Cott Corporation Reports $68.3 MM Loss During 3Q 1998 After Restructuring - All Information In US Dollars -.TORONTO--(BUSINESS WIRE)--Dec. 18, 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) -- Cott Corporation today announced financial results for the third quarter ending October October: see month. 31, 1998. As previously announced, the company is now reporting in US dollars. All the information in this release is in US currency. For the quarter, the net loss 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 before 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). was $6.0 million or $0.10 per common share compared to income before restructuring in the prior year of $4.8 million or $0.07 per common share. After restructuring, the net loss was $68.3 million or $1.10 per common share. Restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and other unusual items included in the third quarter amounted to $84.8 million before tax. This included $10.5 million for the effect of changes in accounting policies. The total after tax impact of the restructuring was $62.3 million. The restructuring charge was previously announced by the Company in an expanded release on October 22, 1998. The net cash impact will be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10 percent of the gross charge. The restructuring charges, which were concentrated in focusing on core businesses in core markets and in fixing the cost structure by streamlining plants, equipment and systems, are expected to lead to bottom line benefits during the first year and to a full recovery within three years. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
"Cott has experienced considerable new plant start-up Start-up The earliest stage of a new business venture. difficulties this fiscal year as it moved to self-manufacturing in the U.S. versus relying on third party packers as it had in the past", said Frank E. Weise, III, President and Chief Executive Officer. "This has been particularly punishing pun·ish v. pun·ished, pun·ish·ing, pun·ish·es v.tr. 1. To subject to a penalty for an offense, sin, or fault. 2. To inflict a penalty for (an offense). 3. in terms of lost volume and promotion opportunities for Cott and for its trade customers. The company is aggressively implementing plans to address these issues and our customers are responding positively to these improvements." Sales in the U.S. were $131.1 million in the quarter, down $14.9 million from the same quarter last year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $2.9 million as compared with $11.2 million in 1997. Lost volume and promotion activity, higher logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. and warehousing costs, and a less profitable sales mix sales mix See product mix. were major factors causing the decline. Sales in the U.K. and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). were $59.1 million, up from $41.5
million last year. Excluding the increase from our purchase of the Hero
Drinks Group (UK) Limited in November November: see month. 1997, however, sales were slightly
down in both value and volume. Cool summer weather in the U.K.,
aggressive national brand pricing and an unfavorable sales mix all
contributed to an operating loss operating lossThe excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $0.4 million, as compared to $1.6 million profit last year. Sales in 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 were $28.7 million in the quarter up 4 percent compared to $27.6 million last year with improvements in most major accounts. Operating income was $2.0 million in the third quarter, down $3.2 million from last year. The impact of the weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. Canadian dollar 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 on cost of goods, which are significantly denominated in US dollars, combined with heavy national brand promotions, were primarily responsible for this decline. For the nine months year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , earnings from continuing operations before restructuring were $3.9 million or $0.06 per share as compared to $28.0 million or $0.41 per share (before discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. ) for the same period last year. After restructuring, the net year-to-date loss was $58.4 million or $0.92 per share compared to a profit of $20.5 million or $0.32 per share for the nine months to October 1997. EBITDA for the first three quarters was $67.3 million compared to $82.9 million in 1997 and total sales revenues were $812.2 million, down slightly from $820.7 million for the first nine months of 1997. With its new senior management team now in place, the company's strategy for profitable growth in the future will emphasize gaining efficiency in manufacturing plants, establishing higher levels of customer service and working closely with trade customers to develop business building initiatives. Cott Corporation is the world's largest supplier of premium retailer branded beverages, with major manufacturing, marketing, product development and customer service facilities in Canada, 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. and the United Kingdom. The Company is the world's fourth largest manufacturer of soft drinks. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement: 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 filing with the appropriate securities commissions. -0-
