Cott Corporation Announces Record Sales and Volume -- Decline in Second Quarter Cash Operating Profit.TORONTO--(BUSINESS WIRE)--Sept. 15, 1998--Cott Corporation (Nasdaq:COTTF)(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :BCB BCB Banco Central do Brasil (Brazil's central bank) BCB Borland C++ Builder BCB Bangladesh Cricket Board BCB Benzocyclobutene (low loss dielectric substrate) BCB Bumiputra-Commerce Bank BCB Broadcast Band .)(ME:BCB.) -0-
-- Continued volume growth in the second quarter produced record
sales and solid cash operating profit.
-- North American gross margins were adversely impacted by
inefficiencies in U.S. manufacturing facilities and by continued
price competition in the supermarket channel.
-- Poor weather in the U.K. during the peak selling season
negatively impacted volume and profitability.
-- Quarterly dividend discontinued.
-0- Cott Corporation announced today that its second quarter cash operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the period ending Aug. 1, 1998 was $46.7 million compared to $48.6 million in the same period in the prior year -- a decline of 4 percent. Total sales revenue for the quarter rose 4 percent to a record second quarter of $455 million fueled by a 6 percent increase in volume. "Our results are heartening heart·en tr.v. heart·ened, heart·en·ing, heart·ens To give strength, courage, or hope to; encourage. See Synonyms at encourage. Adj. 1. in terms of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. strategic direction," said Frank E. Weise, president and chief executive officer. "We see signs of growth in all core markets and we are focused on controlling costs as we build our new manufacturing base. Progress is coming in many operations as 'Cott Power' employee teams attack inefficiencies and implement supply side initiatives. Our emphasis to customer service is being renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. on all fronts." Earnings from continuing operations were $11.0 million or $0.17 per share compared to $19.9 million or $0.30 per share for the same period last year, while net earnings were $11.0 million ($0.17 per common share) compared with $13.9 million ($0.21 per common share) for the same period last year. Today, the company also made known the Board's decision to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: its quarterly dividend. Cash previously reserved for the dividend payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. will be applied to investing in the business and in the company's strategic growth. Through better management of its working capital, the company reported $28 million in cash from operating activities. This compared with $15 million used in operating activities in the prior year. This $43 million improvement is largely attributable to management's focus on key working capital components. This was partially offset by the modest decline in cash operating profit (often defined as normalized EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) and by higher interest costs. The growth in volume is entirely attributable to the United Kingdom, where case sales rose 100 percent and represented 20 percent of total volume. This significant increase reflects the acquisition of Hero Drinks Group (UK) Limited ("Hero"), in November November: see month. 1997. Excluding the increase in sales attributable to the purchase of Hero, volume in the United Kingdom decreased by 3 percent, caused in part by poor weather during June June: see month. and July July: see month. which also impacted the volume performance of other market participants The term market participant is used in United States constitutional law to describe a U.S. State which is acting as a producer or supplier of a marketable good or service. When a state is acting in such a role, it may permissibly discriminate against non-residents. . Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , which showed the effect of competitive pricing in the supermarket channel, experienced a 9 percent decline in sales volumes. In the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , case sales declined by 2 percent as compared to the same period last year (down 1 percent year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. ) and represented 53 percent of total company volume. Sales to key accounts continued to grow. A gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. of 16.2 percent was achieved during the quarter; a decline from the 16.8 percent generated last year, but up by 50 basis points compared to the first quarter of this year. The decline in gross margin compared to the prior year reflects a continuation of the competitive pricing in all core markets, as well as the impact of increases in the cost of certain raw and packaging materials in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Gross margin has also been negatively impacted by the increase in the fixed manufacturing and related start-up Start-up The earliest stage of a new business venture. costs associated with the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. production facilities that were added or expanded in the prior year. In the U.K., lower than expected overall sales for soft drinks led to unfavorable production and warehousing costs. The company expects that these variables will continue to impact its earnings through the balance of this financial year. Selling, general and administrative (SG&A) spending as a percentage of sales declined to 