-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BX8ThdFG16tJz41TBA+Qm5vmKG8ze2GuCmiXNsKIr0TL+h9QIrOp6C82dZ2OSafp xzwgGJb2QVv3vx8YaS+WwA== 0000909567-05-001155.txt : 20050720 0000909567-05-001155.hdr.sgml : 20050720 20050720085247 ACCESSION NUMBER: 0000909567-05-001155 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050720 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050720 DATE AS OF CHANGE: 20050720 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COTT CORP /CN/ CENTRAL INDEX KEY: 0000884713 STANDARD INDUSTRIAL CLASSIFICATION: BOTTLED & CANNED SOFT DRINKS CARBONATED WATERS [2086] IRS NUMBER: 000000000 FISCAL YEAR END: 0125 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31410 FILM NUMBER: 05962789 BUSINESS ADDRESS: STREET 1: 207 QUEENS QUAY W STREET 2: SUITE 340 CITY: TORONTO ONTARIO CANA STATE: A6 ZIP: 00000 BUSINESS PHONE: 4162033898 MAIL ADDRESS: STREET 1: 207 QUEENS QUAY W STREET 2: SUITE 340 CITY: TORONTO ONTARIO STATE: A6 ZIP: 00000 8-K 1 t17427e8vk.txt 8-K UNITED STATES 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 July 20, 2005 ----------------------------------- (Date of earliest reported event) COTT CORPORATION ----------------------------------- (Exact name of registrant as specified in its charter) CANADA 000-19914 None - ------------------------------- ------------------------ ---------------------- (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation or organization) Identification Number) 207 Queen's Quay West, Suite 340 Toronto, Ontario M5J 1A7 -------------------------------------------------------- (Address of principal executive offices) (Postal Code) (416)203-3898 -------------------------------------------------------- (Registrant's telephone number, including area code) N/A -------------------------------------------------------------- (Former name or former address, if changed since last report) 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 (see General Instruction A.2. below): [ ] 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 OPERATION AND FINANCIAL CONDITION On July 20, 2005 Cott Corporation issued a press release announcing its financial results for the three and six month periods ended July 2, 2005. This press release is furnished herewith as Exhibit 99.1 of this Form 8-K and is incorporated by reference into this Item 2.02 as if fully set forth herein. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) 99.1 Press Release dated July 20, 2005 announcing Cott Corporation's earnings for the three and six month periods ended July 2, 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 thereunto duly authorized. COTT CORPORATION (Registrant) Date: July 20, 2005 /s/ Tina Dell' Aquila ------------------------------------------------- Tina Dell' Aquila Vice President, Controller & Assistant Secretary and Interim Chief Financial Officer EXHIBIT INDEX Number Description - ------ ----------- 99.1 Press Release dated July 20, 2005 announcing Cott Corporation's earnings for the three and six month periods ended July 2, 2005. EX-99.1 2 t17427exv99w1.txt EX-99.1 EXHIBIT 99.1 COTT CORPORATION ANNOUNCES SECOND QUARTER RESULTS ------------------------------------------------- o SALES GROWTH OF 6.3% o EPS OF $0.35 o 2005 GUIDANCE REDUCED (ALL INFORMATION IN U.S. DOLLARS) TORONTO, JULY 20, 2005 -- Cott Corporation (NYSE:COT; TSX:BCB) today announced results for the second quarter ended July 2, 2005. Sales continued to grow, up 6.3% in the quarter to $492.7 million compared to $463.7 million in the second quarter last year. Each of the Company's divisions reported sales growth in the quarter and in the first half of the year, despite an increasingly competitive environment in all markets. Excluding the impact of acquisitions and foreign exchange, second quarter sales were up 3.5%. Earnings per diluted share were $0.35, compared with $0.41 in the second quarter last year. "Sales continued to grow this quarter despite an environment of general category softness and aggressive national brand promotions," said John K. Sheppard, Cott's president and chief executive officer. "Building upon the significant sales gains in the second quarter last year, these results demonstrate the ongoing commitment of our customers to their retailer brand soft drink programs." SECOND QUARTER - -------------- Sales in the Company's U.S. business unit were up 4.1%, up 2.4% excluding the impact of acquisitions. In the U.K./Europe division, sales rose 12.0%, 9.2% excluding foreign exchange. In Canada, sales were up 8.7% as compared to the previous year, down 0.5% excluding foreign exchange. Sales for the International division were up 24.2% to $20.0 million, of which sales in Mexico amounted to $14.6 million. Gross margin for the quarter was 16.4% as compared to 18.4% in the second quarter of last year. The year-over-year margin decline reflects the higher fixed costs related to the Company's capacity action plan, including the start-up of the Texas plant, and changes in product mix toward lower margin water, particularly in the U.S. A benefit of $4.9 million relating to the settlement of a lawsuit against suppliers of high fructose corn syrup was recorded in cost of sales. Operating income of $45.2 million was down 12.9% from last year's $51.9 million. During the quarter, Cott announced that its new production facility in Fort Worth, Texas had begun shipping to customers on schedule. With two of its three lines now operating and the third scheduled to begin later in the summer, the Company expects to produce six million cases from the facility in 2005, and over time expects to grow to a full annual capacity of 40 million cases. FIRST HALF 2005 - --------------- Sales in the first six months were $888.2 million, up 6.4% versus prior year, an increase of 5.1% excluding the impact of foreign exchange and up 3.4% excluding both foreign exchange and acquisitions. The U.S. division saw sales grow by 5.7%, 3.6% excluding acquisitions. In the U.K./Europe division, sales were up 7.5% for the first half, up 4.7% excluding the impact of foreign exchange, while in Canada sales rose by 6.4%, down 1.9% excluding foreign exchange. Sales in the International division were up 15.9% to $35.7 million of which sales in Mexico were $25.1 million, representing a 32.8% top-line growth in Cott's newest market in the first half of the year. Gross margin for the first half of the year was 15.4%, including the benefit of the high fructose corn syrup settlement, compared to 18.7% last year. Operating income was $64.5 million, down 22.8% from last year. "Earnings for the first half of the year reflect the impact of increased ingredient and packaging costs and the timing of pricing passed through to our customers," added Sheppard. "These factors are being offset by increased plant efficiencies. As we've said before, we expect that our back-to-basics plan will deliver a positive impact in the second half of the year." 2005 OUTLOOK - ------------ In light of continuing category softness and the shift to lower margin water, Cott is revising its full year guidance. Sales growth for the year is now expected to be between 6% and 8% (down from previous guidance of between 8-10%). EBITDA is now expected to be between $209 million and $214 million (down from previous guidance of between $220 million and $230 million). Earnings per diluted share are now expected to be between $1.06 and $1.11 (down from $1.14 to $1.18). Capital expenditures for the year are projected to be $95 million. SECOND QUARTER RESULTS CONFERENCE CALL - -------------------------------------- Cott Corporation will host a conference call today, Wednesday, July 20 at approximately 10 AM ET to discuss second quarter financial results. For those who wish to listen to the presentation, there is a listen-only, dial-in telephone line, which can be accessed as follows: North America: (800) 796-7558 International: (416) 640-1907 WEBCAST - ------- To access Cott's second quarter conference call with analysts over the Internet, please visit the Company's website at http://www.cott.com. Please log on 15 minutes early