(Unless stated otherwise, all first quarter 2019 comparisons are
relative to the first quarter of 2018; all information is in U.S.
dollars.)
TORONTO and TAMPA, FL,
May 2, 2019 /CNW/ - Cott Corporation
(NYSE:COT; TSX:BCB) today announced its results for the first
quarter ended March 30, 2019.
"I am pleased with the revenue growth we realized in the first
quarter with the continued strong growth in our Route Based
Services business and the performance in our Coffee, Tea and
Extract Solutions business," commented Tom
Harrington, Cott's Chief Executive Officer.
"With one quarter complete, we remain committed to our
financial targets for 2019," continued Mr. Harrington.
FIRST QUARTER 2019 GLOBAL PERFORMANCE
- Revenue increased 2% to $574
million (7% adjusting for the items set forth on Exhibit 8).
Revenue growth by segment in the quarter is tabulated below:
Consolidated
|
Revenue
Bridge
|
2018 Q1
Revenue
|
$
|
560.8
|
Route Based
Services
|
+34.3
|
Coffee, Tea and
Extract Solutions
|
+6.0
|
Foreign exchange
(a)
|
-11.9
|
Change in average
green coffee commodity pass-through costs
|
-4.1
|
Divested Cott
Beverages LLC business
|
-10.5
|
Eliminations
|
-0.5
|
2019 Q1
Revenue
|
$
|
574.1
|
|
|
(a) See Exhibit 5 for details by
reporting segment
|
|
- Excluding the soft drink concentrate production business and RC
Cola International division ("Cott Beverages LLC"), which was sold
on February 8, 2019, gross margin as
a percentage of revenue was flat at 49.9%. The fixed cost leverage
from revenue growth was offset by the negative impact of foreign
exchange as well as incremental operating costs to support
increased revenue growth.
- Excluding Cott Beverages LLC, SG&A as a percentage of
revenue was 47.8% compared to 47.6%.
- Interest expense was $19 million
compared to $21 million as the prior
year's debt reduction benefited the full quarter of 2019 compared
to only two months in the first quarter of 2018.
- Reported net loss and net loss per diluted share were
$20 million and $0.14, respectively, compared to reported net
income and net income per diluted share of $5 million and $0.03, respectively. Adjusted EBITDA was
$63 million compared to $64 million as the growth in revenue was offset
by the negative impact of approximately $2
million of foreign exchange and increased operating
costs.
- Net cash provided by operating activities of $24 million, less $24
million of capital expenditures, resulted in nil free cash
flow, or $4 million of adjusted free
cash flow (adjusting for the items set forth on Exhibit 7),
compared to adjusted free cash flow of $22
million in the prior year due to the timing of working
capital as well as a benefit from other income recorded in the
prior year.
FIRST QUARTER 2019 REPORTING SEGMENT
PERFORMANCE
Route Based Services
- Revenue increased 6% (9% excluding the impact of foreign
exchange) to $421 million. A detailed
breakdown is tabulated below.
Route Based
Services
|
Revenue
Bridge
|
2018 Q1
Revenue
|
|
$
|
398.1
|
HOD Water
related
|
|
+20.2
|
|
|
|
Customer
Growth/Volume
|
+3.6
|
|
|
|
|
Price/Mix
|
+5.2
|
|
|
|
|
Crystal Rock and
Mountain Valley HOD Water
|
+11.4
|
|
|
|
|
Retail
|
|
+6.6
|
Filtration
|
|
+0.5
|
OCS
|
|
+2.6
|
Other
|
|
+4.4
|
Change excluding
foreign exchange impact(a)
|
|
+34.3
|
Foreign exchange
impact
|
|
-11.9
|
2019 Q1
Revenue
|
|
$
|
420.5
|
|
(a) Crystal Rock and Mountain Valley
additions, net of PCS divestiture,
accounted for $21 million of revenue growth with HOD Water
related
+$11 million, Retail +$3 million, OCS +$2 million and Other +$5
million.
|
- Gross profit increased 4% to $243
million driven primarily by growth in revenue. Gross margin
as a percentage of revenue was 57.7% compared to 58.4% as the
leverage from revenue growth was offset by the negative impact of
foreign exchange as well as increased production costs to support
revenue growth.
- SG&A increased to $225
million compared to $215
million due primarily to the addition of the Crystal Rock
and Mountain Valley businesses.
- Operating income was flat at $14
million, while adjusted EBITDA was flat at $60 million, as revenue growth was offset by
approximately $2 million of negative
foreign exchange impact and increased production costs.
Coffee, Tea and Extract Solutions
- Revenue increased 1% (4% adjusting for the change in average
cost of coffee) driven primarily by 6% growth in coffee and tea
pounds sold and 10% volume growth in liquid coffee and extracts,
partially offset by the competitive pricing environment within the
on-the-go roast and ground coffee market. A detailed breakdown is
tabulated below.
Coffee, Tea and
Extract Solutions
|
Revenue
Bridge
|
2018 Q1
Revenue
|
$
|
146.1
|
Coffee
volume
|
+7.7
|
Coffee
price/mix
|
-0.5
|
Liquid coffee and
extracts
|
+2.0
|
Other
|
-3.2
|
Change excluding
change in average
green coffee commodity pass-through
costs
|
+6.0
|
Change in average
green coffee commodity
pass-through costs
|
-4.1
|
2019 Q1
Revenue
|
$
148.0
|
- Gross margin as a percentage of revenue increased to 26.9%
compared to 26.5% driven primarily by leveraging the increased
volumes generated during the quarter.
