PHILADELPHIA, April 20, 2016 /PRNewswire/ -- Crown Holdings,
Inc. (NYSE: CCK) today announced its financial results for the
first quarter ended March 31,
2016.
First Quarter Highlights
- Earnings per share $0.57
versus $0.32 in 2015
- Adjusted earnings per share $0.69 versus $0.53
in 2015
- Constant currency adjusted earnings per share up 40% over
prior year
- Constant currency segment income up 20%
- Global beverage can volumes grew 7%
- Beverage can growth projects on schedule
Net sales in the first quarter were $1,893 million compared to $1,997 million in the first quarter of 2015, and
included $85 million of unfavorable
currency translation impact in 2016 compared to 2015.
Segment income (a non-GAAP measure) increased to $221 million in the first quarter compared to
$192 million in the first quarter of
2015, and included $10 million of
unfavorable currency translation impact.
Commenting on the quarter, Timothy J.
Donahue, President and Chief Executive Officer, stated, "We
are very pleased with the Company's performance during the first
quarter and are on track for an excellent 2016. Adjusted
earnings per share rose 30% and segment income increased 15% over
the prior year, led by strong results in Americas Beverage,
European Beverage and European Food.
"Global beverage can unit volume growth of 7% was driven by
notable gains in Mexico,
Southeast Asia, Southern Europe and the United States, as consumers in both
emerging and developed markets continue to prefer cans over other
beverage packaging formats. We are on schedule with our
capacity expansion plans to meet this increase in demand. We
are building our third Cambodian beverage can plant in Phnom Penh and adding can end capability to
our Sihanoukville beverage can plant, with commercial production
for both projects slated to begin during the second quarter of this
year. Our new beverage can plant in Monterrey, Mexico as well as the second
production line at our Osmaniye, Turkey facility will begin production during
this year's fourth quarter. In early 2017, we expect to start
up our Nichols, New York beverage
can plant, which will be focused primarily on bolstering our
specialty can presence in North
America."
Interest expense was $64 million
in the first quarter of 2016 compared to $65
million in 2015 primarily due to lower outstanding
debt.
Net income attributable to Crown Holdings in the first quarter
was $79 million compared to
$44 million in the first quarter of
2015. Reported diluted earnings per share were $0.57 in the first quarter of 2016 compared to
$0.32 in 2015. Adjusted diluted
earnings per share increased to $0.69
over the $0.53 in 2015 and included
$0.05 per share of unfavorable
currency translation impact.
A reconciliation from net income and diluted earnings per share
to adjusted net income and adjusted diluted earnings per share is
provided
below.
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
revenue, segment income, adjusted net income, the adjusted
effective tax rate and adjusted diluted earnings per 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, the effective tax rate, diluted earnings per 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 adjusted
net income, the adjusted effective tax rate, adjusted diluted
earnings per share, and information excluding the impact of
currency translation are useful in evaluating the Company's
operations. Segment income, free cash flow, the adjusted
effective tax rate, adjusted net income, adjusted diluted earnings
per share and information excluding the impact of currency
translation 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,
the adjusted effective tax rate, adjusted net income, adjusted
diluted earnings per share and information unadjusted for currency
translation can be found within this release.
Conference Call
The Company will hold a conference
call tomorrow, April 21, 2016 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 (630) 395-0227 or toll-free (888) 606-8412
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 website, www.crowncork.com. A replay of the
conference call will be available for a one-week period ending at
midnight on April 28. The telephone numbers for the replay
are (203) 369-3804 or toll free (800) 455-0163.
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; the continuation of performance
trends in 2016; the Company's ability to successfully complete and
begin production at beverage can capacity projects within expected
timelines and budgets in New York,
Cambodia, Mexico and Turkey; future beverage can growth in
Mexico, Southeast Asia, Southern Europe and the United States; and a continuation of the
shift by customers and consumers to beverage cans from other forms
of packaging 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 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, 2015 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
Edward Bisno, Bisno Communications,
(212) 717-7578
Unaudited Consolidated Statements of Operations, Balance
Sheets, Statements of Cash Flows, Segment Information and
Supplemental Data follow.
