Cott Reports First Quarter 2017 Results
May 04, 2017
(Unless stated otherwise, all first quarter 2017 comparisons are relative to the first quarter of 2016; all information is in
FIRST QUARTER 2017 HIGHLIGHTS
- Cott revenue increased 28% to
$896 million compared to$698 million .
- Gross profit increased 45% to
$311 million compared to$214 million and gross margin as a percentage of revenue increased to 34.6% compared to 30.6%.
- Net cash used in operating activities of
$5 million less$41 million of capital expenditures resulted in reported free cash flow usage of($46) million and adjusted free cash flow usage of($40) million (adjusted for acquisition, integration, and other cash costs) compared to adjusted free cash flow usage of($47) million in the prior year representing a$7 million or 15% improvement.
- Issued
$750 million of Senior Notes at a rate of 5.5% and an 8 year maturity with the proceeds to be utilized to redeem all$625 million of our 6.75% Senior Notes and$100 million of our 10% Senior Notes.
- Cott continues to target full year 2017 cash flow provided by operations of approximately
$330 to$340 million and capital expenditures in the range of$165 to$175 million , resulting in adjusted free cash flow of$155 to$175 million (when excluding acquisition, integration, and other cash costs).
- Cott continues to target full year 2017 revenues of over
$3.7 billion .
“I am pleased with our results for the first quarter of 2017 as our water and coffee solutions segment performed well with good growth and performance at DS Services and S&D Coffee and Tea especially. As expected, adverse foreign exchange rates, principally related to the devaluation of the British pound in relation to the
FIRST QUARTER 2017 GLOBAL PERFORMANCE
- Revenue was
$896 million despite$13 million of foreign exchange headwinds. Our reported revenue increased 28% (30% on a foreign exchange neutral basis). Revenue drivers in the quarter are tabulated below:
| |||||||
2016 Q1 Revenue |
$ |
698.4 | |||||
S&D |
143.3 | ||||||
Eden |
89.0 | ||||||
DSS |
5.4 | ||||||
All Other |
(1.7) | ||||||
Cott |
(12.0) | ||||||
|
(12.6) | ||||||
Foreign exchange impact |
(13.4) | ||||||
2017 Q1 Revenue |
$ |
896.4 |
- Gross profit increased 45% to
$311 million , driven primarily by the addition ofEden Springs (“Eden”) and S&D Coffee and Tea (“S&D”) and improvement in DS Services operations, offset in part by the negative impact of foreign exchange rates and lower volumes in our CottU.K. reporting segment. Gross margin as a percentage of revenue increased to 34.6% compared to 30.6%.
- Interest expense was
$36 million after the issuance of$750 million of Senior Notes at a rate of 5.5% and an 8 year maturity with the proceeds to be utilized to redeem all$625 million of our 6.75% Senior Notes and$100 million of our 10% Senior Notes.
- Income tax expense was
$1 million compared to income tax benefit of$10 million as we now place valuation allowances against North American net operating losses. Cash taxes during the period were minimal, with$1 million of cash taxes during the period versus$4 million of cash taxes paid in the comparable prior year period.
- Reported net loss and net loss per diluted share were
$36 million and$0.26 , respectively, compared to reported net loss and net loss per diluted share of$3 million and$0.02 , respectively. Adjusted net loss and adjusted net loss per diluted share (including adjustments for acquisition, integration, debt redemption and other costs) were$19 million and$0.13 , respectively, compared to adjusted net loss and adjusted net loss per diluted share of$2 million and$0.02 , respectively.
- Reported EBITDA was
$67 million compared to$69 million in the prior year. Adjusted EBITDA increased 21% to$88 million (adjusted for$21 million of acquisition, integration, debt redemption, other costs and share-based compensation expense in the current quarter; see Exhibit 6) due primarily to the improved contributions from our Water and Coffee Solutions segment, offset in part by$5 million of adverse foreign exchange headwinds and lower volume in our CottU.K. reporting segment.
