EX-99 2 g67140ex99.txt PRESS RELEASE 1 Exhibit 99 FOR IMMEDIATE RELEASE BROWN-FORMAN REPORTS RECORD THIRD QUARTER EARNINGS LOUISVILLE, KY, February 15, 2001 - Brown-Forman Corporation reported record results for the quarter ended January 31, 2001, as net earnings rose 3% to $56.3 million, or $.82 per share. Operating income increased 4% over last year's third quarter, when sales were lifted by activity surrounding the 2000 millennium celebration. Quarterly results were adversely affected by expenses associated with the company's participation in the Seagram auction and continuing unfavorable exchange rates. Brown-Forman's year-to-date performance also reached record levels, as earnings for the nine months improved 8% on a 6% gain in gross profit. WINES & SPIRITS Beverage operating income grew 5% for the quarter, with segment earnings up 7% for the nine months ended January. Gross profit during the quarter improved 3%, while sales were even against last year's comparable period, which benefited from strong millennial business. Comparative results were diminished by a challenging December trading environment as well as unfavorable exchange rates. Brown-Forman's sales of used barrels to Scotch whisky distillers are also down substantially this year, reflecting a recent industry decline in the production of Scotch. Long-term measures for most of the company's premium brands remain healthy. Jack Daniel's continues to grow on a worldwide basis, but at a more moderate pace in the U.S. than last year. Year-to-date depletions (shipments from wholesalers to retailers) are also positive for Southern Comfort, Finlandia and Bolla. (more) 2 CONSUMER DURABLES Operating income for Brown-Forman's Consumer Durables segment improved 2% for the third quarter and was up 14% for the nine months ended January. Lenox Collections reported vibrant sales and profit growth for the quarter, while results for other consumer durable divisions generally trailed last year's performance. The outlook for full-year segment earnings growth has moderated to a range of 7% to 9%, largely due to lower expectations for Hartmann Luggage. OUTLOOK Brown-Forman's prospects for long-term growth remain positive, based upon favorable demographic trends and benefits from sustained brand investments. Signs of a slowing U.S. economy, Hartmann's recent weak performance and a continued movement toward lower beverage trade inventories suggest that the company's earnings growth rate will moderate for the balance of the fiscal year. Brown-Forman has also tempered its outlook for fiscal 2002 earnings growth to a rate in the high single-digit range. CONFERENCE CALL Brown-Forman will host a conference call to discuss its third quarter results at 10:00 a.m. EST on Thursday, February 15. All interested parties in the U.S. are invited to join the conference by dialing 888-624-9285 and asking for the Brown-Forman call. International callers should dial 706-679-3410 and ask for the Brown-Forman call. No password is required. The company suggests that participants dial in approximately ten minutes in advance of the 10:00 a.m. start of the conference call. A live audio broadcast of the conference call will also be available via Brown-Forman's Internet web site, www.brown-forman.com. Click on "Investor Information" to access the conference call. For those unable to participate in the live call, an audio recording of the conference call will be available on the web page approximately one hour later. (more) 3 Brown-Forman Corporation is a diversified producer and marketer of fine quality consumer products, including Jack Daniel's, Canadian Mist, Southern Comfort, Fetzer and Bolla wines, Korbel California Champagnes, Lenox, Dansk, Gorham tableware and giftware, and Hartmann Luggage. NOTE ON FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements that Brown-Forman is making in good faith, but which should not be interpreted as a guarantee that Brown-Forman will actually achieve the results indicated. In this connection, please refer to the risk factors identified in Part I, Item 2, on pages 9 and 10 of the company's Quarterly Report on Form 10-Q for the period ended October 31, 2000. (more) 4 BROWN-FORMAN CORPORATION LOUISVILLE, KENTUCKY CONSOLIDATED STATEMENTS OF INCOME (Dollars in millions, except per share amounts)
THREE MONTHS ENDED JANUARY 31, 2000 2001 CHANGE Net Sales $ 557.3 $ 559.4 -% Wine & Spirits 393.0 394.0 -% Consumer Durables 164.3 165.4 1% Gross Profit $ 283.8 $ 290.3 2% Wine & Spirits 203.1 209.0 3% Consumer Durables 80.7 81.3 1% Operating Income $ 87.1 $ 90.8 4% Wine & Spirits 74.0 77.5 5% Consumer Durables 13.1 13.3 2% Interest Expense, net 0.8 2.3 Income Before Income Taxes $ 86.3 $ 88.5 2% Taxes on Income 31.5 32.2 Net Income $ 54.8 $ 56.3 3% Earnings Per Share - Basic and Diluted $ 0.80 $ 0.82 3%
(more) 5 BROWN-FORMAN CORPORATION LOUISVILLE, KENTUCKY CONSOLIDATED STATEMENTS OF INCOME (Dollars in millions, except per share amounts)
NINE MONTHS ENDED JANUARY 31, 2000 2001 CHANGE Net Sales $ 1,635.9 $ 1,672.2 2% Wine & Spirits 1,175.3 1,188.5 1% Consumer Durables 460.6 483.7 5% Gross Profit $ 836.6 $ 885.3 6% Wine & Spirits 607.9 641.2 5% Consumer Durables 228.7 244.1 7% Operating Income $ 265.8 $ 287.4 8% Wine & Spirits 225.7 241.7 7% Consumer Durables 40.1 45.7 14% Interest Expense, net 4.2 6.1 Income Before Income Taxes $ 261.6 $ 281.3 8% Taxes on Income 95.5 102.4 Net Income $ 166.1 $ 178.9 8% Earnings Per Share - Basic and Diluted $ 2.42 $ 2.61 8%
(more) 6 BROWN-FORMAN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in millions)
THREE MONTHS ENDED NINE MONTHS ENDED JANUARY 31, JANUARY 31, 2000 2001 2000 2001 Net sales $ 557.3 $ 559.4 $1,635.9 $1,672.2 Excise taxes 62.9 64.1 191.6 192.3 Cost of sales 210.6 205.0 607.7 594.6 Gross profit 283.8 290.3 836.6 885.3 Advertising expenses 75.4 74.5 217.7 229.0 Selling, general, and administrative expenses 121.3 125.0 353.1 368.9 Operating income 87.1 90.8 265.8 287.4 Interest income 2.6 2.0 7.3 6.8 Interest expense 3.4 4.3 11.5 12.9 Income before income taxes 86.3 88.5 261.6 281.3 Taxes on income 31.5 32.2 95.5 102.4 Net income 54.8 56.3 166.1 178.9
(more) 7 BROWN-FORMAN CORPORATION SUPPLEMENTAL INFORMATION (Dollars in millions)
THREE MONTHS NINE MONTHS ENDED ENDED JANUARY 31, JANUARY 31, 2000 2001 2000 2001 EBITDA $ 101.6 $ 106.8 $ 310.6 $ 335.9 Depreciation and $ 14.5 $ 16.1 $ 44.8 48.5 Amortization Capital Expenditures $ 18.5 $ 24.0 $ 48.9 $ 74.1 Effective Tax Rate 36.5% 36.4% 36.5% 36.4% Shares (in thousands) used in the calculation of earnings per share - Basic 68,510 68,460 68,509 68,482 - Diluted 68,573 68,599 68,585 68,563
These figures have been prepared in accordance with the company's customary accounting practices. # # #