USA: Coca-Cola Bottling Co. Consolidated Reports First Quarter 2000 Earnings
Coca-Cola Bottling Co. Consolidated (Nasdaq: COKE) today announced a first quarter loss of $2.0 million for the first quarter of 2000, which compares to a $4.5 million loss for the first quarter of 1999. On a per share basis, the company lost $.22 in the first quarter of 2000, a 56% improvement compared to the $.54 loss incurred in the first quarter of 1999.
Net sales for the first quarter of 2000 were up 4%, driven by a 9% increase in revenue per unit and a 5% decline in unit sales. Excluding volume from acquired territories, unit sales declined by approximately 7.5%. The strong increase in average revenue per unit led to a $7.8 million or 33% increase in operating cash flow.
J. Frank Harrison, III, Chairman and CEO, said that he was very encouraged by the improvements in the Company's first quarter financial performance. Mr. Harrison said that he believed the decline in unit volume was temporary and was in line with our expectations for the quarter. Increased selling prices have had a negative impact on unit sales volume and first quarter volume growth also was affected by the shifting of the Easter holiday, which impacted the first quarter of 1999 but will occur in the second quarter of 2000. Mr. Harrison said that CCBCC has grown unit sales in excess of the industry average for more than 10 years. During the past 3 years, unit sales growth significantly outpaced the industry growth rate, but selling prices did not keep pace with cost increases, thus margins narrowed and net income declined. In 2000, the Company has begun to increase selling prices in order to cover increasing raw material costs and improve operating margins.
James L. Moore, President and COO, said that the increased net pricing in the first quarter drove a 15% increase in gross margin, which led to a 33% increase in operating cash flow. Depreciation and interest expense were up 10% and 19%, respectively, driven primarily by significant 1999 capital investments and slightly higher interest rates. The company's net loss improved by 56% to $2.0 million. Mr. Moore said he believed the negative impact of price increases on unit volume would subside over the next few months as customers and consumers become more accustomed to higher prices. However, Mr. Moore cautioned that the Company has experienced a strike, beginning in mid-March, involving several branches in the Company's West Virginia territory. The impacted branches represent approximately 7% of the Company's total sales. For the first quarter of 2000, the strike did not have a significant impact on the Company's sales or operating income. If the strike continues, it could have a slight dampening effect on both sales and profitability for the remainder of 2000.
Forward looking statements.
Included in this news release are several forward-looking management comments and other statements that reflect management's current outlook for future periods. These 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. Among the events or uncertainties which could adversely affect future periods are: lower-than- expected net pricing resulting from increased marketplace competition, an inability to meet performance requirements for expected levels of marketing support payments from The Coca-Cola Company, material changes from expectations in the cost of raw materials and ingredients, higher than expected fuel prices, an inability to meet projections for performance in newly acquired territories and unfavorable interest rate fluctuations. The forward-looking statements in this news release should be read in conjunction with the detailed cautionary statements found on page 19 of the Company's 1999 Annual Report to shareholders.
- COCA-COLA BOTTLING CO. CONSOLIDATED
- CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
- In Thousands (Except Per Share Data)
First Quarter 2000 1999 1998 Net sales $ 228,184 $ 220,263 $ 203,331 Cost of sales 122,243 128,111 118,397 Gross margin 105,941 92,152 84,934 Selling, general and administrative expenses 74,242 68,224 66,479 Depreciation expense 16,090 14,648 8,780 Amortization of goodwill and intangibles 3,664 3,262 3,175 Income from operations 11,945 6,018 6,500 Interest expense 13,936 11,695 9,258 Other income (expense), net (1,019) (1,215) (1,157) Income (loss) before income taxes (3,010) (6,892) (3,915) Federal and state income taxes (benefit) (1,053) (2,412) (1,453) Net income (loss) $ (1,957) $ (4,480) $ (2,462) Basic net income (loss) per share $ (.22) $ (.54) $ (.29) Diluted net income (loss) per share $ (.22) $ (.54) $ (.29) Weighted average number of common shares outstanding 8,733 8,365 8,365 Weighted average number of common shares outstanding - assuming dilution 8,733 8,365 8,365 Income from operations $ 11,945 $ 6,018 $ 6,500 Amortization of goodwill and intangibles 3,664 3,262 3,175 Depreciation expense 16,090 14,648 8,780 Operating cash flow $ 31,699 $ 23,928 $ 18,455
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