Cott Reports Fourth Quarter and Fiscal 2015 Results and Declares Dividend
Feb 18, 2016
- Adjusted free cash flow grew 25% to
$134 million in fiscal 2015, and operating cash flow increased to$255 million , due to increased earnings, lower than expected capital expenditures (of approximately$15 million ) and stringent working capital management.
- Gross profit grew to
$896 million in fiscal 2015, with gross margin increasing from 13.1% in fiscal 2014 to 30.4% in fiscal 2015.
- On
January 4, 2016 ,Cott acquired Aquaterra,Canada’s oldest and largest direct-to-consumer home and office water delivery business.
(Unless stated otherwise, all fourth quarter 2015 comparisons are relative to the fourth quarter of 2014 and all fiscal year 2015 comparisons are relative to fiscal year 2014; all information is in
Cott’s normalized 2015 free cash flow, after deducting approximately$15 million of lower than expected capital expenditures, was approximately$120 million , which is estimated to grow at a mid-teen compound annual growth rate through 2018.
- On
January 4, 2016 ,Cott acquired Aquaterra for a purchase price ofC$62 million . Aquaterra isCanada’s oldest and largest direct-to-consumer home and office water delivery business with revenues of approximatelyC$75 million for the twelve months endedJune 30, 2015 . This acquisition builds onCott’s strategy of expanding its water, coffee and tea home and office services business, and further diversifies its customer base. The acquisition broadensCott’s customer reach by adding over 70,000 new customers and delivery points while creating cost synergies and a Canadian home and office services platform for continued organic and transaction related expansion.
- DS Services completed the acquisitions of nine small HOD water and coffee businesses during fiscal 2015.
Cott captured$4 million of synergies related to the acquisition of DS Services during the quarter for a total of$10 million of synergies realized during fiscal 2015, with the goal of$30 million in synergies by the end of 2017.
- DS Services continued to grow, generating 4% pro forma revenue growth on an adjusted basis during the quarter and fiscal year.
- Volume stabilization within the
Cott North America business unit continued during the quarter as contract manufacturing volume grew by 40% and sparkling waters and mixers volume grew by 4% (excluding the 53rd week in 2014).Cott North America gross margin increased 190 basis points from 10.6% to 12.5% in the quarter and 170 basis points from 11.6% to 13.3% during the fiscal year as a result of stable volumes and cost and efficiency savings.
“I am pleased with the progress made in pursuit of our strategic priorities in 2015 highlighted by our strong free cash flow, full redemption of the preferred shares issued at the time of the DS Services acquisition, successful pursuit of follow-on home and office acquisitions, as well as significant growth in contract manufacturing within our traditional business,” commented
FOURTH QUARTER 2015 GLOBAL PERFORMANCE
- Adjusted free cash flow was
$72 million . Reported free cash flow was$63 million , reflecting$88 million of net cash provided by operating activities less$25 million of capital expenditures.
- Adjusted EBITDA increased 89% to
$81 million due primarily to the addition of the DS Services business and stable volumes within theCott North America business unit.
- Revenue increased 29% to
$699 million ($711 million excluding the impact of foreign exchange) compared to$544 million .
- Gross profit increased 208% to
$221 million , with a gross margin of 31.6% compared to 13.2%, due primarily to the addition of the DS Services business, stable volumes in theCott North America business unit and cost and efficiency savings, offset in part by the impact of foreign exchange.
- Adjusted net income and adjusted net income per diluted share were
$3 million and$0.03 , respectively, compared to adjusted net income and adjusted net income per diluted share of$34 million and$0.37 , respectively. Reported net loss and net loss per diluted share were$4 million and$0.04 , respectively, compared to reported net income and net income per diluted share of$19 million and$0.19 , respectively. The changes in net income and earnings per share were largely driven by our income tax benefit which was approximately$6 million in the fourth quarter of 2015 compared to an income tax benefit of$65 million due primarily to the release of a valuation allowance in the fourth quarter of 2014.
FOURTH QUARTER 2015 REPORTING SEGMENT PERFORMANCE
- DS Services pro forma revenue increased 8% to
$256 million (4% on an adjusted basis) due primarily to growth in HOD water, single cup coffee delivery, and retail sales as well as the benefit of four additional shipping days during the quarter, offset in part by a reduced energy surcharge as a result of lower diesel fuel prices, and reduced sales in traditional brew basket coffee.
