UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 30, 2014
COTT CORPORATION
(Exact Name of Registrant as Specified in Charter)
Canada | 001-31410 | 98-0154711 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
||
6525 Viscount Road Mississauga, Ontario, Canada
5519 West Idlewild Avenue Tampa, Florida, United States |
L4V1H6
33634 |
|||
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code: (905) 672-1900
(813) 313-1800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Explanatory Note
This amendment is being filed to amend and supplement Item 9.01 of the Current Report on Form 8-K filed by Cott Corporation (Cott) on June 2, 2014 to include the historical financial statements of Aimia Foods Holdings Limited (Aimia), the business acquired by Cott through the Share Purchase Agreement entered into on May 30, 2014, and the unaudited pro forma financial information required pursuant to Item 9.01(b) of Form 8-K, and exhibits under 9.01(d) of Form 8-K.
The historical financial statements of Aimia have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, or U.K. GAAP. The unaudited pro forma financial information required pursuant to Item 9.01(b) of Form 8-K included as Exhibit 99.4 to this Current Report on Form 8-K/A contains pro forma adjustments to reflect the acquisition and the purchasing accounting adjustments related thereto, and to reconcile the differences between the historical amounts presented in Aimias historical financial statements under U.K. GAAP and those historical amounts as if they had been presented in accordance with United States Generally Accepted Accounting Principles, or U.S. GAAP. Those adjustments include: a) the elimination of the goodwill amortization recorded under U.K. GAAP, b) the recording of adjustments to a joint venture investment under the equity method for U.S. GAAP that had been historically recorded at cost under U.K. GAAP, and c) the recording of certain machinery and equipment at its historical cost, including amounts financed by a customer under U.S. GAAP, which had been historically recorded at the cash amount paid by Aimia under U.K. GAAP. Additionally, the unaudited pro forma financial information contains adjustments related to the repayment of the 8.125% senior notes due 2018 with the 5.375% senior notes due 2022.
Item 9.01. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
| The audited consolidated balance sheets of Aimia as of June 30, 2013 and 2012, and the related audited consolidated profit and loss accounts and cash flows for the years then ended, are attached to this Form 8-K/A as Exhibit 99.1 and are incorporated herein by reference. |
| The unaudited consolidated balance sheets of Aimia at March 31, 2014 and 2013, and the related unaudited consolidated profit and loss accounts and cash flows for the three months then ended, are attached to this Form 8-K/A as Exhibit 99.2 and are incorporated herein by reference. |
| The unaudited consolidated balance sheets of Aimia at December 31, 2013 and 2012, and the related unaudited consolidated profit and loss accounts and cash flows for the six months then ended, are attached to this Form 8-K/A as Exhibit 99.3 and are incorporated herein by reference. |
(b) Pro Forma Financial Information
Cotts unaudited pro forma condensed combined consolidated balance sheet as of March 29, 2014, and unaudited pro forma condensed statements of operations for the three months ended March 29, 2014 and the fiscal year ended December 28, 2013 that give effect to the acquisition of Aimia are attached as Exhibit 99.4 to this Form 8-K/A and are incorporated herein by reference.
(d) Exhibits
Exhibit
|
Description |
|
23.1 | Consent of Grant Thornton UK LLP, registered auditors and chartered accountants for Aimia Foods Holdings Limited. | |
99.1 | Aimia Foods Holdings Limited audited consolidated balance sheets at June 30, 2013 and June 30 2012, and the related consolidated profit and loss accounts and cash flows for the years ended June 30, 2013 and 2012. | |
99.2 | Aimia Foods Holdings Limited unaudited consolidated balance sheet at March 31, 2014 and March 31, 2013 and the related unaudited consolidated profit and loss accounts and cash flows for the three months ended March 31, 2014 and 2013. | |
99.3 | Aimia Foods Holdings Limited unaudited consolidated balance sheet at December 31, 2013 and December 31, 2012, and the related consolidated profit and loss accounts and cash flows for the six month periods ended December 31, 2013 and 2012. | |
99.4 | Cott Corporation unaudited pro forma condensed combined balance sheet as of March 29, 2014, unaudited pro forma condensed combined statements of operations for the three months ended March 29, 2014 and the fiscal year ended December 28, 2013. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Cott Corporation | ||||||
Date: August 6, 2014 | By: | /s/ Gregory Leiter | ||||
Gregory Leiter | ||||||
Senior Vice President, Chief Accounting Officer (Principal accounting officer) |
2
INDEX TO EXHIBITS
Exhibit
|
Exhibit Description |
|
23.1 | Consent of Grant Thornton UK LLP, independent certified public accountants for Aimia Foods Holdings Limited. | |
99.1 | Aimia Foods Holdings Limited audited consolidated balance sheets at June 30, 2013 and June 30 2012, and the related consolidated profit and loss accounts and cash flows for the years ended June 30, 2013 and 2012. | |
99.2 | Aimia Foods Holdings Limited unaudited consolidated balance sheet at March 31, 2014 and March 31, 2013 and the related unaudited consolidated profit and loss accounts and cash flows for the three months ended March 31, 2014 and 2013. | |
99.3 | Aimia Foods Holdings Limited unaudited consolidated balance sheet at December 31, 2013 and December 31, 2012, and the related consolidated profit and loss accounts and cash flows for the six month periods ended December 31, 2013 and 2012. | |
99.4 | Cott Corporation unaudited pro forma condensed combined balance sheet as of March 29, 2014, unaudited pro forma condensed combined statements of operations for the three months ended March 29, 2014 and the fiscal year ended December 28, 2013. |
3
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITOR |
Grant Thornton UK LLP 4 Hardman Square Spinningfields Manchester M3 3EB T +44 (0) 161 953 6901 www.grant-thornton.co.uk |
We have issued our report dated 5 August 2014, with respect to the consolidated financial statements of Aimia Foods Holdings Limited as of 30 June 2013 and for the year ended 30 June 2013, included in this Current Report of Cott Corporation on Form 8-K/A. We hereby consent to the incorporation by reference of said report in the Registration Statements of Cott Corporation on Forms S-3 (File No. 33-182100) and on Forms S-8 (File No. 33-188735, 333-151812, 333-122974, 333-108128, 333-56980 and 33-166507).
GRANT THORNTON UK LLP
Manchester
United Kingdom
5 August 2014
Grant Thornton UK LLP
UK member firm of Grant Thornton International Ltd
Grant Thornton UK LLP is a limited liability partnership registered in England and Wales: No.OC307742. Registered office: Grant Thornton House, Melton Street, Euston Square, London NW1 2EP A list of members is available from our registered office.
Exhibit 99.1
Financial Statements
AIMIA Foods Holdings Limited
For the year ended 30 June 2013
Registered number: 06201887
AIMIA Foods Holdings Limited
Contents |
||||
Page | ||||
Independent auditors report |
ii | |||
Consolidated profit and loss account |
1 | |||
Consolidated balance sheet |
2 | |||
Company balance sheet |
3 | |||
Consolidated cash flow statement |
4 | |||
Notes to the financial statements |
5 - 22 |
i
INDEPENDENT AUDITORS REPORT |
Grant Thornton UK LLP 4 Hardman Square Spinningfields Manchester M3 3EB T +44 (0) 161 953 6901 www.grant-thornton.co.uk |
Board of Directors
Aimia Foods Holdings Limited
We have audited the accompanying consolidated financial statements of Aimia Foods Holdings Limited and subsidiaries, which comprise the consolidated balance sheets as of 30 June 2013, and the related consolidated profit and loss account, and cash flow statement for the year then ended, and the related notes to the financial statements.
Managements responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law); this includes the design, implementation, and maintenance of internal control relevant to the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
ii
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects the financial position of Aimia Foods Holdings Limited and subsidiaries as of 30 June 2013, and the results of their operations and their cash flows for the year then ended in accordance with United Kingdom Generally Accepted Accounting Practice.
GRANT THORNTON UK LLP
Manchester
United Kingdom
5 August 2014
iii
AIMIA Foods Holdings Limited
Consolidated profit and loss account
For the year ended 30 June 2013
Unaudited | ||||||||||||
2013 | 2012 | |||||||||||
Note | £000 | £000 | ||||||||||
Turnover |
1,2 | 58,477 | 58,635 | |||||||||
Cost of sales |
(45,404 | ) | (48,075 | ) | ||||||||
|
|
|
|
|||||||||
Gross profit |
13,073 | 10,560 | ||||||||||
Distribution costs |
(1,104 | ) | (1,083 | ) | ||||||||
|
|
|
|
|||||||||
Administrative expenses |
(5,163 | ) | (4,782 | ) | ||||||||
Exceptional administrative expenses |
4 | | (3,109 | ) | ||||||||
|
|
|
|
|||||||||
Total administrative expenses |
(5,163 | ) | (7,891 | ) | ||||||||
Other operating income |
3 | | 32 | |||||||||
|
|
|
|
|||||||||
Operating profit |
4 | 6,806 | 1,618 | |||||||||
Interest payable and similar charges |
8 | (124 | ) | (136 | ) | |||||||
|
|
|
|
|||||||||
Profit on ordinary activities before taxation |
6,682 | 1,482 | ||||||||||
Tax on profit on ordinary activities |
9 | (1,678 | ) | (432 | ) | |||||||
|
|
|
|
|||||||||
Profit for the financial year |
19 | 5,004 | 1,050 | |||||||||
|
|
|
|
All amounts relate to continuing operations.
There were no recognised gains and losses for 2013 or 2012 other than those included in the Profit and loss account.
The accompanying notes 1 to 32 form part of these financial statements.
1
AIMIA Foods Holdings Limited
Registered number: 06201887
Consolidated balance sheet
As at 30 June 2013
Note | £000 |
2013
£000 |
£000 |
Unaudited
£000 |
||||||||||||||||
Fixed assets |
||||||||||||||||||||
Intangible assets |
10 | 6,346 | 6,800 | |||||||||||||||||
Tangible assets |
11 | 2,582 | 1,507 | |||||||||||||||||
Investments |
12 | 672 | | |||||||||||||||||
|
|
|
|
|||||||||||||||||
9,600 | 8,307 | |||||||||||||||||||
Current assets |
||||||||||||||||||||
Stocks |
13 | 4,080 | 3,640 | |||||||||||||||||
Debtors |
14 | 6,630 | 5,965 | |||||||||||||||||
Cash at bank |
2,682 | 606 | ||||||||||||||||||
|
|
|
|
|||||||||||||||||
13,392 | 10,211 | |||||||||||||||||||
Creditors : amounts falling due within one year |
15 | (12,874 | ) | (14,274 | ) | |||||||||||||||
|
|
|
|
|||||||||||||||||
Net current assets/(liabilities) |
518 | (4,063 | ) | |||||||||||||||||
|
|
|
|
|||||||||||||||||
Total assets less current liabilities |
10,118 | 4,244 | ||||||||||||||||||
Creditors : amounts falling due after more than one year |
16 | (1,269 | ) | (399 | ) | |||||||||||||||
|
|
|
|
|||||||||||||||||
Net assets |
8,849 | 3,845 | ||||||||||||||||||
|
|
|
|
|||||||||||||||||
Capital and reserves |
||||||||||||||||||||
Called up share capital |
18 | 500 | 500 | |||||||||||||||||
Capital redemption reserve |
19 | 544 | 544 | |||||||||||||||||
Profit and loss account |
19 | 7,805 | 2,801 | |||||||||||||||||
|
|
|
|
|||||||||||||||||
Shareholders funds |
20 | 8,849 | 3,845 | |||||||||||||||||
|
|
|
|
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 5 August 2014.
Mr R N Unsworth
Director
The accompanying notes 1 to 32 form part of these financial statements.
2
AIMIA Foods Holdings Limited
Registered number: 06201887
Company balance sheet
As at 30 June 2013
Note | £000 |
2013
£000 |
£000 |
Unaudited
2012 £000 |
||||||||||||||||
Fixed assets |
||||||||||||||||||||
Investments |
12 | 12,403 | 12,403 | |||||||||||||||||
Current assets |
||||||||||||||||||||
Debtors |
14 | 110 | 110 | |||||||||||||||||
Creditors : amounts falling due within one year |
15 | (11,631 | ) | (11,631 | ) | |||||||||||||||
|
|
|
|
|||||||||||||||||
Net current liabilities |
(11,521 | ) | (11,521 | ) | ||||||||||||||||
|
|
|
|
|||||||||||||||||
Net assets |
882 | 882 | ||||||||||||||||||
|
|
|
|
|||||||||||||||||
Capital and Reserves |
||||||||||||||||||||
Called up share capital |
18 | 500 | 500 | |||||||||||||||||
Capital redemption reserve |
19 | 544 | 544 | |||||||||||||||||
Profit and loss account |
19 | (162 | ) | (162 | ) | |||||||||||||||
|
|
|
|
|||||||||||||||||
Shareholders funds |
20 | 882 | 882 | |||||||||||||||||
|
|
|
|
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 5 August 2014.
Mr R N Unsworth
Director
The accompanying notes 1 to 32 form part of these financial statements.
3
AIMIA Foods Holdings Limited
Consolidated cash flow statement
For the year ended 30 June 2013
Note |
2013
£000 |
Unaudited
£000 |
||||||||||
Net cash flow from operating activities |
21 | 3,782 | 4,752 | |||||||||
Returns on investments and servicing of finance |
22 | (124 | ) | (136 | ) | |||||||
Taxation |
(332 | ) | (401 | ) | ||||||||
Capital expenditure and financial investment |
22 | (2,210 | ) | (230 | ) | |||||||
|
|
|
|
|||||||||
Cash inflow before financing |
1,116 | 3,985 | ||||||||||
Financing |
22 | 1,137 | (394 | ) | ||||||||
|
|
|
|
|||||||||
Increase in cash in the year |
2,253 | 3,591 | ||||||||||
|
|
|
|
Reconciliation of net cash flow to movement in net funds/(debt)
For the year ended 30 June 2013
2013 £000 |
Unaudited
£000 |
|||||||
Increase in cash in the year |
2,253 | 3,591 | ||||||
Cash inflow from increase in debt and lease financing |
(1,137 | ) | | |||||
|
|
|
|
|||||
Change in net debt resulting from cash flows |
1,116 | 3,591 | ||||||
New finance leases |
| 290 | ||||||
|
|
|
|
|||||
Movement in net funds/(debt) in the year |
1,116 | 3,881 | ||||||
Net debt at 1 July |
(217 | ) | (4,098 | ) | ||||
|
|
|
|
|||||
Net funds/(debt) at 30 June |
899 | (217 | ) | |||||
|
|
|
|
The accompanying notes 1 to 32 form part of these financial statements.
4
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
1. | Accounting policies |
1.1 | Basis of preparation of financial statements |
The financial statements have been prepared under the historical cost convention and in accordance with the Companies Act 2006 and applicable UK accounting standards (United Kingdom Generally Accepted Accounting Principles).
1.2 | Going concern |
The Group has considerable financial resources together with long standing relationships with a number of customers and suppliers across different geographic areas. As a consequence, the directors believe that the Group is well placed to manage its business risk successfully despite the current uncertain economic outlook.
1.3 | Basis of consolidation |
The Group financial statements consolidate the accounts of the company and all of its subsidiary undertakings drawn up for the year ended 30 June 2013.
On acquisition of a subsidiary, all of the subsidiarys assets and liabilities which exist at the date of acquisition are recorded at their fair value reflecting their condition at that date.
1.4 | Turnover |
Turnover is the total amount receivable by the Group for goods supplied and services provided, excluding VAT and trade discounts. Revenue from the supply of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer, which is at the point of despatch.
1.5 | Goodwill |
Goodwill is the difference between amounts paid on the acquisition of a business or a company and the fair value of the identifiable assets and liabilities. It is amortised to the Profit and loss account over its estimated economic life.
1.6 | Investments |
Investments are included at cost less provision for impairment.
