BROOMFIELD, Colo., April 23 /PRNewswire-FirstCall/ -- Ball
Corporation (NYSE:BLL) today reported first quarter net earnings of
$69.5 million, or 73 cents per diluted share, on sales of $1.59
billion, compared to $83.8 million, or 85 cents per diluted share,
on sales of $1.74 billion in the first quarter of 2008. In the
quarter, $5 million ($3.1 million after tax, or 4 cents per diluted
share) of accelerated depreciation expense was recorded as expected
in connection with a prior business consolidation charge to close a
metal beverage can plant in Kansas City, Mo. The plant was closed
by the end of the first quarter. A gain of $7.1 million ($4.4
million after tax, or 5 cents per diluted share) on the sale of an
Australian subsidiary is included in first quarter 2008 results.
Details of comparable segment earnings and business consolidation
activities can be found in Notes 1 and 2 to the unaudited
consolidated financial statements that accompany this news release.
"On a comparable basis, our diluted earnings per share were 77
cents in the quarter, down slightly from our record first quarter
results of 80 cents in 2008," said R. David Hoover, chairman,
president and chief executive officer. "Metal food and household
products packaging, Americas, segment results showed marked
improvement due to pricing and cost recovery initiatives. The
seasonally slow first quarter and significant inventory holding
losses in our other packaging businesses negatively affected
results, but we anticipate volume and margin trends will improve to
more historical levels as we head into the traditionally busier
summer season. Our aerospace segment performed in line with
expectations." "We continue to take disciplined actions to better
balance our supply with market demand in this difficult economic
environment and to manage Ball for long-term growth," said John A.
Hayes, executive vice president and chief operating officer.
"Margins in our global beverage can business are expected to
improve as we work through higher priced metal in inventories and
as customers begin summer promotional activity. Aggressive cost
reduction activities are in place in all of our businesses and cost
savings from prior plant closures will begin to contribute to
performance improvement over the course of the year." Metal
Beverage Packaging, Americas & Asia Metal beverage packaging,
Americas and Asia, comparable segment operating earnings, including
$5 million in accelerated depreciation, were $41.2 million in the
first quarter on sales of $620.4 million, compared to $74 million
on sales of $703.9 million in the first quarter of 2008. First
quarter results were lower primarily due to reduced North American
sales volumes and to higher cost inventory in the segment. In Asia,
an earlier than usual Lunar New Year resulted in some holiday sales
volumes in China occurring in December rather than in January.
Ball's joint venture metal beverage packaging plant under
construction in Tres Rios, Brazil is on schedule to begin
production in late 2009. Metal Beverage Packaging, Europe Metal
beverage packaging, Europe, comparable segment results in the
quarter were operating earnings of $30.9 million on sales of $343.8
million, compared to $48 million on sales of $405.6 million in
2008. Higher priced metal in inventories and a stronger U.S. dollar
negatively affected segment results. Ball's strong export volumes
during the quarter, largely to Africa, partially alleviated the
effects of a decrease in industry sales volumes in Europe. A
continued focus on aligning Ball's supply with market demand and on
cost optimization throughout the supply chain positively affected
results. Metal Food & Household Products Packaging, Americas
Metal food and household products packaging, Americas, comparable
segment results in the quarter were operating earnings of $49.6
million on sales of $283.6 million, compared to $14.8 million in
2008 on sales of $263.8 million. Disciplined pricing initiatives,
higher volumes later in the quarter and metal inventory holding
gains contributed significantly to improved results. Strong cost
control and focused execution in manufacturing plants also improved
performance in the quarter. Plastic Packaging, Americas Plastic
packaging, Americas, comparable segment results in the first
quarter were operating earnings of $3.6 million on sales of $159.7
million, compared to $4.8 million on sales of $188.9 million in the
first quarter of 2008. While overall volumes decreased, the
custom/commodity product mix improved as the segment continued its
focus on growing the custom portion of the business and delivering
value through innovation. Ball announced earlier this month that it
will permanently cease manufacturing operations at two monolayer
PET bottle plants in North America and consolidate volumes from
those plants into larger manufacturing facilities. As a result, an
after-tax charge of approximately $14 million will be recorded in
the company's second quarter results. Cost savings associated with
