Ball Reports Record First Quarter Earnings
April 29 2004 - 9:30AM
PR Newswire (US)
Ball Reports Record First Quarter Earnings BROOMFIELD, Colo., April
29 /PRNewswire-FirstCall/ -- Ball Corporation today reported first
quarter net earnings of $46.8 million, or 82 cents per diluted
share, on sales of $1.23 billion, compared to $31.5 million, or 55
cents per diluted share, on sales of $1.07 billion in the first
quarter of 2003. Sales and earnings were both records for a Ball
first quarter. Sales increased in all three of the company's
business segments, and segment earnings rose in all but aerospace
and technologies, where 2003 first quarter earnings were
exceptionally strong due to completion and milestone payments the
company received on a major satellite. Net earnings were boosted in
part in the quarter by a longer accounting period that included six
more days than the first quarter of 2003. R. David Hoover,
chairman, president and chief executive officer, said other
contributors to the company's record results for a first quarter
included strong demand for beverage cans in North America and
Europe, improvement in Ball's metal food can business and the
strength of the euro against the U.S. dollar relative to the first
quarter of 2003. North American Packaging Segment Earnings in the
company's North American packaging segment were $66.6 million
compared to $55.6 million in the first quarter of 2003. Sales were
$787 million versus $711 million a year ago. "Stronger demand and
the extra shipping days resulted in an increase in our North
American beverage can shipments," Hoover said. "Results also
included a full quarter from a beverage can end business that was
acquired near the end of the first quarter of 2003 and integrated
into our existing beverage can operations. "Also, our food can
business is showing signs of a needed recovery, even as we deal
with the added issue of surcharges being imposed by North American
steel producers," Hoover said. "Our Milwaukee food can line is
performing much better and that is having a positive effect on our
results, where a year ago it was a drain." During the quarter Ball
completed the acquisition of the balance of what had been a joint
venture food can plant in California. The acquisition, which
occurred late in the quarter, had little impact on segment results
for the period but is expected to increase Ball's metal food can
sales volumes by approximately one billion units, or 20 percent, on
an annualized basis. Segment earnings contribution from the
acquisition will be small in 2004, but is expected to improve in
2005. International Packaging Segment Earnings in the international
packaging segment were $27.6 million on sales of $284 million,
compared to $14.3 million on sales of $229 million in the first
quarter of 2003. "Demand for beverage cans in Europe remains
strong, with the exception of Germany," Hoover said. "That and the
strength of the euro relative to early 2003 made for a very solid
first quarter in international packaging. China was a positive
contributor as well." In response to the German deposit situation,
the company has completed the conversion of a line in Germany from
the production of steel cans to the production of aluminum cans.
The conversion will make it easier to produce cans for export from
Germany to other European markets. The company continues plans for
a new beverage can production plant in Belgrade, Serbia, with
groundbreaking scheduled for the second quarter. Aerospace and
Technologies Segment The aerospace and technologies segment had
operating earnings in the quarter of $11.2 million on sales of $160
million, compared to $16.1 million on sales of $132 million a year
ago. "Our aerospace and technologies segment had a very good
quarter," Hoover said. "Comparisons with a year ago are difficult
because in the first quarter of 2003 we earned one-time completion
and milestone payments for the Ice, Cloud and Land Elevation
Satellite spacecraft we provided for NASA's Goddard Space Flight
Center. The first quarter of 2004 saw the continued long-term
growth in this segment's overall performance." Ball Aerospace was
part of a team that during the quarter won a large and
strategically important contract to develop and initially operate
the Space-Based Surveillance System for the U.S. Air Force. The
system will detect and track space objects such as satellites and
orbital debris. Outlook Raymond J. Seabrook, senior vice president
and chief financial officer, said first quarter interest costs were
$4 million lower than in the first quarter of 2003 and, if interest
rates and the euro exchange rate remain at current levels,
full-year 2004 interest expense before debt refinancing costs
should be at least $13 million below 2003. "We re-priced our euro B
term loan during the first quarter at a rate 50 basis points below
where it had been, further improving our already attractive
financing position," Seabrook said. "Our strong free cash flow,
which we expect to be in the $300 million range for the full year,
will allow us to pay down approximately $200 million of debt this
year, further improving our credit quality." Hoover said, "With a
50 percent increase in diluted earnings per share in 2003 over
2002, we set a very high base from which to grow in 2004, but with
our strong first quarter and the prospects for each of our business
segments, we see diluted earnings per share potentially exceeding
our long-term goal of a 10 to 15 percent yearly improvement. "We
are encouraged by the improvement we are seeing in nearly all areas
of our businesses," Hoover said. "We have some uncertainties, such
as the resolution of the German deposit situation and steel
surcharges, but those are factored into our forecasts so that,
barring the unexpected, 2004 should be another solid year for Ball
Corporation." Ball Corporation is a leading supplier of
high-quality packaging products and innovative packaging solutions
to the beverage and food industries. The company also owns Ball
Aerospace & Technologies Corp., which develops sophisticated
sensors, spacecraft, systems and components for the government and
commercial space markets. Ball employs 12,600 people worldwide and
reported 2003 sales of $4.9 billion. Conference Call Information
Ball Corporation (NYSE:BLL) will hold its regular quarterly
conference call to discuss this news release and the company's
performance at 9 a.m. Mountain Time today. The North American
toll-free number to listen to the call is 800-726-5421.
