Cott Corp. sustains loss on year after realignment charges
January 26, 2006
by FoodBusinessNews.net Staff
TORONTO — Toronto-based soft drink maker Cott Corp. saw a major decline in year-end income, and a fourth-quarter loss after the impact of $37.5 million in unusual items, including realignment charges.
For the year ended Dec. 31 Cott Corp. posted net income of $24,600,000, a decline of 69% from the previous year.
Sales for the year totaled $1,755,300,000, an increase of 7% from the previous year. Excluding acquisitions, sales grew 3% year over year.
For the fourth quarter ended Dec. 31, the company sustained a loss of $6,900,000, compared with net income of $11,400,000 in the same period last year. Unusual item charges of $12 million were recorded in the fourth quarter, relating mainly to the closing of the Ohio manufacturing facility, as well as employee contract termination payments resulting from the company’s reorganization of management and operations to a North American basis.
Net sales for the quarter rose 8% to $397,200,000. By region, U.S. sales declined 1% while U.K./Europe sales grew 57%, due to base business growth combined with increase from the Macaw acquisition. Excluding the acquisition, U.K./Europe sales grew 8%, and by 16% when foreign exchange is also excluded. International sales rose 17% behind strong growth in Mexico.
For the coming year, excluding the charges from unusual items, the company expects 2006 to be relatively flat with 2005. Taking unusual items charges into account, the company expects net income in 2006 to be substantially below that of 2005, due to significant increases in depreciation, interest expense and effective tax rate.