Cott North America volume was broadly flat in actual cases and was lower by 4% in servings (excluding the 53rd week in 2014) as increases in contract manufacturing and other growth areas such as sparkling waters and mixers offset the general market decline in carbonated soft drinks (“CSDs”) and private label shelf stable juices (“SSJs”). Revenue was lower by 13% (6% excluding the impact of a 53rd week in 2014 and foreign exchange) at$305 million due primarily to an overall product mix shift into contract manufacturing and other private label categories.
U.K. /Europe volume decreased 3% in actual cases and was higher by 2% in servings (excluding the 53rd week in 2014). Revenue was lower by 14% (6% excluding the impact of a 53rd week in 2014 and foreign exchange) at$131 million due primarily to an adverse product mix shift out of energy and sports drinks and into other products.
- All Other revenue excluding the impact of foreign exchange as well as the benefit from a 53rd week in 2014 was broadly flat.
FISCAL YEAR 2015 GLOBAL PERFORMANCE
- Adjusted free cash flow increased 25% to
$134 million . Reported free cash flow was$144 million , reflecting$255 million of net cash provided by operating activities less$111 million of capital expenditures.
- Adjusted EBITDA increased 98% to
$357 million ($369 million excluding the impact of foreign exchange) due primarily to the addition of theDS Services and Aimia Foods businesses as well as stable volumes within ourCott North America business unit, offset in part by the competitive environment for CSDs and SSJs in the traditional business.
- Revenue increased 40% to
$2,944 million ($3,014 million excluding the impact of foreign exchange) compared to$2,103 million .
- Gross profit increased 224% to
$896 million , with a gross margin of 30.4% compared to 13.1%. Excluding DS Services, gross margin increased by over 100 basis points to 14.4% driven primarily by stable volumes in theCott North America business unit, the higher margin profile of theAimia Foods business, and cost and efficiency savings, offset in part by the impact of foreign exchange and the competitive environment for CSDs and SSJs in the traditional business.
- Adjusted net income and adjusted net income per diluted share were
$23 million and$0.22 , respectively, compared to adjusted net income and adjusted net income per diluted share of$57 million and$0.60 , respectively. Reported net loss and net loss per diluted share were$3 million and$0.03 , respectively, compared to reported net income and net income per diluted share of$10 million and$0.10 , respectively. The changes in net income and earnings per share were largely driven by our income tax benefit which was approximately$23 million in fiscal 2015 compared to an income tax benefit of$61 million due primarily to the release of a valuation allowance in 2014.
FREE CASH FLOW AND DEBT
- With increased earnings, lower than expected capital expenditures and stringent working capital management,
Cott generated$134 million of adjusted free cash flow in fiscal 2015, surpassing its original goal of between$94 million to$114 million (which included$120-$125 million of forecasted capital expenditures) as well as fiscal 2014 adjusted free cash flow of$107 million .
- Leverage (net debt to adjusted EBITDA) was approximately 4.4 times at the end of fiscal 2015.
