YARDLEY, Pa., April 19, 2021 /PRNewswire/ -- Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the first quarter ended March 31, 2021.
- Earnings per share $1.57 versus $0.65 in 2020
- Adjusted earnings per share increased to $1.83 over the $1.13 in 2020
- Global beverage can volumes grew 8%; capacity expansion projects on schedule
- Solid food can demand
- Announced agreement to sell European Tinplate business
- Announces Investor Event
Net sales in the first quarter were $3,078 million compared to $2,757 million in the first quarter of 2020 reflecting increased sales unit volumes in all segments and favorable currency translation of $92 million.
Income from operations was $384 million in the first quarter compared to $246 million in the first quarter of 2020. Segment income was $433 million in the first quarter compared to $298 million in the prior year first quarter primarily due to increased sales unit volumes and $11 million of favorable currency translation. In addition, the results for European Food and the other segments in 2020 included unfavorable impacts of $18 million and $16 million, respectively, arising from the carryover of tinplate costs from the prior year end inventory.
Commenting on the quarter, Timothy J. Donahue, President and Chief Executive Officer, stated, "The Company's performance during the first quarter was excellent, as adjusted earnings per share and segment income grew 62% and 45%, respectively, from prior year results. Each of our global businesses executed well both commercially and operationally in the face of the challenges posed by the continuing pandemic. Beverage can volumes were strong across all global regions, led by North America, as consumers and customers alike continue to increasingly prefer the infinitely recyclable aluminum can over other packaging options. Transit Packaging, having successfully implemented several cost reduction initiatives, exceeded our expectations and is well positioned for continuing improvement as global manufacturing activity further accelerates.
"On April 8th the Company announced an agreement to sell its European Tinplate business, which is comprised of 44 manufacturing facilities in Europe, the Middle East and Africa that produce food cans and ends, aerosol cans, metal closures and promotional packaging for various consumer brands. We are very pleased that the business will have a strong owner in KPS Capital Partners to support future profitable growth and innovation initiatives. Net proceeds from the transaction will be used for debt reduction, beverage can capital projects and share repurchases over time.
"To meet accelerating demand for beverage cans, which now account for approximately 75% of our income from operations, the Company is implementing several capacity expansion projects globally, which include both the construction of new plants and the addition of production lines to existing facilities. Between 2020 and the end of 2022, we expect to add 15 billion units of annual capacity to the 2019 base of 70 billion units. During 2021, we will be commercializing approximately 6 billion units of annual capacity with projects including a new, two-line facility in Bowling Green, Kentucky and a new one-line plant in Vung Tau, Vietnam as well as additional production lines in Olympia, Washington and Rio Verde, Brazil."
Interest expense was $71 million in the first quarter of 2021 compared to $80 million in 2020 primarily due to lower outstanding debt balances.
Net income attributable to Crown Holdings in the first quarter was $211 million compared to $88 million in the first quarter of 2020. Reported diluted earnings per share were $1.57 in the first quarter of 2021 compared to $0.65 in 2020. Adjusted diluted earnings per share increased to $1.83 over the $1.13 in 2020.
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 adjusted earnings to be in the range of $1.70 to $1.80 per share. This guidance includes the results of the European Tinplate operations, which will be reported as discontinued operations beginning with the second quarter results.
The Company's full year adjusted earnings guidance of $6.60 to $6.80 per share is consistent with its previous guidance, as the assumed dilution from the sale of the European Tinplate business in the third quarter is expected to be offset by improved performance in the remaining operations.
The Company will present to the investment community on Thursday, May 27, 2021 during its virtual investor day. Crown senior management will discuss trends, opportunities and key metrics of the Company followed by a question and answer session. Additional information will be provided in a future communication.
Segment income, adjusted free cash flow, adjusted 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 adjusted 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. Reconciliations of estimated adjusted diluted earnings per share for the second quarter and full year of 2021 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 and other costs, asset impairment charges, 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 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. The Company believes that adjusted free cash flow and adjusted 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, adjusted 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 20, 2021 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 27. The telephone numbers for the replay are 203-369-3560 or toll free 800-879-1876.
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 the coronavirus pandemic on the Company's operations, including the Company's ability to continue to operate its plants, distribute its products, and maintain its supply chain; the impact of the coronavirus pandemic on demand for the Company's products; the future impact of currency translation; the continuation of performance and market trends in 2021, including consumer preference for beverage cans and increasing global beverage can demand; future demand for food cans; the Company's ability to close the European Tinplate sale in the third quarter of 2021, or at all, and the impact of the transaction on the Company's earnings; and the Company's ability to successfully complete its previously announced capacity expansion projects and begin production within expected timelines, including any delays related to the pandemic, 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, 2020 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
Unaudited Consolidated Statements of Operations, Balance Sheets, Statements of Cash Flows, Segment Information and Supplemental Data follow.
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SOURCE Crown Holdings, Inc.