(Unless stated otherwise, all first quarter 2018 comparisons are
relative to the first quarter of 2017; all information is in U.S.
dollars.)
TORONTO and TAMPA, FL, May 3,
2018 /CNW/ - Cott Corporation (NYSE:COT; TSX:BCB) today
announced its results for the first quarter ended March 31, 2018.
Following the closing of the sale of Cott's traditional business
on January 30, 2018, Cott became a
pure play water, coffee and filtration business. In keeping
with Cott's new "better for you" business focus, Cott has updated
its corporate logo to reflect its new business of water and coffee
services.
FIRST QUARTER 2018 HIGHLIGHTS – CONTINUING
OPERATIONS
- Revenue increased 4% (3% excluding the impact of foreign
exchange and adjusted for comparable trading days) to $561 million compared to $537 million.
- Reported net income and net income per diluted share were
$5 million and $0.03, respectively. Adjusted EBITDA increased 8%
to $65 million.
- Cott completed the sale of its traditional beverage
manufacturing business to Refresco Group N.V. ("Refresco") on
January 30, 2018 for $1.25 billion, of which approximately
$1.1 billion of proceeds were
utilized to repay outstanding debt (inclusive of principal, premium
and interest payments). As of March 31,
2018, Cott's leverage was 3.6 times (net debt to LTM
adjusted EBITDA).
- On March 23, 2018, Cott completed
the acquisition of Crystal Rock Holdings, Inc., a
direct-to-consumer home and office water, coffee, and filtration
services business. On April 9, 2018,
Cott sold its PolyCycle Solutions assets to Consolidated Container
Company. The net impact of these two transactions on 2018 revenues
is expected to be an increase of approximately $30 million.
- Cott increased targeted full year 2018 revenues to over
$2.35 billion to reflect the Crystal
Rock and PolyCycle transactions.
- Cott increased targeted full year 2018 cash flow provided by
operations to reflect the Crystal Rock and PolyCycle transactions
to approximately $235 million with
capital expenditures in the range of $115 to $120
million, resulting in adjusted free cash flow of
$115 to $120
million (when excluding acquisition, integration, and other
working capital adjustments).
- On May 1, 2018, Cott's Board of
Directors approved a $50 million
share repurchase plan.
"I am pleased with the activity undertaken and the results of
the first quarter. In addition to our continuing revenue and
EBITDA growth, we closed on the sale of our traditional business
which reduced our debt by around $1
billion, we received approval from our Board of Directors to
rebrand Cott's corporate identity to reflect the change in the
business and approved a stock repurchase program," commented
Jerry Fowden, Cott's Chief Executive
Officer.
FIRST QUARTER 2018 GLOBAL PERFORMANCE FROM CONTINUING
OPERATIONS
- Revenue increased 4% to $561
million (3% excluding the impact of foreign exchange and
adjusted for comparable trading days) as each of the operating
segments generated growth during the quarter. Revenue drivers in
the quarter are tabulated below:
Continuing
Operations
|
Revenue
Bridge
|
2017 Q1
Revenue
|
$
|
536.9
|
Route Based
Services
|
|
+8.3
|
Coffee, Tea and
Extract Solutions
|
|
+7.7
|
Fewer trading days
(1)
|
|
-6.4
|
Foreign exchange
(1)
|
|
+14.6
|
Other
|
|
-0.3
|
2018 Q1
Revenue
|
$
|
560.8
|
|
|
|
(1) See
Exhibit 5 for details by reporting segment
|
- Gross profit increased 2% to $274
million, driven primarily by revenue growth within our
operating segments, offset in part by increases in previously
disclosed freight costs within our Route Based Services segment
alongside a change in customer mix within our Coffee, Tea and
Extract solutions segment.
- Interest expense was $21 million.
The proceeds from the sale of our traditional business were used to
redeem the remaining $250 million of
our 10% DS senior secured notes and $525
million of our 5.375% notes, and to pay off the outstanding
balance on our asset-based lending facility. As a result, interest
expense is expected to be approximately $57
million for the remainder of 2018 or $78 million in total for fiscal year 2018.
- Reported net income and net income per diluted share were
$5 million and $0.03, respectively, compared to reported net
loss and net loss per diluted share of $10
million and $0.07,
respectively.
- Reported EBITDA was $74 million
compared to $50 million in the prior
year. Adjusted EBITDA increased 8% to $65
million driven primarily by revenue growth within our
operating segments.
- Net cash provided by operating activities of $23 million, less $30
million of capital expenditures resulted in free cash flow
of ($7) million or $7 million of adjusted free cash flow (adjusted
for acquisition, integration, and other working capital
adjustments) compared to adjusted free cash flow of $9 million in the prior year.
FIRST QUARTER 2018 REPORTING SEGMENT
PERFORMANCE
Route Based Services
- Revenue increased 5% (2% excluding the impact of foreign
exchange and adjusted for comparable trading days) to $371 million. A detailed breakdown is tabulated
below.
