Cott Corp (USA)(NYSE: COT) stock rose over 6.2% on March 1st, 2018 (as of 2:36PM EST; Source: Google finance) leading to a total increase of over 46.4% in the last one year.
For the fourth quarter of 2017, the Gross profit rose 8% to $279 million, boosted by overall revenue growth as well as margin expansion within their Route Based Services segment. Gross margin as a percentage of revenue reached 48.8% against 49.6% as margin expansion within their Route Based Services segment was offset by lower margin mix within their Coffee, Tea and Extract Solutions segment.
The adjusted EBITDA from continuing operations rose 27% to $70 million on the back of contributions from their two key reporting segments. Like-for-like revenue rose over 7% to $162 million during the quarter. The combined coffee and tea pounds rose 7% with revenues rising 8% to $602 million. Major drivers of growth were new SKUs, additional customer locations, and business wins primarily within the national accounts side of the quick-serve restaurant and convenience retail channels.
The North America business for full-year 2017 revenue rose 3%. The revenue rose 5% during the quarter driven by 5 gallon water growth, ongoing success of their profitability improvement plan, and growth within their water filtration and retail divisions. The Gross profit for the quarter rose 5% at $161 million and for the year enhanced 3% at $668 million.
The group continued the expansion of their sales force, with a focus on small commercial businesses in 2018. As per their acquisitions, they signed an agreement to acquire Crystal Rock Holdings. Crystal Rock currently generates over $59 million of revenue and roughly $5 million of EBITDA. The group forecasts synergies of $2 million to $3 million from a combination of the elimination of Crystal Rock’s public company cost and from their scale and procurement advantages over the next couple of years, creating a post synergy EBITDA multiple of around 5 times.