- SG&A was $36 million compared
to $34 million driven primarily by
increased selling costs.
- Operating income was $3 million
compared to $4 million, while
adjusted EBITDA was $9 million
compared to $10 million as the
increased volumes within coffee, tea and extracts were offset by
the competitive pricing environment within the market as well as
increased SG&A costs.
2019 FULL YEAR REVENUE, FREE CASH FLOW, AND FOREIGN EXCHANGE
OUTLOOK
Cott continues to target full year 2019 consolidated revenue in
excess of $2.4 billion and adjusted
free cash flow of over $150 million
(when excluding acquisition, integration and other one-time cash
costs). The targets reflect the sale of Cott Beverages LLC which
represented over $80 million in
annual revenue, as well as expected foreign exchange headwinds of
approximately 1% on full year revenue based on exchange rates as of
the end of the first quarter.
SHARE REPURCHASE PROGRAM
Cott repurchased approximately 0.6 million shares at an average
price of $13.77 totaling
approximately $8 million during the
first quarter under its previously announced share repurchase
program.
In addition, 0.2 million shares totaling approximately
$3 million were withheld during the
first quarter of 2019 to satisfy employees' tax obligations related
to share-based awards.
The Company's Board of Directors approved a 12-month share
repurchase program of up to $50
million which commenced on December
14, 2018 and replaced the then-existing program, which was
scheduled to expire on May 6,
2019. Cott intends to manage this program opportunistically
and make repurchases from time to time when management believes
market conditions are favorable.
There can be no assurance as to the precise number of shares, if
any, that will be repurchased under the share repurchase program in
the future, or the aggregate dollar amount of the shares to be
purchased in future periods. Cott may discontinue purchases at any
time, subject to compliance with applicable regulatory
requirements. Shares purchased pursuant to the share repurchase
program were subsequently cancelled.
FIRST QUARTER 2019 RESULTS CONFERENCE CALL
Cott Corporation will host a conference call today, May 2, 2019, at 10:00 a.m.
ET, to discuss first quarter results, which can be accessed
as follows:
North
America: (888) 231-8191
International: (647) 427-7450
Conference ID: 6679655
A slide presentation and live audio
webcast will be available through Cott's website at
http://www.cott.com. The earnings conference call will be recorded
and archived for playback on the investor relations section of the
website for a period of two weeks following the event.
ABOUT COTT CORPORATION
Cott is a water, coffee, tea, extracts and filtration service
company with a leading volume-based national presence in the North
American and European home and office delivery industry for bottled
water, and a leader in custom coffee roasting, iced tea blending,
and extract solutions for the U.S. foodservice industry. Our
platform reaches over 2.5 million customers or delivery points
across North America and
Europe and is supported by
strategically located sales and distribution facilities and fleets,
as well as wholesalers and distributors. This enables us to
efficiently service residences, businesses, restaurant chains,
hotels and motels, small and large retailers and healthcare
facilities.
Non-GAAP Measures
To supplement its reporting of financial measures determined in
accordance with GAAP, Cott utilizes certain non-GAAP financial
measures. Cott excludes from GAAP revenue the impact of
foreign exchange and the change in average costs of coffee, as well
as other items identified on the exhibits hereto, to separate the
impact of these factors from Cott's results of operations.
Cott utilizes EBITDA and adjusted EBITDA on a
global and segment basis to separate the impact of certain
items from the underlying business. Because Cott uses these
adjusted financial results in the management of its business,
management believes this supplemental information is useful to
investors for their independent evaluation and understanding of
Cott's underlying business performance and the performance of its
management. Additionally, Cott supplements its reporting of
net cash provided by (used in) operating activities from continuing
operations determined in accordance with GAAP by excluding
additions to property, plant and equipment to present free cash
flow, and by excluding acquisition and integration cash
costs, a working capital adjustment related to the
Concentrate Supply Agreement with Refresco and other cash inflows
to present adjusted free cash flow, which management believes
provides useful information to investors in assessing our
performance, comparing our performance to the performance of our
peer group and assessing our ability to service debt and finance
strategic opportunities, which include investing in our business,
making strategic acquisitions, paying dividends, repurchasing
common shares and strengthening the balance sheet. The
non-GAAP financial measures described above are in addition to, and
not meant to be considered superior to, or a substitute for, Cott's
financial statements prepared in accordance with GAAP. In addition,
the non-GAAP financial measures included in this earnings
announcement reflect management's judgment of particular items, and
may be different from, and therefore may not be comparable to,
similarly titled measures reported by other companies.
Safe Harbor Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 conveying
management's expectations as to the future based on plans,
estimates and projections at the time Cott makes the statements.
Forward-looking statements involve inherent risks and uncertainties
and Cott cautions you that a number of important factors could
cause actual results to differ materially from those contained in
any such forward-looking statement. The forward-looking statements
contained in this press release include, but are not limited to,
statements related to the amount of shares that may be repurchased
under the share repurchase program, the execution of our strategic
priorities, future financial and operating trends and results
(including Cott's outlook on 2019 revenue and free cash flow) and
related matters. The forward-looking statements are based on
assumptions regarding management's current plans and estimates.
Management believes these assumptions to be reasonable, but there
is no assurance that they will prove to be accurate.
