(Unless stated otherwise, all third quarter 2018 comparisons are
relative to the third quarter of 2017; all information is in U.S.
dollars.)
TORONTO and TAMPA, Florida, Nov. 8,
2018 /PRNewswire/ -- Cott Corporation (NYSE: COT) (TSX: BCB)
today announced its results for the third quarter ended
September 29, 2018.
THIRD QUARTER 2018 HIGHLIGHTS – CONTINUING OPERATIONS
- Increased revenue 5% (6% excluding the impact of foreign
exchange and adjusting for the change in average cost of coffee) to
$609 million compared to $581 million.
- Reported net income and net income per diluted share of
$9 million and $0.06, respectively, compared to reported net
income and net income per diluted share of $2 million and $0.01, respectively. Adjusted EBITDA increased
11% to $93 million.
- Returned approximately $32
million to shareowners through $8
million in quarterly dividends and $24 million of share repurchases.
- Updated targeted full year 2018 consolidated revenue to
approximately $2.37 billion from over
$2.35 billion and updated full year
2018 cash flow provided by operations to approximately $245 million with capital expenditures of
approximately $125 million, resulting
in adjusted free cash flow at the upper end of our $115 to $120
million expectation (when excluding acquisition,
integration, and other adjustments).
- Acquired Mountain Valley, a fast-growing premium American brand
of spring and sparkling water that is one of the most recognized
home and office ("HOD") brands in the
United States. Mountain Valley has been bottling in glass
continuously since 1871, with one production facility in
Hot Springs, Arkansas, and four
protected and owned springs in the Ouachita Mountains with excess
capacity to supply long-term demand. Channels of business include
HOD, the natural food channel, on-premise, E-commerce and strategic
contract packing.
"We experienced good top and bottom line momentum this quarter
driven by increased customers, consumption, pricing, and tuck-in
acquisitions within our Route Based Services business," commented
Jerry Fowden, Cott's Chief Executive
Officer. "With our Route Based Services business performing
well including the successful implementation of our pricing actions
alongside the addition of a fast-growing premium spring, sparkling
and flavored water brand with the acquisition of Mountain Valley,
we are well positioned to deliver on our 2018 and 2019 free cash
flow goals," continued Mr. Fowden.
THIRD QUARTER 2018 GLOBAL PERFORMANCE FROM CONTINUING
OPERATIONS
- Revenue increased 5% to $609
million (6% excluding the impact of foreign exchange and
adjusting for the change in average cost of coffee) driven
primarily by good growth within the Route Based Services
segment:
Continuing
Operations
|
Revenue
Bridge
|
2017 Q3
Revenue
|
$
|
580.9
|
Route Based
Services
|
|
+29.2
|
Coffee, Tea and
Extract Solutions
|
|
+1.1
|
Foreign
exchange(a)
|
|
-3.0
|
Change in average
green coffee commodity pass-through costs(b)
|
|
-4.3
|
Other
|
|
+5.4
|
2018 Q3
Revenue
|
$
|
609.3
|
(a)
|
See Exhibit 5 for
details by reporting segment
|
(b)
|
See Exhibit 8 for
details by reporting segment
|
- Gross profit increased 6% to $311
million, driven primarily by revenue growth which included
the implementation of pricing actions taken during the quarter that
mitigated the general inflation increases that have been prevalent
in 2018 within the Route Based Services segment.
- Interest expense was $19 million
compared to $23 million.
- Reported net income and net income per diluted share of
$9 million and $0.06, respectively, compared to reported net
income and net income per diluted share of $2 million and $0.01, respectively.
- Reported EBITDA was $78 million
compared to $75 million in the prior
year and adjusted EBITDA increased 11% to $93 million. Both were driven primarily by
revenue growth and gross margin expansion.
- In the third quarter, net cash provided by operating activities
of $78 million less $36 million of capital expenditures resulted in
reported free cash flow of $42
million and adjusted free cash flow of $56 million compared to adjusted free cash flow
of $13 million in the prior year.
Year-to-date, net cash provided by operating activities of
$146 million less $95 million of capital expenditures resulted in
reported free cash flow of $51
million and adjusted free cash flow of $85 million (see Exhibit 7).
THIRD QUARTER 2018 REPORTING SEGMENT
PERFORMANCE
Route Based Services
- Revenue increased 7% (7% excluding the impact of foreign
exchange) to $424 million. A detailed
breakdown is tabulated below.
Route Based
Services
|
Revenue
Bridge
|
2017 Q3
Revenue
|
$
|
397.3
|
HOD Water
related
|
|
+27.1
|
Retail
|
|
+2.8
|
OCS
|
|
+1.9
|
Other
|
|
-2.6
|
Change excluding
foreign exchange impact
|
|
+29.2
|
Foreign exchange
impact(a)
|
|
-2.8
|
2018 Q3
Revenue
|
$
|
423.7
|
(a)
|
See Exhibit 5 for
details by reporting segment
|
- Gross profit increased 7% to $267
million, due primarily to increased revenue from customer
growth, increased consumption and the benefits of tuck-in
acquisitions while our pricing initiatives successfully offset the
market inflation that has been prevalent in 2018.