Route Based
Services
|
Revenue
Bridge
|
2017 Q1
Revenue
|
$
|
352.3
|
HOD Water
related
|
|
+2.5
|
Retail
|
|
+3.9
|
Filtration
|
|
+0.9
|
OCS
|
|
-1.1
|
Other
|
|
+2.1
|
Fewer trading
days
|
|
-1.3
|
Foreign exchange
impact
|
|
+11.8
|
2018 Q1
Revenue
|
$
|
371.1
|
- Gross profit increased 3% to $228
million, driven primarily by increased revenue, offset in
part by freight and transportation costs.
- Operating income increased 32% to $12
million, due primarily to the increase in gross profit.
Coffee, Tea and Extract Solutions
- Revenue increased 2% (5% adjusted for comparable trading days)
driven primarily by 3% growth in coffee pounds sold (7% adjusted
for comparable trading days) and growth in liquid coffee and
extracts.
Coffee, Tea and
Extract Solutions
|
Revenue
Bridge
|
2017 Q1
Revenue
|
$
|
143.3
|
Coffee
volume
|
|
+7.5
|
Coffee
price/mix
|
|
-5.4
|
Liquid coffee and
extracts
|
|
+4.1
|
Other
|
|
+1.5
|
Fewer trading
days
|
|
-4.9
|
2018 Q1
Revenue
|
$
|
146.1
|
- Gross profit was $39 million
compared to $42 million due to a
$2 million commodity hedging gain
recorded in the prior year as well as fewer trading days.
- Operating income was $4 million
compared to $6 million due to a
$2 million commodity hedging gain
recorded in the prior year as well as fewer trading days.
2018 FULL YEAR FOREIGN EXCHANGE, REVENUE, AND FREE CASH FLOW
OUTLOOK FROM CONTINUING OPERATIONS
Cott increased the targeted full year 2018 consolidated revenue
to over $2.35 billion and full year
2018 cash flow provided by operations to approximately $235 million with capital expenditures in the
range of $115 to $120 million, resulting in adjusted free cash
flow of $115 to $120 million (when excluding acquisition,
integration, and other working capital adjustments).
Green coffee commodity market prices have been declining since
the end of 2016. At current rates, in conjunction with the
timing of various pricing agreements, we would expect to see a 0.5%
to 1% lowering of our quarterly consolidated revenues with a
corresponding reduction to cost of goods sold. As a majority
of our coffee purchases are incorporated into our hedging program,
the changes in pricing will operate similar to a pass-through
mechanism and as a result our profitability will not be materially
impacted by revenue impacts caused by the market movement in green
coffee prices.
SHARE REPURCHASE PROGRAM
Cott's board of directors has determined that the repurchase of
a portion of Cott's outstanding common shares is an appropriate use
of available cash and is in the best interests of Cott and its
shareowners. In order to facilitate repurchases, the Toronto Stock
Exchange ("TSX") has approved Cott's notice of intention to make a
normal course issuer bid for a portion of its common shares as
appropriate opportunities arise from time to time. The total size
of the repurchase is capped at $50
million. Repurchases will be made through the facilities of
the TSX, the New York Stock Exchange ("NYSE") and other alternative
Canadian trading systems in accordance with applicable regulatory
requirements, including Rule 10b-18
of the Securities Exchange Act of 1934. Cott may begin to purchase
common shares on or about May 7,
2018.
As of April 23, 2018, Cott's
public float was 137,685,569 common shares, with 140,188,624 common
shares issued and outstanding. Pursuant to the notice, up to 10% of
the public float, or 13,768,557 common shares, may be repurchased
during the 12-month period commencing May 7,
2018 and ending on May 6,
2019, subject to the aggregate $50
million cap. Of this amount, up to 7,009,431 common shares
may be repurchased through the facilities of the NYSE. Common
shares will be repurchased at then-current market prices. Pursuant
to the TSX rules, the maximum number of common shares that may be
repurchased during a single trading day on the TSX is 38,601,
representing 25% of the average daily trading volume of 154,406 of
Cott's common shares on the TSX for the past six months, subject to
certain exceptions for block repurchases. Rule 10b-18 contains similar volume-based restrictions
on daily purchases on the NYSE, subject to certain exceptions for
block repurchases. Cott will fund the purchases through cash on
hand, and repurchased common shares will be cancelled.
The notice of intention provides that no appraisal or valuation
regarding Cott, its material assets or securities, has been
prepared within the two years preceding the date of the notice.
To the knowledge of Cott, no director, senior officer or other
insider of Cott currently intends to sell any Common Shares under
the bid. However, sales by such persons through the facilities of
the TSX or NYSE may occur if the personal circumstances of any such
person change or any such person makes a decision unrelated to
these normal course purchases. The benefits to any such person
whose Common Shares are purchased would be the same as the benefits
available to all other securityholders whose Common Shares are
purchased.
Cott will enter into an automatic purchase plan in relation to
purchases under the normal course issuer bid. The automatic
purchase plan will allow for the purchase of Common Shares, subject
to certain trading parameters, at times when Cott ordinarily would
not be active in the market due to its own internal trading
black-out period, insider trading rules or otherwise. Outside of
these periods, Common Shares may also be repurchased in accordance
with management's discretion and in compliance with applicable
law.
"We are pleased to announce today that a share repurchase
program has been approved by our Board of Directors and the TSX.
This program is an integral part of our capital deployment strategy
which also incorporates an acceleration of our complementary
tuck-in acquisition plan," commented Mr. Fowden.
