SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 26, 2004
Commission File Number 0-9286
COCA-COLA BOTTLING CO. CONSOLIDATED
(Exact name of registrant as specified in its charter)
| Delaware | 56-0950585 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
4100 Coca-Cola Plaza, Charlotte, North Carolina 28211
(Address of principal executive offices) (Zip Code)
(704) 557-4400
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class |
Outstanding at October 28, 2004 | |
| Common Stock, $1.00 Par Value |
6,642,577 | |
| Class B Common Stock, $1.00 Par Value |
2,420,752 |
COCA-COLA BOTTLING CO. CONSOLIDATED
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 26, 2004
INDEX
| Page | ||||
| PART I - FINANCIAL INFORMATION | ||||
| Item 1. |
||||
| 3 | ||||
| 5 | ||||
| 6 | ||||
| 7 | ||||
| 8 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 | ||
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk | 43 | ||
| Item 4. |
Controls and Procedures | 43 | ||
| PART II - OTHER INFORMATION | ||||
| Item 6. |
Exhibits | 44 | ||
2
PART I - FINANCIAL INFORMATION
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS
In Thousands (Except Share Data)
| Unaudited Sept. 26, 2004 |
Dec. 28, 2003 |
Unaudited Sept. 28, 2003 | |||||||
| ASSETS |
|||||||||
| Current Assets: |
|||||||||
| Cash |
$ | 7,895 | $ | 18,044 | $ | 18,280 | |||
| Accounts receivable, trade, less allowance for doubtful accounts of $1,964, $1,723 and $1,888 |
87,876 | 82,222 | 83,977 | ||||||
| Accounts receivable from The Coca-Cola Company |
7,412 | 18,112 | 24,555 | ||||||
| Accounts receivable, other |
7,989 | 10,663 | 4,531 | ||||||
| Inventories |
51,725 | 36,891 | 41,156 | ||||||
| Cash surrender value of life insurance, net |
27,765 | ||||||||
| Prepaid expenses and other current assets |
7,948 | 6,981 | 7,121 | ||||||
| Total current assets |
170,845 | 200,678 | 179,620 | ||||||
| Property, plant and equipment, net |
421,883 | 446,708 | 457,097 | ||||||
| Leased property under capital leases, net |
77,760 | 43,109 | 43,726 | ||||||
| Other assets |
26,703 | 27,653 | 59,421 | ||||||
| Franchise rights, net |
520,672 | 520,672 | 520,672 | ||||||
| Goodwill, net |
102,049 | 102,049 | 102,049 | ||||||
| Other identifiable intangible assets, net |
6,695 | 9,051 | 9,844 | ||||||
| Total |
$ | 1,326,607 | $ | 1,349,920 | $ | 1,372,429 | |||
See Accompanying Notes to Consolidated Financial Statements
3
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS
In Thousands (Except Share Data)
| Unaudited Sept. 26, |
Dec. 28, 2003 |
Unaudited Sept. 28, 2003 |
||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
| Current Liabilities: |
||||||||||||
| Portion of long-term debt payable within one year |
$ | 39 | $ | 78 | $ | 35,039 | ||||||
| Current portion of obligations under capital leases |
1,797 | 1,337 | 1,430 | |||||||||
| Accounts payable, trade |
39,920 | 39,493 | 39,368 | |||||||||
| Accounts payable to The Coca-Cola Company |
21,972 | 10,996 | 17,378 | |||||||||
| Accrued compensation |
17,239 | 18,999 | 15,159 | |||||||||
| Other accrued liabilities |
61,837 | 52,492 | 53,141 | |||||||||
| Accrued interest payable |
16,739 | 10,924 | 18,866 | |||||||||
| Total current liabilities |
159,543 | 134,319 | 180,381 | |||||||||
| Deferred income taxes |
161,029 | 156,094 | 155,650 | |||||||||
| Pension and postretirement benefit obligations |
39,037 | 50,842 | 49,257 | |||||||||
| Other liabilities |
79,684 | 74,457 | 67,092 | |||||||||
| Obligations under capital leases |
79,643 | 44,226 | 44,491 | |||||||||
| Long-term debt |
703,039 | 802,639 | 785,078 | |||||||||
| Total liabilities |
1,221,975 | 1,262,577 | 1,281,949 | |||||||||
| Commitments and Contingencies (Note 14) |
