Exhibit 99.1
Coors Reports 2004 Third Quarter Results
GOLDEN, Colo., Oct. 28 /PRNewswire-FirstCall/ -- Adolph Coors Company
(NYSE: RKY) today announced higher consolidated net sales and net income on
lower consolidated sales volume for the third quarter of 2004.
For the 13-week quarter ended September 26, 2004, the company achieved
consolidated net sales of $1.10 billion, a 5.3 percent increase from third
quarter 2003. Third quarter 2004 sales volume totaled 8,559,000 U.S. barrels, or
10,043,650 hectoliters (HLs), a 2.4 percent decrease from 2003. Third quarter
operating income was $103.9 million, down 5.0 percent from the same period a
year ago. Consolidated third quarter 2004 net income was $64.1 million, up 4.4
percent from third quarter 2003, and earnings per share were $1.68, equal to the
third quarter last year.
Leo Kiely, Coors Brewing Company (CBC) president and chief executive
officer, said, "Overall, the third quarter was a tough volume quarter for Coors
Brewing Company, with weak trends in both our Americas and Europe segments.
Nonetheless, our net income was higher due to improved beer pricing, one-time
non-operating income, a lower effective tax rate and favorable exchange rates
compared to the third quarter of last year.
"In Europe, our results in local currency were impacted substantially by
cold and very wet weather in the third quarter of this year compared with
unusually hot, dry weather in the same period last year. The negative impact of
lower volume and higher costs was offset partly by continued solid pricing gains
in the on-trade. Even with the volume challenges, our top-selling Carling brand
gained share during the quarter.
"In the Americas, sales to retail were down slightly, consistent with trends
earlier in the year. During the quarter, the entire beer category was challenged
by generally unfavorable weather in much of the U.S. Although Coors Light sales
declined at a low-single-digit rate, the brand's trends improved in several key
areas of the U.S. Americas cost of goods per barrel were higher, primarily due
to increases in transportation costs, lower sales volume and a sales mix shift
toward more expensive, higher-margin brands and packages, offset partially by
continued improvements in operations productivity.
"For the balance of 2004, we are focused on achieving a strong finish to the
year. In the U.S., we will be lapping significant volume declines and additional
costs related to our supply-chain disruptions in the fourth quarter of last
year. Our new systems are now running smoothly and have resulted in
substantially improved service to our distributors. In the U.K., in addition to
our expectations that positive on-trade pricing will continue, we believe volume
trends will improve from a difficult summer. On the other hand, if foreign
exchange rates remain at today's levels, we anticipate less currency benefit to
our U.K. financial results in the fourth quarter.
"We also continue to work toward closing our merger of equals with Molson.
The transaction has received U.S. and Canadian anti-trust clearance, and we have
filed a preliminary proxy statement for SEC review. This transaction will build
on the strengths of both companies, make us more competitive in the
consolidating global beer market and increase profits, cash flow and shareholder
value substantially in both the short and long term."
Americas Segment Results
Americas segment net sales increased 3.4 percent compared to the third
quarter 2003. Americas distributor sales to retail declined about 0.3 percent.
Third quarter 2004 sales volume totaled 5,922,000 U.S. barrels (6,949,230 HLs),
a 0.6 percent decrease from 2003. Americas segment pretax earnings were $83.1
million, up 14.4 percent from the third quarter 2003. Americas segment results
benefited from $4.9 million of accelerated royalty receipts from a coal mine
sold several years ago, a $0.8 million pretax gain on the sale of a warehouse
(both reported in other income), and $3.1 million of minority owners' income
attributable to the company's U.S. container joint ventures.
The company's business in Canada achieved pretax earnings of $17.5 million
in the third quarter 2004, up 15.9 percent from 2003, driven by increased beer
pricing and a 4.9 percent appreciation in the Canadian dollar versus the U.S.
dollar, which were partially offset by a low-single-digit decline in sales
volume. In the first three quarters of 2004, the company's Coors Light business
in Canada has achieved pretax earnings of $45.0 million in 2004, a 28.7 percent
increase from a year earlier.
Europe Segment Results
In the third quarter 2004, Europe segment net sales increased 8.3 percent
from the third quarter of 2003 to $442.1 million. Third quarter 2004 sales
volume of owned and licensed beverage brands totaled 2,637,000 U.S. barrels
(3,094,410 HLs), down 6.2 percent from a year ago. As a result, Europe segment
pretax earnings were $40.6 million, down 12.9 percent from the third quarter
2003, despite a 12.8 percent appreciation of the British Pound versus the U.S.
dollar. Europe segment results also were impacted by the lapping of a one-time
gain of $3.5 million pretax on the sale of the rights to the company's Hooper's
Hooch flavored alcohol beverage brand in Russia during the third quarter of
2003.
