The Robert Mondavi Corporation (Nasdaq: MOND) today announced results for its first quarter ended September 30, 2000.

Adjusted net income for the quarter grew 22 percent to $11.3 million, or $0.70 per diluted share, compared to $9.3 million, or $0.58 per diluted share, a year ago. Net revenues for the quarter increased by 20 percent over the same period last year to $97.3 million, driven by a 23 percent increase in sales volume. In addition to strong sales volume growth during the quarter, the company also benefited from improved income from joint ventures that was partially offset by an increase in its operating expense ratio due mainly to new business start-up costs.

Adjusted net income excludes inventory step-up associated with purchase accounting resulting from the company's acquisition of Arrowood Vineyards and Winery and of a minority investment in Ornellaia. For a further explanation of inventory step-up see footnote (A).

"Sales of our Woodbridge and Robert Mondavi Coastal wines were exceptionally strong in preparation for the October debut of national television advertising for these brands," reported R. Michael Mondavi, President and CEO. "While it is too early to evaluate consumer response to the new advertising campaign, the response of our wholesalers and key retailers has been extremely positive." Case sales in U.S. food stores of all of the company's brands combined increased 20 percent over the same period last year, according to ACNielsen/Adams Business Research for the 13 weeks ended September 30, 2000, while sales of the company's wines by wholesalers grew 13 percent during the quarter compared to the same period last year.

R. Michael Mondavi will host a conference call to discuss the quarter's results on Thursday, October 19, 2000 at 7:30 a.m. PT. A live listen only webcast of the conference call will be available at under "Investor Relations." On January 18, 2001, a conference call and live webcast are scheduled to discuss the company's second quarter fiscal 2001 earnings.

The Robert Mondavi family produces and markets fine wines under the following labels: Robert Mondavi Winery, Robert Mondavi Coastal, La Famiglia di Robert Mondavi, Woodbridge Winery, Byron Vineyard and Winery, Io, Arrowood Vineyards and Winery and Vichon Mediterranean. The company also produces Opus One, in partnership with the Baroness Philippine de Rothschild of Chateau Mouton Rothschild of Bordeaux, France; Luce, Lucente and Danzante in partnership with the Marchesi de' Frescobaldi of Tuscany, Italy; and Sena and Caliterra, in partnership with the Eduardo Chadwick family of Vina Errazuriz in Chile. The company has a minority stake in Tenuta dell'Ornellaia, a famous estate in the Bolgheri appelation of Tuscany, producer of Ornellaia and Masseto, founded by Marchese Lodovico Antinori.

(A) Under purchase accounting, the purchase price is allocated to the assets and liabilities of the acquired company based on their estimated fair market values at the time of the transaction. When the inventory acquired is sold in the normal course of business, costs of the inventory are charged to cost of goods sold, including the amount of the inventory step-up (the difference between the original book value of the inventory and the fair market value of the inventory upon acquisition). The inventory step up adjustment reduces the company's reported net income.

(In thousands, except per share data)

Three Months Ended September 30,

Adjusted (A) As Reported
2000 1999 2000 1999
Cases sold 1,966 1,602 1,966 1,602
Net revenues $ 97,278 $ 80,896 $ 97,278 $ 80,896
Cost of goods sold 51,757 42,476 52,857 42,476
Gross profit 45,521 38,420 44,421 38,420
Gross profit % 46.8% 47.5% 45.7% 47.5%
Operating expenses 29,007 23,013 29,007 23,013
Operating income 16,514 15,407 15,414 15,407
Other income (expense):
Interest (4,251) (3,187) (4,251) (3,187)
Other 6,161 2,841 4,852 2,841
Income before income
taxes 18,424 15,061 16,015 15,061
Provision for income
taxes 7,093 5,798 6,166 5,798
Net income 11,331 9,263 9,849 9,263
Weighted average number
of shares outstanding
- Diluted 16,084 15,978 16,084 15,978
Earnings per share
- Diluted $ .70 $ .58 $ .61 $ .58

EBIT $ 22,675 $ 18,248 $ 20,266 $ 18,248
EBIT % 23.3% 22.6% 20.8% 22.6%

At 9/30/00 At 6/30/00
Current assets $ 451,935 $ 383,482
Total assets 821,566 734,943
Current liabilities 144,609 75,410
Total liabilities 462,305 386,775
Shareholders' equity 359,261 348,168
Working capital 307,326 308,072
Total debt 304,292 310,592

(A) Adjusted figures exclude inventory step-up associated with purchase accounting resulting from the company's acquisition of Arrowood Vineyards and Winery and of a minority investment in Ornellaia.