FORM10-Q
ý | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
l
CANADA | 98-0154711 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) | |
1200 BRITANNIA ROAD EAST MISSISSAUGA, ONTARIO, CANADA | ||
4221 WEST BOY SCOUT BOULEVARD SUITE 400 TAMPA, FLORIDA, UNITED STATES | 33607 | |
(Address of principal executive offices) | (Zip Code) |
313-1732
Large accelerated filer | ý | Accelerated filer | ||||
¨ | ||||||
Non-accelerated filer | ¨ | Smaller reporting company | ||||
Emerging growth company |
Class | Outstanding at November | |
Common Shares, no par value per share |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | |||||||||||||
Revenue, net | $ | 580.9 | $ | 476.7 | $ | 1,698.4 | 1,102.0 | |||||||||
Cost of sales | 288.1 | 229.0 | 849.7 | 510.4 | ||||||||||||
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Gross profit | 292.8 | 247.7 | 848.7 | 591.6 | ||||||||||||
Selling, general and administrative expenses | 262.8 | 225.3 | 777.8 | 547.7 | ||||||||||||
(Gain) loss on disposal of property, plant & equipment, net | (0.4 | ) | 1.4 | 4.8 | 4.6 | |||||||||||
Acquisition and integration expenses | 3.2 | 7.4 | 17.2 | 20.5 | ||||||||||||
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Operating income | 27.2 | 13.6 | 48.9 | 18.8 | ||||||||||||
Other expense (income), net | 1.5 | 0.2 | (1.1 | ) | — | |||||||||||
Interest expense, net | 23.2 | 14.5 | 62.1 | 29.2 | ||||||||||||
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Income (loss) from continuing operations before income taxes | 2.5 | (1.1 | ) | (12.1 | ) | (10.4 | ) | |||||||||
Income tax expense (benefit) | 0.9 | 2.9 | 1.0 | (4.8 | ) | |||||||||||
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Net income (loss) from continuing operations | $ | 1.6 | $ | (4.0 | ) | $ | (13.1 | ) | $ | (5.6 | ) | |||||
Net income from discontinued operations, net of income taxes (Note 3) | 43.0 | 2.9 | 1.0 | 12.0 | ||||||||||||
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Net income (loss) | $ | 44.6 | $ | (1.1 | ) | $ | (12.1 | ) | $ | 6.4 | ||||||
Less: Net income attributable tonon-controlling interests - discontinued operations | 2.1 | 1.5 | 6.4 | 4.4 | ||||||||||||
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Net income (loss) attributable to Cott Corporation | $ | 42.5 | $ | (2.6 | ) | $ | (18.5 | ) | $ | 2.0 | ||||||
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Net income (loss) per common share attributable to Cott Corporation | ||||||||||||||||
Basic: | ||||||||||||||||
Continuing operations | $ | 0.01 | $ | (0.03 | ) | $ | (0.09 | ) | $ | (0.04 | ) | |||||
Discontinued operations | $ | 0.29 | $ | 0.01 | $ | (0.04 | ) | $ | 0.06 | |||||||
Net income (loss) | $ | 0.30 | $ | (0.02 | ) | $ | (0.13 | ) | $ | 0.02 | ||||||
Diluted: | ||||||||||||||||
Continuing operations | $ | 0.01 | $ | (0.03 | ) | $ | (0.09 | ) | $ | (0.04 | ) | |||||
Discontinued operations | $ | 0.29 | $ | 0.01 | $ | (0.04 | ) | $ | 0.06 | |||||||
Net income (loss) | $ | 0.30 | $ | (0.02 | ) | $ | (0.13 | ) | $ | 0.02 | ||||||
Weighted average common shares outstanding (in thousands) | ||||||||||||||||
Basic | 139,205 | 138,195 | 138,980 | 124,900 | ||||||||||||
Diluted | 141,003 | 138,195 | 138,980 | 124,900 | ||||||||||||
Dividends declared per common share | $ | 0.06 | $ | 0.06 | $ | 0.18 | $ | 0.18 |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | ||||||||||||
Revenue, net | $ | 609.3 | $ | 580.9 | $ | 1,773.7 | 1,698.4 | ||||||||
Cost of sales | 298.8 | 288.1 | 888.3 | 849.7 | |||||||||||
Gross profit | 310.5 | 292.8 | 885.4 | 848.7 | |||||||||||
Selling, general and administrative expenses | 279.9 | 263.2 | 816.2 | 778.2 | |||||||||||
Loss (gain) on disposal of property, plant and equipment, net | 1.2 | (0.4 | ) | 3.8 | 4.8 | ||||||||||
Acquisition and integration expenses | 1.6 | 7.7 | 10.8 | 21.7 | |||||||||||
Operating income | 27.8 | 22.3 | 54.6 | 44.0 | |||||||||||
Other income, net | (0.6 | ) | (3.4 | ) | (33.0 | ) | (6.0 | ) | |||||||
Interest expense, net | 18.9 | 23.2 | 58.3 | 62.1 | |||||||||||
Income (loss) from continuing operations before income taxes | 9.5 | 2.5 | 29.3 | (12.1 | ) | ||||||||||
Income tax expense | 1.0 | 0.9 | 4.0 | 1.0 | |||||||||||
Net income (loss) from continuing operations | $ | 8.5 | $ | 1.6 | $ | 25.3 | $ | (13.1 | ) | ||||||
Net income from discontinued operations, net of income taxes (Note 3) | 1.5 | 43.0 | 357.5 | 1.0 | |||||||||||
Net income (loss) | $ | 10.0 | $ | 44.6 | $ | 382.8 | $ | (12.1 | ) | ||||||
Less: Net income attributable to non-controlling interests - discontinued operations | — | 2.1 | 0.6 | 6.4 | |||||||||||
Net income (loss) attributable to Cott Corporation | $ | 10.0 | $ | 42.5 | $ | 382.2 | $ | (18.5 | ) | ||||||
Net income (loss) per common share attributable to Cott Corporation | |||||||||||||||
Basic: | |||||||||||||||
Continuing operations | $ | 0.06 | $ | 0.01 | $ | 0.18 | $ | (0.09 | ) | ||||||
Discontinued operations | $ | 0.01 | $ | 0.29 | $ | 2.56 | $ | (0.04 | ) | ||||||
Net income (loss) | $ | 0.07 | $ | 0.30 | $ | 2.74 | $ | (0.13 | ) | ||||||
Diluted: | |||||||||||||||
Continuing operations | $ | 0.06 | $ | 0.01 | $ | 0.18 | $ | (0.09 | ) | ||||||
Discontinued operations | $ | 0.01 | $ | 0.29 | $ | 2.51 | $ | (0.04 | ) | ||||||
Net income (loss) | $ | 0.07 | $ | 0.30 | $ | 2.69 | $ | (0.13 | ) | ||||||
Weighted average common shares outstanding (in thousands) | |||||||||||||||
Basic | 138,787 | 139,205 | 139,503 | 138,980 | |||||||||||
Diluted | 141,176 | 141,003 | 141,963 | 138,980 | |||||||||||
Dividends declared per common share | $ | 0.06 | $ | 0.06 | $ | 0.18 | $ | 0.18 |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | |||||||||||||
Net income (loss) | $ | 44.6 | $ | (1.1 | ) | $ | (12.1 | ) | $ | 6.4 | ||||||
Other comprehensive income (loss): | ||||||||||||||||
Currency translation adjustment | 3.9 | (5.9 | ) | 26.1 | (23.8 | ) | ||||||||||
Pension benefit plan, net of tax1 | (0.2 | ) | — | (0.4 | ) | 0.2 | ||||||||||
Gain (loss) on derivative instruments, net of tax2 | 0.5 | 0.7 | (0.5 | ) | 3.8 | |||||||||||
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Total other comprehensive income (loss) | 4.2 | (5.2 | ) | 25.2 | (19.8 | ) | ||||||||||
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Comprehensive income (loss) | $ | 48.8 | $ | (6.3 | ) | $ | 13.1 | $ | (13.4 | ) | ||||||
Less: Comprehensive income attributable tonon-controlling interests | 2.1 | 1.5 | 6.4 | 4.4 | ||||||||||||
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Comprehensive income (loss) attributable to Cott Corporation | $ | 46.7 | $ | (7.8 | ) | $ | 6.7 | $ | (17.8 | ) | ||||||
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For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | ||||||||||||
Net income (loss) | $ | 10.0 | $ | 44.6 | $ | 382.8 | $ | (12.1 | ) | ||||||
Other comprehensive (loss) income: | |||||||||||||||
Currency translation adjustment | 5.1 | 3.9 | (3.6 | ) | 26.1 | ||||||||||
Pension benefit plan, net of tax 1, 2 | — | (0.2 | ) | 16.9 | (0.4 | ) | |||||||||
Loss on derivative instruments, net of tax 3 | (5.7 | ) | 0.5 | (10.0 | ) | (0.5 | ) | ||||||||
Total other comprehensive (loss) income | (0.6 | ) | 4.2 | 3.3 | 25.2 | ||||||||||
Comprehensive income | $ | 9.4 | $ | 48.8 | $ | 386.1 | $ | 13.1 | |||||||
Less: Comprehensive income attributable to non-controlling interests | — | 2.1 | 0.6 | 6.4 | |||||||||||
Comprehensive income attributable to Cott Corporation | $ | 9.4 | $ | 46.7 | $ | 385.5 | $ | 6.7 |
1 | Net of $3.6 million of associated tax impact that resulted in an increase to the gain on sale of discontinued operations for the nine months ended September 29, 2018. |
2 | Net of the effect of $0.3 million tax |
3 | Net of the effect of $2.0 million and |
September 30, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash & cash equivalents | $ | 82.0 | $ | 78.1 | ||||
Accounts receivable, net of allowance of $8.1 | ||||||||
($6.3 as of December 31, 2016) | 311.6 | 276.7 | ||||||
Inventories | 142.3 | 124.6 | ||||||
Prepaid expenses and other current assets | 22.2 | 22.1 | ||||||
Current assets of discontinued operations | 426.5 | 351.7 | ||||||
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Total current assets | 984.6 | 853.2 | ||||||
Property, plant & equipment, net | 590.4 | 581.8 | ||||||
Goodwill | 1,097.0 | 1,048.3 | ||||||
Intangible assets, net | 763.9 | 759.0 | ||||||
Deferred tax assets | 2.2 | — | ||||||
Other long-term assets, net | 36.8 | 24.0 | ||||||
Long-term assets of discontinued operations | 673.6 | 673.4 | ||||||
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Total assets | $ | 4,148.5 | $ | 3,939.7 | ||||
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LIABILITIES AND EQUITY | ||||||||
Current liabilities | ||||||||
Current maturities of long-term debt | $ | 2.6 | $ | 2.9 | ||||
Accounts payable and accrued liabilities | 453.1 | 368.0 | ||||||
Current liabilities of discontinued operations | 519.1 | 439.2 | ||||||
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Total current liabilities | 974.8 | 810.1 | ||||||
Long-term debt | 1,534.0 | 851.4 | ||||||
Deferred tax liabilities | 131.9 | 155.0 | ||||||
Other long-term liabilities | 67.5 | 75.4 | ||||||
Long-term liabilities of discontinued operations | 566.5 | 1,174.0 | ||||||
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Total liabilities | 3,274.7 | 3,065.9 | ||||||
Equity | ||||||||
Common shares, no par - 139,268,878 | ||||||||
(December 31, 2016 -138,591,100) shares issued | 915.5 | 909.3 | ||||||
Additionalpaid-in-capital | 63.3 | 54.2 | ||||||
(Accumulated deficit) retained earnings | (20.7 | ) | 22.9 | |||||
Accumulated other comprehensive loss | (92.7 | ) | (117.9 | ) | ||||
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Total Cott Corporation equity | 865.4 | 868.5 | ||||||
Non-controlling interests | 8.4 | 5.3 | ||||||
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Total equity | 873.8 | 873.8 | ||||||
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Total liabilities and equity | $ | 4,148.5 | $ | 3,939.7 | ||||
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September 29, 2018 | December 30, 2017 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 175.7 | $ | 91.9 | |||
Accounts receivable, net of allowance of $9.4 ($7.8 as of December 30, 2017) | 331.9 | 285.0 | |||||
Inventories | 136.6 | 127.6 | |||||
Prepaid expenses and other current assets | 29.7 | 20.7 | |||||
Current assets of discontinued operations | — | 408.7 | |||||
Total current assets | 673.9 | 933.9 | |||||
Property, plant and equipment, net | 591.5 | 584.2 | |||||
Goodwill | 1,129.1 | 1,104.7 | |||||
Intangible assets, net | 732.4 | 751.1 | |||||
Deferred tax assets | 1.4 | 2.3 | |||||
Other long-term assets, net | 31.8 | 39.4 | |||||
Long-term assets of discontinued operations | — | 677.5 | |||||
Total assets | $ | 3,160.1 | $ | 4,093.1 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities | |||||||
Short-term borrowings | $ | 9.0 | $ | — | |||
Short-term borrowings required to be repaid or extinguished as part of divestiture | — | 220.3 | |||||
Current maturities of long-term debt | 3.1 | 5.1 | |||||
Accounts payable and accrued liabilities | 463.4 | 412.9 | |||||
Current liabilities of discontinued operations | — | 295.1 | |||||
Total current liabilities | 475.5 | 933.4 | |||||
Long-term debt | 1,262.9 | 1,542.6 | |||||
Debt required to be repaid or extinguished as part of divestiture | — | 519.0 | |||||
Deferred tax liabilities | 132.8 | 98.4 | |||||
Other long-term liabilities | 74.8 | 68.2 | |||||
Long-term liabilities of discontinued operations | — | 45.8 | |||||
Total liabilities | 1,946.0 | 3,207.4 | |||||
Equity | |||||||
Common shares, no par value - 138,105,592 (December 30, 2017 - 139,488,805) shares issued | 911.3 | 917.1 | |||||
Additional paid-in-capital | 72.7 | 69.1 | |||||
Retained earnings (accumulated deficit) | 321.2 | (12.2 | ) | ||||
Accumulated other comprehensive loss | (91.1 | ) | (94.4 | ) | |||
Total Cott Corporation equity | 1,214.1 | 879.6 | |||||
Non-controlling interests | — | 6.1 | |||||
Total equity | 1,214.1 | 885.7 | |||||
Total liabilities and equity | $ | 3,160.1 | $ | 4,093.1 |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | |||||||||||||
Cash flows from operating activities of continuing operations: | ||||||||||||||||
Net income (loss) | $ | 44.6 | $ | (1.1 | ) | $ | (12.1 | ) | $ | 6.4 | ||||||
Net income from discontinued operations, net of income taxes | 43.0 | 2.9 | 1.0 | 12.0 | ||||||||||||
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Net income (loss) from continuing operations | 1.6 | (4.0 | ) | (13.1 | ) | (5.6 | ) | |||||||||
Adjustments to reconcile net income (loss) from continuing operations to cash flows from operating activities: | ||||||||||||||||
Depreciation & amortization | 49.4 | 41.2 | 141.8 | 102.6 | ||||||||||||
Amortization of financing fees | 0.6 | 0.3 | 1.4 | 0.3 | ||||||||||||
Amortization of senior notes premium | (1.1 | ) | (1.5 | ) | (3.9 | ) | (4.4 | ) | ||||||||
Share-based compensation expense | 2.1 | (0.9 | ) | 11.1 | 4.0 | |||||||||||
Benefit for deferred income taxes | (3.1 | ) | 1.3 | 1.4 | (11.3 | ) | ||||||||||
Unrealized commodity hedging gain, net | (0.4 | ) | (1.0 | ) | (1.9 | ) | (0.8 | ) | ||||||||
Gain on extinguishment of debt, net | — | — | (1.5 | ) | — | |||||||||||
(Gain) loss on disposal of property, plant & equipment, net | (0.4 | ) | 1.4 | 4.8 | 4.6 | |||||||||||
Othernon-cash items | (8.4 | ) | 8.5 | (13.2 | ) | 7.7 | ||||||||||
Change in operating assets and liabilities, net of acquisitions: | ||||||||||||||||
Accounts receivable | (16.4 | ) | 4.6 | (36.7 | ) | (18.5 | ) | |||||||||
Inventories | (4.9 | ) | 7.4 | (14.5 | ) | 10.6 | ||||||||||
Prepaid expenses and other current assets | 2.5 | 1.6 | (0.3 | ) | (3.5 | ) | ||||||||||
Other assets | 0.7 | (1.0 | ) | 4.8 | 0.6 | |||||||||||
Accounts payable and accrued liabilities and other liabilities | 24.0 | (6.8 | ) | 58.5 | (14.4 | ) | ||||||||||
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Net cash provided by operating activities from continuing operations | 46.2 | 51.1 | 138.7 | 71.9 | ||||||||||||
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Cash flows from investing activities of continuing operations: | ||||||||||||||||
Acquisitions, net of cash received | (3.4 | ) | (912.5 | ) | (33.4 | ) | (958.7 | ) | ||||||||
Additions to property, plant & equipment | (38.2 | ) | (32.4 | ) | (97.1 | ) | (69.3 | ) | ||||||||
Additions to intangible assets | (3.4 | ) | (1.2 | ) | (6.0 | ) | (2.3 | ) | ||||||||
Proceeds from sale of property, plant & equipment | 3.1 | 1.3 | 6.0 | 1.5 | ||||||||||||
Other investing activities | 0.5 | — | 0.9 | — | ||||||||||||
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Net cash used in investing activities from continuing operations | (41.4 | ) | (944.8 | ) | (129.6 | ) | (1,028.8 | ) | ||||||||
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Cash flows from financing activities of continuing operations: Payments of long-term debt Issuance of long-term debt Premiums and costs paid upon extinguishment of long-term debt Issuance of common shares Common shares repurchased and cancelled Financing fees Dividends paid to common shareholders Payment of contingent consideration for acquisitions Other financing activities Net cash (used in) provided by financing activities from continuing operations Cash flows from discontinued operations: Operating activities of discontinued operations Investing activities of discontinued operations Financing activities of discontinued operations Net cash provided by (used in) discontinued operations Effect of exchange rate changes on cash Net increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash, beginning of period Cash & cash equivalents, end of period Cash & cash equivalents of discontinued operations, end of period Cash & cash equivalents from continuing operations, end of period SupplementalNon-cash Investing and Financing Activities: Accrued deferred financing fees Additions to property, plant & equipment through accounts payable and accrued liabilities and other liabilities Supplemental Disclosures of Cash Flow Information: Cash paid for interest Cash (received) paid for income taxes, net (0.3 ) (0.8 ) (101.9 ) (0.9 ) — — 750.0 498.7 — — (7.7 ) — 2.1 2.4 2.9 366.6 (0.1 ) (3.4 ) (1.9 ) (4.5 ) — (9.6 ) (11.1 ) (9.6 ) (8.4 ) (8.4 ) (25.1 ) (23.1 ) — (10.8 ) — (10.8 ) — — 0.5 — (6.7 ) (30.6 ) 605.7 816.4 47.4 44.9 56.1 87.5 (13.3 ) (8.2 ) (36.7 ) (29.3 ) (9.2 ) 257.9 (610.5 ) 128.3 24.9 294.6 (591.1 ) 186.5 2.0 (4.0 ) 6.4 (4.2 ) 25.0 (633.7 ) 30.1 41.8 123.2 752.6 118.1 77.1 148.2 118.9 148.2 118.9 66.2 27.5 66.2 27.5 $ 82.0 $ 91.4 $ 82.0 $ 91.4 $ — $ 0.7 $ 0.6 $ 0.7 6.8 5.8 6.9 7.1 $ 12.6 $ 17.5 $ 45.4 $ 35.1 (0.1 ) 0.2 1.7 4.2
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | ||||||||||||
Cash flows from operating activities of continuing operations: | |||||||||||||||
Net income (loss) | $ | 10.0 | $ | 44.6 | $ | 382.8 | $ | (12.1 | ) | ||||||
Net income from discontinued operations, net of income taxes | 1.5 | 43.0 | 357.5 | 1.0 | |||||||||||
Net income (loss) from continuing operations | 8.5 | 1.6 | 25.3 | (13.1 | ) | ||||||||||
Adjustments to reconcile net income (loss) from continuing operations to cash flows from operating activities: | |||||||||||||||
Depreciation and amortization | 49.6 | 49.4 | 145.7 | 141.8 | |||||||||||
Amortization of financing fees | 0.9 | 0.6 | 2.6 | 1.4 | |||||||||||
Amortization of senior notes premium | — | (1.1 | ) | (0.4 | ) | (3.9 | ) | ||||||||
Share-based compensation expense | 6.8 | 2.1 | 14.6 | 11.1 | |||||||||||
(Benefit) provision for deferred income taxes | 0.1 | (3.1 | ) | 2.8 | 1.4 | ||||||||||
Commodity hedging (gain) loss, net | — | (0.4 | ) | 0.3 | (1.9 | ) | |||||||||
Gain on extinguishment of debt | — | — | (7.1 | ) | (1.5 | ) | |||||||||
Gain on sale of business | — | — | (6.0 | ) | — | ||||||||||
Loss (gain) on disposal of property, plant and equipment, net | 1.2 | (0.4 | ) | 3.8 | 4.8 | ||||||||||
Other non-cash items | 0.8 | (8.4 | ) | (1.3 | ) | (13.2 | ) | ||||||||
Change in operating assets and liabilities, net of acquisitions: | |||||||||||||||
Accounts receivable | (21.8 | ) | (16.4 | ) | (41.0 | ) | (36.7 | ) | |||||||
Inventories | 4.3 | (4.9 | ) | (9.4 | ) | (14.5 | ) | ||||||||
Prepaid expenses and other current assets | (0.8 | ) | 2.5 | (7.4 | ) | (0.3 | ) | ||||||||
Other assets | 0.2 | 0.7 | 1.4 | 4.8 | |||||||||||
Accounts payable and accrued liabilities and other liabilities | 28.4 | 24.0 | 22.2 | 58.5 | |||||||||||
Net cash provided by operating activities from continuing operations | 78.2 | 46.2 | 146.1 | 138.7 | |||||||||||
Cash flows from investing activities of continuing operations: | |||||||||||||||
Acquisitions, net of cash received | (0.4 | ) | (3.4 | ) | (67.0 | ) | (33.4 | ) | |||||||
Additions to property, plant and equipment | (36.3 | ) | (38.2 | ) | (95.0 | ) | (97.1 | ) | |||||||
Additions to intangible assets | (2.7 | ) | (3.4 | ) | (6.9 | ) | (6.0 | ) | |||||||
Proceeds from sale of property, plant and equipment | 0.8 | 3.1 | 3.7 | 6.0 | |||||||||||
Proceeds from sale of business, net of cash sold | — | — | 12.8 | — | |||||||||||
Proceeds from sale of equity securities | 7.9 | — | 7.9 | — | |||||||||||
Other investing activities | 0.1 | 0.5 | 0.4 | 0.9 | |||||||||||
Net cash used in investing activities from continuing operations | (30.6 | ) | (41.4 | ) | (144.1 | ) | (129.6 | ) |
Cash flows from financing activities of continuing operations: | |||||||||||||||
Payments of long-term debt | (0.2 | ) | (0.3 | ) | (263.5 | ) | (101.9 | ) | |||||||
Issuance of long-term debt | — | — | — | 750.0 | |||||||||||
Borrowings under ABL | 0.4 | — | 1.4 | — | |||||||||||
Payments under ABL | (0.4 | ) | — | (1.4 | ) | — | |||||||||
Premiums and costs paid upon extinguishment of long-term debt | — | — | (12.5 | ) | (7.7 | ) | |||||||||
Issuance of common shares | 1.8 | 2.1 | 6.0 | 2.9 | |||||||||||
Common shares repurchased and canceled | (24.4 | ) | (0.1 | ) | (46.1 | ) | (1.9 | ) | |||||||
Financing fees | — | — | (1.5 | ) | (11.1 | ) | |||||||||
Dividends paid to common shareholders | (8.3 | ) | (8.4 | ) | (25.1 | ) | (25.1 | ) | |||||||
Payment of deferred consideration for acquisitions | — | — | (2.8 | ) | — | ||||||||||
Other financing activities | 1.9 | — | 4.0 | 0.5 | |||||||||||
Net cash (used in) provided by financing activities from continuing operations | (29.2 | ) | (6.7 | ) | (341.5 | ) | 605.7 | ||||||||
Cash flows from discontinued operations: | |||||||||||||||
Operating activities of discontinued operations | (5.6 | ) | 47.4 | (93.6 | ) | 56.1 | |||||||||
Investing activities of discontinued operations | — | (13.3 | ) | 1,228.6 | (36.7 | ) | |||||||||
Financing activities of discontinued operations | — | (9.2 | ) | (769.7 | ) | (610.5 | ) | ||||||||
Net cash (used in) provided by discontinued operations | (5.6 | ) | 24.9 | 365.3 | (591.1 | ) | |||||||||
Effect of exchange rate changes on cash | 0.5 | 2.0 | (8.0 | ) | 6.4 | ||||||||||
Net increase in cash, cash equivalents and restricted cash | 13.3 | 25.0 | 17.8 | 30.1 | |||||||||||
Cash and cash equivalents and restricted cash, beginning of period | 162.4 | 123.2 | 157.9 | 118.1 | |||||||||||
Cash and cash equivalents and restricted cash, end of period | 175.7 | 148.2 | 175.7 | 148.2 | |||||||||||
Cash and cash equivalents and restricted cash of discontinued operations, end of period | — | 66.2 | — | 66.2 | |||||||||||
Cash and cash equivalents and restricted cash from continuing operations, end of period | $ | 175.7 | $ | 82.0 | $ | 175.7 | $ | 82.0 | |||||||
Supplemental Non-cash Investing and Financing Activities: | |||||||||||||||
Accrued deferred financing fees | $ | — | $ | — | $ | — | $ | 0.6 | |||||||
Dividends payable | — | — | 0.4 | — | |||||||||||
Additions to property, plant and equipment through accounts payable and accrued liabilities and other liabilities | 13.5 | 6.8 | 17.5 | 6.9 | |||||||||||
Supplemental Disclosures of Cash Flow Information: | |||||||||||||||
Cash paid for interest | $ | 0.7 | $ | 12.6 | $ | 47.1 | $ | 45.4 | |||||||
Cash paid (received) for income taxes, net | 4.2 | (0.1 | ) | 6.4 | 1.7 |
Cott Corporation Equity | ||||||||||||||||||||||||||||
Number of Common Shares (In thousands) | Common Shares | Additional Paid-in- Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive (Loss) Income | Non- Controlling Interests | Total Equity | ||||||||||||||||||||||
Balance at January 2, 2016 | 109,695 | $ | 534.7 | $ | 51.2 | $ | 129.6 | $ | (76.2 | ) | $ | 6.6 | $ | 645.9 | ||||||||||||||
Cumulative effect adjustment | — | — | — | 2.8 | — | — | 2.8 | |||||||||||||||||||||
Common shares repurchased and cancelled | (302 | ) | (4.5 | ) | — | — | — | — | (4.5 | ) | ||||||||||||||||||
Common shares issued - Equity Incentive Plan | 1,012 | 12.5 | (3.7 | ) | — | — | — | 8.8 | ||||||||||||||||||||
Common shares issued - Equity issuance | 27,853 | 363.6 | — | — | — | — | 363.6 | |||||||||||||||||||||
Common shares issued - Dividend Reinvestment Plan | 14 | 0.2 | — | — | — | — | 0.2 | |||||||||||||||||||||
Common shares issued - Employee Stock Purchase Plan | 74 | 0.9 | (0.1 | ) | — | — | — | 0.8 | ||||||||||||||||||||
Share-based compensation | — | — | 5.7 | — | — | — | 5.7 | |||||||||||||||||||||
Common shares dividends | — | — | — | (23.1 | ) | — | — | (23.1 | ) | |||||||||||||||||||
Distributions tonon-controlling interests | — | — | — | — | — | (5.9 | ) | (5.9 | ) | |||||||||||||||||||
Comprehensive (loss) income | ||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | (23.8 | ) | — | (23.8 | ) | |||||||||||||||||||
Pension benefit plan, net of tax | — | — | — | — | 0.2 | — | 0.2 | |||||||||||||||||||||
Unrealized gain on derivative instruments, net of tax | — | — | — | — | 3.8 | — | 3.8 | |||||||||||||||||||||
Net income | — | — | — | 2.0 | — | 4.4 | 6.4 | |||||||||||||||||||||
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Balance at October 1, 2016 | 138,346 | $ | 907.4 | $ | 53.1 | $ | 111.3 | $ | (96.0 | ) | $ | 5.1 | $ | 980.9 | ||||||||||||||
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Balance at December 31, 2016 | 138,591 | $ | 909.3 | $ | 54.2 | $ | 22.9 | $ | (117.9 | ) | $ | 5.3 | $ | 873.8 | ||||||||||||||
Common shares repurchased and cancelled | (165 | ) | (1.9 | ) | — | — | — | — | (1.9 | ) | ||||||||||||||||||
Common shares issued - Equity Incentive Plan | 708 | 6.4 | (5.0 | ) | — | — | — | 1.4 | ||||||||||||||||||||
Common shares issued - Dividend Reinvestment Plan | 27 | 0.3 | — | — | — | — | 0.3 | |||||||||||||||||||||
Common shares issued - Employee Stock Purchase Plan | 108 | 1.4 | (0.2 | ) | — | — | — | 1.2 | ||||||||||||||||||||
Share-based compensation | — | — | 14.3 | — | — | — | 14.3 | |||||||||||||||||||||
Common shares dividends | — | — | — | (25.1 | ) | — | — | (25.1 | ) | |||||||||||||||||||
Distributions tonon-controlling interests | — | — | — | — | — | (3.3 | ) | (3.3 | ) | |||||||||||||||||||
Comprehensive income (loss) | ||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | 26.1 | — | 26.1 | |||||||||||||||||||||
Pension benefit plan, net of tax | — | — | — | — | (0.4 | ) | — | (0.4 | ) | |||||||||||||||||||
Loss on derivative instruments, net of tax | — | — | — | — | (0.5 | ) | — | (0.5 | ) | |||||||||||||||||||
Net (loss) income | — | — | — | (18.5 | ) | — | 6.4 | (12.1 | ) | |||||||||||||||||||
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Balance at September 30, 2017 | 139,269 | $ | 915.5 | $ | 63.3 | $ | (20.7 | ) | $ | (92.7 | ) | $ | 8.4 | $ | 873.8 | |||||||||||||
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Cott Corporation Equity | ||||||||||||||||||||||||||
Number of Common Shares (In thousands) | Common Shares | Additional Paid-in- Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Non- Controlling Interests | Total Equity | ||||||||||||||||||||
Balance at December 31, 2016 | 138,591 | $ | 909.3 | $ | 54.2 | $ | 22.9 | $ | (117.9 | ) | $ | 5.3 | $ | 873.8 | ||||||||||||
Common shares repurchased and canceled | (165 | ) | (1.9 | ) | — | — | — | — | (1.9 | ) | ||||||||||||||||
Common shares issued - Equity Incentive Plan | 708 | 6.4 | (5.0 | ) | — | — | — | 1.4 | ||||||||||||||||||
Common shares issued - Dividend Reinvestment Plan | 27 | 0.3 | — | — | — | — | 0.3 | |||||||||||||||||||
Common shares issued - Employee Stock Purchase Plan | 108 | 1.4 | (0.2 | ) | — | — | — | 1.2 | ||||||||||||||||||
Share-based compensation | — | — | 14.3 | — | — | — | 14.3 | |||||||||||||||||||
Common shares dividends | — | — | — | (25.1 | ) | — | — | (25.1 | ) | |||||||||||||||||
Distributions to non-controlling interests | — | — | — | — | — | (3.3 | ) | (3.3 | ) | |||||||||||||||||
Comprehensive income (loss) | ||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | 26.1 | — | 26.1 | |||||||||||||||||||
Pension benefit plan, net of tax | — | — | — | — | (0.4 | ) | — | (0.4 | ) | |||||||||||||||||
Loss on derivative instruments, net of tax | — | — | — | — | (0.5 | ) | — | (0.5 | ) | |||||||||||||||||
Net (loss) income | — | — | — | (18.5 | ) | — | 6.4 | (12.1 | ) | |||||||||||||||||
Balance at September 30, 2017 | 139,269 | $ | 915.5 | $ | 63.3 | $ | (20.7 | ) | $ | (92.7 | ) | $ | 8.4 | $ | 873.8 | |||||||||||
Balance at December 30, 2017 | 139,489 | $ | 917.1 | $ | 69.1 | $ | (12.2 | ) | $ | (94.4 | ) | $ | 6.1 | $ | 885.7 | |||||||||||
Common shares repurchased and canceled | (2,930 | ) | (22.8 | ) | — | (23.3 | ) | — | — | (46.1 | ) | |||||||||||||||
Common shares issued - Equity Incentive Plan | 1,462 | 15.8 | (10.9 | ) | — | — | — | 4.9 | ||||||||||||||||||
Common shares issued - Dividend Reinvestment Plan | 17 | 0.2 | — | — | — | — | 0.2 | |||||||||||||||||||
Common shares issued - Employee Stock Purchase Plan | 68 | 1.0 | (0.1 | ) | — | — | — | 0.9 | ||||||||||||||||||
Share-based compensation | — | — | 14.6 | — | — | — | 14.6 | |||||||||||||||||||
Common shares dividends | — | — | — | (25.5 | ) | — | — | (25.5 | ) | |||||||||||||||||
Distributions to non-controlling interests | — | — | — | — | — | (0.9 | ) | (0.9 | ) | |||||||||||||||||
Sale of subsidiary shares of non-controlling interests | — | — | — | — | — | (5.8 | ) | (5.8 | ) | |||||||||||||||||
Comprehensive (loss) income | ||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | (3.6 | ) | — | (3.6 | ) | |||||||||||||||||
Pension benefit plan, net of tax | — | — | — | — | 16.9 | — | 16.9 | |||||||||||||||||||
Loss on derivative instruments, net of tax | — | — | — | — | (10.0 | ) | — | (10.0 | ) | |||||||||||||||||
Net income | — | — | — | 382.2 | — | 0.6 | 382.8 | |||||||||||||||||||
Balance at September 29, 2018 | 138,106 | $ | 911.3 | $ | 72.7 | $ | 321.2 | $ | (91.1 | ) | $ | — | $ | 1,214.1 |
On July 24, 2017, we entered into a Share Purchase Agreement (the “Purchase Agreement”) with Refresco Group N.V., a Netherlands limited liability company (“Refresco”), pursuant to which we will sell to Refresco our carbonated soft drinks (“CSDs”) and juice businesses via the sale of our North America, United Kingdom (“U.K.”) and Mexico business units (including the Canadian business) and our Royal Crown International (“RCI”) finished goods export business (collectively, “Traditional Business”). Accordingly, as a result of the sale of the Traditional Business representing a strategic shift in our operations, those businesses are presented herein as discontinued operations. See Note 3 to the consolidated financial statements for additional information on discontinued operations. The Traditional Business excludes our Route Based Services and Coffee, Tea and Extract Solutions reporting segments, and RCI concentrate business, the Columbus manufacturing facility and our Aimia Foods (“Aimia”) business.