FIRST QUARTER 2018 RESULTS CONFERENCE CALL
Cott Corporation will host a conference call today, May 3, 2018, at 10:00 a.m.
ET, to discuss first quarter results, which can be accessed
as follows:
North
America: (888) 231-8191
International: (647) 427-7450
Conference ID: 4264928
A live audio webcast will be available through Cott's website at
http://www.cott.com. The earnings conference call will be recorded
and archived for playback on the investor relations section of the
website for a period of two weeks following the event.
ABOUT COTT CORPORATION
Cott is a water, coffee, tea, extracts and filtration service
company with a leading volume-based national presence in the North
American and European home and office bottled water delivery
industry and a leader in custom coffee roasting, blending of iced
tea, and extract solutions for the U.S. foodservice industry. Our
platform reaches over 2.4 million customers or delivery points
across North America and
Europe supported by strategically
located sales and distribution facilities and fleets, as well as
wholesalers and distributors. This enables us to efficiently
service residences, businesses, restaurant chains, hotels and
motels, small and large retailers, and healthcare facilities.
Non-GAAP Measures
To supplement its reporting of financial measures determined in
accordance with GAAP, Cott utilizes certain non-GAAP financial
measures. Cott excludes from GAAP revenue the impact of
foreign exchange and the impact of additional trading days in the
prior period to separate the impact of these factors from Cott's
results of operations. Cott utilizes EBITDA and adjusted EBITDA on
a global basis to separate the impact of certain items from the
underlying business. Because Cott uses these adjusted
financial results in the management of its business, management
believes this supplemental information is useful to investors for
their independent evaluation and understanding of Cott's underlying
business performance and the performance of its management.
Additionally, Cott supplements its reporting of net cash provided
by (used in) operating activities determined in accordance with
GAAP by excluding additions to property, plant & equipment to
present free cash flow, and by excluding acquisition and
integration cash costs as well as a working capital adjustment
related to the Concentrate Supply Agreement with Refresco to
present adjusted free cash flow, which management believes provides
useful information to investors about the amount of cash generated
by the business that, after the acquisition of property and
equipment, can be used for strategic opportunities, including
investing in our business, making strategic acquisitions, paying
dividends, repurchasing common shares, and strengthening the
balance sheet. The non-GAAP financial measures described
above are in addition to, and not meant to be considered superior
to, or a substitute for, Cott's financial statements prepared in
accordance with GAAP. In addition, the non-GAAP financial measures
included in this earnings announcement reflect management's
judgment of particular items, and may be different from, and
therefore may not be comparable to, similarly titled measures
reported by other companies.
Safe Harbor Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 conveying
management's expectations as to the future based on plans,
estimates and projections at the time Cott makes the statements.
Forward-looking statements involve inherent risks and uncertainties
and Cott cautions you that a number of important factors could
cause actual results to differ materially from those contained in
any such forward-looking statement. The forward-looking statements
contained in this press release include, but are not limited to,
statements related to the amount of shares that may be repurchased
under the share repurchase program, the execution of our strategic
priorities, future financial and operating trends and results
(including Cott's outlook on 2018 revenue and free cash flow) and
related matters. The forward-looking statements are based on
assumptions regarding management's current plans and estimates.
Management believes these assumptions to be reasonable but there is
no assurance that they will prove to be accurate.
Factors that could cause actual results to differ materially
from those described in this press release include, among others:
our ability to compete successfully in the markets in which we
operate; fluctuations in commodity prices and our ability to pass
on increased costs to our customers or hedge against such rising
costs and the impact of those increased prices on our volumes; our
ability to manage our operations successfully; our ability to fully
realize the potential benefit of acquisitions or other strategic
opportunities that we pursue; potential liabilities associated with
the Refresco transaction; our ability to realize the revenue and
cost synergies of recent acquisitions because of integration
difficulties and other challenges; the limited nature of our
indemnification rights under the acquisition agreements for our
recent acquisitions; our exposure to intangible asset risk;
currency fluctuations that adversely affect the exchange between
the U.S. dollar and the British pound sterling, the Euro, the
Canadian dollar, and other currencies; our ability to maintain
favorable arrangements and relationships with our suppliers; our
ability to meet our obligations under our debt agreements, and
risks of further increases to our indebtedness; our ability to
maintain compliance with the covenants and conditions under our
debt agreements; fluctuations in interest rates, which could
increase our borrowing costs; the incurrence of substantial
indebtedness to finance our recent acquisitions; the impact of
global financial events on our financial results; credit rating
changes; our ability to fully realize the expected cost savings
and/or operating efficiencies from our restructuring activities;
any disruption to production at our manufacturing facilities; our
ability to maintain access to our water sources; our ability to
protect our intellectual property; compliance with product health
and safety standards; liability for injury or illness caused by the
consumption of contaminated products; liability and damage to our
reputation as a result of litigation or legal proceedings; changes
in the legal and regulatory environment in which we operate; the
seasonal nature of our business and the effect of adverse weather
conditions; the impact of national, regional and global
events, including those of a political, economic, business and
competitive nature; our ability to recruit, retain, and integrate
new management; our ability to renew our collective bargaining
agreements on satisfactory terms; disruptions in our information
systems; our ability to securely maintain our customers'
confidential or credit card information, or other private data
relating to our employees or our company; our ability to maintain
our quarterly dividend; our ability to adequately address the
challenges and risks associated with our international operations
and address difficulties in complying with laws and regulations
including the U.S. Foreign Corrupt Practices Act and the U.K.
