Exhibit 99.1
Coca-Cola Bottling Co. Consolidated, 4100 Coca-Cola Plaza, Charlotte, NC 28211
[GRAPHIC REMOVED HERE]
News Release
Media Contact: Lauren C. Steele
VP Corporate Affairs
704-557-4551
Investor Contact: David V. Singer
Executive VP & CFO
704-557-4604
FOR IMMEDIATE RELEASE Symbol: COKE
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October 25, 2002 Quoted: The Nasdaq Stock Market
(National Market)
Coca-Cola Bottling Co. Consolidated Reports Third Quarter 2002 Results
.. Comparable physical case volume increased 8.1% in the third quarter
.. Comparable operating cash flow increased 7.4% in the third quarter
.. Comparable net income for the third quarter increased by 26% to $9.5 million
CHARLOTTE, NC -- Coca-Cola Bottling Co. Consolidated today announced earnings of
$9.5 million or $1.08 per share for the third quarter of 2002. This compares to
net income of $7.9 million or $.90 per share for the third quarter of 2001. For
the first nine months of 2002, net income was $23.7 million or $2.69 per share
as compared to $11.1 million or $1.27 per share for the first nine months of
2001.
Three items materially impact comparability of 2002 results to prior year. These
include the consolidation of Piedmont Coca-Cola Bottling Partnership, a
previously unconsolidated subsidiary in the first quarter 2002, the adoption of
the new accounting standard for amortizing goodwill and other intangible assets
and a non-recurring income tax benefit in the third quarter of 2001. Adjusting
for these items, net income was up 26% and 51% for the third quarter and first
nine months of 2002, respectively.
Comparable net sales were up 7% in both the third quarter and the first nine
months of 2002. This growth was driven primarily by higher bottle/can volume
which was up 8% and 6% in the third quarter and first nine months, respectively.
The differences between the growth rates in net sales and volume reflect
increased contract sales to other Coke bottlers, shifts in channel and package
mix and targeted changes in net selling prices. Excluding contract sales to
other Coke bottlers, the Company's gross margin improved by approximately
one-half percentage point in the third quarter and nearly one percentage point
in the first nine months of 2002, reflecting the success of the Company's
pricing and mix management strategies. Operating expenses grew at about the same
rate as net sales, reflecting solid productivity improvements offset by higher
incentive-based pay, increased wage rates, material increases in employee
benefits expense and sharply higher property and casualty insurance costs.
Comparable operating cash flow improved by 7.4% in the third quarter and 8.1%
the first nine months of 2002.
J. Frank Harrison, III, Chairman and CEO, said, "The Company's third quarter net
income performance was driven by solid gains in operating cash flow and
continued declines in interest expense. The
increase in operating cash flow reflects profitable growth in volume driven by
the continued success of Dasani and the introduction of new brands, led by
Vanilla Coke." Mr. Harrison said, "The Company's third quarter performance
builds on solid trends from the prior year. On a comparable basis, the 8% volume
growth in the third quarter of 2002 follows 3.4% growth in the third quarter of
2001. In addition, the 19% interest expense decline follows a similar decline
posted in the third quarter last year." Mr. Harrison attributed the significant
declines in third quarter 2002 interest expense to a material reduction in debt
and lower interest rates.
William B. Elmore, President and COO, said, "The Company's excellent performance
in the third quarter was driven by new brand introductions, package innovations
and profitable growth in Dasani. Vanilla Coke, which was introduced in June,
continues to exceed our expectations." This brand represents more than 3% of the
Company's third quarter volume and accounted for 42% of the total volume growth
for the quarter. In addition, Fanta Flavors and Minute Maid Lemonade are new
this year and together delivered approximately 40% of the quarter's volume
growth. The Company's Dasani business continues to deliver excellent growth in
volume and improvements in market share with no deterioration in gross margin.
For the third quarter, Dasani's physical case volume was up more than 45% and
now represents 6% of our total volume. This growth was driven in large measure
by packaging innovations. We now offer a broad variety of package configurations
for both take-home and immediate consumption occasions. Our newest offering, the
Dasani 12 ounce PET Fridgepack(TM), has been a big hit with consumers,
accounting for 40% of Dasani's growth for the quarter. Mr. Elmore said, "I
believe our commitment to packaging innovation for Dasani has been the key to
our ability to drive volume growth and gain market share while maintaining our
profit margins in this critically important category."
Forward-looking statements.
