- Q4 reported loss per share of $0.41 TORONTO, Feb. 2
/PRNewswire-FirstCall/ -- Cott Corporation (NYSE:COT; TSX:BCB), the
world's largest retailer brand soft drink provider, announced today
its results for the fourth quarter and full year ended December
30th, 2006. FOURTH QUARTER CONSOLIDATED RESULTS Fourth quarter
volume was 267.2 million eight-ounce equivalent cases, down 2%
compared to the fourth quarter of 2005, primarily due to carbonated
soft drink softness in North America and continued rationalization
of non-performing business and SKUs. Revenue increased 0.7% in the
quarter to $400.1 million, compared to $397.2 million in the fourth
quarter of the prior fiscal year. Excluding the impact of foreign
exchange, revenue declined 1.4% compared to the same period in the
prior year. Fourth quarter gross margin of 7.5% was impacted by
$12.2 million of accelerated depreciation and amortization relating
to the closure of two U.S. manufacturing plants and Cott's U.K.
resin supplier going into receivership, which resulted in inventory
and other losses of $9 million. These two items totalled $21.2
million in pre-tax costs, or 5.3% of sales. On an after-tax basis,
the impact of these items was $13.8 million. The fourth quarter
gross margin in 2005 was 11.9%. Net loss for the quarter was $29.6
million or $0.41 per diluted share, compared to a loss of $6.9
million or $0.10 per diluted share in the fourth quarter of the
prior year. This net loss reflects the charges arising from the
supplier receivership, plant closures, share-based compensation and
executive transition, amounting to $50.8 million before tax or
$32.6 million after taxes. Plant closure charges include
accelerated depreciation and amortization, restructuring, asset
impairment and inventory write-downs.
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4th Quarter Fiscal Year ----------- -----------
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2006 2005 2006 2005 ---- ---- ---- ----
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Volume (8oz MM) 267.2 273.8 1,233.5 1,201.4
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Revenue $400.1 $397.2 $1,771.8 $1,755.3
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Accelerated Depreciation and Amortization, Supplier Receivership
and Gain on Settlement(1) $21.2 $(0.5) $22.2 $(5.4)
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Gross Margin 7.5% 11.9% 12.2% 14.2%
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Restructuring, Assets Impairment & Other Charges(1) $29.6 $12.0
$58.6 $37.5
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Operating (loss) Income $(40.3) $1.8 $2.3 $71.9
-------------------------------------------------------------------------
Reported EPS $(0.41) $(0.10) $(0.24) $0.34
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(1) Refer to Reconciliation of GAAP to non-GAAP measures in
Exhibits 5 & 6. See Non-GAAP Measures. "Reported earnings were
significantly impacted by the planned plant closures, and by the
receivership of our U.K. resin supplier which was unexpected and
highly disappointing. Excluding these costs, our earnings and
fundamental performance continue to improve," said Cott Chief
Executive Officer Brent Willis. "The improvement in our business
fundamentals in the fourth quarter of 2006, particularly in cost
reduction and core customer partnerships, is encouraging. We have
made good progress in improving day-to-day operations, discipline
and focus but we still have significant opportunities to improve
execution." FOURTH QUARTER BUSINESS UNIT HIGHLIGHTS North American
revenue declined 3.8% compared to the fourth quarter of 2005. The
decline was due to lower volumes, the elimination of unprofitable
products and lower revenues as customers were converted from
delivered to customer pick-up. Excluding appreciation in the
Canadian dollar, North American revenue declined 4.3%. The
International business unit posted strong quarterly revenue gains
of 15.6% from base business growth. Excluding the impact of foreign
exchange, International revenue was up 7.4% over the prior year
fourth quarter. OTHER FINANCIAL INFORMATION Selling, general and
administrative expenses increased in the quarter to $46.7 million,
as compared to $32 million in the fourth quarter of 2005, mainly
due to stock-based compensation expense, executive transition costs
and incentive expense. Cott began recording expenses for
stock-based compensation in 2006 under the provisions of FAS
123(R). Restructuring charges, asset impairments and other charges
of $29.6 million on a pre-tax basis, or $18.8 million after taxes,
were recorded in the quarter. This includes charges related to the
previously-announced closure of the Company's plants in
Elizabethtown and Wyomissing. This amount is part of the previously
announced charges of $115-125 million. The fourth quarter operating
loss was $40.3 million compared to operating income of $1.8 million
in the fourth quarter of 2005. Cott is in the process of assessing
the effectiveness of its internal controls over financial reporting
in the areas of procurement, segregation of duties and inventory.
