GlobeNewswire Inc | Feb 26, 2021 04:10PM EST

February 26, 2021

-- Fourth quarter 2020 net sales increased 8.5% versus the fourth quarter of 2019, with physical case volume up 8.1%(a). Fourth quarter and full year 2020 results include four additional selling days versus 2019 results. On a comparable(b) basis, net sales and physical case volume increased 3.5% and 2.6%, respectively. -- Fourth quarter 2020 income from operations was $93.6million, up $54.1million versus the fourth quarter of 2019. On an adjusted(b) basis, income from operations increased $45.6million versus the fourth quarter of 2019. -- Full year 2020 income from operations totaled $313.4million, up $132.6million, or 73.4%, versus full year 2019. On an adjusted(b) basis, income from operations grew 57.4% to $307.6million, driven by strong commercial performance and favorable operating expenses.

Key Results

Fourth Quarter Fiscal Year (inmillions,except per 2020 2019 Change 2020 2019 Changesharedata)Physicalcase 90.7 83.9 8.1 % 358.8 343.2 4.5 %volumeNet sales $ 1,278.6 $ 1,178.9 8.5 % $ 5,007.4 $ 4,826.5 3.7 %Gross $ 461.9 $ 413.2 11.8 % $ 1,768.9 $ 1,670.5 5.9 %profitGross 36.1 % 35.0 % 35.3 % 34.6 % marginIncomefrom $ 93.6 $ 39.5 136.7 % $ 313.4 $ 180.8 73.4 %operationsBasic netincome $ 7.08 $ (1.09 ) $ 8.17 $ 18.40 $ 1.21 $ 17.19 (loss) pershare RetailBeverage Fourth Quarter Fiscal Year Sales(in 2020 2019 Change 2020 2019 Changemillions)Sparkling $ 720.3 $ 653.3 10.3 % $ 2,760.8 $ 2,582.5 6.9 %bottle/canStill $ 402.8 $ 357.0 12.8 % $ 1,641.7 $ 1,558.9 5.3 %bottle/canFountain^ $ 32.5 $ 46.9 (30.6 ) % $ 131.8 $ 197.0 (33.1 ) %(c)

Fourth Quarter and Fiscal Year 2020 Review

CHARLOTTE, N.C., Feb. 26, 2021 (GLOBE NEWSWIRE) -- Coca-Cola Consolidated, Inc. (NASDAQ:COKE) today reported operating results for the fourth quarter and the fiscal year ended December31, 2020.

2020 was an extraordinary year and Im proud of our team for how they responded to the unprecedented challenges we faced throughout the year, said J.Frank Harrison,III, Chairman and Chief Executive Officer. We made decisions early in the pandemic to adjust our operating model and reduce expenses as we navigated an unpredictable business environment. These adjustments, coupled with strong consumer demand for our products, enabled us to deliver incredibly strong operating results and make strategic investments back into our business.

Coca-Cola Consolidated is a purpose-driven company and 2020 was a great example of how we bring our Purpose to life, Mr.Harrison continued. As the pandemic spread across the country, the health and safety of our teammates was a top priority. We reacted quickly by securing protective equipment for our teammates and significantly adjusted our work routines to keep our teammates safe. As the pandemic continues, we remain committed to keeping our teammates health and well-being at the forefront as we push forward into 2021.

Results for the fourth quarter and the fiscal year ended December31, 2020 include four additional days compared to the same fiscal period of 2019. For comparison purposes, the estimated impact of the four additional days has been excluded from our comparable(b) and adjusted(b) results. The Company estimates the impact of the four additional days to be as follows:

(in thousands) Results of extra days in fiscal periodsPhysical case volume 4,586 Net sales $ 58,899 Gross profit $ 21,707 SD&A expenses $ 14,353 Income from operations $ 7,354

Physical case volume increased 8.1% in the fourth quarter of 2020. On a comparable(b) basis, physical case volume increased 2.6% as Sparkling beverages maintained steady growth and certain Still brands, including BodyArmor, AHA and Monster, accelerated as compared to the prior year. Sparkling category volume increased 1.1% on a comparable(b) basis in the fourth quarter of 2020, while comparable(b) Still beverage volume grew 6.8%. Sales of multi-serve packages in larger retail stores remained very strong, while single-serve sales improved in small stores and accounts where our products are consumed on-premise.

