Cott Reports Fourth Quarter and Fiscal 2014 Results and Accelerates Diversification Strategy
Feb 24, 2015
FOURTH QUARTER 2014 HIGHLIGHTS
- Revenue of
$544 million was higher by 13% compared to$482 million .
- Gross profit was
$72 million compared to$60 million which resulted in gross profit as a percentage of revenue of 13.2% compared to 12.5%.
- Adjusted free cash flow was
$80 million . Reported free cash flow was$4 million .
- Adjusted net income and adjusted earnings per diluted share were
$34 million and$0.37 , respectively, compared to adjusted net income of$4 million and adjusted earnings per diluted share of$0.04 . Reported net income and earnings per diluted share were$19 million and$0.19 , respectively.
- Consistent with
Cott’s strategic priorities designed to build long-term shareowner value:
- On
December 12, 2014 ,Cott acquired DS Services, which had revenues of approximately$970 million and EBITDA of approximately$170 million for the twelve months endedSeptember 30, 2014 . The acquisition significantly reducedCott’s business concentration in carbonated soft drinks, shelf stable juices and large format retailers while extendingCott’s beverage portfolio into new and growing markets, including water and coffee home and office delivery services and water filtration. The acquisition is expected to create cost synergies as well as portfolio expansion while broadeningCott’s distribution platform by adding DS Services’ national direct-to-consumer distribution network.
Cott’s North America business unit continued to expand its contract manufacturing business, growing contract manufacturing volume by over 110% or 6 million serving equivalent cases during the quarter.
Cott returned approximately$9.3 million to shareowners through the combination of its quarterly dividend of$0.06 per common share (an approximate aggregate payment of$5.6 million ) and the repurchase of 572,000 shares at an average price of$6.52 for approximately$3.7 million under its share repurchase program during the quarter.
- On
FISCAL YEAR 2014 HIGHLIGHTS
- Revenue of
$2,103 million was slightly higher compared to$2,094 million .
- Gross profit was
$277 million compared to$275 million which resulted in gross profit as a percentage of revenue of 13.2% for both years.
- Adjusted free cash flow was
$107 million . Reported free cash flow was$10 million .
- Adjusted net income and adjusted earnings per diluted share were
$57 million and$0.60 , respectively, compared to adjusted net income of$38 million and adjusted earnings per diluted share of$0.40 . Reported net income and earnings per diluted share were$10 million and$0.10 , respectively.
- Consistent with
Cott’s strategic priorities designed to build long-term shareowner value:
- On
May 30, 2014 ,Cott acquiredAimia Foods , which had revenues of approximately$110 million and EBITDA of approximately$17 million for the twelve months endedMarch 29, 2014 .
Cott’s North America business unit continued to expand its contract manufacturing business, growing contract manufacturing volume by over 110% or 24 million serving equivalent cases during the year, significantly exceeding its first year goal of 15 million to 18 million serving equivalent cases.
Cott returned approximately$33 million to shareowners through the combination of its quarterly dividend of$0.06 per common share (an approximate aggregate payment of$22 million ) and the repurchase of 1.6 million shares at an average price of$6.89 for approximately$11 million under its share repurchase program during the year.
- On
“During the quarter we saw the benefits of our diversification strategy, with global revenue increasing as a result of a 110% growth in North American contract manufacturing volumes, the addition of
(Adjustments to reported results are primarily related to acquisition and integration costs associated with the purchase of
FOURTH QUARTER 2014 GLOBAL PERFORMANCE
- Revenue of
$544 million was higher by 13% (14% excluding the impact of foreign exchange) due primarily to the addition of theAimia Foods and DS Services businesses and the inclusion of a 53rd week, partially offset by a mix shift from private label to contract manufacturing. The 53rd week provided additional revenues of$29 million .