5
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
1. | Accounting policies (continued) |
1.7 | Tangible fixed assets and depreciation |
Tangible fixed assets are stated at cost less depreciation and any provision for impairment. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:
Leasehold improvements | - | 3 - 10 years | ||||
Plant and machinery | - | 3 - 10 years | ||||
Motor vehicles | - | 3 years | ||||
Fixtures & fittings | - | 5 years | ||||
Computer equipment | - | 3 - 5 years |
Those tangible fixed assets held for use under operating leases are depreciated over 4 years.
1.8 | Stocks |
Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes materials, direct labour, other direct overheads and royalties payable. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal.
1.9 | Hire purchase agreements |
Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value. The capital element of the future payments is treated as a liability and the interest is charged to the profit and loss account at a constant rate of charge on the balance of capital repayments outstanding.
1.10 | Operating leases |
Rentals applicable to operating leases, where substantially all of the benefits and risks of ownership remain with the lessor, are charged against profits on a straight line basis over the period of the lease.
1.11 | Lease income |
Payments received under operating leases are credited to the profit and loss account on a straight line basis over the lease term.
1.12 | Current tax |
The current tax charge is based on the profit for the year and is measured at the amounts expected to be paid based on the tax rates and laws substantively enacted by the balance sheet date. Current and deferred tax is recognised in the profit and loss account for the period except to the extent that it is attributable to gain or loss that is, or has been, recognised directly in the statement of total recognised gains and losses.
6
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
1. | Accounting policies (continued) |
1.13 | Deferred taxation |
Deferred tax is recognised in respect of all timing differences that had originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exception, deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
1.14 | Foreign currencies |
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction.
Exchange gains and losses are recognised in the Profit and loss account.
1.15 | Pensions |
The Group operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Group to the fund in respect of the year.
1.16 | Financial Instruments |
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.
Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.
Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.
7
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
2. | Turnover |
An analysis of turnover by class of business is as follows:
Unaudited | ||||||||
2013 | 2012 | |||||||
£000 | £000 | |||||||
United Kingdom |
58,029 | 55,322 | ||||||
Europe |
448 | 2,864 | ||||||
Rest of world |
| 449 | ||||||
|
|
|
|
|||||
58,477 | 58,635 | |||||||
|
|
|
|
The turnover and profit on ordinary activities before taxation is attributable to the manufacture and distribution of food and beverage supplies into the retail, cash and carry, foodservice and vending sectors and the provision of manufacturing and packing services to the food industry.
3. | Other operating income |
Unaudited | ||||||||
2013 | 2012 | |||||||
£000 | £000 | |||||||
Other operating income |
| 32 | ||||||
|
|
|
|
Other operating income relates to net rent receivable in respect of operating leases.
4. | Operating profit |
The operating profit is stated after charging:
Unaudited | ||||||||
2013 | 2012 | |||||||
£000 | £000 | |||||||
Amortisation - intangible fixed assets |
454 | 454 | ||||||
Depreciation of tangible fixed assets: |
||||||||
- owned by the group |
63 | 594 | ||||||
- held under finance leases |
400 | 128 | ||||||
Operating lease rentals: |
||||||||
- other |
117 | 129 | ||||||
- land and buildings |
956 | 956 | ||||||
|
|
|
|
8
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
Exceptional administrative expenses
2013 £000 |
Unaudited | |||||||
2012 | ||||||||
£000 | ||||||||
Provision in respect of GSOP scheme |
| 3,109 | ||||||
|
|
|
|
The Growth Securities Ownership Plan (GSOP) is an incentive arrangement to align employees interests with those of the company. The GSOP was fully settled in 2012.
5. | Auditors remuneration |
2013 |
Unaudited
2012 |
|||||||
£000 | £000 | |||||||
Fees payable to the companys auditor and its associates for the audit of the companys annual accounts |
16 | 15 | ||||||
Fees payable to the companys auditor and its associates in respect of: |
||||||||
Taxation compliance services |
5 | 5 | ||||||
All other non-audit services not included above |
| 5 | ||||||
|
|
|
|
6. | Staff costs |
Staff costs, including directors remuneration, were as follows:
2013 |
Unaudited
2012 |
|||||||
£000 | £000 | |||||||
Wages and salaries |
7,472 | 10,793 | ||||||
Social security costs |
601 | 643 | ||||||
Other pension costs |
247 | 241 | ||||||
|
|
|
|
|||||
8,320 | 11,677 | |||||||
|
|
|
|
The average monthly number of employees, including the directors, during the year was as follows:
2013 |
Unaudited
2012 |
|||||||
No. | No. | |||||||
Production |
159 | 155 | ||||||
Administration |
101 | 110 | ||||||
|
|
|
|
|||||
260 | 265 | |||||||
|
|
|
|
9
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
7. | Directors remuneration |
2013 |
Unaudited
2012 |
|||||||
£000 | £000 | |||||||
Remuneration |
805 | 3,600 | ||||||
|
|
|
|
|||||
Company pension contributions to defined contribution pension schemes |
58 | 59 | ||||||
|
|
|
|
During the year retirement benefits were accruing to 5 directors (2012 unaudited - 5 in respect of defined contribution pension schemes. The highest paid director received remuneration of £132,000 (2012 unaudited - £1,668,000).
Management and consultancy fees of £110,000 (2012 unaudited - £110,000) were paid which comprised charges for the services of I Unsworth and G Unsworth.
8. | Interest payable |
2013 |
Unaudited
2012 |
|||||||
£000 | £000 | |||||||
On bank loans and overdrafts |
62 | 108 | ||||||
On finance leases and hire purchase contracts |
62 | 28 | ||||||
|
|
|
|
|||||
124 | 136 | |||||||
|
|
|
|
9. | Taxation |
2013 |
Unaudited
2012 |
|||||||
£000 | £000 | |||||||
Analysis of tax charge in the year |
||||||||
Current tax (see note below) |
||||||||
UK corporation tax charge on profit for the year |
1,588 | 492 | ||||||
Adjustments in respect of prior periods |
(44 | ) | (151 | ) | ||||
|
|
|
|
|||||
Total current tax |
1,544 | 341 | ||||||
|
|
|
|
10
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
9. | Taxation (continued) |
Deferred tax |
||||||||
Origination and reversal of timing differences |
118 | 91 | ||||||
Effect of increased tax rate on opening liability |
16 | | ||||||
|
|
|
|
|||||
Total deferred tax (see note 17) |
134 | 91 | ||||||
|
|
|
|
|||||
Tax on profit on ordinary activities |
1,678 | 432 | ||||||
|
|
|
|
Factors affecting tax charge for the year
The tax assessed for the year is lower than (2012 unaudited - lower than) the standard rate of corporation tax in the UK of 23.75% (2012 unaudited - 25.5%). The differences are explained below:
2013
£000 |
Unaudited
£000 |
|||||||
Profit on ordinary activities before tax |
6,682 | 1,482 | ||||||
|
|
|
|
|||||
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.75% (2012 - 25.5%) |
1,587 | 378 | ||||||
Effects of: |
||||||||
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment |
123 | 143 | ||||||
Capital allowances for year in excess of depreciation |
(116 | ) | (34 | ) | ||||
Adjustments to tax charge in respect of prior periods |
(44 | ) | (151 | ) | ||||
Short term timing difference leading to an increase (decrease) in taxation |
(6 | ) | 5 | |||||
|
|
|
|
|||||
Current tax charge for the year (see note above) |
1,544 | 341 | ||||||
|
|
|
|
15
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
10. | Intangible fixed assets |
Goodwill
£000 |
||||
Group |
||||
Cost |
||||
At 1 July 2012 (unaudited) and 30 June 2013 |
9,069 | |||
|
|
|||
Amortisation |
||||
At 1 July 2012 (unaudited) |
2,269 | |||
Charge for the year |
454 | |||
|
|
|||
At 30 June 2013 |
2,723 | |||
|
|
|||
Net book value |
||||
At 30 June 2013 |
6,346 | |||
|
|
|||
At 30 June 2012 (unaudited) |
6,800 | |||
|
|
The directors have assessed that the goodwill has a useful economic life of 20 years.
12
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
11. | Tangible fixed assets |
L/Term
£000 |
Plant & machinery £000 |
Motor
£000 |
Fixtures &
fittings £000 |
Other fixed
£000 |
Total
£000 |
|||||||||||||||||||
Group |
||||||||||||||||||||||||
Cost |
||||||||||||||||||||||||
At 1 July 2012 (unaudited) |
188 | 10,342 | 46 | 2,663 | 180 | 13,419 | ||||||||||||||||||
Additions |
| 1,427 | 39 | 72 | | 1,538 | ||||||||||||||||||
Disposals |
| (25 | ) | | | | (25 | ) | ||||||||||||||||
Transfer between classes |
| 180 | | | (180 | ) | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
At 30 June 2013 |
188 | 11,924 | 85 | 2,735 | | 14,932 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Depreciation |
||||||||||||||||||||||||
At 1 July 2012 (unaudited) |
85 | 9,203 | 42 | 2,582 | | 11,912 | ||||||||||||||||||
Charge for the year |
| 407 | 7 | 49 | | 463 | ||||||||||||||||||
On disposals |
| (25 | ) | | | | (25 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
At 30 June 2013 |
85 | 9,585 | 49 | 2,631 | | 12,350 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net book value |
||||||||||||||||||||||||
At 30 June 2013 |
103 | 2,339 | 36 | 104 | | 2,582 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
At 30 June 2012 (unaudited) |
103 | 1,139 | 4 | 81 | 180 | 1,507 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
2013
£000 |
Unaudited
£000 |
|||||||
Group |
||||||||
Plant and machinery |
953 | 449 | ||||||
|
|
|
|
13
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
12. | Fixed asset investments |
Unlisted
£000 |
||||
Group |
||||
Cost or valuation |
||||
At 1 July 2012 Unaudited |
| |||
Additions |
672 | |||
|
|
|||
At 30 June 2013 |
672 | |||
|
|
|||
Net book value |
||||
At 30 June 2013 |
672 | |||
|
|
|||
At 30 June 2012 Unaudited |
| |||
|
|
The fixed asset investment represents a 49% shareholding in Associated Coffee Merchants (International) Limited, a company incorporated in England and Wales. There are no common directors and the directors believe there is no significant influence held over the company, as such the investment has been held at cost under fixed asset investments.
Investments in
£000 |
||||
Company |
||||
Cost or valuation |
||||
At 1 July 2012 Unaudited and 30 June 2013 |
12,403 | |||
|
|
|||
Net book value |
||||
At 30 June 2013 |
12,403 | |||
|
|
|||
At 30 June 2012 Unaudited |
12,403 | |||
|
|
Details of the principal subsidiaries can be found under note number 28.
14
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
13. | Stocks |
Group | Company | |||||||||||||||
Unaudited | Unaudited | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Raw materials |
2,159 | 2,088 | | | ||||||||||||
Finished goods and goods for resale |
1,921 | 1,552 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
4,080 | 3,640 | | | |||||||||||||
|
|
|
|
|
|
|
|
14. | Debtors |
Group | Company | |||||||||||||||
Unaudited | Unaudited | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Trade debtors |
5,494 | 4,725 | | | ||||||||||||
Amounts owed by group undertakings |
| | 110 | 110 | ||||||||||||
Amounts owed by related parties |
| 45 | | | ||||||||||||
Other debtors |
202 | 106 | | | ||||||||||||
Prepayments and accrued income |
689 | 710 | | | ||||||||||||
Deferred tax asset (see note 17) |
245 | 379 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
6,630 | 5,965 | 110 | 110 | |||||||||||||
|
|
|
|
|
|
|
|
15
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
15. | Creditors: |
Amounts falling due within one year
Group | Company | |||||||||||||||
Unaudited | Unaudited | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Bank loans and overdrafts |
| 177 | | | ||||||||||||
Net obligations under finance leases and hire purchase contracts |
515 | 247 | | | ||||||||||||
Trade creditors |
6,964 | 7,223 | | | ||||||||||||
Amounts owed to group undertakings |
| | 11,631 | 11,631 | ||||||||||||
Corporation tax |
1,584 | 372 | | | ||||||||||||
Other taxation and social security |
171 | 173 | | | ||||||||||||
Other creditors |
671 | 115 | | | ||||||||||||
Accruals and deferred income |
2,969 | 5,967 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
12,874 | 14,274 | 11,631 | 11,631 | |||||||||||||
|
|
|
|
|
|
|
|
The finance leases are secured against the assets to which they relate.
16. | Creditors: |
Amounts falling due after more than one year
Group | Company | |||||||||||||
Unaudited | Unaudited | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
£000 | £000 | £000 | £000 | |||||||||||
Net obligations under finance leases and hire purchase contracts |
1,269 | 399 | | | ||||||||||
|
|
|
|
|
|
|
Obligations under finance leases and hire purchase contracts, included above, are payable as follows:
Group | Company | |||||||||||||
Unaudited | Unaudited | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
£000 | £000 | £000 | £000 | |||||||||||
Between one and five years |
1,269 | 399 | | | ||||||||||
|
|
|
|
|
|
|
16
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
17. | Deferred taxation |
Group | Company | |||||||||||||||
2013 £000 |
Unaudited
£000 |
2013 £000 |
Unaudited
£000 |
|||||||||||||
At beginning of year |
379 | 470 | | | ||||||||||||
Charged during the year (P&L) |
(134 | ) | (91 | ) | | | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
At end of year |
245 | 379 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
The deferred taxation balance is made up as follows: |
||||||||||||||||
Group | Company | |||||||||||||||
2013 £000 |
Unaudited
2012 £000 |
2013 £000 |
Unaudited
£000 |
|||||||||||||
Accelerated capital allowances |
(239 | ) | (368 | ) | | | ||||||||||
Short term timing differences |
(6 | ) | (11 | ) | | | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
(245 | ) | (379 | ) | | | |||||||||||
|
|
|
|
|
|
|
|
The directors believe that the deferred tax asset of £245,000 (2012 unaudited - £379,000) recognised in the accounts will be recoverable against suitable profits arising in the future.
18. | Share capital |
2013 £000 |
Unaudited
£000 |
|||||||
Allotted, called up and fully paid |
||||||||
500,000 - Ordinary Shares shares of £1 each |
500 | 500 | ||||||
|
|
|
|
17
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
19. | Reserves |
Capital
£000 |
Profit and loss
£000 |
|||||||
Group |
||||||||
At 1 July 2012 (Unaudited) |
544 | 2,801 | ||||||
Profit for the financial year |
| 5,004 | ||||||
|
|
|
|
|||||
At 30 June 2013 |
544 | 7,805 | ||||||
|
|
|
|
|||||
Capital
£000 |
Profit and loss
£000 |
|||||||
Company |
||||||||
At 1 July 2012 (Unaudited) and 30 June 2013 |
544 | (162 | ) | |||||
|
|
|
|
20. | Reconciliation of movement in shareholders funds |
2013
£000 |
Unaudited
£000 |
|||||||
Group |
||||||||
Opening shareholders funds |
3,845 | 2,795 | ||||||
Profit for the financial year |
5,004 | 1,050 | ||||||
|
|
|
|
|||||
Closing shareholders funds |
8,849 | 3,845 | ||||||
|
|
|
|
|||||
2013
£000 |
Unaudited
2012 £000 |
|||||||
Company |
||||||||
Shareholders funds at 1 July 2012 (unaudited) and 30 June 2013 |
882 | 882 | ||||||
|
|
|
|
The Company has taken advantage of the exemption contained within section 408 of the Companies Act 2006 not to present its own profit and loss account.
The profit for the year dealt with in the accounts of the company was £NIL (2012 unaudited - £nil).