- Operating income increased 27% to $38
million, due largely to an increase in gross profit.
Coffee, Tea and Extract Solutions
- Revenue decreased 2% to $140
million (increased 1% adjusting for the change in average
cost of coffee) driven by the pass-through of lower green coffee
commodity costs, change in customer mix, and the lapping of
outsized coffee and tea volume growth of 9% last year when we
increased our market share and saw new customer pipeline fills. The
1% increase in revenue after adjusting for the change in average
cost of coffee was driven by a 51% increase in liquid extract
volume, offset in part by a 3% reduction in roast and ground coffee
volume.
Coffee, Tea and
Extract Solutions
|
Revenue
Bridge
|
2017 Q3
Revenue
|
$
|
143.4
|
Coffee
volume
|
|
-3.4
|
Coffee
price/mix
|
|
-0.6
|
Liquid coffee and
extracts
|
|
+3.3
|
Other
|
|
+1.8
|
Change excluding
change in average green coffee
commodity pass-through costs
|
|
+1.1
|
Change in average
green coffee commodity pass-through costs(a)
|
|
-4.3
|
2018 Q3
Revenue
|
$
|
140.2
|
(a)
|
See Exhibit 8 for
details by reporting segment
|
- Gross profit was $35 million
compared to $37 million and operating
income was $5 million compared to
$4 million as the effect of lower
roast and ground coffee volume and the price/mix shift into larger
quick service restaurants was more than offset by liquid extract
growth and reduced SG&A costs.
2018 FULL YEAR REVENUE AND FREE CASH FLOW OUTLOOK FROM
CONTINUING OPERATIONS
Cott updated its targeted full year 2018 consolidated revenue to
$2.37 billion and further detailed
the expectation by operating segment with projected full year 2018
revenues as follows:
Operating Segment
(in billions of U.S. dollars)
|
2018
Revenue*
|
|
|
Route Based
Services:
|
$
|
1.61
|
Coffee, Tea and
Extract Solutions:
|
$
|
0.58
|
All Other:
|
$
|
0.18
|
Consolidated 2018
Full Year:
|
$
|
2.37
|
Updated full year expectations for 2018 cash flow provided by
operations of approximately $245
million with capital expenditures of approximately
$125 million, resulting in adjusted
free cash flow at the upper end of our $115 to $120
million expectation (when excluding acquisition,
integration, and other adjustments) as well as full year
expectations for 2019 cash flow provided by operations of
approximately $265 to $270 million with capital expenditures of
approximately $120 million, resulting
in adjusted free cash flow of over $150 plus million (when excluding acquisition,
integration, and other working capital adjustments).
*The Mountain Valley
acquisition is expected to generate approximately $8 - $9 million
in revenue as a part of Cott operations in 2018 and has been
included in the 2018 revenue expectations listed
above. Mountain Valley will only provide a nominal benefit to
free cash flow as a result of the timing of the
acquisition.
|
SHARE REPURCHASE PROGRAM
Cott repurchased approximately 1.6 million shares at an average
price of $15.40 totaling
approximately $24 million during the
third quarter under its previously announced share repurchase
program.
The repurchase program is capped at $50
million, commenced on May 7,
2018 and ends on May 6, 2019.
Cott intends to manage this program opportunistically and make
repurchases from time to time when management believes market
conditions are favorable.
There can be no assurance as to the precise number of shares, if
any, that will be repurchased under the share repurchase program in
the future, or the aggregate dollar amount of the shares to be
purchased in future periods. Cott may discontinue purchases at any
time, subject to compliance with applicable regulatory
requirements. Shares purchased pursuant to the share repurchase
program were cancelled.
THIRD QUARTER 2018 RESULTS CONFERENCE CALL
Cott Corporation will host a conference call today, November 8, 2018, at 10:00
a.m. ET, to discuss third quarter results, which can be
accessed as follows:
North
America: (888) 231-8191
International: (647) 427-7450
Conference ID: 7586828
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 delivery industry for bottled
water, and a leader in custom coffee roasting, iced tea blending,
and extract solutions for the U.S. foodservice industry. Our
platform reaches over 2.5 million customers or delivery points
across North America and
Europe and is 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 change in average costs of coffee 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 from continuing
operations determined in accordance with GAAP by excluding
additions to property, plant and equipment to present free cash
flow, and by excluding acquisition and integration cash
costs, a working capital adjustment related to the Concentrate
Supply Agreement with Refresco and other cash inflows to present
adjusted free cash flow, which management believes provides useful
information to investors in assessing our performance, comparing
our performance to the performance of our peer group, and assessing
our ability to service debt and finance strategic opportunities,
which include 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 our recent acquisitions because of integration
difficulties and other challenges; the limited nature of our
indemnification rights under our recent acquisition agreements; 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, and the exchange between the British pound sterling and
the Euro; 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; increased
tax liabilities in the various jurisdictions in which we operate;
our ability to utilize tax attributes to offset future taxable
income; and the 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: http://www.cott.com/
COTT
CORPORATION
|
|
EXHIBIT
1
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
(in millions of
U.S. dollars, except share and per share amounts, U.S.
