports joint venture with Modelo remained a significant contributor, with equity in earnings of equity method investees rising to $257.9 million from $49.9 million. Branded wine net sales increased to $3,016.9 million, while the company also completed a $500.0 million share repurchase program during the year. Management cited a reduction of distributor wine inventory in the U.S. as a factor that reduced net sales by approximately $110 million and diluted earnings per share by approximately $0.15. The company expects Fiscal 2009 acquisition-related integration costs of $10.3 million and restructuring and related charges of $16.7 million, and plans capital expenditures of $150 million to $170 million. The company has not paid cash dividends since its 1973 initial public offering, and its senior credit facility currently restricts dividend payments.
Apr 29, 2008
2007
Constellation Brands Annual Report, Year Ended Feb 28, 2007
Constellation Brands, Inc. reported net sales of $5,216.4 million for the fiscal year ended February 28, 2007 (Fiscal 2007), up $612.9 million, or 13%, from $4,603.5 million in Fiscal 2006, driven primarily by $405.8 million of net sales from the Vincor acquisition and a $95.7 million increase in base branded wine net sales on a constant currency basis. Operating income rose to $699.0 million from $666.1 million, and net income increased to $331.9 million from $325.3 million, an increase of $6.6 million, or 2%. Diluted Class A EPS was $1.38 versus $1.36 in the prior year. Interest expense, net increased to $268.7 million, up 41.7%, reflecting higher average borrowings used to finance the Vincor acquisition and higher interest rates, and total debt rose to $4,185.5 million, with the debt-to-total-capitalization ratio increasing to 55.1% from 48.6%. The filing describes several structural changes. On January 2, 2007, the company formed Crown Imports, a 50/50 imported beer joint venture with Modelo, and began accounting for it under the equity method. On April 17, 2007, it formed Matthew Clark, a 50/50 U.K. wholesale joint venture with Punch Taverns, and also deconsolidated that business. The Company received $178.8 million of cash proceeds from the Matthew Clark formation. It also acquired the SVEDKA Vodka brand in March 2007 for $383.7 million, net of cash acquired. Going into Fiscal 2008, management plans to reduce U.S. distributor wine inventory levels, which is expected to reduce net sales by $160 million to $190 million and diluted EPS by $0.15 to $0.20. The company has a $900 million revolving credit facility and a $3.9 billion aggregate credit facility under its 2006 Credit Agreement. It has not paid cash dividends on common stock since its 1973 IPO and is constrained by its senior credit facility from paying them. The board authorized up to $500 million in share repurchases in February 2007, and the company repurchased 2,457,200 Class A shares for $55.1 million between fiscal year-end and April 27, 2007.
Apr 30, 2007
2006
Constellation Brands Annual Report, Year Ended Feb 28, 2006
Constellation Brands, Inc. (Delaware; Class A and Class B stock trade on the NYSE as STZ and STZ.B) reported fiscal 2006 (year ended February 28, 2006) net sales of $4.60 billion, up 13% from $4.09 billion in fiscal 2005, with net income rising 18% to $325.3 million. Operating income increased 17% to $666.1 million, driven mainly by higher-margin wine brands from the Robert Mondavi acquisition and branded wine volume growth, partly offset by higher acquisition-related integration costs, restructuring charges and unusual costs totaling $93.9 million. Gross margin improved to 28.8% of net sales from 27.9%. Interest expense rose to $189.7 million from $137.7 million on higher average borrowings tied to the Robert Mondavi acquisition. Total debt fell to $2,809.7 million from a decrease of $479.5 million year over year, and the debt-to-total-capitalization ratio declined to 48.6% from 54.2%. Operating cash flow was $436.0 million and capital expenditures were $132.5 million. The company is subject to restrictive covenants under its 2004 Credit Agreement and reports that it complied with all covenants as of February 28, 2006. Management intends to begin share repurchases under a replenished $100.0 million authorization in Fiscal 2007. A significant pending event is the April 2, 2006 agreement to acquire Vincor International Inc., Canada's largest wine producer, for Cdn$36.50 per share, with total value of approximately Cdn$1.5 billion including Vincor's indebtedness and an expected close in early June 2006. Management expects the deal to have a material impact on future results, financial position and cash flows, and to be financed through an amended and restated senior credit facility, which would significantly increase the debt-to-capitalization ratio.
