Business Context and Reporting Period
Constellation Brands, Inc. filed this Form 8-K on June 28, 2017, to report results of operations and financial condition for the first quarter ended May 31, 2017. The filing incorporates by reference a news release issued on June 29, 2017.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. These figures are contained within the attached news release (Exhibit 99.1) which is incorporated by reference but not reproduced in this document.
The Company utilizes non-GAAP "comparable" or "organic" measures to evaluate core operations. These measures exclude:
- Inventory step-up flow-through from acquisitions.
- Net gains/losses on undesignated commodity derivative contracts and settlements.
- Transaction, integration, and restructuring costs.
- Impairments of intangible and other assets.
- Net gains/costs related to the divestiture of the Canadian wine business.
- Loss on write-off of debt issuance costs.
Organic net sales exclude products from recent acquisitions (The Prisoner Wine Company, High West Holdings, Charles Smith Wines) and the divested Canadian wine business.
Material Changes and Corporate Actions
The filing references the following material corporate actions and historical context:
- Dividend Declaration: On June 28, 2017, the Board declared a quarterly cash dividend payable on August 23, 2017, to stockholders of record as of August 9, 2017.
- Dividend Amounts: $0.52 per share for Class A Common Stock; $0.47 per share for Class B Common Stock; $0.47 per share for Class 1 Common Stock.
- Acquisitions: The filing notes prior acquisitions of The Prisoner Wine Company (April 2016), High West Holdings (October 2016), and Charles Smith Wines (October 2016).
- Divestiture: The Company sold its Canadian wine business on December 17, 2016.
Guidance, Outlook, and Risks
The incorporated news release contains forward-looking projections and guidance. Management states that these projections involve risks and uncertainties, and actual results may vary materially from forecasts. Investors are directed to the "Forward-Looking Statements" section of the news release for details on these risks.
Investor Verification Checklist
- Review Exhibit 99.1 (News Release) for specific Q1 2017 revenue, net income, and cash flow figures.
- Verify the reconciliation of non-GAAP "organic" measures to GAAP financial measures in the news release.
- Confirm the record date (August 9, 2017) and payment date (August 23, 2017) for the declared dividends.
- Assess the impact of the Canadian wine divestiture and recent acquisitions on year-over-year comparisons.
- Examine the "Forward-Looking Statements" in the news release for specific risks affecting future guidance.