Anheuser-Busch Companies Reports Increased Sales And Earnings For First Quarter 1998.ST. LOUIS--(BUSINESS WIRE)--April 22, 1998--Anheuser-Busch Companies (NYSE NYSE See: New York Stock Exchange :BUD) achieved increased sales and earnings for the first quarter 1998, it was announced today by August A. Busch III, Chairman of the Board and President, at the company's annual meeting of shareholders in Williamsburg, Virginia Williamsburg is a city located on the Virginia Peninsula in the Hampton Roads region in southeastern Virginia. As of the 2000 census, the city had a total population of 11,998. . "We entered 1998 with improving volume trends and a commitment to reduce price discounting to increase the company's net revenues and protect our brand equities," Mr. Busch said. "Domestic sales-to- wholesaler growth in the first quarter 1998 was up 5.3 percent, due to strong underlying domestic sales-to-retailer growth of nearly 2 percent and the impact of the planned wholesaler inventory build associated with the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of the collective bargaining agreement The contractual agreement between an employer and a Labor Union that governs wages, hours, and working conditions for employees and which can be enforced against both the employer and the union for failure to comply with its terms. in February. We have also been successful in reducing discounts in most markets compared with the levels that existed in the fourth quarter of last year." The company's worldwide beer sales volume, consisting of Anheuser-Busch brands sold domestically and internationally, rose 4.4 percent, to 22.8 million barrels, for the first quarter 1998. Total volume, which includes worldwide Anheuser-Busch volume plus equity volume associated with Anheuser-Busch's share of foreign equity partners barrelage, was 25.1 million barrels, an increase of 2.6 million barrels, or 11.5 percent over first quarter 1997.
The company's beer volume is summarized in the following table:
Beer Volume (millions of barrels)
First Quarter 1998 versus 1997
1998 1997 Barrels %
Domestic 21.5 20.4 Up 1.1 Up 5.3%
International 1.3 1.4 Dn .1 Dn 8.0%
Worldwide -- A-B Brands 22.8 21.8 Up 1.0 Up 4.4%
Equity Partner Brands 2.3 .7 Up 1.6 N/M
Total Brands 25.1 22.5 Up 2.6 Up 11.5%
N/M - Not Meaningful
Earnings per share in the first quarter 1998 were $.54, up 5.9 percent compared to the first quarter 1997. This increase reflects higher beer sales volume and the company's larger equity stake in Grupo Modelo Grupo Modelo is a large brewery in Mexico. It maintains a large part of the Mexican beer export market and produces top-selling imported beer in the United Kingdom, United States and Canada. . These increases were partially offset by lower revenue per barrel and higher interest expense. First quarter 1998 domestic revenue per barrel declined 1.3 percent versus first quarter 1997 due to the carryover carryover n. in taxation accounting, using a tax year's deductions, business losses or credits to apply to the following year's tax return to reduce the tax liability. (See: carryback) impact of increasingly competitive discounting throughout 1997. However, net revenue per barrel was up versus the fourth quarter of last year, reversing the downward quarterly trend experienced in 1997.
FIRST QUARTER 1998 FINANCIAL RESULTS
Key operating results for the first quarter 1998 versus 1997 are
summarized below:
(in millions, except per share)
First Quarter 1998 versus 1997
1998 1997 $ %
Gross Sales $2,951 $2,864 Up $87 Up 3.1%
Net Sales $2,508 $2,463 Up $45 Up 1.8%
Operating Income $468 $468 --- ---
Equity Income, Net of Tax $19 --- Up $19 N/M
Net Income $265 $258 Up $7 Up 2.9%
Diluted Earnings per Share $.54 $.51 Up $.03 Up 5.9%
N/M - Not Meaningful
A discussion of financial highlights for the first quarter 1998 follows: -- Gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. increased $87 million, or 3.1 percent, and net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increased $45 million, or 1.8 percent, compared to the first quarter 1997. The increases in both gross and net sales were primarily due to higher domestic beer sales volume, partially offset by lower revenue per barrel. -- Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. equalled the first quarter 1997, reflecting higher domestic beer sales volume offset by lower revenue per barrel and lower operating results from the company's theme park and international beer operations. Theme park operations reported lower attendance and earnings in the first quarter 1998 compared to 1997, largely due to the impact of the Easter holiday occurring in April in 1998 versus March in 1997. Operating results from international beer operations (excluding Modelo) were lower in the first quarter 1998 due to a decline in volume compared with the particularly strong first quarter 1997, which included rollouts in new markets in China, Argentina and the Philippines. Adjusted for the comparison with the strong 1997 first quarter, 1998 international volume would have grown by only a small amount, reflecting weak economic conditions in Asia and related conditions in South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . The decline in international beer operations was more than offset by the increase in Grupo Modelo-related earnings. On April 8, 1998, the company and its Brazilian equity partner, Antarctica, announced the successful conclusion of an agreement with the Brazilian antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. agency, CADE, that approved the continuation and affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. viability of the two brewers This is a list of member brewers of the Brewers Association. Numbered
