Press Releases
- First quarter 2021 net sales increased 8.3% versus the first quarter of 2020, with physical case volume up 4.8%(a).
- Gross profit increased
$43 .4 million, or 10.7%, in the first quarter of 2021 versus the first quarter of 2020. Gross margin improved 70 basis points to 35.3% primarily due to revenue management initiatives.
- First quarter 2021 income from operations was
$94 .2 million, up$61 .4 million, or 187.0%, versus the first quarter of 2020.
Key Results
| First Quarter | ||||||||||||
| (in millions, except per share data) | 2021 | 2020 | Change | |||||||||
| Physical case volume | 86.9 | 83.0 | 4.8 | % | ||||||||
| Net sales | $ | 1,269.9 | $ | 1,173.0 | 8.3 | % | ||||||
| Gross profit | $ | 448.7 | $ | 405.3 | 10.7 | % | ||||||
| Gross margin | 35.3 | % | 34.6 | % | ||||||||
| Income from operations | $ | 94.2 | $ | 32.8 | 187.0 | % | ||||||
| Basic net income per share | $ | 5.69 | $ | 1.56 | $ | 4.13 | ||||||
| Retail Beverage Sales | First Quarter | |||||||||||
| (in millions) | 2021 | 2020 | Change | |||||||||
| Sparkling bottle/can | $ | 694.2 | $ | 634.7 | 9.4 | % | ||||||
| Still bottle/can | $ | 420.1 | $ | 373.1 | 12.6 | % | ||||||
| Fountain(b) | $ | 32.6 | $ | 41.9 | (22.2 | )% | ||||||
First Quarter 2021 Review
“Our business performed incredibly well in the first quarter of 2021 thanks to the continued hard work and dedication of our teammates. While we face continued challenges in 2021, we are building on positive momentum from 2020 to deliver strong operating results so far this year,” said J. Frank Harrison, III, Chairman and Chief Executive Officer. “As we approach the summer months, we believe our business is well-positioned to stay agile and responsive to our customers. Our Purpose remains front and center in all we do, as we continue to prioritize the health and wellness of our teammates, and to advance our commitment to diversity, sustainability and service in our communities.”
Physical case volume increased 4.8% in the first quarter of 2021. Sparkling beverages maintained steady growth and certain Still brands, including BodyArmor, AHA and Monster, also performed well versus prior year. Sparkling category volume increased 4.5% in the first quarter of 2021, while Still beverage volume increased 5.5%. Sales of multi-serve packages in larger retail stores remained very strong, while single-serve sales improved in small stores and accounts where our products are consumed on-premise. Our first quarter of 2021 included one additional selling day compared to the first quarter of 2020 and we estimate it impacted our physical case growth rates by approximately 1%.
Revenue increased 8.3% in the first quarter of 2021. The increase in revenue from our bottle/can Sparkling beverages was driven primarily by price realization on most Sparkling packages. Sales of multi-serve PET packages were especially strong in the quarter as we adjusted our commercial plans to emphasize these packages to complement our assortment of multi-serve can products in take-home outlets. Sales in take-home channels continue to outpace other channels, but we are seeing improvement in on-premise selling channels as COVID-related restrictions are being lifted throughout our territory.
Gross profit increased
“We are very pleased with our first quarter results as we built on the success of revenue and operating cost initiatives we established in 2020. Our results reflect the continued strong consumer demand for our future consumption products and were further boosted by improved sales in our immediate consumption channels,” said
Selling, delivery and administrative (“SD&A”) expenses in the first quarter of 2021 decreased
“While we expect continued uncertainty in the marketplace during 2021 coupled with higher operating expenses and increased input costs, we are confident in our ability to mitigate these headwinds with thoughtful adjustments to our commercial plan and operating model,”
Income from operations in the first quarter of 2021 was
Net income in the first quarter of 2021 was
Cash flows provided by operations for the first quarter of 2021 were
(a) All comparisons are to the corresponding period in the prior year unless specified otherwise. The first quarter of 2021 included one additional selling day compared to the first quarter of 2020. We do not believe the additional selling day had a material impact on our financial results.
