Cott Reports Profitable Year And Quarter, Driven By Operations Improvements.Business Editors TORONTO--(BUSINESS WIRE)--Feb. 17, 2000 All information in US dollars 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, 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 ) today announced increased sales and earnings for the year 1999 as well as the fourth quarter. The Company's four consecutive quarters of profitable results was an especially significant achievement. The year's performance showed a gain of 3.4% in sales versus the as-reported 11-month previous period. On a comparable 12-month basis, sales grew by 1% after removing sales by divested units. As reported, 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. before unusual items increased over five times. &uot;This was a breakthrough year for Cott,&uot; said Frank E. Weise, the Company's president and chief executive officer, &uot;Benefits are coming from our ongoing efforts in focusing on core markets and fixing our cost structure. Of note has been the steady improvement in gross profit margins 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. , 14.5% for the year versus 10.4% last year. This performance was driven by major improvements in operations as we gained efficiencies and applied cost discipline in all our activities. &uot;All three of our core markets are being revitalized re·vi·tal·ize tr.v. re·vi·tal·ized, re·vi·tal·iz·ing, re·vi·tal·iz·es To impart new life or vigor to: plans to revitalize inner-city neighborhoods; tried to revitalize a flagging economy. ,&uot; Weise said. &uot;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. , the engine is humming as we grow with strong customers across the country. 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 , our market shares are holding at a high level. In the United Kingdom, although we face many challenges, we are confident that the right actions are underway to improve performance in 2000.&uot; For the year ended January January: see month. 1, 2000, Cott's sales reached $990.8 million from $958.5 million last year, as reported, and operating income before unusual items totaled $45.0 million versus $8.2 million in 1998 as reported, almost a six-fold Adj. 1. six-fold - having six units or components sextuple, sixfold multiple - having or involving or consisting of more than one part or entity or individual; "multiple birth"; "multiple ownership"; "made multiple copies of the speech"; "his multiple increase. The Company reported $0.35 basic earnings per share 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 year. This included an 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. gain of $0.07 per share from the sale of an equity interest in Menu Foods Ltd. and an income tax recovery of $0.06 per share in the year. This compares with a loss 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). of $0.47 in the previous 11-month period. On a fully 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. basis, earnings per share were $0.28 compared to a loss per share of $1.74 for the previous 11-month period. For the quarter, Cott reported sales of $209.3 million, an increase of 43.1% versus the shortened short·en v. short·ened, short·en·ing, short·ens v.tr. 1. To make short or shorter. 2. quarter sales as reported, and a decrease of 2.7% versus last year on a comparable basis. Operating income was positive at $4.6 million versus a loss of $22.3 million as reported in the prior year. The fourth quarter earnings per share were $0.06, compared with a loss of $0.85 last year, which included a charge for restructuring and unusual items. &uot;Overall, our top fifteen customers which account for 70% of our business are up 14% in volume. This is a credit to the dedication of Cott employees worldwide who raised the level of customer service. Our new emphasis on quality is already paying off, especially in the U.S. where we are seeing the benefits from the Six-Sigma training process,&uot; Weise commented. SEGMENTS Canada: The top 5 accounts grew 6% year-over-year, as 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. sustained its healthy profile. Sales highlights included the launch of &uot;Chubby&uot; a special 250-ml package for young children, and a &uot;new product of the year&uot; award winning canned lemon lemon, one of the citrus