Coca-Cola Enterprises Inc. Produced Record Second-Quarter 1996 Volume, Cash Operating Profit, And Net Income On Strong Operating Momentum

Business Wire, July 16, 1996

ATLANTA--(BUSINESS WIRE)--July 16, 1996--Coca-Cola Enterprises Inc. announced today that strong second-quarter 1996 operating performance generated cash operating profit of $332 million, 13 percent ahead of reported second-quarter 1995 results. Comparable cash operating profit, or results adjusted for the effect of acquisitions, reflected a 10 percent second-quarter 1996 growth rate. Coca-Cola Enterprises believes that cash operating profit, or operating income before deducting noncash depreciation and amortization expenses, represents one of the key standards for measuring the Company's operating performance. The Company's second-quarter 1996 performance reflects strong, broad-based volume growth, higher prices, and stable costs. These results were achieved even with the difficult comparison caused by the shift of heavy Fourth of July sales from the second quarter in 1995 to the third quarter in 1996.

In the first six months of 1996, cash operating profit reached $559 million, 14 percent above reported six-month 1995 results. Comparable cash operating profit increased by 9 percent in the first half of 1996, after adjusting for the effect of acquisitions and the favorable first-quarter 1996 supplier settlement.

"With year-to-date results ahead of our expectations, we have increased our cash operating profit growth projection to at least 9 percent for full-year 1996," stated Summerfield K. Johnston, Jr., vice chairman and chief executive officer of Coca-Cola Enterprises. "Our second-quarter 1996 performance reflects our focus on excellence in local marketplace execution and the strategic investment we made in our workforce, equipment, and information systems in the last few years."

Second-quarter 1996 net income applicable to common share owners advanced 24 percent to $57 million, or 46 cents per common share. Second-quarter 1996 results represent record quarterly earnings for Coca-Cola Enterprises. Six-month 1996 net income applicable to common share owners increased 29 percent to $62 million, or 50 cents per common share. Excluding the favorable first-quarter 1996 supplier settlement, six-month 1996 results were $56 million, or 45 cents per common share. Adjusted six-month 1996 earnings per share were 36 percent above six-month 1995 results of 33 cents per common share, excluding the first-quarter 1995 gain on the sale of the Company's interest in The Coca-Cola Bottling Company of the Mid South.

Operating Results

"Coca-Cola Enterprises' operating momentum accelerated in the second quarter of 1996, continuing to produce unprecedented sales, share, and profit growth even with the shift in sales from the Fourth of July holiday," stated Henry A. Schimberg, president and chief operating officer of Coca-Cola Enterprises. "Our focus in the remainder of 1996 will be on extending this operating momentum, and quickly and effectively integrating our pending domestic and international acquisitions."

Second-quarter 1996 net operating revenues increased 10 percent to a record $2 billion. Second-quarter 1996 physical case bottle and can volume exceeded reported and constant territory second-quarter 1995 results by 9 percent and 6 1/2 percent, respectively. Second-quarter 1996 volume growth outpaced prior-year results despite the shift in July Fourth sales and the 4 1/2 percent constant territory growth rate experienced in the second quarter of 1995. The Company's second-quarter 1996 volume performance is expected to be significantly ahead of second-quarter 1996 industry growth.

Coca-Cola classic, Sprite, and Barq's led the broad-based carbonated brand performance. Sprite volume growth continues to outpace all other major domestic carbonated beverages. Noncarbonated product growth accelerated from first-quarter 1996 levels with particularly strong growth in sales and share of Nestea Cool, as well as significant growth in sales of POWERaDE, Fruitopia, and still water products. Constant territory unit case (standard industry 192-ounce cases) growth significantly outpaced physical case growth in the second quarter of 1996.

In the first six months of 1996, net operating revenues increased 10 percent to $3.6 billion. Six-month 1996 physical case bottle and can volume exceeded reported and constant territory six-month 1995 results by 9 1/2 percent and 7 1/2 percent, respectively.

Second-quarter and six-month 1996 bottle and can net revenues per case both exceeded prior-year periods by 1 1/2 percent. Net revenues per case growth resulted from price increases complemented by favorable product, package, and channel mix trends. Second-quarter 1996 cost of sales per case declined 1/2 percent, reflecting favorable packaging cost trends. As expected, this second-quarter 1996 cost performance is significantly better than the 2 percent increase experienced in the first quarter of 1996. Year-to-date 1996 cost of sales per case increased from six-month 1995 levels by 1/2 percent, excluding the favorable first-quarter 1996 supplier settlement.