FOR IMMEDIATE RELEASE
O-I Glass, Inc. (NYSE: OI) today provided a
business update for the third quarter of 2022 in advance of
participation in an investor conference.
“O-I continues to perform well and our business
outlook has improved. Favorable third quarter performance primarily
reflects stronger net price realization and solid operating
performance while quarter-to-date shipment levels have been
consistent with our expectations of flat to slight volume growth in
the third quarter. In addition to an improved business outlook, the
company continues to deliver on key transformation initiatives.
Following the fair and final resolution of legacy asbestos
liabilities in July, the company completed its $1.5 billion
portfolio optimization program in August with proceeds used to
reduce debt and pre-fund upcoming expansion initiatives. Reflecting
a healthier balance sheet, both Moody’s and S&P have upgraded
O-I’s credit rating over the past few weeks. O-I is performing
well, advancing its strategy and is a much more resilient and agile
company as we continue to navigate elevated market volatility,”
said John Haudrich, O-I Glass CFO.
“The company now expects third quarter 2022
results will be at the high-end or slightly exceed its adjusted
earnings guidance of $0.55 - $0.60 per share. Reflecting continued
momentum into the fourth quarter, the company has improved its
full-year 2022 outlook and now expects adjusted earnings of $2.10 -
$2.25 per share compared to prior guidance of $2.05 - $2.20 per
share. Likewise, O-I is raising its full year outlook for Free Cash
Flow to at least $200 million (previously at least $175 million)
and maintaining Adjusted Free Cash Flow of at least $400 million,”
concluded Haudrich.
About O-I Glass
At O-I Glass, Inc. (NYSE: OI), we love glass and
we’re proud to be one of the leading producers of glass bottles and
jars around the globe. Glass is not only beautiful, it’s also pure,
healthy and completely recyclable; making it the most sustainable
rigid packaging material. Headquartered in Perrysburg, Ohio (USA),
O-I is the preferred partner for many of the world’s leading food
and beverage brands. We innovate in line with customers’ needs to
create iconic packaging that builds brands around the world. Led by
our diverse team of approximately 24,000 people across
70 plants in 19 countries, O-I achieved net sales of $6.4
billion in 2021. Recognizing the tremendous benefits of glass, the
United Nations has designated 2022 as the International Year of
Glass to celebrate the past, present, and future of this
transformative material. Learn more about
us: o-i.com / Facebook / Twitter / Instagram / LinkedIn
Non-GAAP Financial Measures
The company uses certain non-GAAP financial
measures, which are measures of its historical or future financial
performance that are not calculated and presented in accordance
with GAAP, within the meaning of applicable SEC rules. Management
believes that its presentation and use of certain non-GAAP
financial measures, including adjusted earnings, adjusted earnings
per share, free cash flow and adjusted free cash flow, provide
relevant and useful supplemental financial information that is
widely used by analysts and investors, as well as by management in
assessing both consolidated and business unit performance.
Adjusted earnings relates to net earnings
attributable to the company, exclusive of items management
considers not representative of ongoing operations and other
adjustments because such items are not reflective of the company’s
principal business activity, which is glass container production.
Adjusted earnings are divided by weighted average shares
outstanding (diluted) to derive adjusted earnings per share.
Management uses adjusted earnings and adjusted earnings per share
to evaluate its period-over-period operating performance because it
believes these provide useful supplemental measures of the results
of operations of its principal business activity by excluding items
that are not reflective of such operations. Adjusted earnings and
adjusted earnings per share may be useful to investors in
evaluating the underlying operating performance of the company’s
business as these measures eliminate items that are not reflective
of its principal business activity.
The Company is unable to present a quantitative
reconciliation of its forward-looking non-GAAP measures, adjusted
earnings and adjusted earnings per share, for the quarter ending
September 30, 2022 or for the year ending December 31, 2022 to its
most directly comparable GAAP financial measure, earnings from
operations attributable to the Company, because management cannot
reliably predict all of the necessary components of the GAAP
financial measures without unreasonable efforts. Earnings from
operations attributable to the Company includes several significant
items, such as restructuring charges, asset impairment charges,
charges for the write-off of finance fees, and the income tax
effect on such items. The decisions and events that typically lead
to the recognition of these and other similar items are complex and
inherently unpredictable, and the amount recognized for each item
can vary significantly. Accordingly, the Company is unable to
provide a reconciliation of adjusted earnings and adjusted earnings
per share to earnings from operations attributable to the Company
or address the probable significance of the unavailable
information, which could be material to the Company's future
financial results.
