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Constellation Brands Annual Report, Year Ended Feb 28, 2005

Filing Date
Filed May 16, 2005
Period End
February 28, 2005
Security
STZ
In the record · 2016–202610-K1110-Q338-K237

STZ filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 237 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jul ’17Jul ’17
  2. Material agreement8-K · Dec ’19Dec ’19
  3. Leadership change8-K · Jan ’22Jan ’22
  4. Leadership change8-K · Oct ’25Oct ’25

01—Abstract

Summary

Summary of the 10-K filed May 16, 2005. Cited figures are marked; the original filing is the authoritative source.

Constellation Brands, Inc. reported fiscal 2005 (year ended February 28, 2005) net sales of $4,087.6 milliona, 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 millionb 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 millionc 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 milliond 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.

02—Key points

Key Highlights

  1. Net sales rose 15.1% to $4,087.6 million; the filing attributes the increase mainly to branded wine, Robert Mondavi sales, U.K. wholesale, imported beer and a $155.5 million favorable currency impact.
  2. Operating income increased 16.5% to $567.9 million, helped by lower acquisition-related integration, restructuring and net unusual costs of $58.8 million versus $71.6 million.
  3. Net income increased 25.4% to $276.5 million; diluted EPS was $1.19 versus $1.03 in fiscal 2004.
  4. Total debt rose to $3,289.3 million from $2,046.1 million in long-term debt a year earlier, and the debt-to-total-capitalization ratio increased to 54.2% from 46.3%, largely from financing Robert Mondavi.
  5. Robert Mondavi, acquired December 22, 2004 for $1,030.7 million in cash, is reported in the Constellation Wines segment and is expected to have a material impact on future results.
  6. Cash from operations was $320.7 million and capital expenditures were $119.7 million; fiscal 2006 capital spending is planned at approximately $140 million.
  7. The company has not paid cash dividends on common stock since its 1973 IPO, and its senior credit facility currently restricts dividend payments.

03—Questions

Frequently Asked Questions

  1. How did Constellation Brands perform financially in fiscal 2005?

    Net sales increased 15.1% to $4,087.6 million, operating income increased 16.5% to $567.9 million, and net income increased 25.4% to $276.5 million. Diluted earnings per share were $1.19, compared with $1.03 in fiscal 2004.

  2. What drove the increase in sales?

    The filing attributes the increase primarily to branded wine net sales growth of $217.8 million on a constant currency basis, including $84.2 million from Robert Mondavi brands, U.K. wholesale growth of $84.1 million, imported beer growth of $60.3 million, and a favorable foreign currency impact of $155.5 million.

  3. How did the Robert Mondavi acquisition affect the company's financing?

    The purchase was financed with borrowings under a new 2004 Credit Agreement providing $2.9 billion of facilities. Total debt outstanding rose to $3,289.3 million, and the debt-to-total-capitalization ratio increased to 54.2% from 46.3%.

  4. Does the company pay dividends?

    No. The company has not paid cash dividends on its common stock since its initial public offering in 1973, retains its earnings to finance growth, and is currently constrained from paying dividends under its senior credit facility.

  5. What are the expected costs and asset sales for fiscal 2006?

    The company expects $14 million of acquisition-related integration costs and $4.9 million of restructuring and related charges in fiscal 2006. It also expects to sell certain Robert Mondavi assets for net proceeds of approximately $150 million to $175 million, with no gain or loss expected on the sale.

04—Continue

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