Molson Coors Brewing Company
NYSE : TAP
TSX : TAP.NV

Molson Coors Brewing Company

February 09, 2005 23:59 ET

Molson Coors Reports Adolph Coors Company 2004 Fourth Quarter and Full-Year Results

GOLDEN, CO, Feb. 9 - Molson Coors Brewing Company (NYSE: TAP; TSX)
today announced the most recent financial results for Adolph Coors Company,
reporting higher consolidated net sales, net income and earnings per share for
the fourth quarter and full-year 2004.
For the 13-week fourth quarter ended Dec. 26, 2004, the company reported
net sales of $1.1 billion, up 10.2 percent from the fourth quarter of 2003.
Fourth quarter 2004 sales volume increased 4.7 percent from the fourth quarter
2003. Fourth quarter operating income of $90.9 million and net income of
$55.7 million increased 37.5 percent and 54.4 percent, respectively, from a
year ago. Fourth quarter earnings per share were $1.45, up 48.0 percent from
a year earlier. Earnings for fourth quarter 2004 benefited from solid beer
pricing and volume growth in the company's Americas and Europe segments, along
with one-time gains on asset sales totaling $19.2 million pretax, a lower
effective tax rate, and favorable foreign currency exchange rates. These
results do not include Molson Inc. financial results for the quarter ended
December 2004, which were released separately.
For the 52-week fiscal year ended Dec. 26, 2004, Adolph Coors Company
achieved consolidated net sales of $4.3 billion, a 7.6 percent increase from
2003. Reported sales volume totaled 32,703,000 U.S. barrels, or 38,376,000
hectoliters, in 2004, a 0.1 percent decrease from 2003. Net income for the
full year was $196.7 million, a 12.6 percent increase compared to full year
2003, and earnings per share were $5.19, up 8.8 percent from the prior year.
Leo Kiely, chief executive officer, said, "Overall, Adolph Coors Company
finished 2004 with good financial results in a very competitive industry
environment. In the U.S., despite very soft industry demand, our sales to
retail increased in the fourth quarter, partially driven by the comparison to
lower sales in the fourth quarter of 2003, when we faced U.S. supply-chain
challenges. Our volume trends also benefited from the introduction of Aspen
Edge earlier this year and strong growth from our Blue Moon and Zima XXX
brands in the fourth quarter. In addition, continued progress on productivity
initiatives in our U.S. operations enabled us to manage cost pressures, which
were particularly challenging in the areas of energy and packaging materials.
In Canada, our Coors Light business continued to deliver strong profit growth.
"Our U.K. business achieved solid growth in volume, net sales and
earnings for the fourth quarter, despite higher distribution costs and
continued declines in sales of flavored alcohol beverages and non-owned
beverage brands. Profit growth in our Europe segment was driven by a gain on
the sale of our Cape Hill brewery property, strong volume performance from
Carling and Grolsch, improved pricing in both the on- and off-trade channels,
and favorable foreign exchange rates. For the full year, we gained market
share in the U.K. in both the on-trade and off-trade channels.
"On a company-wide basis in the fourth quarter, we repaid about
$127 million of debt, resulting in full-year debt repayments of $382 million.
We have now repaid $862 million of debt in the past three years, essentially
all of our short-term debt and more than half of the debt related to our 2002
CBL acquisition.
"Looking ahead, we will be simultaneously focused on improving the
fundamentals of our U.S. and U.K. businesses and on working with our new
colleagues from Molson to maximize the value opportunities presented by the
Molson Coors merger, which closed earlier today."