- Net cash used in operating activities of
$5 million , less$41 million of capital expenditures resulted in free cash flow usage of($46) million or($40) million of adjusted free cash flow usage (adjusted for acquisition, integration, and other cash costs) compared to adjusted free cash flow usage of($47) million in the prior year representing a$7 million or 15% improvement.
FIRST QUARTER 2017 REPORTING SEGMENT PERFORMANCE
Water and Coffee Solutions
- Revenue increased 93% to
$496 million driven primarily by the additions of S&D and Eden alongside the other items tabulated below. Gross profit increased 70% to$262 million from$154 million due primarily to the additions of Eden and S&D as well as operational improvements in DS Services.
Water & Coffee Solutions | ||||||||
| ||||||||
2016 Q1 Revenue |
$ |
257.3 | ||||||
S&D |
143.3 | |||||||
Eden |
89.0 | |||||||
DS Services |
||||||||
Price/Mix |
6.9 | |||||||
Returnable volume |
2.5 | |||||||
Foreign exchange impact |
0.5 | |||||||
Other |
(0.3) | |||||||
OCS/HOD PET/Retail |
(3.7) | |||||||
2017 Q1 Revenue |
$ |
495.5 |
- DS Services had net new customer additions of approximately 2% during the period. In line with expectations, DS Services revenue increased over 2% to
$263 million . DS Services operating income was up 37% as it began to implement its operational improvement plan.
- In line with our acquisition models, Eden and S&D contributed
$89 million and$143 million of revenue, respectively. Integration at Eden is tracking ahead of plan while S&D’s new customer onboarding was completed during the quarter with 9% growth in coffee volume (pounds).
Traditional Business
Cott North America reporting segment volume was flat in actual cases due primarily to 5% growth in value added and sparkling water products and 9% growth in contract manufacturing which offset general market and private label declines in carbonated soft drinks and shelf stable juices.
- Revenue was lower by 4% at
$301 million due primarily to ongoing product mix shifts within the business.
| |||||||
2016 Q1 Revenue |
$ |
313.3 | |||||
Volume |
1.1 | ||||||
Foreign exchange impact |
0.9 | ||||||
Price/Mix |
(14.2) | ||||||
2017 Q1 Revenue |
$ |
301.1 |
- Gross profit was
$33 million or 11.2% of revenue compared to$35 million or 11.4% of revenue due primarily to the phasing of our new 7.5 million annual case hotfill contract manufacturing agreement with full production scheduled to occur by the end of the second quarter. - Cott
U.K. reporting segment volume, although in line with expectations, decreased 13% in actual cases due primarily to the previously announced loss of volume from a large retail customer.
- Revenue decreased 22% (10% on a foreign exchange neutral basis) to
$94 million due primarily to the adverse foreign exchange impact of the British pound and the lost customer volume which will be fully lapped by the end of the second quarter of 2017.
| |||||||
2016 Q1 Revenue |
$ |
120.6 | |||||
Price/Mix |
(1.3) | ||||||
Volume |
(10.7) | ||||||
Foreign exchange impact |
(14.4) | ||||||
2017 Q1 Revenue |
$ |
94.2 |
- Gross profit as a percentage of revenue was lower at 11.8% due primarily to the adverse foreign exchange impact on commodity costs and lower volumes. We have agreed pricing changes with our customers to offset the commodity cost increases caused by the weakness of the British pound that should remediate this adverse foreign exchange impact by the second half of the year.
