Printer Friendly

BROWN-FORMAN REPORTS SECOND QUARTER EARNINGS

 LOUISVILLE, Ky., Nov. 23 /PRNewswire/ -- Brown-Forman Corporation (NYSE: BF.A BF.B) reported net income for the quarter ended October 31, 1993 of $62.5 million, or $2.27 per share, compared to $51.2 million, or $1.86 per share last year. Second quarter results included a gain of $.67 per share from the sale of Brown-Forman Enterprises, a credit card processing business. Recent legislation that increased corporate tax rates reduced earnings in the quarter by $.15 per share, including a non-cash charge to adjust the company's deferred tax liability. Excluding the gain from sale of business and the effect of higher taxes, second quarter earnings were $1.75 per share.
 Net income for the first six months of fiscal 1994 was $63.5 million, or $2.30 per share. Included in these results was a charge of $1.03 per share relating to the adoption of new accounting standards dealing with postretirement and postemployment benefits recorded in the first quarter. Adjusted for the three unusual items affecting the current year -- sale of business, higher tax rate legislation, and adoption of new accounting standards -- earnings for the first six months were $2.81 per share compared to $3.13 per share last year.
 Owsley Brown II, President and Chief Executive Officer, commented that lower operating results for the first half of the year were due primarily to a decline in profits from Jack Daniel's Country Cocktails and promotional costs for the introduction of Southern Comfort Cocktails. Last year's first half benefited from very strong introductory sales of Jack Daniel's Country Cocktails caused by high rates of consumer trial and the initial building of trade inventories. Brown stated that first half earnings were below earlier expectations as a result of sluggish beverage sales, but that the company remains positive in its outlook for improved second half earnings. As a consequence of lower than anticipated results for the first six months, it is no longer certain that Brown-Forman's full-year net income -- excluding the gain from sale of business, the effects of new tax legislation, and the charge for new accounting standards -- will improve from last year's level.
 Sales of the company's wines and spirits segment were down 1 percent for the first six months, largely reflecting lower sales of Jack Daniel's Country Cocktails. First half sales were boosted by Fetzer Vineyards, acquired by Brown-Forman in August 1992, and by worldwide volume gains for Jack Daniel's Black Label. Sales of Brown-Forman's other beverage brands generally declined from last year's level.
 Sales of consumer durables for the first half of the year were unchanged. Lenox china sales were up, reflecting strong pre-holiday orders and successful new product introductions. The company is also realizing benefits from improved manufacturing efficiencies and reduced working capital requirements. However, weak market conditions and competitive discounting continued to depress operating results for Lenox retail stores, where same-store sales were down from last year.
 With the October 15 sale of the company's credit card processing organization, Brown-Forman realized a pre-tax gain of $30.1 million from a very successful venture investment. Costs to develop Brown-Forman Enterprises were charged against operating earnings over the past five years, and cash proceeds from the sale resulted in a high return on those investments.
 Brown-Forman Corporation is a diversified producer and marketer of fine quality consumer products, including Jack Daniel's Tennessee Whiskey, Canadian Mist, Southern Comfort, Korbel California Champagnes, Fetzer Vineyard California Wines, Lenox China and Crystal, Dansk International Designs, Gorham Silver, Crystal and China, and Hartmann Luggage.
 BROWN-FORMAN CORPORATION
 LOUISVILLE, KENTUCKY
 CONSOLIDATED STATEMENT
 (Expressed in thousands except per share amounts)
 THREE MONTHS ENDED
 OCTOBER 31,
 N (EKJ3 1992
 Net Sales $465,725 464,918
 Operating Income $ 76,175 83,048
 Gain on Sale of Business (A) $ 30,077 --
 Income Before Income Taxes $103,651 79,354
 Taxen?come(B) $ 41,136 28,122
 Net Income $ 62,515 51,232
 Earnings Per Share of Common Stock $ 2.27 1.86
 Average Shares of Common Stock 27,555 27,555
 Net Sales Less Excise Tax $395,986 392,755
 BROWN-FORMAN CORPORATION
 LOUISVILLE, KENTUCKY
 CONSOLIDATED STATEMENT
 (Expressed in thousands except per share amounts)
 SIX MONTHS ENDED
 OCTOBER 31,
 1993 1992
 Net Sales $855,380 862,032
 Operating Income $124,552 139,224
 Gain on Sale of Business (A) $ 30,077 --
 Income Before Income Taxes $149,067 133,507
 Taxes on Income (B) $ 57,098 47,077
 Income Before Cumulative Effect
 of Changes in Accounting Principles (C) $ 91,969 86,430
 Cumulative Effect of Changes in
 Accounting Principles (C) $ 28,442 --
 Net Income $ 63,527 86,430
 Earnings Per Share of Common Stock:
 Income Before Cumulative Effect of
 Changes in Accounting Principles (C) $ 3.33 3.13
 Cumulative Effect of Changes in
 Accounting Principles (C) $ 1.03 --
 Net Income $ 2.30 3.13
 Average Shares of Common Stock 27,555 27,555
 Net Sales Less Excise Tax $718,442 719,191


NOTES: (A) In October 1993, the company sold its credit card processing business resulting in a pretax gain of approximately $30,077,000 ($18,350,000 or $.67 per share after-tax).
 (B) Taxes on Income for the second quarter of fiscal 1994 includes a $4,220,000 (or $.15 per share) charge resulting from the increase in corporate income tax rate.
 (C) On May 1, 1993, the company adopted Statements of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," and No. 112, "Employers' Accounting for Postemployment Benefits." The adoption of these standards resulted in a pretax charge totaling $46,501,000 ($28,442,000 or $1.03 per share after-tax.) The charge to net income from adopting these accounting standards was recorded as the cumulative effect of changes in accounting.
 These figures have been prepared in accordance with the company's customary accounting practices and have not been audited.
 -0- 11/23/93
 /CONTACT: Larry Probus, Vice President, Corporate Development, of Brown-Forman Corporation, 502-774-7441/
 (BF)


CO: Brown-Forman Corporation ST: Kentucky IN: FOD SU: ERN

SB -- CH004 -- 7275 11/23/93 12:46 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Nov 23, 1993
Words:1001
Previous Article:RHODE ISLAND CONSULTING FIRM DISCOVERS UNTAPPED MARKET: SAVES MONEY, SAVES JOBS, COSTS NOTHING
Next Article:OLYMPIC FINANCIAL LTD. ANNOUNCES OFFERING OF CUMULATIVE CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters