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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 1994
Commission File Number 0-9286
COCA-COLA BOTTLING CO. CONSOLIDATED
(Exact name of registrant as specified in its charter)
Delaware 56-0950585
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1900 Rexford Road, Charlotte, North Carolina 282ll
(Address of principal executive offices) (Zip Code)
(704) 551-4400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at May 6, 1994
Common Stock, $1 Par Value 7,958,059
Class B Common Stock, $1 Par Value 1,336,362
PART I - FINANCIAL INFORMATION
Item l. Financial Statements.
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands of Dollars
April 3, Jan. 2, April 4,
1994 1994 1993
ASSETS
Current Assets:
Cash $ 2,686 $ 1,262 $ 2,724
Accounts receivable, trade, less
allowance for doubtful accounts
of $417, $425 and $586 11,438 4,960 7,062
Accounts receivable from
The Coca-Cola Company 7,325 6,698 4,131
Due from Piedmont Coca-Cola
Bottling Partnership 4,737 2,454
Accounts receivable, other 7,108 10,758 9,894
Inventories 31,823 27,533 28,265
Prepaid expenses and other
current assets 6,312 4,734 4,970
Total current assets 71,429 58,399 57,046
Property, plant and equipment,
at cost 307,522 297,561 298,103
Less - accumulated depreciation
and amortization 137,137 134,546 127,977
Property, plant and equipment,
net 170,385 163,015 170,126
Investment in Piedmont Coca-Cola
Bottling Partnership 67,754 68,400
Other assets 19,018 18,700 21,534
Identifiable intangible assets,
less accumulated amortization of
$68,267, $65,803 and $63,484 265,251 267,715 467,210
Excess of cost over fair value
of net assets of businesses
acquired, less accumulated
amortization of $19,971, $19,399
and $17,681 71,648 72,220 73,938
Total $665,485 $648,449 $789,854
See Accompanying Notes to Consolidated Financial Statements
LIABILITIES AND SHAREHOLDERS' EQUITY
April 3, Jan. 2, April 4,
1994 1994 1993
Current Liabilities:
Portion of long-term debt payable
within one year $ 611 $ 711 $ 1,040
Accounts payable and accrued
liabilities 66,381 69,232 45,851
Accounts payable to The Coca-Cola
Company 4,366 1,876 4,426
Accrued interest payable 4,757 10,108 6,237
Total current liabilities 76,115 81,927 57,554
Deferred income taxes 79,511 80,065 111,112
Other liabilities 21,758 22,470 27,557
Senior long-term debt 461,497 434,358 568,376
Total liabilities 638,881 618,820 764,599
Shareholders' Equity:
Convertible Preferred Stock, $100 par
value: Authorized-50,000 shares;
Issued-None
Nonconvertible Preferred Stock, $100
par value: Authorized-50,000 shares;
Issued-None
Preferred Stock, $.01 par value:
Authorized-20,000,000 shares;
Issued-None
Common Stock, $1 par value:
Authorized-30,000,000 shares;
Issued-10,090,859; 10,090,859 and
9,977,395 shares 10,090 10,090 9,977
Class B Common Stock, $1 par value:
Authorized-10,000,000 shares;
Issued-1,964,476 shares 1,965 1,965 1,965
Class C Common Stock, $1 par value:
Authorized-20,000,000 shares;
Issued-None
Capital in excess of par value 136,998 139,322 142,931
Accumulated deficit (99,189) (98,488) (111,972)
Minimum pension liability adjustment (5,614) (5,614)
44,250 47,275 42,901
Less-Treasury stock, at cost:
Common-2,132,800 shares 17,237 17,237 17,237
Class B Common-628,114 shares 409 409 409
Total shareholders' equity 26,604 29,629 25,255
Total $665,485 $648,449 $789,854
See Accompanying Notes to Consolidated Financial Statements
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Data)
First Quarter
1994 1993
Net sales (includes sales to Piedmont
of $20,564 in 1994) $163,817 $154,267
Cost of products sold (includes $18,905
related to sales to Piedmont in 1994) 97,484 84,425
Gross margin 66,333 69,842
Selling expenses 34,639 35,982
General and administrative expenses 12,659 12,479
Depreciation expense 5,773 5,640
Amortization of goodwill and
intangibles 3,073 4,300
Income from operations 10,189 11,441
Interest expense 7,526 8,268
Other expense, net 14 605
Income before income taxes and effect
of accounting change 2,649 2,568
Federal and state income taxes 1,139 1,219
Income before effect of accounting
change 1,510 1,349
Effect of accounting change (2,211)
