UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 20, 2015
CROWN HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
|
| | | | |
Pennsylvania | | 0-50189 | | 75-3099507 |
(State or Other Jurisdiction of Incorporation or Organization) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
One Crown Way
Philadelphia, Pennsylvania 19154-4599
(215) 698-5100
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS
SIGNATURE
INDEX TO EXHIBITS
EX-99 PRESS RELEASE
2
Item 2.02. Results of Operations and Financial Condition
On July 20, 2015 Crown Holdings, Inc. issued a press release announcing its earnings for the second quarter ended June 30, 2015. A copy of the press release is attached hereto as Exhibit 99 and incorporated herein by reference.
The information in this Report shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") or otherwise subject to the liability of that section, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits.
The following is furnished as an exhibit to this report.
99. Crown Holdings, Inc. press release dated July 20, 2015.
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
| | |
| | |
| | |
| | |
| By: | /s/ David A. Beaver |
| | David A. Beaver |
| | Vice President and Corporate Controller |
Dated: July 20, 2015
4
INDEX TO EXHIBITS
|
| | |
Exhibit Number | | Description |
| | |
99 | | Press release, dated July 20, 2015, issued by Crown Holdings, Inc. |
5
|
| | |
News Release Corporate Headquarters One Crown Way Philadelphia, PA 19154-4599 | | |
CROWN HOLDINGS, INC. REPORTS SECOND QUARTER 2015 RESULTS
Philadelphia, PA - July 20, 2015. Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the second quarter ended June 30, 2015.
Second Quarter Highlights
| |
• | Earnings per share $1.02; Before Certain Items $1.03, including $0.14 of unfavorable currency translation |
| |
• | YTD earnings per share $1.34; Before Certain Items $1.55, including $0.20 of unfavorable |
currency translation
| |
• | Income before certain items on a constant currency basis grew 15.8% in second quarter, 10.8% YTD |
| |
• | On a constant currency basis, Q2 revenue grew 5.7%, segment income grew 6.0% |
| |
• | Recent acquisitions in Europe and North America made strong contributions |
| |
• | Global beverage can volumes grew 9% in the quarter over 2014 |
Net sales in the second quarter were $2,278 million compared to $2,383 million in the second quarter of 2014, primarily due to $241 million of unfavorable currency translation partially offset by the impact of the Empaque acquisition.
Segment income (a non-GAAP measure defined by the Company as gross profit excluding the impact of fair value adjustments to inventory acquired in an acquisition and the timing impact of hedge ineffectiveness, less selling and administrative expense) was $272 million in the second quarter compared to $285 million in the second quarter of 2014, and included $30 million of unfavorable currency translation.
Commenting on the quarter, John W. Conway, Chairman and Chief Executive Officer, stated, “We continued the year as expected with very solid second quarter performance. On a currency neutral basis, segment income for the second quarter increased 6% over 2014, reflecting strong underlying fundamentals in the Company’s businesses despite challenges in certain of our markets. We are pleased with the integration of the Empaque and Mivisa acquisitions, as our Americas Beverage and European Food businesses both contributed meaningfully to the Company’s results. In addition, we experienced notable beverage can growth in North America and Asia Pacific as well as food can growth in Europe during the quarter compared to 2014.”
Interest expense increased to $69 million in the second quarter of 2015 over the $66 million in 2014 primarily due to increased borrowings to fund the Empaque acquisition.
Net income attributable to Crown Holdings in the second quarter increased to $142 million over the $106 million in the second quarter of 2014. Reported earnings per diluted share were $1.02 in the second quarter of 2015 compared to $0.76 in the 2014 second quarter. Net income per diluted share before certain items increased to $1.03 over the $1.01 in 2014.
A reconciliation from net income and income per diluted share to net income before certain items and income per diluted share before certain items is provided below.
|
| | |
News Release Corporate Headquarters One Crown Way Philadelphia, PA 19154-4599 | | |
Six Month Results
Net sales for the first six months of 2015 were $4,275 million compared to $4,376 million in the first six months of 2014, reflecting unfavorable currency translation of $413 million partially offset by the impact of the Mivisa and Empaque acquisitions.
Segment income in the first half of 2015 was $464 million compared to $485 million in the first six months of 2014, including $46 million of unfavorable currency translation.
Interest expense for the first six months of 2015 increased to $134 million compared to $124 million in the same period of 2014 primarily due to increased borrowings to fund the Mivisa and Empaque acquisitions.
