BROOMFIELD, Colo., April 24 /PRNewswire-FirstCall/ -- Ball
Corporation (NYSE:BLL) today reported first quarter 2008 earnings
of $83.8 million, or 85 cents per diluted share, on sales of $1.74
billion, compared to $81.2 million, or 78 cents per diluted share,
on sales of $1.69 billion in the first quarter of 2007. The first
quarter 2008 results include an after-tax gain of $4.4 million, or
five cents per diluted share, on the sale during the quarter of an
aerospace engineering services business in Australia. The
improvement over what were record results in the first quarter of
2007 was due to better performance in the company's metal food and
household products, Americas, segment; modest improvement in the
company's plastic packaging, Americas, segment; continued sales and
earnings growth in the metal beverage packaging, Europe, segment;
and fewer shares outstanding as a result of stock repurchases.
First quarter results in the metal beverage packaging,
Americas/Asia, segment and the aerospace and technologies segment
were down from especially strong performances in the first quarter
of 2007. "We are pleased with our first quarter performance," said
R. David Hoover, chairman, president and chief executive officer.
"We felt it would be a challenge to equal our 2007 first quarter
performance due to the unusually strong results we experienced in
metal beverage packaging, Americas and Asia, and aerospace and
technologies last year. To see results begin to turnaround in our
metal food and household products packaging, Americas, segment and
to have overall results for the quarter exceed a year ago is
gratifying." Metal Beverage Packaging, Americas/Asia Earnings in
the corporation's metal beverage packaging, Americas/Asia, segment
were $74 million on sales of $703.9 million, compared to $101.9
million on sales of $701.8 million in the first quarter of 2007.
During the first quarter of 2008, the company changed its segment
reporting to include results from China in what is now the metal
beverage packaging, Americas/Asia, segment. The results for the
quarter ended April 1, 2007, have been adjusted for the change (see
note 1 in the accompanying condensed financials). "We announced
yesterday that we plan to close our metal beverage container
manufacturing plant in Kent, Wash.," said John A. Hayes, executive
vice president and chief operating officer. "That will help balance
our 12-ounce beverage can manufacturing capacity in North America
to our current and anticipated needs; redeploy economically
unsustainable capacity; and better utilize the equipment to
generate higher returns elsewhere in our worldwide system." Metal
Beverage Packaging, Europe Earnings in the metal beverage
packaging, Europe, segment were $48 million on sales of $405.6
million, compared to $36.8 million on sales of $320.7 million in
the first quarter of 2007. "Can sales volumes in our metal beverage
packaging, Europe, segment were up more than 13 percent over the
first quarter of 2007, mainly related to continued market growth
throughout the region and our ability to meet the demand, thanks to
the start up of new lines in Hassloch and Hermsdorf, Germany,
during the second quarter of last year," Hayes said. "A stronger
euro also contributed to the earnings improvement." Metal Food
& Household Products Packaging, Americas The metal food and
household products packaging, Americas, segment first quarter
results were earnings of $14.8 million on sales of $263.8 million,
compared to a loss of $0.2 million on sales of $278.8 million in
the first quarter of 2007. "The numerous actions we have taken and
are taking are beginning to have a positive impact on the
performance of our metal food and household products packaging
segment," Hayes said. "We are on target and on schedule toward
completing this year the previously announced restructuring and
streamlining of our manufacturing assets. We are making progress on
rebuilding this business, but we still have a long way to go. We
will continue to optimize our cost structure and pricing and pursue
other opportunities to achieve acceptable and sustainable results
in this segment." Plastic Packaging, Americas Earnings in the
plastic packaging, Americas, segment were $4.8 million on sales of
$188.9 million, compared to $2.3 million on sales of $186.6 million
in the first quarter of 2007. "We continue to work on improving
results in our plastic packaging, Americas, segment," Hayes said.
"The improvement in the first quarter was largely the result of our
ongoing efforts to take costs out of our system and a better mix of
custom products. We continue to focus on those factors and on
additional ways to make this business segment economically
sustainable." Aerospace and Technologies Results in the aerospace
and technologies segment were earnings of $22 million on sales of
$178 million compared to $19.6 million on sales of $206.3 million
in the first quarter of 2007. The first quarter 2008 results
include a pre-tax gain of $7.1 million from the sale of the unit in
Australia. "We have several major projects and numerous smaller
ones in various stages of bid and proposal," Hayes said. "The
timing on some of those projects is stretching out due to
government budgets and funding priorities, but we feel good about
our prospects." Outlook Raymond J. Seabrook, executive vice
president and chief financial officer, said, "Ball's credit quality
is strong, as demonstrated by a recent upgrading of our bank loans
to investment grade by one of the rating agencies. "We remain on
track to repurchase $300 million of our common stock in 2008,
having bought back a net $125 million worth through the first
quarter," Seabrook said. "Our full year cash flow is somewhat of a
moving target this early in the year due in part to the timing of
our capital spending on growth projects, but our current target is
in the range of $300 million." "Our first quarter results provide a
good start on what will be a busy year for Ball Corporation,"
Hoover said. "We are building new facilities internationally,
redeploying assets to achieve greater returns on them,
consolidating operations to improve results and generally working
to have leaner, more efficient businesses. "The management
structure we put in place at the beginning of the year is providing
energy and focus throughout the company," Hoover said. "That, along
with the solid start, makes us optimistic about prospects for
2008." Ball Corporation is a supplier of high-quality metal and
plastic packaging for beverage, food and household products
customers, and of aerospace and other technologies and services,
primarily for the U.S. government. Ball Corporation and its
subsidiaries employ more than 15,500 people worldwide and reported
2007 sales of $7.4 billion. Conference Call Details Ball will hold
its regular quarterly conference call on the company's results and
performance today at 9 a.m. Mountain Time (11 a.m. Eastern). The
North American toll-free number for the call is 800-732-6870.