It expects to report material weaknesses in these areas in the
Company's annual report on Form 10-K, which is expected to be filed
at the end of February 2007. Cott does not expect these weaknesses
to result in any changes to the Company's financial statements for
2006. FULL-YEAR RESULTS 2006 full-year volume was 1,233.5 million
eight-ounce equivalent cases, up 2.7% from 1,201.4 million in 2005.
The volume growth was driven by the International business unit,
including the contribution from Macaw. 2006 revenues increased 0.9%
to $1,771.8 million, compared to $1,755.3 million in the prior
fiscal year. Excluding the acquisition of Macaw, revenue declined
3.6%. When the impact of foreign exchange is also excluded, revenue
declined 4.8% in 2006 compared to 2005. Full-year gross margin was
12.2% compared to 14.2% in 2005. Selling, general and
administrative expenses for 2006 were $176.1 million, a 27.1%
increase over 2005 primarily due to share-based compensation
expense which the Company began recording in 2006, executive
transition costs and increased incentive expense. Net loss for the
year was $17.5 million or $0.24 per diluted share, compared to
income of $24.6 million or $0.34 per diluted share in 2005. This
net loss reflects the charges from plant closures, share-based
compensation, executive transition charges and the inventory loss
triggered by the receivership of Cott's U.K. resin supplier. These
charges totalled $80.8 million before tax or $54.5 million after
taxes for the year. On a business unit basis, full-year North
American revenue was down 6% while International revenue grew 32%
in 2006 when compared to 2005. Excluding the Macaw acquisition,
International revenue grew 7.4% in the year. PROGRESS IN KEY
STRATEGIC AREAS As previously announced, Cott's strategy for
creating and sustaining long-term growth and profitability is based
on three key areas of focus: 1. Lowest cost production 2.
Retailers' best partner 3. Innovation pipeline Cott reported
progress in each of these areas: - The Company's plants in
Wyomissing and Elizabethtown shut down operations ahead of schedule
and with no major disruptions. The closures are expected to result
in $8 million of cost-savings in 2007 and $10 million annually
thereafter. - The Sub-Zero Based Budgeting (SZBB) process was fully
adopted for the 2007 budget. We anticipate realizing more than $10
million in savings in 2007 as a result of the SZBB process. -
Combining all cost reduction programs, including those items above
and previously announced in the second and third quarters of 2006,
Cott expects to deliver a total of $35 million in cost reductions
for 2007, and spend back $15 million of that to support growth
initiatives. - In core business execution, Cott has aligned annual
displays, features, expanded shelf space, and consumer promotion
calendars with many of its major customers. These include in-store
sampling, product tie-ins, dedicated promotional displays and flyer
promotions taking place throughout 2007. - In new products, the
Company finalized agreements to supply sports drinks to one of its
top five customers beginning in the second quarter of 2007. Cott
continues to roll out its portfolio of sports drinks,
ready-to-drink teas, energy drinks, and flavored and enhanced
waters, as part of its expansion of new non-CSD products throughout
North America. - Internationally, Cott continued its strategic
expansion. In addition to new supply arrangements in Europe with a
top five global retailer, Cott also recently aligned with a top
U.K. retailer to supply a range of high quality beverages to its
portfolio. The Company also progressed its relationships with
business partners in China. Cott expects to launch both retailer
brands and RC Cola beginning in the second quarter of 2007. SUMMARY
& OUTLOOK "In the second half of 2006, we made a number of
changes necessary to rebuild our business foundation which we
expect will deliver solid results in 2007. We took actions to
remove millions of dollars in costs from the business, eliminated
hundreds of positions, restructured and refocused the organization,
and re-oriented top-line drivers to renew volume and revenue
growth," added Willis. "We said we would take significant costs out
