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| Name | Symbol | Market | Type |
|---|---|---|---|
| iShares Short Duration High Income ETF CAD Hedged | TSX:CSD | Toronto | Exchange Traded Fund |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 15.22 | 15.12 | 15.25 | 0 | 01:00:00 |
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Cott Corporation (NYSE: COT) (TSX: BCB) today announced its results for the
first quarter ended March 30, 2013, the declaration of a quarterly dividend of
CAD$0.06 per common share, and the renewal of its share repurchase program.
First Quarter 2013 Results
Revenue of $505 million was lower by 4% (3% excluding the impact of foreign
exchange) compared to $524 million.
Gross profit as a percentage of revenue was 11.2% compared to 12.1%.
Selling, general and administrative ("SG&A") expenses of $41 million were
lower by 1% compared to $42 million.
Net income was effectively zero compared to $6 million. Earnings per diluted
share were effectively $0.00 compared to $0.06.
EBITDA was $40 million compared to $45 million.
"During the first quarter, soft volumes alongside a general market decline in
the carbonated soft drink category resulted in unfavorable fixed cost absorption
and adversely impacted our gross margin and overall profitability," commented
Jerry Fowden, Cott's Chief Executive Officer. "We remain firmly focused on being
a low cost, high service producer while following our 4 C's of Customer, Cost,
Capex and Cash. Meanwhile, we continue to implement our capital deployment
strategy which includes the payment of a quarterly dividend, the renewal of our
share repurchase program and the reduction of debt and interest costs,"
continued Mr. Fowden.
FIRST QUARTER 2013 PERFORMANCE SUMMARY
Total filled beverage case volume (excluding concentrate sales) was 193 million
cases compared to 203 million cases. The volume decline was due primarily to the
residual effect of exiting low gross margin business in North America last year,
a general market decline in the North American carbonated soft drink ("CSD")
category and loss of market share for the private label segment within the
overall CSD category in North America.
Revenue was lower by 4% (3% excluding the impact of foreign exchange) at $505
million. The revenue decline was due primarily to lower global volumes slightly
offset by an increase in average price per case in North America.
Gross profit as a percentage of revenue was 11.2% compared to 12.1%. The gross
margin decline was due primarily to lower global volumes which resulted in
unfavorable fixed cost absorption.
SG&A expenses were lower by 1% at $41 million compared to $42 million. The
decrease in SG&A was due primarily to reduced costs associated with our
information technology strategy.
Income before income taxes was $2 million compared to $7 million.
Income tax expense was essentially flat.
EBITDA was $40 million compared to $45 million.
FIRST QUARTER 2013 REPORTING SEGMENT HIGHLIGHTS
North America filled beverage case volume was 148 million cases compared to 156
million cases. Revenue was lower by 4% at $393 million due primarily to the
residual effect of exiting low gross margin business last year, a general market
decline in the North American CSD category and loss of market share for the
private label segment within the overall CSD category, slightly offset by higher
juice volumes and increased average price per case.
U.K. filled beverage case volume was 40 million cases compared to 41 million
cases. Revenue was lower by 2% (1% excluding the impact of foreign exchange) at
$97 million due primarily to lower volumes as a result of poor weather and the
narrowing of price gaps relative to national brands, particularly in the energy
and sports drinks categories.
Mexico filled beverage case volume was 5 million cases compared to 6 million
cases. Revenue was lower by 19% (21% excluding the impact of foreign exchange)
at $7 million due primarily to the continuing impact from the loss of a regional
brand license at the end of its term.
RCI concentrate volume was 64 million cases compared to 71 million cases.
Revenue was flat at $7 million due primarily to lower shipments to Asia, offset
by increased average price per case.
Declaration of Dividend
Cott has declared a dividend of CAD$0.06 per common share, payable in cash on
June 12, 2013 to shareowners of record at the close of business on May 30, 2013.
