GOLDEN, Colo., Feb 5, 2004 /PRNewswire-FirstCall via COMTEX/ -- Adolph Coors Company
(NYSE: RKY) today announced higher consolidated net sales, net income and
earnings per share for 2003, despite declining U.S. beer sales late in the
year.
For the 52-week fiscal year ended Dec. 28, 2003, the company achieved
consolidated net sales of $4.0 billion, a 5.9 percent increase from 2002.
Reported sales volume totaled 32,735,000 U.S. barrels, or 38,413,000
hectoliters (HLs), in 2003, a 2.8 percent increase from 2002. Consolidated
2003 net income was $174.7 million, or $4.77 per diluted share, up 8.0 percent
from a year ago. Higher 2003 earnings were attributable primarily to a lower
effective tax rate, solid beer pricing in the company's Americas business,
higher Europe segment volume and margins, and favorable foreign currency
exchange rates.
Leo Kiely, CBC president and chief executive officer, said, "Overall, 2003
was a tough year for Coors Brewing Company. Our U.S. business suffered from
weak industry demand, increased popularity of 'low-carbohydrate' beers, and
product supply disruptions resulting from implementation of our new supply
chain systems and processes late in the year. After a disappointing first
half of the year, our U.K. business achieved solid earnings growth in the
second half of the year, driven by strong volume and share performance from
the Carling brand, improved pricing in both the on- and off-trade channels,
favorable foreign exchange rates, and significant improvements in operations
costs compared to the prior year."
Kiely added, "During 2003, we also continued to make progress in key high-
opportunity areas of our U.S. business, including young-adult and Hispanic
marketing and the on-premise and convenience-store channels. In the U.K.,
we're pleased with the success of our Carling Extra Cold roll-out last year
and the initial results of the recent Coors Fine Light launch. In addition,
we achieved further cost reductions in key areas of our U.S. and U.K.
operations, and we increased our efforts in the area of product innovation
that we believe will renew category excitement and results for both our U.S.
and U.K. brand portfolios.
"Finally, we increased cash generation and made net principal payments on
debt totaling $272 million, partially aided by some one-time factors,
including lower cash taxes. Going forward, our focus will be on sustaining
the progress that we made late last year in Europe and restoring volume growth
in key markets in the Americas business."
Consolidated 4th Quarter Results
For the 13-week fourth quarter ended Dec. 28, 2003, the company reported
net sales of $1.0 billion, up 4.3 percent from the fourth quarter of 2002.
Fourth quarter 2003 sales volume decreased 1.7 percent from the fourth quarter
2002. Fourth quarter 2003 net income was $36.1 million, or $0.98 per diluted
share, up 78.5 percent from a year ago.
Americas Segment Results
For the full year 2003, Americas segment net sales increased 0.4 percent
from a year earlier. Americas sales volume and sales to retail for 2003
decreased 1.4 percent from the prior year. U.S. distributor sales to
retail -- excluding sales to the Caribbean and Asia -- decreased 1.0 percent
for the full year, compared to 2002. Pretax income for the full year 2003
increased 1.0 percent from 2002.
In the fourth quarter 2003, net sales in the Americas segment decreased
0.8 percent from the fourth quarter a year ago. Fourth quarter sales volume
for the segment was down 2.7 percent from a year earlier, while sales to
retail were down approximately 2.6 percent. Excluding sales to the Caribbean
and Asia, U.S. distributor sales to retail decreased 2.8 percent in the fourth
quarter, compared to 2002. Pretax earnings were up 14.6 percent from a year
earlier.
The supply chain disruptions in the U.S. business resulted in
approximately $8 million of additional costs in the fourth quarter, primarily
in freight, labor and finished goods loss. The disruptions also had a
negative impact on volume and earnings. While performance of the new supply-
chain systems and processes has improved considerably since last fall, more
work needs to be done to improve the reliability and efficiency of the systems
in order to meet the demands of peak season. Although U.S. distributor
inventories ended the year approximately 100,000 barrels above the prior year,
the company's U.S. distributors continue to experience product stock-outs,
particularly of lower-volume products. The company continues to focus on
eliminating all product stock-outs, which currently remain above levels before
the supply chain changeover.
