Brown-Forman Completes Sale of Lenox for $196 Million; Company Recognizes Additional Non-Cash Charge in First Quarter Results.LOUISVILLE, Ky. -- Brown-Forman Corporation The Brown-Forman Corporation is one of the largest American-owned companies in the spirits and wine business, and is a diversified producer and marketer of various consumer products. Headquartered in Louisville, Kentucky, Brown-Forman employs 3,350. (NYSE NYSE See: New York Stock Exchange : BFB BFB Bubbling Fluidized Bed BFB Bromofluorobenzene BFB Blood for Blood (Band) BFB Broken Family Band BFB Balanced Failure Biasing BFB Biker Friendly Bar BFB Big Freakin' Baby (polite form) ) announced today the completion of the sale of substantially all of Lenox, Inc. to Department 56, Inc. of Eden Prairie, Minnesota The creator of this article, or someone who has substantially contributed to it, may have a conflict of interest regarding its subject matter. It may require cleanup to comply with Wikipedia's content policies, particularly neutral point of view. for $196 million in cash (subject to a post-closing working capital adjustment). This total is $6 million higher than previously announced due to a working capital adjustment provision included in the sale agreement. "While this transaction marks the end of 22 years of ownership by Brown-Forman, we believe these historically significant tabletop brands will be a good strategic fit with Department 56 and are likely to reach their full potential in its hands," stated Paul Varga, Brown-Forman's president and chief executive officer. Brown-Forman has retained ownership of the Lenox headquarters property and building located in Lawrenceville, New Jersey Lawrenceville is a census-designated place and unincorporated area located within Lawrence Township in Mercer County, New Jersey. As of the United States 2000 Census, the CDP population was 4,081. Lawrenceville is located roughly halfway between Princeton and Trenton. and Lenox's Brooks and Bentley subsidiary in the United Kingdom. The company expects to sell both of these assets. DISCONTINUED OPERATIONS Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. In connection with the transaction, Brown-Forman recognized in the quarter ended July 31, 2005 a non-cash impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge and transaction fees of $0.54 per share, versus the previously announced $0.32 per share. This additional $0.22 per share charge is due to the non-cash write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of previously deferred losses related to underfunded pension plans Underfunded pension plan A pension plan that has a negative surplus (i.e., liabilities exceed assets). included in the transaction. The company has reflected the above change in its first quarter results in its SEC Form 10-Q Form 10-Q See 10-Q. filed on September 1, 2005 and in the attached amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. quarterly consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge . This incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. impairment reduces previously announced earnings per share but does not affect cash flows from the Lenox transaction or the first quarter earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the announced by the company on August 24, 2005. The estimated full year effect of the Lenox transaction is now expected to be a $0.54 - $0.60 per share reduction in fiscal 2006 results from discontinued operations, as additional transaction advisory fees and final accounting adjustments are recorded in the second quarter.(1) OUTLOOK FOR CONTINUING OPERATIONS Brown-Forman's full year outlook for earnings from continuing operations is unchanged at $2.70 to $2.80 per share, representing 12% to 17% growth over comparable prior year results. This outlook does not include any results associated with Lenox, but does include a net gain of $0.05 per share associated with the previously disclosed sale of distribution rights for the Glenmorangie family of brands. Brown-Forman Corporation is a diversified diversified (di·verˑ·s producer and marketer of fine quality consumer products, including Jack Daniel's For the running coach, see . For the British car engineer, see . For the American politician, see . Jack Daniel's is a Tennessee whiskey distillery and brand known for its rectangular bottles and black label. , Southern Comfort, Finlandia Vodka Finlandia is a Finnish vodka produced from six-row barley. Of all Finnish alcohol products, it is the brand name that most foreigners associate with the country. Finlandia was launched in Scandinavia in 1970 and in the United States in 1971. , Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. Mist, Fetzer and Bolla Wines, Korbel California Champagnes, and Hartmann Luggage LUGGAGE. Such things as are carried by a traveller, generally for his personal accommodation; baggage. In England this word is generally used in the same sense that baggage is used in the United States. See Baggage. . IMPORTANT NOTE ON 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. : This news release contains statements, estimates, or projections that constitute "forward-looking statements" as defined under U.S. federal securities laws. Generally, the words "expect," "believe," "intend," "estimate," "will," "anticipate," and "project," and similar expressions identify a forward-looking statement, which speaks only as of the date the statement is made. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. We believe that the expectations and assumptions with respect to our forward-looking statements are reasonable. But by their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that in some cases are out of our control. These factors could cause our actual results to differ materially from Brown-Forman's historical experience or our present expectations or projections. Here is a non-exclusive list of such risks and uncertainties: --changes in general economic conditions, particularly in 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. where we earn the majority of our profits; --lower consumer confidence or purchasing associated with the aftermath of hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. which occurred in August, 2005.
