COT
$12.85
Cott
$.03
.23%
Earnings Details
3rd Quarter September 2019
Thursday, November 07, 2019 6:45:00 AM
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Summary

Cott Reaffirms

Cott (COT) reported 3rd Quarter September 2019 earnings of $0.06 per share on revenue of $616.1 million. The consensus earnings estimate was $0.16 per share on revenue of $619.0 million. Revenue grew 1.1% on a year-over-year basis.

The company said it continues to expect 2019 revenue of approximately $2.40 billion. The current consensus estimate is revenue of $2.40 billion for the year ending December 31, 2019.

Cott Corp manufactures & sells beverages. It offers products such as carbonated soft drinks, shelf stable juice & juice-based products, clear, flavored waters, energy drinks & shots, sports products, ready-to-drink teas & alcoholic beverages.

Results
Reported Earnings
$0.06
Earnings Whisper
-
Consensus Estimate
$0.16
Reported Revenue
$616.1 Mil
Revenue Estimate
$619.0 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Cott Reports Third Quarter 2019 Results

(Unless stated otherwise, all third quarter 2019 comparisons are relative to the third quarter of 2018; all information is in U.S. dollars.)

TORONTO and TAMPA, FL, Nov. 7, 2019 /CNW/ - Cott Corporation (NYSE:COT; TSX:BCB), a leading provider of home and office bottled water delivery services in North America and Europe and a leader in custom coffee roasting for the U.S. food service industry, today announced its results for the third quarter ended September 28, 2019.

Cott Corporation (CNW Group/Cott Corporation)

"We are pleased with our top and bottom line performance during the quarter," commented Tom Harrington, Cott's Chief Executive Officer. "Both our Route Based Services and our Coffee, Tea and Extract Solutions segments delivered strong revenue and EBITDA growth during the quarter. We remain confident in our full year outlook for 2019, as well as our ability to deliver long-term shareholder value," continued Mr. Harrington.

THIRD QUARTER 2019 GLOBAL PERFORMANCE

  • Revenue increased 1% to $616 million (increased 6% excluding the impact of foreign exchange, the divested Cott Beverages LLC business and the change in average cost of coffee) driven by organic growth within both the Route Based Services and the Coffee, Tea and Extract Solutions reporting segments, as well as the benefit of acquisitions, including Mountain Valley. Revenue growth by segment in the quarter is tabulated below:

Consolidated



Revenue Bridge


?%

2018 Q3 Revenue




$  609.3



Divested Cott Beverages LLC business


-20.7



2018 Q3 adjusted revenue




$ 588.6










Route Based Services




+26.4



Coffee, Tea and Extract Solutions




+9.8



Change before adjustments




+36.2


6.2%

Foreign exchange (a)




-4.1



Change in average green coffee commodity pass-through costs


-4.6










2019 Q3 Revenue




$ 616.1










(a) See Exhibit 5 for details by reporting segment







 

  • Gross profit increased 5% to $326 million (6% excluding the divested Cott Beverages LLC business). Gross margin as a percentage of revenue increased 190 basis points to 52.9% compared to 51.0%. Excluding Cott Beverages LLC, gross margin as a percentage of revenue increased 70 basis points to 52.9% compared to 52.2% driven primarily by improved operating leverage within our operations, offset in part by foreign exchange.

  • Income tax expense was $9 million compared to $1 million due primarily to increased income incurred in taxable jurisdictions. Cash taxes paid during the quarter were $1 million.

  • Reported net income and net income per diluted share were flat at $9 million and $0.06, respectively, as the growth in operating income was offset by increased tax accruals. Adjusted EBITDA was $96 million compared to $92 million driven by growth in revenue and the resulting operational leverage, offset in part by foreign exchange and increased year-over-year incentive accruals in the quarter.

  • Net cash provided by operating activities of $82 million, less $36 million of capital expenditures, resulted in $46 million of free cash flow, or $50 million of adjusted free cash flow (adjusting for the items set forth on Exhibit 7), compared to adjusted free cash flow of $56 million in the prior year due in part to other cash inflows in the prior year.

THIRD QUARTER 2019 REPORTING SEGMENT PERFORMANCE  

Route Based Services

  • Revenue increased 5% (6% excluding the impact of foreign exchange) to $472 million due to organic growth in Home & Office Delivery ("HOD Water") bottled water driven by both volume growth and pricing benefits as well as growth from acquisitions. A detailed breakdown is tabulated below.

 

Route Based Services



Revenue Bridge


?%

2018 Q3 Revenue




$ 449.8



HOD Water related




+18.2



Customer Growth/Volume


+9.7





Price/Mix


+5.2





Mountain Valley HOD Water


+3.3





Other




+8.2



Change excluding foreign exchange impact




+26.4


5.9%

Foreign exchange impact




-4.1



2019 Q3 Revenue




$ 472.1


5.0%

 

    • Gross profit increased 5% to $286 million, driven primarily by revenue growth. Gross profit as a percentage of revenue was up 20 basis points at 60.6%.