The company's business in Canada posted pretax earnings of $47.5 million
for full year 2003, up 28.5 percent from 2002, and $12.6 million in fourth
quarter 2003, up 38.5 percent from a year ago, driven by a 10.8 percent
appreciation in the Canadian dollar vs. the U.S. dollar during the year, high-
single-digit volume growth and improved beer pricing.
Europe Segment Results
Europe segment 2003 full-year comparisons with 2002 results are hard to
make, since 2002 results exclude the first five weeks of the year. In
addition, 2003 results benefited from an 8.4 percent appreciation in the
British pound versus the U.S. dollar. Overall, the company's key brands in
the U.K. -- especially Carling and Grolsch -- continued to grow volume and
market share versus 2002.
In the fourth quarter 2003, the Europe segment achieved a 10.9 percent
increase in net sales from the fourth quarter of 2002. Sales volume increased
0.2 percent versus a year ago, driven by the Carling brand growing at a high-
single-digit rate, largely offset by declines in other brands. Grolsch volume
declined in the fourth quarter, driven by our renewed focus on off-trade
margins, in contrast to aggressive discounting a year ago. Europe segment
2003 fourth quarter pretax income increased 60.7 percent from the prior year
driven by operations cost savings, less off-trade discounting, appreciation of
the British pound vs. the U.S. dollar, and lapping unusually high costs in the
fourth quarter of 2002.
Adolph Coors Company will conduct a conference call with financial
analysts and investors at noon Eastern Time today to discuss the company's
year-end and fourth 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 March 5, 2004.
(Summary of Operations Attached)
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. It also includes financial information, of which, as of the date of
this press release, the Company's independent auditors have not completed
their audit. Subsequent events may occur or additional information may arise
that could have an effect on the final year-end financial information.
Although the Company believes that the assumptions upon which the financial
information and 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 preferences and product trends; price
discounting by major competitors; unanticipated expenses, margin impact and
other factors resulting from the implementation of our new supply chain
process; and increases in cost generally. All forward-looking statements in
this press release are expressly qualified by such cautionary statements and
by reference to the underlying assumptions. We do not undertake to publicly
update forward-looking statements, whether as a result of new information,
future events or otherwise.
ADOLPH COORS COMPANY
SUMMARY OF OPERATIONS - CONSOLIDATED
4th QUARTER AND FULL YEAR 2003
(Unaudited)
Thirteen Weeks Ended Fifty-two Weeks Ended
Dec. 28, Dec. 29, Dec. 28, Dec. 29,
(In thousands, except per 2003 2002 2003 2002
share data)
Barrels of beer and other
beverages sold 7,913 8,047 32,735 31,841
Sales - domestic and
international $1,396,803 $1,326,944 $5,387,220 $4,956,947
Beer excise taxes (373,931) (345,811) (1,387,107) (1,180,625)
Net sales 1,022,872 981,133 4,000,113 3,776,322
Costs and expenses:
Cost of goods sold (686,206) (656,072) (2,586,783) (2,414,530)
Gross profit 336,666 325,061 1,413,330 1,361,792
Marketing, general and
administrative (270,524) (279,156) (1,105,959) (1,057,240)
Special charges - net -- (4,465) -- (6,267)
Operating income 66,142 41,440 307,371 298,285
Other income - net 2,106 4,139 8,397 8,047
Interest expense - net (14,339) (15,251) (61,950) (49,732)
Earnings before income
taxes 53,909 30,328 253,818 256,600
Income tax expense (17,828) (10,113) (79,161) (94,947)
Net income $36,081 $20,215 $174,657 $161,653
Net income per share
(basic) $0.99 $0.56 $4.81 $4.47
Net income per share
(diluted) $0.98 $0.55 $4.77 $4.42
Weighted average number of
shares o/s (basic) 36,376 36,275 36,338 36,140
Weighted average number of
shares o/s (diluted) 36,726 36,774 36,596 36,566
Cash dividends declared
per share $0.205 $0.205 $0.820 $0.820
Note: Results for the first 5 weeks of fiscal 2002 exclude Coors Brewers
Limited (U.K.)
