Coors Reports Second Quarter Results

July 24, 2003

GOLDEN, Colo., July 24 /PRNewswire-FirstCall/ -- Adolph Coors Company (NYSE: RKY) today announced higher consolidated sales for the second quarter of 2003. The company also reported higher net income and earnings per share, driven by a reduction in the company's effective tax rate in the quarter.

For the 13-week quarter ended June 29, 2003, the company reported consolidated net sales of $1.1 billion, a 5.0 percent increase from a year earlier. Second quarter consolidated sales volume totaled 9,132,000 U.S. barrels, or 10,716,000 hectoliters (HLs), up 2.8 percent from a year ago.

The company reported consolidated 2003 second quarter net income of $76.3 million, a 12.9 percent increase from the second quarter of 2002. Second quarter 2003 diluted earnings per share were $2.09, growing 13.6 percent from $1.84 per diluted share last year. This increase was driven by a temporary reduction in the company's effective tax rate to 25.8 percent in the second quarter, primarily related to the Coors Brewers Limited (CBL) acquisition tax structure and the favorable resolution of several tax audits. The tax rate for full year 2003 is currently anticipated to be in the range of 31 to 32 percent, with the longer-term rate closer to 36 percent.

Leo Kiely, Coors Brewing Company (CBC) president and chief executive officer, said, "Although Coors Brewing Company's sales and net income were higher in the second quarter, our operating income declined 4.1 percent as a result of challenges in both of our major business segments. Lower Americas sales-to-retail reflected a very soft U.S. beer industry, which was hindered by poor weather in many parts of the country and general economic weakness that continued from the first quarter of the year. In addition, we faced challenges in a few high-share markets. Lower sales-to-retail largely offset solid pricing and margins in the quarter. U.S. Coors Light sales-to-retail declined at a low-single-digit rate, while Keystone Light continued to grow at a low-double-digit rate. In our U.K. business, strong volume performance was offset by negative channel shifts, off-premise price discounting and reduced income from sales of other companies' beverage brands ("factored brands") that are sold through our U.K. sales and distribution structure. Year-over-year results were also reduced by several transitional arrangements that generated pretax income in 2002, but not this year. These transitional arrangements, which are no longer in effect, included contract brewing and other services related to the CBL acquisition. Consolidated second quarter operating results also were reduced by expected higher pension and interest expense.

"Highlights during the quarter included further significant progress by our U.S. operations team in reducing costs per barrel, which more than offset increased pension and fuel costs. We were successful in rebuilding our U.S. distributor inventories during the quarter, and we're encouraged by stronger U.S. sales trends in early July as we entered the second half of the peak summer selling season. Also, our Coors Light business in Canada continued its strong performance, growing volume at a mid-single-digit rate and posting pretax earnings of $11.9 million. In our Europe segment, volume and share trends in our U.K. business were very strong, driven by our Carling brand growing at a low-double-digit rate and Grolsch volume growing at a solid double-digit rate.

"Looking ahead, we expect that sales mix shifts in our Americas and Europe segments will continue to challenge us. During the remainder of the year, we will focus on improving these trends, while driving volume and share growth."

Americas Segment Results

Americas segment net sales increased 2.3 percent compared to the second quarter 2002. Second quarter 2003 sales volume totaled 6,419,000 U.S. barrels (7,533,000 HLs), up 0.8 percent from 2002. U.S. domestic sales-to-retail decreased an estimated 1.9 percent during the quarter compared to the second quarter of 2002. Total Americas distributor sales-to-retail decreased about 3.1 percent, largely due to an excise tax increase in Puerto Rico during June of last year. Pretax income in the Americas segment increased 4.0 percent to $90.2 million.

Europe Segment Results

Europe segment net sales increased 10.0 percent in the second quarter of 2003. Second quarter 2003 sales volume of owned and licensed beverage brands totaled 2,713,000 U.S. barrels (3,184,000 HLs), up 8.1 percent from a year ago. Europe segment pretax income of $41.9 million was down 10.1 percent from a year ago.

Adolph Coors Company will conduct a conference call with financial analysts and investors at noon Eastern Time today to discuss the company's second quarter financial results. A live webcast of the conference call will be accessible via the company's website, www.coors.com, in the "Invest In Us" area of the site. An online replay of the conference call webcast will be available within two hours following the live webcast until 11:59 p.m. Eastern Time on August 24, 2003.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the federal securities laws, commonly identified by such terms as "looking ahead," "anticipates," "estimates" and other terms with similar meaning. Although the Company believes that the assumptions upon which its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Company's projections and expectations are disclosed in the Company's filings with the Securities and Exchange Commission. These factors include, among others, changes in consumer product preferences, industry price discounting, and increases in costs. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions.