to register, download, and install any necessary audio/video software. For those who are unable to access the live broadcast, a replay will be available at Cott's website following these events until August 3, 2005. ABOUT COTT CORPORATION - ---------------------- Cott Corporation is the world's largest retailer brand soft drink supplier, with the leading take home carbonated soft drink market shares in this segment in its core markets of the United States, Canada and the United Kingdom. NON-GAAP MEASURE - ---------------- EBITDA is defined as net income before interest, income taxes, depreciation and amortization. Cott uses operating income as its primary measure of performance and cash flow from operations as its primary measure of liquidity. Nevertheless, Cott presents EBITDA in its filings for several reasons. Cott uses multiples of EBITDA and discounted cash flows in determining the value of its operations. In addition, Cott uses "cash return on assets", a financial measure calculated by dividing Cott's annualized EBITDA by its aggregate operating assets, for the purposes of calculating performance-related bonus compensation for its management employees, because that measure reflects the ability of management to generate cash while preserving assets. Finally, Cott includes EBITDA in its filings because it believes that its current and potential investors use multiples of EBITDA to make investment decisions about Cott. Investors should not consider EBITDA an alternative to net income, nor to cash provided by operating activities, nor any other indicators of performance or liquidity which have been determined in accordance with U.S. or Canadian GAAP. Cott's method of calculating EBITDA may differ from the methods used by other companies and, accordingly, Cott's EBITDA may not be comparable to similarly titled measures used by other companies. A reconciliation of the Non-GAAP financial measures is attached and also available in the Investor Relations/Financial Reports section of Cott's website. SAFE HARBOR STATEMENTS - ---------------------- This press release contains forward-looking statements reflecting management's current expectations regarding future results of operations, economic performance, financial condition and achievements of the Company. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties are detailed from time to time in the Company's filings with the appropriate securities commissions, and include, without limitation, stability of procurement costs for raw and packaging materials, the Company's ability to restore plant efficiencies and lower logistics costs, adverse weather conditions, competitive activities by national, regional and retailer brand beverage manufacturers, the Company's ability to develop new products that appeal to consumer tastes, the Company's ability to identify acquisition candidates, successfully consummate acquisitions and integrate acquired businesses into its operations, fluctuations in currency versus the U.S. dollar, the uncertainties of litigation, loss of key customers and retailers' continued commitment to their retailer brand beverage programs. The foregoing list of factors is not exhaustive. The Company undertakes no obligation to publicly update or revise any forward-looking statements. COTT CONTACTS: Media Relations Kerry Morgan Tel: (416) 203-5613 Investor Relations Edmund O'Keeffe Tel: (416) 203-5617 EXHIBIT 1 COTT CORPORATION CONSOLIDATED STATEMENTS OF INCOME (IN MILLIONS OF US DOLLARS EXCEPT PER SHARE AMOUNTS, US GAAP) UNAUDITED
