Exhibit 99.A
Robert Mondavi Provides Outlook for Fiscal Year 2005 and
Comments on Fiscal 2004 Results
OAKVILLE, Calif.--(BUSINESS WIRE)--June 30, 2004--The Robert
Mondavi Corporation (Nasdaq:MOND) today commented on its outlook for
fiscal 2005 and its projection of fiscal 2004 results.
The company said that for fiscal 2005 it expected its GAAP
earnings to be in the range of $1.80 to $2.00 per diluted share based
on projected sales volume and revenue growth of between 2% and 4%.
Operating margin as a percentage of net revenues is expected to
improve slightly in fiscal 2005, but equity income is projected to be
below fiscal 2004 levels, resulting in fiscal 2005 EBIT(1) as a
percentage of net revenues that is comparable to fiscal 2004 levels.
The company expects that it will generate cash flow in fiscal 2005
approximately equal to its fiscal 2005 net income. These fiscal 2005
projections do not include any sales of non-strategic fixed assets.
Gregory M. Evans, President and CEO, said, "We are taking steps to
strengthen the company in a wine market that continues to be extremely
competitive. First, we are focusing on consumer needs that help us
maintain our leadership position in offering top quality, high value
wines, and exciting new products. Second, our fiscal 2005 plan
reflects our strategy to invest more heavily in building equity for
our brands in order to reduce reliance, over the long term, on
promotional spending to drive growth. Ultimately, the strength of our
brands enhances value for all Robert Mondavi shareholders. Third, we
continue to work diligently on ways to improve financial returns
through a combination of achieving efficiencies and divesting low
return assets."
The company also said it expects full year fiscal 2004 GAAP
earnings to be in the range of $1.50 to $1.55 per diluted share, which
includes fourth quarter charges of approximately $0.11 per diluted
share in impairment charges related to fixed assets it plans to sell,
as well as $0.03 in severance charges. Also included in the fiscal
2004 results are items from prior quarters, including a gain of $0.06
per diluted share from the sale of fixed assets, a charge of $0.23 per
diluted share related to the sale of a portion of an investment in its
Chilean joint venture, $0.04 per diluted share in one-time governance
costs and $0.06 per diluted share in inventory step-up charges due to
the fiscal 2000 acquisition of Arrowood Vineyards and Winery(2). Full
year fiscal 2004 sales volume and revenue growth are projected to be
in the range of 3.5% to 4.0%, reflecting lower fourth quarter topline
growth than in the first three fiscal quarters due to the slightly
negative performance of the Woodbridge brand.
The company will report results for its fourth quarter and full
fiscal 2004 results on July 29, 2004, followed by a conference call at
7:30 a.m. PT/ 10:30 a.m. ET. 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 Corporation produces and markets fine wines under
the following labels: Robert Mondavi Winery, Robert Mondavi Private
Selection, La Famiglia, 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.
(1) EBIT, or Earnings Before Interest and Taxes, is a non-GAAP measure
calculated by adding back the provision for income taxes and
interest expense to net income, in effect adding to operating
income the results of its joint ventures. The company's joint
venture interests are accounted for as investments under the
equity method of accounting. Accordingly, the company's share of
its joint ventures' results are reflected in "equity income from
joint ventures," below the operating income line in the
Consolidated Statements of Income. The company has presented EBIT
and EBIT as a percentage of net revenues because management and
certain investors find it useful when comparing the company's
operating results to operating results of other companies that do
not use the equity method of accounting or do not employ joint
ventures as part of their business strategy.
(2) Please see Note 3 in the company's fiscal 2003 Annual Report on
Form 10-K for a full discussion of inventory step-up charges.
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 its 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.
CONTACT: Robert Mondavi Corporation
Robert Philipps, 707-251-4850
(VP, Treasury & Investor Relations)
Hilary Martin, 707-251-4487
(VP, Corporate Communications)