BROOMFIELD, Colo., April 29 /PRNewswire-FirstCall/ -- Ball
Corporation (NYSE: BLL) today reported first quarter net earnings
of $79.3 million, or
84 cents per diluted share, on sales
of $1.7 billion, compared to
$69.5 million, or 73 cents per diluted share, on sales of
$1.6 billion in the first quarter of
2009.
"On a comparable basis, our diluted earnings per share of
85 cents in the quarter exceeded our
results of a year ago despite a challenging comparison due to the
impact of significant net inventory holding gains in 2009 and
unfavorable European exchange rate changes this year," said
R. David Hoover, chairman and chief
executive officer. "The additional contribution of four metal
beverage packaging plants acquired late last year, excellent
operating performance, tax benefits realized on a foreign
investment and continued disciplined management of our company
contributed to better results. Our aerospace segment executed well
in a challenging but improving contract award environment."
|
|
Summary*
|
|
|
|
|
First
Quarter
|
|
|
$ in millions, except per share
data
|
2010
|
2009
|
Change
|
|
Total net sales -
Reported
|
$1,706.2
|
$1,585.6
|
$120.6
|
|
Net earnings (attributable to Ball) -
Reported
|
79.3
|
69.5
|
9.8
|
|
Diluted EPS – Reported
|
0.84
|
0.73
|
0.11
|
|
Net earnings (attributable to Ball) -
non-GAAP
|
80.4
|
72.6
|
7.8
|
|
Diluted EPS - non-GAAP
|
0.85
|
0.77
|
0.08
|
|
|
|
* Ball Corporation's financial results
for 2010 and 2009 are presented on both a reported GAAP and a
non-GAAP basis. Reported results were prepared
in accordance with generally accepted U.S. accounting principles
(GAAP). Non-GAAP results exclude items described in more detail in
the notes to the unaudited condensed financial statements that are
part of this news release.
|
|
|
|
|
|
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.
"Positive momentum in our metal can businesses continued from
2009 into 2010 and we are delivering the results we anticipated,"
said John A. Hayes, president and
chief operating officer for the corporation. "As we enter the
seasonally strong quarters for our packaging businesses, we expect
to continue to benefit from our past actions, the execution of our
current initiatives and improving markets. Promotional activity by
our customers is increasing and we see potential upside as the
global economy strengthens."
Metal Beverage Packaging, Americas & Asia
Metal beverage packaging, Americas and Asia, comparable segment operating earnings
were $74.0 million in the first
quarter on sales of $774.4 million,
compared to $46.2 million on sales of
$620.4 million in the first quarter
of 2009. First quarter results were higher primarily due to the
impact of the U.S. plants acquired in late 2009 and the absence of
higher cost inventory in the segment that occurred a year ago.
Results in China improved due
to increased demand and price/cost mix. In Brazil, the joint venture beverage can plant
in Tres Rios, Brazil, that started up in late 2009 is
running well. Ball announced during the quarter plans to
install a second line in the facility. The line is sold out in 2011
and is on track to begin production early next year. The addition
of Tres Rios, as well as improved
operating and financial performance in Brazil, contributed to increased equity
earnings.
Metal Beverage Packaging, Europe
Metal beverage packaging, Europe, comparable segment results in the
quarter were operating earnings of $35.0
million on sales of $367.5
million, compared to $30.9
million on sales of $343.8
million in 2009.
Continued focus on balancing supply and demand, improved volumes
and the effects of disciplined cost management influenced results
in the quarter. Overall market demand increased during the quarter,
continuing the upward trend that began in the fourth quarter of
2009.
Metal Food & Household Products Packaging,
Americas
Metal food and household products packaging, Americas,
comparable segment results in the quarter were operating earnings
of $21.7 million on sales of
$285.4 million, compared to
$49.6 million in 2009 on sales of
$283.6 million. Comparable segment
results improved excluding the effect of significant inventory
holding gains in the first quarter of 2009.
Improved volumes, disciplined commercial activities and
continued operational improvement contributed to better results
during the seasonally slower first quarter.
Plastic Packaging, Americas
Plastic packaging, Americas, comparable segment results in the
first quarter were an operating loss of $3.2
million on sales of $113.9
million, compared to operating income of $3.6 million on sales of $159.7 million in the first quarter of 2009. In
addition to continued weak demand in the cold-fill PET segment,
lower results were due to a qualification issue at one PET
manufacturing plant and a delay in the startup of a new PET preform
contract, both of which have been resolved. The segment saw
stronger specialty food packaging volume and results in the
quarter.
