UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
November 8, 2011
COCA-COLA BOTTLING CO. CONSOLIDATED
(Exact name of registrant as specified in its charter)
| Delaware | 0-9286 | 56-0950585 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
4100 Coca-Cola Plaza, Charlotte, North Carolina 28211
(Address of principal executive offices) (Zip Code)
(704) 557-4400
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On November 8, 2011, Coca-Cola Bottling Co. Consolidated (the “Company”) issued a news release announcing its financial results for the quarter and the nine months ended October 2, 2011. A copy of the news release is furnished as Exhibit 99.1 hereto.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
| 99.1 | News release issued on November 8, 2011, reporting the Company’s financial results for the quarter and the nine months ended October 2, 2011. |
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| COCA-COLA BOTTLING CO. CONSOLIDATED | ||||||
| (REGISTRANT) | ||||||
| Date: November 10, 2011 | BY: |
/s/ James E. Harris | ||||
| James E. Harris | ||||||
| Principal Financial Officer of the Registrant | ||||||
| and | ||||||
| Senior Vice President, Shared Services and Chief Financial Officer | ||||||
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC
EXHIBITS
CURRENT REPORT
ON
FORM 8-K
| Date of Event Reported: |
Commission File No: | |
| November 8, 2011 |
0-9286 |
COCA-COLA BOTTLING CO. CONSOLIDATED
EXHIBIT INDEX
| Exhibit No. |
Exhibit Description | |
| 99.1 | News release issued on November 8, 2011, reporting the Company’s financial results for the quarter and the nine months ended October 2, 2011. | |
Exhibit 99.1
Coca-Cola Bottling Co. Consolidated, 4100 Coca-Cola Plaza, Charlotte, NC 28211
News Release
| FOR IMMEDIATE RELEASE | Symbol: COKE | |
| November 8, 2011 |
Quoted: The NASDAQ Stock Market (Global Select Market) |
Coca-Cola Bottling Co. Consolidated Reports Third Quarter and First Nine Months 2011 Results
CHARLOTTE, NC — Coca-Cola Bottling Co. Consolidated (NASDAQ: COKE) today announced it earned $9.8 million, or basic net income per share of $1.06, on net sales of $405.9 million for the third quarter of 2011, compared to net income of $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. The results for the third quarter of 2011 included $1.1 million of after-tax losses ($1.8 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges and $0.9 million of after-tax gains related to changes in reserves for uncertain tax positions. 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, $0.2 million after-tax gain ($0.3 million on a pre-tax basis) from insurance recoveries on assets lost or damaged due to the Nashville, Tennessee area flood in May 2010 and $1.7 million of after-tax gains related to changes in reserves for uncertain tax positions.
On a comparable basis, the Company earned $10.0 million in the third quarter of 2011, or comparable basic net income per share of $1.09, versus $12.0 million in the third quarter of 2010, or comparable basic net income per share of $1.31.
The following table reconciles reported GAAP net income and basic net income per share to comparable net income and basic net income per share for the third quarter of 2011 and 2010:
| Third Quarter | ||||||||||||||||
| Net Income | Basic Net Income Per Share |
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| In Thousands, Except Per Share Amounts |
2011 | 2010 | 2011 | 2010 | ||||||||||||
| Reported net income (GAAP) |
$ | 9,768 | $ | 15,533 | $ | 1.06 | $ | 1.69 | ||||||||
| Net (gain) loss on fuel & aluminum hedges, net of tax |
1,115 | (1,875 | ) | 0.12 | (0.20 | ) | ||||||||||
| Impact of Nashville area flood, net of tax |
— | (163 | ) | — | (0.02 | ) | ||||||||||
| Change in reserves for uncertain tax position |
(928 | ) | (1,665 | ) | (0.10 | ) | (0.18 | ) | ||||||||
| Other income tax changes |
50 | 196 | 0.01 | 0.02 | ||||||||||||
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| Total |
237 | (3,507 | ) | 0.03 | (0.38 | ) | ||||||||||
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| Comparable net income (a) |
$ | 10,005 | $ | 12,026 | $ | 1.09 | $ | 1.31 | ||||||||
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(a) This non-GAAP financial information is provided to allow investors to more clearly evaluate operating performance and business trends on a comparable basis for the third quarters of 2011 and 2010. Management uses this information to review results after excluding items that are not necessarily indicative of ongoing results.
The Company earned $26.8 million, or basic net income per share of $2.91, on net sales of $1,188.4 million for the first nine months of 2011, compared to net income of $32.2 million, or basic net income per share of $3.51, on net sales of $1,160.2 million for the first nine months of 2010. The results for the first nine months of 2011 included $2.6 million of after-tax losses ($4.2 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges and $0.9 million of after-tax gains related to changes in reserves for uncertain tax positions. 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, $0.5 million after-tax gain ($0.9 million on a pre-tax basis) from the impact of the Nashville flood, $0.5 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.