Consolidated Financial Statements.
Changes See Note 9 to the Consolidated Financial Statements for segment reporting.
Certainthe Consolidated Statements of Operations for the three and nine months ended September 30, 2017. Cash flows from the Company’s discontinued operations are presented in the Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2017. See Note 3 to the Consolidated Financial Statements for additional information on discontinued operations.
Consolidated Financial Statements for segment reporting.
Reporting Segment | ||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Total | ||||||||||||
Balance December 31, 2016 | $ | 886.5 | $ | 117.1 | $ | 44.7 | $ | 1,048.3 | ||||||||
Goodwill acquired during the year | 7.0 | — | 1.3 | 8.3 | ||||||||||||
Adjustments1 | 0.1 | 0.7 | — | 0.8 | ||||||||||||
Foreign exchange | 35.6 | — | 4.0 | 39.6 | ||||||||||||
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Balance September 30, 2017 | $ | 929.2 | $ | 117.8 | $ | 50.0 | $ | 1,097.0 | ||||||||
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______________________ 1 During the nine months ended September 29, 2018, we recorded adjustments to goodwill allocated |
Discontinued Operations
In July 2017, the Company’s Board of Directors committed to a plan to sell our Traditional Business. The closing of the transaction is subject to certain customary closing conditions, including regulatory approval from the United Kingdom. Approval from Refresco’s stockholders was received in September 2017 and accordingly, the Company has presented this portion of our business as discontinued operations beginning in the third quarter of 2017. The Company has reclassified the financial results of the Traditional Business to net income from discontinued operations, net of income taxes in the consolidated statements of operations for all periods presented. The Company has also reclassified the related assets and liabilities as current and long-term assets and liabilities of discontinued operations on the accompanying consolidated balance sheets as of September 30, 2017 and December 31, 2016. Cash flows from the Company’s discontinued operations are presented in the consolidated statements of cash flows for all periods presented. See Note 3 to the consolidated financial statements for additional information on discontinued operations.
Route Based Services segment in connection with the acquisitions of Crystal Rock (see Note 5 to the Consolidated Financial Statements).
In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”)2015-11 – Inventory (Topic 330) to simplify the accounting for inventory. The guidance requires entities to measure most inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted the provisions of this guidance effective January 1, 2017, and applied it prospectively to all periods presented. The adoption of this standard did not have a material impact on the Company’s financial statements.
In March 2016, the FASB issued ASU2016-09—Compensation – Stock Compensation (Topic 718). We elected to early adopt this standard in the fourth quarter of 2016, effective as of the beginning of the Company’s 2016 fiscal year. Amendments requiring the recognition of excess tax benefits and tax deficiencies within the consolidated statements of operations were adopted prospectively and resulted in an increase of $1.0 million and $1.2 million in income tax benefit and net income (loss) from continuing operations for the three and nine months ended October 1, 2016.
Recently issued accounting pronouncements
Changes to GAAP are established by the FASB in the form of ASUs or the issuance of new standards to the FASB’s Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements.
During the first half of
Consolidated Financial Statements.
Consolidated Financial Statements. The Company is evaluating the standard’s applicability to our various contractual arrangements. We currently believe that the most significant changes relate to the recognition of new right of use assets and lease liabilities for real estate and equipment leases, which will result in future increases to our assets and liabilities on our Consolidated Balance Sheets. We believe that substantially all of our lessee lease arrangements will continue to be classified as operating leases under the new standard. Additionally, we had $19.9 million of deferred gains at December 31, 2016 associated with sale-leaseback transactions which are currently being amortized over the leaseback term. Upon adoption of this standard, we will be required to recognize the unamortized deferred gain at January 1, 2017 as a cumulative effect adjustment to equity. In addition, upon adoption of this standard, deferred gains related to the sale-leaseback transactions completed in 2017 of $7.9 million at December 30, 2017 will be recognized in net income (loss) from discontinued operations, net of income taxes in the Consolidated Statement of Operations for the year ended December 30, 2017.
Consolidated Financial Statements.
In January 2017, the FASB amended its guidance regarding business combinations. The amendment clarified the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments provide an analysis of fair value of assets acquired to determine when a set of assets is not a business, and uses more stringent criteria related to inputs, substantive process, and outputs to determine if a business exists. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The amendments in this update should be applied prospectively on or after the effective date with no requirement for disclosures at transition. We are currently assessing the impact of adoption of this standard on our consolidated financial statements.
Update ASU2017-04 – Intangibles—Goodwill and Other (Topic 350)
In January 2017, the FASB amended its guidance regarding goodwill impairment. The amendments remove certain conditions of the goodwill impairment test and simplify the computation of impairment. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted for any tests performed after January 1, 2017. The amendments in this update should be applied prospectively, with disclosure required as to the nature of and reason for the change in accounting principle upon transition. We are currently assessing the impact of adoption of this standard on our consolidated financial statements.
Update ASU2017-07 – Compensation—Retirement Benefits (Topic 715)
In March 2017, the FASB issued an update to its guidance on presentation of net periodic pension cost and net periodic post-retirement pension cost, and requires the service cost component to be presented in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. The amendments in this update also allow only the service cost component to be eligible for capitalization when applicable. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. At adoption, this update will be applied retrospectively for the presentation of the service cost component and other components of net periodic pension cost and net periodic post-retirement benefit cost in the income statement and prospectively, on or after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic post-retirement benefit in assets. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. We are currently assessing the impact of adoption of this standard on our consolidated financial statements.
Update ASU2017-08 – Receivables—Nonrefundable Fees and Other Costs (Subtopic310-20)
Consolidated Financial Statements.
220)
Consolidated Financial Statements.
Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20)
Consolidated Financial Statements.
We have also corrected other immaterial items in the consolidated statements of cash flows for the threeComprehensive Income (Loss) and nine months ended October 1, 2016, as presented herein. These corrections increasenet cash provided by operating activities from continuing operations and cash flows usedoperating activities of discontinued operations as reported in investing activities from continuing operations by $3.1 millionour Consolidated Statements of Cash Flows for the three months ended October 1, 2016March 31, 2018 and decreasedthe six months ended June 30, 2018 as well as accumulated other comprehensive loss as reported in our Consolidated Statements of Equity as of March 31, 2018 and June 30, 2018. The error in the Consolidated Statement of Cash Flows resulted from incorrectly presenting cash flows provided by operating activities from continuing operations and cash flows used in investing activities from continuingof continued operations by $1.1 millionas discontinued operations for the ninethree months ended October 1, 2016. These corrections also impacted the supplemental disclosure of additions to property, plant & equipment through accounts payable and accrued liabilities by $1.1 million for the nine months ended October 1, 2016.
As a result of the revision, our ending cash, cash equivalents and restricted cash in the statements of cash flows for the threeMarch 31, 2018 and six months ended July 2, 2016, now reconcile to the ending cash and restricted cash as presented on the consolidated balance sheet as of July 2, 2016, within the Form10-Q filed August 9, 2016.
June 30, 2018. No other financial statement line items were impacted by this error.
Consolidated Balance Sheets | ||||||||||||||||||
March 31, 2018 | June 30, 2018 | |||||||||||||||||
(in millions of U.S. dollars) | As Previously Reported | Adjustments | As Revised | As Previously Reported | Adjustments | As Revised | ||||||||||||
Accounts payable and accrued liabilities | 439.8 | 10.3 | 450.1 | 421.5 | 10.3 | 431.8 | ||||||||||||
Total current liabilities | 445.6 | 10.3 | 455.9 | 430.2 | 10.3 | 440.5 | ||||||||||||
Total liabilities | 1,948.0 | 10.3 | 1,958.3 | 1,896.3 | 10.3 | 1,906.6 | ||||||||||||
Accumulated other comprehensive loss | (62.7 | ) | (10.3 | ) | (73.0 | ) | (80.2 | ) | (10.3 | ) | (90.5 | ) | ||||||
Total Cott Corporation Equity | 1,263.8 | (10.3 | ) | 1,253.5 | 1,238.9 | (10.3 | ) | 1,228.6 |
Condensed Consolidated Statements of Comprehensive (Loss) Income | ||||||||||||||||||
For the Three Months Ended March 31, 2018 | For the Six Months Ended June 30, 2018 | |||||||||||||||||
(in millions of U.S. dollars) | As Previously Reported | Adjustments | As Revised | As Previously Reported | Adjustments | As Revised | ||||||||||||
Currency translation adjustment | 18.6 | (10.3 | ) | 8.3 | 1.6 | (10.3 | ) | (8.7 | ) | |||||||||
Total other comprehensive income | 31.7 | (10.3 | ) | 21.4 | 14.2 | (10.3 | ) | 3.9 |
Consolidated Statements of Cash Flows | ||||||||||||||||||
For the Three Months Ended March 31, 2018 | For the Six Months Ended June 30, 2018 | |||||||||||||||||
(in millions of U.S. dollars) | As Previously Reported | Adjustments | As Revised | As Previously Reported | Adjustments | As Revised | ||||||||||||
Change in accounts payable and accrued liabilities | (2.6 | ) | 10.3 | 7.7 | (16.5 | ) | 10.3 | (6.2 | ) | |||||||||
Net cash provided by operating activities from continuing operations | 22.6 | 10.3 | 32.9 | 57.6 | 10.3 | 67.9 | ||||||||||||
Operating activities of discontinued operations | (74.4 | ) | (10.3 | ) | (84.7 | ) | (77.7 | ) | (10.3 | ) | (88.0 | ) |
Consolidated Statement of Equity | ||||||||||||||||||
March 31, 2018 | June 30, 2018 | |||||||||||||||||
(in millions of U.S. dollars) | As Previously Reported | Adjustments | As Revised | As Previously Reported | Adjustments | As Revised | ||||||||||||
Currency translation adjustment | 18.6 | (10.3 | ) | 8.3 | 1.6 | (10.3 | ) | (8.7 | ) | |||||||||
Accumulated other comprehensive loss | (62.7 | ) | (10.3 | ) | (73.0 | ) | (80.2 | ) | (10.3 | ) | (90.5 | ) | ||||||
Total Cott Corporation equity | 1,263.8 | (10.3 | ) | 1,253.5 | 1,238.9 | (10.3 | ) | 1,228.6 |
For the Three Months Ended July 2, 2016 | ||||||||||||
(in millions of U.S. dollars) | As Previously Reported | Adjustments | As Revised | |||||||||
Othernon-cash items | $ | 2.6 | $ | (1.3 | ) | $ | 1.3 | |||||
Accounts payable and accrued liabilities and other liabilities | 44.6 | (1.3 | ) | 43.3 | ||||||||
Net cash provided by operating activities | 87.6 | (2.6 | ) | 85.0 | ||||||||
Additions to property, plant & equipment | (33.2 | ) | 1.3 | (31.9 | ) | |||||||
Other investing activities | (2.8 | ) | 2.8 | — | ||||||||
Net cash used in investing activities | (38.6 | ) | 4.1 | (34.5 | ) | |||||||
Issuance of long-term debt | — | 498.7 | 498.7 | |||||||||
Net cash provided by financing activities | 147.5 | 498.7 | 646.2 | |||||||||
Effect of exchange rate changes on cash | (2.1 | ) | 2.9 | 0.8 | ||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | 194.4 | 503.1 | 697.5 | |||||||||
Cash & cash equivalents, beginning of period | 55.1 | — | 55.1 | |||||||||
Cash, cash equivalents and restricted cash, end of period | 249.5 | 503.1 | 752.6 | |||||||||
SupplementalNon-cash Investing and Financing Activities: | ||||||||||||
Long-term debt funded to escrow | 498.7 | (498.7 | ) | — | ||||||||
Additions to property, plant & equipment through accounts payable and accrued liabilities | 10.2 | 1.3 | 11.5 |
(in millions of U.S. dollars) Othernon-cash items Accounts payable and accrued liabilities and other liabilities Net cash provided by operating activities Additions to property, plant & equipment Other investing activities Net cash used in investing activities Issuance of long-term debt Net cash provided by financing activities Effect of exchange rate changes on cash Net (decrease) increase in cash, cash equivalents, and restricted cash Cash & cash equivalents, beginning of period Cash, cash equivalents and restricted cash, end of period SupplementalNon-cash Investing and Financing Activities: Long-term debt funded to escrow Additions to property, plant & equipment through accounts payable and accrued liabilities For the Six Months Ended July 2, 2016 As Previously Reported Adjustments As Revised $ 0.9 $ (1.3 ) $ (0.4 ) 11.1 (4.2 ) 6.9 68.9 (5.5 ) 63.4 (62.7 ) 4.2 (58.5 ) (2.8 ) 2.8 — (112.1 ) 7.0 (105.1 ) — 498.7 498.7 218.7 498.7 717.4 (3.1 ) 2.9 (0.2 ) 172.4 503.1 675.5 77.1 — 77.1 249.5 503.1 752.6 498.7 (498.7 ) — 11.4 4.2 15.6
consolidated financial statements to correct these misstatements.
Upon closingsecure potential indemnification claims. The escrow will be released, subject to any amounts for pending indemnification claims, on the eighteen month anniversary of the saleclosing date of the Transaction. These funds are included in cash and cash equivalents on the Consolidated Balance Sheet as of
For all periods presented,
General Electric Capital Corporation (the “GE Term Loan”).
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
(in millions of U.S. dollars) | September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | ||||||||||||
Revenue, net | $ | 425.6 | $ | 419.3 | $ | 1,244.7 | $ | 1,282.7 | ||||||||
Cost of sales | 371.3 | 361.3 | 1,093.4 | 1,102.0 | ||||||||||||
Operating income from discontinued operations | 13.9 | 21.0 | 33.6 | 67.1 | ||||||||||||
Income (loss) from discontinued operations, before income taxes | 12.1 | 4.5 | (27.5 | ) | 9.5 | |||||||||||
Income tax (benefit) expense1 | (30.9 | ) | 1.6 | (28.5 | ) | (2.5 | ) | |||||||||
Net income from discontinued operations, net of income taxes | 43.0 | 2.9 | 1.0 | 12.0 | ||||||||||||
Less: Net income attributable tonon-controlling interests | 2.1 | 1.5 | 6.4 | 4.4 | ||||||||||||
Net income (loss) attributable to Cott Corporation – discontinued operations | $ | 40.9 | $ | 1.4 | $ | (5.4 | ) | $ | 7.6 |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
(in millions of U.S. dollars) | September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | |||||||||||
Revenue, net | $ | — | $ | 425.6 | $ | 111.2 | $ | 1,244.7 | |||||||
Cost of sales | — | 371.3 | 98.4 | 1,093.4 | |||||||||||
Operating income from discontinued operations | — | 13.9 | 2.0 | 33.6 | |||||||||||
Gain on sale of discontinued operations | 0.6 | — | 427.6 | — | |||||||||||
Income (loss) from discontinued operations, before income taxes | 0.6 | 12.1 | 402.2 | (27.5 | ) | ||||||||||
Income tax (benefit) expense 1 | (0.9 | ) | (30.9 | ) | 44.7 | (28.5 | ) | ||||||||
Net income from discontinued operations, net of income taxes | 1.5 | 43.0 | 357.5 | 1.0 | |||||||||||
Less: Net income attributable to non-controlling interests | — | 2.1 | 0.6 | 6.4 | |||||||||||
Net income (loss) attributable to Cott Corporation – discontinued operations 2 | $ | 1.5 | $ | 40.9 | $ | 356.9 | $ | (5.4 | ) |
The |
Assets and liabilities
2 | Net income (loss) attributable to Cott Corporation – discontinued operations is inclusive of interest expense on short-term borrowings and debt required to be repaid or extinguished as part of divestiture of $3.4 million for the nine months ended September 29, 2018 and $8.4 million and $38.5 million for the three and nine months ended September 30, 2017, respectively. |
(in millions of U.S. dollars) | September 30, 2017 | December 31, 2016 | ||||||
ASSETS | ||||||||
Cash & cash equivalents | $ | 66.2 | $ | 40.0 | ||||
Accounts receivable, net | 165.2 | 127.2 | ||||||
Inventories | 184.7 | 176.8 | ||||||
Prepaid expenses and other current assets | 10.4 | 7.7 | ||||||
|
|
|
| |||||
Current assets of discontinued operations | 426.5 | 351.7 | ||||||
Property, plant & equipment, net | 341.9 | 348.1 | ||||||
Goodwill | 136.9 | 127.1 | ||||||
Intangible assets, net | 175.7 | 180.7 | ||||||
Other long-term assets, net | 19.1 | 17.5 | ||||||
|
|
|
| |||||
Long-term assets of discontinued operations | $ | 673.6 | $ | 673.4 | ||||
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|
|
| |||||
LIABILITIES | ||||||||
Short-term borrowings | 247.6 | 207.0 | ||||||
Current maturities of long-term debt | 2.9 | 2.8 | ||||||
Accounts payable and accrued liabilities | 268.6 | 229.4 | ||||||
|
|
|
| |||||
Current liabilities of discontinued operations | 519.1 | 439.2 | ||||||
Long-term debt | 519.8 | 1,136.6 | ||||||
Deferred tax liabilities | 0.8 | 2.8 | ||||||
Other long-term liabilities | 45.9 | 34.6 | ||||||
|
|
|
| |||||
Long-term liabilities of discontinued operations | $ | 566.5 | $ | 1,174.0 | ||||
|
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|
nine months ended September 30, 2017, respectively.
S&D Acquisition
On August 11, 2016,Revenue
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
(in millions of U.S. dollars) | September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | |||||||||||
United States | $ | 457.8 | $ | 431.1 | $ | 1,330.0 | $ | 1,278.7 | |||||||
United Kingdom | 41.7 | 40.5 | 126.8 | 118.1 | |||||||||||
Canada | 16.7 | 16.8 | 48.8 | 47.0 | |||||||||||
All other countries | 93.1 | 92.5 | 268.1 | 254.6 | |||||||||||
Total 1 | $ | 609.3 | $ | 580.9 | $ | 1,773.7 | $ | 1,698.4 |
(in millions of U.S. dollars) | ||||
Cash paid to sellers | $ | 20.7 | ||
Cash paid on behalf of sellers for sellers’ transaction expenses | 0.8 | |||
Total consideration | $ | 21.5 |
(in millions of U.S. dollars) | Originally Reported | Measurement Period Adjustments | Acquired Value | |||||||||
Cash | $ | 1.7 | $ | — | $ | 1.7 | ||||||
Accounts receivable | 51.4 | — | 51.4 | |||||||||
Inventory | 62.5 | — | 62.5 | |||||||||
Prepaid expenses and other assets | 2.3 | — | 2.3 | |||||||||
Property, plant & equipment | 92.9 | (0.7 | ) | 92.2 | ||||||||
Goodwill | 117.1 | 0.7 | 117.8 | |||||||||
Intangible assets | 119.0 | — | 119.0 | |||||||||
Other assets | 2.2 | — | 2.2 | |||||||||
Accounts payable and accrued liabilities | (46.7 | ) | (0.2 | ) | (46.9 | ) | ||||||
Deferred tax liabilities | (43.3 | ) | 0.2 | (43.1 | ) | |||||||
Other long-term liabilities | (5.5 | ) | — | (5.5 | ) | |||||||
|
|
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| |||||||
Total | $ | 353.6 | $ | — | $ | 353.6 | ||||||
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|
|
Eden
(in millions of U.S. dollars) | Originally Reported | Measurement Period Adjustments | Acquired Value | ||||||||
Cash | $ | 1.6 | $ | — | $ | 1.6 | |||||
Accounts receivable | 6.5 | (0.1 | ) | 6.4 | |||||||
Inventory | 2.3 | (0.1 | ) | 2.2 | |||||||
Prepaid expenses and other assets | 1.2 | 0.3 | 1.5 | ||||||||
Property, plant and equipment | 9.4 | (0.1 | ) | 9.3 | |||||||
Goodwill | 16.7 | (2.7 | ) | 14.0 | |||||||
Intangible assets | 13.3 | 0.6 | 13.9 | ||||||||
Other assets | 0.8 | (0.7 | ) | 0.1 | |||||||
Short-term borrowings | (4.1 | ) | — | (4.1 | ) | ||||||
Current maturities of long-term debt | (1.6 | ) | — | (1.6 | ) | ||||||
Accounts payable and accrued liabilities | (5.2 | ) | (2.2 | ) | (7.4 | ) | |||||
Long-term debt | (10.4 | ) | — | (10.4 | ) | ||||||
Deferred tax liabilities | (6.5 | ) | 3.4 | (3.1 | ) | ||||||
Other long-term liabilities | (2.5 | ) | 1.6 | (0.9 | ) | ||||||
Total | $ | 21.5 | $ | — | $ | 21.5 |
On August 2, 2016, are recorded at their estimated fair values per management’s estimates and are subject to change when formal valuations and other studies are finalized. The fair values of acquired property, plant and equipment, customer relationships, trademarks and trade names, and deferred taxes are provisional pending validation and receipt of the Company acquired Eden Springs Europe B.V., a leading providerfinal valuations for those assets. In addition, consideration for potential loss contingencies, including uncertain tax positions, are still under review.