DECLARATION OF DIVIDEND
FOURTH QUARTER AND FISCAL YEAR 2015 RESULTS CONFERENCE CALL
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ABOUT
With over 9,500 employees,
Non-GAAP Measures
To supplement its reporting of financial measures determined in accordance with GAAP,
Safe Harbor Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 conveying management’s expectations as to the future based on plans, estimates and projections at the time
Factors that could cause actual results to differ materially from those described in this press release include, among others: our ability to compete successfully in the markets in which we operate; changes in consumer tastes and preferences for existing products and our ability to develop and timely launch new products that appeal to such changing consumer tastes and preferences; a loss of or a reduction in business in our legacy
The foregoing list of factors is not exhaustive. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Readers are urged to carefully review and consider the various disclosures, including but not limited to risk factors contained in
Website: www.cott.com
COTT CORPORATION EXHIBIT 1 CONSOLIDATED STATEMENTS OF OPERATIONS (in millions ofU.S. dollars, except share and per share amounts,U.S. GAAP) Unaudited For the Three Months Ended For the Year Ended ---------------------- ---------------------- January 2, January 3, January 2, January 3, 2016 2015 2016 2015 ---------- ---------- ---------- ---------- Revenue, net$ 698.8 $ 543.5 $ 2,944.0 $ 2,102.8 Cost of sales 477.7 471.7 2,048.5 1,826.3 ---------- ---------- ---------- ---------- Gross profit 221.1 71.8 895.5 276.5 Selling, general and administrative expenses 193.7 66.2 768.6 213.7 Loss on disposal of property, plant & equipment 4.2 1.3 6.9 1.7 Restructuring - - - 2.4 Asset impairments - - - 1.7 Acquisition and integration expenses 5.2 37.9 20.6 41.3 ---------- ---------- ---------- ---------- Operating income (loss) 18.0 (33.6) 99.4 15.7 Other (income) expense, net (0.7) (1.9) (9.5) 21.0 Interest expense, net 28.0 12.5 111.0 39.7 ---------- ---------- ---------- ---------- Loss before income taxes (9.3) (44.2) (2.1) (45.0) Income tax benefit (6.4) (65.2) (22.7) (61.4) ---------- ---------- ---------- ---------- Net (loss) income$ (2.9) $ 21.0 $ 20.6 $ 16.4 Less: Net income attributable to non- controlling interests 1.5 1.5 6.1 5.6 Less: Accumulated dividends on convertible preferred shares - 0.6 4.5 0.6 Less: Accumulated dividends on non-convertible preferred shares - 0.2 1.4 0.2 Less: Foreign exchange impact on redemption of preferred shares - - 12.0 - ---------- ---------- ---------- ---------- Net (loss) income attributed to Cott Corporation$ (4.4) $ 18.7 $ (3.4) $ 10.0 ========== ========== ========== ========== Net (loss) income per common share attributed to Cott Corporation Basic$ (0.04) $ 0.20 $ (0.03) $ 0.11 Diluted$ (0.04) $ 0.19 $ (0.03) $ 0.10 Weighted average outstanding shares (millions) attributed to Cott Corporation Basic 109.7 93.0 103.0 93.8 Diluted 109.7 98.0 103.0 95.9 COTT CORPORATION EXHIBIT 2 CONSOLIDATED BALANCE SHEETS (in millions ofU.S. dollars, except share amounts,U.S. GAAP) Unaudited ------------- ------------- January 2, January 3, 2016 2015 ------------- ------------- ASSETS Current assets Cash & cash equivalents$ 77.1 $ 86.2 Accounts receivable, net of allowance 293.3 305.7 Income taxes recoverable 1.6 1.6 Inventories 249.4 262.4 Prepaid expenses and other current assets 17.2 59.3 ------------- ------------- Total current assets 638.6 715.2 Property, plant & equipment, net 769.8 864.5 Goodwill 759.6 743.6 Intangibles and other assets, net 711.7 758.0 Deferred income taxes 7.6 2.5 Other tax receivable - 0.2 ------------- ------------- Total assets$ 2,887.3 $ 3,084.0 ============= ============= LIABILITIES, PREFERRED SHARES AND EQUITY Current liabilities Short-term borrowings$ 122.0 $ 229.0 Current maturities of long-term debt 3.4 4.0 Accounts payable and accrued liabilities 437.6 420.3 ------------- ------------- Total