May 2, 2006
2005
Constellation Brands Annual Report, Year Ended Feb 28, 2005
Constellation Brands, Inc. reported fiscal 2005 (year ended February 28, 2005) net sales of $4,087.6 million, up 15.1% from $3,552.4 million, driven by branded wine growth, the inclusion of Robert Mondavi sales acquired December 22, 2004, U.K. wholesale growth, imported beer growth and a favorable foreign currency impact of $155.5 million. Operating income rose 16.5% to $567.9 million and net income rose 25.4% to $276.5 million, with lower interest expense of $137.7 million. Diluted earnings per share were $1.19, compared with $1.03 in fiscal 2004, and figures are presented after the two-for-one stock splits distributed May 13, 2005. The balance sheet shows a significant increase in leverage. Total long-term debt including current maturities rose to $3,272.8 million from $2,046.1 million, and the ratio of total debt to total capitalization increased to 54.2% from 46.3%, primarily to finance the Robert Mondavi acquisition for $1,030.7 million in cash. Total debt outstanding was $3,289.3 million, and total assets grew to $7,804.2 million. Cash flow from operations was $320.7 million, against capital expenditures of $119.7 million, and the company plans roughly $140 million of capital expenditures in fiscal 2006. The filing also highlights expected integration and restructuring costs for fiscal 2006 of $14 million in acquisition-related integration costs and $4.9 million in restructuring charges, along with planned asset sales of Robert Mondavi assets for net proceeds of approximately $150 million to $175 million. The company has never paid cash dividends on its common stock since its 1973 IPO, and its senior credit facility currently restricts such payments.
May 16, 2005
2004
Constellation Brands Annual Report, Year Ended Feb 29, 2004
Constellation Brands, Inc. reported Fiscal 2004 (year ended February 29, 2004) net sales of $3,552.4 million, up from $2,731.6 million in Fiscal 2003, an increase of $820.8 million, or 30.0%. The increase was driven primarily by $571.4 million of net sales from products acquired in the Hardy Acquisition, along with higher imported beer sales ($86.6 million) and U.K. wholesale sales ($61.1 million on a local currency basis), and a favorable foreign currency impact of $74.6 million. Consolidated operating income rose to $487.4 million from $405.0 million, and net income increased to $220.4 million, or $2.06 diluted EPS, from $203.3 million. Results were affected by $71.6 million of restructuring and related charges and unusual costs, including a $16.8 million write-down of concentrate inventory tied to exiting the commodity concentrate product line. The balance sheet expanded substantially as a result of the Hardy Acquisition, which was financed largely with debt and equity. Total assets rose to $5,558.7 million from $3,196.3 million, and long-term debt including current maturities reached $2,046.1 million. Total debt-to-total capitalization decreased to 46.3% from 51.9%, following $426.1 million of net proceeds from 2003 equity offerings. Net cash provided by operating activities was $340.3 million, while capital expenditures were $105.1 million. The company stated it expects a negative impact on volume trends in Fiscal 2005 following a January 2004 price increase on imported Mexican beer brands, which shifted some volume into Fiscal 2004. The company also said it expects additional restructuring charges of $11.6 million in Fiscal 2005. The company has not paid cash dividends on its common stock since its 1973 initial public offering, and its senior credit facility currently restricts such payments. Management stated that its legal proceedings are not expected to have a material adverse effect on financial condition, results of operations or cash flows.
