Crown Holdings Reports Second Quarter 2004 Results; Segment Income Increases 20% to $166 Million

Wednesday, July 14, 2004

PHILADELPHIA, Jul 14, 2004 /PRNewswire-FirstCall via COMTEX/ -- Crown Holdings, Inc. (NYSE: CCK), today announced its financial results for the second quarter and six months ended June 30, 2004.

Second Quarter Results

Net sales in the second quarter rose to $1,836 million, up 6.4% over the $1,726 million in the second quarter of 2003. Americas Division net sales rose 4.2% in the second quarter of 2004 over the same period in 2003 and European Division net sales increased 7.7% compared to the 2003 second quarter.

Gross profit in the 2004 second quarter grew 16.9% to $256 million over the $219 million in the 2003 second quarter. As a percentage of net sales, gross profit expanded to 13.9% in the second quarter compared to 12.7% in the same quarter last year. The improvements reflect increased operating efficiencies, the ongoing positive effects of the Company's cost containment and restructuring programs in recent years, stronger foreign currencies and firm volumes and pricing.

Segment income (defined by the Company as gross profit less selling and administrative expense and provision for restructuring) was $166 million in the second quarter, up 20.3% over the $138 million in the 2003 second quarter. A reconciliation of segment income from gross profit is provided as a note to the attached unaudited Consolidated Statements of Operations. Segment income as a percentage of net sales expanded to 9.0% from the 8.0% in the same period last year.

Commenting on the quarter, John W. Conway, Chairman and Chief Executive Officer, stated, "With the benefit of improved operating performance from our well capitalized and efficient manufacturing infrastructure, we are in excellent position to continue delevering the balance sheet. At the same time, we also expect to continue to benefit from the Company's international diversification with 70% of sales derived from operations outside the United States."

Interest expense in the second quarter was $89 million compared to $101 million in the second quarter of 2003. The decrease reflects the impact of lower average debt outstanding compared to the prior year second quarter.

Net income in the second quarter was $33 million, or $0.20 per diluted share, after a net charge of $0.09 per diluted share for the remeasurement of foreign currency exposures in Europe. In the second quarter of 2003 net income was $50 million, or $0.30 per diluted share which included a net gain of $0.25 per diluted share related to foreign currency exposures in Europe.

Six Month Results

For the first six months of 2004, net sales were $3,459 million, an increase of 8.6% over the $3,186 million in the first six months of 2003. Americas Division net sales grew 4.6% in the first six months of 2004 over the same period in 2003 and European Division net sales were up 11.9% compared to the first half of last year.

Gross profit for the six month period increased to $439 million, or 12.7% of net sales, over the $367 million, or 11.5% of net sales in the first six months of 2003. The improvements reflect increased operating efficiencies, stronger foreign currencies and firm volumes and pricing.

Segment income in the first half of 2004 improved to $257 million, or 7.4% of net sales, compared to the $205 million, or 6.4% of net sales in the first six months of 2003.

For the first six months of 2004, interest expense was $179 million compared to $180 million for the same period last year.

    Debt and cash amounts were:
                           June 30,    March 31,   December 31,   June 30,
                            2004          2004         2003          2003
    Total debt              $3,904       $4,042       $3,939       $4,364
    Cash                       251          243          401          438
                            $3,653       $3,799       $3,538       $3,926

    Receivables
     securitization           $113         $100          $90         $120

The Company reported net income of $15 million, or $0.09 per diluted share, for the first six months of 2004, after a net charge of $0.10 per diluted share for the remeasurement of foreign currency exposures in Europe. This compares to net income of $16 million, or $0.10 per diluted share, for the first six months of 2003, which included a net gain of $0.32 per diluted share related to foreign currency exposures in Europe.

Conference Call

The Company will hold a conference call tomorrow, July 15, 2004, at 11:00 a.m. (EDT) to discuss this news release. The dial-in numbers for the conference call are (773) 756-4623 or toll-free (888) 459-7564 and the access password is "packaging." A replay of the conference call will be available for a one-week period ending at midnight on July 22. The telephone numbers for the replay are (402) 220-0181 or toll-free (800) 327-0512 and the access passcode is 2893. A live web cast of the call will be made available to the public on the Internet at the Company's Web site.

