- Reported earnings per share of $0.07, compared to a loss of $0.03
per share in Q1 2006 TORONTO, April 26 /PRNewswire-FirstCall/ --
Cott Corporation (NYSE:COT; TSX:BCB), the world's largest retailer
brand soft drink provider, announced today its results for the
first quarter ended March 31, 2007. FIRST QUARTER CONSOLIDATED
RESULTS First quarter volume was 317.8 million eight-ounce
equivalent cases, up 7.7% compared to the first quarter of 2006.
The increase was driven by a 31.8% increase in the International
business unit compared to the prior year first quarter, the
majority of which was Royal Crown concentrate volume growth.
Revenue increased 1.5% in the quarter to $400.2 million, compared
to $394.2 million in the first quarter of the prior fiscal year.
Excluding the impact of foreign exchange, revenue was relatively
flat compared to the prior year first quarter. First quarter gross
margin was 13.4%, flat compared to the prior year first quarter.
This result reflects the benefits of the Company's recent cost
reduction efforts, which offset commodity cost increases of $16
million above those of the prior year first quarter. Net income and
earnings per share returned to profitability in the quarter at $4.8
million or $0.07 per diluted share, compared to a loss of $2.1
million or ($0.03) per diluted share, respectively, in the first
quarter of 2006. As a result of the adoption of FASB Interpretation
# 48 as of the beginning of 2007, the Company has recorded a charge
of $0.8 million in income tax expense for unrecognized tax
benefits.
-------------------------------------------------------------------------
1st Quarter Key Indicators
-------------------------------------------------------------------------
2007 2006 ---- ----
-------------------------------------------------------------------------
Volume (8oz MM) 317.8 295.0
-------------------------------------------------------------------------
Revenue ($MM) $ 400.2 $ 394.2
-------------------------------------------------------------------------
Gross Margin 13.4% 13.4%
-------------------------------------------------------------------------
Restructuring, Assets Impairment & Other Charges ($MM) $ 0.3 $
5.0
-------------------------------------------------------------------------
Operating Income ($MM) $ 15.5 $ 7.7
-------------------------------------------------------------------------
Reported EPS $ 0.07 $ (0.03)
-------------------------------------------------------------------------
"The first quarter performance is further evidence that we are
taking the right actions to rebuild Cott's profitability," said
Cott Chief Executive Officer Brent Willis. "Our teams are doing a
good job executing against our objectives and are demonstrating the
discipline, focus and commitment required to deliver against our
priorities of cost reduction, customer partnership and innovation."
FIRST QUARTER BUSINESS UNIT HIGHLIGHTS North American revenue
declined 4.9% when compared to the first quarter of 2006, as a
result of overall industry softness and actions the Company has
taken to rationalize underperforming SKUs, product lines and
customers. These actions have had a positive impact on North
American gross margin and the Company plans to continue
rationalization of unprofitable products where it makes sense to do
so, despite the potential short-term negative impact on volume and
revenue. The International business unit continued to deliver
strong revenue growth, up 25.6% compared to the same period last
year. All components of the business unit, which is comprised of
the U.K., Europe, Mexico, and all of Cott's other international
markets combined, contributed strong organic revenue growth in the
quarter. "We are beginning to unlock the potential of Cott's
international business," commented Willis. "We're leveraging
international expertise across geographies, and beginning to
capture the benefit of the Company's global functions and
resources. Our expansion plans with key global retailers are
progressing well and we look forward to introducing new beverages
to new consumers in targeted international markets," added Willis.
OTHER FINANCIAL INFORMATION Selling, general and administrative
(SG&A) expenses declined 5.5% to $37.7 million, as compared to
$39.9 million in last year's first quarter, despite increased
investment in sales and marketing compared to the first quarter of
2006. The first quarter operating income more than doubled to $15.5
million from $7.7 million in the prior year first quarter.
