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):
April 23, 2003
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)
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
| (a) | Financial Statements. Not applicable. |
| (b) | Pro Forma Financial Information. Not applicable. |
| (c) | Exhibits. The following exhibit is filed herewith: |
| 99.1 | Press release issued on April 23, 2003. |
Item 9. Regulation FD Disclosure.
The following information is being furnished pursuant to Item 9 – Regulation FD Disclosure and Item 12 – Results of Operations and Financial Condition.
The Registrant issued a press release on April 23, 2003 covering the results of the first quarter of 2003.
Signatures
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 thereunto duly authorized.
| COCA-COLA BOTTLING CO. CONSOLIDATED (REGISTRANT) | ||||||
| Date: April 25, 2003 |
BY: |
/s/ DAVID V. SINGER | ||||
| David V. Singer Principal Financial Officer of the Registrant and Executive 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: | |
| April 23, 2003 |
0-9286 |
COCA-COLA BOTTLING CO. CONSOLIDATED
EXHIBIT INDEX
| Exhibit No. |
Exhibit Description | |
| 99.1 |
Press release issued on April 23, 2003. |
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: |
David V. Singer Executive VP & CFO 704-557-4604 |
| FOR IMMEDIATE RELEASE |
Symbol: COKE | |
| April 23, 2003 |
Quoted:The Nasdaq Stock Market (National Market) |
Coca-Cola Bottling Co. Consolidated Reports First Quarter 2003 Results
| • | Physical case volume increased by 1% |
| • | Operating cash flow* declined by 14% |
| • | Net income was $1.4 million down $2 million from prior year |
CHARLOTTE, NC — Coca-Cola Bottling Co. Consolidated today announced it earned $1.4 million or $.16 per share for the first quarter of 2003. This compares to net income of $3.4 million or $.39 per share for the first quarter of 2002.
The Company’s first quarter results reflect below expected sales, especially in the high margin cold drink channels. Net sales were up 1.3% reflecting a 1% increase in bottle/can volume, higher contract sales and a small decrease in average revenue per case. Volume was up 4% in our take home channels, but was down 5% in our cold drink channels. Cost of goods per unit was approximately flat as slightly higher raw material costs were offset by lower manufacturing costs. As a result, the Company’s gross margin was approximately even with the prior year. Selling, general and administrative (“SG&A”) expenses were up $5.7 million or approximately 6%, which led to a $5.3 million or 14% decline in operating cash flow*. The growth in SG&A expense includes an increase of $1 million in employee benefit costs, primarily reflecting increases in the cost for pension and health benefits. In addition, the cost of property and casualty insurance was up by $1.1 million and fuel costs were up 30% or about $.6 million. Interest expense declined $1.8 million or approximately 15%, offsetting a portion of the operating cash flow* decline.
J. Frank Harrison, III, Chairman and CEO, said, “The Company’s financial results in the first quarter were disappointing. Our financial results reflect lower margins driven by softer than anticipated sales, particularly in our cold drink channels, higher benefit costs as well as the fixed nature of many of our operating expenses.” Mr. Harrison said, “The shift of the Easter holiday from March in 2002 to April in 2003 impacts first quarter volume comparisons, primarily in the take home channels. Severe weather led to closings of businesses in portions of our territories in the first quarter, which reduced sales in the Company’s cold drink channels.” Mr. Harrison also
said, “Despite the disappointing earnings, cash flow continues to be strong as reflected by a decrease in debt and lease liabilities of more than $20 million over the past twelve months, despite the March 28, 2003 purchase of half of The Coca-Cola Company’s interest in Piedmont Coca-Cola Bottling Partnership for $53.5 million.”
William B. Elmore, President and COO, said, “Although overall volume was below expectations, Dasani continued its solid growth trend, with volume up nearly 20% in the first quarter of 2003. Another bright spot in the quarter was the growth in our take home business, which was up 4%, despite the shift in Easter holiday sales. This growth reflects innovation led by Vanilla Coke, diet Vanilla Coke, diet Cherry Coke and Minute Maid Lemonade.” Mr. Elmore also said that a portion of the Company’s weakness in financial results reflects the shift in distribution methodology which was made during 2002 from conventional routing to a pre-sell system. The cost of a pre-sell system is more fixed in nature than a conventional system, which lowers operating margins in the seasonally softer first and fourth quarters. This seasonal softness was exacerbated in the first quarter of 2003 by the shifting of Easter holiday sales and the adverse impact of weather on the Company’s higher margin cold drink business.
