Actionable news
0
All posts from Actionable news
Actionable news in COT: COTT CORPORATION,

Cott Reports First Quarter 2016 Results and Significant Organic Growth in New Home and Office Customers

TORONTO, ON and TAMPA, FL, May 05, 2016 (Marketwired via COMTEX) -- TORONTO, ON and TAMPA, FL--(Marketwired - May 5, 2016) - Cott Corporation COT, +1.14% (BCB) today announced its results for the first quarter ended April 2, 2016.

FIRST QUARTER 2016 HIGHLIGHTS

DS Services achieves 42% first quarter increase in organic new customer additions in the U.S.

DS Services extends in store retail booth partnership through the end of 2021.

Gross profit increased to $214 million and gross margin was 30.6% compared to gross profit of $201 million and gross margin of 28.4%.

Adjusted EBITDA was $71 million (after incremental new customer investment expenses of over $3 million and $3 million adverse foreign exchange impact) compared to $74 million. Reported EBITDA was $69 million.

(Unless stated otherwise, all first quarter 2016 comparisons are relative to the first quarter of 2015; all information is in U.S. dollars.)

"I am very pleased with the quarter's strong new customer additions across our entire Home and Office business as well as the overall increase in our gross margin and improved free cash flow" commented Jerry Fowden, Cott's Chief Executive Officer. "During the quarter we invested over $3 million in incremental sales and marketing behind home and office customer programs which helped drive a first quarter 42% increase in new customer adds," continued Mr. Fowden.

FIRST QUARTER 2016 GLOBAL PERFORMANCE

Adjusted free cash flow improved by $10 million or 17% to ($48) million compared to ($58) million. Free cash flow was ($48) million, reflecting $19 million of net cash used in operating activities less $29 million of capital expenditures. Management continues to target full year adjusted free cash flow of $135 to $145 million.

Adjusted EBITDA of $71 million was lower by 4% (after over $3 million of incremental new home and office customer investment expenses, $3 million of adverse foreign exchange impact and additional cost associated with a product launch for a range of new age sparkling flavored waters for a key customer) compared to $74 million. Reported EBITDA was $69 million compared to $75 million in the prior year ($64 million in the prior year when excluding unrealized intercompany foreign exchange gains).

Revenue of $698 million was lower by 2% (flat on a foreign exchange neutral basis) as a result of the mix shift from private label to contract manufacturing in our traditional business, offset by the growth of DS Services and the addition of the Aquaterra business.

                               
  Revenue Bridge                         
                               
  2015 Q1 Revenue         $      709.8   
  Aquaterra                 14.2    
  DS Services growth        4.9     
  Growth/Volume             1.5     
  Energy surcharge          (2.1)   
  Foreign exchange impact   (11.2)  
  Price/Mix                 (18.7)  
  2016 Q1 Revenue         $      698.4   
                          

Gross profit increased 6% to $214 million, with gross margin of 30.6% compared to 28.4%, driven primarily by the ongoing operational leverage of DS Services, the addition of the Aquaterra business, and cost and efficiency initiatives within our traditional business, offset in part by the negative impact of foreign exchange rates, increased operational costs driven by unscheduled plant downtime as well as costs associated with a new age beverage product launch.

Adjusted net loss and adjusted loss per diluted share were $3 million and $0.02, respectively, compared to adjusted net loss of $8 million and adjusted loss per diluted share of $0.08. Reported net loss and loss per diluted share were $3 million and $0.03, respectively, compared to reported net loss and loss per diluted share of $6 million and $0.06, respectively.

FIRST QUARTER 2016 REPORTING SEGMENT PERFORMANCE

DS Services revenue increased 7% to $257 million due primarily to the addition of the Aquaterra business, growth in home and office delivery water, single cup coffee delivery and retail sales, offset in part by a declining energy surcharge as a result of lower diesel fuel prices and reduced sales in traditional brew basket coffee. Revenue on an energy surcharge neutral basis increased 8% (2% excluding Aquaterra). DS Services gross profit increased by 10% to $154 million while gross profit as a percentage of revenue increased to 60.0% from 58.2%. DS Services EBITDA of $35 million was up 21% from $29 million while DS Services adjusted EBITDA decreased by $1 million to $36 million compared to $37 million, as DS Services invested over $3 million driving strong first quarter organic growth in new customer additions and incurred higher than expected first quarter fleet maintenance and operational manufacturing costs.

                              
  DS Services Revenue Bridge            
  2015 Q1 Revenue  $        240.3       
  Aquaterra            14.2        
  Growth               4.9         
  Energy surcharge     (2.1     )       
  2016 Q1 Revenue  $        257.3       
                         

North America volume increased 2% in actual cases and was lower by 3% in servings with 11% growth in the sparkling water and mixer category and 8% growth in contract manufacturing offset by declines in private label carbonated soft drinks and shelf stable juices. Revenue was lower by 5% (lower by 4% on a foreign exchange neutral basis) at $313 million due primarily to an overall product mix shift into contract manufacturing. Gross profit as a percentage of revenue decreased to 11.4% compared to 12.8% due primarily to approximately $2 million of adverse foreign exchange impact, operational costs driven by unscheduled plant downtime and additional cost associated with a product launch for a range of new age sparkling flavored waters for a key customer.

                                           
  Cott North America Revenue Bridge                  
  2015 Q1 Revenue         $           328.7          
  Growth/Volume                  5.0            
  Foreign exchange impact        (3.3        )       
  Price/Mix                      (17.1       )       
  2016 Q1 Revenue         $           313.3          
                                      

U.K. volume decreased 8% in actual cases and was flat in servings. Revenue decreased 9% (4% on a foreign exchange neutral basis) to $121 million due primarily to the competitive landscape and an adverse product mix shift. Gross profit as a percentage of revenue increased to 16.3% from 11.8% due primarily to lower inventory levels and tighter cost controls.