GAAP)
|
|
|
Unaudited
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
|
September 29,
2018
|
|
September 30,
2017
|
|
September 29,
2018
|
|
September 30,
2017
|
|
|
|
|
|
|
|
|
Revenue,
net
|
$
|
609.3
|
|
$
|
580.9
|
|
$
|
1,773.7
|
|
$
|
1,698.4
|
Cost of
sales
|
298.8
|
|
288.1
|
|
888.3
|
|
849.7
|
Gross
profit
|
310.5
|
|
292.8
|
|
885.4
|
|
848.7
|
Selling, general and
administrative expenses
|
279.9
|
|
263.2
|
|
816.2
|
|
778.2
|
Loss (gain) on
disposal of property, plant and equipment, net
|
1.2
|
|
(0.4)
|
|
3.8
|
|
4.8
|
Acquisition and
integration expenses
|
1.6
|
|
7.7
|
|
10.8
|
|
21.7
|
Operating
income
|
27.8
|
|
22.3
|
|
54.6
|
|
44.0
|
Other income,
net
|
(0.6)
|
|
(3.4)
|
|
(33.0)
|
|
(6.0)
|
Interest expense,
net
|
18.9
|
|
23.2
|
|
58.3
|
|
62.1
|
Income (loss) from
continuing operations before income taxes
|
9.5
|
|
2.5
|
|
29.3
|
|
(12.1)
|
Income tax
expense
|
1.0
|
|
0.9
|
|
4.0
|
|
1.0
|
Net income (loss)
from continuing operations
|
$
|
8.5
|
|
$
|
1.6
|
|
$
|
25.3
|
|
$
|
(13.1)
|
Net income from
discontinued operations, net of income taxes
|
1.5
|
|
43.0
|
|
357.5
|
|
1.0
|
Net income
(loss)
|
$
|
10.0
|
|
$
|
44.6
|
|
$
|
382.8
|
|
$
|
(12.1)
|
Less: Net income
attributable to non-controlling interests - discontinued
operations
|
—
|
|
2.1
|
|
0.6
|
|
6.4
|
Net income (loss)
attributable to Cott Corporation
|
$
|
10.0
|
|
$
|
42.5
|
|
$
|
382.2
|
|
$
|
(18.5)
|
|
|
|
|
|
|
|
|
Net income (loss)
per common share attributable to Cott Corporation
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.06
|
|
$
|
0.01
|
|
$
|
0.18
|
|
$
|
(0.09)
|
Discontinued
operations
|
$
|
0.01
|
|
$
|
0.29
|
|
$
|
2.56
|
|
$
|
(0.04)
|
Net income
(loss)
|
$
|
0.07
|
|
$
|
0.30
|
|
$
|
2.74
|
|
$
|
(0.13)
|
Diluted:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.06
|
|
$
|
0.01
|
|
$
|
0.18
|
|
$
|
(0.09)
|
Discontinued
operations
|
$
|
0.01
|
|
$
|
0.29
|
|
$
|
2.51
|
|
$
|
(0.04)
|
Net income
(loss)
|
$
|
0.07
|
|
$
|
0.30
|
|
$
|
2.69
|
|
$
|
(0.13)
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding (in thousands)
|
|
|
|
|
|
|
|
Basic
|
138,787
|
|
139,205
|
|
139,503
|
|
138,980
|
Diluted
|
141,176
|
|
141,003
|
|
141,963
|
|
138,980
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
0.06
|
|
$
|
0.06
|
|
$
|
0.18
|
|
$
|
0.18
|
COTT
CORPORATION
|
|
|
EXHIBIT
2
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
(in millions of
U.S. dollars, except share amounts, U.S. GAAP)
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
September 29,
2018
|
|
December 30,
2017
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
175.7
|
|
$
|
91.9
|
Accounts receivable,
net of allowance of $9.4 ($7.8 as of December 30, 2017)
|
331.9
|
|
285.0
|
Inventories
|
136.6
|
|
127.6
|
Prepaid expenses and
other current assets
|
29.7
|
|
20.7
|
Current assets of
discontinued operations
|
—
|
|
408.7
|
Total current
assets
|
673.9
|
|
933.9
|
Property, plant and
equipment, net
|
591.5
|
|
584.2
|
Goodwill
|
1,129.1
|
|
1,104.7
|
Intangible assets,
net
|
732.4
|
|
751.1
|
Deferred tax
assets
|
1.4
|
|
2.3
|
Other long-term
assets, net
|
31.8
|
|
39.4
|
Long-term assets of
discontinued operations
|
—
|
|
677.5
|
Total
assets
|
$
|
3,160.1
|
|
$
|
4,093.1
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Short-term
