Coca-Cola Enterprises Inc. Reports Third-Quarter 1995 Cash Operating Profit Increased 12 Percent And Earnings Per Share Grew 42 Percent

Business Wire, Oct 17, 1995

ATLANTA--(BUSINESS WIRE)--Oct. 17, 1995--Coca-Cola Enterprises today announced that operating performance accelerated in the third quarter of 1995 producing cash operating profit that increased from third-quarter 1994 levels by approximately 12 percent to $272 million. This third-quarter 1995 growth rate follows an 11 percent increase in the second quarter of 1995 and a difficult prior-year comparison of 14 percent cash operating profit growth in the third quarter of 1994. Nine-month 1995 cash operating profit advanced to $763 million, approximately 11 percent ahead of nine-month 1994 results. Third-quarter and nine-month 1995 cash operating profit levels include the results of the January 1995 acquisition of the Wichita Coca-Cola Bottling Company ("Wichita bottler"). The results of the Wichita bottler acquisition added approximately 2 percent to both the reported third-quarter and nine-month 1995 cash operating profit growth rates.

Third-quarter 1995 net income applicable to common share owners reached $35 million, or 27 cents per common share, approximately 40 percent above third-quarter 1994 results of $25 million, or 19 cents per common share. In the first nine months of 1995, the Company reported net income applicable to common share owners of approximately $83 million, or 64 cents per common share. Excluding the first-quarter 1995 gain from the sale of the Company's 50 percent interest in The Coca-Cola Bottling Company of the Mid South, nine-month 1995 net income applicable to common share owners was $78 million, or 60 cents per common share, approximately 39 percent above nine-month 1994 results of $56 million, or 43 cents per common share.

Strong volume and net revenues per case growth, combined with decreases in selling, general and administrative expenses as a percent of sales, offset significant cost of sales increases to produce stable operating income margins in both the third quarter and first nine months of 1995. These operating results, favorable trends in net interest expense as a percent of sales, and a lower effective tax rate generated improvement in net income margins in both the third-quarter and nine-month 1995 periods.

"Our third quarter results continue to reflect the ability of the liquid nonalcoholic refreshment business to overcome the challenge of a rising cost environment," stated Summerfield K. Johnston, Jr., vice chairman and chief executive officer of Coca-Cola Enterprises. "We remain confident that we can consistently maximize our financial performance in any operating environment, identify strategic business opportunities and capitalize on those investments, and achieve our primary objective of increasing long-term share-owner value."

Operating Results

"Similar to the second quarter, our third-quarter 1995 performance reflects accelerated volume growth, significant net selling price increases, and flat per case operating expenses," commented Henry A. Schimberg, president and chief operating officer of Coca-Cola Enterprises. "Throughout 1995, our operating performance has gained momentum, reflecting the strength of our product and package portfolio, our emphasis on superior marketplace execution, and our strategic investment in people, equipment, and information systems. We are particularly pleased to have outperformed third-quarter expectations as we face challenging fourth-quarter 1994 pricing and cash operating profit comparisons," continued Mr. Schimberg.

Third-quarter 1995 physical case bottle and can volume outpaced reported and constant territory third-quarter 1994 levels by approximately 8 percent and 6 percent, respectively. The 6 percent third-quarter 1995 constant territory volume growth exceeded the 4 1/2 percent increase in the second quarter of 1995, and was particularly noteworthy in the face of the 7 percent growth achieved in the third quarter of 1994. Nine-month 1995 physical case bottle and can volume increased by approximately 5 1/2 percent and 4 percent, respectively, from reported and constant territory nine-month 1994 levels.

In both the third quarter and the first nine months of 1995, volume growth rates reflect solid performance from core carbonated soft drinks supplemented by the high growth in noncarbonated products. Driven in part by the consumer appeal and acceptance of the 20-ounce contour bottle, regular and diet cola brands continued to generate significant sales and share growth. Sprite's rate of growth continues to outpace that of any other soft drink in the domestic market.

Third-quarter 1995 fountain gallon volume outpaced the third quarter of 1994 by approximately 15 1/2 percent and 11 1/2 percent, respectively, on a reported and constant territory basis. In the first nine months of 1995, fountain gallon volume exceeded nine-month 1994 results by approximately 11 percent and 7 1/2 percent, respectively, on a reported and constant territory basis.

Both third-quarter and nine-month 1995 bottle and can net revenues per case exceeded the same prior-year periods by approximately 7 percent. This year-to-date 1995 performance is the most significant net revenues per case growth in Coca-Cola Enterprises history. In both the third quarter and first nine months of 1995, the net revenues per case growth reflects higher net selling prices combined with the positive effect of favorable product, package, and channel mix shifts.