- Gross profit increased 19% to
$72 million compared to$60 million , with gross profit as a percentage of revenue at 13.2% compared to 12.5%. The increase in gross profit was driven by the addition of theAimia Foods and DS Services higher margin businesses as well as a 53rd week, offset in part by the competitive pricing environment, and increased costs in ourU.K. /Europe operations as we ended the year holding more inventory with third parties as we implement a new warehouse management system. The 53rd week provided additional gross profit of$3 million .
- Selling, general and administrative (“SG&A”) expenses excluding
$38 million of acquisition and integration costs were$66 million while prior year SG&A expenses excluding$1 million of acquisition and integration costs were$44 million . The increase in adjusted SG&A expenses above the previously guided amount of$45 to$48 million was due primarily to$15 million in SG&A expenses associated with the addition of the DS Services business and the reclassification of$5.5 million in customer list amortization from cost of goods sold to SG&A. This reclassification has been made for all periods presented.
- Interest expense was
$12.5 million compared to$12.2 million . Interest expense included two weeks of interest associated with additional debt incurred in connection with the DS Services acquisition partially offset by lower interest expense as a result of redeemingCott’s 8.375% senior notes that were due 2017 (the “2017 Notes”) and the refinancing ofCott’s 8.125% senior notes that were due 2018 (the “2018 Notes”).
- Other income was
$1.9 million compared to other expense of$13.2 million due primarily to costs related to the redemption of our 2017 Notes in the prior year relative to a net unrealized gain on foreign currency in the current year.
- Income tax benefit was approximately
$65 million compared to an income tax benefit of$1 million in the prior year due primarily to the release of a valuation allowance in the quarter, as the DS Services acquisition will allow for the utilization of net operating loss carry-forwards that might have otherwise expired.
- Adjusted EBITDA was flat at
$43 million . Adjusted EBITDA included approximately$2 million of adjusted EBITDA associated with the 53rd week. Reported EBITDA was$1 million compared to$28 million .
- Adjusted net income and adjusted earnings per diluted share were
$34 million and$0.37 , respectively, compared to adjusted net income of$4 million and adjusted earnings per diluted share of$0.04 . Reported net income and earnings per diluted share were$19 million and$0.19 , respectively, compared to reported net loss and loss per diluted share of$11 million and$0.12 , respectively.
- Adjusted free cash flow was
$80 million . Reported free cash flow was$4 million , reflecting$19 million of net cash provided by operating activities less$15 million of capital expenditures.
FOURTH QUARTER 2014 REPORTING SEGMENT PERFORMANCE
North America volume increased 10% in servings as a result of a slightly more rational competitive pricing environment, growth in contract manufacturing and concentrates as well as the addition of a 53rd week. Excluding the 53rd week, volume was higher by 4% in serving equivalent cases. Revenue of$347 million was higher by 2% (3% excluding the impact of foreign exchange) due primarily to an increase in volume partially offset by an overall product mix shift into contract manufacturing. Revenue associated with contract manufacturing typically does not include a charge for ingredients and packaging as the customer provides these commodities, which results in the price per case for contract manufactured products being lower than the price per case for our value brands or private label products.
Cott acquired DS Services onDecember 12, 2014 , and$29 million in DS Services revenue was included in the consolidated financial results as well as approximately$5 million of adjusted EBITDA. Pro Forma fourth quarter DS Services revenue of$240 million was higher by 7% compared to$224 million lead by growth in the home and office water delivery operations, which saw increases in consumption and in customers and also benefited from the new strategic partnership in which DS Services manufactures and delivers bottled water on behalf of Primo Water Corporation.
U.K. volume increased 11% in servings as a result of the addition of theAimia Foods business and a 53rd week. Excluding the 53rd week, volume was higher by 5%. Revenue of$153 million increased 21% (23% excluding the impact of foreign exchange) due primarily to an increase in volume partially offset by a product mix shift in the coreU.K. business and the negative impact of declining foreign exchange rates during the quarter.
