TORONTO, ON and TAMPA, FL--(Marketwired - May 5, 2016) - Cott Corporation announced its results for the first quarter ended April 2, 2016.
First Quarter Highlights
- DS Services achieves 42% first quarter increase in organic new customer additions in the U.S.
- DS Services extends in store retail booth partnership through the end of 2021.
- Gross profit increased to $214 million and gross margin was 30.6% compared to gross profit of $201 million and gross margin of 28.4%.
- Adjusted EBITDA was $71 million (after incremental new customer investment expenses of over $3 million and $3 million adverse foreign exchange impact) compared to $74 million. Reported EBITDA was $69 million.
(Unless stated otherwise, all first quarter 2016 comparisons are relative to the first quarter of 2015; all information is in U.S. dollars.)
"I am very pleased with the quarter's strong new customer additions across our entire Home and Office business as well as the overall increase in our gross margin and improved free cash flow" commented Jerry Fowden, Cott's Chief Executive Officer. "During the quarter we invested over $3 million in incremental sales and marketing behind home and office customer programs which helped drive a first quarter 42% increase in new customer adds," continued Mr. Fowden.
First Quarter 2016 Reporting Segment Performance
DS Services revenue increased 7% to $257 million due primarily to the addition of the Aquaterra business, growth in home and office delivery water, single cup coffee delivery and retail sales, offset in part by a declining energy surcharge as a result of lower diesel fuel prices and reduced sales in traditional brew basket coffee. Revenue on an energy surcharge neutral basis increased 8% (2% excluding Aquaterra). DS Services gross profit increased by 10% to $154 million while gross profit as a percentage of revenue increased to 60.0% from 58.2%. DS Services EBITDA of $35 million was up 21% from $29 million while DS Services adjusted EBITDA decreased by $1 million to $36 million compared to $37 million, as DS Services invested over $3 million driving strong first quarter organic growth in new customer additions and incurred higher than expected first quarter fleet maintenance and operational manufacturing costs.
North America volume increased 2% in actual cases and was lower by 3% in servings with 11% growth in the sparkling water and mixer category and 8% growth in contract manufacturing offset by declines in private label carbonated soft drinks and shelf stable juices. Revenue was lower by 5% (lower by 4% on a foreign exchange neutral basis) at $313 million due primarily to an overall product mix shift into contract manufacturing. Gross profit as a percentage of revenue decreased to 11.4% compared to 12.8% due primarily to approximately $2 million of adverse foreign exchange impact, operational costs driven by unscheduled plant downtime and additional cost associated with a product launch for a range of new age sparkling flavored waters for a key customer. Full report.