Factors that could cause actual results to differ materially
from those described in this press release include, among others:
our ability to compete successfully in the markets in which we
operate; our ability to pass on increased costs to our customers or
hedge against such rising costs and the impact of those increased
prices on our volumes; our ability to manage our operations
successfully; our ability to fully realize the potential benefit of
acquisitions or other strategic opportunities that we pursue;
potential liabilities associated with our recent divestitures; our
ability to realize the revenue and cost synergies of our
acquisitions because of integration difficulties and other
challenges; our exposure to intangible asset risk; currency
fluctuations that adversely affect the exchange between the U.S.
dollar and the British pound sterling, the Euro, the Canadian
dollar and other currencies, and the exchange between the British
pound sterling and the Euro; our ability to maintain favorable
arrangements and relationships with our suppliers; our ability to
meet our obligations under our debt agreements, and risks of
further increases to our indebtedness; our ability to maintain
compliance with the covenants and conditions under our debt
agreements; fluctuations in interest rates, which could increase
our borrowing costs; the incurrence of substantial indebtedness to
finance our acquisitions; the impact on our financial results from
uncertainty in the financial markets and other adverse changes in
general economic conditions; any disruption to production at our
manufacturing facilities; our ability to maintain access to our
water sources; our ability to protect our intellectual property;
compliance with product health and safety standards; liability for
injury or illness caused by the consumption of contaminated
products; liability and damage to our reputation as a result of
litigation or legal proceedings; changes in the legal and
regulatory environment in which we operate; the seasonal nature of
our business and the effect of adverse weather conditions;
the impact of national, regional and global events, including those
of a political, economic, business and competitive nature; our
ability to recruit, retain and integrate new management; our
ability to renew our collective bargaining agreements on
satisfactory terms; disruptions in our information systems; our
ability to securely maintain our customers' confidential or credit
card information, or other private data relating to our employees
or our company; our ability to maintain our quarterly dividend; our
ability to adequately address the challenges and risks associated
with our international operations and address difficulties in
complying with laws and regulations including the U.S. Foreign
Corrupt Practices Act and the U.K. Bribery Act of 2010; increased
tax liabilities in the various jurisdictions in which we operate;
the impact of the 2017 Tax Cuts and Jobs Act on our tax obligations
and effective tax rate; and credit rating changes.
The foregoing list of factors is not exhaustive. Readers are
cautioned not to place undue reliance on any forward-looking
statements, which speak only as of the date hereof. Readers are
urged to carefully review and consider the various disclosures,
including but not limited to risk factors contained in Cott's
Annual Report on Form 10-K and its quarterly reports on Form 10-Q,
as well as other filings with the securities commissions. Cott does
not undertake to update or revise any of these statements in light
of new information or future events, except as expressly required
by applicable law.
Website: www.cott.com
COTT
CORPORATION
|
EXHIBIT
1
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(in millions of
U.S. dollars, except share and per share amounts, U.S.
GAAP)
|
Unaudited
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
March 30,
2019
|
|
March 31,
2018
|
|
|
|
|
|
|
Revenue,
net
|
$
|
574.1
|
|
$
|
560.8
|
Cost of
sales
|
291.2
|
|
287.3
|
Gross
profit
|
282.9
|
|
273.5
|
Selling, general and
administrative expenses
|
272.1
|
|
261.1
|
Loss on disposal of
property, plant and equipment, net
|
1.9
|
|
1.3
|
Acquisition and
integration expenses
|
4.8
|
|
5.0
|
Operating
income
|
4.1
|
|
6.1
|
Other expense
(income), net
|
5.5
|
|
(20.2)
|
Interest expense,
net
|
19.3
|
|
20.8
|
(Loss) income from
