- Reported EPS of $0.09; Adjusted EPS(1) of $0.19 - Company
announces two additional plant closures TORONTO, Oct. 26
/PRNewswire-FirstCall/ -- Cott Corporation (NYSE:COT; TSX:BCB), the
world's largest retailer brand soft drink provider, announced today
its results for the third quarter ended September 30, 2006. "Our
third quarter performance suffered due to weakness in the North
American CSD category and other factors," said Brent Willis, Cott's
chief executive officer. "As we've said before, the top line will
take time to turn around. The impact of our expansion programs to
new channels, segments and customers will not be immediate but we
are making good progress in cost reduction and the processes
necessary to remake Cott into a highly disciplined, high
performance organization." Third quarter volume was 307.6 million
eight-ounce equivalent cases, down 6.6% compared to the third
quarter of 2005. The volume decline was due to continued softness
in the North American carbonated soft drink (CSD) category, the
timing of concentrate shipments, lower bottled water shipments and
product and customer rationalization. These factors were partially
offset by strong International filled beverage volume growth of
29.8% in the quarter, driven by the U.K. and Mexico. Revenue
increased 1.2% in the quarter to $475.5 million, compared to $469.9
million in the third quarter of last year. North American revenue
declined 5.4% compared to the third quarter of 2005 due to the
factors outlined above, as well as the previously disclosed
structural change in an agreement with one of the Company's
self-manufacturing customers. International revenue rose 28% due to
contributions resulting from the acquisition of Macaw Soft Drinks
(Macaw), as well as strong base business growth in the U.K. which
was up 11% year-over-year. Mexico also reported strong revenue
growth of 32% in the third quarter as compared to the same period
in 2005, largely as a result of expanded distribution to
non-supermarket channels. Excluding the impact of acquisitions and
foreign exchange, consolidated third quarter revenue declined 4.0%
when compared to the third quarter of 2005.
---------------------------- (1) Cott supplements its reporting of
net income (loss) and earnings (loss) per share information
determined in accordance with GAAP by using "adjusted net income
(loss)," and "adjusted earnings (loss) per share." Management
believes that certain charges are not pertinent to day-to-day
operational decision making in the business. Therefore, Cott
excludes these items from net income (loss) in determining adjusted
net income (loss) and adjusted earnings (loss) per share. See
Non-GAAP Measures paragraph on page 7 and Non-GAAP Measure
reconciliation on Exhibit 5. Third quarter gross margin as a
percentage of revenue was 13.0%, compared to 13.9% in the prior
year third quarter, due to the impact of lower volume and higher
logistics costs. Net income for the quarter was $6.6 million or
$0.09 per diluted share, compared to a net loss of $1.8 million or
$0.03 per diluted share in the third quarter of 2005. For the third
quarter, adjusted net income (which the Company considers to be net
income excluding unusual items, costs associated with the
transition to a new executive team ("executive transition costs"),
and other costs related to asset optimization activities) was $13.8
million or $0.19 per diluted share, compared to $15.5 million or
$0.22 per diluted share during the same period last year. (See
Non-GAAP Measures paragraph for reconciliation.) Selling, general
and administrative expenses increased in the quarter to $40.8
million, as compared to $34.2 million in the third quarter of 2005,
mainly due to stock-based compensation expense ($2.8 million
pre-tax), incentive expense ($2.0 million pre-tax), and foreign
exchange ($1.0 million pre-tax). Stock-based compensation expense
in the quarter was $2.0 million after taxes. Cott began recording
expenses for stock-based compensation in 2006 under the provisions
of FAS 123(R). Unusual item charges of $9.3 million on a pre-tax
basis, or $6.3 million after taxes, were recorded in the quarter.
