Anheuser-Busch announces record sales and earnings, and initiatives to enhance shareholder value; highlights of Anheuser-Busch Companies third quarter earnings release.-0- Anheuser-Busch achieved record sales, earnings and beer market share in the Third Quarter and first nine months of the year. The company outperformed the brewing brewing: see beer. industry as a whole, which experienced sales declines during the first nine months. Anheuser-Busch achieved higher increases in beer volume and share than any other major brewer for the first nine months of 1995. In a series of moves to enhance shareholder value, Anheuser-Busch announced the following initiatives: 1. Selling the snack food business. 2. Consolidating brewing capacity for greater efficiency, resulting in the closing of the company's Tampa Tampa (tăm`pə), city (1990 pop. 280,015), seat of Hillsborough co., W Fla., a port of entry with an impressive harbor on Tampa Bay; inc. 1855. brewery A brewery can be a building or place that produces beer, or a business (brewing company) whose trade is the production and sale of beer. Breweries can take up multiple city blocks, or be a collection of equipment in a homebrewer's kitchen. . 3. Selling the St. Louis Louis, titular duke of Burgundy Louis, 1682–1712, titular duke of Burgundy; grandson of King Louis XIV of France. He became heir to the throne on the death (1711) of his father, Louis the Great Dauphin. National Baseball baseball, bat-and-ball sport known as the national pastime of the United States. It derives its name from the four bases that form a diamond (the infield) around the pitcher's mound. Club (Cardinals For a list of cardinals in mathematics, see list of large cardinal properties. The following is an alphabetical list of cardinals in the Roman Catholic Church. A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Top of page — See also — External links ). 4. Lowering beer wholesaler inventories in order to achieve greater system-wide efficiencies and reduce costs. -0- Anheuser-Busch Companies, Inc. achieved record sales and earnings for the Third Quarter and first nine months of 1995, it was announced today by August A. Busch Busch , Adolf Georg Wilhelm 1891-1952. German-born Swiss violinist and conductor best known for his work as leader of the Busch Quartet, an internationally acclaimed chamber group formed in 1919. III, Chairman of the Board and President. The company also achieved record beer sales volume and share for the first nine months of 1995, despite an estimated .3 percent decline in overall brewing industry sales for the period. The company also announced a series of moves to enhance shareholder value. When coupled with the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of Campbell Campbell, city, United States Campbell, city (1990 pop. 36,048), Santa Clara co., W Calif., in the fertile Santa Clara valley; founded 1885, inc. 1952. Taggart
"Anheuser-Busch's sales-to-retailers were up over 1 percent in the Third Quarter, with August being a record month for sales-to- retailers," said Busch. "We are seeing increasing momentum in our core brands, the Budweiser and Michelob Michelob is the trade name of a family of beers produced by the Anheuser-Busch brewery. It takes its name from a speciality beer developed by Adolphus Busch in 1896 as a "draught beer for connoisseurs". families, with Bud Light and Michelob Light both growing at double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. rates. Bud Ice sales have grown since its February February: see month. introduction, and several new brands were introduced during the Third Quarter. This is occurring in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with an improved pricing outlook." Operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the company's international brewing, packaging and theme park operations continued to grow at a double-digit pace during the Third Quarter. These results were partially offset by underperformance at Eagle Snacks and one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges for plant consolidations and other productivity enhancement initiatives at Campbell Taggart. -0-
Third Quarter 1995 Financial Results
Key financial results for the Third Quarter of 1995 compared to
the Third Quarter of 1994 are summarized below:
Third Quarter Ended September 30,
($ In Millions, Except Per Share) 1995 vs. 1994
1995 1994 $ %
Gross Sales $3,898 $3,759 Up $139 Up 3.7
Net Sales 3,436 3,298 Up 138 Up 4.2
Operating Income 602 600 Up 2 Up.0.4
Pretax Income 560 549 Up 11 Up 1.9
Net Income 340 329 Up 11 Up 3.1
Fully diluted Earnings
Per Share 1.31 1.24 Up. .07 Up 5.6
-0-
Highlights for the Third Quarter 1995 were as follows:
Net sales rose $138 million, a 4.2 percent increase compared with
the Third Quarter of 1994. The increase was driven primarily by
higher international beer revenues and higher sales by the company's
packaging and theme park operations.
Operating income increased $2 million, or 0.4 percent, in the
quarter. Higher beer packaging material costs, losses at Eagle
Snacks and one-time charges by Campbell Taggart were offset by
earnings growth in the company's other businesses.
Net income grew $11 million, or 3.1 percent, and was favorably
impacted by a slightly lower effective tax rate.
Earnings per share, on a fully diluted basis, rose $.07, or 5.6
percent, to $1.31 per share, compared with $1.24 per share for the
Third Quarter of 1994.
Earnings per share growth continues to benefit from fewer shares
outstanding due to the company's ongoing share repurchase program.
Fully diluted earnings per share assume conversion of the company's
convertible debentures and elimination of the related after-tax
interest expense.