The table below summarizes the originally reported estimated acquisition date fair values, measurement period adjustments recorded and the final purchase price allocation of the assets acquired and liabilities assumed:
(in millions of U.S. dollars) | Originally Reported | Measurement Period Adjustments | Acquired Value | |||||||||
Cash & cash equivalents | $ | 19.6 | $ | — | $ | 19.6 | ||||||
Accounts receivable | 95.4 | (1.0 | ) | 94.4 | ||||||||
Inventories | 17.7 | — | 17.7 | |||||||||
Prepaid expenses and other current assets | 6.2 | — | 6.2 | |||||||||
Property, plant & equipment | 107.1 | (8.2 | ) | 98.9 | ||||||||
Goodwill | 299.7 | 0.1 | 299.8 | |||||||||
Intangible assets | 213.2 | (0.7 | ) | 212.5 | ||||||||
Other assets | 2.8 | — | 2.8 | |||||||||
Deferred tax assets | 19.5 | — | 19.5 | |||||||||
Current maturities of long-term debt | (2.7 | ) | — | (2.7 | ) | |||||||
Accounts payable and accrued liabilities | (128.3 | ) | (0.5 | ) | (128.8 | ) | ||||||
Long-term debt | (3.1 | ) | — | (3.1 | ) | |||||||
Deferred tax liabilities | (49.5 | ) | 3.5 | (46.0 | ) | |||||||
Other long-term liabilities | (21.3 | ) | 6.8 | (14.5 | ) | |||||||
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|
|
|
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| |||||||
Total | $ | 576.3 | $ | — | $ | 576.3 | ||||||
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|
|
Supplemental Pro Forma Data (unaudited)
The following unaudited pro forma financial information for the three and nine months ended October 1, 2016, represent the combined results of operations as if the S&DCrystal Rock Acquisition and Eden Acquisition had occurred on January 4, 2015. Unaudited pro forma consolidated results of operations for the acquisition of Aquaterra Corporation (“Aquaterra”) in
January 2016 were not included in the combined resultsCompany’s Consolidated Statement of our operationsOperations for the three and nine months ended October 1, 2016 because the Company determined they were immaterial. The unaudited pro forma financial information results reflect certain adjustments related to these acquisitions such as increased amortization expense on acquired intangible assets resultingperiod from the preliminary fair valuation of assets acquired. The unaudited pro forma financial information does not necessarily reflect the results of operations that would have occurred had we operated as a single entity during such periods.
(in millions of U.S. dollars, except per share amounts) | For the Three Months Ended October 1, 2016 | For the Nine Months Ended October 1, 2016 | ||||||
Revenue | $ | 588.6 | $ | 1,664.3 | ||||
Net income from continuing operations | 12.8 | 18.0 | ||||||
Net income attributable to Cott Corporation | 13.9 | 23.4 | ||||||
Net income per common share from continuing operations | $ | 0.08 | $ | 0.13 | ||||
Net income per common share attributable to Cott Corporation, diluted | $ | 0.09 | $ | 0.17 |
Note 5—Share-based Compensation
Crystal Rock Acquisition Date through September 29, 2018 was $30.5 million. During the nine months ended September 30, 2017,29, 2018, the Company incurred $2.9 million of acquisition-related costs associated with the Crystal Rock Acquisition, which are included within acquisition and integration expenses in the Consolidated Statement of Operations. During the second quarter of 2018, Crystal Rock was integrated within our DSS business, therefore it is impracticable to determine the amount of net income related to the Crystal Rock Acquisition included in the Company's Statement of Operations for the period from the Crystal Rock Acquisition Date through September 29, 2018.
(in millions of U.S. dollars) | Estimated Fair Market Value | Estimated Useful Life | ||||
Customer relationships | $ | 9.7 | 11 years | |||
Trademarks and trade names | 4.2 | Indefinite | ||||
Total | $ | 13.9 |
The effective tax rate differs from the Canadian statutory rateDirectors approved a share repurchase program for up to $50.0 million of Cott’s outstanding common shares over a 12-month period commencing on May 7, 2018. Since that date, during the three and nine months ended September 30, 201729, 2018, we repurchased 1,560,736 and October 1, 2016, primarily due to: (a) losses incurred2,556,117 common shares, respectively, for approximately $24.0 million and $40.0 million, respectively, through open market transactions. We are unable to predict the number of shares that ultimately will be repurchased under the share repurchase program, or the aggregate dollar amount of the shares to be purchased in tax jurisdictions for which we have not recognized a tax benefit; (b) permanent differences for which we recognized a tax benefit; (c) income in tax jurisdictionsfuture periods. We may discontinue purchases at any time, subject to compliance with lower statutory tax rates than Canada; and (d)applicable regulatory requirements. Shares purchased under the Canadian valuation allowance recorded in the third quarter of 2016.
The pending transaction with Refresco is anticipated to generate a gain on sale which could result in a U.S. valuation allowance release and recognition of a material income tax benefit within the next twelve months.
Note 7—share repurchase program were canceled.
Time-based RSUs during the periods presented. Set forth below is a reconciliation of the numerator and denominator for the diluted net income (loss) per common share computations for the periods indicated:
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | |||||||||||||
Numerator (in millions): | ||||||||||||||||
Net income (loss) attributable to Cott Corporation | ||||||||||||||||
Continuing operations | $ | 1.6 | $ | (4.0 | ) | $ | (13.1 | ) | $ | (5.6 | ) | |||||
Discontinued operations | 40.9 | 1.4 | (5.4 | ) | 7.6 | |||||||||||
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| |||||||||
Net earnings | 42.5 | (2.6 | ) | (18.5 | ) | 2.0 | ||||||||||
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| |||||||||
Basic Earnings Per Share | ||||||||||||||||
Denominator (in thousands): | ||||||||||||||||
Weighted average common shares outstanding - basic | 139,205 | 138,195 | 138,980 | 124,900 | ||||||||||||
Basic Earnings Per Share: | ||||||||||||||||
Continuing operations | 0.01 | (0.03 | ) | (0.09 | ) | (0.04 | ) | |||||||||
Discontinued operations | 0.29 | 0.01 | (0.04 | ) | 0.06 | |||||||||||
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| |||||||||
Net earnings | 0.30 | (0.02 | ) | (0.13 | ) | 0.02 | ||||||||||
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Diluted Earnings Per Share | ||||||||||||||||
Denominator (in thousands): | ||||||||||||||||
Weighted average common shares outstanding - basic | 139,205 | 138,195 | 138,980 | 124,900 | ||||||||||||
Dilutive effect of Stock Options | 1,158 | — | — | — | ||||||||||||
Dilutive effect of Performance based RSUs | 154 | — | — | — | ||||||||||||
Dilutive effect of Time-based RSUs | 486 | — | — | — | ||||||||||||
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| |||||||||
Weighted average common shares outstanding - diluted | 141,003 | 138,195 | 138,980 | 124,900 | ||||||||||||
Diluted Earnings Per Share: | ||||||||||||||||
Continued operations | 0.01 | (0.03 | ) | (0.09 | ) | (0.04 | ) | |||||||||
Discontinued operations | 0.29 | 0.01 | (0.04 | ) | 0.06 | |||||||||||
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Net earnings | 0.30 | (0.02 | ) | (0.13 | ) | 0.02 | ||||||||||
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For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | ||||||||||||
Numerator (in millions of U.S. dollars): | |||||||||||||||
Net income (loss) attributable to Cott Corporation | |||||||||||||||
Continuing operations | $ | 8.5 | $ | 1.6 | $ | 25.3 | $ | (13.1 | ) | ||||||
Discontinued operations | 1.5 | 40.9 | 356.9 | (5.4 | ) | ||||||||||
Net income (loss) | 10.0 | 42.5 | 382.2 | (18.5 | ) | ||||||||||
Basic Earnings Per Share | |||||||||||||||
Denominator (in thousands): | |||||||||||||||
Weighted average common shares outstanding - basic | 138,787 | 139,205 | 139,503 | 138,980 | |||||||||||
Basic Earnings Per Share: | |||||||||||||||
Continuing operations | 0.06 | 0.01 | 0.18 | (0.09 | ) | ||||||||||
Discontinued operations | 0.01 | 0.29 | 2.56 | (0.04 | ) | ||||||||||
Net income (loss) | 0.07 | 0.30 | 2.74 | (0.13 | ) | ||||||||||
Diluted Earnings Per Share | |||||||||||||||
Denominator (in thousands): | |||||||||||||||
Weighted average common shares outstanding - basic | 138,787 | 139,205 | 139,503 | 138,980 | |||||||||||
Dilutive effect of Stock Options | 1,212 | 1,158 | 1,260 | — | |||||||||||
Dilutive effect of Performance-based RSUs | 918 | 154 | 954 | — | |||||||||||
Dilutive effect of Time-based RSUs | 259 | 486 | 246 | — | |||||||||||
Weighted average common shares outstanding - diluted | 141,176 | 141,003 | 141,963 | 138,980 | |||||||||||
Diluted Earnings Per Share: | |||||||||||||||
Continuing operations | 0.06 | 0.01 | 0.18 | (0.09 | ) | ||||||||||
Discontinued operations | 0.01 | 0.29 | 2.51 | (0.04 | ) | ||||||||||
Net income (loss) | 0.07 | 0.30 | 2.69 | (0.13 | ) |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
(in thousands) | September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | ||||||||||||
Stock Options | 198 | 2,846 | 4,286 | 2,846 | ||||||||||||
Performance-based RSUs1 | — | 1,574 | 1,703 | 1,574 | ||||||||||||
Time-based RSUs | — | 882 | 660 | 882 |
For the Three Months Ended | For the Nine Months Ended | ||||||||||
(in thousands) | September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | |||||||
Stock Options | 1,141 | 198 | 1,086 | 4,286 | |||||||
Performance-based RSUs 1 | 327 | — | 327 | 1,703 | |||||||
Time-based RSUs | — | — | — | 660 |
1 | Performance-based RSUs represent the number of shares expected to be issued based primarily on the estimated achievement of cumulativepre-tax income targets for these awards. |
During the third quarter of 2017, we reviewed our reporting segments as a result of the Refresco transaction. Following such review, we reorganized our reporting segments intomineral water.
(which includes our Aimia and RCI concentrate businesses, the Columbus manufacturing facility and other miscellaneous expenses).Other. Our corporate oversight function is not treated as a segment. This functionsegment; it includes certain general and administrative costs that are not allocated to any of the reporting segments. SegmentDuring the second quarter of 2018, we combined and disclosed the corporate oversight function in the All Other category. Our segment reporting results have been recast to reflect these changes for all periods presented.
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Corporate | Total | |||||||||||||||
For the Three Months Ended September 30, 2017 | ||||||||||||||||||||
Revenue, net1 | $ | 397.3 | $ | 143.4 | $ | 40.2 | $ | — | $ | 580.9 | ||||||||||
Depreciation and amortization | 41.7 | 6.0 | 1.7 | — | 49.4 | |||||||||||||||
Operating income (loss) | 34.6 | 3.7 | 4.7 | (15.8 | ) | 27.2 | ||||||||||||||
Additions to property, plant & equipment | 34.8 | 3.3 | 0.1 | — | 38.2 | |||||||||||||||
For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||
Revenue, net 1 | $ | 1,134.9 | $ | 440.2 | $ | 123.3 | $ | — | $ | 1,698.4 | ||||||||||
Depreciation and amortization | 119.1 | 17.2 | 5.5 | — | 141.8 | |||||||||||||||
Operating income (loss) | 66.3 | 13.3 | 6.9 | (37.6 | ) | 48.9 | ||||||||||||||
Additions to property, plant & equipment | 85.9 | 10.6 | 0.6 | — | 97.1 | |||||||||||||||
As of September 30, 2017 | ||||||||||||||||||||
Total assets2 | $ | 2,370.3 | $ | 471.8 | $ | 206.3 | $ | — | $ | 3,048.4 |
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Eliminations | Total | ||||||||||||||
For the Three Months Ended September 29, 2018 | |||||||||||||||||||
Revenue, net 1 | $ | 423.7 | $ | 140.2 | $ | 47.1 | $ | (1.7 | ) | $ | 609.3 | ||||||||
Depreciation and amortization | 41.9 | 5.8 | 1.9 | — | 49.6 | ||||||||||||||
Operating income (loss) | 37.5 | 5.0 | (14.7 | ) | — | 27.8 | |||||||||||||
Additions to property, plant and equipment | 29.5 | 4.4 | 2.4 | — | 36.3 | ||||||||||||||
For the Nine Months Ended September 29, 2018 | |||||||||||||||||||
Revenue, net 1 | $ | 1,207.4 | $ | 431.8 | $ | 138.8 | $ | (4.3 | ) | $ | 1,773.7 | ||||||||
Depreciation and amortization | 122.8 | 17.2 | 5.7 | — | 145.7 | ||||||||||||||
Operating income (loss) | 77.6 | 12.3 | (35.3 | ) | — | 54.6 | |||||||||||||
Additions to property, plant and equipment | 81.5 | 9.0 | 4.5 | — | 95.0 | ||||||||||||||
As of September 29, 2018 | |||||||||||||||||||
Total assets 2 | $ | 2,411.6 | $ | 461.7 | $ | 286.8 | $ | — | $ | 3,160.1 |
1 | Intersegment revenue between the Coffee, Tea and Extract Solutions and the Route Based Services reporting segments was $1.4 million and $4.0 million for the three and nine months ended September 29, 2018, respectively. Intersegment revenue between the All Other and the Route Based Services reporting segments was $0.3 million for the three and nine months ended September 29, 2018. All Other includes |
2 | Excludes intersegment receivables, investments and notes receivable. |
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Eliminations | Total | ||||||||||||||
For the Three Months Ended September 30, 2017 | |||||||||||||||||||
Revenue, net 1 | $ | 397.3 | $ | 143.4 | $ | 40.2 | $ | — | $ | 580.9 | |||||||||
Depreciation and amortization | 41.7 | 6.0 | 1.7 | — | 49.4 | ||||||||||||||
Operating income (loss) 3 | 29.6 | 3.5 | (10.8 | ) | — | 22.3 | |||||||||||||
Additions to property, plant and equipment | 34.8 | 3.3 | 0.1 | — | 38.2 | ||||||||||||||
For the Nine Months Ended September 30, 2017 | |||||||||||||||||||
Revenue, net 1 | $ | 1,134.9 | $ | 440.2 | $ | 123.3 | $ | — | $ | 1,698.4 | |||||||||
Depreciation and amortization | 119.1 | 17.2 | 5.5 | — | 141.8 | ||||||||||||||
Operating income (loss) 3 | 61.9 | 13.1 | (31.0 | ) | — | 44.0 | |||||||||||||
Additions to property, plant and equipment | 85.9 | 10.6 | 0.6 | — | 97.1 | ||||||||||||||
As of December 30, 2017 | |||||||||||||||||||
Total assets 2 | $ | 2,343.4 | $ | 455.7 | $ | 207.8 | $ | — | $ | 3,006.9 |
1 | All Other includes $9.6 million and $31.4 million of related party concentrate sales to discontinued operations for the three and nine months ended September 30, |
2 | Excludes intersegment receivables, investments and notes receivable, as well as assets of discontinued operations. |
3 | Operating income in our Route Based Services reporting segment for the three and nine months ended September 30, 2017 decreased $4.9 million as a result of adopting ASU 2017-07 (see Note 1 to the Consolidated Financial Statements). |
Reconciliation of Segment Assets to Total Assets | |||
(in millions of U.S. dollars) | December 30, 2017 | ||
Segment assets 1 | $ | 3,006.9 | |
Assets of discontinued operations 1 | 1,086.2 | ||
Total assets | $ | 4,093.1 |
1 | Excludes intersegment receivables, investments and notes receivable. |
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Corporate | Total | |||||||||||||||
For the Three Months Ended October 1, 2016 | ||||||||||||||||||||
Revenue, net1 | $ | 349.2 | $ | 87.3 | $ | 40.2 | $ | — | $ | 476.7 | ||||||||||
Depreciation and amortization | 36.9 | 2.8 | 1.5 | — | 41.2 | |||||||||||||||
Operating income (loss) | 21.2 | (0.1 | ) | 0.7 | (8.2 | ) | 13.6 | |||||||||||||
Additions to property, plant & equipment | 30.4 | 1.8 | 0.2 | — | 32.4 | |||||||||||||||
For the Nine Months Ended October 1, 2016 | ||||||||||||||||||||
Revenue, net1 | $ | 882.3 | $ | 87.3 | $ | 132.4 | $ | — | $ | 1,102.0 | ||||||||||
Depreciation and amortization | 94.6 | 2.8 | 5.2 | — | 102.6 | |||||||||||||||
Operating income (loss) | 44.7 | (0.1 | ) | 7.5 | (33.3 | ) | 18.8 | |||||||||||||
Additions to property, plant & equipment | 66.6 | 1.8 | 0.9 | — | 69.3 | |||||||||||||||
As of December 31, 2016 | ||||||||||||||||||||
Total assets2 | $ | 2,287.1 | $ | 463.2 | $ | 164.3 | $ | — | $ | 2,914.6 |
Reconciliation of Segment Assets to Total Assets | ||||||||
(in millions of U.S. dollars) | September 30, 2017 | December 31, 2016 | ||||||
Segment assets1 | $ | 3,048.4 | $ | 2,914.6 | ||||
Assets of discontinued operations1 | 1,100.1 | 1,025.1 | ||||||
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| |||||
Total assets | $ | 4,148.5 | $ | 3,939.7 | ||||
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|
For the Three Months Ended September 30, 2017 | ||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Total | ||||||||||||
Revenue, net | ||||||||||||||||
Home and office bottled water delivery | $ | 268.0 | $ | — | $ | — | $ | 268.0 | ||||||||
Coffee and tea services | 44.2 | 120.9 | 0.7 | 165.8 | ||||||||||||
Retail | 43.5 | — | 11.7 | 55.2 | ||||||||||||
Other | 41.6 | 22.5 | 27.8 | 91.9 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 397.3 | $ | 143.4 | $ | 40.2 | $ | 580.9 | ||||||||
|
|
|
|
|
|
|
| |||||||||
For the Nine Months Ended September 30, 2017 | ||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Total | ||||||||||||
Revenue, net | ||||||||||||||||
Home and office bottled water delivery | $ | 753.7 | $ | — | $ | — | $ | 753.7 | ||||||||
Coffee and tea services | 134.9 | 369.6 | 2.0 | 506.5 | ||||||||||||
Retail | 127.8 | — | 33.9 | 161.7 | ||||||||||||
Other | 118.5 | 70.6 | 87.4 | 276.5 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,134.9 | $ | 440.2 | $ | 123.3 | $ | 1,698.4 | ||||||||
|
|
|
|
|
|
|
| |||||||||
For the Three Months Ended October 1, 2016 | ||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Total | ||||||||||||
Revenue, net | ||||||||||||||||
Home and office bottled water delivery | $ | 235.9 | $ | — | $ | — | $ | 235.9 | ||||||||
Coffee and tea services | 38.9 | 72.0 | 2.0 | 112.9 | ||||||||||||
Retail | 42.9 | — | 10.0 | 52.9 | ||||||||||||
Other | 31.5 | 15.3 | 28.2 | 75.0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 349.2 | $ | 87.3 | $ | 40.2 | $ | 476.7 | ||||||||
|
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|
|
|
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|
(in millions of U.S. dollars) Revenue, net Home and office bottled water delivery Coffee and tea services Retail Other Total For the Nine Months Ended October 1, 2016 Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Total $ 575.1 $ — $ — $ 575.1 100.4 72.0 2.0 174.4 127.7 — 37.8 165.5 79.1 15.3 92.6 187.0 $ 882.3 $ 87.3 $ 132.4 $ 1,102.0
For the Three Months Ended September 29, 2018 | |||||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Eliminations | Total | ||||||||||||||
Revenue, net | |||||||||||||||||||
Home and office bottled water delivery | $ | 271.1 | $ | — | $ | — | $ | — | $ | 271.1 | |||||||||
Coffee and tea services | 45.4 | 113.0 | 0.9 | (1.4 | ) | 157.9 | |||||||||||||
Retail | 61.3 | — | 16.9 | (0.3 | ) | 77.9 | |||||||||||||
Other | 45.9 | 27.2 | 29.3 | — | 102.4 | ||||||||||||||
Total | $ | 423.7 | $ | 140.2 | $ | 47.1 | $ | (1.7 | ) | $ | 609.3 |
For the Nine Months Ended September 29, 2018 | |||||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Eliminations | Total | ||||||||||||||
Revenue, net | |||||||||||||||||||
Home and office bottled water delivery | $ | 759.5 | $ | — | $ | — | $ | — | $ | 759.5 | |||||||||
Coffee and tea services | 139.8 | 349.0 | 2.5 | (3.9 | ) | 487.4 | |||||||||||||
Retail | 177.1 | — | 49.1 | (0.3 | ) | 225.9 | |||||||||||||
Other | 131.0 | 82.8 | 87.2 | (0.1 | ) | 300.9 | |||||||||||||
Total | $ | 1,207.4 | $ | 431.8 | $ | 138.8 | $ | (4.3 | ) | $ | 1,773.7 |
For the Three Months Ended September 30, 2017 | |||||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Eliminations | Total | ||||||||||||||
Revenue, net | |||||||||||||||||||
Home and office bottled water delivery | $ | 252.5 | $ | — | $ | — | $ | — | $ | 252.5 | |||||||||
Coffee and tea services | 44.2 | 120.9 | 0.7 | — | 165.8 | ||||||||||||||
Retail | 58.6 | — | 11.7 | — | 70.3 | ||||||||||||||
Other | 42.0 | 22.5 | 27.8 | — | 92.3 | ||||||||||||||
Total | $ | 397.3 | $ | 143.4 | $ | 40.2 | $ | — | $ | 580.9 |
For the Nine Months Ended September 30, 2017 | |||||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Eliminations | Total | ||||||||||||||
Revenue, net | |||||||||||||||||||
Home and office bottled water delivery | $ | 715.5 | $ | — | $ | — | $ | — | $ | 715.5 | |||||||||
Coffee and tea services | 134.9 | 369.6 | 2.0 | — | 506.5 | ||||||||||||||
Retail | 165.7 | — | 33.9 | — | 199.6 | ||||||||||||||
Other | 118.8 | 70.6 | 87.4 | — | 276.8 | ||||||||||||||
Total | $ | 1,134.9 | $ | 440.2 | $ | 123.3 | $ | — | $ | 1,698.4 |
(in millions of U.S. dollars) | September 30, 2017 | December 31, 2016 | ||||||
Raw materials | $ | 80.5 | $ | 56.5 | ||||
Finished goods | 37.5 | 42.7 | ||||||
Resale items | 21.1 | 22.0 | ||||||
Other | 3.2 | 3.4 | ||||||
|
|
|
| |||||
Total | $ | 142.3 | $ | 124.6 | ||||
|
|
|
|
30, 2017:
(in millions of U.S. dollars) | September 29, 2018 | December 30, 2017 | |||||
Raw materials | $ | 71.5 | $ | 68.1 | |||
Finished goods | 41.7 | 34.3 | |||||
Resale items | 20.4 | 21.8 | |||||
Other | 3.0 | 3.4 | |||||
Total | $ | 136.6 | $ | 127.6 |
September 30, 2017 | December 31, 2016 | |||||||||||||||||||||||
(in millions of U.S. dollars) | Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | ||||||||||||||||||
Intangible Assets | ||||||||||||||||||||||||
Not subject to amortization | ||||||||||||||||||||||||
Rights1 | $ | 24.5 | $ | — | $ | 24.5 | $ | 24.5 | $ | — | $ | 24.5 | ||||||||||||
Trademarks | 263.1 | — | 263.1 | 257.1 | — | 257.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total intangible assets not subject to amortization | 287.6 | — | 287.6 | 281.6 | — | 281.6 | ||||||||||||||||||
|
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|
|
|
|
|
|
| |||||||||||||
Subject to amortization | ||||||||||||||||||||||||
Customer relationships | 580.8 | 138.9 | 441.9 | 552.3 | 94.3 | 458.0 | ||||||||||||||||||
Patents | 15.2 | 0.6 | 14.6 | — | — | — | ||||||||||||||||||
Trademarks | 1.2 | 0.2 | 1.0 | 1.1 | 0.1 | 1.0 | ||||||||||||||||||
Information technology | 27.4 | 11.8 | 15.6 | 20.5 | 6.3 | 14.2 | ||||||||||||||||||
Other | 6.7 | 3.5 | 3.2 | 6.2 | 2.0 | 4.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total intangible assets subject to amortization | 631.3 | 155.0 | 476.3 | 580.1 | 102.7 | 477.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total intangible assets | $ | 918.9 | $ | 155.0 | $ | 763.9 | $ | 861.7 | $ | 102.7 | $ | 759.0 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
30, 2017:
September 29, 2018 | December 30, 2017 | ||||||||||||||||||||||
(in millions of U.S. dollars) | Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | |||||||||||||||||
Intangible Assets | |||||||||||||||||||||||
Not subject to amortization | |||||||||||||||||||||||
Rights | $ | 24.5 | $ | — | $ | 24.5 | $ | 24.5 | $ | — | $ | 24.5 | |||||||||||
Trademarks | 266.4 | — | 266.4 | 264.1 | — | 264.1 | |||||||||||||||||
Total intangible assets not subject to amortization | 290.9 | — | 290.9 | 288.6 | — | 288.6 | |||||||||||||||||
Subject to amortization | |||||||||||||||||||||||
Customer relationships | 599.3 | 197.4 | 401.9 | 583.4 | 154.7 | 428.7 | |||||||||||||||||
Patents | 15.2 | 2.2 | 13.0 | 15.2 | 1.0 | 14.2 | |||||||||||||||||
Software | 34.4 | 19.0 | 15.4 | 28.8 | 13.0 | 15.8 | |||||||||||||||||
Other | 17.0 | 5.8 | 11.2 | 8.0 | 4.2 | 3.8 | |||||||||||||||||
Total intangible assets subject to amortization | 665.9 | 224.4 | 441.5 | 635.4 | 172.9 | 462.5 | |||||||||||||||||
Total intangible assets | $ | 956.8 | $ | 224.4 | $ | 732.4 | $ | 924.0 | $ | 172.9 | $ | 751.1 |
(in millions of U.S. dollars) | ||||
Remainder of 2017 | $ | 18.1 | ||
2018 | 66.7 | |||
2019 | 59.2 | |||
2020 | 50.2 | |||
2021 | 44.0 | |||
Thereafter | 238.1 | |||
|
| |||
Total | $ | 476.3 | ||
|
|
Note 11—Accounts Payable and Accrued Liabilities
The following table summarizes accounts payable and accrued liabilities as of September 30, 2017 and December 31, 2016:
(in millions of U.S. dollars) | September 30, 2017 | December 31, 2016 | ||||||
Trade payables | $ | 218.0 | $ | 185.9 | ||||
Accrued compensation | 48.5 | 38.4 | ||||||
Accrued sales incentives | 6.9 | 1.0 | ||||||
Accrued interest | 30.9 | 11.6 | ||||||
Payroll, sales and other taxes | 13.3 | 9.0 | ||||||
Accrued deposits | 65.8 | 51.9 | ||||||
Other accrued liabilities | 69.7 | 70.2 | ||||||
|
|
|
| |||||
Total | $ | 453.1 | $ | 368.0 | ||||
|
|
|
|
(in millions of U.S. dollars) | |||
Remainder of 2018 | $ | 19.0 | |
2019 | 65.7 | ||
2020 | 56.5 | ||
2021 | 48.2 | ||
2022 | 40.9 | ||
Thereafter | 211.2 | ||
Total | $ | 441.5 |
September 30, 2017 | December 31, 2016 | |||||||||||||||||||||||
(in millions of U.S. dollars) | Principal | Unamortized Debt Issuance Costs | Net | Principal | Unamortized Debt Issuance Costs | Net | ||||||||||||||||||
10.000% senior notes due in 20211 | 271.1 | — | 271.1 | 384.2 | — | 384.2 | ||||||||||||||||||
5.500% senior notes due in 2024 | 531.1 | 9.8 | 521.3 | 474.1 | 9.8 | 464.3 | ||||||||||||||||||
5.500% senior notes due in 2025 | 750.0 | 11.2 | 738.8 | — | — | — | ||||||||||||||||||
Capital leases | 5.4 | — | 5.4 | 5.8 | — | 5.8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total debt | 1,557.6 | 21.0 | 1,536.6 | 864.1 | 9.8 | 854.3 | ||||||||||||||||||
Capital leases - current maturities | 2.6 | — | 2.6 | 2.9 | — | 2.9 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current debt | 2.6 | — | 2.6 | 2.9 | — | 2.9 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total long-term debt | $ | 1,555.0 | $ | 21.0 | $ | 1,534.0 | $ | 861.2 | $ | 9.8 | $ | 851.4 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
September 29, 2018 | December 30, 2017 | ||||||||||||||||||||||
(in millions of U.S. dollars) | Principal | Unamortized Debt Issuance Costs | Net | Principal | Unamortized Debt Issuance Costs | Net | |||||||||||||||||
10.000% senior notes due in 20211 | $ | — | $ | — | $ | — | $ | 269.9 | $ | — | $ | 269.9 | |||||||||||
5.375% senior notes due in 2022 | — | — | — | 525.0 | 6.0 | 519.0 | |||||||||||||||||
5.500% senior notes due in 2024 | 526.2 | 7.7 | 518.5 | 539.1 | 9.5 | 529.6 | |||||||||||||||||
5.500% senior notes due in 2025 | 750.0 | 10.1 | 739.9 | 750.0 | 11.0 | 739.0 | |||||||||||||||||
ABL facility | — | — | — | 220.3 | — | 220.3 | |||||||||||||||||
GE Term Loan | — | — | — | 2.0 | — | 2.0 | |||||||||||||||||
Short-term borrowings | 9.0 | — | 9.0 | — | — | — | |||||||||||||||||
Capital leases | 5.3 | — | 5.3 | 6.4 | — | 6.4 | |||||||||||||||||
Other debt financing | 2.3 | — | 2.3 | 0.8 | — | 0.8 | |||||||||||||||||
Total debt | 1,292.8 | 17.8 | 1,275.0 | 2,313.5 | 26.5 | 2,287.0 | |||||||||||||||||
Less: Short-term borrowings and current debt: | |||||||||||||||||||||||
ABL facility | — | — | — | 220.3 | — | 220.3 | |||||||||||||||||
Total short-term borrowings required to be repaid or extinguished as part of divestiture | — | — | — | 220.3 | — | 220.3 | |||||||||||||||||
GE Term Loan - current maturities | — | — | — | 2.0 | — | 2.0 | |||||||||||||||||
Short-term borrowings | 9.0 | — | 9.0 | — | — | — | |||||||||||||||||
Capital leases - current maturities | 1.7 | — | 1.7 | 2.3 | — | 2.3 | |||||||||||||||||
Other debt financing | 1.4 | — | 1.4 | 0.8 | — | 0.8 | |||||||||||||||||
Total current debt | 12.1 | — | 12.1 | 225.4 | — | 225.4 | |||||||||||||||||
Less: Debt required to be repaid or extinguished as part of divestiture 5.375% senior notes due in 2022 | — | — | — | 525.0 | 6.0 | 519.0 | |||||||||||||||||
Total debt required to be repaid or extinguished as part of divestiture | — | — | — | 525.0 | 6.0 | 519.0 | |||||||||||||||||
Total long-term debt | $ | 1,280.7 | $ | 17.8 | $ | 1,262.9 | $ | 1,563.1 | $ | 20.5 | $ | 1,542.6 |
1 | Includes unamortized premium of |
5.500% Senior Notes due in 2025 (the “2025 Notes”)
On March 22, 2017, we issued $750.0 million of 2025 Notes to qualified purchasers in a private placement offering under Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States tonon-U.S. purchasers pursuant to Regulation S under the Securities Act and other applicable laws. The 2025 Notes were issued by our wholly-owned subsidiary Cott Holdings Inc., and most of our U.S., Canadian, U.K., Luxembourg and Dutch subsidiaries guarantee the 2025 Notes. The 2025 Notes will mature on April 1, 2025 and interest is payable semi-annually on April 1st and October 1st of each year commencing on October 1, 2017.