current liabilities 563.0 653.3 Long-term debt 1,525.4 1,541.3 Deferred income taxes 76.5 119.9 Other long-term liabilities 76.5 71.8 ------------- ------------- Total liabilities 2,241.4 2,386.3 Convertible preferred shares,$1,000 stated value, no shares issued (January 3, 2015 - 116,054 shares issued) - 116.1 Non-convertible preferred shares,$1,000 stated value, no shares issued (January 3, 2015 - 32,711 shares issued) - 32.7 Equity Capital stock, no par - 109,695,435 (January 3, 2015 - 93,072,850) shares issued 534.7 388.3 Additional paid-in-capital 51.2 46.6 Retained earnings 129.6 158.1 Accumulated other comprehensive loss (76.2) (51.0) ------------- ------------- Total Cott Corporation equity 639.3 542.0 Non-controlling interests 6.6 6.9 ------------- ------------- Total equity 645.9 548.9 ------------- ------------- Total liabilities, preferred shares and equity$ 2,887.3 $ 3,084.0 ============= ============= COTT CORPORATION EXHIBIT 3 CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions ofU.S. dollars) Unaudited For the Three Months Ended For the Year Ended ---------------------- ---------------------- January 2, January 3, January 2, January 3, 2016 2015 2016 2015 ---------- ---------- ---------- ---------- Operating Activities Net (loss) income$ (2.9) $ 21.0 $ 20.6 $ 16.4 Depreciation & amortization 50.1 33.1 223.8 110.7 Amortization of financing fees 1.2 0.6 4.8 2.5 Amortization of senior notes premium (1.4) (0.4) (5.6) (0.4) Share-based compensation expense 1.9 0.9 10.3 5.8 Decrease in deferred income taxes (8.8) (69.9) (30.4) (65.8) Write-off of financing fees and discount - - - 4.1 Loss on disposal of property, plant & equipment 4.2 1.3 6.9 1.7 Asset impairments - - - 1.7 Other non-cash items 2.4 1.0 (9.4) 0.3 Change in operating assets and liabilities, net of acquisitions: Accounts receivable 27.4 40.7 4.5 1.5 Inventories 0.9 3.1 6.5 12.9 Prepaid expenses and other current assets 2.1 (23.7) 30.8 (25.2) Other assets (1.0) 1.9 (8.5) 1.7 Accounts payable and accrued liabilities, and other liabilities 11.0 12.9 (3.3) (6.8) Income taxes recoverable 1.1 (3.3) 3.6 (4.4) ---------- ---------- ---------- ---------- Net cash provided by operating activities 88.2 19.2 254.6 56.7 ---------- ---------- ---------- ---------- Investing Activities Acquisitions, net of cash received (1.5) (717.7) (24.0) (798.5) Additions to property, plant & equipment (25.3) (15.3) (110.8) (46.7) Additions to intangibles and other assets (1.9) (2.6) (4.6) (6.9) Proceeds from sale of property, plant & equipment and sale- leaseback - 0.2 40.9 1.8 Other investing activities (1.2) - (1.2) - ---------- ---------- ---------- ---------- Net cash used in investing activities (29.9) (735.4) (99.7) (850.3) ---------- ---------- ---------- ---------- Financing Activities Payments of long-term debt (0.8) (1.0) (3.7) (393.6) Issuance of long-term debt - 625.0 - 1,150.0 Borrowings under ABL 193.2 484.7 994.5 959.0 Payments under ABL (227.3) (324.2) (1,101.8) (779.6) Distributions to non- controlling interests (1.7) (1.3) (8.5) (8.5) Issuance of common shares - - 143.1 - Financing fees (0.3) (14.9) (0.6) (24.0) Preferred shares repurchased and cancelled - - (148.8) - Common shares repurchased and cancelled - (4.4) (0.8) (12.1) Dividends paid to common and preferred shareholders (6.5) (6.4) (31.0) (22.8) Payment of deferred consideration for acquisitions - - (2.5) (32.4) Other financing activities - (0.3) - (0.3) ---------- ---------- ---------- ---------- Net cash (used in) provided by financing activities (43.4) 757.2 (160.1) 835.7 ---------- ---------- ---------- ---------- Effect of exchange rate changes on cash (1.5) (2.2) (3.9) (3.1) ---------- ---------- ---------- ---------- Net increase (decrease) in cash & cash equivalents 13.4 38.8 (9.1) 39.0 Cash & cash equivalents, beginning of period 63.7 47.3 86.2 47.2 ---------- ---------- ---------- ---------- Cash & cash equivalents, end of period$ 77.1 $ 86.1 $ 77.1 $ 86.2 ========== ========== ========== ========== EXHIBIT