COTT CORPORATION
CONSOLIDATED INCOME STATEMENT
(in millions of US dollars except per share amounts)
------------------------ ----------------------
For the three For the nine
months ended months ended
October 31, October 25, October 31, October 25,
1998 1997 1998 1997
------------------------ ----------------------
Sales $244.0 $249.7 $812.2 $820.7
Cost of sales 220.4 212.2 711.1 693.6
------- ------ ------ ------
Gross profit 23.6 37.5 101.1 127.1
Selling, general and
administrative
expenses 23.7 24.5 70.6 72.8
------- ------ ------ ------
Operating (loss)
income (0.1) 13.0 30.5 54.3
Restructuring and
other unusual
items 74.3 3.6 74.3 3.6
Other expense
(income), net 0.1 - 0.2 (0.3)
Interest expense,
net 8.7 6.5 26.5 15.9
------- ------ ------ ------
(Loss) income
before income
taxes (83.2) 2.9 (70.5) 35.1
Provision for
income taxes 22.3 (1.0) 18.5 (10.3)
Minority interest 0.1 - - (0.1)
Equity income (0.1) 0.5 1.0 0.9
------- ------ ------ ------
(Loss) income from
continuing
operations (60.9) 2.4 (51.0) 25.6
Loss from
discontinued
operations - - - (5.1)
Cumulative effect of
change in accounting
policies, net of
taxes (7.4) - (7.4) -
------- ------ ------ ------
Net (loss)
income $(68.3) $2.4 $(58.4) $20.5
------- ------ ------ ------
------- ------ ------ ------
Earnings per common share:
(Loss) income from
continuing
operations $(0.98) $0.04 $(0.80) $0.40
Net (loss) income $(1.10) $0.04 $(0.92) $0.32
Fully diluted
earnings per
common share:
(Loss) income
from continuing
operations $(0.98) $0.04 $(0.80) $0.39
Net (loss)
income $(1.10) $0.04 $(0.92) $0.31
COTT CORPORATION
STATEMENT OF CASH FLOWS
(in millions of US dollars)
---------------------------
For the nine months ended
October 31, October 25,
1998 1997
-------------- ------------
Operating Activities
Income from continuing operations $(51.0) $25.6
Depreciation and amortization 37.6 29.0
Deferred income taxes (18.5) 6.1
Minority interest - 0.1
Equity income (1.0) (0.9)
Noncash restructuring charge 43.4 -
Gain on sale of property, plant and
equipment (0.3) -
Net change in noncash working capital (6.6) (54.8)
------ ------
Net cash provided by operating
activities 3.6 5.1
Investing Activities
Additions to property, plant and
equipment (37.4) (60.4)
Proceeds from disposal of property,
plant and equipment 3.9 -
Acquisitions and investments (2.9) (13.3)
Other investing activities (6.0) (7.7)
------ ------
Net cash used by investing
activities (42.4) (81.4)
Financing Activities
Net change in long-term debt (29.5) 104.6
Short-term borrowings 2.6 2.8
Cost of issuing debt - (3.5)
Cash dividends paid (2.2) (2.3)
Share repurchases (23.3) -
Issue of preferred shares 40.0 -
Share issue expense (1.8) -
Issue of common shares 0.7 5.3
Other financing activities - (0.6)
------ ------
Net cash used by financing
activities (13.5) 106.3
Net cash (used) provided by
discontinued operations (0.5) 0.5
Effect of exchange rate changes on
cash and cash equivalents (4.2) (2.1)
------ ------
Net (decrease) increase in cash and
cash equivalents (57.0) 28.4
Cash and cash equivalents -
beginning of year 103.6 64.1
------ ------
Cash and cash equivalents - end of
period $46.6 $92.5
------ ------
------ ------
COTT CORPORATION
CONSOLIDATED BALANCE SHEET
(in millions of US dollars)
October 31, January 31,
1998 1998
ASSETS
Current assets
Cash and cash equivalents $46.6 $103.6
Accounts receivable 106.4 126.7
Inventories 102.6 112.9
Prepaid expenses 3.7 4.9
Discontinued operations 15.1 12.5
------- ------
274.4 360.6
Property, plant and equipment 300.5 305.5
Goodwill and other intangible assets 146.1 148.7
Investments and other assets 42.0 43.2
------- ------
$763.0 $858.0
------- ------
------- ------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings $11.0 $8.4
Accounts payable and accrued
liabilities 145.4 163.7
Income taxes payable 4.8 7.6
Current maturities of long-term debt 16.0 20.2
Discontinued operations 4.9 2.1
------- ------
182.1 202.0
Long-term debt 401.6 425.0
Other liabilities - 0.1
Capital stock 218.0 202.4
(Deficit) retained earnings (11.9) 48.7
Currency translation adjustment (26.8) (20.2)
------- ------
Shareholders' equity 179.3 230.9
------- ------
$763.0 $858.0
------- ------
------- ------
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