EXHIBIT 99.1
COTT CORPORATION ANNOUNCES FIRST QUARTER RESULTS
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o SALES GROWTH CONTINUES, UP 7% TO $395.5 MILLION
o DILUTED EPS DOWN TO $0.12
o 2005 GUIDANCE REDUCED
(ALL INFORMATION IN US DOLLARS)
TORONTO, Apr 21, 2005 -- Cott Corporation (NYSE:COT; TSX:BCB) today announced
results for the first quarter ended April 2, 2005. Sales continue to increase,
up 7% in the first quarter to $395.5 million compared to $370.9 million last
year. Excluding the impact of acquisitions and foreign exchange, sales were up
3%. Earnings per diluted share were $0.12, down from $0.21 in the first quarter
last year.
"We were pleased to see continued sales growth, despite category weakness," said
John K. Sheppard, Cott's president and chief executive officer. "Price increases
have been accepted by all our US and Canadian customers and took effect
throughout the quarter. Although our earnings were disappointing, we saw
favourable trends in both plant efficiencies and gross margins through the
quarter and expect these positive trends to continue."
FIRST QUARTER
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Sales in the Company's US business unit were up 7.8%, up 5.1% excluding the
impact of acquisitions. In the UK/Europe business unit sales rose 2.1%, down
0.7% excluding foreign exchange. In Canada sales were up 3.3% as compared to the
previous year, down 4.0% excluding foreign exchange. Sales for the International
business unit were up 6.8% to $15.7 million, of which sales in Mexico amounted
to $10.5 million.
Gross margin for the quarter was 14.2% as compared to 19.0% last year,
reflecting a combination of: increased ingredient and packaging costs,
particularly PET resin, and the timing of the price increases to recover them;
higher fixed costs resulting from newly-added production capacity in the US; and
changes in the US product and packaging mix. Gross margin improved through the
quarter as a result of higher plant efficiencies in the US and price increases
to North American customers. The Company has now successfully passed through all
2004 ingredient and packaging cost increases. It expects to recover new 2005
cost increases through further pricing, phased in over the balance of this year
in order to
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protect peak season promotional plans already in place. Operating income of
$19.3 million was down 39.1% from last year's $31.7 million.
"Our back-to-basics focus is beginning to show results and we expect the
positive trends in efficiencies and gross margins to continue through the
balance of the year," added Sheppard. "Our customers remain committed to their
retailer brand programs and their investment in merchandising and display
activity for Cott products continues to grow."
FULL-YEAR OUTLOOK
- -----------------
Despite recent price increases, Cott's guidance on sales growth for the year
remains unchanged at 8-10%. However, the Company's full-year earnings are
expected to be reduced by a shift in product mix and higher than originally
anticipated plant costs. Assuming current levels of ingredient and packaging
costs, EBITDA is projected to be between $220 and $230 million, and earnings per
diluted share are expected to be in the range of $1.14 - $1.18. Capital
expenditures for the year are projected to be $95 million.
FIRST QUARTER RESULTS CONFERENCE CALL
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Cott Corporation will host a conference call today, Thursday, April 21st at
approximately 1:00 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) 796-7558
International: (416) 640-1907
ANNUAL GENERAL MEETING
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Cott Corporation's Annual General Meeting of shareowners will take place today,
Thursday, April 21, 2005 at 8:30 AM ET at the Glenn Gould Studio, Canadian
Broadcasting Centre, 250 Front St. West, Toronto, Ontario.
WEBCAST
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To access Cott's first quarter conference call with analysts and today's Annual
General Meeting 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
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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 21, 2005.
ABOUT COTT CORPORATION
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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
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EBITDA is defined as net income 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. A reconciliation of the Non-GAAP financial measures is
attached and also available in the Investor Relations/Financial Reports section
of Cott's website.
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, the Company's
6
ability to restore plant efficiencies and lower logistics costs, 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.
