Cott Corp. income continues to dip
April 20, 2006
by FoodBusinessNews.net Staff
TORONTO — Toronto-based soft drink maker Cott Corp. experienced a decline in both income and sales for the first quarter of 2006 as the company continues to accrue charges related to its North American realignment.
For the first quarter ended April 1, the company sustained a loss of $2,100,000, compared with net income of $8,300,000 in the same period last year. Unusual item charges of $5 million were recorded in the first quarter, $3 million of which was related to the North American realignment.
Net sales for the quarter were static at $394,200,000, but excluding acquisitions, net sales fell 5%. By region, U.S. sales declined 8%, due mainly to a structural change in Cott’s agreement with one of its self-manufacturing clients. Continued softness in the carbonated soft drink category as well as lower bottled water shipments also contributed to the decline.
U.K./Europe sales grew 50%, principally due to the Macaw acquisition. Excluding the acquisition, U.K./Europe sales grew 4%, and by 12% when foreign exchange is also excluded. International sales rose 14% behind strong growth in Mexico and Royal Crown International. Excluding foreign exchange, international sales were up 10%.
The company also has begun shipments of retailer brand carbonated soft drinks in Brazil, the world’s fourth largest market for carbonated soft drinks by per capita consumption.
The company continues to expect 2006 to be relatively flat with 2005, excluding the impact from unusual items and stock option expenses. The company is forecasting charges for unusual items to be between $23 million and $43 million on the year, $3 million of which was recorded in the first quarter.