On a comparable basis, the Company earned $28.6 million in the first nine months of 2011, or comparable basic net income per share of $3.11, versus $33.3 million in the first nine months of 2010, or comparable basic net income per share of $3.63. The following table reconciles reported GAAP net income and basic net income per share to comparable net income and basic net income per share for the first nine months of 2011 and 2010:
| First Nine Months | ||||||||||||||||
| Net Income | Basic Net Income Per Share |
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| In Thousands, Except Per Share Amounts |
2011 | 2010 | 2011 | 2010 | ||||||||||||
| Reported net income (GAAP) |
$ | 26,782 | $ | 32,236 | $ | 2.91 | $ | 3.51 | ||||||||
| Net loss on fuel & aluminum hedges, net of tax |
2,563 | 2,725 | 0.28 | 0.30 | ||||||||||||
| 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 | ||||||||||||
| Change in reserves for uncertain tax position |
(928 | ) | (1,665 | ) | (0.10 | ) | (0.18 | ) | ||||||||
| Other income tax changes |
226 | 62 | 0.02 | 0.01 | ||||||||||||
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| Total |
1,861 | 1,051 | 0.20 | 0.12 | ||||||||||||
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| Comparable net income (a) |
$ | 28,643 | $ | 33,287 | $ | 3.11 | $ | 3.63 | ||||||||
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(a) This non-GAAP financial information is provided to allow investors to more clearly evaluate operating performance and business trends on a comparable basis for the first nine months of 2011 and 2010. Management uses this information to review results after excluding items that are not necessarily indicative of ongoing results.
J. Frank Harrison, III, Chairman and CEO, said, “In what continues to be a very challenging environment, we are pleased that the Company has been able to increase revenue for both the third quarter and year to date. 2011 has been a challenging year as the economy remains weak and commodity costs continue to increase at rates that exceed the rate of inflation. Despite these challenges, we are pleased with our results in 2011 and remain focused on finding ways to bring value to our customers and grow profitably.”
William B. Elmore, President and COO, added, “The trends that we experienced in the first half of 2011 continued in the third quarter. Consumers are cautious and value oriented in their purchasing decisions. This becomes even more challenging as raw material costs continue to rise. We have seen strength in our more value oriented channels such as food and dollar stores and weakness in the convenience and on premise channels. The migration to lower margin channels is reflected in a lower gross margin percentage for both the third quarter and first nine months of 2011. We continuously review our price and package mix in our efforts to maximize gross margin, however, in such a highly competitive market, we cannot always pass along all of our cost increases immediately.”
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 include, among others, statements regarding the challenges we face in 2011, including the impact of higher commodity prices and the continuing weak economy, our continued focus on finding ways to bring value to our customers and grow profitably and our intention to continuously review our price and package mix to maximize gross margin.
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 our top customer relationships; 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 beverage agreements; 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 claims costs; sustained increases in the cost of employee benefits; product liability claims or product recalls; technology failures; changes in interest rates; the impact of debt levels on operating flexibility and access to capital and credit markets; 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 affecting our distribution and packaging; adoption of significant product labeling or warning requirements; additional taxes resulting from tax audits; natural disasters and unfavorable weather; global climate change or legal or regulatory responses to such change; issues surrounding labor relations; bottler system disputes; our use of estimates and assumptions; changes in accounting standards; impact of obesity and health concerns on product demand; public policy challenges regarding the sale of soft drinks in schools; the impact of volatility in the financial markets on access to the credit markets; the impact of acquisitions of bottlers by their franchisors; 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 2, 2011 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 | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net sales |
$ | 405,858 | $ | 395,364 | $ | 1,188,380 | $ | 1,160,223 | ||||||||
| Cost of sales |
243,142 | 222,247 | 710,930 | 672,395 | ||||||||||||
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| Gross margin |
162,716 | 173,117 | 477,450 | 487,828 | ||||||||||||
| Selling, delivery and administrative expenses |
137,752 | 139,455 | 404,887 | 406,689 | ||||||||||||
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| Income from operations |
24,964 | 33,662 | 72,563 | 81,139 | ||||||||||||
| Interest expense |
9,087 | 8,841 | 26,898 | 26,453 | ||||||||||||
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| Income before income taxes |
15,877 | 24,821 | 45,665 | 54,686 | ||||||||||||
| Income taxes |
4,892 | 7,610 | 16,227 | 18,936 | ||||||||||||
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| Net income |
10,985 | 17,211 | 29,438 | 35,750 | ||||||||||||
| Less: Net income attributable to the noncontrolling interest |
1,217 | 1,678 | 2,656 | 3,514 | ||||||||||||
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| Net income attributable to Coca-Cola Bottling Co. Consolidated |
$ | 9,768 | $ | 15,533 | $ | 26,782 | $ | 32,236 | ||||||||
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| Basic net income per share based on net income attributable to Coca-Cola Bottling Co. Consolidated: |
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| Common Stock |
$ | 1.06 | $ | 1.69 | $ | 2.91 | $ | 3.51 | ||||||||
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| Weighted average number of Common Stock shares outstanding |
7,141 | 7,141 | 7,141 | 7,141 | ||||||||||||
| Class B Common Stock |
$ | 1.06 | $ | 1.69 | $ | 2.91 | $ | 3.51 | ||||||||
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| Weighted average number of Class B Common Stock shares outstanding |
2,067 | 2,044 | 2,061 | 2,039 | ||||||||||||
| Diluted net income per share based on net income attributable to |
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| Common Stock |
$ | 1.06 | $ | 1.68 | $ | 2.90 | $ | 3.50 | ||||||||
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| Weighted average number of Common Stock shares outstanding — assuming dilution |
9,248 | 9,225 | 9,242 | 9,220 | ||||||||||||
| Class B Common Stock |
$ | 1.05 | $ | 1.68 | $ | 2.89 | $ | 3.48 | ||||||||
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| Weighted average number of Class B Common Stock shares outstanding — assuming dilution |
2,107 | 2,084 | 2,101 | 2,079 | ||||||||||||