Cott Corporation Reports Strong Results.Business Editors TORONTO--(BUSINESS WIRE)--July 18, 2002 Cott Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :COTT) (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :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 )
- Earnings up 32% in Second Quarter; EPS up 29%
- Sales Rise 8% for Q2 and Year to Date
- Guidance Revised Upward for 2002
- Joining the NYSE July 30
(All information in U.S. Dollars)
Building on its four-year record of profitable operating results, Cott Corporation (NASDAQ:COTT) (TSX:BCB) today reported higher sales and earnings for the second quarter ended June June: see month. 29, 2002. The retailer-brand soft drink manufacturer announced that net income for the quarter rose by 32% to $19.2 million up from $14.5 million a year ago. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.27 vs. $0.21, a gain of 29% over second quarter 2001. Sales increased to $329.5 million, an all-time all-time adj. Exceeding all others up to the present time: an all-time speed skating record. all-time Adjective Informal high for the quarter, an increase of 8% over last year, up 2% excluding the impact of acquisitions. For the first half of the year, Cott reported that 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 rose 37% to $26.8 million up from $19.6 million in the same period last year. After including extraordinary charges for early debt redemption and for the effect of a change in accounting principle as applied to the goodwill in its U.K. business unit, the Company's net loss for the half year was $27.6 million. Excluding these one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges, earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share were $0.38, a rise of 31% over $0.29 reported for last year's first six months. Sales for the first half climbed to a record $579.5 million, 8% more than a year ago, 3% up excluding acquisitions. "Our performance is at a record pace for the year," said Frank E. Weise, Cott chairman, president and chief executive officer. "Despite some volume softness due to unseasonably cool spring weather in the Northeastern north·east n. 1. Abbr. NE The direction or point on the mariner's compass halfway between due north and due east, or 45° east of due north. 2. An area or region lying in the northeast. 3. U.S. and 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 , all our major business units are showing gains year over year. We anticipate strong growth for the balance of the year both in our ongoing businesses and in such acquisitions as our new venture in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. ." Weise noted progress on three fronts that bodes well for the Company. "Importantly," he said, "we expect to add new supermarket and warehouse club business in the U.S., to regain momentum in Canada and to move from loss to profit in the U.K. & International -- all signs that point to successfully reaching our targets for 2002." He credited Cott managers and employees for driving positive momentum in both customer service and plant efficiencies, and applauded initiatives that are "expanding the Company's core," a key strategy for the years ahead. During the quarter, the Company took a 90% stake in a new venture, Cott Embotelladores de Mexico, S.A. de C.V., to manufacture and market retailer brand beverages in Mexico, and also announced the acquisition of Premium Beverage Packers, Inc. a move that reinforces its strong position in the Northeast U.S. Second Quarter 2002 Sales for the second quarter were $329.5 million, an increase of 8% from the same quarter last year, and rose in each of Cott's geographic segments. The Company's U.S. business unit led the way with a 9% increase over last year. Sales in Canada were 7% ahead, and in the U.K.& International business unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. rose by 2%. Gross margin for the quarter improved 2.5 points as compared to the same quarter last year. Productivity gains from operations, the integration of recent acquisitions and the impact of acquiring assets from Royal Crown last year all contributed to this improvement. Higher interest expense related to the cost of acquiring the RC assets partially offset this gain. 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. overall increased by 34% to $38.8 million, with a sharp improvement from the U.K.& International operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. . For the quarter, the U.S. business unit reported a 23% increase in operating income, while Canada had a 21% increase. First Half 2002 The 8% rise in sales to 579.5 million in the first six months was led by a 10% improvement in U.S. sales. U.K. & International sales were ahead 8% and in Canada, net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were up 1%. Gross margin expanded 2.5 points versus the same period in 2001, driven by both productivity gains and the integration of acquisitions including the RC assets. Higher interest expenses relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the acquisitions partially offset this gain. Operating income increased 36% overall with increases of 23% and 18% respectively in the U.S. and Canada being bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. by a reduction in the loss recorded in the U.K.