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Coca-Cola Consolidated, its philanthropic arm, Coke Cares, and its local branches strive daily to meet the needs of the communities where we live and work. At Coca-Cola Consolidated, we recognize that we cannot have a healthy and growing business unless the communities we serve are healthy and sustainable. ...  Coca-Cola Consolidated, its philanthropic arm, Coke Cares, and its local branches strive daily to meet the needs of the communities where we live and work. At Coca-Cola Consolidated, we recognize that we cannot have a healthy and growing business unless the communities we serve are healthy and sustainable. Coca-Cola Consolidated, its philanthropic arm, Coke Cares, and its local branches strive daily to meet the needs of the communities where we live and work. At Coca-Cola Consolidated, we recognize that we cannot have a healthy and growing business unless the communities we serve are healthy and sustainable.  More

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Coca-Cola Bottling Co. Consolidated Reports Third Quarter and First Nine Months 2015 Results

CHARLOTTE, N.C.--(BUSINESS WIRE)--Nov. 3, 2015-- Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) today announced it earned $25.6 million, or basic net income per share of $2.75, on net sales of $618.8 million for the third quarter of 2015, compared to net income of $12.1 million, or basic net income per share of $1.31, on net sales of $457.7 million for the third quarter of 2014.

The results for the third quarters of 2015 and 2014 include certain items which are either events that are not expected to recur or are recurring items that have changed materially period-to-period. Certain of these items relate to the Company’s expanding distribution territory and intensified work on further expanding its distribution territory and preparing to purchase manufacturing assets from The Coca-Cola Company. The following table reconciles reported GAAP net income and basic net income per share to comparable net income and basic net income per share for the third quarters of 2015 and 2014:

Third Quarter
Net Income  

Basic Net Income Per

Share

In Thousands, Except Per Share Amounts 2015   2014 2015   2014
 
Reported net income (GAAP) $ 25,553 $ 12,132 $ 2.75 $ 1.31
 
Gain on sale of business, net of tax (13,908 ) - (1.50 ) -
Expenses related to distribution territory expansion, net of tax 4,265 1,562 0.46 0.17
Fair value adjustment of acquisition related contingent
consideration, net of tax 2,451 - 0.26 -
Net loss on commodity hedges, net of tax 1,308 195 0.14 0.02
Change in deferred tax liabilities due to state rate reduction (1,170 ) - (0.12 ) -
Acquired distribution territory operating income, net of tax (1,122 ) (728 ) (0.12 ) (0.08 )
Exchanged distribution territories and sold operating entities - (881 ) - (0.09 )
operating income, net of tax
Change in valuation allowance due to sale of business (1,080 ) - (0.12 ) -
Other income tax changes   (184 )   (173 )   (0.02 )   (0.02 )
 
Total   (9,440 )   (25 )   (1.02 )   (0.00 )
 
Comparable net income (a) $ 16,113   $ 12,107   $ 1.73   $ 1.31  

On a comparable basis, the Company earned $16.1 million in the third quarter of 2015, or comparable basic net income per share of $1.73, versus $12.1 million in the third quarter of 2014, or comparable basic net income per share of $1.31.

The Company earned $54.7 million, or basic net income per share of $5.89, on net sales of $1.69 billion for the first nine months of 2015, compared to net income of $28.4 million, or basic net income per share of $3.06, on net sales of $1.31 billion for the first nine months of 2014.

The results for the first nine months of 2015 and 2014 include certain items which are either events that are not expected to recur or are recurring items that have changed materially period-to-period. Certain of these items relate to the Company’s expanding distribution territory and intensified work on further expanding its distribution territory and preparing to purchase manufacturing assets from The Coca-Cola Company. The following table reconciles reported GAAP net income and basic net income per share to comparable net income and basic net income per share for the first nine months of 2015 and 2014:

Fiscal Year
Net Income  

Basic Net Income Per

Share

In Thousands, Except Per Share Amounts 2015   2014 2015   2014
 
Reported net income (GAAP) $ 54,711 $ 28,364 $ 5.89 $ 3.06
 
Gain on sale of business, net of tax (13,908 ) - (1.50 ) -
Expenses related to distribution territory expansion, net of tax 8,715 4,679 0.94 0.51
Acquired distribution territory operating income, net of tax (5,079 ) (932 ) (0.55 ) (0.10 )
Gain on exchange of franchise territories, net of tax (5,407 ) - (0.58 ) -
Fair value adjustment of acquisition related contingent
consideration, net of tax 1,844 - 0.20 -
Net (gain) loss on commodity hedges, net of tax 1,373 (338 ) 0.15 (0.04 )
Exchanged distribution territories and sold operating entities - (1,469 ) - (0.16 )
operating income, net of tax
Change in deferred tax liabilities due to state rate reduction (1,170 ) - (0.12 ) -
Change in valuation allowance due to sale of business (1,080 ) - (0.12 ) -
Other income tax changes   272     (118 )   0.03     (0.01 )
 
Total   (14,440 )   1,822     (1.55 )   0.20  
 
Comparable net income (a) $ 40,271   $ 30,186   $ 4.34   $ 3.26  

On a comparable basis, the Company earned $40.3 million in the first nine months of 2015, or comparable basic net income per share of $4.34, versus $30.2 million in the first nine months of 2014, or comparable basic net income per share of $3.26.

Frank Harrison, Chairman and CEO, said, “The geographical footprint of our distribution territory has expanded significantly over the past year through the acquisition of new territories as part of The Coca-Cola Company’s System of the Future refranchising. Our financial results in the third quarter and first nine months of 2015 reflect solid revenue growth combined with a favorable cost of goods environment and an outstanding effort from all of our dedicated employees. With our expanding footprint, our opportunity to serve our consumers, customers, communities, and employees has also expanded significantly and will continue to expand. We are thankful for the support and cooperation we have received from The Coca-Cola Company in transforming the franchise model in the United States and we remain committed to partnering with them and other U.S. bottlers to ensure the franchise model in the U.S. continues to improve for the benefit of our shareholders, employees, customers and communities.”

Hank Flint, President and COO, added, “Our 2015 first nine months’ performance is a result of the dynamic growth we are experiencing due to territory expansion and organic growth in our legacy territories. Our total revenues on a comparable basis grew by 9.3% due to strong performance in our energy and still beverage portfolios. We were able to grow comparable gross margin by 8.2% through a combination of effective product mix management as well as a favorable cost of goods environment. We continue to invest in shaping the future of our company and we are indebted to all of our employees as they exhibit leadership, integrity and excellence in helping to create a Coca-Cola Consolidated worthy of their efforts and commitment.”

(a) The Company reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP). However, management believes that certain non-GAAP financial measures provide users with additional meaningful financial information that should be considered when assessing the Company’s ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. The Company’s non-GAAP financial information does not represent a comprehensive basis of accounting.

Cautionary Information Regarding Forward-Looking Statements

Included in this news release and other information that we make publicly available from time to time are forward-looking management comments and other statements that reflect management’s current outlook for future periods. These statements include, among others, statements regarding the following challenges we face in 2015 and 2016: ongoing work on (i) agreements for the additional proposed territory expansion that is described in the Letter of Intent dated May 12, 2015 with The Coca-Cola Company that we believe will provide us with the opportunity for growth in contiguous territories where we can leverage our current infrastructure and operational capabilities and (ii) agreements for the acquisition of six manufacturing facilities and related assets that are described in the letter of intent dated September 23, 2015 with The Coca-Cola Company that will result in us becoming a regional producing bottler in the national product supply system.