of the business and we have - but there is a lot more that we can
and will do. We've made good early progress in new channels, new
products, and new customers, especially internationally. These new
initiatives and expansions take time to contribute, but we expect
them to positively impact the business in 2007. We said top-line
would take at least until the beginning of the year to turn-around
and we are now seeing the initial signs of improvement and a fast
start to the new year." Cott announced its business model for
growth with anticipated financial targets of: - Long-term annual
organic volume growth of 2-4% - Long-term annual organic revenue
growth of 3-5% - Gross margin improvement of 50 - 100 basis points
year-on-year, exceeding 16% in 2009 - Long-term annual operating
income growth of 12-15% - Annual capital expenditures of $50-70
million (These targets are based on certain assumptions as laid out
in the Safe Harbor Statements below.) "The top and bottom line
opportunities for the Company are considerable and we believe we
are well positioned to drive strong multi-year performance. Given
the industry unknowns in 2007, we expect volume and revenue growth
to be on the lower end, but profit growth to be on the upper end of
the Company's long-term targets, as performance recovers from
2006." Going forward, Cott will no longer provide earnings per
share (EPS) guidance but will update performance against its
business model each quarter. Fourth Quarter Results Conference Call
-------------------------------------- Cott Corporation will host a
conference call today, Friday, February 2 at approximately 9 AM ET
to discuss fourth quarter and full-year 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: 800-732-9303 International: 416-644-3423
Webcast ------- To access Cott's fourth 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
February 9, 2007. 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 ----------------- Cott supplements
its reporting of net income (loss) determined in accordance with
GAAP by using comparable net income (loss). 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 comparable net income
(loss). The term comparable net income (loss) excludes
restructuring, asset impairment and other charges, certain charges
relating to plant closures (product and customer rationalization
activities and accelerated depreciation and amortization and
inventory reserves), proceeds from litigation settlement, U.K.
supplier receivership, share-based compensation expense, and
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 these
results to evaluate the impact of operational business decisions.
Since Cott uses these 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 comparable net income (loss)
should be considered in addition to, and not as a substitute for,
net income (loss) or any other amount determined in accordance with
GAAP. Cott's comparable net income (loss) 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.
The forward-looking statements are based on the assumption that
volume and revenue will be consistent with historical trends, that
margins will improve through a balance of revenue realization and
cost containment, and that interest rates will remain constant and
debt levels will decline. Management believes these assumptions to
be reasonable but there is no assurance that they will prove to be
accurate. Forward-looking statements, specifically those concerning
future performance such as those relating to the success of the
Company's measures to increase volume and revenue, reduce costs and
increase operating 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 1-7
attached) COTT CORPORATION EXHIBIT 1 CONSOLIDATED STATEMENTS OF
(LOSS) INCOME (in millions of US dollars except per share amounts,
US GAAP) Unaudited For the three months ended For the years ended
----------------------- ----------------------- December December
December December 30, 2006 31, 2005 30, 2006 31, 2005 ------------
----------- ----------- ----------- Revenue $ 400.1 $ 397.2 $
1,771.8 $ 1,755.3 Cost of sales 370.2 349.8 1,554.9 1,505.8
------------ ----------- ----------- ----------- Gross profit 29.9
47.4 216.9 249.5 Selling, general and administrative expenses 46.7
32.0 176.1 138.6 Loss on disposal of property, plant &