Aerospace and Technologies
Aerospace and technologies segment results were operating
earnings of $13.5 million on sales of
$165.0 million in the quarter,
compared to $14.6 million on sales of
$178.1 million in 2009. Backlog at
the end of the quarter was $516.4
million.
Ball Aerospace continued to execute well and achieved milestones
on existing contracts, including the successful integration in
March of the Visible Infrared Imager Radiometer Suite weather
instrument for the National Polar-orbiting Operational
Environmental Satellite System Preparatory Project. The pace of
contract awards appears to be increasing and may favorably affect
second half segment performance. Earlier this month, the U.S. Navy
selected Ball Aerospace for the Geosat Follow-on 2 (GFO-2), the
next generation ocean altimetry mission. GFO-2 measurements will be
used for global ocean and tactical battlespace
characterization.
Outlook
"During the quarter, Ball successfully priced a public
debt offering of $500 million due in
2020 and issued a notice to redeem $509
million in senior notes due in 2012," said Scott C. Morrison, senior vice president and
chief financial officer. "This extends our debt maturity profile
and provides additional flexibility to return value to Ball's
shareholders through transactions such as the $125 million accelerated stock repurchase
agreement announced in February.
"Also, as Ball Corporation referenced during its January 2010 conference call, as a result of a
new accounting pronouncement our accounts receivable securitization
program was placed on the balance sheet beginning in 2010,"
Morrison said. "Excluding the impact of this accounting
change, we continue to anticipate full-year free cash flow in
excess of $500 million. While the
first quarter effective tax rate was 20 percent, the full-year
effective tax rate is expected to be in the range of 32
percent."
Details regarding the public offering, note redemption and
accounting pronouncements can be found in the unaudited
consolidated financial statements that accompany this news
release.
"Our solid first quarter results, increasing customer promotion
and consumer demand for our products and an improving economy
combined for a positive start to the year," Hoover said. "We
continue to expect the company's full-year 2010 earnings to be
above those of 2009."
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 2009 sales of more than
$7.3 billion. For the latest Ball
news and for other company information, please visit
www.ball.com.
Conference Call Details
Ball Corporation (NYSE: BLL) will hold its regular quarterly
conference call on the company's first quarter 2010 earnings on
Thursday, April 29, 2010, at
9 a.m. Mountain Time (11 a.m. Eastern). The North American toll-free
number for the call is 800-732-5617. International callers should
dial 212-231-2901. 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=2976701.
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
6, 2010. To access the replay, call 800-633-8284 (North
American callers) or 402-977-9140 (international callers) and use
reservation number 21463971. A written transcript of the call will
be posted within 48 hours of the call's conclusion to Ball's Web
site at 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
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; 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 or tax rates.
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 recession
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 climate change, or
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
2010)
|
|
Unaudited
Statements of Consolidated Earnings
|
|
|
|
|
|
|
|
Three months
ended
|
|
($ in millions, except per share
amounts)
|