This includes restructuring charges related to the closure of the
Columbus, Ohio plant which was announced in December 2005, as well
as severance costs. In the third quarter of 2005, unusual items
charges of $25.7 million on a pre-tax basis, or $17.3 million after
taxes, were recorded for asset impairment, restructuring and other
costs. Operating income in the quarter rose to $11.9 million from
$5.5 million in the prior year's third quarter. In the third
quarter, the Company reduced tax valuation allowances and
recognized a cumulative income tax benefit of $3.3 million for 2006
due to a more favorable geographic mix of earnings. NINE MONTHS
PERFORMANCE MIXED ----------------------------- Volume increased
4.2% in the first three quarters of 2006, compared to the same
period in 2005, to 966.2 million eight-ounce equivalent cases. The
increase was due to the Macaw acquisition, U.K. base business
growth, as well as strong growth in Mexico and concentrate sales
over the first nine months of the year. Year-to-date organic volume
was up 2.3%, compared to 2005. Revenue in the first nine months
increased 1% to $1,371.7 million from $1,358.1 million in the first
nine months of the prior year. Year-to-date revenue declined 4.8%
when acquisitions and foreign exchange are excluded. Revenue in
North America declined by 6.8% in the first nine months compared to
the same period in 2005. International revenue was up 38.8% for the
first three quarters of the year and was up 10.9% excluding
acquisitions and foreign exchange, when compared to the first three
quarters of 2005. Gross margin as a percentage of revenue for the
first nine months of 2006 was 13.6%, compared to 14.9% during the
same period last year. The decline was due primarily to the impact
of lower volume and higher logistics costs. Selling, general and
administrative expenses increased to $129.4 million from $106.6
million in the first nine months of 2005 mainly due to stock-based
compensation expense of $7.4 million ($5.6 million after tax),
executive transition costs of $6.6 million and increased incentive
provisions. Operating income declined to $42.6 million from $70.2
million in the first nine months of 2005 due to the factors
outlined above and unusual items. Through the first nine months of
2006, unusual items including restructuring charges and asset
impairments totalled $15.0 million, compared to $25.5 million
during the first nine months of 2005. Net income for the first nine
months of 2006 declined to $12.1 million, or $0.17 per diluted
share, compared to $31.5 million, or $0.44 per diluted share, in
the same period in 2005. Adjusted net income for the first nine
months of 2006 was $28.4 million, or $0.40 per diluted share,
compared to $48.6 million or $0.68 per diluted share during the
same period of 2005. PROGRESS ON COST REDUCTION PROGRAM
---------------------------------- The Company previously announced
that it had embarked on a significant cost reduction program to
improve profitability and allow for strategic reinvestment in the
business to support long term growth. The program encompasses five
areas: - Asset Optimization, Fixed Cost Reduction and World-Class
Efficiency - Sub-Zero Based Budgeting - Selling, General and
Administrative (SG&A) Optimization - Centralized Procurement -
SKU Rationalization In the second quarter, Cott reported that it
expected to achieve $8 million in savings for 2007 from SG&A
optimization and an initial $5 million from centralized
procurement. Today, the Company announced that it will close its
manufacturing plants in Elizabethtown, Kentucky and Wyomissing,
Pennsylvania, which it expects will contribute more than $8 million
in operating income for 2007. Cott anticipates that the savings
will increase to nearly $10 million for 2008 and beyond. The
Company intends to cease production at both plants by December 31,
2006 and reallocate volume to other manufacturing sites in its
North American system. As a result of the closures, approximately
350 positions will be eliminated and the Company expects related
charges for restructuring, asset impairment and accelerated
depreciation and amortization to be between $40-45 million. There
will be no disruption in customer service as a result of this
initiative. Following the closures, Cott will continue to operate
15 bottling plants and one concentrate manufacturing plant in North
America. These closures have been enabled by North American plant
efficiency levels which have improved three percentage points in
the third quarter of 2006 compared to the third quarter of 2005. In
addition, plant level turnover has been reduced in more than 60% of
the facilities and more than 550 SKUs have been eliminated.
Progress in SG&A expense optimization continues and Cott
reported that it expects to achieve an additional $2 million in
incremental savings for 2007 through consolidation and streamlining
of corporate functions and ongoing headcount reductions, allowing
for improved profitability or reinvestment in the business. "We
committed to aggressively tackling costs and we are following
through on our commitments," added Willis. "Some of the actions we
are taking are difficult, particularly those that impact our
employees. However, with the unknown but clearly negative impact of
commodity costs in 2007, these savings are even more important to
capture now." TOP LINE GROWTH INITIATIVES UNDERWAY
------------------------------------ Cott previously communicated
its model for top line growth: - Superior in-store execution to
drive core business - Penetration of new, high-margin beverage
segments in existing customers - Expansion to new, high-margin
channels and customers in existing and new segments - Expansion to
new global customers and geographies with Cott and Royal Crown
International The Company's entry into the high-margin,
fast-growing, ready-to-drink tea category is showing early signs of
success and acceptance from new customers throughout North America.