2017 FULL YEAR FOREIGN EXCHANGE, REVENUE, AND FREE CASH FLOW OUTLOOK
Based on current exchange rates and the 2017 published forecasts of various major financial institutions, we continue to expect the adverse impact of foreign exchange rates on full year 2017 EBITDA to be
Cott continues to target full year 2017 consolidated revenue of over
FIRST QUARTER 2017 RESULTS CONFERENCE CALL
International: (647) 427-7450
Conference ID: 7166215
A 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 is a diversified beverage company with a leading volume-based national presence in the
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 to separate the impact of this factor from Cott’s results of operations. Cott utilizes adjusted net income (loss), adjusted income (loss) per diluted share, and EBITDA and adjusted EBITDA on a global 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 determined in accordance with GAAP by excluding additions to property, plant & equipment to present free cash flow, and by excluding acquisition, integration, and other cash costs to present adjusted free cash flow, which management believes provides useful information to investors about the amount of cash generated by the business that, after the acquisition of property and equipment, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, paying dividends, 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 execution of our strategic priorities, future financial and operating trends and results (including the impact of foreign exchange on 2017 results, revenue, and adjusted 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; changes in consumer tastes and preferences for existing products and our ability to develop and timely launch new products that appeal to such changing consumer tastes and preferences; a loss of or a reduction in business in our traditional business with key customers, particularly Walmart; consolidation of retail customers; fluctuations in commodity prices and 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; our ability to realize the revenue and cost synergies of recent acquisitions because of integration difficulties and other challenges; the limited nature of our indemnification rights under the acquisition agreements for our recent acquisitions; the incurrence of substantial indebtedness to finance our recent acquisitions; significant one-time transaction costs in connection with our recent acquisitions; our exposure to intangible asset risk; currency fluctuations that adversely affect the exchange between the
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
|
EXHIBIT 1 | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
(in millions of |
||||||||
Unaudited |
||||||||
For the Three Months Ended | ||||||||
|
| |||||||
Revenue, net |
$ |
896.4 |
$ |
698.4 | ||||
Cost of sales |
585.8 |
484.4 | ||||||
Gross profit |
310.6 |
214.0 | ||||||
Selling, general and administrative expenses |
291.1 |
197.0 | ||||||
Loss on disposal of property, plant & equipment, net |
1.4 |
0.9 | ||||||
Acquisition and integration expenses |
7.3 |
1.4 | ||||||