Further, free cash flow relates to cash provided
by operating activities plus funding of the Paddock 524(g) trust
and related expenses less cash payments for property, plant, and
equipment. Adjusted free cash flow relates to cash provided by
operating activities plus funding of the Paddock 524(g) trust and
related expenses less cash payments for property, plant and
equipment pertaining to base maintenance activity. Management has
historically used free cash flow and adjusted free cash flow to
evaluate its period-over-period cash generation performance because
it believes these have provided useful supplemental measures
related to its principal business activity. It should not be
inferred that the entire free cash flow or adjusted free cash flow
amount is available for discretionary expenditures, since the
company has mandatory debt service requirements and other
non-discretionary expenditures that are not deducted from these
measures. Management uses non-GAAP information principally for
internal reporting, forecasting, budgeting, and calculating
compensation payments. The Company provides the below
reconciliations to reconcile free cash flow and adjusted free cash
flow to cash provided by operating activities.
Dollars in millions |
Current Forecast for Year Ended December 31,
2022 |
Previous Forecast for Year Ended December 31,
2022 |
Cash provided by operating activities |
$155 |
$155 |
Addback: Funding of Paddock 524(g) and related expenses |
620 |
620 |
Cash payment for property, plant and equipment |
(575) |
(600) |
Free Cash Flow (non-GAAP) |
$200 |
$175 |
Addback: Cash payments for property, plant and equipment –
strategic/expansion only (non-GAAP) |
200 |
225 |
Adjusted Free Cash Flow (non-GAAP) |
$400 |
$400 |
The company routinely posts important
information on its website – www.o-i.com/investors.
Forward-Looking-Statements This press
release contains “forward-looking” statements related to O-I Glass,
Inc. (“O-I” or the “company”) within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended, and Section 27A of
the Securities Act of 1933, as amended. Forward-looking statements
reflect the company’s current expectations and projections about
future events at the time, and thus involve uncertainty and risk.
The words “believe,” “expect,” “anticipate,” “will,” “could,”
“would,” “should,” “may,” “plan,” “estimate,” “intend,” “predict,”
“potential,” “continue,” and the negatives of these words and other
similar expressions generally identify forward-looking
statements.
It is possible that the company’s future financial performance
may differ from expectations due to a variety of factors including,
but not limited to the following: (1) the impact of the COVID-19
pandemic and the various governmental, industry and consumer
actions related thereto, (2) the company’s ability to obtain the
benefits it anticipates from the Corporate Modernization, (3) the
company’s ability to manage its cost structure, including its
success in implementing restructuring or other plans aimed at
improving the company’s operating efficiency and working capital
management, and achieving cost savings, (4) the company’s ability
to acquire or divest businesses, acquire and expand plants,
integrate operations of acquired businesses and achieve expected
benefits from acquisitions, divestitures or expansions, (5) the
company’s ability to achieve its strategic plan, (6) the company’s
ability to improve its glass melting technology, known as the MAGMA
program, and implement it within the timeframe expected, (7)
foreign currency fluctuations relative to the U.S. dollar, (8)
changes in capital availability or cost, including interest rate
fluctuations and the ability of the company to refinance debt on
favorable terms, (9) the general political, economic and
competitive conditions in markets and countries where the company
has operations, including uncertainties related to economic and
social conditions, disruptions in the supply chain, competitive
pricing pressures, inflation or deflation, changes in tax rates and
laws, war, civil disturbance or acts of terrorism, natural
disasters, and weather, (10) the company’s ability to generate
sufficient future cash flows to ensure the company’s goodwill is
not impaired, (11) consumer preferences for alternative forms of
packaging, (12) cost and availability of raw materials, labor,
energy and transportation (including impacts related to the current
conflict between Russia and Ukraine and disruptions in supply of
raw materials caused by transportation delays), (13) consolidation
among competitors and customers, (14) unanticipated expenditures
with respect to data privacy, environmental, safety and health
laws, (15) unanticipated operational disruptions, including higher
capital spending, (16) the company’s ability to further develop its
sales, marketing and product development capabilities, (17) the
failure of the company’s joint venture partners to meet their
obligations or commit additional capital to the joint venture, (18)
the ability of the company and the third parties on which it relies
for information technology system support to prevent and detect
security breaches related to cybersecurity and data privacy, (19)
changes in U.S. trade policies, (20) risks related to recycling and
recycled content laws and regulations, (21) risks related to
climate-change and air emissions, including related laws or
regulations and the other risk factors discussed in the company's
filings with the Securities and Exchange Commission.
It is not possible to foresee or identify all such factors. Any
forward-looking statements in this document are based on certain
assumptions and analyses made by the company in light of its
experience and perception of historical trends, current conditions,
expected future developments, and other factors it believes are
appropriate in the circumstances. Forward-looking statements are
not a guarantee of future performance and actual results or
developments may differ materially from expectations. While the
company continually reviews trends and uncertainties affecting the
company’s results or operations and financial condition, the
company does not assume any obligation to update or supplement any
particular forward-looking statements contained in this
document.
- O-I Glass 3Q 2022 Capital Markets Presentation
- O-I Glass Business Update Press Releae
For more information, contact:
Chris Manuel, Vice President of Investor Relations
567-336-2600
Chris.Manuel@o-i.com
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