Mondavi will break even on DCA Investment in 2002

[Sarangel]

From CBSMarketWatch:

Winemaker Robert Mondavi Corp. on Thursday called recent efforts to promote Walt Disney Co.'s newest theme park encouraging, saying it would break even on its $12-million investment in the project in fiscal 2002.

Mondavi, which also warned on Thursday that its earnings for the current quarter would fall short of Wall Street forecasts, sponsors the 'Golden Vine Winery,' an attraction representing the wine-growing region of Napa Valley at Disney's California Adventure theme park.

The $1.4 billion park, located next to its original site in Anaheim, Calif., opened to fanfare in February but has failed to draw the visitors Disney anticipated. The Mondavi location at the heart of the park features a wine-tasting facility and a gourmet restaurant.

Disney began offering discounts to residents of southern California last month, allowing eligible adults to bring small children with them for free and cutting ticket prices by as much as 23 percent in an effort to boost attendance.

The unusual discount program from Disney, which seldom offers such promotions, will last until September 4.

"They're getting people into the park. They'll need to bring parents into the park too, because children obviously can't drink wine," Mondavi Chief Financial Officer Hank Salvo told Reuters.

"The California Adventure is running below expectations" but Mondavi lowered its projections for the return on its own investment a few months ago and is staying with that forecast for break-even in fiscal 2002, Salvo said.

Kristine Koerber, a senior analyst with WR Hambrecht and Co., said Mondavi's lowered expectations were realistic.

Sarangel