Form 8-K

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): October 22, 2003

 


 

COCA-COLA BOTTLING CO. CONSOLIDATED

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other

jurisdiction of incorporation)

 

0-9286

(Commission File Number)

 

56-0950585

(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)

 


 


Item 7.   Financial Statements, Pro Forma Financial Information and Exhibits.

 

a) Financial Statements. Not applicable.

 

b) Pro Forma Financial Information. Not applicable.

 

c) Exhibits.

 

99.1    Press release issued on October 22, 2003.

 

Item 12.   Results of Operations and Financial Condition.

 

On October 22, 2003, Coca-Cola Bottling Co. Consolidated issued a press release announcing third quarter 2003 results. A copy of the press release is attached as Exhibit 99.1.

 

The information in this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

 

 


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: October 27, 2003       By:   /s/    David V. Singer        
         
               

David V. Singer

Principal Financial Officer of the Registrant and

Executive Vice President and Chief Financial Officer


SECURITIES AND EXCHANGE COMMISSION

Washington, DC

 

EXHIBITS

 

CURRENT REPORT

ON

FORM 8-K

 

Date of Event Reported:

      Commission File No:

October 22, 2003

      0-9286            

 

COCA-COLA BOTTLING CO. CONSOLIDATED

 

EXHIBIT INDEX

 

Exhibit No.

  

Exhibit Description


99.1   

Press  release issued on October 22, 2003.

Press Release

Exhibit 99.1

 

Coca-Cola Bottling Co. Consolidated, 4100 Coca-Cola Plaza, Charlotte, NC 28211

 

 

LOGO             

News Release

 

       

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

October 22, 2003

  Quoted: The Nasdaq Stock Market (National Market)

 

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

 

CHARLOTTE, NC — Coca-Cola Bottling Co. Consolidated today announced earnings of $13.8 million or $1.53 per share for the third quarter of 2003. This compares to net income of $9.5 million or $1.08 per share for the third quarter of 2002. For the first nine months of 2003, net income was $27.2 million or $3.00 per share as compared to $23.7 million or $2.69 per share for the first nine months of 2002.

 

Net sales increased 1.8% in the third quarter of 2003 as compared to the third quarter of 2002. This increase reflected growth in average revenue per case and contract sales, which more than offset a 3.8% decline in bottle/can volume. The decline in volume reflected unseasonably cool and abnormally wet weather across the Company’s territories in July and August as well as less aggressive retail pricing by several of the Company’s customers. For the third quarter of 2003, average revenue per case, excluding customer marketing costs, increased by 1.9%. Income from operations in the third quarter of 2003 was down 6.8%, which primarily reflected higher operating expenses, driven by higher wage rates and a significant increase in pension costs, health care benefits and fuel prices. The reduction in income from operations was offset by declines in interest expense and minority interest expense. The Company’s effective income tax rate was 17% in the third quarter of 2003 compared to 42% in the third quarter of 2002. This decrease was attributable to deferred tax benefits relating to a reduction in the valuation allowance against state deferred tax assets.

 

For the first nine months of 2003, net sales were approximately even with the prior year. These results reflected a 2.6% decline in bottle/can volume offset by a 1.2% increase in average revenue per case, excluding customer marketing costs, and higher contract sales. Income from operations for the first nine months was down 16.7% compared to the prior year. This decline primarily reflected higher operating expenses driven by increased wage rates, pension costs, health care benefits, fuel costs and casualty insurance. Declines in interest expense, minority interest expense and income tax expense have more than offset the decline in operating income, resulting in an increase in net income for the first nine months of 2003. The Company’s effective income tax rate was 19% for the first nine months of 2003 compared to 41% for the first nine months of 2002. This decrease was attributable to deferred tax benefits arising


from the completion of a favorable state tax audit and a reduction in the valuation allowance against state deferred tax assets.

 

J. Frank Harrison, III, Chairman and CEO, said, “While I am disappointed in the Company’s operating income performance through September, the pricing increases we have been able to implement in the third quarter are encouraging.” Mr. Harrison said, “I am also encouraged by the Company’s expense control through the first nine months. Despite higher wage rates, a significant increase in pension and medical benefit costs, and higher fuel prices, the Company’s other operating expenses have only increased modestly.” Mr. Harrison also noted that the Company’s strong cash flow has enabled it to reduce debt considerably over the past few years and increase the Company’s ownership in Piedmont Coca-Cola Bottling Partnership. These moves have led to lower interest expense and minority interest expense, offsetting much of the decline in operating income.

