-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SRfObpV/lxtyjnG05mmKiCnwnrA4NthILKsCxVLoQ5E/d31NI7lrv1RDVUUJrUn4 WgVk8DlyL8zxds9b3slU1Q== 0000950149-97-000296.txt : 19970314 0000950149-97-000296.hdr.sgml : 19970314 ACCESSION NUMBER: 0000950149-97-000296 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970213 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONDAVI ROBERT CORP CENTRAL INDEX KEY: 0000902276 STANDARD INDUSTRIAL CLASSIFICATION: 2080 IRS NUMBER: 942765451 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-61516 FILM NUMBER: 97529678 BUSINESS ADDRESS: STREET 1: 7801 ST HELENA HWY STREET 2: PO BOX 106 CITY: OAKVILLE STATE: CA ZIP: 94562 BUSINESS PHONE: 7072599463 MAIL ADDRESS: STREET 1: 7801 ST HELENA HWY CITY: OAKVILLE STATE: CA ZIP: 94562 10-Q 1 FORM 10-Q FOR PERIOD ENDED 12/31/96 1 =============================================================================== U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended December 31, 1996 ------------------------------------------- or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------------------- ------------------- Commission File Number: 33-61516 ---------------------------------------------------- THE ROBERT MONDAVI CORPORATION Incorporated under the laws I.R.S. Employer Identification: of the State of California 94-2765451 Principal Executive Offices: 7801 St. Helena Highway Oakville, CA 94562 Telephone: (707) 259-9463 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of January 31, 1997 there were issued and outstanding 7,389,405 shares of the issuer's Class A Common Stock and 7,676,012 shares of the issuer's Class B Common Stock. =============================================================================== 2 PART I ITEM 1. FINANCIAL STATEMENTS. THE ROBERT MONDAVI CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
ASSETS December 31, June 30, 1996 1996 --------- --------- Unaudited Current assets: Cash and cash equivalents $ - - $ - - Accounts receivable--trade, net 46,215 39,495 Advances to joint ventures 55 118 Inventories 182,144 142,565 Prepaid income taxes - - 2,370 Deferred income taxes 1,855 570 Prepaid expenses and other current assets 2,465 722 -------- -------- Total current assets 232,734 185,840 Property, plant and equipment, net 174,411 156,754 Investments in joint ventures 19,546 17,100 Other assets 1,722 1,501 -------- -------- Total assets $428,413 $361,195 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Book overdraft $ 2,086 $ 403 Accounts payable--trade 31,061 13,733 Accrued payroll, bonuses and benefits 10,237 10,322 Other accrued expenses 4,535 2,828 Current portion of long-term debt 6,954 4,115 Income taxes payable 3,964 - - Deferred revenue 1,561 1,682 -------- -------- Total current liabilities 60,398 33,083 Long-term debt, less current portion 143,805 123,713 Deferred income taxes 9,804 8,944 Deferred executive compensation 6,762 6,098 Other liabilities 2,980 1,102 -------- -------- Total liabilities 223,749 172,940 -------- -------- Commitments and contingencies Shareholders' equity: Preferred Stock: Authorized--5,000,000 shares Issued and outstanding--no shares - - - - Class A Common Stock, without par value: Authorized--25,000,000 shares Issued and outstanding--7,374,355 and 7,281,529 shares 74,603 73,402 Class B Common Stock, without par value: Authorized--12,000,000 shares Issued and outstanding--7,676,012 and 7,676,012 shares 12,324 12,324 Paid-in Capital 2,004 1,334 Retained earnings 115,733 101,195 -------- -------- 204,664 188,255 -------- -------- Total liabilities and shareholders' equity $428,413 $361,195 ======== ========
See Notes to Consolidated Financial Statements. 2 3 THE ROBERT MONDAVI CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except per share data)
Three Months Ended Six Months Ended December 31, December 31, ------------------- --------------------- 1996 1995 1996 1995 ------- ------- -------- -------- Gross revenues $91,669 $74,761 $153,863 $122,650 Less excise taxes 4,472 3,975 7,682 6,303 ------- ------- -------- -------- Net revenues 87,197 70,786 146,181 116,347 Cost of goods sold 49,157 36,644 82,525 60,112 ------- ------- -------- -------- Gross profit 38,040 34,142 63,656 56,235 Selling, general and administrative expenses 21,039 19,500 37,405 33,796 ------- ------- -------- -------- Operating income 17,001 14,642 26,251 22,439 Other income (expense): Interest (2,627) (2,012) (4,993) (4,053) Equity in net income of joint ventures 992 772 3,084 2,250 Other (258) (62) (509) 251 ------- ------- -------- -------- Income before income taxes 15,108 13,340 23,833 20,887 Provision for income taxes 5,893 5,281 9,295 8,271 ------- ------- -------- -------- Net income $ 9,215 $ 8,059 $14,538 $ 12,616 ======= ======= ======= ======== Earnings per share $ .59 $ .52 $ .93 $ .84 ======= ======= ======= ======== Weighted average number of common shares and equivalents outstanding 15,606 15,395 15,564 14,967 ======= ======= ======= ========