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED ----------------------------- ----------------------------- JULY 2, 2005 JULY 3, 2004 JULY 2, 2005 JULY 3, 2004 ------------- ------------- ------------- ------------- SALES $ 492.7 $ 463.7 $ 888.2 $ 834.6 Cost of sales 412.0 378.2 751.5 678.7 ------------ ------------ ------------ ------------ GROSS PROFIT 80.7 85.5 136.7 155.9 Selling, general and administrative expenses 35.5 34.1 72.4 72.8 Unusual items - (0.5) (0.2) (0.5) ------------ ------------ ------------ ------------ OPERATING INCOME 45.2 51.9 64.5 83.6 Other expense, net (0.1) - (0.2) 0.3 Interest expense, net 6.6 6.6 13.1 13.2 Minority interest 1.4 1.2 2.3 2.2 ------------ ------------ ------------ ------------ INCOME BEFORE INCOME TAXES AND EQUITY LOSS 37.3 44.1 49.3 67.9 Income taxes (12.3) (14.6) (16.0) (22.9) Equity loss - (0.1) - (0.2) ------------ ------------ ------------ ------------ NET INCOME $ 25.0 $ 29.4 $ 33.3 $ 44.8 ============ ============ ============ ============ VOLUME - 8 OZ EQUIVALENT CASES 326.0 328.6 598.3 598.7 NET INCOME PER COMMON SHARE Basic $ 0.35 $ 0.41 $ 0.47 $ 0.63 Diluted $ 0.35 $ 0.41 $ 0.46 $ 0.62
EXHIBIT 2 COTT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (IN MILLIONS OF US DOLLARS, US GAAP) UNAUDITED
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED --------------------------- --------------------------- JULY 2, 2005 JULY 3, 2004 JULY 2, 2005 JULY 3, 2004 ------------ ------------ ------------ ------------ OPERATING ACTIVITIES Net income $ 25.0 $ 29.4 $ 33.3 $ 44.8 Depreciation and amortization 15.9 15.0 32.7 30.0 Amortization of financing fees 0.3 0.1 0.3 0.3 Deferred income taxes 3.5 4.6 3.3 4.3 Minority interest 1.4 1.2 2.3 2.2 Equity loss - 0.1 - 0.2 Other non-cash items 0.8 0.3 0.5 0.6 Net change in non-cash working capital (12.7) (52.7) (16.9) (65.4) ----------- ----------- ----------- ----------- Cash provided by (used in) operating activities 34.2 (2.0) 55.5 17.0 ----------- ----------- ----------- ----------- INVESTING ACTIVITIES Additions to property, plant and equipment (26.7) (10.0) (54.8) (19.5) Acquisitions - - - (17.7) Other investing activities (1.6) 2.2 (2.1) 0.2 ----------- ----------- ----------- ----------- Cash used in investing activities (28.3) (7.8) (56.9) (37.0) ----------- ----------- ----------- ----------- FINANCING ACTIVITIES Payments of long-term debt (0.2) (0.3) (0.4) (2.5) Short-term borrowings (0.6) 4.3 (5.5) 6.4 Distributions to subsidiary minority shareowner (0.8) (1.0) (1.9) (2.2) Issue of common shares 0.9 7.7 1.8 9.9 Financing costs (0.5) - (2.6) - Other financing activities (0.1) (0.1) (0.2) (0.2) ----------- ----------- ----------- ----------- Cash provided by (used in) financing activities (1.3) 10.6 (8.8) 11.4 ----------- ----------- ----------- ----------- Effect of exchange rate changes on cash (0.1) (0.2) (0.5) (0.2) ----------- ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH 4.5 0.6 (10.7) (8.8) CASH, BEGINNING OF PERIOD 11.4 9.0 26.6 18.4 ----------- ----------- ----------- ----------- CASH, END OF PERIOD $ 15.9 $ 9.6 $ 15.9 $ 9.6 =========== =========== =========== ===========
EXHIBIT 3 COTT CORPORATION CONSOLIDATED BALANCE SHEETS (IN MILLIONS OF US DOLLARS, US GAAP)
UNAUDITED AUDITED JULY 2, 2005 JANUARY 1, 2005 ------------ --------------- ASSETS CURRENT ASSETS Cash $ 15.9 $ 26.6 Accounts receivable 226.3 184.3 Inventories 138.3 122.8 Prepaid and other expenses 12.4 9.7 ---------- ---------- 392.9 343.4 PROPERTY, PLANT AND EQUIPMENT 350.9 313.7 GOODWILL 88.4 88.8 INTANGIBLES AND OTHER ASSETS 259.7 276.1 ---------- ---------- $ 1,091.9 $ 1,022.0 ========== ========== LIABILITIES AND SHAREOWNERS' EQUITY CURRENT LIABILITIES Short-term borrowings $ 65.5 $ 71.4 Current maturities of long-term debt 0.8 0.8 Accounts payable and accrued liabilities 188.9 145.2 ---------- ---------- 255.2 217.4 LONG-TERM DEBT 272.4 272.5 DEFERRED INCOME TAXES 54.2 51.0 ---------- ---------- 581.8 540.9 MINORITY INTEREST 24.2 23.8 SHAREOWNERS' EQUITY Capital stock 289.4 287.0 Retained earnings 194.9 161.6 Accumulated other comprehensive income 1.6 8.7 ---------- ---------- 485.9 457.3 ---------- ---------- $ 1,091.9 $ 1,022.0 ========== ==========
EXHIBIT 4 COTT CORPORATION SEGMENT INFORMATION (IN MILLIONS OF US DOLLARS, US GAAP) UNAUDITED
