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):
February 23, 2006
COCA-COLA BOTTLING CO. CONSOLIDATED
(Exact name of registrant as specified in its charter)
| Delaware | 0-9286 | 56-0950585 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
4100 Coca-Cola Plaza, Charlotte, North Carolina 28211
(Address of principal executive offices) (Zip Code)
(704) 557-4400
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On February 23, 2006, Coca-Cola Bottling Co. Consolidated (the “Company”) issued a press release announcing its financial results for the fiscal year ended January 1, 2006. A copy of the press release is furnished as Exhibit 99.1 hereto.
Item 9.01. Financial Statements and Exhibits.
| (c) | Exhibits. |
| 99.1 | Press release issued on February 23, 2006, reporting the Company’s financial results for the fourth quarter and fiscal year ended January 1, 2006. |
Signature
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 hereunto duly authorized.
| COCA-COLA BOTTLING CO. CONSOLIDATED | ||||
| (REGISTRANT) | ||||
| Date: February 27, 2006 | BY: | /s/ Steven D. Westphal | ||
| Steven D. Westphal | ||||
| Principal Financial Officer of the Registrant | ||||
| and | ||||
| Senior Vice President and Chief Financial Officer | ||||
SECURITIES AND EXCHANGE COMMISSION
Washington, DC
EXHIBITS
CURRENT REPORT
ON
FORM 8-K
| Date of Event Reported: | Commission File No: | |
| February 23, 2006 | 0-9286 |
COCA-COLA BOTTLING CO. CONSOLIDATED
EXHIBIT INDEX
| Exhibit No. | Exhibit Description | |
| 99.1 | Press release issued on February 23, 2006, reporting the Company’s financial results for the fourth quarter and fiscal year ended January 1, 2006. |
Exhibit 99.1
Coca-Cola Bottling Co. Consolidated, 4100 Coca-Cola Plaza, Charlotte, NC 28211
 |
News Release | |||||
| Media Contact: |
Lauren C. Steele VP Corporate Affairs 704-557-4551 | |||||
| Investor Contact: | Steven D. Westphal Senior VP -CFO 704-557-4456 |
| FOR IMMEDIATE RELEASE | Symbol: COKE | |
| February 23, 2006 | Quoted: The Nasdaq Stock Market (National Market) |
Coca-Cola Bottling Co. Consolidated Reports 2005 Results
CHARLOTTE, NC — Coca-Cola Bottling Co. Consolidated 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,
1
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 Blák, 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 Ended 01/01/06 |
Quarter Ended 01/02/05 |
Change | |||||||||
| Reported net income |
$ | 1,921 | $ | 2,322 | $ | (401 | ) | ||||
| Estimated 53rd week impact |
— | (1,711 | ) | 1,711 | |||||||
| Adjusted net income |
$ | 1,921 | $ | 611 | $ | 1,310 | |||||
| Year Ended 01/01/06 |
Year Ended 01/02/05 |
Change | |||||||||
| Reported net income |
$ | 22,951 | $ | 21,848 | $ | 1,103 | |||||
| Estimated 53rd week impact |
— | (1,711 | ) | 1,711 | |||||||
| Adjusted net income |
$ | 22,951 | $ | 20,137 | $ | 2,814 | |||||
| DILUTED NET INCOME PER SHARE RECONCILIATION | |||||||||||
| Quarter Ended 01/01/06 |
Quarter Ended 01/02/05 |
Change | |||||||||
| Reported net income per share |
$ | .21 | $ | .26 | $ | (.05 | ) | ||||
| Estimated 53rd week impact |
— | (.19 | ) | .19 | |||||||
| Adjusted net income per share |
$ | .21 | $ | .07 | $ | .14 | |||||
| Year Ended 01/01/06 |
Year Ended 01/02/05 |
Change | |||||||||
| Reported net income per share |
$ | 2.53 | $ | 2.41 | $ | .12 | |||||
| Estimated 53rd week impact |
— | (.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 result.