18
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
21. | Net cash flow from operating activities |
2013
£000 |
Unaudited
£000 |
|||||||
Operating profit |
6,806 | 1,618 | ||||||
Amortisation of intangible fixed assets |
454 | 454 | ||||||
Depreciation of tangible fixed assets |
463 | 722 | ||||||
Profit on disposal of tangible fixed assets |
| (41 | ) | |||||
(Increase)/decrease in stocks |
(440 | ) | 418 | |||||
(Increase)/decrease in debtors |
(798 | ) | 688 | |||||
(Decrease)/increase in creditors |
(2,703 | ) | 893 | |||||
|
|
|
|
|||||
Net cash inflow from operating activities |
3,782 | 4,752 | ||||||
|
|
|
|
22. | Analysis of cash flows for headings netted in cash flow statement |
2013
£000 |
Unaudited
£000 |
|||||||
Returns on investments and servicing of finance |
||||||||
Interest paid |
(62 | ) | (108 | ) | ||||
Hire purchase interest |
(62 | ) | (28 | ) | ||||
|
|
|
|
|||||
Net cash outflow from returns on investments and servicing of finance |
(124 | ) | (136 | ) | ||||
|
|
|
|
|||||
2013 £000 |
Unaudited
2012 £000 |
|||||||
Capital expenditure and financial investment |
||||||||
Purchase of tangible fixed assets |
(1,538 | ) | (271 | ) | ||||
Sale of tangible fixed assets |
| 41 | ||||||
Purchase of fixed asset investments |
(672 | ) | | |||||
|
|
|
|
|||||
Net cash outflow from capital expenditure |
(2,210 | ) | (230 | ) | ||||
|
|
|
|
19
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
2013 £000 |
Unaudited
2012 £000 |
|||||||
Financing |
||||||||
Repayment of finance leases |
(363 | ) | | |||||
New finance leases |
1,500 | | ||||||
Repayment of finance leases |
| (394 | ) | |||||
|
|
|
|
|||||
Net cash inflow/(outflow) from financing |
1,137 | (394 | ) | |||||
|
|
|
|
23. | Analysis of changes in net debt |
Unaudited
£000 |
Cash flow
£000 |
Other
non-cash changes £000 |
30 June
2013 £000 |
|||||||||||||
Cash at bank and in hand |
606 | 2,076 | | 2,682 | ||||||||||||
Bank overdraft |
(177 | ) | 177 | | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
429 | 2,253 | | 2,682 | |||||||||||||
Finance lease obligations |
||||||||||||||||
Debts due within one year |
(247 | ) | (1,137 | ) | 870 | (514 | ) | |||||||||
Debts falling due after more than one year |
(399 | ) | | (870 | ) | (1,269 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net (debt)/funds |
||||||||||||||||
(217 | ) | 1,116 | | 899 | ||||||||||||
|
|
|
|
|
|
|
|
24. | Pension commitments |
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounts to £247,000 (2012 unaudited - £241,000). Contributions totalling £43,000 (2012 unaudited - £43,000) were payable to the fund at the balance sheet date.
20
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
25. | Capital commitments |
The Group had capital commitments at 30 June 2013 of £600,000 (2012 unaudited: £Nil).
26. | Contingent liabilities |
There were no contingent liabilities at 30 June 2013 (2012 unaudited: £nil).
27. | Operating lease commitments |
At 30 June 2013, the group had annual commitments under non-cancellable operating leases as follows:
Land and buildings | Other | |||||||||||||||
Unaudited | Unaudited | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Group |
||||||||||||||||
Expiry date: |
||||||||||||||||
Within 1 year |
| | 21 | 17 | ||||||||||||
Between 2 and 5 years |
488 | 189 | 51 | 68 | ||||||||||||
After more than 5 years |
493 | 792 | | | ||||||||||||
|
|
|
|
|
|
|
|
28. | Principal subsidiaries |
Percentage | ||||||
Company name | Country | Shareholding | Description | |||
Aimia Foods Limited |
England and Wales | 100 |
Food and beverage manufacturing and distribution |
|||
Aimia Foods Group Limited |
England and Wales | 100 |
Intermediate Holding Company |
|||
Stockpack Limited |
England and Wales | 100 | Dormant | |||
Aimia Foods EBT Company Limited |
England and Wales | 100 | Employee benefits trust |
29. | Financial instruments |
The Group incurs foreign exchange risk on sales and purchases that are denominated in currencies other than sterling. The Group uses forward exchange contracts to hedge this risk. The fair value of the Groups forward contracts to buy Euros at 30 June 2013 was £nil (2012 unaudited - £nil).
21
AIMIA Foods Holdings Limited
Notes to the financial statements
For the year ended 30 June 2013
30. | Related party transactions |
The company has taken advantage of the exemption in Financial Reporting Standard No. 8 Related party disclosures and has not disclosed transactions with group undertakings, all of which have been eliminated on consolidation.
During the period, the company paid rent of £8,500 (2012 unaudited: £8,500) in relation to a property owned by Mr I M Unsworth and Mr R N Unsworth. As at 30 June 2013, the rent prepaid amounted to £6,375 (2012 unaudited: £6,375).
31. | Post balance sheet events |
Cott Ventures Ltd, a subsidiary of Cott Corporation, acquired 100 percent of the share capital of Aimia Foods Holdings Limited pursuant to a Share Purchase Agreement dated 30 May 2014. The aggregate purchase price for the Aimia Acquisition was £52.1 million payable in cash, which included a payment for estimated closing balance sheet working capital, £19.9 million in deferred consideration to be paid by 30 September 2014, and aggregate contingent consideration of up to £15.9 million, which is payable upon the achievement of certain performance measures during 52 weeks ending 1 July 2016.
Prior to the transaction the Group settled all balances owed between group companies and secured finance lease creditors.
32. | Ultimate controlling party |
Subsequent to 30 May 2014, the ultimate controlling party is Cott Corporation by virtue of its 100% shareholding. Prior to that date the ultimate controlling party was the Unsworth family.
22
Exhibit 99.2
Unaudited Financial Statements
AIMIA Foods Holdings Limited
For the three months ended 31 March 2014
Registered number: 06201887
AIMIA Foods Holdings Limited
Contents
Page | ||
Independent auditors review report | ii | |
Unaudited consolidated profit and loss account | 1 | |
Unaudited consolidated balance sheet | 2 | |
Unaudited company balance sheet | 3 | |
Unaudited consolidated cash flow statement | 4 | |
Notes to the unaudited financial statements | 5 - 21 |
i
INDEPENDENT AUDITORS REVIEW REPORT |
Grant Thornton UK LLP 4 Hardman Square Spinningfields Manchester M3 3EB T +44 (0) 161 953 6901 www.grant-thornton.co.uk |
Board of Directors
Aimia Foods Holdings limited
We have reviewed the accompanying consolidated interim financial statements of Aimia Foods Holdings Limited and subsidiaries (the Company), which comprise the consolidated balance sheets as of 31 March 2014 and 2013, and the related consolidated profit and loss accounts and cash flow statements for the three-month periods ended 31 March 2014 and 2013, and the related notes to the interim financial statements.
Managements responsibility
The Companys management is responsible for the preparation and fair presentation of the consolidated interim financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law); this responsibility includes the design, implementation, and maintenance of internal control sufficient to provide a reasonable basis for the preparation and fair presentation of interim financial information in accordance with United Kingdom Generally Accepted Accounting Practice.
Auditors responsibility
Our responsibility is to conduct our reviews in accordance with auditing standards generally accepted in the United States of America applicable to reviews of interim financial information. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements. Accordingly, we do not express such an opinion.
ii
Conclusion
Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial statements referred to above for them to in accordance with United Kingdom Generally Accepted Accounting Practice.
GRANT THORNTON UK LLP
Manchester
United Kingdom
5 August 2014
iii
AIMIA Foods Holdings Limited
Unaudited consolidated profit and loss account
For the three months ended 31 March 2014
3 months | 3 months | |||||||||||
ended 31 March | ended 31 March | |||||||||||
2014 | 2013 | |||||||||||
Note | £000 | £000 | ||||||||||
Turnover |
1,2 | 17,995 | 15,192 | |||||||||
Cost of sales |
(13,302 | ) | (11,637 | ) | ||||||||
|
|
|
|
|||||||||
Gross profit |
4,693 | 3,555 | ||||||||||
Distribution costs |
(338 | ) | (274 | ) | ||||||||
Administrative expenses |
(1,663 | ) | (1,327 | ) | ||||||||
|
|
|
|
|||||||||
Operating profit |
3 | 2,692 | 1,954 | |||||||||
Interest payable and similar charges |
7 | (37 | ) | (32 | ) | |||||||
|
|
|
|
|||||||||
Profit on ordinary activities before taxation |
2,655 | 1,922 | ||||||||||
|
|
|
|
|||||||||
Tax on profit on ordinary activities |
8 | (589 | ) | (444 | ) | |||||||
Profit for the financial period |
18 | 2,066 | 1,478 | |||||||||
|
|
|
|
All amounts relate to continuing operations.
There were no recognised gains and losses for the current or prior period other than those included in the Profit and loss account.
The accompanying notes 1 to 31 form part of these financial statements.
Page 1
AIMIA Foods Holdings Limited
Registered number: 06201887
Unaudited consolidated balance sheet
As at 31 March 2014
Note |
31 March 2014
£000 |
31 March 2013
£000 |
||||||||||
Fixed assets |
||||||||||||
Intangible assets |
9 | 6,006 | 6,460 | |||||||||
Tangible assets |
10 | 3,479 | 1,691 | |||||||||
Investments |
11 | 672 | 672 | |||||||||
|
|
|
|
|||||||||
10,157 | 8,823 | |||||||||||
Current assets |
||||||||||||
Stocks |
12 | 5,022 | 4,499 | |||||||||
Debtors |
13 | 7,770 | 7,415 | |||||||||
Cash at bank |
9,186 | 2,472 | ||||||||||
|
|
|
|
|||||||||
21,978 | 14,386 | |||||||||||
Creditors : amounts falling due within one year |
14 | (14,594 | ) | (14,087 | ) | |||||||
|
|
|
|
|||||||||
Net current assets |
7,384 | 299 | ||||||||||
|
|
|
|
|||||||||
Total assets less current liabilities |
17,541 | 9,122 | ||||||||||
Creditors: amounts falling due after more than one year |
15 | (3,053 | ) | (1,344 | ) | |||||||
|
|
|
|
|||||||||
Net assets |
14,488 | 7,778 | ||||||||||
|
|
|
|
|||||||||
Capital and reserves |
||||||||||||
Called up share capital |
17 | 500 | 500 | |||||||||
Capital redemption reserve |
18 | 544 | 544 | |||||||||
Profit and loss account |
18 | 13,444 | 6,734 | |||||||||
|
|
|
|
|||||||||
Shareholders funds |
19 | 14,488 | 7,778 | |||||||||
|
|
|
|
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 5 August 2014.
Mr R N Unsworth, Director
The accompanying notes 1 to 31 form part of these financial statements.
Page 2
AIMIA Foods Holdings Limited
Registered number: 06201887
Unaudited company balance sheet
As at 31 March 2014
Note |
31 March 2014
£000 |
31 March 2013
£000 |
||||||||||
Fixed assets |
||||||||||||
Investments |
11 | 12,403 | 12,403 | |||||||||
Current assets |
||||||||||||
Debtors |
13 | 110 | 110 | |||||||||
Creditors: amounts falling due within one year |
14 | (11,631 | ) | (11,631 | ) | |||||||
|
|
|
|
|||||||||
Net current liabilities |
(11,521 | ) | (11,521 | ) | ||||||||
|
|
|
|
|||||||||
Net assets |
882 | 882 | ||||||||||
|
|
|
|
|||||||||
Capital and Reserves |
||||||||||||
Called up share capital |
17 | 500 | 500 | |||||||||
Capital redemption reserve |
18 | 544 | 544 | |||||||||
Profit and loss account |
18 | (162 | ) | (162 | ) | |||||||
|
|
|
|
|||||||||
Shareholders funds |
19 | 882 | 882 | |||||||||
|
|
|
|
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 5 August 2014
Mr R N Unsworth, Director
The accompanying notes 1 to 31 form part of these financial statements.
Page 3
AIMIA Foods Holdings Limited
Unaudited consolidated cash flow statement
For the three months ended 31 March 2014
3 months | 3 months | |||||||||||
ended 31 March | ended 31 March | |||||||||||
2014 | 2013 | |||||||||||
Note | £000 | £000 | ||||||||||
Net cash flow from operating activities |
21 | 1,707 | 1,745 | |||||||||
Returns on investments and servicing of finance |
21 | (37 | ) | (32 | ) | |||||||
Taxation |
(397 | ) | (4 | ) | ||||||||
Capital expenditure and financial investment |
21 | (199 | ) | (941 | ) | |||||||
|
|
|
|
|||||||||
Cash inflow before financing |
1,074 | 768 | ||||||||||
Financing |
22 | (346 | ) | (150 | ) | |||||||
|
|
|
|
|||||||||
Increase in cash in the period |
728 | 618 | ||||||||||
|
|
|
|
Reconciliation of net cash flow to movement in net funds/debt
For the three months ended 31 March 2014
3 months | 3 months | |||||||
ended 31 March | ended 31 March | |||||||
2014 | 2013 | |||||||
£000 | £000 | |||||||
Increase in cash in the period |
728 | 618 | ||||||
Amounts repaid on finance leases |
346 | | ||||||
|
|
|
|
|||||
Change in net debt resulting from cash flows and movement in net debt in the period |
1,074 | 618 | ||||||
Net funds / (debt) at 1 January |
3,629 | (212 | ) | |||||
|
|
|
|
|||||
Net funds at 31 March |
4,703 | 406 | ||||||
|
|
|
|
The accompanying notes 1 to 31 form part of these financial statements.
Page 4
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
1. | Accounting policies |
1.1 | Basis of preparation of financial statements |
The financial statements have been prepared under the historical cost convention and in accordance with the Companies Act 2006 and applicable UK accounting standards (United Kingdom Generally Accepted Accounting Principles).
1.2 | Going concern |
The Group has considerable financial resources together with long standing relationships with a number of customers and suppliers across different geographic areas. As a consequence, the directors believe that the Group is well placed to manage its business risk successfully despite the current uncertain economic outlook.
1.3 | Basis of consolidation |
The Group financial statements consolidate the accounts of the company and all of its subsidiary undertakings drawn up for the three months ended 31 March 2014.
On acquisition of a subsidiary, all of the subsidiarys assets and liabilities which exist at the date of acquisition are recorded at their fair value reflecting their condition at that date.
1.4 | Turnover |
Turnover is the total amount receivable by the Group for goods supplied and services provided, excluding VAT and trade discounts. Revenue from the supply of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer, which is at the point of despatch.
1.5 | Goodwill |
Goodwill is the difference between amounts paid on the acquisition of a business or a company and the fair value of the identifiable assets and liabilities. It is amortised to the Profit and loss account over its estimated economic life.
1.6 | Investments |
Investments are included at cost less provision for impairment.
Page 5
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
1. | Accounting policies (continued) |
1.7 | Tangible fixed assets and depreciation |
Tangible fixed assets are stated at cost less depreciation and less any provision for impairment. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:
Leasehold improvements | - | 3 - 10 years | ||||
Plant and machinery | - | 3 - 10 years | ||||
Motor vehicles | - | 3 years | ||||
Fixtures & fittings | - | 5 years | ||||
Computer equipment | - | 3 - 5 years |
1.8 | Stocks |
Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes materials, direct labour, other direct overheads and royalties payable. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal.
1.9 | Hire purchase agreements |
Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value. The capital element of the future payments is treated as a liability and the interest is charged to the profit and loss account at a constant rate of charge on the balance of capital repayments outstanding.
1.10 | Operating leases |
Rentals applicable to operating leases, where substantially all of the benefits and risks of ownership remain with the lessor, are charged against profits on a straight line basis over the period of the lease.
1.11 | Lease income |
Payments received under operating leases are credited to the profit and loss account on a straight line basis over the lease term.