Restructuring charges, asset impairments and other charges were
$0.3 million on a pre-tax basis in the quarter. This compares to
pre-tax charges of $5.0 million in the first quarter of 2006 which
were recorded for the closure of the Ohio plant and costs
associated with the U.K. Competition Commission's review of Cott's
acquisition of Macaw. PROGRESS IN KEY STRATEGIC AREAS Cott
continued to make progress in the first quarter in its three key
areas of strategic focus, plus its key organizational enabler: 1.
Lowest cost producer 2. Retailers' best partner 3. Innovation
pipeline +1 High-performance, world class organization - Cott
continued to expand market penetration in its four innovation focus
areas: premium ready-to-drink teas, energy drinks, sports drinks,
and flavored and enhanced waters. The Company has begun
distribution of this innovation portfolio in numerous grocery, mass
merchandise, convenience and gas customers across North America. -
The Company's installation of the second aseptic manufacturing line
in one of Cott's U.K. production facilities proceeded on plan and
on budget. The additional production line is expected to double the
Company's aseptic capacity, allowing Cott to respond to the
increasing demand for preservative-free products in the U.K. and
Europe. - Two senior management appointments during the quarter
strengthened the Company's leadership. Juan Figuereo was appointed
Chief Financial Officer and brings nearly two decades of senior
finance experience in the snack foods, beverage, and retail
industries, most recently as Vice-President, Mergers &
Acquisitions for Wal-Mart International. Bill Reis joined the
Company as Chief Procurement Officer bringing 13 years of
procurement experience with the Coca-Cola Company, and most
recently as Chief Procurement Officer for Revlon. - David T.
Gibbons was appointed to Cott's Board of Directors during the
quarter, adding further strength in finance and diversity of
executive experience to the Board. Mr. Gibbons is an international
business executive with global experience in Rubbermaid and 3M who
is currently Chairman and was recently CEO of the Perrigo Company,
a publicly-traded manufacturer of retailer brand over-the-counter
pharmaceutical and nutritional products. PERFORMANCE AGAINST
BUSINESS MODEL First quarter results were in line on volume and
gross margin, and well ahead on operating income, against our
long-term business targets. Results were short of the revenue range
in the quarter, but as the Company completes its portfolio
rationalization and as it continues to implement its new
product/channel expansion initiatives over the course of the year,
it expects revenue growth to come closer to its long-range targets.
"We remain confident that there is multi-year growth ahead for
Cott," added Willis. "As previously communicated, for 2007 we
expect volume and revenue growth to be on the lower end and
operating income growth to be on the upper end of the Company's
long-term targets." First Quarter Results Conference Call
------------------------------------- Cott Corporation will host a
conference call today, Thursday, April 26, at approximately 1 PM ET
to discuss first 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:
(800) 733-7560 International: (416) 644-3418 Annual and Special
Meeting of Shareowners -----------------------------------------
Cott Corporation's Annual and Special Meeting of shareowners will
take place today, Thursday, April 26, 2007 at 8:30 AM ET at St.
Andrew's Club and Conference Centre, 150 King Street West, 27th
Floor, St. Andrew's Hall, Toronto, Ontario. Webcast ------- To
access Cott's Shareowner Meeting or first quarter conference call
with analysts over the Internet, please visit the Company's website
at http://www.cott.com/. Please log on 15 minutes early to
register, download, and install any necessary audio/video software.
For those who are unable to access the live broadcast, a replay of
both events will be available at Cott's website until May 4, 2007.