5.7 percent compared to 5.8 percent in the prior year. This positive leverage on spending is largely due to the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). undertaken by the company in the prior year. Approximately $0.9 million of this year's spending reflects the impact of translating the SG&A spending of the U.S. and U.K. operations into weaker Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents . Adjusted for this unfavorable translation effect, SG&A spending would have declined by 2 percent. The increased levels of amortization and interest expense are largely attributable to the current and prior year's capital additions, the impact of the purchase of Hero and the debt incurred to finance these acquisitions. Also, with approximately 77 percent of the company's capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) and approximately 94 percent of its debt denominated in U.S. and U.K. currencies, approximately $1.5 million of the increase in amortization and interest expense is due to the year-over-year decline in the Canadian dollar relative to the U.S. and U.K. currencies. This news release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the future performance of Cott. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties are detailed from time to time in the company's filings with the appropriate securities commissions. -0-
COTT CORPORATION
CONSOLIDATED STATEMENT OF EARNINGS
(in thousands of Canadian dollars except per share amounts)
For the three For the six
months ended months ended
August 1, July 26, August 1, July 26,
1998 1997 1998 1997
Sales $ 454,943 $ 437,217 $ 823,096 $ 785,865
Cost of goods
sold 381,416 363,560 691,800 651,491
Gross profit 73,527 73,657 131,296 134,374
Selling, general
and administrative
expenses 25,893 25,516 51,657 51,760
Other expense 970 (475) 116 (475)
Earnings before
undernoted 46,664 48,616 79,523 83,089
Amortization 18,657 14,022 35,360 26,085
Interest expense, net 13,413 6,900 25,788 12,883
Earnings before
income taxes 14,594 27,694 18,375 44,121
Income taxes (4,379) (8,147) (5,513) (12,926)
Non-controlling
interest (87) (79) (102) (119)
Equity in net earnings of
long-term investments 894 400 1,498 636
Earnings from
continuing
operations 11,022 19,868 14,258 31,712
Loss from discontinued
operations -- (5,977) -- (6,970)
Net earnings $ 11,022 $ 13,891 $ 14,258 $ 24,742
Earnings per common share from continuing operations
Basic $ 0.17 $ 0.31 $ 0.22 $ 0.48
Fully diluted $ 0.17 $ 0.30 $ 0.22 $ 0.47
Net earnings per Common Share
Basic $ 0.17 $ 0.22 $ 0.22 $ 0.39
Fully diluted $ 0.17 $ 0.21 $ 0.22 $ 0.38
COTT CORPORATION
STATEMENT OF CHANGES IN FINANCIAL POSITION
(in thousands of Canadian dollars)
Cash Provided By (Used In) For the six months ended
August 1, 1998 July 26, 1997
Operating Activities
Earnings from continuing
operations $ 14,258 $ 31,712
Items not affecting working
capital:
Deferred development
amortization 3,821 4,178
Prepaid contract amortization 3,513 3,802
Other amortization 29,083 18,530
Gain on sale of capital assets (484) -
Deferred income taxes (1,643) 5,006
Non-controlling interest 102 119
Net earnings from long-term
investments (1,498) (636)
---------- ----------
47,152 62,711
Net change in non-cash working
Capital components from
continuing operations (59,267) (84,260)
Cash provided from continuing
operations (12,115) (21,549)
Cash used in discontinued
operations 17 (1,264)
---------- ----------
(12,098) (22,813)
Financing Activities
Change in long-term debt (38,052) 148,977
Cost of issuing long-term debt -- (4,764)
Issue of common shares 955 14,657
Purchase of common shares (12,465) --
Issue of preferred shares 58,940 --
Cost of issuing preferred
shares (2,610) --
Dividends (3,211) (1,608)
Change in non-controlling
shareholder advances -- (768)
---------- ----------
3,557 156,494
Investing Activities
Business acquisitions - (31,182)
Cash of acquired subsidiary - 4,599
Proceeds from disposal of
capital assets 5,489 -
Additions to capital assets (40,967) (61,277)
Additions to other assets:
Prepaid contract costs (651) (399)
Deferred development costs (2,431) (4,811)
Other (1,954) (525)
---------- ----------
(40,514) (93,595)
(Decrease) increase in cash
during the period (49,055) 40,086
Cash -- beginning of period 138,594 75,146
---------- ----------
Cash -- end of period $ 89,539 $ 115,232
Cash is net of bank
indebtedness
COTT CORPORATION
CONSOLIDATED BALANCE SHEET
(in thousands of Canadian dollars)
August 1, 1998 July 26, 1997
ASSETS
Cash and short-term deposits $ 108,835 $ 130,492
Accounts receivable 207,028 191,886
Inventories 203,384 208,347
Prepaid expenses 9,638 8,116
Capital assets 472,614 322,975
Goodwill, licences and trademarks 228,559 132,433
Other assets 51,935 43,950
Long-term investment 17,081 14,251
---------- ----------
$ 1,299,074 $ 1,052,450
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank indebtedness $ 19,296 $ 15,260
Accounts payable and accrued
liabilities 233,590 187,701
Income taxes payable 14,948 13,745
Term debt 632,704 463,183
Other liabilities 310 2,908
Shareholders' equity 398,226 369,653
---------- ----------
$ 1,299,074 $ 1,052,450
CONTACT: Cott Corporation Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. K. Henderson Henderson. 1 City (1990 pop. 25,945), seat of Henderson co., NW Ky., on the Ohio River, in an oil, coal, tobacco, corn, and livestock area; founded 1797, inc. as a city 1867. , 416/203-3898 Monica Ruthig, 416/203-3898 |
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