1.12 | Current tax |
The current tax charge is based on the profit for the period and is measured at the amounts expected to be paid based on the tax rates and laws substantively enacted by the balance sheet date. Current and deferred tax is recognised in the profit and loss account for the period except to the extent that it is attributable to gain or loss that is, or has been, recognised directly in the statement of total recognised gains and losses.
Page 6
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
1. | Accounting policies (continued) |
1.13 | Deferred taxation |
Deferred tax is recognised in respect of all timing differences that had originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exception, deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
1.14 | Foreign currencies |
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction.
Exchange gains and losses are recognised in the Profit and loss account.
1.15 | Pensions |
The Group operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Group to the fund in respect of the period.
1.16 | Financial Instruments |
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.
Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.
Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.
Page 7
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
2. | Turnover |
An analysis of turnover by class of business is as follows:
3 months | 3 months | |||||||
ended 31 March | ended 31 March | |||||||
2014 | 2013 | |||||||
£000 | £000 | |||||||
United Kingdom |
17,859 | 15,077 | ||||||
Europe |
136 | 115 | ||||||
|
|
|
|
|||||
17,995 | 15,192 | |||||||
|
|
|
|
The turnover and profit on ordinary activities before taxation is attributable to the manufacture and distribution of food and beverage supplies into the retail, cash and carry, foodservice and vending sectors and the provision of manufacturing and packing services to the food industry.
3. | Operating profit |
The operating profit is stated after charging:
3 months | 3 months | |||||||
ended 31 March | ended 31 March | |||||||
2014 | 2013 | |||||||
£000 | £000 | |||||||
Amortisation - intangible fixed assets |
113 | 113 | ||||||
Depreciation of tangible fixed assets: |
||||||||
- owned by the group |
23 | 23 | ||||||
- held under finance leases |
139 | 139 | ||||||
Operating lease rentals: |
||||||||
- land and buildings |
237 | 237 | ||||||
|
|
|
|
Page 8
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
4. | Auditors remuneration |
3 months | 3 months | |||||||
ended 31 March | ended 31 March | |||||||
2014 | 2013 | |||||||
£000 | £000 | |||||||
Fees payable to the companys auditor and its associates for the UK statutory audit of the companys annual accounts |
4 | 4 | ||||||
Fees payable to the companys auditor and its associates in respect of: |
||||||||
Taxation compliance services |
1 | 1 | ||||||
|
|
|
|
5. | Staff costs |
Staff costs, including directors remuneration, were as follows:
3 months | 3 months | |||||||
ended 31 March | ended 31 March | |||||||
2014 | 2013 | |||||||
£000 | £000 | |||||||
Wages and salaries |
2,597 | 1,566 | ||||||
Social security costs |
177 | 167 | ||||||
Other pension costs |
70 | 66 | ||||||
|
|
|
|
|||||
2,844 | 1,799 | |||||||
|
|
|
|
The average monthly number of employees, including the directors, during the period was as follows:
3 months | 3 months | |||||||
ended 31 March | ended 31 March | |||||||
2014 | 2013 | |||||||
No. | No. | |||||||
Production |
106 | 100 | ||||||
Administration |
189 | 159 | ||||||
|
|
|
|
|||||
295 | 259 | |||||||
|
|
|
|
Page 9
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
6. | Directors remuneration |
3 months | 3 months | |||||||
ended 31 March | ended 31 March | |||||||
2014 | 2013 | |||||||
£000 | £000 | |||||||
Remuneration |
177 | 173 | ||||||
|
|
|
|
|||||
Company pension contributions to defined contribution pension schemes |
14 | 14 | ||||||
|
|
|
|
During the period retirement benefits were accruing to 5 directors (2013 - 5 in respect of defined contribution pension schemes. The highest paid director received remuneration of £33k (2013 - £33k). Management and consultancy fees of £23,000 (2013 - £23,000) were paid which comprised charges for the services of I Unsworth and G Unsworth.
7. | Interest payable |
3 months | 3 months | |||||||
ended 31 March | ended 31 March | |||||||
2014 | 2013 | |||||||
£000 | £000 | |||||||
On bank loans and overdrafts |
8 | 12 | ||||||
On finance leases and hire purchase contracts |
29 | 20 | ||||||
|
|
|
|
|||||
37 | 32 | |||||||
|
|
|
|
8. | Taxation |
Page 10
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
Origination and reversal of timing differences |
| | ||||||
Effect of increased tax rate on opening liability |
| | ||||||
|
|
|
|
|||||
Total deferred tax (see note 16) |
| | ||||||
|
|
|
|
|||||
Tax on profit on ordinary activities |
589 | 444 | ||||||
|
|
|
|
Factors affecting tax charge for the period
The tax assessed for the period is lower than (2013 - lower than) the standard rate of corporation tax in the UK of 23.00% (2013 24.00%). The differences are explained below:
3 months
ended 31 March 2014 £000 |
3 months
ended 31 March 2013 £000 |
|||||||
Profit on ordinary activities before tax |
2,655 | 1,922 | ||||||
|
|
|
|
|||||
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.00% (2013 24.00%) |
631 | 456 | ||||||
Effects of: |
||||||||
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment |
119 | 37 | ||||||
Capital allowances for period in excess of depreciation |
(112 | ) | (34 | ) | ||||
Adjustments to tax charge in respect of prior periods |
(43 | ) | (13 | ) | ||||
Short term timing difference leading to an increase (decrease) in taxation |
(6 | ) | (2 | ) | ||||
|
|
|
|
|||||
Current tax charge for the period (see note above) |
589 | 444 | ||||||
|
|
|
|
Page 11
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
9. | Intangible fixed assets |
Group |
Goodwill
£000 |
|||
Cost |
||||
At 1 January 2014 and 31 March 2014 |
9,069 | |||
|
|
|||
Amortisation |
||||
At 1 January 2014 |
2,950 | |||
Charge for the period |
113 | |||
|
|
|||
At 31 March 2014 |
3,063 | |||
|
|
|||
Net book value |
||||
At 31 March 2014 |
6,006 | |||
|
|
|||
At 31 December 2013 |
6,119 | |||
|
|
|||
At 31 March 2013 |
6,460 | |||
|
|
The directors have assessed that the goodwill has a useful economic life of 20 years.
Page 12
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
10. | Tangible fixed assets |
Group |
L/Term
£000 |
Plant & machinery £000 |
Motor vehicles £000 |
Fixtures & fittings
£000 |
Total
£000 |
|||||||||||||||
Cost |
||||||||||||||||||||
At 1 January 2014 |
188 | 13,013 | 85 | 2,769 | 16,055 | |||||||||||||||
Additions |
| 199 | | | 199 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At 31 March 2014 |
188 | 13,212 | 85 | 2,769 | 16,254 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Depreciation |
||||||||||||||||||||
At 1 January 2014 |
85 | 9,824 | 55 | 2,649 | 12,613 | |||||||||||||||
Charge for the period |
| 147 | 4 | 11 | 162 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At 31 March 2014 |
85 | 9,971 | 59 | 2,660 | 12,775 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net book value |
||||||||||||||||||||
At 31 March 2014 |
103 | 3,241 | 26 | 109 | 3,479 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At 31 December 2013 |
103 | 3,189 | 30 | 120 | 3,442 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At 31 March 2013 |
103 | 1,451 | 19 | 118 | 1,691 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
Group |
2014
£000 |
2013 £000 |
||||||
Plant and machinery |
1,935 | 990 | ||||||
|
|
|
|
Page 13
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
11. | Fixed asset Investments |
Group |
Unlisted
£000 |
|||
Cost |
||||
At 1 January 2014 and 31 March 2014 |
672 | |||
|
|
|||
Net book value |
||||
At 31 March 2014 |
672 | |||
|
|
|||
At 31 December 2013 |
672 | |||
|
|
|||
At 31 March 2013 |
672 | |||
|
|
The fixed asset investment represents a 49% shareholding in Associated Coffee Merchants (International) Limited, a company incorporated in England and Wales. There are no common directors and the directors believe there is no significant influence held over the company, as such the investment has been held at cost under fixed asset investments.
Investments
in subsidiary |
||||
companies | ||||
Company | £000 | |||
Cost |
||||
At 1 January 2014 and 31 March 2014 |
12,403 | |||
|
|
|||
Net book value |
||||
At 31 March 2014 |
12,403 | |||
|
|
|||
At 31 December 2013 |
12,403 | |||
|
|
|||
At 31 March 2013 |
12,403 | |||
|
|
Details of the principal subsidiaries can be found under note number 27.
Page 14
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
12. | Stocks |
Group | Company | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Raw materials |
2,718 | 2,749 | | | ||||||||||||
Finished goods and goods for resale |
2,304 | 1,750 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
5,022 | 4,499 | | | |||||||||||||
|
|
|
|
|
|
|
|
13. | Debtors |
Group | Company | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Trade debtors |
6,888 | 6,184 | | | ||||||||||||
Amounts owed by group undertakings |
| | 110 | 110 | ||||||||||||
Other debtors |
136 | 177 | | | ||||||||||||
Prepayments and accrued income |
501 | 584 | | | ||||||||||||
Deferred tax asset (see note 16) |
245 | 470 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
7,770 | 7,415 | 110 | 110 | |||||||||||||
|
|
|
|
|
|
|
|
Page 15
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
14. | Creditors: |
Amounts falling due within one year
Group | Company | |||||||||||||||
2014
£000 |
2013
£000 |
2014 £000 |
2013 £000 |
|||||||||||||
Net obligations under finance leases and hire purchase contracts |
1,430 | 572 | | | ||||||||||||
Trade creditors |
8,243 | 8,022 | | | ||||||||||||
Amounts owed to group undertakings |
| | 11,631 | 11,631 | ||||||||||||
Corporation tax |
1,218 | 1,770 | | | ||||||||||||
Other taxation and social security |
207 | 168 | | | ||||||||||||
Other creditors |
143 | 106 | | | ||||||||||||
Accruals and deferred income |
3,353 | 3,449 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
14,594 | 14,087 | 11,631 | 11,631 | |||||||||||||
|
|
|
|
|
|
|
|
The finance leases are secured against the assets to which they relate.
15. | Creditors: |
Amounts falling due after more than one year
Group | Company | |||||||||||||||
2014
£000 |
2013
£000 |
2014 £000 |
2013 £000 |
|||||||||||||
Net obligations under finance leases and hire purchase contracts |
3,053 | 1,344 | | | ||||||||||||
|
|
|
|
|
|
|
|
Obligations under finance leases and hire purchase contracts, included above, are payable as follows:
Group | Company | |||||||||||||||
2014
£000 |
2013
£000 |
2014 £000 |
2013 £000 |
|||||||||||||
Between one and five years |
3,053 | 1,344 | | | ||||||||||||
|
|
|
|
|
|
|
|
Page 16
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
16. | Deferred taxation |
Group | Company | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
At beginning of period |
245 | 470 | | | ||||||||||||
Charged during the period (P&L) |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
At end of period |
245 | 470 | | | ||||||||||||
|
|
|
|
|
|
|
|
The deferred taxation balance is made up as follows:
Group | Company | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Accelerated capital allowances |
245 | 470 | | | ||||||||||||
Short term timing differences |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
245 | 470 | | | |||||||||||||
|
|
|
|
|
|
|
|
The directors believe that the deferred tax asset of £245,000 (2013 - £470,000) recognised in the accounts will be recoverable against suitable profits arising in the future.
17. | Share capital |
2014 | 2013 | |||||||
£000 | £000 | |||||||
Allotted, called up and fully paid |
||||||||
500,000 - Ordinary Shares shares of £1 each |
500 | 500 | ||||||
|
|
|
|
Page 17
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
18. | Reserves |
Capital
redemptn reserve |
Profit and loss
account |
|||||||
Group | £000 | £000 | ||||||
At 1 January 2014 |
544 | 11,378 | ||||||
Profit for the financial period |
| 2,066 | ||||||
|
|
|
|
|||||
At 31 March 2014 |
544 | 13 | ||||||
|
|
|
|
Capital
redemptn reserve |
Profit and loss
account |
|||||||
Company | £000 | £000 | ||||||
At 1 January 2014 and 31 March 2014 |
544 | (162 | ) | |||||
|
|
|
|
19. | Reconciliation of movement in shareholders funds |
2014 | 2013 | |||||||
Group | £000 | £000 | ||||||
Opening shareholders funds |
12,422 | 6,300 | ||||||
Profit for the financial period |
2,066 | 1,478 | ||||||
|
|
|
|
|||||
Closing shareholders funds |
14,488 | 7,778 | ||||||
|
|
|
|
2014 | 2013 | |||||||
Company | £000 | £000 | ||||||
Shareholders funds at 1 January 2014 and 31 March 2014 |
882 | 882 | ||||||
|
|
|
|
The company has taken advantage of the exemption contained within section 408 of the Companies Act 2006 not to present its own profit and loss account.
The profit for the period dealt with in the accounts of the company was £NIL (2013 - £nil).
Page 18
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
20. | Net cash flow from operating activities |
3 month period
to 31 March 2014 £000 |
3 month period
to 31 March 2013 £000 |
|||||||
Operating profit |
2,692 | 1,954 | ||||||
Amortisation of intangible fixed assets |
113 | 113 | ||||||
Depreciation of tangible fixed assets |
162 | 103 | ||||||
Profit on disposal of tangible fixed assets |
| (25 | ) | |||||
(Increase) in stocks |
(66 | ) | (622 | ) | ||||
Decrease/(increase) in debtors |
795 | (146 | ) | |||||
(Decrease)/increase in creditors |
(1,989 | ) | 368 | |||||
|
|
|
|
|||||
Net cash inflow from operating activities |
1,707 | 1,745 | ||||||
|
|
|
|
21. | Analysis of cash flows for headings netted in cash flow statement |
3 month period
to 31 March 2014 £000 |
3 month period
to 31 March 2013 £000 |
|||||||
Returns on investments and servicing of finance |
||||||||
Interest paid |
(7 | ) | (12 | ) | ||||
Hire purchase interest |
(30 | ) | (20 | ) | ||||
|
|
|
|
|||||
Net cash outflow from returns on investments and servicing of finance |
(37 | ) | (32 | ) | ||||
|
|
|
|
2014 | 2013 | |||||||
£000 | £000 | |||||||
Capital expenditure and financial investment |
||||||||
Purchase of tangible fixed assets |
(199 | ) | (294 | ) | ||||
Sale of tangible fixed assets |
| 25 | ||||||
Purchase of fixed asset investments |
| (672 | ) | |||||
|
|
|
|
|||||
Net cash outflow from capital expenditure |
(199 | ) | (941 | ) | ||||
|
|
|
|
2014 | 2013 | |||||||
£000 | £000 | |||||||
Financing |
||||||||
Repayment of finance leases |
(346 | ) | (150 | ) | ||||
|
|
|
|
|||||
Net cash outflow from financing |
(346 | ) | (150 | ) | ||||
|
|
|
|
Page 19
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
22. | Analysis of changes in net debt |
1 January
2014 |
Cash flow |
31 March 2014 |
||||||||||
£000 | £000 | £000 | ||||||||||
Cash at bank and in hand |
8,458 | 728 | 9,186 | |||||||||
|
|
|
|
|
|
|||||||
8,458 | 728 | 9,186 | ||||||||||
Finance lease obligations |
||||||||||||
Debts due within one year |
(4,829 | ) | 346 | (4,483 | ) | |||||||
Net debt |
3,629 | 1,074 | 4,703 | |||||||||
|
|
|
|
|
|
23. | Pension commitments |
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounts to £194k (2013 - £185k). Contributions totalling £80k (2013 - £43k) were payable to the fund at the balance sheet date.
24. | Capital commitments |
The Group had capital commitments at 31 March 2014 of £NIL (31 March 2013: £NIL).
25. | Contingent liabilities |
There were no contingent liabilities at 31 March 2014 (31 March 2013: £NIL).