- All Other revenue remained flat at
$15 million .Cott’s All Other reporting segment includesCott’s Mexico operating segment,Royal Crown International operating segment and other miscellaneous expenses (prior year information has been updated to reflect this change in reporting segments made in the fourth quarter of 2013).
FISCAL YEAR 2014 GLOBAL PERFORMANCE
- Revenue of
$2,103 million was slightly higher than the prior year (slightly lower when excluding the impact of foreign exchange). Revenue increased as a result of the addition of theAimia Foods and DS Services businesses in 2014, theCalypso Soft Drinks business acquired in 2013, as well as the 53rd week, which was offset by the competitive pricing environment and a product mix shift into contract manufacturing.
- Gross profit was
$277 million compared to$275 million , resulting in gross profit as a percentage of revenue remaining constant at 13.2%. Increases in gross profit were the result of the addition of the Calypso,Aimia Foods and DS Services businesses, which were offset by the competitive pricing environment, additional freight and start up costs associated with the growth and launch of our contract manufacturing business inNorth America , and increased costs in ourU.K. /Europe operations as we ended the year holding more inventory with third parties as we implement a new warehouse management system.
- SG&A expenses excluding over
$41 million of acquisition and integration costs were$214 million while prior year SG&A expenses excluding$3 million of acquisition and integration costs were$180 million . The increase in adjusted SG&A expenses was due primarily to expenses associated with the addition of the Calypso,Aimia Foods and DS Services businesses, lower employee-related incentive costs and the reversal of certain long term incentive accruals in the prior year, and the addition of a 53rd week. SG&A expenses were also affected by the reclassification of$23 million of amortization related to customer lists from cost of goods sold to SG&A expenses. This reclassification has been made for all periods presented.
- Interest expense was lower by 23% at
$40 million compared to$52 million . Interest expense in 2014 included two weeks of interest associated with additional debt incurred in connection with the DS Services acquisition but benefited from the redemption of the 2017 Notes, the refinancing of the 2018 Notes and the prior year amendment of our asset based lending facility to more favorable pricing terms.
- Other expense was
$21 million compared to$13 million . The expense incurred in 2014 was due primarily to the refinancing of the 2018 Notes during the year.
- Income tax benefit was approximately
$61 million compared to income tax expense of$2 million due primarily to the release of a valuation allowance, as the DS Services acquisition will allow for the utilization of net operating loss carry-forwards that might have otherwise expired.
- Adjusted EBITDA was
$180 million compared to$198 million . The reduction in Adjusted EBITDA was due primarily to the competitive pricing environment and an increase in SG&A expenses partially offset by the addition of theAimia Foods business at the end of May and the DS Services business in mid December, as well as growth in North American contract manufacturing. Reported EBITDA was$105 million compared to$176 million primarily due to over$66 million of acquisition and refinancing costs incurred in 2014.
- Adjusted net income and adjusted earnings per diluted share were
$57 million and$0.60 , respectively, compared to adjusted net income of$38 million and adjusted earnings per diluted share of$0.40 . Reported net income and earnings per diluted share were$10 million and$0.10 , respectively, compared to reported net income and earnings per diluted share of$17 million and$0.18 , respectively.
- Adjusted free cash flow was
$107 million . Reported free cash flow was$10 million , reflecting$57 million of net cash provided by operating activities less$47 million of capital expenditures.