COTT CORPORATION 4 SEGMENT INFORMATION - NON-GAAP (in millions ofU.S. dollars) Unaudited For the Three Months Ended January 2, 2016 --------------------------------------------------------------------------- (in millions Cott of U.S. North Cott All dollars) America DSS U.K. Other Corporate Elimination Total -------- -------- ------ ------ --------- ----------- -------- Revenue Private label retail$ 248.1 $ 15.6 $ 64.2 $ 0.8 $ - $ -$ 328.7 Branded retail 27.0 20.9 38.5 0.8 - (0.3) 86.9 Contract packaging 23.8 - 24.4 5.8 - (2.5) 51.5 Home and office bottled water delivery - 163.6 - - - - 163.6 Office coffee services - 31.5 - - - - 31.5 Concentrate and other 5.8 24.1 4.0 5.4 - (2.7) 36.6 -------- -------- ------ ------ --------- ----------- -------- Total$ 304.7 $ 255.7 $131.1 $ 12.8 $ - $ (5.5)$ 698.8 ======== ======== ====== ====== ========= =========== ======== Gross Profit (1)$ 37.5 $ 158.5 $ 20.4 $ 4.7 $ - $ -$ 221.1 ======== ======== ====== ====== ========= =========== ======== Gross Margin % (2) 12.5% 62.0% 15.6% 36.7%$ - $ - 31.6% ======== ======== ====== ====== ========= =========== ======== Operating income (loss)$ 4.7 $ 13.3 $ 2.5 $ 2.1 $ (4.6)$ -$ 18.0 ======== ======== ====== ====== ========= =========== ======== For the Three Months Ended January 3, 2015 --------------------------------------------------------------------------- (in millions Cott of U.S. North Cott All dollars) America DSS U.K. Other Corporate Elimination Total -------- -------- ------ ------ --------- ----------- -------- Revenue Private label retail$ 301.1 $ 2.1 $ 70.2 $ 2.9 $ - $ (0.4)$ 375.9 Branded retail 26.5 2.6 46.1 0.9 - (0.3) 75.8 Contract packaging 15.6 - 33.7 4.0 - (0.7) 52.6 Home and office bottled water delivery - 12.2 - - - - 12.2 Office coffee services - 4.3 - - - - 4.3 Concentrate and other 8.5 7.5 2.6 7.3 - (3.2) 22.7 -------- -------- ------ ------ --------- ----------- -------- Total$ 351.7 $ 28.7 $152.6 $ 15.1 $ - $ (4.6)$ 543.5 ======== ======== ====== ====== ========= =========== ======== Gross Profit (1)$ 36.9 $ 12.8 $ 17.1 $ 5.0 $ - $ -$ 71.8 ======== ======== ====== ====== ========= =========== ======== Gross Margin % (2) 10.6% 44.6% 11.2% 33.1%$ - $ - 13.2% ======== ======== ====== ====== ========= =========== ======== Operating income (loss)$ 3.0 $ (1.7)$ 3.1 $ 1.8 $ (39.8)$ -$ (33.6) ======== ======== ====== ====== ========= =========== ======== For the Year ended January 2, 2016 --------------------------------------------------------------------------- (in millions Cott of U.S. North Cott All dollars) America DSS U.K. Other Corporate Elimination Total -------- -------- ------ ------ --------- ----------- -------- Revenue Private label retail$1,075.9 $ 65.3 $262.3 $ 4.5 $ - $ (1.6)$1,406.4 Branded retail 114.9 84.1 169.8 4.1 - (1.5) 371.4 Contract packaging 111.8 - 114.0 22.2 - (6.5) 241.5 Home and office bottled water delivery - 651.3 - - - - 651.3 Office coffee services - 121.3 - - - - 121.3 Concentrate and other 28.3 99.1 10.9 26.8 - (13.0) 152.1 -------- -------- ------ ------ --------- ----------- -------- Total$1,330.9 $1,021.1 $557.0 $ 57.6 $ - $ (22.6)$2,944.0 ======== ======== ====== ====== --------- =========== ======== Gross Profit (1)$ 173.8 $ 618.3 $ 81.5 $ 21.9 $ - $ -$ 895.5 ======== ======== ====== ====== ========= =========== ======== Gross Margin % (2) 13.3% 60.6% 14.6% 38.0%$ - $ - 30.4% ======== ======== ====== ====== ========= =========== ======== Operating income (loss)$ 38.5 $ 39.0 $ 28.0 $ 10.5 $ (16.6)$ -$ 99.4 ======== ======== ====== ====== ========= =========== ======== For the Year ended January 3, 2015 --------------------------------------------------------------------------- (in millions Cott of U.S. North Cott All dollars) America DSS U.K. Other Corporate Elimination Total -------- -------- ------ ------ --------- ----------- -------- Revenue Private label retail$1,206.4 $ 2.1 $296.7 $ 7.4 $ - $ (1.2)$1,511.4 Branded retail 108.4 2.6 173.7 4.5 - (1.6) 287.6 Contract packaging 86.9 - 120.8 24.6 - (6.7) 225.6 Home and