26. | Operating lease commitments |
At 31 March 2014, the Group had annual commitments under non-cancellable operating leases as follows:
Land and buildings | Other | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Group | £000 | £000 | £000 | £000 | ||||||||||||
Expiry date: |
||||||||||||||||
Within 1 year |
| 126 | 16 | 16 | ||||||||||||
Between 2 and 5 years |
488 | 299 | 65 | 47 | ||||||||||||
After more than 5 years |
445 | 445 | | | ||||||||||||
|
|
|
|
|
|
|
|
Page 20
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the three months ended 31 March 2014
27. | Principal subsidiaries |
Company name | Country |
Percentage
Shareholding |
Description | |||||
Aimia Foods Limited | England and Wales | 100 | Food and beverage manufacturing and distribution | |||||
Aimia Foods Group Limited |
England and Wales | 100 | Intermediate Holding Company | |||||
Stockpack Limited |
England and Wales | 100 | Dormant | |||||
Aimia Foods EBT Company Limited |
England and Wales | 100 | Employee benefits trust |
28. | Financial Instruments |
The Group incurs foreign exchange risk on sales and purchases that are denominated in currencies other than sterling. The Group uses forward exchange contracts to hedge this risk. The fair value of the Groups forward contracts to buy Euros at 31 March 2014 was £1,674k (31 March 2013 - £800k). The fair value of the Groups forward contracts to buy Dollars at 31 March 2014 was £184k (31 March 2013 - £nil).
29. | Related party transactions |
The company has taken advantage of the exemption in Financial Reporting Standard No. 8 Related party disclosures and has not disclosed transactions with group undertakings, all of which are eliminated on consolidation.
During the period, the company paid rent of £2,125 (2013: £2,125) in relation to a property owned by Mr I M Unsworth and Mr R N Unsworth, As at 31 March 2014, the rent prepaid amounted to £NIL (2013: £NIL).
30. | Post balance sheet events |
Cott Ventures Ltd., a subsidiary of Cott Corporation, acquired 100 percent of the share capital of the Aimia Foods Holdings Limited, pursuant to a Share Purchase Agreement dated May 30, 2014. The aggregate purchase price for the Aimia Acquisition was £52.1 million payable in cash, which included a payment for estimated closing balance sheet working capital, £19.9 million in deferred consideration to be paid by September 30, 2014, and aggregate contingent consideration of up to £15.9 million, which is payable upon the achievement of certain performance measures during 52 weeks ending July 1, 2016.
Prior to the transaction, the Group settled all balances owed between group companies and secured finance lease creditors.
31. | Ultimate controlling party |
Subsequent to 30 May 2014, the ultimate controlling party is Cott Corporation by virtue of its 100% shareholding. Prior to that date the ultimate controlling party was the Unsworth family.
Page 21
Exhibit 99.3
Unaudited Financial Statements
AIMIA Foods Holdings Limited
For the six months ended 31 December 2013
Registered number: 06201887
AIMIA Foods Holdings Limited
Contents
Page | ||
Independent auditors review report | ii | |
Unaudited consolidated profit and loss account | 1 | |
Unaudited consolidated balance sheet | 2 | |
Unaudited company balance sheet | 3 | |
Unaudited consolidated cash flow statement | 4 | |
Notes to the unaudited financial statements | 5 - 21 |
INDEPENDENT AUDITORS REVIEW REPORT |
Grant Thornton UK LLP 4 Hardman Square Spinningfields Manchester M3 3EB T +44 (0) 161 953 6901 www.grant-thornton.co.uk |
Board of Directors
Aimia Foods Holdings Limited
We have reviewed the accompanying consolidated interim financial statements of Aimia Foods Holdings Limited and subsidiaries (the Company), which comprise the consolidated balance sheets as of 31 December 2013 and 2012, and the related consolidated profit and loss accounts and cash flow statements for the six-month periods ended 31 December 2013 and 2012, and the related notes to the interim financial statements.
Managements responsibility
The Companys management is responsible for the preparation and fair presentation of the consolidated interim financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law); this responsibility includes the design, implementation, and maintenance of internal control sufficient to provide a reasonable basis for the preparation and fair presentation of interim financial information in accordance with United Kingdom Generally Accepted Accounting Practice.
Auditors responsibility
Our responsibility is to conduct our reviews in accordance with auditing standards generally accepted in the United States of America applicable to reviews of interim financial information. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements. Accordingly, we do not express such an opinion.
ii
Conclusion
Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial statements referred to above for them to in accordance with United Kingdom Generally Accepted Accounting Practice.
GRANT THORNTON UK LLP
Manchester
United Kingdom
5 August 2014
iii
AIMIA Foods Holdings Limited
Unaudited consolidated profit and loss account
For the six months ended 31 December 2013
Note |
6 months ended
£000 |
6 months ended
£000 |
||||||||||
Turnover |
1,2 | 33,870 | 29,512 | |||||||||
Cost of sales |
(25,725 | ) | (23,061 | ) | ||||||||
|
|
|
|
|||||||||
Gross profit |
8,145 | 6,451 | ||||||||||
Distribution costs |
(681 | ) | (540 | ) | ||||||||
Administrative expenses |
(2,813 | ) | (2,655 | ) | ||||||||
|
|
|
|
|||||||||
Operating profit |
3 | 4,651 | 3,256 | |||||||||
Interest payable and similar charges |
7 | (52 | ) | (55 | ) | |||||||
|
|
|
|
|||||||||
Profit on ordinary activities before taxation |
4,599 | 3,201 | ||||||||||
|
|
|
|
|||||||||
Tax on profit on ordinary activities |
8 | (1,026 | ) | (747 | ) | |||||||
Profit for the financial period |
18 | 3,573 | 2,454 | |||||||||
|
|
|
|
All amounts relate to continuing operations.
There were no recognised gains and losses for the current or prior period other than those included in the Profit and loss account.
The accompanying notes 1 to 31 form part of these financial statements.
1
AIMIA Foods Holdings Limited
Registered number: 06201887
Unaudited consolidated balance sheet
As at 31 December 2013
Note |
31 December 2013 £000 |
31 December 2012 £000 |
||||||||||
Fixed assets |
||||||||||||
Intangible assets |
9 | 6,119 | 6,573 | |||||||||
Tangible assets |
10 | 3,442 | 1,500 | |||||||||
Investments |
11 | 672 | | |||||||||
|
|
|
|
|||||||||
10,233 | 8,073 | |||||||||||
Current assets |
||||||||||||
Stocks |
12 | 4,956 | 3,877 | |||||||||
Debtors |
13 | 8,565 | 7,269 | |||||||||
Cash at bank |
8,458 | 1,854 | ||||||||||
|
|
|
|
|||||||||
21,979 | 13,000 | |||||||||||
Creditors: amounts falling due within one year |
14 | (16,416 | ) | (13,281 | ) | |||||||
|
|
|
|
|||||||||
Net current assets/(liabilities) |
5,563 | (281 | ) | |||||||||
|
|
|
|
|||||||||
Total assets less current liabilities |
15,796 | 7,792 | ||||||||||
Creditors: amounts falling due after more than one year |
15 | (3,375 | ) | (1,494 | ) | |||||||
|
|
|
|
|||||||||
Net assets |
12,421 | 6,298 | ||||||||||
|
|
|
|
|||||||||
Capital and reserves |
||||||||||||
Called up share capital |
17 | 500 | 500 | |||||||||
Capital redemption reserve |
18 | 544 | 544 | |||||||||
Profit and loss account |
18 | 11,377 | 5,254 | |||||||||
|
|
|
|
|||||||||
Shareholders funds |
19 | 12,421 | 6,298 | |||||||||
|
|
|
|
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 5 August 2014.
Mr R N Unsworth
Director
The accompanying notes 1 to 31 form part of these unaudited financial statements.
2
AIMIA Foods Holdings Limited
Registered number: 06201887
Unaudited company balance sheet
As at 31 December 2013
Note |
31 December 2013
£000 |
31 December 2012
£000 |
||||||||||
Fixed assets |
||||||||||||
Investments |
11 | 12,403 | 12,403 | |||||||||
Current assets |
||||||||||||
Debtors |
13 | 110 | 110 | |||||||||
Creditors: amounts falling due within one year |
14 | (11,631 | ) | (11,631 | ) | |||||||
|
|
|
|
|||||||||
Net current Liabilities |
(11,521 | ) | (11,521 | ) | ||||||||
|
|
|
|
|||||||||
Net assets |
882 | 882 | ||||||||||
|
|
|
|
|||||||||
Capital and Reserves |
||||||||||||
Called up share capital |
17 | 500 | 500 | |||||||||
Capital redemption reserve |
18 | 544 | 544 | |||||||||
Profit and loss account |
18 | (162 | ) | (162 | ) | |||||||
|
|
|
|
|||||||||
Shareholders funds |
19 | 882 | 882 | |||||||||
|
|
|
|
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 5 August 2014.
Mr R N Unsworth
Director
The accompanying notes 1 to 31 form part of these unaudited financial statements.
3
AIMIA Foods Holdings Limited
Unaudited consolidated cash flow statement
For the six months ended 31 December 2013
Note |
6 months
December 2013
|
6 months
ended
|
||||||||||
Net cash flow from operating activities |
20 | 5,490 | (76 | ) | ||||||||
Returns on investments and servicing of finance |
21 | (52 | ) | (55 | ) | |||||||
Taxation |
(1,588 | ) | 211 | |||||||||
Capital expenditure and financial investment |
21 | (1,119 | ) | (252 | ) | |||||||
|
|
|
|
|||||||||
Cash inflow/(outflow) before financing |
2,731 | (172 | ) | |||||||||
Financing |
21 | 3,045 | 1,420 | |||||||||
|
|
|
|
|||||||||
Increase in cash in the period |
5,776 | 1,248 | ||||||||||
|
|
|
|
Reconciliation of net cash flow to movement in net funds/(debt)
For the six months ended 31 December 2013
6 months
ended 31 December 2013 £000 |
6 months
ended 31 December 2012 £000 |
|||||||||
Increase in cash in the period |
5,776 | 1,248 | ||||||||
Increase in debt |
(3,045 | ) | (1,420 | ) | ||||||
|
|
|
|
|||||||
Change in net debt resulting from cash flows |
2,731 | (172 | ) | |||||||
New finance lease |
| 177 | ||||||||
|
|
|
|
|||||||
Movement in net debt in the period |
2,731 | 5 | ||||||||
Net funds/(debt) at 1 July |
898 | (212 | ) | |||||||
|
|
|
|
|||||||
Net funds/(debt) at 31 December |
3,629 | (207 | ) | |||||||
|
|
|
|
The accompanying notes 1 to 31 form part of these financial statements.
4
AIMIA Foods Holdings limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
1. | Accounting policies |
1.1 | Basis of preparation of financial statements |
The financial statements have been prepared under the historical cost convention and in accordance with the Companies Act 2006 and applicable UK accounting standards (United Kingdom Generally Accepted Accounting Principles).
1.2 | Going concern |
The Group has considerable financial resources together with long standing relationships with a number of customers and suppliers across different geographic areas. As a consequence, the directors believe that the Group is well placed to manage its business risk successfully despite the current uncertain economic outlook.
1.3 | Basis of consolidation |
The Group financial statements consolidate the accounts of the company and all of its subsidiary undertakings drawn up for the six months ended 31 December 2013.
On acquisition of a subsidiary, all of the subsidiarys assets and liabilities which exist at the date of acquisition are recorded at their fair value reflecting their condition at that date.
1.4 | Turnover |
Turnover is the total amount receivable by the Group for goods supplied and services provided, excluding VAT and trade discounts. Revenue from the supply of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer, which is at the point of despatch.
1.5 | Goodwill |
Goodwill is the difference between amounts paid on the acquisition of a business or a company and the fair value of the identifiable assets and liabilities. It is amortised to the Profit and loss account over its estimated economic life.
1.6 | Investments |
Investments are included at cost less provision for impairment.
5
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
1. | Accounting policies (continued) |
1.7 | Tangible fixed assets and depreciation |
Tangible fixed assets are stated at cost less depreciation and less any provision for impairment. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:
Leasehold improvements | - | 3 - 10 years | ||||||
Plant and machinery | - | 3 - 10 years | ||||||
Motor vehicles | - | 3 years | ||||||
Fixtures & fittings | - | 5 years | ||||||
Computer equipment | - | 3 - 5 years |
1.8 | Stocks |
Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes materials, direct labour, other direct overheads and royalties payable. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal
1.9 | Hire purchase agreements |
Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value. The capital element of the future payments is treated as a liability and the interest is charged to the profit and loss account at a constant rate of charge on the balance of capital repayments outstanding.
1.10 | Operating leases |
Rentals applicable to operating leases, where substantially all of the benefits and risks of ownership remain with the lessor, are charged against profits on a straight line basis over the period of the lease.
1.11 | Lease income |
Payments received under operating leases are credited to the profit and loss account on a straight line basis over the lease term.
1.12 | Current tax |
The current tax charge is based on the profit for the period and is measured at the amounts expected to be paid based on the tax rates and laws substantively enacted by the balance sheet date. Current and deferred tax is recognised in the profit and loss account for the period except to the extent that it is attributable to gain or loss that is, or has been, recognised directly in the statement of total recognised gains and losses.
6
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
1. | Accounting policies (continued) |
1.13 | Deferred taxation |
Deferred tax is recognised in respect of all timing differences that had originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exception, deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
1.14 | Foreign currencies |
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction.
Exchange gains and losses are recognised in the Profit and loss account.
1.15 | Pensions |
The Group operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Group to the fund in respect of the period.
1.16 | Financial Instruments |
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.
Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.
Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.
7
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
2. | Turnover |
An analysis of turnover by class of business is as follows:
6 months ended 31 December 2013 |
6 months ended 31 December 2012 |
|||||||
£000 | £000 | |||||||
United Kingdom |
33,609 | 29,284 | ||||||
Europe |
261 | 228 | ||||||
|
|
|
|
|||||
33,870 | 29,512 | |||||||
|
|
|
|
The turnover and profit on ordinary activities before taxation is attributable to the manufacture and distribution of food and beverage supplies into the retail, cash and carry, foodservice and vending sectors and the provision of manufacturing and packing services to the food industry.
3. | Operating profit |
The operating profit is stated after charging:
6 months
ended 31 December 2013 |
6 months ended 31 December 2012 |
|||||||
£000 | £000 | |||||||
Amortisationintangible fixed assets |
227 | 227 | ||||||
Depreciation of tangible fixed assets: |
||||||||
- owned by the group |
37 | 36 | ||||||
- held under finance leases |
226 | 223 | ||||||
Operating lease rentals: |
||||||||
- other |
59 | 59 | ||||||
- land and buildings |
478 | 478 | ||||||
|
|
|
|
4. | Auditors remuneration |
6 months ended 31 December 2013 |
6 months ended 31 December 2012 |
|||||||
£000 | £000 | |||||||
Fees payable to the companys auditor and its associates for the UK statutory audit of the companys annual accounts |
17 | 19 | ||||||
Fees payable to the companys auditor and its associates in respect of: |
||||||||
Taxation compliance services |
2 | 2 | ||||||
|
|
|
|
8
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
5. | Staff costs |
Staff costs, including directors remuneration, were as follows:
6 months ended 31 December 2013 |
6 months ended 31 December 2012 |
|||||||
£000 | £000 | |||||||
Wages and salaries |
3,351 | 3,606 | ||||||
Social security costs |
371 | 283 | ||||||
Other pension costs |
124 | 120 | ||||||
|
|
|
|
|||||
3,846 | 4,009 | |||||||
|
|
|
|
The average monthly number of employees, including the directors, during the period was as follows:
6 months ended 31 December 2013 |
6 months ended 31 December 2012 |
|||||||
No. | No. | |||||||
Production |
106 | 99 | ||||||
Administration |
188 | 160 | ||||||
|
|
|
|
|||||
294 | 259 | |||||||
|
|
|
|
6. | Directors remuneration |
6 months ended 31 December 2013 |
6 months ended 31 December 2012 |
|||||||
£000 | £000 | |||||||
Remuneration |
430 | 348 | ||||||
|
|
|
|
|||||
Company pension contributions to defined contribution pension schemes |
32 | 29 | ||||||
|
|
|
|
During the period retirement benefits were accruing to 5 directors (2013 - 5 in respect of defined contribution pension schemes. The highest paid director received remuneration of £66,000 (2012 - £66,000). Management and consultancy fees of £55,000 (2012 - £55,000) were paid which comprised charges for the services of I Unsworth and G Unsworth.
