Press Releases
CHARLOTTE, N.C., July 23 /PRNewswire-FirstCall/ -- Coca-Cola Bottling Co. Consolidated (Nasdaq: COKE) today announced earnings of $11.9 million or $1.32 per share for the second quarter of 2003. This compares to net income of $10.8 million or $1.23 per share for the second quarter of 2002. For the first six months of 2003, net income was $13.3 million or $1.47 per share as compared to $14.2 million or $1.61 per share for the first six months of 2002. Net sales declined 3.4% in the second quarter of 2003 as compared to the second quarter of 2002. This decline reflects lower bottle/can volume, which was down 4.3% in the second quarter and 1.9% in the first half. The difference between the growth rate in net sales and the growth rate in volume primarily reflects higher average revenue per case. The decline in net sales reflects unseasonably cool and abnormally wet weather across the Company's territories as well as less aggressive retail pricing by several of the Company's large customers. As a result of soft net sales performance, income from operations was down $6.3 million or 19% for the second quarter. The reduction in income from operations was partially offset by declines in interest expense and minority interest. In addition, the Company's second quarter income tax provision was favorably impacted by a $3.1 million benefit resulting from the completion of a tax audit.
J. Frank Harrison, III, Chairman and CEO, said that he was disappointed with operating income through June, but was pleased with the Company's expense control and continued success in debt reduction. Mr. Harrison said, "Due to the fixed nature of many of the Company's costs, weaker than anticipated net sales translate into lower operating income." Mr. Harrison said, "Despite higher wage rates and a significant increase in the cost of pension and health care benefits, the Company's operating expenses were up less than 3% for the first half of 2003. Furthermore, the Company reduced overall debt and capital lease liabilities by more than $11 million over the past 12 months, despite the $53.5 million acquisition of an additional 22.7% interest in Piedmont Coca-Cola Bottling Partnership. The reductions in debt and capital lease liabilities along with the acquisition of another portion of Piedmont provided for lower interest expense and minority interest, which helped offset some of the Company's shortfall in operating income in the first half of 2003."
William B. Elmore, President and COO, attributes some of the Company's net sales performance through the first six months to industry wide softness in the Company's markets. Mr. Elmore said, "Although our volume has been weak during the first half of 2003, our market share has remained stable. The unseasonably cool and wet weather we have experienced so far this year appears to have had a dampening effect on overall beverage sales in our territories, especially in the higher margin immediate consumption market." Mr. Elmore went on to say, "The Company is focused on improving net sales performance in the second half of the year through a combination of higher pricing and innovations in packaging, which include a 390 ml PET bottle for the immediate consumption market and 12 ounce PET bottles in Fridge Packs(TM) for the take- home market."
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 improving net sales performance in the second half of 2003 and our introduction of a 390 ml PET bottle for the immediate consumption market and 12 ounce PET bottles in Fridge Packs(TM) for the take-home market. 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, adverse weather conditions 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 27 and 28 of the Company's Annual Report on Form 10- K for the fiscal year ended December 29, 2002.
-Enjoy Coca-Cola-
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Data)
Second Quarter First Half
2003 2002 2003 2002
Net sales $318,165 $329,512 $593,365 $601,130
Cost of sales 164,505 170,068 304,811 307,212
Gross margin 153,660 159,444 288,554 293,918
Selling, general and
administrative
expenses 106,789 106,757 208,914 203,169
Depreciation expense 19,282 18,857 38,297 36,842
Amortization of
intangibles 767 686 1,465 1,373
Income from operations 26,822 33,144 39,878 52,534
Interest expense 10,916 11,877 21,287 24,017
Other income (expense),
net (246) (650) (445) (1,549)
Minority interest 1,142 2,764 1,258 3,523
Income before income
taxes 14,518 17,853 16,888 23,445
Income taxes 2,618 7,070 3,581 9,284
Net income $11,900 $10,783 $13,307 $14,161
Basic net income per
share $1.32 $1.23 $1.47 $1.61
Diluted net income per
share $1.32 $1.21 $1.47 $1.60
Weighted average number
of common shares
outstanding 9,043 8,784 9,043 8,779
Weighted average number
of common shares
outstanding - assuming
dilution 9,043 8,880 9,043 8,869
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands
June 29, Dec. 29, June 30,
2003 2002 2002
ASSETS
Current Assets:
Cash $7,272 $18,193 $8,667
Accounts receivable, trade, net 84,858 79,548 93,548
Accounts receivable from The
Coca-Cola Company 12,586 12,992 15,729
Accounts receivable, other 2,770 17,001 5,610
Inventories 40,114 38,648 42,020
Prepaid expenses and other
current assets 8,565 4,588 7,404
Total current assets 156,165 170,970 172,978
Property, plant and equipment,
net 461,707 466,840 472,790
Leased property under capital
leases, net 44,342 44,623 48,532
Other assets 60,912 58,167 73,376
Franchise rights and goodwill,
net 622,426 606,128 607,007
Other identifiable intangible
assets, net 9,631 6,797 7,340
Total $1,355,183 $1,353,525 $1,382,023
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands
June 29, Dec. 29, June 30,
2003 2002 2002
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Portion of long-term debt payable
within one year $39 $31 $215,631
Current portion of obligations under
capital leases 4,091 3,960 4,777
Accounts payable, trade 38,083 38,303 42,257
Accounts payable to The Coca-Cola
Company 8,229 9,823 6,646
Other accrued liabilities 76,748 72,647 82,261
Accrued compensation 12,904 20,462 11,570
Accrued interest payable 11,962 10,649 11,140
Total current liabilities 152,056 155,875 374,282
Deferred income taxes 158,874 155,964 164,485
Pension and retiree benefit obligations 39,286 37,227 30,893
Other liabilities 60,248 58,261 61,133
Obligations under capital leases 42,182 42,066 42,123
Long-term debt 825,078 807,725 620,125
Total liabilities 1,277,724 1,257,118 1,293,041
Minority interest 32,832 63,540 59,356
Stockholders' Equity:
Common Stock 9,704 9,704 9,498
Class B Common Stock 3,029 3,009 3,009
Capital in excess of par value 97,220 95,986 88,843
Retained earnings 14,828 6,043 1,854
Accumulated other comprehensive loss (18,900) (20,621) (12,324)
105,881 94,121 90,880
Less-Treasury stock, at cost:
Common 60,845 60,845 60,845
Class B Common 409 409 409
Total stockholders' equity 44,627 32,867 29,626
Total $1,355,183 $1,353,525 $1,382,023
SOURCE Coca-Cola Bottling Co. Consolidated
CONTACT: media, Lauren C. Steele, VP Corporate Affairs, +1-704-557-4551,
or investors, David V. Singer, Executive VP & CFO, +1-704-557-4604, both of
Coca-Cola Bottling Co. Consolidated/
(COKE)