All Other revenue was $14 million while gross profit was $5 million compared to $4 million, which resulted in gross profit as a percentage of revenue of 36.8% compared to 33.1%.

2016 FULL YEAR FREE CASH FLOW OUTLOOK

Cott Corporation reaffirmed its full year 2016 adjusted free cash flow outlook of $135 to $145 million.

FIRST QUARTER RESULTS CONFERENCE CALL

Cott Corporation will host a conference call today, May 5, 2016, at 10:00 a.m. EDT, to discuss first quarter results, which can be accessed as follows:

North America: (888) 206-4913 International: (913) 312-0678 Passcode: 9463425

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.

                                                                                                        
                                                                                                        
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                                 
                                                                 April 2, 2016                 April 4, 2015      
                                                                                              
Revenue, net                                                          $          698.4              $        709.8     
Cost of sales                                                               484.4                  508.5     
                                                                                              
Gross profit                                                                214.0                  201.3     
                                                                                              
Selling, general and administrative expenses                                197.0                  188.5     
Loss on disposal of property, plant & equipment                             0.9                    1.4       
Acquisition and integration expenses                                        1.4                    4.7       
Operating income                                                            14.7                   6.7       
                                                                                              
Other income, net                                                           (2.2       )                (10.4    )
Interest expense, net                                                       27.8                   27.7      
                                                                                              
Loss before income taxes                                                    (10.9      )                (10.6    )
                                                                                              
Income tax benefit                                                          (9.0       )                (9.4     )
                                                                                              
Net loss                                                              $          (1.9       )            $        (1.2     )
                                                                                              
Less: Net income attributable to non-controlling interests                  1.4                    1.3       
Less: Accumulated dividends on convertible preferred shares                 -                      2.7       
Less: Accumulated dividends on non-convertible preferred shares             -                      0.8       
                                                                                              
Net loss attributed to Cott Corporation                               $          (3.3       )            $        (6.0     )
                                                                                              
Net loss per common share attributed to Cott Corporation                                           
                           Basic                                 $          (0.03      )            $        (0.06    )
                           Diluted                               $          (0.03      )            $        (0.06    )
                                                                                              
Weighted average common shares outstanding (millions)                                                             
                           Basic                                       113.3                  93.2      
                           Diluted                                     113.3                  93.2      
                                                                                              
Dividends declared per common share                                   $          0.06               $        0.06      
                                                                                              
                                                                                              
                                                                                              

COTT CORPORATION                                                                                      EXHIBIT 2        
CONSOLIDATED BALANCE SHEETS                                                                                                                
(in millions of U.S. dollars, except share amounts, U.S. GAAP)                                                                             
Unaudited                                                                                                                                  
                                                                                                             
                                                                                April 2, 2016         January 2, 2016  
ASSETS                                                                                                  
Current assets                                                                                          
Cash & cash equivalents                                                              $       55.1          $       77.1     
Accounts receivable, net of allowance                                                   320.4            293.3    
Income taxes recoverable                                                                0.9              1.6      
Inventories                                                                             254.7            249.4    
Prepaid expenses and other current assets                                               20.9             17.2     
                                                                                                   
Total current assets                                                                    652.0            638.6    
                                                                                                   
Property, plant & equipment, net                                                        774.6            769.8    
Goodwill                                                                                779.8            759.6    
Intangibles and other assets, net                                                       710.9            711.7    
Deferred tax assets                                                                     10.3             7.6      
                                                                                                   
Total assets                                                                         $       2,927.6       $       2,887.3  
                                                                                                   
LIABILITIES AND EQUITY                                                                                  
Current liabilities                                                                                     
Short-term borrowings                                                                $       62.8          $       122.0    
Current maturities of long-term debt                                                    3.4              3.4      
Accounts payable and accrued liabilities                                                420.7            437.6    
                                                                                                   
Total current liabilities                                                               486.9            563.0    
                                                                                                   
Long-term debt                                                                          1,524.1          1,525.4  
Deferred tax liabilities                                                                65.9             76.5     
Other long-term liabilities                                                             71.8             76.5     
                                                                                                   
Total liabilities                                                                       2,148.7          2,241.4  
                                                                                                   
Equity                                                                                                  
Common shares, no par - 122,676,770 (January 2, 2016 - 109,695,435) shares issued       682.2            534.7    
Additional paid-in-capital                                                              50.8             51.2     
Retained earnings                                                                       119.0            129.6    
Accumulated other comprehensive loss                                                    (78.8   )             (76.2   )
Total Cott Corporation equity                                                           773.2            639.3    
Non-controlling interests                                                               5.7              6.6      
                                                                                                   
Total equity                                                                            778.9            645.9    
                                                                                                   
Total liabilities and equity                                                         $       2,927.6       $       2,887.3  
                                                                                                   
                                                                                                   

COTT CORPORATION                                                                                                                     EXHIBIT 3      
CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                                                   
(in millions of U.S. dollars)                                                                                                                                           
Unaudited                                                                                                                                                               
                                                                                                                                                                   
                                                                                                                   For the Three Months Ended                 
                                                                                                                   April 2, 2016     April 4, 2015  
                                                                                                                                
Operating Activities                                                                                                                 
       Net loss                                                                                                    $      (1.9   )        $      (1.2   )
       Depreciation & amortization                                                                                   52.5         57.4    
       Amortization of financing fees                                                                                1.2          1.3     
       Amortization of senior notes premium                                                                         ...

More