Net income (loss) $ (701) $ 1,349
Income (loss) per share:
Income before effect of
accounting change $ .16 $ .15
Effect of accounting change (.24)
Net income (loss) $ (.08) $ .15
Cash dividends per share:
Common Stock $ .25 $ .22
Class B Common Stock .25 .13
Weighted average number of Common
and Class B Common shares outstanding 9,294 9,181
See Accompanying Notes to Consolidated Financial Statements
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
In Thousands of Dollars
Capital Minimum
Class B in Pension
Common Common Excess of Accumulated Liability Treasury
Stock Stock Par Value Deficit Adjustment Stock
Balance on
January 3,
1993 $ 9,977 $ 1,965 $ 144,831 $ (113,321) $ 17,646
Net income 1,349
Cash dividends
declared:
Common (1,900)
Balance on
April 4, 1993 $ 9,977 $ 1,965 $ 142,931 $ (111,972) $ 17,646
Balance on
January 2,
1994 $10,090 $ 1,965 $ l39,322 $ (98,488) $ (5,614) $ 17,646
Net loss (701)
Cash dividends
declared:
Common (2,324)
Balance on
April 3, 1994 $10,090 $ 1,965 $ 136,998 $ (99,189) $ (5,614) $ 17,646
See Accompanying Notes to Consolidated Financial Statements
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
In Thousands of Dollars
First Quarter
1994 1993
Cash Flows from Operating Activities
Net income (loss) $ (701) $ 1,349
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Effect of accounting change 2,211
Depreciation expense 5,773 5,640
Amortization of goodwill and intangibles 3,073 4,300
Deferred income taxes 1,139 1,207
(Gains) losses on sale of property, plant
and equipment (356) 89
Amortization of debt costs 114 134
Undistributed loss of Piedmont Coca-Cola
Bottling Partnership 646
Increase in current assets less current
liabilities (20,899) (15,025)
Increase in other noncurrent assets (455) (1,105)
Decrease in other noncurrent liabilities (238) (219)
Other 125 (13)
Total adjustments (8,867) (4,992)
Net cash used in operating activities (9,568) (3,643)
Cash Flows from Financing Activities
Proceeds from the issuance of long-term debt 27,166 16,795
Repayments of long-term debt (28) (3,544)
Cash dividends paid (2,324) (1,900)
Other (913) (1,235)
Net cash provided by financing activities 23,901 10,116
Cash Flows from Investing Activities
Additions to property, plant and equipment (14,681) (5,283)
Proceeds from the sale of property, plant
and equipment 1,772 120
Net cash used in investing activities (12,909) (5,163)
Net increase in cash 1,424 1,310
Cash at beginning of period 1,262 1,414
Cash at end of period $ 2,686 $ 2,724
See Accompanying Notes to Consolidated Financial Statements
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
1. Accounting Policies
The consolidated financial statements include the accounts of Coca-Cola
Bottling Co. Consolidated and its wholly owned subsidiaries ("the
Company"). All significant intercompany accounts and transactions have
been eliminated.
The information contained in the financial statements is unaudited.
The statements reflect all adjustments which, in the opinion of
management, are necessary for a fair statement of the results for the
interim periods presented. Except for the accounting change discussed
in Note 2, all such adjustments are of a normal, recurring nature.
The accounting policies followed in the presentation of interim
financial results are the same as those followed on an annual basis.
These policies are presented in Note 1 to the consolidated financial
statements included in the Company's Annual Report on Form 10-K for the
year ended January 2, 1994 filed with the Securities and Exchange
Commission.
Certain prior year amounts have been reclassified to conform to current
year classifications.
2. Accounting Change
In November 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits" ("SFAS 112"). SFAS 112
requires the accrual, during the years that employees render service,
of the expected cost of providing postemployment benefits if certain
criteria are met. The Company adopted the provisions of SFAS 112 in
the first quarter of 1994, effective January 3, 1994. As a result, the
Company recorded an after-tax charge of $2.2 million. This charge
appears within the caption "Effect of accounting change."