Nine Months 1995 Financial Results
Key financial results for the first nine months of 1995 as
compared to 1994 are summarized below:
Nine Months Ended September 30,
($ In Millions, Except Per Share) 1995 vs. 1994
1995 1994 $ %
Gross Sales $10,780 $10,383 Up $397 Up 3.8
Net Sales 9,485 9,095 Up 390 Up 4.3
Operating Income 1,601 1,562 Up 39 Up.2.5
Pretax Income 1,458 1,418 Up 40 Up 2.8
Net Income 885 856 Up 29 Up 3.3
Fully diluted Earnings
Per Share 3.40 3.20 Up. .20 Up 6.3
-0-
Highlights for the first nine months of 1995 were as follows:
Net sales increased $390 million, or 4.3 percent, for the first
nine months of 1995, reflecting the higher beer sales volume level,
higher revenue per barrel, stronger international beer revenues and
higher sales by the company s packaging and theme park operations.
Operating income rose $39 million, or 2.5 percent, compared to
the same period of 1994. The company's beer, packaging and theme
park operations were solid contributors to consolidated growth during
the period, offset partially by the underperformance of Eagle Snacks
and one-time charges at Campbell Taggart.
Net income grew $29 million, or 3.3 percent.
Fully diluted earnings per share increased $.20, or 6.3 percent,
compared to the same period in 1994. Earnings per share for the
first nine months also benefited from the company's ongoing share
repurchase program.
Beer Volume and Market Share
Anheuser-Busch, Inc., the company's brewing subsidiary, reported
record Third Quarter sales-to-wholesalers of 24.2 million barrels, up
slightly compared to the Third Quarter of 1994. Sales-to-wholesalers
for the first nine months of 1995 were a record 68.1 million barrels
compared to 67.8 million barrels during the first nine months of
1994, an increase of 0.4 percent.
The previously announced fall price increases have been
implemented in seven states, and the environment appears favorable
for the company's planned February 1996 price increase in the
remainder of the country.
International beer performance increased during the first nine
months, led by continuing sales expansion in the United Kingdom and
Ireland. International brewing s contribution to company
profitability for the first nine months of 1995 increased at a
double-digit pace versus the same period in 1994.
The company has recently introduced or announced seven new beer
brands this year. Busch Ice and Natural Ice were introduced in
selected regional markets. Michelob Amber Bock has been introduced
to the national market and a special Christmas Brew will be added for
the important holiday season.
Three "American Original" specialty beers (Faust, Muenchener and
Black & Tan), based on recipes of beers originally brewed by Adolphus
Busch in the late 1800s, were introduced for test marketing in
Seattle and Denver.
For the first nine months of 1995, Anheuser-Busch's beer volume
sales-to-wholesalers accounted for 44.3 percent of total U.S.
brewing industry sales (including imports and exports), as estimated
from information provided by The Beer Institute. This compares to a
share of 44.0 percent for the same period last year, an increase of
.3 share points.
Selected Subsidiary Operations
Campbell Taggart, the company's baking subsidiary, experienced
lower profits for both the Third Quarter and first nine months of
1995 compared to the previous year. However, this was primarily
because of higher raw material costs, costs associated with the
restructuring of unprofitable bakery locations and increased expenses
related to implementing productivity improvements.
Underlying profit margins for this subsidiary's core businesses
and international operations are up for both the Third Quarter and
first nine months of 1995.
As announced in the second quarter, Campbell Taggart is preparing
for its spin-off from Anheuser-Busch. In anticipation of the
spin-off, Campbell Taggart is continuing to restructure its bakery
operations and focus on its core businesses. The spin-off is on
schedule for completion in the first half of 1996.
Eagle Snacks, the company's snack foods subsidiary, reported
operating losses for the Third Quarter and first nine months of 1995.
Initiatives to Enhance Shareholder Value
In order to enhance future profitability and devote maximum
attention to the company's core domestic and international beer
businesses, the following initiatives were approved by the Board of
Directors today:
1. Selling the Snack Food Business
Anheuser-Busch has decided to sell the snack food business. The
company has received serious expressions of interest to purchase
Eagle Snacks from qualified parties. "The quality of our snack foods
is second to none, and our production facilities are among the best
in the industry," Busch said.
It is anticipated that the sale of Eagle Snacks will result in a
substantial write-off which will be recognized in the Fourth Quarter
of 1995. The book value of Eagle Snacks is $240 million and the
company will lose $25 million in 1995. The sale of Eagle Snacks,
along with the spin-off of Campbell Taggart, effectively eliminates
Anheuser-Busch's food products segment, thereby allowing the company
to devote maximum attention to its core businesses.
2. Consolidation of Brewing Capacity
Through full production at the Cartersville brewery and its
ongoing efficiency program, Anheuser-Busch has been able to add a
significant amount of efficient, lower cost capacity. The Tampa
brewery is the company's highest cost per barrel brewery.
Accordingly, the Tampa brewery will be closed and cease
production by the end of the year resulting in an estimated pretax
write-off in the Fourth Quarter of approximately $150 million ($.36
per share), but will result in $33 million a year in operational cost
savings.
