Cott Corp. Reports Revenue Gains In Third Quarter

Cott Corp., the world's largest retailer brand beverage company, announced its results for the third quarter ended Oct. 1, 2011. Third quarter 2011 revenue was $611 million compared to $487 million. The Cliffstar business, which was acquired during the third quarter of 2010, contributed $73 million of the increase in revenue. Operating income increased 49 percent to $29 million, compared to $20 million. The third quarter of 2010 included $6.4 million of transaction costs. Excluding Cliffstar purchase accounting adjustments and integration expenses, adjusted operating income was $35 million. EBITDA was $52 million, compared to $37 million in the prior year. Excluding Cliffstar purchase accounting adjustments and integration expenses, adjusted EBITDA was $55 million. Net income and earnings per diluted share were $16 million and $0.17, respectively, compared to $6 million and $0.07, respectively. Excluding Cliffstar purchase accounting adjustments and integration expenses, adjusted net income and adjusted earnings per diluted share were $21 million and $0.22, respectively, compared to $15 million and $0.17, respectively.

"During the third quarter, we experienced a solid increase in volume and revenue, both of which exceeded our expectations. However, margins were lower than we would have wished due to higher than anticipated commodity costs and our product mix during the quarter," commented Jerry Fowden, Cott's chief executive officer in a prepared statement. "As we look to 2012, we are focusing on improving our margins as we endeavor to adjust the balance across volume, revenue growth and per case margins," continued Fowden.

In the third quarter, filled beverage case volume increased 13 percent (6 percent excluding Cliffstar) driven by higher volumes in North America, the United Kingdom/Europe (U.K.) and Mexico.

Revenue increased 26 percent (9 percent excluding Cliffstar and the impact of foreign exchange). Increased revenues were driven by a combination of higher volumes and higher pricing in North America and the U.K. The U.K. benefited from continued favorable product mix.

Gross profit as a percentage of revenue was 11.1 percent compared to 13.8 percent. The decline in gross profit as a percentage of revenue was attributable primarily to the continued adverse impact of higher commodity costs.

Selling, general and administrative (SG&A) expenses were $38 million compared to $47 million. The decrease in SG&A was driven by reduced integration and acquisition costs, lower information technology expenses and reduced accruals for bonus and long-term incentive compensation costs.

Operating income increased 49 percent to $29 million compared to $20 million. The third quarter of 2010 included $6.4 million of transaction costs. Excluding Cliffstar purchase accounting adjustments and integration expenses, adjusted operating income was $35 million compared to $33 million.

EBITDA was $52 million compared to $37 million. Excluding Cliffstar purchase accounting adjustments and integration expenses, adjusted EBITDA was $55 million compared to $50 million.

Cash provided by operating activities was $64 million and capital expenditures were $8 million.

North America filled beverage case volume increased 12 percent (4 percent excluding Cliffstar) to 188 million cases. Revenue increased 26 percent to $468 million. Excluding the impact of the Cliffstar acquisition and foreign exchange, revenue increased 5 percent. Operating income was $20 million compared to $13 million.

 

 

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