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

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.

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:

               
  First Quarter
  Net Income  

Basic Net Income Per

Share

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  
               
(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.

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.”

 

—Enjoy Coca-Cola—

 

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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