Net income attributable to Crown Holdings for the first six months of 2015 increased to $186 million over the $130 million in the first six months of 2014. Income per diluted share for the first six months of 2015 rose to $1.34 compared to $0.94 in the first half of last year. Net income per diluted share before certain items was $1.55 compared to $1.58 in 2014.
Non-GAAP Measures
Segment income and free cash flow are not defined terms under U.S. generally accepted accounting principles (non-GAAP measures). In addition, the information presented excluding the impact of currency translation, regarding net income before certain items and regarding income before certain items per diluted share does not conform to GAAP and includes non-GAAP measures. Non-GAAP measures should not be considered in isolation or as a substitute for net income, income per diluted share or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to calculations of similarly titled measures by other companies.
The Company views segment income and free cash flow as the principal measures of performance of its operations and for the allocation of resources. Free cash flow has certain limitations, however, including that it does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure. The amount of mandatory versus discretionary expenditures can vary significantly between periods. The Company believes that net income before certain items, income before certain items per diluted share, and information excluding the impact of currency translation are useful in evaluating the Company’s operations. Segment income, free cash flow, net income before certain items and income before certain items per diluted share are derived from the Company’s Consolidated Statements of Operations and Cash Flows and Consolidated Balance Sheets, as applicable, and reconciliations to segment income, free cash flow, net income before certain items and income before certain items per diluted share can be found within this release.
Conference Call
The Company will hold a conference call tomorrow, July 21, 2015 at 9:00 a.m. (EDT) to discuss this news release. Forward-looking and other material information may be discussed on the conference call. The dial-in numbers for the conference call are (517) 308-9237 or toll-free (888) 469-0976 and the access password is “packaging.” A live webcast of the call will be made available to the public on the internet at the Company’s web site, www.crowncork.com. A replay of the conference call will be available for a one-week period ending at midnight on July 28. The telephone numbers for the replay are (402) 998-1595 or toll free (888) 568-0923.
Cautionary Note Regarding Forward-Looking Statements
Except for historical information, all other information in this press release consists of forward-looking statements. These forward-looking statements involve a number of risks, uncertainties and other factors, including the future impact of currency translation, whether the Company can continue to grow segment income and benefit from its recent acquisitions of Empaque and Mivisa, future demand for beverage cans, including in North America and Asia Pacific, and food cans in Europe that may cause actual results to be materially different from those expressed or implied in the forward-looking statements. Important factors that could cause the statements made in this press release or the actual
|
| | |
News Release Corporate Headquarters One Crown Way Philadelphia, PA 19154-4599 | | |
results of operations or financial condition of the Company to differ are discussed under the caption "Forward Looking Statements" in the Company's Form 10-K Annual Report for the year ended December 31, 2014 and in subsequent filings made prior to or after the date hereof. The Company does not intend to review or revise any particular forward-looking statement in light of future events.
Crown Holdings, Inc., through its subsidiaries, is a leading supplier of packaging products to consumer marketing companies around the world. World headquarters are located in Philadelphia, Pennsylvania.
For more information, contact:
Thomas A. Kelly, Senior Vice President and Chief Financial Officer, (215) 698-5341
Thomas T. Fischer, Vice President, Investor Relations and Corporate Affairs, (215) 552-3720
Ed Bisno, Bisno Communications, (212) 717-7578
Unaudited Consolidated Statements of Operations, Balance Sheets, Statements of Cash Flows, Segment Information and Supplemental Data follow.