office bottled water delivery - 12.2 - - - - 12.2 Office coffee services - 4.3 - - - - 4.3 Concentrate and other 31.8 7.5 6.7 28.5 - (12.8) 61.7 -------- -------- ------ ------ --------- ----------- -------- Total$1,433.5 $ 28.7 $597.9 $ 65.0 $ - $ (22.3)$2,102.8 ======== ======== ====== ====== ========= =========== ======== Gross Profit (1)$ 163.5 $ 12.8 $ 78.8 $ 21.4 $ - $ -$ 276.5 ======== ======== ====== ====== ========= =========== ======== Gross Margin % (2) 11.6% 44.6% 13.2% 32.9%$ - $ - 13.1% ======== ======== ====== ====== ========= =========== ======== Operating income (loss)$ 29.7 $ (1.7)$ 26.3 $ 10.0 $ (48.6)$ -$ 15.7 ======== ======== ====== ====== ========= =========== ======== (1) Gross profit from external revenues. (2)Cott North America gross margin relative to external revenues. COTT CORPORATION EXHIBIT 5 SUPPLEMENTARY INFORMATION - NON-GAAP - Analysis of Revenue by Reporting Segment Unaudited For the Three Months Ended ---------------------------------------------------------- (in millions of U.S. dollars, except percentage amounts) January 2, 2016 ---------------------------------------------------------- Cott North Cott All America DSS U.K. Other Elimination Cott(1) -------- -------- ------- ------- ----------- ------- Change in revenue$ (47.0) $ 227.0 $ (21.5) $ (2.3) $ (0.9) $ 155.3 Impact of foreign exchange(2) 5.2 - 5.7 1.3 - 12.2 -------- -------- ------- ------- ----------- ------- Change excluding foreign exchange$ (41.8) $ 227.0 $ (15.8) $ (1.0) $ (0.9) $ 167.5 -------- -------- ------- ------- ----------- ------- Percentage change in revenue -13.4% 790.9% -14.1% -15.2% 19.6% 28.6% -------- -------- ------- ------- ----------- ------- Percentage change in revenue excluding foreign exchange -11.9% 790.9% -10.4% -6.6% 19.6% 30.8% -------- -------- ------- ------- ----------- ------- Impact of 53rd week in 2014 21.5 - 6.4 1.2 - 29.1 Impact of four additional shipping days in 2015 - (12.5) - - - (12.5) -------- -------- ------- ------- ----------- ------- Change excluding foreign exchange and impact of 53rd week in 2014 and additional shipping days in 2015$ (20.3) $ 214.5 $ (9.4) $ 0.2 $ (0.9) $ 184.1 -------- -------- ------- ------- ----------- ------- Percentage change in revenue excluding foreign exchange and impact of 53rd week in 2014 and four additional shipping days in 2015 -6.1% 747.4% -6.4% 1.4% 19.6% 35.8% -------- -------- ------- ------- ----------- ------- For the Year Ended ---------------------------------------------------------- (in millions of U.S. dollars, except percentage amounts) January 2, 2016 ---------------------------------------------------------- Cott North Cott All America DSS U.K. Other Elimination Cott(1) -------- -------- ------- ------- ----------- ------- Change in revenue$ (102.6) $ 992.4 $ (40.9) $ (7.4) $ (0.3) $ 841.2 Impact of foreign exchange(2) 20.7 - 44.0 5.0 - 69.7 -------- -------- ------- ------- ----------- ------- Change excluding foreign exchange$ (81.9) $ 992.4 $ 3.1 $ (2.4) $ (0.3) $ 910.9 -------- -------- ------- ------- ----------- ------- Percentage change in revenue -7.2% 3457.8% -6.8% -11.4% 1.3% 40.0% -------- -------- ------- ------- ----------- ------- Percentage change in revenue excluding foreign exchange -5.7% 3457.8% 0.5% -3.7% 1.3% 43.3% -------- -------- ------- ------- ----------- ------- Impact of 53rd week in 2014 21.5 - 6.4 1.2 - 29.1 Impact of four additional shipping days in 2015 - (12.5) - - - (12.5) -------- -------- ------- ------- ----------- ------- Change excluding foreign exchange and impact of 53rd week in 2014 and additional shipping days in 2015$ (60.4) $ 979.9 $ 9.5 $ (1.2) $ (0.3) $ 927.5 -------- -------- ------- ------- ----------- ------- Percentage change in revenue excluding foreign exchange and impact of 53rd week in 2014 and four additional shipping days in 2015 -4.3% 3414.3% 1.6% -1.9% 1.3% 44.7% -------- -------- ------- ------- ----------- ------- (1)Cott includes the following reporting segments:Cott North America , DSS, CottU.K. and All