Cott Reports Loss From Continuing Operations; Restructuring Charges Affect Profitability; Change in Fiscal Year-End Impacts Reported Sales -All Information in U.S. dollars.TORONTO--(BUSINESS WIRE)--March 18, 1999--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 :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 sales and earnings for the 2-month fourth period and 11-month fiscal period that ended January January: see month. 2, 1999. Results were affected by the Company's previously announced change to calendar-year reporting to conform with customary practice of the beverage industry. Results reported today cover the 11-month period of February February: see month. 1, 1998 to January 2, 1999; the previous year's comparison period was the 12 months from January 26, 1997 to January 31, 1998. Sales for the period that ended January 2, 1999 declined by 8.5 percent to $958.5 million compared to sales of $1,047.8 million reported in the previous fiscal year and 1.3 percent when compared to $970.7 million for February-December 1997. Aggressive competitive pricing, combined with startup (STARTing UP) "At startup" means when the computer is first turned on or when a program is first loaded. See Startup folder. difficulties at the Company's new U.S. plants, impacted sales results. 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 was $29.7 million for the period, versus $15.4 million loss the previous fiscal year. After an $88.2 million charge for 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). and unusual items, the net loss for the shortened short·en v. short·ened, short·en·ing, short·ens v.tr. 1. To make short or shorter. 2. fiscal period was $109.5 million with $9.7 million net cash used in operating activities. For the previous year, the company reported a loss of $4.7 million and $54.0 million net cash provided by operations. For the fourth period, November-December 1998, sales fell by 39.4 percent to $146.3 million when compared to the fourth quarter of 1997 and 11.0 percent when compared to $164.4 million for November-December 1997. The net loss for the fourth period was $51.1 million, versus a $25.1 million loss during the previous year's fourth quarter. Since arriving at Cott in mid- mid- pref. Middle: midbrain. 1998, president and chief executive officer Frank E. Weise and his new management team have focused the Company on the premium soft drink business 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 , 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, and have begun to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. non-strategic businesses. Production efficiencies have been increased, and the Company's extensive product line has been pruned. "We are continuing to build powerful customer relationships in our three core markets," said Weise. "After a year of challenges, we are moving forward with renewed energy and enthusiasm, and a solid commitment to delivering outstanding customer service, better volume growth and improved earnings." Strategic Initiatives Cott's turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. began in late 1998 with the implementation of three critical strategies: Focus on key businesses in core markets: The Company is now organized around three core geographies: the U.S., Canada and the U.K. Unprofitable SKUs are being cut, and non-strategic units are being divested. In addition to the previously announced divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of the Norway Norway, Nor. Norge, officially Kingdom of Norway, constitutional monarchy (2005 est. pop. 4,593,000), 125,181 sq mi (324,219 sq km), N Europe, occupying the western part of the Scandinavian peninsula. bottling operation, Cott is actively seeking or negotiating with buyers for Destination Products International, The Watt Design Group, the Featherstone This article is about the Yorkshire town. For other references, see Featherstone (disambiguation). Featherstone Featherstone is a town in the City of Wakefield district, in West Yorkshire, England. plant in the U.K., as well as its minority interest in Menu Foods. Fix the cost structure: A series of key performance indicators Key Performance Indicators (KPI) are financial and non-financial metrics used to quantify objectives to reflect strategic performance of an organization. KPIs are used in Business Intelligence to assess the present state of the business and to prescribe a course of action. set tough goals for improved customer service, product quality, waste reduction and asset utilization. Achievement of these goals has helped the Company improve service and quality levels. Strengthen the management team: During the second half of 1998, Weise assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. a team of professionals who have brought formidable strengths to the Company's turnaround effort. Cott today has a new CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , CFO See Chief Financial Officer. , CIO CIO: see American Federation of Labor and Congress of Industrial Organizations. (Chief Information Officer) The executive officer in charge of information processing in an organization. , and new Presidents for its two largest markets. The team is working to develop the potential of Cott employees through new tools, training and management backup, and is extending accountability for the achievement of corporate goals. "1999 is a rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective year for Cott," said Weise. "Signs are positive for sales and earnings performance. Cott employee teams in our plants, laboratories and sales centers are working diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d to achieve goals for customer service, sales volume and earnings per share. They are truly making our assets "sweat" and they're they're Contraction of they are. they're be excited about their role in the Company's turnaround." First quarter results in 1999 will cover the months of January - March 1999, while last year's first quarter results covered February - April 1998. Segment Comments United States: In moving to self-manufacturing, Cott's U.S. business experienced plant start-up Start-up The earliest stage of a new business venture. difficulties during the 11-month fiscal period that ended January 2, 1999. These difficulties led to lost volume and promotional opportunities. Sales and EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). before restructuring were $506.3 million and $11.1 million, respectively, for the 11-month period, compared to $603.4 million and $37.2 million for the previous fiscal year, and $558.1 million and $40.3 million during February-December 1997. Canada: The Canadian business Canadian Business is the longest-publishing business magazine in Canada. It was founded in 1928 as The Commerce of the Nation, the organ of the Canadian Chamber of Commerce. The magazine was renamed Canadian Business in 1933. faced unfavorable exchange rates and intense pricing competition in 1998. These conditions led to sales of $168.0 million for the 11-month fiscal period, and EBIT before restructuring of $12.1 million, compared to sales of $192.6 million and EBIT before restructuring of $22.2 million for the previous fiscal year, and sales and EBIT before restructuring of $182.1 million and $21.4 million during February-December 1997. United Kingdom: The U.K. business was challenged by costs and logistical lo·gis·tic also lo·gis·ti·cal adj. 1. Of or relating to symbolic logic. 2. Of or relating to logistics. [Medieval Latin logisticus, of calculation difficulties arising from integration of the Hero acquisition. While the acquisition helped increase case volume, overall sales and EBIT before restructuring for the 11-month fiscal period were $239.4 million and $9.9 million, respectively, compared to $191.3 million and $7.4 million for the previous fiscal year, and $175.0 million and $9.5 million for February-December 1997. 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 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.
