Constellation Brands, Inc. (NYSE: STZ - news, STZ.B), today reported record results for the three months ended August 31, 2000 ("Second Quarter 2001"). Net income of $26 million represents an increase of 24 percent over net income of $21 million for the three months ended August 31, 1999 ("Second Quarter 2000"). Earnings per share on a diluted basis were $1.40 for Second Quarter 2001 versus $1.14 for the comparable quarter a year ago, an increase of 23 percent.

Richard Sands, Chairman, Chief Executive Officer and President of Constellation said, "We are very pleased with the results reported for the quarter and for the first six months of this fiscal year. Led by our North American businesses, we continue to drive sales and earnings growth, particularly in our beer and fine wine portfolio, which outperformed their respective industries. Net sales and operating income for our North American businesses grew eight percent and 21 percent, respectively. Additionally, our free cash flow exceeded earnings and we continue to pay down debt, thereby creating greater financial flexibility as we build a foundation for future growth."

Consolidated Results

Net sales reached $637 million for Second Quarter 2001, an increase of three percent over net sales of $622 million reported in Second Quarter 2000. The net sales growth is attributed primarily to increases in beer and fine wine sales in the U.S. and table wine sales in the U.K. For the six months ended August 31, 2000 ("Six Months 2001"), net sales grew by six percent to reach $1.22 billion versus net sales of $1.15 billion reported for the six months ended August 31, 1999 ("Six Months 2000"). Increases in beer sales in the U.S. and table wine sales in the U.K., as well as the inclusion of products from the Black Velvet and Franciscan acquisitions for a full six months, accounted for most of the increase. On a pro forma basis, sales increased four percent year to date. After adjusting for an adverse foreign currency impact, sales for the quarter and for the fiscal year to date period, increased four percent and eight percent, respectively.

Gross profit grew to $201 million in Second Quarter 2001 from $189 million reported a year ago, an increase of $12 million or six percent. The improvement in gross profit is attributed primarily to increases in volume and pricing on beer and fine wine. As a percent of net sales, gross profit increased 110 basis points to 31.5 percent in Second Quarter 2001 from 30.4 percent in Second Quarter 2000. For Six Months 2001, gross profit was $385 million versus $345 million reported for Six Months 2000. As a percent of net sales, gross profit increased 140 basis points for Six Months 2001 to 31.4 percent. The gross profit and gross margin improvements for Six Months 2001 can be attributed primarily to the Black Velvet and Franciscan acquisitions, as well as increased beer sales.

Selling, general and administrative expenses increased four percent for Second Quarter 2001 to $130 million from $125 million reported a year ago. Increased corporate expenses accounted for most of the increase. Excluding Corporate expenses, selling, general and administrative costs declined by 40 basis points as a percent of net sales. For Six Months 2001, selling, general and administrative expenses reached $256 million, an increase of $21 million, or nine percent. The inclusion of selling expenses related to brands acquired in the Black Velvet and Franciscan acquisitions and an increase in Corporate expenses, accounted for most of the increase.

Operating income in Second Quarter 2001 grew to $71 million versus $64 million in Second Quarter 2000, an increase of 11 percent. For Six Months 2001, operating income increased 17 percent to $128 million from $109 million reported for Second Quarter 2000, excluding the pretax impact of nonrecurring charges reported in Second Quarter 2000.

Despite higher average borrowing costs, net interest expense for Second Quarter 2001 decreased $2 million, or five percent, to $27 million from $29 million reported for Second Quarter 2000. The decline in interest expense is a direct result of lower average borrowings for the period as the Company used free cash flow to pay down debt. For Six Months 2001, net interest expense increased eight percent from $51 million to $55 million, primarily due to higher debt levels for the full period related to financing the Franciscan and Simi acquisitions.

As a result of the above factors, net income for Second Quarter 2001 increased 24 percent to $26 million from $21 million for Second Quarter 2000. Earnings per share, on a fully diluted basis, for Second Quarter 2001 grew by 23 percent to $1.40 from $1.14 reported in Second Quarter 2000. For Six Months 2001, net income grew 25 percent to $44 million from $35 million reported in Six Months 2000, excluding the after-tax impact of nonrecurring charges reported in Six Months 2000.

Barton

Barton's net sales for Second Quarter 2001 grew by 14 percent to reach $285 million. Beer sales grew 20 percent for the quarter, of which approximately four percent related to pricing. Spirits sales were down slightly due to the loss of contract production sales. Excluding contract production, spirits sales increased five percent, primarily from price increases on tequila products.

Operating income grew 21 percent to reach $51 million for Second Quarter 2001 from $42 million reported a year ago. The increase is attributed primarily to growth in beer sales and the reduction of operating expenses as a percent of sales.

Net sales and operating income for Six Months 2001 increased to $520 million and $89 million, respectively. Net sales and operating income increased 15 percent and 22 percent, respectively, primarily due to the inclusion of products from the Black Velvet acquisition for the full six months. On a pro forma basis, net sales and operating income increased 13 percent and 17 percent, respectively.

Canandaigua Wine

Canandaigua Wine's net sales for Second Quarter 2001 were $168 million, decreasing slightly from Second Quarter 2000 net sales of $170 million. The decrease is due to lower concentrate sales and lower international sales.

Operating income for Second Quarter 2001 remained virtually unchanged when compared with Second Quarter 2000.

Net sales for Six Months 2001 of $330 million decreased one percent when compared to a year ago. Operating income for Six Months 2001 remained virtually unchanged compared to Six Months 2000, excluding the pretax impact of nonrecurring charges reported for Six Months 2000.

Matthew Clark

Net sales for Matthew Clark were $170 million for Second Quarter 2001 versus $183 million reported for the comparable quarter a year ago, a decrease of seven percent. The majority of the decline, or $10 million, relates to an adverse foreign currency impact. The remaining difference is attributed to a decrease in draft cider sales, partially offset by growth in wine, packaged cider and wholesale sales.

Despite the decline in net sales, operating income for Second Quarter 2001 grew to $12 million, an increase of two percent versus the comparable quarter a year ago. The increase was due primarily to improved operating efficiencies from the consolidation of cider production. Additionally, Matthew Clark Wholesale continues to focus on depot rationalization as the number of depots were reduced from 13 to 11.

Net sales of $339 million for Six Months 2001 were down from the $350 million reported for the comparable period a year ago. Excluding the pretax nonrecurring charges reported in Six Months 2000, operating income for Six Months 2001 increased two percent to reach $23 million. Excluding an adverse foreign currency impact and the pretax nonrecurring charges, net sales and operating income would have increased two percent and seven percent, respectively.

Franciscan

Franciscan's net sales for Second Quarter 2001 increased 25 percent to reach $21 million from $17 million reported for Second Quarter 2000, driven by increases in pricing and volume. Operating income more than doubled to reach $4 million, also driven by pricing and volume increases. Net sales and operating income for Six Months 2001 were $43 million and $10 million, respectively. On a pro forma basis, net sales for Six Months 2001 increased 19%.

Constellation Brands, Inc., headquartered in Fairport, New York, is a leader in the production, marketing and distribution of beverage alcohol products in North America and the United Kingdom. The Company markets leading brands, including imported beers, wines, spirits, cider and bottled water, and is a leading drinks wholesaler in the United Kingdom.

CONFERENCE CALL DETAILS

A conference call to discuss the quarterly results will be hosted by Richard Sands, CEO, and Tom Summer, CFO, on Wednesday, September 27, 2000, at 11:00 a.m. EDT. The conference call can be accessed by dialing 412-858-4600. A live listen-only web cast of the conference call is available on the Internet at Constellation's web site: http://www.cbrands.com under: Investor Info.

If you are unable to participate in the conference call, there will be a replay available on Constellation's web site.


CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

August 31, February 29,
2000 2000
(unaudited) (audited)

ASSETS
CURRENT ASSETS:
Cash and cash investments $4,150 $34,308
Accounts receivable, net 358,297 291,108
Inventories, net 604,346 615,700
Prepaid expenses and other current assets 64,723 54,881
Total current assets 1,031,516 995,997
PROPERTY, PLANT AND EQUIPMENT, net 530,069 542,971
OTHER ASSETS 778,474 809,823
Total assets $2,340,059 $2,348,791

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $43,300 $26,800
Current maturities of long-term debt 20,775 53,987
Accounts payable 137,717 122,213
Accrued excise taxes 43,530 30,446
Other accrued expenses and liabilities 250,964 204,771
Total current liabilities 496,286 438,217
LONG-TERM DEBT, less current maturities 1,144,984 1,237,135
DEFERRED INCOME TAXES 116,918 116,447
OTHER LIABILITIES 31,836 36,152
STOCKHOLDERS' EQUITY 550,035 520,840
Total liabilities and stockholders' equity $2,340,059 $2,348,791

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)

Three Months Three Months
Ended Ended
August 31, August 31,
2000 1999 Percent
(unaudited) (unaudited) Change

Gross sales $828,668 $814,845 2%
Net sales $637,490 $621,580 3%
Cost of product sold (436,851) (432,452) 1%
Gross profit 200,639 189,128 6%
Selling, general and
administrative expenses (129,935) (125,320) 4%
Operating income 70,704 63,808 11%
Interest expense, net (27,187) (28,640) -5%
Income before income taxes 43,517 35,168 24%
Provision for income taxes (17,407) (14,067) 24%
Net income $26,110 $21,101 24%

Earnings per common share:
Basic $1.43 $1.17 22%
Diluted $1.40 $1.14 23%
Weighted average common
shares outstanding:
Basic 18,300 18,010 2%
Diluted 18,675 18,499 1%

Segment Information:
Net sales:
Barton
Beer $212,159 $177,195 20%
Spirits 72,561 73,010 -1%
Net sales $284,720 $250,205 14%
Canandaigua Wine
Branded $149,272 $150,779 -1%
Other 18,786 19,449 -3%
Net sales $168,058 $170,228 -1%
Matthew Clark
Branded $76,368 $80,879 -6%
Wholesale 93,310 102,331 -9%
Net sales $169,678 $183,210 -7%
Franciscan $21,393 $17,137 25%
Corporate Operations and Other $774 $2,004 -61%
Intersegment eliminations $(7,133) $(1,204) 492%
Consolidated net sales $637,490 $621,580 3%

Operating income:
Barton $50,613 $41,962 21%
Canandaigua Wine 10,415 10,412 0%
Matthew Clark 12,222 11,980 2%
Franciscan 4,242 1,571 170%
Corporate Operations and Other (6,788) (2,117) 221%
Consolidated operating income $70,704 $63,808 11%

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)

Six Months Six Months
Ended Ended
August 31, August 31,
2000 1999 Percent
(unaudited) (unaudited) Change

Gross sales $1,603,190 $1,519,834 5%
Net sales $1,223,070 $1,151,749 6%
Cost of product sold (838,558) (806,499) 4%
Gross profit 384,512 345,250 11%
Selling, general and
administrative expenses (256,344) (235,821) 9%
Nonrecurring charges -- (5,510) N/A
Operating income 128,168 103,919 23%
Interest expense, net (54,814) (50,675) 8%
Income before income taxes 73,354 53,244 38%
Provision for income taxes (29,342) (21,297) 38%
Net income $44,012 $31,947 38%

Earnings per common share:
Basic $2.41 $1.78 35%
Diluted $2.36 $1.73 36%
Weighted average common
shares outstanding:
Basic 18,265 17,994 2%
Diluted 18,627 18,459 1%

Segment Information:
Net sales:
Barton
Beer $375,293 $323,806 16%
Spirits 145,107 127,149 14%
Net sales $520,400 $450,955 15%
Canandaigua Wine
Branded $293,838 $295,171 0%
Other 36,598 38,616 -5%
Net sales $330,436 $333,787 -1%
Matthew Clark
Branded $145,983 $155,254 -6%
Wholesale 193,233 194,753 -1%
Net sales $339,216 $350,007 -3%
Franciscan $43,282 $17,137 153%
Corporate Operations and Other $1,859 $2,889 -36%
Intersegment eliminations $(12,123) $(3,026) 301%
Consolidated net sales $1,223,070 $1,151,749 6%

Operating income:
Barton $89,448 $73,459 22%
Canandaigua Wine 18,396 16,019 15%
Matthew Clark 22,596 19,310 17%
Franciscan 9,658 1,571 515%
Corporate Operations and Other (11,930) (6,440) 85%
Consolidated operating income $128,168 $103,919 23%