continuing operations before income taxes
|
(20.7)
|
|
5.5
|
Income tax (benefit)
expense
|
(1.0)
|
|
0.9
|
Net (loss) income
from continuing operations
|
$
|
(19.7)
|
|
$
|
4.6
|
Net income from
discontinued operations, net of income taxes
|
—
|
|
357.4
|
Net (loss)
income
|
$
|
(19.7)
|
|
$
|
362.0
|
Less: Net income
attributable to non-controlling interests - discontinued
operations
|
—
|
|
0.6
|
Net (loss) income
attributable to Cott Corporation
|
$
|
(19.7)
|
|
$
|
361.4
|
|
|
|
|
Net (loss) income
per common share attributable to Cott Corporation
|
|
|
|
Basic:
|
|
|
|
Continuing
operations
|
$
|
(0.14)
|
|
$
|
0.03
|
Discontinued
operations
|
$
|
—
|
|
$
|
2.55
|
Net (loss)
income
|
$
|
(0.14)
|
|
$
|
2.58
|
Diluted:
|
|
|
|
Continuing
operations
|
$
|
(0.14)
|
|
$
|
0.03
|
Discontinued
operations
|
$
|
—
|
|
$
|
2.51
|
Net (loss)
income
|
$
|
(0.14)
|
|
$
|
2.54
|
|
|
|
|
Weighted average
common shares outstanding (in thousands)
|
|
|
|
Basic
|
135,948
|
|
139,953
|
Diluted
|
135,948
|
|
142,335
|
|
|
|
|
Dividends declared
per common share
|
$
|
0.06
|
|
$
|
0.06
|
COTT
CORPORATION
|
EXHIBIT
2
|
CONSOLIDATED
BALANCE SHEETS
|
|
(in millions of
U.S. dollars, except share amounts, U.S. GAAP)
|
|
Unaudited
|
|
|
|
|
|
|
March 30,
2019
|
|
December 29,
2018
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
153.9
|
|
$
|
170.8
|
Accounts receivable,
net of allowance of $7.2 ($9.6 as of December 29, 2018)
|
289.7
|
|
308.3
|
Inventories
|
120.1
|
|
129.6
|
Prepaid expenses and
other current assets
|
39.9
|
|
27.2
|
Total current
assets
|
603.6
|
|
635.9
|
Property, plant and
equipment, net
|
625.6
|
|
624.7
|
Operating lease
right-of-use assets
|
210.5
|
|
—
|
Goodwill
|
1,144.1
|
|
1,143.9
|
Intangible assets,
net
|
716.6
|
|
739.2
|
Deferred tax
assets
|
0.9
|
|
0.1
|
Other long-term
assets, net
|
20.2
|
|
31.7
|
Total
assets
|
$
|
3,321.5
|
|
$
|
3,175.5
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Short-term
borrowings
|
63.1
|
|
89.0
|
Current maturities of
long-term debt
|
3.9
|
|
3.0
|
Accounts payable and
accrued liabilities
|
456.5
|
|
469.0
|
Current operating
lease obligations
|
42.3
|
|
—
|
Total current
liabilities
|
565.8
|
|
561.0
|
Long-term
debt
|
1,250.9
|
|
1,250.2
|
Operating lease
right-of-use liabilities
|
173.9
|
|
—
|
Deferred tax
liabilities
|
125.9
|
|
124.3
|
Other long-term
liabilities
|
54.0
|
|
69.6
|
Total
liabilities
|
2,170.5
|
|
2,005.1
|
Equity
|
|
|
|
Common shares, no par
value - 135,965,923 (December 29, 2018 - 136,195,108) shares
issued
|
899.0
|
|
899.4
|
Additional
paid-in-capital
|
71.3
|
|
73.9
|
Retained
earnings
|
277.3
|
|
298.8
|
Accumulated other
comprehensive loss
|
(96.6)
|
|
(101.7)
|
Total Cott
Corporation equity
|
1,151.0
|
|
1,170.4
|
Total liabilities
and equity
|
$
|
3,321.5
|
|
$
|
3,175.5
|
COTT
CORPORATION
|
EXHIBIT
3
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in millions
of U.S. dollars, U.S. GAAP)
|
Unaudited
|
|
|
|
For the Three
Months Ended
|
|
March 30,
2019
|
|
March 31,
2018
|
|
|
|
|
Cash flows from
operating activities of continuing operations:
|
|
|
|
Net (loss)
income
|
$
|
(19.7)
|
|
$
|
362.0
|
Net income from
discontinued operations, net of income taxes
|
—
|
|
357.4
|
Net (loss) income
from continuing operations
|
$
|
(19.7)
|
|
$
|
4.6
|
Adjustments to
reconcile net (loss) income from continuing operations to cash
flows from operating activities:
|
|
|
|
Depreciation and
amortization
|
45.2
|
|
47.4
|
Amortization of
financing fees
|
0.8
|
|
0.9
|
Share-based
compensation expense
|
3.5
|
|
3.4
|
Benefit for deferred
income taxes
|
(3.2)
|
|
(0.2)
|
Loss on sale of
business
|
5.4
|
|
—
|
Gain on
extinguishment of debt
|
—
|
|
(7.1)
|
Loss on disposal of
property, plant and equipment, net
|
1.9
|
|
1.3
|
Other non-cash
items
|
0.4
|
|
—
|
Change in operating
assets and liabilities, net of acquisitions:
|
|
|
|
Accounts
receivable
|
1.6
|
|
(12.7)
|
Inventories
|
(6.6)
|
|
(9.1)
|
Prepaid expenses and
other current assets
|
(1.9)
|
|
(4.3)
|
Other
assets
|
0.7
|
|
1.0
|
Accounts payable and
accrued liabilities and other liabilities
|
(4.5)
|
|
7.7
|
Net cash provided by
operating activities from continuing operations
|
23.6
|
|
32.9
|
Cash flows from
investing activities of continuing operations:
|
|
|
|
Acquisitions, net of
cash received
|
(21.0)
|
|
(27.8)
|
Additions to
property, plant and equipment