Revenue increased 8.5% in the fourth quarter of 2020 and increased 3.5% excluding the impact of the additional four days. The increase in revenue from our bottle/can Sparkling beverages was driven primarily by price realization on multi-serve packages. Sales of multi-serve PET packages were especially strong in the quarter as we adjusted our commercial plans to emphasize these packages to complement our assortment of multi-pack can products in take-home outlets. Revenue from our Still beverages increased in the fourth quarter of 2020 as a result of higher sales volume across multiple selling channels.

For fiscal year 2020, revenue increased $180.8million, or 3.7%. While sales within our Sparkling and Still categories grew 6.9% and 5.3%, respectively, for fiscal year 2020 fountain syrup sales decreased 33.1%. The decline in fountain sales reflects the COVID-related restrictions that are in place throughout our territory.

Gross profit increased $48.7million, or 11.8%, in the fourth quarter of 2020, while gross margin increased 110basis points to 36.1%. On an adjusted(b) basis, gross profit increased $32.8million, or 8.1%, in the fourth quarter of 2020. The improvement in gross profit and gross margin was primarily due to price realization within our Sparkling category, favorable input costs and the efficiency of our manufacturing operations. Gross profit in fiscal year 2020 increased $98.4million, or 5.9%, while gross margin increased 70 basis points to 35.3%. On an adjusted(b) basis, gross profit increased $80.7million compared to fiscal year 2019.

COVID related quarantines and other restrictions we experienced in 2020 caused a severe downturn in parts of our business, but they also resulted in a significant increase in demand for our products across our take-home channels. In response, our team worked diligently throughout 2020 to meet this elevated demand and optimize our commercial plan as well as our manufacturing and distribution network, said Dave Katz, President and Chief Operating Officer. Our full-year financial results reflect the strong benefit of the pricing realization, manufacturing efficiencies and cost savings we achieved throughout the year. The combination of these factors along with favorable input costs, drove our operating income up more than $100million to $313million for the full year.

Selling, delivery and administrative (SD&A) expenses in the fourth quarter of 2020 decreased $5.4million, or 1.4%. SD&A expenses as a percentage of net sales decreased 290basis points in the fourth quarter of 2020. Adjusted(b) SD&A expenses in the fourth quarter of 2020 decreased $12.8million, or 3.5%. The decrease in SD&A expenses related to lower labor costs as a result of adjustments we made to our operating model earlier in the year in response to COVID-19-related impacts on our business. Additionally, we generated favorable results in a number of expense categories due to the diligent management of our variable operating expenses. SD&A expenses in fiscal year 2020 decreased $34.2million, or 2.3%. SD&A expenses as a percentage of net sales decreased 180basis points in fiscal year 2020 as compared to fiscal year 2019.

We are very optimistic about our top line growth opportunities in 2021 as we execute a robust commercial plan with our brand partners, but we are also mindful of the continuing impact COVID-19 is having on our communities and the uncertainty it brings to our operating environment, Mr. Katz continued. When impacted business channels reopen and consumer buying patterns normalize, we expect our operating costs to increase as we adjust our business model to properly grow and service our full portfolio of customers. While we expect to achieve another solid year of financial performance in 2021, the combination of higher operating expenses and expected input cost inflation will likely result in 2021 income from operations below the record performance we reached in 2020.

Income from operations in the fourth quarter of 2020 was $93.6million, compared to $39.5million in the fourth quarter of 2019, an increase of 137%. Adjusted(b) income from operations in the fourth quarter of 2020 was $84.0million, an increase of 119%. For fiscal year 2020, income from operations increased $132.6million to $313.4million. Adjusted(b) income from operations in fiscal year 2020 was $307.6million, an increase of $112.2million, or 57%, compared to fiscal year 2019.

