Press Releases

Coca-Cola Bottling Co. Consolidated Reports 2005 Results

CHARLOTTE, N.C., Feb. 23 /PRNewswire-FirstCall/ -- Coca-Cola Bottling Co. Consolidated (Nasdaq: COKE) today announced it earned $23.0 million or $2.53 per share in 2005 compared to $21.8 million or $2.41 per share in 2004. The Company earned $1.9 million or $.21 per share in the fourth quarter of 2005 compared to $2.3 million or $.26 per share in the fourth quarter of 2004. The Company's 2004 fiscal year had 53 weeks versus 52 weeks in 2005. Excluding the estimated impact of the 53rd week in 2004, adjusted net income for the fourth quarter of 2004 would have been $0.6 million or $.07 per share and adjusted net income for full year 2004 would have been $20.1 million or $2.22 per share.

The Company's net income for 2005 reflected the favorable after-tax impact of $.46 per share related to proceeds received from the settlement of a class action lawsuit related to high fructose corn syrup, offset partially by financing transaction costs of $.11 per share on an after-tax basis associated with a debt exchange and the early retirement of certain debt. In 2004, the Company's reported results reflected a one-time unfavorable impact of $.11 per share on an after-tax basis due to a change in the manner in which The Coca- Cola Company delivers marketing funding support, offset by the favorable impact of $.13 per share on an after-tax basis related to certain customer- related marketing programs between the Company and The Coca-Cola Company.

The Company faced a number of significant challenges in 2005 including record-setting increases in packaging costs and historically high fuel prices. J. Frank Harrison, III, Chairman and CEO, said, "Over the past several years, packaging costs have increased at rates consistent with changes in overall inflation. In 2005, packaging costs were up more than 10% impacting the Company's gross margins. In addition, the Company experienced significant increases in fuel expense in the second half of 2005 which reduced the Company's income from operations. Despite these significant cost challenges, we are encouraged by the improvement in revenue in both the fourth quarter and full year 2005. Average revenue per case increased by approximately 4.5% and 3%, in the fourth quarter and full year 2005, respectively, versus the same periods a year ago. Solid product innovation including the introduction of Vault, Coca-Cola Zero and Dasani flavors, as well as strong growth in Dasani, Powerade and energy drinks, led to bottle/can volume growth of approximately 7% and 4% in the fourth quarter and full year 2005, respectively. Also, sales to other bottlers rose significantly, increasing by approximately $19 million and $61 million in the fourth quarter and full year 2005, respectively, compared to the same periods in 2004, primarily as a result of the production and sale of Full Throttle to other Coca-Cola bottlers in the eastern portion of the United States."

William B. Elmore, President and COO, said, "The Company implemented additional selling price increases in the third and fourth quarters of 2005 to improve revenue production and offset a significant portion of the impact of higher packaging and fuel costs and increases in interest expense. Packaging costs increased by approximately 11%, fuel costs increased by approximately 30% and interest expense increased by 12% in 2005 as compared to 2004. The increase in interest expense in 2005 was primarily due to an increase in interest rates and the impact of financing transaction costs. Debt and capital lease obligations, net of cash investments, decreased by approximately $42 million in 2005. In addition, the Company's launch of a number of new products enabled the Company to enjoy significant bottle/can growth in the second half of 2005. The successful rollout of a significant number of new products in 2005 resulted from the efforts of the entire organization. The Company experienced positive bottle/can volume growth in 2005 across all of its key product categories with carbonated soft drink volume up approximately 2%, bottled water increasing approximately 23% and isotonics up approximately 29%. In addition, the Company's energy products portfolio contributed approximately 22% of the gross margin growth in 2005." The Company is eagerly anticipating the impact of the introduction of additional new products in 2006, including Tab Energy, Coca-Cola Blak, Black Cherry Vanilla Coke and line extensions for Full Throttle.

Cautionary Information Regarding Forward-Looking Statements

Included in this press 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 about the impact of the introduction of additional new products in 2006.

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 net pricing resulting from increased marketplace competition; an inability to meet performance requirements for expected levels of marketing funding support payments from The Coca-Cola Company or other beverage companies; changes in how significant customers market or promote our products; reduced advertising and marketing spending by The Coca-Cola Company or other beverage companies; an inability to meet requirements under bottling contracts with The Coca-Cola Company or other beverage companies; the inability of our aluminum can or PET bottle suppliers to meet our demand; significant changes from expectations in the cost of raw materials; higher than expected insurance premiums and fuel costs; lower than anticipated return on pension plan assets; higher than anticipated health care costs; unfavorable interest rate fluctuations; higher than anticipated cash payments for income taxes; unfavorable weather conditions; significant changes in consumer preferences related to nonalcoholic beverages; an inability to increase selling prices, increase bottle/can volume or reduce expenses to offset higher raw material costs; reduced brand and packaging innovation; significant changes in credit ratings impacting the Company's ability to borrow; adverse or unanticipated outcomes arising from the disposition of certain claims and legal proceedings occurring in the ordinary course of business; assessments of additional taxes resulting from audits of our filings for various periods; terrorist attacks, war or other civil disturbances or national emergencies; and changes in financial markets. The forward-looking statements in this news release should be read in conjunction with the detailed cautionary statements found on pages 34, 35 and 36 of the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 2005. The Company undertakes no obligation to publicly update or revise any forward- looking statements.