We incurred $11.7 million of financing fees in connection with the issuance of the 2025 Notes. The financing fees are being amortized using the effective interest method over an eight-year period, which represents the term to maturity of the 2025 Notes.
(in millions of U.S. dollars)1 Beginning balance January 2, 2016 OCI before reclassifications Amounts reclassified from AOCI Net current-period OCI Ending balance October 1, 2016 Beginning balance December 31, 2016 OCI before reclassifications Amounts reclassified from AOCI Net current-period OCI Ending balance September 30, 2017 (the “DSS Notes”)May 5, 2017,January 30, 2018, we used a portion of the proceeds from the issuance ofTransaction to redeem the 2025 Notes to purchase $100.0remaining $250.0 million in aggregate principal amount of the DSS Notes. The redemption of the DSS Notes included $7.7$12.5 million in premium payments, accrued interest of $1.8$10.3 million and thewrite-off of $9.2$19.6 million of unamortized premium. and October 1, 2016 were as follows: Gains and Losses
on Derivative
Instruments Pension
Benefit
Plan Items Currency
Translation
Adjustment Items Total $ (4.7 ) $ (10.1 ) $ (61.4 ) $ (76.2 ) 7.4 — (23.8 ) (16.4 ) (3.6 ) 0.2 — (3.4 ) 3.8 0.2 (23.8 ) (19.8 ) $ (0.9 ) $ (9.9 ) $ (85.2 ) $ (96.0 ) $ (0.1 ) $ (14.4 ) $ (103.4 ) $ (117.9 ) 1.2 (0.5 ) 26.1 26.8 (1.7 ) 0.1 — (1.6 ) (0.5 ) (0.4 ) 26.1 25.2 $ (0.6 ) $ (14.8 ) $ (77.3 ) $ (92.7 ) Total Beginning balance December 31, 2016 $ (0.1 ) $ (14.4 ) $ (103.4 ) $ (117.9 ) OCI before reclassifications 1.2 (0.5 ) 26.1 26.8 Amounts reclassified from AOCI (1.7 ) 0.1 — (1.6 ) Net current-period OCI (0.5 ) (0.4 ) 26.1 25.2 Ending balance September 30, 2017 $ (0.6 ) $ (14.8 ) $ (77.3 ) $ (92.7 ) Beginning balance December 30, 2017 $ (1.4 ) $ (16.8 ) $ (76.2 ) $ (94.4 ) OCI before reclassifications (13.8 ) — (13.0 ) (26.8 ) Amounts reclassified from AOCI 3.8 16.9 9.4 30.1 Net current-period OCI (10.0 ) 16.9 (3.6 ) 3.3 Ending balance September 29, 2018 $ (11.4 ) $ 0.1 $ (79.8 ) $ (91.1 ) 1.All amounts are net of tax. Amounts in parentheses indicate debits.
(in millions of U.S. dollars) | For the Three Months Ended | For the Nine Months Ended | Affected Line Item in | |||||||||||||||||
Details About AOCI Components1 | September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | the Statement Where Net Income Is Presented | |||||||||||||||
Gains and losses on derivative instruments | ||||||||||||||||||||
Foreign currency and commodity hedges | $ | 0.2 | $ | 1.5 | $ | 1.7 | $ | 5.5 | Cost of sales | |||||||||||
— | (0.6 | ) | — | (1.9 | ) | Tax expense | ||||||||||||||
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| |||||||||||||
$ | 0.2 | $ | 0.9 | $ | 1.7 | $ | 3.6 | Net of tax | ||||||||||||
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| |||||||||||||
Amortization of pension benefit plan items | ||||||||||||||||||||
Prior service costs2 | $ | (0.3 | ) | $ | — | $ | (0.1 | ) | $ | (0.2 | ) | Cost of sales | ||||||||
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| |||||||||||||
(0.3 | ) | — | (0.1 | ) | (0.2 | ) | Total before taxes | |||||||||||||
— | — | — | — | Tax expense | ||||||||||||||||
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| |||||||||||||
$ | (0.3 | ) | $ | — | $ | (0.1 | ) | $ | (0.2 | ) | Net of tax | |||||||||
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| |||||||||||||
Total reclassifications for the period | $ | (0.1 | ) | $ | 0.9 | $ | 1.6 | $ | 3.4 | Net of tax | ||||||||||
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|
(in millions of U.S. dollars) | For the Three Months Ended | For the Nine Months Ended | Affected Line Item in the Statement Where Net Income Is Presented | ||||||||||||||
Details About AOCI Components 1 | September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | |||||||||||||
Gains and losses on derivative instruments | |||||||||||||||||
Foreign currency and commodity hedges | $ | (2.4 | ) | $ | 0.2 | $ | (3.8 | ) | $ | 1.7 | Cost of sales | ||||||
(2.4 | ) | 0.2 | (3.8 | ) | 1.7 | Total before taxes | |||||||||||
— | — | — | — | Tax expense or (benefit) | |||||||||||||
$ | (2.4 | ) | $ | 0.2 | $ | (3.8 | ) | $ | 1.7 | Net of tax | |||||||
Amortization of pension benefit plan items | |||||||||||||||||
Recognized net actuarial loss 2 | — | — | (16.9 | ) | — | Gain on sale of discontinued operations | |||||||||||
Prior service costs 3 | $ | — | $ | (0.3 | ) | $ | — | $ | (0.1 | ) | Cost of sales | ||||||
— | (0.3 | ) | (16.9 | ) | (0.1 | ) | Total before taxes | ||||||||||
— | — | — | — | Tax expense or (benefit) | |||||||||||||
$ | — | $ | (0.3 | ) | $ | (16.9 | ) | $ | (0.1 | ) | Net of tax | ||||||
Foreign currency translation adjustments | — | — | (9.4 | ) | — | Gain on sale of discontinued operations | |||||||||||
Total reclassifications for the period | $ | (2.4 | ) | $ | (0.1 | ) | $ | (30.1 | ) | $ | 1.6 | Net of tax |
1 | Amounts in |
2 | Net of $3.6 million of associated tax impact that resulted in an increase to the gain on the sale of discontinued operations for the nine months ended September 29, 2018. |
3 | These AOCI components are included in the computation of net periodic pension cost. |
In addition, the Israeli Ministry of Environmental Protection (the "Ministry") has alleged that a non-profit recycling corporation, which collects and recycles bottles sold by manufacturers, including Eden, failed to meet recycling quotas in 2016, in violation of Israeli law. The law imposes liability directly on manufacturers, and the Ministry has asserted that the manufacturers involved with the corporation owe a fine. Eden received a notice from the Ministry on June 21, 2018. Although we cannot predict the outcome of any potential proceedings at this early stage, Eden may be subject to a fine in excess of $0.1 million. Management believes, however, that the resolution of this matter will not be material to our financial position, results of operations, or cash flows.
respectively.
We did not elect hedge accounting for our coffee futures contracts in 2016.
is $9.7 million.
(in millions of U.S. dollars) | September 30, 2017 | December 31, 2016 | ||||||||||||||
Derivative Contract | Assets | Liabilities | Assets | Liabilities | ||||||||||||
Coffee futures1 | $ | — | $ | 1.9 | $ | — | $ | 6.1 | ||||||||
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| |||||||||
$ | — | $ | 1.9 | $ | — | $ | 6.1 | |||||||||
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(in millions of U.S. dollars) | September 29, 2018 | December 30, 2017 | |||||||||||||
Derivative Contract | Assets | Liabilities | Assets | Liabilities | |||||||||||
Coffee futures1 | $ | — | $ | 10.7 | $ | — | $ | 1.2 |
1 | The fair value of the coffee futures excludes amounts in the related margin accounts. We are required to maintain margin accounts in accordance with futures market and broker regulations. As of September |
(in millions of U.S. dollars) | September 30, 2017 | December 31, 2016 | ||||||
Coffee futures assets | $ | 0.1 | $ | 1.4 | ||||
Coffee futures liabilities | (2.0 | ) | (7.5 | ) | ||||
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| |||||
Net liability | $ | (1.9 | ) | $ | (6.1 | ) | ||
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|
(in millions of U.S. dollars) | September 29, 2018 | December 30, 2017 | |||||
Coffee futures assets | $ | 2.1 | $ | 0.6 | |||
Coffee futures liabilities | (12.8 | ) | (1.8 | ) | |||
Net asset (liability) | $ | (10.7 | ) | $ | (1.2 | ) |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | ||||||||||||
(in millions of U.S. dollars) | Cost of sales | Cost of sales | |||||||||||||
Total amounts of income and expense line items presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded | $ | 298.8 | $ | 288.1 | $ | 888.3 | $ | 849.7 | |||||||
Loss (gain) on cash flow hedging relationship | |||||||||||||||
Coffee futures: | |||||||||||||||
Loss (gain) reclassified from AOCI into expense | $ | 2.4 | $ | (0.2 | ) | $ | 3.8 | $ | (1.7 | ) |
ASC No.
2017.
September 30, 2017 | December 31, 2016 | |||||||||||||||
(in millions of U.S. dollars) | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
10.000% senior notes due in 20211, 2 | 271.1 | 264.4 | 384.2 | 383.7 | ||||||||||||
5.500% senior notes due in 20241, 3 | 521.3 | 584.9 | 464.3 | 505.5 | ||||||||||||
5.500% senior notes due in 20251, 3 | 738.8 | 781.9 | — | — | ||||||||||||
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Total | $ | 1,531.2 | $ | 1,631.2 | $ | 848.5 | $ | 889.2 | ||||||||
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September 29, 2018 | December 30, 2017 | ||||||||||||||
(in millions of U.S. dollars) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
10.000% senior notes due in 2021 1, 2 | $ | — | $ | — | $ | 269.9 | $ | 283.4 | |||||||
5.375% senior notes due in 2022 1, 3 | — | — | 519.0 | 539.9 | |||||||||||
5.500% senior notes due in 2024 1, 3 | 518.5 | 550.3 | 529.6 | 574.0 | |||||||||||
5.500% senior notes due in 2025 1, 3 | 739.9 | 722.4 | 739.0 | 759.3 | |||||||||||
Total | $ | 1,258.4 | $ | 1,272.7 | $ | 2,057.5 | $ | 2,156.6 |
1 | The fair values were based on the trading levels and bid/offer prices observed by a market participant and are considered Level 2 financial instruments. |
2 | Includes unamortized premium of |
3 | Carrying value of our significant outstanding debt is net of unamortized debt issuance costs |
Guarantor SubsidiariesSubsequent Events
approximately $78.5 million on a debt and cash free basis. The DSS Notesacquisition was funded using cash on hand as well as borrowings under our ABL facility. Due to the limited time since the Mountain Valley acquisition closing date, the Company is unable to provide actual amounts recognized related to the Mountain Valley assets acquired and liabilities assumed as part of the accounting for the purchase price allocation has not yet been completed. As a result, certain required disclosures relative to the Mountain Valley acquisition, of DSS are guaranteed on a senior secured basis by Cott Corporation and certain of its 100% owned direct and indirect subsidiaries (the “DSS Guarantor Subsidiaries”). DSS and each DSS Guarantor Subsidiary is 100% owned by Cott Corporation. The DSS Notes are fully and unconditionally, jointly and severally, guaranteed by Cott Corporation and the DSS Guarantor Subsidiaries. The Indenture governing the DSS Notes (“DSS Indenture”) requiresincluding those related to any 100% owned domestic restricted subsidiary (i) that guaranteesgoodwill or becomes a borrower under the Credit Agreement (as defined in the DSS Indenture) or the asset-based lending facility (the “ABL facility”) or (ii) that guarantees any other indebtedness of Cott Corporation, DSS or any of the DSS Guarantor Subsidiaries (other than junior lien obligations) secured by collateral (other than Excluded Property (as defined in the DSS Indenture))bargain purchase amounts to guarantee on a secured basis the DSS Notes. The guarantees of Cott Corporation and the DSS Guarantor Subsidiaries may be released in limited circumstances only upon the occurrence of certain customary conditions set forth in the Indenture governing the DSS Notes.
We have not presented separate financial statements and separate disclosuresrecognized, have not been provided concerning the DSS Guarantor Subsidiaries due to the presentation of condensed consolidating financial information set forth in this Note, consistent with Securities and Exchange Commission (“SEC”) rules governing reporting of subsidiary financial information.
The following summarized condensed consolidating financial information of the Company sets forth onmade. Mountain Valley will become a consolidating basis: our Balance Sheets, Statements of Operations and Cash Flows for Cott Corporation, DSS, the DSS Guarantor Subsidiaries and our othernon-guarantor subsidiaries (the “DSSNon-Guarantor Subsidiaries”). This supplemental financial information reflects our investments and those of DSS in their respective subsidiaries using the equity method of accounting.
The €450.0 million (U.S. $531.1 million at the exchange rate in effect on September 30, 2017) of the 2024 Notes were initially issued on June 30, 2016 by Cott Finance Corporation, which was not a DSS Guarantor Subsidiary. Cott Finance Corporation was declared an unrestricted subsidiary under the DSS Indenture. As a result, such entity is reflected as a DSSNon-Guarantor Subsidiary in the following summarized condensed consolidating financial information through August 2, 2016. Substantially simultaneously with the closing of the Eden Acquisition on August 2, 2016, we assumed all of the obligations of Cott Finance Corporation as issuer under the 2024 Notes, and Cott Corporation’s U.S., Canadian, U.K., Luxembourg and Dutch subsidiaries that are currently obligors under the 5.375% senior notes due 2022 (“2022 Notes”) and the 6.75% senior notes due 2020 (“2020 Notes”) (including Cott Beverages Inc.) entered into a supplemental indenture to guarantee the 2024 Notes. Currently, the obligors under the 2024 Notes are different than the obligors under the DSS Notes, but identical to the obligors under the 2020 Notes and the 2022 Notes. The 2024 Notes are listed on the official list of the Irish Stock Exchange and are traded on the Global Exchange Market thereof.
Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
For the Three Months Ended September 30, 2017 | ||||||||||||||||||||||||
Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 271.9 | $ | 198.7 | $ | 110.3 | $ | — | $ | 580.9 | ||||||||||||
Cost of sales | — | 105.4 | 145.9 | 36.8 | — | 288.1 | ||||||||||||||||||
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Gross profit | — | 166.5 | 52.8 | 73.5 | — | 292.8 | ||||||||||||||||||
Selling, general and administrative expenses | 1.2 | 143.7 | 57.0 | 60.9 | — | 262.8 | ||||||||||||||||||
Loss (gain) on disposal of property, plant & equipment, net | — | 0.3 | (0.6 | ) | (0.1 | ) | — | (0.4 | ) | |||||||||||||||
Acquisition and integration expenses | — | 2.5 | 2.2 | (1.5 | ) | — | 3.2 | |||||||||||||||||
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Operating (loss) income | (1.2 | ) | 20.0 | (5.8 | ) | 14.2 | — | 27.2 | ||||||||||||||||
Other expense (income), net | — | 0.3 | 1.3 | (0.1 | ) | — | 1.5 | |||||||||||||||||
Intercompany interest expense (income), net | — | 54.2 | (33.4 | ) | (12.8 | ) | (8.0 | ) | — | |||||||||||||||
Interest expense, net | 7.5 | 5.2 | 10.5 | — | — | 23.2 | ||||||||||||||||||
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(Loss) income before income tax expense, equity income and discontinued operations | (8.7 | ) | (39.7 | ) | 15.8 | 27.1 | 8.0 | 2.5 | ||||||||||||||||
Income tax expense | — | 0.4 | 0.5 | — | — | 0.9 | ||||||||||||||||||
Equity income | 43.4 | — | 0.1 | — | (43.5 | ) | — | |||||||||||||||||
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Net income (loss) from continuing operations | $ | 34.7 | $ | (40.1 | ) | $ | 15.4 | $ | 27.1 | $ | (35.5 | ) | $ | 1.6 | ||||||||||
Net income from discontinued operations, net of income taxes | 7.8 | — | 32.8 | 3.3 | (0.9 | ) | 43.0 | |||||||||||||||||
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Net income (loss) | 42.5 | (40.1 | ) | 48.2 | 30.4 | (36.4 | ) | 44.6 | ||||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 2.1 | — | 2.1 | ||||||||||||||||||
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Net income (loss) attributable to Cott Corporation | $ | 42.5 | $ | (40.1 | ) | $ | 48.2 | $ | 28.3 | $ | (36.4 | ) | $ | 42.5 | ||||||||||
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Comprehensive income (loss) attributable to Cott Corporation | $ | 46.7 | $ | (40.1 | ) | $ | 27.4 | $ | 23.0 | $ | (10.3 | ) | $ | 46.7 | ||||||||||
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Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||||||
Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 786.3 | $ | 607.6 | $ | 304.5 | $ | — | $ | 1,698.4 | ||||||||||||
Cost of sales | — | 305.9 | 443.8 | 100.0 | — | 849.7 | ||||||||||||||||||
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Gross profit | — | 480.4 | 163.8 | 204.5 | — | 848.7 | ||||||||||||||||||
Selling, general and administrative expenses | 4.1 | 423.4 | 171.6 | 178.7 | — | 777.8 | ||||||||||||||||||
Loss (gain) on disposal of property, plant & equipment, net | — | 6.3 | (1.5 | ) | — | — | 4.8 | |||||||||||||||||
Acquisition and integration expenses | — | 5.9 | 6.9 | 4.4 | — | 17.2 | ||||||||||||||||||
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Operating (loss) income | (4.1 | ) | 44.8 | (13.2 | ) | 21.4 | — | 48.9 | ||||||||||||||||
Other (income) expense, net | — | (1.4 | ) | 0.9 | (0.6 | ) | — | (1.1 | ) | |||||||||||||||
Intercompany interest expense (income), net | — | 32.5 | (21.6 | ) | (7.6 | ) | (3.3 | ) | — | |||||||||||||||
Interest expense, net | 21.6 | 18.4 | 22.1 | — | — | 62.1 | ||||||||||||||||||
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(Loss) income before income tax (benefit) expense, equity income and discontinued operations | (25.7 | ) | (4.7 | ) | (14.6 | ) | 29.6 | 3.3 | (12.1 | ) | ||||||||||||||
Income tax (benefit) expense | — | 1.2 | (5.3 | ) | 5.1 | — | 1.0 | |||||||||||||||||
Equity income | 0.6 | — | 0.1 | — | (0.7 | ) | — | |||||||||||||||||
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Net (loss) income from continuing operations | $ | (25.1 | ) | $ | (5.9 | ) | $ | (9.2 | ) | $ | 24.5 | $ | 2.6 | $ | (13.1 | ) | ||||||||
Net income (loss) from discontinued operations, net of income taxes | 6.6 | — | (7.4 | ) | 10.8 | (9.0 | ) | 1.0 | ||||||||||||||||
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Net (loss) income | (18.5 | ) | (5.9 | ) | (16.6 | ) | 35.3 | (6.4 | ) | (12.1 | ) | |||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 6.4 | — | 6.4 | ||||||||||||||||||
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Net (loss) income attributable to Cott Corporation | $ | (18.5 | ) | $ | (5.9 | ) | $ | (16.6 | ) | $ | 28.9 | $ | (6.4 | ) | $ | (18.5 | ) | |||||||
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Comprehensive income (loss) attributable to Cott Corporation | $ | 6.7 | $ | (5.9 | ) | $ | (81.3 | ) | $ | 28.5 | $ | 58.7 | $ | 6.7 | ||||||||||
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Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
For the Three Months Ended October 1, 2016 | ||||||||||||||||||||||||
Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 262.2 | $ | 144.6 | $ | 69.9 | $ | — | $ | 476.7 | ||||||||||||
Cost of sales | — | 101.2 | 103.0 | 24.8 | — | 229.0 | ||||||||||||||||||
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Gross profit | — | 161.0 | 41.6 | 45.1 | — | 247.7 | ||||||||||||||||||
Selling, general and administrative expenses | 1.6 | 143.9 | 38.7 | 41.1 | — | 225.3 | ||||||||||||||||||
Loss (gain) on disposal of property, plant & equipment, net | — | 1.6 | (0.2 | ) | — | — | 1.4 | |||||||||||||||||
Acquisition and integration expenses | — | (1.4 | ) | 7.4 | 1.4 | — | 7.4 | |||||||||||||||||
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Operating (loss) income | (1.6 | ) | 16.9 | (4.3 | ) | 2.6 | — | 13.6 | ||||||||||||||||
Other (income) expense, net | — | (0.3 | ) | (0.6 | ) | 1.1 | — | 0.2 | ||||||||||||||||
Intercompany interest expense (income), net | — | 10.8 | (0.6 | ) | (4.2 | ) | (6.0 | ) | — | |||||||||||||||
Interest expense (income), net | 7.4 | 7.4 | — | (0.3 | ) | — | 14.5 | |||||||||||||||||
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(Loss) income before income tax expense (benefit), equity income and discontinued operations | (9.0 | ) | (1.0 | ) | (3.1 | ) | 6.0 | 6.0 | (1.1 | ) | ||||||||||||||
Income tax expense (benefit) | 7.6 | (0.2 | ) | (4.9 | ) | 0.4 | — | 2.9 | ||||||||||||||||
Equity income | 8.7 | — | — | — | (8.7 | ) | — | |||||||||||||||||
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Net (loss) income from continuing operations | $ | (7.9 | ) | $ | (0.8 | ) | $ | 1.8 | $ | 5.6 | $ | (2.7 | ) | $ | (4.0 | ) | ||||||||
Net income from discontinued operations, net of income taxes | 5.3 | — | 5.0 | 3.2 | (10.6 | ) | 2.9 | |||||||||||||||||
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Net (loss) income | (2.6 | ) | (0.8 | ) | 6.8 | 8.8 | (13.3 | ) | (1.1 | ) | ||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 1.5 | — | 1.5 | ||||||||||||||||||
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Net (loss) income attributable to Cott Corporation | $ | (2.6 | ) | $ | (0.8 | ) | $ | 6.8 | $ | 7.3 | $ | (13.3 | ) | $ | (2.6 | ) | ||||||||
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Comprehensive (loss) income attributable to Cott Corporation | $ | (7.8 | ) | $ | (0.8 | ) | $ | 110.4 | $ | 11.2 | $ | (120.8 | ) | $ | (7.8 | ) | ||||||||
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Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
For the Nine Months Ended October 1, 2016 | ||||||||||||||||||||||||
Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 764.3 | $ | 267.8 | $ | 69.9 | $ | — | $ | 1,102.0 | ||||||||||||
Cost of sales | — | 297.5 | 188.1 | 24.8 | — | 510.4 | ||||||||||||||||||
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Gross profit | — | 466.8 | 79.7 | 45.1 | — | 591.6 | ||||||||||||||||||
Selling, general and administrative expenses | 12.6 | 422.3 | 71.7 | 41.1 | — | 547.7 | ||||||||||||||||||
Loss (gain) on disposal of property, plant & equipment, net | — | 4.8 | (0.2 | ) | — | — | 4.6 | |||||||||||||||||
Acquisition and integration expenses | — | 0.6 | 18.5 | 1.4 | — | 20.5 | ||||||||||||||||||
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Operating (loss) income | (12.6 | ) | 39.1 | (10.3 | ) | 2.6 | — | 18.8 | ||||||||||||||||
Other (income) expense, net | — | (1.6 | ) | 0.5 | 1.1 | — | — | |||||||||||||||||
Intercompany interest expense (income), net | — | 32.4 | 0.4 | (13.3 | ) | (19.5 | ) | — | ||||||||||||||||
Interest expense (income), net | 7.4 | 22.0 | — | (0.2 | ) | — | 29.2 | |||||||||||||||||
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(Loss) income before income tax expense (benefit), equity income and discontinued operations | (20.0 | ) | (13.7 | ) | (11.2 | ) | 15.0 | 19.5 | (10.4 | ) | ||||||||||||||
Income tax expense (benefit) | 7.4 | (4.8 | ) | (7.6 | ) | 0.2 | — | (4.8 | ) | |||||||||||||||
Equity income | 22.9 | — | — | — | (22.9 | ) | — | |||||||||||||||||
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Net (loss) income from continuing operations | $ | (4.5 | ) | $ | (8.9 | ) | $ | (3.6 | ) | $ | 14.8 | $ | (3.4 | ) | $ | (5.6 | ) | |||||||
Net income from discontinued operations, net of income taxes | 6.5 | — | 26.7 | 9.4 | (30.6 | ) | 12.0 | |||||||||||||||||
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Net income (loss) | 2.0 | (8.9 | ) | 23.1 | 24.2 | (34.0 | ) | 6.4 | ||||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 4.4 | — | 4.4 | ||||||||||||||||||
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Net income (loss) attributable to Cott Corporation | $ | 2.0 | $ | (8.9 | ) | $ | 23.1 | $ | 19.8 | $ | (34.0 | ) | $ | 2.0 | ||||||||||
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Comprehensive (loss) income attributable to Cott Corporation | $ | (17.8 | ) | $ | (8.9 | ) | $ | 211.2 | $ | 23.8 | $ | (226.1 | ) | $ | (17.8 | ) | ||||||||
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Consolidating Balance Sheets
(in millions of U.S. dollars)
Unaudited
As of September 30, 2017 | ||||||||||||||||||||||||
Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash & cash equivalents | $ | — | $ | 20.8 | $ | 34.4 | $ | 26.8 | $ | — | $ | 82.0 | ||||||||||||
Accounts receivable, net of allowance | — | 137.4 | 89.0 | 93.9 | (8.7 | ) | 311.6 | |||||||||||||||||
Inventories | — | 30.2 | 96.5 | 15.6 | — | 142.3 | ||||||||||||||||||
Prepaid expenses and other current assets | 0.1 | 8.5 | 7.1 | 6.5 | — | 22.2 | ||||||||||||||||||
Current assets of discontinued operations | 63.2 | — | 563.4 | 28.9 | (229.0 | ) | 426.5 | |||||||||||||||||
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Total current assets | 63.3 | 196.9 | 790.4 | 171.7 | (237.7 | ) | 984.6 | |||||||||||||||||
Property, plant & equipment, net | — | 371.2 | 112.2 | 107.0 | — | 590.4 | ||||||||||||||||||
Goodwill | — | 587.2 | 189.6 | 320.2 | — | 1,097.0 | ||||||||||||||||||
Intangible assets, net | — | 353.1 | 203.6 | 207.2 | — | 763.9 | ||||||||||||||||||
Deferred tax assets | — | — | — | 2.2 | — | 2.2 | ||||||||||||||||||
Other long-term assets, net | 0.4 | 14.6 | 5.6 | 16.2 | — | 36.8 | ||||||||||||||||||
Due from affiliates | — | — | 1.1 | 371.8 | (372.9 | ) | — | |||||||||||||||||
Investments in subsidiaries | — | — | 3.9 | — | (3.9 | ) | — | |||||||||||||||||
Long-term assets of discontinued operations | 1,425.1 | — | 1,546.1 | 6.9 | (2,304.5 | ) | 673.6 | |||||||||||||||||
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Total assets | $ | 1,488.8 | $ | 1,523.0 | $ | 2,852.5 | $ | 1,203.2 | $ | (2,919.0 | ) | $ | 4,148.5 | |||||||||||
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LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Current maturities of long-term debt | $ | — | $ | 0.1 | $ | — | $ | 2.5 | $ | — | $ | 2.6 | ||||||||||||
Accounts payable and accrued liabilities | 8.6 | 275.6 | 187.1 | 136.8 | (155.0 | ) | 453.1 | |||||||||||||||||
Current liabilities of discontinued operations | 91.6 | — | 500.2 | 10.0 | (82.7 | ) | 519.1 | |||||||||||||||||
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| |||||||||||||
Total current liabilities | 100.2 | 275.7 | 687.3 | 149.3 | (237.7 | ) | 974.8 | |||||||||||||||||
Long-term debt | 521.3 | 271.2 | 738.8 | 2.7 | — | 1,534.0 | ||||||||||||||||||
Deferred tax liabilities | — | 82.6 | 18.6 | 30.7 | — | 131.9 | ||||||||||||||||||
Other long-term liabilities | — | 39.5 | 17.2 | 10.8 | — | 67.5 | ||||||||||||||||||
Due to affiliates | — | 543.3 | 424.8 | 858.6 | (1,826.7 | ) | — | |||||||||||||||||
Long-term liabilities of discontinued operations | 1.9 | — | 655.4 | 28.1 | (118.9 | ) | 566.5 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities | 623.4 | 1,212.3 | 2,542.1 | 1,080.2 | (2,183.3 | ) | 3,274.7 | |||||||||||||||||
Equity | ||||||||||||||||||||||||
Common shares, no par | 915.5 | 355.5 | 752.1 | 144.5 | (1,252.1 | ) | 915.5 | |||||||||||||||||
Additionalpaid-in-capital | 63.3 | — | — | — | 63.3 | |||||||||||||||||||
(Accumulated deficit) retained earnings | (20.7 | ) | (44.6 | ) | (534.8 | ) | (38.6 | ) | 618.0 | (20.7 | ) | |||||||||||||
Accumulated other comprehensive (loss) income | (92.7 | ) | (0.2 | ) | 93.1 | 8.7 | (101.6 | ) | (92.7 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Cott Corporation equity | 865.4 | 310.7 | 310.4 | 114.6 | (735.7 | ) | 865.4 | |||||||||||||||||
Non-controlling interests | — | — | — | 8.4 | — | 8.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total equity | 865.4 | 310.7 | 310.4 | 123.0 | (735.7 | ) | 873.8 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities and equity | $ | 1,488.8 | $ | 1,523.0 | $ | 2,852.5 | $ | 1,203.2 | $ | (2,919.0 | ) | $ | 4,148.5 | |||||||||||
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|
|
|
|
|
|
|
|
|
|
Consolidating Balance Sheets
(in millions of U.S. dollars)
As of December 31, 2016 | ||||||||||||||||||||||||
Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash & cash equivalents | $ | — | $ | 22.7 | $ | 23.6 | $ | 31.8 | $ | — | $ | 78.1 | ||||||||||||
Accounts receivable, net of allowance | — | 121.7 | 82.6 | 84.0 | (11.6 | ) | 276.7 | |||||||||||||||||
Inventories | — | 29.2 | 79.9 | 15.5 | — | 124.6 | ||||||||||||||||||
Prepaid expenses and other current assets | 1.7 | 7.1 | 10.0 | 4.2 | (0.9 | ) | 22.1 | |||||||||||||||||
Current assets of discontinued operations | 47.2 | — | 346.6 | 23.2 | (65.3 | ) | 351.7 | |||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current assets | 48.9 | 180.7 | 542.7 | 158.7 | (77.8 | ) | 853.2 | |||||||||||||||||
Property, plant & equipment, net | — | 364.5 | 115.8 | 101.5 | — | 581.8 | ||||||||||||||||||
Goodwill | — | 582.0 | 183.6 | 282.7 | — | 1,048.3 | ||||||||||||||||||
Intangible assets, net | — | 356.8 | 204.4 | 197.8 | — | 759.0 | ||||||||||||||||||
Other long-term assets, net | 0.5 | 14.6 | 6.6 | 2.3 | — | 24.0 | ||||||||||||||||||
Due from affiliates | — | — | — | 329.6 | (329.6 | ) | — | |||||||||||||||||
Investments in subsidiaries | — | — | — | — | — | — | ||||||||||||||||||
Long-term assets of discontinued operations | 1,353.7 | — | 1,548.9 | 4.2 | (2,233.4 | ) | 673.4 | |||||||||||||||||
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|
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|
|
|
|
|
| |||||||||||||
Total assets | $ | 1,403.1 | $ | 1,498.6 | $ | 2,602.0 | $ | 1,076.8 | $ | (2,640.8 | ) | $ | 3,939.7 | |||||||||||
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|
| |||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Current maturities of long-term debt | $ | — | $ | — | $ | 0.1 | $ | 2.8 | $ | — | $ | 2.9 | ||||||||||||
Accounts payable and accrued liabilities | 4.2 | 135.1 | 124.9 | 124.8 | (21.0 | ) | 368.0 | |||||||||||||||||
Current liabilities of discontinued operations | 63.6 | — | 423.8 | 8.5 | (56.7 | ) | 439.2 | |||||||||||||||||
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current liabilities | 67.8 | 135.1 | 548.8 | 136.1 | (77.7 | ) | 810.1 | |||||||||||||||||
Long-term debt | 464.4 | 384.2 | — | 2.8 | — | 851.4 | ||||||||||||||||||
Deferred tax liabilities | 0.9 | 81.2 | 46.5 | 26.4 | — | 155.0 | ||||||||||||||||||
Other long-term liabilities | — | 38.0 | 16.9 | 20.5 | — | 75.4 | ||||||||||||||||||
Due to affiliates | — | 543.3 | 390.6 | 775.1 | (1,709.0 | ) | — | |||||||||||||||||
Long-term liabilities of discontinued operations | 1.5 | — | 1,255.8 | 24.6 | (107.9 | ) | 1,174.0 | |||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities | 534.6 | 1,181.8 | 2,258.6 | 985.5 | (1,894.6 | ) | 3,065.9 | |||||||||||||||||
Equity | ||||||||||||||||||||||||
Common shares, no par | 909.3 | 355.4 | 691.5 | 149.7 | (1,196.6 | ) | 909.3 | |||||||||||||||||
Additionalpaid-in-capital | 54.2 | — | — | — | — | 54.2 | ||||||||||||||||||
Retained earnings (accumulated deficit) | 22.9 | (38.4 | ) | (505.9 | ) | (72.8 | ) | 617.1 | 22.9 | |||||||||||||||
Accumulated other comprehensive (loss) income | (117.9 | ) | (0.2 | ) | 157.8 | 9.1 | (166.7 | ) | (117.9 | ) | ||||||||||||||
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|
|
|
|
|
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|
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| |||||||||||||
Total Cott Corporation equity | 868.5 | 316.8 | 343.4 | 86.0 | (746.2 | ) | 868.5 | |||||||||||||||||
Non-controlling interests | — | — | — | 5.3 | — | 5.3 | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Total equity | 868.5 | 316.8 | 343.4 | 91.3 | (746.2 | ) | 873.8 | |||||||||||||||||
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|
|
|
|
|
|
|
| |||||||||||||
Total liabilities and equity | $ | 1,403.1 | $ | 1,498.6 | $ | 2,602.0 | $ | 1,076.8 | $ | (2,640.8 | ) | $ | 3,939.7 | |||||||||||
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| �� |
|
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
For the Three Months Ended September 30, 2017 | ||||||||||||||||||||||||
Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash (used in) provided by operating activities from continuing operations | $ | (0.1 | ) | $ | (88.0 | ) | $ | 17.4 | $ | 14.7 | $ | 102.2 | $ | 46.2 | ||||||||||
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| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | — | (1.1 | ) | — | (2.3 | ) | — | (3.4 | ) | |||||||||||||||
Additions to property, plant & equipment | — | (22.1 | ) | (7.9 | ) | (8.2 | ) | — | (38.2 | ) | ||||||||||||||
Additions to intangible assets | — | (0.4 | ) | (2.7 | ) | (0.3 | ) | — | (3.4 | ) | ||||||||||||||
Proceeds from sale of property, plant & equipment | — | 0.2 | 0.9 | 2.0 | — | 3.1 | ||||||||||||||||||
Other investing activities | — | — | 0.5 | — | — | 0.5 | ||||||||||||||||||
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| |||||||||||||
Net cash used in investing activities from continuing operations | — | (23.4 | ) | (9.2 | ) | (8.8 | ) | — | (41.4 | ) | ||||||||||||||
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| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (0.2 | ) | (0.1 | ) | — | (0.3 | ) | |||||||||||||||
Issuance of common shares | 2.1 | — | — | — | — | 2.1 | ||||||||||||||||||
Common shares repurchased and cancelled | (0.1 | ) | — | — | — | — | (0.1 | ) | ||||||||||||||||
Dividends paid to common shareowners | (8.4 | ) | — | — | — | — | (8.4 | ) | ||||||||||||||||
Proceeds from intercompany loan from affiliate | — | 109.5 | — | — | (109.5 | ) | — | |||||||||||||||||
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| |||||||||||||
Net cash (used in) provided by financing activities from continuing operations | (6.4 | ) | 109.5 | (0.2 | ) | (0.1 | ) | (109.5 | ) | (6.7 | ) | |||||||||||||
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| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by operating activities from discontinued operations | 7.6 | — | 137.5 | 6.1 | (103.8 | ) | 47.4 | |||||||||||||||||
Net cash used in investing activities from discontinued operations | (0.5 | ) | — | (121.8 | ) | (0.5 | ) | 109.5 | (13.3 | ) | ||||||||||||||
Net cash used in financing activities from discontinued operations | — | — | (7.9 | ) | (2.9 | ) | 1.6 | (9.2 | ) | |||||||||||||||
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| |||||||||||||
Net cash provided by discontinued operations | 7.1 | — | 7.8 | 2.7 | 7.3 | 24.9 | ||||||||||||||||||
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| |||||||||||||
Effect of exchange rate changes on cash | 0.1 | — | 1.1 | 0.8 | — | 2.0 | ||||||||||||||||||
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|
|
| |||||||||||||
Net increase (decrease) in cash & cash equivalents | 0.7 | (1.9 | ) | 16.9 | 9.3 | — | 25.0 | |||||||||||||||||
Cash & cash equivalents, beginning of period | 5.1 | 22.7 | 67.3 | 28.1 | — | 123.2 | ||||||||||||||||||
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|
|
|
| |||||||||||||
Cash & cash equivalents, end of period | 5.8 | 20.8 | 84.2 | 37.4 | — | 148.2 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 5.8 | — | 49.8 | 10.6 | — | 66.2 | ||||||||||||||||||
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| |||||||||||||
Cash & cash equivalents from continuing operations, end of period | $ | — | $ | 20.8 | $ | 34.4 | $ | 26.8 | $ | — | $ | 82.0 | ||||||||||||
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|
|
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|
|
|
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||||||
Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash provided by operating activities from continuing operations | $ | 0.5 | $ | 84.0 | $ | 34.4 | $ | 29.8 | $ | (10.0 | ) | $ | 138.7 | |||||||||||
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|
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| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | — | (27.9 | ) | (2.1 | ) | (3.4 | ) | — | (33.4 | ) | ||||||||||||||
Additions to property, plant & equipment | — | (59.8 | ) | (13.3 | ) | (24.0 | ) | — | (97.1 | ) | ||||||||||||||
Additions to intangible assets | — | (2.4 | ) | (2.7 | ) | (0.9 | ) | — | (6.0 | ) | ||||||||||||||
Proceeds from sale of property, plant & equipment | — | 2.4 | 0.9 | 2.7 | — | 6.0 | ||||||||||||||||||
Intercompany loan to affiliate | — | — | (750.0 | ) | — | 750.0 | — | |||||||||||||||||
Other investing activities | — | — | 0.9 | — | — | 0.9 | ||||||||||||||||||
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|
|
|
|
|
|
| |||||||||||||
Net cash used in investing activities from continuing operations | — | (87.7 | ) | (766.3 | ) | (25.6 | ) | 750.0 | (129.6 | ) | ||||||||||||||
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|
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|
|
| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | (100.0 | ) | (0.2 | ) | (1.7 | ) | — | (101.9 | ) | ||||||||||||||
Issuance of long-term debt | — | — | 750.0 | — | — | 750.0 | ||||||||||||||||||
Premiums and costs paid upon extinguishment of long-term debt | — | (7.7 | ) | — | — | — | (7.7 | ) | ||||||||||||||||
Financing fees | — | — | (11.1 | ) | — | — | (11.1 | ) | ||||||||||||||||
Issuance of common shares | 2.9 | — | — | — | — | 2.9 | ||||||||||||||||||
Common shares repurchased and cancelled | (1.9 | ) | — | — | — | — | (1.9 | ) | ||||||||||||||||
Dividends paid to common shareowners | (25.1 | ) | — | — | — | — | (25.1 | ) | ||||||||||||||||
Proceeds from intercompany loan from affiliate | — | 109.5 | — | — | (109.5 | ) | — | |||||||||||||||||
Other financing activities | — | — | — | 0.5 | — | 0.5 | ||||||||||||||||||
Intercompany dividends | — | — | — | (10.9 | ) | 10.9 | — | |||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash (used in) provided by financing activities from continuing operations | (24.1 | ) | 1.8 | 738.7 | (12.1 | ) | (98.6 | ) | 605.7 | |||||||||||||||
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|
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|
|
| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by operating activities from discontinued operations | 27.0 | — | 21.8 | 11.6 | (4.3 | ) | 56.1 | |||||||||||||||||
Net cash used in investing activities from discontinued operations | (1.9 | ) | — | (142.9 | ) | (1.4 | ) | 109.5 | (36.7 | ) | ||||||||||||||
Net cash provided by (used in) financing activities from discontinued operations | — | — | 142.4 | (6.3 | ) | (746.6 | ) | (610.5 | ) | |||||||||||||||
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|
|
|
|
|
|
|
| |||||||||||||
Net cash provided by (used in) discontinued operations | 25.1 | — | 21.3 | 3.9 | (641.4 | ) | (591.1 | ) | ||||||||||||||||
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| |||||||||||||
Effect of exchange rate changes on cash | (0.5 | ) | — | 4.0 | 2.9 | — | 6.4 | |||||||||||||||||
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|
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|
|
|
| |||||||||||||
Net increase (decrease) in cash & cash equivalents | 1.0 | (1.9 | ) | 32.1 | (1.1 | ) | — | 30.1 | ||||||||||||||||
Cash & cash equivalents, beginning of period | 4.8 | 22.7 | 52.1 | 38.5 | — | 118.1 | ||||||||||||||||||
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|
|
|
|
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| |||||||||||||
Cash & cash equivalents, end of period | 5.8 | 20.8 | 84.2 | 37.4 | — | 148.2 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 5.8 | — | 49.8 | 10.6 | — | 66.2 | ||||||||||||||||||
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|
|
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| |||||||||||||
Cash & cash equivalents from continuing operations, end of period | $ | — | $ | 20.8 | $ | 34.4 | $ | 26.8 | $ | — | $ | 82.0 | ||||||||||||
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|
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
For the Three Months Ended October 1, 2016 | ||||||||||||||||||||||||
Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash (used in) provided by operating activities from continuing operations | $ | (0.3 | ) | $ | 35.6 | $ | 17.8 | $ | 52.5 | $ | (54.5 | ) | $ | 51.1 | ||||||||||
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| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | (911.3 | ) | (1.2 | ) | — | — | — | (912.5 | ) | |||||||||||||||
Additions to property, plant & equipment | — | (24.2 | ) | (4.1 | ) | (4.1 | ) | — | (32.4 | ) | ||||||||||||||
Additions to intangible assets | — | (1.2 | ) | — | — | — | (1.2 | ) | ||||||||||||||||
Proceeds from sale of property, plant & equipment | — | — | 0.9 | 0.4 | — | 1.3 | ||||||||||||||||||
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| |||||||||||||
Net cash used in investing activities from continuing operations | (911.3 | ) | (26.6 | ) | (3.2 | ) | (3.7 | ) | — | (944.8 | ) | |||||||||||||
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| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (0.2 | ) | (0.6 | ) | — | (0.8 | ) | |||||||||||||||
Financing fees | (9.6 | ) | — | — | — | — | (9.6 | ) | ||||||||||||||||
Issuance of common shares | 2.4 | — | — | — | — | 2.4 | ||||||||||||||||||
Common shares repurchased and cancelled | (3.4 | ) | — | — | — | — | (3.4 | ) | ||||||||||||||||
Dividends paid to common shareowners | (8.4 | ) | — | — | — | — | (8.4 | ) | ||||||||||||||||
Payment of deferred consideration for acquisitions | — | — | (10.8 | ) | — | — | (10.8 | ) | ||||||||||||||||
Intercompany dividends | — | — | — | (13.9 | ) | 13.9 | — | |||||||||||||||||
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|
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| |||||||||||||
Net cash used in financing activities from continuing operations | (19.0 | ) | — | (11.0 | ) | (14.5 | ) | 13.9 | (30.6 | ) | ||||||||||||||
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| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities from discontinued operations | 252.2 | — | (250.4 | ) | 5.3 | 37.8 | 44.9 | |||||||||||||||||
Net cash provided by (used in) investing activities from discontinued operations | 0.4 | — | (8.5 | ) | (0.1 | ) | — | (8.2 | ) | |||||||||||||||
Net cash (used in) provided by financing activities from discontinued operations | (2.3 | ) | — | 262.9 | (5.5 | ) | 2.8 | 257.9 | ||||||||||||||||
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|
|
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| |||||||||||||
Net cash provided by (used in) discontinued operations | 250.3 | — | 4.0 | (0.3 | ) | 40.6 | 294.6 | |||||||||||||||||
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| |||||||||||||
Effect of exchange rate changes on cash | (4.1 | ) | — | (0.5 | ) | 0.6 | — | (4.0 | ) | |||||||||||||||
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| |||||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (684.4 | ) | 9.0 | 7.1 | 34.6 | — | (633.7 | ) | ||||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 685.7 | 26.4 | 33.2 | 7.3 | — | 752.6 | ||||||||||||||||||
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| |||||||||||||
Cash & cash equivalents, end of period | 1.3 | 35.4 | 40.3 | 41.9 | — | 118.9 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 1.3 | — | 19.2 | 7.0 | — | 27.5 | ||||||||||||||||||
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Cash & cash equivalents from continuing operations, end of period | $ | — | $ | 35.4 | $ | 21.1 | $ | 34.9 | $ | — | $ | 91.4 | ||||||||||||
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Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
For the Nine Months Ended October 1, 2016 | ||||||||||||||||||||||||
Cott Corporation | DS Services of America, Inc. | DSS Guarantor Subsidiaries | DSS Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash provided by operating activities from continuing operations | $ | 1.4 | $ | 87.4 | $ | 34.2 | $ | 52.6 | $ | (103.7 | ) | $ | 71.9 | |||||||||||
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Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | (954.0 | ) | (4.7 | ) | — | — | — | (958.7 | ) | |||||||||||||||
Additions to property, plant & equipment | — | (58.0 | ) | (7.2 | ) | (4.1 | ) | — | (69.3 | ) | ||||||||||||||
Additions to intangible assets | — | (2.3 | ) | — | — | — | (2.3 | ) | ||||||||||||||||
Proceeds from sale of property, plant & equipment | — | 0.2 | 0.9 | 0.4 | — | 1.5 | ||||||||||||||||||
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Net cash used in investing activities from continuing operations | (954.0 | ) | (64.8 | ) | (6.3 | ) | (3.7 | ) | — | (1,028.8 | ) | |||||||||||||
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Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (0.3 | ) | (0.6 | ) | — | (0.9 | ) | |||||||||||||||
Issuance of long-term debt | 498.7 | — | — | — | — | 498.7 | ||||||||||||||||||
Financing fees | (9.6 | ) | — | — | — | — | (9.6 | ) | ||||||||||||||||
Issuance of common shares | 366.6 | — | — | — | — | 366.6 | ||||||||||||||||||
Common shares repurchased and cancelled | (4.5 | ) | — | — | — | — | (4.5 | ) | ||||||||||||||||
Dividends paid to common shareowners | (23.1 | ) | — | — | — | — | (23.1 | ) | ||||||||||||||||
Payment of deferred consideration for acquisitions | — | — | (10.8 | ) | — | — | (10.8 | ) | ||||||||||||||||
Intercompany dividends | — | — | (12.2 | ) | (13.9 | ) | 26.1 | — | ||||||||||||||||
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Net cash provided by (used in) financing activities from continuing operations | 828.1 | — | (23.3 | ) | (14.5 | ) | 26.1 | 816.4 | ||||||||||||||||
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Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities from discontinued operations | 112.2 | — | (98.4 | ) | 15.1 | 58.6 | 87.5 | |||||||||||||||||
Net cash used in investing activities from discontinued operations | (0.6 | ) | — | (28.0 | ) | (0.7 | ) | — | (29.3 | ) | ||||||||||||||
Net cash (used in) provided by financing activities from discontinued operations | (5.2 | ) | — | 127.0 | (12.5 | ) | 19.0 | 128.3 | ||||||||||||||||
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Net cash provided by discontinued operations | 106.4 | — | 0.6 | 1.9 | 77.6 | 186.5 | ||||||||||||||||||
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Effect of exchange rate changes on cash | (1.4 | ) | — | (3.3 | ) | 0.5 | — | (4.2 | ) | |||||||||||||||
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Net (decrease) increase in cash & cash equivalents | (19.5 | ) | 22.6 | 1.9 | 36.8 | — | 41.8 | |||||||||||||||||
Cash & cash equivalents, beginning of period | 20.8 | 12.8 | 38.4 | 5.1 | — | 77.1 | ||||||||||||||||||
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Cash & cash equivalents, end of period | 1.3 | 35.4 | 40.3 | 41.9 | — | 118.9 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 1.3 | — | 19.2 | 7.0 | — | 27.5 | ||||||||||||||||||
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Cash & cash equivalents from continuing operations, end of period | $ | — | $ | 35.4 | $ | 21.1 | $ | 34.9 | $ | — | $ | 91.4 | ||||||||||||
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Guarantor Subsidiaries for 2020 Notes, 2022 Notes, and 2024 Notes
The 2020 Notes and the 2022 Notes, each issued by Cott Corporation’s 100% owned subsidiary Cott Beverages Inc. (“CBI”), are fully and unconditionally, jointly and severally guaranteed on a senior basis by Cott Corporation and certain of its 100% owned direct and indirect subsidiaries (the “Cott Guarantor Subsidiaries”). The Indentures governing the 2020 Notes and the 2022 Notes require (i) any 100% owned direct and indirect restricted subsidiary that guarantees any indebtedness of CBI or any guarantor and (ii) anynon-100% owned subsidiary that guarantees any other capital markets debt of CBI or any guarantor to guarantee the 2020 Notes and the 2022 Notes. Nonon-100% owned subsidiaries guarantee the 2020 Notes or the 2022 Notes. The guarantees of Cott Corporation and the Cott Guarantor Subsidiaries may be released in limited circumstances only upon the occurrence of certain customary conditions set forth in the Indentures governing the 2020 Notes and the 2022 Notes. In April 2017, the entire aggregate principal amountpart of our 2020 Notes were redeemed.