9
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
7. | Interest payable |
6 months ended 31 December 2013 |
6 months ended 31 December 2012 |
|||||||
£000 | £000 | |||||||
On bank loans and overdrafts |
10 | 36 | ||||||
On finance leases and hire purchase contracts |
42 | 19 | ||||||
|
|
|
|
|||||
52 | 55 | |||||||
|
|
|
|
8. | Taxation |
6 months ended 31 December 2013 |
6 months
December 2012 |
|||||||
£000 | £000 | |||||||
Analysis of tax charge in the period |
||||||||
Current tax (see note below) |
||||||||
UK corporation tax charge on profit for the period |
1,095 | 761 | ||||||
Adjustments in respect of prior periods |
(69 | ) | (14 | ) | ||||
|
|
|
|
|||||
Total current tax |
1,026 | 747 | ||||||
|
|
|
|
|||||
Deferred tax |
||||||||
Origination and reversal of timing differences |
| | ||||||
Effect of increased tax rate on opening liability |
| | ||||||
|
|
|
|
|||||
Total deferred tax (see note 16) |
| | ||||||
|
|
|
|
|||||
Tax on profit on ordinary activities |
1,026 | 747 | ||||||
|
|
|
|
10
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
Factors affecting tax charge for the period
The tax assessed for the period is lower than (2012 - lower than) the standard rate of corporation tax in the UK of 23.00% (2012 24.00%). The differences are explained below:
6 months ended 31 December 2013 |
6 months ended 31 December 2012 |
|||||||
£000 | £000 | |||||||
Profit on ordinary activities before tax |
4,599 | 3,201 | ||||||
|
|
|
|
|||||
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.00% (2012 24.00%) |
1,092 | 760 | ||||||
Effects of: |
||||||||
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment |
190 | 39 | ||||||
Capital allowances for period in excess of depreciation |
(179 | ) | (36 | ) | ||||
Adjustments to tax charge in respect of prior periods |
(68 | ) | (14 | ) | ||||
Short term timing difference leading to an decrease in taxation |
(9 | ) | (2 | ) | ||||
|
|
|
|
|||||
Current tax charge for the period (see note above) |
1,026 | 747 | ||||||
|
|
|
|
9. | Intangible fixed assets |
Goodwill | ||||
£000 | ||||
Group |
||||
Cost |
||||
At 1 July 2013 and 31 December 2013 |
9,069 | |||
|
|
|||
Amortisation |
||||
At 1 July 2013 |
2,723 | |||
Charge for the period |
227 | |||
|
|
|||
At 31 December 2013 |
2,950 | |||
|
|
|||
Net book value |
||||
At 31 December 2013 |
6,119 | |||
|
|
|||
At 30 June 2013 |
6,346 | |||
|
|
|||
At 31 December 2012 |
6,573 | |||
|
|
The directors have assessed that the goodwill has a useful economic life of 20 years.
11
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
10. | Tangible fixed assets |
L/Term
Leasehold Property |
Plant &
machinery |
Motor
vehicles |
Fixtures &
fittings |
Total | ||||||||||||||||
Group | £000 | £000 | £000 | £000 | £000 | |||||||||||||||
Cost |
||||||||||||||||||||
At 1 July 2013 |
188 | 11,924 | 85 | 2,735 | 14,932 | |||||||||||||||
Additions |
| 1,089 | | 34 | 1,123 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At 31 December 2013 |
188 | 13,013 | 85 | 2,769 | 16,055 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Depreciation |
||||||||||||||||||||
At 1 July 2013 |
85 | 9,585 | 49 | 2,631 | 12,350 | |||||||||||||||
Charge for the period |
| 239 | 6 | 18 | 263 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At 31 December 2013 |
85 | 9,824 | 55 | 2,649 | 12,613 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net book value |
||||||||||||||||||||
At 31 December 2013 |
103 | 3,189 | 30 | 120 | 3,442 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At 30 June 2013 |
103 | 2,339 | 36 | 104 | 2,582 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At 31 December 2012 |
103 | 1,274 | 2 | 121 | 1,500 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
2013 | 2012 | |||||||
Group | £000 | £000 | ||||||
Plant and machinery |
2,069 | 1,175 | ||||||
|
|
|
|
12
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
11. | Fixed asset investments |
Unlisted
investments |
||||
Group | £000 | |||
Cost |
||||
At 1 July 2013 and 31 December 2013 |
672 | |||
|
|
|||
Net book value |
||||
At 30 June 2013 and 31 December 2013 |
672 | |||
|
|
|||
At 31 December 2012 |
| |||
|
|
The fixed asset investment represents a 49% shareholding in Associated Coffee Merchants (International) Limited, incorporated in England and Wales. There are no common directors and the directors believe there is no significant influence held over the company, as such the investment has been held at cost under fixed asset investments.
Investments in
subsidiary companies |
||||
Company | £000 | |||
Cost |
||||
At 1 July 2013 and 31 December 2013 |
12,403 | |||
|
|
|||
Net book value |
||||
At 31 December 2013 |
12,403 | |||
|
|
|||
At 30 June 2013 |
12,403 | |||
|
|
|||
At 31 December 2012 |
12,403 | |||
|
|
Details of the principal subsidiaries can be found under note number 27.
13
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
12. | Stocks |
Group | Company | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Raw materials |
2,737 | 1,897 | | | ||||||||||||
Finished goods and goods for resale |
2,219 | 1,980 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
4,956 | 3,877 | | | |||||||||||||
|
|
|
|
|
|
|
|
13. | Debtors |
Group | Company | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Trade debtors |
7,626 | 6,127 | | | ||||||||||||
Amounts owed by group undertakings |
| | 110 | 110 | ||||||||||||
Other debtors |
47 | 113 | | | ||||||||||||
Prepayments and accrued income |
647 | 559 | | | ||||||||||||
Deferred tax asset (see note 16) |
245 | 470 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
8,565 | 7,269 | 110 | 110 | |||||||||||||
|
|
|
|
|
|
|
|
14
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
14. | Creditors: |
Amounts falling due within one year
Group | Company | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Net obligations under finance leases and hire purchase contracts |
1,454 | 572 | | | ||||||||||||
Trade creditors |
10,332 | 8,116 | | | ||||||||||||
Amounts owed to group undertakings |
| | 11,631 | 11,631 | ||||||||||||
Corporation tax |
1,027 | 1,330 | | | ||||||||||||
Other taxation and social security |
179 | 179 | | | ||||||||||||
Other creditors |
102 | 109 | | | ||||||||||||
Accruals and deferred income |
3,322 | 2,975 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
16,416 | 13,281 | 11,631 | 11,631 | |||||||||||||
|
|
|
|
|
|
|
|
The finance leases are secured against the assets to which they relate.
15. | Creditors: |
Amounts falling due after more than one year
Group | Company | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Net obligations under finance leases and hire purchase contracts |
3,375 | 1,494 | | | ||||||||||||
|
|
|
|
|
|
|
|
Obligations under finance leases and hire purchase contracts, included above, are payable as follows:
Group | Company | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Between one and five years |
3,375 | 1,494 | | | ||||||||||||
|
|
|
|
|
|
|
|
15
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
16. | Deferred taxation |
Group | Company | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
At beginning of period |
245 | 470 | | | ||||||||||||
Charge during the period (P&L) |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
At end of period |
245 | 470 | | | ||||||||||||
|
|
|
|
|
|
|
|
The deferred taxation balance is made up as follows:
Group | Company | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
£000 | £000 | £000 | £000 | |||||||||||||
Accelerated capital allowances |
245 | 470 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
245 | 470 | | | |||||||||||||
|
|
|
|
|
|
|
|
The directors believe that the deferred tax asset of £245,000 (2012 - £470,000) recognised in the accounts will be recoverable against suitable profits arising in the future.
17. | Share capital |
2013 | 2012 | |||||||
£000 | £000 | |||||||
Allotted, called up and fully paid |
||||||||
500,000 - Ordinary Shares of £l each |
500 | 500 | ||||||
|
|
|
|
16
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
18. | Reserves |
Group |
Capital
£000 |
Profit and
£000 |
||||||
At 1 July 2013 |
544 | 7,804 | ||||||
Profit for the financial period |
| 3,573 | ||||||
|
|
|
|
|||||
At 31 December 2013 |
544 | 11,377 | ||||||
|
|
|
|
|||||
Company |
Capital redemptn reserve £000 |
Profit and loss account £000 |
||||||
At 1 July 2013 and 31 December 2013 |
544 | (162 | ) | |||||
|
|
|
|
19. | Reconciliation of movement in shareholders funds |
Group |
2013
£000 |
2012
£000 |
||||||
Opening shareholders funds |
8,848 | 3,844 | ||||||
Profit for the financial period |
3,573 | 2,454 | ||||||
|
|
|
|
|||||
Closing shareholders funds |
12,421 | 6,298 | ||||||
|
|
|
|
|||||
Company |
2013 £000 |
2012 £000 |
||||||
Shareholders funds at 1 July 2013 and 31 December 2013 |
882 | 882 | ||||||
|
|
|
|
The company has taken advantage of the exemption contained within section 408 of the Companies Act 2006 not to present its own profit and loss account.
The profit for the period dealt with in the accounts of the company was £NIL (2013 - £nil).
17
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
20. | Net cash flow from operating activities |
6 month
period to 31
£000 |
6 month
period to 31
£000 |
|||||||
Operating profit |
4,651 | 3,257 | ||||||
Amortisation of intangible fixed assets |
227 | 227 | ||||||
Depreciation of tangible fixed assets |
263 | 259 | ||||||
Increase in stocks |
(876 | ) | (237 | ) | ||||
Increase in debtors |
(1,935 | ) | (1,304 | ) | ||||
Increase/(decrease) in creditors |
3,160 | (2,278 | ) | |||||
|
|
|
|
|||||
Net cash inflow/(outflow) from operating activities |
5,490 | (76 | ) | |||||
|
|
|
|
21. | Analysis of cash flows for headings netted in cash flow statement |
6 month period to 31 December 2013 £000 |
6 month period to 31 December 2012 £000 |
|||||||
Returns on investments and servicing of finance |
||||||||
Interest paid |
(10 | ) | (36 | ) | ||||
Hire purchase interest |
(42 | ) | (19 | ) | ||||
|
|
|
|
|||||
Net cash outflow from returns on investments and servicing of finance |
(52 | ) | (55 | ) | ||||
|
|
|
|
|||||
2013 £000 |
2012 £000 |
|||||||
Capital expenditure and financial investment |
||||||||
Purchase of tangible fixed assets |
(1,123 | ) | (252 | ) | ||||
Sale of tangible fixed assets |
4 | | ||||||
|
|
|
|
|||||
Net cash outflow from capital expenditure |
(1,119 | ) | (252 | ) | ||||
|
|
|
|
18
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
2013
£000 |
2012
£000 |
|||||||
Financing |
||||||||
Repayment of finance leases |
(253 | ) | (124 | ) | ||||
New finance leases |
3,298 | 1,544 | ||||||
|
|
|
|
|||||
Net cash inflow from financing |
3,045 | 1,420 | ||||||
|
|
|
|
22. | Analysis of changes in net debt |
1 July
£000 |
Cash flow £000 |
Inception of new finance leases £000 |
31 December
£000 |
|||||||||||||
Cash at bank and in hand |
2,682 | 5,776 | | 8,458 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
2,682 | 5,776 | | 8,458 | |||||||||||||
Finance lease obligations |
||||||||||||||||
Debts due within one year |
(1,784 | ) | | (3,045 | ) | (4,829 | ) | |||||||||
Debts falling due after more than one year |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net debt |
898 | 5,776 | (3,045 | ) | 3,629 | |||||||||||
|
|
|
|
|
|
|
|
23. | Pension commitments |
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounts to £124,000 (six months ended December 2012 - £120,000). Contributions totalling £44,000 (six months ended December 2012 - £44,000) were payable to the fund at the balance sheet date.
24. | Capital commitments |
The Group had capital commitments at 31 December 2013 of £NIL (2012: £NIL).
25. | Contingent liabilities |
There were no contingent liabilities at 31 December 2013 (2012: £Nil).
19
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
26. | Operating lease commitments |
At 31 December 2013, the group had annual commitments under non-cancellable operating leases as follows:
Land and buildings | Other | |||||||||||||||
Group |
2013
£000 |
2012
£000 |
2013
£000 |
2012
£000 |
||||||||||||
Expiry date: |
||||||||||||||||
Within 1 year |
173 | | 22 | 1 | ||||||||||||
Between 2 and 5 years |
299 | 488 | 53 | 82 | ||||||||||||
After more than 5 years |
445 | 445 | | | ||||||||||||
|
|
|
|
|
|
|
|
27. | Principal subsidiaries |
Company name | Country |
Percentage
Shareholding |
Description | |||
Aimia Foods Limited | England and Wales | 100 | Food and beverage manufacturing and distribution | |||
Aimia Foods Group Limited | England and Wales | 100 | Intermediate Holding Company | |||
Stockpack Limited | England and Wales | 100 | Dormant | |||
Aimia Foods EBT Company Limited | England and Wales | 100 | Employee benefits trust |
28. | Financial Instruments |
The Group incurs foreign exchange risk on sales and purchases that are denominated in currencies other than sterling. The Group uses forward exchange contracts to hedge this risk. The fair value of the Groups forward contracts to buy Euros at 31 December 2013 was £1,446,000 (2012 - £1,835,000). The fair value of the Groups forward contracts to buy Dollars at 31 December 2013 was £340,000 (2012 - £nil).
29. | Related party transactions |
The company has taken advantage of the exemption in Financial Reporting Standard No. 8 Related party disclosures and has not disclosed transactions with group undertakings, all of which are eliminated on consolidation.
During the period, the company paid rent of £4,250 (2012: £4,250) in relation to a property owned by Mr I M Unsworth and Mr R N Unsworth. As at 31 December 2013, the rent prepaid amounted to £4,250 (2012: £2,125).
20
AIMIA Foods Holdings Limited
Notes to the unaudited financial statements
For the six months ended 31 December 2013
30. | Post balance sheet events |
Cott Ventures Ltd., a subsidiary of Cott Corporation, acquired 100 percent of the share capital of the Aimia Foods Holdings Limited, pursuant to a Share Purchase Agreement dated May 30, 2014. The aggregate purchase price for the Aimia Acquisition was £52.1 million payable in cash, which included a payment for estimated closing balance sheet working capital, £19.9 million in deferred consideration to be paid by September 30, 2014, and aggregate contingent consideration of up to £15.9 million, which is payable upon the achievement of certain performance measures during 52 weeks ending July 1, 2016.
Prior to the transaction, the Group settled all balances owed between group companies and secured finance lease creditors.
31. | Ultimate controlling party |
Subsequent to 30 May 2014, the ultimate controlling party is Cott Corporation by virtue of its 100% shareholding. Prior to that date the ultimate controlling party was the Unsworth family.