                              -Enjoy Coca-Cola-



     Coca-Cola Bottling Co. Consolidated
     CONSOLIDATED STATEMENTS OF OPERATIONS
     In Thousands (Except Per Share Data)




                                                       Fiscal Year
                                             2005         2004          2003


    Net sales                          $1,380,172   $1,267,227    $1,220,403


    Cost of sales*                        752,409      659,466       629,080
    Gross margin                          627,763      607,761       591,323

    Selling, delivery and
     administrative expenses*             466,533      449,497       428,462
    Depreciation expense                   68,222       70,798        76,485
    Amortization of intangibles               880        3,117         3,105
    Income from operations                 92,128       84,349        83,271

    Interest expense                       49,279       43,983        41,914
    Minority interest                       4,097        3,816         3,297
    Income before income taxes             38,752       36,550        38,060
    Income taxes                           15,801       14,702         7,357
    Net income                             22,951       21,848        30,703

    Basic net income per share              $2.53        $2.41         $3.40

    Diluted net income per share            $2.53        $2.41         $3.40

    Weighted average number of
     common shares outstanding              9,083        9,063         9,043

    Weighted average number of
     common shares outstanding
     - assuming dilution                    9,083        9,063         9,043

    * Excludes depreciation expense



     Coca-Cola Bottling Co. Consolidated
     CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
     In Thousands (Except Per Share Data)

                                                   Fourth Quarter
                                           2005         2004          2003


    Net sales                            $347,717     $321,485      $294,299

    Cost of sales*                        193,598      171,899       152,543
    Gross margin                          154,119      149,586       141,756

    Selling, delivery and
     administrative expenses*             120,288      115,782       106,449
    Depreciation expense                   17,046       17,690        19,232
    Amortization of intangibles               157          761           794
    Income from operations                 16,628       15,353        15,281

    Interest expense                       12,883       12,161        10,213
    Minority interest                         935          372           607
    Income before income taxes              2,810        2,820         4,461
    Income taxes                              889          498           911
    Net income                             $1,921       $2,322        $3,550

    Basic net income per share               $.21         $.26          $.39

    Diluted net income per share             $.21         $.26          $.39

    Weighted average number of
     common shares outstanding              9,083        9,063         9,043

    Weighted average number of
     common shares outstanding
     - assuming dilution                    9,083        9,063         9,043

    * Excludes depreciation expense



     Coca-Cola Bottling Co. Consolidated
     Reconciliation of GAAP and Non-GAAP Information
     (In Thousands, Except Per Share Amounts, and Unaudited)

     NET INCOME RECONCILIATION

                                           Quarter       Quarter
                                            Ended         Ended
                                          01/01/06       01/02/05      Change

    Reported net income                     $1,921         $2,322      $(401)
    Estimated 53rd week impact                   0         (1,711)     1,711
    Adjusted net income                     $1,921           $611     $1,310

                                          Year Ended     Year Ended
                                           01/01/06       01/02/05     Change


    Reported net income                    $22,951        $21,848     $1,103
    Estimated 53rd week impact                   0         (1,711)     1,711
    Adjusted net income                    $22,951        $20,137     $2,814


     DILUTED NET INCOME PER SHARE RECONCILIATION

                                           Quarter       Quarter
                                            Ended         Ended        Change
                                          01/01/06       01/02/05

    Reported net income per share             $.21           $.26      $(.05)
    Estimated 53rd week impact                   0           (.19)       .19
    Adjusted net income per share             $.21           $.07       $.14

                                         Year Ended      Year Ended
                                          01/01/06        01/02/05      Change


    Reported net income per share            $2.53          $2.41       $.12
    Estimated 53rd week impact                   0           (.19)       .19
    Adjusted net income per share            $2.53          $2.22       $.31

The following financial measures are not measures as defined by generally accepted accounting principles (GAAP): (i) our 2004 adjusted net income and (ii) our 2004 adjusted diluted net income per share. These non-GAAP measures are provided to allow investors to more clearly evaluate our ongoing operating performance and business trends by excluding the estimated impact of the additional week included in our reported results for 2004 and the fourth quarter thereof. Management uses this information to review results excluding items that are not necessarily indicative of our ongoing results.

SOURCE  Coca-Cola Bottling Co. Consolidated
    -0-                             02/23/2006
    /CONTACT: Media, Lauren C. Steele, VP Corporate Affairs, +1-704-557-4551,
or Investors, Steven D. Westphal, Senior VP - CFO, +1-704-557-4456, both of
Coca-Cola Bottling Co. Consolidated/
    /Web site:  http://www.cokeconsolidated.com/
    (COKE)

CO:  Coca-Cola Bottling Co. Consolidated
ST:  North Carolina
IN:  FOD
SU:  ERN

WB-DL
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2852 02/23/2006 10:06 EST http://www.prnewswire.com