-
Comparable Net Sales Rise at Double-Digit Rate on
Continued Worldwide Gains for Bourbon Brands and New
Product Launches
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Diluted Earnings per Share from Continuing Operations
Increase at Strong Double-Digit Rate
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Results Reinforce Company's Confidence in 2012
Earnings Target
Deerfield, Illinois, May 3, 2012 - Beam Inc. (NYSE: BEAM),
a leading global premium spirits company, today reported
strong results for the first quarter of 2012. Reported net
sales increased 2%, reflecting the adverse impact on
comparisons of the initial sale of inventory in the
year-ago period for the start-up of the company's
enhanced Australia distribution agreement. On a comparable
basis, net sales were up 13%, reflecting strong growth for
the company's bourbon brands and shipments of newly
introduced products.
Operating income grew faster than sales, benefiting from
higher volumes, product mix and foreign exchange. Diluted
earnings per share from continuing operations were $0.49,
up 26%, on a reported basis. Diluted EPS before
charges/gains was $0.53, up 29%, reflecting strong
operating performance and the benefit of lower interest
expense.
Continued Market Outperformance
"We indicated we expected a strong start to 2012, and
the first quarter was a little better than we anticipated
as we benefited from strong demand and excellent initial
sell-in for new product launches that are front-loaded in
2012," said Matt Shattock, president and chief
executive officer of Beam.
"Consistent with our long-term goals, we once again
outperformed our global market on sustained momentum for
our Power Brands, led by continued gains for Jim Beam and
Maker's Mark in the fast-growing bourbon
category," Shattock continued. "Our organic
growth strategy is proving highly effective. Our innovation
pipeline delivered several exciting new products across
categories that helped boost our sales in our seasonally
smallest quarter. Once again, our comparable net sales
growth was broad-based across our three regions, and
emerging markets delivered strong double-digit gains. We
expanded margins and delivered double-digit growth in
operating income and earnings per share."
For the first quarter of 2012:
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Income from continuing operations was $78.4 million, or
$0.49 per diluted share, compared to $61.7 million, or
$0.39 per share, for the first quarter of 2011.
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Excluding charges and gains, diluted EPS from continuing
operations was $0.53, up 29% from $0.41 in the year-ago
quarter.
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Net sales were $533.8 million (excluding excise taxes),
up 2%.
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Net sales were up 13% on a comparable basis, which
adjusts for foreign exchange, acquisitions/divestitures,
and the impact of the Australia spirits distribution
agreement announced in the first quarter of 2011.
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Comparable net sales were up 12% in North America, up
12% in Europe/Middle East/Africa (EMEA), and up 16%
in Asia Pacific/South America (APSA).
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Operating income was $131.1 million, up 17%.
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Operating income before charges/gains was $138.0
million, also up 17%.
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Adjusted return on invested capital (rolling 12 months)
was 7% and was 23% excluding intangibles.
Enhanced Confidence in 2012 Earnings Target
"We're encouraged by the strength of our first
quarter results and our continued outperformance against
our market. Our momentum is carrying into the second
quarter, which is already off to a strong start. As a
reminder, second quarter results will cycle against our
2011 innovations that launched principally in Q2 last
year," Shattock said.
"The strength of our first quarter and our continuing
momentum reinforce our confidence in our 2012 earnings
target. Given that it is still early in the year, we're
currently maintaining our target to deliver
high-single-digit growth in diluted EPS before
charges/gains for 2012," Shattock said.
"Beam is benefitting from strong worldwide demand for
bourbon and the success of our innovations, and we continue
to expect that our global spirits market will grow value in
the range of 3%. As the year progresses, we'll closely
monitor the macro-economic environment, consumer demand for
our latest innovations, growth in the global bourbon
market, and the potential for improvement in the pricing
environment across categories. We're also looking
forward to completing the acquisition of Pinnacle Vodka,
which we believe will further enhance our prospects to
maximize long-term shareholder value," Shattock
concluded.
