EXHIBIT 99.1
COTT CORPORATION REPORTS RECORD RESULTS IN FIRST QUARTER;
-- SALES UP 26% TO $370.9 MILLION;
-- DILUTED EARNINGS PER SHARE RISE 40% TO $0.21;
-- COMPANY RAISES GUIDANCE AND PLANS TO LIMIT
DIRECTORS' OPTIONS
(All information in U.S. dollars)
TORONTO -- APRIL 20, 2004 - Cott Corporation (NYSE:COT; TSX:BCB) today announced
record sales and earnings per share for the first quarter ended April 3, 2004.
Sales in the first quarter were up 26% to $370.9 million compared to $295.3
million last year. Excluding the impact of acquisitions and foreign exchange,
sales were up 18%. Earnings per diluted share were $0.21; an increase of 40%
from last year's reported $0.15.
"Retailer branded soft drinks are outpacing category growth as in 2003," said
Frank E. Weise, Cott's chairman and chief executive officer. "This strong
performance underlines our customers' commitment to their own-brand beverage
programs. At the same time, these record results are a credit to Cott employees
and their delivery of superior products and services."
Sales in the Company's UK/Europe business unit rose 45%, up 26% excluding
foreign exchange. In the US business unit, sales were up 21%, up 15% excluding
the impact of acquisitions. Canada saw a 25% increase in sales, up 9% excluding
the impact of foreign exchange; and sales for the International business unit
doubled to $14.7 million, of which sales in Mexico amounted to $9.0 million.
Commenting on the sales growth, John K. Sheppard, Cott president and chief
operating officer added, "Our customer-centric approach to the business
continues to make a significant impact across all business units." He said sales
growth in the Company's U.S. business unit was driven by new product development
and merchandising programs, while in Canada it was as a result of Cott's
continued efforts in the grocery channels. In the U.K. business unit, sales were
up in all channels and were also favorably affected by the impact of the Nichols
business. Sales in Mexico were up almost three fold, as customers there continue
to demonstrate their commitment to building their retailer branded soft drink
programs.
Gross margin for the quarter was 19.0% compared to 19.1% last year. Operating
income of $31.7 million was up 28% from last year's $24.8 million. Cott created
a reserve against certain Canadian export receivables, resulting in a charge of
$2.3 million in the first quarter.
Earlier in the quarter, the Company announced that it had acquired assets of The
Cardinal Companies of Elizabethtown, LLC, including a bottling facility located
in Elizabethtown, Kentucky, with the objective of strengthening the Company's
capabilities in the mid-western U.S. Full terms of this transaction were not
disclosed.
4
During the quarter, Cott announced the appointment of John K. Sheppard as chief
executive officer, effective September 1, 2004. Sheppard currently serves as
president and chief operating officer. Weise, the company's chief executive
officer since 1998, will remain chairman with an active role in assisting
management in long-term strategy, customer relations and investor relations.
The Company also amended its guidance for the full year, raising its estimate of
earnings per diluted share to $1.23-$1.27. Sales are expected to increase
12-15%. EBITDA is expected to reach $220 million to $225 million. (see below for
discussion of EBITDA). Capital spending is expected to be held to $55 million in
2004.
Finally, in response to evolving market practices and to the policies of
representative shareowner groups, Cott announced that it has decided to amend
its Common Share Option Plan to limit the number of options that may be granted
to directors of Cott who are not also employees or officers of Cott. The
amendment provides that the aggregate number of common shares that may be
issued, pursuant to the exercise of options, to directors who are not also
officers or employees of Cott be limited to 0.5% of the total number of issued
and outstanding common shares on the date of the grant of options. Options that
are held by directors that were granted to them when they were officers or
employees of Cott will not be counted for purposes of calculating the 0.5%
amount.
This amendment is in addition to the amendment to the Option Plan that will be
voted on at Cott's upcoming annual meeting, and while this amendment is not the
subject of the upcoming vote, the Company intends to administer the Option Plan
in accordance with this amendment pending regulatory approval.
Currently, there are a total of 240,000 options that have been granted (and are
outstanding) to directors who are not officers or employees of Cott,
representing approximately 0.34% of the number of total issued and outstanding
common shares.
