TOA BAJA, Puerto Rico, May 24 /PRNewswire/ -- Pepsi-Cola Puerto Rico Bottling Company (NYSE: PPO) today reported results for the first quarter ended March 31, 1999. Net sales increased slightly to $23.3 million in the first quarter compared to $22.9 million in 1998. The Company reported a net loss of ($2.9 million) for the first quarter, or ($0.13) per share, compared with ($1.1 million) or ($0.05) per share for the same period in 1998. Despite higher sales and lower operating expenses in the first quarter of 1999, the absence of a credit to revenue and a tax benefit in the first quarter of 1998 caused the loss to widen in 1999. Case volume sales increased nine percent in the first quarter of 1999. The increase was driven primarily by the volume increase in cans and higher overall pricing, but the revenue increase was largely offset by lower sales of fountain products and home-delivered bulk water in the quarter. The home-delivered bulk water business was included in the sale of Pepsi-Cola Puerto Rico Bottling Company's Cristalia Water Company in April. This transaction included an asset impairment loss of $267,000 in Pepsi-Cola Puerto Rico's first quarter. The Net loss is attributable to the asset impairment loss, as well as a decline in gross profit of approximately 12 percent, to $5.3 million in 1999, from $6.0 million in the first quarter of 1998. Accordingly, the Company's gross margin was 22.7 percent for the first quarter of 1999, as compared to 26.2 percent for the prior year. This decline was primarily the result of increased production line repair and maintenance expenses, as well as a modest shift in product mix toward cans. These factors were somewhat offset by a decline in sales, general and administrative expenses, so operating income declined to ($2.7 million) in 1999 from ($2.0 million) in 1998. In addition, there was an absence of the tax benefit from last year. "We continue to implement our strategy to return Pepsi-Cola Puerto Rico Bottling Company to profitability, and feel we are making progress toward that goal," said Robert C. Pohlad, chairman and CEO. "We are focusing on key areas, such as improving our production facilities and working to solidify our customer relationships in an effort to generate positive results for the Company in 1999. Some of our initiatives require time to generate positive earnings impact." Pepsi-Cola Puerto Rico switched from a September 30 year-end in 1998, to a December 31 year-end in 1999. First quarter 1999 results are being compared to the corresponding January through March time period in 1998. Pepsi-Cola Puerto Rico distributes and markets Pepsi(R) products, fruit juice products under the Welch's(R) trademark, and Cristalia(TM) bottled water in Puerto Rico. The Company was the first Caribbean soft-drink bottler to list its shares on the New York Stock Exchange. This release contains forward-looking statements of expected future developments. The Company wishes to insure such statements are accompanied by meaningful cautionary statements pursuant to the safe harbor established in the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this release refer to the expectations regarding achieving additional cost savings and improved profitability. These forward-looking statements reflect management's expectation and are based upon currently available data; however, actual results are subject to future events and uncertainties, which could materially affect actual performance. The Company's future performance also involves a number of risks and uncertainties. Among the factors that can cause actual to differ materially are: inability to achieve additional cost savings and continued competitive pressures with respect to pricing and volume in the Puerto Rico market, which could result in continued erosion of market share; unexpected developments which prevent improved results from the Company's marketing activities; and other factors, including economic, climatic and political conditions in Puerto Rico, and the impact of such conditions on consumer spending. PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31 Unaudited (Dollars in thousands, except share data) 1999 1998 OPERATIONS: Net Sales $23,267 $22,943 Cost of Sales 17,997 16,931 Gross Profit 5,270 6,012 Selling, general and administrative expenses 7,703 8,033 Losses on asset impairments 267 -- Loss from operations (2,700) (2,021) OTHER INCOME (EXPENSES): Interest expense (442) (629) Interest income 163 156 Other, net 102 282 (177) (191) LOSS BEFORE INCOME TAXES (2,877) (2,212) INCOME TAX BENEFIT (EXPENSE) (17) 1,061 NET LOSS $(2,894) $(1,151) COMPREHENSIVE INCOME (LOSS) $(2,894) $(1,151) NET LOSS PER COMMON SHARE $(0.13) $(0.05) NET LOSS PER COMMON SHARE-ASSUMING DILUTION $(0.13) $(0.05) WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING (IN THOUSANDS) 21,690 21,500 EBITDA $(1,271) $(197) Earnings (2,894) (1,151) Interest 442 629 Tax 17 (1,061) Depreciation 1,164 1,386 Amortization -- -- (1,271) (197)  