Consolidated
Statements of Operations (Unaudited)
(in millions, except
share and per share data)
|
|
|
|
|
Three
Months Ended March 31,
|
|
|
2016
|
|
2015
|
|
Net
sales
|
$1,893
|
|
$1,997
|
|
Cost of products
sold
|
1,521
|
|
1,660
|
|
Depreciation and
amortization
|
60
|
|
51
|
|
Selling and
administrative expense
|
91
|
|
98
|
|
Restructuring and
other
|
2
|
|
20
|
|
Income from
operations (1)
|
219
|
|
168
|
|
Foreign
exchange
|
(6)
|
|
6
|
|
Interest
expense
|
64
|
|
65
|
|
Interest
income
|
(3)
|
|
(2)
|
|
Loss from early
extinguishment of debt
|
27
|
|
|
|
Income before income
taxes
|
137
|
|
99
|
|
Provision for income
taxes
|
38
|
|
37
|
|
Net
income
|
99
|
|
62
|
|
Net income
attributable to noncontrolling interests
|
(20)
|
|
(18)
|
|
Net income
attributable to Crown Holdings
|
$79
|
|
$44
|
|
Earnings per share
attributable to Crown Holdings
common
shareholders:
|
|
|
|
|
Basic
|
$0.57
|
|
$0.32
|
|
Diluted
|
$0.57
|
|
$0.32
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
Basic
|
138,105,319
|
|
137,697,898
|
|
Diluted
|
138,992,630
|
|
138,953,440
|
|
Actual common shares
outstanding
|
139,430,490
|
|
139,194,766
|
|
|
|
(1) A
reconciliation from income from operations to segment income
follows.
|
Consolidated Supplemental Financial Data
(Unaudited)
(in millions)
Reconciliation from Income from Operations 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 income from operations adjusted to add back provisions
for asbestos and restructuring and other, the impact of fair value
adjustments to inventory acquired in an acquisition, and the timing
impact of hedge ineffectiveness.
|
Three Months
Ended March
31,
|
|
2016
|
|
2015
|
Income from
operations
|
$
|
219
|
|
$
|
168
|
Add back:
|
|
|
|
|
|
Restructuring and
other
|
|
2
|
|
|
20
|
Fair value adjustment
to inventory (1)
|
|
|
|
|
6
|
Impact of hedge
ineffectiveness (1)
|
|
|
|
|
(2)
|
Segment
Income
|
$
|
221
|
|
$
|
192
|
|
|
|
|
|
|
|
(1) Included in
cost of products sold
|
Segment
Information
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
Net
Sales
|
|
|
2016
|
|
2016
at
|
|
|
2015
|
|
|
|
|
Actual
|
|
2015 rates
(2)
|
|
|
Actual
|
|
Americas
Beverage
|
|
$
|
643
|
|
$
|
686
|
|
$
|
617
|
|
North America
Food
|
|
|
146
|
|
|
151
|
|
|
160
|
|
European
Beverage
|
|
|
315
|
|
|
327
|
|
|
324
|
|
European
Food
|
|
|
398
|
|
|
409
|
|
|
431
|
|
Asia
Pacific
|
|
|
277
|
|
|
288
|
|
|
310
|
|
Total reportable
segments
|
|
|
1,779
|
|
|
1,861
|
|
|
1,842
|
|
Non-reportable
segments
|
|
|
114
|
|
|
117
|
|
|
155
|
|
Total net
sales
|
|
$
|
1,893
|
|
$
|
1,978
|
|
$
|
1,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Beverage
|
|
$
|
104
|
|
$
|
110
|
|
$
|
85
|
|
North America
Food
|
|
|
12
|
|
|
12
|
|
|
24
|
|
European
Beverage
|
|
|
46
|
|
|
48
|
|
|
38
|
|
European
Food
|
|
|
49
|
|
|
50
|
|
|
42
|
|
Asia
Pacific
|
|
|
35
|
|
|
36
|
|
|
35
|
|
Total reportable
segments
|
|
|
246
|
|
|
256
|
|
|
224
|
|
Non-reportable
segments
|
|
|
13
|
|
|
13
|
|
|
17
|
|
Corporate and other
unallocated items
|
|
|
(38)
|
|
|
(38)
|
|
|
(49)
|
|
Total segment
income
|
|
$
|
221
|
|
$
|
231
|
|
$
|
192
|
|
|
|
(2)
|
Information presented
for 2016 at 2015 rates represents financial results assuming
constant foreign currency exchange rates used for translation based
on the rates in effect for the comparable prior year period.