Key Brand Performance
Comparable net sales growth, year-to-date 2012 (January -
March):
Results include ready-to-drink products
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Comparable net sales growth rate represents the
percentage increase or decrease in reported net sales in
accordance with U.S. GAAP, adjusted for certain items. A
reconciliation from reported to comparable net sales
growth rates, a non-GAAP measure, and the reasons why
management believes these adjustments are useful are
included in the attached financial tables.
-
Total represents consolidated Beam comparable net sales
(excluding excise taxes), including non-branded sales to
third parties.
* * *
About Beam Inc.
As one of the world's leading premium spirits
companies, Beam is Crafting the Spirits that Stir the
World. Consumers from all corners of the globe call for the
company's brands, including Jim Beam Bourbon,
Maker's Mark Bourbon, Sauza Tequila, Canadian Club
Whisky, Courvoisier Cognac, Teacher's Scotch Whisky,
Kilbeggan Irish Whiskey, Laphroaig Scotch Whisky, Cruzan
Rum, Hornitos Tequila, Knob Creek Bourbon, EFFEN Vodka,
Pucker Flavored Vodka, Larios Gin, Whisky DYC, DeKuyper
Cordials, and Skinnygirl Cocktails. Beam is focused on
delivering superior performance with its unique combination
of scale with agility and a strategy of Creating Famous
Brands, Building Winning Markets and Fueling Our Growth.
Beam and its 3,200 passionate associates worldwide
generated 2011 sales of $2.8 billion, volume of 34 million
9-liter cases and some of the industry's fastest
growing innovations.
Headquartered in Deerfield, Illinois, Beam is traded on the
New York Stock Exchange under the ticker symbol BEAM and is
included in the S&P 500 Index and the MSCI World Index. For
more information on Beam, its brands, and its commitment to
social responsibility, please visit www.beamglobal.com and www.drinksmart.com.
Forward-Looking Statements
This press release contains forward-looking statements, as
that term is defined in the Private Securities Litigation
Reform Act of 1995. Readers are cautioned that these
forward-looking statements speak only as of the date
hereof, and the company does not assume any obligation to
update, amend or clarify them to reflect events, new
information or circumstances occurring after the date of
this release. Actual results may differ materially from
those projected as a result of certain risks and
uncertainties, including but not limited to: general
economic conditions and credit market instability,
particularly in Europe; customer defaults and related bad
debt expense; competitive market pressures (including
pricing pressures); changes in customer preferences and
trends; risks pertaining to strategic acquisitions and
joint ventures, particularly financial and integration
risks; any possible downgrades of the company's credit
ratings; commodity and energy price volatility; risks
associated with doing business outside the United States,
including currency exchange rate risks; inability to
attract and retain qualified personnel; the impact of
excise tax increases and customs duties on distilled
spirits; the status of the U.S. rum excise tax cover-over
program; dependence on performance of distributors and
other marketing arrangements; costs of certain employee and
retiree benefits and returns on pension assets; tax law
changes and/or interpretation of existing tax laws;
potential liabilities, costs and uncertainties of
litigation; ability to secure and maintain rights to
trademarks and trade names; impairment in the carrying
value of goodwill or other acquired intangible assets;
disruptions at production facilities; risks related to the
Home & Security spin-off; and other risks and uncertainties
detailed from time to time in the Company's Securities
and Exchange Commission filings.
Use of Non-GAAP Financial Information
This press release includes measures not derived in
accordance with generally accepted accounting principles
("GAAP"), including comparable net sales, diluted
EPS before charges/gains, operating income before
charges/gains, adjusted return on invested capital, and
adjusted return on invested capital excluding intangibles.
These measures should not be considered in isolation or as
a substitute for any measure derived in accordance with
GAAP, and may also be inconsistent with similar measures
presented by other companies. Reconciliation of these
measures to the most closely comparable GAAP measures, and
reasons for the company's use of these measures, are
presented in the attached pages.
# # #
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