Cott Corp. (COT) Details Plans to Refocus on Private Label Beverages

June 19, 2008 8:15 AM EDT
Cott Corporation (NYSE: COT) today announced its plans to refocus the Company on private label beverages.

These actions are the results of an intensive sixty-day evaluation of all aspects of Cott's business, undertaken by David Gibbons upon his appointment as interim CEO. The plan will result in the combination of several executive positions, including the departure of the President of the North American business unit and the Chief People Officer. Cott is also eliminating positions throughout the organization, including not filling certain executive vacancies.

The Company estimates that total severance costs will be approximately $6-$8 million. Overall, Cott is targeting annualized SG&A cost reductions of over 10%, or $20-$22 million. The total annual savings, including headcount reductions and manufacturing and supply chain optimization, is anticipated to be between $39-$43 million. In 2H08, Cott expects to realize over $10 million of these savings.

Cott recognizes that within the U.S., its best growth opportunities reside within its core capabilities in private label beverages. The Company believes that there are opportunities for further growth within its current customer base by carefully following consumer trends in new flavors, categories, package types, and product mix by geography.

Finally, Cott also announced that, following discussions with Crescendo Partners and in consultation with other significant shareowners, an agreement with Crescendo Partners has been reached. Under the agreement, the Cott Board of Directors will be expanded in size from 10 to 11 directors.

Under the terms of the agreement David Gibbons will be appointed Chairman of the Board of Directors. The CEO Search Committee will be reconstituted to consist of four directors: George Burnett, David Gibbons, Eric Rosenfeld and Mario Pilozzi.

Cott Corporation, through its subsidiaries, engages in the production and distribution of retailer branded soft drinks worldwide.

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