Bribery Act of 2010; our ability to use net operating losses to
offset future taxable income; and the potential impact of the 2017
Tax Cuts and Jobs Act on our tax obligations and effective tax
rate.
The foregoing list of factors is not exhaustive. Readers are
cautioned not to place undue reliance on any forward-looking
statements, which speak only as of the date hereof. Readers are
urged to carefully review and consider the various disclosures,
including but not limited to risk factors contained in Cott's
Annual Report on Form 10-K and its quarterly reports on Form 10-Q,
as well as other filings with the securities commissions. Cott does
not undertake to update or revise any of these statements in light
of new information or future events, except as expressly required
by applicable law.
Website: www.cott.com
COTT
CORPORATION
|
|
|
EXHIBIT
1
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(in millions of
U.S. dollars, except share and per share amounts, U.S.
GAAP)
|
Unaudited
|
|
|
|
|
|
For the Three
Months Ended
|
|
March 31,
2018
|
|
April 1,
2017
|
|
|
|
|
Revenue,
net
|
$
|
560.8
|
|
$
|
536.9
|
Cost of
sales
|
287.3
|
|
268.1
|
Gross
profit
|
273.5
|
|
268.8
|
|
|
|
|
Selling, general and
administrative expenses
|
261.1
|
|
255.0
|
Loss on disposal of
property, plant & equipment, net
|
1.3
|
|
1.3
|
Acquisition and
integration expenses
|
5.0
|
|
7.3
|
Operating
income
|
6.1
|
|
5.2
|
|
|
|
|
Other income,
net
|
(20.2)
|
|
(1.6)
|
Interest expense,
net
|
20.8
|
|
15.3
|
Income (loss) from
continuing operations before income taxes
|
5.5
|
|
(8.5)
|
|
|
|
|
Income tax
expense
|
0.9
|
|
1.7
|
Net income (loss)
from continuing operations
|
$
|
4.6
|
|
$
|
(10.2)
|
Net income (loss)
from discontinued operations, net of income taxes
|
357.4
|
|
(24.2)
|
Net income
(loss)
|
$
|
362.0
|
|
$
|
(34.4)
|
|
|
|
|
Less: Net income
attributable to non-controlling interests -
|
|
|
|
|
discontinued
operations
|
0.6
|
|
2.0
|
Net income (loss)
attributable to Cott Corporation
|
$
|
361.4
|
|
$
|
(36.4)
|
|
|
|
|
Net income (loss)
per common share attributable to Cott Corporation
|
|
|
|
|
Basic:
|
|
|
|
|
|
Continuing
operations
|
$
|
0.03
|
|
$
|
(0.07)
|
|
|
Discontinued
operations
|
$
|
2.55
|
|
$
|
(0.19)
|
|
|
Net income
(loss)
|
$
|
2.58
|
|
$
|
(0.26)
|
|
Diluted:
|
|
|
|
|
|
Continuing
operations
|
$
|
0.03
|
|
$
|
(0.07)
|
|
|
Discontinued
operations
|
$
|
2.51
|
|
$
|
(0.19)
|
|
|
Net income
(loss)
|
$
|
2.54
|
|
$
|
(0.26)
|
|
|
|
|
|
Weighted average
common shares outstanding (in thousands)
|
|
|
|
|
|
Basic
|
139,953
|
|
138,735
|
|
|
Diluted
|
142,335
|
|
138,735
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
0.06
|
|
$
|
0.06
|
COTT
CORPORATION
|
|
|
EXHIBIT
2
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
(in millions of
U.S. dollars, except share amounts, U.S. GAAP)
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
March 31,
2018
|
|
December 30,
2017
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash & cash
equivalents
|
$
|
212.3
|
|
$
|
91.9
|
Accounts receivable,
net of allowance
|
308.1
|
|
285.0
|
Inventories
|
139.7
|
|
127.6
|
Prepaid expenses and
other current assets
|
27.3
|
|
20.7
|
Current assets of
discontinued operations
|
-
|
|
408.7
|
Total current
assets
|
687.4
|
|
933.9
|
|
|
|
|
Property, plant &
equipment, net
|
589.8
|
|
584.2
|
Goodwill
|
1,137.3
|
|
1,104.7
|
Intangible assets,
net
|
758.4
|
|
751.1
|
Deferred tax
assets
|
1.4
|
|
2.3
|
Other long-term
assets, net
|
37.5
|
|
39.4
|
Long-term assets of
discontinued operations
|
-
|
|
677.5
|
Total
assets
