Coca-Cola Bottling Co. Consolidated announced it earned $11.1 million, or basic net income per share of $1.21, on net sales of $422.9 million for the second quarter of 2011, compared to net income of $12.0 million, or basic net income per share of $1.31, on net sales of $417.4 million for the second quarter of 2010. The results for the second quarter of 2011 included $1.1 million of after-tax losses ($1.7 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges. The results for the second quarter of 2010 included $4.7 million of after-tax losses ($7.8 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges and a $0.4 million after-tax gain ($0.6 million on a pre-tax basis) from insurance recoveries on assets lost or damaged due to the Nashville flood in May 2010.
On a comparable basis, the company earned $12.3 million in the second quarter of 2011, or comparable basic net income per share of $1.33, versus $16.3 million in the second quarter of 2010, or comparable basic net income per share of $1.78.
The company earned $17.0 million, or basic net income per share of $1.85, on net sales of $782.5 million for the first half of 2011, compared to net income of $16.7 million, or basic net income per share of $1.82, on net sales of $764.9 million for the first half of 2010. The results for the first half of 2011 included $1.4 million of after-tax losses ($2.4 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges. The results for the first half of 2010 included $4.6 million of after-tax losses ($7.6 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges and a $0.4 million after-tax gain ($0.6 million on a pre-tax basis) from the impact of the Nashville flood.
On a comparable basis, the company earned $18.6 million in the first half of 2011, or comparable basic net income per share of $2.03, versus $21.3 million in the first half of 2010, or comparable basic net income per share of $2.32.
J. Frank Harrison, III, Chairman and CEO, said in a prepared statement, “Our results for the second quarter and first half of 2011 reflect ongoing challenges from a slow economic recovery and significantly higher commodity prices as well as the cycling of significant promotional activity in the prior year by a large customer. We continued to focus on finding new and innovative ways to bring value to our customers and consumers through new packaging and on driving improved efficiency throughout our operations.“
William B. Elmore, president and COO, added, “As noted in our first quarter earnings release, we believed our biggest challenges were ahead of us. These challenges are reflected in our second quarter and first half results. While we were able to grow revenue in the second quarter and first half, consumers are migrating to lower cost channels and packages resulting in lower gross margin. While we have seen steady volume performance in our food store channel, we continue to experience weakness in the convenience store and on premise channels as consumers are impacted by high fuel prices. Higher costs for key raw materials, including fuel, resin for bottles, and sweetener, have resulted in greater increases in our costs than we experienced in the past two years. We continue to review our pricing and, whenever feasible, adjust to offset the higher costs; however, price increases have to be balanced against market conditions.”
