EXHIBIT 99.1
Robert Mondavi Reports Results for Fourth Quarter and Full-Year
Fiscal 2004
NAPA, Calif.--(BUSINESS WIRE)--July 29, 2004--The Robert Mondavi
Corporation (NASDAQ:MOND) today announced results for its fourth
quarter and full fiscal year ended June 30, 2004.
The company reported net income of $4.3 million, or $0.26 per
diluted share, for the quarter ended June 30, 2004, compared to net
income of $0.8 million, or $0.05 per diluted share, during the same
period a year ago. This year's fourth quarter included $2.4 million in
net charges, or $0.09 per diluted share, while last year's fourth
quarter included $6.9 million in net charges, or $0.27 per diluted
share. Details of these charges are listed in the notes following the
Financial Highlights.
Net revenues for the quarter declined 2 percent from the same
period last year to $118.6 million, reflecting a 2 percent increase in
sales volume and a 4 percent decrease in average price per case.
Wholesaler depletions grew 5 percent, resulting in 48 days of
inventory of the company's products held by wholesalers, compared to
51 days last year and 50 days at the end of March.
Net income for the twelve months of fiscal 2004 increased 53
percent to $25.6 million, or $1.55 per diluted share, from $16.7
million, or $1.02 per diluted share, during fiscal 2003. Net revenues
for fiscal 2004 increased 3 percent to $468.0 million, reflecting a 4
percent increase in sales volume and a 1 percent decrease in average
price per case.
The company also reported that its June 30, 2004 balance sheet
included $49.0 million in cash, up from $15.1 million on March 31,
2004.
"Our results for the quarter and year were quite good on both an
absolute and industry-comparison basis," said Greg Evans, President
and CEO. "In this challenging environment, our disciplined approach to
cost controls and inventory management enabled us to improve profits
and cash flow. Moreover, while we remained vigilant on expenses, we
continued to invest in brand building to support our products in the
marketplace. These investments paid off in our relationships with
wholesalers, and most critically, the consumer. We were especially
pleased that wholesale depletions, which are a key measure of demand,
were very strong for the Robert Mondavi Winery and Robert Mondavi
Private Selection brands. We were also encouraged by the depletions of
Woodbridge, which were flat when compared to last year following two
quarters of mild declines, and by the fact that wholesale inventories
are in a good position as we begin fiscal 2005."
Evans added, "For the past three years the company has been
implementing a wide-ranging set of strategies designed to strengthen
our competitive position and our operating performance in a rapidly
evolving and increasingly challenging premium wine market. Our
progress has been both steady and encouraging, and in fiscal 2004 we
continued to reduce our cost structure and decrease our non-essential
asset base, while maintaining the strong market position for one of
the most successful and well-regarded brand portfolios in our
industry."
The company also said that based upon current business conditions,
it remains comfortable with its previously disclosed earnings guidance
for fiscal 2005 of $1.80 to $2.00 per fully diluted share, and sales
volume and revenue growth of between 2 percent and 4 percent.
Regarding its upcoming first fiscal quarter ending September 30, 2004,
the company anticipates its earnings would be $0.25 to $0.30 per
diluted share lower than in the quarter ended September 30, 2003 due
to $0.06 per diluted share in net gains from the sale of fixed assets
during last year's quarter, and $0.21 per diluted share in increased
expenses during the quarter ending September 30, 2004. Included in the
$0.21 per diluted share are $0.10 per diluted share in additional
marketing and consumer investments, $0.05 per diluted share in lower
equity income, $0.04 per diluted share in unfavorable sales mix, and
$0.02 per diluted share in higher governance costs and audit fees.
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.
On October 21, 2004, Robert Mondavi expects to announce its first
quarter fiscal 2005 results, 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
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
Three Months Ended Full Year Ended
June 30, June 30,
-------------------- ------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Cases sold 2,653 2,593 10,090 9,699
Net revenues $118,620 $120,809 $468,047 $452,673
Cost of goods sold (1) 72,614 78,562 283,849 280,957
--------- --------- --------- ---------
Gross profit 46,006 42,247 184,198 171,716
Gross profit % 38.8% 35.0% 39.4% 37.9%
Operating expenses (2) 35,391 35,030 130,728 129,993
Special charges (3) - - 1,751 - - 2,111
--------- --------- --------- ---------
Operating income 10,615 5,466 53,470 39,612
Other (income) expense:
Interest 5,262 5,756 21,382 22,414
Equity (income) from joint
ventures (4) (659) (1,517) (6,685) (9,423)
Other (800) 8 (1,580) 89
--------- --------- --------- ---------
Income before income taxes 6,812 1,219 40,353 26,532
Income tax provision 2,527 451 14,769 9,817
--------- --------- --------- ---------
Net income 4,285 768 25,584 16,715
Weighted average number of
shares outstanding -
Diluted 16,606 16,356 16,542 16,356
Earnings per share - Diluted $0.26 $0.05 $1.55 $1.02
Net cash flows from Operating
Activities $39,384 $23,824 $83,470 $42,147
At 6/30/04 At 6/30/03
---------- ----------
Current assets $538,474 $502,630
Total assets 978,170 961,177
Current liabilities 82,512 71,983
Total liabilities 498,370 510,183
Shareholders' equity 479,800 450,994
Working capital 455,962 430,647
Total debt 382,749 412,726
(1) The three months ended June 30, 2003 include inventory write-downs
totaling $4,004 and grape contract buyouts totaling $1,171. The
full year ended June 30, 2003 includes inventory write-downs
totaling $11,565 and grape contract buyouts totaling $1,171.
(2) The three months ended June 30, 2004 include asset impairment
charges of $2,176. The full year ended June 30, 2004 includes
asset impairment charges of $2,176, a net gain on the sale of
fixed assets of $1,531 and Board-related governance costs of $750.
(3) During the six months ended June 30, 2003 the company incurred a
number of restructuring charges. For the three months ended June
30, 2003, the restructuring included a gain on the sale of fixed
assets of $1,168 and employee separation charges of $2,919. For
the full year ended June 30, 2003, the restructuring included a
gain on the sale of fixed assets of $7,312, employee separation
charges totaling $4,076, and asset impairment charges totaling
$5,347.
(4) The three months ended June 30, 2004 include charges related to
transforming the company's Australian joint venture into
production service agreements of $226. The full year ended June
30, 2004 includes charges related to transforming the company's
Australian joint venture into production service agreements of
$226 and asset impairment charges of $6,075 related to the sale of
the Caliterra joint venture.
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.
CONTACT: The Robert Mondavi Corporation
Robert Philipps, 707-251-4850
(VP, Treasury & Investor Relations)
Hilary Martin, 707-251-4487
(VP, Corporate Communications)