* * *
FIRST QUARTER RESULTS CONFERENCE CALL
Cott Corporation will host a conference call today, Tuesday, April 20th at
approximately 10:00 AM 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)-814-4860
International: (416)-640-1907
ANNUAL GENERAL MEETING
Cott Corporation's annual general meeting of shareowners will take place on
Tuesday, April 27, 2004 at 8:30 AM ET at the Glenn Gould Studio, CBC Building,
250 Front Street West, Toronto, Ontario.
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WEBCAST
To access the conference call today and the Annual General Meeting on April 27th
over the Internet, please visit Cott's website at http://www.cott.com on both
dates at least fifteen minutes early to register, download, 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 these events
until May 11th, 2004.
ABOUT COTT CORPORATION
Cott Corporation is the world's largest retailer brand soft drink supplier, with
the leading take home carbonated soft drink market shares in this segment in its
core markets of the United States, Canada and the United Kingdom.
NON-GAAP MEASURE
EBITDA is defined as earnings from continuing operations before interest, income
taxes, depreciation and amortization. Cott uses operating income as its primary
measure of performance and cash flow from operations as its primary measure of
liquidity. Nevertheless, Cott presents EBITDA in its filings for several
reasons. Cott uses multiples of EBITDA and discounted cash flows in determining
the value of its operations. In addition, Cott uses "cash return on assets," a
financial measure calculated by dividing Cott's annualized EBITDA by its
aggregate operating assets, for the purposes of calculating performance-related
bonus compensation for its management employees, because that measure reflects
the ability of management to generate cash while preserving assets. Finally,
Cott includes EBITDA in its filings because it believes that its current and
potential investors use multiples of EBITDA to make investment decisions about
Cott. Investors should not consider EBITDA an alternative to net income, nor to
cash provided by operating activities, nor any other indicators of performance
or liquidity which have been determined in accordance with U.S. or Canadian
GAAP. Cott's method of calculating EBITDA may differ from the methods used by
other companies and, accordingly, Cott's EBITDA may not be comparable to
similarly titled measures used by other companies.
SAFE HARBOR STATEMENTS
This press release contains forward-looking statements 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 costs for raw and packaging
materials, adverse weather conditions, competitive activities by national,
regional and retailer 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, loss of key customers
and retailers' continued commitment to their retailer brand beverage
6
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 Tel: (416) 203-5606
Investor Relations
Edmund O'Keeffe Tel: (416) 203-5617
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EXHIBIT 1
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, 2004 MARCH 29, 2003
------------- --------------
SALES $ 370.9 $ 295.3
Cost of sales 300.5 238.9
---------- ----------
GROSS PROFIT 70.4 56.4
Selling, general and
administrative expenses 38.7 31.6
---------- ----------
OPERATING INCOME 31.7 24.8
Other expense, net 0.3 0.5
Interest expense, net 6.6 7.7
Minority interest 1.0 0.6
---------- ----------
INCOME BEFORE INCOME TAXES AND EQUITY LOSS 23.8 16.0
Income taxes (8.3) (5.4)
Equity loss (0.1) (0.1)
---------- ----------
NET INCOME $ 15.4 $ 10.5
========== ==========
VOLUME - 8 OZ EQUIVALENT CASES 270.1 208.1
NET INCOME PER SHARE
Basic $ 0.22 $ 0.15
Diluted $ 0.21 $ 0.15
EXHIBIT 2
COTT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS OF US DOLLARS, US GAAP)
UNAUDITED
FOR THE THREE MONTHS ENDED
-----------------------------------
APRIL 3, 2004 MARCH 29, 2003
------------- --------------
OPERATING ACTIVITIES
Net income $ 15.4 $ 10.5
Depreciation and amortization 15.0 12.1
Amortization of financing fees 0.2 0.9
Deferred income taxes (0.3) 2.1
Minority interest 1.0 0.6
Equity loss 0.1 0.1
Other non-cash items 0.3 0.3
Net change in non-cash working capital (12.7) (1.7)
---------- ----------
Cash provided by operating activities 19.0 24.9
---------- ----------
INVESTING ACTIVITIES
Additions to property, plant and equipment (11.3) (10.1)
Acquisitions and equity investments (17.7) (0.3)
Other (0.2) --
---------- ----------
Cash used in investing activities (29.2) (10.4)