|
$
|
3,211.8
|
|
$
|
4,093.1
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Short-term
borrowings
|
3.7
|
|
-
|
Short-term borrowings
required to be repaid or extinguished as part of
divestiture
|
-
|
|
220.3
|
Current maturities of
long-term debt
|
2.1
|
|
5.1
|
Accounts payable and
accrued liabilities
|
439.8
|
|
412.9
|
Current liabilities
of discontinued operations
|
-
|
|
295.1
|
Total current
liabilities
|
445.6
|
|
933.4
|
|
|
|
|
Long-term
debt
|
1,288.7
|
|
1,542.6
|
Debt required to be
repaid or extinguished as part of divestiture
|
-
|
|
519.0
|
Deferred tax
liabilities
|
136.5
|
|
98.4
|
Other long-term
liabilities
|
77.2
|
|
68.2
|
Long-term liabilities
of discontinued operations
|
-
|
|
45.8
|
Total
liabilities
|
1,948.0
|
|
3,207.4
|
|
|
|
|
Equity
|
|
|
|
Common shares, no par
- 140,159,714 (December 30, 2017 - 139,488,805) shares
issued
|
922.2
|
|
917.1
|
Additional
paid-in-capital
|
63.6
|
|
69.1
|
Retained earnings
(accumulated deficit)
|
340.7
|
|
(12.2)
|
Accumulated other
comprehensive loss
|
(62.7)
|
|
(94.4)
|
Total Cott
Corporation equity
|
1,263.8
|
|
879.6
|
Non-controlling
interests
|
-
|
|
6.1
|
Total
equity
|
1,263.8
|
|
885.7
|
Total liabilities
and equity
|
$
|
3,211.8
|
|
$
|
4,093.1
|
COTT
CORPORATION
|
EXHIBIT
3
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(in millions of
U.S. dollars)
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended
|
|
March 31,
2018
|
|
April 1,
2017
|
|
|
|
|
Cash flows from
operating activities of continuing operations:
|
|
|
|
|
Net income
(loss)
|
$
|
362.0
|
|
$
|
(34.4)
|
|
Net income (loss)
from discontinued operations, net of income taxes
|
357.4
|
|
(24.2)
|
|
Net income (loss)
from continuing operations
|
$
|
4.6
|
|
$
|
(10.2)
|
Adjustments to
reconcile net income (loss) from continuing
|
|
|
|
operations to cash
flows from operating activities:
|
|
|
|
|
Depreciation &
amortization
|
47.4
|
|
43.6
|
|
Amortization of
financing fees
|
0.9
|
|
0.3
|
|
Amortization of
senior notes premium
|
(0.4)
|
|
(1.6)
|
|
Share-based
compensation expense
|
3.4
|
|
4.0
|
|
(Benefit) provision
for deferred income taxes
|
(0.2)
|
|
1.8
|
|
Commodity hedging
loss (gain), net
|
0.3
|
|
(1.9)
|
|
Gain on
extinguishment of debt
|
(7.1)
|
|
-
|
|
Loss on disposal of
property, plant & equipment, net
|
1.3
|
|
1.3
|
|
Other non-cash
items
|
0.1
|
|
(1.8)
|
|
Change in operating
assets and liabilities, net of acquisitions:
|
|
|
|
|
|
Accounts
receivable
|
(12.7)
|
|
0.1
|
|
|
Inventories
|
(9.1)
|
|
(8.4)
|
|
|
Prepaid expenses and
other current assets
|
(4.3)
|
|
(6.5)
|
|
|
Other
assets
|
1.0
|
|
(0.1)
|
|
|
Accounts payable and
accrued liabilities, and other liabilities
|
(2.6)
|
|
10.5
|
|
|
Net cash provided by
operating activities
|
|
|
|
|
|
|
from continuing
operations
|
22.6
|
|
31.1
|
Cash flows from
investing activities of continuing operations:
|
|
|
|
|
Acquisitions, net of
cash received
|
(27.8)
|
|
(5.0)
|
|
Additions to
property, plant & equipment
|
(29.8)
|
|
(28.2)
|
|
Additions to
intangible assets
|
(2.2)
|
|
(1.0)
|
|
Proceeds from sale of
property, plant & equipment
|
1.9
|
|
4.1
|
|
Other investing
activities
|
0.2
|
|
0.2
|
|
Net cash used in
investing activities
|
|
|
|
|
|
from continuing
operations
|
(57.7)
|
|
(29.9)
|
Cash flows from
financing activities of continuing operations:
|
|
|
|
|
Payments of long-term
debt
|
(262.7)
|
|
(0.4)
|
|
Issuance of long-term
debt
|
-
|
|
750.0
|
|
Borrowings under
ABL
|
0.6
|
|
-
|
|
Payments under
ABL
|
(0.6)
|
|
-
|
|
Premiums and costs
paid upon extinguishment of long-term debt