In order to compute constant currency results, we multiply or
divide, as appropriate, our current year U.S. dollar results by the
current year average foreign exchange rates and then multiply or
divide, as appropriate, those amounts by the applicable prior year
average foreign exchange rates.
|
Consolidated Supplemental Data
(Unaudited)
(in millions, except per share data)
Reconciliation from Net Income and Diluted Earnings Per Share
to Adjusted Net Income and Adjusted Diluted Earnings Per
Share
The following table reconciles reported net income and diluted
earnings per share attributable to the Company to adjusted net
income and adjusted diluted earnings per share, as used elsewhere
in this release.
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Crown Holdings, as reported
|
|
$79
|
|
$44
|
|
Fair value adjustment to
inventory (1)
|
|
|
|
6
|
|
Impact of hedge
ineffectiveness (2)
|
|
|
|
(2)
|
|
Restructuring and other
(3)
|
|
2
|
|
20
|
|
Loss from early
extinguishment of debt (4)
|
|
27
|
|
|
|
|
Income taxes
(5)
|
|
(12)
|
|
5
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
|
$96
|
|
$73
|
|
|
|
|
|
|
|
|
Diluted earnings per
share as reported
|
|
$0.57
|
|
$0.32
|
|
Adjusted diluted
earnings per share
|
|
$0.69
|
|
$0.53
|
|
Effective tax rate as
reported
|
|
27.7%
|
|
37.4%
|
|
Adjusted effective
tax rate
|
|
30.1%
|
|
26.0%
|
Adjusted net income, adjusted diluted earnings per share and the
adjusted effective tax rate are non-GAAP measures and are not meant
to be considered in isolation or as a substitute for net income,
diluted earnings per 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.
|
|
|
(2)
|
In the first quarter
of 2015, the Company recorded a benefit of $2 million in cost of
products sold related to hedge ineffectiveness caused primarily by
volatility in the metal premium component of aluminum prices.
|
|
|
(3)
|
In the first quarter
of 2016, the Company recorded restructuring and other charges of $4
million primarily for pension settlement charges. In the
first quarter of 2015, the Company recorded restructuring and other
charges of $15 million primarily for costs related to its
acquisition of Empaque.
|
|
|
|
In the first quarter
of 2016, the Company recorded gains of $2 million for asset sales
and impairments. In the first quarter of 2015, the Company
recorded charges of $5 million for asset sales and impairments
primarily related to the sale of four industrial specialty
packaging plants in Europe.
|
|
|
(4)
|
In the first quarter
of 2016, the Company recorded a charge of $27 million for premiums
paid and the write off of deferred financing fees in connection
with the redemption of its outstanding $700 million notes due
2021.
|
|
|
(5)
|
In the first quarter
of 2016, the Company recorded income tax benefits of $12 million
related to the items described above. In the first quarter of
2015, the Company recorded income tax benefits of $2 million
related to the items described above, and a charge of $7 million to
record a potential liability arising from an unfavorable tax court
ruling in Spain.