equipment - 1.6 - 1.5 Restructuring, asset impairments and other
Restructuring 9.3 1.2 20.5 3.2 Asset impairments 14.2 10.0 15.4
33.5 Other - 0.8 2.6 0.8 ------------ ----------- -----------
----------- Operating (loss) income (40.3) 1.8 2.3 71.9 Other
expense (income), net 0.5 (0.2) 0.1 (0.7) Interest expense, net 8.7
8.0 32.2 28.8 Minority interest 0.8 1.1 3.8 4.5 ------------
----------- ----------- ----------- (Loss) Income before income
taxes (50.3) (7.1) (33.8) 39.3 Income tax (recovery) expense (20.7)
(0.2) (16.3) 14.7 ------------ ----------- ----------- -----------
Net (loss) income $ (29.6) $ (6.9) $ (17.5) $ 24.6 ------------
----------- ----------- ----------- ------------ -----------
----------- ----------- Volume - 8 oz equivalent cases 267.2 273.8
1,233.5 1,201.4 - Filled Beverage 200.9 209.3 889.5 903.4 Net
income (loss) per common share Basic $(0.41) $(0.10) $(0.24) $0.34
Diluted $(0.41) $(0.10) $(0.24) $0.34 Weighted average outstanding
shares Basic 71,746,245 71,711,015 71,726,053 71,627,797 Diluted
71,794,139 71,777,904 71,772,928 71,900,120 COTT CORPORATION
EXHIBIT 2 CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions of US
dollars, US GAAP) Unaudited For the three months ended For the
years ended ----------------------- -----------------------
December December December December 30, 2006 31, 2005 30, 2006 31,
2005 ------------ ----------- ----------- ----------- Operating
Activities Net (loss) income $ (29.6) $ (6.9) $ (17.5) $ 24.6
Depreciation and amortization 29.4 19.2 86.8 70.2 Amortization of
financing fees 0.3 0.3 1.1 0.8 Share-based compensation 4.0 - 11.4
- Deferred income taxes (9.8) (9.8) (6.6) (6.5) Minority interest
0.8 1.1 3.8 4.5 Loss on disposal of property, plant & equipment
- 1.6 - 1.5 Asset impairments 14.2 10.0 15.4 33.5 Other non-cash
items 5.3 2.0 12.0 1.5 Net change in non-cash working capital 11.1
8.8 3.0 (1.0) ------------ ----------- ----------- ----------- Cash
provided by operating activities 25.7 26.3 109.4 129.1 ------------
----------- ----------- ----------- Investing Activities Additions
to property, plant and equipment (11.6) (14.7) (35.1) (75.8)
Acquisitions - - - (135.1) Proceeds from disposal of property,
plant & equipment 0.1 - 1.6 2.2 Other investing activities
(6.4) (2.7) (13.0) (9.0) ------------ ----------- -----------
----------- Cash used in investing activities (17.9) (17.4) (46.5)
(217.7) ------------ ----------- ----------- ----------- Financing
Activities Payments of long-term debt (0.2) (0.2) (1.0) (0.9)
Short-term borrowings (22.9) 6.3 (65.9) 91.8 Distributions to
subsidiary minority shareowner (1.8) (1.9) (5.4) (5.8) Issue of
common shares 0.1 0.1 0.4 3.6 Financing costs - - - (3.8) Other
financing activities 0.7 (0.1) 0.6 (0.4) ------------ -----------
----------- ----------- Cash used in financing activities (24.1)
4.2 (71.3) 84.5 ------------ ----------- ----------- -----------
Effect of exchange rate changes on cash - (0.2) 0.1 (0.8)
------------ ----------- ----------- ----------- Net (decrease)
increase in cash (16.3) 12.9 (8.3) (4.9) Cash, beginning of period
29.7 8.8 21.7 26.6 ------------ ----------- ----------- -----------
Cash, end of period $ 13.4 $ 21.7 $ 13.4 $ 21.7 ------------
----------- ----------- ----------- ------------ -----------
----------- ----------- COTT CORPORATION EXHIBIT 3 CONSOLIDATED
BALANCE SHEETS (in millions of US dollars, US GAAP) Unaudited
December 30, December 31, 2006 2005 ------------ ------------
ASSETS Current assets Cash $ 13.4 $ 21.7 Accounts receivable 187.0
190.1 Income taxes recoverable 16.6 1.0 Inventories 131.2 144.2
Prepaid and other expenses 10.3 9.5 Deferred income taxes 11.7 7.3
------------ ------------ 370.2 373.8 Property, plant and equipment
360.2 394.2 Goodwill 158.4 150.3 Intangibles and other assets 250.7
260.4 Deferred income taxes - 0.4 ------------ ------------ $
1,139.5 $ 1,179.1 ------------ ------------ ------------
------------ LIABILITIES AND SHAREOWNERS' EQUITY Current
liabilities Short-term borrowings $ 107.7 $ 157.9 Current
maturities of long-term debt 2.0 0.8 Accounts payable and accrued
liabilities 186.5 182.5 Deferred income taxes - 0.2 ------------
------------ 296.2 341.4 Long-term debt 275.2 272.3 Deferred income
taxes 58.5 61.0 ------------ ------------ 629.9 674.7 Minority