    • SG&A expenses as a percentage of revenue decreased 80 basis points to 50.2% (see Exhibit 4). SG&A expenses increased to $237 million compared to $230 million due primarily to the addition of Mountain Valley as well as higher year-over-year incentive accruals in the quarter, offset in part by a foreign exchange benefit and lower amortization expense.

    • Operating income increased 20% to $46 million compared to $39 million, while adjusted EBITDA increased 4% to $92 million compared to $89 million, as revenue growth and the corresponding operational leverage was offset in part by foreign exchange and higher year-over-year incentive accruals in the quarter.

Coffee, Tea and Extract Solutions  

  • Revenue increased 4% (7% adjusting for the change in average cost of coffee) to $145 million driven primarily by 4% growth in coffee pounds sold and 19% volume growth in liquid coffee and extracts. A detailed breakdown is tabulated below.

Coffee, Tea and Extract Solutions



Revenue Bridge


?%

2018 Q3 Revenue




$ 140.2



Coffee volume




+2.9



Coffee price/mix




+2.8



Liquid coffee and extracts




+3.7



Other




+0.4



Change excluding change in average green
coffee commodity pass-through costs




+9.8


7.0%

Change in average green coffee commodity
pass-through costs




-4.6



2019 Q3 Revenue




$ 145.4


3.7%

 

  • Gross profit was $40 million compared to $35 million and gross margin as a percentage of revenue increased to 27.4% compared to 25.2% driven primarily by leveraging the volume growth generated during the quarter.

  • SG&A expenses were $37 million compared to $33 million driven primarily by higher selling and operating costs which supported the volume and revenue growth of the business segment.

  • Operating income was $3 million compared to $5 million while adjusted EBITDA was up 17% at $10 million, driven by growth in revenue and the resulting operational leverage, offset in part by the higher selling and operating costs associated with driving volume growth.

2019 FULL YEAR REVENUE AND ADJUSTED FREE CASH FLOW

Cott continues to expect full year 2019 consolidated revenue of $2.4 billion and adjusted free cash flow of more than $150 million (when excluding acquisition, integration and other one-time cash costs).

THIRD QUARTER 2019 RESULTS CONFERENCE CALL

Cott Corporation will host a conference call today, November 7, 2019, at 10:00 a.m. ET, to discuss third quarter results, which can be accessed as follows:

North America: (888) 231-8191
International: (647) 427-7450
Conference ID: 6899766

A slide presentation and live audio webcast will be available through Cott's website at http://www.cott.com. The earnings conference call will be recorded and archived for playback on the investor relations section of the website for a period of two weeks following the event.

ABOUT COTT CORPORATION

Cott is a water, coffee, tea, extracts and filtration service company with a leading volume-based national presence in the North American and European home and office delivery industry for bottled water, and a leader in custom coffee roasting, iced tea blending, and extract solutions for the U.S. foodservice industry.  Our platform reaches over 2.5 million customers or delivery points across North America and Europe and is supported by strategically located sales and distribution facilities and fleets, as well as wholesalers and distributors.  This enables us to efficiently service residences, businesses, restaurant chains, hotels and motels, small and large retailers and healthcare facilities.

Non-GAAP Measures

To supplement its reporting of financial measures determined in accordance with GAAP, Cott utilizes certain non-GAAP financial measures.  Cott excludes from GAAP revenue the impact of foreign exchange, results of the divested Cott Beverages LLC business, and the change in average costs of coffee, as well as other items identified on the exhibits hereto, to separate the impact of these factors from Cott's results of operations.  Cott excludes from GAAP gross profit the results of the divested Cott Beverages LLC business to separate the impact of this divested business from Cott's results of operations.  Cott utilizes EBITDA and adjusted EBITDA on a global and segment basis to separate the impact of certain items from the underlying business.  Because Cott uses these adjusted financial results in the management of its business, management believes this supplemental information is useful to investors for their independent evaluation and understanding of Cott's underlying business performance and the performance of its management.  Additionally, Cott supplements its reporting of net cash provided by (used in) operating activities from continuing operations determined in accordance with GAAP by excluding additions to property, plant and equipment to present free cash flow, and by excluding acquisition and integration cash costs,  a working capital adjustment related to the Concentrate Supply Agreement with Refresco, and other cash inflows to present adjusted free cash flow, which management believes provides useful information to investors in assessing our performance, comparing our performance to the performance of our peer group and assessing our ability to service debt and finance strategic opportunities, which include investing in our business, making strategic acquisitions, paying dividends, repurchasing common shares and strengthening the balance sheet.  The non-GAAP financial measures described above are in addition to, and not meant to be considered superior to, or a substitute for, Cott's financial statements prepared in accordance with GAAP. In addition, the non-GAAP financial measures included in this earnings announcement reflect management's judgment of particular items, and may be different from, and therefore may not be comparable to, similarly titled measures reported by other companies.

