Press Releases
* Physical case volume grew 3.4% * Net income was $22.8 million or $2.58/share, more than double the prior year * Debt was reduced by $64 million
CHARLOTTE, N.C., Feb 27, 2003 /PRNewswire-FirstCall via COMTEX/ -- Coca-Cola Bottling Co. Consolidated (Nasdaq: COKE) today announced it earned $22.8 million or $2.58 per share in 2002. This represents a $13.4 million or $1.50 per share improvement over net income of $9.5 million or $1.08 per share in 2001. Net income in 2002 reflects a $7.5 million after tax reduction in amortization expense associated with the adoption of SFAS No. 142 and net income in 2001 benefited from a favorable income tax settlement. Excluding the tax settlement in 2001 and had SFAS No. 142 been in effect during both years, the comparable growth in net income and earnings per share would have been 62% and 60%, respectively.When viewed on a comparable basis, the Company's net sales for 2002 increased by 4.8%. This increase primarily resulted from bottle/can volume growth of 3.4% and increased contract sales. Net pricing was relatively flat for the year, reflecting a modest price increase on many packages offset by strategic price decreases in certain channels and a shift in package mix toward the popular Fridgepack (TM) twelve pack can package. Operating cash flow, defined as income from operations before amortization and depreciation expense, was up approximately 5% in 2002. For the fourth quarter of 2002, volume and net sales were down by approximately 3% and 1%, respectively, reflecting abnormally cold and wet weather. Most notably, a December ice storm resulted in a multi-day loss of power to over one million households and businesses in the Company's North Carolina and South Carolina franchise territories impacting volume, particularly in the highest margin cold drink and immediate consumption channels. Fourth quarter net income benefited from a reversal of accrued retirement benefits for our former Chairman, the late J. Frank Harrison, Jr., and was negatively impacted by the cost of early termination of debt. The retired debt was refinanced with a portion of the proceeds from the Company's November 2002 issuance of $150 million in 10 year senior notes with a coupon of 5%. The net effect of these two items was an increase in net income of approximately $1 million in the fourth quarter.
J. Frank Harrison, III, Chairman and CEO, said, "The Company's performance in 2002 was quite strong. Despite the fourth quarter impact of the December ice storm, the Company reported record volume, net sales, operating profit and net income in 2002." Mr. Harrison also said that 2002 represented the third consecutive year of strong free cash flow, which enabled the Company to reduce debt by $64 million and fund the acquisition of an additional 5% interest in Piedmont Coca-Cola Bottling Partnership, the Company's partnership with The Coca-Cola Company. This acquisition increased the Company's ownership interest in Piedmont to approximately 55%, resulting in Piedmont's financial results being consolidated with the Company's beginning in the first quarter of 2002. Over the past three years, the Company has reduced its debt and lease obligations by approximately $200 million, or about 20%, when viewed on a comparable basis as if Piedmont had been consolidated throughout this period. These results are attributable to having excellent people, a very focused strategy and consistent execution coupled with ongoing innovation. The growth in our industry has become increasingly driven by new brands and packages and the Company's strategy is centered around innovation. During 2002 the Company introduced more than 70 new brand/package combinations, led by various package sizes of Vanilla Coke, Fanta flavors, and Minute Maid's Lemonade and Fruit Punch. Furthermore, the Company embarked on a major restructuring of its distribution network geared toward improving efficiency and effectiveness in the distribution of an expanding product mix.
William B. Elmore, President and COO, said, "I am very encouraged by the Company's results in 2002, especially in the face of major changes to our distribution system. During 2002 the Company closed approximately 10% of its distribution facilities, folding their operations into existing facilities. In addition, the Company converted distribution systems for more than half of its sales from conventional delivery to a pre-sell system. While these changes position the Company to become more productive while handling a more complex product mix, they are disruptive and expensive during the transition period. The combination of turnover, training, severance cost and asset write-downs associated with these distribution changes which occurred throughout 2002 reduced net income by approximately $3.5 million." Mr. Elmore added, "Despite these disruptions our people did an excellent job of executing the introduction of Vanilla Coke and Fanta Flavors, which together helped us drive growth in our carbonated soft drink business for the second consecutive year. In addition, Dasani water continues to deliver profitable growth, up more than 40% in volume with solid profit margins."
Forward-looking statements.
Included in this news release and other information that we make publicly available from time to time are several forward-looking management comments and other statements that reflect management's current outlook for future periods. 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, material changes from expectations in the cost of raw materials, the inability of our aluminum can or PET bottle suppliers to meet our demand, higher than expected fuel prices 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 23 and 24 of the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2001.