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 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, 2003 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 affiliated companies, is a leading supplier of packaging products to consumer marketing companies around the world. World headquarters are located in Philadelphia, Pennsylvania.

Unaudited Consolidated Statements of Operations and Balance Sheets and Segment Information follow this page.


              Consolidated Statements of Operations (Unaudited)

    (in millions, except share and per share data)
                             Three Months Ended           Six Months Ended
                                   June 30,                    June 30,
                              2004         2003         2004         2003
    Net sales               $1,836       $1,726       $3,459       $3,186

    Cost of products sold    1,478        1,399        2,815        2,610
    Depreciation and
     amortization               76           85          153          163
    Pension expense             26           23           52           46
    Gross profit (1)           256          219          439          367
    Selling and administrative
     expense                    90           81          182          162
    Gain on sale of assets                   (3)                       (3)
    (Gain)/loss from early
     extinguishments of debt                 (2)           4            9
    Interest expense            89          101          179          180
    Interest income             (1)          (3)          (3)          (5)
    Translation and foreign
     exchange adjustments       23          (56)          27          (69)
      Income before income taxes,
       minority interests
       and equity earnings      55          101           50           93
    Provision for income taxes  16           20           24           39
    Minority interests and
     equity earnings            (6)         (31)         (11)         (38)
      Net income               $33          $50          $15          $16

    Income per average common share:
      Basic                  $0.20        $0.30        $0.09        $0.10
      Diluted                $0.20        $0.30        $0.09        $0.10



    Weighted average common shares outstanding:
      Basic          165,165,133   164,910,274    165,120,811  164,379,638
      Diluted        167,343,493   165,843,258    167,247,804  165,312,801
    Actual common
     shares
     outstanding     165,234,044   164,922,827    165,234,044  164,922,827

    (1) The Company views segment income, as defined below, as the principal
        measure of performance of its operations and for the allocation of
        resources.  Segment income is defined by the Company as gross profit
        less selling and administrative expense and provision for
        restructuring.  A reconciliation from gross profit to segment income
        for the three and six months ended June 30 follows:

                             Three Months Ended           Six Months Ended
                                  June 30,                    June 30,
                              2004         2003         2004         2003
    Gross profit              $256         $219         $439         $367
    Selling and administrative
     expense                    90           81          182          162
    Segment income            $166         $138         $257         $205



             CONSOLIDATED BALANCE SHEETS (Condensed & Unaudited)
                                (in millions)
    June 30,                                            2004           2003
    Assets
    Current assets
      Cash and cash equivalents                         $251           $438
      Receivables, net                                 1,008          1,023
      Inventories                                        978            975
      Prepaid expenses and other current assets           92             94
        Total current assets                           2,329          2,530

    Goodwill                                           2,430          2,362
    Property, plant and equipment, net                 1,992          2,176
    Other non-current assets                           1,117          1,139
        Total                                         $7,868         $8,207

    Liabilities and shareholders' equity
    Current liabilities
      Short-term debt                                    $79            $62
      Current maturities of long-term debt               116            190
      Other current liabilities                        1,897          1,820
        Total current liabilities                      2,092          2,072

    Long-term debt, excluding current maturities       3,709          4,112
    Other non-current liabilities and minority
     interests                                         1,889          1,967
    Shareholders' equity                                 178             56

    Total                                             $7,868         $8,207



             Consolidated Supplemental Financial Data (Unaudited)

                  Three Months Ended June 30,  Six Months Ended June 30,
    (in millions)
    Net Sales             2004       2003         2004           2003

    Americas              $748       $718       $1,388         $1,327
    Europe                 996        925        1,895          1,693
    Asia                    92         83          176            166
                        $1,836     $1,726       $3,459         $3,186

    Segment Income

    Americas               $57        $46          $82            $64
    Europe                 117        101          197            163
    Asia                    14         13           26             22
    Corporate              (22)       (22)         (48)           (44)
                          $166       $138         $257           $205

SOURCE Crown Holdings, Inc.

Timothy J. Donahue, Senior Vice President - Finance, Crown
Holdings, +1-215-698-5088, or Edward Bisno, Bisno Communications,
+1-917-881-5441, for Crown Holdings