See Notes to Consolidated Financial Statements. 3 4 THE ROBERT MONDAVI CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands)
Six Months Ended December 31, ---------------------- 1996 1995 -------- --------- Cash flows from operating activities: Net income $ 14,538 $ 12,616 Adjustments to reconcile net income to net cash used in operating activities: Deferred income taxes (425) 253 Depreciation and amortization 5,908 4,616 Equity in net income of joint ventures (3,084) (2,250) Other 141 181 Changes in assets and liabilities: Accounts receivable--trade (6,720) (2,592) Inventories (39,607) (44,111) Other assets 979 (224) Accounts payable--trade and accrued expenses 18,950 17,674 Income taxes payable 3,964 2,718 Deferred revenue (121) (39) Deferred executive compensation 664 880 Other liabilities 1,878 1,439 -------- -------- Net cash used in operating activities (2,935) (8,839) -------- -------- Cash flows from investing activities: Acquisitions of property, plant and equipment (23,532) (17,134) Distributions from joint ventures 792 3,019 Contributions to joint ventures (235) (207) -------- -------- Net cash used in investing activities (22,975) (14,322) -------- -------- Cash flows from financing activities: Book overdraft 1,683 2,494 Proceeds from issuance of long-term debt 50,000 17,868 Principal repayments of long-term debt (27,069) (34,317) Proceeds from issuance of Class A Common Stock - - 35,401 Exercise of Class A Common Stock options 1,075 551 Other 95 264 -------- -------- Net cash provided by financing activities 25,910 22,261 -------- -------- Net decrease in cash and cash equivalents - - (900) Cash and cash equivalents at the beginning of the period - - 900 -------- -------- Cash and cash equivalents at the end of the period $ - - $ - - ========= ========
See Notes to Consolidated Financial Statements. 4 5 THE ROBERT MONDAVI CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1--BASIS OF PRESENTATION: In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (which include only normal recurring adjustments) necessary to present fairly the Company's financial position at December 31, 1996, its results of operations for the three and six month periods ended December 31, 1996 and 1995 and its cash flows for the six month periods ended December 31, 1996 and 1995. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from the accompanying consolidated financial statements. For further information, reference should be made to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K (the 10-K) for the fiscal year ended June 30, 1996, on file at the Securities and Exchange Commission. NOTE 2--INVENTORIES: Inventories consist of the following (in thousands):
December 31, June 30, 1996 1996 ------------ -------- Wine in production $143,520 $ 95,747 Bottled wine 53,221 46,247 Supplies and crop costs 7,491 13,097 -------- -------- Inventories stated at FIFO cost 204,232 155,091 Reserve for LIFO valuation method (22,088) (12,526) -------- -------- $182,144 $142,565 ======== ========
Information related to the FIFO method may be useful in comparing operating results to those of companies not on LIFO. If inventories valued at LIFO cost had been valued at FIFO cost, net income would have increased by approximately $3.4 million and $5.8 million, respectively, for the three months and six months ended December 31, 1996 and decreased by $98,000 and $431,000, respectively, for the three months and six months ended December 31, 1995. 5 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. THREE MONTHS ENDED DECEMBER 31, 1996. GROSS REVENUES. Gross revenues increased by 22.6% to $91.7 million in the second quarter of fiscal 1997 from $74.8 million in the second quarter of fiscal 1996. The increase in gross revenues was primarily attributable to a 13.1% increase in sales volume to 1,894,000 cases in the second quarter of fiscal 1997 from 1,674,000 cases in the second quarter of fiscal 1996. EXCISE TAXES. The Company's federal and state excise taxes increased by 12.5% to $4.5 million in the second quarter of fiscal 1997 from $4.0 million in the second quarter of fiscal 1996. The dollar increase in excise taxes generally correlates to the increase in sales volume, since the excise tax is assessed on a per gallon basis and the excise tax rate is unchanged from the prior year. NET REVENUES. As a result of the above factors, net revenues increased by 23.2% to $87.2 million in the second quarter of fiscal 1997 from $70.8 million in the second quarter of fiscal 1996. Net