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF OPERATIONS
In Thousands (Except Per Share Data)
Fiscal Year
Unaudited
2002 2001* 2001**
Net sales $1,246,591 $1,189,577 $ 989,188
Cost of sales 667,260 641,494 544,528
Gross margin 579,331 548,083 444,660
Selling, general and
administrative expenses 404,194 381,257 304,565
Depreciation expense 76,075 71,542 66,134
Amortization of goodwill
and intangibles 2,796 23,810 15,296
Income from operations 96,266 71,474 58,665
Interest expense 49,120 57,802 44,322
Other income (expense), net (3,084) (2,313) (2,647)
Minority interest 5,992 378 --
Income before income taxes 38,070 10,981 11,696
Federal and state income taxes 15,247 1,947 2,226
Net income $ 22,823 $ 9,034 $ 9,470
Basic net income per share $ 2.58 $ 1.03 $ 1.08
Diluted net income per share $ 2.56 $ 1.02 $ 1.07
Weighted average number of
common shares outstanding 8,861 8,753 8,753
Weighted average number of common
shares outstanding -
assuming dilution 8,921 8,821 8,821
Income from operations $ 96,266 $ 71,474 $ 58,665
Amortization of goodwill
and intangibles 2,796 23,810 15,296
Depreciation expense 76,075 71,542 66,134
Operating cash flow $ 175,137 $ 166,826 $ 140,095
* Certain prior year amounts have been reclassified to conform to
current year classifications and reflects the consolidation of
Piedmont's results of operations with those of the Company as if the
additional purchase had occurred at the beginning of 2001.
** Certain prior year amounts have been reclassified to conform to
current year classifications.
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS
In Thousands
Unaudited
Dec. 29, Dec. 30, Dec. 30,
2002 2001* 2001**
ASSETS
Current Assets:
Cash $ 18,193 $ 18,210 $ 16,912
Accounts receivable, trade, net 79,548 84,384 63,974
Accounts receivable from
The Coca-Cola Company 12,992 5,004 3,935
Accounts receivable, other 17,001 7,603 5,253
Inventories 38,648 45,812 39,916
Prepaid expenses and
other current assets 4,588 3,211 3,068
Total current assets 170,970 164,224 133,058
Property, plant and equipment 842,994 822,096 766,222
Less-Accumulated depreciation
and amortization 376,154 332,942 308,916
Property, plant and equipment, net 466,840 489,154 457,306
Leased property under
capital leases 47,618 20,424 12,265
Less-Accumulated amortization 2,995 10,109 6,882
Leased property under capital
leases, net 44,623 10,315 5,383
Investment in Piedmont Coca-Cola
Bottling Partnership -- -- 60,203
Other assets 58,167 68,067 62,451
Franchise rights and goodwill 606,128 604,650 335,662
Other identifiable intangible assets 6,797 10,396 10,396
Total $1,353,525 $1,346,806 $1,064,459
* Certain prior year amounts have been reclassified to conform to current
year classifications and reflects the consolidation of Piedmont's
financial position with that of the Company as if the additional
purchase had occurred at the beginning of 2001.
** Certain prior year amounts have been reclassified to conform to current
year classifications.
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS
In Thousands
Unaudited
Dec. 29, Dec. 30, Dec. 30,
2002 2001* 2001**
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Portion of long-term debt payable
within one year $ 31 $ 154,208 $ 56,708
Current portion of obligations
under capital leases 3,960 2,466 1,489
Accounts payable, trade 38,303 34,214 28,370
Accounts payable to
The Coca-Cola Company 9,823 8,193 7,925
Due to Piedmont Coca-Cola
Bottling Partnership -- -- 24,682
Other accrued liabilities 72,647 56,998 49,169
Accrued compensation 20,462 17,946 17,350
Accrued interest payable 10,649 13,646 11,878
Total current liabilities 155,875 287,671 197,571
Deferred income taxes 155,964 157,739 133,743
Pension and postretirement
benefit obligations 37,227 34,862 37,203
Other liabilities 58,261 63,767 57,770
Obligations under capital leases 42,066 4,033 935
Long-term debt 807,725 727,656 620,156
Total liabilities 1,257,118 1,275,728 1,047,378
Minority interest 63,540 54,603 --
Stockholders' Equity:
Common Stock 9,704 9,454 9,454
Class B Common Stock 3,009 2,989 2,989
Capital in excess of par value 95,986 91,004 91,004
Retained earnings (accumulated
deficit) 6,043 (12,743) (12,307)
Accumulated other comprehensive loss (20,621) (12,975) (12,805)
94,121 77,729 78,335
Less-Treasury stock, at cost:
Common 60,845 60,845 60,845
Class B Common 409 409 409
Total stockholders' equity 32,867 16,475 17,081
Total $1,353,525 $1,346,806 $1,064,459
* Certain prior year amounts have been reclassified to conform to
current year classifications and reflects the consolidation of
Piedmont's financial position with that of the Company as if the
additional purchase had occurred at the beginning of 2001.
** Certain prior year amounts have been reclassified to conform to
current year classifications.
SOURCE Coca-Cola Bottling Co. Consolidated
CONTACT: media, Lauren C. Steele, VP Corporate Affairs, +1-704-557-4551, or investors, David V. Singer, Executive VP & CFO, +1-704-557-4604, both of Coca-Cola Bottling Co. Consolidated