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):
September 8, 2006
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 September 8, 2006, Coca-Cola Bottling Co. Consolidated issued its Report to Stockholders for the quarter ended July 2, 2006. A copy of the Report to Stockholders is furnished as Exhibit 99.1 hereto.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Report to Stockholders for the quarter ended July 2, 2006.
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: September 8, 2006 | BY: | /s/ Steven D. Westphal | ||
| Steven D. Westphal | ||||
| Principal Financial Officer of the Registrant | ||||
| and | ||||
| Senior Vice President 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: | |
| September 8, 2006 |
0-9286 |
COCA-COLA BOTTLING CO. CONSOLIDATED
EXHIBIT INDEX
| Exhibit No. | Exhibit Description | |||
| 99.1 | Report to Stockholders for the quarter ended July 2, 2006. | |||
Exhibit 99.1
Report to Stockholders for the Quarter Ended July 2, 2006
Dear Stockholders:
Your Company reported net income for the second quarter of 2006 of $8.9 million, or $.97 per share on a diluted basis, compared to $11.5 million, or $1.27 per share on a diluted basis, for the second quarter of 2005. In addition, net income for the first six months of 2006 was $9.7 million, or $1.06 per share on a diluted basis, compared to $12.2 million, or $1.35 per share on a diluted basis, for the same period of 2005. Our results in the second quarter and first six months of 2005 were favorably impacted by an adjustment of $3.7 million after-tax, or $.41 per share, as the result of proceeds received from the settlement of a class action litigation related to high fructose corn syrup, offset partially by financing costs of $.7 million after-tax, or $.08 per share, associated with a debt exchange offer which occurred in June 2005.
The Company’s results in the second quarter of 2006 reflected revenue growth of 7.0%, or $25.4 million, which offset cost increases in raw materials, employee related expenses, property and casualty insurance and fuel. The growth in revenue was due to an approximate 6% increase in bottle/can revenue and an approximate 20%, or $6.9 million, increase in sales to other Coca-Cola bottlers, partially offset by a 1.3% decrease in average revenue per case from price reductions made in response to competitive pressures, primarily in the supermarket channel. The decline in average revenue per case in the second quarter of 2006 represented a short-term departure from our long-term pricing strategy of executing price increases necessary to maintain our margins.
The Company’s gross margin in the second quarter of 2006 increased by $1.3 million to $167.7 million as compared to the second quarter of 2005. Growth in energy products was the primary reason for the increase in gross margin in the second quarter of 2006. The second quarter of 2005 included a favorable impact of $6.4 million for the proceeds received from the settlement of the class action litigation related to high fructose corn syrup.
We are encouraged about our growth in bottle/can revenue in the second quarter of 2006 as such growth was balanced across our product portfolio. Carbonated soft drink revenue (including energy products) grew by 4% and noncarbonated revenue grew by 13%. Energy products continue to perform strongly, contributing 15% of the overall increase in net sales in the second quarter of 2006 as compared to the second quarter of 2005. Product innovation played a key role as well, particularly with growth in the Vault and Coke Zero brands.
| J. Frank Harrison, III Chairman and Chief Executive Officer |
William B. Elmore President and Chief Operating Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS
In Thousands
| Unaudited July 2, 2006 |
Jan. 1, 2006 |
Unaudited July 3, 2005 | |||||||
| Assets |
|||||||||
| Current Assets: |
|||||||||
| Cash and cash equivalents |
$ | 30,971 | $ | 39,608 | $ | 10,155 | |||
| Trade accounts receivable, net |
106,740 | 94,576 | 100,640 | ||||||
| Accounts receivable, other |
21,194 | 11,107 | 12,216 | ||||||
| Inventories |
63,932 | 58,233 | 55,324 | ||||||
| Prepaids and other current assets |
15,848 | 8,862 | 12,806 | ||||||
| Total current assets |
238,685 | 212,386 | 191,141 | ||||||
| Property, plant and equipment, net |
385,813 | 389,199 | 398,368 | ||||||
| Leased property under capital leases, net |
71,511 | 73,244 | 75,051 | ||||||
| Other assets |
38,892 | 39,235 | 40,239 | ||||||
| Franchise rights |
520,672 | 520,672 | 520,672 | ||||||
| Goodwill |
102,049 | 102,049 | 102,049 | ||||||
| Other identifiable intangible assets, net |
4,986 | 5,054 | 5,369 | ||||||
| Total |