fruits, from a tree (Citrus limon) of the family Rutaceae (orange family), probably native to India. A small tree (to about 15 ft/5 m tall) with thorny branches and purple-edged white blossoms, it requires a mild, equable climate. iced tea. For the year, Cott Canada's sales reached $169.2 million compared to $161.1 million in the previous 11-month period, a gain of 5.0%. On a 12-month comparable basis, sales decreased 1.5%. Gross profit rose to $29.4 million from $23.6 million in the previous shortened year, an increase of 24.6%. For the quarter, sales in Canada of $37.4 million were up from $25.4 million on as-reported basis, an increase of 47.2%. On a comparable basis, sales increased 3.3%. Gross profit rose to $7.0 million from the $2.6 million reported in 1998. United Kingdom: The U.K. management team has made significant headway head·way n. 1. Forward movement or the rate of forward movement, especially of a ship. 2. Progress toward a goal. 3. The clear vertical space beneath a ceiling or archway; clearance. 4. in 1999 towards overcoming a host of integration problems. On an upbeat note, fourth quarter earnings were ahead of last year on a comparable basis. For the year, however, sales were $186.1 million versus $209.5 million in the previous 11-month period, a decrease of 11.2%. On a comparable 12-month basis, sales were down 16.6%. Gross profit fell to $24.3 million from $25.6 million, a reduction of 5.1%. 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 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 May 1999 contributed to these declines. For the quarter, the U.K. sales were $43.7 million, up from $39.7 million, a 10.1% increase as reported but down 20.4% from the comparable period last year. Gross profit was $6.4 million almost twice the $3.4 million reported in 1998. United States: Recording a 20% sales growth with its top 5 accounts, Cott USA scored major success in leading the Company results for the year. Progress was evident in manufacturing and service as quality initiatives took hold across the American system The term American System can mean one of the following:
For the quarter, sales in the U.S. climbed to $122.4 million from $68.3 million as reported, an increase of 79.2%. On a comparable basis, fourth quarter sales increased by 16.7%. Gross profit in the fourth quarter was $18.7 million versus a loss of $4.1 million reported in 1998. COMMENTS
- Initiatives in 1999 showed payback that should create long-term
value. Efforts to streamline the product offering in all three
core markets resulted in a one-third reduction in SKUs. While
this cut back in the number of marginal product lines and less
profitable accounts resulted in short term volume loss, operating
efficiencies and customer service were significantly improved.
- The drive to &uot;make assets sweat&uot; led the way in the Company's
gains in productivity. Operating cash flow in 1999 increased by
$84.8 million to $38.4 million. Debt was reduced by year-end to
$324 million from $378 million.
- Divestitures of non-strategic assets were concluded during 1999
resulting in cash proceeds of $39.1 million. These included The
Watt Design Group, Destination Products International, the
beverage operations in Featherstone (U.K.) and Australia and a
38.25% equity interest in Menu Foods.
- To further align resources, the Company announced that its PET
bottle manufacturing assets and operations located at various
Cott sites in the U.S. are to be sold to Schmalbach-Lubeca
Plastic Containers USA. This is the result of the Company's
assessment of its manufacturing strategy for the future and will
give Cott access to S-L's leading edge plastic container
technology. (see separate press release)
Cott is the world's largest retailer brand beverage supplier, with major manufacturing facilities in its three core markets of Canada, the U.K. and the U.S. 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 STATEMENTS OF INCOME
(in millions of US dollars, except per share amounts, US GAAP)
AUDITED
(UNAUDITED)
January 1, January 2, January 1, January 2,
2000 1999 2000 1999
(13 weeks) (9 weeks) (52 weeks) (48 weeks)
---------- ---------- ---------- ----------
Sales $ 209.3 $ 146.3 $ 990.8 $ 958.5
Cost of sales 176.9 146.8 846.7 859.0
---------- ---------- ---------- ----------
Gross profit (loss) 32.4 (0.5) 144.1 99.5