Other. (2) Impact of foreign exchange is the difference between the current year's revenue translated utilizing the current year's average foreign exchange rates less the current year's revenue translated utilizing the prior year's average foreign exchange rates. COTT CORPORATION EXHIBIT 6 SUPPLEMENTARY INFORMATION - NON-GAAP - EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION & AMORTIZATION (EBITDA) (in millions ofU.S. dollars) Unaudited For the Three Months Ended For the Year Ended ---------------------- ---------------------- January 2, January 3, January 2, January 3, 2016 2015 2016 2015 ---------- ---------- ---------- ---------- Net (loss) income attributed to Cott Corporation$ (4.4) $ 18.7 $ (3.4) $ 10.0 Interest expense, net 28.0 12.5 111.0 39.7 Income tax benefit (6.4) (65.2) (22.7) (61.4) Depreciation & amortization 50.1 33.1 223.8 110.7 Net income attributable to non-controlling interests 1.5 1.5 6.1 5.6 Accumulated dividends on preferred shares - 0.8 5.9 0.8 Foreign exchange impact on redemption of preferred shares - - 12.0 - ---------- ---------- ---------- ---------- EBITDA$ 68.8 $ 1.4 $ 332.7 $ 105.4 Restructuring and asset impairments - - - 4.1 Bond redemption and other financing costs - - - 25.2 Facility reorganization costs 3.0 - 3.0 - Acquisition and integration costs 5.2 37.9 20.6 41.3 Purchase accounting adjustments, net - 1.7 4.2 2.9 Unrealized commodity hedging loss (gain), net - 1.2 (1.2) 1.2 Unrealized foreign exchange and other losses (gains), net 0.2 (2.2) (10.9) (0.5) Loss on disposal of property, plant & equipment 4.1 2.7 6.9 3.2 Other adjustments (0.8) - 1.7 (2.6) ---------- ---------- ---------- ---------- Adjusted EBITDA$ 80.5 $ 42.7 $ 357.0 $ 180.2 ========== ========== ========== ========== Impact of foreign exchange(1)$ 2.6 $ -$ 12.1 $ - ---------- ---------- ---------- ---------- Adjusted EBITDA, foreign exchange impacted$ 83.1 $ 42.7 $ 369.1 $ 180.2 ========== ========== ========== ========== (1) Includes translational and transactional foreign exchange impact. COTT CORPORATION EXHIBIT 7 SUPPLEMENTARY INFORMATION - NON-GAAP - FREE CASH FLOW AND ADJUSTED FREE CASH FLOW (in millions ofU.S. dollars) Unaudited For the Three Months Ended ---------------------------- January 2, January 3, 2016 2015 ------------- ------------- Net cash provided by operating activities$ 88.2 $ 19.2 Less: Additions to property, plant & equipment (25.3) (15.3) ------------- ------------- Free Cash Flow$ 62.9 $ 3.9 ============= ============= Plus: 53rd week interest payment 2022 Notes - 14.7 DSS integration capital expenditures 3.5 - Acquisition and integration cash costs 5.2 32.2 Cash collateral(1) - 29.4 ------------- ------------- Adjusted Free Cash Flow$ 71.6 $ 80.2 (2) ============= ============= For the Year Ended ---------------------------- January 2, January 3, 2016 2015 ------------- ------------- Net cash provided by operating activities$ 254.6 $ 56.7 Less: Additions to property, plant & equipment (110.8) (46.7) ------------- ------------- Free Cash Flow$ 143.8 $ 10.0 ============= ============= Plus: Bond redemption cash costs - 20.8 53rd week interest payment 2022 Notes - 14.7 DSS integration capital expenditures 5.3 - Acquisition and integration cash costs 13.9 32.2 Cash collateral(1) (29.4) 29.4 ------------- ------------- Adjusted Free Cash Flow$ 133.6 $ 107.1 (2) ============= ============= (1) In connection with the DSS Acquisition,$29.4 million was required to cash collateralize certain DSS self-insurance programs. The$29.4 million was funded with borrowings against our ABL facility, and the cash collateral is included within prepaid and other current assets on our Consolidated Balance Sheet atJanuary 3, 2015 . Subsequent toJanuary 3, 2015 additional letters of credit were issued from our available ABL facility capacity, and the cash collateral was returned to the Company, which was used to repay a portion of our outstanding ABL facility. (2) 2014 includes$5.6 million of DSS's free cash flow from the acquisition date.
