BROOMFIELD, Colo., Oct. 29 /PRNewswire-FirstCall/ -- Ball
Corporation (NYSE:BLL) today reported third quarter net earnings of
$103.7 million, or $1.09 cents per diluted share, on sales of $1.97
billion, compared to earnings of $101.9 million, or $1.05 cents per
diluted share, on sales of $2.01 billion in the third quarter of
2008. For the first nine months of 2009, Ball's earnings were
$306.5 million, or $3.23 per diluted share, on sales of $5.48
billion. For the same period in 2008, results were earnings of
$285.7 million, or $2.92 per diluted share, on sales of $5.83
billion. Third quarter 2009 results include $9.1 million ($5.5
million after-tax, or 6 cents per diluted share) of transaction
costs related to the acquisition of four metal beverage packaging
plants as well as a charge of $13.6 million ($8.8 million
after-tax, or 9 cents per diluted share) for accelerated
depreciation and other costs related primarily to the closure of
the two plastic manufacturing plants announced in the second
quarter. Details of third quarter and nine month 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, Ball
reported diluted earnings per share of $1.24 in the third quarter,
compared to $1.13 in the third quarter of 2008," said R. David
Hoover, chairman, president and chief executive officer. "Excellent
operating performance from our plants, as well as cost savings from
prior rationalization activities, drove improved performance."
Metal Beverage Packaging, Americas & Asia Metal beverage
packaging, Americas and Asia, comparable segment operating earnings
for the third quarter were $102.9 million on sales of $706.4
million, compared to $77 million on sales of $767 million for the
same period in 2008. For the first nine months, comparable earnings
were $223.9 million on sales of $2.08 billion, compared to $228.4
million on sales of $2.3 billion in the first nine months of 2008.
Third quarter results were higher primarily due to benefits from
cost rationalizations taken over the past 18 months. Though volumes
were down moderately in North America, increasing demand in Asia
contributed to better performance during the quarter. The company's
new joint venture plant in Tres Rios, Brazil, is on schedule to
start up in mid-November to meet the growing demand for beverage
cans in the region. "The integration of the new facilities acquired
on Oct. 1 from AB InBev is progressing well, and our focus is on
identifying best practices and synergies across all of our metal
beverage plants to enhance operating performance," said John A.
Hayes, executive vice president and chief operating officer. Metal
Beverage Packaging, Europe Metal beverage packaging, Europe,
segment results in the quarter were operating earnings of $68.8
million on sales of $478 million, compared to $76.7 million on
sales of $511.3 million in 2008. For the first nine months,
earnings were $164.5 million on sales of $1.31 billion, compared to
$201.9 million on sales of $1.49 billion in the first nine months
of 2008. While volumes were relatively flat, segment sales and
earnings were lower in the quarter due primarily to changes in
product mix and a lower euro /dollar exchange rate compared to a
year ago. Metal Food & Household Products Packaging, Americas
Metal food and household products packaging, Americas, comparable
segment results in the third quarter were operating earnings of
$27.8 million on sales of $459.5 million, compared to $15.8 million
in 2008 on sales of $365 million. For the first nine months,
comparable earnings were $112.5 million on sales of $1.07 billion,
compared to $44.9 million on sales of $912 million during the same
period in 2008. Third quarter results improved due largely to the
effects of prior capacity rationalizations in the segment, better
manufacturing performance and disciplined management of the
business. Plastic Packaging, Americas Plastic packaging, Americas,
comparable segment results in the third quarter were operating
earnings of $3.8 million on sales of $156.8 million, compared to
$5.3 million on sales of $184.1 million in the third quarter of
2008. For the first nine months, comparable earnings were $15.2
million on sales of $498.1 million, compared to $15.8 million on
sales of $574 million in the first nine months of 2008. Growing
demand for specialty plastic packaging for foods and beverages in
the quarter did not offset double-digit volume declines for
monolayer PET bottles. After the quarter closed, Ball sold its
plastic pail assets for $32 million to BWAY Corporation. The
transaction involved the sale of a pail manufacturing plant in
Newnan, Ga., that produces injection molded plastic pails and drums
for products such as building materials and pool chemicals.
Aerospace and Technologies Aerospace and technologies comparable
segment results were operating earnings of $16.2 million on sales
of $168.4 million in the quarter, compared to $18.4 million on
sales of $180.8 million in 2008. For the first nine months,
comparable earnings were $45.6 million on sales of $528 million,
compared to $56 million on sales of $550 million in the first nine
months of 2008. Backlog at the end of the quarter was $563.5
million. Earlier this month, the WorldView-2 remote sensing
satellite built for DigitalGlobe successfully launched from
Vandenberg Air Force Base, Calif. The first images from the
satellite were released on Oct. 20. In August, new images were
released from the Hubble Space Telescope following its servicing
mission earlier this year. All four of the working science
instruments currently on the telescope were built by Ball
Aerospace. Outlook "Full-year capital spending will be reduced to
around $200 million and full-year free cash flow will be at least
$375 million," said Raymond J. Seabrook, executive vice president
and chief financial officer. "Free cash flow is not expected to
increase significantly above $375 million in 2009 due to a
temporary increase in working capital levels in some businesses.