these actions are expected to be approximately $12 million annually
beginning in 2010. Aerospace and Technologies Aerospace and
technologies comparable segment results were operating earnings of
$14.6 million on sales of $178.1 million in the quarter, compared
to $22 million, including the gain on the sale of an Australian
subsidiary, on sales of $178 million in 2008. Backlog at the end of
the quarter was $592 million. The Ball Aerospace-built Kepler
spacecraft successfully launched in March carrying the largest
camera ever sent by NASA beyond Earth's orbit. Kepler is the first
NASA mission capable of finding Earth-sized planets in potentially
habitable zones. Ball Aerospace was also selected during the
quarter as the contractor for the Ares I Instrument Unit Assembly
Flight Computer and Command Telemetry Computer. Outlook "We
continue to anticipate full-year free cash flow to be in the range
of $375 million, and capital spending for the year is expected to
be less than $250 million," said Raymond J. Seabrook, executive
vice president and chief financial officer. "Lower manufacturing
costs as a result of the plant closings completed at the end of the
first quarter, the elimination of higher cost inventories and a $35
million full year reduction in interest expense will contribute to
improved second half results." "We are managing our businesses with
a sharp focus on controlling costs, delivering value with our
products and proactively balancing our supply with market demand,"
Hoover said. "While the first quarter was three cents below the
same period last year, we expect diluted earnings per share to be
higher for the full year than they were in 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
14,000 people worldwide and reported 2008 sales of approximately
$7.6 billion. For the latest Ball news and for other company
information, please visit http://www.ball.com/. Conference Call
Details Ball Corporation [NYSE: BLL] will hold its regular
quarterly conference call on the company's first quarter 2009
results today at 9 a.m. Mountain Time (11 a.m. Eastern). The North
American toll-free number for the call is 800-742-6164.
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
=2141026. 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 April 30, 2009. To access the replay, call
800-633-8284 (North American callers) or 402-977-9140
(international callers) and use reservation number 21419511. 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; 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 and its effects on liquidity, credit
risk, asset values and the economy; 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. http://www.ball.com/
Condensed Financials (March 2009)
----------------------------------------------------------------------
Unaudited Statements of Consolidated Earnings Three months ended ($
in millions, except per share --------------------------------
amounts) March 29, 2009 March 30, 2008
----------------------------------------------------------------------
Net sales (Note 1) $1,585.6 $1,740.2
----------------------------------------------------------------------
Costs and expenses Cost of sales (excluding depreciation and
amortization) 1,312.5 1,437.7 Depreciation and amortization 66.7
74.6 Selling, general and administrative 75.2 81.6 Business
consolidation and other activities (Note 2) 5.0 (7.1) 1,459.4
1,586.8
----------------------------------------------------------------------
Earnings before interest and taxes (Note 1) 126.2 153.4
----------------------------------------------------------------------
Interest expense (25.8) (36.2) Tax provision (28.1) (37.2) Equity
in results of affiliates (2.7) 3.9 Less net earnings attributable
to noncontrolling interests (0.1) (0.1)
----------------------------------------------------------------------
Net earnings $69.5 $83.8
----------------------------------------------------------------------
Earnings per share (Note 2): Basic $0.74 $0.86 Diluted $0.73 $0.85
Weighted average shares outstanding (000s): Basic 93,544 97,199
Diluted 94,673 98,589
----------------------------------------------------------------------
Condensed Financials (March 2009)
-------------------------------------------------------------------------
Unaudited Statements of Consolidated Cash Flows Three months ended
------------------------------ ($ in millions) March 29, 2009 March
30, 2008 -------------- -------------- Cash Flows From Operating
Activities: Net earnings $69.5 $83.8 Depreciation and amortization
66.7 74.6 Business consolidation and other activities (Note 2) 5.0
(7.1) Income taxes 11.3 6.8 Other changes in working capital
(467.8) (354.6) Other 7.5 (18.1) ------ ------ (307.8) (214.6)
--------------------------------------- ------ ------ Cash Flows
From Investing Activities: Additions to property, plant and
equipment (67.8) (74.5) Cash collateral deposits, net 20.9 -
Proceeds from sale of subsidiary (Note 2) - 8.7 Other (0.3) (2.3)
------ ------ (47.2) (68.1) ---------------------------------------
