BROOMFIELD, Colo., July 24 /PRNewswire-FirstCall/ -- Ball
Corporation (NYSE:BLL) today announced second quarter earnings of
$100 million, or $1.02 per diluted share, on sales of $2.08
billion, compared to $105.9 million, or $1.03 per diluted share, on
sales of $2.03 billion in the second quarter of 2007. For the first
six months of 2008, Ball's earnings were $183.8 million, or $1.87
per diluted share, on sales of $3.82 billion. First half 2007
results were earnings of $187.1 million, or $1.81 per diluted
share, on sales of $3.73 billion. The second quarter and first six
months of 2008 included an $8.1 million after-tax charge, or
approximately 8 cents per diluted share, for various business
consolidation and other activities initiated in the quarter. The
results for the first half of 2008 also included an after-tax gain
of $4.4 million, or approximately 4 cents per diluted share, on the
sale in the first quarter of a small aerospace business in
Australia. "We are pleased that comparable earnings for both the
second quarter and the first half increased over record results
during the same period a year ago," said R. David Hoover, chairman,
president and chief executive officer. "Our operations are
performing well in a difficult economic environment," said John A.
Hayes, executive vice president and chief operating officer. "Our
food and household products packaging and aerospace and
technologies segments led the company's improved performance and
demand continues to increase for beverage cans in Europe, China and
Brazil. We are focused on margin management, reducing costs and
balancing supply with demand in all of our packaging segments. The
aerospace and technologies segment had a record second quarter in
terms of earnings. Though pleased with this segment's first half
performance, we remain focused on building its backlog." Metal
Beverage Packaging, Americas and Asia Earnings for the quarter in
the metal beverage packaging, Americas and Asia, segment were $74
million on sales of $833.9 million. In 2007, second quarter
earnings in the segment were $89.1 million on sales of $871.2
million. For the first six months, earnings in 2008 were $148
million on sales of $1.54 billion, compared to $191 million on
sales of $1.57 billion in the first half of 2007. The second
quarter and first half of 2008 included a charge of $10.6 million
to close a metal beverage container manufacturing plant in Kent,
Wash. Also in the second quarter, a decision to continue to operate
existing end- making equipment and not install a new end-module
that would have been part of a multi-year project resulted in a
gain of $7.2 million for the recovery of costs previously provided
for closure obligations. Improved operating performance in the
quarter partially offset the effects of softer North American
volumes and the absence in 2008 of the North American inventory
gain realized in the second quarter of 2007. Sales volumes in China
increased around 20 percent. Metal Beverage Packaging, Europe
Second quarter earnings in the metal beverage packaging, Europe,
segment were $77.2 million on sales of $571 million, compared to
$86.1 million on sales of $484.8 million a year ago. For the first
six months, earnings were $125.2 million on sales of $976.6
million, compared to $122.9 million on sales of $805.5 million in
the first half of 2007. Volumes in the metal beverage packaging,
Europe, segment were up approximately 7 percent over 2007 levels
for the quarter despite cool, wet weather in much of eastern and
central Europe and transportation and customer strikes in France
and Spain. The strength of the euro contributed to higher European
beverage can earnings in the quarter and helped offset the absence
of $17 million of business interruption insurance proceeds in 2007
stemming from a 2006 fire at a German plant. Metal Food &
Household Products Packaging, Americas The metal food and household
products packaging, Americas, segment second quarter results were
earnings of $14.3 million on sales of $283.2 million, compared to
$11.1 million on sales of $284 million in 2007. For the first half
of 2008, segment earnings were $29.1 million on sales of $547
million, compared to $10.9 million on sales of $562.8 million in
the first six months of 2007. The metal food and household products
packaging segment's improved performance was driven by increases in
pricing, a better product mix and cost reduction activities. The
previously announced closing of plants in California and Georgia is
on schedule. Plastic Packaging, Americas Earnings in the plastic
packaging, Americas, segment for the second quarter of 2008 were
$1.4 million on sales of $201 million, compared to $7.1 million on
sales of $198.7 million in 2007. For the first half of 2008,
earnings were $6.2 million on sales of $389.9 million, compared to
$9.4 million on sales of $385.3 million in the first six months of
2007. The second quarter and first half of 2008 included a charge
of $4.3 million for the closure of the Brampton, Ontario, plant.
Those operations will be consolidated into the company's other
plastic packaging manufacturing facilities in North America.