May 14, 2004
2003
Constellation Brands Annual Report, Year Ended Feb 28, 2003
Constellation Brands, Inc. (STZ) reported its Form 10-K for the fiscal year ended February 28, 2003 (Fiscal 2003). Net sales rose to $2,731.6 million from $2,606.8 million, an increase of $124.9 million, or 4.8%. Operating income increased to $405.0 million from $342.5 million, and net income increased to $203.3 million, or $2.19 diluted earnings per share, from $136.4 million. Growth was driven by Imported Beer and Spirits, where net sales rose 5.7% on a price increase in the Mexican beer portfolio, and by Fine Wine, up 18.1%. Popular and Premium Wine net sales declined 3.7% on lower volumes amid heavier industry promotional spending. The most consequential development is the Hardy Acquisition. The Company completed its acquisition of BRL Hardy Limited (now Hardy Wine Company Limited), Australia's largest wine producer, on April 9, 2003, for total consideration of $1,137.4 million in cash and Class A Common Stock. The cash portion of $1,060.2 million was financed with $660.2 million of borrowings under a new 2003 Credit Agreement and $400.0 million under a Bridge Agreement. The Company states the acquisition is expected to have a material impact on its future results of operations, financial position and cash flows. Beginning in Fiscal 2004, the Company will report three segments: Constellation Wines, Constellation Beers and Spirits, and Corporate Operations and Other. At February 28, 2003, total debt was $1,265.5 million, down $164.0 million from the prior year, and the ratio of total debt to total capitalization fell to 51.9% from 59.9%. Net cash provided by operating activities was $236.1 million, and capital expenditures were $71.6 million. Subsequent to year-end, the Company drew $1,200.0 million in term loans and $8.0 million in revolving debt under the 2003 Credit Agreement, plus the $400.0 million Bridge Agreement borrowing, to repay the 2000 Credit Agreement and fund the Hardy payment, which substantially increases its debt load going forward.
May 13, 2003
2002
Constellation Brands Annual Report, Year Ended Feb 28, 2002
Constellation Brands, Inc. (filed as Canandaigua Brands, Inc. until its Fiscal 2001 name change) reported net sales of $2,820.5 million for the fiscal year ended February 28, 2002 (Fiscal 2002), up $423.8 million, or 17.7%, from $2,396.7 million in Fiscal 2001. Operating income rose 26.4% to $342.5 million, and net income increased 40.1% to $136.4 million, or $1.55 per diluted share. Growth was driven mainly by the March 2001 Turner Road Vintners and Corus wine acquisitions, the Ravenswood acquisition, and volume growth in Mexican beer. Gross profit as a percent of net sales rose to 32.6% from 31.6%. Net cash provided by operating activities was $213.3 million, against $585.4 million used in investing activities, which included $472.8 million of net acquisition payments and $77.3 million of investment in the Pacific Wine Partners joint venture. Total debt was $1,429.6 million at February 28, 2002, up $63.8 million, and the ratio of total debt to total capitalization fell to 59.9% from 68.9%. The company issued $250.0 million of 8 1/8% Senior Subordinated Notes in January 2002 and used the proceeds to redeem older notes. Management believes cash from operations and short-term borrowings will meet its working capital and capital expenditure needs. The company stated it does not expect an impairment charge from its initial SFAS No. 142 goodwill review, though it could not assure that none would be recorded. Goodwill of $675.2 million represented 22.0% of total assets. The filing notes risks including competition, excise tax increases, reliance on wholesale distributors, dependence on imported beer distribution agreements (notably Corona Extra, through December 2006), grape and glass supply, and leverage. The company retains earnings and has not paid cash dividends since its 1973 IPO, and its credit facilities and indentures restrict dividends.
