PHILADELPHIA, July 17, 2013 /PRNewswire/ -- Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the second quarter ended June 30, 2013.
Second Quarter Highlights
- Income per diluted share $0.93; Before Certain Items $0.96
- 4.4 million shares repurchased in the quarter
- Global beverage can volumes up 3% in Q2, 5% YTD
- New plants in Danang, Vietnam and Bangkok, Thailand commercialized in second quarter
Net sales in the second quarter grew to $2,223 million compared to $2,184 million in the second quarter of 2012, primarily due to increased global beverage and food can unit sales offset by the pass-through of lower raw material costs.
Second quarter gross profit improved to $375 million compared to $340 million in the 2012 second quarter, primarily due to increased beverage can sales volumes and lower depreciation expense.
Selling and administrative expense increased to $102 million in the second quarter compared to $90 million in the prior year second quarter and included a charge of $11 million to record a reserve against a portion of the outstanding receivable balance due from a European food can customer.
Segment income (a non-GAAP measure defined by the Company as gross profit less selling and administrative expense) rose to $273 million in the second quarter compared to $250 million in the second quarter of 2012 primarily due to improved gross profit, partially offset by the receivable reserve discussed above. Lower corporate expense includes $6 million of lower pension expense.
Commenting on the quarter, John W. Conway, Chairman and Chief Executive Officer, stated, "Our performance in the quarter was in line with our expectations and we remain on track for another successful year. We continue to benefit from our beverage can capacity expansions targeted at the most promising growth markets. During the second quarter we began commercial production at new beverage can plants in Danang, Vietnam and Bangkok, Thailand and last week began production at our new plant in Sihanoukville, Cambodia."
Interest expense in the second quarter was $61 million compared to $55 million in the second quarter of 2012 primarily due to higher average debt outstanding.
Net income attributable to Crown Holdings in the second quarter was $133 million compared to $134 million in the second quarter last year. Income per diluted share increased to $0.93 in the second quarter compared to $0.89 in the second quarter of 2012. Net income per diluted share before certain items increased to $0.96 over the $0.84 in the second quarter of 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.
During the second quarter, the Company repurchased 4.4 million shares of its outstanding common stock for $188 million through open market purchases.
Six Month Results
Net sales for the first six months of 2013 were $4,196 million compared to $4,131 million in the first six months of 2012, reflecting increased global beverage can volumes partially offset by the pass-through of lower raw material costs.
Gross profit for the six month period improved to $674 million compared to $627 million in the first six months of 2012. The increase in gross profit primarily reflects increased beverage can sales and lower depreciation expense.
Selling and administrative expense for the six month period was $206 million compared to $196 million for the same 2012 period and includes a charge of $11 million for the receivable reserve discussed above.
Segment income in the first half of 2013 grew to $468 million from the $431 million in the first six months of 2012 primarily due to improved gross profit. Lower corporate expense includes $11 million of lower pension expense.
Interest expense for the first six months of 2013 was $121 million compared to $113 million in the same period of 2012, reflecting higher average debt outstanding.
Net income attributable to Crown Holdings for the first six months of 2013 was $174 million compared to $203 million in the first six months of 2012. Income per diluted share for the first six months of 2013 was $1.21 compared to $1.35 in the first half of last year. Net income per diluted share before certain items increased to $1.46 over the $1.30 in 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, July 18, 2013 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 (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 July 25. The telephone numbers for the replay are (203) 369-1497 or toll free (866) 470-8797.
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 Company's ability to collect any or all of the outstanding receivable balance due from a European food can customer, the level of future customer demand for the Company's products in emerging and developed markets and the Company's ability to successfully commercialize new production capacity in Vietnam, Thailand and Cambodia, and to conservatively and effectively deploy capital in the Company's emerging market expansion program 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, or
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.