Business Context and Reporting Period
Constellation Brands, Inc. filed this Form 8-K on October 6, 2015, to report results of operations and financial condition for the second quarter ended August 31, 2015. The filing incorporates by reference a news release issued on October 7, 2015.
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 the text of this 8-K.
The Company utilizes non-GAAP financial measures, including "comparable," "organic," and "constant currency" metrics, to evaluate core operations. Reconciliations to GAAP measures are provided in the referenced news release.
Material Changes and Unusual Items
The filing identifies several items excluded from comparable results to reflect underlying business trends:
- Costs associated with a voluntary product recall of select Corona Extra beer packages in the U.S. and Guam.
- Net loss on the mark to fair value of undesignated commodity derivative contracts.
- Transaction, integration, and related costs from acquisitions.
- Inventory step-up flow-through associated with acquisitions.
- Settlements of undesignated commodity derivative contracts.
- Loss on certain assets due to an earthquake in Napa, California.
- Restructuring and related charges.
- Gain from an adjustment to a guarantee from a prior divestiture.
- Net gain on the sale and write-down of property, plant, and equipment.
- Loss on write-off of financing costs.
On August 3, 2015, the Company acquired the Meiomi wine brand and related assets. Organic net sales measures exclude Meiomi net sales for the indicated periods.
Guidance, Outlook, and Dividends
The referenced news release contains forward-looking projections and guidance, which involve risks and uncertainties that may cause actual results to vary materially. The filing does not detail specific guidance numbers.
On October 6, 2015, the Board of Directors declared a quarterly cash dividend payable on November 24, 2015, to stockholders of record as of November 9, 2015:
- Class A Common Stock: $0.31 per share
- Class B Common Stock: $0.28 per share
- Class 1 Common Stock: $0.28 per share
Investor Verification Checklist
- Review Exhibit 99.1 (News Release) for specific Q2 2015 revenue, earnings, and cash flow figures.
- Verify the reconciliation of non-GAAP "comparable" and "organic" measures to GAAP results in the news release.
- Assess the financial impact of the Corona Extra product recall and the Napa earthquake losses.
- Confirm the integration status and financial contribution of the newly acquired Meiomi brand.
- Examine the forward-looking statements in the news release for updated full-year guidance.