Cott announced that it is on-track with plans to install a second
aseptic (preservative-free) manufacturing line in its Nelson, U.K.
site to support significant growth in aseptic beverages. The
Company expects the new line to be commissioned in the second
quarter of 2007. Channel expansion in the third quarter was driven
by gas and convenience chains. Partnerships have been expanded or
initiated with two of North America's largest convenience store
operators, two major gas chain operators, and selected regional
convenience chains. In geographic expansion, the Company now has
arrangements with four Chinese bottlers which, beginning in the
first quarter of 2007, it expects will help it meet the needs of
major customers that are expanding in China. In The Philippines,
Cott's local partner supported overall international growth in the
quarter with the commissioning of a third CSD manufacturing plant.
The additional lines will allow for a 50% increase in production
capacity to satisfy consumer demand. RCI also expanded in Guatemala
with the successful introduction of fortified, flavored water.
ORGANIZATION STRENGTHENING -------------------------- During the
quarter, Cott announced the internal promotion of Edmund O'Keeffe
to Vice President Strategy & Investor Relations, leveraging
Edmund's extensive industry and retail knowledge and insights. The
Company also announced the appointment of Rick Dobry to the
position of Chief Manufacturing and Supply Officer. Rick joined the
Company in October and brings a track record of success in
world-class consumer packaged goods companies, across multiple
functions including manufacturing, supply chain, logistics, quality
and R&D. "Completing the appointments to our senior management
team during the quarter was an important milestone for the Company
as we work to remake our culture and strengthen our consistent and
superior performance orientation," commented Willis. "Rick will add
significant value in helping us ensure our cost reduction
initiatives deliver results in 2007 and beyond." FOURTH QUARTER AND
FULL YEAR OUTLOOK ------------------------------------ At this
time, Cott expects fourth quarter 2006 adjusted net income to be
below the prior year fourth quarter due to continuing volume
softness, planned curtailment in production to reduce inventories,
the inclusion of stock-based compensation expense and aggressive
actions to position the Company for improved performance in 2007.
Cott expects full year adjusted net income to be substantially
lower in 2006 compared to 2005. Cott has revised its expectation of
charges related to cost reduction activities to be in the range of
$115 to $125 million, up from the previously announced estimate for
such charges of $60 to $80 million, as a result of additional plant
closures, office consolidation and organizational streamlining.
This range includes $49.3 million of charges incurred to-date since
September 2005. Of the total amount, fourth quarter 2006 pre-tax
charges related to cost reductions including asset impairments,
accelerated depreciation and amortization, and restructuring
charges are expected to be between $25 million and $35 million.
2006 expenses for stock-based compensation are expected to be
between $10 million and $12 million on a pre-tax basis. "Clearly
the trends in North American volume and mix will continue to be our
biggest and toughest challenges in 2007," said Willis. "We remain
focused on aggressively expanding into new categories, channels and
geographies that will drive future profitability, while at the same
time becoming the lowest cost producer in each of our markets. We
will continue to report on our action plan progress in each quarter
and plan to provide more detail on our multi-year business model as
part of our fourth quarter earnings release." Third Quarter Results
Conference Call ------------------------------------- Cott
Corporation will host a conference call today, Thursday, October 26
at approximately 9 AM ET to discuss third quarter financial
results. For those who wish to listen to the presentation, there is
a listen-only, dial-in telephone line, which can be accessed as
follows: North America: (800) 814-4859 International: (416)
644-3415 Webcast ------- To access Cott's third quarter conference
call with analysts over the Internet, please visit the Company's
website at http://www.cott.com/. Please log on 15 minutes early to
register, download, and install any necessary audio/video software.