-- Net income increased $7 million, or 2.9 percent, versus the same period last year. Net income in 1998 includes $19 million for the company's pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. share of the net earnings of Grupo Modelo, accounted for under the equity method. The company adopted the equity method of accounting for Modelo in the second quarter 1997 concurrent with increasing its ownership to 37 percent. -- The effective income tax rate declined .4 of a percentage point in the first quarter 1998 principally due to lower state taxes. -- Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $.54, an increase of $.03, or 5.9 percent, compared to the first quarter 1997. Earnings per share growth continues to benefit from fewer shares outstanding due to the company's ongoing share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program. BEER SALES RESULTS Worldwide Beer Volume Worldwide Anheuser-Busch beer volume in the first quarter 1998 was 22.8 million barrels, up 4.4 percent versus the first quarter 1997. Worldwide beer volume is comprised of domestic volume and international volume. Domestic volume represents Anheuser-Busch beer produced and shipped within the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . International volume represents exports from the company's U.S. breweries See for an up to date listing of all the breweries detailed on Wikipedia, sorted into regions. Africa
Asia
Total volume, which combines equity volume (representing the company's share of its foreign equity partners volume) with worldwide volume, was 25.1 million barrels in the first quarter 1998, up 2.6 million barrels, or 11.5 percent over first quarter 1997. Total volume includes Anheuser-Busch's 37 percent ownership in Modelo in the first quarter 1998 compared to a 17.7 percent ownership in the first quarter 1997. Assuming a constant Anheuser-Busch ownership level of 37 percent of Modelo, total beer volume would have increased 4.4 percent. Domestic Beer Volume Anheuser-Busch reported domestic beer shipments of 21.5 million barrels, an increase of 1.1 million barrels, or 5.3 percent for the first quarter 1998 compared to the first quarter 1997. The increase in beer shipments reflects strong underlying sales-to-retailer trends (up nearly 2 percent) led by Bud Family sales and the planned increase in inventories associated with the expiration of the collective bargaining agreement. Wholesaler inventories will be reduced once a labor agreement is ratified rat·i·fy tr.v. rat·i·fied, rat·i·fy·ing, rat·i·fies To approve and give formal sanction to; confirm. See Synonyms at approve. . Beer Market Share The company's domestic market share (excluding exports) for the first quarter 1998 was 46.9 percent, an increase of 1.4 percentage points over 1997 market share of 45.5 percent. Including exports, the company's share of U.S. shipments was 46.7 percent versus 45.2 percent for the first quarter 1997. Domestic market share and share of U.S. shipments are determined based on industry sales estimates provided by the Beer Institute and are influenced by the company's inventory build. OTHER MATTERS Labor Negotiations The company's labor contract with the International Brotherhood of Teamsters Teamsters large, powerful union of U. S. truckers. [Am. Hist.: NCE, 2703] See : Labor , representing approximately 8,000 Anheuser-Busch employees, expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. at midnight on March 29, 1998 after a 30 day extension from the original expiration date Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. of February 28, 1998. The company presented its final proposal to the Teamsters bargaining committee on March 27, 1998. Union leadership has mailed ballots to members homes for consideration of the contract offer, with a recommendation that it be rejected. Ballots will be counted in early May. The company anticipates reaching an agreement but remains fully prepared to operate in the event of a work stoppage stoppage - /sto'p*j/ Extreme lossage that renders something (usually something vital) completely unusable. "The recent system stoppage was caused by a fried transformer." .
Comparative Statement of Earnings
First Quarter Ended March 31, 1998
(In Millions, Except Per Share)
Change versus 1997
Increase/(Decrease)
1998 1997 Amount %
Gross Sales $2,951.2 $2,863.8 $87.4 3.1
Excise Taxes (443.7) (400.9) 42.8 10.7
Net Sales 2,507.5 2,462.9 44.6 1.8
Cost of Products
and Services (1,638.8) (1,597.0) 41.8 2.6
Marketing, Distribution
and Administrative
Expenses (400.4) (397.6) 2.8 .7
Operating Income 468.3 468.3 --- ---
Interest Expense (75.5) (57.2) 18.3 32.0
Interest Capitalized 8.7 8.8 (.1) (.9)
Interest Income 1.5 1.9 (.4) (20.5)
Other Expense, Net (6.1) (3.5) 2.6 78.0
Income Before Income Taxes 396.9 418.3 (21.4) (5.1)
Provision for Income Taxes (151.0) (160.6) (9.6) (6.0)
Equity Income, Net of Tax 19.3 --- 19.3 N/M
Net Income $265.2 $257.7 $7.5 2.9
Basic Earnings Per Share $.54 $.52 $.02 3.8
Diluted Earnings Per Share $.54 $.51 $.03 5.9
Capital Expenditures $237.4 $265.6 $(28.2) (10.6)
Depreciation and Amortization $177.5 $160.8 $16.7 10.4
Weighted Average Shares:
Basic 486.7 497.4 (10.7) (2.2)
Diluted 491.1 505.3 (14.2) (2.8)
N/M - Not Meaningful
CONTACT: Anheuser-Busch Terri Vogt, 314/577-9615 or Carlos Ramirez, 314/577-9629 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion