USA: Coors Achieves Record Third Quarter Sales, Net Income and Earnings Per Share
For the 13-week quarter ended Sept. 24, 2000, the company reported record net sales of $603.3 million, a 10.9 percent increase from 1999. Third quarter 2000 sales volume reached 6,236,000 barrels, an 8.4 percent increase from 5,754,000 barrels sold last year. Sales to retail increased approximately 5.3 percent.
The company achieved record third quarter 2000 net income of $34.5 million, a 58.0 percent increase from $21.8 million in the third quarter of 1999. After-tax income, excluding special items, was $31.1 million, a 22.9 percent increase from $25.3 million a year ago. Excluding special items, third quarter 2000 diluted earnings per share were $0.83, up 22.1 percent from $0.68 in 1999.
Peter H. Coors, chairman of Coors Brewing Company (CBC), said, "The third quarter this year capped another solid summer for Coors. We achieved record top-line and bottom-line results while continuing to increase our investments in key brands and in our sales organization. These solid results were driven primarily by the continued strength of our largest brands and the replenishment of our U.S. wholesalers' inventories, boosted by modest domestic price increases and higher international income. I am personally proud of the way our entire organization worked throughout the summer to meet unprecedented demand for our products."
W. Leo Kiely III, CBC president and chief executive officer, said, "We achieved record results for the quarter despite higher costs per barrel. These higher costs were primarily due to the continuing shift in consumer demand toward higher-cost brands and packages, along with higher costs related to aluminum and fuel rates. Also important, our costs were higher because of operating inefficiencies related to meeting unusually high demand for our brands this summer.
"Looking ahead, we are beginning the fourth quarter with good sales momentum in an encouraging pricing environment. We will, however, be going up against strong volume growth trends a year ago that were partially due to Year 2000 pantry loading at the end of 1999. As such, we face a difficult challenge to achieve on-trend volume growth in the fourth quarter, excluding the extra week in our fiscal fourth quarter this year."
For the first three quarters of 2000, Coors reported record net sales of $1.68 billion, up 7.9 percent from $1.56 billion last year. Year-to-date 2000 sales volume totaled a record 17,452,000 barrels, up 4.7 percent from 16,669,000 barrels last year. Sales to retail increased approximately 5.7 percent from a year ago. After-tax income, excluding special items, was $99.4 million year to date, an increase of 18.9 percent from $83.5 million in 1999. Excluding special items, year-to-date 2000 earnings per diluted share were $2.66, up 19.3 percent from $2.23 a year ago.
Including special items, year-to-date net income was a record $97.7 million, or $2.61 per diluted share, up 22.0 percent from $80.0 million in 1999.
Third quarter 2000 results included a $5.4 million pretax special credit primarily due to the settlement of a past insurance claim.
Second quarter 2000 results included a $15.5 million pretax special charge related to closing the company's sales and brewing operations in Spain by the end of 2000. With the closure of the Spain operations in the fourth quarter, the company will incur additional expenses that it anticipates will be much smaller than the second quarter 2000 special charge.
Third quarter 1999 results included pretax special charges of $5.7 million, due to severance costs associated with restructuring the company's Engineering & Construction unit, as well as costs related to the purchase and resale of a distributorship in Colorado Springs, Colo.
Capital Expenditure Plans
Updating its 2000 capital expenditure plans, the company announced that it now expects capital spending in the range of $145 million to $155 million for full year 2000. The company also announced a preliminary capital spending plan in the range of $200 million to $240 million for 2001. This level of investment represents a significant increase over recent years, driven entirely by increased demand for the company's products. In the short term, these investments in added capacity will help the company avoid some of the inefficiencies it has experienced as a result of increasing capacity constraints. Longer term, the company anticipates that these capital improvements will achieve significant production efficiencies. Because some of these investments will provide a foundation for future capacity additions, 2002 capital expenditures are expected to be lower than in 2001.
ADOLPH COORS COMPANY
SUMMARY OF OPERATIONS
3rd QUARTER 2000
(Dollars in thousands, Thirteen Weeks Ended Thirty-nine Weeks Ended
except per share data) Sept. 24, Sept. 26, Sept. 24, Sept. 26,
2000 1999 2000 1999
Barrels of beer and
other malt beverages
sold 6,236,000 5,754,000 17,452,000 16,669,000
Sales - domestic and
international $719,734 $651,054 $2,008,803 $1,867,579
Beer excise taxes (116,459) (107,029) (326,927) (308,124)
Net sales 603,275 544,025 1,681,876 1,559,455
Costs and expenses:
Cost of goods sold (359,513) (320,538) (994,361) (908,140)
Gross Profit 243,762 223,487 687,515 651,315
Marketing, general and
administrative (197,702) (184,305) (538,974) (520,301)
Special credit (charge) 5,442 (5,705) (10,060) (5,705)
Operating income 51,502 33,477 138,481 125,309
Other income - net 214 55 1,819 1,057
Interest income - net 3,917 2,118 9,916 4,325
Income before income
taxes 55,633 35,650 150,216 130,691
Income tax expense (21,141) (13,814) (52,561) (50,643)
Net income $34,492 $21,836 $97,655 $80,048
Net income per common
share (basic) $ 0.94 $ 0.59 $ 2.66 $ 2.18
Net income per common
share (diluted) $ 0.92 $ 0.58 $ 2.61 $ 2.14
number of shares
o/s (basic) 36,861,115 36,747,031 36,745,418 36,714,040
number of shares
o/s (diluted) 37,557,478 37,433,105 37,371,002 37,472,330
Cash dividends declared
per share $ 0.185 $ 0.165 $ 0.535 $ 0.480
Excluding special items:
Operating earnings $46,060 $39,182 $148,541 $131,014
Earnings before income
taxes $50,191 $41,355 $160,276 $136,396
After-tax earnings $31,118 $25,330 $99,371 $83,543
per share (basic) $0.84 $0.69 $2.70 $2.28
per share (diluted) $0.83 $0.68 $2.66 $2.23
Companies: Adolph Coors
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