interest 20.9 22.5 Shareowners' equity Capital stock 273.4 273.0
Restricted shares (0.7) - Additional paid-in capital 29.8 18.4
Retained earnings 168.7 186.2 Accumulated other comprehensive
income 17.5 4.3 ------------ ------------ 488.7 481.9 ------------
------------ $ 1,139.5 $ 1,179.1 ------------ ------------
------------ ------------ COTT CORPORATION EXHIBIT 4 SEGMENT
INFORMATION (in millions of US dollars, US GAAP) Unaudited For the
three months ended For the years ended -----------------------
----------------------- December December December December 30,
2006 31, 2005 30, 2006 31, 2005 ------------ -----------
----------- ----------- Revenue North America $ 290.3 $ 301.9 $
1,339.4 $ 1,428.0 International 108.8 94.1 427.1 323.5 Corporate
1.0 1.2 5.3 3.8 ------------ ----------- ----------- ----------- $
400.1 $ 397.2 $ 1,771.8 $ 1,755.3 ------------ -----------
----------- ----------- ------------ ----------- -----------
----------- Operating (loss) income North America $ (25.8) $ (1.1)
$ 26.1 $ 61.1 International (1.2) 7.3 23.3 24.5 Corporate (13.3)
(4.4) (47.1) (13.7) ------------ ----------- -----------
----------- $ (40.3) $ 1.8 $ 2.3 $ 71.9 ------------ -----------
----------- ----------- ------------ ----------- -----------
----------- COTT CORPORATION EXHIBIT 5 SUPPLEMENTARY INFORMATION -
NON GAAP MEASURES (in millions of US dollars, except per share
amounts) Unaudited Reconciliation of GAAP to Non-GAAP measures(1)
For the three months ended December 30, 2006
------------------------------------------------- 2006 Plant UK
Closures HFCS Supplier Reported and Litigation Receiv- (GAAP)
Other(2) Proceeds ership ---------- ---------- ----------
---------- Revenue $ 400.1 $ - - $ - Cost of sales 370.2 12.2 - 9.0
---------- ---------- ---------- ---------- Gross profit 29.9
(12.2) - (9.0) Selling, general and administrative expenses 46.7 -
- - Loss on disposal of property, plant & equipment - - - -
Restructuring, asset impairments and other Restructuring 9.3 9.3 -
- Asset impairments 14.2 14.2 - - Other - - - - ----------
---------- ---------- ---------- Operating (loss) income (40.3)
(35.7) - (9.0) Other expense (income), net 0.5 - - - Interest
expense, net 8.7 - - - Minority interest 0.8 - - - ----------
---------- ---------- ---------- (Loss) Income before income taxes
(50.3) (35.7) - (9.0) Income tax (recovery) expense (20.7) (13.7) -
(2.7) ---------- ---------- ---------- ---------- Net (loss) income
$ (29.6) $ (22.0) $ - $ (6.3) ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- For the
three months ended December 30, 2006
------------------------------------ Share- based Compen- Executive
Comparable sation Transition (Non-GAAP) ---------- ----------
---------- Revenue $ - $ - $ 400.1 Cost of sales - - 349.0
---------- ---------- ---------- Gross profit - - 51.1 Selling,
general and administrative expenses 4.0 2.1 40.6 Loss on disposal
of property, plant & equipment - - - Restructuring, asset
impairments and other Restructuring - - - Asset impairments - - -
Other - - - ---------- ---------- ---------- Operating (loss)
income (4.0) (2.1) 10.5 Other expense (income), net - - 0.5
Interest expense, net - - 8.7 Minority interest - - 0.8 ----------
---------- ---------- (Loss) Income before income taxes (4.0) (2.1)
0.5 Income tax (recovery) expense (1.2) (0.6) (2.5) ----------
---------- ---------- Net (loss) income $ (2.8) $ (1.5) $ 3.0
---------- ---------- ---------- ---------- ---------- ----------
For the three months ended December 31, 2005
------------------------------------------------- 2005 Plant UK
Closures HFCS Supplier Reported and Litigation Receiv- (GAAP)
Other(2) Proceeds ership ---------- ---------- ----------
---------- Revenue $ 397.2 $ - $ - $ - Cost of sales 349.8 - (0.5)
- ---------- ---------- ---------- ---------- Gross profit 47.4 -
0.5 - Selling, general and administrative expenses 32.0 - - - Loss
on disposal of property, plant & equipment 1.6 - - -
Restructuring, asset impairments and other Restructuring 1.2 1.2 -
- Asset impairments 10.0 10.0 - - Other 0.8 0.8 - - ----------
---------- ---------- ---------- Operating (loss) income 1.8 (12.0)
0.5 - Other expense (income), net (0.2) - - - Interest expense, net
8.0 - - - Minority interest 1.1 - - - ---------- ----------