revenues per case increased by 9.2% in the second quarter of fiscal 1997 compared to the second quarter of fiscal 1996, primarily due to a shift in sales mix to Robert Mondavi Coastal wines and price increases on certain brands. COST OF GOODS SOLD. Cost of goods sold increased by 34.1% to $49.2 million in the second quarter of fiscal 1997 from $36.6 million in the second quarter of fiscal 1996, primarily due to increased sales volume and higher grape and bulk wine costs. If inventories valued at LIFO cost had been valued at FIFO cost, then cost of goods sold would have been $5.6 million lower and $162,000 higher, respectively, in the second quarter of fiscal 1997 and 1996. GROSS PROFIT. Gross profit increased by 11.4% to $38.0 million in the second quarter of fiscal 1997 from $34.1 million in the second quarter of fiscal 1996. The Company's gross profit percentages for the second quarter of fiscal 1997 and 1996 were 43.6% and 48.2%, respectively. OPERATING EXPENSES. Operating expenses increased by 7.9% to $21.0 million in the second quarter of fiscal 1997 from $19.5 million in the second quarter of fiscal 1996. The ratio of operating expenses to net revenues was 24.1% in the second quarter of fiscal 1997 and 27.5% in the second quarter of fiscal 1996. The dollar increase in operating expenses was primarily attributable to an increase in sales and marketing expenses associated with increased sales volume. The improved operating expense ratio was due to economies of scale in personnel and overhead costs achieved as a result of increased net revenues and a decrease in the average promotional dollars spent per case. INTEREST. Interest expense increased by 30.6% to $2.6 million for the second quarter of fiscal 1997 from $2.0 million for the second quarter of fiscal 1996. This increase was primarily attributable to an increase in the Company's average borrowings that was partially offset by a decrease in the average interest rate. EQUITY IN NET INCOME OF JOINT VENTURES. Equity in net income of joint ventures was $992,000 in the second quarter of fiscal 1997 compared to $772,000 in the second quarter of fiscal 1996. PROVISION FOR INCOME TAXES. The provision for income taxes was $5.9 million in the second quarter of fiscal 1997 compared to $5.3 million in the second quarter of fiscal 1996. The Company's effective tax rate was 30.0% and 39.6%, respectively, in the second quarter of fiscal 1997 and 1996. 6 7 NET INCOME AND EARNINGS PER SHARE. As a result of the above factors, net income increased by 14.3% to $9.2 million in the second quarter of fiscal 1997 from $8.1 million in the second quarter of fiscal 1996. Earnings per share increased to $.59 in the second quarter of fiscal 1997 from $.52 in the second quarter of fiscal 1996. SIX MONTHS ENDED DECEMBER 31, 1996. GROSS REVENUES. Gross revenues increased by 25.4% to $153.9 million in the first six months of fiscal 1997 from $122.7 million in the first six months of fiscal 1996. The increase in gross revenues was primarily attributable to a 21.8% increase in sales volume to 3,262,000 cases in the first six months of fiscal 1997 from 2,679,000 cases in the first six months of fiscal 1996. Due to the limited supply of the Company's wines, sales volume growth is not expected to continue at this level for the remainder of the fiscal year. EXCISE TAXES. The Company's federal and state excise taxes increased by 21.9% to $7.7 million in the first six months of fiscal 1997 from $6.3 million in the first six months of fiscal 1996. The dollar increase in excise taxes generally correlates to the increase in sales volume, since the excise tax is assessed on a per gallon basis and the excise tax rate is unchanged from the prior year. NET REVENUES. As a result of the above factors, net revenues increased by 25.6% to $146.2 million in the first six months of fiscal 1997 from $116.3 million in the first six months of fiscal 1996. Net revenues per case increased by 3.3% in the first six months of fiscal 1997 compared to the first six months of fiscal 1996, reflecting price increases on certain brands. COST OF GOODS SOLD. Cost of goods sold increased by 37.3% to $82.5 million in the first six months of fiscal 1997 from $60.1 million in the first six months of fiscal 1996, primarily reflecting increased sales volume and higher grape and bulk wine costs. If inventories valued at LIFO cost had been valued at FIFO cost, then cost of goods sold would have been $9.6 million lower and $713,000 higher, respectively, in the first six months of fiscal 1997 and 1996. GROSS PROFIT. Gross profit increased by 13.2% to $63.7 million in the first six months of fiscal 1997 from $56.2 million in the first six months of fiscal 1996, primarily reflecting the increase in