Additional plant closure costs of approximately $2 million are
expected to be incurred in the second half of the year. The closure
is expected to result in annual, fixed-cost savings of
approximately $4 million beginning in 2009. Aerospace &
Technologies Earnings in the aerospace and technologies segment
were $22.7 million on sales of $191.2 million during the second
quarter of 2008, compared to $15.6 million on sales of $194.1
million in the same period a year ago. For the first half of 2008,
segment earnings were $44.7 million on sales of $369.2 million,
compared to $35.2 million on sales of $400.4 million in the first
six months of 2007. The first half of 2008 included a pretax gain
of $7.1 million on the sale in the first quarter of the segment's
aerospace engineering services business in Australia. Improved
program execution and contract mix, lower unrecoverable costs and
higher profit accruals on certain fixed price contracts as they
near completion contributed to the higher earnings. Outlook "The
company's comparable performance during the first six months of
2008 improved upon a record first half performance in 2007," Hoover
said. "We continue to expect cash flow for the year to be in the
range of $300 million, including capital spending of around $330
million. Even with the tough economic conditions our businesses
have experienced to date, our goal for the second half of 2008 is
to exceed last year's solid second half performance." 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
approximately $7.4 billion. Conference Call Details Ball
Corporation 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
800-734-8583. International callers should dial 212-231-2900.
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=1882825
For those unable to listen to the live call, a taped replay will be
available about an hour after the live call's conclusion until 1
p.m. Eastern Time on July 31, 2008. To access the replay, call
800-633-8284 (North American callers) or 402-977-9140
(international callers) and use reservation number 21386780. 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; the current global credit squeeze; 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 (June 2008) Unaudited
Statements of Consolidated Earnings Three months ended Six months
ended ($ in millions, except per June 29, July 1, June 29, July 1,
share amounts) 2008 2007 2008 2007 Net sales (Note 1) $2,080.3
$2,032.8 $3,820.5 $3,727.0 Costs and expenses Cost of sales
(excluding depreciation and amortization) 1,738.5 1,682.6 3,176.2
3,076.9 Depreciation and amortization 76.2 69.9 150.8 134.9
Business consolidation costs and other (Note 2) 11.5 - 11.5 - Gain
on sale of subsidiary (Note 2) - - (7.1) - Selling, general and
administrative 78.5 87.3 160.1 169.5 1,904.7 1,839.8 3,491.5
3,381.3 Earnings before interest and taxes (Note 1) 175.6 193.0
329.0 345.7 Interest expense (34.7) (38.1) (70.9) (76.0) Tax
provision (45.4) (52.3) (82.6) (89.0) Minority interests (0.1)
(0.1) (0.2) (0.2) Equity in results of affiliates 4.6 3.4 8.5 6.6
Net earnings $100.0 $105.9 $183.8 $187.1 Earnings per share (Note
2): Basic $1.03 $1.04 $1.89 $1.84 Diluted $1.02 $1.03 $1.87 $1.81
Weighted average shares outstanding (000s): Basic 96,911 101,542
97,055 101,826 Diluted 98,459 103,165 98,465 103,374 Condensed
Financials (June 2008) Unaudited Statements of Consolidated Cash
Flows Three months ended Six months ended ($ in millions) June 29,
July 1, June 29, July 1, 2008 2007 2008 2007 Cash Flows From
Operating Activities: Net earnings $100.0 $105.9 $183.8 $187.1
Depreciation and amortization 76.2 69.9 150.8 134.9 Business
consolidation costs and other (Note 2) 11.5 - 11.5 - Gain on sale
of subsidiary (Note 2) - - (7.1) - Income taxes (1.1) 33.6 6.3 57.4
Pension funding and expense, net (3.8) (6.4) 0.7 (2.4) Legal
settlement - - (70.3) - Other changes in working capital (54.8)
137.7 (366.3) (148.2) Other 17.0 18.1 21.0 22.3 145.0 358.8 (69.6)
251.1 Cash Flows From Investing Activities: Additions to property,
plant and equipment (86.0) (78.2) (160.5) (166.3) Proceeds from
sale of subsidiary - - 8.7 - Property insurance proceeds - - - 48.6
Other (7.9) (1.7) (10.2) 0.7 (93.9) (79.9) (162.0) (117.0) Cash
Flows From Financing Activities: Net change in borrowings (16.8)
(224.8) 335.3 (85.6) Dividends (9.4) (10.2) (19.0) (20.4) Purchases
of common stock, net (56.1) (7.8) (181.2) (95.3) Other 2.0 3.7 2.4
6.7 (80.3) (239.1) 137.5 (194.6) Effect of exchange rate changes on
cash 2.7 0.9 5.9 0.9 Change in cash (26.5) 40.7 (88.2) (59.6)
Cash-beginning of period 89.9 51.2 151.6 151.5 Cash-end of period
$63.4 $91.9 $63.4 $91.9 Condensed Financials (June 2008) Unaudited
Consolidated Balance Sheets June 29, July 1, ($ in millions) 2008