Americas Segment Results
In the fourth quarter 2004, net sales in the Americas segment increased
9.0 percent from the fourth quarter a year ago. Fourth quarter sales volume
for the segment was up 4.2 percent from a year earlier, and wholesaler sales
to retail increased 1.0 percent. U.S. sales volume to wholesalers also
increased 4.2 percent, while wholesaler sales to retail increased 0.8 percent
compared to the same period a year ago. Sales volume to wholesalers exceeded
sales to retail because the company's distributors started the fourth quarter
of 2003 with high beer inventories in anticipation of our supply-chain systems
changeover that quarter. Americas segment pretax earnings, up 74.6 percent
from a year earlier, partially benefited by one-time real estate sales of
$11.7 million pretax in the quarter.
For the full year 2004, Americas segment net sales increased 3.0 percent
from a year earlier. Americas segment sales volume for 2004 decreased
0.7 percent compared to the prior year, while sales to retail decreased
0.3 percent. U.S. sales volume and sales to retail decreased 0.8 percent and
0.2 percent, respectively, compared to full year 2003. Pretax income for the
full year 2004 increased 17.8 percent from 2003.
The company's Coors Light business in Canada achieved pretax earnings of
$60.7 million for full year 2004, up 27.7 percent from 2003. Fourth quarter
income of $15.7 million was 25.0 percent higher than a year ago, driven by
mid-single-digit volume growth in a tough market, improved beer pricing, and a
7.3 percent appreciation in the Canadian dollar versus the U.S. dollar during
the quarter.

Europe Segment Results
In the fourth quarter 2004, the Europe segment achieved an 11.7 percent
increase in net sales from the fourth quarter of 2003. Sales volume increased
5.5 percent versus a year ago, driven by the Carling brand growing at a high-
single-digit rate and Grolsch volume growing at a strong-double-digit rate
during the quarter. Europe segment 2004 fourth quarter pretax income
increased to $60.7 million, up 25.2 percent from the prior year, driven by
solid volume growth, a one-time asset sale of $7.5 million pretax (reported as
a special credit on the company's income statement) and 9.3 percent
appreciation of the British pound versus the U.S. dollar.
For the full year 2004, Europe segment net sales increased 14.7 percent
and sales volume increased 1.3 percent compared to full year 2003. Pretax
earnings for the segment in 2004 were $158.7 million, a 15.2 percent increase
from the prior year.

Molson Coors Brewing 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 results. A live webcast of the
conference call will be accessible via the company's website,
www.molsoncoors.com. 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 9, 2005.

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 2004
(Unaudited)

Thirteen Weeks Ended Fifty-two Weeks Ended
(In thousands, except Dec. 26, Dec. 28, Dec. 26, Dec. 28,
per share data) 2004 2003 2004 2003

Barrels of beer and
other beverages sold 8,284 7,913 32,703 32,735

Sales - domestic and
international $1,546,886 $1,396,803 $5,819,727 $5,387,220
Beer excise taxes (419,581) (373,931) (1,513,911) (1,387,107)
Net sales 1,127,305 1,022,872 4,305,816 4,000,113

Costs and expenses:
Cost of goods sold (738,542) (686,206) (2,741,694) (2,586,783)
Gross profit 388,763 336,666 1,564,122 1,413,330

Marketing, general
and administrative (305,362) (270,524) (1,223,219) (1,105,959)
Special item 7,522 -- 7,522 --
Operating income 90,923 66,142 348,425 307,371

Other income - net 7,063 2,106 12,946 8,397
Interest expense
- net (12,358) (14,339) (53,189) (61,950)

Earnings before
income taxes 85,628 53,909 308,182 253,818
Income tax expense (25,570) (17,828) (95,228) (79,161)
Earnings before
minority interest 60,058 36,081 212,954
Minority interest (1) (4,340) -- (16,218) --
Net income $55,718 $36,081 $196,736 $174,657

Net income per
share (basic) $1.49 $0.99 $5.29 $4.81
Net income per
share (diluted) $1.45 $0.98 $5.19 $4.77

Weighted average number
of shares o/s (basic) 37,471 36,376 37,159 36,338
Weighted average number
of shares o/s (diluted) 38,376 36,726 37,909 36,596

Cash dividends declared
per share $0.205 $0.205 $0.820 $0.820

(1) Minority interest is the minority owners' share of income generated
in 2004 by the Rocky Mountain Bottle Company (RMBC), Rocky Mountain
Metal Container (RMMC), and Grolsch NV (Grolsch) joint ventures.