ADOLPH COORS COMPANY
SUMMARY OF OPERATIONS - AMERICAs
4th QUARTER AND FULL YEAR 2003
(Unaudited)
Thirteen Weeks Ended Fifty-two Weeks Ended
Dec. 28, Dec. 29, Dec. 28, Dec. 29,
(In thousands) 2003 2002 2003 2002
Barrels of beer and other
beverages sold 5,090 5,231 22,374 22,688
Sales - domestic and
international $641,144 $648,873 $2,813,866 $2,811,326
Beer excise taxes (90,781) (93,940) (404,271) (410,477)
Net sales 550,363 554,933 2,409,595 2,400,849
Costs and expenses:
Cost of goods sold (350,792) (356,875) (1,474,250) (1,481,630)
Gross profit 199,571 198,058 935,345 919,219
Marketing, general and
administrative (168,457) (168,791) (717,622) (701,454)
Special charges - net -- (4,465) -- (3,625)
Operating income 31,114 24,802 217,723 214,140
Other income - net 588 2,856 3,485 4,864
Interest expense - net -- -- -- --
Earnings before income taxes $31,702 $27,658 $221,208 $219,004
ADOLPH COORS COMPANY
SUMMARY OF OPERATIONS - EUROPE
4th QUARTER AND FULL YEAR 2003
(Unaudited)
Thirteen Weeks Ended Fifty-two Weeks Ended
Dec. 28, Dec. 29, Dec. 28, Dec. 29,
(In thousands) 2003 2002 2003 2002
Barrels of beer and other
beverages sold 2,823 2,816 10,361 9,153
Sales - domestic and
international $755,659 $678,071 $2,573,354 $2,145,621
Beer excise taxes (283,150) (251,871) (982,836) (770,148)
Net sales 472,509 426,200 1,590,518 1,375,473
Costs and expenses:
Cost of goods sold (335,414) (299,197) (1,112,533) (932,900)
Gross profit 137,095 127,003 477,985 442,573
Marketing, general and
administrative (93,987) (102,644) (361,553) (331,656)
Special charges -- -- -- --
Operating income 43,108 24,359 116,432 110,917
Other income - net 1,205 1,443 4,114 1,766
Interest income - net 4,196 4,385 17,156 16,390
Earnings before income taxes $48,509 $30,187 $137,702 $129,073
Note: Results for the first 5 weeks of fiscal 2002 exclude Coors Brewers
Limited (U.K.)
ADOLPH COORS COMPANY
SUMMARY OF OPERATIONS - CORPORATE
4th QUARTER AND FULL YEAR 2003
(Unaudited)
Thirteen Weeks Ended Fifty-two Weeks Ended
Dec. 28, Dec. 29, Dec. 28, Dec. 29,
(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 (8,080) (7,721) (26,784) (24,130)
Special charges - net -- -- -- (2,642)
Operating loss (8,080) (7,721) (26,784) (26,772)
Other income (expense) - net 313 (160) 798 1,417
Interest expense - net (18,535) (19,636) (79,106) (66,122)
Loss before income taxes $(26,302) $(27,517) $(105,092) $(91,477)
SOURCE Adolph Coors Company
media, Coors Corporate Communications, +1-303-277-2555, or
investors, Dave Dunnewald, +1-303-279-6565, or Kevin Caulfield,
+1-303-277-6894, all of Adolph Coors Company
http://www.coors.com
