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):
June 2, 2005
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 June 2, 2005, Coca-Cola Bottling Co. Consolidated issued its Report to Stockholders for the quarter ended April 3, 2005. A copy of the Report to Stockholders is furnished as Exhibit 99.1 hereto.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
99.1 Report to Stockholders for the quarter ended April 3, 2005.
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 hereunto duly authorized.
| COCA-COLA BOTTLING CO. CONSOLIDATED |
| (REGISTRANT) |
| Date: June 2, 2005 | 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: | |
| June 2, 2005 |
0-9286 |
COCA-COLA BOTTLING CO. CONSOLIDATED
EXHIBIT INDEX
| Exhibit No. |
Exhibit Description | |
| 99.1 | Report to Stockholders for the quarter ended April 3, 2005. | |
Exhibit 99.1
Report to Stockholders: For the Period Ended April 3, 2005
Dear Stockholders:
Your Company reported net income for the first quarter of 2005 of $.7 million or $.08 per share compared to net income of $2.8 million or $.31 per share for the first quarter of 2004. Income from operations in the first quarter of 2004 included a favorable nonrecurring item of approximately $2 million related to the settlement of certain customer-related marketing programs between the Company and The Coca-Cola Company.
The Company’s results in the first quarter of 2005 reflected revenue growth of 8%. Approximately half of the revenue increase was driven by franchise bottle/can revenues and half reflected higher contract sales to other Coca-Cola bottlers. The increase in franchise bottle/can sales reflected a healthy balance between growth in volume and average revenue per case as both volume and average revenue per case increased by approximately 2%. While this combination of volume growth and price growth historically would have yielded strong operating income results, operating income was negatively impacted due to a significant increase in certain costs, with raw material packaging costs increasing by more than 10% and fuel costs up more than 20%.
We believe that some of these cost increases will subside in the future. As a result, we have targeted lower increases in net selling prices than would be required to fully cover our cost increases. We believe our long-term results will benefit from these actions despite the short-term impact on operating margins. The Company continues to focus on minimizing growth in operating expenses not only to help offset some of the impact of increases in packaging materials and fuel costs but also to meet the Company’s ongoing objective of optimizing operating efficiency.
We also continue to focus on reducing debt through limiting capital spending and deliberate management of working capital. Debt at the end of the first quarter of 2005 was $70 million lower than at the end of the first quarter of 2004.
Bottle/can volume in the first quarter of 2005 grew across all major product categories. Our sugar carbonated business grew slightly more than 1%, its first increase in a number of years. Diet carbonated volume increased by 2% on top of almost 8% growth a year ago and our noncarbonated beverages grew by more than 8% in the first quarter of 2005. Product innovation continues to be an important factor in the Company’s overall volume and financial results. Our new energy drink offerings of Full Throttle and Rock Star are on a solid growth trajectory and this product category delivers profit margins that are more than twice the margins of our core carbonated soft drink products. We eagerly anticipate the introduction of Coca-Cola Zero in the second quarter of 2005 and other new products over the remainder of 2005.
| J. Frank Harrison, III Chairman and Chief Executive Officer |
William B. Elmore President and Chief Operating Officer |
CONSOLIDATED BALANCE SHEETS
In Thousands
| Unaudited April 3, 2005 |
Jan. 2, 2005 |
Unaudited March 28, 2004 | |||||||
| Assets |
|||||||||
| Current Assets: |
|||||||||
| Cash |
$ | 9,068 | $ | 8,885 | $ | 11,033 | |||
| Trade accounts receivable, net |
88,034 | 82,036 | 81,490 | ||||||
| Accounts receivable, other |
21,246 | 16,686 | 26,059 | ||||||
| Inventories |
54,604 | 48,886 | 51,598 | ||||||
| Cash surrender value of life insurance, net |
20,009 | ||||||||
| Prepaid expenses and other current assets |
10,423 | 7,935 | 9,321 | ||||||
| Total current assets |
183,375 | 164,428 | 199,510 | ||||||
| Property, plant and equipment, net |
408,793 | 418,853 | 432,282 | ||||||
| Leased property under capital leases, net |
75,954 | 76,857 | 74,810 | ||||||
| Other assets |