DECLARATION OF DIVIDEND
Our Board of Directors declared a dividend of
SHARE REPURCHASE PROGRAM
We repurchased approximately 1.6 million shares at an average price of
FOURTH QUARTER AND FISCAL YEAR 2014 RESULTS CONFERENCE CALL
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ABOUT
With approximately 9,500 employees,
Defined Terms
Certain defined terms used in this press release include the following. “GAAP” means U.S. generally accepted accounting principles. “Adjusted net income (loss)” means GAAP earnings (loss) excluding restructuring and asset impairments, bond redemption and other financing costs, tax reorganization and regulatory costs, acquisition and integration costs, unrealized commodity hedging loss, unrealized foreign exchange (gain) loss and realized loss on disposal of property, plant and equipment. “Adjusted earnings (loss) per diluted share” means adjusted net income (loss) divided by diluted weighted average outstanding shares. “EBITDA” means GAAP earnings (loss) before interest, taxes, depreciation and amortization. “Adjusted EBITDA” means GAAP earnings (loss) before interest, taxes, depreciation and amortization, excluding restructuring and asset impairments, bond redemption and other financing costs, tax reorganization and regulatory costs, acquisition and integration costs, unrealized commodity hedging loss, unrealized foreign exchange (gain) loss and realized loss on disposal of property, plant and equipment. “Adjusted SG&A expenses” means GAAP selling, general and administrative expenses, excluding acquisition and integration costs. “Free cash flow” is GAAP net cash provided by operating activities excluding capital expenditures. “Adjusted free cash flow” is free cash flow excluding bond redemption cash costs, the interest payments on the 2022 Notes related to the 53rd week in 2014 and cash costs related to the DSS acquisition as well as cash collateral associated with cash deposits used as collateral for letters of credit that subsequently was returned in Q1. See the accompanying reconciliations of these non-GAAP measures to the corresponding GAAP measures, as well as the “Non-GAAP Measures” paragraph below.
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 a highly competitive beverage category; 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 of U.S. dollars, except share and per share
amounts, U.S. GAAP)
Unaudited
For the Three Months Ended For the Year Ended
-------------------------- --------------------------
January 3, December 28, January 3, December 28,
2015 2013 2015 2013
------------ ------------ ------------ ------------
Revenue, net $ 543.5 $ 481.6 $ 2,102.8 $ 2,094.0
Cost of sales 471.7 421.5 1,826.3 1,818.6
------------ ------------ ------------ ------------
Gross profit 71.8 60.1 276.5 275.4
Selling, general and
administrative
expenses 104.1 45.1 255.0 183.4
Loss on disposal of
property, plant &
equipment 1.3 0.2 1.7 1.8
Restructuring and
asset impairments
Restructuring - - 2.4 2.0
Asset impairments - - 1.7 -
------------ ------------ ------------ ------------
Operating (loss)
income (33.6) 14.8 15.7 88.2
Other (income)
expense, net (1.9) 13.2 21.0 12.8
Interest expense, net 12.5 12.2 39.7 51.6
------------ ------------ ------------ ------------
(Loss) income before
income taxes (44.2) (10.6) (45.0) 23.8
Income tax (benefit)
expense (65.2) (0.5) (61.4) 1.8
------------ ------------ ------------ ------------
Net income (loss) $ 21.0 $ (10.1) $ 16.4 $ 22.0
Less: Net income
attributable to non-
controlling interests 1.5 1.1 5.6 5.0
Less: Accumulated
dividends on
convertible preferred
shares 0.6 - 0.6 -
Less: Accumulated
dividends on non-
convertible preferred
shares 0.2 - 0.2 -
------------ ------------ ------------ ------------