About Cott Corporation ---------------------- Cott Corporation is
one of the world's largest non-alcoholic beverage companies and the
world's largest retailer brand soft drink company. The Company
commercializes its business in over 60 countries worldwide, with
its principal markets being the United States, Canada, the United
Kingdom and Mexico. Cott markets or supplies over 200 retailer and
licensed brands, and Company-owned brands including Cott, RC,
Vintage, Vess and So Clear. Its products include carbonated soft
drinks, sparkling and flavored waters, energy drinks, sports
drinks, juices, juice drinks and smoothies, ready-to-drink teas,
and other non-carbonated beverages. The Company's website is
http://www.cott.com/. The brand names and trademarks referenced in
this press release are trademarks of Cott Corporation, its
affiliated companies, our customers, or other third parties. Safe
Harbor Statements ---------------------- This press release
contains or refers to forward-looking statements reflecting
management's current expectations regarding future results of
operations, economic performance, financial condition and
achievements of the Company. The forward-looking statements are
based on the assumption that volume and revenue will be consistent
with historical trends, that margins will improve through a balance
of revenue realization and cost containment, and that interest
rates will remain constant and debt levels will decline, and, in
the case of the statements relating to new product introductions
and capacity increases, on management's current plans and
estimates. Management believes these assumptions to be reasonable
but there is no assurance that they will prove to be accurate.
Forward-looking statements, specifically those concerning future
performance such as those relating to the success of the Company's
measures to increase volume and revenue, reduce costs and increase
operating income, obtain capacity increases, and introduce new
products 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 costs for raw and packaging
materials, the Company's ability to restore plant efficiencies and
reduce logistics and other costs, adverse weather conditions,
competitive activities by other brand beverage manufacturers, the
Company's ability to develop new products that appeal to consumer
tastes, the Company's ability to identify acquisition candidates,
successfully consummate acquisitions and integrate acquired
businesses into its operations, fluctuations in currency versus the
U.S. dollar, the uncertainties of litigation and regulatory review,
loss of key customers and retailers' continued commitment to their
Company-supplied beverage programs. The foregoing list of factors
is not exhaustive. The Company undertakes no obligation to publicly
update or revise any forward-looking statements. (Financial tables
in Exhibits 1-5 attached) COTT CORPORATION EXHIBIT 1 CONSOLIDATED
STATEMENTS OF INCOME (LOSS) (in millions of US dollars except per
share amounts, US GAAP) Unaudited For the three months ended
--------------------------------- March 31, 2007 April 1, 2006
---------------- --------------- Sales $ 400.2 $ 394.2 Cost of
sales 346.7 341.5 ---------------- --------------- Gross profit
53.5 52.7 Selling, general and administrative expenses 37.7 39.9
Loss on disposal of property, plant & equipment - 0.1
Restructuring, asset impairments and other charges Restructuring
0.3 1.6 Asset impairments - 1.4 Other - 2.0 ----------------
--------------- Operating income 15.5 7.7 Other (income) expense,
net 0.2 (0.2) Interest expense, net 7.8 8.2 Minority interest 0.7
1.0 ---------------- --------------- Income (loss) before income
taxes 6.8 (1.3) Income tax expense 2.0 0.8 ----------------
--------------- Net income (loss) $ 4.8 $ (2.1) ----------------
--------------- ---------------- --------------- Volume - 8 oz
equivalent cases 317.8 295.0 - Filled Beverage 192.9 199.9 Net
income (loss) per common share Basic $ 0.07 $ (0.03) Diluted $ 0.07
$ (0.03) Weighted average outstanding shares Basic 71,751,553
71,712,399 Diluted 71,794,871 71,755,031 COTT CORPORATION EXHIBIT 2
CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions of US dollars,
US GAAP) Unaudited For the three months ended
--------------------------------- March 31, 2007 April 1, 2006
---------------- --------------- Operating Activities Net income