2007 Assets Current assets Cash and cash equivalents $63.4 $91.9
Receivables, net 839.0 772.4 Inventories, net 1,092.8 898.8
Deferred taxes and other current assets 170.2 93.4 Total current
assets 2,165.4 1,856.5 Property, plant and equipment, net 2,016.0
1,913.8 Goodwill 1,951.6 1,783.8 Other assets 447.6 371.0 Total
assets $6,580.6 $5,925.1 Liabilities and Shareholders' Equity
Current liabilities Short-term debt and current portion of
long-term debt $327.1 $162.1 Payables and accrued liabilities
1,261.4 1,173.4 Total current liabilities 1,588.5 1,335.5 Long-term
debt 2,415.3 2,233.0 Other liabilities and minority interests
1,053.6 1,011.0 Shareholders' equity 1,523.2 1,345.6 Total
liabilities and shareholders' equity $6,580.6 $5,925.1 Notes to
Condensed Financials (June 2008) 1. Business Segment Information
Due to first quarter 2008 management reporting changes, Ball's
China operations are included in the metal beverage packaging,
Americas and Asia, segment. The results for the 2007 periods have
been retrospectively adjusted to conform to the current year
presentation. Three months ended Six months ended June 29, July 1,
June 29, July 1, ($ in millions) 2008 2007 2008 2007 Sales- Metal
beverage packaging, Americas & Asia $833.9 $871.2 $1,537.8
$1,573.0 Metal beverage packaging, Europe 571.0 484.8 976.6 805.5
Metal food & household packaging, Americas 283.2 284.0 547.0
562.8 Plastic packaging, Americas 201.0 198.7 389.9 385.3 Aerospace
& technologies 191.2 194.1 369.2 400.4 Consolidated net sales
$2,080.3 $2,032.8 $3,820.5 $3,727.0 Earnings before interest and
taxes- Metal beverage packaging, Americas & Asia $77.4 $89.1
$151.4 $191.0 Business consolidation costs and other (Note 2) (3.4)
- (3.4) - Total metal beverage packaging, Americas & Asia 74.0
89.1 148.0 191.0 Metal beverage packaging, Europe 77.2 86.1 125.2
122.9 Metal food & household packaging, Americas 14.3 11.1 29.1
10.9 Plastic packaging, Americas 5.7 7.1 10.5 9.4 Business
consolidation costs and other (Note 2) (4.3) - (4.3) - Total
plastic packaging, Americas 1.4 7.1 6.2 9.4 Aerospace &
technologies 22.7 15.6 37.6 35.2 Gain on sale of subsidiary (Note
2) - - 7.1 - Total aerospace & technologies 22.7 15.6 44.7 35.2
Segment earnings before interest and taxes 189.6 209.0 353.2 369.4
Undistributed corporate costs (10.2) (16.0) (20.4) (23.7) Business
consolidation costs and other (Note 2) (3.8) - (3.8) - Total
undistributed corporate costs (14.0) (16.0) (24.2) (23.7) Earnings
before interest and taxes $175.6 $193.0 $329.0 $345.7 Notes to
Condensed Financials (June 2008) 2. Significant Operating and
Nonoperating Items Business Consolidation and Other Activities In
April 2008 the company announced the closure of a U.S. metal
beverage packaging plant in Kent, Wash., and recorded a pretax
charge of $10.6 million ($6.4 million after tax). The plant
operates two, 12-ounce aluminum beverage can manufacturing lines
that will be redeployed to generate higher returns elsewhere in
Ball's worldwide beverage can system. Also in the second quarter,
earnings of $7.2 million ($4.4 million after tax) were recorded to
reflect a decision to finalize the North American beverage can end
modernization program resulting in the recovery of costs previously
expensed in a prior business consolidation charge that will no
longer be incurred. In June 2008 the company announced the closure
of a plastic packaging manufacturing plant in Brampton, Ontario,
which employs approximately 90 people. The closed operations will
be consolidated into the company's other plastic packaging
manufacturing facilities in North America and will result in a
charge of approximately $6 million, of which $4.3 million ($3.8
million after tax) was recorded in the second quarter, with the
remaining closure costs to be recorded in the second half of 2008
as they are incurred. A pretax charge of $3.8 million ($2.3 million
after tax), related to previously closed and sold facilities, was
also recorded in the second quarter. 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 ($4.4 million after tax).
A summary of the effects of the above transactions on after-tax
earnings follows: Three months ended Six months ended ($ in
millions, except per June 29, July 1, June 29, July 1, share
amounts) 2008 2007 2008 2007 Net earnings as reported $100.0 $105.9
$183.8 $187.1 Business consolidation costs and other, net of tax
8.1 - 8.1 - Gain on sale of subsidiary, net of tax - - (4.4) - Net
earnings before above transactions $108.1 $105.9 $187.5 $187.1 Per
diluted share before above transactions $1.10 $1.03 $1.90 $1.81
Ball's management segregates the above items 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.
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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