Net income (loss)
attributed to Cott
Corporation $ 18.7 $ (11.2) $ 10.0 $ 17.0
============ ============ ============ ============
Net income (loss) per common share
attributed to Cott Corporation
Basic $ 0.20 $ (0.12) $ 0.11 $ 0.18
Diluted $ 0.19 $ (0.12) $ 0.10 $ 0.18
Weighted average outstanding
shares (millions) attributed to
Cott Corporation
Basic 93.0 94.2 93.8 94.8
Diluted 98.0 94.2 95.9 95.6
COTT CORPORATION EXHIBIT 2
CONSOLIDATED BALANCE SHEETS
(in millions of U.S. dollars, except share amounts, U.S. GAAP)
Unaudited
------------ ------------
January 3, December 28,
2015 2013
------------ ------------
ASSETS
Current assets
Cash & cash equivalents $ 86.2 $ 47.2
Accounts receivable, net of allowance 305.7 203.3
Income taxes recoverable 1.6 1.1
Inventories 271.3 233.1
Prepaid expenses and other current assets 59.3 19.3
------------ ------------
Total current assets 724.1 504.0
Property, plant & equipment, net 855.6 480.5
Goodwill 766.0 139.2
Intangibles and other assets, net 745.9 296.2
Deferred income taxes 2.5 3.6
Other tax receivable 0.2 0.2
------------ ------------
Total assets $ 3,094.3 $ 1,423.7
============ ============
LIABILITIES, PREFERRED SHARES AND EQUITY
Current liabilities
Short-term borrowings $ 229.0 $ 50.8
Current maturities of long-term debt 4.0 3.9
Accounts payable and accrued liabilities 420.3 297.7
------------ ------------
Total current liabilities 653.3 352.4
Long-term debt 1,565.0 403.5
Deferred income taxes 106.5 41.1
Other long-term liabilities 71.8 22.3
------------ ------------
Total liabilities 2,396.6 819.3
Convertible preferred shares, $0.01 par value,
116,054 shares issued 116.1 -
Non-convertible preferred shares, $0.01 par
value, 32,711 shares issued 32.7 -
Equity
Capital stock, no par - 93,072,850 (December 28,
2013 - 94,238,190) shares issued 388.3 392.8
Additional paid-in-capital 46.6 44.1
Retained earnings 158.1 174.8
Accumulated other comprehensive loss (51.0) (16.8)
------------ ------------
Total Cott Corporation equity 542.0 594.9
Non-controlling interests 6.9 9.5
------------ ------------
Total equity 548.9 604.4
------------ ------------
Total liabilities, preferred shares and equity $ 3,094.3 $ 1,423.7
============ ============
COTT CORPORATION EXHIBIT 3
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of U.S. dollars)
Unaudited
For the Three Months Ended For the Year Ended
-------------------------- --------------------------
January 3, December 28, January 3, December 28,
2015 2013 2015 2013
------------ ------------ ------------ ------------
Operating Activities
Net income $ 21.0 $ (10.1) $ 16.4 $ 22.0
Depreciation &
amortization 33.1 26.1 110.7 100.6
Amortization of
financing fees 0.6 0.6 2.5 2.8
Amortization of
bond premium (0.4) - (0.4) -
Share-based
compensation
expense 0.9 0.4 5.8 4.0
(Decrease) increase
in deferred income
taxes (69.9) (1.4) (65.8) 0.5
Write-off of
financing fees and
discount - 4.0 4.1 4.0
Gain on bargain
purchase - - - -
Loss on disposal of
property, plant &
equipment 1.3 0.2 1.7 1.8
Asset impairments - - 1.7 -
Other non-cash
items 1.0 0.7 0.3 0.9
Change in operating
assets and
liabilities, net
of acquisitions:
Accounts
receivable 40.6 52.7 1.5 13.9
Inventories 3.1 (16.8) 12.9 (1.0)
Prepaid expenses
and other
current assets (23.7) 0.7 (25.2) (1.3)
Other assets 1.9 0.1 1.7 6.1
Accounts payable
and accrued
liabilities, and
other
liabilities 12.9 33.8 (6.8) (1.1)
Income taxes
recoverable (3.3) 1.3 (4.4) 1.7
------------ ------------ ------------ ------------
Net cash
provided by
operating
activities 19.1 92.3 56.7 154.9
------------ ------------ ------------ ------------
Investing Activities
Acquisitions, net
of cash received (717.7) - (798.5) (11.2)
Additions to
property, plant &