Next year, we will continue to focus on deleveraging the company's
balance sheet after the acquisition and, with the incremental
contribution from the acquired facilities and a decrease in working
capital, expect substantially higher full-year free cash flow in
2010." "We are pleased with our solid third quarter results and our
improved performance through the first nine months of the year,"
Hoover said. "Despite global economic uncertainty, and one-time
costs associated with the acquisition of the four metal beverage
packaging plants, we anticipate fourth quarter results from
continuing operations will be well above those of the same period
last year." 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 14,500 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 results and performance today at 9 a.m. (11 a.m. Eastern
Time). The North American toll-free number for the call is
800-732-6870. International callers should dial 212-231-2907.
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&eve
ntID=2459788. 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 Nov. 5, 2009. To access the replay, call
800-633-8284 (North American callers) or 402-977-9140
(international callers) and use reservation number 21438727. 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; 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
(September 2009) -------------------------------------- Unaudited
Statements of Consolidated Earnings Three months ended Nine months
ended ------------------ ----------------- ($ in millions,
September September September September except per share 27, 28,
27, 28, amounts) 2009 2008 2009 2008 ----------------- --------
-------- -------- -------- Net sales (Note 1) $1,969.1 $2,008.2
$5,480.9 $5,828.7 ------------------ -------- -------- --------
-------- Costs and expenses Cost of sales (excluding depreciation)
1,609.7 1,679.9 4,515.4 4,856.1 Depreciation and amortization 70.4
73.9 206.5 224.7 Selling, general and administrative 86.8 67.5
239.9 227.6 Business consolidation and other activities (Note 2)
22.7 9.1 46.8 20.6 Gain on sales of investments (Note 2) - - (34.8)
(7.1) --- --- ----- ---- 1,789.6 1,830.4 4,973.8 5,321.9
------------------ ----- ----- ----- ----- Earnings before interest
and taxes (Note 1) 179.5 177.8 507.1 506.8 -------------------
----- ----- ----- ----- Total interest expense (28.9) (33.1) (79.4)
(104.0) Tax provision (52.3) (45.8) (128.8) (128.4) Equity in
results of affiliates 5.5 3.1 8.0 11.6 Less net earnings
attributable to noncontrolling interests (0.1) (0.1) (0.4) (0.3)
------------- ------ ------ ------ ------ Net earnings $103.7
$101.9 $306.5 $285.7 ------------- ------ ------ ------ ------
Earnings per share (Note 2): Basic $1.10 $1.07 $3.27 $2.96 Diluted
$1.09 $1.05 $3.23 $2.92 Weighted average shares outstanding (000s):
Basic 93,976 95,368 93,763 96,491 Diluted 95,351 96,604 94,950
97,796 Condensed Financials (September 2009)
-------------------------------------- Unaudited Statements of
Consolidated Cash Flows Three months ended Nine months ended
------------------ ----------------- September September September
September ($ in millions) 27, 28, 27, 28, 2009 2008 2009 2008 ----
---- ---- ---- Cash Flows From Operating Activities: Net earnings
$103.7 $101.9 $306.5 $285.7 Depreciation and amortization 70.4 73.9
206.5 224.7 Business consolidation and other activities (Note 2)
14.7 9.1 36.2 20.6 Gain on sales of investments (Note 2) - - (34.8)
(7.1) Income taxes 6.7 9.4 12.8 15.7 Legal settlement - - - (70.3)
Other changes in working capital (197.6) 16.8 (528.8) (349.5) Other
(1.0) (3.1) 7.7 18.6 ---- ---- --- ---- (3.1) 208.0 6.1 138.4
------------------------- ---- ----- --- ----- Cash Flows From
Investing Activities: Additions to property, plant and equipment
(33.2) (70.3) (141.3) (230.8) Cash collateral deposits, net 31.0 -
85.7 - Proceeds from sales of investments (Note 2) - - 37.0 8.7
Other 1.4 20.0 0.7 9.8 --- ---- --- --- (0.8) (50.3) (17.9) (212.3)
------------------------- ---- ----- ----- ------ Cash Flows From
Financing Activities: Net change in borrowings 389.7 (19.2) 331.7
316.1 Debt issuance costs (12.1) - (12.1) - Dividends (9.4) (9.3)
(28.1) (28.3) Issuances (purchases) of common stock, net (8.8)
(76.3) 2.2 (257.5) Other 3.6 1.1 6.5 3.5 --- --- --- --- 363.0
(103.7) 300.2 33.8 ----------------------- ----- ------ ----- ----
Effect of exchange rate changes on cash (0.5) (3.5) 2.3 2.4 Change
in cash 358.6 50.5 290.7 (37.7) Cash-beginning of period 59.5 63.4
127.4 151.6 ---- ---- ----- ----- Cash-end of period $418.1 $113.9
$418.1 $113.9 ------------------ ====== ====== ====== ======
Condensed Financials (September 2009)
-------------------------------------- Unaudited Consolidated
Balance Sheets ($ in millions) September 27, September 28, 2009
2008 ---- ---- Assets Current assets Cash and cash equivalents
$418.1 $113.9 Receivables, net 1,058.7 773.8 Inventories, net 906.9
1,000.9 Cash collateral - receivable 67.5 - Deferred taxes and
other current assets 225.9 128.2 ----- ----- Total current assets
2,677.1 2,016.8 Property, plant and equipment, net 1,812.1 1,934.5
Goodwill 1,867.9 1,864.2 Other assets, net 435.0 396.2
-------------- -------- -------- Total assets $6,792.1 $6,211.7
-------------- -------- -------- Liabilities and Shareholders'
Equity Current liabilities Short-term debt and current portion of
long-term debt $253.1 $221.5 Cash collateral - liability 47.7 -
Payables and accrued liabilities 1,251.3 1,143.2 ------- -------
Total current liabilities 1,552.1 1,364.7 Long-term debt 2,532.7
2,438.0 Other long-term liabilities 1,228.2 1,000.9 Shareholders'
equity 1,479.1 1,408.1 ----------------------- -------- --------
Total liabilities and shareholders' equity $6,792.1 $6,211.7
----------------------- -------- -------- Unaudited Notes to
Condensed Financials (September 2009)
-------------------------------------------------------- 1.
