Coca-Cola Beverages Reports 24 Percent Increase In Cash Operating Profit And Second Consecutive Quarter With Positive Net Income

Business Wire, Oct 26, 1995

TORONTO, Ontario--(BUSINESS WIRE)--Oct. 26, 1995--COCA-COLA BEVERAGES (TSE,ME: KOC)

- Volume increases coupled with selling price increases have improved gross profit by 6 percent for the third quarter and 7 percent for the first nine months, over the same periods last year.

- Operating expenses decreased for the eighth consecutive quarter, while case volumes increased 4 percent for the quarter and 3 percent for the year to date.

- Operating income improved by 43 percent in the third quarter over the prior year to $22 million, cash operating profit improved 24 percent to $32 million and net income available to common shareholders was positive for the second consecutive quarter.

Coca-Cola Beverages Ltd. reported the second consecutive quarter of positive net income available to common shareholders this year. Third quarter net income available to common shareholders advanced to $4.3 million, an eightfold increase from $0.5 million in the same quarter of 1994. Net loss to common shareholders is $3.7 million on a year to date basis, compared to $13.0 million during the same period last year.

William P. Casey, president and chief executive officer said, "We are continuing to execute our plan - to increase sales volume by focusing on our consumers and customers, increasing margin by focusing on profitable packages and channels and reducing our expenses through the successful implementation of our restructuring plan. Our results are in line with our expectations and we are continuing to show positive trends."

Net operating revenues for the third quarter of 1995 exceeded 1994 third quarter results by 12 percent, reaching $265.0 million. On a year to date basis, net operating revenues increased 9 percent over the prior year. Sales volume grew 4 percent for the quarter and 3 percent for the year to date.

Cost of sales increased by 11 percent on a standard physical case basis for the quarter and 7 percent for the year to date compared to the prior year. These increases are due primarily to industry increases in the price of raw and packaging materials.

Operating expenses have decreased for the eighth consecutive quarter, when compared to the same quarter of the prior year, primarily due to the success of the Company's restructuring plan announced in the fourth quarter of 1993. In the same time frame that the Company has benefitted from declining operating expenses, it has also experienced an increase in volume.

Operating expenses have decreased by 1 percent for the quarter and 2 percent for the first nine months versus the prior year, overall. On a standard physical case basis, operating expenses have decreased by 6 percent for the quarter and 5 percent for the first nine months.

Operating income improved by 43 percent for the quarter to $22 million over the third quarter of 1994. An improvement of 102 percent for the first nine months over the same period last year, has driven year to date operating income to $40.6 million. "Our operating income improvements reflect the success of our strategy to sell more of our superior product line through the customer to the consumer at a profit," continued Mr. Casey.

The Company reported that cash operating profit increased by 24 percent to $32.0 million in 1995 from $25.8 million in 1994 for the third quarter. Cash operating profit is defined as operating income plus depreciation, amortization and non-cash expenses. For the year to date, cash operating profit increased by 37 percent to $71.0 million in 1995 from $51.9 million in 1994.

Interest expense for the quarter increased by $1.9 million over the same quarter of 1994 primarily due to higher interest rates.

Coca-Cola Beverages Ltd. is the largest bottler of soft drink products in Canada and one of the largest Coca-Cola bottlers in the world. The Company, through its subsidiary, produces and distributes Coca-Cola soft drink products as well as various Canada Dry, Schweppes, Nestea and A&W trademark products. Also included in the Company's product line are Fruitopia fruit beverages, Minute Maid fruit juices and beverages, POWERaDE sports drinks, and Evian and Volvic premium bottled waters. -0-