equipment (15.3) (10.9) (46.7) (55.3)
Additions to
intangibles and
other assets (2.6) (1.9) (6.9) (5.9)
Proceeds from sale
of property, plant
& equipment 0.2 - 1.8 0.2
Proceeds from
insurance
recoveries - 0.2 - 0.6
------------ ------------ ------------ ------------
Net cash used in
investing
activities (735.4) (12.6) (850.3) (71.6)
------------ ------------ ------------ ------------
Financing Activities
Payments of long-
term debt (1.0) (200.6) (393.6) (220.8)
Issuance of long-
term debt 625.0 - 1,150.0 -
Borrowings under
ABL 484.7 131.9 959.0 131.9
Payments under ABL (324.2) (82.1) (779.6) (82.1)
Distributions to
non-controlling
interests (1.3) (1.6) (8.5) (6.6)
Financing fees (14.9) (0.7) (24.0) (0.8)
Common shares
repurchased and
cancelled (4.4) (0.1) (12.1) (13.0)
Dividends paid to
common and
preferred
shareholders (6.4) (5.2) (22.8) (21.9)
Payment of deferred
consideration for
acquisitions - - (32.4) -
Other financing
activities (0.3) - (0.3) -
------------ ------------ ------------ ------------
Net cash provided
by (used in)
financing
activities 757.2 (158.4) 835.7 (213.3)
------------ ------------ ------------ ------------
Effect of exchange
rate changes on cash (2.1) 0.1 (3.1) (2.2)
------------ ------------ ------------ ------------
Net increase
(decrease) in cash &
cash equivalents 38.8 (78.6) 39.0 (132.2)
Cash & cash
equivalents,
beginning of period 47.4 125.8 47.2 179.4
------------ ------------ ------------ ------------
Cash & cash
equivalents, end of
period $ 86.2 $ 47.2 $ 86.2 $ 47.2
============ ============ ============ ============
COTT CORPORATION EXHIBIT 4
SEGMENT INFORMATION
(in millions of U.S. dollars, U.S. GAAP)
Unaudited
For the Three Months Ended For the Year Ended
-------------------------- --------------------------
January 3, December 28, January 3, December 28,
2015 2013 2015 2013
------------ ------------ ------------ ------------
Revenue
North America $ 347.2 $ 340.6 $ 1,411.2 $ 1,535.2
DSS 28.7 - 28.7 -
United Kingdom 152.5 126.1 597.9 494.3
All Other 15.1 14.9 65.0 64.5
------------ ------------ ------------ ------------
Total $ 543.5 $ 481.6 $ 2,102.8 $ 2,094.0
============ ============ ============ ============
Operating income
(loss)
North America $ 3.1 $ 9.3 $ 29.7 67.1
DSS (1.7) - (1.7) -
United Kingdom 3.0 7.0 26.3 25.6
All Other 1.8 1.4 10.0 7.2
Corporate (39.8) (2.9) (48.6) (11.7)
------------ ------------ ------------ ------------
Total $ (33.6) $ 14.8 $ 15.7 $ 88.2
============ ============ ============ ============
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 3, 2015
---------------------------------------------------------
North United
Cott(1) America DSS Kingdom All Other
---------- ---------- ---------- ---------- ----------
Change in
revenue $ 61.9 $ 6.6 $ 28.7 $ 26.4 $ 0.2
Impact of
foreign
exchange(2) 5.2 2.8 - 2.0 0.4
---------- ---------- ---------- ---------- ----------
Change excluding
foreign
exchange $ 67.1 $ 9.4 $ 28.7 $ 28.4 $ 0.6
---------- ---------- ---------- ---------- ----------
Percentage
change in
revenue 12.9% 1.9% - 20.9% 1.3%
---------- ---------- ---------- ---------- ----------
Percentage
change in
revenue
excluding
foreign
exchange 13.9% 2.8% - 22.5% 4.0%
---------- ---------- ---------- ---------- ----------
For the Year Ended
---------------------------------------------------------
(in millions of
U.S. dollars,
except percentage
amounts) January 3, 2015
---------------------------------------------------------
North United
Cott(1) America DSS Kingdom All Other
---------- ---------- ---------- ---------- ----------
Change in
revenue $ 8.8 $ (124.0) $ 28.7 $ 103.6 $ 0.5
Impact of
foreign
exchange(2) (19.1) 10.9 - (31.0) 1.0
---------- ---------- ---------- ---------- ----------
Change excluding
foreign