New Accounting Rule
This year, Coors began consolidating its U.S. container joint ventures and
its U.K. venture with Grolsch under a new U.S. accounting standard, FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities." The
implementation of the new accounting standard:
* decreased Americas segment cost of goods sold by $3.4 million;
* reduced Europe segment cost of goods sold by $8.2 million and increased
Europe segment marketing, general and administrative expenses by $6.3
million; and
* increased corporate interest expense by $0.8 million.
Taken together, these factors positively affected consolidated pretax income
and were offset by a negative $4.0 million in minority interest -- the minority
owners' share of joint-venture income now consolidated and included in Coors'
operating results.
Adolph Coors Company will conduct a conference call with financial analysts
and investors at noon Eastern Time today to discuss the company's third quarter
financial results. A live webcast of the conference call will be accessible via
the company's website, www.coors.com, in the "Invest In Us" area of the site. An
online replay of the conference call webcast will be available beginning on
October 29, 2004, until 11:59 p.m. Eastern Time on November 28, 2004.
(Summary of Operations Attached)
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning
of the federal securities laws, commonly identified by such terms as "looking
ahead," "anticipates," "estimates," "will," "expects" or "expected to" and other
terms with similar meaning, indicating possible future events or actions or
potential impact on the businesses or shareholders of Adolph Coors Company. Such
statements include, but are not limited to, statements about the anticipated
benefits, savings and synergies of the proposed merger between Adolph Coors
Company and Molson, Inc., including future financial and operating results. It
also includes financial information, of which, as of the date of this press
release, the Company's independent auditors have not completed their review.
Subsequent events may occur or additional information may arise that could have
an effect on the final quarterly financial information, and there is no
assurance the proposed merger referenced in this release will be completed at
all, or completed upon the same terms and conditions described. Although the
Company believes that the assumptions upon which the financial information and
its forward-looking statements are based are reasonable, it can give no
assurance that these assumptions will prove to be correct. Important factors
that could cause actual results to differ materially from the Company's
projections and expectations are disclosed in the Company's filings with the
Securities and Exchange Commission. These factors include, among others, changes
in consumer preferences and product trends, price discounting by major
competitors, unanticipated expenses, and increases in costs generally. All
forward-looking statements in this press release are expressly qualified by such
cautionary statements and by reference to the underlying assumptions. We do not
undertake to publicly update forward-looking statements, whether as a result of
new information, future events or otherwise.
Coors has filed a preliminary joint proxy statement/management information
circular regarding the proposed transaction with the Securities and Exchange
Commission. Stockholders are urged to read the definitive joint proxy
statement/management information circular when it becomes available, because it
will contain important information. Stockholders will be able to obtain a free
copy of the definitive joint proxy statement/management information circular, as
well as other filings containing information about Coors, without charge, at the
Securities and Exchange Commission's internet site (http://www.sec.gov). Copies
of the definitive joint proxy statement/management information circular and the
filings with the Securities and Exchange Commission that will be incorporated by
reference in the definitive joint proxy statement/management information
circular can also be obtained, without charge, by directing a request to Adolph
Coors Company, 311 10th Street, Golden, Colorado 80401, Attention: Shareholder
Relations, (303) 279-6565.
ADOLPH COORS COMPANY
SUMMARY OF OPERATIONS - CONSOLIDATED
3rd QUARTER 2004
(Unaudited)
Thirteen Weeks Ended Thirty-nine Weeks Ended
(In thousands, except Sept. 26, Sept. 28, Sept. 26, Sept. 28,
per share data) 2004 2003 2004 2003
Barrels of beer and
other beverages sold 8,559 8,772 24,419 24,822
Sales - domestic and
international $1,487,828 $1,420,191 $4,272,841 $3,990,417
Beer excise taxes (383,522) (371,467) (1,094,330) (1,013,176)
Net sales 1,104,306 1,048,724 3,178,511 2,977,241
Costs and expenses:
Cost of goods sold (688,384) (658,016) (2,003,152) (1,900,577)
Gross profit 415,922 390,708 1,175,359 1,076,664
Marketing, general
and administrative (312,018) (281,313) (917,857) (835,435)
Operating income 103,904 109,395 257,502 241,229
Other income
(expense) - net 5,903 (1) 5,883 6,291
Interest expense
- net (12,268) (13,639) (40,831) (47,611)
Income before income
taxes 97,539 95,755 222,554 199,909
Income tax expense (29,430) (34,327) (69,658) (61,333)
Income before minority
interest 68,109 61,428 152,896 138,576
Minority interest (1) (3,967) -- (11,878) --
Net income $64,142 $61,428 $141,018 $138,576
Net income per share
(basic) $1.72 $1.69 $3.81 $3.81
Net income per share
(diluted) $1.68 $1.68 $3.74 $3.79
Weighted average number
of shares o/s (basic) 37,341 36,339 37,054 36,325
Weighted average number
of shares o/s (diluted) 38,125 36,575 37,754 36,553
Cash dividends declared
per share $0.205 $0.205 $0.615 $0.615
(1) Minority interest is the minority owners' share of income generated in
2004 by the Rocky Mountain Bottle Company (RMBC), Rocky Mountain Metal
Container (RMMC), and Grolsch NV (Grolsch) joint ventures.