|
Consolidated
Balance Sheets (Condensed & Unaudited)
(in
millions)
|
March
31,
|
2016
|
|
2015
(1)
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
257
|
|
|
$
|
280
|
|
Receivables, net
|
|
|
980
|
|
|
|
1,039
|
|
Inventories
|
|
|
1,413
|
|
|
|
1,446
|
|
Prepaid expenses and other current assets
|
|
|
254
|
|
|
|
307
|
|
Total current assets
|
|
|
2,904
|
|
|
|
3,072
|
|
|
|
|
|
|
|
|
|
|
Goodwill and
intangible assets
|
|
|
3,627
|
|
|
|
3,746
|
|
Property, plant and
equipment, net
|
|
|
2,727
|
|
|
|
2,619
|
|
Other non-current
assets
|
|
|
682
|
|
|
|
638
|
|
Total
|
|
$
|
9,940
|
|
|
$
|
10,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
$
|
67
|
|
|
$
|
72
|
|
Current maturities of long-term debt
|
|
|
239
|
|
|
|
171
|
|
Accounts payable and
accrued liabilities
|
|
|
2,412
|
|
|
|
2,369
|
|
Total current liabilities
|
|
|
2,718
|
|
|
|
2,612
|
|
|
|
|
|
|
|
|
|
|
Long-term debt,
excluding current maturities
|
|
|
5,293
|
|
|
|
5,678
|
|
Other non-current
liabilities
|
|
|
1,376
|
|
|
|
1,537
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
|
304
|
|
|
|
275
|
|
Crown Holdings
shareholders' equity/(deficit)
|
|
|
249
|
|
|
|
(27)
|
|
Total
equity
|
|
|
553
|
|
|
|
248
|
|
Total
|
|
$
|
9,940
|
|
|
$
|
10,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Certain prior year
amounts have been reclassified in accordance with new accounting
guidance regarding the presentation of debt issuance
costs.
|
Consolidated
Statements of Cash Flows (Condensed & Unaudited)
(in
millions)
|
Three months ended
March 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
99
|
|
|
$
|
62
|
|
Depreciation and
amortization
|
|
|
|
60
|
|
|
|
51
|
|
Restructuring and
other
|
|
|
|
2
|
|
|
|
20
|
|
Pension
expense
|
|
|
|
7
|
|
|
|
11
|
|
Pension
contributions
|
|
|
|
(25)
|
|
|
|
(17)
|
|
Stock-based
compensation
|
|
|
|
6
|
|
|
|
11
|
|
Working capital
changes and other
|
|
|
|
(557)
|
|
|
|
(425)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used for operating activities
(1)
|
|
|
|
(408)
|
|
|
|
(287)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
Purchase of
business
|
|
|
|
|
|
|
|
(1,206)
|
|
Capital
expenditures
|
|
|
|
(51)
|
|
|
|
(52)
|
|
Proceeds from sale of
business
|
|
|
|
4
|
|
|
|
21
|
|
Other
|
|
|
|
(1)
|
|
|
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used for investing
activities
|
|
|
|
(48)
|
|
|
|
(1,246)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
Net change in
debt
|
|
|
|
(23)
|
|
|
|
943
|
|
Dividends paid to
noncontrolling interests
|
|
|
|
(8)
|
|
|
|
(9)
|
|
Other, net
|
|
|
|
27
|
|
|
|
(48)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by/(used for)
financing activities
|
|
|
|
(4)
|
|
|
|
886
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
|
|
|
|
|
(38)
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
|
|
(460)
|
|
|
|
(685)
|
|
Cash and cash
equivalents at January 1
|
|
|
|
717
|
|
|
|
965
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at March 31
|
|
|
$
|
257
|
|
|
$
|
280
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Free cash flow is
defined by the Company as net cash used for operating activities
less capital expenditures and certain other items. A
reconciliation from net cash used for operating activities to free
cash flow for the three months ended March 31, 2016 and 2015
follows:
|
Three months ended
March 31,
|
2016
|
|
2015
|
Net cash used for
operating activities
|
($408)
|
|
($287)
|
Premiums paid to
retire debt early
|
22
|
|
|
Adjusted net cash used
for operating
activities
|
(386)
|
|
(287)
|
Capital
expenditures
|
(51)
|
|
(52)
|
Free cash
flow
|
($437)
|
|
($339)
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/crown-holdings-inc-reports-first-quarter-2016-results-300254967.html
SOURCE Crown Holdings, Inc.