|
(23.8)
|
|
(29.8)
|
Additions to
intangible assets
|
(2.3)
|
|
(2.2)
|
Proceeds from sale of
property, plant and equipment
|
1.4
|
|
1.9
|
Proceeds from sale of
business
|
50.5
|
|
—
|
Other investing
activities
|
0.1
|
|
0.2
|
Net cash provided by
(used in) investing activities from continuing
operations
|
4.9
|
|
(57.7)
|
Cash flows from
financing activities of continuing operations:
|
|
|
|
Payments of long-term
debt
|
(1.5)
|
|
(262.7)
|
Borrowings under
ABL
|
25.0
|
|
0.6
|
Payments under
ABL
|
(52.8)
|
|
(0.6)
|
Premiums and costs
paid upon extinguishment of long-term debt
|
—
|
|
(12.5)
|
Issuance of common
shares
|
0.4
|
|
1.8
|
Common shares
repurchased and canceled
|
(11.0)
|
|
(5.6)
|
Financing
fees
|
—
|
|
(1.5)
|
Dividends paid to
common shareholders
|
(8.2)
|
|
(8.4)
|
Other financing
activities
|
1.4
|
|
(1.3)
|
Net cash used in
financing activities from continuing operations
|
(46.7)
|
|
(290.2)
|
Cash flows from
discontinued operations:
|
|
|
|
Operating activities
of discontinued operations
|
—
|
|
(84.7)
|
Investing activities
of discontinued operations
|
—
|
|
1,228.6
|
Financing activities
of discontinued operations
|
—
|
|
(769.7)
|
Net cash provided by
discontinued operations
|
—
|
|
374.2
|
Effect of exchange
rate changes on cash
|
1.3
|
|
(4.8)
|
Net (decrease)
increase in cash, cash equivalents and restricted
cash
|
(16.9)
|
|
54.4
|
Cash and cash
equivalents and restricted cash, beginning of period
|
170.8
|
|
157.9
|
Cash and cash
equivalents and restricted cash from continuing operations, end of
period
|
$
|
153.9
|
|
$
|
212.3
|
COTT
CORPORATION
|
EXHIBIT
4
|
SEGMENT
INFORMATION
|
(in millions of
U.S. dollars, U.S. GAAP)
|
Unaudited
|
|
For the Three
Months Ended March 30, 2019
|
(in millions of
U.S. dollars)
|
|
Route Based
Services
|
|
Coffee, Tea
and
Extract Solutions
|
|
All
Other
|
|
Eliminations
|
|
Total
|
Revenue,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
Home and office
bottled water delivery
|
|
$
|
258.6
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
258.6
|
Coffee and tea
services
|
|
48.6
|
|
120.2
|
|
—
|
|
(1.6)
|
|
167.2
|
Retail
|
|
70.9
|
|
—
|
|
—
|
|
—
|
|
70.9
|
Other
|
|
42.4
|
|
27.8
|
|
7.2
|
|
—
|
|
77.4
|
Total
|
|
$
|
420.5
|
|
$
|
148.0
|
|
$
|
7.2
|
|
$
|
(1.6)
|
|
$
|
574.1
|
Gross
Profit
|
|
$
|
242.8
|
|
$
|
39.8
|
|
$
|
0.3
|
|
$
|
—
|
|
$
|
282.9
|
Gross Margin
%
|
|
57.7%
|
|
26.9%
|
|
4.2%
|
|
—
|
|
49.3%
|
Selling, general
and administrative expenses
|
|
$
|
224.5
|
|
$
|
36.3
|
|
$
|
11.3
|
|
$
|
—
|
|
$
|
272.1
|
Operating income
(loss)
|
|
$
|
14.0
|
|
$
|
3.4
|
|
$
|
(13.3)
|
|
$
|
—
|
|
$
|
4.1
|
Depreciation and
Amortization
|
|
$
|
39.6
|
|
$
|
5.5
|
|
$
|
0.1
|
|
$
|
—
|
|
$
|
45.2
|
|
|
For the Three
Months Ended March 31, 2018
|
(in millions of
U.S. dollars)
|
|
Route Based
Services
|
|
Coffee, Tea
and
Extract Solutions
|
|
All
Other
|
|
Eliminations
|
|
Total
|
Revenue,
net
|
|
|
|
|
|
|
|
|
|
|
Home and office
bottled water delivery (a)
|
|
$
|
245.5
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
245.5
|
Coffee and tea
services
|
|
47.0
|
|
117.2
|
|
—
|
|
(1.0)
|
|
163.2
|
Retail (a)
|
|
66.6
|
|
—
|
|
—
|
|
—
|
|
66.6
|
Other (a)
|
|
39.0
|
|
28.9
|
|
17.7
|
|
(0.1)
|
|
85.5
|
Total
|
|
$
|
398.1
|
|
$
|
146.1
|
|
$
|
17.7
|
|
$
|
(1.1)
|
|
$
|
560.8
|
Gross Profit
(b)
|
|
$
|
232.5
|
|
$
|
38.7
|
|
$
|
2.3
|
|
$
|
—
|
|
$
|
273.5
|
Gross Margin
%
|
|
58.4%
|
|
26.5%
|
|
13.0%
|
|
—
|
|
48.8%
|
Selling, general
and administrative expenses
|
|
$
|
214.9
|
|
$
|
34.4
|
|
$
|
11.8
|
|
$
|
—
|
|
$
|
261.1
|
Operating income
(loss)
|
|
$
|
14.0
|
|
$
|
4.0
|
|
$
|
(11.9)
|
|
$
|
—
|
|
$
|
6.1
|
Depreciation and
Amortization
|
|
$
|
41.4
|
|
$
|
5.7
|
|
$
|
0.3
|
|
$
|
—
|
|
$
|
47.4
|
|
(a) Revenues by
channel of our Route Based Services reporting segment for the three
months ended March 31, 2018 were revised to reclassify $16.6
million of revenues from the other channel to the home and office
bottled water delivery channel as these activities are associated
with the home and office bottled water delivery channel. In
addition, we reclassified $3.5 million out of the retail channel
and into the other channel in order to better align the activities
of a recent acquisition with those of our U.S. Route Based Services
business.
|
(b) Includes related
party concentrate sales to discontinued operations.