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED ------------------------------ ----------------------------- JULY 2, 2005 JULY 3, 2004 JULY 2, 2005 JULY 3, 2004 ------------ ------------ ------------ ------------ SALES USA $ 354.4 $ 340.4 $ 648.7 $ 613.5 Canada 59.7 54.9 100.8 94.7 UK & Europe 57.9 51.7 101.5 94.4 International 20.0 16.1 35.7 30.8 Corporate 0.7 0.6 1.5 1.2 ----------- ----------- ----------- ----------- $ 492.7 $ 463.7 $ 888.2 $ 834.6 =========== =========== =========== =========== OPERATING INCOME (LOSS) USA $ 36.9 $ 39.9 $ 55.0 $ 71.0 Canada 5.5 6.3 5.9 6.7 UK & Europe 3.1 3.8 5.2 5.4 International 2.8 3.7 5.1 6.4 Corporate (3.1) (1.8) (6.7) (5.9) ----------- ----------- ----------- ----------- $ 45.2 $ 51.9 $ 64.5 $ 83.6 =========== =========== =========== ===========
EXHIBIT 5 COTT CORPORATION SUPPLEMENTARY INFORMATION - NON GAAP MEASURES (IN MILLIONS OF US DOLLARS) UNAUDITED
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED ------------------------------ ----------------------------- JULY 2, 2005 JULY 3, 2004 JULY 2, 2005 JULY 3, 2004 ------------ ------------ ------------ ------------ NET INCOME $ 25.0 $ 29.4 $ 33.3 $ 44.8 Depreciation and amortization 15.9 15.0 32.7 30.0 Interest expense, net 6.6 6.6 13.1 13.2 Income taxes 12.3 14.6 16.0 22.9 ----------- ----------- ----------- ----------- EBITDA $ 59.8 $ 65.6 $ 95.1 $ 110.9 =========== =========== =========== ===========
FOR THE YEAR ENDED DECEMBER 31, 2005 -- GUIDANCE NET INCOME $77 - $80 Depreciation and amortization $63 Interest expense, net $26 Income taxes and other $43 - $45 ----------- EBITDA $209 - $214 ===========
NON-GAAP MEASURE - ---------------- EBITDA is defined as net income before interest, income taxes, depreciation and amortization. Cott uses operating income as its primary measure of performance and cash flow from operations as its primary measure of liquidity. Nevertheless, Cott presents EBITDA in its filings for several reasons. Cott uses multiples of EBITDA and discounted cash flows in determining the value of its operations. In addition, Cott uses "cash return on assets," a financial measure calculated by dividing Cott's annualized EBITDA by its aggregate operating assets, for the purposes of calculating performance-related bonus compensation for its management employees, because that measure reflects the ability of management to generate cash while preserving assets. Finally, Cott includes EBITDA in its filings because it believes that its current and potential investors use multiples of EBITDA to make investment decisions about Cott. Investors should not consider EBITDA an alternative to net income, nor to cash provided by operating activities, nor any other indicators of performance or liquidity which have been determined in accordance with U.S. or Canadian GAAP. Cott's method of calculating EBITDA may differ from the methods used by other companies and, accordingly, Cott's EBITDA may not be comparable to similarly titled measures used by other companies. SAFE HARBOR STATEMENTS - ---------------------- This document contains forward-looking statements reflecting management's current expectations regarding future results of operations, economic performance, financial condition and achievements of the Company. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties are detailed from time to time in the Company's filings with the appropriate securities commissions, and include, without limitation, stability of procurement costs for raw and packaging materials, the Company's ability to restore plant efficiencies and lower logistics costs, adverse weather conditions, competitive activities by national, regional and retailer brand beverage manufacturers, the Company's ability to develop new products that appeal to consumer tastes, the Company's ability to identify acquisition candidates, successfully consummate acquisitions and integrate acquired businesses into its operations, fluctuations in currency versus the U.S. dollar, the uncertainties of litigation, loss of key customers and retailers' continued commitment to their retailer brand beverage programs. The foregoing list of factors is not exhaustive. The Company undertakes no obligation to publicly update or revise any forward-looking statements. -----END PRIVACY-ENHANCED MESSAGE-----