March 28,
2010
|
|
March 29,
2009
|
|
Net sales (Note
1)
|
$
1,706.2
|
|
$
1,585.6
|
|
Costs and expenses
|
|
|
|
|
Cost of sales (excluding
depreciation and amortization)
|
1,420.4
|
|
1,312.5
|
|
Depreciation and
amortization
|
71.7
|
|
66.7
|
|
Selling, general and
administrative
|
84.7
|
|
75.2
|
|
Business consolidation and
other activities (Note 2)
|
1.7
|
|
5.0
|
|
|
1,578.5
|
|
1,459.4
|
|
|
|
|
|
|
Earnings before interest and
taxes (Note 1)
|
127.7
|
|
126.2
|
|
Interest expense
|
(33.9)
|
|
(25.8)
|
|
Tax provision
|
(19.1)
|
|
(28.1)
|
|
Equity in results of
affiliates
|
4.7
|
|
(2.7)
|
|
|
|
|
|
|
Net earnings
|
79.4
|
|
69.6
|
|
|
|
|
|
|
Less net earnings attributable
to noncontrolling interests
|
(0.1)
|
|
(0.1)
|
|
|
|
|
|
|
Net earnings attributable to Ball
Corporation
|
$
79.3
|
|
$
69.5
|
|
|
|
|
|
|
Earnings per share
(Note
2):
|
|
|
|
|
Basic
|
$
0.85
|
|
$
0.74
|
|
Diluted
|
$
0.84
|
|
$
0.73
|
|
|
|
|
|
|
Weighted average shares outstanding
(000s):
|
|
|
|
|
Basic
|
93,053
|
|
93,544
|
|
Diluted
|
94,438
|
|
94,673
|
|
|
|
|
|
Condensed Financials (March
2010)
|
|
Unaudited
Statements of Consolidated Cash Flows
|
|
|
|
|
|
|
|
Three months
ended
|
|
($ in millions)
|
March 28,
2010
|
|
March 29,
2009
|
|
Cash Flows From Operating
Activities:
|
|
|
|
|
Net earnings
|
$
79.4
|
|
$
69.6
|
|
Depreciation and
amortization
|
71.7
|
|
66.7
|
|
Business consolidation and
other activities (Note 2)
|
1.4
|
|
5.0
|
|
Income taxes
|
(3.8)
|
|
11.3
|
|
Increase in accounts receivable
due to change in
|
|
|
|
|
accounting for
securitization program
|
(250.0)
|
|
-
|
|
Other changes in working
capital
|
(182.7)
|
|
(467.8)
|
|
Other
|
12.0
|
|
7.4
|
|
|
(272.0)
|
|
(307.8)
|
|
Cash Flows From Investing
Activities:
|
|
|
|
|
Additions to property, plant
and equipment
|
(37.2)
|
|
(67.8)
|
|
Cash collateral deposits,
net
|
(2.6)
|
|
20.9
|
|
Other
|
(8.5)
|
|
(0.3)
|
|
|
(48.3)
|
|
(47.2)
|
|
Cash Flows From Financing
Activities:
|
|
|
|
|
Increase in short-term
borrowings due to change in
|
|
|
|
|
accounting for
securitization program
|
50.0
|
|
-
|
|
Other changes in borrowings,
net (Note 3)
|
583.5
|
|
285.9
|
|
Dividends
|
(9.2)
|
|
(9.3)
|
|
Issuances (purchases) of common
stock, net
|
(119.7)
|
|
4.9
|
|
Other
|
(6.4)
|
|
2.4
|
|
|
498.2
|
|
283.9
|
|
Effect of exchange rate changes on
cash
|
2.9
|
|
(3.2)
|
|
Change in cash
|
180.8
|
|
(74.3)
|
|
Cash-beginning of
period
|
210.6
|
|
127.4
|
|
Cash-end of period
|
$
391.4
|
|
$
53.1
|
|
|
|
|
|
Condensed Financials (March
2010)
|
|
|
|
|
Unaudited
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
March
28,
|
|
March
29,
|
|
($ in millions)
|
2010
|
|
2009
|
|
|
|
|
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
391.4
|
|
$
53.1
|
|
Receivables, net
|
986.7
|
|
691.5
|
|
Inventories, net
|
1,019.4
|
|
1,083.2
|
|
Cash collateral -
receivable
|
5.3
|
|
181.9
|
|
Current derivative
contracts
|
78.2
|
|
205.1
|
|
Deferred taxes and other
current assets
|
106.5
|
|
111.6
|
|
Total current assets
|
2,587.5
|
|
2,326.4
|
|
Property, plant and equipment,
net
|
1,875.7
|
|
1,813.8
|
|
Goodwill
|
2,044.0
|
|
1,777.5
|
|
Other assets, net
|
528.5
|
|
506.9
|
|
|
|
|
|
|
Total assets
|
$
7,035.7
|
|
$
6,424.6
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
Current liabilities
|
|
|
|
|
Short-term debt and current
portion of long-term debt
|
$
366.7
|
|
$
302.3
|
|
Callable bonds (Note
3)
|
509.0
|
|
-
|
|
Cash collateral -
liability
|
2.7
|
|
98.1
|
|
Payables and other accrued
liabilities
|
1,163.0
|
|
1,297.2
|
|
Total current liabilities
|
2,041.4
|
|
1,697.6
|
|
Long-term debt
|
2,317.9
|
|
2,357.1
|
|
Other long-term
liabilities
|
1,164.0
|
|
1,257.9
|
|
Shareholders' equity
|
1,512.4
|
|
1,112.0
