Crown Holdings Reports Second Quarter 2009 Results
Second Quarter Highlights
-- Gross profit improved to 16.2% of net sales
-- Segment income rose to 11.8% of net sales
-- Diluted earnings per share increased 6.6% to $0.65
Commenting on the results,
Second Quarter Results
Net sales in the second quarter were
Gross profit in the quarter of
Selling and administrative expense in the second quarter was
Segment income (a non-GAAP measure defined by the Company as gross profit less selling and administrative expense) in the second quarter was
"Underscoring our continuing commitment and excitement about the Vietnamese and broader Southeast Asian markets, we acquired a new beverage can plant northeast of
Interest expense in the second quarter was
Net income attributable to
In the second quarter, the Company recorded a net charge of
As previously announced, on
The following table reconciles net income and diluted earnings per share attributable to
Three Months Ended Six Months Ended
June 30, June 30,
-------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
Net income as reported $105 $99 $145 $126
Items, net of tax:
Provision for
restructuring 1 1 2 1
Gain on sale of
assets (1) (1) (1)
Loss from early
extinguishments
of debt 2
Closure of
non-consolidated
PET joint
venture 5
----- ----- ----- -----
Net income before the
above items $106 $99 $151 $128
==== === ==== ====
Earnings per diluted
share as reported $0.65 $0.61 $0.90 $0.77
Diluted earnings per
share before the
above items $0.66 $0.61 $0.94 $0.78
Net income before the above items and diluted earnings per share before the above items are non-GAAP measures.
Six Month Results
For the first six months of 2009, net sales were
Gross profit for the six month period improved to 15.5% of net sales over the 14.9% of net sales in the first six months of 2008. For the six months, gross profit was
Selling and administrative expense for the six month period ended
Segment income in the first half of 2009 was
For the first six months of 2009, interest expense was
Net income attributable to
During the first half of 2009 the Company recorded a net charge of
Net debt (a non-GAAP measure defined by the Company as total debt less cash) was
Debt and cash amounts were:
June 30, December 31, June 30, December 31,
2009 2008 2008 2007
---- ---- ---- ----
Total debt $3,735 $3,337 $3,799 $3,437
Cash 706 596 311 457
--- --- --- ---
Net debt $3,029 $2,741 $3,488 $2,980
====== ====== ====== ======
Receivables
securitization $272 $234 $279 $272
==== ==== ==== ====
Non-GAAP Measures
Segment income, free cash flow and net debt are not defined terms under U.S. generally accepted accounting principles (non-GAAP measures). In addition, the information presented above regarding net income before certain items 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, cash flow or total debt data prepared in accordance with 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. The Company believes net debt is a useful measure of the Company's debt levels and that net income before certain items can be used to evaluate the Company's operations. Segment income, free cash flow, net debt and net income before certain items are derived from the Company's Consolidated Statements of Operations and Cash Flows and Consolidated Balance Sheets, respectively, and reconciliations to segment income, free cash flow, net debt and net income before certain items can be found within this release.
Conference Call
The Company will hold a conference call tomorrow,
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 Company's ability to increase efficiency and productivity, the Company's ability to increase unit volumes and sales in developing markets such as Vietnam and Southeast Asia, the Company's ability to commercialize new facilities, the Company's ability to maintain and benefit from a diverse customer base and the Company's ability to achieve operating targets and generate free cash flow 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
For more information, contact:
Timothy J. Donahue , Executive Vice President and Chief Financial Officer,
(215) 698-5088, or
Ed Bisno, Bisno Communications , (212) 717-7578.
