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): July 24, 2002 ------------- COCA-COLA BOTTLING CO. CONSOLIDATED ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 0-9286 56-0950585 -------- ---------- ---------- (State or other jurisdiction (Commission File Number) (IRS Employer Identification No.) of incorporation) 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)
Item 5. Other Events The Company issued the following press release on July 24, 2002.
Coca-Cola Bottling Co. Consolidated, 4100 Coca-Cola Plaza, Charlotte, NC 28211 News Release [LOGO] Media Contact: Lauren C. Steele VP Corporate Affairs 704-557-4551 Investor Contact: David V. Singer Executive VP & CFO 704-557-4604 FOR IMMEDIATE RELEASE Symbol: COKE July 24, 2002 Quoted: The Nasdaq Stock Market (National Market) Coca-Cola Bottling Co. Consolidated Reports Second Quarter 2002 Results .. Physical case volume increased 5% in the second quarter .. Operating Cash Flow increased 8% in the second quarter .. Net income for the second quarter doubled to $10.8 million CHARLOTTE, NC -- Coca-Cola Bottling Co. Consolidated today announced earnings of $10.8 million or $1.23 per share for the second quarter of 2002. This compares to net income of $5.0 million or $.57 per share for the second quarter of 2001. For the first six months of 2002, net income was $14.2 million or $1.61 per share as compared to $3.2 million or $.37 per share for the first six months of 2001. On January 2, 2002, the Company purchased an additional interest in Piedmont Coca-Cola Bottling Partnership, a partnership with The Coca-Cola Company, increasing its ownership from 50% to approximately 55%. As a result of the increase in ownership, the financial results of Piedmont are consolidated with those of the Company beginning with the first quarter of 2002. All comparisons of operating results in this release include the results of Piedmont as if it had been consolidated in all prior periods. During the first quarter of 2002, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," which had the effect of reducing amortization expense by $5.2 million in the second quarter and $10.3 million in the first half of 2002. This change materially impacts net income comparisons with the prior year. Had the new accounting method been in place in both years, the comparison of 2002 net income with prior year would show an increase of 34% in the second quarter and 54% in the first half. Comparable net sales were up 8.5% in the second quarter and 6.8% for the first six months of 2002. This growth was driven primarily by higher bottle/can volume which was up 5.4% in the second quarter and 4.2% in the first half. The difference between the growth rate in net sales and the volume growth rate reflects increased contract sales to other Coke bottlers, higher average revenue per case and shifting package and channel mix. Operating cash flow improved more than 8% in both the second quarter and the first half of 2002.
J. Frank Harrison, III, Chairman and CEO, said that he was pleased with the Company's results through June. Mr. Harrison said, "The Company's net income growth in the first half of 2002 was driven by solid gains in operating cash flow and significant declines in interest expense. The improved operating cash flow reflects profitable growth in volume, which is up more than 4% in the first half of 2002 on top of about 3% growth last year." Mr. Harrison said, "These gains in operating performance reflect our continued focus on growing carbonated soft drink brands through innovation, as well as the continued success of Dasani water and the successful introduction of Minute Maid Lemonade." Mr. Harrison attributed the significant declines in interest expense to the Company's sharp focus on generating free cash flow for debt reduction. He said, "Since December 31, 1999, the Company has reduced outstanding debt and lease liabilities by more than $170 million, when viewed on a comparable basis. Over the past year, the Company's debt has been reduced by more than $60 million. This lower debt balance, combined with a favorable interest rate environment has driven the Company's interest expense down by $6.6 million or 22% in the first half of 2002." William B. Elmore, President and COO, said that he believed the Company's performance through the first six months of 2002 reflects