Central European Distribution

SECURITIES AND EXCHANGE COMMISSION

FORM 8-K Current report filing

Filing Date: 2006-09-28 | Period of Report: 2006-09-28 SEC Accession No. 0001193125-06-199182

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FILER CENTRAL EUROPEAN DISTRIBUTION CORP Mailing Address Business Address TWO BALA PLAZA TWO BALA PLAZA CIK:1046880| IRS No.: 541865271 | State of Incorp.:DE | Fiscal Year End: 1231 SUITE 300 SUITE 300 Type: 8-K | Act: 34 | File No.: 000-24341 | Film No.: 061114797 BALA CYNWYD PA 19004 BALA CYNWYD PA 19004 SIC: 5180 Beer, wine & distilled alcoholic beverages 6106607817

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) September 28, 2006

CENTRAL EUROPEAN DISTRIBUTION CORPORATION (Exact Name of Registrant as Specified in Charter)

DELAWARE 0-24341 54-18652710 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.)

Two Bala Plaza, Suite 300 Bala Cynwyd, Pennsylvania 19004 (Address of Principal Executive Offices) (Zip Code)

(610) 660-7817 (Registrants telephone number, including area code)

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:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Item 1.01. Entry into a Material Definitive Agreement. On September 28, 2006, the board of directors of Central European Distribution Corporation (the Company) approved an increase in the annual fee for serving as a member of the board of directors from $6,000 per year to $10,000 per year, effective October 1, 2006. The complete compensation package for members of the board of directors is now as follows: Each director is entitled to receive an annual fee of $10,000 for serving as a member of board of directors. The chairmen of the audit committee and the compensation committee are each entitled to receive an additional annual fee of $4,000. The chairman of the nominating committee is not entitled to receive any additional fee. In addition to the director fee, the chairman of the board of directors is entitled to receive an annual fee of $12,000. Pursuant to the Companys 1997 Stock Incentive Plan (the Option Plan), a director on the date of his or her initial election to the board of directors is granted an option to purchase 11,812 shares of common stock. Thereafter, the director is granted an option to purchase 5,062 shares of common stock annually. In addition, the chairmen of the audit committee and the compensation committee each receives an annual grant of an option to purchase 10,125 shares of common stock under the Option Plan, while the chairman of the nominating committee does not receive any additional option grant. In addition, the members of the compensation committee each receive an annual grant of an option to purchase 1,687 shares of common stock under the Option Plan, and the members of the audit committee each receive an annual grant of an option to purchase 4,500 shares of common stock under the Option Plan. The members of the nominating committee do not receive any additional option grants. In addition to the options granted to directors, the chairman of the board of directors receives an additional annual grant of an option to purchase 15,187 shares of common stock under the Option Plan. The Company reimburses directors for out-of-pocket travel expenditures relating to their service on the board of directors.

Item 7.01. Regulation FD Disclosure. On September 28 and 29, 2006, Central European Distribution Corporation will make presentations to its shareholders in Chicago, Illinois, on October 2, 2006, Central European Distribution Corporation will make a presentation to its shareholders in Boston, Massachusetts, and on October 3 and 4, 2006, Central European Distribution Corporation will make presentations to its shareholders in New York, New York. A copy of the presentation materials is furnished as Exhibit 99.1 hereto and incorporated by reference herein. This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits. (d) Exhibits.

99.1 PowerPoint slides.

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

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

By: /s/ James Archbold James Archbold Vice President, Secretary and Director of Investor Relations

Date: September 28, 2006

Exhibit No. Description 99.1 PowerPoint slides.

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the actual results, performance or achievements of CEDC to be materially different from any future results, performance or achievements, expressed or implied, by forward- looking statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. CEDC undertakes no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise unless required to do so by the securities laws. Investors are referred to the full discussion of risks and uncertainties included in CEDCsForm 10-K for the fiscal year ended December 31, 2005, and in other periodic reports filed by CEDC with the Securities and Exchange Commission.