May 21, 2002
2001
Constellation Brands Annual Report, Year Ended Feb 28, 2001
Constellation Brands, Inc. (filed as Canandaigua Brands, Inc. during the period covered; the name change to Constellation Brands took effect in Fiscal 2001) reported net sales of $2,396.7 million for the fiscal year ended February 28, 2001, up $56.2 million, or 2.4%, from $2,340.5 million in Fiscal 2000. Operating income rose to $270.9 million from $235.0 million, an increase of 15.2%, and net income increased to $97.3 million, or $2.60 per diluted share, from $77.4 million ($2.09 per diluted share) in the prior year. Growth was driven by Barton (net sales up 12.8% to $945.1 million, led by Mexican beer) and Franciscan (up 49.9% to $93.1 million), while Canandaigua Wine declined 3.3% and Matthew Clark declined 5.3%, the latter largely due to an adverse foreign currency impact of $58.8 million. Total debt was $1,365.8 million at February 28, 2001, and the ratio of total debt to total capitalization decreased to 68.9% from 71.7%. The company completed a $289.7 million acquisition of the Turner Road Vintners Assets and a $52.0 million acquisition of the Corus Assets in early 2001, and agreed to acquire Ravenswood Winery for approximately $148 million in cash, expected to close in late June or early July 2001. The Board also approved a two-for-one stock split, distributed May 14, 2001. The company states it intends to retain earnings and has not paid cash dividends since its 1973 initial public offering.
May 29, 2001
2000
Constellation Brands Annual Report, Year Ended Feb 29, 2000
Canandaigua Brands, Inc. (filed under this name; the filing is the annual report on Form 10-K for the fiscal year ended February 29, 2000) reported net sales of $2,340.5 million, up $843.1 million, or 56.3%, from $1,497.3 million in Fiscal 1999. Net income rose to $77.4 million, or $4.18 diluted EPS, from $50.5 million ($2.69 diluted) a year earlier, an increase of 53.3%. The growth was driven mainly by acquisitions: Matthew Clark (U.K.; acquired December 1998), the Black Velvet Canadian whisky assets (April 1999) and Franciscan Estates and Simi wineries (June 1999). Operating income increased 61.1% to $235.0 million, though net interest expense more than doubled to $106.1 million from $41.5 million, a 155.9% increase, reflecting acquisition borrowings. Leverage rose sharply. Total debt was $1,317.9 million at February 29, 2000, up $392.5 million, and the ratio of total debt to total capitalization increased to 71.7% from 68.0%. The company's cash flow from operations was $148.1 million, and it spent $452.9 million on acquisitions and $57.7 million on capital expenditures. The company retains all earnings and pays no cash dividends, and its debt indentures restrict dividend payments. The company operates five segments (Canandaigua Wine, Barton, Matthew Clark, Franciscan and Corporate Operations) and states it is the second largest U.S. supplier of wine, the second largest importer of beer and the fourth largest supplier of distilled spirits. Management reports that its legal proceedings are not expected to have a material adverse effect, and it believes it complies in all material respects with applicable laws.
May 30, 2000
1999
Constellation Brands Annual Report, Year Ended Feb 28, 1999
Canandaigua Brands, Inc. (now Constellation Brands, Inc.) reported net sales of $1,497.3 million for fiscal 1999 (year ended February 28, 1999), up $284.6 million, or 23.5%, from $1,212.8 million in fiscal 1998. The increase was driven largely by the December 1, 1998 Matthew Clark acquisition, which contributed $158.8 million in net sales since acquisition, and by Barton's beer sales, which rose 27.1% to $478.6 million. Operating income increased 30.2% to $145.9 million, and net income rose 7.1% to $50.5 million, or $2.69 per diluted share. Net income was reduced by an $11.4 million after-tax extraordinary charge tied to replacing the bank credit facility. The balance sheet expanded significantly. Total assets rose to $1.79 billion from $1.09 billion, and long-term debt increased to $831.7 million from $309.2 million. Total debt outstanding was $925.4 million, and the ratio of total debt to total capitalization rose to 68.0% from 50.0%. The company funded the Matthew Clark purchase with credit facility borrowings and issued $200.0 million of 8 1/2% Senior Subordinated Notes in March 1999 to fund the April 1999 Black Velvet Canadian whisky acquisition for $185.5 million. The company also changed its inventory method from LIFO to FIFO, with prior periods restated. The filing also describes pending acquisitions of Simi Winery and Franciscan Estates, both expected to close in the second quarter of fiscal 2000 and to be financed through the bank credit facility. The company stated that the Matthew Clark and Black Velvet acquisitions are expected to have a material impact on future results of operations. Management reported Year 2000 remediation at approximately 75% for information technology systems and 64% for non-information technology systems, with testing expected to be completed by September 1999.