21
Exhibit 99.4
Cott and Aimia Unaudited Pro Forma Condensed Combined Financial Statements
On May 30, 2014, the United Kingdom / Europe (U.K.) Business Unit of Cott Corporation (Cott or the Company) entered into a Share Purchase Agreement (the SPA) pursuant to which it acquired on that date all of the issued share capital of Aimia Foods Holdings Limited (Aimia). Aimia, a privately-held company headquartered in Merseyside, United Kingdom, manufactures, sells and distributes food and beverages, including hot chocolate, coffee, malt drinks, creamers/whiteners and cereals. The purchase price under the SPA, based on exchange rates in effect on the acquisition date of May 30, 2014, includes the payment of approximately $80.4 million at closing plus a $7.2 million adjustment for working capital, $33.5 million in deferred consideration payable in September 2014, and on-target earnout consideration of $20.1 million, with a minimum earnout consideration of $13.4 million and a maximum earnout consideration of $26.9 million, based upon the achievement of certain performance measures during the twelve months ending July 1, 2016. The SPA contains representations, warranties, covenants and conditions that the Company believes are customary for a transaction of this size and type, as well as indemnification provisions subject to specified limitations.
The unaudited pro forma condensed combined financial statements have been prepared to illustrate the effect of the acquisition of Aimia, including related financing. The unaudited pro forma condensed combined balance sheet combines the historical consolidated balance sheet of Cott, derived from the Companys Form 10-Q filed with the U.S. Securities and Exchange Commission (SEC) on May 8, 2014, and the historical consolidated balance sheet of Aimia, giving effect to the acquisition of Aimia as if it had occurred on March 29, 2014. The unaudited pro forma condensed combined statement of operations for the twelve months ended December 28, 2013, and for the three months ended March 29, 2014 combines the historical consolidated statements of operations of Cott, derived from the Companys Form 10-K filed with the SEC on February 24, 2014 and Form 10-Q filed on May 8, 2014, and the historical consolidated profit and loss accounts of Aimia, giving effect to the acquisition of Aimia as if it had occurred on December 30, 2012. The historical financial information of Aimia in the condensed combined statements of operations for the twelve months ended December 31, 2013 is calculated by adding the unaudited historical financial information of Aimia in the consolidated profit and loss account for the six months ended December 31, 2013 and the audited historical financial information of Aimia in the consolidated profit and loss account for the year ended June 30, 2013, and subtracting the unaudited historical financial information of Aimia in the consolidated profit and loss account for the six months ended December 31, 2012. The historical financial information has been adjusted to give effect to matters that are (i) directly attributable to the acquisition of Aimia, (ii) factually supportable, and (iii) with respect to the statements of operations, expected to have a continuing impact on the operating results of the combined company. The unaudited pro forma condensed combined financial statements should be read in conjunction with the accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Statements and:
| the audited historical financial statements of Cott Corporation, as of and for the year ended December 28, 2013, included in Cotts Annual Report on Form 10-K filed with the SEC on February 24, 2014; |
| the unaudited historical financial statements of Cott Corporation, as of and for the three months ended March 29, 2014 and the three months ended March 30, 2013, included in Cotts Quarterly Report on Form 10-Q filed with the SEC on May 8, 2014; |
| the audited historical financial statements of Aimia as of and for the year ended June 30, 2013, included in this Current Report on Form 8-K; and |
| the unaudited historical financial statements of Aimia as of and for the six months ended December 31, 2013 and the six months ended December 31, 2012, and as of and for the three months ended March 31, 2014 included in this Current Report on Form 8-K. |
The unaudited pro forma condensed combined financial statements have been prepared using the acquisition method of accounting, with Cott treated as the acquirer. The unaudited pro forma condensed combined financial statements will differ from our final acquisition accounting for a number of reasons, including the fact that our estimates of fair values of assets and liabilities acquired are preliminary and subject to change when our formal valuation and other studies are finalized. The differences that will occur between the preliminary estimates and the final acquisition accounting could have a material impact on the accompanying unaudited pro forma condensed combined financial statements.
The unaudited pro forma condensed combined financial statements are presented for informational purposes only. They have been prepared in accordance with Article 11 of Regulation S-X of the SEC and are not necessarily indicative of what our financial position or results of operations actually would have been had we completed the acquisition of Aimia at the dates indicated, nor do they purport to project the future financial position or operating results of the combined company. The unaudited pro forma condensed combined statements of operations do not reflect any revenue or cost savings from synergies that may be achieved with respect to the combined companies, or the impact of non-recurring items, including synergies, directly related to the acquisition of Aimia.
Cott Corporation
Unaudited Pro Forma Condensed Combined Balance Sheet
As of March 29, 2014
Historical at March 29, 2014 | Proforma Adjustments | |||||||||||||||||||||||||||||||||||
Pro Forma Combined at | ||||||||||||||||||||||||||||||||||||
Cott | Aimia | UK to US GAAP | Bond Offering | Purchase Accounting | March 29, 2014 | |||||||||||||||||||||||||||||||
(In millions of U.S. Dollars) | ||||||||||||||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||||||||||
Current Assets |
A | A | A | |||||||||||||||||||||||||||||||||
Cash & cash equivalents |
$ | 40.6 | $ | 15.3 | $ | | $ | 111.8 | C | $ | (86.7 | ) | D | $ | 81.0 | |||||||||||||||||||||
Accounts receivable, net of allowance |
237.9 | 11.5 | | | | 249.4 | ||||||||||||||||||||||||||||||
Income taxes recoverable |
1.1 | | | | | 1.1 | ||||||||||||||||||||||||||||||
Inventories |
249.0 | 8.3 | | | 1.2 | E | 258.5 | |||||||||||||||||||||||||||||
Prepaid expenses and other current assets |
19.1 | 1.1 | | | | 20.2 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total current assets |
547.7 | 36.2 | | 111.8 | (85.5 | ) | 610.2 | |||||||||||||||||||||||||||||
Property, plant and equipment, net |
472.6 | 5.8 | 3.0 | B | | 1.6 | F | 483.0 | ||||||||||||||||||||||||||||
Goodwill |
136.5 | 10.0 | 5.1 | B | | 31.7 | G | 183.3 | ||||||||||||||||||||||||||||
Intangibles and other assets, net |
292.1 | 1.1 | 0.2 | B | 5.6 | C | 83.8 | H | 382.8 | |||||||||||||||||||||||||||
Deferred income taxes |
4.9 | 0.4 | | | | 5.3 | ||||||||||||||||||||||||||||||
Other tax receivable |
0.4 | | | | | 0.4 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total assets |
$ | 1,454.2 | $ | 53.5 | $ | 8.3 | $ | 117.4 | $ | 31.6 | $ | 1,665.0 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
LIABILITIES AND EQUITY |
||||||||||||||||||||||||||||||||||||
Current Liabilities |
||||||||||||||||||||||||||||||||||||
Short-term borrowings |
$ | 130.9 | $ | | $ | | $ | | $ | | $ | 130.9 | ||||||||||||||||||||||||
Current maturities of long-term debt |
3.9 | 2.2 | | | (2.2 | ) | I | 3.9 | ||||||||||||||||||||||||||||
Accounts payable and accrued liabilities |
273.8 | 22.0 | 0.3 | B | (8.3 | ) | C | 34.6 | D | 322.4 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total current liabilities |
408.6 | 24.2 | 0.3 | (8.3 | ) | 32.4 | 457.2 | |||||||||||||||||||||||||||||
Long-term debt |
387.8 | 5.2 | | 150.0 | C | (5.2 | ) | I | 537.8 | |||||||||||||||||||||||||||
Deferred income taxes |
41.8 | | | | 17.3 | J | 59.1 | |||||||||||||||||||||||||||||
Other long-term liabilities |
20.8 | | 2.7 | B | | 18.3 | D | 41.8 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total liabilities |
859.0 | 29.4 | 3.0 | 141.7 | 62.8 | 1,095.9 | ||||||||||||||||||||||||||||||
Equity |
||||||||||||||||||||||||||||||||||||
Capital stock |
393.6 | 0.8 | | | (0.8 | ) | K | 393.6 | ||||||||||||||||||||||||||||
Additional paid-in capital |
44.2 | | | | | 44.2 | ||||||||||||||||||||||||||||||
Retained earnings |
167.3 | 23.3 | 5.3 | B | (24.3 | ) | C | (30.4 | ) | K | 141.2 | |||||||||||||||||||||||||
Accumulated other comprehensive loss |
(18.5 | ) | | | | | (18.5 | ) | ||||||||||||||||||||||||||||
Non-controlling interests |
8.6 | | | | | 8.6 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total equity |
595.2 | 24.1 | 5.3 | (24.3 | ) | (31.2 | ) | 569.1 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total liabilities and equity |
$ | 1,454.2 | $ | 53.5 | $ | 8.3 | $ | 117.4 | $ | 31.6 | $ | 1,665.0 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Cott Corporation
Unaudited Pro Forma Condensed Combined Statement of Operations
For the three months ended March 29, 2014
Historical for the three months | ||||||||||||||||||||||||||||||
ended March 29, 2014 | Proforma Adjustments | |||||||||||||||||||||||||||||
Pro Forma Combined for | ||||||||||||||||||||||||||||||
Cott | Aimia |
UK to US
GAAP |
Bond Offering |
Purchase
Accounting |
the three months ended
March 29, 2014 |
|||||||||||||||||||||||||
(In millions of U.S. Dollars) | ||||||||||||||||||||||||||||||
A | A | A | ||||||||||||||||||||||||||||
Revenue, net |
$ | 475.1 | $ | 29.8 | $ | 0.1 | B | $ | | $ | | $ | 505.0 | |||||||||||||||||
Cost of sales |
424.8 | 22.0 | 0.1 | B | | 0.4 | G | 447.3 | ||||||||||||||||||||||
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Gross profit |
50.3 | 7.8 | | | (0.4 | ) | 57.7 | |||||||||||||||||||||||
Selling, general and administrative expenses |
42.3 | 3.3 | (0.2 | ) | C | | 1.0 | G | 46.4 | |||||||||||||||||||||
Loss on disposal of property, plant and equipment |
0.1 | | | | | 0.1 | ||||||||||||||||||||||||
Restructuring and asset impairments |
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Restructuring |
2.2 | | | | | 2.2 | ||||||||||||||||||||||||
Asset impairments |
1.6 | | | | | 1.6 | ||||||||||||||||||||||||
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Operating income |
4.1 | 4.5 | 0.2 | | (1.4 | ) | 7.4 | |||||||||||||||||||||||
Other (income) expense, net |
(2.3 | ) | | (0.0 | ) | D | | | (2.3 | ) | ||||||||||||||||||||
Interest expense, net |
9.8 | 0.1 | | (0.5 | ) | F | (0.1 | ) | H | 9.3 | ||||||||||||||||||||
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Income (loss) before income taxes |
(3.4 | ) | 4.4 | 0.2 | 0.5 | (1.3 | ) | 0.4 | ||||||||||||||||||||||
Income tax (benefit) expense |
(0.9 | ) | 1.0 | 0.1 | E | 0.1 | E | (0.3 | ) | E | (0.0 | ) | ||||||||||||||||||
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Net income (loss) |
$ | (2.5 | ) | $ | 3.4 | $ | 0.2 | $ | 0.4 | $ | (1.0 | ) | $ | 0.4 | ||||||||||||||||
Less: Net income attributable to non-controlling interest |
1.4 | | | | | 1.4 | ||||||||||||||||||||||||
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Net loss attributed to Cott Corporation |
$ | (3.9 | ) | $ | 3.4 | $ | 0.2 | $ | 0.4 | $ | (1.0 | ) | $ | (1.0 | ) | |||||||||||||||
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Net income per common share |
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Basic |
$ | (0.04 | ) | $ | (0.01 | ) | ||||||||||||||||||||||||
Diluted |
$ | (0.04 | ) | $ | (0.01 | ) | ||||||||||||||||||||||||
Weighted average outstanding shares (in thousands) |
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Basic |
94,319 | 94,319 | ||||||||||||||||||||||||||||
Diluted |
94,319 | 94,319 |
Cott Corporation
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ended December 28, 2013
Historical for the year ended | ||||||||||||||||||||||||||||||
December 28, 2013 | Proforma Adjustments | |||||||||||||||||||||||||||||
Pro Forma Combined | ||||||||||||||||||||||||||||||
Cott | Aimia |
UK to US
GAAP |
Bond Offering |
Purchase
Accounting |
for the year ended
December 28, 2013 |
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(In millions of U.S. Dollars) | ||||||||||||||||||||||||||||||
A | A | A | ||||||||||||||||||||||||||||
Revenue, net |
$ | 2,094.0 | $ | 98.3 | $ | 0.1 | B | $ | | $ | | $ | 2,192.4 | |||||||||||||||||
Cost of sales |
1,842.0 | 75.2 | 0.1 | B | | 2.8 | G | 1,920.1 | ||||||||||||||||||||||
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Gross profit |
252.0 | 23.1 | | | (2.8 | ) | 272.3 | |||||||||||||||||||||||
Selling, general and administrative expenses |
160.4 | 10.3 | (0.7 | ) | C | | 4.5 | G | 174.5 | |||||||||||||||||||||
Loss on disposal of property, plant and equipment |
1.0 | | | | | 1.0 | ||||||||||||||||||||||||
Restructuring and asset impairments |
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Restructuring |
2.0 | | | | | 2.0 | ||||||||||||||||||||||||
Asset impairments |
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Operating income |
88.6 | 12.8 | 0.7 | | (7.3 | ) | 94.8 | |||||||||||||||||||||||
Other (income) expense, net |
12.8 | | (0.1 | ) | D | 12.7 | ||||||||||||||||||||||||
Interest expense, net |
51.6 | 0.2 | | (2.1 | ) | F | (0.2 | ) | H | 49.5 | ||||||||||||||||||||
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Income before income taxes |
24.2 | 12.6 | 0.8 | 2.1 | (7.1 | ) | 32.6 | |||||||||||||||||||||||
Income tax (benefit) expense |
2.2 | 2.9 | 0.2 | E | 0.2 | E | (1.6 | ) | E | 3.9 | ||||||||||||||||||||
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Net income |
$ | 22.0 | $ | 9.7 | $ | 0.6 | $ | 1.9 | $ | (5.5 | ) | $ | 28.7 | |||||||||||||||||
Less: Net income attributable to non-controlling interest |
5.0 | | | | | 5.0 | ||||||||||||||||||||||||
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Net income attributed to Cott Corporation |
$ | 17.0 | $ | 9.7 | $ | 0.6 | $ | 1.9 | $ | (5.5 | ) | $ | 23.7 | |||||||||||||||||
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Net income per common share |
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Basic |
$ | 0.18 | $ | 0.25 | ||||||||||||||||||||||||||
Diluted |
$ | 0.18 | $ | 0.25 | ||||||||||||||||||||||||||
Weighted average outstanding shares (in thousands) |
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Basic |
94,750 | 94,750 | ||||||||||||||||||||||||||||
Diluted |
95,633 | 95,633 |
Notes to the Unaudited Pro Forma Condensed Combined Financial Statements
Note 1Basis of Presentation
The historical financial information of Cott is presented in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The historical financial information of Aimia is presented in accordance with accounting principles generally accepted in the United Kingdom, or U.K. GAAP. The unaudited pro forma condensed combined balance sheet at March 29, 2014 was prepared using the historical unaudited consolidated balance sheets of Cott and Aimia as of March 29, 2014 and March 31, 2014, respectively. The unaudited pro forma condensed combined statement of operations for the year ended December 28, 2013 was prepared using the historical audited consolidated statements of operations of Cott for the fiscal year ended December 28, 2013 and the historical audited consolidated profit and loss account of Aimia for the fiscal year ended June 30, 2013 and the historical unaudited consolidated profit and loss accounts of Aimia for the six month periods ended December 31, 2013 and December 31, 2012. The unaudited pro forma condensed combined statement of operations for the three months ended March 29, 2014 was prepared using the historical unaudited consolidated statements of operations of Cott for the three months ended March 29, 2014 and the unaudited consolidated profit and loss account of Aimia for the three months ended March 31, 2014. The historical financial information of Aimia in the condensed combined statements of operations for the twelve months ended December 28, 2013 is calculated by adding the unaudited historical financial information of Aimia in the consolidated profit and loss account for the six months ended December 31, 2013 and the audited historical financial information of Aimia in the consolidated profit and loss account for the year ended June 30, 2013, and subtracting the unaudited historical financial information of Aimia in the consolidated profit and loss account for the six months ended December 31, 2012. Certain historical financial information of Aimia has been reclassified to conform to the presentation of historical financial information of Cott.