Net income in the fourth quarter of 2020 was $66.4million, compared to a net loss of $10.2million in the fourth quarter of 2019, an improvement of $76.5million. Net income in the fourth quarter of 2019 was adversely impacted by fair value adjustments to our acquisition related contingent consideration liability, driven primarily by changes in the underlying discount rate used to value the liability. Fair value adjustments to this liability are non-cash in nature and a routine part of our quarterly financial closing process. Net income increased $161.1million for fiscal year 2020 to $172.5million, as compared to fiscal year 2019.

Cash flows provided by operations for fiscal year 2020 were $494.5million, compared to $290.4million for fiscal year 2019. The significant increase in operating cash flows for fiscal year 2020 was a result of our strong operating performance and working capital improvement.

(a) All comparisons are to the corresponding period in the prior year unless specified otherwise.(b) The discussion of the results for the fourth quarter and the fiscal year ended December31, 2020 includes selected non-GAAP financial information, such as "comparable" and adjusted results. The schedules in this news release reconcile such non-GAAP financial measures to the most directly comparable GAAP financial measures.(c) Fountain syrups are dispensed through equipment that mixes with carbonated or still water, enabling fountain retailers to sell finished products to consumers in cups or glasses.

About Coca-Cola Consolidated, Inc.

Coca-Cola Consolidated is the largest Coca-Cola bottler in the United States. Our Purpose is to honor God in all we do, serve others, pursue excellence and grow profitably. For over 118years, we have been deeply committed to the consumers, customers and communities we serve and passionate about the broad portfolio of beverages and services we offer. We make, sell and distribute beverages of TheCoca-ColaCompany and other partner companies in more than 300brands and flavors across 14states and the District of Columbia to over 66million consumers.

Headquartered in Charlotte, N.C., Coca-Cola Consolidated is traded on the NASDAQ Global Select Market under the symbol COKE. More information about the Company is available at www.cokeconsolidated.com. Follow Coca-Cola Consolidated on Facebook, Twitter, Instagramand LinkedIn.

Cautionary Information Regarding Forward-Looking Statements

Certain statements contained in this news release are forward-looking statements that involve risks and uncertainties. The words anticipate, believe, expect, project, may, will, should, could and similar expressions are intended to identify those forward-looking statements. These forward-looking statements reflect the Companys best judgment based on current information, and, although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the projected results and expectations discussed in this news release. Factors that might cause the Companys actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: increased costs, disruption of supply or shortages of raw materials, fuel and other supplies; the reliance on purchased finished products from external sources; changes in public and consumer perception and preferences, including concerns related to obesity, artificial ingredients, product safety and sustainability and brand reputation; changes in government regulations related to nonalcoholic beverages, including regulations related to obesity, public health, artificial ingredients and product safety and sustainability; technology failures or cyberattacks on our technology systems or our effective response to technology failures or cyberattacks on our customers, suppliers or other third parties technology systems; decreases from historic levels of marketing funding support provided to us by TheCocaColaCompany and other beverage companies; material changes in the performance requirements for marketing funding support or our inability to meet such requirements; decreases from historic levels of advertising, marketing and product innovation spending by TheCocaColaCompany and other beverage companies, or advertising campaigns that are negatively perceived by the public; any failure of the several CocaCola system governance entities of which we are a participant to function efficiently or on our best behalf and any failure or delay of ours to receive anticipated benefits from these governance entities; provisions in our beverage distribution and manufacturing agreements with TheCocaColaCompany that could delay or prevent a change in control of us or a sale of our CocaCola distribution or manufacturing businesses; the concentration of our capital stock ownership; unfavorable changes in the general economy; changes in our top customer relationships and marketing strategies; lower than expected net pricing of our products resulting from continued and increased customer and competitor consolidations and marketplace competition; our inability to meet requirements under our beverage distribution and manufacturing agreements; the effect of changes in our level of debt, borrowing costs and credit ratings on our access to capital and credit markets, operating flexibility and ability to obtain additional financing to fund future needs; the failure to attract, train and retain qualified employees while controlling labor costs, and other labor issues; the failure to maintain productive relationships with our employees covered by collective bargaining agreements, including failing to renegotiate collective bargaining agreements; changes in accounting standards; our use of estimates and assumptions; changes in the inputs used to calculate our acquisition related contingent consideration liability; changes in tax laws, disagreements with tax authorities or additional tax liabilities; changes in legal contingencies; natural disasters, changing weather patterns and unfavorable weather; climate change or legislative or regulatory responses to such change; and the COVID-19 pandemic and other pandemic outbreaks in the future. These and other factors are discussed in the Companys regulatory filings with the Securities and Exchange Commission, including those in Item 1A. Risk Factors of the Companys Annual Report on Form 10-K for the fiscal year ended December29, 2019 and in Item 1A. Risk Factors of the Companys Quarterly Report on Form 10-Q for the quarter ended September27, 2020. The forward-looking statements contained in this news release speak only as of this date, and the Company does not assume any obligation to update them, except as required by applicable law.