Cott intends to pay a regular quarterly dividend on its common shares subject
to, among other things, the best interests of its shareowners, Cott's results of
operations, cash balances and future cash requirements, financial condition,
statutory regulations and covenants set forth in Cott's asset-based credit
lending facility and indentures governing the Senior Notes due in 2017 and
Senior Notes due in 2018, as well as other factors that the Board of Directors
may deem relevant from time to time.
Share Repurchase Program
Cott's Board of Directors has approved the renewal of its share repurchase
program, subject to compliance with the annual limits established by the Toronto
Stock Exchange ("TSX"), for up to 5% of Cott's outstanding common shares over a
12-month period commencing upon the expiration of Cott's currently effective
share repurchase program on May 21, 2013. Cott's common shares may be purchased
under the program in open market transactions and privately negotiated
repurchases through either a 10b5-1 automatic trading plan or at management's
discretion in compliance with regulatory requirements, and given market, cost
and other considerations.
Subject to completion of appropriate filings with and approval by the TSX,
repurchases will be made through the facilities of the TSX, the New York Stock
Exchange ("NYSE"), or by such other means as may be permitted by the TSX and/or
the NYSE. The rules and policies of the TSX contain restrictions on the number
of shares that can be repurchased over a 12-month period, and also contain
restrictions on the number of shares that can be purchased on any given day,
based on the average daily trading volumes of the common shares on the TSX.
Similarly, the safe harbor conditions of Rule 10b-18 impose certain limitations
on the number of shares that can be purchased on the NYSE per day.
"We are pleased to announce the renewal of our share repurchase authorization,
which we intend to manage opportunistically as an integral part of our balanced
capital deployment strategy, which alongside our quarterly dividend, is designed
to return approximately 30% of our free cash flow to shareowners," continued Mr.
Fowden.
There can be no assurance as to the precise number of shares, if any, that will
be repurchased under the share repurchase program, or the aggregate dollar
amount of the shares actually purchased. Cott may discontinue purchases at any
time, subject to compliance with applicable regulatory requirements. Shares
purchased pursuant to the share repurchase program will be cancelled.
First Quarter Results Conference Call
Cott Corporation will host a conference call today, May 1, 2013, at 10:00 a.m.
EDT, to discuss first quarter results, which can be accessed as follows:
North America: (877) 407-8031
International: (201) 689-8031
A live audio webcast will be available through Cott's website at
http://www.cott.com. The earnings conference call will be recorded and
archived for playback on the investor relations section of the website for a
period of two weeks following the event.
About Cott Corporation
Cott is one of the world's largest producers of beverages on behalf of
retailers, brand owners and distributors. Cott produces multiple types of
beverages in a variety of packaging formats and sizes, including carbonated soft
drinks, 100% shelf stable juice and juice-based products, clear, still and
sparkling flavored waters, energy products, sports products, new age beverages,
and ready-to-drink teas, as well as alcoholic beverages for brand owners. Cott's
large manufacturing footprint, substantial research and development capability
and high-level of quality and customer service enables Cott to offer its
customers a strong value-added proposition of low cost, high quality products.
With approximately 4,000 employees, Cott operates manufacturing facilities in
the United States, Canada, the United Kingdom and Mexico. Cott also develops and
manufactures beverage concentrates, which it exports to over 50 countries around
the world.
Defined Terms
Certain defined terms used in this press release include the following. "GAAP"
means U.S. generally accepted accounting principles. "Total filled beverage case
volume" means filled beverage 8-ounce equivalents. "EBITDA" means GAAP earnings
(loss) before interest, taxes, depreciation and amortization. See the
accompanying reconciliation of Cott's EBITDA to its GAAP net income, as well as
the "Non-GAAP Measures" paragraph below.