For those who are unable to access the live broadcast, a replay
will be available at Cott's website following these events until
November 2, 2006. About Cott Corporation ----------------------
Cott Corporation is one of the world's largest non-alcoholic
beverage companies and the world's largest retailer brand soft
drink provider. The Company commercializes its business in over 60
countries worldwide, with its principal markets being the United
States, Canada, the United Kingdom and Mexico. Cott markets or
supplies over 200 retailer and licensed brands, and Company-owned
brands including Cott, RC, Vintage, Vess and So Clear. Its products
include carbonated soft drinks, sparkling and flavored waters,
energy drinks, sports drinks, juices, juice drinks and smoothies,
ready-to-drink teas, and other non-carbonated beverages. The
Company's website is http://www.cott.com/. The brand names
referenced in this press release are trademarks of Cott
Corporation, its affiliated companies, our customers, or other
third parties. Non-GAAP Measures ----------------- For the third
quarter ended September 30, 2006, the term adjusted net income
consists of net income excluding unusual items, the costs
associated with executive transition costs and other costs related
to asset optimization activities. Adjusted earnings per share is
equal to adjusted net income divided by the weighted average
outstanding diluted shares. The term adjusted net income excludes
unusual items (restructuring, asset impairment and other charges),
certain charges relating to asset optimization activities (product
and customer rationalization activities) and, the executive
transition costs, net of the applicable tax impact of these
charges. Cott excludes these items in order to more clearly focus
on the factors it believes are pertinent to the daily management of
the Company's operations, and management uses adjusted results to
evaluate the impact of operational business decisions. Cott
supplements its reporting of net income (loss) and earnings (loss)
per share information determined in accordance with GAAP by using
"adjusted net income (loss)", and "adjusted earnings (loss) per
share". Management believes that certain charges are not pertinent
to day-to-day operational decision making in the business.
Therefore, Cott excludes these items from net income (loss) in
determining adjusted net income (loss) and adjusted earnings (loss)
per share. Since Cott uses certain adjusted financial results in
the management of its business, the Company believes this
supplemental information is useful to investors for their
independent evaluation and understanding of the performance of the
Company's management and its core business performance. Cott's
adjusted net income (loss) and adjusted earnings (loss) per share
should be considered in addition to, and not as a substitute for,
net income (loss) or earnings (loss) per share or any other amount
determined in accordance with GAAP. Cott's adjusted income (loss)
from operations, adjusted net income (loss) and adjusted earnings
per share reflect management's judgment of particular items, and
may not be comparable to similarly titled measures reported by
other companies. Safe Harbor Statements ---------------------- This
press release contains forward-looking statements reflecting
management's current expectations regarding future results of
operations, economic performance, financial condition and
achievements of the Company. Forward-looking statements,
specifically those concerning future performance such as those
relating to the success of the Company's measures to reduce costs
and increase sales and income, are subject to certain risks and
uncertainties, and actual results may differ materially. These
risks and uncertainties are detailed from time to time in the
Company's filings with the appropriate securities commissions, and
include, without limitation, stability of procurement costs for raw
and packaging materials, the Company's ability to restore plant
efficiencies and reduce logistics and other costs, adverse weather
conditions, competitive activities by other brand beverage
manufacturers, the Company's ability to develop new products that
appeal to consumer tastes, the Company's ability to identify
acquisition candidates, successfully consummate acquisitions and
integrate acquired businesses into its operations, fluctuations in
currency versus the U.S. dollar, the uncertainties of litigation
and regulatory review, loss of key customers and retailers'
continued commitment to their Company-supplied beverage programs.