The 2024 Notes were initially issued on June 30, 2016 by Cott Finance Corporation, which was not a Cott Guarantor Subsidiary. Cott Finance Corporation was declared an unrestricted subsidiary under the Indentures governing the 2022 Notes and the 2020 Notes. As a result, such entity is reflected as a CottNon-Guarantor Subsidiary in the following summarized condensed consolidating financial information through August 2, 2016. Substantially simultaneously with the closing of the Eden Acquisition on August 2, 2016, we assumed all of the obligations of Cott Finance Corporation as issuer under the 2024 Notes, and Cott Corporation’s U.S., Canadian, U.K., Luxembourg and Dutch subsidiaries that are currently obligors under the 2022 Notes and the 2020 Notes (including CBI) entered into a supplemental indenture to guarantee the 2024 Notes. The Indenture governing the 2024 Notes requires (i) any 100% owned domestic restricted subsidiary that guarantees any debt of the issuer or any guarantor and (ii) and anynon-100% owned subsidiary that guarantees any other capital markets debt of Cott Corporation or any other guarantor to guarantee the 2024 Notes. Nonon-100% owned subsidiaries guarantee the 2024 Notes. The guarantees of CBI and the Cott Guarantor Subsidiaries may be released in limited circumstances only upon the occurrence of certain customary conditions set forth in the Indenture governing the 2024 Notes. Currently, the obligors under the 2024 Notes are identical to the obligors under the 2020 Notes and the 2022 Notes, but different than the obligors under the DSS Notes. The 2024 Notes are listed on the official list of the Irish Stock Exchange and are traded on the Global Exchange Market thereof.
We have not presented separate financial statements and separate disclosures have not been provided concerning the Cott Guarantor Subsidiaries due to the presentation of condensed consolidating financial information set forth in this Note, consistent with the SEC rules governingRoute Based Services reporting of subsidiary financial information.
The following summarized condensed consolidating financial information of the Company sets forth on a consolidating basis: our Balance Sheets, Statements of Operations and Cash Flows for Cott Corporation, CBI, the Cott Guarantor Subsidiaries and our othernon-guarantor subsidiaries (the “CottNon-Guarantor Subsidiaries”). This supplemental financial information reflects our investments and those of CBI in their respective subsidiaries using the equity method of accounting.
Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
For the Three Months Ended September 30, 2017 | ||||||||||||||||||||||||
Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 15.8 | $ | 454.8 | $ | 110.3 | $ | — | $ | 580.9 | ||||||||||||
Cost of sales | — | 13.2 | 238.1 | 36.8 | — | 288.1 | ||||||||||||||||||
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Gross profit | — | 2.6 | 216.7 | 73.5 | — | 292.8 | ||||||||||||||||||
Selling, general and administrative expenses | 1.2 | 10.4 | 190.3 | 60.9 | — | 262.8 | ||||||||||||||||||
Gain on disposal of property, plant & equipment, net | — | — | (0.3 | ) | (0.1 | ) | — | (0.4 | ) | |||||||||||||||
Acquisition and integration expenses | — | 2.5 | 2.2 | (1.5 | ) | — | 3.2 | |||||||||||||||||
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Operating (loss) income | (1.2 | ) | (10.3 | ) | 24.5 | 14.2 | — | 27.2 | ||||||||||||||||
Other expense (income), net | — | 0.1 | 1.5 | (0.1 | ) | — | 1.5 | |||||||||||||||||
Intercompany interest expense (income), net | — | — | 20.8 | (12.8 | ) | (8.0 | ) | — | ||||||||||||||||
Interest expense, net | 7.5 | — | 15.7 | — | — | 23.2 | ||||||||||||||||||
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(Loss) income before income tax expense (benefit), equity income and discontinued operations | (8.7 | ) | (10.4 | ) | (13.5 | ) | 27.1 | 8.0 | 2.5 | |||||||||||||||
Income tax expense (benefit) | — | 0.2 | 0.7 | — | — | 0.9 | ||||||||||||||||||
Equity income | 43.4 | — | 0.1 | — | (43.5 | ) | — | |||||||||||||||||
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Net income (loss) from continuing operations | $ | 34.7 | $ | (10.6 | ) | $ | (14.1 | ) | $ | 27.1 | $ | (35.5 | ) | $ | 1.6 | |||||||||
Net income (loss) from discontinued operations, net of income taxes | 7.8 | 33.5 | (0.7 | ) | 3.3 | (0.9 | ) | 43.0 | ||||||||||||||||
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Net income (loss) | 42.5 | 22.9 | (14.8 | ) | 30.4 | (36.4 | ) | 44.6 | ||||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 2.1 | — | 2.1 | ||||||||||||||||||
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Net income (loss) attributable to Cott Corporation | $ | 42.5 | $ | 22.9 | $ | (14.8 | ) | $ | 28.3 | $ | (36.4 | ) | $ | 42.5 | ||||||||||
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Comprehensive income (loss) attributable to Cott Corporation | $ | 46.7 | $ | 22.5 | $ | (36.5 | ) | $ | 23.0 | $ | (9.0 | ) | $ | 46.7 | ||||||||||
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Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||||||
Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 52.1 | $ | 1,341.8 | $ | 304.5 | $ | — | $ | 1,698.4 | ||||||||||||
Cost of sales | — | 43.8 | 705.9 | 100.0 | — | 849.7 | ||||||||||||||||||
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Gross profit | — | 8.3 | 635.9 | 204.5 | — | 848.7 | ||||||||||||||||||
Selling, general and administrative expenses | 4.1 | 30.8 | 564.2 | 178.7 | — | 777.8 | ||||||||||||||||||
Loss on disposal of property, plant & equipment, net | — | — | 4.8 | — | — | 4.8 | ||||||||||||||||||
Acquisition and integration expenses | — | 5.9 | 6.9 | 4.4 | — | 17.2 | ||||||||||||||||||
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Operating (loss) income | (4.1 | ) | (28.4 | ) | 60.0 | 21.4 | — | 48.9 | ||||||||||||||||
Other expense (income), net | — | 0.1 | (0.6 | ) | (0.6 | ) | — | (1.1 | ) | |||||||||||||||
Intercompany interest expense (income), net | — | — | 10.9 | (7.6 | ) | (3.3 | ) | — | ||||||||||||||||
Interest expense, net | 21.6 | — | 40.5 | — | — | 62.1 | ||||||||||||||||||
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(Loss) income before income tax expense (benefit), equity income and discontinued operations | (25.7 | ) | (28.5 | ) | 9.2 | 29.6 | 3.3 | (12.1 | ) | |||||||||||||||
Income tax expense (benefit) | — | 0.3 | (4.4 | ) | 5.1 | — | 1.0 | |||||||||||||||||
Equity income | 0.6 | — | 0.1 | — | (0.7 | ) | — | |||||||||||||||||
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Net (loss) income from continuing operations | $ | (25.1 | ) | $ | (28.8 | ) | $ | 13.7 | $ | 24.5 | $ | 2.6 | $ | (13.1 | ) | |||||||||
Net income (loss) from discontinued operations, net of income taxes | 6.6 | (7.3 | ) | (0.1 | ) | 10.8 | (9.0 | ) | 1.0 | |||||||||||||||
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Net (loss) income | (18.5 | ) | (36.1 | ) | 13.6 | 35.3 | (6.4 | ) | (12.1 | ) | ||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 6.4 | — | 6.4 | ||||||||||||||||||
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Net (loss) income attributable to Cott Corporation | $ | (18.5 | ) | $ | (36.1 | ) | $ | 13.6 | $ | 28.9 | $ | (6.4 | ) | $ | (18.5 | ) | ||||||||
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Comprehensive income (loss) attributable to Cott Corporation | $ | 6.7 | $ | (34.3 | ) | $ | (44.1 | ) | $ | 28.5 | $ | 49.9 | $ | 6.7 | ||||||||||
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Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
For the Three Months Ended October 1, 2016 | ||||||||||||||||||||||||
Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 15.4 | $ | 391.4 | $ | 69.9 | $ | — | $ | 476.7 | ||||||||||||
Cost of sales | — | 13.0 | 191.2 | 24.8 | — | 229.0 | ||||||||||||||||||
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Gross profit | — | 2.4 | 200.2 | 45.1 | — | 247.7 | ||||||||||||||||||
Selling, general and administrative expenses | 1.6 | 4.5 | 178.1 | 41.1 | — | 225.3 | ||||||||||||||||||
Loss on disposal of property, plant & equipment, net | — | — | 1.4 | — | — | 1.4 | ||||||||||||||||||
Acquisition and integration expenses | — | 3.2 | 2.8 | 1.4 | — | 7.4 | ||||||||||||||||||
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Operating (loss) income | (1.6 | ) | (5.3 | ) | 17.9 | 2.6 | — | 13.6 | ||||||||||||||||
Other (income) expense, net | — | — | (0.8 | ) | 1.0 | — | 0.2 | |||||||||||||||||
Intercompany interest expense (income), net | — | — | 55.4 | (22.4 | ) | (33.0 | ) | — | ||||||||||||||||
Interest expense (income), net | 7.4 | — | 7.3 | (0.2 | ) | — | 14.5 | |||||||||||||||||
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(Loss) income before income tax expense (benefit), equity income and discontinued operations | (9.0 | ) | (5.3 | ) | (44.0 | ) | 24.2 | 33.0 | (1.1 | ) | ||||||||||||||
Income tax expense (benefit) | 7.6 | (1.9 | ) | (3.2 | ) | 0.4 | — | 2.9 | ||||||||||||||||
Equity income | 8.7 | — | — | — | (8.7 | ) | — | |||||||||||||||||
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Net (loss) income from continuing operations | $ | (7.9 | ) | $ | (3.4 | ) | $ | (40.8 | ) | $ | 23.8 | $ | 24.3 | $ | (4.0 | ) | ||||||||
Net income (loss) from discontinued operations, net of income taxes | 5.3 | 7.7 | (2.8 | ) | 3.2 | (10.5 | ) | 2.9 | ||||||||||||||||
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Net (loss) income | (2.6 | ) | 4.3 | (43.6 | ) | 27.0 | 13.8 | (1.1 | ) | |||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 1.5 | — | 1.5 | ||||||||||||||||||
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Net (loss) income attributable to Cott Corporation | $ | (2.6 | ) | $ | 4.3 | $ | (43.6 | ) | $ | 25.5 | $ | 13.8 | $ | (2.6 | ) | |||||||||
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Comprehensive (loss) income attributable to Cott Corporation | $ | (7.8 | ) | $ | 3.7 | $ | 60.6 | $ | 29.4 | $ | (93.7 | ) | $ | (7.8 | ) | |||||||||
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Condensed Consolidating Statements of Operations
(in millions of U.S. dollars)
Unaudited
For the Nine Months Ended October 1, 2016 | ||||||||||||||||||||||||
Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Revenue, net | $ | — | $ | 52.2 | $ | 979.9 | $ | 69.9 | $ | — | $ | 1,102.0 | ||||||||||||
Cost of sales | — | 42.5 | 443.1 | 24.8 | — | 510.4 | ||||||||||||||||||
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Gross profit | — | 9.7 | 536.8 | 45.1 | — | 591.6 | ||||||||||||||||||
Selling, general and administrative expenses | 12.6 | 13.8 | 480.2 | 41.1 | — | 547.7 | ||||||||||||||||||
Loss on disposal of property, plant & equipment, net | — | — | �� | 4.6 | — | — | 4.6 | |||||||||||||||||
Acquisition and integration expenses | — | 14.2 | 4.9 | 1.4 | — | 20.5 | ||||||||||||||||||
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Operating (loss) income | (12.6 | ) | (18.3 | ) | 47.1 | 2.6 | — | 18.8 | ||||||||||||||||
Other (income) expense, net | — | — | (1.0 | ) | 1.0 | — | — | |||||||||||||||||
Intercompany interest expense (income), net | — | — | 32.8 | (13.3 | ) | (19.5 | ) | — | ||||||||||||||||
Interest expense (income), net | 7.4 | — | 22.0 | (0.2 | ) | — | 29.2 | |||||||||||||||||
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(Loss) income before income tax expense (benefit), equity income and discontinued operations | (20.0 | ) | (18.3 | ) | (6.7 | ) | 15.1 | 19.5 | (10.4 | ) | ||||||||||||||
Income tax expense (benefit) | 7.4 | (4.0 | ) | (8.4 | ) | 0.2 | — | (4.8 | ) | |||||||||||||||
Equity income | 22.9 | — | — | — | (22.9 | ) | — | |||||||||||||||||
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Net (loss) income from continuing operations | $ | (4.5 | ) | $ | (14.3 | ) | $ | 1.7 | $ | 14.9 | $ | (3.4 | ) | $ | (5.6 | ) | ||||||||
Net income from discontinued operations, net of income taxes | 6.5 | 16.2 | 12.0 | 9.4 | (32.1 | ) | 12.0 | |||||||||||||||||
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Net income (loss) | 2.0 | 1.9 | 13.7 | 24.3 | (35.5 | ) | 6.4 | |||||||||||||||||
Less: Net income attributable tonon-controlling interests | — | — | — | 4.4 | — | 4.4 | ||||||||||||||||||
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Net income (loss) attributable to Cott Corporation | $ | 2.0 | $ | 1.9 | $ | 13.7 | $ | 19.9 | $ | (35.5 | ) | $ | 2.0 | |||||||||||
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Comprehensive (loss) income attributable to Cott Corporation | $ | (17.8 | ) | $ | — | $ | 203.7 | $ | 23.9 | $ | (227.6 | ) | $ | (17.8 | ) | |||||||||
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Consolidating Balance Sheets
(in millions of U.S. dollars)
Unaudited
As of September 30, 2017 | ||||||||||||||||||||||||
Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash & cash equivalents | $ | — | $ | — | $ | 55.2 | $ | 26.8 | $ | — | $ | 82.0 | ||||||||||||
Accounts receivable, net of allowance | — | 8.1 | 216.5 | 93.9 | (6.9 | ) | 311.6 | |||||||||||||||||
Inventories | — | 15.5 | 111.2 | 15.6 | — | 142.3 | ||||||||||||||||||
Prepaid expenses and other current assets | 0.1 | 0.4 | 15.2 | 6.5 | — | 22.2 | ||||||||||||||||||
Current assets of discontinued operations | 63.2 | 324.4 | 415.2 | 28.9 | (405.2 | ) | 426.5 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current assets | 63.3 | 348.4 | 813.3 | 171.7 | (412.1 | ) | 984.6 | |||||||||||||||||
Property, plant & equipment, net | — | 3.7 | 479.7 | 107.0 | — | 590.4 | ||||||||||||||||||
Goodwill | — | 4.5 | 772.3 | 320.2 | — | 1,097.0 | ||||||||||||||||||
Intangible assets, net | — | 24.5 | 532.2 | 207.2 | — | 763.9 | ||||||||||||||||||
Deferred tax assets | — | — | — | 2.2 | — | 2.2 | ||||||||||||||||||
Other long-term assets, net | 0.4 | 1.1 | 19.1 | 16.2 | — | 36.8 | ||||||||||||||||||
Due from affiliates | — | — | 893.2 | 371.8 | (1,265.0 | ) | — | |||||||||||||||||
Investments in subsidiaries | — | — | 1,038.7 | — | (1,038.7 | ) | — | |||||||||||||||||
Long-term assets of discontinued operations | 1,425.1 | 1,847.4 | 414.1 | 6.9 | (3,019.9 | ) | 673.6 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total assets | $ | 1,488.8 | $ | 2,229.6 | $ | 4,962.6 | $ | 1,203.2 | $ | (5,735.7 | ) | $ | 4,148.5 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Current maturities of long-term debt | $ | — | $ | — | $ | 0.1 | $ | 2.5 | $ | — | $ | 2.6 | ||||||||||||
Accounts payable and accrued liabilities | 8.6 | 27.8 | 385.1 | 136.8 | (105.2 | ) | 453.1 | |||||||||||||||||
Current liabilities of discontinued operations | 91.6 | 580.3 | 144.1 | 10.0 | (306.9 | ) | 519.1 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current liabilities | 100.2 | 608.1 | 529.3 | 149.3 | (412.1 | ) | 974.8 | |||||||||||||||||
Long-term debt | 521.3 | — | 1,010.0 | 2.7 | — | 1,534.0 | ||||||||||||||||||
Deferred tax liabilities | — | 11.5 | 89.7 | 30.7 | — | 131.9 | ||||||||||||||||||
Other long-term liabilities | — | 10.9 | 45.8 | 10.8 | — | 67.5 | ||||||||||||||||||
Due to affiliates | — | — | 1,208.3 | 858.6 | (2,066.9 | ) | — | |||||||||||||||||
Long-term liabilities of discontinued operations | 1.9 | 1,427.6 | 119.9 | 28.1 | (1,011.0 | ) | 566.5 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities | 623.4 | 2,058.1 | 3,003.0 | 1,080.2 | (3,490.0 | ) | 3,274.7 | |||||||||||||||||
Equity | ||||||||||||||||||||||||
Common shares, no par | 915.5 | 1,034.7 | 1,574.1 | 144.5 | (2,753.3 | ) | 915.5 | |||||||||||||||||
Additionalpaid-in-capital | 63.3 | — | — | — | — | 63.3 | ||||||||||||||||||
(Accumulated deficit) retained earnings | (20.7 | ) | (844.9 | ) | 265.5 | (38.6 | ) | 618.0 | (20.7 | ) | ||||||||||||||
Accumulated other comprehensive (loss) income | (92.7 | ) | (18.3 | ) | 120.0 | 8.7 | (110.4 | ) | (92.7 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Cott Corporation equity | 865.4 | 171.5 | 1,959.6 | 114.6 | (2,245.7 | ) | 865.4 | |||||||||||||||||
Non-controlling interests | — | — | — | 8.4 | — | 8.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total equity | 865.4 | 171.5 | 1,959.6 | 123.0 | (2,245.7 | ) | 873.8 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities and equity | $ | 1,488.8 | $ | 2,229.6 | $ | 4,962.6 | $ | 1,203.2 | $ | (5,735.7 | ) | $ | 4,148.5 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Consolidating Balance Sheets
(in millions of U.S. dollars)
As of December 31, 2016 | ||||||||||||||||||||||||
Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash & cash equivalents | $ | — | $ | — | $ | 46.3 | $ | 31.8 | $ | — | $ | 78.1 | ||||||||||||
Accounts receivable, net of allowance | — | 8.6 | 198.0 | 84.0 | (13.9 | ) | 276.7 | |||||||||||||||||
Inventories | — | 13.2 | 95.9 | 15.5 | — | 124.6 | ||||||||||||||||||
Prepaid expenses and other current assets | 1.7 | 0.8 | 15.4 | 4.2 | — | 22.1 | ||||||||||||||||||
Current assets of discontinued operations | 47.2 | 126.9 | 360.5 | 23.2 | (206.1 | ) | 351.7 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current assets | 48.9 | 149.5 | 716.1 | 158.7 | (220.0 | ) | 853.2 | |||||||||||||||||
Property, plant & equipment, net | — | 4.0 | 476.3 | 101.5 | — | 581.8 | ||||||||||||||||||
Goodwill | — | 4.5 | 761.1 | 282.7 | — | 1,048.3 | ||||||||||||||||||
Intangible assets, net | — | 24.5 | 536.7 | 197.8 | — | 759.0 | ||||||||||||||||||
Deferred tax assets | — | 6.0 | — | — | (6.0 | ) | — | |||||||||||||||||
Other long-term assets, net | 0.5 | 1.3 | 19.9 | 2.3 | — | 24.0 | ||||||||||||||||||
Due from affiliates | — | — | 143.1 | 329.6 | (472.7 | ) | — | |||||||||||||||||
Investments in subsidiaries | — | — | 975.0 | — | (975.0 | ) | — | |||||||||||||||||
Long-term assets of discontinued operations | 1,353.7 | 1,635.4 | 411.3 | 4.2 | (2,731.2 | ) | 673.4 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total assets | $ | 1,403.1 | $ | 1,825.2 | $ | 4,039.5 | $ | 1,076.8 | $ | (4,404.9 | ) | $ | 3,939.7 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Current maturities of long-term debt | $ | — | $ | — | $ | 0.1 | $ | 2.8 | $ | — | $ | 2.9 | ||||||||||||
Accounts payable and accrued liabilities | 4.2 | 30.5 | 229.7 | 124.8 | (21.2 | ) | 368.0 | |||||||||||||||||
Current liabilities of discontinued operations | 63.6 | 437.7 | 128.2 | 8.5 | (198.8 | ) | 439.2 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current liabilities | 67.8 | 468.2 | 358.0 | 136.1 | (220.0 | ) | 810.1 | |||||||||||||||||
Long-term debt | 464.4 | — | 384.2 | 2.8 | — | 851.4 | ||||||||||||||||||
Deferred tax liabilities | 0.9 | — | 133.7 | 26.4 | (6.0 | ) | 155.0 | |||||||||||||||||
Other long-term liabilities | — | 11.3 | 43.6 | 20.5 | — | 75.4 | ||||||||||||||||||
Due to affiliates | — | — | 970.8 | 775.1 | (1,745.9 | ) | — | |||||||||||||||||
Long-term liabilities of discontinued operations | 1.5 | 1,290.7 | 107.4 | 24.6 | (250.2 | ) | 1,174.0 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities | 534.6 | 1,770.2 | 1,997.7 | 985.5 | (2,222.1 | ) | 3,065.9 | |||||||||||||||||
Equity | ||||||||||||||||||||||||
Common shares, no par | 909.3 | 834.8 | 1,648.7 | 149.7 | (2,633.2 | ) | 909.3 | |||||||||||||||||
Additionalpaid-in-capital | 54.2 | — | — | — | — | 54.2 | ||||||||||||||||||
Retained earnings | ||||||||||||||||||||||||
(accumulated deficit) | 22.9 | (759.7 | ) | 215.4 | (72.8 | ) | 617.1 | 22.9 | ||||||||||||||||
Accumulated other comprehensive | ||||||||||||||||||||||||
(loss) income | (117.9 | ) | (20.1 | ) | 177.7 | 9.1 | (166.7 | ) | (117.9 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Cott Corporation equity | 868.5 | 55.0 | 2,041.8 | 86.0 | (2,182.8 | ) | 868.5 | |||||||||||||||||
Non-controlling interests | — | — | — | 5.3 | — | 5.3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total equity | 868.5 | 55.0 | 2,041.8 | 91.3 | (2,182.8 | ) | 873.8 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities and equity | $ | 1,403.1 | $ | 1,825.2 | $ | 4,039.5 | $ | 1,076.8 | $ | (4,404.9 | ) | $ | 3,939.7 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
For the Three Months Ended September 30, 2017 | ||||||||||||||||||||||||
Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash (used in) provided by operating activities from continuing operations | $ | (0.1 | ) | $ | — | $ | (70.6 | ) | $ | 14.7 | $ | 102.2 | $ | 46.2 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | — | — | (1.1 | ) | (2.3 | ) | — | (3.4 | ) | |||||||||||||||
Additions to property, plant & equipment | — | — | (30.0 | ) | (8.2 | ) | — | (38.2 | ) | |||||||||||||||
Additions to intangible assets | — | — | (3.1 | ) | (0.3 | ) | — | (3.4 | ) | |||||||||||||||
Proceeds from sale of property, plant & equipment | — | — | 1.1 | 2.0 | — | 3.1 | ||||||||||||||||||
Other investing activities | — | — | 0.5 | — | — | 0.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash used in investing activities from continuing operations | — | — | (32.6 | ) | (8.8 | ) | — | (41.4 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (0.2 | ) | (0.1 | ) | — | (0.3 | ) | |||||||||||||||
Issuance of common shares | 2.1 | — | — | — | — | 2.1 | ||||||||||||||||||
Common shares repurchased and cancelled | (0.1 | ) | — | — | — | — | (0.1 | ) | ||||||||||||||||
Dividends paid to common shareowners | (8.4 | ) | — | — | — | — | (8.4 | ) | ||||||||||||||||
Proceeds from intercompany loan from affiliate | — | — | 109.5 | — | (109.5 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash (used in) provided by financing activities from continuing operations | (6.4 | ) | — | 109.3 | (0.1 | ) | (109.5 | ) | (6.7 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by operating activities from discontinued operations | 7.6 | 132.8 | 4.7 | 6.1 | (103.8 | ) | 47.4 | |||||||||||||||||
Net cash used in investing activities from discontinued operations | (0.5 | ) | (117.7 | ) | (4.1 | ) | (0.5 | ) | 109.5 | (13.3 | ) | |||||||||||||
Net cash used in financing activities from discontinued operations | — | (7.8 | ) | (0.1 | ) | (2.9 | ) | 1.6 | (9.2 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash provided by discontinued operations | 7.1 | 7.3 | 0.5 | 2.7 | 7.3 | 24.9 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Effect of exchange rate changes on cash | 0.1 | — | 1.1 | 0.8 | — | 2.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase in cash & cash equivalents | 0.7 | 7.3 | 7.7 | 9.3 | — | 25.0 | ||||||||||||||||||
Cash & cash equivalents, beginning of period | 5.1 | 16.1 | 73.9 | 28.1 | — | 123.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash & cash equivalents, end of period | 5.8 | 23.4 | 81.6 | 37.4 | — | 148.2 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 5.8 | 23.4 | 26.4 | 10.6 | — | 66.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash & cash equivalents from continuing operations, end of period | $ | — | $ | — | $ | 55.2 | $ | 26.8 | $ | — | $ | 82.0 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||||||
Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash provided by operating activities from continuing operations | $ | 0.5 | $ | — | $ | 118.4 | $ | 29.8 | $ | (10.0 | ) | $ | 138.7 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | — | — | (30.0 | ) | (3.4 | ) | — | (33.4 | ) | |||||||||||||||
Additions to property, plant & equipment | — | — | (73.1 | ) | (24.0 | ) | — | (97.1 | ) | |||||||||||||||
Additions to intangible assets | — | — | (5.1 | ) | (0.9 | ) | — | (6.0 | ) | |||||||||||||||
Proceeds from sale of property, plant & equipment | — | — | 3.3 | 2.7 | — | 6.0 | ||||||||||||||||||
Intercompany loan to affiliate | — | — | (750.0 | ) | — | 750.0 | — | |||||||||||||||||
Other investing activities | — | — | 0.9 | — | — | 0.9 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash used in investing activities from continuing operations | — | — | (854.0 | ) | (25.6 | ) | 750.0 | (129.6 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (100.2 | ) | (1.7 | ) | — | (101.9 | ) | |||||||||||||||
Issuance of long-term debt | — | — | 750.0 | — | — | 750.0 | ||||||||||||||||||
Premiums and costs paid upon extinguishment of long-term debt | — | — | (7.7 | ) | — | — | (7.7 | ) | ||||||||||||||||
Financing fees | — | — | (11.1 | ) | — | — | (11.1 | ) | ||||||||||||||||
Issuance of common shares | 2.9 | — | — | — | — | 2.9 | ||||||||||||||||||
Common shares repurchased and cancelled | (1.9 | ) | — | — | — | — | (1.9 | ) | ||||||||||||||||
Dividends paid to common shareowners | (25.1 | ) | — | — | — | — | (25.1 | ) | ||||||||||||||||
Proceeds from intercompany loan from affiliate | — | — | 109.5 | — | (109.5 | ) | — | |||||||||||||||||
Other financing activities | — | — | — | 0.5 | — | 0.5 | ||||||||||||||||||