Jun 1, 1999
1998
Constellation Brands Annual Report, Year Ended Feb 28, 1998
Canandaigua Brands, Inc. reported net sales of $1,212.8 million for the fiscal year ended February 28, 1998 (Fiscal 1998), up from $1,135.0 million in Fiscal 1997, an increase of $77.8 million, or 6.9%. Net income rose to $50.1 million, or $2.62 diluted earnings per share, from $27.7 million in Fiscal 1997, an increase of 80.9%. Growth was driven by beer, where net sales rose 26.0% to $376.6 million on strong Corona and other Mexican beer sales, while wine net sales grew 4.0% to $533.3 million and distilled spirits rose 8.9% to $200.3 million. Gross profit increased to $348.7 million, and gross margin improved to 28.8% from 25.6%. The filing also flags a challenge: although table wine sales increased, the company experienced a market share decline for its wine products during Fiscal 1998, a trend it said continued into fiscal 1999, and it is pursuing pricing and promotional programs to address it. Operating income rose to $117.1 million, and interest expense fell to $32.2 million. Balance sheet and cash flow items were mixed. Total assets were $1,073.2 million and stockholders' equity was $415.2 million. Operating cash flow was $28.8 million, reflecting a $65.6 million increase in inventories tied to higher grape purchases. Total debt declined $11.1 million to $425.2 million, with the debt-to-total-capitalization ratio falling to 50.6% from 54.5%. The company refinanced its credit facilities with a $325.0 million Credit Agreement in December 1997 and has not paid cash dividends since its 1973 initial public offering.
May 29, 1998
1997
Constellation Brands Annual Report, Year Ended Feb 28, 1997
Canandaigua Wine Company, Inc. (now Constellation Brands, Inc.) reported net sales of $1,135.0 million for the fiscal year ended February 28, 1997, up from $987.1 million for Pro Forma Fiscal 1996, an increase of $147.9 million, or approximately 15.0%. Net income rose to $27.7 million from $24.0 million, while gross profit margin fell to 25.6% from 26.8%. Management attributed the margin decline mainly to higher grape costs, which increased 17.5% in the 1996 harvest, and to production inefficiencies at the Mission Bell Winery. Growth was driven by imported beer, where net sales rose 24.7% on 23.3% higher unit volume, largely from Mexican brands such as Corona, along with price increases on varietal table wines. The company's wine division faced the most pressure. Management described an ongoing reengineering effort, new accounting and information systems, and new senior management hires, including a new CFO, Thomas S. Summer, who joined in April 1997. Management stated that selling price increases had not fully offset the higher grape costs from the 1995 and 1996 harvests, and that there can be no assurance the steps being taken will resolve the inefficiencies. On the balance sheet, total assets were $1.02 billion and stockholders' equity was $364.7 million at February 28, 1997. Long-term debt, less current maturities, was $338.9 million, and notes payable were $57.0 million. Operating cash flow was $107.8 million, and the company repurchased $20.8 million of Class A stock during the year, completing a $30.0 million program in May 1997. The company has not paid cash dividends since its 1973 initial public offering, and its credit agreement and note indentures restrict dividend payments.
