Coca-Cola Enterprises Inc. Reports 9 Percent Comparable Cash Operating Profit Growth On Record Revenues Of $2.2 Billion In The Third Quarter Of 1996

Business Wire, Oct 16, 1996

ATLANTA--(BUSINESS WIRE)--Oct. 16, 1996--

-- Cash operating profit reached $325 million,

reflecting 9 percent comparable growth and

19 percent reported growth in the third

quarter of 1996.

-- Third-quarter 1996 net operating revenues

increased 19 percent to a record $2.2 billion

as a result of strong internal and acquisition

growth.

-- Earnings per common share advanced 7 percent

to 29 cents in the third quarter of 1996,

even with the previously disclosed increase

in stock-performance related expenses.

Coca-Cola Enterprises today reported that third-quarter 1996 cash operating profit advanced to $325 million, 19 percent above reported third-quarter 1995 results. The comparable cash operating profit growth rate was 9 percent for the third quarter of 1996, building on a 10 percent comparable growth rate in the third quarter of 1995. In management's opinion, comparable cash operating profit, or operating income before deducting noncash depreciation and amortization expenses and after adjusting for acquisitions and nonrecurring items, represents one of the key standards for measuring the Company's operating performance. The third-quarter 1996 comparable growth rate would have been 12 percent without the previously announced stock-performance related benefits expenses resulting from the 70 percent nine-month 1996 stock price growth. Third-quarter 1996 cash operating profit results reflect solid domestic volume performance, higher net revenues per case, and a decrease in domestic cost of sales per case.

In the first nine months of 1996, reported cash operating profit advanced by 16 percent to $885 million. Nine-month 1996 comparable cash operating profit increased by 9 percent, reflecting adjustments for acquisitions and a first-quarter 1996 favorable supplier settlement.

"With our strong nine-month 1996 performance as a base, we are confident that we can achieve at least 9 percent comparable cash operating profit growth and at least 25 percent earnings per share growth for full-year 1996," commented Summerfield K. Johnston, Jr., vice chairman and chief executive officer of Coca-Cola Enterprises. "In 1997 and beyond, we continue to see strong momentum in our domestic business and expect to capitalize on the significant opportunities for profitable growth that are available in our European operations."

Third-quarter 1996 net income per common share was 29 cents, 7 percent ahead of third-quarter 1995 earnings of 27 cents per common share. Strong third-quarter 1996 domestic operating performance offset the majority of the incremental stock-related selling, general and administrative (SG&A) expenses. Reported nine-month 1996 net income per common share increased 23 percent to 79 cents, from nine-month 1995 results of 64 cents per common share. After adjusting for the favorable first-quarter 1996 supplier settlement and the first-quarter 1995 gain on the sale of the Company's interest in The Coca-Cola Bottling Company of the Mid South, nine-month 1996 adjusted results were 74 cents per common share compared to adjusted nine-month 1995 earnings per common share of 60 cents.

The results of the French and Belgian acquisition did not materially affect third-quarter 1996 earnings per share, reflecting the unfavorable European summer weather conditions experienced in 1996 compared to 1995 which caused a 6 1/2 percent decrease in constant territory international volume. Management currently expects the results of the French and Belgian operations to be dilutive to fourth-quarter 1996 results by approximately 5 cents per share reflecting the relationship between seasonally low fourth-quarter European carbonated beverage consumption and fixed costs such as depreciation, amortization, and interest expense. As a result of the delay in closing the acquisition of the bottling operations in Great Britain, the Company does not currently expect that this transaction will have any material effect on 1996 results. For 1997, the Company continues to expect earnings per share dilution of approximately 5 cents from the combined effect of the French, Belgian, and British acquisitions, which represent significant long-term opportunities for profitable volume growth.

Operating Results

"Through the first nine months of 1996 Coca-Cola Enterprises has consistently generated strong growth in sales, market share, and cash operating profit," stated Henry A. Schimberg, president and chief operating officer of Coca-Cola Enterprises. "With the strong foundation we have established in our domestic business and our ability to capitalize on our international opportunities, we expect to post volume gains significantly greater than industry growth and an increase in comparable cash operating profit of at least 9 percent in 1997."

Third-quarter 1996 net operating revenues reached $2.2 billion, 19 percent above third-quarter 1995 results. Reported third-quarter 1996 revenue growth resulted from increases in bottle and can volume of 15 percent and net revenues per case of 4 percent. Reported nine-month 1996 net operating revenues advanced by 13 percent to $5.8 billion, reflecting bottle and can volume growth of 11 1/2 percent and a 2 1/2 percent increase in net revenues per case.