The unaudited pro forma condensed combined financial statements were prepared using the acquisition method of accounting. Pursuant to the terms of the SPA, Cott is treated as the acquirer of Aimia. Accordingly, we have adjusted the historical consolidated balance sheets to give effect to the impact of the consideration issued in connection with the acquisition of Aimia as if the acquisition occurred on March 29, 2014. The historical consolidated statements of operations and profit and loss accounts have been adjusted to give effect to the impact of the acquisition and related financing as if the acquisition occurred on December 30, 2012. The purchase price has been allocated in the unaudited pro forma condensed combined balance sheet, based on managements preliminary estimate of their respective values. Definitive allocations of the purchase price will be performed based on the exchange rates in affect on the acquisition date. Accordingly, the purchase price allocation adjustments and related amortization reflected in the following unaudited pro forma condensed combined financial statements are preliminary based on exchange rates in effect on March 29, 2014, and have been made solely for the purpose of preparing these statements and are subject to revision based on a final determination of fair value after the finalization of our valuation studies. For example, if the value of the finite-lived intangible assets increased by 10%, annual pro forma operating income would decrease by approximately $0.5 million. The unaudited pro forma condensed combined statements of operations also include certain acquisition accounting adjustments that are expected to have a continuing impact on the combined results, such as changes in interest expense related to debt refinancing and amortization of acquired assets.
Note 2Preliminary Purchase Price Allocation
The purchase price for the acquisition of Aimia is $137.5 million based on a pound sterling to U.S. dollar conversion rate of 1.6625 as if the acquisition was completed on March 29, 2014. The purchase price included $86.7 million payable in cash at closing, which includes a payment for working capital, $33.1 million in deferred consideration to be paid in September 2014 and contingent consideration of up to $26.5 million if certain performance measures during the twelve months ending July 1, 2016 are achieved. This contingent consideration is payable in August 2016. For purposes of the unaudited pro forma condensed combined financial statements the contingent consideration is treated as fully earned at a target amount of $17.7 million, which is the estimated fair value of the contingent consideration.
The purchase price of $137.5 million has been allocated to the assets acquired and the liabilities assumed as follows (in millions):
Cash and cash equivalents |
$ | 15.3 | ||
Accounts receivable |
11.5 | |||
Inventories |
9.5 | |||
Prepaid expenses and other current assets |
1.1 | |||
Property, plant and equipment |
10.4 | |||
Identifiable intangibles and other assets |
85.1 | |||
Goodwill |
46.8 | |||
Deferred income taxes |
(16.9 | ) | ||
Accounts payable and accrued liabilities |
(22.0 | ) | ||
Other long term liabilities |
(3.3 | ) | ||
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Total purchase price |
$ | 137.5 | ||
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For the purpose of preparing the unaudited pro forma condensed combined financial statements, certain of the assets acquired and liabilities assumed have been measured at their estimated fair values as of March 29, 2014. A final determination of fair values will be based on the actual assets and liabilities that existed on the date of the closing of the acquisition of Aimia and on our formal valuation and other studies when they are finalized. Accordingly, the fair values of the assets and liabilities included in the table above are preliminary and subject to change pending additional information that may become known as well as for changes in the exchange rate between the pound sterling and the U.S. dollar subsequent to March 29, 2014 to the acquisition date. An increase in the fair value of inventory, property, plant and equipment, or any identifiable intangible assets will reduce the amount of goodwill in the unaudited pro forma condensed combined financial statements, and may result in increased cost of sales, depreciation, and/or amortization expense.
The following outlines the adjustments made to Aimias assets and liabilities in connection with the preparation of these unaudited pro forma condensed combined financial statements:
Intangible Assets: Based on our initial assessments as well as discussions with Aimia management and our external valuation advisors, Cott identified customer relationships and licensing agreements as the most significant intangible assets. The determination of fair value for these assets was determined using the excess earnings method and is primarily based upon expected discounted cash flows according to currently available information, such as Aimias historical and projected revenues, customer attrition rates, licensing agreement terms and certain other high level assumptions. Cott assigned a value of $75.7 million to customer relationships and licensing agreements, the values of which were estimated with the assistance of our external third party valuation advisors. The estimated economic life is 15 years. Based on these assumptions our annual amortization for customer relationships and licensing agreements is approximately $5.0 million.
The fair value and estimated economic life assigned to the intangible assets are preliminary estimates and the final fair values and/or lives may be different. We also may identify additional intangible assets as we integrate Aimias operations. The difference could have a material impact on the accompanying unaudited pro forma condensed combined financial statements.
Inventories: Inventories reflect an adjustment of $1.2 million to reflect the fair value of the inventories on hand. This step-up in inventory effectively represents the net realizable value of Aimias finished goods inventories less expected selling costs and thus will temporarily impact our gross margins after closing until such inventory has been sold. Therefore, this step-up amount is considered non-recurring and is not included in the unaudited pro forma condensed combined statement of operations for the three month period ended March 29, 2014 as it would have only impacted gross margins in the year ended December 28, 2013.
Contingent Consideration: Pursuant to the SPA, Cott is required to make a contingent consideration payment based on certain adjusted earnings targets for Aimia for the twelve months ending July 1, 2016. We have adjusted these unaudited condensed combined pro forma financials for the estimated fair value of the expected payment amounts of $17.7 million. The fair value of the contingent consideration was determined by estimating the probability of achieving the various earnings targets and taking a weighted average. This value was then discounted to present value utilizing a discount factor. The estimated payment is preliminary and is subject to a number of factors that may cause the actual results to differ materially.
Debt: Approximately $7.4 million of Aimias debt associated with capital leases was repaid prior to the acquisition date by the former owners of Aimia.
Goodwill: Goodwill is calculated as the difference between the acquisition date fair value of the consideration expected to be transferred and the values assigned to the assets acquired and liabilities assumed. Goodwill is not amortized and is subject to an annual fair value impairment test. None of the goodwill is expected to be deductible for tax purposes.
Property, Plant and Equipment: The acquired property, plant and equipment includes an adjustment to the historical net book value of $4.6 million to reflect the fair value of the acquired assets.
Note 3Adjustments to U.K. GAAP
For the purpose of presenting the unaudited condensed combined financial statements, certain adjustments were made to the historical financial information of Aimia to present it in accordance with U.S. GAAP.
Note 4Adjustments to unaudited Pro Forma Condensed Combined Balance Sheets
AThese amounts in millions of U.S. Dollars have been converted from pounds sterling at a conversion rate of 1.6625, which approximates the exchange rate at March 29, 2014.
BThese adjustments are to reflect the historical balances of Aimia in accordance with U.S. GAAP. The $5.1 million reverses the cumulative amortization of goodwill. The $0.2 million increases the value of an Aimia investment in a joint venture that was historically held at cost that would be accounted for under the equity method of accounting in U.S. GAAP. These adjustments are offset by an increase to retained earnings of $5.3 million. The increase to property, plant and equipment is to account for the portion of machinery and equipment financed by a customer net of accumulated depreciation of $3.0 million and the unamortized portion of the machinery and equipment cost financed by the customer, of which $0.3 million would be recognized in the next 12 months, with the remaining $2.7 million to be recognized in revenue over the remaining term of the agreement with that customer, or the equipment useful life, whichever is less.
CThese adjustments display the impact of the repayment of Cotts 8.125% senior notes due 2018 (the 2018 Notes) with the 5.375% senior notes due 2022 (the 2022 Notes), and all related transaction costs. A portion of the remaining proceeds from the 2022 Notes after repayment of the 2018 Notes were used to fund the initial cash payment and working capital amounts due to the sellers of Aimia of $86.7 million. These amounts represent additional borrowings of $525.0 million under the 2022 Notes, net of a repayment of $375.0 million of the 2018 Notes, which included an accrued interest repayment of $10.1 million which is reflected as a decrease to accounts payable and accrued liabilities, and a repayment premium on the 2018 Notes of $20.0 million, tender related expenses of $0.2 million and amortization of deferred financing costs associated with the repaid 2018 Notes of $4.1 million. Underwriter and third party expenses associated with the 2022 Notes of $9.7 million were capitalized, of which $1.8 million is reflected as an increase to accounts payable and accrued liabilities.
DRepresents the initial cash payment and working capital adjustment payment of $86.7 million, the deferred consideration payable in September 2014 of $33.1 million, and the contingent earn-out consideration of $17.7 million payable in August of 2016, as well as an estimated $3.3 million related to an Aimia tax liability. The $3.3 million liability has been offset by an indemnification asset. See comment H. Accounts payable and accrued liabilities also contains an adjustment of $1.8 million related to Aimia related acquisition costs, which are offset in retained earnings. See comment K. Those acquisition costs, including financial and legal advisory fees, are excluded from the unaudited pro forma condensed combined statement of operations for the fiscal year ended December 28, 2013 and for the three months ended March 29, 2014, as they are considered non-recurring. This adjustment also includes the elimination of the deferred income amounts associated with the portion of historical cost of machinery and equipment financed by a customer, as there is no continuing obligation to the Company associated with this deferred income and as such, has no fair value.
EThis adjustment reflects an increase in the value of inventory to record at fair value. The fair value of raw materials inventory is assumed to be equivalent to the most recent purchase price. The fair value of finished goods inventory is based upon expected selling price, less associated costs of disposal, including a reasonable margin associated with the disposition.
FThis amount represents the adjustment necessary to record the property, plant and equipment acquired in the acquisition of Aimia at fair value.
GThis adjustment reflects the preliminary estimate of goodwill from the acquisition of Aimia after allocating the purchase price to the fair value of net assets acquired and liabilities assumed, net of elimination of Aimia goodwill of $15.1 million.
HThis adjustment reflects the preliminary valuation of approximately $75.7 million of identifiable customer relationships and licensing agreements, $1.5 million of trademark assets, and $2.8 million attributed to non-competition agreements, as well as $0.5 million related to adjusting the Aimia joint venture investment to fair value, and an indemnification asset of $3.3 million related to expected indemnification for an Aimia tax liability. See comment D.
IThis adjustment reflects the elimination of current and long-term portions of unamortized capital lease balances which were paid off by the former owners of Aimia prior to the acquisition of Aimia by the Company.
JThis adjustment reflects the deferred tax liabilities recognized on new book to tax basis difference in acquired property, plant and equipment, inventories and intangible assets, as well as the increase in fair value recorded associated with the joint venture investment accounted for under the equity method.
KThese adjustments reflect the elimination of historical share capital and retained earnings of Aimia, as well as an adjustment to recognize $1.8 million of Aimia related acquisition costs.
Note 5Adjustments to unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended March 29, 2014
AThese amounts in millions of U.S. Dollars have been converted from pounds sterling at a conversion rate of 1.65407, which approximates the average exchange rate over the period from December 29, 2013 through March 29, 2014.
BThis adjustment is to reflect the amortization of the deferred income associated with the portion of the historical cost of machinery and equipment financed by a customer, and an increase in depreciation expense associated with the increase in historical cost of the equipment in accordance with U.S. GAAP. The machinery and equipment was historically recorded under U.K. GAAP at the portion of the historical cost of the equipment paid by Aimia.
CThis adjustment is to reflect the historical balances of Aimia in accordance with U.S. GAAP. The decrease in selling, general and administrative expenses of $0.2 million reverses the amortization of goodwill recognized by Aimia in accordance with U.K. GAAP during the three months ended March 29, 2014.
DThe $0.0 million increase in other income reflects Aimias equity in earnings of its joint venture investment in accordance with U.S. GAAP equity method of accounting for investments, which was previously accounted for at cost under U.K. GAAP. The amount recognized was less than $100,000 and as such is not reflected in the rounding.
EThe adjustment in the bond offering column assumes income taxes assessed at the same effective rate applicable to Cott Corporation, as those transactions are specific to the Company. The adjustments in the other pro forma adjustment columns assume income taxes based on Aimias historical statutory income tax rate. However, the effective tax rate of the combined company could be significantly different, depending on post-acquisition activities.
FThis adjustment represents an interest rate savings associated with the refinance of the 2018 Notes with the 2022 Notes and reducing the interest rate from 8.125% to 5.375%, including the impact of the change in amortization of deferred financing costs.
GThis adjustment represents an increase in amortization expense for the fair value of intangible assets acquired in the acquisition of Aimia, as well as an increase in depreciation for the step up of acquired property, plant and equipment to their fair values as of the acquisition date totaling $1.7 million, of which $1.3 million is related to the amortization of the customer relationships and licensing agreements intangible assets recorded as an adjustment to selling, general and administrative expenses. The adjustment to selling, general and administrative expenses was reduced by $0.3 million to eliminate certain acquisition related costs reflected in the historical profit and loss accounts of Aimia for the three months ended March 29, 2014. Those acquisition costs, which included financial and other advisory fees, are excluded from the unaudited pro forma condensed combined statement of operations for the three months ended March 29, 2014, as they are considered non-recurring.
HThis adjustment reverses the historical interest expense of Aimia as all interest bearing liabilities were repaid by the former owners of Aimia prior to the acquisition.
Note 6Adjustment to unaudited Pro Forma Condensed Combined Statements of Operations for the year ended December 28, 2013
AThese amounts in millions of U.S. Dollars have been converted from pounds sterling at a conversion rate of 1.56433, which approximates the average exchange rate over the period from December 30, 2012 through December 28, 2013.
BThis adjustment is to reflect the amortization of the deferred income associated with the portion of the historical cost of machinery and equipment financed by a customer, and an increase in depreciation expense associated with the increase in historical cost of the equipment in accordance with U.S. GAAP. The machinery and equipment was historically recorded under U.K. GAAP at the portion of the historical cost of the equipment paid directly by Aimia.
CThis adjustment is to reflect the historical balances of Aimia in accordance with U.S. GAAP. The decrease in selling, general and administrative expenses of $0.7 million reverses the amortization of goodwill recognized by Aimia in accordance with U.K. GAAP during the year ended December 28, 2013.
DThe $0.1 million increase in other income reflects Aimias equity in earnings of its joint venture investment in accordance with U.S. GAAP equity method of accounting for investments, which was previously accounted for at cost under U.K. GAAP.
EThe adjustment in the bond offering column assumes income taxes assessed at the same effective rate applicable to Cott Corporation, as those transactions are specific to the Company. The adjustments in the other pro forma adjustment columns assume income taxes based on Aimias historical statutory income tax rate. However, the effective tax rate of the combined company could be significantly different, depending on post-acquisition activities.
FThis adjustment represents an interest rate savings associated with the refinance of the 2018 Notes with the 2022 Notes and reducing the interest rate from 8.125% to 5.375%, including the impact of the change in amortization of deferred financing costs.
GThis adjustment represents an increase in amortization expense for the fair value of intangible assets acquired in the acquisition of Aimia, as well as an increase in depreciation for the step up of acquired property, plant and equipment to their fair values as of the acquisition date totaling $6.4 million, of which $4.7 million is related to the amortization of the customer relationships and licensing agreements intangible assets recorded as an adjustment to selling, general and administrative expenses. The adjustment to selling, general and administrative expenses was reduced by $0.2 million to eliminate certain acquisition related costs reflected in the historical profit and loss accounts of Aimia for the year ended December 28, 2013. Those acquisition costs, which included financial and other advisory fees, are excluded from the unaudited pro forma condensed combined statement of operations for the year ended December 28, 2013, as they are considered non-recurring. The remaining $1.1 million is attributable to an increase in cost of goods sold associated with the increase in fair value of acquired finished goods inventories sold during the year ended December 28, 2013.
HThis adjustment reverses the historical interest expense of Aimia as all interest bearing liabilities were repaid by the former owners of Aimia prior to the acquisition.