Non-GAAP Measures
To supplement its reporting of financial measures determined in accordance with
GAAP, Cott utilizes certain non-GAAP financial measures. Cott excludes from GAAP
revenue the impact of foreign exchange to separate the impact of currency
exchange rate changes from Cott's results of operations. Cott utilizes EBITDA to
separate the impact of certain items from the underlying business. Because Cott
uses these adjusted financial results in the management of its business,
management believes this supplemental information is useful to investors for
their independent evaluation and understanding of Cott's underlying business
performance and the performance of its management. The non-GAAP financial
measures described above are in addition to, and not meant to be considered
superior to, or a substitute for, Cott's financial statements prepared in
accordance with GAAP. In addition, the non-GAAP financial measures included in
this earnings announcement reflect management's judgment of particular items,
and may be different from, and therefore may not be comparable to, similarly
titled measures reported by other companies.
Safe Harbor Statements
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 conveying management's expectations as to the future based
on plans, estimates and projections at the time Cott makes the statements.
Forward-looking statements involve inherent risks and uncertainties and Cott
cautions you that a number of important factors could cause actual results to
differ materially from those contained in any such forward-looking statement.
The forward-looking statements contained in this press release include, but are
not limited to, statements related to the declaration of future dividends, the
amount of shares that may be repurchased under the share repurchase program,
future financial operating results and related matters. The forward-looking
statements are based on assumptions regarding management's current plans and
estimates. Management believes these assumptions to be reasonable but there is
no assurance that they will prove to be accurate.
Factors that could cause actual results to differ materially from those
described in this press release include, among others: Cott's ability to compete
successfully; changes in consumer tastes and preferences for existing products
and Cott's ability to develop and timely launch new products that appeal to such
changing consumer tastes and preferences; a loss of or reduction in business
with key customers, particularly Walmart; fluctuations in commodity prices and
Cott's ability to pass on increased costs to its customers, and the impact of
those increased prices on Cott's volumes; Cott's ability to manage its
operations successfully; currency fluctuations that adversely affect the
exchange between the U.S. dollar and the British pound sterling, the Euro, the
Canadian dollar, the Mexican peso and other currencies; Cott's ability to
maintain favorable arrangements and relationships with its suppliers; the
significant amount of Cott's outstanding debt and Cott's ability to meet its
obligations under its debt agreements; Cott's ability to maintain compliance
with the covenants and conditions under its debt agreements; fluctuations in
interest rates; credit rating changes; the impact of global financial events on
Cott's financial results; Cott's ability to fully realize the expected cost
savings and/or operating efficiencies from its restructuring activities; any
disruption to production at Cott's beverage concentrates or other manufacturing
facilities; Cott's ability to protect its intellectual property; compliance with
product health and safety standards; liability for injury or illness caused by
the consumption of contaminated products; liability and damage to Cott's
reputation as a result of litigation or legal proceedings; changes in the legal
and regulatory environment in which Cott operates; the impact of proposed taxes
on soda and other sugary drinks; enforcement of compliance with the Ontario
Environmental Protection Act; unseasonably cold or wet weather, which could
reduce the demand for Cott's beverages; the impact of national, regional and
global events, including those of a political, economic, business and
competitive nature; Cott's ability to recruit, retain, and integrate new
management and a new management structure; Cott's exposure to intangible asset
risk; Cott's ability to renew its collective bargaining agreements on
satisfactory terms; disruptions in Cott's information systems; compliance with
product health and safety standards; and the volatility of Cott's stock price.
The foregoing list of factors is not exhaustive. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date hereof. Readers are urged to carefully review and consider the various
disclosures, including but not limited to risk factors contained in Cott's
Annual Report on Form 10-K for the fiscal year ended December 29, 2012 and its
quarterly reports on Form 10-Q, as well as other periodic reports filed with the
securities commissions. Cott does not undertake to update or revise any of these
statements in light of new information or future events, except as expressly
required by applicable law.