exchange $ (10.3) $ (113.1) $ 28.7 $ 72.6 $ 1.5
---------- ---------- ---------- ---------- ----------
Percentage
change in
revenue 0.4% -8.1% - 21.0% 0.8%
---------- ---------- ---------- ---------- ----------
Percentage
change in
revenue
excluding
foreign
exchange -0.5% -7.4% - 14.7% 2.3%
---------- ---------- ---------- ---------- ----------
(1) Cott includes the following reporting segments: North America , DSS,
United Kingdom 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 of U.S. dollars)
Unaudited
For the Three Months Ended For the Year Ended
-------------------------- --------------------------
January 3, December 28, January 3, December 28,
2015 2013 2015 2013
------------ ------------ ------------ ------------
Net income (loss)
attributed to Cott
Corporation $ 18.7 $ (11.2) $ 10.0 $ 17.0
Interest expense, net 12.5 12.2 39.7 51.6
Income tax (benefit)
expense (65.2) (0.5) (61.4) 1.8
Depreciation &
amortization 33.1 26.1 110.7 100.6
Net income
attributable to non-
controlling
interests 1.5 1.1 5.6 5.0
Accumulated dividends
on preferred shares 0.8 - 0.8 -
------------ ------------ ------------ ------------
EBITDA $ 1.4 $ 27.7 $ 105.4 $ 176.0
Restructuring and
asset impairments - - 4.1 2.0
Bond redemption and
other financing
costs - 12.7 25.2 12.7
Tax reorganization
and regulatory costs - 0.9 0.9 1.4
Acquisition and
integration costs,
net 39.6 1.1 40.7 4.1
Unrealized commodity
hedging loss, net 1.2 - 1.2 -
Unrealized foreign
exchange (gain)
loss, net (2.2) - (0.5) (0.7)
Realized loss on
disposal of
property, plant &
equipment 2.7 0.6 3.2 2.4
------------ ------------ ------------ ------------
Adjusted EBITDA $ 42.7 $ 43.0 $ 180.2 $ 197.9
============ ============ ============ ============
COTT CORPORATION - DS SERVICES EXHIBIT 7
SUPPLEMENTARY INFORMATION - NON-GAAP - EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION & AMORTIZATION
(EBITDA)
(in millions of U.S. dollars)
Unaudited
-----------------------------
For the Two Week Period Ended
December 26, 2014
-----------------------------
Net loss $ (2.8)
Interest expense (including intercompany) 3.6
Income tax benefit (2.5)
Depreciation & amortization 5.2
-----------------------------
EBITDA $ 3.5
Acquisition and integration costs (inventory
step-up) 1.7
-----------------------------
Adjusted EBITDA $ 5.2
=============================
COTT CORPORATION EXHIBIT 8
SUPPLEMENTARY INFORMATION - NON-GAAP - FREE CASH FLOW AND ADJUSTED FREE
CASH FLOW
(in millions of U.S. dollars)
Unaudited
For the Three Months Ended
--------------------------
January 3, December 28,
2015 2013
------------ ------------
Net cash provided by operating activities $ 19.1 $ 92.3
Less: Capital expenditures (15.3) (10.9)
------------ ------------
Free Cash Flow $ 3.8 $ 81.4
Plus:
Bond redemption cash costs - 9.9
53rd week interest payment 2022 Notes 14.7 -
DSS acquisition related cash costs 32.2 -
Cash collateral (1) 29.4 -
------------ ------------
Adjusted Free Cash Flow (2) $ 80.1 $ 91.3
============ ============
For the Year Ended
--------------------------
January 3, December 28,
2015 2013
------------ ------------
Net cash provided by operating activities $ 56.7 $ 154.9
Less: Capital expenditures (46.7) (55.3)
------------ ------------
Free Cash Flow $ 10.0 $ 99.6
Plus:
Bond redemption cash costs 20.8 9.9
53rd week interest payment 2022 Notes 14.7 -
DSS acquisition related cash costs 32.2 -
Cash collateral (1) 29.4 -
------------ ------------
Adjusted Free Cash Flow (2) $ 107.1 $ 109.5
============ ============
(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 at January 3, 2015 . Subsequent to January
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) Includes $5.6 million of DSS's free cash flow from the acquisition date.