Operating income |
10.8 |
14.7 | ||||||
Other expense (income), net |
8.4 |
(2.2) | ||||||
Interest expense, net |
35.7 |
27.8 | ||||||
Loss before income taxes |
(33.3) |
(10.9) | ||||||
Income tax expense (benefit) |
1.1 |
(9.5) | ||||||
Net loss |
$ |
(34.4) |
$ |
(1.4) | ||||
Less: Net income attributable to non-controlling interests |
2.0 |
1.4 | ||||||
Net loss attributed to |
$ |
(36.4) |
$ |
(2.8) | ||||
Net loss per common share attributed to |
||||||||
Basic |
$ |
(0.26) |
$ |
(0.02) | ||||
Diluted |
$ |
(0.26) |
$ |
(0.02) | ||||
Weighted average common shares outstanding (in thousands) |
||||||||
Basic |
138.7 |
113.3 | ||||||
Diluted |
138.7 |
113.3 | ||||||
Dividends declared per common share |
$ |
0.06 |
$ |
0.06 |
|
EXHIBIT 2 | |||||
CONSOLIDATED BALANCE SHEETS |
||||||
(in millions of |
||||||
Unaudited |
||||||
|
| |||||
ASSETS |
||||||
Current assets |
||||||
Cash & cash equivalents |
$ |
86.1 |
$ |
118.1 | ||
Restricted cash |
444.4 |
– | ||||
Accounts receivable, net of allowance |
427.5 |
403.9 | ||||
Inventories |
329.4 |
301.4 | ||||
Prepaid expenses and other current assets |
42.7 |
29.8 | ||||
Total current assets |
1,330.1 |
853.2 | ||||
Property, plant & equipment, net |
933.2 |
929.9 | ||||
|
1,184.3 |
1,175.4 | ||||
Intangible assets, net |
930.1 |
939.7 | ||||
Deferred tax assets |
1.4 |
0.2 | ||||
Other long-term assets, net |
40.6 |
41.3 | ||||
Total assets |
$ |
4,419.7 |
$ |
3,939.7 | ||
LIABILITIES AND EQUITY |
||||||
Current liabilities |
||||||
Short-term borrowings |
$ |
146.8 |
$ |
207.0 | ||
Current maturities of long-term debt |
4.9 |
5.7 | ||||
Accounts payable and accrued liabilities |
618.1 |
597.4 | ||||
Total current liabilities |
769.8 |
810.1 | ||||
Long-term debt |
2,532.5 |
1,988.0 | ||||
Deferred tax liabilities |
157.6 |
157.8 | ||||
Other long-term liabilities |
111.6 |
110.0 | ||||
Total liabilities |
3,571.5 |
3,065.9 | ||||
Equity |
||||||
Common shares, no par – 138,902,294 |
911.7 |
909.3 | ||||
Additional paid-in-capital |
55.3 |
54.2 | ||||
(Accumulated deficit) retained earnings |
(21.9) |
22.9 | ||||
Accumulated other comprehensive loss |
(103.3) |
(117.9) | ||||
|
841.8 |
868.5 | ||||
Non-controlling interests |
6.4 |
5.3 | ||||
Total equity |
848.2 |
873.8 | ||||
Total liabilities and equity |
$ |
4,419.7 |
$ |
3,939.7 |
COTT CORPORATION |
EXHIBIT 3 | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||
(in millions of |
|||||||||
Unaudited |
|||||||||
For the Three Months Ended | |||||||||
|
| ||||||||
Operating Activities |
|||||||||
Net loss |
$ |
(34.4) |
$ |
(1.4) | |||||
Depreciation & amortization |
64.4 |
52.5 | |||||||
Amortization of financing fees |
1.6 |
1.2 | |||||||
Amortization of senior notes premium |
(1.6) |
(1.4) | |||||||
Share-based compensation expense |
4.8 |
2.4 | |||||||
Benefit for deferred income taxes |
(0.5) |
(11.3) | |||||||
Unrealized commodity hedging gain, net |
(1.9) |
– | |||||||
Loss on extinguishment of debt |
10.1 |
– | |||||||
Loss on disposal of property, plant & equipment, net |
1.4 |
0.9 | |||||||
Other non-cash items |
0.4 |
(1.7) | |||||||