Safe Harbor Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 conveying management's expectations as to the future based on plans, estimates and projections at the time Cott makes the statements. Forward-looking statements involve inherent risks and uncertainties and Cott cautions you that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statement. The forward-looking statements contained in this press release include, but are not limited to, statements related to the execution of our strategic priorities, future financial and operating trends and results (including Cott's outlook on 2019 adjusted revenue and adjusted free cash flow), potential uses for cash and related matters. The forward-looking statements are based on assumptions regarding management's current plans and estimates. Management believes these assumptions to be reasonable, but there is no assurance that they will prove to be accurate.

Factors that could cause actual results to differ materially from those described in this press release include, among others: our ability to compete successfully in the markets in which we operate; fluctuations in commodity prices and our ability to pass on increased costs to our customers or hedge against such rising costs and the impact of those increased prices on our volumes; our ability to manage our operations successfully; our ability to fully realize the potential benefit of acquisitions or other strategic opportunities that we pursue; potential liabilities associated with our recent divestitures; our ability to realize the revenue and cost synergies of our acquisitions due to integration difficulties and other challenges; our exposure to intangible asset risk; currency fluctuations that adversely affect the exchange between the U.S. dollar and the British pound sterling, the exchange between the Euro, the Canadian dollar and other currencies, and the exchange between the British pound sterling and the Euro; our ability to maintain favorable arrangements and relationships with our suppliers; our ability to meet our obligations under our debt agreements, and risks of further increases to our indebtedness; our ability to maintain compliance with the covenants and conditions under our debt agreements; fluctuations in interest rates, which could increase our borrowing costs; the incurrence of substantial indebtedness to finance our acquisitions; the impact on our financial results from uncertainty in the financial markets and other adverse changes in general economic conditions; any disruption to production at our manufacturing facilities; our ability to maintain access to our water sources; our ability to protect our intellectual property; compliance with product health and safety standards; liability for injury or illness caused by the consumption of contaminated products; liability and damage to our reputation as a result of litigation or legal proceedings; changes in the legal and regulatory environment in which we operate; the seasonal nature of our business and the effect of adverse weather conditions;  the impact of national, regional and global events, including those of a political, economic, business and competitive nature; our ability to recruit, retain and integrate new management; our ability to renew our collective bargaining agreements on satisfactory terms; disruptions in our information systems; our ability to securely maintain our customers' confidential or credit card information, or other private data relating to our employees or our company; our ability to maintain our quarterly dividend; our ability to adequately address the challenges and risks associated with our international operations and address difficulties in complying with laws and regulations including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act of 2010; increased tax liabilities in the various jurisdictions in which we operate; the impact of the 2017 Tax Cuts and Jobs Act on our tax obligations and effective tax rate; and credit rating changes.

The foregoing list of factors is not exhaustive. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Readers are urged to carefully review and consider the various disclosures, including but not limited to risk factors contained in Cott's Annual Report on Form 10-K and its quarterly reports on Form 10-Q, as well as other filings with the securities commissions. Cott does not undertake to update or revise any of these statements in light of new information or future events, except as expressly required by applicable law. 

Website: www.cott.com

COTT CORPORATION





EXHIBIT 1

CONSOLIDATED STATEMENTS OF OPERATIONS






(in millions of U.S. dollars, except share and per share amounts, U.S. GAAP)

Unaudited



















For the Three Months Ended


For the Nine Months Ended


September 28,
2019



September 29,
2018


September 28,
2019


September 29,
2018









Revenue, net

$

616.1



$

609.3


$

1,794.3


$

1,773.7

Cost of sales

289.9



298.8


872.1


888.3

Gross profit

326.2



310.5


922.2


885.4

Selling, general and administrative expenses

280.8



279.9


837.1


816.2

Loss on disposal of property, plant and equipment, net

1.1



1.2


4.6


3.8

Acquisition and integration expenses

2.7



1.6


10.2


10.8

Operating income

41.6



27.8


70.3


54.6

Other expense (income), net

3.8



(0.6)


6.9


(33.0)

Interest expense, net

20.2



18.9


58.6


58.3

Income from continuing operations before income taxes

17.6



9.5


4.8


29.3

Income tax expense

9.0



1.0


11.5


4.0

Net income (loss) from continuing operations

$

8.6



$

8.5


$

(6.7)


$

25.3

Net income from discontinued operations, net of income taxes

1.5



1.5


1.5


357.5

Net income (loss)

$

10.1



$

10.0


$

(5.2)


$

382.8

Less: Net income attributable to non-controlling interests - discontinued operations





0.6

Net income (loss) attributable to Cott Corporation

$

10.1



$

10.0


$

(5.2)


$

382.2










Net income (loss) per common share attributable to Cott Corporation









Basic:









Continuing operations

$

0.06



$

0.06


$

(0.05)


$

0.18

Discontinued operations

$

0.01



$

0.01


$

0.01


$

2.56

Net income (loss)

$

0.07



$

0.07


$

(0.04)


$

2.74

Diluted:









Continuing operations

$

0.06



$

0.06


$

(0.05)


$

0.18

Discontinued operations

$

0.01



$

0.01


$

0.01


$

2.51

Net income (loss)

$

0.07



$

0.07


$

(0.04)


$

2.69










Weighted average common shares outstanding (in thousands)









Basic

134,667



138,787


135,395


139,503

Diluted

136,208



141,176


135,395


141,963

 

COTT CORPORATION



EXHIBIT 2

CONSOLIDATED BALANCE SHEETS




(in millions of U.S. dollars, except share amounts, U.S. GAAP)




 Unaudited









September 28, 2019


December 29, 2018

ASSETS




Current assets




Cash and cash equivalents

$

143.6


$

170.8

Accounts receivable, net of allowance of $8.6 ($9.6 as of December 29, 2018)

312.6


308.3

Inventories

126.2


129.6

Prepaid expenses and other current assets

29.1


27.2

Total current assets

611.5


635.9

Property, plant and equipment, net

640.9


624.7

Operating lease right-of-use-assets

198.6


Goodwill

1,152.2


1,143.9

Intangible assets, net

696.4


739.2

Deferred tax assets

0.1


0.1

Other long-term assets, net

21.1


31.7

Total assets

$

3,320.8


$

3,175.5

LIABILITIES AND EQUITY




Current liabilities




Short-term borrowings

96.3


89.0

Current maturities of long-term debt

5.1


3.0

Accounts payable and accrued liabilities

445.6


469.0

Current operating lease obligations

37.7


Total current liabilities

584.7


561.0

Long-term debt

1,243.0


1,250.2

Operating lease obligations

166.2


Deferred tax liabilities

126.4


124.3

Other long-term liabilities

58.6


69.6

Total liabilities

2,178.9


2,005.1

Equity




Common shares, no par value - 134,670,538 (December 29, 2018 - 136,195,108) shares issued

890.5


899.4

Additional paid-in-capital

75.8


73.9

Retained earnings

265.0


298.8

Accumulated other comprehensive loss

(89.4)


(101.7)

Total Cott Corporation equity

1,141.9


1,170.4

Total liabilities and equity

$

3,320.8


$

3,175.5

 

 COTT CORPORATION





EXHIBIT 3

 CONSOLIDATED STATEMENTS OF CASH FLOWS






 (in millions of U.S. dollars, U.S. GAAP)






 Unaudited













For the Three Months Ended


For the Nine Months Ended


September
28, 2019


September
29, 2018


September
28, 2019


September
29, 2018









Cash flows from operating activities of continuing operations:








Net income (loss)

$

10.1


$

10.0


$

(5.2)


$

382.8

Net income from discontinued operations, net of income taxes

1.5


1.5


1.5


357.5

Net income (loss) from continuing operations

$

8.6


$

8.5


$

(6.7)


$

25.3

Adjustments to reconcile net income (loss) from continuing operations to cash flows from operating activities:








Depreciation and amortization

48.0


49.6


142.1


145.7

Amortization of financing fees

0.9


0.9


2.6


2.6

Share-based compensation expense

1.7


6.8


8.5


14.6

Provision for deferred income taxes

6.0


0.1


0.8


2.8

Loss (gain) on sale of business



6.0


(6.0)

Gain on extinguishment of debt




(7.1)

Loss on disposal of property, plant and equipment, net

1.1


1.2


4.6


3.8

Other non-cash items

3.5


0.8


0.2


(1.4)

Change in operating assets and liabilities, net of acquisitions:








Accounts receivable

(6.4)


(21.8)


(21.0)


(41.0)

Inventories

3.9


4.3


(12.2)


(9.4)

Prepaid expenses and other current assets

(0.8)


(0.8)


(2.1)


(7.4)

Other assets

0.2


0.2


1.5


1.4

Accounts payable and accrued liabilities and other liabilities

15.4


28.4


(7.1)


22.2

Net cash provided by operating activities from continuing operations

82.1


78.2


117.2


146.1

Cash flows from investing activities of continuing operations:








Acquisitions, net of cash received

(5.2)


(0.4)


(47.7)


(67.0)

Additions to property, plant and equipment

(35.9)


(36.3)


(87.5)


(95.0)

Additions to intangible assets

(3.3)


(2.7)


(7.6)


(6.9)

Proceeds from sale of property, plant and equipment

0.5


0.8


2.9


3.7

Proceeds from sale of business, net of cash sold



50.5


12.8

Proceeds from sale of equity securities


7.9



7.9

Other investing activities

0.5


0.1


0.6


0.4

Net cash used in investing activities from continuing operations

(43.4)