|
(12.5)
|
|
-
|
|
Issuance of common
shares
|
(1.5)
|
|
(9.4)
|
|
Financing
fees
|
1.8
|
|
0.5
|
|
Common shares
repurchased and cancelled
|
(5.6)
|
|
(1.8)
|
|
Dividends paid to
common shareowners
|
(8.4)
|
|
(8.4)
|
|
Other financing
activities
|
(1.3)
|
|
(1.0)
|
|
Net cash (used in)
provided by financing activities
|
|
|
|
|
|
from continuing
operations
|
(290.2)
|
|
729.5
|
Cash flows from
discontinued operations:
|
|
|
|
|
Operating activities
of discontinued operations
|
(74.4)
|
|
(34.8)
|
|
Investing activities
of discontinued operations
|
1,228.6
|
|
(14.2)
|
|
Financing activities
of discontinued operations
|
(769.7)
|
|
(270.8)
|
|
Net cash provided by
(used in) discontinued operations
|
384.5
|
|
(319.8)
|
|
Effect of exchange
rate changes on cash
|
(4.8)
|
|
1.5
|
Net increase in
cash, cash equivalents, and restricted cash
|
54.4
|
|
412.4
|
Cash & cash
equivalents and restricted cash, beginning of period
|
157.9
|
|
118.1
|
Cash & cash
equivalents and restricted cash, end of period
|
212.3
|
|
530.5
|
Cash &
cash equivalents and restricted cash from discontinued
operations, end of period
|
-
|
|
457.6
|
Cash
& cash equivalents and restricted cash
from continuing operations, end of period
|
212.3
|
|
72.9
|
COTT
CORPORATION
|
EXHIBIT
4
|
SEGMENT
INFORMATION
|
(in millions of
U.S. dollars)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended March 31, 2018
|
(in millions of
U.S. dollars)
|
|
Route Based
Services
|
|
Coffee, Tea
and
Extract Solutions
|
|
All
Other
|
|
Corporate
|
|
Eliminations
|
|
Total
|
Revenue,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
Home and office
bottled water delivery
|
|
$
|
228.9
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
228.9
|
Coffee and tea
services
|
|
46.3
|
|
117.2
|
|
0.7
|
|
-
|
|
(1.0)
|
|
163.2
|
Retail
|
|
54.7
|
|
-
|
|
15.4
|
|
-
|
|
-
|
|
70.1
|
Other
|
|
41.2
|
|
28.9
|
|
28.6
|
|
-
|
|
(0.1)
|
|
98.6
|
Total
|
|
$
|
371.1
|
|
$
|
146.1
|
|
$
|
44.7
|
|
$
|
-
|
|
$
|
(1.1)
|
|
$
|
560.8
|
Gross Profit
1
|
|
$
|
227.8
|
|
$
|
38.7
|
|
$
|
7.0
|
|
$
|
-
|
|
$
|
-
|
|
$
|
273.5
|
Gross Margin %
2
|
|
61.4%
|
|
26.5%
|
|
15.7%
|
|
-
|
|
-
|
|
48.8%
|
Operating income
(loss)
|
|
$
|
12.4
|
|
$
|
4.1
|
|
$
|
1.4
|
|
$
|
(11.8)
|
|
$
|
-
|
|
$
|
6.1
|
Depreciation and
Amortization
|
|
$
|
39.8
|
|
$
|
5.7
|
|
$
|
1.8
|
|
$
|
0.1
|
|
$
|
-
|
|
$
|
47.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended April 1, 2017
|
(in millions of
U.S. dollars)
|
|
Route Based
Services
|
|
Coffee, Tea
and
Extract Solutions
|
|
All
Other
|
|
Corporate
|
|
Eliminations
|
|
Total
|
Revenue,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
Home and office
bottled water delivery
|
|
$
|
218.0
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
218.0
|
Coffee and tea
services
|
|
45.9
|
|
119.7
|
|
0.6
|
|
-
|
|
-
|
|
166.2
|
Retail
|
|
51.8
|
|
-
|
|
11.7
|
|
-
|
|
-
|
|
63.5
|
Other
|
|
36.6
|
|
23.6
|
|
29.0
|
|
-
|
|
-
|
|
89.2
|
Total
|
|
$
|
352.3
|
|
$
|
143.3
|
|
$
|
41.3
|
|
$
|
-
|
|
$
|
-
|
|
$
|
536.9
|
Gross Profit
1
|
|
$
|
220.6
|
|
$
|
41.8
|
|
$
|
6.4
|
|
$
|
-
|
|
$
|
-
|
|
$
|
268.8
|
Gross Margin %
2
|
|
62.6%
|
|
29.2%
|
|
15.5%
|
|
-
|
|
-
|
|
50.1%
|
Operating income
(loss)
|
|
$
|
9.4
|
|
$
|
5.6
|
|
$
|
0.4
|
|
$
|
(10.2)
|
|
$
|
-
|
|
$
|
5.2
|
Depreciation and
Amortization
|
|
$
|
36.0
|
|
$
|
5.5
|
|
$
|
2.1
|
|
$
|
-
|
|
$
|
-
|
|
$
|
43.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Includes
related party concentrate sales to discontinued
operations.
|
2Gross
profit from external and related party revenues.