the dedicated efforts of a high quality organization focused on success. Mr. Elmore said, "Despite distractions resulting from branch consolidations, significant changes in distribution methodology and the addition of nearly 50 new products, our people have delivered outstanding results." Mr. Elmore said, "The Company's excellent performance in the first half is broad based, including gains in all major product categories and within all major channels of business. With regard to product categories, carbonated soft drinks were up by about 1% led by the introduction of Fanta flavors and Vanilla Coke. In the water category, Dasani volume was up more than 40%, driven by package innovation and broader distribution. In other noncarbonated beverages, the successful launch of Minute Maid Lemonade has driven significant growth and POWERade was up more than 25%." Mr. Elmore also said that solid sales performance and continued gains in productivity have enabled the Company to increase its investment in marketing activities during the first half of 2002. Although these spending increases have resulted in operating expenses growing at a faster rate than net sales, we believe our increased marketing investments position us to extend our sales momentum into the second half of 2002. 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 our focus on generating free cash flow for debt reduction, our expectations about increased marketing investment and our expectations about sales momentum in the second half of 2002. 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. --Enjoy Coca-Cola-
Coca-Cola Bottling Co. Consolidated CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) In Thousands (Except Per Share Data) Second Quarter First Half ------------------------------------ ------------------------------------ Pro forma Pro forma 2002 2001* 2001** 2002 2001* 2001** --------- --------- --------- --------- --------- ---------- Net sales $ 341,119 $ 262,338 $ 314,362 $ 624,317 $ 486,038 $ 584,689 Cost of sales 181,448 144,407 169,696 330,064 265,208 313,103 --------- --------- --------- --------- --------- --------- Gross margin 159,671 117,931 144,666 294,253 220,830 271,586 --------- --------- --------- --------- --------- --------- Selling, general and administrative expenses 106,984 76,733 96,080 203,504 150,324 187,939 Depreciation expense 18,857 16,595 17,985 36,842 32,398 35,192 Amortization of goodwill and intangibles 686 3,720 5,848 1,373 7,440 11,697 --------- --------- --------- --------- --------- --------- Income from operations 33,144 20,883 24,753 52,534 30,668 36,758 Interest expense 11,877 11,329 14,844 24,017 23,481 30,608 Other income (expense), net (650) (1,274) (1,238) (1,549) (1,853) (1,550) Minority interest 2,764 525 3,523 (323) --------- --------- --------- --------- --------- --------- Income before income taxes 17,853 8,280 8,146 23,445 5,334 4,923 Federal and state income taxes 7,070 3,271 3,221 9,284 2,107 1,942 --------- --------- --------- --------- --------- --------- Net income $ 10,783 $ 5,009 $ 4,925 $ 14,161 $ 3,227 $ 2,981 ========= ========= ========= ========= ========= ========= Basic net income per share $ 1.23 $ .57 $ .56 $ 1.61 $ .37 $ .34 ========= ========= ========= ========= ========= ========= Diluted net income per share $ 1.21 $ .57 $ .56 $ 1.60 $ .37 $ .34 ========= ========= ========= ========= ========= ========= Weighted average number of common shares outstanding 8,784 8,753 8,753 8,779 8,753 8,753 Weighted average number of common shares outstanding - assuming dilution 8,880 8,825 8,825 8,869 8,824 8,824 Income from operations $ 33,144 $ 20,883 $ 24,753 $ 52,534 $ 30,668 $ 36,758 Amortization of goodwill and intangibles 686 3,720 5,848 1,373 7,440 11,697 Depreciation expense 18,857 16,595 17,985 36,842 32,398 35,192 --------- --------- --------- --------- --------- --------- Operating cash flow $ 52,687 $ 41,198 $ 48,586 $ 90,749 $ 70,506 $ 83,647 ========= ========= ========= ========= ========= ========= * Certain prior year amounts have been reclassified to conform to current year classifications. **Certain prior year amounts have been reclassified to conform to current year classifications and include the results of operations of Piedmont Coca-Cola Bottling Partnership as if it were consolidated with those of the Company beginning January 1, 2001.