Change in operating assets and liabilities, net of acquisitions: |
|||||||||
Accounts receivable |
(14.0) |
(21.7) | |||||||
Inventories |
(26.6) |
(3.3) | |||||||
Prepaid expenses and other current assets |
(13.2) |
(4.4) | |||||||
Other assets |
0.5 |
2.4 | |||||||
Accounts payable and accrued liabilities, and other liabilities |
3.3 |
(30.0) | |||||||
Income taxes recoverable |
0.7 |
(2.9) | |||||||
Net cash used in operating activities |
(5.0) |
(18.7) | |||||||
Investing Activities |
|||||||||
Acquisitions, net of cash received |
(5.0) |
(44.4) | |||||||
Additions to property, plant & equipment |
(40.6) |
(29.5) | |||||||
Additions to intangible assets |
(2.8) |
(2.3) | |||||||
Proceeds from sale of property, plant & equipment |
5.4 |
2.7 | |||||||
Other investing activities |
0.2 |
– | |||||||
Net cash used in investing activities |
(42.8) |
(73.5) | |||||||
Financing Activities |
|||||||||
Payments of long-term debt |
(203.3) |
(1.1) | |||||||
Issuance of long-term debt |
750.0 |
– | |||||||
Borrowings under ABL |
772.9 |
497.2 | |||||||
Payments under ABL |
(834.2) |
(558.3) | |||||||
Premiums and costs paid upon extinguishment of long-term debt |
(7.2) |
– | |||||||
Financing fees |
(9.4) |
– | |||||||
Distributions to non-controlling interests |
(0.9) |
(2.3) | |||||||
Issuance of common shares |
0.5 |
144.1 | |||||||
Common shares repurchased and cancelled |
(1.8) |
(1.1) | |||||||
Dividends paid to common shareowners |
(8.4) |
(7.3) | |||||||
Other financing activities |
0.5 |
– | |||||||
Net cash provided by financing activities |
458.7 |
71.2 | |||||||
Effect of exchange rate changes on cash |
1.5 |
(1.0) | |||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
412.4 |
(22.0) | |||||||
Cash, cash equivalents, and restricted cash, beginning of period |
118.1 |
77.1 | |||||||
Cash, cash equivalents, and restricted cash, end of period |
$ |
530.5 |
$ |
55.1 |
|
EXHIBIT 4 | ||||||||||||||||||||
SEGMENT INFORMATION | |||||||||||||||||||||
(in millions of | |||||||||||||||||||||
Unaudited | |||||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||||
(in millions of |
Water & Coffee |
Cott North |
Cott |
All Other |
Corporate |
Elimination |
Total | ||||||||||||||
Revenue, net |
|||||||||||||||||||||
Private label retail |
$ |
21.4 |
$ |
240.6 |
$ |
38.3 |
$ |
0.9 |
$ |
– |
$ |
(0.4) |
$ |
300.8 | |||||||
Branded retail |
19.1 |
22.6 |
29.5 |
0.9 |
– |
(0.4) |
71.7 | ||||||||||||||
Contract packaging |
– |
31.1 |
21.8 |
3.0 |
– |
(1.9) |
54.0 | ||||||||||||||
Home and office bottled water delivery |
229.1 |
– |
– |
– |
– |
– |
229.1 | ||||||||||||||
Coffee and tea services |
165.6 |
– |
0.6 |
– |
– |
– |
166.2 | ||||||||||||||
Concentrate and other |
60.3 |
6.8 |
4.0 |
6.7 |
– |
(3.2) |
74.6 | ||||||||||||||
Total |
$ |
495.5 |
$ |
301.1 |
$ |
94.2 |
$ |
11.5 |
$ |
– |
$ |
(5.9) |
$ |
896.4 | |||||||
Gross Profit 1 |
$ |
262.4 |
$ |
33.2 |
$ |
11.1 |
$ |
3.9 |
$ |
– |
$ |
– |
$ |
310.6 | |||||||
Gross Margin % 2 |
53.0% |
11.2% |
11.8% |
33.9% |
– |
– |
34.6% | ||||||||||||||
Operating income (loss) |
$ |
14.9 |
$ |
1.1 |
$ |
– |
$ |
1.6 |
$ |
(6.8) |
$ |
– |
$ |
