Business Context and Reporting Period
Company: Constellation Brands, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: April 5, 2007
Reporting Period: Fourth fiscal quarter and full fiscal year ended February 28, 2007.
This filing announces the Company's financial condition and results of operations via a news release (Exhibit 99.1). The report includes non-GAAP financial measures (comparable, organic, and constant currency) to provide insight into underlying business trends, excluding specific acquisition-related costs and restructuring charges.
Key Financial Metrics
Revenue, Profit, Cash Flow, Margins, Debt, and Liquidity: 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 the text of this 8-K.
Material Changes and Adjustments
The Company utilizes non-GAAP measures to exclude the following items from comparable results to better evaluate year-over-year performance:
- Flow through of adverse grape costs and inventory step-up associated with acquisitions (specifically Vincor International Inc., acquired June 5, 2006).
- Accelerated depreciation and inventory write-downs related to restructuring and integration activities.
- Acquisition-related integration costs and restructuring charges.
- Write-off of deferred financing fees.
- Loss on the sale of the branded water business.
- Gain on change in fair value of derivative instruments hedging foreign currency denominated acquisitions.
- Foreign currency losses on intercompany loan balances.
- Due diligence costs for a potential offer for Allied Domecq.
- Income tax adjustments related to the reversal of accruals from tax examinations.
Organic Net Sales: Measures exclude net sales of Vincor products and the imported beers business (Crown Imports LLC joint venture, effective January 2, 2007).
Guidance, Outlook, and Risks
Guidance and Outlook: The attached news release contains projections and guidance. Management notes that these involve risks and uncertainties, and actual results may vary materially from forecasts.
Risks and Contingencies:
- Forward-Looking Statements: Subject to risks and uncertainties that cannot be foreseen.
- Regulatory Status: Information in the release and Item 2.02 is "furnished" and not "filed" under Section 18 of the Securities Exchange Act of 1934, limiting liability.
- Website Disclaimer: References to the Company's website in the release do not incorporate website information by reference.
Investor Verification Checklist
- Review Exhibit 99.1 (News Release) for specific numerical data on revenue, earnings, and cash flow, as these are not listed in the 8-K text.
- Verify the reconciliation of non-GAAP measures (comparable/organic) to GAAP measures provided in the news release.
- Assess the impact of the Vincor International Inc. acquisition and the Crown Imports LLC joint venture on reported sales figures.
- Examine the "Forward-Looking Statements" section in the news release for specific risks affecting future guidance.
- Confirm the status of the potential offer for Allied Domecq and associated due diligence costs.