sales volume. The Company's gross profit percentages for the first six months of fiscal 1997 and 1996 were 43.5% and 48.3%, respectively. OPERATING EXPENSES. Operating expenses increased by 10.7% to $37.4 million in the first six months of fiscal 1997 from $33.8 million in the first six months of fiscal 1996. The ratio of operating expenses to net revenues was 25.6% in the first six months of fiscal 1997 and 29.0% in the first six months of fiscal 1996. The dollar increase in operating expenses was primarily attributable to an increase in sales and marketing expenses associated with increased sales volume. The improved operating expense ratio was due to economies of scale in personnel and overhead costs achieved as a result of increased net revenues and a decrease in the average promotional dollars spent per case. INTEREST. Interest expense increased by 23.2% to $5.0 million in the first six months of fiscal 1997 from $4.1 million in the first six months of fiscal 1996. This increase was primarily attributable to an increase in the Company's average borrowings that was partially offset by a decrease in the Company's average interest rate. EQUITY IN NET INCOME OF JOINT VENTURES. Equity in net income of joint ventures was $3.1 million in the first six months of fiscal 1997 compared to $2.3 million in the first six months of fiscal 1996. This increase was primarily attributable to improved income from the Opus One joint venture during the period. 7 8 Provision For Income Taxes. The provision for income taxes was $9.3 million in the first six months of fiscal 1997 and $8.3 million in the first six months of fiscal 1996. The Company's effective tax rate was 39.0% and 39.6%, respectively, for the first six months of fiscal 1997 and 1996. Net Income And Earnings Per Share. As a result of the above factors, net income increased to $14.5 million in the first six months of fiscal 1997 from $12.6 million in the first six months of fiscal 1996. Earnings per share increased to $.93 in the first six months of fiscal 1997 from $.84 in the first six months of fiscal 1996. LIQUIDITY AND CAPITAL RESOURCES. During the second quarter of fiscal 1997, the Company completed its 1996 harvest. The completion of harvest had a significant impact on the Company's balance sheet, including increases in inventories and amounts payable to external growers. Working capital as of December 31, 1996, was $172.3 million compared to $152.8 million at June 30, 1996. The $19.5 million increase in working capital was primarily attributable to a $40.0 million increase in inventories, that was partially offset by $20.2 million increase in grower accounts payable. The Company had a book overdraft of $2.1 million and $403,000 at December 31, 1996, and June 30, 1996, respectively. The Company has unsecured short-term and long-term credit lines that have a maximum credit availability of $41.2 million and $50.0 million, respectively, at January 1, 1997. During the first six months of fiscal 1997, the Company obtained $50.0 million of unsecured term loans. The proceeds from these loans were used to repay a portion of the Company's secured long-term debt and a portion of its unsecured credit lines of $18.9 million and $31.1 million, respectively. The Company anticipates that current capital combined with cash from operating activities and the availability of cash under its credit lines will be sufficient to meet its liquidity and capital expenditure requirements at least through the end of fiscal 1998. PART II Item 1. Legal Proceedings. The Company is subject to litigation in the ordinary course of its business. In the opinion of management, the ultimate outcome of existing litigation will not have a material adverse effect on the Company's consolidated financial condition or the results of its operations. Item 4. Submission of Matters to a Vote of Security Holders. The Company's Annual Meeting of Shareholders was held on November 4, 1996 at the Robert Mondavi Winery, Oakville, California. Two matters were submitted to a vote of shareholders: election of directors and ratification of Price Waterhouse LLP as the Company's independent auditors for the fiscal year ending June 30, 1997. Frank Farella, Philip Greer and James Barksdale were nominated as Class A directors. 6,393,119 Class A shares were voted for Mr. Farella and 89,180 shares were withheld. 6,342,689 Class A shares were voted for Mr. Greer and 139,610 shares were withheld. 6,394,980 Class A shares were voted for Mr. Barksdale and 87,319 shares were withheld. Accordingly, Mssrs. Farella, Greer and Barksdale were elected as Class A directors. Robert G. Mondavi, R. Michael Mondavi, Marcia Mondavi Borger, Timothy J. Mondavi, Clifford S. Adams and Bartlett R. Rhoades were nominated as Class B directors. 