borrowings
|
9.0
|
|
—
|
Short-term borrowings
required to be repaid or extinguished as part of
divestiture
|
—
|
|
220.3
|
Current maturities of
long-term debt
|
3.1
|
|
5.1
|
Accounts payable and
accrued liabilities
|
463.4
|
|
412.9
|
Current liabilities
of discontinued operations
|
—
|
|
295.1
|
Total current
liabilities
|
475.5
|
|
933.4
|
Long-term
debt
|
1,262.9
|
|
1,542.6
|
Debt required to be
repaid or extinguished as part of divestiture
|
—
|
|
519.0
|
Deferred tax
liabilities
|
132.8
|
|
98.4
|
Other long-term
liabilities
|
74.8
|
|
68.2
|
Long-term liabilities
of discontinued operations
|
—
|
|
45.8
|
Total
liabilities
|
1,946.0
|
|
3,207.4
|
Equity
|
|
|
|
Common shares, no par
value - 138,105,592 (December 30, 2017 - 139,488,805) shares
issued
|
911.3
|
|
917.1
|
Additional
paid-in-capital
|
72.7
|
|
69.1
|
Retained earnings
(accumulated deficit)
|
321.2
|
|
(12.2)
|
Accumulated other
comprehensive loss
|
(91.1)
|
|
(94.4)
|
Total Cott
Corporation equity
|
1,214.1
|
|
879.6
|
Non-controlling
interests
|
—
|
|
6.1
|
Total
equity
|
1,214.1
|
|
885.7
|
Total liabilities
and equity
|
$
|
3,160.1
|
|
$
|
4,093.1
|
COTT
CORPORATION
|
|
|
|
|
|
|
EXHIBIT
3
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
(in millions
of U.S. dollars, U.S. GAAP)
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
|
September 29,
2018
|
|
September 30,
2017
|
|
September 29,
2018
|
|
September 30,
2017
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities of continuing operations:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
10.0
|
|
$
|
44.6
|
|
$
|
382.8
|
|
$
|
(12.1)
|
Net income from
discontinued operations, net of income taxes
|
1.5
|
|
43.0
|
|
357.5
|
|
1.0
|
Net income (loss)
from continuing operations
|
$
|
8.5
|
|
$
|
1.6
|
|
$
|
25.3
|
|
$
|
(13.1)
|
Adjustments to
reconcile net income (loss) from continuing operations to cash
flows from operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
49.6
|
|
49.4
|
|
145.7
|
|
141.8
|
Amortization of
financing fees
|
0.9
|
|
0.6
|
|
2.6
|
|
1.4
|
Amortization of
senior notes premium
|
—
|
|
(1.1)
|
|
(0.4)
|
|
(3.9)
|
Share-based
compensation expense
|
6.8
|
|
2.1
|
|
14.6
|
|
11.1
|
(Benefit) provision
for deferred income taxes
|
0.1
|
|
(3.1)
|
|
2.8
|
|
1.4
|
Commodity hedging
(gain) loss, net
|
—
|
|
(0.4)
|
|
0.3
|
|
(1.9)
|
Gain on sale of
business
|
—
|
|
—
|
|
(6.0)
|
|
—
|
Gain on
extinguishment of debt
|
—
|
|
—
|
|
(7.1)
|
|
(1.5)
|
Loss (gain) on
disposal of property, plant and equipment, net
|
1.2
|
|
(0.4)
|
|
3.8
|
|
4.8
|
Other non-cash
items
|
0.8
|
|
(8.4)
|
|
(1.3)
|
|
(13.2)
|
Change in operating
assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(21.8)
|
|
(16.4)
|
|
(41.0)
|
|
(36.7)
|
Inventories
|
4.3
|
|
(4.9)
|
|
(9.4)
|
|
(14.5)
|
Prepaid expenses and
other current assets
|
(0.8)
|
|
2.5
|
|
(7.4)
|
|
(0.3)
|
Other
assets
|
0.2
|
|
0.7
|
|
1.4
|
|
4.8
|
Accounts payable and
accrued liabilities and other liabilities
|
28.4
|
|
24.0
|
|
22.2
|
|
58.5
|
Net cash provided by
operating activities from continuing operations
|
78.2
|
|
46.2
|
|
146.1
|
|
138.7
|
Cash flows from
investing activities of continuing operations:
|
|
|
|
|
|
|
|
Acquisitions, net of
cash received
|
(0.4)
|
|
(3.4)
|
|
(67.0)
|
|
(33.4)
|
Additions to
property, plant and equipment