(loss) $ 4.8 $ (2.1) Depreciation and amortization 17.9 19.3
Amortization of financing fees 0.3 0.3 Share-based compensation 2.5
2.7 Deferred income taxes 0.2 0.2 Increase in other income tax
liabilities 0.8 - Minority interest 0.7 1.0 Loss on disposal of
property, plant & equipment - 0.1 Asset impairments - 1.4 Other
non-cash items 0.3 0.3 Net change in non-cash working capital
(12.1) (15.8) ---------------- --------------- Cash provided by
operating activities 15.4 7.4 ---------------- ---------------
Investing Activities Additions to property, plant and equipment
(16.2) (8.3) Additions to intangibles and other assets (0.4) (2.4)
Proceeds from disposal of property, plant & equipment 0.2 0.7
---------------- --------------- Cash used in investing activities
(16.4) (10.0) ---------------- --------------- Financing Activities
Payments of long-term debt (1.2) (0.2) Short-term borrowings (4.2)
(7.0) Distributions to subsidiary minority shareowner (0.6) (1.1)
Other financing activities (0.1) (0.1) ----------------
--------------- Cash used in financing activities (6.1) (8.4)
---------------- --------------- Effect of exchange rate changes on
cash (0.1) 0.1 ---------------- --------------- Net decrease in
cash (7.2) (10.9) Cash, beginning of period 13.4 21.7
---------------- --------------- Cash, end of period $ 6.2 $ 10.8
---------------- --------------- ---------------- ---------------
COTT CORPORATION EXHIBIT 3 CONSOLIDATED BALANCE SHEETS (in millions
of US dollars, US GAAP) Unaudited December 30, March 31, 2007 2006
---------------- --------------- ASSETS Current assets Cash $ 6.2 $
13.4 Accounts receivable 196.6 187.0 Income taxes recoverable 16.3
17.8 Inventories 147.9 131.2 Prepaid and other expenses 11.9 10.3
Deferred income taxes 12.9 11.7 ---------------- ---------------
391.8 371.4 Property, plant and equipment 364.6 360.2 Goodwill
159.1 158.4 Intangibles and other assets 247.8 250.7 Deferred
income taxes 9.8 - ---------------- --------------- $ 1,173.1 $
1,140.7 ---------------- --------------- ----------------
--------------- LIABILITIES AND SHAREOWNERS' EQUITY Current
liabilities Short-term borrowings $ 103.7 $ 107.7 Current
maturities of long-term debt 1.7 2.0 Accounts payable and accrued
liabilities 201.0 186.5 ---------------- --------------- 306.4
296.2 Long-term debt 276.7 275.2 Deferred income taxes 49.7 48.2
Other tax liabilities 31.0 11.5 ---------------- ---------------
663.8 631.1 Minority interest 21.0 20.9 Shareowners' equity Capital
stock 273.4 273.4 Restricted shares (0.6) (0.7) Additional
paid-in-capital 27.7 29.8 Retained earnings 169.2 168.7 Accumulated
other comprehensive income 18.6 17.5 ----------------
--------------- 488.3 488.7 ---------------- --------------- $
1,173.1 $ 1,140.7 ---------------- --------------- ----------------
--------------- COTT CORPORATION EXHIBIT 4 SEGMENT INFORMATION (in
millions of US dollars, US GAAP) Unaudited For the three months
ended --------------------------------- March 31, 2007 April 1,
2006 ---------------- --------------- Sales North America $ 295.6 $
310.9 International 104.6 83.3 ---------------- --------------- $
400.2 $ 394.2 ---------------- --------------- ----------------
--------------- Operating income North America $ 10.6 $ 5.0
International 4.9 2.7 ---------------- --------------- $ 15.5 $ 7.7
---------------- --------------- ---------------- ---------------
COTT CORPORATION EXHIBIT 5 SUPPLEMENTARY INFORMATION - NON GAAP
MEASURES (in millions of US dollars) Unaudited Change in revenue
excluding foreign exchange For the three months ended
------------------------------------------------- March 31, 2007
------------------------------------------------- Cott North
America International --------------- ---------------
--------------- Change in revenue $ 6.0 $ (15.3) $ 21.3 Impact of
foreign exchange (6.5) 0.5 (7.0) --------------- ---------------
--------------- Change excluding foreign exchange $ (0.5) $ (14.8)
$ 14.3 --------------- --------------- --------------- Percentage
change excluding foreign exchange (0%) (5%) 16% ---------------
--------------- --------------- --------------- ---------------
--------------- DATASOURCE: Cott Corporation CONTACT: COTT
CONTACTS: Media Relations, Kerry Morgan, Tel: (416) 203-5613;
Investor Relations, Edmund O'Keeffe, Tel: (416) 203-5617
Copyright