(30.6)


(88.8)


(144.1)

Cash flows from financing activities of continuing operations:








Payments of long-term debt

(1.5)


(0.2)


(4.5)


(263.5)

Borrowings under ABL

1.2


0.4


64.1


1.4

Payments under ABL

(1.2)


(0.4)


(63.1)


(1.4)

Premiums and costs paid upon extinguishment of long-term debt




(12.5)

Issuance of common shares

0.2


1.8


0.9


6.0

Common shares repurchased and canceled

(0.1)


(24.4)


(31.1)


(46.1)

Financing fees




(1.5)

Dividends paid to common shareholders

(8.2)


(8.3)


(24.4)


(25.1)

Payment of deferred consideration for acquisitions



(0.2)


(2.8)

Other financing activities

2.0


1.9


5.4


4.0

Net cash used in financing activities from continuing operations

(7.6)


(29.2)


(52.9)


(341.5)

Cash flows from discontinued operations:








Operating activities of discontinued operations


(5.6)


(3.2)


(93.6)

Investing activities of discontinued operations




1,228.6

Financing activities of discontinued operations




(769.7)

Net cash (used in) provided by discontinued operations


(5.6)


(3.2)


365.3

Effect of exchange rate changes on cash

(0.9)


0.5


0.5


(8.0)

Net increase (decrease) in cash, cash equivalents and restricted cash

30.2


13.3


(27.2)


17.8

Cash and cash equivalents and restricted cash, beginning of period

113.4


162.4


170.8


157.9

Cash and cash equivalents and restricted cash from continuing operations, end of period

$

143.6


$

175.7


$

143.6


$

175.7

 

COTT CORPORATION










EXHIBIT 4

SEGMENT INFORMATION











(in millions of U.S. dollars, U.S. GAAP)











Unaudited






















For the Three Months Ended September 28, 2019

(in millions of U.S. dollars)


Route Based
Services


Coffee, Tea and
Extract Solutions


All Other


Eliminations


Total

Revenue, net













Home and office bottled water delivery


$

309.3



$



$



$



$

309.3


Coffee and tea services


43.0



114.8





(1.4)



156.4


Retail


77.9









77.9


Other


41.9



30.6







72.5


Total


$

472.1



$

145.4



$



$

(1.4)



$

616.1


Gross Profit


$

286.3



$

39.9



$



$



$

326.2


Gross Margin %


60.6

%


27.4

%


%




52.9

%

Selling, general and administrative expenses


$

237.0



$

36.6



$

7.2



$



$

280.8


SG&A% of revenue


50.2

%


25.2

%


N/A


N/A


45.6

%

Operating income (loss)


$

46.4



$

3.2



$

(8.0)



$



$

41.6


Depreciation and Amortization


$

41.6



$

6.3



$

0.1



$



$

48.0













For the Three Months Ended September 29, 2018

(in millions of U.S. dollars)


Route Based
Services


Coffee, Tea and
Extract Solutions


All Other


Eliminations


Total

Revenue, net











Home and office bottled water delivery (a)


$

293.4



$



$



$



$

293.4


Coffee and tea services


46.3



113.0





(1.4)



157.9


Retail (a)


73.8









73.8


Other (a)


36.3



27.2



20.7





84.2


Total


$

449.8



$

140.2



$

20.7



$

(1.4)



$

609.3


Gross Profit


$

271.9



$

35.4



$

3.2



$



$

310.5


Gross Margin %


60.4

%


25.2

%


15.5

%




51.0

%

Selling, general and administrative expenses


$

229.5



$

33.0



$

17.4



$



$

279.9


SG&A% of revenue


51.0

%


23.5

%


N/A


N/A


45.9

%

Operating income (loss)


$

38.8



$

5.0



$

(16.0)



$



$

27.8


Depreciation and Amortization


$

43.5



$

5.8



$

0.3



$



$

49.6













For the Nine Months Ended September 28, 2019

(in millions of U.S. dollars)


Route Based
Services


Coffee, Tea and
Extract Solutions


All Other


Eliminations


Total

Revenue, net











Home and office bottled water delivery


$

858.5



$



$



$



$

858.5


Coffee and tea services


138.5



355.6





(4.5)



489.6


Retail


224.6









224.6


Other


126.6



87.8



7.2





221.6


Total


$

1,348.2



$

443.4



$

7.2



$

(4.5)



$

1,794.3


Gross Profit


$

800.7



$

121.2



$

0.3



$



$

922.2


Gross Margin %


59.4

%


27.3

%


4.2

%




51.4

%

Selling, general and administrative expenses


$

699.1



$

111.4



$

26.6



$



$

837.1


SG&A% of revenue


51.9

%


25.1

%


N/A


N/A


46.7

%

Operating income (loss)


$

89.8



$

9.7



$

(29.2)



