Business Context and Reporting Period
Company: Brown-Forman Corporation
Filing Type: Form 10-K (Annual Report)
Period Ended: April 30, 1995
Headquarters: Louisville, Kentucky
Brown-Forman operates primarily through two segments: Wines and Spirits and Consumer Durables. The Wines and Spirits segment manufactures and markets brands such as Jack Daniel's, Southern Comfort, Canadian Mist, and Korbel Champagne. The Consumer Durables segment produces fine china, crystal, silverware, and luggage under brands including Lenox, Gorham, Dansk, and Hartmann. The company employs approximately 7,300 people.
Key Financial Metrics
Note: Specific revenue, profit, cash flow, margin, debt, and liquidity figures are not provided in the text of this filing. The document explicitly incorporates these financial statements by reference to the 1995 Annual Report to Stockholders (pages 17-38) and Selected Financial Data (pages 18-19).
- Valuation and Qualifying Accounts: The Allowance for Doubtful Accounts balance was $14,061,000 at April 30, 1995, compared to $12,006,000 at April 30, 1994.
- Market Value: The aggregate market value of voting stock held by nonaffiliates was $224,608,000 as of April 30, 1995.
- Share Count (May 25, 1995): 28,988,091 Class A (voting) and 40,008,147 Class B (nonvoting).
Material Changes and Operational Updates
- Segment Discontinuation: The "Other Segment" was discontinued effective November 1, 1993.
- Accounting Changes: In 1994, the company adopted changes in accounting methods for postretirement benefits other than pensions, postemployment benefits, and contributions.
- Leadership Changes: W. L. Lyons Brown, Jr. became Chairman and CEO in July 1993. Owsley Brown II became President and CEO in July 1993. Steven B. Ratoff joined as Executive Vice President and CFO in December 1994.
- Legal Resolution: A consolidated age discrimination case (Adams, et al. v. Brown-Forman) was resolved with all claims dismissed, having no material adverse effect. A product liability case (Brune v. Brown-Forman) regarding alcohol consumption was dismissed in the company's favor by the Texas Supreme Court.
Guidance, Risks, and Contingencies
Management Commentary and Outlook: The filing text does not provide specific forward-looking guidance or numerical outlooks, as this information is incorporated by reference from the Annual Report to Stockholders. Management emphasizes a strategy of marketing high-quality products supported by extensive international and national programs to extend brand loyalty.
Risks and Contingencies:
- Regulatory Environment: The Wines and Spirits industry is heavily regulated by the Bureau of Alcohol, Tobacco, and Firearms and individual state statutes regarding production, advertising, and distribution.
- Competition: Both segments face intense competition. The Consumer Durables segment faces significant foreign competition in fine china, crystal, and luggage.
- Raw Materials: While generally adequate, the acquisition price of fine silver and tin for the Consumer Durables segment is influenced by worldwide economic events and commodity trading.
- Inventory Management: Due to aging requirements for whisky (3-5 years), inventories are larger relative to sales and assets than in most other industries.
Investor Verification Checklist
- Verify the specific revenue, net income, and cash flow figures in the 1995 Annual Report to Stockholders (pages 17-38), as they are not listed in this 10-K text.
- Review the "Financial Review" section (pages 22-26 of the Annual Report) for management's detailed analysis of results and outlook.
- Confirm the impact of the 1994 accounting changes for postretirement benefits on comparative financial data.
- Monitor the status of distributor contracts, particularly regarding termination reimbursement formulas based on length of service and purchase history.
- Check the "Environmental" note (Note 13 in the Annual Report) for details on compliance costs and liabilities.