YARDLEY, Pa., April 17, 2019 /PRNewswire/ -- Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the first quarter ended March 31, 2019.
- Earnings per share $0.77 versus $0.67 in 2018
- Adjusted earnings per share increased to $1.05 over the $0.94 in 2018
- Global beverage can volumes grew 3%
- Reaffirmed full year adjusted earnings and cash flow guidance
Net sales in the first quarter were $2,755 million compared to $2,197 million in the first quarter of 2018 reflecting the impact of the Signode acquisition in April 2018 and increased beverage and food can volumes, offset by $100 million of unfavorable currency translation impact.
Income from operations was $262 million in the quarter compared to $221 million in the first quarter of 2018. Segment income increased to $315 million in the first quarter compared to $245 million in the prior year first quarter and included the impact of the Signode acquisition offset by $10 million of unfavorable currency translation impact.
Commenting on the quarter, Timothy J. Donahue, President and Chief Executive Officer, stated, "We started off the year as expected, as the fundamentals underlying our global businesses remain strong. The Company is on track for a solid 2019, and we reaffirm our free cash flow guidance of $775 million for the year. Global beverage can volume during the quarter increased 3%, driven by robust shipments in Brazil, Europe and Southeast Asia. The Transit Packaging business continued to perform well and is an important strategic addition to Crown's portfolio. As expected, we were adversely impacted by currency translation and start-up costs related to the two new beverage can facilities in Europe.
"Beverage cans are the world's most sustainable and recycled beverage packaging and are increasingly being viewed as its most responsible format. As such, cans are gaining preference among both brand owners and consumers, as reflected by increasing offerings of new beverage products – both non-alcoholic and alcoholic – being introduced in cans versus alternative packaging formats. To meet the rising demand for beverage cans, during the first quarter, we began production on a third line at the Company's existing plant in Phnom Penh, Cambodia and started up a second high-speed aluminum line at our new beverage can facility in Valencia, Spain. During the fourth quarter of 2019, we expect to begin operations at a new one-line beverage can plant in Rio Verde, central Brazil."
Interest expense was $98 million in the first quarter of 2019 compared to $74 million in 2018 primarily due to higher outstanding debt from borrowings incurred to finance the Signode acquisition.
Net income attributable to Crown Holdings in the first quarter was $103 million compared to $90 million in the first quarter of 2018. Reported diluted earnings per share were $0.77 in the first quarter of 2019 compared to $0.67 in 2018. Adjusted diluted earnings per share increased to $1.05 over the $0.94 in 2018.
A reconciliation from net income and diluted earnings per share to adjusted net income and adjusted diluted earnings per share is provided below.
The Company currently expects second quarter and full year 2019 adjusted diluted earnings to be in the ranges of $1.43 to $1.53 and $5.20 to $5.40 per share, respectively.
The adjusted effective income tax rate for the full year of 2019 is expected to be between 25% and 26%, although it may vary from quarter to quarter.
Adjusted free cash flow, as defined below, is currently expected to be approximately $775 million for 2019, unchanged from previous guidance.
Segment income, adjusted free cash flow, net leverage ratio, adjusted net income, the adjusted effective tax rate, adjusted diluted earnings per share and adjusted EBITDA are not defined terms under U.S. generally accepted accounting principles (non-GAAP measures). Non-GAAP measures should not be considered in isolation or as a substitute for income from operations, net income, diluted earnings per share, effective tax rates, cash flow or leverage ratio 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 as the principal measure of the performance of its operations and adjusted free cash flow and net leverage ratio as the principal measure of its liquidity. The Company considers all of these measures in the allocation of resources. Adjusted 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 and adjusted diluted earnings per share are useful in evaluating the Company's operations as these measures are adjusted for items that affect comparability between periods. Reconciliations of estimated adjusted diluted earnings per share for the second quarter and full year of 2019 to estimated diluted earnings per share on a GAAP basis are not provided in this release due to the unavailability of estimates of the following, the timing and magnitude of which the Company is unable to reliably forecast without unreasonable efforts, which are excluded from estimated adjusted diluted earnings per share and could have a significant impact on earnings per share on a GAAP basis: gains or losses on the sale of businesses or other assets, restructuring costs, asset impairment charges, acquisition related costs including fair value adjustments to inventory, asbestos-related charges, losses from early extinguishment of debt, pension settlement and curtailment charges, the tax and noncontrolling interest impact of the items above, and the impact of tax law changes or other tax matters. The Company believes that adjusted free cash flow and net leverage ratio provide meaningful measures of liquidity and a useful basis for assessing the Company's ability to fund its activities, including the financing of acquisitions, debt repayments, share repurchases or possible future dividends. Segment income, adjusted free cash flow, net leverage ratio, the adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share and adjusted EBITDA are derived from the Company's Consolidated Statements of Operations and Cash Flows and Consolidated Balance Sheets, as applicable, and reconciliations to segment income, adjusted free cash flow, net leverage ratio, the adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share and adjusted EBITDA can be found within this release.
The Company will hold a conference call tomorrow, April 18, 2019 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 630-395-0194 or toll-free 888-324-8108 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 25. The telephone numbers for the replay are 203-369-3432 or toll free 888-562-6205.
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 and market trends in 2019, including consumer preference for beverage cans and increasing global beverage can demand; the Company's ability to successfully complete and begin production within expected timelines at its new plant in Brazil; and the Company's ability to generate expected earnings and cash flow in 2019 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, 2018 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 global supplier of rigid packaging products to consumer marketing companies, as well as transit and protective packaging products, equipment and services to a broad range of end markets. World headquarters are located in Yardley, 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.
View original content:http://www.prnewswire.com/news-releases/crown-holdings-inc-reports-first-quarter-2019-results-300834215.html
SOURCE Crown Holdings, Inc.