---------- ----------
FINANCING ACTIVITIES
Payments of long-term debt (2.2) (38.0)
Short-term borrowings 2.1 21.7
Distributions to subsidiary minority shareowner (1.2) (1.2)
Issue of common shares 2.2 1.1
Other financing activities (0.1) --
---------- ----------
Cash provided by (used in) financing activities 0.8 (16.4)
---------- ----------
NET DECREASE IN CASH (9.4) (1.9)
CASH, BEGINNING OF PERIOD 18.4 3.3
---------- ----------
CASH, END OF PERIOD $ 9.0 $ 1.4
========== ==========
EXHIBIT 3
COTT CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS OF US DOLLARS, US GAAP)
UNAUDITED AUDITED
APRIL 3, 2004 JANUARY 3, 2004
------------- ---------------
ASSETS
CURRENT ASSETS
Cash $ 9.0 $ 18.4
Accounts receivable 169.2 148.8
Inventories 119.9 94.4
Prepaid and other expenses 6.5 5.5
---------- ----------
304.6 267.1
PROPERTY, PLANT AND EQUIPMENT 328.8 314.3
GOODWILL 81.2 81.6
INTANGIBLES AND OTHER ASSETS 244.6 245.8
---------- ----------
$ 959.2 $ 908.8
========== ==========
LIABILITIES AND SHAREOWNERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 80.3 $ 78.1
Current maturities of long-term debt 1.5 3.3
Accounts payable and accrued liabilities 173.0 140.5
---------- ----------
254.8 221.9
LONG-TERM DEBT 275.6 275.7
DEFERRED INCOME TAXES 40.6 40.5
---------- ----------
571.0 538.1
MINORITY INTEREST 25.4 25.6
SHAREOWNERS' EQUITY
Capital stock 270.9 267.9
Retained earnings 98.7 83.3
Accumulated other comprehensive income (6.8) (6.1)
---------- ----------
362.8 345.1
---------- ----------
$ 959.2 $ 908.8
========== ==========
EXHIBIT 4
COTT CORPORATION
SEGMENT INFORMATION
(IN MILLIONS OF US DOLLARS, US GAAP)
UNAUDITED
FOR THE THREE MONTHS ENDED
----------------------------------
APRIL 3, 2004 MARCH 29, 2003
------------- --------------
SALES
USA $ 273.1 $ 226.6
Canada 39.8 31.8
UK & Europe 42.7 29.5
International 14.7 7.2
Corporate & Other 0.6 0.2
---------- ----------
$ 370.9 $ 295.3
========== ==========
OPERATING INCOME (LOSS)
USA $ 31.1 $ 25.5
Canada 0.4 0.8
UK & Europe 1.6 (0.3)
International 2.7 1.3
Corporate & Other (4.1) (2.5)
---------- ----------
$ 31.7 $ 24.8
========== ==========
EXHIBIT 5
COTT CORPORATION
SUPPLEMENTARY INFORMATION - NON GAAP MEASURES
(IN MILLIONS OF US DOLLARS)
UNAUDITED
FOR THE THREE MONTHS ENDED
---------------------------------
APRIL 3, 2004 MARCH 29, 2003
------------- --------------
NET INCOME $ 15.4 $ 10.5
Depreciation and amortization 15.0 12.1
Interest expense, net 6.6 7.7
Income taxes 8.3 5.4
---------- ----------
EBITDA $ 45.3 $ 35.7
========== ==========
FOR THE YEAR ENDED JANUARY 1, 2005 -- GUIDANCE
INCOME FROM CONTINUING OPERATIONS $87 - $91
Depreciation and amortization $58
Interest expense, net $30
Income taxes $45 - $46
-----------
EBITDA $220 - $225
===========
EBITDA is defined as earnings from continuing operations before interest, income
taxes, depreciation and amortization. Cott uses operating income as its primary
measure of performance and cash flow from operations as its primary measure of
liquidity. Nevertheless, Cott presents EBITDA in its filings for several
reasons. Cott uses multiples of EBITDA and discounted cash flows in
determining the value of its operations. In addition, Cott uses "cash return on
assets," a financial measure calculated by dividing Cott's annualized
EBITDA by its aggregate operating assets, for the purposes of calculating
performance-related bonus compensation for its management employees, because
that measure reflects the ability of management to generate cash while
preserving assets. Finally, Cott includes EBITDA in its filings because it
believes that its current and potential investors use multiples of EBITDA to
make investment decisions about Cott. Investors should not consider EBITDA an
alternative to net income, nor to cash provided by operating activities, nor any
other indicators of performance or liquidity which have been determined in
accordance with U.S. or Canadian GAAP. Cott's method of calculating EBITDA may
differ from the methods used by other companies and, accordingly, Cott's EBITDA
may not be comparable to similarly titled measures used by other companies.
SAFE HARBOR STATEMENTS
This document contains forward-looking statements 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 costs for raw and packaging
materials, adverse weather conditions, competitive activities by national,
regional and retailer 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, loss of key customers
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.