|
| | |
News Release Corporate Headquarters One Crown Way Philadelphia, PA 19154-4599 | | |
Consolidated Statements of Operations (Unaudited)
(in millions, except share and per share data)
|
| | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| June 30, | | June 30, |
| 2015 | | 2014 | | 2015 | | 2014 |
Net sales | $ | 2,278 |
| | $ | 2,383 |
| | $ | 4,275 |
| | $ | 4,376 |
|
| | | | | | | |
Cost of products sold | 1,843 |
| | 1,960 |
| | 3,503 |
| | 3,621 |
|
Depreciation and amortization | 62 |
| | 47 |
| | 113 |
| | 82 |
|
Gross profit (1) | 373 |
| | 376 |
| | 659 |
| | 673 |
|
| | | | | | | |
Selling and administrative expense | 99 |
| | 103 |
| | 197 |
| | 207 |
|
Restructuring and other | (3 | ) | | 31 |
| | 17 |
| | 83 |
|
Loss from early extinguishment of debt | 9 |
| | — |
| | 9 |
| | — |
|
Foreign exchange | (1 | ) | | — |
| | 5 |
| | 6 |
|
Interest expense | 69 |
| | 66 |
| | 134 |
| | 124 |
|
Interest income | (2 | ) | | (1 | ) | | (4 | ) | | (3 | ) |
Income before income taxes | 202 |
| | 177 |
| | 301 |
| | 256 |
|
Provision for income taxes | 49 |
| | 50 |
| | 86 |
| | 83 |
|
Net income | 153 |
| | 127 |
| | 215 |
| | 173 |
|
| | | | | | | |
Net income attributable to noncontrolling interests | (11 | ) | | (21 | ) | | (29 | ) | | (43 | ) |
Net income attributable to Crown Holdings | $ | 142 |
| | $ | 106 |
| | $ | 186 |
| | $ | 130 |
|
Earnings per share attributable to Crown Holdings common shareholders: |
| | | |
|
| |
|
|
Basic | $ | 1.03 |
| | $ | 0.77 |
| | $ | 1.35 |
| | $ | 0.95 |
|
Diluted | $ | 1.02 |
| | $ | 0.76 |
| | $ | 1.34 |
| | $ | 0.94 |
|
|
| | | |
|
| |
|
|
Weighted average common shares outstanding: |
| | | |
|
| |
|
|
Basic | 137,914,062 |
| | 137,246,172 |
| | 137,805,980 |
| | 137,032,786 |
|
Diluted | 139,319,455 |
| | 138,599,132 |
| | 139,175,449 |
| | 138,398,582 |
|
Actual common shares outstanding | 139,400,803 |
| | 138,888,817 |
| | 139,400,803 |
| | 138,888,817 |
|
| |
(1) | A reconciliation from gross profit to segment income follows. |
|
| | |
News Release Corporate Headquarters One Crown Way Philadelphia, PA 19154-4599 | | |
Consolidated Supplemental Financial Data (Unaudited)
(in millions)
Reconciliation from Gross Profit to Segment Income
The Company views segment income, as defined below, as a principal measure of performance of its operations and for the allocation of resources. Segment income is defined by the Company as gross profit excluding the impact of fair value adjustments to inventory acquired in an acquisition and the timing impact of hedge ineffectiveness, less selling and administrative expense.
|
| | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2015 | | 2014 | | 2015 | | 2014 |
Gross profit | $ | 373 |
| | $ | 376 |
| | $ | 659 |
| | $ | 673 |
|
Fair value adjustment to inventory (1) | — |
| | 15 |
| | $ | 6 |
| | 15 |
|
Impact of hedge ineffectiveness (1) | (2 | ) | | (3 | ) | | (4 | ) | | 4 |
|
Selling and administrative expense | (99 | ) | | (103 | ) | | (197 | ) | | (207 | ) |
| $ | 272 |
| | $ | 285 |
| | $ | 464 |
| | $ | 485 |
|
(1) Included in cost of products sold
Segment Information
|
| | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
Net Sales | 2015 | | 2014 | | 2015 | | 2014 |
| | | | | | | |
Americas Beverage | $ | 741 |
| | $ | 594 |
| | $ | 1,358 |
| | $ | 1,143 |
|
North America Food | 170 |
| | 213 |
| | 330 |
| | 392 |
|
European Beverage | 422 |
| | 496 |
| | 746 |
| | 884 |
|
European Food | 492 |
| | 555 |
| | 923 |
| | 928 |
|
Asia Pacific | 310 |
| | 316 |
| | 620 |
| | 614 |
|
Total reportable segments | 2,135 |
| | 2,174 |
| | 3,977 |
| | 3,961 |
|
Non-reportable segments | 143 |
| | 209 |
| | 298 |
| | 415 |
|
Total net sales | $ | 2,278 |
| | $ | 2,383 |
| | $ | 4,275 |
| | $ | 4,376 |
|
|
| | | | | | | | | | | | | | | |
Segment Income | | | | | | | |
| | | | | | | |
Americas Beverage | $ | 99 |
| | $ | 85 |
| | $ | 184 |
| | $ | 164 |
|
North America Food | 23 |
| | 38 |
| | 47 |
| | 67 |
|
European Beverage | 66 |
| | 83 |
| | 104 |
| | 142 |
|
European Food | 68 |
| | 63 |
| | 110 |
| | 89 |
|
Asia Pacific | 39 |
| | 36 |
| | 74 |
| | 70 |
|
Total reportable segments | 295 |
| | 305 |
| | 519 |
| | 532 |
|
Non-reportable segments | 20 |
| | 22 |
| | 37 |
| | 46 |
|
Corporate and other unallocated items | (43 | ) | | (42 | ) | | (92 | ) | | (93 | ) |
Total segment income | $ | 272 |
| | $ | 285 |
| | $ | 464 |
| | $ | 485 |
|
|
| | |
News Release Corporate Headquarters One Crown Way Philadelphia, PA 19154-4599 | | |
Consolidated Supplemental Data (Unaudited)
(in millions, except per share data)
Reconciliation from Net Income and Income Per Diluted Common Share to Net Income before Certain Items and Income Per Diluted Common Share before Certain Items
The following table reconciles reported net income and diluted earnings per share attributable to the Company to net income before certain items and income per diluted common share before certain items, as used elsewhere in this release.