--a strengthening U.S. dollar against foreign currencies, especially the British Pound; --reduced bar, restaurant, hotel and travel business in wake of other terrorist attacks or threats, such as occurred in September, 2001 in the US and in July, 2005 in London. --lower consumer confidence or purchasing associated with rising oil prices; --effects from recent published trends suggesting a slight reduction in the growth rate of distilled spirits in the U.S. market; --developments in the class action lawsuits class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax filed against Brown-Forman and other spirits, beer and wine manufacturers alleging that our advertising causes illegal consumption of alcohol by those under the legal drinking age The legal drinking age is a limit assigned by governments to restrict the access of children and youth to alcoholic beverages. In most countries the legal age to purchase alcohol is at least 18, but there are notable exceptions. , or other attempts to limit alcohol marketing, through either litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or regulation; --a dramatic change in consumer preferences, social trends or cultural trends that results in the reduced consumption of our premium spirits brands; --tax increases, whether at the federal or state level; --changes in distribution arrangements in major markets; --increases in the price of raw materials including grapes Grapes - A Modula-like system description language. E-mail: <peter@cadlab.cadlab.de>. ["GRAPES Language Description. Syntax, Semantics and Grammar of GRAPES-86", Siemens Nixdorf Inform, Berlin 1991, ISBN 3-8009-4112-0]. , grain, wood, and plastic; --continued depressed retail prices and margins in our wine business because of our excess wine inventories, existing grape contract obligations, and a world-wide oversupply o·ver·sup·ply n. pl. o·ver·sup·plies A supply in excess of what is appropriate or required. tr.v. o·ver·sup·plied, o·ver·sup·ply·ing, o·ver·sup·plies of grapes. (1) The previously disclosed expectation of a $0.13 per share postretirement curtailment Curtailment The act of contracting or reducing operations of a company in the hope of bringing it financial or operational stability. This management technique is often used when a company has grown too fast and is unable to effectively manage its operations. gain in the second quarter will not occur.
Brown-Forman Corporation
Consolidated Statements of Income
(Dollars in millions, except per share amounts)
Three Months Ended
July 31,
2004 2005 Change
----- ----- ------
Continuing Operations
Net sales $481.3 $547.5 14%
Gross profit 253.4 303.0 20%
Advertising expenses 61.6 72.3 17%
Selling, general, and
administrative expenses 96.3 110.3 14%
Other expense (income), net (0.4) (13.7)
Operating income 95.9 134.1 40%
Interest expense, net 4.9 2.6
Income before income taxes 91.0 131.5 44%
Income taxes 31.2 43.6
Net income 59.8 87.9 47%
Earnings per share:
Basic 0.49 0.72 47%
Diluted 0.49 0.71 46%
Discontinued Operations
Net loss $(8.6) $(75.1)(a)
Loss per share:
Basic (0.07) (0.62)(a)
Diluted (0.07) (0.61)(a)
Total Company
Net income $51.2 $12.8(a) (75%)(a)
Earnings per share:
Basic 0.42 0.10(a) (75%)(a)
Diluted 0.42 0.10(a) (75%)(a)
(a) Results have been revised from the company's first quarter
earnings release dated August 24, 2005.
Brown-Forman Corporation
Condensed Consolidated Balance Sheets
(Dollars in millions)
April 30, July 31,
2005 2005
------- -------
Assets:
Cash and cash equivalents $ 294.9 $ 265.3
Accounts receivable, net 295.9 321.0
Inventories 469.9 488.0
Current assets held for sale 157.6 176.6
Other current assets 96.9 89.4
------- -------
Total current assets 1,315.2 1,340.3
Property, plant, and equipment, net 417.9 414.2
Trademarks and brand names 334.2 331.5
Goodwill 192.7 188.5
Noncurrent assets held for sale 217.9 154.9(a)
Other assets 171.2 167.3
------- -------
Total assets $2,649.1 $2,596.7(a)
======= =======
Liabilities:
Accounts payable and accrued expenses $ 264.2 $ 227.1
Accrued income taxes 41.9 75.1
Dividends payable -- 29.9
Current portion of long-term debt 279.3 249.3
Current liabilities held for sale 52.7 63.8
------- -------
Total current liabilities 638.1 645.2
Long-term debt 351.5 351.6
Deferred income taxes 157.8 155.2
Accrued postretirement benefits 77.6 79.4
Noncurrent liabilities held for sale 82.9 84.7
Other liabilities 31.2 18.4
------- -------
Total liabilities 1,339.1 1,334.5
Stockholders' equity 1,310.0 1,262.2(a)
------- -------
Total liabilities and
stockholders' equity $2,649.1 $2,596.7(a)
======= =======
(a) Results have been revised from the company's first quarter
earnings release dated August 24, 2005.
Brown-Forman Corporation
Condensed Consolidated Statements of Cash Flows
(Dollars in millions)
Three Months Ended
July 31,
2004 2005
----- -----
Cash provided by operating activities $79.2 $33.7
Cash flows from investing activities:
Additions to property, plant, and equipment (9.3) (8.6)
Other (0.4) (0.5)
----- -----
Cash used for investing activities (9.7) (9.1)
Cash flows from financing activities:
Net decrease in debt (33.0) (30.0)
Dividends paid (25.9) (29.9)
Other 5.7 5.7
----- -----
Cash used for financing activities (53.2) (54.2)
Net increase (decrease) in
cash and cash equivalents 16.3 (29.6)
Cash and cash equivalents, beginning of period 67.7 294.9
----- -----
Cash and cash equivalents, end of period $84.0 $265.3
===== =====
Brown-Forman Corporation
Continuing Operations Only
Supplemental Information
(Dollars in millions, except per share amounts)
Three Months Ended
July 31,
2004 2005
------ ------
Depreciation and amortization $10.2 $10.7
Excise taxes $82.0 $97.7
Effective tax rate 34.3% 33.2%
Cash dividends paid per common share $0.2125 $0.245
Shares (in thousands) used in the
calculation of earnings per share
- Basic 121,693 121,945
- Diluted 122,414 123,161
These figures have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the company's customary accounting practices. |
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