 

William B. Elmore, President and COO, said, “The volume decline in the third quarter reflects unseasonably cool and wet weather in July and August and exceptionally strong prior year volume. Volume in the third quarter of 2002 was up 8% sparked by the very successful launch of Vanilla Coke.” Mr. Elmore also said, “While overall volume declined in the third quarter, our diet portfolio was very strong, growing nearly 8% fueled by diet Vanilla Coke and diet Cherry Coke.” Mr. Elmore concluded, “The Company remains focused on improving net sales performance through a combination of higher pricing and innovations in packaging. These innovations include a 390 ml PET bottle for the immediate consumption market and 12 ounce PET bottle in Fridge Packs 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 fourth quarter of 2003 through a combination of higher pricing and innovations in packaging including the 390 ml PET bottle for the immediate consumption market and 12 ounce PET bottle in Fridge Packs 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 funding 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)

 

     Third Quarter

   First Nine Months

     2003

   2002

   2003

   2002

Net sales

   $ 325,637    $ 319,725    $ 919,002    $ 920,855

Cost of sales

     168,878      165,902      473,718      473,245
    

  

  

  

Gross margin

     156,759      153,823      445,284      447,610

Selling, general and administrative expenses

     108,400      103,087      317,730      307,674

Depreciation expense

     18,956      19,405      57,253      56,247

Amortization of intangibles

     846      683      2,311      2,056
    

  

  

  

Income from operations

     28,557      30,648      67,990      81,633

Interest expense

     10,414      11,454      31,701      35,471

Minority interest

     1,432      2,672      2,690      6,195
    

  

  

  

Income before income taxes

     16,711      16,522      33,599      39,967

Income taxes

     2,865      6,983      6,446      16,267
    

  

  

  

Net income

   $ 13,846    $ 9,539    $ 27,153    $ 23,700
    

  

  

  

Basic net income per share

   $ 1.53    $ 1.08    $ 3.00    $ 2.69
    

  

  

  

Diluted net income per share

   $ 1.53    $ 1.07    $ 3.00    $ 2.67
    

  

  

  

Weighted average number of common shares outstanding

     9,043      8,864      9,043      8,807

Weighted average number of common shares outstanding - assuming dilution

     9,043      8,924      9,043      8,887

 

Certain prior year amounts have been reclassified to conform to current year classifications.

 


Coca-Cola Bottling Co. Consolidated

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

In Thousands

 

    

Sept. 28,

2003


  

Dec. 29,

2002


  

Sept. 29,

2002


ASSETS

                    

Current Assets:

                    

Cash

   $ 18,280    $ 18,193    $ 8,286

Accounts receivable, trade, net

     83,977      79,548      84,365

Accounts receivable from The Coca-Cola Company

     24,555      12,992      19,965

Accounts receivable, other

     4,531      17,001      6,479

Inventories

     41,156      38,648      42,433

Prepaid expenses and other current assets

     7,121      4,588      6,501
    

  

  

Total current assets

     179,620      170,970      168,029
    

  

  

Property, plant and equipment, net

     457,097      466,840      467,281

Leased property under capital leases, net

     43,726      44,623      44,593

Other assets

     59,421      58,167      72,220

Franchise rights and goodwill, net

     622,721      606,128      607,007

Other identifiable intangible assets, net

     9,844      6,797      6,658
    

  

  

Total

   $ 1,372,429    $ 1,353,525    $ 1,365,788
    

  

  


Coca-Cola Bottling Co. Consolidated

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

In Thousands

 

    

Sept. 28,

2003


   

Dec. 29,

2002


    Sept. 29,
2002


 

LIABILITIES AND STOCKHOLDERS’ EQUITY

                        

Current Liabilities:

                        

Portion of long-term debt payable within one year

   $ 35,039     $ 31     $ 154,731  

Current portion of obligations under capital leases

     4,194       3,960       3,717  

Accounts payable, trade

     39,368       38,303       35,238  

Accounts payable to The Coca-Cola Company

     5,559       9,823       41,477  

Other accrued liabilities

     74,931       72,647       66,985  

Accrued compensation

     15,159       20,462       16,912  

Accrued interest payable

     18,866       10,649       16,179  
    


 


 


Total current liabilities

     193,116       155,875       335,239  
    


 


 


Deferred income taxes

     161,789       155,964       170,012  

Pension and retiree benefit obligations

     39,286       37,227       31,603  

Other liabilities

     60,953       58,261       61,782  

Obligations under capital leases

     41,727       42,066       41,985  

Long-term debt

     785,078       807,725       620,125  
    


 


 


Total liabilities

     1,281,949       1,257,118       1,260,746  
    


 


 


Minority interest

     34,264       63,540       62,332  

Stockholders’ Equity:

                        

Common Stock

     9,704       9,704       9,653  

Class B Common Stock

     3,029       3,009       3,009  

Capital in excess of par value

     97,220       95,986       94,209  

Retained earnings

     26,413       6,043       9,176  

Accumulated other comprehensive loss

     (18,896 )     (20,621 )     (12,083 )
    


 


 


       117,470       94,121       103,964  

Less-Treasury stock, at cost:

                        

Common

     60,845       60,845       60,845  

Class B Common

     409       409       409  
    


 


 


Total stockholders’ equity

     56,216       32,867       42,710  
    


 


 


Total

   $ 1,372,429     $ 1,353,525     $ 1,365,788