|
| | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| June 30, | | June 30, |
| 2015 | | 2014 | | 2015 | | 2014 |
| | | | | | | |
Net income attributable to Crown Holdings, as reported | $ | 142 |
| | $ | 106 |
| | $ | 186 |
| | $ | 130 |
|
| | | | | | | |
Fair value adjustment to inventory (1) | — |
| | 15 |
| | 6 |
| | 15 |
|
Hedge ineffectiveness (2) | (2 | ) | | (3 | ) | | (4 | ) | | 4 |
|
Restructuring and other (3) | (3 | ) | | 31 |
| | 17 |
| | 83 |
|
Loss from early extinguishment of debt (4) | 9 |
| | — |
| | 9 |
| | — |
|
Income taxes (5) | (3 | ) | | (9 | ) | | 2 |
| | (13 | ) |
Net income before the above items | $ | 143 |
| | $ | 140 |
| | $ | 216 |
| | $ | 219 |
|
| | | | | | | |
Income per diluted common share as reported | $ | 1.02 |
| | $ | 0.76 |
| | $ | 1.34 |
| | $ | 0.94 |
|
Income per diluted common share before the above items | $ | 1.03 |
| | $ | 1.01 |
| | $ | 1.55 |
| | $ | 1.58 |
|
|
| |
| | | | |
Effective tax rate as reported | 24.3 | % | | 28.2 | % | | 28.6 | % | | 32.4 | % |
Effective tax rate before the above items | 25.2 | % | | 26.8 | % | | 25.5 | % | | 26.8 | % |
Net income before certain items, income per diluted common share before certain items and the effective tax rate before certain items are non-GAAP measures and are not meant to be considered in isolation or as a substitute for net income, income per diluted common share and effective tax rates determined in accordance with U.S. generally accepted accounting principles. The Company believes these non-GAAP measures provide useful information to evaluate the performance of the Company’s ongoing business.
| |
(1) | In the first quarter of 2015, the Company recorded a charge of $6 million in cost of products sold for fair value adjustments related to the sale of inventory acquired in its acquisition of Empaque. In the second quarter of 2014, the Company recorded a charge of $15 million related to the sale of inventory acquired in its acquisition of Mivisa. |
| |
(2) | In the second quarter and first six months of 2015, the Company recorded benefits of $2 million and $4 million in cost of products sold related to hedge ineffectiveness. In the second quarter and first six months of 2014, the Company recorded a benefit of $3 million and a charge of $4 million for hedge ineffectiveness. |
| |
(3) | In the second quarter and first six months of 2015, the Company recorded restructuring and other charges of $2 million and $17 million primarily for costs related to its acquisition of Empaque. In the second quarter and first six months of 2014, the Company recorded restructuring and other charges of $19 million and $27 million. |
In the first and second quarters of 2015, the Company recorded a charge of $5 million and a gain of $5 million for asset sales and impairments. In the second quarter and first six months of 2014, the Company recorded charges of $12 million and $56 million primarily for asset sales and impairments related to the divestment of certain operations and transaction costs incurred in connection with its acquisition of Mivisa.