26,738 | 25,270 | 26,922 | ||||||
| Franchise rights, net |
520,672 | 520,672 | 520,672 | ||||||
| Goodwill, net |
102,049 | 102,049 | 102,049 | ||||||
| Other identifiable intangible assets, net |
5,525 | 5,934 | 8,256 | ||||||
| Total |
$ | 1,323,106 | $ | 1,314,063 | $ | 1,364,501 | |||
| Liabilities and Stockholders’ Equity |
|||||||||
| Current Liabilities: |
|||||||||
| Current portion of long-term debt |
$ | 8,000 | $ | 39 | |||||
| Current portion of obligations under capital leases |
$ | 1,857 | 1,826 | 1,830 | |||||
| Accounts payable and accrued expenses |
138,339 | 128,671 | 134,065 | ||||||
| Total current liabilities |
140,196 | 138,497 | 135,934 | ||||||
| Deferred income taxes |
167,906 | 170,437 | 157,835 | ||||||
| Other liabilities |
123,604 | 122,762 | 125,819 | ||||||
| Obligations under capital leases |
78,726 | 79,202 | 75,767 | ||||||
| Long-term debt |
709,439 | 700,039 | 779,739 | ||||||
| Total liabilities |
1,219,871 | 1,210,937 | 1,275,094 | ||||||
| Minority interest |
39,207 | 38,687 | 35,318 | ||||||
| Stockholders’ equity |
64,028 | 64,439 | 54,089 | ||||||
| Total |
$ | 1,323,106 | $ | 1,314,063 | $ | 1,364,501 | |||
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Data)
| First Quarter | ||||||
| 2005 |
2004 | |||||
| Net sales |
$ | 306,257 | $ | 282,727 | ||
| Cost of sales, excluding depreciation expense shown below |
166,315 | 142,210 | ||||
| Gross margin |
139,942 | 140,517 | ||||
| Selling, delivery and administrative expenses, excluding |
109,111 | 106,570 | ||||
| Depreciation expense |
17,196 | 17,652 | ||||
| Amortization of intangibles |
409 | 795 | ||||
| Income from operations |
13,226 | 15,500 | ||||
| Interest expense |
11,498 | 10,308 | ||||
| Minority interest |
520 | 447 | ||||
| Income before income taxes |
1,208 | 4,745 | ||||
| Income taxes |
489 | 1,950 | ||||
| Net income |
$ | 719 | $ | 2,795 | ||
| Basic net income per share |
$ | .08 | $ | .31 | ||
| Diluted net income per share |
$ | .08 | $ | .31 | ||
| Weighted average number of common shares outstanding |
9,083 | 9,063 | ||||
| Weighted average number of common shares outstanding — assuming dilution |
9,083 | 9,063 | ||||
| Cash dividends per share |
||||||
| Common Stock |
$ | .25 | $ | .25 | ||
| Class B Common Stock |
$ | .25 | $ | .25 | ||
STOCKHOLDER INFORMATION
Corporate Address
The corporate office is located at 4100 Coca-Cola Plaza, Charlotte, NC 28211. The mailing address is Coca-Cola Bottling Co. Consolidated, P.O. Box 31487, Charlotte, NC 28231.
Company Website
www.cokeconsolidated.com
Common Stock Listing
Coca-Cola Bottling Co. Consolidated is listed on the Nasdaq National Market System under the ticker symbol - COKE.
Stockholder Inquiries
The Company’s transfer agent is responsible for stockholder records, issuance of stock certificates and distribution of dividend payments and IRS Form 1099s. The transfer agent also administers plans for dividend reinvestment and direct deposit. Stockholder requests and inquiries concerning these matters are most efficiently answered by corresponding directly with Wachovia Bank, N.A., Attention: Corporate Trust Client Services NC-1153, 1525 West W.T. Harris Blvd. 3C3, Charlotte, NC 28288-1153. Communication may also be made by calling Toll Free (800) 829-8432, Local (704) 590-7375 or Fax (704) 590-7598.
Stockholder Reports
Additional copies of the Company’s Annual Report on Form 10-K or Quarterly Reports on Form 10-Q to the Securities and Exchange Commission (“SEC”) are available without charge upon written request to Steven D. Westphal, Senior Vice President and Chief Financial Officer, Coca-Cola Bottling Co. Consolidated, P.O. Box 31487, Charlotte, NC 28231. These filings are also available on the Company’s website as well as on the SEC’s website at www.sec.gov.
CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Included in this report 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: our expectations regarding certain cost increases subsiding in the next year or so; our business benefiting in the long-term from accepting narrower operating margins this year; the effects of new product introductions on sales volume; innovation in the second quarter and the remainder of 2005; our focus on reducing debt through limiting capital spending and working capital management; and our focus on minimizing growth in operating expenses.
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; terrorist attacks, war or other civil disturbances or national emergencies; and changes in financial markets. The forward-looking statements in this report 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.