& International segment. Corporate The Company revised its guidance upwards for full year 2002, estimating its earnings per diluted share at $0.76 - $0.78, before the effect of the one-time charges already taken in the first quarter. It also reaffirmed its earlier estimates that sales are expected to grow at 8-10% for the year; 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 is expected to total about $160 million; and capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. is expected to range between $45-$50 million in 2002. The Company announced earlier this week that it will be transferring its common stock listing from the NASDAQ to the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. (NYSE NYSE See: New York Stock Exchange ) where its stock will trade under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors "COT". The transfer will occur on July July: see month. 30, 2002. No new shares will be issued in conjunction with this change and Cott will retain its existing listing on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. (TSX) where its ticker symbol will continue to be "BCB". - - - Conference Call Cott will host a conference call today at approximately 2:00 pm EST EST electroshock therapy. EST abbr. electroshock therapy to discuss second quarter financial results. For those who wish to listen to the presentation, there is a listen-only dial-in telephone line, which can be accessed as follows:
North America: 888-881-4892
International: 416-640-4127
Webcast To access the conference call over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , investors, analysts and the public in general are invited to visit Cott's website at http://www.cott.com at least fifteen minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio/video software. For those who are unable to access the live broadcasts, a replay will be available at Cott's website following the Conference Call through 12:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. on Thursday Thursday: see week. July 25, 2002 About Cott Corporation Cott Corporation is the world's largest retailer brand soft drink supplier, with the leading take home carbonated car·bon·ate tr.v. car·bon·at·ed, car·bon·at·ing, car·bon·ates 1. To charge (a beverage, for example) with carbon dioxide gas. 2. To burn to carbon; carbonize. 3. To change into a carbonate. soft drink market shares in this segment in its core markets of 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. , Canada and the United Kingdom. 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. Statements This press release contains 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. reflecting management's current expectations regarding future results of operations, economic performance, financial condition and achievements of the Company. 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, and include, without limitation, stability of procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. costs for raw and packaging materials, adverse weather conditions, competitive activities by national, regional and retailer brand beverage manufacturers, the Company's ability to integrate acquired business into its operations, fluctuations in currency versus the U.S. dollar, the uncertainties of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , and retailers' continued commitment to their retailer brand beverage programs. The foregoing list of factors is not exhaustive. The Company undertakes no obligation to publicly update or revise any forward-looking statements. Cott Contacts Media Relations Rod Jimenez Ji·mé·nez , Juan Ramón 1881-1958. Spanish poet who introduced modernism to Spanish verse. Platero y Yo (1914) is his most popular work. He won the 1956 Nobel Prize for literature. Noun 1. Tel: (416) 203-5606 Investor Relations Investor relations The process by which the corporation communicates with its investors. Edmund Edmund, 921–46, king of Wessex (939–46), half brother and successor of Athelstan. Immediately after his accession he had to face an invasion of Irish vikings led by Olaf Guthfrithson. O'Keeffe Tel: (416) 203-5617
CONSOLIDATED STATEMENTS OF INCOME
(in millions of US dollars except per share amounts, US GAAP)
Unaudited
For the three months ended For the six months ended
--------------------------- ---------------------------
June 29, 2002 June 30, 2001 June 29, 2002 June 30, 2001
------------- ------------- ------------- -------------
Sales $ 329.5 $ 305.6 $ 579.5 $ 534.6
Cost of sales 262.4 251.0 466.3 443.9
------------- ------------- ------------- -------------
Gross profit 67.1 54.6 113.2 90.7
Selling, general
and administrative
expenses 28.3 25.6 56.0 48.7
------------- ------------- ------------- -------------
Operating income 38.8 29.0 57.2 42.0