COTT CONTACTS:
Media Relations
Kerry Morgan Tel: (416) 203-5613
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 2, 2005 APRIL 3, 2004
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SALES $ 395.5 $ 370.9
Cost of sales 339.5 300.5
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GROSS PROFIT 56.0 70.4
Selling, general and
administrative expenses 36.9 38.7
Unusual items (0.2) --
------------- -------------
OPERATING INCOME 19.3 31.7
Other expense (income), net (0.1) 0.3
Interest expense, net 6.5 6.6
Minority interest 0.9 1.0
------------- -------------
INCOME BEFORE INCOME TAXES AND EQUITY LOSS 12.0 23.8
Income taxes (3.7) (8.3)
Equity loss -- (0.1)
------------- -------------
NET INCOME $ 8.3 $ 15.4
============= =============
VOLUME -- 8 OZ EQUIVALENT CASES 272.3 270.1
NET INCOME PER SHARE
Basic $ 0.12 $ 0.22
Diluted $ 0.12 $ 0.21
EXHIBIT 2
COTT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS OF US DOLLARS, US GAAP)
UNAUDITED
FOR THE THREE MONTHS ENDED
----------------------------------
APRIL 2, 2005 APRIL 3, 2004
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OPERATING ACTIVITIES
Net income $ 8.3 $ 15.4
Depreciation and amortization 16.8 15.0
Amortization of financing fees -- 0.2
Deferred income taxes (0.2) (0.3)
Minority interest 0.9 1.0
Equity loss -- 0.1
Other non-cash items (0.3) 0.3
Net change in non-cash working capital (4.2) (12.7)
------------- -------------
Cash provided by operating activities 21.3 19.0
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INVESTING ACTIVITIES
Additions to property, plant and equipment (28.1) (9.5)
Acquisitions -- (17.7)
Proceeds from disposal of property,
plant and equipment 1.0 --
Other investing activities (1.5) (2.0)
------------- -------------
Cash used in investing activities (28.6) (29.2)
------------- -------------
FINANCING ACTIVITIES
Payments of long-term debt (0.2) (2.2)
Short-term borrowings (4.9) 2.1
Distributions to subsidiary
minority shareowner (1.1) (1.2)
Issue of common shares 0.9 2.2
Financing costs (2.1) --
Other financing activities (0.1) (0.1)
------------- -------------
Cash provided by (used in) financing
activities (7.5) 0.8
------------- -------------
Effect of exchange rate changes on cash (0.4) --
------------- -------------
NET DECREASE IN CASH (15.2) (9.4)
CASH, BEGINNING OF PERIOD 26.6 18.4
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CASH, END OF PERIOD $ 11.4 $ 9.0
============= =============
EXHIBIT 3
COTT CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS OF US DOLLARS, US GAAP)
UNAUDITED AUDITED
APRIL 2, 2005 JANUARY 1, 2005
------------- ---------------
ASSETS
CURRENT ASSETS
Cash $ 11.4 $ 26.6
Accounts receivable 199.7 184.3
Inventories 140.5 122.8
Prepaid expenses and other assets 9.3 9.7
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360.9 343.4
PROPERTY, PLANT AND EQUIPMENT 339.7 313.7
GOODWILL 88.6 88.8
INTANGIBLES AND OTHER ASSETS 262.3 276.1
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$ 1,051.5 $ 1,022.0
============= ===============
LIABILITIES AND SHAREOWNERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 66.3 $ 71.4
Current maturities of long-term debt 0.8 0.8
Accounts payable and accrued liabilities 173.6 145.2
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240.7 217.4
LONG-TERM DEBT 272.5 272.5
DEFERRED INCOME TAXES 50.8 51.0
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564.0 540.9
MINORITY INTEREST 23.6 23.8
SHAREOWNERS' EQUITY
Capital stock 288.2 287.0
Retained earnings 169.9 161.6
Accumulated other comprehensive income 5.8 8.7
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463.9 457.3
------------- ---------------
$ 1,051.5 $ 1,022.0
============= ===============
EXHIBIT 4
COTT CORPORATION
SEGMENT INFORMATION
(IN MILLIONS OF US DOLLARS, US GAAP)
UNAUDITED
FOR THE THREE MONTHS ENDED
-----------------------------------
APRIL 2, 2005 APRIL 3, 2004
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SALES
USA $ 294.3 $ 273.1
Canada 41.1 39.8
UK & Europe 43.6 42.7
International 15.7 14.7
Corporate & Other 0.8 0.6
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$ 395.5 $ 370.9
============= =============
OPERATING INCOME (LOSS)
USA $ 18.1 $ 31.1
Canada 0.4 0.4
UK & Europe 2.1 1.6
International 2.3 2.7
Corporate & Other (3.6) (4.1)
------------- -------------
$ 19.3 $ 31.7
============= =============
EXHIBIT 5
COTT CORPORATION
SUPPLEMENTARY INFORMATION -- NON GAAP MEASURES
(IN MILLIONS OF US DOLLARS)
UNAUDITED
FOR THE THREE MONTHS ENDED
-------------------------------
APRIL 2, 2005 APRIL 3, 2004
------------- -------------
NET INCOME $ 8.3 $ 15.4
Depreciation and amortization 16.8 15.0
Interest expense, net 6.5 6.6
Income taxes 3.7 8.3
------------- -------------
EBITDA $ 35.3 $ 45.3
============= =============
FOR THE YEAR ENDED DECEMBER 31, 2005 -- GUIDANCE
NET INCOME $83 - $86
Depreciation and amortization $69
Interest expense, net $30
Income taxes $38 - $45
-------------
EBITDA $220 - $230
=============
NON-GAAP MEASURE
EBITDA is defined as net income 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, the Company's ability to restore plant efficiencies and lower
logistics costs, 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.