|
COTT
CORPORATION
|
EXHIBIT
5
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - ANALYSIS OF REVENUE BY REPORTING
SEGMENT
|
Unaudited
|
|
|
(in millions of
U.S. dollars, except percentage amounts)
|
For the Three
Months Ended March 30, 2019
|
|
Route Based
Services
|
|
Coffee, Tea
and
Extract Solutions
|
|
All
Other
|
|
Eliminations
|
|
Cott
(a)
|
Change in
revenue
|
$
|
22.4
|
|
$
|
1.9
|
|
$
|
(10.5)
|
|
$
|
(0.5)
|
|
$
|
13.3
|
Impact of foreign
exchange (b)
|
$
|
11.9
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
11.9
|
Change excluding
foreign exchange
|
$
|
34.3
|
|
$
|
1.9
|
|
$
|
(10.5)
|
|
$
|
(0.5)
|
|
$
|
25.2
|
Percentage change in
revenue
|
5.6%
|
|
1.3%
|
|
(59.3)%
|
|
45.5%
|
|
2.4%
|
Percentage change in
revenue excluding foreign exchange
|
8.6%
|
|
1.3%
|
|
(59.3)%
|
|
45.5%
|
|
4.5%
|
|
(a) Cott includes the
following reporting segments: Route Based Services, Coffee, Tea and
Extract Solutions and All Other.
|
(b) Impact of foreign
exchange is the difference between the current period revenue
translated utilizing the current period average foreign exchange
rates less the current period revenue translated utilizing the
prior period average foreign exchange rates.
|
COTT
CORPORATION
|
EXHIBIT
6
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION &
AMORTIZATION
|
(EBITDA)
|
(in millions of
U.S. dollars)
|
Unaudited
|
|
|
|
For the Three
Months Ended
|
|
March 30,
2019
|
|
March 31,
2018
|
|
|
|
|
Net (loss) income
from continuing operations
|
$
|
(19.7)
|
|
$
|
4.6
|
Interest expense,
net
|
19.3
|
|
20.8
|
Income tax (benefit)
expense
|
(1.0)
|
|
0.9
|
Depreciation and
amortization
|
45.2
|
|
47.4
|
EBITDA
|
$
|
43.8
|
|
$
|
73.7
|
|
|
|
|
|
|
Acquisition and
integration costs (a), (c)
|
4.8
|
|
5.0
|
Share-based
compensation costs (d)
|
3.3
|
|
2.4
|
Commodity hedging
loss, net (e)
|
—
|
|
0.3
|
Foreign exchange and
other losses (gains), net (f)
|
1.0
|
|
(8.2)
|
Loss on disposal of
property, plant and equipment, net (g)
|
1.9
|
|
1.3
|
Gain on
extinguishment of long-term debt (h)
|
—
|
|
(7.1)
|
Loss on sale of
business (i)
|
5.4
|
|
—
|
Cott Beverages LLC
(b), (j)
|
0.4
|
|
(0.5)
|
Other adjustments,
net (k)
|
2.3
|
|
(2.9)
|
Adjusted
EBITDA
|
$
|
62.9
|
|
$
|
64.0
|
|
(a) Includes $0.2
million and $1.0 million of share-based compensation costs for the
three months ended March 30, 2019 and March 31, 2018, respectively,
related to awards granted in connection with the acquisition of our
S&D and Eden businesses.
|
(b) Impact on our
operations related to the Cott Beverages LLC business, which was
sold on February 8, 2019.
|
|
|
|
For the Three
Months Ended
|
|
Location in
Consolidated Statements of Operations
|
|
March 30,
2019
|
|
March 31,
2018
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
(c) Acquisition and
integration costs
|
Acquisition and
integration expenses
|
|
$
|
4.8
|
|
$
|
5.0
|
(d) Share-based
compensation costs
|
Selling,
general and administrative expenses
|
|
3.3
|
|
2.4
|
(e) Commodity hedging
loss, net
|
Cost of
sales
|
|
—
|
|
0.3
|
(f) Foreign exchange
and other losses (gains), net
|
Other expense
(income), net
|
|
1.0
|
|
(8.2)
|
(g) Loss on disposal
of property, plant and equipment, net
|
Loss on
disposal of property, plant and equipment, net
|
|
1.9
|
|
1.3
|
(h) Gain on
extinguishment of long-term debt
|
Other expense
(income), net
|
|
—
|
|
(7.1)
|
(i) Loss on sale of
business
|
Other expense
(income), net
|
|
5.4
|
|
—
|
(j) Cott Beverages
LLC
|
Revenue,
net
|
|
(7.2)
|
|
(17.7)
|
|
Cost of
sales
|
|
6.8
|
|
15.2
|
|
Selling,
general and administrative expenses
|
|
1.1
|
|
2.7
|
|
Other expense
(income), net
|
|
(0.3)
|
|
(0.7)
|
(k) Other
adjustments, net
|
Selling,
general and administrative expenses
|
|
2.3
|
|
1.0
|
|
Other expense
(income), net
|
|
—
|
|
(3.9)
|
COTT
CORPORATION
|
EXHIBIT
7
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - FREE CASH FLOW AND ADJUSTED FREE CASH
FLOW
|
|
(in millions of
U.S. dollars)
|
Unaudited
|
|
|
|
For the Three
Months Ended
|
|
March 30,
2019
|
|
March 31,
2018
|
|
|
|
|
|
|
Net cash provided
by operating activities from continuing operations
|
$
|
23.6
|
|
$
|
32.9
|
Less: Additions
to property, plant, and equipment
|
(23.8)
|
|
(29.8)
|
Free Cash
Flow
|
$
|
(0.2)
|
|
$
|
3.1
|
|
|
|
|
Plus:
|
|
|
|
Acquisition and
integration cash costs
|
4.3
|
|
5.6
|
Working capital
adjustment - Refresco concentrate supply agreement (a)
|
—
|
|
8.9
|
Cott Beverages LLC
(b)
|
—
|
|
4.1
|
Adjusted Free Cash
Flow
|
$
|
4.1
|
|
$
|
21.7
|
|
(a) Increase in
working capital related to the Concentrate Supply Agreement with
Refresco in connection with the Transaction.