May 29, 1997
1996
Constellation Brands Annual Report, Year Ended Feb 29, 1996
Canandaigua Wine Company, Inc. filed this Form 10-K transition report covering the six-month transition period from September 1, 1995 to February 29, 1996, after changing its fiscal year end from August 31 to the last day of February. Net sales for the Transition Period were $535.0 million, up 17.7% from $454.5 million in the six months ended February 28, 1995, driven largely by the UDG Acquisition, which contributed $53.3 million in net sales and $3.1 million in after-tax net income. Net income fell to $3.3 million from $20.3 million, reflecting $12.9 million of after-tax One-time Items, higher selling, general and administrative expenses, and higher grape costs. The effective tax rate rose to 50.4% from 38.5%. The company reported net cash used in operating activities of $84.8 million, driven by a $70.2 million inventory increase tied to the 1995 grape harvest, and borrowed $111.3 million under its revolving loans. Total debt stood at $368.4 million at February 29, 1996, including $236.0 million of term loans and $130.0 million of 8.75% Senior Subordinated Notes due 2003. The company also disclosed a Securities class action, filed after its November 1995 earnings announcement, alleging misleading public statements, which management believes is without merit. For Fiscal 1997, management projected fully diluted net income per share of $2.30 to $2.50 and estimated that higher grape costs would reduce gross profit by approximately $13 million under LIFO.
May 29, 1996
1995
Constellation Brands Annual Report, Year Ended Aug 31, 1995
Canandaigua Wine Company, Inc. reported fiscal 1995 (year ended August 31, 1995) net sales of $906.5 million, up from $629.6 million in fiscal 1994, and net income of $41.0 million, or $2.13 per fully diluted share, versus $11.7 million ($0.74) in fiscal 1994. Growth was driven largely by the Almaden/Inglenook acquisition, which contributed $234.7 million of net sales, along with a 6.0% increase in branded beverage alcohol unit volume, led by imported beer (Corona and other Mexican brands) and varietal table wines. Excluding nonrecurring restructuring expenses, net income was $42.4 million, or $2.20 per fully diluted share. Gross margin declined to 27.9% from 29.0%, partly reflecting higher grape costs expected to pressure fiscal 1996 margins. The company's balance sheet shows total assets of $785.9 million and long-term debt of $198.9 million at August 31, 1995, down from $289.1 million a year earlier, reflecting a November 1994 Class A stock offering of 3 million shares at $33.50 and debt repayment. Following year-end, the company acquired assets of United Distillers Glenmore on September 1, 1995 for approximately $144.3 million in cash, financed by a $155 million increase in its Term Loan facility, which will raise debt levels materially. The filing also discloses that management expects the acquisition to have a material impact on future results. Investors should note the November 1995 shareholder class actions alleging misleading public statements, filed after the company announced fiscal 1995 results that fell below analyst expectations. The filing states Class A shares fell approximately 38% and Class B shares fell approximately 30% on November 10, 1995. The company believes the suits are without merit, and it has not paid cash dividends since its 1973 initial public offering.
Nov 29, 1995
1994-A2
Constellation Brands Annual Report (Amendment), Year Ended Aug 31, 1994
This Form 10-K/A (Amendment No. 2) is an annual report amendment for Canandaigua Wine Company, Inc. for the fiscal year ended August 31, 1994, filed January 11, 1995. Its stated purpose is to identify Canandaigua Wine Company, Inc. as the sole party for whom the Exhibit 27 Financial Data Schedule is submitted. The filing lists the parent and 18 wholly owned subsidiaries as co-registrants, including Barton Incorporated, Barton Brands, Ltd., Vintners International Company, Inc., Guild Wineries & Distilleries, Inc., and Monarch Wine Company, Limited Partnership. The cover page reports an aggregate market value of $479,968,662 for voting stock held by non-affiliates as of November 21, 1994. As of that date, 16,049,368 shares of Class A Common Stock and 3,390,051 shares of Class B Convertible Common Stock were outstanding. The registrant's proxy statement for its annual meeting to be held January 19, 1995 is incorporated by reference for Part III. The exhibit index describes the company's major transactions and financing arrangements. These include an Asset Purchase Agreement with Guild Wineries and Distilleries dated August 2, 1991, a Stock Purchase Agreement for Barton Incorporated dated April 27, 1993, an Asset Sale Agreement with Vintners International Company, Inc. dated September 14, 1993, and an Asset Purchase Agreement with Heublein, Inc. dated August 3, 1994, as amended November 8, 1994. The index also lists a Chemical Bank indenture dated December 27, 1993, and a credit agreement second amended and restated August 5, 1994, with The Chase Manhattan Bank (National Association) as agent.