$



$

70.3


Depreciation and Amortization


$

124.1



$

17.8



$

0.2



$



$

142.1













For the Nine Months Ended September 29, 2018

(in millions of U.S. dollars)


Route Based
Services


Coffee, Tea and
Extract Solutions


All Other


Eliminations


Total

Revenue, net











Home and office bottled water delivery (a)


$

817.7



$



$



$



$

817.7


Coffee and tea services


142.3



349.0





(3.9)



487.4


Retail (a)


214.4









214.4


Other (a)


111.2



82.8



60.3



(0.1)



254.2


Total


$

1,285.6



$

431.8



$

60.3



$

(4.0)



$

1,773.7


Gross Profit (b)


$

765.6



$

111.5



$

8.3



$



$

885.4


Gross Margin %


59.6

%


25.8

%


13.8

%




49.9

%

Selling, general and administrative expenses


$

673.2



$

101.2



$

41.8



$



$

816.2


SG&A% of revenue


52.4

%


23.4

%


N/A


N/A


46.0

%

Operating income (loss)


$

80.9



$

12.3



$

(38.6)



$



$

54.6


Depreciation and Amortization


$

127.8



$

17.2



$

0.7



$



$

145.7



(a) Revenues by channel of our Route Based Services reporting segment for the three and nine months ended September 29, 2018 had $22.3 million and $58.2 million of revenue, respectively, reclassified from "other" to "home and office bottled water delivery" as these activities are associated with the "home and office bottled water delivery" channel. In addition, for the three and nine months ended September 29, 2018, we reclassified $4.1 million and $11.5 million of revenue, respectively, out of the "retail" channel and into the "other" channel in order to better align the activities of a recent acquisition with those of our U.S. Route Based Services business.

(b) Includes related party concentrate sales to discontinued operations.

 

 

COTT CORPORATION









EXHIBIT 5

SUPPLEMENTARY INFORMATION - NON-GAAP - ANALYSIS OF REVENUE BY REPORTING SEGMENT

Unaudited




















(in millions of U.S. dollars, except percentage amounts)

For the Three Months Ended September 28, 2019


Route Based
Services


Coffee, Tea and
Extract Solutions


All Other


Eliminations


Cott (a)

Change in revenue

$

22.3



$

5.2



$

(20.7)



$



$

6.8


Impact of foreign exchange (b)

$

4.1



$



$



$



$

4.1


Change excluding foreign exchange

$

26.4



$

5.2



$

(20.7)



$



$

10.9


Percentage change in revenue

5.0

%


3.7

%


(100.0)

%


%


1.1

%

Percentage change in revenue excluding foreign exchange

5.9

%


3.7

%


(100.0)

%


%


1.8

%



(a) Cott includes the following reporting segments: Route Based Services, Coffee, Tea and Extract Solutions and All Other.


(b) Impact of foreign exchange is the difference between the current period revenue translated utilizing the current period average foreign exchange rates less the current period revenue
translated utilizing the prior period average foreign exchange rates.

 

COTT CORPORATION






EXHIBIT 6

SUPPLEMENTARY INFORMATION - NON-GAAP - EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION & AMORTIZATION

(EBITDA)







(in millions of U.S. dollars)







Unaudited















For the Three Months Ended


For the Nine Months Ended


September
28, 2019



September
29, 2018


September
28, 2019



September
29, 2018











Net income (loss) from continuing operations

$

8.6



$

8.5


$

(6.7)



$

25.3

Interest expense, net

20.2



18.9


58.6



58.3

Income tax expense

9.0



1.0


11.5



4.0

Depreciation and amortization

48.0



49.6


142.1



145.7

EBITDA

$

85.8



$

78.0


$

205.5



$

233.3











Acquisition and integration costs (a), (c)

2.7



1.6


10.2



10.8

Share-based compensation costs (d)

2.1



10.2


8.5



16.2

Commodity hedging loss, net (e)






0.3

Foreign exchange and other losses (gains), net (f)

4.3



0.4


4.6



(10.8)

Loss on disposal of property, plant and equipment, net (g)

1.1



1.2


4.6



3.8

Gain on extinguishment of long-term debt (h)






(7.1)

Loss (gain) on sale of business (i)




6.0



(6.0)

Cott Beverages LLC (b), (j)



(1.2)


0.4



(3.1)

Other adjustments, net (k)

0.4



1.4


3.5



(0.4)

Adjusted EBITDA

$

96.4



$

91.6


$

243.3



$

237.0


(a) Includes a reduction of $0.4 million for the three months ended September 28, 2019, and a reduction of $3.4 million and $1.6 million for the three and nine months ended September 29, 2018, respectively, of share-based compensation costs related to awards granted in connection with the acquisition of our S&D and Eden businesses.

(b) Impact on our operations related to the Cott Beverages LLC business, which was sold on February 8, 2019.

