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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)

x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2004

OR

o
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 001-08495
 
 
CONSTELLATION BRANDS, INC.
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
  
16-0716709
(State or other jurisdiction of
incorporation or organization)
  
(I.R.S. Employer
Identification No.)
 
 
370 Woodcliff Drive, Suite 300, Fairport, New York
14450
(Address of principal executive offices)
(Zip Code)
 
 
(585) 218-3600
(Registrant’s telephone number, including area code)
 
 
(Former name, former address and former fiscal year, if changed since last report)


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  o

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x   No  o

The number of shares outstanding with respect to each of the classes of common stock of Constellation Brands, Inc., as of December 31, 2004, is set forth below:

 
Class
  
Number of Shares Outstanding
Class A Common Stock, Par Value $.01 Per Share
  
96,375,153
Class B Common Stock, Par Value $.01 Per Share
  
11,980,530
 

 
 
     
 
 

PART I - FINANCIAL INFORMATION
 
           
Item 1.     Financial Statements
          
           
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
 
(in thousands, except share and per share data)
 
(unaudited)
 
   
November 30,
 
February 29,
  
   
2004
 
2004
 
ASSETS
         
CURRENT ASSETS:
             
Cash and cash investments
 
$
12,754
 
$
37,136
 
Accounts receivable, net
   
906,317
   
635,910
 
Inventories
   
1,443,430
   
1,261,378
 
Prepaid expenses and other
   
185,626
   
137,047
 
Total current assets
   
2,548,127
   
2,071,471
 
PROPERTY, PLANT AND EQUIPMENT, net
   
1,124,070
   
1,097,362
 
GOODWILL
   
1,562,762
   
1,540,637
 
INTANGIBLE ASSETS, net
   
748,106
   
744,978
 
OTHER ASSETS, net
   
96,819
   
104,225
 
Total assets
 
$
6,079,884
 
$
5,558,673
 
               
               
LIABILITIES AND STOCKHOLDERS' EQUITY
             
CURRENT LIABILITIES:
             
Notes payable to banks
 
$
226,058
 
$
1,792
 
Current maturities of long-term debt
   
85,838
   
267,245
 
Accounts payable
   
383,416
   
270,291
 
Accrued excise taxes
   
73,579
   
48,465
 
Other accrued expenses and liabilities
   
558,682
   
442,009
 
Total current liabilities
   
1,327,573
   
1,029,802
 
LONG-TERM DEBT, less current maturities
   
1,716,685
   
1,778,853
 
DEFERRED INCOME TAXES
   
206,429
   
187,410
 
OTHER LIABILITIES
   
159,954
   
184,989
 
STOCKHOLDERS' EQUITY:
             
Preferred Stock, $.01 par value-
  Authorized, 1,000,000 shares;
  Issued, 170,500 shares at November 30, 2004, and
  February 29, 2004 (Aggregate liquidation preference
  of $172,951 at November 30, 2004)
   
2
   
2
 
Class A Common Stock, $.01 par value-
  Authorized, 275,000,000 shares;
  Issued, 98,776,349 shares at November 30, 2004,
  and 97,150,219 shares at February 29, 2004
   
988
   
971
 
Class B Convertible Common Stock, $.01 par value-
  Authorized, 30,000,000 shares;
  Issued, 14,484,030 shares at November 30, 2004,
  and 14,564,630 shares at February 29, 2004
   
145
   
146
 
Additional paid-in capital
   
1,051,022
   
1,024,048
 
Retained earnings
   
1,231,676
   
1,010,193
 
Accumulated other comprehensive income
   
414,474
   
372,302
 
     
2,698,307
   
2,407,662
 
Less-Treasury stock-
             
Class A Common Stock, 2,482,058 shares at
  November 30, 2004, and 2,583,608 shares at
  February 29, 2004, at cost
   
(26,774
)
  
(27,786
)
Class B Convertible Common Stock, 2,502,900 shares
  at November 30, 2004, and February 29, 2004, at cost
   
(2,207
)
  
(2,207
)
     
(28,981
)
  
(29,993
)
Less-Unearned compensation-restricted stock awards
   
(83
)
  
(50
)
Total stockholders' equity
   
2,669,243
   
2,377,619
 
Total liabilities and stockholders' equity
 
$
6,079,884
 
$
5,558,673
 
               
The accompanying notes are an integral part of these statements.
 
 
  1  
 
 
 
 CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 
(in thousands, except per share data)
 
(unaudited)
 
   
   
For the Nine Months Ended November 30,
 
For the Three Months Ended November 30,
 
   
2004
 
2003
 
2004
 
2003
 
SALES
 
$
3,834,988
 
$
3,354,298
 
$
1,360,431
 
$
1,213,541
 
Less - Excise taxes
   
(785,031
)
  
(683,184
)
  
(274,720
)
  
(226,293
)
Net sales
   
3,049,957
   
2,671,114
   
1,085,711
   
987,248
 
COST OF PRODUCT SOLD
   
(2,196,148
)
  
(1,938,881
)
  
(772,047
)
  
(704,632
)
Gross profit
   
853,809
   
732,233
   
313,664
   
282,616
 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
   
(401,116
)
  
(348,428
)
  
(130,333
)
  
(113,333
)
RESTRUCTURING AND RELATED CHARGES
   
(4,426
)
  
(27,487
)
  
(1,644
)
  
(8,088
)
Operating income
   
448,267
   
356,318
   
181,687