PHILADELPHIA, July 20, 2015 /PRNewswire/ -- 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.
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.
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.
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 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.
Consolidated Supplemental Financial Data (Unaudited)
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.
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.
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SOURCE Crown Holdings, Inc.