ADOLPH COORS COMPANY
SUMMARY OF OPERATIONS - AMERICAs
3rd QUARTER 2004
(Unaudited)
Thirteen Weeks Ended Thirty-nine Weeks Ended
Sept. 26, Sept. 28, Sept. 26, Sept. 28,
(In thousands) 2004 2003 2004 2003
Barrels of beer and
other beverages sold 5,922 5,960 16,903 17,284
Sales - domestic and
international $769,540 $749,033 $2,188,002 $2,172,722
Beer excise taxes (107,325) (108,590) (306,609) (313,490)
Net sales 662,215 640,443 1,881,393 1,859,232
Costs and expenses:
Cost of goods sold (386,576) (384,356) (1,110,998) (1,123,458)
Gross profit 275,639 256,087 770,395 735,774
Marketing, general
and administrative (198,791) (182,920) (573,611) (549,165)
Operating income 76,848 73,167 196,784 186,609
Other income
(expense) - net 6,226 (560) 8,563 2,897
Interest expense
- net -- -- -- --
Earnings before
income taxes (1) $83,074 $72,607 $205,347 $189,506
(1) Earnings before income taxes in 2004 includes $3,054 and $9,731 for the
thirteen and thirty-nine weeks ended September 26, 2004, respectively,
and represents the minority owners' share of income attributable to the
RMBC and RMMC joint ventures.
ADOLPH COORS COMPANY
SUMMARY OF OPERATIONS - EUROPE
3rd QUARTER 2004
(Unaudited)
Thirteen Weeks Ended Thirty-nine Weeks Ended
Sept. 26, Sept. 28, Sept. 26, Sept. 28,
(In thousands) 2004 2003 2004 2003
Barrels of beer and
other beverages sold 2,637 2,812 7,516 7,538
Sales - domestic and
international $718,288 $671,158 $2,084,839 $1,817,695
Beer excise taxes (276,197) (262,877) (787,721) (699,686)
Net sales 442,091 408,281 1,297,118 1,118,009
Costs and expenses:
Cost of goods sold (301,808) (273,660) (892,154) (777,119)
Gross profit 140,283 134,621 404,964 340,890
Marketing, general
and administrative (102,527) (92,149) (315,871) (267,566)
Operating income 37,756 42,472 89,093 73,324
Other (expense)
income - net (948) (99) (2,996) 2,909
Interest income
- net 3,757 4,207 11,828 12,960
Earnings before income
taxes (1) $40,565 $46,580 $97,925 $89,193
(1) Earnings before income taxes in 2004 includes $1,305 and $3,327 for the
thirteen and thirty-nine weeks ended September 26, 2004, respectively,
and represents the minority owner's share of income attributable to the
Grolsch joint venture.
ADOLPH COORS COMPANY
SUMMARY OF OPERATIONS - CORPORATE
3rd QUARTER 2004
(Unaudited)
Thirteen Weeks Ended Thirty-nine Weeks Ended
Sept. 26, Sept. 28, Sept. 26, Sept. 28,
(In thousands) 2004 2003 2004 2003
Barrels of beer and
other beverages sold -- -- -- --
Sales - domestic and
international $-- $-- $-- $--
Beer excise taxes -- -- -- --
Net sales -- -- -- --
Costs and expenses:
Cost of goods sold -- -- -- --
Gross profit -- -- -- --
Marketing, general
and administrative (10,700) (6,244) (28,375) (18,704)
Operating loss (10,700) (6,244) (28,375) (18,704)
Other expense - net 625 658 316 485
Interest expense
- net (16,025) (17,846) (52,659) (60,571)
Loss before income
taxes (1) $(26,100) $(23,432) $(80,718) $(78,790)
(1) Loss before income taxes in 2004 includes $392 and $1,180 for the
thirteen and thirty-nine weeks ended September 26, 2004 and represents
the minority owner's share of interest expense attributable to debt
obligations of the RMMC joint venture.
SOURCE Adolph Coors Company
-0- 10/28/2004
/CONTACT: News Media, Laura Sankey, +1-303-277-5035, or Investor
Relations, Dave Dunnewald, +1-303-279-6565, or Kevin Caulfield,
+1-303-277-6894, all of Adolph Coors Company/
/Web site: http://www.coors.com /
(RKY)
CO: Adolph Coors Company
ST: Colorado
IN: FOD REA
SU: ERN CCA