---------- ---------- (Loss) Income before income taxes (7.1)
(12.0) 0.5 - Income tax (recovery) expense (0.2) (4.0) 0.2 -
---------- ---------- ---------- ---------- Net (loss) income $
(6.9) $ (8.0) $ 0.3 $ - ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- For the three months
ended December 31, 2005 ------------------------------------ Share-
based Compen- Executive Comparable sation Transition (Non-GAAP)
---------- ---------- ---------- Revenue $ - $ - $ 397.2 Cost of
sales - - 350.3 ---------- ---------- ---------- Gross profit - -
46.9 Selling, general and administrative expenses - - 32.0 Loss on
disposal of property, plant & equipment - - 1.6 Restructuring,
asset impairments and other Restructuring - - - Asset impairments -
- - Other - - - ---------- ---------- ---------- Operating (loss)
income - - 13.3 Other expense (income), net - - (0.2) Interest
expense, net - - 8.0 Minority interest - - 1.1 ----------
---------- ---------- (Loss) Income before income taxes - - 4.4
Income tax (recovery) expense - - 3.6 ---------- ----------
---------- Net (loss) income $ - $ - $ 0.8 ---------- ----------
---------- ---------- ---------- ---------- (1) For a description
of non-GAAP measures, please refer to exhibit 7. (2) "Plant
Closures" include accelerated depreciation and amortization and
inventory writedowns recorded in cost of sales related to plant
closures. "Other" include restructuring charges, severances and
other costs associated with staff reductions in selling, general
and administrative. COTT CORPORATION EXHIBIT 6 SUPPLEMENTARY
INFORMATION - NON GAAP MEASURES (in millions of US dollars, except
per share amounts) Unaudited Reconciliation of GAAP to Non-GAAP
measures(1) For the year ended December 30, 2006
------------------------------------------------- 2006 Plant UK
Closures HFCS Supplier Reported and Litigation Receiv- (GAAP)
Other(2) Proceeds ership ---------- ---------- ----------
---------- Revenue $1,771.8 $ - - $ - Cost of sales 1,554.9 13.2 -
9.0 ---------- ---------- ---------- ---------- Gross profit 216.9
(13.2) - (9.0) Selling, general and administrative expenses 176.1 -
- - Loss on disposal of property, plant & equipment - - - -
Restructuring, asset impairments and other Restructuring 20.5 20.5
- - Asset impairments 15.4 15.4 - - Other 2.6 2.6 - - ----------
---------- ---------- ---------- Operating (loss) income 2.3 (51.7)
- (9.0) Other expense (income), net 0.1 - - - Interest expense, net
32.2 - - - Minority interest 3.8 - - - ---------- ----------
---------- ---------- (Loss) Income before income taxes (33.8)
(51.7) - (9.0) Income tax (recovery) expense (16.3) (18.1) - (2.7)
---------- ---------- ---------- ---------- Net (loss) income $
(17.5) $ (33.6) $ - $ (6.3) ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- For the year
ended December 30, 2006 ------------------------------------ Share-
based Compen- Executive Comparable sation Transition (Non-GAAP)
---------- ---------- ---------- Revenue $ - $ - $1,771.8 Cost of
sales - - 1,532.7 ---------- ---------- ---------- Gross profit - -
239.1 Selling, general and administrative expenses 11.4 8.7 156.0
Loss on disposal of property, plant & equipment - - -
Restructuring, asset impairments and other Restructuring - - -
Asset impairments - - - Other - - - ---------- ----------
---------- Operating (loss) income (11.4) (8.7) 83.1 Other expense
(income), net - - 0.1 Interest expense, net - - 32.2 Minority
interest - - 3.8 ---------- ---------- ---------- (Loss) Income
before income taxes (11.4) (8.7) 47.0 Income tax (recovery) expense
(3.0) (2.5) 10.0 ---------- ---------- ---------- Net (loss) income
$ (8.4) $ (6.2) $ 37.0 ---------- ---------- ---------- ----------
---------- ---------- For the year ended December 31, 2005
------------------------------------------------- 2005 Plant UK
Closures HFCS Supplier Reported and Litigation Receiv- (GAAP)
Other(2) Proceeds ership ---------- ---------- ----------
---------- Revenue $1,755.3 $ - - $ - Cost of sales 1,505.8 - (5.4)
- ---------- ---------- ---------- ---------- Gross profit 249.5 -
5.4 - Selling, general and administrative expenses 138.6 - - - Loss
on disposal of property, plant & equipment 1.5 - - -
Restructuring, asset impairments and other Restructuring 3.2 3.2 -