|
(36.3)
|
|
(38.2)
|
|
(95.0)
|
|
(97.1)
|
Additions to
intangible assets
|
(2.7)
|
|
(3.4)
|
|
(6.9)
|
|
(6.0)
|
Proceeds from sale of
property, plant and equipment
|
0.8
|
|
3.1
|
|
3.7
|
|
6.0
|
Proceeds from sale of
business, net of cash sold
|
—
|
|
—
|
|
12.8
|
|
—
|
Proceeds from sale of
equity securities
|
7.9
|
|
—
|
|
7.9
|
|
—
|
Other investing
activities
|
0.1
|
|
0.5
|
|
0.4
|
|
0.9
|
Net cash used in
investing activities from continuing operations
|
(30.6)
|
|
(41.4)
|
|
(144.1)
|
|
(129.6)
|
Cash flows from
financing activities of continuing operations:
|
|
|
|
|
|
|
|
Payments of long-term
debt
|
(0.2)
|
|
(0.3)
|
|
(263.5)
|
|
(101.9)
|
Issuance of long-term
debt
|
—
|
|
—
|
|
—
|
|
750.0
|
Borrowings under
ABL
|
0.4
|
|
—
|
|
1.4
|
|
—
|
Payments under
ABL
|
(0.4)
|
|
—
|
|
(1.4)
|
|
—
|
Premiums and costs
paid upon extinguishment of long-term debt
|
—
|
|
—
|
|
(12.5)
|
|
(7.7)
|
Issuance of common
shares
|
1.8
|
|
2.1
|
|
6.0
|
|
2.9
|
Common shares
repurchased and canceled
|
(24.4)
|
|
(0.1)
|
|
(46.1)
|
|
(1.9)
|
Financing
fees
|
—
|
|
—
|
|
(1.5)
|
|
(11.1)
|
Dividends paid to
common shareholders
|
(8.3)
|
|
(8.4)
|
|
(25.1)
|
|
(25.1)
|
Payment of deferred
consideration for acquisitions
|
—
|
|
—
|
|
(2.8)
|
|
—
|
Other financing
activities
|
1.9
|
|
—
|
|
4.0
|
|
0.5
|
Net cash (used in)
provided by financing activities from continuing
operations
|
(29.2)
|
|
(6.7)
|
|
(341.5)
|
|
605.7
|
Cash flows from
discontinued operations:
|
|
|
|
|
|
|
|
Operating activities
of discontinued operations
|
(5.6)
|
|
47.4
|
|
(93.6)
|
|
56.1
|
Investing activities
of discontinued operations
|
—
|
|
(13.3)
|
|
1,228.6
|
|
(36.7)
|
Financing activities
of discontinued operations
|
—
|
|
(9.2)
|
|
(769.7)
|
|
(610.5)
|
Net cash (used in)
provided by discontinued operations
|
(5.6)
|
|
24.9
|
|
365.3
|
|
(591.1)
|
Effect of exchange
rate changes on cash
|
0.5
|
|
2.0
|
|
(8.0)
|
|
6.4
|
Net increase in
cash, cash equivalents and restricted cash
|
13.3
|
|
25.0
|
|
17.8
|
|
30.1
|
Cash and cash
equivalents and restricted cash, beginning of period
|
162.4
|
|
123.2
|
|
157.9
|
|
118.1
|
Cash and cash
equivalents and restricted cash, end of period
|
175.7
|
|
148.2
|
|
175.7
|
|
148.2
|
Cash and cash
equivalents and restricted cash of discontinued operations, end of
period
|
—
|
|
66.2
|
|
—
|
|
66.2
|
Cash and cash
equivalents and restricted cash from continuing operations, end of
period
|
$
|
175.7
|
|
$
|
82.0
|
|
$
|
175.7
|
|
$
|
82.0
|
COTT
CORPORATION
|
|
|
|
|
|
|
|
|
|
EXHIBIT
4
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
(in millions of
U.S. dollars, U.S. GAAP)
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended September 29, 2018
|
(in millions of
U.S. dollars)
|
|
Route Based
Services
|
|
Coffee, Tea
and
Extract Solutions
|
|
All
Other
|
|
Eliminations
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenue,
net
|
|
|
|
|
|
|
|
|
|
|
Home and office
bottled water delivery
|
|
$
|
271.1
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
271.1
|
Coffee and tea
services
|
|
45.4
|
|
113.0
|
|
0.9
|
|
(1.4)
|
|
157.9
|
Retail
|
|
61.3
|
|
—
|
|
16.9
|
|
(0.3)
|
|
77.9
|
Other
|
|
45.9
|
|
27.2
|
|
29.3
|
|
—
|
|
102.4
|
Total
|
|
$
|
423.7
|
|
$
|
140.2
|
|
$
|
47.1
|
|
$
|
(1.7)
|
|
$
|
609.3
|
