Beringer Wine Estates Announces Third Quarter 1998 Earnings.ST. HELENA Helena. 1 Town (1990 pop. 7,491), seat of Phillips co., E central Ark., on the Mississippi River and at the southern end of Crowley's Ridge; inc. 1833. , Calif.--(BUSINESS WIRE)--May 5, 1998--Beringer Wine Estates Holdings, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BERW) today announced operating and financial results for its third quarter and nine months of fiscal 1998 ended March 31. Third Quarter Ended March 31, 1998 Third quarter net income to common shareholders, adjusted for non-cash acquisition-related charges, increased 69% to $8.8 million, or $0.44 per share. This compares with adjusted net income of $5.2 million, or $0.39 per share for the third quarter last year. Net revenues for the quarter increased over 14% to $77.2 million, generated by both volume growth and increases in average per case revenue. Volume of nine-liter case shipments increased 11% to 1.4 million cases, while average unit revenue increased over 3% to $53.33 per case. "We are pleased with the continued growth of our key brands during the quarter, led by revenue increases in Beringer of 11% and Meridian Meridian (mərĭd`ēən), city (1990 pop. 41,036), seat of Lauderdale co., E Miss., near the Ala. line; settled 1831, inc. 1860. of 55%," said Walt Klenz, Chairman and Chief Executive Officer. Beringer Wine Estates' brands continue to outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, industry growth of premium U.S. 750ml varietal wines Noun 1. varietal wine - a wine made principally from one grape and carrying the name of that grape varietal vino, wine - fermented juice (of grapes especially) . As measured by retail case volume in U.S. food stores, the 750ml premium wine category grew by 6% during the January January: see month. - March period. Beringer Wine Estates' brands grew in food stores at a combined rate of 9% during the same 12 week period. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma 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. for the quarter increased by 15% to $18.4 million. The company's operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 23.9% was consistent with the prior year. Interest and other income/expenses (net) was $4.3 million for the quarter as compared with $6.0 million in the prior year. The third quarter reflects the first full quarter of reduced interest expense following the pay down of debt at the time of the October October: see month. , 1997 initial public offering. On an as-reported basis, including the impact of non-cash acquisition-related charges, the Company reported net income to common shareholders of $5.2 million as compared with a net loss of $1.2 million in the third quarter last year. Nine Months Ended March 31, 1998 Nine month net income to common shareholders, adjusted for non-cash acquisition-related charges and the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges related to the redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. and retirement of debt, increased 82% to $20.8 million or $1.19 per share. This result compares with pro forma net income of $11.4 million, or $0.86 per share for the nine months last year. Net revenues for the nine months were $237.4 million, an increase of over 18% versus the prior year. Volume of nine-liter case shipments increased over 10% to 4.5 million cases while average unit revenue increased over 7% to $52.85 per case. Pro forma operating income for the nine months increased 23% to $52.0 million. The company's operating margin of 21.9% compares with a 21.1% operating margin for the nine months last year. Interest and other income/expenses (net) were $16.1 million for the nine months as compared with $19.2 million for the prior year. The year-to-year reduction reflects lower interest expense due to the reduction of debt following the October, 1997 initial public offering. Net income to common shareholders includes preferred stock dividends of $1.9 million or $0.11 per share for the nine months as compared with $3.7 million or $0.28 per share for the nine months last year. On an as-reported basis, including the impact of non-cash acquisition-related charges and one-time charges related to the redemption of preferred stock and retirement of subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". , the company reported net income to common shareholders of $1.6 million for the nine months as compared with a loss of $8.8 million in the prior year. Beringer Wine Estates Holdings, Inc. is a market leader in the premium wine industry. The company consists of six award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). wineries and a growing import portfolio from Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. , France and Chile Chile (chĭl`ē, Span. chē`lā), officially Republic of Chile, republic (2005 est. pop. 15,981,000), 292,256 sq mi (756,945 sq km), S South America, west of the continental divide of the Andes Mts. . The company controls over 9,500 acres of vineyard vineyard, land on which cultivation of the grape—known as viticulture—takes place. As many as 40 varieties of grape, Vitis vinifera, are known. land, all in the coastal regions of California. -0- Note: This press release contains forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward looking statements, including whether the premium wine category will continue to grow, whether consumer demand for the wines of Beringer Wine Estates Holdings, Inc. will continue to expand and whether the company is well-positioned for the future. There are risk factors discussed in the company's Registration Statement on Form S-1 filed with the Securities and Exchange Commission. The forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. represent the company's judgement as of the date of this press release. Beringer Wine Estates Holdings, Inc. disclaims any intent or obligation to update their forward-looking statements. Actual results may differ materially and adversely from those anticipated, believed, estimated or otherwise indicated. -0-
Beringer Wine Estates
Income Statement
Three Months Ended March 31, 1998
(in thousands, except per share data)
Pro Forma (1) As Reported
1998 1997 1998 1997
Net revenue $ 77,168 $ 67,444 $77,168 $67,444
Cost of goods sold (2) 36,715 32,977 43,409 42,408
Gross profit (2) 40,453 34,467 33,759 25,036
Operating expenses 22,030 18,488 22,030 18,488
Operating income (2) 18,423 15,979 11,729 6,548
Interest and other expense (net) 4,273 6,036 4,273 6,036
Pre-tax income (2) 14,150 9,943 7,456 512
Income taxes (3) 5,349 3,480 2,208 466
Net income before
extraordinary items 8,801 6,463 5,248 46
Preferred dividends
and discount accretion -- 1,255 -- 1,255
Net income (loss) available to
common shareholders before
extraordinary items 8,801 5,208 5,248 (1,209)
Net income (loss) to
common shareholders $ 8,801 $ 5,208 $ 5,248 $ (1,209)
Weighted average shares
Diluted shares outstanding 20,187 13,338 20,187 11,931
Earnings (loss) per share $ 0.44 $ 0.39 $ 0.26 $(0.10)
(1) In accordance with purchase accounting rules applied to the
acquisition of Beringer Wine Estates in 1996 and to the
subsequent acquisitions of Chateau St. Jean and Stags' Leap,
inventory of each acquired company was increased to fair market
value. This inventory step-up generates non-cash charges to cost
of goods sold as the inventory on hand at the acquisition date is
sold.