ADOLPH COORS COMPANY
SUMMARY OF OPERATIONS - AMERICAs
4th QUARTER AND FULL YEAR 2004
(Unaudited)

Thirteen Weeks Ended Fifty-two Weeks Ended
Dec. 26, Dec. 28, Dec. 26, Dec. 28,
(In thousands) 2004 2003 2004 2003

Barrels of beer and
other beverages sold 5,305 5,090 22,208 22,374

Sales - domestic and
international $693,685 $641,144 $2,881,687 $2,813,866
Beer excise taxes (94,040) (90,781) (400,649) (404,271)
Net sales 599,645 550,363 2,481,038 2,409,595

Costs and expenses:
Cost of goods sold (367,884) (350,792) (1,478,882) (1,474,250)
Gross profit 231,761 199,571 1,002,156 935,345

Marketing, general
and administrative (187,012) (168,457) (760,623) (717,622)
Special item -- -- -- --
Operating income 44,749 31,114 241,533 217,723

Other income - net 10,587 588 19,150 3,485
Interest expense - net -- -- -- --
Earnings before income
taxes (1) $55,336 $31,702 $260,683 $221,208

(1) Earnings before income taxes in 2004 includes $3,284 and $13,015 for
the thirteen and fifty-two weeks ended December 26, 2004,
respectively, and represents the minority owners' share of income
attributable to the RMBC and RMMC joint ventures.



ADOLPH COORS COMPANY
SUMMARY OF OPERATIONS - EUROPE
4th QUARTER AND FULL YEAR 2004
(Unaudited)

Thirteen Weeks Ended Fifty-two Weeks Ended
Dec. 26, Dec. 28, Dec. 26, Dec. 28,
(In thousands) 2004 2003 2004 2003

Barrels of beer and
other beverages sold 2,979 2,823 10,495 10,361

Sales - domestic and
international $853,201 $755,659 $2,938,040 $2,573,354
Beer excise taxes (325,541) (283,150) (1,113,262) (982,836)
Net sales 527,660 472,509 1,824,778 1,590,518

Costs and expenses:
Cost of goods sold (370,658) (335,414) (1,262,812) (1,112,533)
Gross profit 157,002 137,095 561,966 477,985

Marketing, general
and administrative (105,229) (93,987) (421,100) (361,553)
Special item 7,522 -- 7,522 --
Operating income 59,295 43,108 148,388 116,432

Other income
(expense) - net (2,757) 1,205 (5,753) 4,114
Interest income - net 4,196 4,196 16,024 17,156
Earnings before income
taxes $60,734 $48,509 $158,659 $137,702

(1) Earnings before income taxes in 2004 includes $2,101 ($1,471, net of
tax) and $6,854 ($4,798, net of tax) for the thirteen and fifty-two
weeks ended December 26, 2004, respectively, and represents the
minority owner's share of income attributable to the Grolsch joint
venture.



ADOLPH COORS COMPANY
SUMMARY OF OPERATIONS - CORPORATE
4th QUARTER AND FULL YEAR 2004
(Unaudited)

Thirteen Weeks Ended Fifty-two Weeks Ended
Dec. 26, Dec. 28, Dec. 26, Dec. 28,
(In thousands) 2004 2003 2004 2003

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 (13,121) (8,080) (41,496) (26,784)
Special item -- -- -- --
Operating loss (13,121) (8,080) (41,496) (26,784)

Other income
(expense) - net (767) 313 (451) 798
Interest expense
- net (16,554) (18,535) (69,213) (79,106)
Loss before income
taxes $(30,442) $(26,302) $(111,160) $(105,092)

(1) Loss before income taxes in 2004 includes $415 and $1,595 for the
thirteen and fifty-two weeks ended December 26, 2004 and represents
the minority owner's share of interest expense attributable to debt
obligations of the RMMC joint venture.

Contact Information

  • News Media, Laura Sankey, (303) 277-5035; or
    Investor Relations, Dave Dunnewald, (303) 279-6565; or Kevin Caulfield,
    (303) 277-6894, both of Molson Coors Brewing Company;
    Web site: http://www.molsoncoors.com