Gross
Profit
|
|
$
|
267.4
|
|
$
|
35.4
|
|
$
|
7.7
|
|
$
|
—
|
|
$
|
310.5
|
Gross Margin
%
|
|
63.1%
|
|
25.2%
|
|
16.3%
|
|
—
|
|
51.0%
|
Operating income
(loss)
|
|
$
|
37.5
|
|
$
|
5.0
|
|
$
|
(14.7)
|
|
$
|
—
|
|
$
|
27.8
|
Depreciation and
Amortization
|
|
$
|
41.9
|
|
$
|
5.8
|
|
$
|
1.9
|
|
$
|
—
|
|
$
|
49.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended September 30, 2017
|
(in millions of
U.S. dollars)
|
|
Route Based
Services
|
|
Coffee, Tea
and
Extract Solutions
|
|
All
Other
|
|
Eliminations
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenue,
net
|
|
|
|
|
|
|
|
|
|
|
Home and office
bottled water delivery
|
|
$
|
252.5
|
|
$
|
—
|
|
—
|
|
—
|
|
252.5
|
Coffee and tea
services
|
|
44.2
|
|
120.9
|
|
0.7
|
|
—
|
|
165.8
|
Retail
|
|
58.6
|
|
—
|
|
11.7
|
|
—
|
|
70.3
|
Other
|
|
42.0
|
|
22.5
|
|
27.8
|
|
—
|
|
92.3
|
Total
|
|
$
|
397.3
|
|
$
|
143.4
|
|
$
|
40.2
|
|
$
|
—
|
|
$
|
580.9
|
Gross Profit
(a)
|
|
$
|
249.2
|
|
$
|
36.8
|
|
$
|
6.8
|
|
$
|
—
|
|
$
|
292.8
|
Gross Margin
%
|
|
62.7%
|
|
25.7%
|
|
16.9%
|
|
—
|
|
50.4%
|
Operating income
(loss)
|
|
$
|
29.6
|
|
$
|
3.5
|
|
$
|
(10.8)
|
|
$
|
—
|
|
$
|
22.3
|
Depreciation and
Amortization
|
|
$
|
41.7
|
|
$
|
6.0
|
|
$
|
1.7
|
|
$
|
—
|
|
$
|
49.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine
Months Ended September 29, 2018
|
(in millions of
U.S. dollars)
|
|
Route Based
Services
|
|
Coffee, Tea
and
Extract Solutions
|
|
All
Other
|
|
Eliminations
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenue,
net
|
|
|
|
|
|
|
|
|
|
|
Home and office
bottled water delivery
|
|
$
|
759.5
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
759.5
|
Coffee and tea
services
|
|
139.8
|
|
349.0
|
|
2.5
|
|
(3.9)
|
|
487.4
|
Retail
|
|
177.1
|
|
—
|
|
49.1
|
|
(0.3)
|
|
225.9
|
Other
|
|
131.0
|
|
82.8
|
|
87.2
|
|
(0.1)
|
|
300.9
|
Total
|
|
$
|
1,207.4
|
|
$
|
431.8
|
|
$
|
138.8
|
|
$
|
(4.3)
|
|
$
|
1,773.7
|
Gross Profit
(a)
|
|
$
|
752.8
|
|
$
|
111.5
|
|
$
|
21.1
|
|
$
|
—
|
|
$
|
885.4
|
Gross Margin
%
|
|
62.3%
|
|
25.8%
|
|
15.2%
|
|
—
|
|
49.9%
|
Operating income
(loss)
|
|
$
|
77.6
|
|
$
|
12.3
|
|
$
|
(35.3)
|
|
$
|
—
|
|
$
|
54.6
|
Depreciation and
Amortization
|
|
$
|
122.8
|
|
$
|
17.2
|
|
$
|
5.7
|
|
$
|
—
|
|
$
|
145.7
|
|
|
For the Nine
Months Ended September 30, 2017
|
(in millions of
U.S. dollars)
|
|
Route Based
Services
|
|
Coffee, Tea
and
Extract Solutions
|
|
All
Other
|
|
Eliminations
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenue,
net
|
|
|
|
|
|
|
|
|
|
|
Home and office
bottled water delivery
|
|
$
|
715.5
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
715.5
|
Coffee and tea
services
|
|
134.9
|
|
369.6
|
|
2.0
|
|
—
|
|
506.5
|
Retail
|
|
165.7
|
|
—
|
|
33.9
|
|
—
|
|
199.6
|
Other
|
|
118.8
|
|
70.6
|
|
87.4
|
|
—
|
|
276.8
|
Total
|
|
$
|
1,134.9
|
|
$
|
440.2
|
|
$
|
123.3
|
|
$
|
—
|
|
$
|
1,698.4
|
Gross Profit
(a)
|
|
$
|
710.9
|
|
$
|
117.9
|
|
$
|
19.9
|
|
$
|
—
|
|
$
|
848.7
|
Gross Margin
%
|
|
62.6%
|
|
26.8%
|
|
16.1%
|
|
—
|
|
50.0%
|
Operating income
(loss)
|
|
$
|
61.9
|
|
$
|
13.1
|
|
$
|
(31.0)
|
|
$
|
—
|
|
$
|
44.0
|
Depreciation and
Amortization
|
|
$
|
119.1
|
|
$
|
17.2
|
|
$
|
5.5
|
|
$
|
—
|
|
$
|
141.8
|
|
(a) Includes related
party concentrate sales to discontinued operations.