|
(b) Impact on our
operations related to the Cott Beverages LLC business, which was
sold on February 8, 2019.
|
COTT CORPORATION
AND COFFEE, TEA AND EXTRACT SOLUTIONS REPORTING
SEGMENT
|
EXHIBIT
8
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - ANALYSIS OF REVENUE AND ADJUSTED
REVENUE
|
(in millions of
U.S. dollars)
|
Unaudited
|
|
|
|
|
|
Cott
(a)
|
|
Coffee, Tea and
Extract Solutions
|
|
For the Three
Months Ended
|
|
For the Three
Months Ended
|
|
March 30,
2019
|
|
March 31,
2018
|
|
March 30,
2019
|
|
March 31,
2018
|
|
|
|
|
|
|
|
|
Revenue,
net
|
$
|
574.1
|
|
$
|
560.8
|
|
$
|
148.0
|
|
$
|
146.1
|
Divested Cott
Beverages LLC business
|
$
|
(7.2)
|
|
$
|
(17.7)
|
|
$
|
—
|
|
$
|
—
|
Adjusted
Revenue
|
$
|
566.9
|
|
$
|
543.1
|
|
$
|
148.0
|
|
$
|
146.1
|
|
|
|
|
|
|
|
|
Change in adjusted
revenue
|
$
|
23.8
|
|
|
|
$
|
1.9
|
|
|
|
|
|
|
|
|
|
|
Percentage change
in adjusted revenue
|
4.4%
|
|
|
|
1.3%
|
|
|
|
|
|
|
|
|
|
|
Impact of foreign
exchange (b)
|
$
|
11.9
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Impact of change in
average cost of green coffee (c)
|
$
|
4.1
|
|
|
|
$
|
4.1
|
|
|
|
|
|
|
|
|
|
|
Change in adjusted
revenue excluding foreign exchange and impact
of change in average cost of green coffee
|
$
|
39.8
|
|
|
|
$
|
6.0
|
|
|
|
|
|
|
|
|
|
|
Percentage change
in adjusted revenue excluding foreign
exchange and impact of change in average cost of green
coffee
|
7.3%
|
|
|
|
4.1%
|
|
|
|
(a) Cott includes the
following reporting segments: Route Based Services, Coffee, Tea and
Extract Solutions and All Other.
|
(b) Impact of foreign
exchange is the difference between the current period revenue
translated utilizing the current period average foreign exchange
rates less the current period revenue translated utilizing the
prior period average foreign exchange rates.
|
(c) Impact of change
in average cost of green coffee represents the difference between
the average cost per pound of green coffee in the current period
compared to the average cost per pound of green coffee in the prior
period multiplied by the pounds of coffee sold in the current
period.
|
COTT
CORPORATION
|
EXHIBIT
9
|
SUPPLEMENTARY
INFORMATION - NON-GAAP
|
(in millions of
U.S. dollars)
|
Unaudited
|
|
|
For the Three
Months Ended
|
|
March 30,
2019
|
|
Cott
Consolidated
|
|
Divested
Business(a)
|
|
Cott
Adjusted
|
|
|
|
|
|
|
|
|
|
Revenue,
net
|
$
|
574.1
|
|
$
|
7.2
|
|
$
|
566.9
|
Cost of
sales
|
291.2
|
|
6.9
|
|
284.3
|
Gross
profit
|
282.9
|
|
0.3
|
|
282.6
|
Gross margin
%
|
49.3%
|
|
|
|
49.9%
|
Selling, general and
administrative expenses
|
272.1
|
|
1.3
|
|
270.8
|
SG&A% of
revenue
|
47.4%
|
|
|
|
47.8%
|
Loss on disposal of
property, plant and equipment, net
|
1.9
|
|
—
|
|
1.9
|
Acquisition and
integration expenses
|
4.8
|
|
—
|
|
4.8
|
Operating income
(loss)
|
4.1
|
|
(1.0)
|
|
5.1
|
Other expense
(income), net
|
5.5
|
|
(0.3)
|
|
5.8
|
Depreciation and
Amortization
|
45.2
|
|
0.1
|
|
45.1
|
EBITDA
|
43.8
|
|
(0.6)
|
|
44.4
|
Adjustments
|
19.1
|
|
0.6
|
|
18.5
|
Adjusted
EBITDA
|
$
|
62.9
|
|
$
|
—
|
|
$
|
62.9
|
|
|
|
For the Three
Months Ended
|
|
March 31,
2018
|
|
Cott
Consolidated
|
|
Divested
Business(a)
|
|
Cott
Adjusted
|
|
|
|
|
|
|
|
|
Revenue,
net
|
$
|
560.8
|
|
$
|
17.7
|
|
$
|
543.1
|
Cost of
sales
|
287.3
|
|
15.4
|
|
271.9
|
Gross
profit
|
273.5
|
|
2.3
|
|
271.2
|
Gross margin
%
|
48.8%
|
|
|
|
49.9%
|
Selling, general and
administrative expenses
|
261.1
|
|
2.8
|
|
258.3
|
SG&A% of
revenue
|
46.6%
|
|
|
|
47.6%
|
Loss on disposal of
property, plant and equipment, net
|
1.3
|
|
—
|
|
1.3
|
Acquisition and
integration expenses
|
5.0
|
|
—
|
|
5.0
|
Operating income
(loss)
|
6.1
|
|
(0.5)
|
|
6.6
|
Other income,
net
|
(20.2)
|
|
(0.7)
|
|
(19.5)
|
Depreciation and
Amortization
|
47.4
|
|