The foregoing list of factors is not exhaustive. The Company
undertakes no obligation to publicly update or revise any
forward-looking statements. (Financial tables in Exhibits 1-6
attached) COTT CORPORATION EXHIBIT 1 CONSOLIDATED STATEMENTS OF
INCOME (LOSS) (in millions of US dollars except per share amounts,
US GAAP) Unaudited For the three For the nine months ended months
ended ----------------------- ----------------------- September
October September October 30, 2006 1, 2005 30, 2006 1, 2005
----------- ----------- ----------- ----------- Revenue $ 475.5 $
469.9 $ 1,371.7 $ 1,358.1 Cost of sales 413.5 404.5 1,184.7 1,156.0
----------- ----------- ----------- ----------- Gross profit 62.0
65.4 187.0 202.1 Selling, general and administrative expenses 40.8
34.2 129.4 106.6 Gain on disposal of property, plant &
equipment - - - (0.2) Unusual items Restructuring 9.4 2.0 11.2 2.0
Asset impairments (recovery) (0.1) 23.7 1.2 23.5 Other - - 2.6 -
----------- ----------- ----------- ----------- Operating income
11.9 5.5 42.6 70.2 Other income, net (0.2) (0.4) (0.4) (0.4)
Interest expense, net 7.8 7.7 23.5 20.8 Minority interest 0.9 1.1
3.0 3.4 ----------- ----------- ----------- ----------- Income
(loss) before income taxes 3.4 (2.9) 16.5 46.4 Income tax expense
(recovery) (3.2) (1.1) 4.4 14.9 ----------- ----------- -----------
----------- Net income (loss) $ 6.6 $ (1.8) $ 12.1 $ 31.5
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- Volume - 8 oz equivalent cases
307.6 329.3 966.2 927.6 - Filled Beverage 238.0 240.8 688.5 694.1
Net income (loss) per common share Basic $ 0.09 $ (0.03) $ 0.17 $
0.44 Diluted $ 0.09 $ (0.03) $ 0.17 $ 0.44 Weighted average
outstanding shares Basic 71,731,245 71,702,612 71,719,322
71,600,058 Diluted 71,782,170 71,988,667 71,765,858 71,940,859 COTT
CORPORATION EXHIBIT 2 CONSOLIDATED STATEMENTS OF CASH FLOWS (in
millions of US dollars, US GAAP) Unaudited For the three For the
nine months ended months ended -----------------------
----------------------- September October September October 30,
2006 1, 2005 30, 2006 1, 2005 ----------- ----------- -----------
----------- Operating Activities Net income (loss) $ 6.6 $ (1.8) $
12.1 $ 31.5 Depreciation and amortization 19.0 18.3 57.4 51.0
Amortization of financing fees 0.3 0.2 0.8 0.5 Share based
compensation 2.8 - 7.4 - Deferred income taxes (3.4) - 3.2 3.3
Minority interest 0.9 1.1 3.0 3.4 Gain on disposal of property,
plant & equipment - - - (0.2) Asset impairments (recovery)
(0.1) 23.7 1.2 23.5 Other non-cash items 6.2 0.3 6.7 1.2 Net change
in non-cash working capital 23.3 13.9 (8.1) (3.6) -----------
----------- ----------- ----------- Cash provided by operating
activities 55.6 55.7 83.7 110.6 ----------- ----------- -----------
----------- Investing Activities Additions to property, plant and
equipment (6.8) (14.1) (23.5) (68.9) Acquisitions - (135.1) -
(135.1) Proceeds from disposal of property, plant & equipment
0.4 0.1 1.9 2.1 Other investing activities (1.3) (2.1) (7.0) (6.2)
----------- ----------- ----------- ----------- Cash used in
investing activities (7.7) (151.2) (28.6) (208.1) -----------
----------- ----------- ----------- Financing Activities Payments
of long-term debt (0.3) (0.3) (0.8) (0.7) Short-term borrowings
(26.3) 91.0 (43.0) 85.5 Distributions to subsidiary minority
shareowner (1.8) (2.0) (3.6) (3.9) Issue of common shares 0.3 1.1
0.3 3.5 Financing costs - (1.2) - (3.8) Other financing activities
- (0.1) (0.1) (0.3) ----------- ----------- ----------- -----------
Cash used in financing activities (28.1) 88.5 (47.2) 80.3
----------- ----------- ----------- ----------- Effect of exchange
rate changes on cash 0.1 (0.1) 0.1 (0.6) ----------- -----------
----------- ----------- Net increase (decrease) in cash 19.9 (7.1)
8.0 (17.8) ----------- ----------- ----------- ----------- Cash,
beginning of period 9.8 15.9 21.7 26.6 ----------- -----------
----------- ----------- Cash, end of period $ 29.7 $ 8.8 $ 29.7 $
8.8 ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- COTT CORPORATION EXHIBIT 3