COTT CORPORATION
CONSOLIDATED INCOME STATEMENTS
(in millions of US dollars except per share amounts, US GAAP)
For the periods ended
----------------------- ---------------------------
two months three months eleven months twelve months
January 2, January 31, January 2, January 31,
1999 1998 1999 1998
---------- ---------- ---------- ----------
Sales $ 146.3 $ 241.5 $ 958.5 $ 1,047.8
Cost of sales 146.3 217.1 856.5 899.4
---------- ---------- ---------- ----------
Gross profit - 24.4 102.0 148.4
Selling, general
and administrative
expenses 22.3 30.7 93.8 99.4
Unusual items 2.9 18.1 77.2 21.7
---------- ---------- ---------- ----------
Operating (loss)
income (25.2) (24.4) (69.0) 27.3
Other expense
(income), net (1.2) 2.6 (1.0) 2.4
Interest
expense, net 6.7 8.6 33.2 24.4
---------- ---------- ---------- ----------
(Loss) income before
income taxes (30.7) (35.6) (101.2) 0.5
Income taxes (14.5) 10.9 4.0 0.6
Minority interest (0.1) 0.3 (0.1) 0.2
Equity income 0.5 (0.7) 1.5 (0.9)
---------- ---------- ---------- ----------
(Loss) income
from continuing
operations (44.8) (25.1) (95.8) 0.4
Loss from
discontinued
operations (3.8) - (3.8) (5.1)
Cumulative effect
of change in
accounting policy,
net of tax (2.5) - (9.9) -
---------- ---------- ---------- ----------
Net (loss)
income $(51.1) $(25.1) $(109.5) $(4.7)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per common share:
(Loss) income
from continuing
operations $(0.74) $(0.39) $ (1.53) $0.01
Net (loss)
income $(0.85) $(0.39) $ (1.74) $(0.07)
Diluted earnings
per common share:
(Loss) income
from continuing
operations $(0.74) $(0.39) $ (1.53) $ 0.01
Net (loss)
income $(0.85) $(0.39) $ (1.74) $(0.07)
COTT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of US dollars, US GAAP)
For the periods ended
----------------------------
eleven months twelve months
January 2, January 31,
1999 1998
------------- -------------
Operating Activities
Income (loss) from continuing
operations $ (95.8) $ 0.4
Depreciation and amortization 43.7 39.6
Deferred income taxes (6.9) (5.1)
Minority interest 0.1 (0.2)
Equity income (1.5) 0.9
Non-cash unusual items 51.4 -
Gain on sale of property,
plant and equipment (0.3) -
Other non-cash items 6.8 0.4
Net change in non-cash
working capital (7.2) 18.0
------------- -------------
Net cash provided by (used in)
operating activities (9.7) 54.0
Investing Activities
Additions to property,
plant and equipment (36.7) (81.8)
Proceeds from disposal
of property, plant and
equipment 3.9 4.9
Acquisitions (2.9) (97.1)
Other investing activities (6.4) (6.5)
------------- -------------
Net cash used in investing
activities (42.1) (180.5)
Financing Activities
Net change in long-term debt (31.2) 184.8
Short-term borrowings 5.2 0.7
Cost of issuing debt - (7.5)
Dividends paid (2.2) (3.5)
Common shares repurchased
and cancelled (30.0) -
Issue of preferred shares 40.0 -
Share issue expenses (1.8) -
Issue of common shares 0.7 5.2
Other financing activities - (0.5)
------------- -------------
Net cash provided by (used in)
financing activities (19.3) 179.2
Net cash used in discontinued
operations (1.5) (7.5)
Effect of exchange rate changes
on cash and cash equivalents (2.9) (5.5)
------------- -------------
Net (decrease) increase in cash
and cash equivalents (75.5) 39.7
Cash and cash equivalents,
beginning of period 103.6 63.9
------------- -------------
Cash and cash equivalents,
end of period $ 28.1 $ 103.6
------------- -------------
------------- -------------
COTT CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions of US dollars, US GAAP)
January 2, 1999 January 31, 1998
---------------- -----------------
ASSETS
Current assets
Cash and cash equivalents $ 28.1 $ 103.6
Accounts receivable 113.3 132.0
Inventories 77.3 112.9
Prepaid expenses 2.6 4.9
Discontinued operations 12.0 12.5
-------- --------
233.3 365.9
Property, plant and equipment 295.8 310.0
Investment 11.6 10.7
Goodwill and other assets 142.4 174.9
-------- --------
$ 683.1 $ 861.5
-------- --------
-------- --------
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Short-term borrowings $ 13.5 $ 8.4
Accounts payable and accrued
liabilities 124.4 163.9
Current maturities of long-term
debt 12.5 20.2
Discontinued operations 5.7 2.1
-------- --------
156.1 194.6
Long-term debt 402.4 425.0
Deferred income taxes 2.6 11.0
Capital stock 229.0 202.4
(Deficit) retained earnings (81.8) 47.6
Foreign currency translation
adjustment (25.2) (19.1)
-------- --------
Shareowners' equity 122.0 230.9
-------- --------
$ 683.1 $ 861.5
-------- --------
-------- --------
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