$ | 1,362,608 | $ | 1,341,839 | $ | 1,332,889 | |||
| Liabilities and Stockholders’ Equity |
|||||||||
| Current Liabilities: |
|||||||||
| Current portion of debt |
$ | — | $ | 6,539 | $ | 2,939 | |||
| Current portion of obligations |
1,594 | 1,709 | 1,794 | ||||||
| Accounts payable and accrued expenses |
150,378 | 139,567 | 146,496 | ||||||
| Total current liabilities |
151,972 | 147,815 | 151,229 | ||||||
| Deferred income taxes |
163,650 | 167,131 | 168,433 | ||||||
| Pension, postretirement and other liabilities |
154,685 | 140,032 | 120,966 | ||||||
| Obligations under capital leases |
76,728 | 77,493 | 78,336 | ||||||
| Long-term debt |
691,450 | 691,450 | 700,000 | ||||||
| Total liabilities |
1,238,485 | 1,223,921 | 1,218,964 | ||||||
| Minority interest |
44,489 | 42,784 | 40,648 | ||||||
| Stockholders’ equity |
79,634 | 75,134 | 73,277 | ||||||
| Total |
$ | 1,362,608 | $ | 1,341,839 | $ | 1,332,889 | |||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Data)
| Second Quarter |
First Half | |||||||||||
| 2006 |
2005 |
2006 |
2005 | |||||||||
| Net sales |
$ | 386,624 | $ | 361,224 | $ | 719,803 | $ | 670,409 | ||||
| Cost of sales |
218,935 | 194,859 | 406,088 | 364,510 | ||||||||
| Gross margin |
167,689 | 166,365 | 313,715 | 305,899 | ||||||||
| Selling, delivery and administrative expenses |
138,310 | 132,025 | 270,038 | 257,924 | ||||||||
| Amortization of intangibles |
142 | 157 | 290 | 566 | ||||||||
| Income from operations |
29,237 | 34,183 | 43,387 | 47,409 | ||||||||
| Interest expense |
12,843 | 12,893 | 25,063 | 24,391 | ||||||||
| Minority interest |
1,149 | 1,441 | 1,705 | 1,961 | ||||||||
| Income before income taxes |
15,245 | 19,849 | 16,619 | 21,057 | ||||||||
| Income taxes |
6,358 | 8,330 | 6,917 | 8,819 | ||||||||
| Net income |
$ | 8,887 | $ | 11,519 | $ | 9,702 | $ | 12,238 | ||||
| Diluted net income per share |
$ | .97 | $ | 1.27 | $ | 1.06 | $ | 1.35 | ||||
| Weighted average number of common shares outstanding — assuming dilution |
9,123 | 9,083 | 9,118 | 9,083 | ||||||||
| Cash dividends per share |
||||||||||||
| Common Stock |
$ | .25 | $ | .25 | $ | .50 | $ | .50 | ||||
| Class B Common Stock |
$ | .25 | $ | .25 | $ | .50 | $ | .50 | ||||
CORPORATE INFORMATION
Transfer Agent and Dividend Disbursing Agent
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 American Stock Transfer & Trust Company, 59 Maiden Lane, New York, New York 10038. Communication may also be made by calling toll-free (866) 668-6550, local (718) 921-8346 or fax (718) 236-2641.
Stock Listing
Coca-Cola Bottling Co. Consolidated is listed on The Nasdaq Global Market under the ticker symbol COKE.
Company Website
www.cokeconsolidated.com
Corporate Office
Our corporate office is located at 4100 Coca-Cola Plaza, Charlotte, NC 28211. Our mailing address is Coca-Cola Bottling Co. Consolidated, P.O. Box 31487, Charlotte, NC 28231.
Periodic Reports and Code of Ethics for Senior Financial Officers
Copies of the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K to the United States Securities and Exchange Commission and its Code of Ethics for Senior Financial Officers are available without charge upon written request to Steven D. Westphal, Senior Vice President and Chief Financial Officer, Coca-Cola Bottling Co. Consolidated, P.O. Box 31487, Charlotte, NC 28231. This information may also be obtained from the Company’s website as noted above.
CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Included in this Report to Stockholders 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 about the Company’s long-term pricing strategy of executing price increases necessary to maintain margins.
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 public and consumer preferences related to nonalcoholic beverages; our inability to meet requirements under bottling contracts; 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 level 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 costs; sustained increases in the cost of employee benefits; changes in interest rates; adverse changes in our debt 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; additional taxes resulting from tax audits; natural disasters and unfavorable weather; issues surrounding labor relations; recent bottler litigation; and our use of estimates and assumptions. The forward-looking statements in this Report to Stockholders 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 1, 2006 under Part I, Item 1A “Risk Factors.” The Company undertakes no obligation to update or revise any forward-looking statements contained in this Report to Stockholders as a result of new information or future events or developments.