Originally founded in 1990 NASDAQ listed since 1998 with current market capitalisation of approximately US$ 900 million The leading producer of vodka in Poland and one of the largest producers of vodka worldwide. The leading distributor and importer of alcoholic beverages in Poland. Operates largest nationwide next-day alcoholic beverage delivery service with 15 distribution centers and 76 satellite branches located throughout Poland

Distributes over 700 brands of alcoholic beverages consisting of a wide range of alcoholic beverages. Over 2,900 employees in Poland Net Sales CAGR of 43% over the last five years EPS CAGR of 81% over the last five years Operating cash flow per share of $1.11 for the 6 months ending June 30, 2006 2006 forecasted sales of US$934 million to US$959 million and forecasted EPS of US$1.27 to US$1.40

Leading producer of vodka in East/Central Europe Leading importer of alcoholic beverages in Poland and Hungary, - No. 1 Mainstream Vodka in Poland Absolwent - No. 1 importer of wine - No. 1 Premium Vodka in Poland and Hungary Bols - No. 1 importer of beer

- No. 2 Flavoured Vodka in Poland Zubrowka - A leading importer of spirits - No. 1 Vodka in Hungary Royal

- Fastest growing Vodka in Poland Soplica

- No. 1 Rum in Poland - Senorita

Leading distributor of alcoholic beverages in Poland

- No. 1 distributor of domestic spirits

- No. 1 distributor of wine

Vodka producers market share Market shares for key brands by value by value

Value Rank Brand Segment Producer Share

Other, 17% 1 Absolwent Mainstream 14.5% 2 Starogardzka Econony Sobieski 9.1% 32% Brown Forman, 3% 3 Bols Premium 6.0% Diageo, 3% 4 Gorzka Zoladkowa Mainstream Polmos Lublin 5.7% Pernod, 3% 5 Sobieski Premium Sobieski 5.3%

Vin & Spirit, 7% 6 Soplica Mainstream 4.6% 7 Luksusowa Mainstream Vin & Spirit 4.0%

Polmos Lublin, 8% 8 Krakowska Econony Sobieski 3.5% 9 Zubrowka Mainstream 3.4% Sobieski, 28% 10 Smirnoff Mainstream Diageo 2.8%

Excluding the economy sector, CEDC has over 46% of the vodka market by volume

Source: AC Nielsen; Rinki Alkoholowe Source: AC Nielsen

CEDC Exclusive Import Portfolio

Spirits Beers/Water Wines

Metaxa(1) Amsterdam E&J Gallo wines (1) Rémy Martin cognac Bitburger Sutter Home (1) Passoa Liqueur Budweiser Rosemount St. Rémy brandy Corona Veuve Clicquot Cointreau Liqueur Fosters Rothschild Bols Liqueurs (1) Franziskaner Laroche Grants whisky Grolsch Moreau & Fils Jim Beam bourbon(1) Guinness Codorniu Jaegermeister bitter Kilkenny Torres Camus Cognac Banfi Raynal Evian Frescobaldi Sierra (1) Penfolds Teachers Concha y Toro(1) Sauza Georges Duboeuf Piper Heidsieck

Above represents only partial selection of products imported by CEDC Notes: (1) Hold a leading position in their respective sectors

Distribution platform with national footprint: 15 distribution centres and 76 satellite branches 700 sales people visiting both on and off-trade clients 40,000 outlets serviced

National coverage is important due to: Poor road infrastructure Local stores (traditional trade) are expected to remain key point of purchase for alcoholic beverage products

Next largest distributor, Alti Plus (7% market share) has a multi-regional rather than national network

Producers are highly dependant on distributors with national footprint Above the line advertising not allowed in Poland

In July 2006, CEDC acquired Bols Hungary, a major importer of spirits in Hungary Import Portfolio include products from: Remy Cointreau Jagermeister Bols C&C CEDC owns Royal Vodka brand, the #1 Vodka in Hungary CEDC acquired to rights to Bols Vodka in Hungary, the #1 premium Vodka in Hungary CEDC is exploring opportunities for expansion in other Central and Eastern European countries