 

 




For the Three Months Ended


For the Nine Months Ended


Location in Consolidated Statements of Operations


September 28,
2019


September 29,
2018


September 28,
2019


September 29,
2018




(Unaudited)


(Unaudited)

(c) Acquisition and integration costs

Acquisition and integration expenses


$

2.7


$

1.6


$

10.2


$

10.8

(d) Share-based compensation costs

Selling, general and administrative expenses


2.1


10.2


8.5


16.2

(e) Commodity hedging loss, net

Cost of sales





0.3

(f) Foreign exchange and other losses (gains), net

Other expense (income), net


4.3


0.4


4.6


(10.8)

(g) Loss on disposal of property, plant and equipment, net

Loss on disposal of property, plant and equipment, net


1.1


1.2


4.6


3.8

(h) Gain on extinguishment of long-term debt

Other expense (income), net





(7.1)

(i) Loss (gain) on sale of business

Other expense (income), net




6.0


(6.0)

(j) Cott Beverages LLC

Revenue, net



(20.7)


(7.2)


(60.3)


Cost of sales



17.4


6.8


51.6


Selling, general and administrative expenses



2.8


1.1


7.7


Other expense (income), net



(0.7)


(0.3)


(2.1)

(k) Other adjustments, net

Other expense (income), net


(0.5)



(2.5)


(6.6)


Selling, general and administrative expenses


0.8


1.3


5.9


4.9


Cost of sales


0.1


0.1


0.1


1.3

 

COTT CORPORATION



EXHIBIT 7

SUPPLEMENTARY INFORMATION - NON-GAAP - FREE CASH FLOW AND ADJUSTED FREE CASH FLOW

(in millions of U.S. dollars)




Unaudited









For the Three Months Ended


September 28, 2019


September 29, 2018





Net cash provided by operating activities from continuing operations

$

82.1



$

78.2


Less:  Additions to property, plant, and equipment

(35.9)



(36.3)


Free Cash Flow

$

46.2



$

41.9






Plus:




Acquisition and integration cash costs

3.4



3.1


Working capital adjustment - Refresco concentrate supply agreement (a)



2.6


Additional cash proceeds from Primo operating agreement (b)



7.9


Adjusted Free Cash Flow

$

49.6



$

55.5


 


For the Nine Months Ended


September 28, 2019


September 29, 2018





Net cash provided by operating activities from continuing operations

$

117.2



$

146.1


Less:  Additions to property, plant, and equipment

(87.5)



(95.0)


Free Cash Flow

$

29.7



$

51.1






Plus:




Acquisition and integration cash costs

12.0



12.5


Working capital adjustment - Refresco concentrate supply agreement (a)



13.7


Additional cash proceeds from Primo operating agreement (b)



7.9


Adjusted Free Cash Flow

$

41.7



$

85.2






(a) Increase in working capital related to the Concentrate Supply Agreement with Refresco in connection with the Transaction.

(b) The Company received warrants in connection with our 2014 operating agreement with Primo Water Corporation.

 

COTT CORPORATION


EXHIBIT 8

SUPPLEMENTARY INFORMATION - NON-GAAP - ANALYSIS OF REVENUE AND ADJUSTED REVENUE



(in millions of U.S. dollars)












Unaudited

























Cott (a)


Route Based Services


Coffee, Tea and Extract Solutions


For the Three Months Ended


For the Three Months Ended


For the Three Months Ended


September 28,
2019


September 29,
2018


September 28,
2019


September 29,
2018


September 28,
2019


September 29,
2018













Revenue, net

$

616.1



$

609.3



$

472.1



$

449.8



$

145.4



$

140.2


Divested Cott Beverages LLC business

$



$

(20.7)



$



$



$



$


Adjusted Revenue

$

616.1



$

588.6



$

472.1



$

449.8



$

145.4



$

140.2














Change in adjusted revenue

$

27.5





$

22.3





$

5.2
















Percentage change in adjusted revenue

4.7

%




5.0

%




3.7

%















Impact of foreign exchange (b)

$

4.1





$

4.1





$
















Impact of change in average cost of green coffee (c)

$

4.6





$





$

4.6
















Change in adjusted revenue excluding foreign exchange
and impact of change in average cost of green coffee

$

36.2





$

26.4





$

9.8
















Percentage change in adjusted revenue excluding
foreign exchange and impact of change in average cost
of green coffee

6.2

%




5.9

%




7.0

%















(a) Cott includes the following reporting segments: Route Based Services, Coffee, Tea and Extract Solutions and All Other.

(b) Impact of foreign exchange is the difference between the current period revenue translated utilizing the current period average foreign exchange rates less the current period revenue translated utilizing the
prior period average foreign exchange rates.

(c) Impact of change in average cost of green coffee represents the difference between the average cost per pound of green coffee in the current period compared to the average cost per pound of green coffee in
the prior period multiplied by the pounds of coffee sold in the current period.