International callers should dial 212-748-2797. A taped rebroadcast
will be available until midnight Mountain Time on May 6, 2004. To
access the rebroadcast, dial 800-633-8284 (domestic callers) or
+1-402-977-9140 (international callers) and enter 21189605 as the
reservation number. To listen to the call via Web cast, please use
this URL for the live call and for replay:
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=BLL&script=1010&item_id=869168
A written transcript of the call will also be posted within 48
hours of the call's conclusion to Ball's Web site at
http://www.ball.com/ in the investor relations section under
"presentations." Forward-Looking Statements The information in this
news release contains "forward-looking" statements. Actual results
or outcomes may differ materially from those expressed or implied.
As time passes, the relevance and accuracy of forward-looking
statements contained in this release may change. The company
currently does not intend to update any particular forward-looking
statement except as it deems necessary at quarterly or annual
release of earnings. Please refer to the Form 10-K filed by Ball
Corporation on March 12, 2004, for a summary of key risk factors
that could affect actual results or outcomes. Factors that might
affect the packaging segments of the company are: fluctuation in
consumer and customer demand; competitive packaging material
availability, pricing and substitution; the weather; fruit,
vegetable and fishing yields; company and industry productive
capacity and competitive activity; lack of productivity improvement
or production cost reductions; regulatory action or laws, including
the German mandatory deposit or other restrictive packaging laws
and environmental and workplace safety regulations; availability
and cost of raw materials, energy and transportation; the ability
or inability to pass on to customers changes in these costs,
particularly resin, steel and aluminum; pricing and ability or
inability to sell scrap; international business risks (including
foreign exchange rates and tax rates) particularly in the United
States, Europe and in developing countries such as China and
Brazil; and the effect of LIFO accounting on earnings. Factors that
may affect the aerospace segment are: funding, authorization and
availability of government contracts and the nature and
continuation of those contracts; and technical uncertainty
associated with aerospace segment contracts. Factors that could
affect the company as a whole include those listed plus: successful
and unsuccessful acquisitions, joint ventures or divestitures and
the integration activities associated therewith including the
integration and operation of the business of Ball Packaging Europe;
the number and timing of the purchases of the company's common
stock; insufficient or reduced cash flow; regulatory action or laws
including those related to corporate governance and financial
reporting, regulations and standards; actual and estimated business
consolidation and investment costs and the net realizable value of
assets associated with these activities; goodwill impairment;
changes in generally accepted accounting principles or their
interpretation; litigation; antitrust, intellectual property,
consumer and other issues; strikes; boycotts; increases in various
employee benefits and labor costs, specifically pension, medical
and health care costs incurred in the countries in which Ball has
operations; rates of return projected and earned on assets of the
company's defined benefit retirement plans; interest rates and
level of company debt, including floating rate debt; terrorist
activities, war or catastrophic events that disrupt or impact
production, supply or pricing of the company's goods and services,
including raw materials and energy costs, or disrupt or impact the
credit and financing of the company's businesses; and U.S. and
foreign economic conditions. Condensed Financials (1st quarter
2004) Unaudited Statements of Consolidated Earnings ($ in millions,
except per share amounts) Three months ended April 4, 2004 March
30, 2003 Net sales (Note 1) $1,231.5 $1,070.9 Costs and expenses
Cost of sales (excluding depreciation and amortization) 1,012.5
886.0 Business consolidation costs -- 1.4 Depreciation and
amortization 53.8 49.9 Selling and administrative 71.1 56.7 1,137.4
994.0 Earnings before interest and taxes (Note 1) 94.1 76.9