CONSOLIDATED BALANCE SHEETS (in millions of US dollars, US GAAP)
Unaudited September December 30, 2006 31, 2005 -----------
----------- ASSETS Current assets Cash $ 29.7 $ 21.7 Accounts
receivable 192.4 191.1 Inventories 157.8 144.2 Prepaid and other
expenses 14.6 9.5 Deferred income taxes 8.3 7.3 -----------
----------- 402.8 373.8 Property, plant and equipment 378.2 394.2
Goodwill 156.3 150.3 Intangibles and other assets 251.1 260.4
Deferred income taxes - 0.4 ----------- ----------- $ 1,188.4 $
1,179.1 ----------- ----------- ----------- ----------- LIABILITIES
AND SHAREOWNERS' EQUITY Current liabilities Short-term borrowings $
125.4 $ 157.9 Current maturities of long-term debt 1.0 0.8 Accounts
payable and accrued liabilities 191.0 182.5 Deferred income taxes -
0.2 ----------- ----------- 317.4 341.4 Long-term debt 272.1 272.3
Deferred income taxes 64.0 61.0 ----------- ----------- 653.5 674.7
Minority interest 21.9 22.5 Shareowners' equity Capital stock 273.3
273.0 Restricted shares (0.8) - Additional paid-in capital 25.8
18.4 Retained earnings 198.3 186.2 Accumulated other comprehensive
income 16.4 4.3 ----------- ----------- 513.0 481.9 -----------
----------- $ 1,188.4 $ 1,179.1 ----------- ----------- -----------
----------- COTT CORPORATION EXHIBIT 4 SEGMENT INFORMATION (in
millions of US dollars, US GAAP) Unaudited For the three For the
nine months ended months ended -----------------------
----------------------- September October September October 30,
2006 1, 2005 30, 2006 1, 2005 ----------- ----------- -----------
----------- Revenue North America $ 356.4 $ 376.6 $ 1,049.1 $
1,126.1 International 118.0 92.2 318.3 229.4 Corporate 1.1 1.1 4.3
2.6 ----------- ----------- ----------- ----------- $ 475.5 $ 469.9
$ 1,371.7 $ 1,358.1 ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- Operating income
(loss) North America $ 11.9 $ 1.1 $ 52.0 $ 62.2 International 11.2
6.9 24.5 17.2 Corporate (11.2) (2.5) (33.9) (9.2) -----------
----------- ----------- ----------- $ 11.9 $ 5.5 $ 42.6 $ 70.2
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- COTT CORPORATION EXHIBIT 5
SUPPLEMENTARY INFORMATION - NON GAAP MEASURES (in millions of US
dollars, except per share amounts) Unaudited Reconciliation of
adjusted net income For the three For the nine months ended months
ended ----------------------- ----------------------- September
October September October 30, 2006 1, 2005 30, 2006 1, 2005
----------- ----------- ----------- ----------- Net income (loss) $
6.6 $ (1.8) $ 12.1 $ 31.5 Reconciling items, net of tax effect:
Asset optimization(1) 0.6 - 0.6 - Executive transition costs(2) 0.3
- 4.7 - Unusual items Restructuring 6.4 1.3 7.6 1.3 Asset
impairments (recovery) (0.1) 16.0 0.8 15.8 Other - - 2.6 -
----------- ----------- ----------- ----------- Adjusted net income
$ 13.8 $ 15.5 $ 28.4 $ 48.6 ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- (1)
Pre-tax amount of $1.0 was included in cost of sales for the three
and nine months period ended September 30, 2006 (2) Pre-tax amount
of $0.3 and $6.6 were included in selling, general and
administrative expenses for the three and nine months period ended
September 30, 2006 respectively Reconciliation of adjusted diluted
earnings per share For the three For the nine months ended months
ended ----------------------- ----------------------- September
October September October 30, 2006 1, 2005 30, 2006 1, 2005
----------- ----------- ----------- ----------- Earnings (loss) per
diluted share $ 0.09 $ (0.03) $ 0.17 $ 0.44 Reconciling items, net
of tax effect: Asset optimization(1) 0.01 - 0.01 - Executive
transition costs(2) 0.00 - 0.07 - Unusual items Restructuring 0.09
0.02 0.11 0.02 Asset impairments (recovery) (0.00) 0.22 0.01 0.22
Other - - 0.04 - ----------- ----------- ----------- -----------
Adjusted earnings per diluted share $ 0.19 $ 0.22 $ 0.40 $ 0.68
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- Weighted average outstanding
shares Basic 71,731,245 71,702,612 71,719,322 71,600,058 Diluted
