Cott Corp. (COT) Tops Q4 EPS by 5c

Cott Corp. (NYSE: COT) reported Q4 EPS of $0.01, $0.05 better than the analyst estimate of ($0.04). Revenue for the quarter came in at $887 million versus the consensus estimate of $891.33 million.

• Revenue was $887 million despite $24 million of foreign exchange headwinds and one less week of operations at DS Services that accounted for $13 million of revenue. Our reported revenue was higher by 27% (30% on a foreign exchange neutral basis).
• Gross profit increased 36% to $302 million, with gross margin as a percentage of revenue increasing to 34.0% compared to 31.6%, driven primarily by the additions of Eden Springs ("Eden") and Aquaterra as well as cost and efficiency initiatives within our traditional business, offset in part by the negative impact of foreign exchange rates, increased operational costs at DS Services and the competitive environment in our traditional business.
• Income tax expense was $31 million compared to income tax benefit of $6 million as we recorded $44 million of tax expense associated with placing a valuation allowance against our existing U.S. net operating loss carryovers and other tax assets as a result of the S&D Coffee and Tea ("S&D") acquisition. Cash taxes during the period were minimal, with $0.4 million of cash taxes refunded during the period compared to $0.2 million of cash taxes paid in the comparable prior year period.
• Reported net loss and net loss per diluted share were $78 million and $0.56, respectively, compared to reported net loss and net loss per diluted share of $4 million and $0.04, respectively. Adjusted net income and adjusted net income per diluted share (including adjustments for acquisition, integration and other costs as well as a tax valuation allowance) were $2 million and $0.01, respectively, compared to adjusted net income and adjusted net income per diluted share of $3 million and $0.03, respectively.
• Reported EBITDA was $60 million compared to $69 million in the prior year as the company incurred increased integration and acquisition costs in the quarter as well as unrealized/noncash hedge losses. Adjusted EBITDA increased 7% to $87 million due primarily to the contributions from Eden and S&D, offset in part by $5 million of adverse foreign exchange, the competitive landscape in our traditional business, increased operational costs and reduced sales of case pack water, office coffee services and retail products at DS Services as well as $2 million from one less week of operations at DS Services.
• Net cash provided by operating activities of $109 million, less $38 million of capital expenditures resulted in free cash flow of $71 million or $75 million of adjusted free cash flow (adjusted for $4 million of acquisition, integration and other costs) despite the previously mentioned adverse foreign exchange impact and one less week of operations at DS Services.

For earnings history and earnings-related data on Cott Corp. (COT) click here.

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