(b) Fountain syrups are dispensed through equipment that mixes with carbonated or still water, enabling fountain retailers to sell finished products to consumers in cups or glasses.
(c) The discussion of the results for the first quarter ended
About
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Cautionary Information Regarding Forward-Looking Statements
Certain statements contained in this news release are “forward-looking statements” that involve risks and uncertainties. The words “anticipate,” “believe,” “expect,” “project,” “may,” “will,” “should,” “could” and similar expressions are intended to identify those forward-looking statements. These forward-looking statements reflect the Company’s best judgment based on current information, and, although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the projected results and expectations discussed in this news release. Factors that might cause the Company’s actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: increased costs, disruption of supply or shortages of raw materials, fuel and other supplies; the reliance on purchased finished products from external sources; changes in public and consumer perception and preferences, including concerns related to obesity, artificial ingredients, product safety and sustainability and brand reputation; changes in government regulations related to nonalcoholic beverages, including regulations related to obesity, public health, artificial ingredients and product safety and sustainability; the COVID-19 pandemic and other pandemic outbreaks in the future; decreases from historic levels of marketing funding support provided to us by The Coca‑Cola Company and other beverage companies; material changes in the performance requirements for marketing funding support or our inability to meet such requirements; decreases from historic levels of advertising, marketing and product innovation spending by The Coca‑Cola Company and other beverage companies, or advertising campaigns that are negatively perceived by the public; any failure of the several Coca‑Cola system governance entities of which we are a participant to function efficiently or on our best behalf and any failure or delay of ours to receive anticipated benefits from these governance entities; provisions in our beverage distribution and manufacturing agreements with The Coca‑Cola Company that could delay or prevent a change in control of us or a sale of our Coca‑Cola distribution or manufacturing businesses; the concentration of our capital stock ownership; our inability to meet requirements under our beverage distribution and manufacturing agreements; changes in the inputs used to calculate our acquisition related contingent consideration liability; technology failures or cyberattacks on our technology systems or our effective response to technology failures or cyberattacks on our customers’, suppliers’ or other third parties’ technology systems; unfavorable changes in the general economy; changes in our top customer relationships and marketing strategies; lower than expected net pricing of our products resulting from continued and increased customer and competitor consolidations and marketplace competition; the effect of changes in our level of debt, borrowing costs and credit ratings on our access to capital and credit markets, operating flexibility and ability to obtain additional financing to fund future needs; the failure to attract, train and retain qualified employees while controlling labor costs, and other labor issues; the failure to maintain productive relationships with our employees covered by collective bargaining agreements, including failing to renegotiate collective bargaining agreements; changes in accounting standards; our use of estimates and assumptions; changes in tax laws, disagreements with tax authorities or additional tax liabilities; changes in legal contingencies; natural disasters, changing weather patterns and unfavorable weather; and climate change or legislative or regulatory responses to such change. These and other factors are discussed in the Company’s regulatory filings with the
FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| First Quarter | ||||||||
| (in thousands, except per share data) | 2021 | 2020 | ||||||
| Net sales | $ | 1,269,857 | $ | 1,173,021 | ||||
| Cost of sales | 821,154 | 767,726 | ||||||
| Gross profit | 448,703 | 405,295 | ||||||
| Selling, delivery and administrative expenses | 354,519 | 372,474 | ||||||
| Income from operations | 94,184 | 32,821 | ||||||
| Interest expense, net | 8,746 | 9,561 | ||||||
| Other expense, net | 12,055 | 2,298 | ||||||
| Income before income taxes | 73,383 | 20,962 | ||||||
| Income tax expense | 20,020 | 5,361 | ||||||
| Net income | 53,363 | 15,601 | ||||||
| Less: Net income attributable to noncontrolling interest | — | 939 | ||||||
| Net income attributable to Coca‑Cola Consolidated, Inc. | $ | 53,363 | $ | 14,662 | ||||
| Basic net income per share based on net income attributable to Coca‑Cola Consolidated, Inc.: | ||||||||
| Common Stock | $ | 5.69 | $ | 1.56 | ||||
| Weighted average number of Common Stock shares outstanding | 7,141 | 7,141 | ||||||
| Class B Common Stock | $ | 5.69 | $ | 1.56 | ||||
| Weighted average number of Class B Common Stock shares outstanding | 2,232 | 2,232 | ||||||
| Diluted net income per share based on net income attributable to Coca‑Cola Consolidated, Inc.: | ||||||||
| Common Stock | $ | 5.67 | $ | 1.55 | ||||
| Weighted average number of Common Stock shares outstanding – assuming dilution | 9,409 | 9,444 | ||||||
| Class B Common Stock | $ | 5.67 | $ | 1.55 | ||||
| Weighted average number of Class B Common Stock shares outstanding – assuming dilution | 2,268 | 2,303 | ||||||
FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| (in thousands) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 51,828 | $ | 54,793 | ||||
| Trade accounts receivable, net | 439,374 | 403,825 | ||||||
| Other accounts receivable | 95,341 | 86,287 | ||||||
| Inventories | 257,363 | 225,757 | ||||||
| Prepaid expenses and other current assets | 76,592 | 74,146 | ||||||
| Assets held for sale | 6,350 | 6,429 | ||||||
| Total current assets | 926,848 | 851,237 | ||||||
| Property, plant and equipment, net | 1,021,198 | 1,022,722 | ||||||
| Right-of-use assets - operating leases | 129,445 | 134,383 | ||||||
| Leased property under financing leases, net | 68,453 | 69,867 | ||||||
| Other assets | 112,995 | 111,781 | ||||||
| 165,903 | 165,903 | |||||||
| Other identifiable intangible assets, net | 859,990 | 866,557 | ||||||
| Total assets | $ | 3,284,832 | $ | 3,222,450 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Current portion of obligations under operating leases | $ | 19,388 | $ | 19,766 | ||||
| Current portion of obligations under financing leases | 5,909 | 5,860 | ||||||
| Accounts payable and accrued expenses | 658,610 | 621,434 | ||||||
| Total current liabilities | 683,907 | 647,060 | ||||||
| Deferred income taxes | 159,845 | 139,423 | ||||||
| Pension and postretirement benefit obligations and other liabilities | 782,191 | 792,605 | ||||||
| Noncurrent portion of obligations under operating leases | 115,487 | 119,923 | ||||||
| Noncurrent portion of obligations under financing leases | 68,756 | 69,984 | ||||||
| Long-term debt | 909,304 | 940,465 | ||||||
| Total liabilities | 2,719,490 | 2,709,460 | ||||||
| Equity: | ||||||||
| Stockholders’ equity | 565,342 | 512,990 | ||||||
| Total liabilities and equity | $ | 3,284,832 | $ | 3,222,450 | ||||
FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| First Quarter | ||||||||
| (in thousands) | 2021 | 2020 | ||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income | $ | 53,363 | $ | 15,601 | ||||
| Depreciation expense, amortization of intangible assets and deferred proceeds, net | 43,526 | 43,559 | ||||||
| Fair value adjustment of acquisition related contingent consideration | 10,998 | 712 | ||||||
