Constellation Brands Inc. (STZ, Financial) filed Annual Report for the period ended 2012-02-29.
Constellatn Brd has a market cap of $4.38 billion; its shares were traded at around $21.54 with a P/E ratio of 9.3 and P/S ratio of 1.7.
The Company recorded impairment losses of $38.1 million and $23.6 million for Fiscal 2012 and Fiscal 2011, respectively. The Fiscal 2012 impairment loss resulted from the Companys fourth quarter annual review, pursuant to the Companys accounting policy, of indefinite lived intangible assets for impairment. The Company determined that trademarks associated with the CWNA segments Canadian business were impaired largely due to lower revenue and profitability associated with products incorporating these assets included in long-term financial forecasts developed as part of the strategic planning cycle conducted during the Companys fourth quarter. As a result of this review, the Company recorded an impairment loss of $38.1 million, which is included in impairment of intangible assets on the Companys Consolidated Statements of Operations. The Fiscal 2011 impairment losses resulted primarily from the Companys fourth quarter annual review, pursuant to the Companys accounting policy, of indefinite lived intangible assets for impairment. The Company determined that trademarks associated with the CWNA segments Canadian business were impaired largely due to lower revenue
The Company recorded impairment losses of $23.6 million and $103.2 million for Fiscal 2011 and Fiscal 2010, respectively. The Fiscal 2011 impairment losses resulted primarily from the Companys fourth quarter annual review, pursuant to the Companys accounting policy, of indefinite lived intangible assets for impairment. The Company determined that trademarks associated with the CWNA segments Canadian business were impaired largely due to lower revenue and profitability associated with products incorporating these assets included in long-term financial forecasts developed as part of the strategic planning cycle conducted during the Companys fourth quarter. As a result of this review, the Company recorded an impairment loss of $16.7 million, which is included in impairment of intangible assets on the Companys Consolidated Statements of Operations. In addition, in the third quarter of fiscal 2011, in connection with the Companys decision to discontinue certain wine brands within its CWNA segments U.S. wine portfolio, the Company determined that certain indefinite lived trademarks associated with the CWNA segments U.S. business were impaired. As a result of this decision, the Company recorded an impairment loss of $6.9 million, which is included in impairment of intangible assets on the Companys Consolidated Statements of Operations. The Fiscal 2010 impairment losses resulted from the Companys fourth quarter annual review, pursuant to the Companys accounting policy, of indefinite lived
The net noncash items consisted primarily of depreciation expense, deferred tax provision, stock-based compensation expense and an impairment of intangible assets. The net cash provided by the net change in the Companys operating assets and liabilities resulted primarily from a decrease in inventories of $51.5 million and an increase in other accrued expenses and liabilities of $44.6 million. The decrease in inventories is due primarily to a decrease in U.S. inventory levels driven largely by net sales volume growth during the fourth quarter of fiscal 2012 as compared to the fourth quarter of fiscal 2011 in the U.S. branded wine portfolio, combined with the lower U.S. calendar 2011 grape harvest. The increase in other accrued expenses and liabilities is due largely to an increase in current income taxes payable due primarily to a refund of $85.5 million received in the first quarter of fiscal 2012 associated with the recognition of income tax benefits in the fourth quarter of fiscal 2011 in connection with the January 2011 CWAE Divestiture.
Accounting for promotional activities. Sales reflect reductions attributable to consideration given to customers in various customer incentive programs, including pricing discounts on single transactions, volume discounts, promotional and advertising allowances, coupons, and rebates. Certain customer incentive programs require management to estimate the cost of those programs. The accrued liability for these programs is determined through analysis of programs offered, historical trends, expectations regarding customer and consumer participation, sales and payment trends, and experience with payment patterns associated with similar programs that have been offered previously. If assumptions included in the Companys estimates were to change or market conditions were to change, then material incremental reductions to revenue could be required, which could have a material adverse impact on the Companys financial statements. Promotional costs were $418.5 million, $699.0 million and $749.8 million for Fiscal 2012, Fiscal 2011 and Fiscal 2010, respectively. Accrued promotion costs were $58.0 million and $52.3 million as of February 29, 2012, and February 28, 2011, respectively.
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Constellatn Brd has a market cap of $4.38 billion; its shares were traded at around $21.54 with a P/E ratio of 9.3 and P/S ratio of 1.7.