Unaudited Consolidated Statements of Operations, Statements of Cash Flows, 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,
2009 2008 2009 2008
---- ---- ---- ----
Net sales $2,055 $2,196 $3,739 $4,059
------ ------ ------ ------
Cost of products sold 1,676 1,789 3,068 3,347
Depreciation and
amortization 46 56 93 109
-- -- -- ---
Gross profit (1) 333 351 578 603
Selling and administrative
expense 90 105 179 207
Provision for
restructuring 1 1 2 1
Gain on sale of assets (1) (2) (1) (2)
Loss from early
extinguishments of debt 2
Interest expense 62 79 123 156
Interest income (1) (2) (3) (5)
Translation and foreign
exchange adjustments 1 4 1
--- --- --- ---
Income before income taxes
and equity earnings 182 169 274 243
Provision for income taxes 44 42 68 68
Equity earnings/(loss) in
affiliates 1 3 (4) 3
--- --- --- ---
Net income 139 130 202 178
Net income attributable to
noncontrolling interests (34) (31) (57) (52)
---- ---- ---- ----
Net income attributable to
Crown Holdings $105 $99 $145 $126
==== === ==== ====
Earnings per share attributable
to Crown Holdings
common shareholders:
Basic $0.66 $0.62 $0.91 $0.79
===== ===== ===== =====
Diluted $0.65 $0.61 $0.90 $0.77
===== ===== ===== =====
Weighted average common
shares outstanding:
Basic 158,920,842 159,631,670 158,707,472 159,409,493
Diluted 161,728,278 163,298,467 161,508,765 163,037,370
Actual common shares
outstanding 160,037,940 160,868,424 160,037,940 160,868,424
(1) A reconciliation from gross profit to segment income is found on the
following page.
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
less selling and administrative expense. 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,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Gross profit $333 $351 $578 $603
Selling and administrative expense 90 105 179 207
-- --- --- ---
Segment income $243 $246 $399 $396
==== ==== ==== ====
Segment Information
Three Months Ended Six Months Ended
June 30, June 30,
Net Sales 2009 2008 2009 2008
Americas Beverage $478 $519 $887 $952
North America Food 250 220 447 405
European Beverage 453 476 792 824
European Food 466 557 855 1,045
European Specialty Packaging 108 125 189 230
--- --- --- ---
Total reportable segments 1,755 1,897 3,170 3,456
Non-reportable segments 300 299 569 603
--- --- --- ---
Total net sales $2,055 $2,196 $3,739 $4,059
====== ====== ====== ======
Segment Income
--------------
Americas Beverage $62 $62 $103 $105
North America Food 29 20 47 31
European Beverage 88 84 145 133
European Food 71 63 123 103
European Specialty Packaging 8 11 9 12
--- --- --- ---
Total reportable segments 258 240 427 384
Non-reportable segments 46 42 88 82
Corporate and other unallocated
items (61) (36) (116) (70)
--- --- ---- ---
Total segment income $243 $246 $399 $396
==== ==== ==== ====
CONSOLIDATED BALANCE SHEETS (CONDENSED & UNAUDITED)
(in millions)
June 30, 2009 2008
Assets
Current assets
Cash and cash equivalents $706 $311
Receivables, net 939 1,085
Inventories 1,209 1,325
Prepaid expenses and other current assets 115 116
--- ---
Total current assets 2,969 2,837
----- -----
Goodwill 2,031 2,266
Property, plant and equipment, net 1,490 1,612
Other non-current assets 900 983
--- ---
Total $7,390 $7,698
====== ======
Liabilities and equity
Current liabilities
Short-term debt $62 $78
Current maturities of long-term debt 27 29
Other current liabilities 1,850 2,090
----- -----
Total current liabilities 1,939 2,197
Long-term debt, excluding current maturities 3,646 3,692
Other non-current liabilities 1,441 1,258
Noncontrolling interests 386 348
Crown Holdings shareholders' (deficit)/equity (22) 203
--- ---
Total equity 364 551
--- ---
Total $7,390 $7,698
====== ======
Consolidated Statements of Cash Flows (Condensed & Unaudited)
(in millions)
Six months ended June 30, 2009 2008
Cash flows from operating activities
Net income $202 $178
Depreciation and amortization 93 109
Other, net (458) (641)
---- ----
Net cash used for operating activities (A) (163) (354)
---- ----
Cash flows from investing activities
Capital expenditures (75) (71)
Other, net (3) (15)
--- ---
Net cash used for investing activities (78) (86)
--- ---
Cash flows from financing activities
Net change in debt 375 269
Other, net (31) 6
--- ---
Net cash provided by financing activities 344 275
--- ---
Effect of exchange rate changes on cash and cash
equivalents 7 19
--- --
Net change in cash and cash equivalents 110 (146)
Cash and cash equivalents at January 1 596 457
--- ---
Cash and cash equivalents at June 30 $706 $311
==== ====
(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 follows:
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Net cash used for operating activities $182 $89 ($163) ($354)
Capital expenditures (25) (38) (75) (71)
--- --- --- ---
Free cash flow $157 $51 ($238) ($425)
==== === ====== ======
SOURCE
CONTACT:
Financial Officer of
Ed Bisno of
(CCK CCK)
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