|
COTT
CORPORATION
|
|
|
|
|
EXHIBIT
5
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - ANALYSIS OF REVENUE BY REPORTING
SEGMENT
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
U.S. dollars, except percentage amounts)
|
For the Three
Months Ended March 31, 2018
|
|
Route
Based Services
|
Coffee, Tea
and Extract Solutions
|
All
Other
|
Eliminations
|
Cott1
|
Change in
revenue
|
$
|
18.8
|
$
|
2.8
|
$
|
3.4
|
$
|
(1.1)
|
$
|
23.9
|
Impact of foreign
exchange 2
|
$
|
(11.8)
|
$
|
-
|
$
|
(2.8)
|
$
|
-
|
(14.6)
|
Change excluding
foreign exchange
|
$
|
7.0
|
$
|
2.8
|
$
|
0.6
|
$
|
(1.1)
|
$
|
9.3
|
Percentage change in
revenue
|
5.3%
|
2.0%
|
8.2%
|
100.0%
|
4.5%
|
Percentage change in
revenue excluding foreign exchange
|
2.0%
|
2.0%
|
1.5%
|
100.0%
|
1.7%
|
Impact of fewer
trading days 3
|
$
|
1.3
|
$
|
4.9
|
$
|
0.2
|
$
|
-
|
$
|
6.4
|
|
|
|
|
|
|
Change excluding
foreign exchange and impact of fewer trading days
|
$
|
8.3
|
$
|
7.7
|
$
|
0.8
|
$
|
(1.1)
|
$
|
15.7
|
|
|
|
|
|
|
Percentage change in
revenue excluding foreign exchange and impact of fewer trading
days
|
2.4%
|
5.4%
|
1.9%
|
100.0%
|
2.9%
|
1Cott
includes the following reporting segments: Route Based Services,
Coffee, Tea and Extract Solutions and All Other.
|
2 Impact
of foreign exchange is the difference between the current period
revenue translated utilizing the current period average foreign
exchange rates less the current period revenue translated utilizing
the prior period average foreign exchange rates.
|
3 Our Eden
business had two fewer trading days, our S&D business had three
fewer trading days, and our Aimia business had one fewer trading
day for the three months ended March 31, 2018 as compared to the
prior year period.
|
COTT
CORPORATION
|
|
|
EXHIBIT
6
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION
& AMORTIZATION
|
(EBITDA)
|
|
|
|
(in millions of
U.S. dollars)
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended
|
|
March 31,
2018
|
|
April 1,
2017
|
|
|
|
|
Net income (loss)
from continuing operations
|
$
|
4.6
|
|
$
|
(10.2)
|
Interest expense,
net
|
20.8
|
|
15.3
|
Income tax
expense
|
0.9
|
|
1.7
|
Depreciation &
amortization
|
47.4
|
|
43.6
|
EBITDA
|
$
|
73.7
|
|
$
|
50.4
|
|
|
|
|
Acquisition and
integration costs 1, 2
|
5.0
|
|
7.3
|
Share-based
compensation costs 3
|
2.4
|
|
2.7
|
Commodity hedging
loss (gain), net 4
|
0.3
|
|
(1.9)
|
Foreign exchange and
other gains, net 5
|
(8.2)
|
|
(1.3)
|
Loss on disposal of
property, plant & equipment, net 6
|
1.3
|
|
1.7
|
Gain on
extinguishment of long-term debt 7
|
(7.1)
|
|
-
|
Other adjustments,
net 8
|
(2.9)
|
|
1.0
|
Adjusted
EBITDA
|
$
|
64.5
|
|
$
|
59.9
|
|
|
|
|
1Includes
$1.0 million and $1.3 million of share-based compensation costs for
the three months ended March 31, 2018
and April 1, 2017, respectively, related to awards granted in
connection with the acquisition of our S&D and Eden
businesses.
|
|
Location in
Consolidated
|
|
For the
Three Months Ended
|
|
Statements
Of Operations
|
|
March 31,
2018
|
|
April 1,
2017
|
|
|
|
(Unaudited)
|
2Acquisition and integration
costs
|
Acquisition and
integration expenses
|
|
$
|
5.0
|
|
$
|
7.3
|
3Share-based compensation costs
|
Selling,
general and administrative expenses
|
|
2.4
|
|
2.7
|
4Commodity
hedging loss (gain)
|
Cost of
sales
|
|
0.3
|
|
(1.9)
|
5Foreign
exchange and other gains, net
|
Other income,
net
|
|
(8.2)
|
|
(1.3)
|
6Loss on
disposal of property, plant & equipment, net
|
Loss on
disposal of property, plant & equipment, net
|
|
1.3
|
|
1.7
|
7Gain on
extinguishment of long-term debt
|
Other income,
net
|
|
(7.1)
|
|
-
|
8Other
adjustments, net
|
Selling,
general and administrative expenses
|
|
1.0
|
|
1.0
|
|
Other income,
net
|
|
(3.9)
|
|
-
|
COTT
CORPORATION
|
EXHIBIT
7
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - FREE CASH FLOW AND ADJUSTED FREE CASH
FLOW
|
(in millions of
U.S. dollars)
|
Unaudited
|
|
|
For the
Three Months Ended
|
|
March 31,
2018
|
|
April 1,
2017
|
|
|
|
|
Net cash provided
by operating activities from
|
|
|
|
|
continuing
operations
|
$
|
22.6
|
|
$
|
31.1
|
|
|
Less: Additions
to property, plant, and equipment
|
(29.8)
|
|
(28.2)
|
Free Cash
Flow
|
$
|
(7.2)
|
|
$
|
2.9
|
|
|
|
|
|
|
Plus:
|
|
|
|
|
Acquisition and
integration cash costs
|
5.6
|
|
5.7
|
|
Working capital
adjustment - Refresco concentrate supply agreement
1
|
8.9
|
|
-
|
Adjusted Free Cash
Flow
|
$
|
7.3
|
|
$
|
8.6
|
|
1 Increase
in working capital related to the Concentrate Supply Agreement with
Refresco in connection with the Transaction.
