Directors Elected; Dividend Declared
Louisville, KY, July 24, 2008 – At their annual meeting today, Brown-Forman stockholders celebrated a record financial year and another successful milestone in the company’s leadership succession, as Geo. Garvin Brown IV officiated at his first annual meeting – and Brown-Forman’s 75th since the company went public in 1933 – as presiding chairman of the board of directors. Brown, a fifth generation family shareholder, became a director in 2006 and assumed the additional role of presiding chairman of the board in September, 2007.
In his remarks to shareholders, Brown commended former Chairman and Chief Executive Officer Owsley Brown II, a fourth generation family shareholder, for his exemplary service to the company as he completed the final term of his 37-year tenure on the company’s board of directors. “It is hard to express in words or events the gratitude felt for Owsley's many contributions over his illustrious career. One thing that stands out for me is that he has consistently advocated taking a long-term perspective at our company on a wide range of topics - from succession planning to independence, performance, brand equity, and total shareholder return," said Garvin Brown.
Brown-Forman Chief Executive Officer Paul Varga lauded the men and women who comprise the Brown-Forman workforce for posting record results for fiscal 2008, with net sales of nearly $3.3 billion, diluted earnings per share from continuing operations up 10% to $3.55, and operating income growth of 14%, to $685 million for the fiscal year.
“This excellent performance came in the wake of difficult economic conditions in the U.S. and other important markets and I congratulate all of our employees for their outstanding work that produced these results, and I thank both our board and our long-term shareholders for their support of the company,” stated Varga.
Varga also emphasized the company's excellent long-term performance as evidenced by Brown-Forman's superior total shareholder return relative to the S&P 500 and the company’s competitive set over one, three, five, and 10-year periods. In addition, in fiscal 2008 Brown-Forman achieved several important milestones: sales revenue eclipsed $3 billion for the first time in the company’s 138-year history; international markets contributed more than 50% of total net sales for the first time; Jack Daniel’s family of brands surpassed the drinks equivalent of 10 million nine-liter cases; Finlandia was recognized by a U.K.-based magazine as the “fastest growing global spirits brand”; and Woodford Reserve exceeded 100,000 cases.
In formal business of the meeting, shareholders elected the following people to the Brown-Forman Board of Directors: Patrick Bousquet-Chavanne, Barry D. Bramley, Geo. Garvin Brown IV, Martin S. Brown, Jr., Donald G. Calder, Sandra A. Frazier, Richard P. Mayer, William E. Mitchell, Matthew R. Simmons, William M. Street, Dace Brown Stubbs, Paul C. Varga, and James S. Welch, Jr.
At its meeting, the board of directors approved a regular quarterly cash dividend of $0.34 cents per share on Class A and Class B Common Stock. Stockholders of record on September 8, 2008 will receive the cash dividend on October 1, 2008. Brown-Forman has paid regular quarterly cash dividends for 63 consecutive years.
Brown-Forman Corporation is a producer and marketer of fine quality beverage alcohol brands, including Jack Daniel’s, Southern Comfort, Finlandia Vodka, Tequila Herradura, el Jimador Tequila, Canadian Mist, Fetzer and Bolla Wines, and Korbel Champagne.
Important Note on Forward-Looking Statements:
This release contains statements, estimates, or projections that constitute "forward-looking statements" as defined under U.S. federal securities laws. Generally, the words "expect," "believe," "intend," "estimate," "will," "anticipate," and "project," and similar expressions identify a forward-looking statement, which speaks only as of the date the statement is made. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. We believe that the expectations and assumptions with respect to our forward-looking statements are reasonable. But by their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that in some cases are out of our control. These factors could cause our actual results to differ materially from Brown-Forman's historical experience or our present expectations or projections. Here is a non-exclusive list of such risks and uncertainties:
• continuation of the deterioration in general economic conditions, particularly in the United States where we earn about half of our profits, and other markets with economies linked to the U.S., including higher energy prices, declining home prices, deterioration of the sub-prime lending market, decreased discretionary income or other factors;
• pricing, marketing and other competitive activity focused against our major brands;
• lower consumer confidence or purchasing related to economic conditions, major natural disasters, terrorist attacks or widespread outbreak of infectious diseases;
• tax increases and/or tariff barriers or other restrictions affecting beverage alcohol, whether at the federal or state level in the U.S. or in other major markets around the world, and the unpredictability or suddenness with which they can occur;
• limitations and restrictions on distribution of products and alcohol marketing, including advertising and promotion, as a result of stricter governmental policies adopted either in the United States or in our other major markets;
• fluctuations in the U.S. Dollar against foreign currencies, especially the British Pound, Euro, Australian Dollar, and the South African Rand;
• reduced bar, restaurant, hotel and travel business, including travel retail;
• longer-term, a change in consumer preferences, societal attitudes or cultural trends that results in the reduced consumption of our premium spirits brands or our ready-to-drink products;
• changes in distribution arrangements in major markets that limit our ability to market or sell our products;
• adverse impacts relating to our acquisition strategies or our integration of acquired businesses and conforming them to the company’s trade practice standards, financial controls environment and U.S. public company requirements;
• price increases in energy or raw materials, including grapes, grain, agave, wood, glass, and plastic;
• changes in climate conditions, agricultural uncertainties or other supply limitations that adversely affect the price, availability or quality of grapes, agave, grain, glass, closures or wood;
• termination of our rights to distribute and market agency brands in our portfolio;
• press articles or other public media related to our company, brands, personnel, operations, business performance or prospects;
• counterfeit production of our products and any resulting negative effect on our intellectual property rights or brand equity; and
• adverse developments stemming from state or federal investigations of beverage alcohol industry marketing or trade practices of suppliers, distributors or retailers.