Coca-Cola Bottling Co. Consolidated Reports Third Quarter And First Nine Months 2013 Results

Coca-Cola Bottling Co. Consolidated (NASDAQ: COKE) today announced it earned $16.2 million, or basic net income per share of $1.75, on net sales of $434.5 million for the third quarter of 2013, compared to net income of $10.1 million, or basic net income per share of $1.09, on net sales of $419.9 million for the third quarter of 2012. The results for the third quarter of 2013 included a $0.1 million decrease in income tax expense due to the release of a valuation allowance for certain deferred tax assets, $0.9 million of after-tax gains related to changes in reserves for uncertain tax positions due to lapse of statute of limitations, and a $2.3 million decrease in income tax expense due to recent legislation requiring a change in the blended deferred state income tax rate. The results for the third quarter of 2012 included $0.6 million of after-tax gains ($1.0 million on a pre-tax basis) due to mark-to-market adjustments on commodity hedges and a $0.4 million increase in income tax expense due to recording a valuation allowance for certain deferred tax assets.

On a comparable basis, the Company earned $12.7 million in the third quarter of 2013, or comparable basic net income per share of $1.38, versus $9.8 million in the third quarter of 2012, or comparable basic net income per share of $1.06.

The following table reconciles reported GAAP net income and basic net income per share to comparable net income and basic net income per share for the third quarters of 2013 and 2012:
     
Third Quarter
Net Income Basic Net Income Per Share
In Thousands, Except Per Share Amounts   2013     2012     2013     2012  
 
Reported net income (GAAP) $ 16,169 $ 10,079 $ 1.75 $ 1.09
 
Net gain on commodity hedges, net of tax - (629 ) - (0.07 )
Valuation allowance for certain deferred tax assets (94 ) 399 (0.01 ) 0.04
Change in reserves for uncertain tax positions due to lapse
of statute of limitations (895 ) (217 ) (0.10 ) (0.02 )
Change in deferred state income tax rate due to legislation (2,261 ) - (0.24 ) -
Other income tax changes   (188 )   212     (0.02 )   0.02  
 
Total   (3,438 )   (235 )   (0.37 )   (0.03 )
 
Comparable net income (a) $ 12,731   $ 9,844   $ 1.38   $ 1.06  

(a) This non-GAAP financial information is provided to allow investors to more clearly evaluate operating performance and business trends for the third quarters of 2013 and 2012. Management uses this information to review results excluding items that are not necessarily indicative of ongoing results.

The Company earned $32.3 million, or basic net income per share of $3.49, on net sales of $1,247.0 million for the first nine months of 2013, compared to net income of $25.4 million, or basic net income per share of $2.75, on net sales of $1,227.7 million for the first nine months of 2012. The results for the first nine months of 2013 included $0.3 million of after-tax losses ($0.5 million on a pre-tax basis) due to mark-to-market adjustments on commodity hedges, $0.9 million of after-tax gains related to changes in reserves for uncertain tax positions due to lapse of statute of limitations, a $0.4 million decrease to tax expense due to certain favorable tax items associated with the American Taxpayer Relief Act (H.R.8) enacted on January 2, 2013, and a $2.3 million decrease in income tax expense due to recent legislation requiring a change in the blended deferred state income tax rate. The results for the first nine months of 2012 included $0.6 million of after-tax gains ($1.0 million on a pre-tax basis) due to mark-to-market adjustments on commodity hedges and a $1.7 million net increase in income tax expense due to recording a valuation allowance for certain deferred tax assets, changes in reserves for uncertain tax positions and other income tax changes.

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