FINANCIAL STATEMENTSCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)

Fourth Quarter Fiscal Year(in thousands,except per 2020 2019 2020 2019share data)Net sales $ 1,278,637 $ 1,178,949 $ 5,007,357 $ 4,826,549 Cost of sales 816,762 765,758 3,238,448 3,156,047 Gross profit 461,875 413,191 1,768,909 1,670,502 Selling,delivery and 368,280 373,651 1,455,531 1,489,748 administrativeexpensesIncome from 93,595 39,540 313,378 180,754 operationsInterest 8,957 10,144 36,735 45,990 expense, netOther (income) (4,223 ) 32,796 35,603 100,539 expense, netIncome (loss)before income 88,861 (3,400 ) 241,040 34,225 taxesIncome tax 20,032 4,864 58,943 15,665 expenseNet income 68,829 (8,264 ) 182,097 18,560 (loss)Less: Netincomeattributable 2,451 1,906 9,604 7,185 tononcontrollinginterestNet income(loss)attributable $ 66,378 $ (10,170 ) $ 172,493 $ 11,375 to Coca-ColaConsolidated,Inc. Basic netincome (loss)per sharebased on netincome (loss) attributableto Coca-ColaConsolidated,Inc.:Common Stock $ 7.08 $ (1.09 ) $ 18.40 $ 1.21 Weightedaverage numberof Common 7,141 7,141 7,141 7,141 Stock sharesoutstanding Class B Common $ 7.08 $ (1.09 ) $ 18.40 $ 1.21 StockWeightedaverage numberof Class B 2,232 2,232 2,232 2,229 Common Stocksharesoutstanding Diluted netincome (loss)per sharebased on netincome (loss) attributableto Coca-ColaConsolidated,Inc.:Common Stock $ 7.05 $ (1.08 ) $ 18.30 $ 1.21 Weightedaverage numberof CommonStock shares 9,405 9,373 9,427 9,417 outstanding ?assumingdilution Class B Common $ 7.04 $ (1.09 ) $ 18.28 $ 1.19 StockWeightedaverage numberof Class BCommon Stock 2,264 2,232 2,286 2,276 sharesoutstanding ?assumingdilution

FINANCIAL STATEMENTSCONDENSED CONSOLIDATED BALANCE SHEETS(UNAUDITED)

(in thousands) December 31, December 29, 2020 2019ASSETS Current Assets: Cash and cash equivalents $ 54,793 $ 9,614 Trade accounts receivable, net 403,825 419,770 Other accounts receivable 86,287 105,505 Inventories 225,757 225,926 Prepaid expenses and other current assets 74,146 69,461 Assets held for sale 6,429 ? Total current assets 851,237 830,276 Property, plant and equipment, net 1,022,722 997,403 Right-of-use assets - operating leases 134,383 111,376 Leased property under financing leases, net 69,867 17,960 Other assets 111,781 113,269 Goodwill 165,903 165,903 Other identifiable intangible assets, net 866,557 890,739 Total assets $ 3,222,450 $ 3,126,926 LIABILITIES AND EQUITY Current Liabilities: Current portion of obligations under operating $ 19,766 $ 15,024 leasesCurrent portion of obligations under financing 5,860 9,403 leasesAccounts payable and accrued expenses 621,434 597,768 Total current liabilities 647,060 622,195 Deferred income taxes 139,423 125,130 Pension and postretirement benefit obligations 792,605 783,397 and other liabilitiesNoncurrent portion of obligations under 119,923 97,765 operating leasesNoncurrent portion of obligations under 69,984 17,403 financing leasesLong-term debt 940,465 1,029,920 Total liabilities 2,709,460 2,675,810 Equity: Stockholders? equity 512,990 346,952 Noncontrolling interest ? 104,164 Total liabilities and equity $ 3,222,450 $ 3,126,926