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
7,035.7
|
|
$
6,424.6
|
|
|
|
|
|
Notes to Condensed Financials (March
2010)
|
|
|
|
|
|
|
|
|
|
|
|
1. Business Segment
Information
|
|
|
|
|
|
|
|
Three months
ended
|
|
($ in millions)
|
March 28,
2010
|
|
March 29,
2009
|
|
Sales-
|
|
|
|
|
|
Metal beverage packaging, Americas
& Asia
|
$
774.4
|
|
$
620.4
|
|
|
Metal beverage packaging,
Europe
|
367.5
|
|
343.8
|
|
|
Metal food & household packaging,
Americas
|
285.4
|
|
283.6
|
|
|
Plastic packaging, Americas
|
113.9
|
|
159.7
|
|
|
Aerospace &
technologies
|
165.0
|
|
178.1
|
|
|
|
Net
sales
|
$
1,706.2
|
|
$
1,585.6
|
|
|
|
|
|
|
|
|
Earnings before interest and
taxes-
|
|
|
|
|
|
Metal beverage packaging, Americas
& Asia
|
$
74.0
|
|
$
46.2
|
|
|
Business consolidation activities
(Note 2)
|
0.5
|
|
(5.0)
|
|
|
|
Total metal beverage packaging,
Americas & Asia
|
74.5
|
|
41.2
|
|
|
|
|
|
|
|
|
|
Metal beverage packaging,
Europe
|
35.0
|
|
30.9
|
|
|
|
|
|
|
|
|
|
Metal food & household packaging,
Americas
|
21.7
|
|
49.6
|
|
|
|
|
|
|
|
|
|
Plastic packaging, Americas
|
(3.2)
|
|
3.6
|
|
|
Business consolidation
activities
|
(2.2)
|
|
-
|
|
|
|
Total plastic packaging,
Americas
|
(5.4)
|
|
3.6
|
|
|
|
|
|
|
|
|
|
Aerospace &
technologies
|
13.5
|
|
14.6
|
|
|
|
Segment earnings before
interest and taxes
|
139.3
|
|
139.9
|
|
|
Undistributed corporate
costs
|
(11.6)
|
|
(13.7)
|
|
|
|
Earnings before interest
and taxes
|
$
127.7
|
|
$
126.2
|
|
|
|
|
|
|
|
Notes to Condensed Financials (March
2010)
|
|
|
|
|
|
|
|
|
|
|
2. Business Consolidation Activities
and Other Significant Nonoperating Items
|
|
|
|
|
|
|
|
In the first quarter of 2010, a net
charge of $1.7 million ($1.1 million after tax) was recorded to
reflect individually insignificant costs and recoveries related to
previously announced plant closures.
|
|
|
|
|
|
|
|
In the first quarter of 2009, $5
million ($3.1 million after tax) of accelerated depreciation
expense was recorded in connection with a prior business
consolidation charge to close Ball's Kansas City, Mo., metal
beverage can plant. The Kansas City plant was closed by the end of
the first quarter of 2009.
|
|
|
|
|
|
|
|
A summary of the effects of the above
transactions on after-tax earnings follows:
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
($ in millions, except per share
amounts)
|
March 28,
2010
|
|
March 29,
2009
|
|
|
Net earnings attributable to Ball
Corporation, as reported
|
$
79.3
|
|
$
69.5
|
|
|
Business consolidation costs, net of
tax
|
1.1
|
|
3.1
|
|
|
Net earnings attributable to
Ball Corporation
|
|
|
|
|
|
before above
transactions
|
$
80.4
|
|
$
72.6
|
|
|
|
|
|
|
|
|
Per diluted share before above
transactions
|
$
0.85
|
|
$
0.77
|
|
|
|
|
|
|
|
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 and should not be considered superior to,
or a substitute for, financial measures calculated in accordance
with U.S. GAAP.
|
|
|
|
|
|
|
|
3. Bond Issuance and
Redemption
|
|
|
|
|
|
|
|
|
|
|
On March 22, 2010, Ball issued
$500 million of new 6.75 percent senior notes due in
September 2020. On that same date, the company issued a notice
of redemption to call $509 million of 6.875 percent
senior notes due December 2012 at a redemption price of
101.146 percent of the outstanding principal amount plus accrued
interest. The redemption of the notes due December 2012 occurred on
April 21, 2010, and resulted in a charge of $7.8 million
($4.7 million after tax) for the related call premium and
write off of unamortized financing costs and unamortized premiums.
This charge will be reported in the company’s second quarter
consolidated financial statements as a component of interest
expense.
|
|
|
|
|
|
|
SOURCE Ball Corporation