PHILADELPHIA, Feb. 3, 2014 /PRNewswire/ -- Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the fourth quarter ended December 31, 2013.
- Full year income per diluted share $2.30, Before Certain Items $2.99
- Q4 income per diluted share $0.36, Before Certain Items $0.48
- Full year free cash flow of $641 million
- Announced agreement to acquire Mivisa Envases, SAU
- 6.9 million shares repurchased during the year
- Commercialized three new beverage can plants in Southeast Asia
- Global beverage can volumes increased 6% in the fourth quarter and 5% for the full year
- Issued $1.0 billion of Senior Notes due 2023 at 4.5%
- Refinanced and extended maturities of revolving credit and term loan facilities
Twelve Month Results
For the full year, net sales grew to $8,656 million over the $8,470 million in 2012, reflecting increased global beverage can volumes and $54 million from foreign currency translation, partially offset by the pass-through of lower raw material costs.
Gross profit for 2013 rose to $1,342 million over the $1,277 million in 2012. The increase in gross profit primarily reflects increased beverage can sales, lower depreciation expense and $10 million of favorable foreign currency translation.
Selling and administrative expense for 2013 was $425 million compared to $382 million for 2012. The increase in 2013 included charges of $39 million ($31 million, net of tax, or $0.22 per diluted share) related to reserves provided against outstanding receivable balances due from a European food can customer and a North American food can customer and $4 million of foreign currency translation.
Segment income (a non-GAAP measure defined by the Company as gross profit less selling and administrative expense) in 2013 grew to $917 million over the $895 million in 2012, including $6 million of improvement due to foreign currency translation.
Commenting on the year, John W. Conway, Chairman and Chief Executive Officer, stated, "We finished another successful year in 2013. Sales were up over prior year, and we were very fortunate that global beverage can unit sales increased 5%. Demand in our food can business was essentially flat year-on-year and our global aerosol business increased unit sales by 2%. All of this contributed to year-on-year improvement in gross profit, segment income and net income after certain items. We put special effort into generating substantial free cash and the results speak for themselves with free cash flow at an all-time record for our Company.
"Looking ahead to 2014, general business conditions in North America and Europe are expected to improve, positively affecting the Company's performance. We also anticipate further global beverage can growth and solid contributions from the 2013 capacity expansions in Cambodia, China, Malaysia, Thailand and Vietnam, as well as the start-up of a new plant in Teresina, Brazil. This, combined with a continuing focus on cost reduction and productivity improvement throughout the Company, will deliver increased value to our shareholders."
Interest expense for 2013 was $236 million compared to $226 million in 2012, primarily reflecting higher average debt outstanding.
Net income attributable to Crown Holdings for 2013 was $324 million compared to $559 million in 2012. Income per diluted share for 2013 was $2.30 compared to $3.77 last year. Net income per diluted share before certain items increased to $2.99 over the $2.81 in 2012.
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.
The Company generated free cash flow of $641 million and $345 million, in 2013 and 2012 respectively. Free cash flow in 2013 benefited from working capital improvements and lower capital expenditures. The Company repurchased $300 million of its common shares during the year.
During the fourth quarter of 2013, the Company announced that it had entered into an agreement to acquire Mivisa Envases, SAU, a leading Spanish manufacturer of two- and three-piece food cans and ends in a transaction valued at €1.2 billion. The acquisition, which is subject to review by the European Commission and other competition authorities, is expected to close during 2014 and to be earnings accretive.
Also during the fourth quarter, the Company successfully refinanced and extended the maturities of its revolving credit facilities to 2018 and term loan facilities to 2018 and 2019, including delayed draw term loan facilities in support of the pending acquisition of Mivisa Envases.
Fourth Quarter Results
Net sales in the fourth quarter grew to $2,071 million over the $2,037 million in the fourth quarter of 2012, primarily due to increased global beverage can volumes and $15 million from the impact of foreign currency translation, partially offset by decreased food can volumes.
Fourth quarter gross profit was $274 million compared to $281 million in the 2012 fourth quarter, as increased beverage can volumes and lower depreciation expense were offset by lower volumes and substantially reduced production activity across food can operations in North America and Europe.
Selling and administrative expense increased to $106 million in the fourth quarter over the $94 million in the prior year fourth quarter. The current year expense included a charge of $10 million ($9 million, net of tax, or $0.07 per diluted share) to increase the reserve against a receivable balance due from a European food can customer, and costs of $3 million ($3 million, net of tax, or $0.02 per diluted share) related to the Company's agreement to acquire Mivisa Envases.
Segment income was $168 million in the fourth quarter compared to $187 million in the fourth quarter of 2012.
In the fourth quarter of 2013, the Company recorded a charge of $32 million ($21 million, net of tax) to increase its reserve for asbestos-related liabilities. Cash payments for asbestos-related liabilities were $28 million in 2013.
Net income attributable to Crown Holdings in the fourth quarter was $49 million compared to $31 million in the fourth quarter last year. Income per diluted share was $0.36 in the fourth quarter compared to $0.21 in the fourth quarter of 2012. Net income per diluted share before certain items was $0.48 compared to $0.51 in the fourth quarter of 2012.
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 regarding net income before certain items and income per diluted share before certain items does not conform to U.S. 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 and income per diluted share before certain items can be used to evaluate the Company's operations. Segment income, free cash flow, net income before certain items and income per diluted share before certain items are derived from the Company's Consolidated Statements of Operations and Cash Flows, as applicable, and reconciliations to segment income, free cash flow, net income before certain items and income per diluted share before certain items can be found within this release.
The Company will hold a conference call tomorrow, February 4, 2014 at 9:00 a.m. (EST) 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 (212) 519-0813 or toll-free (888) 994-8798 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 February 11. The telephone numbers for the replay are (203) 369-1605 or toll free (866) 484-6431.
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 whether general business conditions in North America and Europe will improve and whether this will positively affect the Company's performance, whether there will be further global beverage can growth in 2014, the Company's ability to continue to increase beverage can sales in Cambodia, China, Malaysia, Thailand and Vietnam, and successfully implement cost reduction and productivity improvement throughout the Company, and whether the Mivisa acquisition will close in 2014 and be accretive to earnings 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, 2012 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, (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.
SOURCE Crown Holdings, Inc.