SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
July 24, 2002
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COCA-COLA BOTTLING CO. CONSOLIDATED
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(Exact name of registrant as specified in its charter)
Delaware 0-9286 56-0950585
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(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation)
4100 Coca-Cola Plaza, Charlotte, North Carolina 28211
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(Address of principal executive offices) (Zip Code)
(704) 557-4400
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(Registrant's telephone number, including area code)
Item 5. Other Events
The Company issued the following press release on July 24, 2002.
Coca-Cola Bottling Co. Consolidated, 4100 Coca-Cola Plaza, Charlotte, NC 28211
News Release
[LOGO] 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
July 24, 2002 Quoted: The Nasdaq Stock Market (National Market)
Coca-Cola Bottling Co. Consolidated Reports Second Quarter 2002 Results
.. Physical case volume increased 5% in the second quarter
.. Operating Cash Flow increased 8% in the second quarter
.. Net income for the second quarter doubled to $10.8 million
CHARLOTTE, NC -- Coca-Cola Bottling Co. Consolidated today announced earnings of
$10.8 million or $1.23 per share for the second quarter of 2002. This compares
to net income of $5.0 million or $.57 per share for the second quarter of 2001.
For the first six months of 2002, net income was $14.2 million or $1.61 per
share as compared to $3.2 million or $.37 per share for the first six months of
2001.
On January 2, 2002, the Company purchased an additional interest in Piedmont
Coca-Cola Bottling Partnership, a partnership with The Coca-Cola Company,
increasing its ownership from 50% to approximately 55%. As a result of the
increase in ownership, the financial results of Piedmont are consolidated with
those of the Company beginning with the first quarter of 2002. All comparisons
of operating results in this release include the results of Piedmont as if it
had been consolidated in all prior periods.
During the first quarter of 2002, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets," which had the effect of reducing amortization expense by
$5.2 million in the second quarter and $10.3 million in the first half of 2002.
This change materially impacts net income comparisons with the prior year. Had
the new accounting method been in place in both years, the comparison of 2002
net income with prior year would show an increase of 34% in the second quarter
and 54% in the first half.
Comparable net sales were up 8.5% in the second quarter and 6.8% for the first
six months of 2002. This growth was driven primarily by higher bottle/can volume
which was up 5.4% in the second quarter and 4.2% in the first half. The
difference between the growth rate in net sales and the volume growth rate
reflects increased contract sales to other Coke bottlers, higher average revenue
per case and shifting package and channel mix. Operating cash flow improved more
than 8% in both the second quarter and the first half of 2002.
J. Frank Harrison, III, Chairman and CEO, said that he was pleased with the
Company's results through June. Mr. Harrison said, "The Company's net income
growth in the first half of 2002 was driven by solid gains in operating cash
flow and significant declines in interest expense. The improved operating cash
flow reflects profitable growth in volume, which is up more than 4% in the first
half of 2002 on top of about 3% growth last year." Mr. Harrison said, "These
gains in operating performance reflect our continued focus on growing carbonated
soft drink brands through innovation, as well as the continued success of Dasani
water and the successful introduction of Minute Maid Lemonade." Mr. Harrison
attributed the significant declines in interest expense to the Company's sharp
focus on generating free cash flow for debt reduction. He said, "Since December
31, 1999, the Company has reduced outstanding debt and lease liabilities by more
than $170 million, when viewed on a comparable basis. Over the past year, the
Company's debt has been reduced by more than $60 million. This lower debt
balance, combined with a favorable interest rate environment has driven the
Company's interest expense down by $6.6 million or 22% in the first half of
2002."
William B. Elmore, President and COO, said that he believed the Company's
performance through the first six months of 2002 reflects the dedicated efforts
of a high quality organization focused on success. Mr. Elmore said, "Despite
distractions resulting from branch consolidations, significant changes in
distribution methodology and the addition of nearly 50 new products, our people
have delivered outstanding results." Mr. Elmore said, "The Company's excellent
performance in the first half is broad based, including gains in all major
product categories and within all major channels of business. With regard to
product categories, carbonated soft drinks were up by about 1% led by the
introduction of Fanta flavors and Vanilla Coke. In the water category, Dasani
volume was up more than 40%, driven by package innovation and broader
distribution. In other noncarbonated beverages, the successful launch of Minute
Maid Lemonade has driven significant growth and POWERade was up more than 25%."
Mr. Elmore also said that solid sales performance and continued gains in
productivity have enabled the Company to increase its investment in marketing
activities during the first half of 2002. Although these spending increases have
resulted in operating expenses growing at a faster rate than net sales, we
believe our increased marketing investments position us to extend our sales
momentum into the second half of 2002.
