TORONTO, ON and TAMPA, FL--(Marketwired - Nov 10, 2016) - Cott Corporation announced its results for the third quarter ended October 1, 2016.
Third Quarter 2016 Highlights
- Cott completed the acquisitions of Eden Springs ("Eden") and S&D Coffee and Tea ("S&D") during the quarter, adding businesses with pro forma estimated 2016 revenues of approximately $950 million.
- Cott revenue during the quarter was higher by 17% (20% on a foreign exchange neutral basis) at $885 million compared to $756 million.
- Gross profit increased to $306 million compared to $233 million and gross margin as a percentage of revenue increased to 34.5% compared to 30.8%.
- Net cash provided by operating activities of $92 million less $39 million of capital expenditures resulted in free cash flow of $53 million, or $67 million on an adjusted basis when excluding $14 million of acquisition, integration and transaction related costs.
"During the quarter we made significant progress in the continued transformation of our business towards a more diversified and higher margin beverage company with the closing of both the Eden and S&D acquisitions," commented Jerry Fowden, Cott's Chief Executive Officer.
Third Quarter 2016 Reporting Segment Performance
During the quarter, Cott completed the acquisitions of both Eden and S&D. Subsequent to the closing of the acquisitions, these businesses were added to Cott's DSS reporting segment which was renamed "Water & Coffee Solutions". Our Cott North America, Cott U.K. and All Other reporting segments will continue to be referred to as our "traditional business".
Water and Coffee Solutions
- Revenue of $437 million was higher by 63% driven primarily by the additions of Eden and S&D. Gross profit increased to $241 million from $164 million due primarily to the additions of Eden and S&D, offset by reduced sales at DS Services (excluding Aquaterra) and higher operational costs primarily associated with the DS Services higher level of customer growth.
- DS Services organic new customer additions increased approximately 20% in the United States compared to the third quarter of 2015 driving year to date net new organic additions to 68,000 compared to 7,000 in the prior year. DS Services revenue increased 4% to $279 million due primarily to the addition of the Aquaterra business. Excluding Aquaterra, revenue decreased 2% due primarily to organic customer growth in HOD water being offset by reduced sales in office coffee services, retail supermarkets, and HOD case pack water. DS Services gross profit increased to $171 million from $164 million as the addition of Aquaterra and volume growth in HOD water offset increased operational costs primarily associated with organic customer growth as well as reduced sales in office coffee services, retail supermarkets, and HOD case pack water.
- Cott acquired Eden on August 2, 2016 and, in line with expectations, $70 million of revenue and $45 million of gross profit was included in Cott's third quarter consolidated financial results.
- Cott acquired S&D on August 11, 2016 and $87 million of revenue and $25 million of gross profit was included in Cott's third quarter consolidated financial results. S&D is off to a good start winning a number of new customer contracts during the quarter for production starting at the end of 2016 and early 2017. Full report.
