US: Charges drag down Q3 profits for Coke Consolidated
Coca-Cola Bottling Co. Consolidated has seen a one-off pension-related payment help turn profit to loss in its third quarter.
The North Carolina-based bottler said yesterday (29 October) that the net profit of US$5.3m in the third quarter last year has become a loss of $3.1m in the three months to the end of September. The results include a $7.2m net charge to freeze the company's liability to the Central States, Southeast and Southwest Areas Pension Fund, while preserving pension benefits previously earned by company employees covered by this plan. The company also highlighted that it took a $2.1m net charge for "the actions taken under the company's previously announced restructuring plan".
Sales in the quarter rose, meanwhile, to $381.5m from $367.4m.
For the first nine months of 2008, net profit plunged to $7.7m from $21.6m in the corresponding period a year earlier. As well as the $9.3m charges in the third quarter, Coke Consolidated was hit by a further net charge of $1.6m relating to "a simplification of the company's operating management structure and reduction in workforce".
In the nine-month period, sales increased slightly, to $1.12bn from $1.09bn.
"We are pleased we were able to increase our net sales by 4% ... in the third quarter ... given the rapidly softening economy and extraordinary increases in raw materials costs," said company president and COO, William Elmore. "Our intense focus on price realisation to cover input costs coupled with aggressive but thoughtful reductions in operating expenses delivered a sizeable increase in operating income on a normalised basis."
Coke Consolidated's CEO, Frank Harrison, added: "The current uncertainty in the economy presents a challenge for our consumers, customers, suppliers and employees. Nonetheless ... we remain confident about our future prospects."
Coke Consolidated is the country's second-largest bottler for The Coca-Cola Co.
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