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. These statements may include, among
others, statements relating to our expectations concerning our focus on
generating free cash flow for debt reduction, our expectations about increased
marketing investment and our expectations about sales momentum in the second
half of 2002. 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)
Second Quarter First Half
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Pro forma Pro forma
2002 2001* 2001** 2002 2001* 2001**
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Net sales $ 341,119 $ 262,338 $ 314,362 $ 624,317 $ 486,038 $ 584,689
Cost of sales 181,448 144,407 169,696 330,064 265,208 313,103
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Gross margin 159,671 117,931 144,666 294,253 220,830 271,586
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Selling, general and administrative
expenses 106,984 76,733 96,080 203,504 150,324 187,939
Depreciation expense 18,857 16,595 17,985 36,842 32,398 35,192
Amortization of goodwill and
intangibles 686 3,720 5,848 1,373 7,440 11,697
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Income from operations 33,144 20,883 24,753 52,534 30,668 36,758
Interest expense 11,877 11,329 14,844 24,017 23,481 30,608
Other income (expense), net (650) (1,274) (1,238) (1,549) (1,853) (1,550)
Minority interest 2,764 525 3,523 (323)
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Income before income taxes 17,853 8,280 8,146 23,445 5,334 4,923
Federal and state income taxes 7,070 3,271 3,221 9,284 2,107 1,942
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Net income $ 10,783 $ 5,009 $ 4,925 $ 14,161 $ 3,227 $ 2,981
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Basic net income per share $ 1.23 $ .57 $ .56 $ 1.61 $ .37 $ .34
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Diluted net income per share $ 1.21 $ .57 $ .56 $ 1.60 $ .37 $ .34
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Weighted average number of
common shares outstanding 8,784 8,753 8,753 8,779 8,753 8,753
Weighted average number of
common shares outstanding -
assuming dilution 8,880 8,825 8,825 8,869 8,824 8,824
Income from operations $ 33,144 $ 20,883 $ 24,753 $ 52,534 $ 30,668 $ 36,758
Amortization of goodwill and
intangibles 686 3,720 5,848 1,373 7,440 11,697
Depreciation expense 18,857 16,595 17,985 36,842 32,398 35,192
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Operating cash flow $ 52,687 $ 41,198 $ 48,586 $ 90,749 $ 70,506 $ 83,647
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* 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
June 30, Dec. 30, July 1, July 1,
2002 2001 2001* 2001**
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ASSETS
Current Assets:
Cash $ 8,667 $ 16,912 $ 6,833 $ 7,919
Accounts receivable, trade, net 93,548 63,974 68,149 89,156
Accounts receivable from The Coca-Cola Company 15,729 3,935 4,784 5,886
Accounts receivable, other 5,610 5,253 6,187 7,015
Inventories 42,020 39,916 36,014 42,399
Prepaid expenses and other current assets 17,715 13,379 15,201 15,654
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Total current assets 183,289 143,369 137,168 168,029
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Property, plant and equipment 827,979 766,222 770,697 829,336
Less-Accumulated depreciation and amortization 355,189 308,916 297,031 323,611
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Property, plant and equipment, net 472,790 457,306 473,666 505,725
Leased property under capital leases 56,892 12,265 12,146 20,337
Less-Accumulated amortization 8,360 6,882 5,856 8,586
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Leased property under capital leases, net 48,532 5,383 6,290 11,751
Investment in Piedmont Coca-Cola Bottling
Partnership 60,203 59,858
Other assets 63,065 52,140 60,280 65,663
Franchise rights and goodwill 607,007 335,662 341,435 614,680
Other identifiable intangible assets 7,340 10,396 12,478 12,478
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Total $ 1,382,023 $ 1,064,459 $ 1,091,175 $ 1,378,326
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* 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
June 30, Dec. 30, July 1, July 1,
2002 2001 2001* 2001**
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Portion of long-term debt payable within one year $ 215,631 $ 56,708 $ 57,132 $ 154,632
Current portion of obligations under capital leases 4,777 1,489 1,967 3,242
Accounts payable, trade 42,257 28,370 29,624 36,281
Accounts payable to The Coca-Cola Company 6,646 7,925 5,794 6,139
Due to Piedmont Coca-Cola Bottling Partnership 24,682 23,121
Other accrued liabilities 82,261 49,169 55,349 65,794
Accrued compensation 11,570 17,350 10,041 10,322
Accrued interest payable 11,140 11,878 13,413 15,149
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Total current liabilities 374,282 197,571 196,441 291,559
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Deferred income taxes 164,485 133,743 149,240 173,560
Pension and retiree benefit obligations 30,893 37,203 24,950 24,950
Other liabilities 61,133 57,770 51,299 54,386
Obligations under capital leases 42,123 935 1,291 4,606
Long-term debt 620,125 620,156 641,456 748,956
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Total liabilities 1,293,041 1,047,378 1,064,677 1,298,017
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Minority interest 59,356 54,057
Stockholders' Equity:
Common Stock 9,498 9,454 9,454 9,454
Class B Common Stock 3,009 2,989 2,989 2,989
Capital in excess of par value 88,843 91,004 95,380 95,380
Retained earnings (accumulated deficit) 1,854 (12,307) (18,550) (18,796)
Accumulated other comprehensive loss (12,324) (12,805) (1,521) (1,521)
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90,880 78,335 87,752 87,506
Less-Treasury stock, at cost:
Common 60,845 60,845 60,845 60,845
Class B Common 409 409 409 409
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Total stockholders' equity 29,626 17,081 26,498 26,252
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Total $1,382,023 $1,064,459 $1,091,175 $1,378,326
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized:
COCA-COLA BOTTLING CO. CONSOLIDATED
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(REGISTRANT)
Date: July 26, 2002 BY: /s/ David V. Singer
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David V. Singer
Principal Financial Officer of the Registrant
and
Executive Vice President and Chief Financial Officer