POLAND - Focused National Marketing Team of 28 people to develop own and agency brands in Poland - Three focused National Sales Organizations On Trade Sales Key Brand Building Opportunity - Over 70 people employed in the only dedicated On-Trade sales team in Poland Key Account Sales Team - Dedicated team of 60 people across all CEDC companies focused on serving key accounts Traditional Trade Sales Team - National sales force of 560 people focused on dominant channel in Poland HUNGARY - Sales team of 30 people - Marketing team of 6 people

#1 Premium Vodka in Poland and Hungary

Sales of more than 1.5 million cases

Most profitable brand in Poland

License production in Russia planned for 2007

Considered to be a vodka in a category of its own in Poland with a unique flavor and heritage Leading brand for export Very loyal base of consumers Strongly connected with tradition and Polish culture Considered one of the top icons of Poland Approaching 1 million cases

One of the oldest vodka brands in Poland Associated with Polish nobility and heritage Currently exported to markets such as UK and Mexico Fastest growing brand in Poland over 50% growth over prior year in August 2006 New line extensions of flavors launched this year in 1st quarter of 2006 On target to reach 1 million cases in 2006

#1 Vodka in Poland for last 7 years One of the top 10 selling vodka brands in the world High quality at a reasonable price Brand has continued to outperform the category Positioned in the mainstream Close to 4 million cases sold

Accelerate direct sales of our own brands 700 strong sales force to focus on selling own brands and imports Leverage our 40,000 direct customers to grow sales of our brands Utilize dedicated on-trade sales force to execute brand building in on trade outlets

Develop new brand opportunities Introduction of new brands for own and third-party brands Current excess production capacity gives opportunity for growth of new brands for next three to five years Restricted advertising laws in Poland emphasize new brands to be developed through distribution Post rectification (lowering of spirit costs) more aggressive move into private label and economy sector

Reduce costs of goods sold Leverage purchasing power to reduce cost of raw materials Largest spirit purchaser in Poland Purchase over 120 million each of bottles, caps and labels per year Build rectified spirit plant by mid 2007 at our two production sites -> payback within 3 years on $10 million investment

Reduce key operating overhead expenses Combine purchasing power to reduce key SG&A costs Continue to consolidate satellite branches Consolidate back office of CEDC in 2008 Reduction of headcount by 10% by 2008

Continued Acquisitions of Producers/Brands and Distributors Grow current 32% production share to 40% by acquiring niche brands and growth of own brands Utilize excess capacity through acquired niche brands Targeting mid-single digit multiple for brand acquisitions on a forward 12 month basis Acquire distributors with at least $140 million in annualized sales in 2006 and 2007

Target opportunities outside of Poland Regional acquisition opportunities (Central and Eastern Europe) Target companies with similar business model as CEDC Leverage our know how and business relations to utilize in other markets License production of Bols in Russia

Expand higher margin (30%-40% margin) import portfolio Combination of CEDCs and Bolsexclusive imports strengthens position as a one stop shop Rapid on premise expansion in Poland drives growth opportunities for imports Our direct distribution and strong sales force makes us more attractive for additional agency brands Strong GDP and purchasing power growth in Poland will fuel consumer demand for imports Expand higher margin (70% margin) export sales Vodka represents the fastest growing category world wide Grow Zubrowka exports to reach 750,000 cases within 5 years (current base 200,000 cases) Expand export sales of other brands to 200,000 cases within 5 years (current base 30,000 cases) Expand geographical reach of Zubrowka from current small base

2006 2002 2003 2004 2005 (Forecast)

(1) Net sales $ 293 million $ 429 million $ 580 million $ 749 million $ 934-959 million

(2) (3) EPS (fully diluted) $0.44 $0.64 $0.89 $1.09 $1.27 1.40

$56 million $105 million EBITDA $14 million $24 million $32 million

Following the integration of the Polmos and Bols businesses, CEDC has developed into a strong cash flow generating business delivering operating cash flow per share of $1.11 ($40.1 million) for the 6 months ending June 30, 2006

Notes: (1) Net of excise tax (2) Excludes the impact of acquisition one-offs and foreign exchange (3) Excludes the impact of new acquisitions and the impact of foreign exchange