| * | Operating Cash Flow is defined as Income from Operations plus Depreciation and Amortization Expense. Included in the attached pages of this release is a reconciliation of this non-GAAP measure to a measurement required by accounting principles generally accepted in the United States of America. The Company believes that operating cash flow is a useful measurement tool that is commonly used in evaluating the financial performance and in business valuations of soft drink bottlers by investors. |
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 statements include the effect of the shift of the Easter holiday from March 2002 to April 2003 and the effect of the shift in distribution methodology from conventional routing to a pre-sell system. 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. 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, reduced marketing and advertising spending by The Coca-Cola Company or other beverage companies; material changes from expectations in the cost of raw materials; higher than expected insurance premiums; lower than anticipated return on pension plan assets; higher than anticipated health care costs; war or other civil disturbances; the inability of our aluminum can or PET bottle suppliers to meet our demand; higher than expected fuel prices; changes in financial markets; an inability to meet projections in acquired bottling territories 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)
| First Quarter |
||||||||
| 2003 |
2002 |
|||||||
| Net sales |
$ |
275,200 |
|
$ |
271,618 |
| ||
| Cost of sales |
|
140,306 |
|
|
137,144 |
| ||
| Gross margin |
|
134,894 |
|
|
134,474 |
| ||
| Selling, general and administrative expenses |
|
102,125 |
|
|
96,412 |
| ||
| Depreciation expense |
|
19,015 |
|
|
17,985 |
| ||
| Amortization of goodwill and intangibles |
|
698 |
|
|
687 |
| ||
| Income from operations |
|
13,056 |
|
|
19,390 |
| ||
| Interest expense |
|
10,371 |
|
|
12,140 |
| ||
| Other income (expense), net |
|
(199 |
) |
|
(899 |
) | ||
| Minority interest |
|
116 |
|
|
759 |
| ||
| Income before income taxes |
|
2,370 |
|
|
5,592 |
| ||
| Federal and state income taxes |
|
963 |
|
|
2,214 |
| ||
| Net income |
$ |
1,407 |
|
$ |
3,378 |
| ||
| Basic net income per share |
$ |
.16 |
|
$ |
.39 |
| ||
| Diluted net income per share |
$ |
.16 |
|
$ |
.38 |
| ||
| Weighted average number of common shares outstanding |
|
9,043 |
|
|
8,773 |
| ||
| Weighted average number of common shares outstanding—assuming dilution |
|
9,043 |
|
|
8,857 |
| ||
| Reconciliation of Operating Cash Flow |
||||||||
| Income from operations |
$ |
13,056 |
|
$ |
19,390 |
| ||
| Amortization of goodwill and intangibles |
|
698 |
|
|
687 |
| ||
| Depreciation expense |
|
19,015 |
|
|
17,985 |
| ||
| Operating cash flow |
$ |
32,769 |
|
$ |
38,062 |
| ||
Certain prior year amounts have been reclassified to conform to current year classifications.
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands
| March 30, 2003 |
March 31, 2002 | |||||
| ASSETS |
||||||
| Current Assets: |
||||||
| Cash |
$ |
7,162 |
$ |
9,172 | ||
| Accounts receivable, trade, net |
|
79,341 |
|
81,303 | ||
| Accounts receivable from The Coca-Cola Company |
|
13,134 |
|
15,475 | ||
| Accounts receivable, other |
|
5,649 |
|
6,385 | ||
| Inventories |
|
38,469 |
|
40,852 | ||
| Prepaid expenses and other current assets |
|
9,334 |
|
5,304 | ||
| Total current assets |
|
153,089 |
|
158,491 | ||
| Property, plant and equipment |
|
853,681 |
|
826,018 | ||
| Less-Accumulated depreciation and amortization |
|
390,956 |
|
347,045 | ||
| Property, plant and equipment, net |
|
462,725 |
|
478,973 | ||
| Leased property under capital leases |
|
47,618 |
|
60,761 | ||
| Less-Accumulated amortization |
|
3,538 |
|
9,982 | ||
| Leased property under capital leases, net |
|
44,080 |
|
50,779 | ||
| Other assets |
|
58,521 |
|
70,729 | ||
| Franchise rights, net |
|
522,189 |
|
506,277 | ||
| Goodwill, net |
|
100,754 |
|
100,754 | ||
| Other identifiable intangible assets, net |
|
10,398 |
|
8,026 | ||
| Total |
$ |
1,351,756 |
$ |
1,374,029 | ||
Certain prior year amounts have been reclassified to conform to current year classifications.
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands
| March 30, 2003 |
March 31, 2002 |
|||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current Liabilities: |
||||||||
| Portion of long-term debt payable within one year |
$ |
39 |
|
$ |
147,431 |
| ||
| Current portion of obligations under capital leases |
|
3,969 |
|
|
5,715 |
| ||
| Accounts payable, trade |
|
38,617 |
|
|
35,476 |
| ||
| Accounts payable to The Coca-Cola Company |
|
5,227 |
|
|
4,817 |
| ||
| Other accrued liabilities |
|
65,543 |
|
|
68,257 |
| ||
| Accrued compensation |
|
11,354 |
|
|
7,817 |
| ||
| Accrued interest payable |
|
16,577 |
|
|
15,122 |
| ||
| Total current liabilities |
|
141,326 |
|
|
284,635 |
| ||
| Deferred income taxes |
|
156,330 |
|
|
160,578 |
| ||
| Pension and retiree benefit obligations |
|
39,286 |
|
|
32,941 |
| ||
| Other liabilities |
|
60,248 |
|
|
60,510 |
| ||
| Obligations under capital leases |
|
41,771 |
|
|
41,811 |
| ||
| Long-term debt |
|
845,978 |
|
|
717,625 |
| ||
| Total liabilities |
|
1,284,939 |
|
|
1,298,100 |
| ||
| Minority interest |
|
31,819 |
|
|
56,452 |
| ||
| Stockholders’ Equity: |
||||||||
| Common Stock |
|
9,704 |
|
|
9,454 |
| ||
| Class B Common Stock |
|
3,029 |
|
|
3,009 |
| ||
| Capital in excess of par value |
|
97,220 |
|
|
89,559 |
| ||
| Retained earnings (accumulated deficit) |
|
5,189 |
|
|
(8,929 |
) | ||
| Accumulated other comprehensive loss |
|
(18,890 |
) |
|
(12,362 |
) | ||
|
|
96,252 |
|
|
80,731 |
| |||
| Less-Treasury stock, at cost: |
||||||||
| Common |
|
60,845 |
|
|
60,845 |
| ||
| Class B Common |
|
409 |
|
|
409 |
| ||
| Total stockholders’ equity |
|
34,998 |
|
|
19,477 |
| ||
| Total |
$ |
1,351,756 |
|
$ |
1,374,029 |
| ||
Certain prior year amounts have been reclassified to conform to current year classifications.