The pro forma income statements for the three months ended March
31, 1998 and 1997 reflect the comparative consolidated financial
data excluding the non-cash inventory step-up charges.
(2) For the three months ended March 31, 1998 and 1997, cost of goods
sold was reduced and gross profit, operating income and income
before taxes were effectively increased in the pro forma income
statements by $6.7 million and $9.4 million, respectively, as a
result of the adjustment for inventory step-up charges.
(3) For the three months ended March 31, 1998 and 1997, pro forma
income taxes have been computed on pre-tax income adjusted for
the inventory step-up charges. A pro forma tax rate of 37.8% was
applied in the current quarter as compared with a 35.0% rate in
the comparable quarter last year.
Beringer Wine Estates
Income Statement
Nine Months Ended March 31, 1998
(in thousands, except per share data)
Pro Forma (1) As Reported
1998 1997 1998 1997
Net revenue $237,355 $200,530 $237,355 $200,530
Cost of goods sold (2) 115,548 100,532 138,314 133,685
Gross profit (2) 121,807 99,998 99,041 66,845
Operating expenses 69,828 57,643 69,828 57,643
Operating income (2) 51,979 42,355 29,213 9,202
Interest and other expense (net) 16,067 19,166 16,067 19,166
Pre-tax income (loss) (2) 35,912 23,189 13,146 (9,964)
Income taxes (benefit) (3) 13,183 8,116 3,847 (4,794)
Net income (loss) before
extraordinary items 22,729 15,073 9,299 (5,170)
Preferred dividends and
discount accretion 1,889 3,650 1,889 3,650
Accelerated accretion
of remaining discount (4) -- -- 2,476 --
Net income (loss) available
to common shareholders
before extraordinary items 20,840 11,423 4,934 (8,820)
Extraordinary items, net of tax (5) -- -- 3,317 --
Net income (loss) to
common shareholders $20,840 $11,423 $1,617 $(8,820)
Weighted average shares
Diluted shares outstanding 17,472 13,239 17,472 11,849
Earnings (loss) per share $1.19 $0.86 $0.09 $(0.74)
(1) In accordance with purchase accounting rules applied to the
acquisition of Beringer Wine Estates in 1996 and to the
subsequent acquisitions of Chateau St. Jean and Stags' Leap,
inventory of each acquired company was increased to fair market
value. This inventory step-up generates non-cash charges to cost
of goods sold as the inventory on hand at the acquisition date is
sold.
The pro forma income statements for the nine months ended March
31, 1998 and 1997 reflect the comparative consolidated financial
data adjusted for the inventory step-up charges as well as the
one-time expenses referred in notes (4) and (5).
(2) For the nine months ended March 31, 1998 and 1997, cost of goods
sold was reduced and gross profit, operating income and income
before taxes were effectively increased in the pro forma income
statements by $22.8 million and $33.2 million, respectively, as a
result of the adjustment for inventory step-up charges.
(3) For the nine months ended March 31, 1998 and 1997, pro forma
income taxes have been computed on pre-tax income adjusted for
the inventory step-up charges. A pro forma tax rate of 36.7% has
been applied for the current nine months with a tax rate of 35.0%
applied for the comparable period last year.
(4) The early redemption of the Series A Preferred Stock resulted in
a one-time $2,478 reduction of net income to common stockholders,
which represents the difference on the redemption date between
the carrying amount and the redemption amount of the Series A
Preferred Stock.
(5) Proceeds from the public offering allowed the company to retire
all of the outstanding subordinated notes. The prepayment penalty
and write-off of the remaining original issue discount resulted
in an extraordinary tax-effected charge of $3.3 million.
Beringer Wine Estates
Selected Balance Sheet Information
(in millions)
March 31, 1998 June 30, 1997
Current Assets $289.8 $247.5
Current Liabilities $42.5 $37.8
Total Liabilities $349.2 $388.9
Shareholders' Equity $179.1 $44.0
Working Capital $247.3 $209.7
Total Debt (1) $275.6 $319.1
(1) March 31 balances include senior debt (line of credit and
long-term debt) reduced at the time of the IPO while the June 30
balance includes subordinated debt that was paid off in full at
the time of the IPO.
CONTACT: Beringer Wine Estates Holdings Inc. Tor Kenward/Mora Cronin Cronin is a surname, and may refer to
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