|
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 September 29, 2018
|
|
Route Based
Services
|
|
Coffee, Tea
and
Extract Solutions
|
|
All
Other
|
|
Eliminations
|
|
Cott
(a)
|
Change in
revenue
|
$
|
26.4
|
|
$
|
(3.2)
|
|
$
|
6.9
|
|
$
|
(1.7)
|
|
$
|
28.4
|
Impact of foreign
exchange (b)
|
$
|
2.8
|
|
$
|
—
|
|
$
|
0.2
|
|
$
|
—
|
|
$
|
3.0
|
Change excluding
foreign exchange
|
$
|
29.2
|
|
$
|
(3.2)
|
|
$
|
7.1
|
|
$
|
(1.7)
|
|
$
|
31.4
|
Percentage change in
revenue
|
6.6%
|
|
(2.2)%
|
|
17.2%
|
|
100.0%
|
|
4.9%
|
Percentage change in
revenue excluding foreign exchange
|
7.3%
|
|
(2.2)%
|
|
17.7%
|
|
100.0%
|
|
5.4%
|
|
|
|
|
|
|
|
|
|
|
(a) Cott includes the
following reporting segments: Route Based Services, Coffee, Tea and
Extract Solutions and All Other.
|
(b) 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.
|
COTT
CORPORATION
|
|
|
|
|
|
|
EXHIBIT
6
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION & AMORTIZATION
|
(EBITDA)
|
|
|
|
|
|
|
|
(in millions of
U.S. dollars)
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
|
September 29,
2018
|
|
September 30,
2017
|
|
September 29,
2018
|
|
September 30,
2017
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations
|
$
|
8.5
|
|
$
|
1.6
|
|
$
|
25.3
|
|
$
|
(13.1)
|
Interest expense,
net
|
18.9
|
|
23.2
|
|
58.3
|
|
62.1
|
Income tax
expense
|
1.0
|
|
0.9
|
|
4.0
|
|
1.0
|
Depreciation and
amortization
|
49.6
|
|
49.4
|
|
145.7
|
|
141.8
|
EBITDA
|
$
|
78.0
|
|
$
|
75.1
|
|
$
|
233.3
|
|
$
|
191.8
|
|
|
|
|
|
|
|
|
Acquisition and
integration costs (a), (b), (c)
|
1.6
|
|
7.7
|
|
10.8
|
|
21.7
|
Share-based
compensation costs (d)
|
10.2
|
|
1.9
|
|
16.2
|
|
8.7
|
Commodity hedging
(gain) loss, net (e)
|
—
|
|
(0.4)
|
|
0.3
|
|
(1.9)
|
Foreign exchange and
other losses (gains), net (f)
|
0.4
|
|
(0.2)
|
|
(10.8)
|
|
(1.1)
|
Loss on disposal of
property, plant and equipment, net (g)
|
1.2
|
|
—
|
|
3.8
|
|
5.7
|
Gain on
extinguishment of long-term debt (h)
|
—
|
|
—
|
|
(7.1)
|
|
(1.5)
|
Gain on sale
(i)
|
—
|
|
—
|
|
(6.0)
|
|
—
|
Other adjustments,
net (b), (j)
|
1.4
|
|
(0.2)
|
|
(0.4)
|
|
1.8
|
Adjusted
EBITDA
|
$
|
92.8
|
|
$
|
83.9
|
|
$
|
240.1
|
|
$
|
225.2
|
|
|
|
|
|
|
|
|
(a) Includes a
reduction of $3.4 million and $1.6 million of share-based
compensation costs for the three and nine months ended September
29, 2018,
respectively, related to awards granted in connection with the
acquisition of our S&D and Eden businesses and an increase of
$0.2 million and $2.4
million of share-based compensation costs for the three and nine
months ended September 30, 2017, respectively, related to awards
granted in connection
with the acquisition of our S&D and Eden businesses.
|
(b) With the adoption
of Accounting Standards Update 2017-07,
"Compensation-Retirement Benefits (Topic 715)," the gain on
pension curtailment of $4.5 million
that was previously recorded to acquisition and integration costs
was reclassified to other adjustments, net for the three and nine
months ended September 30,
2017. This reclassification had no effect on Adjusted EBITDA for
the three and nine months ended September 30, 2017.