- Asset impairments 33.5 33.5 - - Other 0.8 0.8 - - ----------
---------- ---------- ---------- Operating (loss) income 71.9
(37.5) 5.4 - Other expense (income), net (0.7) - - - Interest
expense, net 28.8 - - - Minority interest 4.5 - - - ----------
---------- ---------- ---------- (Loss) Income before income taxes
39.3 (37.5) 5.4 - Income tax (recovery) expense 14.7 (12.4) 2.1 -
---------- ---------- ---------- ---------- Net (loss) income $
24.6 $ (25.1) $ 3.3 $ - ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- For the year ended
December 31, 2005 ------------------------------------ Share- based
Compen- Executive Comparable sation Transition (Non-GAAP)
---------- ---------- ---------- Revenue $ - $ - $1,755.3 Cost of
sales - - 1,511.2 ---------- ---------- ---------- Gross profit - -
244.1 Selling, general and administrative expenses - - 138.6 Loss
on disposal of property, plant & equipment - - 1.5
Restructuring, asset impairments and other Restructuring - - -
Asset impairments - - - Other - - - ---------- ----------
---------- Operating (loss) income - - 104.0 Other expense
(income), net - - (0.7) Interest expense, net - - 28.8 Minority
interest - - 4.5 ---------- ---------- ---------- (Loss) Income
before income taxes - - 71.4 Income tax (recovery) expense - - 25.0
---------- ---------- ---------- Net (loss) income $ - $ - $ 46.4
---------- ---------- ---------- ---------- ---------- ----------
(1) For a description of non-GAAP measures, please refer to exhibit
7. (2) "Plant Closures" include accelerated depreciation and
amortization and inventory writedowns recorded in cost of sales
related to plant closures. "Other" include restructuring charges,
severances and other costs associated with staff reductions in
selling, general and administrative. COTT CORPORATION EXHIBIT 7
SUPPLEMENTARY INFORMATION - NON GAAP MEASURES (in millions of US
dollars, except per share amounts) Unaudited Change in revenue
excluding acquisitions & foreign exchange For the three months
ended For the year ended ------------------------------
------------------------------ December 30, 2006 December 30, 2006
------------------------------ ------------------------------ North
Inter- North Inter- Cott America national Cott America national
-------- ---------- ---------- -------- ---------- ----------
Change in revenue $ 2.9 $ (11.6) $ 14.7 $ 16.5 $ (88.6) $ 103.6
Impact of acquisitions - - - (79.6) - (79.6) Impact of foreign
exchange (8.5) (1.3) (7.2) (21.5) (14.5) (6.9) -------- ----------
---------- -------- ---------- ---------- Change excluding
acquisitions & foreign exchange $ (5.6) $ (12.9) $ 7.5 $ (84.6)
$ (103.1) $ 17.1 -------- ---------- ---------- -------- ----------
---------- Percentage change excluding acquisitions & foreign
exchange (1%) (4%) 7% (5%) (7%) 5% -------- ---------- ----------
-------- ---------- ---------- -------- ---------- ----------
-------- ---------- ---------- NON-GAAP MEASURE Cott supplements
its reporting of net income (loss) determined in accordance with
GAAP by using comparable net income (loss). 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 comparable net income
(loss). The term comparable net income (loss) excludes
restructuring, asset impairments and other charges, certain charges
relating to plant closures (product and customer rationalization
activities and accelerated depreciation and amortization and
inventory reserves), proceeds from litigation settlement, U.K.
supplier receivership, share-based compensation expense and
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 these
results to evaluate the impact of operational business decisions.
Since Cott uses these 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 comparable net income (loss)
should be considered in addition to, and not as a substitute for,
net income (loss) or any other amount determined in accordance with
GAAP. Cott's comparable net income (loss) reflect management's
judgement of particular items, and may not be comparable to
similarly titled measures reported by other companies. DATASOURCE:
Cott Corporation CONTACT: Media Relations, Kerry Morgan, Tel: (416)
203-5613; Investor Relations, Edmund O'Keeffe, Tel: (416) 203-5617
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