10.8 | |||||||
Depreciation and Amortization |
$ |
41.6 |
$ |
17.8 |
$ |
4.8 |
$ |
0.2 |
$ |
– |
$ |
– |
$ |
64.4 | |||||||
For the Three Months Ended | |||||||||||||||||||||
(in millions of |
Water & Coffee |
Cott North |
Cott |
All Other |
Corporate |
Elimination |
Total | ||||||||||||||
Revenue, net |
|||||||||||||||||||||
Private label retail |
$ |
16.9 |
$ |
248.5 |
$ |
50.7 |
$ |
0.5 |
$ |
– |
$ |
(0.4) |
$ |
316.2 | |||||||
Branded retail |
24.3 |
26.8 |
36.2 |
0.8 |
– |
(0.3) |
87.8 | ||||||||||||||
Contract packaging |
– |
31.4 |
28.3 |
4.7 |
– |
(2.1) |
62.3 | ||||||||||||||
Home and office bottled water delivery |
162.0 |
– |
– |
– |
– |
– |
162.0 | ||||||||||||||
Coffee and tea services |
31.5 |
– |
0.8 |
– |
– |
– |
32.3 | ||||||||||||||
Concentrate and other |
22.6 |
6.6 |
4.6 |
7.6 |
– |
(3.6) |
37.8 | ||||||||||||||
Total |
$ |
257.3 |
$ |
313.3 |
$ |
120.6 |
$ |
13.6 |
$ |
– |
$ |
(6.4) |
$ |
698.4 | |||||||
Gross Profit 1 |
$ |
154.4 |
$ |
34.9 |
$ |
19.7 |
$ |
5.0 |
$ |
– |
$ |
– |
$ |
214.0 | |||||||
Gross Margin % 2 |
60.0% |
11.4% |
16.3% |
36.8% |
– |
– |
30.6% | ||||||||||||||
Operating income (loss) |
$ |
5.7 |
$ |
0.6 |
$ |
9.9 |
$ |
2.5 |
$ |
(4.0) |
$ |
– |
$ |
14.7 | |||||||
Depreciation and Amortization |
$ |
28.4 |
$ |
18.3 |
$ |
5.5 |
$ |
0.3 |
$ |
– |
$ |
– |
$ |
52.5 |
1 Gross profit from external revenues. |
2 |
|
EXHIBIT 5 | ||||||||||||
SUPPLEMENTARY INFORMATION – NON-GAAP – Analysis of Revenue by Reporting Segment |
|||||||||||||
Unaudited |
|||||||||||||
For the Three Months Ended | |||||||||||||
(in millions of |
| ||||||||||||
Water & |
Cott North |
Cott |
All Other |
Elimination |
Cott 1 | ||||||||
Change in revenue |
$ |
238.2 |
$ |
(12.2) |
$ |
(26.4) |
$ |
(2.1) |
$ |
0.5 |
$ |
198.0 | |
Impact of foreign exchange 2 |
$ |
(0.5) |
$ |
(0.9) |
$ |
14.4 |
$ |
0.4 |
$ |
– |
13.4 | ||
Change excluding foreign exchange |
$ |
237.7 |
$ |
(13.1) |
$ |
(12.0) |
$ |
(1.7) |
$ |
0.5 |
$ |
211.4 | |
Percentage change in revenue |
92.6% |
-3.9% |
-21.9% |
-15.4% |
-7.8% |
28.4% | |||||||
Percentage change in revenue excluding foreign exchange |
92.4% |
-4.2% |
-10.0% |
-12.5% |
-7.8% |
30.3% |
1Cott includes the following reporting segments: Water & Coffee Services, |
2 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. |
|
EXHIBIT 6 | |||||
SUPPLEMENTARY INFORMATION – NON-GAAP – EARNINGS BEFORE INTEREST, TAXES, | ||||||
(EBITDA) |
||||||
(in millions of |
||||||
Unaudited |
||||||
For the Three Months Ended | ||||||
|
| |||||
Net loss attributed to |
$ |
(36.4) |
$ |
(2.8) | ||
Interest expense, net |
35.7 |
27.8 | ||||
Income tax expense (benefit) |
1.1 |
(9.5) | ||||
Depreciation & amortization |
64.4 |
52.5 | ||||
Net income attributable to non-controlling interests |
2.0 |
1.4 | ||||
EBITDA |
$ |
66.8 |
$ |
69.4 | ||
Acquisition and integration costs 1,3 |
7.3 |
1.4 | ||||
Share-based compensation expense 2,4 |
3.6 |
2.0 | ||||
Inventory step-up 5 |
– |
0.5 | ||||
Unrealized commodity hedging gain, net 6 |
(1.9) |
– | ||||
Foreign exchange and other gains, net 7 |
(1.4) |
(2.6) | ||||
Loss on disposal of property, plant & equipment, net 8 |