| |
(4) | In the second quarter of 2015, the Company recorded a charge of $9 million for the write off of deferred financing fees in connection with the repayment of its Term Loan B borrowings. |
| |
(5) | In the second quarter and first six months of 2015, the Company recorded income tax benefits of $3 million and $5 million related to the items described above, and a charge of $7 million in the first quarter to record a potential liability arising from a recent unfavorable tax court ruling in Spain. In the second quarter and first six months of 2014, the Company recorded income tax benefits of $9 million and $13 million related to the items described above. |
|
| | |
News Release Corporate Headquarters One Crown Way Philadelphia, PA 19154-4599 | | |
|
| | | | | | | |
Consolidated Balance Sheets (Condensed & Unaudited) |
(in millions) |
| | | |
June 30, | 2015 | | 2014 |
Assets | | | |
Current assets | | | |
Cash and cash equivalents | $ | 288 |
| | $ | 244 |
|
Receivables, net | 1,098 |
| | 1,264 |
|
Inventories | 1,454 |
| | 1,615 |
|
Prepaid expenses and other current assets | 344 |
| | 364 |
|
Total current assets | 3,184 |
| | 3,487 |
|
|
| |
|
Goodwill and intangible assets | 3,790 |
| | 3,272 |
|
Property, plant and equipment, net | 2,672 |
| | 2,496 |
|
Other non-current assets | 713 |
| | 640 |
|
Total | $ | 10,359 |
| | $ | 9,895 |
|
|
| |
|
|
| |
|
Liabilities and equity |
| |
|
Current liabilities |
| |
|
Short-term debt | $ | 56 |
| | $ | 172 |
|
Current maturities of long-term debt | 152 |
| | 90 |
|
Accounts payable and accrued liabilities | 2,525 |
| | 2,587 |
|
Total current liabilities | 2,733 |
| | 2,849 |
|
|
| |
|
Long-term debt, excluding current maturities | 5,677 |
| | 5,230 |
|
Other non-current liabilities | 1,545 |
| | 1,404 |
|
|
| |
|
Noncontrolling interests | 278 |
| | 268 |
|
Crown Holdings shareholders' equity | 126 |
| | 144 |
|
Total equity | 404 |
| | 412 |
|
Total | $ | 10,359 |
| | $ | 9,895 |
|
|
| | |
News Release Corporate Headquarters One Crown Way Philadelphia, PA 19154-4599 | | |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed & Unaudited)
(in millions)
|
| | | | | | | |
Six Months Ended June 30, | 2015 | | 2014 |
| | | |
Cash flows from operating activities | | | |
Net income | $ | 215 |
| | $ | 173 |
|
Depreciation and amortization | 113 |
| | 82 |
|
Provision for restructuring and other | 17 |
| | 83 |
|
Pension expense | 22 |
| | 31 |
|
Pension contributions | (34 | ) | | (42 | ) |
Stock-based compensation | 17 |
| | 14 |
|
Working capital changes and other | (365 | ) | | (458 | ) |
Net cash used for operating activities (A) | (15 | ) | | (117 | ) |
| | | |
Cash flows from investing activities | | | |
Purchase of business | (1,207 | ) | | (733 | ) |
Capital expenditures | (111 | ) | | (149 | ) |
Proceeds from sale of assets and divestitures | 30 |
| | 27 |
|
Other | (14 | ) | | 1 |
|
Net cash used for investing activities | (1,302 | ) | | (854 | ) |
| | | |
Cash flows from financing activities | | | |
Net change in debt | 765 |
| | 682 |
|
Dividends paid to noncontrolling interests | (17 | ) | | (34 | ) |
Purchase of noncontrolling interests | — |
| | (93 | ) |
Debt issue costs | (17 | ) | | (33 | ) |
Other, net | (52 | ) | | 6 |
|
Net cash provided by financing activities | 679 |
| | 528 |
|
| | | |
Effect of exchange rate changes on cash and cash equivalents | (39 | ) | | (2 | ) |
|
| |
|
Net change in cash and cash equivalents | (677 | ) | | (445 | ) |
Cash and cash equivalents at January 1 | 965 |
| | 689 |
|
|
| |
|
Cash and cash equivalents at June 30 | $ | 288 |
| | $ | 244 |
|
| |
(A) | Free cash flow is defined by the Company as net cash used for operating activities less capital expenditures. A reconciliation from net cash used for operating activities to free cash flow for the three and six months ended June 30, 2015 and 2014 follows: |
|
| | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| June 30, | | June 30, |
| 2015 | | 2014 | | 2012 | | 2011 |
Net cash used for operating activities | $ | 275 |
| | $ | 378 |
| | $ | (15 | ) | | $ | (117 | ) |
Capital expenditures | (59 | ) | | (65 | ) | | (111 | ) | | (149 | ) |
Free cash flow | $ | 216 |
| | $ | 313 |
| | $ | (126 | ) | | $ | (266 | ) |
Crown (NYSE:CCK)
Historical Stock Chart
From Mar 2024 to Apr 2024
Crown (NYSE:CCK)
Historical Stock Chart
From Apr 2023 to Apr 2024
