Indianapolis-based National Wine & Spirits, Inc. reported its financial results for the quarter ended September 30, 2000. Revenue for the quarter increased 20.1% to $156.6 million compared to $130.4 million in the prior year, meeting expectations. Operating income increased 12.2% to $2.9 million vs. $2.6 million in the prior year.

Earnings for the quarter did not keep pace with the sales increase for several reasons:

  1. Gross margin percent for product sales was down for the quarter (19.4% vs. 21.0%) from the prior year reflecting a more normal sales mix this year than in 1999 when we had an increased mix of smaller, higher margin customers who had not bought in prior to the price increase of July 1, 1999. Also contributing to lower margins this year was the sale in June 2000 of Cameron Springs which always had significantly higher margins than the Company as a whole.

  2. Operating earnings from U.S. Beverage were down from last year as the sales growth of Hooper's Hooch slowed down while a planned expansion of the organization increased operating costs. The organizational changes were necessary to put U.S. Beverage in a position to compete for some important beer franchises.
  3. Net income for the six months was $10.0 million vs. $3.2 million in the prior year due primarily to the sale of Cameron Springs. The Company's adjusted EBITDA (EBITDA plus LIFO charge) was $14.0 million for the six months ended September 2000, compared to $14.2 million in the prior year. Adjusted EBITDA was $27.2 million for the latest twelve months ended September 30, 2000 as compared to $26.2 million for the prior twelve month period.

    The Company expects that the third and fourth quarters of this fiscal year will show some improvement over the same period in the prior year. For the year ending March 31, 2001, adjusted EBITDA should show a small increase over the prior year. The Company expects that capital expenditures for the year ended March 31, 2001, will be at or slightly above the prior year.

    The Company continues to be concerned about the pending sale of the Seagram wine & spirits brands. At this point, there has been no decision on which buyer will prevail.

    Indianapolis-based National Wine & Spirits, Inc. is one of the leading distributors of alcohol beverages in the U.S. The Company has a strong portfolio that includes brands from Seagram [VO], Fortune Brands [FO], Diageo [DEO], Canandaigua Brands [CDB], Brown-Forman, Allied Domecq, Sebastiani Winery, Sutter Home Winery, Banfi, and Beringer Wine [BERW] among others.

    Certain information in this press release may contain forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, and similar matters. Such statements are necessarily estimates reflecting the Company's best judgment based on current information, and the Company's actual results could differ materially. The Company notes that a variety of factors could cause the Company's actual results and experiences to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements in its most recent Form 10-K, Form 10-Q and Exhibits 99 thereto. The risks and uncertainties that may affect the operations, performance and results of the Company's business include, without limitation, economic and competitive conditions in the markets in which the Company operates; strikes or other work stoppages affecting the Company or its major customers or suppliers; the Company's ability to continue to control and reduce its costs of storage and distribution; the level of consumer demand in the states in which the Company operates for the Company's line of alcohol- based beverages; supplier consolidation could result in brand realignment and the loss of certain products and customers; the risks associated with the reliance on one or a few significant suppliers; the impact of significant price increases or decreases in availability of certain alcohol-based beverages distributed by the Company; the nature and extent of any current or future state and federal regulations regarding the distribution of alcohol- based beverages; changes in financial markets affecting the Company's financial structure and the Company's costs of capital and borrowed money; and any other factors which may be identified from time to time in the Company's periodic SEC filings and other public announcements. The Company does not intend to update forward-looking statements.