Plastic bottles filled with soda prior to being labelled are carried on conveyor belt at the soft drink maker Cott's bottling plant in this file photo.Fernando Morales/The Globe and Mail
Beverage maker Cott Corp. has instituted a new quarterly dividend despite a decline in both third-quarter revenue and profit.
Cott says the dividend will be 6 cents per share payable Dec. 20 to shareholders of record at the close of business on Dec. 4.
"We have a track record of strong cash generation for the past three years and this, coupled with our increased confidence in our business model, allow us to allocate some of our cash generation to shareholders in the form of a dividend," CEO Jerry Fowden said in remarks accompanying Cott's earnings report.
"We believe this will be well received by our shareholders."
Cott says it earned net income attributable to shareholders of $14.5-million (U.S.) or 15 cents per diluted share on revenue of $584-million in the three months ended Sept. 29.
That was down from $16.2-million or 17 cents per share on revenue of $611-million in the same 2011 period.
However, gross profit as a percentage of revenue increased 140 basis points to 12.5 per cent from 11.1 per cent and EBITDA increased six per cent to $55-million from $52-million.
EBITDA, or earnings before income tax, depreciation and amortization is a non-standard accounting term that many firms believe gives a better picture of a company's position that simple statements of revenue and profit.
Analysts had expected that Cott would face pressure on its expenses as costs rise on their key ingredients like sugar and corn syrup, as well as the aluminum used to make its cans.
The company has already raised price to attempt to keep those costs down.
Cott is the world's largest distributor of store-brand beverages, with about 4,000 employees and soft drink, juice, water and other beverage bottling plants in the United States, Canada, the United Kingdom and Mexico.
Cott, one of the world's largest producers of beverages on behalf of retailers, brand owners and distributors, said the company's exit from low-margin businesses was a factor in volume declines in both North America and the United Kingdom.
Volume in Mexico dropped by a third to six million cases primarily due to the loss of a regional brand licence, part ly offset by increased contract manufacturing volume.
Revenue from RCI concentrate increased 55 per cent to $9-million due primarily to increased volume from a new customer in South America and the timing of shipments to a customer in Asia.