Exhibit 99.1
Robert Mondavi Reports Results for First Quarter of Fiscal Year 2005
NAPA, Calif.--(BUSINESS WIRE)--Oct. 27, 2004--
-- Excluding Recapitalization and Restructuring Charges,
Company Reports Adjusted Net Income of $7.3 million
or $0.44 per diluted share --
The Robert Mondavi Corporation (Nasdaq:MOND) today announced
results for its first quarter of fiscal year 2005 ended September 30,
2004.
The company reported a net loss of $(57.7) million, or $(3.47) per
diluted share, for the quarter ended September 30, 2004, compared to
net income of $9.8 million, or $0.60 per diluted share, during the
same period a year ago. This year's quarter included $105.9 million in
pre-tax net charges, or $3.91 per diluted share, while last year's
quarter included $0.9 million in pre-tax net gains, or $0.04 per
diluted share. Details of these items are listed following the
Financial Highlights. Excluding the aforementioned charges and gains,
first quarter adjusted earnings of $0.44 per diluted share compare to
$0.57 per diluted share a year ago and to the company's previously
issued guidance of $0.33 per diluted share.
Net revenues for the quarter grew 1 percent from the same period
last year to $105.1 million, reflecting a 2 percent increase in sales
volume and a 1 percent decrease in average price per case. Wholesaler
depletions grew 3 percent, resulting in 46 days of inventory of the
company's products held by wholesalers, compared to 49 days last year
and 48 days at the end of June.
The company also reported that its September 30, 2004 balance
sheet included $54.4 million in cash, up from $49.0 million on June
30, 2004.
"Our results for the quarter reflected continued strong
performance by the Robert Mondavi Private Selection and Robert Mondavi
Winery brands," said Greg Evans, President and CEO. "While Woodbridge
posted a 2 percent decline in depletions during the quarter, we are
encouraged by its improving trends in scanning channels during each of
the last four months and the strong level of marketing and trade
support planned for the fall holidays." The company also said that
based upon current business and wine industry conditions, it remains
comfortable with its previously disclosed earnings guidance for fiscal
2005 of $1.30 to $1.50 per fully diluted share, excluding any
recapitalization and restructuring charges which are expected to range
from $161 million to $200 million, pre-tax. The company continues to
forecast sales volume and revenue growth of between 2 percent and 4
percent for the year.
The company also reported that its proxy statement became
effective October 25, 2004 and is being mailed to shareholders
immediately. The proxy is currently available for viewing on the SEC's
EDGAR database. Ted Hall, Chairman of the Board, noted "We continue to
move ahead towards completing the recapitalization and reincorporation
initiatives essential to enhancing shareholder value. These items will
be presented to shareholders at the annual shareholder meeting on
November 30, 2004 in Napa."
Robert Mondavi Corporation produces and markets fine wines under
the following labels: Woodbridge Winery, Robert Mondavi Private
Selection, Robert Mondavi Winery, La Famiglia, Kirralaa, Byron
Vineyards and Winery, Io, Arrowood Vineyards and 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. In
addition to the partnership wines, Robert Mondavi Imports represents
the wines of Marchesi de' Frescobaldi, Attems and Caliterra in the
United States.
The company will conduct a conference call to discuss its first
quarter results at 7:30 a.m. PT / 10:30 a.m. ET October 28, 2004. The
phone number for the call is (800) 218-8862. A live listen-only web
cast and a copy of the prepared remarks of the conference call are
available at www.robertmondavi.com under "Investor Relations."
On January 27, 2005, Robert Mondavi expects to announce its second
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."
Three Months Ended
September 30,
----------------------------
2004 2003
------------ -------------
Cases sold 2,166 2,130
Net revenues $105,115 $103,937
Cost of goods sold (1) 95,464 61,924
------------ -------------
Gross profit 9,651 42,013
Gross profit % 9.2% 40.4%
Operating expenses 30,728 28,730
Special charges (2) 73,534 --
------------ -------------
Operating income (loss) (94,611) 13,283
Other (income) expense:
Interest 5,106 5,540
Equity (income) from joint
ventures (5,383) (8,006)
Other (423) 240
------------ -------------
Income (loss) before income taxes (93,911) 15,509
Income tax provision (benefit) (36,250) 5,661
------------ -------------
Net income (loss) (57,661) 9,848
Weighted average number of shares
outstanding - Diluted 16,629 16,404
Earnings (loss) per share - Diluted $(3.47) $0.60
Net cash flows from Operating
Activities $11,694 $15,346
At 9/30/04 At 6/30/04
------------ --------------
Current assets $606,300 $538,474
Total assets 999,821 978,170
Current liabilities 151,589 82,512
Total liabilities 574,021 498,370
Shareholders' equity 425,800 479,800
Working capital 454,711 455,962
Total debt 379,751 382,199
Total debt, net of Cash 325,374 333,239
(1) The three months ended September 30, 2004 include inventory
write-downs totaling $32,152 related to restructuring.
(2) The three months ended September 30, 2004 include fixed asset
impairment charges and related selling expenses of $54,472,
severance charges of $10,955, and other fees of $4,365 related
to the restructuring of the company. Also included in these
charges are fees related to the company's recapitalization of
$3,742.
Items included in GAAP Earnings per share
-----------------------------------------
$000 (3) $ per diluted share
---------- -------------------
Q1 Fiscal 2005
Reported Net Income (GAAP) $(57,661) $(3.47)
Included in Net Income
- ----------------------
Recapitalization charges 2,297 0.14
Restructuring charges:
Fixed Asset impairment charges 27,920 1.68
Inventory write-downs 19,741 1.19
Severance charges 6,727 0.40
Selling expenses 5,526 0.33
Other 2,680 0.16
---------- -------------------
Sub-total 62,594 3.76
Inventory step-up 122 $0.01
---------- -------------------
Adjusted Net Income excluding
above items $7,352 $0.44
Q1 Fiscal 2004
Net Income (GAAP) $9,848 $0.60
Included in Net Income
- ----------------------
Inventory step-up 396 $0.02
Net gain on sale of Fixed Assets (972) ($0.06)
Adjusted Net Income excluding above
items $9,272 $0.57
(3) Numbers are reported after tax.
Cautionary Statement Regarding 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, the anticipated
approval of the company's proposed recapitalization plan by its
shareholders, other statements regarding the announced restructuring
and the amount of the related charges, the estimate of proceeds from
the sale of assets, projections or predictions about the company's
future earnings before interest and tax ratios and financial returns,
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 conflict in the Middle East, 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. The restructuring announced on September 14, 2004 may impair
management's ability to focus on other needed areas of business
execution. There are also significant risks associated with the
restructuring, including the divestiture of the company's luxury wine
assets and investments and non-strategic assets announced on September
14, 2004. There is no assurance that the company will successfully
complete the divestitures within the company's expected timeframe or
at all, or that it will realize the after-tax proceeds it presently
estimates for such divestitures. There is no assurance the company
will be able to effectively re-deploy any proceeds received from such
divestitures. The lay-offs and significant restructuring charges
announced in connection with the company's September 14, 2004
restructuring will materially affect future earnings. There is no
assurance that the proposed restructuring will enable the company to
achieve significant cost savings or asset rationalization, or if any
cost savings or assets rationalization is achieved, that it will be
sufficient to grow the company's volumes, profit or cash flow, or to
enhance the company's competitive position. 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, 2004 and
the company's proxy statement dated October 25, 2004, 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 & IR)
Hilary Martin, 707-251-4487 (VP Corporate Communications)