FINANCIAL STATEMENTSCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)

Fiscal Year(in thousands) 2020 2019Cash Flows from Operating Activities: Net income $ 182,097 $ 18,560 Depreciation expense, amortization of intangible 179,017 179,916 assets and deferred proceeds, netFair value adjustment of acquisition related 31,210 92,788 contingent considerationDeferred income taxes 8,737 3,987 Stock compensation expense ? 2,045 Change in assets and liabilities 78,068 (23,683 )Other 15,332 16,757 Net cash provided by operating activities $ 494,461 $ 290,370 Cash Flows from Investing Activities: Additions to property, plant and equipment $ (202,034 ) $ (171,374 )Other 1,615 (2,303 )Net cash used in investing activities $ (200,419 ) $ (173,677 ) Cash Flows from Financing Activities: Payments on revolving credit facility, term loan $ (325,000 ) $ (690,339 )facility and senior bondsBorrowings under revolving credit facility and 235,000 615,339 proceeds from issuance of senior notesPurchase of noncontrolling interest in Piedmont (100,000 ) ? Coca-Cola Bottling PartnershipPayments of acquisition related contingent (43,400 ) (27,182 )considerationCash dividends paid (9,374 ) (9,369 )Principal payments on financing lease obligations (5,861 ) (8,656 )Debt issuance fees (228 ) (420 )Net cash used in financing activities $ (248,863 ) $ (120,627 ) Net increase (decrease) in cash during period $ 45,179 $ (3,934 )Cash at beginning of period 9,614 13,548 Cash at end of period $ 54,793 $ 9,614

NON-GAAP FINANCIAL MEASURES(d) The following tables reconcile reported results (GAAP) to comparable and adjusted results (non-GAAP):

Fourth Quarter Fiscal Year (in millions) 2020 2019 Change 2020 2019 ChangePhysical case volume 90.7 83.9 8.1 % 358.8 343.2 4.5 %Volume related to extra 4.6 ? 4.6 ? days in fiscal yearComparable physical 86.1 83.9 2.6 % 354.2 343.2 3.2 %case volume

Fourth Quarter 2020(in Income Income Basic netthousands, Net sales Gross SD&A from before Net income perexcept per profit expenses operations income taxes income shareshare data)Reportedresults $ 1,278,637 $ 461,875 $ 368,280 $ 93,595 $ 88,861 $ 66,378 $ 7.08 (GAAP)Fair valueadjustment ofacquisition ? ? ? ? (3,858 ) (2,963 ) (0.31 ) relatedcontingentconsiderationFair valueadjustmentsfor commodity ? (1,072 ) 1,740 (2,812 ) (2,812 ) (2,109 ) (0.22 ) derivativeinstrumentsSupply chainand asset ? 543 (5 ) 548 548 403 0.04 optimizationResults ofextra days in (58,899 ) (21,707 ) (14,353 ) (7,354 ) (7,354 ) (5,516 ) (0.59 ) fiscal yearOther tax ? ? ? ? ? 1,103 0.11 adjustmentsTotalreconciling (58,899 ) (22,236 ) (12,618 ) (9,618 ) (13,476 ) (9,082 ) (0.97 ) itemsAdjustedresults $ 1,219,738 $ 439,639 $ 355,662 $ 83,977 $ 75,385 $ 57,296 $ 6.11 (non-GAAP) Adjusted % )change vs. Q4 3.5 % 8.1 % (3.5 % 118.7 % 2019

