Press Releases

Coca-Cola Bottling Co. Consolidated ReportsThird Quarter and
First Nine Months 2010 Results

CHARLOTTE, N.C., Nov 10, 2010 (BUSINESS WIRE) --

Coca-Cola Bottling Co. Consolidated (NASDAQ: COKE) today announced it earned $15.5 million, or basic net income per share of $1.69, on net sales of $395.4 million for the third quarter of 2010, compared to net income of $15.4 million, or basic net income per share of $1.68, on net sales of $374.6 million for the third quarter of 2009. The results for the third quarter of 2010 included $1.9 million of after-tax gains ($3.1 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges, $.2 million of after-tax gains ($.3 million on a pre-tax basis) from additional insurance recoveries on assets lost or damaged due to the Nashville, Tennessee area flood, and $1.7 million of after-tax gains related to changes in reserves for uncertain tax positions. The results for the third quarter of 2009 included $.6 million of after-tax gains ($.9 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges, and $5.4 million of after-tax gains related to changes in reserves for uncertain tax positions.

On a comparable basis, the Company earned $12.0 million in the third quarter of 2010, or comparable basic net income per share of $1.31, versus $9.4 million in the third quarter of 2009, or comparable basic net income per share of $1.03. The following table reconciles reported GAAP net income and comparable net income and basic net income per share for the third quarter of 2010 and 2009:

Third Quarter
Net Income Basic Net Income Per Share
In Thousands, Except Per Share Amounts 2010 2009 2010 2009
Reported net income (GAAP) $ 15,533 $ 15,428 $ 1.69 $ 1.68
Net (gain) loss on fuel & aluminum hedges, net of tax (1,875 ) (572 ) (0.20 ) (0.06 )
Impact of Nashville area flood, net of tax (163 ) - (0.02 ) -
Changes in reserves for uncertain tax positions (1,665 ) (5,385 ) (0.18 ) (0.58 )
Other income tax changes 196 (55 ) 0.02 (0.01 )
Total (3,507 ) (6,012 ) (0.38 ) (0.65 )
Comparable net income (a) $ 12,026 $ 9,416 $ 1.31 $ 1.03

(a) This non-GAAP financial information is provided to allow investors to more clearly evaluate operating performance and business trends for the third quarters of 2010 and 2009. Management uses this information to review results excluding items that are not necessarily indicative of ongoing results.

The Company earned $32.2 million, or basic net income per share of $3.51, on net sales of $1.16 billion for the first nine months of 2010, compared to net income of $36.1 million, or basic net income per share of $3.94, on net sales of $1.09 billion for the first nine months of 2009. The results for the first nine months of 2010 included $2.7 million of after-tax losses ($4.5 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges, $.5 million of after-tax gains ($.9 million on a pre-tax basis) from the impact of the Nashville flood, a $.5 million increase in tax expense due to the change in tax law eliminating the tax deduction once available for Medicare Part D subsidies, and $1.7 million of after-tax gains related to changes in reserves for uncertain tax positions. The results for the first nine months of 2009 included $5.0 million of after-tax gains ($8.2 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges and $7.1 million of after-tax gains related to changes in reserves for uncertain tax positions.

On a comparable basis, the Company earned $33.3 million in the first nine months of 2010, or comparable basic net income per share of $3.63, versus $24.2 million in the first nine months of 2009, or comparable basic net income per share of $2.64. The following table reconciles reported GAAP net income and comparable net income and basic net income per share for the first nine months of 2010 and 2009:

First Nine Months
Net Income Basic Net Income Per Share
In Thousands, Except Per Share Amounts 2010 2009 2010 2009
Reported net income (GAAP) $ 32,236 $ 36,146 $ 3.51 $ 3.94
Net (gain) loss on fuel & aluminum hedges, net of tax 2,725 (5,002 ) 0.30 (0.54 )
Impact of Nashville area flood, net of tax (535 ) - (0.06 ) -
Impact of change in tax law regarding Medicare Part D subsidy 464 - 0.05 -
Changes in reserves for uncertain tax positions (1,665 ) (7,071 ) (0.18 ) (0.77 )
Other income tax changes 62 77 0.01 0.01
Total 1,051 (11,996 ) 0.12 (1.30 )
Comparable net income (a) $ 33,287 $ 24,150 $ 3.63 $ 2.64

(a) This non-GAAP financial information is provided to allow investors to more clearly evaluate operating performance and business trends for the first nine months of 2010 and 2009. Management uses this information to review results excluding items that are not necessarily indicative of ongoing results.

J. Frank Harrison, III, Chairman and CEO, said, "We are very pleased with our performance thus far in 2010. Despite continued high unemployment in most of our franchise markets, we have seen strong growth on both a top-line and comparable bottom-line basis. Our employees have done an excellent job of providing the world's best brands to our customers and consumers, and execution throughout the business is strong and continues to improve."

William B. Elmore, President and COO, added, "We are especially pleased with the increased activity we are seeing in our On-Premise business, which is perhaps the best barometer of the strength of our brands. Our price/package/channel strategies and our continuous improvement efforts have collectively driven very strong marketplace and financial results."