|
COTT
CORPORATION
|
|
EXHIBIT
8
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - LEVERAGE
|
|
|
(in millions of
U.S. dollars)
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
LTM
|
|
|
March 31,
2018
|
|
|
|
Adjusted EBITDA
1
|
|
$
|
300.2
|
|
|
|
Total debt
|
|
$
|
1,294.5
|
|
|
|
Less: Cash & cash
equivalents 2
|
|
(199.8)
|
Net
Debt
|
|
$
|
1,094.7
|
|
|
|
Leverage (Net Debt
/ Adjusted EBITDA)
|
|
3.6
|
|
|
|
1 See
Exhibit 9 for reconciliation
|
|
|
|
|
|
2 Excludes
$12.5 million of cash proceeds received from the sale of the
Traditional Business that was held in escrow as of March 31,
2018.
|
COTT
CORPORATION
|
|
|
|
|
|
|
EXHIBIT
9
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - LAST TWELVE MONTHS (LTM)
|
EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION & AMORTIZATION
(EBITDA)
|
(in millions of
U.S. dollars)
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A
|
|
B
|
|
C
|
|
A+B-C
|
|
For the Year
Ended
|
|
For the
Three Months Ended
|
|
LTM
Ending
|
|
December 30,
2017
|
|
March 31,
2018
|
|
April 1,
2017
|
|
March 31,
2018
|
Net (loss) income
from continuing operations
|
$
|
(3.6)
|
|
$
|
4.6
|
|
$
|
(10.2)
|
|
$
|
11.2
|
Interest expense,
net
|
85.5
|
|
20.8
|
|
15.3
|
|
91.0
|
Income tax (benefit)
expense
|
(30.0)
|
|
0.9
|
|
1.7
|
|
(30.8)
|
Depreciation &
amortization
|
188.6
|
|
47.4
|
|
43.6
|
|
192.4
|
EBITDA
|
$
|
240.5
|
|
$
|
73.7
|
|
$
|
50.4
|
|
$
|
263.8
|
|
|
|
|
|
|
|
|
Acquisition and
integration costs 1,2
|
25.9
|
|
5.0
|
|
7.3
|
|
23.6
|
Share-based
compensation costs 3
|
14.0
|
|
2.4
|
|
2.7
|
|
13.7
|
Commodity hedging
(gain) loss, net 4
|
(0.3)
|
|
0.3
|
|
(1.9)
|
|
1.9
|
Foreign exchange and
other gains, net 5
|
(2.0)
|
|
(8.2)
|
|
(1.3)
|
|
(8.9)
|
Loss on disposal of
property, plant & equipment, net 6
|
11.1
|
|
1.3
|
|
1.7
|
|
10.7
|
Gain on
extinguishment of long-term debt 7
|
(1.5)
|
|
(7.1)
|
|
-
|
|
(8.6)
|
Other adjustments,
net 8
|
7.9
|
|
(2.9)
|
|
1.0
|
|
4.0
|
Adjusted
EBITDA
|
$
|
295.6
|
|
$
|
64.5
|
|
$
|
59.9
|
|
$
|
300.2
|
|
|
|
|
|
|
|
|
|
1Includes
$3.5 million of share-based compensation costs for the year ended
December 30, 2017, and $1.0 million and $1.3 million of share-based
compensation costs for the three months ended March 31, 2018 and
April 1, 2017, respectively, related to awards granted in
connection with the acquisitions of our S&D and
Eden.
|
|
Location in
Consolidated
|
|
For the Year
Ended
|
|
For the
Three Months Ended
|
|
Statements of
Operations
|
|
December 30,
2017
|
|
March 31,
2018
|
|
April 1,
2017
|
|
|
|
(Unaudited)
|
2Acquisition and integration
costs
|
Acquisition and
integration expenses
|
|
$
|
25.9
|
|
$
|
5.0
|
|
$
|
7.3
|
3Share-based compensation costs
|
Selling, general and
administrative expenses
|
|
14.0
|
|
2.4
|
|
2.7
|
4Commodity
hedging (gain) loss, net
|
Cost of
sales
|
|
(0.3)
|
|
0.3
|
|
(1.9)
|
5Foreign
exchange and other gains, net
|
Other income,
net
|
|
(2.0)
|
|
(8.2)
|
|
(1.3)
|
6Loss on
disposal of property, plant & equipment, net
|
Loss on disposal of
property,
|
|
|
|
|
|
|
|
|
plant &
equipment, net
|
|
11.1
|
|
1.3
|
|
1.7
|
7Gain on
extinguishment of long-term debt
|
Other income,
net
|
|
(1.5)
|
|
(7.1)
|
|
-
|
8Other
adjustments, net
|
Selling, general and
administrative expenses
|
|
6.3
|
|
1.0
|
|
1.0
|
|
Other income,
net
|
|
1.6
|
|
(3.9)
|
|
-
|
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SOURCE Cott Corporation