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): September 5, 2003
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)
| Item 7. | Financial Statements, Pro Forma Financial Information and Exhibits. |
(a) Financial Statements. Not applicable.
(b) Pro Forma Financial Information. Not applicable.
(c) Exhibits. The following exhibit is being filed herewith:
| 99.1 | Report to Stockholders for the period ending June 29, 2003. | |
| Item 12. | Results of Operations and Financial Condition. |
Registrant’s Report to Stockholders for the period ending June 29, 2003.
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: | September 5, 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: September 5, 2003
Commission File No: 0-9286
COCA-COLA BOTTLING CO. CONSOLIDATED
EXHIBIT INDEX
| Exhibit No. |
Exhibit Description | |
| 99.1 |
Report to Stockholders for the period ending June 29, 2003 |
Exhibit 99.1
Report to Stockholders: For the Period Ending June 29, 2003
Dear Stockholders:
Your Company reported net income for the second quarter of 2003 of $11.9 million or $1.32 per share compared to net income of $10.8 million or $1.23 per share for the second quarter of 2002. The results of the second quarter and first six months of 2003 were favorably impacted by a $3.1 million income tax benefit resulting from the completion of a tax audit. For the first six months of 2003, net income was $13.3 million or $1.47 per share compared to $14.2 million or $1.61 per share for the same period of 2002.
Net sales in the second quarter of 2003 declined by 3.4% as bottle/can volume decreased 4.3% and average revenue per unit increased about 1%. The decline in bottle/can volume was primarily attributable to unseasonably wet and cool weather across the Company’s territories as well as higher retail pricing by several of the Company’s large customers. In addition, the unseasonable weather conditions dampened sales in the higher margin immediate consumption market. For the first half of 2003, net sales decreased by 1.3% as bottle/can volume declined by 1.9% and average revenue per unit was flat. Primarily as a result of the changes in net sales, income from operations declined by 19% and 24% in the second quarter and first half of 2003, respectively.
Selling, general and administrative expenses increased only 3% in the first six months of 2003 and were flat in the second quarter of 2003, as compared to the respective prior periods, despite higher wage rates and significant increases in pension and casualty insurance expenses. Interest expense declined by 8% and 11% in the second quarter and first half of 2003 as compared to the comparable periods in the prior year due to lower average interest rates and lower debt balances. We believe that interest expense will approximate $43 million in 2003 or $6 million lower than last year.
The Company reduced total debt and capital lease obligations 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 at the end of March 2003.
We are pleased with the initial sales results for Sprite Remix, which was introduced in the second quarter of 2003. In addition, the Company continues to innovate with new packaging. The Company introduced a 390 ml PET package for the immediate consumption market in the second quarter of 2003 and recently has introduced 12-ounce PET bottles in Fridge Packs™ for the take home market in a portion of the Company’s territories. We are excited about the prospects for additional volume and gross margin from these two new packages as well as additional new packaging in the near future.
| J. Frank Harrison, III Chairman and Chief Executive Officer |
William B. Elmore President and Chief Operating Officer |
CONSOLIDATED BALANCE SHEETS
In Thousands
| Unaudited June 29, 2003 |
Dec. 29, 2002 |
Unaudited June 30, 2002 | |||||||
| Assets |
|||||||||
| Current Assets: |
|||||||||
| Cash |
$ | 7,272 | $ | 18,193 | $ | 8,667 | |||
| Trade accounts receivable, net |
84,858 | 79,548 | 93,548 | ||||||
| Accounts receivable, other |
15,356 | 29,993 | 21,339 | ||||||
| Inventories |
40,114 | 38,648 | 42,020 | ||||||
| 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 | ||||||
| Goodwill and other intangibles, net |
632,057 | 612,925 | 614,347 | ||||||
| Other assets |
60,912 | 58,167 | 73,376 | ||||||
| Total |
$ | 1,355,183 | $ | 1,353,525 | $ | 1,382,023 | |||
| Liabilities and Stockholders’ Equity |
|||||||||
| Current Liabilities: |
|||||||||
| Current portion of long-term debt |
$ | 39 | $ | 31 | $ | 215,631 | |||
| Current portion of obligations under capital leases |
4,091 | 3,960 | 4,777 | ||||||
| Accounts payable and accrued expenses |
147,926 | 151,884 | 153,874 | ||||||
| Total current liabilities |
152,056 | 155,875 | 374,282 | ||||||
| Deferred income taxes |
158,874 | 155,964 | 164,485 | ||||||
| Other liabilities |
99,534 | 95,488 | 92,026 | ||||||
| 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 |
44,627 | 32,867 | 29,626 | ||||||
| Total |
$ | 1,355,183 | $ | 1,353,525 | $ | 1,382,023 | |||
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 | ||||||||||||
| Cash dividends per share |
||||||||||||||||
| Common Stock |
$ | .25 | $ | .25 | $ | .50 | $ | .50 | ||||||||
| Class B Common Stock |
$ | .25 | $ | .25 | $ | .50 | $ | .50 | ||||||||
STOCKHOLDER INFORMATION
Corporate Address
The corporate office is located at 4100 Coca-Cola Plaza, Charlotte, NC 28211. The mailing address is Coca-Cola Bottling Co. Consolidated, P.O. Box 31487, Charlotte, NC 28231.
Common Stock Listing
Coca-Cola Bottling Co. Consolidated is listed on the Nasdaq National Market System under the ticker symbol - COKE.
Stockholder Inquiries
The Company’s transfer agent is responsible for stockholder records, issuance of stock certificates and distribution of dividend payments and IRS Form 1099s. The transfer agent also administers plans for dividend reinvestment and direct deposit. Stockholder requests and inquiries concerning these matters are most efficiently answered by corresponding directly with Wachovia Bank, N.A., Attention: Corporate Trust Client Services NC-1153, 1525 West W.T. Harris Blvd. 3C3, Charlotte, NC 28288-1153. Communication may also be made by calling Toll Free (800) 829-8432, Local (704) 590-7375 or Fax (704) 590-7598.
Stockholder Reports
Additional copies of the Company’s Annual Report on Form 10-K to the Securities and Exchange Commission or Quarterly Reports on Form 10-Q are available without charge upon written request to David V. Singer, Executive Vice President, Chief Financial Officer, Coca-Cola Bottling Co. Consolidated, P.O. Box 31487, Charlotte, NC 28231.
FORWARD-LOOKING STATEMENTS
This Report to Stockholders, as well as information included in, or incorporated by reference from, future filings by the Company with the Securities and Exchange Commission and information contained in written material, press releases and oral statements issued by or on behalf of the Company, contains, or may contain, forward-looking management comments and other statements that reflect management’s current outlook for future periods. These statements include, among others, statements relating to: the expectation for interest expense for 2003 and the introduction of new packaging in the future. These statements and expectations are based on the current available competitive, financial and economic data along with the Company’s operating plans, and are subject to future events and uncertainties. Events or uncertainties that could adversely affect future periods include, without limitation: lower than expected net pricing resulting from increased marketplace competition; changes in how significant customers market our products; an inability to meet performance requirements for expected levels of marketing funding support payments from The Coca-Cola Company; reduced marketing and advertising spending by The Coca-Cola Company or other beverage companies; an inability to meet requirements under bottling contracts; the inability of our aluminum can or PET bottle suppliers to meet our demand; material changes from expectations in the cost of raw materials; higher than expected fuel prices; adverse weather conditions; higher than expected insurance premiums; lower than anticipated return on pension plan assets; higher than anticipated health care costs; changes in financial markets; an inability to meet projections in acquired bottling territories and unfavorable interest rate fluctuations.