0.2
|
|
47.2
|
EBITDA
|
73.7
|
|
0.4
|
|
73.3
|
Adjustments
|
(9.7)
|
|
(0.4)
|
|
(9.3)
|
Adjusted
EBITDA
|
$
|
64.0
|
|
$
|
—
|
|
$
|
64.0
|
|
|
|
|
|
|
|
|
(a) Cott Beverages
LLC
|
|
|
|
|
|
|
|
COTT
CORPORATION
|
EXHIBIT
10
|
SUPPLEMENTARY
INFORMATION - NON-GAAP – EBITDA AND ADJUSTED EBITDA BY REPORTING
SEGMENT
|
|
(in millions of
U.S. dollars)
|
Unaudited
|
|
For the Three
Months Ended March 30, 2019
|
|
Route Based
Services
|
|
Coffee, Tea
and
Extract Solutions
|
|
All
Other
|
|
Total
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
14.0
|
|
$
|
3.4
|
|
$
|
(13.3)
|
|
$
|
4.1
|
Other (income)
expense, net
|
(0.5)
|
|
—
|
|
6.0
|
|
5.5
|
Depreciation and
amortization
|
39.6
|
|
5.5
|
|
0.1
|
|
45.2
|
EBITDA
(a)
|
$
|
54.1
|
|
$
|
8.9
|
|
$
|
(19.2)
|
|
$
|
43.8
|
|
|
|
|
|
|
|
|
Acquisition and
integration costs
|
2.4
|
|
0.1
|
|
2.3
|
|
4.8
|
Share-based
compensation costs
|
0.9
|
|
0.2
|
|
2.2
|
|
3.3
|
Foreign exchange and
other losses, net
|
0.1
|
|
—
|
|
0.9
|
|
1.0
|
Loss on disposal of
property, plant and equipment, net
|
1.9
|
|
—
|
|
—
|
|
1.9
|
Loss on sale of
business (b)
|
—
|
|
—
|
|
5.4
|
|
5.4
|
Cott Beverages LLC
(c)
|
—
|
|
—
|
|
0.4
|
|
0.4
|
Other adjustments,
net (d)
|
0.6
|
|
—
|
|
1.7
|
|
2.3
|
Adjusted
EBITDA
|
$
|
60.0
|
|
$
|
9.2
|
|
$
|
(6.3)
|
|
$
|
62.9
|
|
|
|
For the Three
Months Ended March 31, 2018
|
|
Route Based
Services
|
|
Coffee, Tea
and
Extract Solutions
|
|
All
Other
|
|
Total
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
14.0
|
|
$
|
4.0
|
|
$
|
(11.9)
|
|
$
|
6.1
|
Other income,
net
|
(8.6)
|
|
(0.1)
|
|
(11.5)
|
|
(20.2)
|
Depreciation and
amortization
|
41.4
|
|
5.7
|
|
0.3
|
|
47.4
|
EBITDA
(a)
|
$
|
64.0
|
|
$
|
9.8
|
|
$
|
(0.1)
|
|
$
|
73.7
|
|
|
|
|
|
|
|
|
Acquisition and
integration costs
|
2.3
|
|
0.3
|
|
2.4
|
|
5.0
|
Share-based
compensation costs
|
0.6
|
|
—
|
|
1.8
|
|
2.4
|
Commodity hedging
loss, net
|
—
|
|
0.3
|
|
—
|
|
0.3
|
Foreign exchange and
other gains, net
|
(1.3)
|
|
—
|
|
(6.9)
|
|
(8.2)
|
Loss on disposal of
property, plant and equipment, net
|
1.3
|
|
—
|
|
—
|
|
1.3
|
Gain on
extinguishment of long-term debt (e)
|
(7.1)
|
|
—
|
|
—
|
|
(7.1)
|
Cott Beverages LLC
(c)
|
—
|
|
—
|
|
(0.5)
|
|
(0.5)
|
Other adjustments,
net (f), (g)
|
0.4
|
|
—
|
|
(3.3)
|
|
(2.9)
|
Adjusted
EBITDA
|
$
|
60.2
|
|
$
|
10.4
|
|
$
|
(6.6)
|
|
$
|
64.0
|
|
(a) EBITDA by
reporting segment is derived from operating income as operating
income is the performance measure regularly reviewed by the chief
operating decision maker when evaluating performance of our
reportable segments.
|
(b) Loss on sale of
business is reflected under other expense (income), net in the
Consolidated Statements of Operations.
|
(c) Impact on our
operations related to the Cott Beverages LLC business, which was
sold on February 8, 2019, after a $0.2 million and a $0.1 million
share-based compensation adjustment for the three months ended
March 30, 2019 and March 31, 2018, respectively.
|
(d) Impact of other
adjustments, net is reflected under selling, general and
administrative expenses in the Consolidated Statements of
Operations.
|
(e) Gain on
extinguishment of long-term debt is reflected under other expense
(income), net in the Consolidated Statements of
Operations.
|
(f) Impact of other
adjustments, net for Route Based Services is reflected under
selling, general and administrative expenses in the Consolidated
Statements of Operations.
|
(g) Impact of other
adjustments, net for All Other includes $0.6 million of adjustments
reflected under selling, general and administrative expenses and
($3.9) million of adjustments reflected under other expense
(income), net in the Consolidated Statements of
Operations.
|
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SOURCE Cott Corporation