Selling, general and
administrative expenses 27.8 21.8 99.1 91.3
Unusual items (1.2) 2.9 (1.2) 77.2
---------- ---------- ---------- ----------
Operating income (loss) 5.8 (25.2) 46.2 (69.0)
Other expenses (income), net 0.4 (1.2) (5.1) (1.0)
Interest expense, net 7.6 6.7 34.6 33.2
---------- ---------- ---------- ----------
Income (loss) before income
taxes, equity income and
minority interest (2.2) (30.7) 16.7 (101.2)
Income taxes 6.8 (14.5) 3.8 4.0
Equity income - 0.5 0.9 1.5
Minority interest - (0.1) - (0.1)
---------- ---------- ---------- ----------
Income (loss) from
continuing operations 4.6 (44.8) 21.4 (95.8)
Loss from discontinued
operations (0.8) (3.8) (0.8) (3.8)
Cumulative effect of changes in
accounting principles, net
of tax - (2.5) (2.1) (9.9)
---------- ---------- ---------- ----------
Net income (loss) $ 3.8 $ (51.1) $ 18.5 $ (109.5)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Income (loss) per common share:
Income (loss) from
continuing operations $ 0.07 $ (0.74) $ 0.35 $ (1.53)
Discontinued operations $ (0.01) $ (0.05) $ (0.01) $ (0.05)
Cumulative effect of changes
in accounting principles $ - $ (0.05) $ (0.03) $ (0.16)
Net income (loss) $ 0.06 $ (0.85) $ 0.31 $ (1.74)
Diluted income (loss) per
common share:
Income (loss) from
continuing operations $ 0.07 $ (0.74) $ 0.32 $ (1.53)
Discontinued operations $ (0.01) $ (0.05) $ (0.01) $ (0.05)
Cumulative effect of changes
in accounting principles $ - $ (0.05) $ (0.03) $ (0.16)
Net income (loss) $ 0.06 $ (0.85) $ 0.28 $ (1.74)
COTT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of US dollars, US GAAP)
AUDITED
January 1, January 2,
2000 1999
(52 weeks) (48 weeks)
---------- ----------
Operating Activities
Income (loss) from continuing operations $ 21.4 $ (95.8)
Depreciation and amortization 39.1 43.7
Deferred income taxes (6.1) (6.9)
Equity income (0.9) (1.5)
Minority interest - 0.1
Loss (gain) on sale of property, plant
and equipment 0.3 (0.3)
Gain on disposal of equity investment (5.9) -
Non-cash unusual items 0.3 51.4
Other non-cash items 0.3 6.8
Net change in non-cash working capital from
continuing operations 8.4 (7.2)
---------- ----------
Cash provided by (used in) operating
activities 56.9 (9.7)
Investing Activities
Additions to property, plant and equipment (18.5) (36.7)
Proceeds from disposals of businesses 39.1 -
Proceeds from disposal of property, plant
and equipment 1.4 3.9
Acquisitions (25.0) (2.9)
Other (2.6) (6.4)
---------- ----------
Cash used in investing activities (5.6) (42.1)
Financing Activities
Payments of long-term debt (52.0) (31.2)
Short-term borrowings (24.4) 5.2
Common shares purchased and cancelled - (30.0)
Issue of common shares - 0.7
Issue of preferred shares - 40.0
Share issue expense - (1.8)
Dividends paid - (2.2)
---------- ----------
Cash used in financing activities (76.4) (19.3)
Net cash used in discontinued operations (1.0) (1.5)
Effect of exchange rate changes on cash and
cash equivalents 0.6 (2.9)
---------- ----------
Net decrease in cash and cash equivalents (25.5) (75.5)
Cash and cash equivalents, beginning of
period 28.1 103.6
---------- ----------
Cash and cash equivalents, end of period $ 2.6 $ 28.1
---------- ----------
---------- ----------
COTT CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions of US dollars, US GAAP)
AUDITED
January 1, January 2,
2000 1999
---------- ----------
ASSETS
Current assets
Cash and cash equivalents $ 2.6 $ 28.1
Accounts receivable 97.6 113.3
Inventories 67.3 77.3
Prepaid expenses 4.4 2.6
Discontinued operations - 12.0
---------- ----------
171.9 233.3
Property, plant and equipment 266.4 295.8
Goodwill 108.1 132.1
Investment and other assets 43.2 21.9
---------- ----------
$ 589.6 $ 683.1
---------- ----------
---------- ----------
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Short-term borrowings $ 1.8 $ 26.2
Accounts payable and accrued
liabilities 104.8 111.7
Current maturities of long-term debt 1.6 12.5
Discontinued operations 1.0 5.7
---------- ----------
109.2 156.1
Long-term debt 322.0 365.2
Other non-current liabilities 16.1 39.8
Shareowners' equity
Capital stock 229.0 229.0
Deficit (63.3) (81.8)
Foreign currency translation adjustment (23.4) (25.2)
---------- ----------
142.3 122.0
---------- ----------
$ 589.6 $ 683.1
---------- ----------
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