 ADOLPH COORS COMPANY
                     SUMMARY OF OPERATIONS - CONSOLIDATED
                               2nd QUARTER 2003
                                 (Unaudited)

                                   Thirteen Weeks        Twenty-six Weeks
                                        Ended                  Ended
    (In thousands,               June 29,   June 30,    June 29,    June 30,
     except per share data)        2003       2002        2003        2002

    Barrels of beer and other
     beverages sold                 9,132       8,881      16,050      15,387

    Sales - domestic and
     international             $1,469,371 $1,363,025 $2,570,226 $2,307,281
    Beer excise taxes            (368,995)   (315,256)   (641,709)   (513,690)
    Net sales                   1,100,376   1,047,769   1,928,517   1,793,591

    Costs and expenses:
      Cost of goods sold         (683,087)   (640,020) (1,242,561) (1,122,364)
        Gross profit              417,289     407,749     685,956     671,227

      Marketing, general and
       administrative            (299,812)   (286,311)   (554,122)   (501,725)
      Special credits
       (charges)                       --       1,074          --      (1,802)
    Operating income              117,477     122,512     131,834     167,700

      Other income
       (expense) - net              2,908      (2,571)      6,292       2,356
      Interest expense - net      (17,491)    (13,216)    (33,972)    (18,365)
    Earnings before
     income taxes                 102,894     106,725     104,154     151,691
    Income tax expense            (26,552)    (39,109)    (27,006)    (56,872)
    Net income                    $76,342 $67,616 $77,148 $94,819

    Net income per share
     (basic)                        $2.10 $1.87 $2.12 $2.63
    Net income per share
     (diluted)                      $2.09 $1.84 $2.11 $2.60

    Weighted average number of
     shares o/s (basic)            36,319      36,117      36,318      36,045
    Weighted average number of
     shares o/s (diluted)          36,524      36,683      36,541      36,477

    Cash dividends declared
     per share                     $0.205      $0.205      $0.410      $0.410

     Note:  Results for the first 5 weeks of fiscal 2002 exclude Coors Brewers
            Limited (U.K.)


                             ADOLPH COORS COMPANY
                       SUMMARY OF OPERATIONS - AMERICAs
                               2nd QUARTER 2003
                                 (Unaudited)

                                      Thirteen Weeks      Twenty-six Weeks
                                          Ended                 Ended
                                    June 29,  June 30,   June 29,   June 30,
    (In thousands)                    2003      2002       2003       2002

    Barrels of beer and other
     beverages sold                   6,419     6,371      11,324      11,501

    Sales - domestic and
     international                 $808,164 $791,531 $1,423,689 $1,428,500
    Beer excise taxes              (116,131) (114,955)   (204,900)   (206,948)
    Net sales                       692,033   676,576   1,218,789   1,221,552

    Costs and expenses:
      Cost of goods sold           (401,512) (400,473)   (739,102)   (743,805)
        Gross profit                290,521   276,103     479,687     477,747

      Marketing, general and
       administrative              (201,106) (191,113)   (366,245)   (348,890)
      Special charges                    --     1,644          --         840
    Operating income                 89,415    86,634     113,442     129,697

      Other income
       (expense) - net                  795       142       3,457          (7)
      Interest expense - net             --        --          --          --
    Earnings before income taxes    $90,210 $86,776 $116,899 $129,690 ADOLPH COORS COMPANY
                        SUMMARY OF OPERATIONS - EUROPE
                               2nd QUARTER 2003
                                 (Unaudited)

                                      Thirteen Weeks       Twenty-six Weeks
                                           Ended                 Ended
                                     June 29,  June 30,   June 29,   June 30,
    (In thousands)                     2003      2002       2003       2002

    Barrels of beer and other
     beverages sold                     2,713     2,510       4,726     3,886

    Sales - domestic and
     international                   $661,207 $571,494 $1,146,537 $878,781
    Beer excise taxes                (252,864) (200,301)   (436,809) (306,742)
    Net sales                         408,343   371,193     709,728   572,039

    Costs and expenses:
      Cost of goods sold             (281,575) (239,547)   (503,459) (378,559)
        Gross profit                  126,768   131,646     206,269   193,480

      Marketing, general and
       administrative                 (91,472)  (88,923)   (175,417) (141,976)
      Special charges                      --        --          --        --
    Operating income                   35,296    42,723      30,852    51,504

      Other income
       (expense) - net                  2,203    (1,117)      3,008       761
      Interest income - net             4,388     5,011       8,753     7,431
    Earnings before income taxes      $41,887 $46,617 $42,613 $59,696

     Note:  All results prior to 2/2/02 exclude Coors Brewers Limited, leaving
            only pre-CBL-acquisition Europe results prior to 2/2/02.


                             ADOLPH COORS COMPANY
                      SUMMARY OF OPERATIONS - CORPORATE
                               2nd QUARTER 2003
                                 (Unaudited)

                                         Thirteen Weeks     Twenty-six Weeks
                                              Ended               Ended
                                        June 29,  June 30,  June 29,  June 30,
    (In thousands)                        2003      2002      2003      2002

    Barrels of beer and other
     beverages sold                          --        --        --        --

    Sales - domestic and
     international                         $ --      $ --      $ --      $ --
    Beer excise taxes                        --        --        --        --
    Net sales                                --        --        --        --

    Costs and expenses:
      Cost of goods sold                     --        --        --        --
        Gross profit                         --        --        --        --

      Marketing, general and
       administrative                    (7,234)   (6,275)  (12,460)  (10,859)
      Special charges                        --      (570)       --    (2,642)
    Operating loss                       (7,234)   (6,845)  (12,460)  (13,501)

      Other (expense)
       income - net                         (90)   (1,596)     (173)    1,602
      Interest expense - net            (21,879)  (18,227)  (42,725)  (25,796)
    Loss before income taxes           $(29,203) $(26,668) $(55,358) $(37,695)

SOURCE Adolph Coors Company
07/24/2003
CONTACT: news media, Aimee Valdez, +1-303-277-6472, or investor
relations, Dave Dunnewald, +1-303-279-6565, or Kevin Caulfield,
+1-303-277-6894, all of Adolph Coors Company
Web site: http://www.coors.com