Intercompany dividends | — | — | — | (10.9 | ) | 10.9 | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash (used in) provided by financing activities from continuing operations | (24.1 | ) | — | 740.5 | (12.1 | ) | (98.6 | ) | 605.7 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by operating activities from discontinued operations | 27.0 | 15.7 | 6.1 | 11.6 | (4.3 | ) | 56.1 | |||||||||||||||||
Net cash used in investing activities from discontinued operations | (1.9 | ) | (138.0 | ) | (4.9 | ) | (1.4 | ) | 109.5 | (36.7 | ) | |||||||||||||
Net cash provided by (used in) financing activities from discontinued operations | — | 142.6 | (0.2 | ) | (6.3 | ) | (746.6 | ) | (610.5 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash provided by (used in) discontinued operations | 25.1 | 20.3 | 1.0 | 3.9 | (641.4 | ) | (591.1 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Effect of exchange rate changes on cash | (0.5 | ) | — | 4.0 | 2.9 | — | 6.4 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) in cash & cash equivalents | 1.0 | 20.3 | 9.9 | (1.1 | ) | — | 30.1 | |||||||||||||||||
Cash & cash equivalents, beginning of period | 4.8 | 3.1 | 71.7 | 38.5 | — | 118.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash & cash equivalents, end of period | 5.8 | 23.4 | 81.6 | 37.4 | — | 148.2 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 5.8 | 23.4 | 26.4 | 10.6 | — | 66.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash & cash equivalents from continuing operations, end of period | $ | — | $ | — | $ | 55.2 | $ | 26.8 | $ | — | $ | 82.0 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
For the Three Months Ended October 1, 2016 | ||||||||||||||||||||||||
Cott Corporation | Cott Beverages Inc. | Cott Guarantor Subsidiaries | Cott Non-Guarantor Subsidiaries | Elimination Entries | Consolidated | |||||||||||||||||||
Net cash (used in) provided by operating activities from continuing operations | $ | (0.3 | ) | $ | 0.4 | $ | 53.0 | $ | 52.5 | $ | (54.5 | ) | $ | 51.1 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | (911.3 | ) | — | (1.2 | ) | — | — | (912.5 | ) | |||||||||||||||
Additions to property, plant & equipment | — | (0.4 | ) | (27.9 | ) | (4.1 | ) | — | (32.4 | ) | ||||||||||||||
Additions to intangible assets | — | — | (1.2 | ) | — | — | (1.2 | ) | ||||||||||||||||
Proceeds from sale of property, plant & equipment | — | — | 0.9 | 0.4 | — | 1.3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash used in investing activities from continuing operations | (911.3 | ) | (0.4 | ) | (29.4 | ) | (3.7 | ) | — | (944.8 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (0.2 | ) | (0.6 | ) | — | (0.8 | ) | |||||||||||||||
Financing fees | (9.6 | ) | — | — | — | (9.6 | ) | |||||||||||||||||
Issuance of common shares | 2.4 | — | — | — | — | 2.4 | ||||||||||||||||||
Common shares repurchased and cancelled | (3.4 | ) | — | — | — | — | (3.4 | ) | ||||||||||||||||
Dividends paid to common shareowners | (8.4 | ) | — | — | — | — | (8.4 | ) | ||||||||||||||||
Payment of deferred consideration for acquisitions | — | — | (10.8 | ) | — | — | (10.8 | ) | ||||||||||||||||
Intercompany dividends | — | — | — | (13.9 | ) | 13.9 | — | |||||||||||||||||
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Net cash used in financing activities from continuing operations | (19.0 | ) | — | (11.0 | ) | (14.5 | ) | 13.9 | (30.6 | ) | ||||||||||||||
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Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities from discontinued operations | 252.2 | (258.1 | ) | 7.7 | 5.3 | 37.8 | 44.9 | |||||||||||||||||
Net cash provided by (used in) investing activities from discontinued operations | 0.4 | (5.0 | ) | (3.5 | ) | (0.1 | ) | — | (8.2 | ) | ||||||||||||||
Net cash (used in) provided by financing activities from discontinued operations | (2.3 | ) | 262.9 | — | (5.5 | ) | 2.8 | 257.9 | ||||||||||||||||
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Net cash provided by (used in) discontinued operations | 250.3 | (0.2 | ) | 4.2 | (0.3 | ) | 40.6 | 294.6 | ||||||||||||||||
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Effect of exchange rate changes on cash | (4.1 | ) | — | (0.5 | ) | 0.6 | — | (4.0 | ) | |||||||||||||||
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Net (decrease) increase in cash, cash equivalents and restricted cash | (684.4 | ) | (0.2 | ) | 16.3 | 34.6 | — | (633.7 | ) | |||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 685.7 | 2.4 | 57.2 | 7.3 | — | 752.6 | ||||||||||||||||||
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Cash & cash equivalents, end of period | 1.3 | 2.2 | 73.5 | 41.9 | — | 118.9 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 1.3 | 2.2 | 17.0 | 7.0 | — | 27.5 | ||||||||||||||||||
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Cash & cash equivalents from continuing operations, end of period | $ | — | $ | — | $ | 56.5 | $ | 34.9 | $ | — | $ | 91.4 | ||||||||||||
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Consolidating Statements of Condensed Cash Flows
(in millions of U.S. dollars)
Unaudited
For the Nine Months Ended October 1, 2016 | ||||||||||||||||||||||||
Cott | Cott | |||||||||||||||||||||||
Cott | Cott | Guarantor | Non-Guarantor | Elimination | ||||||||||||||||||||
Corporation | Beverages Inc. | Subsidiaries | Subsidiaries | Entries | Consolidated | |||||||||||||||||||
Net cash provided by operating activities from continuing operations | $ | 1.4 | $ | 0.4 | $ | 121.2 | $ | 52.6 | $ | (103.7 | ) | $ | 71.9 | |||||||||||
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Investing Activities | ||||||||||||||||||||||||
Acquisitions, net of cash received | (954.0 | ) | — | (4.7 | ) | — | — | (958.7 | ) | |||||||||||||||
Additions to property, plant & equipment | — | (0.4 | ) | (64.8 | ) | (4.1 | ) | — | (69.3 | ) | ||||||||||||||
Additions to intangible assets | — | — | (2.3 | ) | — | — | (2.3 | ) | ||||||||||||||||
Proceeds from sale of property, plant & equipment | — | — | 1.1 | 0.4 | — | 1.5 | ||||||||||||||||||
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Net cash used in investing activities from continuing operations | (954.0 | ) | (0.4 | ) | (70.7 | ) | (3.7 | ) | — | (1,028.8 | ) | |||||||||||||
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Financing Activities | ||||||||||||||||||||||||
Payments of long-term debt | — | — | (0.3 | ) | (0.6 | ) | — | (0.9 | ) | |||||||||||||||
Issuance of long-term debt | 498.7 | — | — | — | — | 498.7 | ||||||||||||||||||
Financing fees | (9.6 | ) | — | — | — | — | (9.6 | ) | ||||||||||||||||
Issuance of common shares | 366.6 | — | — | — | — | 366.6 | ||||||||||||||||||
Common shares repurchased and cancelled | (4.5 | ) | — | — | — | — | (4.5 | ) | ||||||||||||||||
Dividends paid to common shareowners | (23.1 | ) | — | — | — | — | (23.1 | ) | ||||||||||||||||
Payment of deferred consideration for acquisitions | — | — | (10.8 | ) | — | — | (10.8 | ) | ||||||||||||||||
Intercompany dividends | — | — | (12.2 | ) | (13.9 | ) | 26.1 | — | ||||||||||||||||
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Net cash provided by (used in) financing activities from continuing operations | 828.1 | — | (23.3 | ) | (14.5 | ) | 26.1 | 816.4 | ||||||||||||||||
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Cash Flows from Discontinued Operations | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities from discontinued operations | 112.2 | (112.3 | ) | 13.9 | 15.1 | 58.6 | 87.5 | |||||||||||||||||
Net cash used in investing activities from discontinued operations | (0.6 | ) | (18.0 | ) | (10.0 | ) | (0.7 | ) | — | (29.3 | ) | |||||||||||||
Net cash (used in) provided by financing activities from discontinued operations | (5.2 | ) | 131.5 | (4.5 | ) | (12.5 | ) | 19.0 | 128.3 | |||||||||||||||
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Net cash provided by (used in) discontinued operations | 106.4 | 1.2 | (0.6 | ) | 1.9 | 77.6 | 186.5 | |||||||||||||||||
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Effect of exchange rate changes on cash | (1.4 | ) | — | (3.3 | ) | 0.5 | — | (4.2 | ) | |||||||||||||||
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Net (decrease) increase in cash, cash equivalents and restricted cash | (19.5 | ) | 1.2 | 23.3 | 36.8 | — | 41.8 | |||||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 20.8 | 1.0 | 50.2 | 5.1 | — | 77.1 | ||||||||||||||||||
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Cash & cash equivalents, end of period | 1.3 | 2.2 | 73.5 | 41.9 | — | 118.9 | ||||||||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 1.3 | 2.2 | 17.0 | 7.0 | — | 27.5 | ||||||||||||||||||
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Cash & cash equivalents from continuing operations, end of period | $ | — | $ | — | $ | 56.5 | $ | 34.9 | $ | — | $ | 91.4 | ||||||||||||
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Note 18—Subsequent Events
On October 26, 2017, the Company’s wholly owned subsidiaries CBI and DSS, gave notice to the trustees under the indentures governing the 2022 Notes and DSS Notes of their intent to conditionally redeem all of the outstanding 2022 Notes and DSS Notes on November 27, 2017 (the “Redemption Date”). The redemption price of the 2022 Notes, as set forth in the indenture governing the 2022 Notes, is equal to 104.031% of the principal amount of such 2022 Notes redeemed, plus accrued and unpaid interest thereon, if any, to, but excluding, the Redemption Date. The redemption price of the DSS Notes, as set forth in the indenture governing the DSS Notes, is equal to 105.000% of the principal amount of such DSS Notes redeemed, plus accrued and unpaid interest thereon, if any, to, but excluding, the Redemption Date. The redemptions of the 2022 Notes and the DSS Notes are each conditioned upon the closing of the sale of the Company’s Traditional Business to Refresco.
segment.
27, 2018.
On July 24, 2017, we entered into a Share Purchase Agreement with Refresco Group N.V., a Netherlands limited liability company (“Refresco”), pursuant to which we will sell to Refresco our carbonated soft drinks (“CSDs”) and juice businesses via the sale of our North America, United Kingdom (“U.K.”) and Mexico business units (including the Canadian business) and our Royal Crown International (“RCI”) finished goods export business (collectively “Traditional Business”).
The beverage market is subject to some seasonal variations. Our water delivery sales are generally higher during the warmer months, while sales of our coffee products are generally higher during cooler months, and may also be influenced by the timing of holidays and weather fluctuations. Our purchases of raw materials and related accounts payable fluctuate based upon the demand for our products. The seasonality of our sales volume causes our working capital needs to fluctuate throughout the year, with inventory levels increasing in the first half of the year in order to meet high summer demand. In addition, our accounts receivable balances decline in the fall as customers pay their higher-than-average outstanding balances from the summer deliveries.
year.
During
Financing Transactions
On March 22, 2017, we issued $750.0 million The following discussion and analysis of 5.500% senior notes due April 1, 2025 (the “2025 Notes”) to qualified purchasers in a private placement offering under Rule 144A under the Securities Actfinancial condition and results of 1933, as amended (the “Securities Act”), and outside the United States tonon-U.S. purchasers pursuant to Regulation S under the Securities Act and other applicable laws. The 2025 Notes were issued by our wholly-owned subsidiary Cott Holdings Inc., and most
We incurred $11.7repay in full our $262.5 million of financing fees in connection with the issuance of the 2025 Notes. The financing fees are being amortized using the effective interest method over an eight-year period, which represents the term to maturity of the 2025 Notes.
On October 26, 2017,outstanding balance on our wholly owned subsidiaries, Cott Beverages Inc. and DSS, gave notice to the trustees under the indentures governing the 5.375% senior notes due 2022asset-based lending facility (the “2022 Notes”) and the DSS Notes of their intent to conditionally redeem all of the outstanding 2022 Notes and DSS Notes on November 27, 2017 (the “Redemption Date”“ABL facility”). The redemption price of theour 2022 Notes as set forthincluded $21.2 million in the indenture governing the 2022 Notes, is equal to 104.031% of the principal amount of such 2022 Notes redeemed, pluspremium payments and $2.2 million in accrued and unpaid interest thereon, if any, to, but excluding, the Redemption Date.interest. The redemption price of theour DSS Notes as set forthincluded $12.5 million in the indenture governing the DSS Notes, is equal to 105.000% of the principal amount of such DSS Notes redeemed, pluspremium payments, $10.3 million in accrued and unpaid interest, thereon, if any, to, but excluding, the Redemption Date. The redemptions of the 2022 Notes and the DSS Notes are each conditioned upon the closingwrite-off of the sale$19.6 million of unamortized premium. Additionally, we amended and restated our Traditional Business to Refresco.
ABL facility, as further discussed below.
We exclude these items to better understand trends in the business. We exclude the impact of foreign exchange to separate the impact of currency exchange rate changes from our results of operations and, in some cases, the impact of fewer trading days within our business units from our results of operations.
We also utilize adjusted net income (loss) from continuing operations, which is GAAP income (loss) from continuing operations excluding acquisition and integration costs, inventorystep-up adjustments, unrealized gain on commodity hedging instruments, net, foreign exchange and other (gains) losses, net, loss on disposal of property, plant & equipment, net, interest payment on 2024 Notes (as defined below), interest expense on 2020 Notes (as defined below), tax valuation allowance, gain on extinguishment of long-term debt, other adjustments, and the tax effect of adjustments, as well as adjusted net income (loss) per diluted common share from continuing operations, which is adjusted net income (loss) from continuing operations divided by diluted weighted average common shares outstanding. We consider these measures to be indicators of our operating performance.
Additionally, we supplement our reporting of net cash provided by operating activities from continuing operations determined in accordance with GAAP by excluding additions to property, plant & equipment to present free cash flow and adjusted free cash flow (which is free cash flow excluding acquisition and integration cash costs), which management believes provides useful information to investors about the amount of cash generated by the business that can be used for strategic opportunities, including investing in our business, making strategic acquisitions, paying dividends, and strengthening the balance sheet.
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||
September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | |||||||||||||||||||||||||||||
(in millions of U.S. dollars) | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||
Revenue, net | 580.9 | 100.0 | 476.7 | 100.0 | 1,698.4 | 100.0 | 1,102.0 | 100.0 | ||||||||||||||||||||||||
Cost of sales | 288.1 | 49.6 | 229.0 | 48.0 | 849.7 | 50.0 | 510.4 | 46.3 | ||||||||||||||||||||||||
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Gross profit | 292.8 | 50.4 | 247.7 | 52.0 | 848.7 | 50.0 | 591.6 | 53.7 | ||||||||||||||||||||||||
Selling, general, and administrative expenses | 262.8 | 45.2 | 225.3 | 47.3 | 777.8 | 45.8 | 547.7 | 49.7 | ||||||||||||||||||||||||
(Gain) loss on disposal of property, plant & equipment, net | (0.4 | ) | (0.1 | ) | 1.4 | 0.3 | 4.8 | 0.3 | 4.6 | 0.4 | ||||||||||||||||||||||
Acquisition and integration expenses | 3.2 | 0.6 | 7.4 | 1.5 | 17.2 | 1.0 | 20.5 | 1.9 | ||||||||||||||||||||||||
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Operating income | 27.2 | 4.7 | 13.6 | 2.9 | 48.9 | 2.9 | 18.8 | 1.7 | ||||||||||||||||||||||||
Other expense (income), net | 1.5 | 0.3 | 0.2 | — | (1.1 | ) | (0.1 | ) | — | — | ||||||||||||||||||||||
Interest expense, net | 23.2 | 4.0 | 14.5 | 3.1 | 62.1 | 3.7 | 29.2 | 2.6 | ||||||||||||||||||||||||
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Income (loss) from continuing operations before income taxes | 2.5 | 0.4 | (1.1 | ) | (0.2 | ) | (12.1 | ) | (0.7 | ) | (10.4 | ) | (0.9 | ) | ||||||||||||||||||
Income tax expense (benefit) | 0.9 | 0.1 | 2.9 | 0.6 | 1.0 | 0.1 | (4.8 | ) | (0.4 | ) | ||||||||||||||||||||||
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Net income (loss) from continuing operations | 1.6 | 0.3 | (4.0 | ) | (0.8 | ) | (13.1 | ) | (0.8 | ) | (5.6 | ) | (0.5 | ) | ||||||||||||||||||
Net income from discontinued operations, net of income taxes | 43.0 | 7.4 | 2.9 | 0.6 | 1.0 | 0.1 | 12.0 | 1.1 | ||||||||||||||||||||||||
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Net income (loss) | 44.6 | 7.7 | (1.1 | ) | (0.2 | ) | (12.1 | ) | (0.7 | ) | 6.4 | 0.6 | ||||||||||||||||||||
Less: Net income attributable to non-controlling interests—discontinued operations | 2.1 | 0.4 | 1.5 | 0.3 | 6.4 | 0.4 | 4.4 | 0.4 | ||||||||||||||||||||||||
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Net income (loss) attributable to Cott Corporation | 42.5 | 7.3 | (2.6 | ) | (0.5 | ) | (18.5 | ) | (1.1 | ) | 2.0 | 0.2 | ||||||||||||||||||||
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Depreciation & amortization | 49.4 | 8.5 | 41.2 | 8.6 | 141.8 | 8.3 | 102.6 | 9.3 | ||||||||||||||||||||||||
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2017:
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | ||||||||||||||||||||
(in millions of U.S. dollars) | $ | % | $ | % | $ | % | $ | % | |||||||||||||||
Revenue, net | 609.3 | 100.0 | 580.9 | 100.0 | 1,773.7 | 100.0 | 1,698.4 | 100.0 | |||||||||||||||
Cost of sales | 298.8 | 49.0 | 288.1 | 49.6 | 888.3 | 50.1 | 849.7 | 50.0 | |||||||||||||||
Gross profit | 310.5 | 51.0 | 292.8 | 50.4 | 885.4 | 49.9 | 848.7 | 50.0 | |||||||||||||||
Selling, general and administrative expenses | 279.9 | 45.9 | 263.2 | 45.3 | 816.2 | 46.0 | 778.2 | 45.8 | |||||||||||||||
Loss (gain) on disposal of property, plant and equipment, net | 1.2 | 0.2 | (0.4 | ) | (0.1 | ) | 3.8 | 0.2 | 4.8 | 0.3 | |||||||||||||
Acquisition and integration expenses | 1.6 | 0.3 | 7.7 | 1.3 | 10.8 | 0.6 | 21.7 | 1.3 | |||||||||||||||
Operating income | 27.8 | 4.6 | 22.3 | 3.8 | 54.6 | 3.1 | 44.0 | 2.6 | |||||||||||||||
Other income, net | (0.6 | ) | (0.1 | ) | (3.4 | ) | (0.6 | ) | (33.0 | ) | (1.9 | ) | (6.0 | ) | (0.4 | ) | |||||||
Interest expense, net | 18.9 | 3.1 | 23.2 | 4.0 | 58.3 | 3.3 | 62.1 | 3.7 | |||||||||||||||
Income (loss) from continuing operations before income taxes | 9.5 | 1.6 | 2.5 | 0.4 | 29.3 | 1.7 | (12.1 | ) | (0.7 | ) | |||||||||||||
Income tax expense | 1.0 | 0.2 | 0.9 | 0.2 | 4.0 | 0.2 | 1.0 | 0.1 | |||||||||||||||
Net income (loss) from continuing operations | 8.5 | 1.4 | 1.6 | 0.3 | 25.3 | 1.4 | (13.1 | ) | (0.8 | ) | |||||||||||||
Net income from discontinued operations, net of income taxes (Note 3) | 1.5 | 0.2 | 43.0 | 7.4 | 357.5 | 20.2 | 1.0 | 0.1 | |||||||||||||||
Net income (loss) | 10.0 | 1.6 | 44.6 | 7.7 | 382.8 | 21.6 | (12.1 | ) | (0.7 | ) | |||||||||||||
Less: Net income attributable to non-controlling interests - discontinued operations | — | — | 2.1 | 0.4 | 0.6 | — | 6.4 | 0.4 | |||||||||||||||
Net income (loss) attributable to Cott Corporation | 10.0 | 1.6 | 42.5 | 7.3 | 382.2 | 21.5 | (18.5 | ) | (1.1 | ) | |||||||||||||
Depreciation and amortization | 49.6 | 8.1 | 49.4 | 8.5 | 145.7 | 8.2 | 141.8 | 8.3 |
For the Three Months Ended September 30, 2017 | ||||||||||||||||
(in millions of U.S. dollars, except percentage amounts) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Total | ||||||||||||
Change in revenue | $ | 48.1 | $ | 56.1 | $ | — | $ | 104.2 | ||||||||
Impact of foreign exchange 1 | (5.8 | ) | — | 0.6 | (5.2 | ) | ||||||||||
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Change excluding foreign exchange | $ | 42.3 | $ | 56.1 | $ | 0.6 | $ | 99.0 | ||||||||
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Percentage change in revenue | 13.8 | % | 64.3 | % | — | % | 21.9 | % | ||||||||
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Percentage change in revenue excluding foreign exchange | 12.1 | % | 64.3 | % | 1.5 | % | 20.8 | % | ||||||||
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For the Nine Months Ended September 30, 2017 | ||||||||||||||||
(in millions of U.S. dollars, except percentage amounts) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Total | ||||||||||||
Change in revenue | $ | 252.6 | $ | 352.9 | $ | (9.1 | ) | $ | 596.4 | |||||||
Impact of foreign exchange1 | (5.7 | ) | — | 5.7 | — | |||||||||||
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Change excluding foreign exchange | $ | 246.9 | $ | 352.9 | $ | (3.4 | ) | $ | 596.4 | |||||||
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Percentage change in revenue | 28.6 | % | 404.2 | % | (6.9 | )% | 54.1 | % | ||||||||
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Percentage change in revenue excluding foreign exchange | 28.0 | % | 404.2 | % | (2.6 | )% | 54.1 | % | ||||||||
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For the Three Months Ended September 29, 2018 | |||||||||||||||||||
(in millions of U.S. dollars, except percentage amounts) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Eliminations | Total | ||||||||||||||
Change in revenue | $ | 26.4 | $ | (3.2 | ) | $ | 6.9 | $ | (1.7 | ) | $ | 28.4 | |||||||
Impact of foreign exchange 1 | 2.8 | — | 0.2 | — | 3.0 | ||||||||||||||
Change excluding foreign exchange | $ | 29.2 | $ | (3.2 | ) | $ | 7.1 | $ | (1.7 | ) | $ | 31.4 | |||||||
Percentage change in revenue | 6.6 | % | (2.2 | )% | 17.2 | % | 100.0 | % | 4.9 | % | |||||||||
Percentage change in revenue excluding foreign exchange | 7.3 | % | (2.2 | )% | 17.7 | % | 100.0 | % | 5.4 | % | |||||||||
Impact of fewer trading days 2 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Change excluding foreign exchange and impact of fewer trading days | $ | 29.2 | $ | (3.2 | ) | $ | 7.1 | $ | (1.7 | ) | $ | 31.4 | |||||||
Percentage change in revenue excluding foreign exchange and impact of fewer trading days | 7.3 | % | (2.2 | )% | 17.7 | % | 100.0 | % | 5.4 | % | |||||||||
For the Nine Months Ended September 29, 2018 | |||||||||||||||||||
(in millions of U.S. dollars, except percentage amounts) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Eliminations | Total | ||||||||||||||
Change in revenue | $ | 72.5 | $ | (8.4 | ) | $ | 15.5 | $ | (4.3 | ) | $ | 75.3 | |||||||
Impact of foreign exchange 1 | (14.0 | ) | — | (3.5 | ) | — | (17.5 | ) | |||||||||||
Change excluding foreign exchange | $ | 58.5 | $ | (8.4 | ) | $ | 12.0 | $ | (4.3 | ) | $ | 57.8 | |||||||
Percentage change in revenue | 6.4 | % | (1.9 | )% | 12.6 | % | 100.0 | % | 4.4 | % | |||||||||
Percentage change in revenue excluding foreign exchange | 5.2 | % | (1.9 | )% | 9.7 | % | 100.0 | % | 3.4 | % | |||||||||
Impact of fewer trading days 2 | $ | 1.3 | $ | 4.9 | $ | 0.2 | $ | — | $ | 6.4 | |||||||||
Change excluding foreign exchange and impact of fewer trading days | $ | 59.8 | $ | (3.5 | ) | $ | 12.2 | $ | (4.3 | ) | $ | 64.2 | |||||||
Percentage change in revenue excluding foreign exchange and impact of fewer trading days | 5.3 | % | (0.8 | )% | 9.9 | % | 100.0 | % | 3.8 | % |
1 | Impact of foreign exchange is the difference between the current period revenue translated utilizing the current period average foreign exchange rates less the current period revenue translated utilizing the prior period average foreign exchange rates. |
2 | Our Eden business had two fewer trading days, our S&D business had three fewer trading days, and our Aimia business had one fewer trading day for the nine months ended September 29, 2018 as compared to the prior year period. |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
(in millions of U.S. dollars) | September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | ||||||||||||
Revenue, net | ||||||||||||||||
Route Based Services | $ | 397.3 | $ | 349.2 | $ | 1,134.9 | $ | 882.3 | ||||||||
Coffee, Tea and Extract Solutions | 143.4 | 87.3 | 440.2 | 87.3 | ||||||||||||
All Other | 40.2 | 40.2 | 123.3 | 132.4 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 580.9 | $ | 476.7 | $ | 1,698.4 | $ | 1,102.0 | ||||||||
|
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|
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| |||||||||
