Due to the recent deterioration in macroeconomic and market conditions, the company recorded a non-cash, after-tax impairment charge of $696m (or $2.74 per share) in the quarter, related to goodwill and certain intangible assets. Excluding this charge and certain other items, the company earned $0.39 per share compared to $0.48 per share in the prior year period.
For the fourth quarter, net sales declined 1% and the loss from operations totalled $836m compared to income of $273m in the prior year period. Excluding the impact of glaceau and Hansen US product distribution losses, net sales increased 3%, reflecting a 1% increase in sales volume and the ongoing benefit of pricing actions taken earlier in the year. Segment operating profit increased 4%, reflecting continuing strength in the company’s carbonated soft drinks (CSD) business.
For the year, the company reported a loss of $1.23 per share compared to earnings of $1.96 per share in the prior year period. Excluding certain items, the company earned $1.85 per share compared to $1.98 per share in the prior year period. The company generated $709m of cash from operating activities. Since its separation from Cadbury in May 2008, the company has repaid $395m of principal of its floating rate term loan, covering its 2008 and 2009 obligations.
DPS president and CEO, Larry Young, said, “With the US economy facing its worst recession in post-war times, and rising unemployment rates, consumers have dramatically changed the way they shop. Value, quality, product satisfaction and increased at-home usage are key factors in purchasing decisions.
“For the quarter, our CSD case volume contracted only slightly at a time when liquid refreshment beverages declined low single digits. Weak demand for our premium products, especially Snapple, continued during the fourth quarter and in to 2009.
“While we have certainly increased our focus on cost containment, we remain committed to our long-term strategy and continue to invest behind growth initiatives. Stepped-up marketing spend and increased media leverage ensure we are reaching more consumers every day.
“In our first year as a public company, and in what is arguably one of the toughest economic environments on record, we’re proud of what we have accomplished so far. Our CSD and value juice momentum continues, and together with expanded distribution of Crush, we’re off to a solid start in 2009. The strength of our brands, the passion of our people and strong relationships with our retail partners and bottlers, along with the realisation of a strengthened, company-owned route-to-market, provide the fuel that will support our growth plans for many years to come.”
Source: Dr Pepper Snapple Group
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