Fourth Quarter 2019(in thousands, Income Income Net Basic netexcept per Net sales Gross SD&A from (loss) income incomeshare data) profit expenses operations before (loss) (loss) income taxes per shareReported $ 1,178,949 $ 413,191 $ 373,651 $ 39,540 $ (3,400 ) $ (10,170 ) $ (1.09 ) results (GAAP)Fair valueadjustment ofacquisition ? ? ? ? 30,771 22,954 2.45 relatedcontingentconsiderationFair valueadjustmentsfor commodity ? (7,084 ) 961 (8,045 ) (8,045 ) (6,030 ) (0.64 ) derivativeinstrumentsSupply chainand asset ? 750 (4,952 ) 5,702 5,702 4,267 0.46 optimizationCapitalizationthreshold ? ? (1,194 ) 1,194 1,194 884 0.09 change forcertain assetsOther tax ? ? ? ? ? 2,178 0.24 adjustmentsTotalreconciling ? (6,334 ) (5,185 ) (1,149 ) 29,622 24,253 2.60 itemsAdjustedresults $ 1,178,949 $ 406,857 $ 368,466 $ 38,391 $ 26,222 $ 14,083 $ 1.51 (non-GAAP)

Fiscal Year 2020(in Income Income Basic netthousands, Net sales Gross SD&A from before Net income perexcept per profit expenses operations income taxes income shareshare data)Reportedresults $ 5,007,357 $ 1,768,909 $ 1,455,531 $ 313,378 $ 241,040 $ 172,493 $ 18.40 (GAAP)Fair valueadjustment ofacquisition ? ? ? ? 31,210 23,408 2.50 relatedcontingentconsiderationFair valueadjustmentsfor commodity ? (1,996 ) 791 (2,787 ) (2,787 ) (2,090 ) (0.22 ) derivativeinstrumentsSupply chainand asset ? 4,984 596 4,388 4,388 3,291 0.35 optimizationResults ofextra days in (58,899 ) (21,707 ) (14,353 ) (7,354 ) (7,354 ) (5,516 ) (0.59 ) fiscal yearTotalreconciling (58,899 ) (18,719 ) (12,966 ) (5,753 ) 25,457 19,093 2.04 itemsAdjustedresults $ 4,948,458 $ 1,750,190 $ 1,442,565 $ 307,625 $ 266,497 $ 191,586 $ 20.44 (non-GAAP) Adjusted % )change vs. 2.5 % 4.8 % (2.1 % 57.4 % 2019

Fiscal Year 2019(in thousands, Gross SD&A Income Income Basic netexcept per Net sales profit expenses from before Net income income pershare data) operations income taxes shareReported $ 4,826,549 $ 1,670,502 $ 1,489,748 $ 180,754 $ 34,225 $ 11,375 $ 1.21 results (GAAP)Fair valueadjustment ofacquisition ? ? ? ? 92,788 69,591 7.43 relatedcontingentconsiderationFair valueadjustmentsfor commodity ? (6,602 ) 3,536 (10,138 ) (10,138 ) (7,604 ) (0.81 ) derivativeinstrumentsSupply chainand asset ? 5,625 (4,952 ) 10,577 10,577 7,933 0.85 optimizationCapitalizationthreshold ? ? (7,305 ) 7,305 7,305 5,479 0.58 change forcertain assetsSystemtransformation ? ? (6,915 ) 6,915 6,915 5,200 0.56 expensesTotalreconciling ? (977 ) (15,636 ) 14,659 107,447 80,599 8.61 itemsAdjustedresults $ 4,826,549 $ 1,669,525 $ 1,474,112 $ 195,413 $ 141,672 $ 91,974 $ 9.82 (non-GAAP)

(d) The Company reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP). However, management believes that certain non-GAAP financial measures provide users with additional meaningful financial information that should be considered when assessing the Companys ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Companys performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Companys reported results prepared in accordance with GAAP. The Companys non-GAAP financial information does not represent a comprehensive basis of accounting.

MEDIA CONTACT: INVESTOR CONTACT:Kimberly Kuo Scott AnthonySenior Vice President Public Affairs, Executive Vice PresidentCommunications & Communities & Chief Financial OfficerKimberly.Kuo@cokeconsolidated.com Scott.Anthony@cokeconsolidated.com(704) 557-4584 (704) 557-4633

A PDF accompanying this release is available at: http://ml.globenewswire.com/Resource/Download/def8bc94-7ae2-4bee-84e3-563dc7f435f4