Highlight of Business Operations:
The increase in CWNAs selling, general and administrative expenses is due to increases in advertising expenses (on a constant currency basis) of $11.6 million, selling expenses (on a constant currency basis) of $5.7 million and an unfavorable year-over-year foreign currency translation impact of $4.7 million, partially offset by a decrease in general and administrative expenses (on a constant currency basis) of $21.1 million. The increases in advertising and selling expenses are due largely to the launch of several new products in the segments U.S. branded wine portfolio. The decrease in general and administrative expenses is primarily due to (i) a favorable legal settlement in the U.S. related to the use of a certain intangible asset, (ii) lower annual profit sharing and management incentive compensation expense and (iii) higher gains on foreign currency transactions. Selling, general and administrative expenses as a percent of net sales increased to 19.6% for Fiscal 2012 as compared to 19.2% for Fiscal 2011 primarily due to the factors discussed above, combined with lower U.S. base branded wine net sales.The Company recorded impairment losses of $38.1 million and $23.6 million for Fiscal 2012 and Fiscal 2011, respectively. The Fiscal 2012 impairment loss resulted from the Companys fourth quarter annual review, pursuant to the Companys accounting policy, of indefinite lived intangible assets for impairment. The Company determined that trademarks associated with the CWNA segments Canadian business were impaired largely due to lower revenue and profitability associated with products incorporating these assets included in long-term financial forecasts developed as part of the strategic planning cycle conducted during the Companys fourth quarter. As a result of this review, the Company recorded an impairment loss of $38.1 million, which is included in impairment of intangible assets on the Companys Consolidated Statements of Operations. The Fiscal 2011 impairment losses resulted primarily from the Companys fourth quarter annual review, pursuant to the Companys accounting policy, of indefinite lived intangible assets for impairment. The Company determined that trademarks associated with the CWNA segments Canadian business were impaired largely due to lower revenue
The Company recorded impairment losses of $23.6 million and $103.2 million for Fiscal 2011 and Fiscal 2010, respectively. The Fiscal 2011 impairment losses resulted primarily from the Companys fourth quarter annual review, pursuant to the Companys accounting policy, of indefinite lived intangible assets for impairment. The Company determined that trademarks associated with the CWNA segments Canadian business were impaired largely due to lower revenue and profitability associated with products incorporating these assets included in long-term financial forecasts developed as part of the strategic planning cycle conducted during the Companys fourth quarter. As a result of this review, the Company recorded an impairment loss of $16.7 million, which is included in impairment of intangible assets on the Companys Consolidated Statements of Operations. In addition, in the third quarter of fiscal 2011, in connection with the Companys decision to discontinue certain wine brands within its CWNA segments U.S. wine portfolio, the Company determined that certain indefinite lived trademarks associated with the CWNA segments U.S. business were impaired. As a result of this decision, the Company recorded an impairment loss of $6.9 million, which is included in impairment of intangible assets on the Companys Consolidated Statements of Operations. The Fiscal 2010 impairment losses resulted from the Companys fourth quarter annual review, pursuant to the Companys accounting policy, of indefinite lived
The net noncash items consisted primarily of depreciation expense, deferred tax provision, stock-based compensation expense and an impairment of intangible assets. The net cash provided by the net change in the Companys operating assets and liabilities resulted primarily from a decrease in inventories of $51.5 million and an increase in other accrued expenses and liabilities of $44.6 million. The decrease in inventories is due primarily to a decrease in U.S. inventory levels driven largely by net sales volume growth during the fourth quarter of fiscal 2012 as compared to the fourth quarter of fiscal 2011 in the U.S. branded wine portfolio, combined with the lower U.S. calendar 2011 grape harvest. The increase in other accrued expenses and liabilities is due largely to an increase in current income taxes payable due primarily to a refund of $85.5 million received in the first quarter of fiscal 2012 associated with the recognition of income tax benefits in the fourth quarter of fiscal 2011 in connection with the January 2011 CWAE Divestiture.
Accounting for promotional activities. Sales reflect reductions attributable to consideration given to customers in various customer incentive programs, including pricing discounts on single transactions, volume discounts, promotional and advertising allowances, coupons, and rebates. Certain customer incentive programs require management to estimate the cost of those programs. The accrued liability for these programs is determined through analysis of programs offered, historical trends, expectations regarding customer and consumer participation, sales and payment trends, and experience with payment patterns associated with similar programs that have been offered previously. If assumptions included in the Companys estimates were to change or market conditions were to change, then material incremental reductions to revenue could be required, which could have a material adverse impact on the Companys financial statements. Promotional costs were $418.5 million, $699.0 million and $749.8 million for Fiscal 2012, Fiscal 2011 and Fiscal 2010, respectively. Accrued promotion costs were $58.0 million and $52.3 million as of February 29, 2012, and February 28, 2011, respectively.
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