Website: www.cott.com
COTT CORPORATION EXHIBIT 1
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions of U.S. dollars, except share and per share amounts, U.S. GAAP)
Unaudited
For the Three Months Ended
--------------------------
March 30, March 31,
2013 2012
------------ ------------
Revenue, net $ 505.4 $ 523.8
Cost of sales 449.0 460.4
------------ ------------
Gross profit 56.4 63.4
Selling, general and administrative expenses 41.3 41.8
Loss on disposal of property, plant & equipment - 0.6
------------ ------------
Operating income 15.1 21.0
Other expense (income), net 0.3 (0.2)
Interest expense, net 13.3 14.0
------------ ------------
Income before income taxes 1.5 7.2
Income tax expense 0.5 0.4
------------ ------------
Net income 1.0 6.8
Less: Net income attributable to non-
controlling interests 1.0 0.9
------------ ------------
Net income attributed to Cott Corporation $ - $ 5.9
============ ============
Net income per common share attributed to Cott
Corporation
Basic $ - $ 0.06
Diluted $ - $ 0.06
Weighted average outstanding shares (millions)
attributed to Cott Corporation
Basic 95.4 94.4
Diluted 95.8 95.7
Dividends declared per share $ 0.06 $ -
COTT CORPORATION EXHIBIT 2
CONSOLIDATED BALANCE SHEETS
(in millions of U.S. dollars, except share amounts, U.S. GAAP)
Unaudited
------------ ------------
March 30, December 29,
2013 2012
------------ ------------
ASSETS
Current assets
Cash & cash equivalents $ 93.0 $ 179.4
Accounts receivable, net of allowance of $6.1
($6.8 as of December 29, 2012) 223.3 199.4
Income taxes recoverable 1.0 1.2
Inventories 235.7 224.8
Prepaid expenses and other current assets 20.8 20.3
------------ ------------
Total current assets 573.8 625.1
Property, plant & equipment, net 486.8 490.9
Goodwill 129.7 130.3
Intangibles and other assets, net 305.6 315.4
Deferred income taxes 3.0 3.3
Other tax receivable 1.2 0.9
------------ ------------
Total assets $ 1,500.1 $ 1,565.9
============ ============
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt $ 2.0 $ 1.9
Accounts payable and accrued liabilities 238.4 287.7
------------ ------------
Total current liabilities 240.4 289.6
Long-term debt 601.4 601.8
Deferred income taxes 38.4 39.1
Other long-term liabilities 15.1 12.5
------------ ------------
Total liabilities 895.3 943.0
Equity
Capital stock, no par - 95,371,484 (December
29, 2012 - 95,371,484) shares issued 397.8 397.8
Additional paid-in-capital 41.1 40.4
Retained earnings 180.4 186.0
Accumulated other comprehensive loss (24.4) (12.4)
------------ ------------
Total Cott Corporation equity 594.9 611.8
Non-controlling interests 9.9 11.1
------------ ------------
Total equity 604.8 622.9
------------ ------------
Total liabilities and equity $ 1,500.1 $ 1,565.9
============ ============
COTT CORPORATION EXHIBIT 3
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of U.S. dollars, U.S. GAAP)
Unaudited
For the Three Months Ended
---------------------------
March 30, March 31,
2013 2012
------------ ------------
Operating Activities
Net income $ 1.0 $ 6.8
Depreciation & amortization 24.7 23.8
Amortization of financing fees 0.7 1.2
Share-based compensation expense 0.7 0.8
Loss on disposal of property, plant &
equipment - 0.6
Other non-cash items 0.3 (0.4)
Change in operating assets and liabilities,
net of acquisition:
Accounts receivable (28.2) (20.5)
Inventories (13.2) (16.5)
Prepaid expenses and other current assets (0.6) (1.8)
Other assets (0.1) 1.0
Accounts payable and accrued liabilities (44.1) (38.4)
Income taxes recoverable 0.2 0.3
------------ ------------
Net cash used in operating activities (58.6) (43.1)
------------ ------------
Investing Activities
Acquisition - (5.0)
Additions to property, plant & equipment (19.9) (17.7)
Additions to intangibles and other assets (0.2) (2.7)