 

COTT CORPORATION



EXHIBIT 9

SUPPLEMENTARY INFORMATION - NON-GAAP



(in millions of U.S. dollars)






Unaudited













For the Three Months Ended


September 28, 2019


Cott Consolidated


Divested Business (a)


Cott Adjusted







Revenue, net

$

616.1



$



$

616.1


Cost of sales

289.9





289.9


Gross profit

326.2





326.2


Gross margin %

52.9

%




52.9

%







Selling, general and administrative expenses

280.8





280.8


SG&A% of revenue

45.6

%




45.6

%







Loss on disposal of property, plant and equipment, net

1.1





1.1


Acquisition and integration expenses

2.7





2.7


Operating income

41.6





41.6








Other expense, net

3.8





3.8


Depreciation and Amortization

48.0





48.0


EBITDA

85.8





85.8








Adjustments

10.6





10.6


Adjusted EBITDA

$

96.4



$



$

96.4









For the Three Months Ended


September 29, 2018


Cott Consolidated


Divested Business (a)


Cott Adjusted







Revenue, net

$

609.3



$

20.7



$

588.6


Cost of sales

298.8



17.5



281.3


Gross profit

310.5



3.2



307.3


Gross margin %

51.0

%




52.2

%







Selling, general and administrative expenses

279.9



2.9



277.0


SG&A% of revenue

45.9

%




47.1

%







Loss on disposal of property, plant and equipment, net

1.2





1.2


Acquisition and integration expenses

1.6





1.6


Operating income

27.8



0.3



27.5








Other income, net

(0.6)



(0.6)




Depreciation and Amortization

49.6



0.2



49.4


EBITDA

78.0



1.1



76.9








Adjustments

13.6



(1.1)



14.7


Adjusted EBITDA

$

91.6



$



$

91.6








(a) Cott Beverages LLC






 

COTT CORPORATION

EXHIBIT 10

SUPPLEMENTARY INFORMATION - NON-GAAP - EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION & AMORTIZATION (EBITDA)
AND ADJUSTED EBITDA BY REPORTING SEGMENT (a)

(in millions of U.S. dollars)




Unaudited





For the Three Months Ended September 28, 2019


Route Based
Services


Coffee, Tea and
Extract Solutions


All Other


Total









Operating income (loss)

$

46.4



$

3.2



$

(8.0)



$

41.6


Other expense (income), net

4.2





(0.4)



3.8


Depreciation and amortization

41.6



6.3



0.1



48.0


EBITDA (a)

$

83.8



$

9.5



$

(7.5)



$

85.8










Acquisition and integration costs

1.8



0.1



0.8



2.7


Share-based compensation costs

0.8



0.2



1.1



2.1


Foreign exchange and other losses (gains), net

4.5





(0.2)



4.3


Loss on disposal of property, plant and equipment, net

1.1







1.1


Other adjustments, net (b)

0.3





0.1



0.4


Adjusted EBITDA

$

92.3



$

9.8



$

(5.7)



$

96.4











For the Three Months Ended September 29, 2018


Route Based
Services


Coffee, Tea and
Extract Solutions


All Other


Total









Operating income (loss)

$

38.8



$

5.0



$

(16.0)



$

27.8


Other (income) expense, net

(0.6)



(0.3)



0.3



(0.6)


Depreciation and amortization

43.5



5.8



0.3



49.6


EBITDA (a)

$

82.9



$

11.1



$

(16.0)



$

78.0










Acquisition and integration costs

2.4



(2.6)



1.8



1.6


Share-based compensation costs

1.1



0.1



9.0



10.2


Foreign exchange and other (gains) losses, net

(0.4)





0.8



0.4


Loss (gain) on disposal of property, plant and equipment, net

1.4



(0.2)





1.2


Cott Beverages LLC (c)





(1.2)



(1.2)


Other adjustments, net (d)

1.1





0.3



1.4


Adjusted EBITDA

$

88.5



$

8.4



$

(5.3)



$

91.6



(a) EBITDA by reporting segment is derived from operating income as operating income is the performance measure regularly reviewed by the chief operating decision maker when evaluating
performance of our reportable segments.


(b) Impact of other adjustments, net for Route Based Services includes $0.7 million of expenses reflected under selling, general and administrative expenses, $0.1 million of expenses reflected under
cost of sales and $0.5 million of net gains reflected under other (income) expense in the Consolidated Statements of Operations. Impact of other adjustments, net for All Other is reflected under selling,
general and administrative expenses in the Consolidated Statements of Operations.


(c) Impact on our operations related to the Cott Beverages LLC business, which was sold on February 8, 2019.


(d) Impact of other adjustments, net for Route Based Services includes $0.1 million of expenses reflected under cost of sales and $1.0 million of expenses reflected under selling, general and
administrative expenses in the Consolidated Statements of Operations. Impact of other adjustments, net for All Other is reflected under selling, general and administrative expenses in the Consolidated
Statements of Operations.

 

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SOURCE Cott Corporation