71,782,170 71,988,667 71,765,858 71,940,859 Change in revenue
excluding acquisitions & foreign exchange For the three months
ended For the three months ended ------------------------------
------------------------------ September 30, 2006 October 1, 2005
------------------------------ ------------------------------ North
Inter- North Inter- Cott America national Cott America national
-------- ---------- ---------- -------- ---------- ----------
Change in revenue $ 5.6 $ (20.4) $ 25.8 $ 27.5 $ 1.5 $ 25.6 Impact
of acquisitions (16.6) - (16.6) (17.7) (3.8) (13.9) Impact of
foreign exchange (7.5) (3.9) (3.4) (4.7) (4.7) (0.2) --------
---------- ---------- -------- ---------- ---------- Change
excluding acquisitions & foreign exchange $ (18.5) $ (24.3) $
5.8 $ 5.1 $ (7.0) $ 11.5 -------- ---------- ---------- --------
---------- ---------- Percentage change excluding acquisitions
& foreign exchange (4%) (6%) 7% 1% (2%) 17% -------- ----------
---------- -------- ---------- ---------- -------- ----------
---------- -------- ---------- ---------- For the nine months ended
For the nine months ended ------------------------------
------------------------------ September 30, 2006 October 1, 2005
------------------------------ ------------------------------ North
Inter- North Inter- Cott America national Cott America national
-------- ---------- ---------- -------- ---------- ----------
Change in revenue $ 13.6 $ (77.0) $ 88.9 $ 81.1 $ 42.8 $ 37.6
Impact of acquisitions (65.8) - (65.8) (31.3) (17.4) (13.9) Impact
of foreign exchange (13.0) (13.2) 0.3 (15.6) (12.8) (2.9) --------
---------- ---------- -------- ---------- ---------- Change
excluding acquisitions & foreign exchange $ (65.2) $ (90.2) $
23.4 $ 34.2 $ 12.6 $ 20.8 -------- ---------- ---------- --------
---------- ---------- Percentage change excluding acquisitions
& foreign exchange (5%) (8%) 11% 3% 1% 11% -------- ----------
---------- -------- ---------- ---------- -------- ----------
---------- -------- ---------- ---------- NON-GAAP MEASURE Cott
supplements its reporting of net income (loss) and earnings (loss)
per share information determined in accordance with GAAP by using
"adjusted net income" and "adjusted earnings per share". Management
believes that certain charges are not pertinent to day-to-day
operational decision making in the business. Therefore, Cott
excludes these items from net income (loss) in determining adjusted
net income and adjusted earnings per share. The term adjusted net
income excludes unusual items (restructuring, asset impairment and
other charges), other costs relating to asset optimization
activities (product and customer rationalization activities) and,
the costs associated with the transition to a new executive team,
net of the applicable tax impact of these charges. Cott excludes
these items in order to more clearly focus on the factors it
believes are pertinent to the daily management of the company's
operations, and management uses adjusted results to evaluate the
impact of operational business decisions. Since Cott uses certain
adjusted financial results in the management of its business, the
company believes this supplemental information is useful to
investors for their independent evaluation and understanding of the
performance of the company's management and its core business
performance. Cott's adjusted net income and adjusted earnings per
share should be considered in addition to, and not as a substitute
for, net income (loss) or earnings (loss) per share or any other
amount determined in accordance with GAAP. Cott's adjusted income
from operations, adjusted net income and adjusted earnings per
share reflect management's judgement of particular items, and may
not be comparable to similarly titled measures reported by other
companies. DATASOURCE: Cott Corporation CONTACT: COTT CONTACTS:
Media Relations, Kerry Morgan, Tel: (416) 203-5613; Investor
Relations, Edmund O'Keeffe, Tel: (416) 203-5617
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