DR PEPPER SNAPPLE GP (DPS) filed Quarterly Report for the period ended 2009-09-30.
DR PEPPER SNAPPLE Group is one of the largest beverage companies in the Americas. They manufacture market and distribute more than 50 brands of carbonated soft drinks juices ready to drink teas mixers and other premium beverages across the United States Canada Mexico and the Caribbean. Dr Pepper Snapple Gp has a market cap of $7.07 billion; its shares were traded at around $27.82 with a P/E ratio of 15.2 and P/S ratio of 1.2.
Highlight of Business Operations:
Volume. Volume (BCS) increased 3% for the three months ended September 30, 2009, compared with the year ago period. In the U.S. and Canada, volumes increased 3% and in Mexico and the Caribbean, volumes increased 9%. CSD volumes increased 4% and NCB volumes increased slightly. The absence of Hansen Natural Corporation (“Hansen”) product sales following the contract termination settlement in the U.S. and Mexico negatively impacted both total volumes and CSD volumes by one percentage point for the three months ended September 30, 2009. In Beverage Concentrates and Latin American Beverages, Crush added an incremental 13 million cases to volume for the three months ended September 30, 2009 due to expanded distribution in the U.S. and the launch of Crush value offerings in Mexico. In CSDs, Dr Pepper volumes increased by 3% compared with the year ago period. Our “Core 4” brands, which include 7UP, Sunkist soda, A&W and Canada Dry (collectively, the “Core 4”) decreased 3% compared to the year ago period. In NCBs, a 6% decline in Snapple was partially offset by a 3% growth in Hawaiian Punch compared with the year ago period. Snapple volume declined primarily due to higher net pricing associated with the Snapple premium product restage and the impact of a slowdown in consumer spending on premium beverage products. We are extending and repositioning our Snapple offerings to support the long term health of the brand.
Gross Profit. Gross profit increased $70 million for the three months ended September 30, 2009, compared with the year ago period as a decrease in commodity costs and the impact of price increases offset the decline in net sales. Gross margin for the three months ended September 30, 2009, increased to 60%, from 53% for the year ago period.
Provision for Income Taxes. The effective tax rates for the three months ended September 30, 2009 and 2008 were 38.0% and 35.8%, respectively. The increase in the effective rate for the three months ended September 30, 2009, was primarily driven by the reduced impact of foreign operations and non-recurring separation related costs of $3 million.
Volume (BCS) increased 5% for the three months ended September 30, 2009, as compared with the year ago period, primarily driven by the expanded distribution of Crush, which added an incremental 12 million cases in 2009. Dr Pepper increased 3% led by the launch of the Cherry line extensions and increased Diet Dr Pepper distribution. The Core 4 brands decreased 2%.
Sales volumes decreased approximately 3% for the three months ended September 30, 2009, compared with the year ago period. The absence of sales of Hansen’s products following the contract termination settlement negatively impacted total volumes by approximately 2%. Total CSD volumes decreased slightly. Dr Pepper volumes increased low single digits led by the launch of the Cherry line extensions, offset by low single digit volume declines within our Core 4 brands. Total NCB volumes remained relatively flat as a shift to value products increased Hawaiian Punch volumes, while other NCB brands showed volume declines.
DPS is in the portfolios of John Keeley of Keeley Fund Management, John Paulson of Paulson & Co., George Soros of Soros Fund Management LLC, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
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