Packaging

Coca-Cola Bottling Co. Consolidated Reports Fiscal Year and Fourth Quarter 2010 Results

Thursday 10. March 2011 - Coca-Cola Bottling Co. Consolidated (NASDAQ: COKE) today announced it earned $36.1 million, or basic net income per share of $3.93, on net sales of $1.51 billion for fiscal 2010, compared to net income of $38.1 million, or basic net income per share of $4.16, on net sales of $1.44 billion for fiscal 2009.

The results for 2010 included $3.2 million of after-tax losses ($5.2 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges, $.5 million of after-tax gains ($.9 million on a pre-tax basis) from insurance recoveries on assets lost or damaged during the Nashville, Tennessee area flood in May 2010, a $.5 million increase in tax expense due to the change in tax law eliminating the tax deduction previously available for Medicare Part D subsidies, and $1.7 million in tax benefits related to changes in reserves for uncertain tax positions. The results for fiscal 2009 included $8.5 million of after-tax gains ($14.1 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges and $1.1 million of additional income on an after-tax basis ($1.9 million on a pre-tax basis) from the 53rd week of fiscal 2009 (fiscal 2009 was a 53-week year). Fiscal 2009 results also included $7.1 million in tax benefits related to changes in reserves for uncertain tax positions which reduced the Company’s effective tax rate to 30.3%.
The following table reconciles reported GAAP net income to comparable net income and basic net income per share for fiscal 2010 and 2009:


Fiscal Year
Net Income Basic Net Income Per Share
In Thousands, Except Per Share Amounts 2010 2009 2010 2009

Reported net income (GAAP) $ 36,057 $ 38,136 $ 3.93 $ 4.16

Net (gain) loss on fuel & aluminum hedges, net of tax 3,179 (8,522 ) 0.35 (0.93 )
Impact of Nashville area flood, net of tax (541 ) – (0.06 ) –
Impact of change in tax law regarding Medicare Part D subsidy 478 – 0.05 –
Change in reserves for uncertain tax positions (1,665 ) (7,071 ) (0.18 ) (0.77 )
Results from the 53rd week, net of tax – (1,143 ) – (0.12 )
Other income tax items 198 77 0.02 0.01

Total 1,649 (16,659 ) 0.18 (1.81 )

Comparable net income (a) $ 37,706 $ 21,477 $ 4.11 $ 2.35
(a) This non-GAAP financial information is provided to allow investors to more clearly evaluate operating performance and business trends for fiscal 2010 and 2009. Management uses this information to review results excluding items that are not necessarily indicative of ongoing results.
For the fourth quarter of 2010, the Company earned $3.8 million, or basic net income per share of $.42, on net sales of $354 million compared to net income of $2.0 million, or basic net income per share of $.22, on net sales of $354 million in the fourth quarter of 2009. The fourth quarter of 2010 results included $0.5 million of after-tax losses ($0.7 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges. The fourth quarter of 2009 results included $3.5 million of after-tax gains ($5.8 million on a pre-tax basis) due to mark-to-market adjustments on fuel and aluminum hedges and $1.1 million of additional income on an after-tax basis ($1.9 million on a pre-tax basis) from the 53rd week of fiscal 2009.
The following table reconciles reported GAAP net income to comparable net income (loss) and basic net income (loss) per share for the fourth quarter of 2010 and 2009:


Fourth Quarter
Net Income (Loss) Basic Net Income (Loss) Per Share
In Thousands, Except Per Share Amounts 2010 2009 2010 2009

Reported net income (GAAP) $ 3,821 $ 1,990 $ 0.42 $ 0.22

Net (gain) loss on fuel & aluminum hedges, net of tax 454 (3,521 ) 0.05 (0.38 )
Results from the 53rd week, net of tax – (1,143 ) – (0.12 )

Total 454 (4,664 ) 0.05 (0.50 )

Comparable net income (loss) (a) $ 4,275 $ (2,674 ) $ 0.47 $ (0.28 )
(a) This non-GAAP financial information is provided to allow investors to more clearly evaluate operating performance and business trends for the fourth quarters of 2010 and 2009. Management uses this information to review results excluding items that are not necessarily indicative of ongoing results.
J. Frank Harrison, III, Chairman and CEO, said, “2010 was a very successful year for our Company. Our performance was the result of the combination of solid volume driven top-line growth, muted increases in our input costs and continued focus on managing our operating costs. We were very pleased with strong performance by our brands across all segments of our business producing both volume and share growth. We also thank our dedicated employees, who generate the continuous improvement for which we strive, bringing value to our shareholders, customers, consumers and the communities in which we live and work.”
William B. Elmore, President and COO, added, “We are very pleased with our results for 2010. Many of the initiatives we have undertaken over the past few years contributed to these results. Our immediate consumption business saw significant improvement during 2010 driven by our 16/24 ounce convenience store strategy and a revitalized focus on our on-premise channels. Overall, our future consumption business also experienced robust growth. Process improvement in our supply chain system, including warehouse automation and branch consolidations, continue to allow us to operate more effectively and efficiently. Our results for 2010 were also aided by a significant decline in the rate of cost increases in key raw material costs, including packaging and fuel. As we look to 2011, these costs have again begun to rise significantly, creating new challenges for our Company. We will continue our focus on improving how we make, sell and deliver our products to ensure that we meet these challenges.”