Coca-Cola Bottling Co. Consolidated CONSOLIDATED BALANCE SHEETS (UNAUDITED) In Thousands Pro forma June 30, Dec. 30, July 1, July 1, 2002 2001 2001* 2001** ----------- ----------- ----------- ----------- ASSETS Current Assets: Cash $ 8,667 $ 16,912 $ 6,833 $ 7,919 Accounts receivable, trade, net 93,548 63,974 68,149 89,156 Accounts receivable from The Coca-Cola Company 15,729 3,935 4,784 5,886 Accounts receivable, other 5,610 5,253 6,187 7,015 Inventories 42,020 39,916 36,014 42,399 Prepaid expenses and other current assets 17,715 13,379 15,201 15,654 ----------- ----------- ----------- ----------- Total current assets 183,289 143,369 137,168 168,029 ----------- ----------- ----------- ----------- Property, plant and equipment 827,979 766,222 770,697 829,336 Less-Accumulated depreciation and amortization 355,189 308,916 297,031 323,611 ----------- ----------- ----------- ----------- Property, plant and equipment, net 472,790 457,306 473,666 505,725 Leased property under capital leases 56,892 12,265 12,146 20,337 Less-Accumulated amortization 8,360 6,882 5,856 8,586 ----------- ----------- ----------- ----------- Leased property under capital leases, net 48,532 5,383 6,290 11,751 Investment in Piedmont Coca-Cola Bottling Partnership 60,203 59,858 Other assets 63,065 52,140 60,280 65,663 Franchise rights and goodwill 607,007 335,662 341,435 614,680 Other identifiable intangible assets 7,340 10,396 12,478 12,478 ----------- ----------- ----------- ----------- Total $ 1,382,023 $ 1,064,459 $ 1,091,175 $ 1,378,326 =========== =========== =========== =========== * Certain prior year amounts have been reclassified to conform to current year classifications. **Certain prior year amounts have been reclassified to conform to current year classifications and include the financial position of Piedmont Coca-Cola Bottling Partnership as if it were consolidated with that of the Company beginning January 1, 2001.
Coca-Cola Bottling Co. Consolidated CONSOLIDATED BALANCE SHEETS (UNAUDITED) In Thousands Pro forma June 30, Dec. 30, July 1, July 1, 2002 2001 2001* 2001** ---------- ---------- ---------- ---------- LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Portion of long-term debt payable within one year $ 215,631 $ 56,708 $ 57,132 $ 154,632 Current portion of obligations under capital leases 4,777 1,489 1,967 3,242 Accounts payable, trade 42,257 28,370 29,624 36,281 Accounts payable to The Coca-Cola Company 6,646 7,925 5,794 6,139 Due to Piedmont Coca-Cola Bottling Partnership 24,682 23,121 Other accrued liabilities 82,261 49,169 55,349 65,794 Accrued compensation 11,570 17,350 10,041 10,322 Accrued interest payable 11,140 11,878 13,413 15,149 ---------- ---------- ---------- ---------- Total current liabilities 374,282 197,571 196,441 291,559 ---------- ---------- ---------- ---------- Deferred income taxes 164,485 133,743 149,240 173,560 Pension and retiree benefit obligations 30,893 37,203 24,950 24,950 Other liabilities 61,133 57,770 51,299 54,386 Obligations under capital leases 42,123 935 1,291 4,606 Long-term debt 620,125 620,156 641,456 748,956 ---------- ---------- ---------- ---------- Total liabilities 1,293,041 1,047,378 1,064,677 1,298,017 ---------- ---------- ---------- ---------- Minority interest 59,356 54,057 Stockholders' Equity: Common Stock 9,498 9,454 9,454 9,454 Class B Common Stock 3,009 2,989 2,989 2,989 Capital in excess of par value 88,843 91,004 95,380 95,380 Retained earnings (accumulated deficit) 1,854 (12,307) (18,550) (18,796) Accumulated other comprehensive loss (12,324) (12,805) (1,521) (1,521) ---------- ---------- ---------- ---------- 90,880 78,335 87,752 87,506 Less-Treasury stock, at cost: Common 60,845 60,845 60,845 60,845 Class B Common 409 409 409 409 ---------- ---------- ---------- ---------- Total stockholders' equity 29,626 17,081 26,498 26,252 ---------- ---------- ---------- ---------- Total $1,382,023 $1,064,459 $1,091,175 $1,378,326 ========== ========== ========== ==========
Signatures 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 thereunto duly authorized: COCA-COLA BOTTLING CO. CONSOLIDATED ----------------------------------- (REGISTRANT) Date: July 26, 2002 BY: /s/ David V. Singer ------------------------------------------------ David V. Singer Principal Financial Officer of the Registrant and Executive Vice President and Chief Financial Officer