| Deferred income taxes | 19,980 | 5,910 | ||||||
| Change in current assets and current liabilities | (38,662 | ) | (42,310 | ) | ||||
| Change in noncurrent assets and noncurrent liabilities | (9,133 | ) | 8,106 | |||||
| Other | 1,838 | 711 | ||||||
| Net cash provided by operating activities | $ | 81,910 | $ | 32,289 | ||||
| Cash Flows from Investing Activities: | ||||||||
| Additions to property, plant and equipment | $ | (37,204 | ) | $ | (33,093 | ) | ||
| Other | (2,438 | ) | 765 | |||||
| Net cash used in investing activities | $ | (39,642 | ) | $ | (32,328 | ) | ||
| Cash Flows from Financing Activities: | ||||||||
| Payments on revolving credit facility and term loan facility | $ | (31,250 | ) | $ | (132,500 | ) | ||
| Borrowings under revolving credit facility | — | 185,000 | ||||||
| Payments of acquisition related contingent consideration | (10,046 | ) | (10,452 | ) | ||||
| Cash dividends paid | (2,343 | ) | (2,344 | ) | ||||
| Principal payments on financing lease obligations | (1,447 | ) | (1,485 | ) | ||||
| Debt issuance fees | (147 | ) | (46 | ) | ||||
| Net cash provided by (used in) financing activities | $ | (45,233 | ) | $ | 38,173 | |||
| Net increase (decrease) in cash during period | $ | (2,965 | ) | $ | 38,134 | |||
| Cash at beginning of period | 54,793 | 9,614 | ||||||
| Cash at end of period | $ | 51,828 | $ | 47,748 | ||||
NON-GAAP FINANCIAL MEASURES(d) The following tables reconcile reported results (GAAP) to adjusted results (non-GAAP):
| First Quarter 2021 | ||||||||||||||||||||||||
| (in thousands, except per share data) | Gross profit | SD&A expenses | Income from operations | Income before income taxes | Net income | Basic net income per share | ||||||||||||||||||
| Reported results (GAAP) | $ | 448,703 | $ | 354,519 | $ | 94,184 | $ | 73,383 | $ | 53,363 | $ | 5.69 | ||||||||||||
| Fair value adjustment of acquisition related contingent consideration | — | — | — | 10,998 | 8,249 | 0.89 | ||||||||||||||||||
| Fair value adjustments for commodity derivative instruments | (288 | ) | 560 | (848 | ) | (848 | ) | (636 | ) | (0.07 | ) | |||||||||||||
| Supply chain optimization | 276 | (106 | ) | 382 | 382 | 287 | 0.03 | |||||||||||||||||
| Total reconciling items | (12 | ) | 454 | (466 | ) | 10,532 | 7,900 | 0.85 | ||||||||||||||||
| Adjusted results (non-GAAP) | $ | 448,691 | $ | 354,973 | $ | 93,718 | $ | 83,915 | $ | 61,263 | $ | 6.54 | ||||||||||||
| Adjusted % change vs. Q1 2020 | 10.1 | % | (4.2 | )% | 154.9 | % | ||||||||||||||||||
| First Quarter 2020 | ||||||||||||||||||||||||
| (in thousands, except per share data) | Gross profit | SD&A expenses | Income from operations | Income before income taxes | Net income | Basic net income per share | ||||||||||||||||||
| Reported results (GAAP) | $ | 405,295 | $ | 372,474 | $ | 32,821 | $ | 20,962 | $ | 14,662 | $ | 1.56 | ||||||||||||
| Fair value adjustment of acquisition related contingent consideration | — | — | — | 712 | 535 | 0.06 | ||||||||||||||||||
| Fair value adjustments for commodity derivative instruments | 1,536 | (2,329 | ) | 3,865 | 3,865 | 2,906 | 0.31 | |||||||||||||||||
| Supply chain optimization | 648 | 571 | 77 | 77 | 58 | 0.01 | ||||||||||||||||||
| Total reconciling items | 2,184 | (1,758 | ) | 3,942 | 4,654 | 3,499 | 0.38 | |||||||||||||||||
| Adjusted results (non-GAAP) | $ | 407,479 | $ | 370,716 | $ | 36,763 | $ | 25,616 | $ | 18,161 | $ | 1.94 | ||||||||||||
(d) The Company reports its financial results in accordance with accounting principles generally accepted in
| MEDIA CONTACT: | INVESTOR CONTACT: | |
| Senior Vice President Public Affairs, Communications & Communities |
Executive Vice President & Chief Financial Officer |
|
| Kimberly.Kuo@cokeconsolidated.com | Scott.Anthony@cokeconsolidated.com | |
| (704) 557-4584 | (704) 557-4633 |
A PDF accompanying this release is available at: http://ml.globenewswire.com/Resource/Download/9bba2f64-de6f-4489-be8f-b23944b74310
Source: Coca-Cola Consolidated, Inc.