OAKVILLE, CA -- 01/29/2004 -- The Robert Mondavi Corporation (NASDAQ: MOND) today announced results for its second quarter of fiscal 2004.
The company reported net income of $9.4 million, or $0.57 per diluted share, for the quarter ended December 31, 2003, compared to net income of $9.7 million, or $0.59 per diluted share, a year ago. Included in the quarter's result is an after-tax asset impairment charge of $3.9 million, or $0.23 per diluted share, related to the anticipated sale of the Caliterra brand and assets to Vina Errazuriz, the company's joint venture partner in Chile. Included in last year's quarterly results is an after-tax asset impairment charge of $2.0 million, or $0.12 per diluted share, related to the sale of a vineyard. Net revenues for the quarter increased 4 percent from the same period last year to $147.3 million, reflecting a 3 percent increase in shipment volume and positive mix from strong sales of Robert Mondavi Winery, Robert Mondavi Private Selection and new brands.
"Excluding the asset impairment charges in each year, we saw a 12.7 percent improvement in earnings per share, and reasonable top line growth. The retail marketplace remains very competitive as many producers continue to work through excess supply," said Gregory M. Evans, President and CEO. "Now, more than ever, we remain committed to investing in our core businesses, delivering new products to market and actively reducing costs."
Evans added, "As these marketplace conditions persist into the second half of our fiscal year, our earnings guidance remains unchanged, except for the Caliterra charge taken during the quarter."
The company expects second half earnings to be skewed towards the fourth quarter. Third quarter earnings per share are expected to be in the range of $0.01 to $0.05. This includes $0.07 per share in incremental operating expenses for compensation for the company's new non-executive Chairman of the Board, restricted stock units to be granted in the quarter, and outside services related to Sarbanes-Oxley section 404 compliance. Of the $0.07 per share, $0.04 per share will be non-recurring expenses.
Robert Mondavi Corporation produces and markets fine wines under the following labels: Robert Mondavi Winery, Robert Mondavi Private Selection, La Famiglia di Robert Mondavi, Woodbridge Winery, Byron Vineyards & Winery, Io, Arrowood Vineyards & Winery and Grand Archer by Arrowood. The company also produces Opus One, in partnership with the Baroness Philippine de Rothschild of Chateau Mouton Rothschild of Bordeaux, France; Luce, Lucente, Danzante and the wines of Tenuta dell'Ornellaia, in partnership with the Marchesi de' Frescobaldi of Tuscany, Italy; and Sena and Arboleda, in partnership with the Eduardo Chadwick family of Vina Errazuriz in Chile. Kirralaa, the first Australian wines produced by Robert Mondavi in partnership with Southcorp and Rosemount's Oatley family, were introduced in February 2003. In addition to the partnership wines, Robert Mondavi Imports represents the wines of Marchesi de' Frescobaldi, Attems, Vina Errazuriz and Vina Caliterra in the United States.
On April 22, 2004, Robert Mondavi will release its third quarter fiscal 2004 earnings, followed by a conference call at 7:30 a.m. PT. A live listen-only web cast and a copy of the prepared remarks of the conference call will be available at www.robertmondavi.com under "Investor Relations."
ROBERT MONDAVI FINANCIAL HIGHLIGHTS (In thousands, except per share data) Three Months Ended Six Months Ended December 31, December 31, ----------------- ------------------ 2003 2002 2003 2002 ---- ---- ---- ---- Cases sold 3,136 3,031 5,266 5,120 Net revenues $ 147,341 $ 141,094 $ 251,278 $ 239,700 Cost of goods sold 87,802 81,759 149,726 139,716 Gross profit 59,539 59,335 101,552 99,984 Gross profit % 40.4% 42.1% 40.4% 41.7% Operating expenses 35,904 36,716 64,634 66,622 Special charges - 3,110 - 3,110 Operating income 23,635 19,509 36,918 30,252 Other (income) expense: Interest 5,660 5,534 11,200 10,826 Equity loss (income) from joint ventures 3,549 (1,074) (4,457) (8,395) Other (427) (408) (187) (424) Income before income taxes 14,853 15,457 30,362 28,245 Income tax provision 5,421 5,718 11,082 10,450 Net income 9,432 9,739 19,280 17,795 Weighted average number of shares outstanding - Diluted 16,513 16,383 16,447 16,372 Earnings per share - Diluted $ 0.57 $ 0.59 $ 1.17 $ 1.09 Net cash flows from Operating Activities $ 15,605 $ 11,976 $ 30,951 $ 27,625 At 12/31/03 At 6/30/03 ----------- ----------- Current assets $ 545,015 $ 502,630 Total assets 995,694 961,177 Current liabilities 107,020 71,983 Total liabilities 521,087 510,183 Shareholders' equity 474,607 450,994 Working capital 437,995 430,647 Total debt 384,910 412,726
Forward-looking Statements
This announcement 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, anticipated future investment in vineyards and other capital projects, the premium wine grape market and the premium wine industry generally. Actual results may differ materially from the company's present expectations. Among other things, a soft economy, a downturn in the travel and entertainment sector, risk associated with continued worldwide conflicts, reduced consumer spending, or changes in consumer preferences could reduce demand for the company's wines. Similarly, increased competition or changes in tourism to our California properties could affect the company's volume and revenue growth outlook. The supply and price of grapes, the company's most important raw material, is beyond the company's control. A shortage of grapes might constrict the supply of wine available for sale and cause higher grape costs that put more pressure on gross profit margins. A surplus of grapes might allow for greater sales and lower grape costs, but it might also result in more competition and pressure on selling prices or marketing spending. Interest rates and other business and economic conditions could increase significantly the cost and risks of projected capital spending, which in turn could impact profit margins. 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, 2003, 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.
Contacts: Robert Philipps VP, Treasury & Investor Relations (707) 251-4850 Sandra Timpson Director, Public Relations (707) 968-2017