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
3. Summarized Income Statement Data of Piedmont Coca-Cola Bottling
Partnership
On July 2, 1993, the Company and The Coca-Cola Company formed Piedmont
Coca-Cola Bottling Partnership ("Piedmont") to distribute and market
soft drink products primarily in portions of North Carolina and South
Carolina. The Company and The Coca-Cola Company, through their
respective subsidiaries, each beneficially own a 50% interest in
Piedmont. The Company provides substantially all of the soft drink
products for Piedmont and manages the operations of Piedmont pursuant
to a management agreement. Summarized income statement data for
Piedmont is as follows:
First Quarter
In Thousands 1994
Net sales $43,961
Gross margin 19,174
Income from operations 1,015
Net loss (1,292)
4. Inventories
Inventories are summarized as follows:
April 3, Jan. 2, April 4,
In Thousands 1994 1994 1993
Finished products $20,203 $16,622 $18,114
Manufacturing materials 10,094 9,498 9,117
Used bottles and cases 1,526 1,413 1,034
Total inventories $31,823 $27,533 $28,265
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
5. Long-Term Debt
Long-term debt is summarized as follows:
TREASURY BOND: 6.313%
RENTAL FACTOR: 3.14674%
LEASE FUNDING NO: 94001
LEASE SUPPLEMENT TO
MASTER EQUIPMENT LEASE (the "Master Lease")
BETWEEN
COCA-COLA FINANCIAL CORPORATION ("Lessor")
AND
COCA-COLA BOTTLING CO. CONSOLIDATED ("Lessee")
DATED FEBRUARY 9, 1993
Lease Supplement Date: 11 March, 1994.
1. Term
The "Initial Term" shall commence on the 11th day of March, 1994 (the
"Lease Commencement Date") and will continue for a term of one hundred eight
(108) months ending on 11 March, 2003.
2. Rent
(a) BASIC RENT: As Basic Rent hereunder, Lessee shall pay an aggregate
rental charge of $646,160.76, payable in arrears in thirty-six (36) quarterly
installments of $17,948.91 each, beginning on June 11, 1994 and continuing on
the same day of each calendar quarter thereafter during the Initial Term, with
the final such installment being due and payable on March 11, 2003.
(b) INTERIM RENT: Lessee shall pay Lessor Interim Rent on all payments
made by Lessor for Equipment from the date of Lessor's payment, if paid
prior to the Lease Commencement Date, until the Lease Commencement Date.
Interim Rent shall be calculated from the date of such payment on the basis
of a rate which shall be the lesser of (i) a daily rate of ______ per
dollar so paid by Lessor, (which rate is based on the rate implied by the
Basic Rent amount set forth above), or (ii) a per annum rate applied to
the amount so paid by Lessor equal to the "Prime Rate" as published in
The Wall Street Journal on the last business day prior to the date of
such payment by Lessor. Interim Rent shall be payable in full on the Lease
Commencement Date.
(c) SUPPLEMENTAL RENT: In addition to Basic Rent and Interim Rent,
Lessee shall pay Lessor all Supplemental Rent provided for in the Master
Lease including, without limitation, all applicable sales and use taxes.
3. Location of the Equipment
The location(s) of the Equipment leased is (are) set forth on Exhibit
"A" attached hereto.
4. Equipment Leased
The Equipment leased is described on each equipment invoice and
installation notification subject to this Lease Supplement. The supporting
equipment invoices, installation notifications and equipment serial numbers
are summarized on Exhibit "A" attached hereto.
5. Stipulated Loss Value
The "Stipulated Loss Value" of each item of Equipment, as of any
particular date of computation, shall be determined with reference to Exhibit
"B" attached hereto by multiplying the original cost of such item of Equipment
as stated on Exhibit "A" hereto by the percentage set forth opposite the
applicable month number of Exhibit "B" hereto. For this purpose the applicable
month number means the number of months or partial months elapsed since the
Lease Commencement Date. If only a portion of an item of Equipment is affected
by any event causing calculation of "Stipulated Loss Value" as specified in
the Master Lease, and the cost of such portion of the Equipment cannot be
readily determined from the original cost of such item set forth on Exhibit A,
then the Stipulated Loss Value for such portion of the Equipment shall be as
reasonably calculated by Lessor, with written notice of such amount being sent
to Lessee by Lessor.
6. Lease
This Lease Supplement is executed and delivered under and pursuant to the
terms of the Master Lease, and this Lease Supplement shall be deemed to be a
part of, and shall be governed by the terms and conditions of the Master Lease.
For purposes of this Lease Supplement, capitalized terms which are used herein
but which are not otherwise defined herein shall have the meanings ascribed to
such terms in the Master Lease.
IN WITNESS WHEREOF, Lessee has caused this Lease Supplement to be duly
executed and delivered by its duly authorized officer, this 10th day of March,
1994.
LESSEE:
COCA-COLA BOTTLING CO. CONSOLIDATED
By: Brenda B. Jackson
Title: Vice President & Treasurer
Accepted in Atlanta, Georgia, this 11th day of March, 1994.
LESSOR:
COCA-COLA FINANCIAL CORPORATION
By: Chris Tambeaux
Title: Vice President