Form 8K-071106
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)  July 11, 2006
 
 
 
 
CONSTELLATION BRANDS, INC.
(Exact name of registrant as specified in its charter)

 
 
            Delaware           
 
            001-08495           
 
            16-0716709           
(State or other jurisdiction
of incorporation)
  
(Commission
File Number)
  
(IRS Employer
Identification No.)

 
        370 Woodcliff Drive, Suite 300, Fairport, NY 14450      
(Address of Principal Executive Offices)
 
(Zip Code)
 
 
 
                        Registrant's telephone number, including area code  
  
(585) 218-3600 

 
 
             Not Applicable           
(Former name or former address, if changed since last report)
 
 
 
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
 
 o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
 o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
 o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
 o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

ITEM 2.05
   COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES.
 
On July 11, 2006, Constellation Brands, Inc. (the “Company”) committed to the principal features of a plan to restructure and integrate the operations of Vincor International Inc. (“Vincor”) which the Company acquired on June 5, 2006 (the “Plan”). The Plan is under development and is expected to be finalized by May 31, 2007. The objective of the Plan is to achieve operational efficiencies and eliminate redundant costs resulting from the transaction as well as to achieve greater efficiency in sales, marketing, administrative and operational activities. Approximately 90% of Vincor’s 2,358 worldwide employees will be retained, with positions trimmed coming primarily from sales, marketing, administrative and production redundancies in the United States, United Kingdom and Australia, where Constellation’s operations are significantly larger in scale than Vincor’s. The Plan also includes the termination of various contracts. The actions under the Plan commenced on July 11, 2006, and the Company currently expects to substantially complete the Plan by the end of the Company’s current fiscal year, which ends on February 28, 2007 (“Fiscal 2007”).
 
As further detailed in the table below, a portion of the costs associated with the Plan will be recorded as liabilities in the Company’s allocation of purchase price in connection with the Company’s acquisition of Vincor. The remaining portion of the costs associated with the Plan will be charged to the Company’s results of operations during Fiscal 2007 and its fiscal year ending February 29, 2008 (“Fiscal 2008”). In connection with the Plan, the Company expects to incur aggregate cash expenditures of approximately $89 million, primarily during Fiscal 2007. No non-cash charges are contemplated in connection with the Plan. The following table sets forth the Company’s current expectations related to the Plan:
 

   
Estimated
Purchase
Price
Allocations
  
Estimated
Pretax
Charges
During
Fiscal 2007
  
Estimated
Pretax
Charges
During
Fiscal 2008
  
Estimated
Total
  
(in millions)
                  
Restructuring Costs:
                          
Employee termination costs
  
$
18
  
$
3
  
$
1
  
$
22
  
Contract termination costs
    
29
    
-
    
-
    
29
  
Other associated costs
    
3
    
-
    
-
    
3
  
Total Restructuring Costs
    
50
    
3
    
1
    
54
  
                           
Integration Costs:
                          
Employee related costs
    
-
    
12
    
-
    
12
  
Facilities and other one-time costs
    
-
    
20
    
3
    
23
  
Total Integration Costs
    
-
    
32
    
3
    
35
  
                           
Total Restructuring and
Integration Costs
  
$
50
  
$
35
  
$
4
  
$
89
  

This Current Report on Form 8-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results to differ materially from those set forth in, or implied by, such forward-looking statements. All statements other than statements of historical facts included in this Current Report on Form 8-K, including statements regarding the Company’s expected restructuring and related charges, acquisition-related integration costs and purchase accounting adjustments associated with the Plan are forward-looking statements. All forward-looking statements speak only as of the date of this Current Report on Form 8-K. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition to the risks and uncertainties of ordinary business operations and conditions in the general economy and the markets in which the Company competes, the forward-looking statements of the Company contained in this Current Report on Form 8-K are also subject to the following risks and uncertainties: the Company’s ability to integrate successfully the Vincor business into that of the Company; the Company’s restructuring and related charges, acquisition-related integration costs and purchase accounting adjustments associated with the Plan varying materially from management’s current estimates of these charges, costs and adjustments due to variations in anticipated headcount reductions, contract terminations, and costs of the implementation of the Plan; and other risks and uncertainties described in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2006, and other Securities and Exchange Commission filings.
 
 
ITEM 7.01
   REGULATION FD DISCLOSURE.

On July 11, 2006, the Company issued a press release, a copy of which is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.  The release provided information about, among other items, the Company’s plan to integrate operations acquired through its recent acquisition of Vincor International Inc., estimated costs and charges associated with that integration and guidance for the Company’s second quarter and fiscal year ending February 28, 2007.  The projections constituting the guidance included in the release involve risks and uncertainties, the outcome of which cannot be foreseen at this time and, therefore, actual results may vary materially from these forecasts. In this regard, see the information included in the release under the caption “Forward-Looking Statements.”
 
References to the Company’s website in the release do not incorporate by reference the information on such website into this Current Report on Form 8-K and the Company disclaims any such incorporation by reference.  The information included in this Current Report on Form 8-K, including the press release attached as Exhibit 99.1, is incorporated by reference into this Item 7.01 in satisfaction of the public disclosure requirements of Regulation FD.  This information is “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section.  It may only be incorporated by reference in another filing under the Securities Exchange Act of 1934 or the Securities Act of 1933 only if and to the extent such subsequent filing specifically references the information incorporated by reference herein.
 

ITEM 9.01
   FINANCIAL STATEMENTS AND EXHIBITS.
 
(a)
Financial statements of businesses acquired.

 
Not applicable.

(b)
Pro forma financial information.
 
 
Not applicable.

(c)
Shell company transactions.

 
Not applicable.
 
(d)
Exhibits.  
 
 
The following exhibit is furnished as part of this Current Report on Form 8-K:

Exhibit No.
Description
99.1
Press Release of the Company dated July 11, 2006.

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.


 
 
CONSTELLATION BRANDS, INC.
Date: July 12, 2006
By:
/s/ Thomas S. Summer  
   
Thomas S. Summer, Executive Vice
President and Chief Financial Officer




INDEX TO EXHIBITS

Exhibit Number
  
Description
     
(1)
  
UNDERWRITING AGREEMENT
     
   
Not Applicable.
     
(2)
  
PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR SUCCESSION
     
   
Not Applicable.
     
(3)
  
ARTICLES OF INCORPORATION AND BYLAWS
     
   
Not Applicable.
     
(4)
  
INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES
     
   
Not Applicable.
     
(7)
  
CORRESPONDENCE FROM AN INDEPENDENT ACCOUNTANT REGARDING NON-RELIANCE ON A PREVIOUSLY ISSUED AUDIT REPORT OR COMPLETED INTERIM REVIEW
     
   
Not Applicable.
     
(14)
  
CODE OF ETHICS
     
   
Not Applicable.
     
(16)
  
LETTER RE CHANGE IN CERTIFYING ACCOUNTANT
     
   
Not Applicable.
     
(17)
  
CORRESPONDENCE ON DEPARTURE OF DIRECTOR
     
   
Not Applicable.
     
(20)
  
OTHER DOCUMENTS OR STATEMENTS TO SECURITY HOLDERS
     
   
Not Applicable.
     
(23)
  
CONSENTS OF EXPERTS AND COUNSEL
     
   
Not Applicable.
     
(24)
  
POWER OF ATTORNEY
     
   
Not Applicable.
     
(99)
  
ADDITIONAL EXHIBITS
     
(99.1)
  
Press Release of Constellation Brands, Inc. dated July 11, 2006.
     
(100)
  
XBRL-RELATED DOCUMENTS
     
   
Not Applicable.