Press Releases

Coca-Cola Bottling Co. Consolidated Reports Second Quarter 2003 Results

CHARLOTTE, N.C., July 23 /PRNewswire-FirstCall/ -- Coca-Cola Bottling Co. Consolidated (Nasdaq: COKE) today announced earnings of $11.9 million or $1.32 per share for the second quarter of 2003. This compares to net income of $10.8 million or $1.23 per share for the second quarter of 2002. For the first six months of 2003, net income was $13.3 million or $1.47 per share as compared to $14.2 million or $1.61 per share for the first six months of 2002. Net sales declined 3.4% in the second quarter of 2003 as compared to the second quarter of 2002. This decline reflects lower bottle/can volume, which was down 4.3% in the second quarter and 1.9% in the first half. The difference between the growth rate in net sales and the growth rate in volume primarily reflects higher average revenue per case. The decline in net sales reflects unseasonably cool and abnormally wet weather across the Company's territories as well as less aggressive retail pricing by several of the Company's large customers. As a result of soft net sales performance, income from operations was down $6.3 million or 19% for the second quarter. The reduction in income from operations was partially offset by declines in interest expense and minority interest. In addition, the Company's second quarter income tax provision was favorably impacted by a $3.1 million benefit resulting from the completion of a tax audit.

J. Frank Harrison, III, Chairman and CEO, said that he was disappointed with operating income through June, but was pleased with the Company's expense control and continued success in debt reduction. Mr. Harrison said, "Due to the fixed nature of many of the Company's costs, weaker than anticipated net sales translate into lower operating income." Mr. Harrison said, "Despite higher wage rates and a significant increase in the cost of pension and health care benefits, the Company's operating expenses were up less than 3% for the first half of 2003. Furthermore, the Company reduced overall debt and capital lease liabilities by more than $11 million over the past 12 months, despite the $53.5 million acquisition of an additional 22.7% interest in Piedmont Coca-Cola Bottling Partnership. The reductions in debt and capital lease liabilities along with the acquisition of another portion of Piedmont provided for lower interest expense and minority interest, which helped offset some of the Company's shortfall in operating income in the first half of 2003."

William B. Elmore, President and COO, attributes some of the Company's net sales performance through the first six months to industry wide softness in the Company's markets. Mr. Elmore said, "Although our volume has been weak during the first half of 2003, our market share has remained stable. The unseasonably cool and wet weather we have experienced so far this year appears to have had a dampening effect on overall beverage sales in our territories, especially in the higher margin immediate consumption market." Mr. Elmore went on to say, "The Company is focused on improving net sales performance in the second half of the year through a combination of higher pricing and innovations in packaging, which include a 390 ml PET bottle for the immediate consumption market and 12 ounce PET bottles in Fridge Packs(TM) for the take- home market."

Forward-looking statements

Included in this news release 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. These statements may include, among others, statements relating to our expectations concerning improving net sales performance in the second half of 2003 and our introduction of a 390 ml PET bottle for the immediate consumption market and 12 ounce PET bottles in Fridge Packs(TM) for the take-home market. 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, adverse weather conditions 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 27 and 28 of the Company's Annual Report on Form 10- K for the fiscal year ended December 29, 2002.


                              -Enjoy Coca-Cola-

    Coca-Cola Bottling Co. Consolidated
    CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
    In Thousands (Except Per Share Data)

                              Second Quarter               First Half
                            2003          2002         2003          2002
    Net sales             $318,165 $329,512 $593,365 $601,130
    Cost of sales          164,505       170,068      304,811       307,212
    Gross margin           153,660       159,444      288,554       293,918
    Selling, general and
     administrative
     expenses              106,789       106,757      208,914       203,169
    Depreciation expense    19,282        18,857       38,297        36,842
    Amortization of
     intangibles               767           686        1,465         1,373
    Income from operations  26,822        33,144       39,878        52,534

    Interest expense        10,916        11,877       21,287        24,017
    Other income (expense),
     net                      (246)         (650)        (445)       (1,549)
    Minority interest        1,142         2,764        1,258         3,523
    Income before income
     taxes                  14,518        17,853       16,888        23,445
    Income taxes             2,618         7,070        3,581         9,284
    Net income             $11,900 $10,783 $13,307 $14,161


    Basic net income per
     share                   $1.32 $1.23 $1.47 $1.61

    Diluted net income per
     share                   $1.32 $1.21 $1.47 $1.60

    Weighted average number
     of common shares
     outstanding             9,043         8,784        9,043         8,779

    Weighted average number
     of common shares
     outstanding - assuming
     dilution                9,043         8,880        9,043         8,869


    Coca-Cola Bottling Co. Consolidated
    CONSOLIDATED BALANCE SHEETS (UNAUDITED)
    In Thousands


                                    June 29,       Dec. 29,       June 30,
                                      2003           2002           2002
    ASSETS

    Current Assets:

    Cash                             $7,272 $18,193 $8,667
    Accounts receivable, trade, net  84,858          79,548        93,548
    Accounts receivable from The
     Coca-Cola Company               12,586          12,992        15,729
    Accounts receivable, other        2,770          17,001         5,610
    Inventories                      40,114          38,648        42,020
    Prepaid expenses and other
     current assets                   8,565           4,588         7,404
    Total current assets            156,165         170,970       172,978

    Property, plant and equipment,
     net                            461,707         466,840       472,790
    Leased property under capital
     leases, net                     44,342          44,623        48,532
    Other assets                     60,912          58,167        73,376
    Franchise rights and goodwill,
     net                            622,426         606,128       607,007
    Other identifiable intangible
     assets, net                      9,631           6,797         7,340

    Total                        $1,355,183 $1,353,525 $1,382,023



    Coca-Cola Bottling Co. Consolidated
    CONSOLIDATED BALANCE SHEETS (UNAUDITED)
    In Thousands



                                            June 29,  Dec. 29,      June 30,
                                              2003      2002          2002
    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current Liabilities:

    Portion of long-term debt payable
     within one year                           $39 $31 $215,631
    Current portion of obligations under
     capital leases                          4,091      3,960         4,777
    Accounts payable, trade                 38,083     38,303        42,257
    Accounts payable to The Coca-Cola
     Company                                 8,229      9,823         6,646
    Other accrued liabilities               76,748     72,647        82,261
    Accrued compensation                    12,904     20,462        11,570
    Accrued interest payable                11,962     10,649        11,140
    Total current liabilities              152,056    155,875       374,282

    Deferred income taxes                  158,874    155,964       164,485
    Pension and retiree benefit obligations 39,286     37,227        30,893
    Other liabilities                       60,248     58,261        61,133
    Obligations under capital leases        42,182     42,066        42,123
    Long-term debt                         825,078    807,725       620,125
    Total liabilities                    1,277,724  1,257,118     1,293,041

    Minority interest                       32,832     63,540        59,356

    Stockholders' Equity:
    Common Stock                             9,704      9,704         9,498
    Class B Common Stock                     3,029      3,009         3,009
    Capital in excess of par value          97,220     95,986        88,843
    Retained earnings                       14,828      6,043         1,854
    Accumulated other comprehensive loss   (18,900)   (20,621)      (12,324)
                                           105,881     94,121        90,880
    Less-Treasury stock, at cost:
     Common                                 60,845     60,845        60,845
     Class B Common                            409        409           409
    Total stockholders' equity              44,627     32,867        29,626

    Total                               $1,355,183 $1,353,525 $1,382,023 
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/
    (COKE)