Cautionary Information Regarding Forward-Looking Statements

Included in this news release 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 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 selling pricing resulting from increased marketplace competition; changes in how significant customers market or promote our products; changes in public and consumer preferences related to nonalcoholic beverages; unfavorable changes in the general economy; miscalculation of our need for infrastructure investment; our inability to meet requirements under bottling contracts; material changes in the performance requirements for marketing funding support or our inability to meet such requirements; decreases from historic levels of marketing funding support; changes in The Coca-Cola Company's and other beverage companies' levels of advertising, marketing and spending on brand innovation; the inability of our aluminum can or plastic bottle suppliers to meet our purchase requirements; our inability to offset higher raw material costs with higher selling prices, increased bottle/can sales volume or reduced expenses; sustained increases in fuel costs or our inability to secure adequate supplies of fuel; sustained increases in workers' compensation, employment practices and vehicle accident costs; sustained increases in the cost of employee benefits; product liability claims or product recalls; technology failures; changes in interest rates; adverse changes in our credit rating (whether as a result of our operations or prospects or as a result of those of The Coca-Cola Company or other bottlers in the Coca-Cola system); changes in legal contingencies; legislative changes effecting our distribution and packaging; additional taxes resulting from tax audits; natural disasters and unfavorable weather; issues surrounding labor relations; recent bottler litigation; our use of estimates and assumptions; public policy challenges regarding the sale of soft drinks in schools; the impact of recent volatility in the financial markets to access the credit markets; legislative changes that could affect distribution and packaging; the impact of recently announced and completed acquisitions of bottlers by their franchisors; obesity and other health concerns may reduce demand for the Company's products; global climate change or legal, regulatory or market response to such change; ability to change distribution methods and business practices could be negatively affected by bottler disputes; and the concentration of our capital stock ownership.The forward-looking statements in this news release should be read in conjunction with the more detailed descriptions of the above factors located in our Annual Report on Form 10-K for the year ended January 3, 2010 under Part I, Item 1A "Risk Factors" as well as those additional factors we may describe from time to time in other filings with the Securities and Exchange Commission.Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements contained in this release as a result of new information or future events or developments.

--Enjoy Coca-Cola--

Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Data)
Third Quarter First Nine Months
2010 2009 2010 2009
Net sales $ 395,364 $ 374,556 $ 1,160,223 $ 1,088,566
Cost of sales 222,247 217,236 672,395 623,990
Gross margin 173,117 157,320 487,828 464,576
Selling, delivery and administrative expenses 139,455 131,024 406,689 386,461
Income from operations 33,662 26,296 81,139 78,115
Interest expense 8,841 8,866 26,453 28,059
Income before income taxes 24,821 17,430 54,686 50,056
Income taxes 7,610 1,043 18,936 11,928
Net income 17,211 16,387 35,750 38,128
Less: Net income attributable to the
noncontrolling interest 1,678 959 3,514 1,982
Net income attributable to Coca-Cola Bottling Co.
Consolidated $ 15,533 $ 15,428 $ 32,236 $ 36,146
Basic net income per share based on net
income attributable to Coca-Cola Bottling Co.
Consolidated:
Common Stock $ 1.69 $ 1.68 $ 3.51 $ 3.94
Weighted average number of Common
Stock shares outstanding 7,141 7,141 7,141 7,047
Class B Common Stock $ 1.69 $ 1.68 $ 3.51 $ 3.94
Weighted average number of Class B
Common Stock shares outstanding 2,044 2,022 2,039 2,117
Diluted net income per share based on net
income attributable to Coca-Cola Bottling Co.
Consolidated:
Common Stock $ 1.68 $ 1.68 $ 3.50 $ 3.93
Weighted average number of Common
Stock shares outstanding - assuming dilution 9,225 9,203 9,220 9,194
Class B Common Stock $ 1.68 $ 1.67 $ 3.48 $ 3.92
Weighted average number of Class B Common
Stock shares outstanding - assuming dilution 2,084 2,062 2,079 2,147
Coca-Cola Bottling Co. Consolidated
CONDENSED BALANCE SHEETS (UNAUDITED)
In Thousands
October 3, January 3, September 27,
2010 2010 2009
ASSETS
Current assets:
Cash $ 33,924 $ 22,270 $ 29,574
Trade accounts receivable, net 115,554 92,727 96,263
Accounts receivable, other 43,547 21,114 34,475
Inventories 62,686 59,122 67,762
Prepaids and other current assets 31,817 35,016 25,398
Total current assets 287,528 230,249 253,472
Property, plant and equipment, net 312,759 326,701 319,456
Leased property under capital leases, net 48,029 51,548 52,727
Other assets 40,645 46,508 46,001
Franchise rights, goodwill and other intangibles, net 627,704 628,071 628,210
Total $ 1,316,665 $ 1,283,077 $ 1,299,866
LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt and capital lease obligations $ 3,861 $ 3,846 $ 3,759
Accounts payable and accrued expenses 183,331 158,136 176,088
Total current liabilities 187,192 161,982 179,847
Deferred income taxes 158,359 158,548 142,239
Pension, postretirement and other liabilities 189,438 196,274 202,854
Long-term debt and obligations under capital leases 579,411 597,178 613,129
Total liabilities 1,114,400 1,113,982 1,138,069
Stockholders' equity 145,947 116,291 109,418
Noncontrolling interest 56,318 52,804 52,379
Total $ 1,316,665 $ 1,283,077 $ 1,299,866

SOURCE: Coca-Cola Bottling Co. Consolidated 

Coca-Cola Bottling Co. Consolidated
Media Contact:
Lauren C. Steele, 704-557-4551
VP - Corporate Affairs
or
Investor Contact:
James E. Harris, 704-557-4582
Senior VP - CFO