1.8 |
0.9 | ||||
Loss on extinguishment of 2020 Notes 9 |
10.1 |
– | ||||
Other adjustments 10 |
1.8 |
1.3 | ||||
Adjusted EBITDA |
$ |
88.1 |
$ |
72.9 |
1 Includes |
2 Effective quarter ended |
Location in Consolidated |
Three Months Ended | |||||||
Statements Of Operations |
|
| ||||||
(Unaudited) | ||||||||
3Acquisition and integration costs |
Acquisition and integration expenses |
$ |
7.3 |
$ |
1.4 | |||
4Share-based compensation expense |
Selling, general and administrative expenses |
3.6 |
2.0 | |||||
5Inventory step-up |
Cost of sales |
– |
0.5 | |||||
6Unrealized commodity hedging gain, net |
Cost of sales |
(1.9) |
– | |||||
7Foreign exchange and other gains, net |
Other expense (income), net |
(1.4) |
(2.6) | |||||
8Loss on disposal of property, plant & equipment, net |
Loss on disposal of property, plant & equipment, net |
1.8 |
0.9 | |||||
9Loss on extinguishment of 2020 Notes |
Other expense (income), net |
10.1 |
– | |||||
10Other adjustments |
Selling, general and administrative expenses |
1.8 |
1.3 |
|
EXHIBIT 7 | |||||||
SUPPLEMENTARY INFORMATION – NON-GAAP – FREE CASH FLOW AND ADJUSTED FREE CASH FLOW | ||||||||
(in millions of |
||||||||
Unaudited |
||||||||
For the Three Months Ended | ||||||||
|
| |||||||
Net cash used in operating activities |
$ |
(5.0) |
$ |
(18.7) | ||||
Less: Additions to property, plant, and equipment |
(40.6) |
(29.5) | ||||||
Free Cash Flow |
$ |
(45.6) |
$ |
(48.2) | ||||
Plus: |
||||||||
Acquisition and integration cash costs |
5.7 |
1.1 | ||||||
Adjusted Free Cash Flow |
$ |
(39.9) |
$ |
(47.1) |
|
EXHIBIT 8 | ||||||
SUPPLEMENTARY INFORMATION – NON-GAAP – ADJUSTED NET LOSS |
|||||||
(in millions of |
|||||||
Unaudited |
|||||||
For the Three Months Ended | |||||||
|
| ||||||
Net loss attributed to |
$ |
(36.4) |
$ |
(2.8) | |||
Acquisition and integration costs |
7.3 |
1.4 | |||||
Inventory step-up |
– |
0.5 | |||||
Unrealized commodity hedging gain, net |
(1.9) |
– | |||||
Foreign exchange and other gains, net |
(1.4) |
(2.6) | |||||
Loss on disposal of property, plant & equipment, net |
1.8 |
0.9 | |||||
Loss on extinguishment of 2020 Notes |
10.1 |
– | |||||
Other adjustments1 |
2.6 |
1.3 | |||||
Adjustments for tax effect 2 |
(0.6) |
(0.7) | |||||
Adjusted net loss attributed to |
$ |
(18.5) |
$ |
(2.0) | |||
Adjusted net loss per common share attributed to |
|||||||
Basic |
$ |
(0.13) |
$ |
(0.02) | |||
Diluted |
$ |
(0.13) |
$ |
(0.02) | |||
Weighted average common shares outstanding (millions) |
|||||||
Basic |
138.7 |
113.3 | |||||
Diluted |
138.7 |
113.3 |
1 Includes |
2 Reflects tax effect of adjustments at the statutory tax rate within the applicable tax jurisdiction. |
WATER & COFFEE SOLUTIONS REPORTING SEGMENT |
EXHIBIT 9 | |||||||||||
SUPPLEMENTARY INFORMATION – OPERATING INCOME |
||||||||||||
(in millions of |
||||||||||||
Unaudited |
||||||||||||
For the Three Months Ended | ||||||||||||
|
| |||||||||||
DSS |
Eden + |
Water & |
DSS | |||||||||
Revenue, net |
$ |
263.2 |
$ |
232.3 |
$ |
495.5 |
$ |
257.3 | ||||
Operating income |
$ |
7.8 |
$ |
7.1 |
$ |
14.9 |
$ |
5.7 |
SOURCE