PHILADELPHIA, Oct. 19, 2016 /PRNewswire/ -- Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the third quarter ended September 30, 2016.
Third Quarter Highlights
- Earnings per share $1.31 for the quarter; $3.09 YTD versus $2.35 in 2015
- Adjusted earnings per share $1.33 for the quarter; $3.21 YTD versus $2.89 in 2015
- Income from operations up 14% YTD, from $726 million to $829 million
- Segment income up 6% YTD, from $792 million to $842 million
- Beverage can growth projects on schedule
Net sales in the third quarter were $2,326 million compared to $2,460 million in the third quarter of 2015, reflecting $55 million of unfavorable currency translation in 2016 compared to 2015 and the pass through of lower raw material costs.
Income from operations improved to $315 million in the quarter compared to $281 million in the third quarter of 2015. Segment income improved to $333 million in the quarter compared to $328 million in 2015, and included $9 million of unfavorable currency translation.
Commenting on the quarter, Timothy J. Donahue, President and Chief Executive Officer, stated, "Performance in the third quarter was solid across most businesses, notably beverage cans where global sales volumes grew 4% during the quarter.
"We are on schedule with our capacity expansion projects to meet continuing growth in beverage can demand. In June, we successfully commenced operations at our third Cambodian beverage can plant in Phnom Penh. Our new beverage can plant in Monterrey, Mexico as well as the second production line at our Osmaniye, Turkey facility are scheduled to begin production during this year's fourth quarter. In early 2017, we expect to start up our Nichols, New York beverage can plant, which will expand our specialty can presence in North America. In Colombia, we have begun a capacity expansion with the added production expected to be available for shipment in the second quarter of 2017. We will also begin installation of a second high speed aluminum production line at our beverage can plant in Custines, France, which will complete that facility's conversion from steel to aluminum. Commercial start-up of the line is scheduled for April 2017.
"Looking ahead, we continue to see opportunities as we meet growing customer and consumer demand."
Interest expense was $59 million in the third quarter of 2016 compared to $68 million in 2015 primarily due to lower outstanding debt.
Net income attributable to Crown Holdings in the third quarter increased to $183 million over the $141 million in the third quarter of 2015. Reported diluted earnings per share were $1.31 in the third quarter of 2016 compared to $1.01 in the 2015 third quarter. Adjusted diluted earnings per share were $1.33 compared to $1.34 in 2015.
A reconciliation from net income and diluted earnings per share to adjusted net income and adjusted diluted earnings per share is provided below.
Nine Month Results
Net sales for the first nine months of 2016 were $6,361 million compared to $6,735 million in the first nine months of 2015, and included $200 million of unfavorable currency translation in 2016 compared to 2015 and the pass through of lower raw material costs.
Income from operations improved to $829 million compared to $726 million in the first nine months of 2015. Segment income improved to $842 million compared to $792 million in the first nine months of 2015, and included $30 million of unfavorable currency translation.
Interest expense was $181 million for the first nine months of 2016 compared to $202 million in the same period of 2015 primarily due to lower outstanding debt.
Net income attributable to Crown Holdings for the first nine months of 2016 increased to $431 million over the $327 million in the first nine months of 2015. Reported diluted earnings per share for the first nine months of 2016 were $3.09 compared to $2.35 in the same period of last year. Adjusted diluted earnings per share were $3.21 compared to $2.89 in 2015.
Segment income, adjusted free cash flow, adjusted net income, the adjusted effective tax rate, adjusted earnings per share, and the information presented excluding the impact of currency translation 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 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 as the principal measure of the performance of its operations and adjusted free cash flow as the principal measure of its liquidity. The Company considers both 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, adjusted diluted earnings per share, and information excluding the impact of currency translation 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 provides a meaningful measure 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, the adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share and information excluding the impact of currency translation 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, the adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share and information unadjusted for currency translation can be found within this release.
The Company will hold a conference call tomorrow, October 20, 2016 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) 395-0227 or toll-free (888) 606-8412 and the access passcode is 3799330. 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 October 27. The telephone numbers for the replay are (402) 998-0517 or toll free (888) 282-0034.
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 trends in 2016; the future growth in demand for beverage, food and aerosol cans, including in regions where the Company is adding capacity; the Company's ability to successfully complete and begin production at beverage can capacity or conversion projects within expected timelines and budgets in Mexico, Turkey, New York, Colombia and France; and the Company's ability to continue to identify and successfully complete and operate additional projects 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, 2015 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.
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SOURCE Crown Holdings, Inc.