------ ------ Cash Flows From Financing Activities: Net change in
borrowings 285.9 352.1 Dividends (9.3) (9.6) Purchases of common
stock, net 4.9 (125.1) Other 2.4 0.4 ------ ------ 283.9 217.8
--------------------------------------- ------ ------ Effect of
exchange rate changes on cash (3.2) 3.2 Change in cash (74.3)
(61.7) Cash-beginning of period 127.4 151.6 ------ ------ Cash-end
of period $53.1 $89.9 ---------------------------------------
====== ====== Condensed Financials (March 2009)
-------------------------------------------------------------------
Unaudited Consolidated Balance Sheets March 29, March 30, ($ in
millions) 2009 2008 -------- -------- Assets Cash and cash
equivalents $53.1 $89.9 Receivables, net 691.5 675.1 Inventories,
net 1,083.2 1,134.0 Cash collateral - receivable 181.9 - Deferred
taxes and other current assets 316.7 156.2 -------- -------- Total
current assets 2,326.4 2,055.2 Property, plant and equipment, net
1,813.8 1,999.9 Goodwill 1,777.5 1,952.6 Other assets, net 506.9
438.5
-------------------------------------------------------------------
Total assets $6,424.6 $6,446.2
-------------------------------------------------------------------
Liabilities and Shareholders' Equity Current liabilities Short-term
debt and current portion of long- term debt $302.3 $309.1 Cash
collateral - liability 98.1 - Payables and other accrued
liabilities 1,297.2 1,186.7 -------- -------- Total current
liabilities 1,697.6 1,495.8 Long-term debt 2,357.1 2,450.5 Other
long-term liabilities 1,257.9 1,041.4 Shareholders' equity 1,112.0
1,458.5
-------------------------------------------------------------------
Total liabilities and shareholders' equity $6,424.6 $6,446.2
-------------------------------------------------------------------
Notes to Condensed Financials (March 2009)
-------------------------------------------------------------------------
1. Business Segment Information Three months ended
------------------------------ ($ in millions) March 29, 2009 March
30, 2008 -------------- -------------- Sales- Metal beverage
packaging, Americas & Asia $620.4 $703.9 Metal beverage
packaging, Europe 343.8 405.6 Metal food & household packaging,
Americas 283.6 263.8 Plastic packaging, Americas 159.7 188.9
Aerospace & technologies 178.1 178.0 -------- -------- Net
sales $1,585.6 $1,740.2 ======== ======== Earnings before interest
and taxes- Metal beverage packaging, Americas & Asia $46.2
$74.0 Business consolidation activities (Note 2) (5.0) - --------
-------- Total metal beverage packaging, Americas & Asia 41.2
74.0 -------- -------- Metal beverage packaging, Europe 30.9 48.0
-------- -------- Metal food & household packaging, Americas
49.6 14.8 -------- -------- Plastic packaging, Americas 3.6 4.8
-------- -------- Aerospace & technologies 14.6 14.9 Gain on
sale of subsidiary (Note 2) - 7.1 -------- -------- Total aerospace
& technologies 14.6 22.0 -------- -------- Segment earnings
before interest and taxes 139.9 163.6 Undistributed corporate costs
(13.7) (10.2) -------- -------- Earnings before interest and taxes
$126.2 $153.4 ======== ======== Notes to Condensed Financials
(March 2009)
-------------------------------------------------------------------------
2. Business Consolidation Activities and Other Significant
Nonoperating Items 2009 In the quarter, $5 million ($3.1 million
after tax) of accelerated depreciation expense was recorded in
connection with a prior business consolidation charge to close
Ball's Kansas City, Mo., metal beverage can plant. The Kansas City
plant was closed by the end of the first quarter. 2008 On February
15, 2008, Ball Aerospace & Technologies Corp. completed the
sale of a subsidiary for $10.5 million that resulted in a pretax
gain of $7.1 million ($4.4 million after tax). A summary of the
effects of the above transactions on after-tax earnings follows:
Three months ended ($ in millions, except
------------------------------ per share amounts) March 29, 2009
March 30, 2008 -------------- -------------- Net earnings as
reported $69.5 $83.8 Business consolidation costs, net of tax 3.1 -
Gain on sale of subsidiary, net of tax - (4.4) ----- ----- Net
earnings before above transactions $72.6 $79.4 ===== ===== Per
diluted share before above transactions $0.77 $0.80 ===== =====
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. 3.
Subsequent Event On April 8, 2009, the company announced that it
will permanently cease manufacturing operations at two polyethylene
terephthalate (PET) plastic packaging manufacturing plants in
Baldwinsville, N.Y., and Watertown, Wis. These actions will
consolidate PET production capacity into lower-cost plants. A
pretax charge of approximately $24 million ($14 million after tax)
will be recorded in the second quarter results. Cost savings
associated with these activities are expected to exceed $12 million
annually beginning in 2010. 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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