Jan 11, 1995
1994-A
Constellation Brands Annual Report (Amendment), Year Ended Aug 31, 1994
This Form 10-K/A is Amendment No. 1 to the annual report of Canandaigua Wine Company, Inc. (now Constellation Brands, Inc.) for the fiscal year ended August 31, 1994. The stated purpose of the amendment is to submit the Exhibit 27 Financial Data Schedule. The filing is made by the parent company together with 18 wholly owned subsidiaries, including Barton Incorporated, Barton Brands, Ltd., Guild Wineries & Distilleries, Inc., Vintners International Company, Inc., and Monarch Wine Company, Limited Partnership. As of November 21, 1994, non-affiliate holders held voting stock with an aggregate market value of $479,968,662. The company had 16,049,368 Class A common shares and 3,390,051 Class B convertible common shares outstanding. The exhibit index shows the company's major 1991 to 1994 transactions. These include an asset purchase agreement with Guild Wineries and Distilleries (1991), a stock purchase agreement for Barton Incorporated (1993), an asset sale agreement with Vintners International Company, Inc. (1993), and an asset purchase agreement with Heublein, Inc. dated August 3, 1994, with amendments dated November 8 and November 18, 1994. The index also lists a credit agreement and a second amended and restated credit agreement dated August 5, 1994 with banks for which The Chase Manhattan Bank acts as agent, a senior subordinated loan agreement dated October 15, 1993, and an indenture dated December 27, 1993 with Chemical Bank. The amendment itself contains no operating results or financial statement narrative. Its main contents are the cover page information, the list of exhibits, and references to the original Form 10-K for the fiscal year ended August 31, 1994 for several exhibits, including the subsidiaries list, the consent of Arthur Andersen & Co., and the statement of computation of per share earnings. The proxy statement for the January 19, 1995 annual meeting is incorporated by reference for Part III.
Dec 23, 1994
1994
Constellation Brands Annual Report, Year Ended Aug 31, 1994
Canandaigua Wine Company, Inc. (now Constellation Brands, Inc.) reported fiscal 1994 (year ended August 31, 1994) net sales of $629.6 million, up from $306.3 million in fiscal 1993, with the increase driven mainly by the Barton, Vintners and Almaden/Inglenook acquisitions. Net sales on a pro forma basis were $876.4 million. Gross profit rose to $182.4 million, and gross margin declined to 29.0% from 29.8%. Net income fell to $11.7 million from $15.6 million, reflecting a $24.0 million pretax ($14.9 million after-tax, or $0.91 per fully diluted share) nonrecurring restructuring charge for consolidating California wineries. Excluding that charge, the filing states net income increased 71% to $26.6 million, or $1.65 per fully diluted share. The company describes itself as the second largest supplier of wines, the fourth largest importer of beers and the eighth largest supplier of distilled spirits in the United States, with over 125 national and regional brands. Its Corona, Almaden and Inglenook brands are highlighted as market leaders. Total assets were $826.6 million at August 31, 1994, up from $355.2 million, and long-term debt was $289.1 million. Stockholders' equity was $204.2 million. Subsequent to year-end, the company completed a public offering of 3,000,000 Class A shares by the company, with net proceeds of approximately $95.4 million, which were used to repay Term Loans under its Credit Facility. Investors should note the filing's disclosures on the company's grape purchase commitments, where a reserve of approximately $62.7 million was established for estimated losses on firm purchase contracts, and the $28.3 million Barton earn-out payment due December 30, 1994. The company has not paid cash dividends since its 1973 initial public offering, and its credit agreement and note indenture restrict dividend payments. The company also reports a pending dispute with the former Vintners owners over the final net current asset amount, and a New Jersey Attorney General investigation into trade practices in which the company states it does not believe a settlement would be material.
Nov 29, 1994