COTT CORPORATION - DS SERVICES EXHIBIT 9
SUPPLEMENTARY INFORMATION - NON-GAAP - FREE CASH FLOW AND ADJUSTED FREE
CASH FLOW
(in millions of U.S. dollars)
Unaudited
-----------------------------
For the Two Week Period Ended
December 26, 2014
-----------------------------
Net cash provided by operating activities $ 9.0
Less: Capital expenditures (3.4)
-----------------------------
Free Cash Flow $ 5.6
=============================
COTT CORPORATION EXHIBIT 10
SUPPLEMENTARY INFORMATION - NON-GAAP - ADJUSTED NET INCOME
(in millions of U.S. dollars, except share and per share
amounts)
Unaudited
For the Three Months Ended For the Year Ended
-------------------------- --------------------------
January 3, December 28, January 3, December 28,
2015 2013 2015 2013
------------ ------------ ------------ ------------
Net income (loss)
attributed to Cott
Corporation $ 18.7 $ (11.2) $ 10.0 $ 17.0
Restructuring and
asset impairments,
net of tax (0.2) (0.1) 3.0 1.8
Bond redemption and
other financing
costs, net of tax (9.4) 12.7 15.8 12.7
Tax reorganization
and regulatory
costs, net of tax (0.3) 0.9 0.6 1.4
Acquisition and
integration costs,
net of tax 24.7 0.8 25.1 3.4
Unrealized commodity
hedging loss, net of
tax 0.8 - 0.8 -
Unrealized foreign
exchange (gain)
loss, net of tax (1.7) (0.1) (0.3) (0.6)
Realized loss on
disposal of
property, plant &
equipment, net of
tax 1.7 0.5 2.1 2.3
------------ ------------ ------------ ------------
Adjusted net income
attributed to Cott
Corporation $ 34.3 $ 3.5 $ 57.1 $ 38.0
============ ============ ============ ============
Adjusted net income
per common share
attributed to Cott
Corporation
Basic $ 0.37 $ 0.04 $ 0.61 $ 0.40
Diluted $ 0.37 $ 0.04 $ 0.60 $ 0.40
Weighted average outstanding
shares (millions) attributed to
Cott Corporation
Basic 93.0 94.2 93.8 94.8
Diluted, adjusted
to exclude
dilutive effect of
convertible
preferred shares 93.8 94.9 94.8 95.6
COTT CORPORATION EXHIBIT 11
SUPPLEMENTARY INFORMATION - NON-GAAP - ADJUSTED SELLING,
GENERAL AND
ADMINISTRATIVE EXPENSES
(in millions of U.S. dollars)
Unaudited
For the Three Months
Ended For the Year Ended
------------------------- -------------------------
January 3, December 28, January 3, December 28,
2015 2013 2015 2013
------------ ------------ ------------ ------------
Selling, general and
administrative expenses $ 104.1 $ 45.1 $ 255.0 $ 183.4
Less: Acquisition and
integration costs 37.9 1.1 41.3 3.1
------------ ------------ ------------ ------------
Adjusted selling, general
and administrative
expenses $ 66.2 $ 44.0 $ 213.7 $ 180.3
============ ============ ============ ============
CONTACT:Jarrod Langhans Investor Relations Tel: (813) 313-1732 Email Contact
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