Included in this news release are several forward-looking management comments
and other statements that reflect management's current outlook for future
periods. These expectations are based on currently available competitive,
financial and economic data along with the Company's operating plans, and are
subject to future events and uncertainties. Among the events or uncertainties
which could adversely affect future periods are lower-than-expected net pricing
resulting from increased marketplace competition, an inability to meet
requirements under bottling contracts, an inability to meet performance
requirements for expected levels of marketing support payments from The
Coca-Cola Company, material changes from expectations in the cost of raw
materials, the inability of our aluminum can or PET bottle suppliers to meet our
demand, higher than expected fuel prices and unfavorable interest rate
fluctuations. The forward-looking statements in this news release should be read
in conjunction with the detailed cautionary statements found on pages 23 and 24
of the Company's Annual Report on Form 10-K for the fiscal year ended December
30, 2001.
--Enjoy Coca-Cola-
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Data)
Third Quarter Nine Months
-------------------------------------- --------------------------------------
Pro forma Pro forma
2002 2001* 2001** 2002 2001* 2001**
----------- ----------- ---------- ----------- ----------- ----------
Net sales $ 333,047 $ 258,600 $ 311,508 $ 957,364 $ 744,638 $ 896,197
Cost of sales 179,129 142,645 168,415 509,193 407,853 481,518
----------- ----------- --------- --------- --------- ---------
Gross margin 153,918 115,955 143,093 448,171 336,785 414,679
----------- ----------- --------- --------- --------- ---------
Selling, general and administrative
expenses 102,961 76,377 95,650 306,465 226,701 283,589
Depreciation expense 19,405 16,810 18,102 56,247 49,208 53,294
Amortization of goodwill and
intangibles 683 3,721 5,850 2,056 11,161 17,547
----------- ----------- --------- --------- --------- ---------
Income from operations 30,869 19,047 23,491 83,403 49,715 60,249
Interest expense 11,454 10,764 14,204 35,471 34,245 44,812
Other income (expense), net (221) 88 246 (1,770) (1,765) (1,304)
Minority interest 2,672 1,224 6,195 901
----------- ----------- --------- --------- ---------- ---------
Income before income taxes 16,522 8,371 8,309 39,967 13,705 13,232
Federal and state income taxes 6,983 456 434 16,267 2,563 2,376
----------- ----------- --------- --------- --------- ---------
Net income $ 9,539 $ 7,915 $ 7,875 $ 23,700 $ 11,142 $ 10,856
=========== =========== ========= ========= ========= =========
Basic net income per share $ 1.08 $ .90 $ .90 $ 2.69 $ 1.27 $ 1.24
=========== =========== ========= ========= ========= =========
Diluted net income per share $ 1.07 $ .90 $ .89 $ 2.67 $ 1.26 $ 1.23
=========== =========== ========= ========= ========= =========
Weighted average number of
common shares outstanding 8,864 8,753 8,753 8,807 8,753 8,753
Weighted average number of
common shares outstanding --
assuming dilution 8,924 8,818 8,818 8,887 8,822 8,822
Income from operations $ 30,869 $ 19,047 $ 23,491 $ 83,403 $ 49,715 $ 60,249
Amortization of goodwill and
intangibles 683 3,721 5,850 2,056 11,161 17,547
Depreciation expense 19,405 16,810 18,102 56,247 49,208 53,294
----------- ----------- --------- --------- -------- ---------
Operating cash flow $ 50,957 $ 39,578 $ 47,443 $ 141,706 $ 110,084 $ 131,090
=========== =========== ========= ========= ========= =========
* Certain prior year amounts have been reclassified to conform to current year
classifications.
**Certain prior year amounts have been reclassified to conform to current year
classifications and include the results of operations of Piedmont Coca-Cola
Bottling Partnership as if it were consolidated with those of the Company
beginning January 1, 2001.