Gross profit | ||||||||||||||||
Route Based Services | $ | 249.2 | $ | 216.5 | $ | 710.9 | $ | 541.7 | ||||||||
Coffee, Tea and Extract Solutions | 36.8 | 24.5 | 117.9 | 24.5 | ||||||||||||
All Other | 6.8 | 6.7 | 19.9 | 25.4 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 292.8 | $ | 247.7 | $ | 848.7 | $ | 591.6 | ||||||||
|
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|
|
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| |||||||||
Operating income (loss) | ||||||||||||||||
Route Based Services | $ | 34.6 | $ | 21.2 | $ | 66.3 | $ | 44.7 | ||||||||
Coffee, Tea and Extract Solutions | 3.7 | (0.1 | ) | 13.3 | (0.1 | ) | ||||||||||
All Other | 4.7 | 0.7 | 6.9 | 7.5 | ||||||||||||
Corporate | (15.8 | ) | (8.2 | ) | (37.6 | ) | (33.3 | ) | ||||||||
|
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|
|
|
|
|
| |||||||||
Total | $ | 27.2 | $ | 13.6 | $ | 48.9 | $ | 18.8 | ||||||||
|
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|
|
|
|
|
|
2017:
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
(in millions of U.S. dollars) | September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | |||||||||||
Revenue, net | |||||||||||||||
Route Based Services | $ | 423.7 | $ | 397.3 | $ | 1,207.4 | $ | 1,134.9 | |||||||
Coffee, Tea and Extract Solutions | 140.2 | 143.4 | 431.8 | 440.2 | |||||||||||
All Other | 47.1 | 40.2 | 138.8 | 123.3 | |||||||||||
Eliminations | (1.7 | ) | — | (4.3 | ) | — | |||||||||
Total | $ | 609.3 | $ | 580.9 | $ | 1,773.7 | $ | 1,698.4 | |||||||
Gross profit | |||||||||||||||
Route Based Services | $ | 267.4 | $ | 249.2 | $ | 752.8 | $ | 710.9 | |||||||
Coffee, Tea and Extract Solutions | 35.4 | 36.8 | 111.5 | 117.9 | |||||||||||
All Other | 7.7 | 6.8 | 21.1 | 19.9 | |||||||||||
Total | $ | 310.5 | $ | 292.8 | $ | 885.4 | $ | 848.7 | |||||||
Operating income (loss) | |||||||||||||||
Route Based Services 1 | $ | 37.5 | $ | 29.6 | $ | 77.6 | $ | 61.9 | |||||||
Coffee, Tea and Extract Solutions | 5.0 | 3.5 | 12.3 | 13.1 | |||||||||||
All Other | (14.7 | ) | (10.8 | ) | (35.3 | ) | (31.0 | ) | |||||||
Total | $ | 27.8 | $ | 22.3 | $ | 54.6 | $ | 44.0 |
1 | Operating income in our Route Based Services reporting segment for the three and nine months ended September 30, 2017 decreased $4.9 million as a result of adopting ASU 2017-07 (see Note 1 to the Consolidated Financial Statements). |
For the Three Months Ended September 30, 2017 | ||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Total | ||||||||||||
Revenue, net | ||||||||||||||||
Home and office bottled water delivery | $ | 268.0 | $ | — | $ | — | $ | 268.0 | ||||||||
Coffee and tea services | 44.2 | 120.9 | 0.7 | 165.8 | ||||||||||||
Retail | 43.5 | — | 11.7 | 55.2 | ||||||||||||
Other | 41.6 | 22.5 | 27.8 | 91.9 | ||||||||||||
|
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|
|
|
|
|
| |||||||||
Total | $ | 397.3 | $ | 143.4 | $ | 40.2 | $ | 580.9 | ||||||||
|
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|
|
|
|
|
|
(in millions of U.S. dollars) Revenue, net Home and office bottled water delivery Coffee and tea services Retail Other Total (in millions of U.S. dollars) Revenue, net Home and office bottled water delivery Coffee and tea services Retail Other Total (in millions of U.S. dollars) Revenue, net Home and office bottled water delivery Coffee and tea services Retail Other Total For the Nine Months Ended September 30, 2017 Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Total $ 753.7 $ — $ — $ 753.7 134.9 369.6 2.0 506.5 127.8 — 33.9 161.7 118.5 70.6 87.4 276.5 $ 1,134.9 $ 440.2 $ 123.3 $ 1,698.4 For the Three Months Ended October 1, 2016 Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Total $ 235.9 $ — $ — $ 235.9 38.9 72.0 2.0 112.9 42.9 — 10.0 52.9 31.5 15.3 28.2 75.0 $ 349.2 $ 87.3 $ 40.2 $ 476.7 For the Nine Months Ended October 1, 2016 Route
Based
Services Coffee, Tea
and Extract
Solutions All
Other Total $ 575.1 $ — $ — $ 575.1 100.4 72.0 2.0 174.4 127.7 — 37.8 165.5 79.1 15.3 92.6 187.0 $ 882.3 $ 87.3 $ 132.4 $ 1,102.0
2017:
For the Three Months Ended September 29, 2018 | |||||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Eliminations | Total | ||||||||||||||
Revenue, net | |||||||||||||||||||
Home and office bottled water delivery | $ | 271.1 | $ | — | $ | — | $ | — | $ | 271.1 | |||||||||
Coffee and tea services | 45.4 | 113.0 | 0.9 | (1.4 | ) | 157.9 | |||||||||||||
Retail | 61.3 | — | 16.9 | (0.3 | ) | 77.9 | |||||||||||||
Other | 45.9 | 27.2 | 29.3 | — | 102.4 | ||||||||||||||
Total | $ | 423.7 | $ | 140.2 | $ | 47.1 | $ | (1.7 | ) | $ | 609.3 |
For the Nine Months Ended September 29, 2018 | |||||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Eliminations | Total | ||||||||||||||
Revenue, net | |||||||||||||||||||
Home and office bottled water delivery | $ | 759.5 | $ | — | $ | — | $ | — | $ | 759.5 | |||||||||
Coffee and tea services | 139.8 | 349.0 | 2.5 | (3.9 | ) | 487.4 | |||||||||||||
Retail | 177.1 | — | 49.1 | (0.3 | ) | 225.9 |
Other | 131.0 | 82.8 | 87.2 | (0.1 | ) | 300.9 | |||||||||||||
Total | $ | 1,207.4 | $ | 431.8 | $ | 138.8 | $ | (4.3 | ) | $ | 1,773.7 | ||||||||
For the Three Months Ended September 30, 2017 | |||||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Eliminations | Total | ||||||||||||||
Revenue, net | |||||||||||||||||||
Home and office bottled water delivery | $ | 252.5 | $ | — | $ | — | $ | — | $ | 252.5 | |||||||||
Coffee and tea services | 44.2 | 120.9 | 0.7 | — | 165.8 | ||||||||||||||
Retail | 58.6 | — | 11.7 | — | 70.3 | ||||||||||||||
Other | 42.0 | 22.5 | 27.8 | — | 92.3 | ||||||||||||||
Total | $ | 397.3 | $ | 143.4 | $ | 40.2 | $ | — | $ | 580.9 | |||||||||
For the Nine Months Ended September 30, 2017 | |||||||||||||||||||
(in millions of U.S. dollars) | Route Based Services | Coffee, Tea and Extract Solutions | All Other | Eliminations | Total | ||||||||||||||
Revenue, net | |||||||||||||||||||
Home and office bottled water delivery | $ | 715.5 | $ | — | $ | — | $ | — | $ | 715.5 | |||||||||
Coffee and tea services | 134.9 | 369.6 | 2.0 | — | 506.5 | ||||||||||||||
Retail | 165.7 | — | 33.9 | — | 199.6 | ||||||||||||||
Other | 118.8 | 70.6 | 87.4 | — | 276.8 | ||||||||||||||
Total | $ | 1,134.9 | $ | 440.2 | $ | 123.3 | $ | — | $ | 1,698.4 |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
(in millions of U.S. dollars) | September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | ||||||||||||
Net income (loss) from continuing operations | $ | 1.6 | $ | (4.0 | ) | $ | (13.1 | ) | $ | (5.6 | ) | |||||
Interest expense, net | 23.2 | 14.5 | 62.1 | 29.2 | ||||||||||||
Income tax expense (benefit) | 0.9 | 2.9 | 1.0 | (4.8 | ) | |||||||||||
Depreciation & amortization | 49.4 | 41.2 | 141.8 | 102.6 | ||||||||||||
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| |||||||||
EBITDA | $ | 75.1 | $ | 54.6 | $ | 191.8 | $ | 121.4 | ||||||||
Acquisition and integration costs1 | 3.2 | 7.4 | 17.2 | 20.5 | ||||||||||||
Inventorystep-up | — | 4.2 | — | 4.7 | ||||||||||||
Unrealized commodity hedging gain, net | (0.4 | ) | (1.0 | ) | (1.9 | ) | (0.8 | ) | ||||||||
Foreign exchange and other (gains) losses, net | (0.2 | ) | 0.8 | (1.1 | ) | (0.5 | ) | |||||||||
Loss on disposal of property, plant & equipment, net | — | 1.4 | 5.7 | 4.6 | ||||||||||||
Gain on extinguishment of long-term debt | — | — | (1.5 | ) | — | |||||||||||
Share-based compensation costs | 1.9 | 0.2 | 8.7 | 4.4 | ||||||||||||
Other adjustments | 4.3 | 0.9 | 6.3 | 1.8 | ||||||||||||
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| |||||||||
Adjusted EBITDA | $ | 83.9 | $ | 68.5 | $ | 225.2 | $ | 156.1 | ||||||||
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|
|
|
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
(in millions of U.S. dollars) | September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | |||||||||||
Net income (loss) from continuing operations | $ | 8.5 | $ | 1.6 | $ | 25.3 | $ | (13.1 | ) | ||||||
Interest expense, net | 18.9 | 23.2 | 58.3 | 62.1 | |||||||||||
Income tax expense | 1.0 | 0.9 | 4.0 | 1.0 | |||||||||||
Depreciation and amortization | 49.6 | 49.4 | 145.7 | 141.8 | |||||||||||
EBITDA | $ | 78.0 | $ | 75.1 | $ | 233.3 | $ | 191.8 | |||||||
Acquisition and integration costs 1, 2 | 1.6 | 7.7 | 10.8 | 21.7 | |||||||||||
Share-based compensation costs | 10.2 | 1.9 | 16.2 | 8.7 | |||||||||||
Commodity hedging (gain) loss, net | — | (0.4 | ) | 0.3 | (1.9 | ) | |||||||||
Foreign exchange and other losses (gains), net | 0.4 | (0.2 | ) | (10.8 | ) | (1.1 | ) | ||||||||
Loss on disposal of property, plant and equipment, net | 1.2 | — | 3.8 | 5.7 | |||||||||||
Gain on extinguishment of long-term debt | — | — | (7.1 | ) | (1.5 | ) | |||||||||
Gain on sale | — | — | (6.0 | ) | — | ||||||||||
Other adjustments, net 2 | 1.4 | (0.2 | ) | (0.4 | ) | 1.8 | |||||||||
Adjusted EBITDA | $ | 92.8 | $ | 83.9 | $ | 240.1 | $ | 225.2 |
1 | Includes a reduction of $3.4 million and $1.6 million for the three and nine months ended September 29, 2018, and an increase of $0.2 million and $2.4 million |
2 | With the adoption of ASU 2017-07 (see Note 1 to the Consolidated Financial Statements), the gain on pension curtailment of $4.5 million that was previously recorded to acquisition and |
The following table summarizes our adjusted net income (loss) from continuing operations and adjusted net income (loss) per common share from continuing operationsSeptember 30, 2017. This reclassification had no effect on Adjusted EBITDA for the three and nine months ended September 30, 2017.
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
(in millions of U.S. dollars, except share amounts) | September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | ||||||||||||
Net income (loss) from continuing operations | $ | 1.6 | $ | (4.0 | ) | $ | (13.1 | ) | $ | (5.6 | ) | |||||
Acquisition and integration costs | 3.2 | 7.4 | 17.2 | 20.5 | ||||||||||||
Inventorystep-up | — | 4.2 | — | 4.7 | ||||||||||||
Unrealized commodity hedging gain, net | (0.4 | ) | (1.0 | ) | (1.9 | ) | (0.8 | ) | ||||||||
Foreign exchange and other (gains) losses, net | (0.2 | ) | 0.8 | (1.1 | ) | (0.5 | ) | |||||||||
Loss on disposal of property, plant & equipment, net | — | 1.4 | 5.7 | 4.6 | ||||||||||||
Interest payment on 2024 Notes1 | — | 2.4 | — | 2.4 | ||||||||||||
Interest expense on 2020 Notes2 | — | (10.7 | ) | (9.5 | ) | (31.9 | ) | |||||||||
Tax valuation allowance | — | 8.5 | — | 8.5 | ||||||||||||
Gain on extinguishment of long-term debt | — | — | (1.5 | ) | — | |||||||||||
Other adjustments | 4.3 | 0.9 | 6.3 | 1.8 | ||||||||||||
Adjustments for tax effect3 | 0.1 | (4.5 | ) | (1.4 | ) | (10.7 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Adjusted net income (loss) from continuing operations | $ | 8.6 | $ | 5.4 | $ | 0.7 | $ | (7.0 | ) | |||||||
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|
|
|
|
| |||||||||
Adjusted net income (loss) per common share from continuing operations | ||||||||||||||||
Basic | $ | 0.06 | $ | 0.04 | $ | 0.01 | $ | (0.06 | ) | |||||||
Diluted | $ | 0.06 | $ | 0.04 | $ | 0.01 | $ | (0.06 | ) | |||||||
Weighted average common shares outstanding (in millions) | ||||||||||||||||
Basic | 139.2 | 138.2 | 139.0 | 124.9 | ||||||||||||
Diluted | 141.0 | 139.3 | 140.2 | 124.9 |
The following table summarizes our free cash flow and adjusted free cash flow for the three and nine months ended September 30, 2017 and October 1, 2016:
For the Three Months Ended | ||||||||
(in millions of U.S. dollars) | September 30, 2017 | October 1, 2016 | ||||||
Net cash provided by operating activities from continuing operations | $ | 46.2 | $ | 51.1 | ||||
Less: Additions to property, plant & equipment | (38.2 | ) | (32.4 | ) | ||||
|
|
|
| |||||
Free Cash Flow | $ | 8.0 | $ | 18.7 | ||||
|
|
|
| |||||
Plus: | ||||||||
Acquisition and integration cash costs | 4.6 | 14.1 | ||||||
|
|
|
| |||||
Adjusted Free Cash Flow | $ | 12.6 | $ | 32.8 | ||||
|
|
|
|
For the Nine Months Ended | ||||||||
(in millions of U.S. dollars) | September 30, 2017 | October 1, 2016 | ||||||
Net cash provided by operating activities from continuing operations | $ | 138.7 | $ | 71.9 | ||||
Less: Additions to property, plant & equipment | (97.1 | ) | (69.3 | ) | ||||
|
|
|
| |||||
Free Cash Flow | $ | 41.6 | $ | 2.6 | ||||
|
|
|
| |||||
Plus: | ||||||||
Acquisition and integration cash costs | 16.9 | 16.0 | ||||||
|
|
|
| |||||
Adjusted Free Cash Flow | $ | 58.5 | $ | 18.6 | ||||
|
|
|
|
rates of $2.8 million.
All Other net revenue had no change in the third quarter, and decreased $9.1 million, or 6.9%, year to date, respectively, from the comparable prior year periodsperiod due primarily to the impact of unfavorable foreign exchange rates and the loss of a key customer. Excluding the impact of foreign exchange, net revenue increased 1.5% in the third quarter and decreased 2.6% year to date from the comparable prior year periods.
Cost of Sales
Cost of sales represented 49.6% and 50.0% of revenue in the third quarter and year to date, respectively, compared to 48.0% and 46.3% in the comparable prior year periods. The increase in cost of sales as a percentage of revenue was due primarily to the addition of our S&D business.
volumes.
Selling, General and Administrative Expenses
SG&A expensesperiod.
Operating Income
Operating income increased to $27.2office water delivery operations of $22.1 million, partially offset by increases in production costs of $1.5 million, increases in freight costs of $2.1 million and $48.9the unfavorable impact of foreign exchange rates of $0.8 million.
Other Expense (Income), Net
Other expense, net was $1.5increased to $7.7 million in the third quarter and other income, net was $1.1 million year to date compared to other expense, net of $0.2 million and nil in the comparable prior year periods. The increase in other expense, net in the third quarter comparable to the prior year period was due primarily to the reduction of net gains on foreign currency transactions. The increase in other income, net year to date comparable to the prior year period was due primarily to gains recognized on the partial redemption of our DSS Notes.
Interest Expense, Net
Interest expense, net was $23.2 million and $62.1 million for the third quarter and year to date, respectively, compared to $14.5 million and $29.2from $6.8 million in the comparable prior year periodsperiod due primarily to increased volumes.
in January 2018.
period. The effective tax ratesrate for the three and nine months ended September 30, 2017third quarter was 10.5% compared to 36.0% in the comparable prior year period.
comparable prior year period. The effective tax rate differsfor the year to date was 13.7% compared to (8.3)% in the comparable prior year period.
The pending transaction with Refresco is anticipated to generate a gain on sale which could result in a U.S. valuation allowance release and recognition of a material income tax benefit within the next twelve months.
2018.
30, 2017. Our cash and cash equivalents balance as of September 29, 2018 includes $12.5 million of cash proceeds received from the sale of the Traditional Business that are being held in escrow by a third party escrow agent to secure potential indemnification claims. The escrow will be released, subject to any amounts for pending indemnification claims, on the eighteen month anniversary of the closing date of the Transaction. In addition, our cash and cash equivalents balances as of September 29, 2018 and December 30, 2017, include margin account balances related to our coffee futures of $15.4 million and $5.3 million, respectively. We are required to maintain margin account balances in accordance with futures market and broker regulations.
We intend to use However, the proceeds of the Refresco transaction to repaycovenants in our outstanding ABL facility indebtednesssubject such purchases to certain limitations and to redeem the 5.375% senior notes due 2022 from our discontinued operations and the remaining DSS Notes from our continuing operations.
conditions.
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, | October 1, | September 30, | October 1, | |||||||||||||
(in millions of U.S. dollars) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net cash provided by operating activities from continuing operations | $ | 46.2 | $ | 51.1 | $ | 138.7 | $ | 71.9 | ||||||||
Net cash used in investing activities from continuing operations | (41.4 | ) | (944.8 | ) | (129.6 | ) | (1,028.8 | ) | ||||||||
Net cash (used in) provided by financing activities from continuing operations | (6.7 | ) | (30.6 | ) | 605.7 | 816.4 | ||||||||||
Cash flows from discontinued operations: | ||||||||||||||||
Net cash provided by operating activities from discontinued operations | 47.4 | 44.9 | 56.1 | 87.5 | ||||||||||||
Net cash used in investing activities from discontinued operations | (13.3 | ) | (8.2 | ) | (36.7 | ) | (29.3 | ) | ||||||||
Net cash (used in) provided by financing activities from discontinued operations | (9.2 | ) | 257.9 | (610.5 | ) | 128.3 | ||||||||||
Effect of exchange rate changes on cash | 2.0 | (4.0 | ) | 6.4 | (4.2 | ) | ||||||||||
|
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|
|
|
|
|
| |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 25.0 | (633.7 | ) | 30.1 | 41.8 | |||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 123.2 | 752.6 | 118.1 | 77.1 | ||||||||||||
|
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|
|
|
|
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| |||||||||
Cash & cash equivalents, end of period | 148.2 | 118.9 | 148.2 | 118.9 | ||||||||||||
Cash & cash equivalents from discontinued operations, end of period | 66.2 | 27.5 | 66.2 | 27.5 | ||||||||||||
|
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| |||||||||
Cash & cash equivalents from continuing operations, end of period | $ | 82.0 | $ | 91.4 | $ | 82.0 | $ | 91.4 | ||||||||
|
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|
|
Consolidated Financial Statements:
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 29, | September 30, | September 29, | September 30, | ||||||||||||
(in millions of U.S. dollars) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net cash provided by operating activities from continuing operations | $ | 78.2 | $ | 46.2 | $ | 146.1 | $ | 138.7 | |||||||
Net cash used in investing activities from continuing operations | (30.6 | ) | (41.4 | ) | (144.1 | ) | (129.6 | ) | |||||||
Net cash (used in) provided by financing activities from continuing operations | (29.2 | ) | (6.7 | ) | (341.5 | ) | 605.7 | ||||||||
Cash flows from discontinued operations: | |||||||||||||||
Net cash (used in) provided by operating activities from discontinued operations | (5.6 | ) | 47.4 | (93.6 | ) | 56.1 | |||||||||
Net cash (used in) provided by investing activities from discontinued operations | — | (13.3 | ) | 1,228.6 | (36.7 | ) | |||||||||
Net cash (used in) financing activities from discontinued operations | — | (9.2 | ) | (769.7 | ) | (610.5 | ) | ||||||||
Effect of exchange rate changes on cash | 0.5 | 2.0 | (8.0 | ) | 6.4 | ||||||||||
Net increase in cash, cash equivalents and restricted cash | 13.3 | 25.0 | 17.8 | 30.1 | |||||||||||
Cash and cash equivalents and restricted cash, beginning of period | 162.4 | 123.2 | 157.9 | 118.1 | |||||||||||
Cash and cash equivalents and restricted cash, end of period | 175.7 | 148.2 | 175.7 | 148.2 | |||||||||||
Cash and cash equivalents and restricted cash of discontinued operations, end of period | — | 66.2 | — | 66.2 | |||||||||||
Cash and cash equivalents and restricted cash from continuing operations, end of period | $ | 175.7 | $ | 82.0 | $ | 175.7 | $ | 82.0 |
period.
proceeds received from the sale of our PCS business and proceeds received from the sale of equity securities.
6.75% senior notes due 2020 in the prior year period.
29, 2018.
Except as described below, there were
In March 2017, we issued $750.0 million of 5.500% senior notes due April 1, 2025. The interest on the notes is payable semi-annually on April 1st and October 1st of each year commencing October 1, 2017. We used a portion of these proceeds to redeem $202.3 million aggregate principal amount of our 2020 Notes in a cash tender offer in March 2017, $422.7 million to redeem the remaining aggregate principal amount of our 2020 Notes in April 2017 and $100.0 million to redeem a portion of the aggregate principal amount of our DSS Notes in May 2017.
In connection with
29, 2018.
Consolidated Financial Statements.
Reference is made to the risk factors described in our 20162017 Annual Report as updated byand our Quarterly Report on Form10-Q for the quarter ended July 1, 2017. At the time of this filing, there haveJune 30, 2018.
On July 24, 2017, we entered into a Share Purchase Agreement with Refresco Group N.V., a Netherlands limited liability company (“Refresco”), to sell our Traditional Business in the United States, Canada, Mexico and United Kingdom for $1.25 billion in cash. The transaction, which is expected to close near the end of 2017, is subject to certain customary closing conditions, including regulatory approval from the United Kingdom. If any closing conditions are not met, the closing of the transaction may be delayed or fail to occur, and we may not achieve the intended benefits we anticipate. Other risks and uncertainties related to the pending transaction include, among others: the difficulties in the separation of operations, services, products and personnel; the need to provide significant ongoing post-closing transition support to Refresco; and the obligation to indemnify or reimburse Refresco for certain past liabilities of the divested business. In addition, we have incurred and will continue to incur significant costs, expenses and fees for professional services and other transaction costs in connection with the transaction, as well as the diversion of management resources, for which we will receive little or no benefit if the closing of the transaction does not occur. We may not be successful in managing these or any other significant risks that we may encounter arising from the transaction, which could have a material adverse effect on our business.
Total Number of Common Shares Purchased | Average Price Paid per Common Share | Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Common Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
July 1 - July 31, 2018 | — | $ | — | — | $ | 34,037,418 | |||||||
August 1 - August 31, 2018 | 1,202,704 | $ | 15.49 | 1,202,704 | $ | 15,454,541 | |||||||
September 1 - September 30, 2018 | 358,032 | $ | 15.30 | 358,032 | $ | 10,000,143 | |||||||
Total | 1,560,736 | 1,560,736 |
Total Number of | Maximum Number | |||||||||||||||
Common Shares | (or Dollar Value) of | |||||||||||||||
Total | Purchased as | Common Shares | ||||||||||||||
Number of | Average Price | Part of Publicly | that May Yet Be | |||||||||||||
Common Shares | Paid per | Announced Plans | Purchased Under the | |||||||||||||
Purchased | Common Share | or Programs | Plans or Programs | |||||||||||||
July 2017 | — | $ | — | N/A | N/A | |||||||||||
August 2017 | 13,770 | $ | 15.33 | N/A | N/A | |||||||||||
September 2017 | — | $ | — | N/A | N/A | |||||||||||
|
| |||||||||||||||
Total | 13,770 | |||||||||||||||
|
|
Total Number of Common Shares Purchased | Average Price Paid per Common Share | Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Common Shares that May Yet Be Purchased Under the Plans or Programs | |||||||
July 1 - July 31, 2018 | — | $ | — | N/A | N/A | |||||
August 1 - August 31, 2018 | 13,688 | $ | 15.49 | N/A | N/A | |||||
September 1 - September 29, 2018 | — | $ | — | N/A | N/A | |||||
Total | 13,688 |
Incorporated by Reference | Filed Herewith | |||||||
Exhibit No. | Description of Exhibit | Form | Exhibit | Filing Date | File No. | |||
3.1 | 8-A | 3.1 | 5/4/2018 | 001-31410 | ||||
3.2 | 8-A | 3.2 | 5/4/2018 | 001-31410 | ||||
10.1 | 8-K | 10.1 | 8/3/2018 | 001-31410 | ||||
10.2 | 8-K | 10.2 | 8/3/2018 | 001-31410 | ||||
10.3 | 8-K | 10.3 | 8/3/2018 | 001-31410 | ||||
31.1 | * | |||||||
31.2 | * | |||||||
32.1 | ||||||||
32.2 | ||||||||
101 | The following financial statements from Cott Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2018, filed November 8, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Equity, (vi) Notes to the Consolidated Financial Statements. | * | ||||||
COTT CORPORATION | |||||
(Registrant) | |||||
Date: November | /s/ Jay Wells | ||||
Jay Wells | |||||
Chief Financial Officer | |||||
(On behalf of the Company) | |||||
Date: November | /s/ Jason Ausher | ||||
Jason Ausher | |||||
Chief Accounting Officer | |||||
(Principal Accounting Officer) |
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