International callers should dial 212-231-2902. Please use the
following URL for a Web cast of the live call:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-
eventDetails&c=115234&eventID=1808135 For those unable to
listen to the live call, a taped replay will be available after the
call's conclusion until 1 p.m. Eastern Time on May 1, 2008. To
access the replay, call 800-633-8284 (North American callers) or
402-977-9140 (international callers) and use reservation number
21379244. A written transcript of the call will be posted within 48
hours of the call's conclusion to Ball's Web site at
http://www.ball.com/ in the investors section under
"presentations." Forward-Looking Statements This release contains
"forward-looking" statements concerning future events and financial
performance. Words such as "expects," "anticipates," "estimates"
and similar expressions are intended to identify forward-looking
statements. Such statements are subject to risks and uncertainties
which could cause actual results to differ materially from those
expressed or implied. The company undertakes no obligation to
publicly update or revise any forward- looking statements, whether
as a result of new information, future events or otherwise. Key
risks and uncertainties are summarized in filings with the
Securities and Exchange Commission, including Exhibit 99.2 in our
Form 10-K, which are available at our Web site and at
http://www.sec.gov/. Factors that might affect our packaging
segments include fluctuation in product demand and preferences;
availability and cost of raw materials, including recent
significant increases in resin, steel, aluminum and energy costs,
and the ability to pass such increases on to customers; competitive
packaging availability, pricing and substitution; changes in
climate and weather; crop yields; competitive activity; failure to
achieve anticipated productivity improvements or production cost
reductions, including our beverage can end project; mandatory
deposit or other restrictive packaging laws; changes in major
customer or supplier contracts or loss of a major customer or
supplier; and changes in foreign exchange rates, tax rates and
activities of foreign subsidiaries. Factors that might affect our
aerospace segment include: funding, authorization, availability and
returns of government and commercial contracts; and delays,
extensions and technical uncertainties affecting segment contracts.
Factors that might affect the company as a whole include those
listed plus: accounting changes; changes in senior management;
successful or unsuccessful acquisitions, joint ventures or
divestitures; integration of recently acquired businesses;
regulatory action or laws including tax, environmental, health and
workplace safety, including in respect of chemicals or substances
used in raw materials or in the manufacturing process; governmental
investigations; technological developments and innovations;
goodwill impairment; antitrust, patent and other litigation;
strikes; labor cost changes; rates of return projected and earned
on assets of the company's defined benefit retirement plans;
pension changes; reduced cash flow; interest rates affecting our
debt; and changes to unaudited results due to statutory audits or
other effects. Condensed Financials (March 2008) Unaudited
Statements of Consolidated Earnings ($ in millions, except per
share Three months ended amounts) March 30, 2008 April 1, 2007 Net
sales (Note 1) $1,740.2 $1,694.2 Costs and expenses Cost of sales
(excluding depreciation and amortization) 1,437.7 1,394.3
Depreciation and amortization 74.6 65.0 Gain on sale of subsidiary
(Note 2) (7.1) - Selling, general and administrative 81.6 82.2
1,586.8 1,541.5 Earnings before interest and taxes (Note 1) 153.4
152.7 Interest expense (36.2) (37.9) Tax provision (37.2) (36.7)
Minority interests (0.1) (0.1) Equity in results of affiliates 3.9
3.2 Net earnings $83.8 $81.2 Earnings per share (Note 2): Basic
$0.86 $0.79 Diluted $0.85 $0.78 Weighted average shares outstanding
(000s): Basic 97,199 102,110 Diluted 98,589 103,815 Condensed
Financials (March 2008) Unaudited Statements of Consolidated Cash
Flows Three months ended ($ in millions) March 30, 2008 April 1,
2007 Cash Flows From Operating Activities: Net earnings $83.8 $81.2
Depreciation and amortization 74.6 65.0 Gain on sale of subsidiary
(Note 2) (7.1) - Income taxes 8.7 19.2 Pension funding and expense,
net 4.5 4.2 Other changes in working capital (381.1) (281.3) Other
2.0 4.0 (214.6) (107.7) Cash Flows From Investing Activities:
Additions to property, plant and equipment (74.5) (88.1) Proceeds
from sale of subsidiary 8.7 - Property insurance proceeds - 48.6
Other (2.3) 2.4 (68.1) (37.1) Cash Flows From Financing Activities:
Net change in borrowings 352.1 139.2 Dividends (9.6) (10.2)
Purchases of common stock, net (125.1) (87.5) Other 0.4 3.0 217.8
44.5 Effect of exchange rate changes on cash 3.2 - Change in cash
(61.7) (100.3) Cash-beginning of period 151.6 151.5 Cash-end of
period $89.9 $51.2 Condensed Financials (March 2008) Unaudited
Consolidated Balance Sheets ($ in millions) March 30, 2008 April 1,
2007 Assets Current assets Cash and cash equivalents $89.9 $51.2
Receivables, net 675.1 698.6 Inventories, net 1,134.0 1,018.7
Deferred taxes and other current assets 220.6 90.7 Total current
assets 2,119.6 1,859.2 Property, plant and equipment, net 1,999.9
1,889.2 Goodwill 1,952.6 1,770.4 Other assets 374.1 399.2 Total
assets $6,446.2 $5,918.0 Liabilities and Shareholders' Equity
Current liabilities Short-term debt and current portion of
long-term debt $309.1 $238.2 Payables and accrued liabilities
1,231.7 1,095.8 Total current liabilities 1,540.8 1,334.0 Long-term
debt 2,450.5 2,360.7 Other liabilities and minority interests 997.6
1,007.9 Shareholders' equity 1,457.3 1,215.4 Total liabilities and
shareholders' equity $6,446.2 $5,918.0 Notes to Condensed
Financials (March 2008) 1. Business Segment Information Due to
first quarter 2008 management reporting changes, Ball's China
operations are included in the metal beverage packaging, Americas
and Asia, segment. The results for the quarter ended April 1, 2007,
have been retrospectively adjusted to conform to the current year
presentation. Three months ended ($ in millions) March 30, 2008
April 1, 2007 Sales- Metal beverage packaging, Americas & Asia
$703.9 $701.8 Metal beverage packaging, Europe 405.6 320.7 Metal
food & household packaging, Americas 263.8 278.8 Plastic
packaging, Americas 188.9 186.6 Aerospace & technologies 178.0
206.3 Consolidated net sales $1,740.2 $1,694.2 Earnings before
interest and taxes- Metal beverage packaging, Americas & Asia
$74.0 $101.9 Metal beverage packaging, Europe 48.0 36.8 Metal food
& household packaging, Americas 14.8 (0.2) Plastic packaging,
Americas 4.8 2.3 Aerospace and technologies 14.9 19.6 Gain on sale
of subsidiary (Note 2) 7.1 - Total aerospace & technologies
22.0 19.6 Segment earnings before interest and taxes 163.6 160.4
Undistributed corporate costs (10.2) (7.7) Earnings before interest
and taxes $153.4 $152.7 Notes to Condensed Financials (March 2008)
2. Sale of Subsidiary On February 15, 2008, Ball Aerospace &
Technologies Corp. (BATC) completed the sale of its shares in Ball
Solutions Group Pty Ltd (BSG) to QinetiQ Pty Ltd for approximately
$10.5 million. BSG was previously a wholly owned Australian
subsidiary of BATC that provided services to the Australian
department of defense and related government agencies. After an
adjustment for working capital items, the sale resulted in a pretax
gain of $7.1 million ($4.4 million after tax). A summary of the
effects of the above transaction on after-tax earnings follows: ($
in millions, except per share Three months ended amounts) March 30,
2008 April 1, 2007 Net earnings as reported $83.8 $81.2 Gain on
sale of subsidiary, net of tax (4.4) - Net earnings before gain on
sale of subsidiary $79.4 $81.2 Per diluted share before gain on
sale of subsidiary $0.80 $0.78 Ball's management segregates the
above item to evaluate the performance of the company's operations.
The information is presented on a non-U.S. GAAP basis and should be
considered in connection with the unaudited statements of
consolidated earnings. Non-U.S. GAAP measures should not be
considered in isolation. 3. Subsequent Event On April 23, 2008, the
company announced plans to close a U.S. metal beverage packaging
plant in Kent, Wash. The plant operates two, 12-ounce aluminum
beverage can manufacturing lines that produce approximately 1.1
billion cans annually. Those lines will be redeployed to generate
higher returns elsewhere in Ball's worldwide system. A pretax
charge of approximately $12 million ($7 million after tax) will be
recorded in the second quarter results. On final disposition of the
facilities, the closure is expected to be approximately $4 million
cash positive inclusive of income tax benefits. DATASOURCE: Ball
Corporation CONTACT: Investors, Ann T. Scott, +1-303-460-3537, , or
Media, Scott McCarty, +1-303-460-2103, , both of Ball Corporation
Web site: http://www.ball.com/
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