Other expense
(income), net (0.5) 0.4 (0.6) (1.6)
Interest
expense, net 8.0 7.0 17.3 13.7
Minority interest 0.5 - 1.0 -
------------- ------------- ------------- -------------
Income before
income taxes
and equity loss 30.8 21.6 39.5 29.9
Income taxes (11.4) (7.1) (12.5) (10.3)
Equity loss (0.2) - (0.2) -
------------- ------------- ------------- -------------
Income from
continuing
operations 19.2 14.5 26.8 19.6
Extraordinary item - - (9.6) -
Cumulative effect
of change in
accounting
principle - - (44.8) -
------------- ------------- ------------- -------------
Net income
(loss) $ 19.2 $ 14.5 $ (27.6) $ 19.6
============= ============= ============= =============
Volume - 8 oz
equivalent
cases 218.0 177.8 391.3 313.5
Income per
share - basic
Income from
continuing
operations $ 0.31 $ 0.24 $ 0.44 $ 0.33
Extraordinary
item $ - $ - $ (0.16) $ -
Cumulative effect
of change in
accounting
principle $ - $ - $ (0.72) $ -
Net income
(loss) $ 0.31 $ 0.24 $ (0.44) $ 0.33
Income per
share - diluted
Income from
continuing
operations $ 0.27 $ 0.21 $ 0.38 $ 0.29
Extraordinary
item $ - $ - $ (0.16) $ -
Cumulative
effect of change
in accounting
principle $ - $ - $ (0.72) $ -
Net income
(loss) $ 0.27 $ 0.21 $ (0.44) $ 0.29
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of US dollars, US GAAP)
Unaudited
For the six months ended
---------------------------
June 29, 2002 June 30, 2001
------------- -------------
Operating Activities
Income from continuing operations $ 26.8 $ 19.6
Depreciation and amortization 20.8 19.5
Amortization of financing fees 0.9 0.6
Deferred income taxes 3.8 9.0
Minority interest 1.0 -
Equity loss 0.2 -
Gain on disposal of investment (1.3) -
Other non-cash items 1.1 (1.2)
Net change in non-cash working capital
from continuing operations (27.6) (16.7)
------------- -------------
Cash provided by continuing operations 25.7 30.8
Cost of debt redemption (10.6) -
------------- -------------
Cash provided by operating activities 15.1 30.8
------------- -------------
Investing Activities
Additions to property, plant and
equipment (18.6) (16.3)
Acquisitions (31.0) -
Proceeds from disposal of businesses - 1.2
Proceeds from disposal of property,
plant and equipment 0.2 1.0
Other 1.2 (0.4)
------------- -------------
Cash used in investing activities (48.2) (14.5)
------------- -------------
Financing Activities
Payments of long-term debt (278.4) (0.7)
Short-term borrowings 16.9 (15.0)
Decrease in cash in trust 297.3 -
Distributions to subsidiary
minority shareowner (1.7) -
Issue of common shares 5.0 1.5
------------- -------------
Cash provided by (used in) financing
activities 39.1 (14.2)
------------- -------------
Effect of exchange rate changes on
cash and cash equivalents 0.6 -
------------- -------------
Net increase in cash and cash equivalents 6.6 2.1
Cash and cash equivalents,
beginning of period 3.9 7.2
------------- -------------
Cash and cash equivalents, end of period $ 10.5 $ 9.3
============= =============
CONSOLIDATED BALANCE SHEETS
(in millions of US dollars, US GAAP)
Unaudited Audited
June 29, 2002 December 29, 2001
------------- -----------------
ASSETS
Current assets
Cash and cash equivalents $ 10.5 $ 3.9
Cash in trust - 297.3
Accounts receivable 147.0 122.0
Inventories 81.1 68.2
Prepaid expenses 4.2 3.4
------------- -----------------
242.8 494.8
Property, plant and equipment 271.9 246.9
Goodwill, intangibles and other assets 292.6 323.7
------------- -----------------
$ 807.3 $ 1,065.4
============= =================
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Short-term borrowings $ 51.1 $ 34.2
Current maturities of long-term debt 8.8 281.8
Accounts payable and accrued
liabilities 135.4 125.4
Other current liabilities 18.3 -
------------- -----------------
213.6 441.4
Long-term debt 354.4 359.5
Other liabilities 30.8 41.0
------------- -----------------
598.8 841.9
Minority interest 27.8 28.1
Shareowners' equity
Capital stock 242.1 237.1
Retained earnings (deficit) (25.6) 2.0
Accumulated other comprehensive income (35.8) (43.7)
------------- -----------------
180.7 195.4
------------- -----------------
$ 807.3 $ 1,065.4
============= =================
SEGMENT INFORMATION
(in millions of US dollars, US GAAP)
Unaudited
For the three months ended For the six months ended
--------------------------- ---------------------------
June 29, 2002 June 30, 2001 June 29, 2002 June 30, 2001
------------- ------------- ------------- -------------
Sales
USA $ 239.7 $ 219.7 $ 427.2 $ 388.4
Canada 50.2 47.1 82.2 81.0
UK &
International 39.6 38.8 70.1 65.2
------------- ------------- ------------- -------------
$ 329.5 $ 305.6 $ 579.5 $ 534.6
============= ============= ============= =============
Operating
income (loss)
USA $ 33.0 $ 26.8 $ 53.3 $ 43.3
Canada 6.8 5.6 8.6 7.3
UK &
International 2.0 0.1 (0.8) (1.4)
Corporate &
Other (3.0) (3.5) (3.9) (7.2)
------------- ------------- ------------- -------------
$ 38.8 $ 29.0 $ 57.2 $ 42.0
============= ============= ============= =============
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