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands
Pro forma
Sept. 29, Dec. 30, Sept. 30, Sept. 30,
2002 2001 2001* 2001**
------------- ------------ ------------ ------------
ASSETS
Current Assets:
Cash $ 8,286 $ 16,912 $ 6,252 $ 7,902
Accounts receivable, trade, net 84,365 63,974 63,762 83,760
Accounts receivable from The Coca-Cola Company 19,965 3,935 7,860 9,601
Accounts receivable, other 6,479 5,253 4,611 6,137
Inventories 42,433 39,916 37,180 43,326
Prepaid expenses and other current assets 16,812 13,379 14,688 14,993
----------- ----------- ----------- -----------
Total current assets 178,340 143,369 134,353 165,719
----------- ----------- ----------- -----------
Property, plant and equipment 834,968 766,222 768,917 824,936
Less-Accumulated depreciation and amortization 367,687 308,916 303,079 327,252
----------- ----------- ----------- -----------
Property, plant and equipment, net 467,281 457,306 465,838 497,684
Leased property under capital leases 47,115 12,265 12,442 20,633
Less-Accumulated amortization 2,522 6,882 6,389 9,377
----------- ----------- ----------- -----------
Leased property under capital leases, net 44,593 5,383 6,053 11,256
Investment in Piedmont Coca-Cola Bottling
Partnership 60,203 60,229
Other assets 61,909 52,140 60,544 66,087
Franchise rights and goodwill 607,007 335,662 338,549 609,665
Other identifiable intangible assets 6,658 10,396 11,644 11,644
----------- ----------- ----------- -----------
Total $ 1,365,788 $ 1,064,459 $ 1,077,210 $ 1,362,055
=========== =========== =========== ===========
* Certain prior year amounts have been reclassified to conform to current year
classifications.
**Certain prior year amounts have been reclassified to conform to current year
classifications and include the financial position of Piedmont Coca-Cola
Bottling Partnership as if it were consolidated with that of the Company
beginning January 1, 2001.
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands
Pro forma
Sept. 29, Dec. 30, Sept. 30, Sept. 30,
2002 2001 2001* 2001**
---------- ----------- ----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Portion of long-term debt payable within one year $ 154,731 $ 56,708 $ 56,891 $ 154,391
Current portion of obligations under capital leases 3,717 1,489 1,713 2,839
Accounts payable, trade 35,238 28,370 31,163 36,620
Accounts payable to The Coca-Cola Company 41,477 7,925 9,543 10,070
Due to Piedmont Coca-Cola Bottling Partnership 24,682 23,746
Other accrued liabilities 66,985 49,169 44,453 52,300
Accrued compensation 16,912 17,350 11,817 12,201
Accrued interest payable 16,179 11,878 13,310 15,314
---------- ---------- ---------- ----------
Total current liabilities 335,239 197,571 192,636 283,735
---------- ---------- ---------- ----------
Deferred income taxes 170,012 133,743 149,309 173,432
Pension and retiree benefit obligations 31,603 37,203 24,950 24,950
Other liabilities 61,782 57,770 51,170 56,068
Obligations under capital leases 41,985 935 1,256 4,465
Long-term debt 620,125 620,156 626,256 733,756
---------- ---------- ---------- ----------
Total liabilities 1,260,746 1,047,378 1,045,577 1,276,406
---------- ---------- ---------- ----------
Minority interest 62,332 54,302
Stockholders' Equity:
Common Stock 9,653 9,454 9,454 9,454
Class B Common Stock 3,009 2,989 2,989 2,989
Capital in excess of par value 94,209 91,004 93,192 93,192
Retained earnings (accumulated deficit) 9,176 (12,307) (10,635) (10,921)
Accumulated other comprehensive loss (12,083) (12,805) (2,113) (2,113)
---------- ---------- ---------- ----------
103,964 78,335 92,887 92,601
Less-Treasury stock, at cost:
Common 60,845 60,845 60,845 60,845
Class B Common 409 409 409 409
---------- ---------- ---------- ----------
Total stockholders' equity 42,710 17,081 31,633 31,347
---------- ---------- ---------- ----------
Total $1,365,788 $1,064,459 $1,077,210 $1,362,055
========== ========== ========== ==========
Coca-Cola Bottling Co. Consolidated
RECONCILIATION OF COMPARABLE 2001 NET INCOME (UNAUDITED)
In Thousands
This schedule is intended to provide the information necessary to compute
comparable 2001 net income.
Third First Nine
Quarter 2001* Months 2001*
------------ -----------
Income before income taxes $ 8,309 $13,232
Add: Reduction in amortization expense as if
SFAS 142 was adopted as of January 1, 2001 5,167 15,491
Less: Adjustment to minority interest related
to Piedmont's amortization expense 954 2,861
------- -------
Adjusted income before income taxes 12,522 25,862
Federal and state income taxes (excluding income
tax benefit recorded in 3rd quarter 2001) 4,946 10,215
------- -------
Comparable 2001 net income $ 7,576 $15,647
======= =======
2002 net income $ 9,539 $23,700
Comparable 2001 net income $ 7,576 $15,647
% change 26% 51%
* Includes the results of operations of Piedmont as if it were consolidated with
those of the Company beginning January 1, 2001.