"Earlier this year, our Cartersville brewery --- the most
efficient facility of its kind in the world --- brought 3 million
barrels of expansion capacity on stream," Busch said. "As
previously announced, Anheuser-Busch will spend $2 billion on a
benchmarking program to bring all production facilities as near as
possible to the efficiency levels we have achieved at our
Cartersville brewery."
3. Sale of St. Louis National Baseball Club (Cardinals)
Anheuser-Busch has decided to sell the St. Louis National
Baseball Club (Cardinals) in order to better focus attention on its
core businesses. Sale of the club will include Busch Memorial
Stadium and several nearby parking garages owned by the company's
Civic Center Corp. subsidiary in downtown St. Louis.
In 1995, because of a strike shortened season and the team's
performance, the Cardinals will incur an operating loss of $12
million.
"It is our objective to keep the Cardinals in St. Louis, and the
company will remain a sponsor of major league baseball," Busch said.
"The question is whether our corporate objectives, which are highly
focused on producing value for Anheuser-Busch shareholders, are
consistent with the needs of the baseball team," he added. "Similarly,
continued ownership of the club diverts significant management efforts
away from the needs of our core businesses."
"We concluded that it is in the best interests of everyone,
including the Cardinals, and the fans, to seek a new owner for the
team," he added.
It is anticipated that the sale of the Cardinals will result in a
substantial gain which will be recognized when the sale is completed.
4. Beer Wholesaler Inventory Reduction Program
In a move that will minimize inventory system costs, the company
will reduce wholesaler inventories during the final two months of the
year.
This lower inventory level will result in a $12 million
system-wide cost savings by both Anheuser-Busch and wholesalers
through improved scheduling, lower transportation costs and reduced
working capital requirements.
"Today's marketplace demands that we take every step we can to be
as efficient as possible," Busch said. "This step will not only
provide significant savings, but will improve production scheduling
at our breweries and ensure that we continue to have the freshest
beer in the market. Thus, it provides a competitive advantage as
well."
Lowering wholesaler inventories will require a one-time reduction
in production levels at the company s breweries. As a result, total
shipments will be down approximately 1.1 million barrels, or 5
percent, in the Fourth Quarter which will reduce operating profits by
approximately $71 million.
For all of 1995, shipments will be reduced about 1 percent.
However, sales-to-retailers --- a more accurate measure of consumer
demand --- will not be affected and will reflect record levels for
the year.
Conclusion
"As a result of the moves announced today, and the spin off of
Campbell Taggart, Anheuser-Busch will be a more focused and competitive
company," Busch said.
"We plan to achieve three major objectives in coming years,"
Busch stated. "First, we will continue to gain an increased share of
the brewing industry margin pool in the United States. Second, we
will continue to globalize our beer operations. Finally, we will
support the growth of our entertainment and packaging subsidiaries.
"Focus on these objectives will permit the company to capitalize
on its market leadership and competitive advantages in its core
brewing business, enhance profitability through the entertainment of
more than 20 million guests annually, and gain efficiencies through
the manufacture of beverage containers," Busch added.
-0-
COMPARATIVE STATEMENT OF EARNINGS
THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(In Millions, Except Per Share)
Third Quarter Year-to-Date
1995 1994 1995 1994
Gross Sales $ 3,897.5 $ 3,759.3 $10,780.2 $10,383.3
Excise Taxes (461.3) (461.4) (1,295.4) (1,288.7)
Net Sales 3,436.2 3,297.9 9,484.8 9,094.6
Cost of Products &
Services 2,180.1 2,062.0 6,091.5 5,808.4
Marketing, Distribution
and Administrative
Expenses 653.7 635.7 1,792.8 1,724.4
Operating Income 602.4 600.2 1,600.5 1,561.8
Interest Expense (54.7) (54.3) (169.2) (165.1)
Interest Capitalized 6.0 5.6 16.8 15.2
Interest Income 2.3 1.3 6.6 2.7
Other Income/(Expense),
Net 3.9 (3.5) 3.0 3.2
Income Before Income Taxes 559.9 549.3 1,457.7 1,417.8
Income Taxes (220.2) (219.9) (572.8) (561.4)
Net Income $ 339.7 $ 329.4 $ 884.9 $ 856.4
Primary Earnings
Per Share $ 1.32 $ 1.26 $ 3.43 $ 3.23
Fully Diluted Earnings
Per Share $ 1.31 $ 1.24 $ 3.40 $ 3.20
Capital Expenditures $ 279.6 $ 181.1 $ 752.6 $ 542.2 Depreciation and Amortization $ 168.8 $ 153.4 $ 482.6 $ 465.7 Weighted Average Shares Outstanding - Primary 256.7 262.4 258.1 265.4 Weighted Average Shares Outstanding - Full-Diluted 260.9 267.4 262.6 270.4 CONTACT: Anheuser-Busch, St.Louis Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. Wagman or Barry Barry, Welsh Barri, town (1991 pop. 45,053) and port, Vale of Glamorgan, S Wales, on the Bristol Channel. Once a major coal-exporting port, its more diversified export products include cement, flour, and steel products. Murov, 314/982-1700 |
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