7,676,012 Class B shares were voted 8 9 for Robert G. Mondavi, R. Michael Mondavi, Marcia Mondavi Borger, Timothy J. Mondavi and Clifford S. Adams. 7,526,582 Class B shares were voted for Bartlett R. Rhoades and 149,430 shares were withheld. Accordingly, each of the Class B nominees was re-elected to the board. 6,474,420 Class A shares were voted in favor of the ratification of Price Waterhouse LLP, 6,184 shares were voted against and 1,695 shares abstained. 76,760,120 Class B votes were cast in favor of the ratification of Price Waterhouse LLP. Item 6. Exhibits and Reports on Form 8-K. 1) Exhibits: Exhibit 11 Statement re Computation of Per Share Earnings. 2) Form 8-K: No reports on Form 8-K were filed during the quarter ended December 31, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE ROBERT MONDAVI CORPORATION Dated: February 13, 1997 By /s/ GREGORY M. EVANS -------------------------------- Gregory M. Evans, Senior Vice President and Chief Financial Officer Forward-looking Statements The above form 10-Q and other information provided from time to time by the Company contain historical information as well as forward-looking statements about the Company, the premium wine industry and general business and economic conditions. Such forward-looking statements include, for example, projections or predictions about the Company's future growth, consumer demand for its wines, including new brands and brand extensions, margin trends, the premium wine grape market and the Company's anticipated future investment in vineyards and other capital projects. Actual results may differ materially from the Company's present expectations. Among other things, reduced consumer spending or a change in consumer preferences could reduce demand for the Company's wines. Similarly, competition from numerous domestic and foreign vintners could affect the Company's ability to sustain volume and revenue growth. The price of grapes, the Company's single largest product cost, is beyond the Company's control and higher grape costs may put more pressure on the Company's gross profit margin than is currently forecast. Interest rates and other business and economic conditions could increase significantly the cost and risks of projected capital spending. For additional cautionary statements identifying important factors that could cause actual results to differ materially from such forward-looking information, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1996, on file with the Securities and Exchange Commission. For these and other reasons, no forward-looking statement by the Company can nor should be taken as a guarantee of what will happen in the future. 9 EX-11 2 STATEMENT RE COMPUTATIONOF PER SHARE EARNINGS 1 THE ROBERT MONDAVI CORPORATION STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11 COMPUTATION OF PRIMARY EARNINGS PER SHARE
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, --------------------------- -------------------------- 1996 1995 1996 1995 ----------- ----------- ----------- ----------- Weighted average number of common shares outstanding during the period 15,010,697 14,760,933 14,985,539 14,390,655 Common Stock equivalents considered to be outstanding for periods presented: Options 595,276 633,630 578,049 576,765 ----------- ----------- ----------- ----------- 15,605,973 15,394,563 15,563,588 14,967,420 =========== =========== =========== =========== Net income $ 9,215,000 $ 8,059,000 $14,538,000 $12,616,000 =========== =========== =========== =========== Primary earnings per share $ .59 $ .52 $ .93 $ .84 =========== =========== =========== ===========
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, ---------------------- -------------------------- 1996 1995 1996 1995 ---------- ---------- ------------ ----------- Weighted average number of common shares outstanding during the period 15,010,697 14,760,933 14,985,539 14,390,655 Common Stock equivalents considered to be outstanding for periods presented: Options 641,240 634,127 643,822 634,006 ----------- ----------- ------------ ----------- 15,690,547 15,395,060 15,629,361 15,024,661 ----------- ----------- ------------ ----------- Net income $ 9,215,000 $ 8,059,000 $14,538,000 $12,616,000 =========== =========== =========== =========== Fully diluted earnings per share $ .59 $ .52 $ .93 $ .84 =========== =========== =========== ===========
EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 U.S.DOLLAR 6-MOS JUN-30-1997 JUL-01-1996 DEC-31-1996 1 0 0 46,215 0 182,144 232,734 251,001 76,590 428,413 60,398 143,805 0 0 86,927 117,737 428,413 146,181 146,181 82,525 82,525 37,405 0 4,993 23,833 9,295 14,538 0 0 0 14,538 .93 .93
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