Proceeds from insurance recoveries 0.4 -
------------ ------------
Net cash used in investing activities (19.7) (25.4)
------------ ------------
Financing Activities
Payments of long-term debt (0.5) (1.2)
Borrowings under ABL - 7.0
Payments under ABL - (7.0)
Distributions to non-controlling interests (2.1) (1.1)
Common shares repurchased and cancelled (2.9) -
------------ ------------
Net cash used in financing activities (5.5) (2.3)
------------ ------------
Effect of exchange rate changes on cash (2.6) 1.5
------------ ------------
Net decrease in cash & cash equivalents (86.4) (69.3)
Cash & cash equivalents, beginning of period 179.4 100.9
------------ ------------
Cash & cash equivalents, end of period $ 93.0 $ 31.6
============ ============
COTT CORPORATION EXHIBIT 4
SEGMENT INFORMATION
(in millions of U.S. dollars or 8 oz equivalent cases, U.S. GAAP)
Unaudited
For the Three Months Ended
---------------------------
March 30, March 31,
2013 2012
------------ ------------
Revenue
North America $ 393.2 $ 408.1
United Kingdom 97.4 99.2
Mexico 7.4 9.1
RCI 7.4 7.4
------------ ------------
$ 505.4 $ 523.8
============ ============
Operating income (loss)
North America $ 13.8 $ 17.3
United Kingdom - 3.2
Mexico (0.7) (1.3)
RCI 2.0 1.8
------------ ------------
$ 15.1 $ 21.0
============ ============
Volume - 8 oz equivalent cases - Total
Beverage (including concentrate)
North America 172.6 179.6
United Kingdom 44.5 44.9
Mexico 4.9 5.9
RCI 63.5 71.0
------------ ------------
285.5 301.4
============ ============
Volume - 8 oz equivalent cases - Filled
Beverage
North America 148.0 156.4
United Kingdom 40.1 40.9
Mexico 4.9 5.9
RCI 0.2 -
------------ ------------
193.2 203.2
============ ============
COTT CORPORATION EXHIBIT 5
SUPPLEMENTARY INFORMATION - NON-GAAP - Analysis of Revenue by Reporting
Segment
Unaudited
For the Three Months Ended
-----------------------------------------------------
(in millions of U.S.
dollars, except
percentage amounts) March 30, 2013
-----------------------------------------------------
North United
Cott(1) America Kingdom Mexico RCI
--------- --------- --------- --------- ---------
Change in revenue $ (18.4) $ (14.9) $ (1.8) $ (1.7) $ -
Impact of foreign
exchange(2) 0.6 0.1 0.7 (0.2) -
--------- --------- --------- --------- ---------
Change excluding
foreign exchange $ (17.8) $ (14.8) $ (1.1) $ (1.9) $ -
--------- --------- --------- --------- ---------
Percentage change in
revenue -3.5% -3.7% -1.8% -18.7% 0.0%
--------- --------- --------- --------- ---------
Percentage change in
revenue excluding
foreign exchange -3.4% -3.6% -1.1% -20.9% 0.0%
--------- --------- --------- --------- ---------
(1) Cott includes the following reporting segments: North America, United
Kingdom, Mexico and RCI.
(2) Impact of foreign exchange is the difference between the current year's
revenue translated utilizing the current year's average foreign exchange
rates less the current year's revenue translated utilizing the prior
year's average foreign exchange rates.
COTT CORPORATION EXHIBIT 6
SUPPLEMENTARY INFORMATION - NON-GAAP - EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION & AMORTIZATION
(EBITDA)
(in millions of U.S. dollars)
Unaudited
For the Three Months Ended
--------------------------
March 30, March 31,
2013 2012
------------ ------------
Net income attributed to Cott
Corporation $ - $ 5.9
Interest expense, net 13.3 14.0
Income tax expense 0.5 0.4
Depreciation & amortization 24.7 23.8
Net income attributable to non-
controlling interests 1.0 0.9
------------ ------------
EBITDA $ 39.5 $ 45.0
============ ============
FOR FURTHER INFORMATION PLEASE CONTACT:
Michael C. Massi
Investor Relations
Tel: (813) 313-1786
Investorrelations@cott.com
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