||||||||||||
| Minority interest |
38,315 | 34,871 | 34,264 | |||||||||
| Stockholders’ Equity: |
||||||||||||
| Common Stock, $1.00 par value: |
||||||||||||
| Authorized - 30,000,000 shares; |
||||||||||||
| Issued - 9,704,951 shares |
9,704 | 9,704 | 9,704 | |||||||||
| Class B Common Stock, $1.00 par value: |
||||||||||||
| Authorized - 10,000,000 shares; |
||||||||||||
| Issued - 3,048,866, 3,028,866 and 3,028,866 shares |
3,049 | 3,029 | 3,029 | |||||||||
| Capital in excess of par value |
98,255 | 97,220 | 97,220 | |||||||||
| Retained earnings |
40,431 | 27,703 | 26,413 | |||||||||
| Accumulated other comprehensive loss |
(23,868 | ) | (23,930 | ) | (18,896 | ) | ||||||
| 127,571 | 113,726 | 117,470 | ||||||||||
| Less-Treasury stock, at cost: |
||||||||||||
| Common - 3,062,374 shares |
60,845 | 60,845 | 60,845 | |||||||||
| Class B Common - 628,114 shares |
409 | 409 | 409 | |||||||||
| Total stockholders’ equity |
66,317 | 52,472 | 56,216 | |||||||||
| Total |
$ | 1,326,607 | $ | 1,349,920 | $ | 1,372,429 | ||||||
See Accompanying Notes to Consolidated Financial Statements
4
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Data)
| Third Quarter |
First Nine Months | |||||||||||
| 2004 |
2003 |
2004 |
2003 | |||||||||
| Net sales |
$ | 321,336 | $ | 325,637 | $ | 937,774 | $ | 919,002 | ||||
| Cost of sales, excluding depreciation shown below |
169,938 | 168,949 | 485,174 | 474,663 | ||||||||
| Gross margin |
151,398 | 156,688 | 452,600 | 444,339 | ||||||||
| Selling, delivery and administrative expenses, excluding depreciation shown below |
109,646 | 108,329 | 328,140 | 316,785 | ||||||||
| Depreciation expense |
17,795 | 18,956 | 53,108 | 57,253 | ||||||||
| Amortization of intangibles |
766 | 846 | 2,356 | 2,311 | ||||||||
| Income from operations |
23,191 | 28,557 | 68,996 | 67,990 | ||||||||
| Interest expense |
10,838 | 10,414 | 31,822 | 31,701 | ||||||||
| Minority interest |
1,346 | 1,432 | 3,444 | 2,690 | ||||||||
| Income before income taxes |
11,007 | 16,711 | 33,730 | 33,599 | ||||||||
| Income taxes |
4,899 | 2,865 | 14,204 | 6,446 | ||||||||
| Net income |
$ | 6,108 | $ | 13,846 | $ | 19,526 | $ | 27,153 | ||||
| Basic net income per share |
$ | .67 | $ | 1.53 | $ | 2.15 | $ | 3.00 | ||||
| Diluted net income per share |
$ | .67 | $ | 1.53 | $ | 2.15 | $ | 3.00 | ||||
| Weighted average number of common shares outstanding |
9,063 | 9,043 | 9,063 | 9,043 | ||||||||
| Weighted average number of common shares outstanding-assuming dilution |
9,063 | 9,043 | 9,063 | 9,043 | ||||||||
| Cash dividends per share: |
||||||||||||
| Common Stock |
$ | .25 | $ | .25 | $ | .75 | $ | .75 | ||||
| Class B Common Stock |
$ | .25 | $ | .25 | $ | .75 | $ | .75 | ||||
See Accompanying Notes to Consolidated Financial Statements
5
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
In Thousands
| Common Stock |
Class B Common Stock |
Capital in Excess of Par Value |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Treasury Stock |
Total |
|||||||||||||||||||
| Balance on December 29, 2002 |
$ | 9,704 | $ | 3,009 | $ | 95,986 | $ | 6,043 | $ | (20,621 | ) | $ | (61,254 | ) | $ | 32,867 | |||||||||
| Comprehensive income: |
|||||||||||||||||||||||||
| Net income |
27,153 | 27,153 | |||||||||||||||||||||||
| Net gain on derivatives, net of tax |
1,725 | 1,725 | |||||||||||||||||||||||
| Total comprehensive income |
28,878 | ||||||||||||||||||||||||
| Cash dividends paid: |
|||||||||||||||||||||||||
| Common ($.75 per share) |
(4,982 | ) | (4,982 | ) | |||||||||||||||||||||
| Class B Common ($.75 per share) |
(1,801 | ) | (1,801 | ) | |||||||||||||||||||||
| Issuance of 20,000 shares of Class B Common Stock |
20 | 1,234 | |||||||||||||||||||||||