Interest expense (28.3) (32.0) Tax provision (21.5) (15.7) Minority
interests (0.3) (0.3) Equity in results of affiliates 2.8 2.6 Net
earnings $46.8 $31.5 Earnings per share: Basic $0.84 $0.56 Diluted
$0.82 $0.55 Weighted average shares outstanding (000's): Basic
55,674 56,163 Diluted 57,030 57,425 Condensed Financials (1st
quarter 2004) Unaudited Statements of Consolidated Cash Flows ($ in
millions) Three months ended April 4, 2004 March 30, 2003 Cash
Flows From Operating Activities: Net earnings $46.8 $31.5
Depreciation and amortization 53.8 49.9 Change in working capital
(189.4) (251.0) Withholding tax payment related to acquisition --
(138.3) Other 19.4 3.4 (69.4) (304.5) Cash Flows From Investing
Activities: Additions to property, plant and equipment (34.9)
(30.3) Business acquisitions (30.0) (28.0) Other (5.8) (5.6) (70.7)
(63.9) Cash Flows From Financing Activities: Net change in
borrowings 168.3 162.1 Dividends (8.4) (4.9) Issue (purchase) of
common stock, net (14.6) 6.2 Other (0.4) (1.2) 144.9 162.2 Effect
of exchange rate changes on cash (0.1) 1.1 Increase (decrease) in
cash 4.7 (205.1) Cash-beginning of period 36.5 259.2 Cash-end of
period $41.2 $54.1 Condensed Financials (1st quarter 2004)
Unaudited Consolidated Balance Sheets ($ in millions) April 4,
March 30, Assets 2004 2003 Current assets Cash and cash equivalents
$41.2 $54.1 Receivables, net 372.8 452.0 Inventories, net 645.5
640.7 Deferred taxes and prepaid expenses 89.4 58.8 Total current
assets 1,148.9 1,205.6 Property, plant and equipment, net 1,466.9
1,433.0 Goodwill 1,300.9 1,189.8 Other assets 336.4 332.0 $4,253.1
$4,160.4 Liabilities and Shareholders' Equity Current liabilities
Short-term debt and current portion of term debt $208.8 $143.9
Payables and accrued liabilities 763.3 723.3 Total current
liabilities 972.1 867.2 Long-term debt 1,632.4 2,005.8 Other
liabilities and minority interests 825.7 742.6 Shareholders' equity
822.9 544.8 $4,253.1 $4,160.4 Notes to Condensed Financials (1st
quarter 2004) ($ in millions) 1. Business Segment Information Three
months ended Sales- April 4, 2004 March 30, 2003 North American
Packaging- Metal beverage $549.3 $502.0 Metal food 145.1 121.8
Plastic containers 93.0 87.0 787.4 710.8 International Packaging-
Europe metal beverage 242.0 195.1 Asia metal beverage and plastic
containers 41.8 33.5 283.8 228.6 Aerospace and technologies 160.3
131.5 Consolidated net sales $1,231.5 $1,070.9 Earnings before
interest and taxes- North American Packaging $66.6 $55.6
International Packaging 27.6 14.3 Aerospace and technologies 11.2
16.1 Segment earnings before interest and taxes 105.4 86.0
Undistributed corporate costs (11.3) (9.1) Earnings before interest
and taxes $94.1 $76.9 2. Non-GAAP Financial Measures Management
utilizes various accounting measures to evaluate the company's
operating results, to evaluate strategic investments and to
evaluate the company's ability to incur and service debt. For
example, the company internally uses free cash flow as one of these
accounting measures. Free cash flow is not a defined term under
U.S. generally accepted accounting principles (a non-U.S. GAAP
measure). Non-U.S. GAAP measures should not be considered in
isolation or as a substitute for data prepared in accordance with
U.S. GAAP and may not be comparable to similarly titled measures of
other companies. Free cash flow is defined as cash flows from
operating activities less capital spending. Cash flow from
operating activities is the most comparable GAAP term to free cash
flow. Free cash flow is typically derived directly from the
company's cash flow statements, which are prepared in accordance
with U.S. generally accepted accounting principles; however, from
time to time, it may be adjusted for items that affect
comparability between periods. Based on our current 2004 capital
spending forecast of $175 to $200 million, our projected free cash
flow could exceed $300 million in 2004. For a complete presentation
of non-GAAP financial measures please go to our website at
http://www.ball.com/. DATASOURCE: Ball Corporation CONTACT:
Investors, Ann Scott, +1-303-460-3537, , or Media, Scott McCarty,
+1-303-460-2103, , both of Ball Corporation Web site:
http://www.ball.com/
Copyright
Ball (NYSE:BLL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ball (NYSE:BLL)
Historical Stock Chart
From Jul 2023 to Jul 2024