UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 26, 2003
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Constellation Brands, Inc.
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(Exact name of registrant as specified in its charter)
001-08495
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(Commission File Number)
Delaware 16-0716709
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(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
300 WillowBrook Office Park, Fairport, New York 14450
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(Address of principal executive offices) (Zip Code)
(585) 218-3600
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE
Constellation Brands, Inc. released the following information on February 26,
2003:
CONSTELLATION RECEIVES APPROVAL FROM FOREIGN INVESTMENT REVIEW BOARD OF
AUSTRALIA TO PROCEED WITH BRL HARDY ACQUISITION
Rating Agencies Confirm Debt Ratings
Company Reaffirms Earnings Guidance
FAIRPORT, NEW YORK, FEBRUARY 26, 2003 - Constellation Brands, Inc. (NYSE: STZ
and STZ.B) announced today that the Foreign Investment Policy Division of the
Treasury of Australia has advised that it has no objection to Constellation's
acquisition of BRL Hardy (ASX: BRL). The transaction is scheduled to close
early April 2003 and is subject to customary closing conditions, including
termination of the Hart-Scott-Rodino Act waiting period in the United States,
and approval by BRL Hardy shareholders (scheduled for March 20th) and the final
approval of the Supreme Court of South Australia (scheduled for March 27th).
Constellation also announced that Moody's Investors Service confirmed the
Company's rating on its existing debt and assigned a higher rating of BA1 to the
Company's new bank facility. The credit rating is predicated on Constellation
issuing sufficient equity in connection with the transaction and after closing
to reduce its debt. Moody's previously put Constellation on credit watch
following the announcement of the Company's $1.4 billion acquisition of BRL
Hardy, Australia's largest wine producer. Standard and Poor's had previously
confirmed the Company's debt rating while putting the Company on negative
outlook.
The ratings confirm the stability of Constellation's strong cash flow and
the Company's commitment and history of quickly deleveraging following
acquisitions. Consistent with Constellation's strategy of balanced financing and
maintaining a flexible capital structure, the Company will target a debt to
EBITDA ratio of approximately 4.0 in a timely manner after the close of the
transaction.
Constellation has $2.0 billion committed financing for all of its potential
cash requirements under the transaction. The Company has offered BRL Hardy
shareholders
the opportunity to participate in the future of the combined company by offering
up to 15 million shares of Constellation Class A common stock. Following the
closing of the transaction, Constellation intends to undertake a secondary
offering of its Class A common stock to achieve its debt to EBITDA target. The
amount of the secondary offering will depend in part on the extent BRL Hardy
shareholders elect shares, which will be known upon closing of the transaction.
OUTLOOK
The following statements are management's current expectations for the
Company's fiscal year ending February 28, 2003 ("Fiscal 2003"), fiscal year
ending February 28, 2004 ("Fiscal 2004") and the effects of the BRL Hardy
transaction on Fiscal 2004. These statements are made as of the date of this
press release and are forward-looking. Actual results may differ materially
from these expectations due to a number of risks and uncertainties.
- Constellation's diluted earnings per share for Fiscal 2003 are expected to
be within a range of $2.03 to $2.05.
- Constellation's diluted earnings per share for Fiscal 2004 are expected to
be within a range of $2.29 to $2.35, excluding the impact of the BRL Hardy
acquisition.
- The BRL Hardy transaction is expected to add $0.10 to earnings per share
for Constellation's Fiscal year 2004, before one-time transaction related
expenses and after synergies.
ABOUT CONSTELLATION
Constellation Brands, Inc. is a leading producer and marketer of beverage
alcohol brands, with a broad portfolio of wine, spirits and imported beer. The
Company is the largest single-source supplier of these products in the United
States, and both a major producer and independent drinks wholesaler in the
United Kingdom. The company also operates a US based joint venture with the
largest Australian wine producer, BRL Hardy. Well-known brands in
Constellation's portfolio include: Corona Extra, Pacifico, St. Pauli Girl, Black
Velvet, Fleischmann's, Estancia, Simi, Ravenswood, Blackstone, Banrock Station,
Alice White, Talus, Vendange, Almaden, Arbor Mist, Stowells of Chelsea and
Blackthorn.
ABOUT BRL HARDY
BRL Hardy Limited is a leading Australian producer and exporter of wine, with
products sourced from Australia, New Zealand and France. The company's wines are
distributed worldwide through a network of sales and marketing operations, with
the majority of sales generated in Australia, the United Kingdom and the United
States. Major export brands include: Hardys Stamp of Australia, Hardys Nottage
Hill, Hardys VR and
Banrock Station. Other domestic and international brands include: Houghton,
Nobilo, Leasingham, Moondah Brook, Yarra Burn, Stonehaven, Stanley and Renmano.
FORWARD-LOOKING STATEMENTS
The statements made under the heading Outlook, as well as all other statements
set forth in this press release which are not historical facts, are
forward-looking statements that involve risks and uncertainties that could cause
actual results to differ materially from those set forth in or implied by the
forward-looking statements. The Company's forward-looking statements are based
on management's current expectations and unless otherwise noted do not take into
account the impact of any future acquisition, merger or any other business
combination, divestiture or financing that may be completed after the date of
this release. Any projections of future results of operations, and in
particular, (i) the Company's estimated diluted earnings per share for Fiscal
2003, (ii) the Company's estimated diluted earnings per share for Fiscal 2004,
and (iii) the Company's expectations for the transaction's impact on its
earnings per share for Fiscal 2004, should not be construed in any manner as a
guarantee that such results will in fact occur. In addition to the risks and
uncertainties of ordinary business operations, the forward-looking statements of
the Company contained in this press release are also subject to the following
risks and uncertainties: the successful integration of the BRL Hardy business
into that of the Company, the Company achieving certain sales projections and
meeting certain cost targets; wholesalers and retailers may give higher priority
to products of the Company's competitors; raw material supply, production or
shipment difficulties could adversely affect the Company's ability to supply its
customers; increased competitive activities in the form of pricing, advertising
and promotions could adversely impact consumer demand for the Company's products
and/or result in higher than expected selling, general and administrative
expenses; a general decline in alcohol consumption; increases in federal and
state excise taxes on beverage alcohol products; changes in foreign exchange
rates. For additional information about risks and uncertainties that could
adversely affect the Company's forward-looking statements, please refer to the
Company's filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K for the fiscal year ended February 28, 2002 and its
Forms 8-K dated January 16, 2003 and February 13, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
CONSTELLATION BRANDS, INC.
Dated: February 26, 2003 By: /s/ Thomas F. Howe
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Thomas F. Howe, Senior Vice
President and Controller
INDEX TO EXHIBITS
(1) UNDERWRITING AGREEMENT
Not Applicable.
(2) PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR SUCCESSION
Not Applicable.
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES
Not Applicable.
(16) LETTER RE CHANGE IN CERTIFYING ACCOUNTANT
Not Applicable.
(17) LETTER RE DIRECTOR RESIGNATION
Not Applicable.
(20) OTHER DOCUMENTS OR STATEMENTS TO SECURITY HOLDERS
Not Applicable.
(23) CONSENTS OF EXPERTS AND COUNSEL
Not Applicable.
(24) POWER OF ATTORNEY
Not Applicable.
(99) ADDITIONAL EXHIBITS
None