COTT CORPORATION EXHIBIT 8 SUPPLEMENTARY INFORMATION - NON-GAAP - ADJUSTED NET INCOME(1) (in millions ofU.S. dollars, except share and per share amounts) Unaudited For the Three Months Ended For the Year Ended -------------------------- -------------------------- January 2, January 3, January 2, January 3, 2016 2015 2016 2015 ------------ ------------ ------------ ------------ Net (loss) income attributed to Cott Corporation$ (4.4) $ 18.7 $ (3.4) $ 10.0 Restructuring and asset impairments, net of tax - (0.2) - 3.0 Bond redemption and other financing costs, net of tax - (9.4) - 15.8 Facility reorganization costs, net of tax 1.9 - 1.9 - Acquisition and integration costs, net of tax 3.3 23.4 13.1 26.3 Purchase accounting adjustments, net of tax - - 2.6 1.0 Unrealized commodity hedging loss (gain), net of tax - 0.8 (0.8) 0.8 Unrealized foreign exchange and other losses (gains), net of tax 0.2 (1.7) (8.0) (0.3) Foreign exchange impact on redemption of preferred shares - - 12.0 - Loss on disposal of property, plant & equipment, net of tax 2.8 1.7 4.5 2.1 Other adjustments, net of tax (0.8) 1.0 1.1 (1.6) ------------ ------------ ------------ ------------ Adjusted net income attributed to Cott Corporation$ 3.0 $ 34.3 $ 23.0 $ 57.1 ============ ============ ============ ============ Adjusted net income per common share attributed to Cott Corporation Basic$ 0.03 $ 0.37 $ 0.22 $ 0.61 Diluted$ 0.03 $ 0.37 $ 0.22 $ 0.60 Weighted average outstanding shares (millions) attributed to Cott Corporation Basic 109.7 93.0 103.0 93.8 Diluted 110.5 93.8(2) 103.7 94.8(2) (1) Adjustments are tax effected based on the statutory tax rate within the applicable tax jurisdiction. (2) Adjusted to exclude dilutive effect of convertible preferred shares. COTT CORPORATION - DS SERVICES EXHIBIT 9 SUPPLEMENTARY INFORMATION - NON-GAAP - ADJUSTED REVENUES (in millions ofU.S. dollars) Unaudited Pro forma ------------- ------------- For the Three For the Three Months Ended Months Ended January 2, January 3, 2016 2015 ------------- ------------- Revenue, net$ 255.7 $ 236.5 Energy surcharge adjustment(1) $ 2.5 2015 four additional shipping days$ (12.5) ------------- ------------- Adjusted Revenue, net$ 245.7 $ 236.5 Adjusted Revenue, net growth vs. Pro forma 3.9% Pro forma ------------- ------------- For the Year For the Year Ended Ended January 2, January 3, 2016 2015 ------------- ------------- Revenue, net$ 1,021.1 $ 978.2 Energy surcharge adjustment(1) $ 8.0 Deferred revenue adjustment(2) $ 0.9 2015 four additional shipping days$ (12.5) ------------- ------------- Adjusted Revenue, net$ 1,017.5 $ 978.2 Adjusted Revenue, net growth vs. Pro forma 4.0% (1) Represents the impact of the energy fuel surcharge on current year operations assuming prior year's pro forma average rate. (2) 2015 measurement period adjustment. COTT CORPORATION EXHIBIT 10 SUPPLEMENTARY INFORMATION - NON-GAAP - LEVERAGE (in millions ofU.S. dollars) Unaudited January 2, 2016 ---------------- Adjusted EBITDA $ 357.0 Total debt$ 1,650.8 Less: Cash (77.1) ---------------- Net Debt$ 1,573.7 ---------------- ---------------- Leverage (Net Debt / Adjusted EBITDA) 4.41 ----------------
CONTACT:Jarrod Langhans Investor Relations Tel: (813) 313-1732 Email Contact
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