Coca-Cola Bottling's Q1 net income up 26.9% to US$5.9M, as net sales grew 3.5% to US$359.6M; despite positive performance, company preparing for tougher remainder of 2011 due to higher fuel, commodity costs
Graziela Medina Shepnick
CHARLOTTE, North Carolina
,
May 11, 2011
(press release)
–
Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE - News) today announced it earned $5.9 million, or basic net income per share of $.64, on net sales of $359.6 million for the first quarter of 2011, compared to net income of $4.7 million, or basic net income per share of $.51, on net sales of $347.5 million for the first quarter of 2010. The results for the first quarter of 2011 included $0.4 million of after-tax losses ($0.7 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges. The results for the first quarter of 2010 included $0.1 million of after-tax gains ($0.2 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges and a $0.5 million increase in income tax expense due to the change in tax law eliminating the tax deduction once available for Medicare Part D subsidies.
Basic Net Income Per Share —Enjoy Coca-Cola—
On a comparable basis, the Company earned $6.4 million in the first quarter of 2011, or comparable basic net income per share of $.69, versus $4.9 million in the first quarter of 2010, or comparable basic net income per share of $.54.
The following table reconciles reported GAAP net income and basic net income per share to comparable net income and basic net income per share for the first quarter of 2011 and 2010:
(a) This non-GAAP financial information is provided to allow investors to more clearly evaluate operating performance and business trends for the first quarters of 2011 and 2010. Management uses this information to review results excluding items that are not necessarily indicative of ongoing results.
First Quarter
Net Income
In Thousands, Except Per Share Amounts
2011
2010
2011
2010
Reported net income (GAAP)
$
5,913
$
4,660
$
0.64
$
0.51
Net (gain) loss on fuel & aluminum hedges, net of tax
396
(149
)
0.04
(0.02
)
Impact of change in tax law regarding Medicare Part D subsidy
-
464
-
0.05
Other income tax changes
62
(35
)
0.01
(0.00
)
Total
458
280
0.05
0.03
Comparable net income (a)
$
6,371
$
4,940
$
0.69
$
0.54
J. Frank Harrison, III, Chairman and CEO, said, “We are pleased with our first quarter results. We continued to grow our revenue and effectively control costs which resulted in a strong start to 2011. Our first quarter results reflect strong execution across our entire business. We continue to face many challenges including the potential for significant increases in commodity costs and persistently high unemployment in the areas we serve. ”
William B. Elmore, President and COO, added, “Our strong first quarter results are a great start for the year. However, we believe that our greatest challenges in 2011 lie in the months ahead. As we look to the remainder of 2011, the challenges are expected to get tougher as higher commodity prices will have greater impact on costs. We are also starting to see lower sales trends in our convenience store business as consumers react to higher fuel prices. As we have been doing over the past several years, we will continue to look for ways to improve our supply chain and minimize our operating costs. We will also review our pricing and make adjustments as necessary to maintain our profitability.”
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Data)
First Quarter
2011
2010
Net sales
$
359,629
$
347,498
Cost of sales
210,468
200,795
Gross margin
149,161
146,703
Selling, delivery and administrative expenses
129,982
129,044
Income from operations
19,179
17,659
Interest expense
8,769
8,810
Income before income taxes
10,410
8,849
Income taxes
3,941
3,714
Net income
6,469
5,135
Less: Net income attributable to the
noncontrolling interest
556
475
Net income attributable to Coca-Cola Bottling Co.
Consolidated
$
5,913
$
4,660
Basic net income per share based on net
income attributable to Coca-Cola Bottling Co.
Consolidated:
Common Stock
$
0.64
$
0.51
Weighted average number of Common
Stock shares outstanding
7,141
7,141
Class B Common Stock
$
0.64
$
0.51
Weighted average number of Class B
Common Stock shares outstanding
2,051
2,029
Diluted net income per share based on net
income attributable to Coca-Cola Bottling Co.
Consolidated:
Common Stock
$
0.64
$
0.51
Weighted average number of Common
Stock shares outstanding – assuming dilution
9,232
9,210
Class B Common Stock
$
0.64
$
0.50
Weighted average number of Class B Common
Stock shares outstanding – assuming dilution
2,091
2,069
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