|
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
|
|
September 29,
2018
|
|
September 30,
2017
|
|
September 29,
2018
|
|
September 30,
2017
|
|
|
(Unaudited)
|
|
(Unaudited)
|
(c) Acquisition and
integration costs
|
Acquisition and
integration expenses
|
$
|
1.6
|
|
$
|
7.7
|
|
$
|
10.8
|
|
$
|
21.7
|
(d) Share-based
compensation costs
|
Selling,
general and administrative expenses
|
10.2
|
|
1.9
|
|
16.2
|
|
8.7
|
(e) Commodity hedging
(gain) loss, net
|
Cost of
sales
|
—
|
|
(0.4)
|
|
0.3
|
|
(1.9)
|
(f) Foreign exchange
and other losses (gains), net
|
Other income,
net
|
0.4
|
|
(0.2)
|
|
(10.8)
|
|
(1.1)
|
(g) Loss on disposal
of property, plant and equipment, net
|
Loss on
disposal of property, plant and equipment, net
|
1.2
|
|
—
|
|
3.8
|
|
5.7
|
(h) Gain on
extinguishment of long-term debt
|
Other income,
net
|
—
|
|
—
|
|
(7.1)
|
|
(1.5)
|
(i) Gain on
sale
|
Other income,
net
|
—
|
|
—
|
|
(6.0)
|
|
—
|
(j) Other
adjustments, net
|
Other income,
net
|
—
|
|
(3.0)
|
|
(6.6)
|
|
(3.0)
|
|
Selling,
general and administrative expenses
|
1.3
|
|
2.8
|
|
4.9
|
|
4.8
|
|
Cost of
sales
|
0.1
|
|
—
|
|
1.3
|
|
—
|
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
|
|
September 29,
2018
|
|
September 30,
2017
|
|
|
|
|
Net cash provided
by operating activities from continuing operations
|
$
|
78.2
|
|
$
|
46.2
|
Less: Additions
to property, plant, and equipment
|
(36.3)
|
|
(38.2)
|
Free Cash
Flow
|
$
|
41.9
|
|
$
|
8.0
|
|
|
|
|
Plus:
|
|
|
|
Acquisition and
integration cash costs
|
3.1
|
|
4.6
|
Working capital
adjustment - Refresco concentrate supply agreement (a)
|
2.6
|
|
—
|
Additional cash
proceeds from Primo operating agreement (b)
|
7.9
|
|
—
|
Adjusted Free Cash
Flow
|
$
|
55.5
|
|
$
|
12.6
|
|
|
|
|
|
For the Nine
Months Ended
|
|
September 29,
2018
|
|
September 30,
2017
|
|
|
|
|
Net cash provided
by operating activities from continuing operations
|
$
|
146.1
|
|
$
|
138.7
|
Less: Additions
to property, plant, and equipment
|
(95.0)
|
|
(97.1)
|
Free Cash
Flow
|
$
|
51.1
|
|
$
|
41.6
|
|
|
|
|
Plus:
|
|
|
|
Acquisition and
integration cash costs
|
12.5
|
|
16.9
|
Working capital
adjustment - Refresco concentrate supply agreement (a)
|
13.7
|
|
—
|
Additional cash
proceeds from Primo operating agreement (b)
|
7.9
|
|
—
|
Adjusted Free Cash
Flow
|
$
|
85.2
|
|
$
|
58.5
|
|
(a) Increase in
working capital related to the Concentrate Supply Agreement with
Refresco in connection with the Transaction.
|
(b) The Company
received warrants in connection with our 2014 operating agreement
with Primo Water Corporation.
|
COTT CORPORATION
AND COFFEE, TEA AND EXTRACT SOLUTIONS REPORTING
SEGMENT
|
EXHIBIT
8
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - ANALYSIS OF REVENUE
|
(in millions of
U.S. dollars)
|
Unaudited
|
|
|
Cott
(a)
|
|
Coffee, Tea and
Extract Solutions
|
|
For the Three
Months Ended
|
|
For the Three
Months Ended
|
|
September 29,
2018
|
|
September 30,
2017
|
|
September 29,
2018
|
|
September 30,
2017
|
|
|
|
|
|
|
|
|
Revenue,
net
|
$
|
609.3
|
|
$
|
580.9
|
|
$
|
140.2
|
|
$
|
143.4
|
|
|
|
|
|
|
|
|
Change in
revenue
|
$
|
28.4
|
|
|
|
$
|
(3.2)
|
|
|
|
|
|
|
|
|
|
|
Percentage change
in revenue
|
4.9%
|
|
|
|
(2.2)%
|
|
|
|
|
|
|
|
|
|
|
Impact of foreign
exchange (b)
|
$
|
3.0
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Impact of change in
average cost of green coffee (c)
|
$
|
4.3
|
|
|
|
$
|
4.3
|
|
|
|
|
|
|
|
|
|
|
Change excluding
foreign exchange and impact of change in average cost of green
coffee
|
$
|
35.7
|
|
|
|
$
|
1.1
|
|
|
|
|
|
|
|
|
|
|
Percentage change
in revenue excluding foreign exchange and impact of change in
average cost of green coffee
|
6.1%
|
|
|
|
0.8%
|
|
|
|
(a) Cott includes the
following reporting segments: Route Based Services, Coffee, Tea and
Extract Solutions and All Other.
|
(b) 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.
|
(c) Impact of change
in average cost of green coffee represents the difference between
the average cost per pound of green coffee in the current period
compared to the average cost per pound of green coffee in the prior
period multiplied by the pounds of coffee sold in the current
period.
|
Jarrod Langhans, Investor
Relations, Tel: (813) 313-1732, Investorrelations@cott.com