Cott Reports Positive Operating Results Led By U.S. Higher Sales And Earnings.TORONTO--(BUSINESS WIRE)--May 9, 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.) today announced positive 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. for the first quarter of 1999 following two quarters of losses. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. company president and chief executive officer, Frank E. Weise, "These results are early signals that our team's strategic plan is showing results." Consolidated sales for the January-March quarter totaled $232.2 million versus $258.1 million for last year's quarter which ran February February: see month. through April. Net income in the quarter, before a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge for a change in accounting principle, was $0.8 million versus $2.3 million for last year. Adoption of a new change in U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). resulted in the company having to absorb a one-time after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge of $2.1 million for previously capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. start-up Start-up The earliest stage of a new business venture. costs. Overall totals for the retailer brand soft drink manufacturer were negatively impacted by a change in its fiscal periods, as the company shifted to calendar-year reporting of results. "Credit for these positive results goes to Cott employees," said Weise. "I see the values of the New Cott taking hold as we move to higher levels of performance. Our managers and teams have seized seized (seised) n. 1) having ownership, commonly used in wills as "I give all the property of which I die seized as follows:...." 2) having taken possession of evidence for use in a criminal prosecution. 3) having taken property or a person by force. (See: seisin, seizure) accountability and winning attitude as their own driving forces." Weise cited the company's strong performance 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. . With increases in both sales and earnings, this unit is leading the 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. in operations results now underway. As Cott's largest core unit, followed by the United Kingdom 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 , the US business has been a major management focus. "Improvements in manufacturing efficiency and product rationalization rationalization, in psychology: see defense mechanism. as well as strengthening of financial controls have been vital factors," Weise said. "In fact, allowing for discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of marginal accounts and the 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 non-core businesses, these results are especially encouraging. We now strive to deliver results on a sustained basis. We view our challenge not as a sprint but as a marathon run for gold." Cott is the world's largest retailer brand beverage supplier, with major manufacturing facilities in its core markets of the United States, the United Kingdom and Canada. United States Sales in the U.S. for the January-March quarter rose to $138.2 from $136.7 million in the prior year. The unit posted first-quarter operating income of $9.7 million compared to $8.3 million last year. Gains in operational efficiencies led to margin improvement while sales to the top retail accounts grew solidly. United Kingdom/Europe Sales in the UK 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). declined to $45.2 million from $65.2
last year. Operating income was $1.0 million versus $3.7 million.The largest factor in the sales shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. versus prior year was market softness in the U.K. Importantly, Cott U.K.'s volume share of the market remained stable in Q1 as compared to the same period last year. Other key factors causing these sales declines included a reduction in co-packing activities and loss of sales due to divesting operations in Norway. Canada Sales in Canada slowed due to product mix and calendar adjustments falling to $36.3 million from $43.9 million last year. Operating income of $2.6 million versus $3.3 million was on plan. Sales were hurt by weak winter demand and customers' timing issues. Currency devaluation Currency devaluation A deliberate downward adjustment in the official exchange rates established, or pegged, by a government against a specified standard, such as another currency or gold. versus last year had an adverse effect on earnings offsetting gains in productivity for the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. unit. 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 -0-
COTT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in millions of US dollars except per share amounts, US GAAP)
Unaudited
For the three months ended
---------------------------
April 3, 1999 May 2, 1998
------------- -----------
Sales $232.2 $258.1
Cost of sales 200.3 223.2
-------- --------
Gross profit 31.9 34.9
Selling, general and
administrative expenses 20.9 24.0
-------- --------
Operating income 11.0 10.9
Other expenses (income), net 0.3 (0.5)
Interest expense, net 9.2 8.7
-------- --------
Income before income taxes and equity
income 1.5 2.7
Provision for income taxes (1.0) (0.9)
Equity income 0.3 0.5
-------- --------
Income before change in accounting
principle 0.8 2.3
Cumulative effect of change in accounting
principle, net of tax (2.1) -
-------- --------
Net (loss) income $(1.3) $2.3
======== ========
Income (loss) per common share:
Income before change in accounting
principle $0.01 $0.04
Cumulative effect of change in
accounting principle $(0.03) $-
Net (loss) income $(0.02) $0.04
Diluted income (loss) per common share:
Income before change in accounting
principle $0.01 $0.04
Cumulative effect of change in
accounting principle $(0.03) $-
Net (loss) income $(0.02) $0.04
COTT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of US dollars, US GAAP)
Unaudited
For the three months ended
--------------------------
April 3, 1999 May 2, 1998
------------- -----------
Operating Activities
Income before change in accounting
principle $0.8 $2.3
Depreciation and amortization 9.9 11.9
Deferred income taxes - (1.2)
Equity income (0.3) (0.5)
Gain on sale of property, plant and
equipment - (0.3)
Net change in non-cash working capital
from continuing operations (13.9) (40.6)
-------- --------
Net cash used in operating activities (3.5) (28.4)
Investing Activities
Additions to property, plant and
equipment (4.6) (19.7)
Proceeds from disposal of property, plant
and equipment - 0.9
Other investing activities - (2.3)
-------- --------
Net cash used in investing activities (4.6) (21.1)
Financing Activities
Payments of long-term debt (7.3) (1.9)
Short-term borrowings 9.7 (1.0)
Dividends paid - (1.1)
-------- --------
Net cash provided by (used in) financing
activities 2.4 (4.0)
Net cash provided by (used in) discontinued
operations (0.3) 0.1
Effect of exchange rate changes on cash
and cash equivalents 0.1 2.4
-------- --------
Net decrease in cash and cash equivalents (5.9) (51.0)
Cash and cash equivalents,
beginning of period 28.1 103.6
-------- --------
Cash and cash equivalents, end of period $22.2 $52.6
======== ========
COTT CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions of US dollars, US GAAP)
Unaudited Audited
April 3, 1999 January 2, 1999
------------- ---------------
ASSETS
Current assets
Cash and cash equivalents $22.2 $28.1
Accounts receivable 117.1 113.3
Inventories 82.0 77.3
Prepaid expenses 3.3 2.6
Discontinued operations 11.3 12.0
-------- --------
235.9 233.3
Property, plant and equipment 287.6 295.8
Investment 12.2 11.6
Goodwill and other assets 138.5 142.4
-------- --------
$674.2 $683.1
======== ========
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Short-term borrowings $23.2 $13.5
Accounts payable and accrued
liabilities 119.7 124.4
Current maturities of long-term debt 15.6 12.5
Discontinued operations 4.8 5.7
-------- --------
163.3 156.1
Long-term debt 388.4 402.4
Deferred income taxes 1.4 2.6
Shareowners' equity
Capital stock 229.0 229.0
Deficit (83.1) (81.8)
Foreign currency translation
adjustment (24.8) (25.2)
-------- --------
Shareowners' equity 121.1 122.0
-------- --------
$674.2 $683.1
======== ========
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