These statements and expectations are based on currently available competitive, financial and economic data along with our operating plans and are subject to future events and uncertainties that could cause anticipated events not to occur or actual results to differ materially from historical or anticipated results. Among the events or uncertainties which could adversely affect future periods are: lower than expected selling pricing resulting from increased marketplace competition; changes in how significant customers market or promote our products; changes in our top customer relationships; changes in public and consumer preferences related to nonalcoholic beverages; unfavorable changes in the general economy; miscalculation of our need for infrastructure investment; our inability to meet requirements under beverage agreements; material changes in the performance requirements for marketing funding support or our inability to meet such requirements; decreases from historic levels of marketing funding support; changes in The Coca-Cola Company’s and other beverage companies’ levels of advertising, marketing and spending on brand innovation; the inability of our aluminum can or plastic bottle suppliers to meet our purchase requirements; our inability to offset higher raw material costs with higher selling prices, increased bottle/can sales volume or reduced expenses; sustained increases in fuel costs or our inability to secure adequate supplies of fuel; sustained increases in workers’ compensation, employment practices and vehicle accident claims costs; sustained increases in the cost of employee benefits; product liability claims or product recalls; technology failures; changes in interest rates; the impact of debt levels on operating flexibility and access to capital and credit markets; adverse changes in our credit rating (whether as a result of our operations or prospects or as a result of those of The Coca-Cola Company or other bottlers in the Coca-Cola system); changes in legal contingencies; legislative changes affecting our distribution and packaging; adoption of significant product labeling or warning requirements; additional taxes resulting from tax audits; natural disasters and unfavorable weather; global climate change or legal or regulatory responses to such change; issues surrounding labor relations; bottler system disputes; our use of estimates and assumptions; changes in accounting standards; impact of obesity and health concerns on product demand; public policy challenges regarding the sale of soft drinks in schools; the impact of volatility in the financial markets on access to the credit markets; and the concentration of our capital stock ownership. The forward-looking statements in this news release should be read in conjunction with the more detailed descriptions of the above factors located in our Annual Report on Form 10-K for the year ended December 28, 2014 under Part I, Item 1A “Risk Factors” as well as those additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements contained in this release as a result of new information or future events or developments.

—Enjoy Coca-Cola—

Coca-Cola Bottling Co. Consolidated      
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Data)
 
 
Third Quarter First Nine Months
2015 2014 2015 2014
 
Net sales $ 618,806 $ 457,676 $ 1,686,742

$

1,305,731

Cost of sales   380,270     272,734   1,026,516     778,936
Gross margin 238,536 184,942 660,226 526,795
Selling, delivery and administrative expenses   210,851     156,496   577,323     454,969
Income from operations 27,685 28,446 82,903 71,826
Interest expense, net 6,686 7,333 20,751 21,899
Other income (expense) (3,992 ) - (3,003 ) -

Gain on exchange of franchise territory

- - 8,807 -
Gain on sale of business   22,651     -   22,651     -
Income before income taxes 39,658 21,113 90,607 49,927
Income taxes   12,099     7,408   31,174     17,789
Net income 27,559 13,705 59,433 32,138
Less: Net income attributable to
noncontrolling interest   2,006     1,573   4,722     3,774
Net income attributable to Coca-Cola
Bottling Co. Consolidated $ 25,553   $ 12,132 $ 54,711   $ 28,364
 
 
Basic net income per share based on net
income attributable to Coca-Cola
Bottling Co. Consolidated:
Common Stock $ 2.75   $ 1.31 $ 5.89   $ 3.06
Weighted average number of Common
Stock shares outstanding 7,141 7,141 7,141 7,141
 
Class B Common Stock $ 2.75   $ 1.31 $ 5.89   $ 3.06
Weighted average number of Class B
Common Stock shares outstanding 2,151 2,130 2,146 2,125
 
Diluted net income per share based on net
income attributable to Coca-Cola
Bottling Co. Consolidated:
Common Stock $ 2.74   $ 1.30 $ 5.87   $ 3.05
Weighted average number of Common
Stock shares outstanding – assuming dilution 9,332 9,311 9,327 9,306
 
Class B Common Stock $ 2.73   $ 1.30 $ 5.85   $ 3.04
Weighted average number of Class B Common
Stock shares outstanding – assuming dilution 2,191 2,170 2,186 2,165

Source: Coca-Cola Bottling Co. Consolidated

Coca-Cola Bottling Co. Consolidated
Media Contact: Lauren C. Steele
Senior VP - Corporate Affairs
704-557-4551
or
Investor Contact: James E. Harris
Senior VP - Shared Services & CFO
704-557-4582