Business Segment Information Three months ended Nine months ended
------------------ ----------------- September September September
September ($ in 27, 28, 27, 28, millions) 2009 2008 2009 2008
---------- ---------- ---------- ---------- Sales- Metal beverage
packaging, Americas & Asia $706.4 $767.0 $2,075.9 $2,304.8
Metal beverage packaging, Europe 478.0 511.3 1,312.4 1,487.9 Metal
food & household packaging, Americas 459.5 365.0 1,066.5 912.0
Plastic packaging, Americas 156.8 184.1 498.1 574.0 Aerospace &
technologies 168.4 180.8 528.0 550.0 ----- ----- ----- ----- Net
sales $1,969.1 $2,008.2 $5,480.9 $5,828.7 ======== ========
======== ======== Earnings before interest and taxes- Metal
beverage packaging, Americas & Asia $102.9 $77.0 $223.9 $228.4
Business consolidation activities (Note 2) (1.0) (0.6) (9.3) (4.0)
---- ---- ---- ---- Total metal beverage packaging, Americas &
Asia 101.9 76.4 214.6 224.4 ----- ---- ----- ----- Metal beverage
packaging, Europe 68.8 76.7 164.5 201.9 ---- ---- ----- ----- Metal
food & household packaging, Americas 27.8 15.8 112.5 44.9
Business consolidation activities (Note 2) - (4.5) - (4.5) --- ----
--- ---- Total metal food & household packaging, Americas 27.8
11.3 112.5 40.4 ---- ---- ----- ---- Plastic packaging, Americas
3.8 5.3 15.2 15.8 Business consolidation activities (Note 2) (12.6)
(4.0) (24.5) (8.3) ----- ---- ----- ---- Total plastic packaging,
Americas (8.8) 1.3 (9.3) 7.5 ---- --- ---- --- Aerospace &
technologies 16.2 18.4 45.6 56.0 Gain on sale of investment (Note
2) - - - 7.1 --- --- --- --- Total aerospace & technologies
16.2 18.4 45.6 63.1 ---- ---- ---- ---- Segment earnings before
interest and taxes 205.9 184.1 527.9 537.3 Undistributed corporate
costs, net (17.3) (6.3) (42.6) (26.7) Gain on sale of investment
(Note 2) - - 34.8 - Business consolidation and other activities
(Note 2) (9.1) - (13.0) (3.8) ---- --- ----- ---- Total
undistributed corporate costs, net (26.4) (6.3) (20.8) (30.5) -----
---- ----- ----- Earnings before interest and taxes $179.5 $177.8
$507.1 $506.8 ====== ====== ====== ====== Unaudited Notes to
Condensed Financials (September 2009)
-------------------------------------------------------- 2.
Business Consolidation Activities and Other Significant
Nonoperating Items 2009 In the first quarter, a restructuring
charge of $5 million ($3.1 million after tax) was recorded for
accelerated depreciation in connection with the closure of a North
American metal beverage plant. In the second quarter the following
significant nonoperating activities occurred: -- The company
recorded restructuring charges of $16.2 million ($9.8 million after
tax) for the closure of two plastic packaging manufacturing plants,
administrative downsizing in our North American metal beverage
business and clean-up costs related to previously closed and sold
facilities. -- The company sold a portion of its interest in
DigitalGlobe for proceeds of approximately $37 million. As a result
of this transaction, a gain of $34.8 million ($30.7 million after
tax) was recorded in corporate costs. -- The company recorded $2.9
million ($1.8 million after tax) for transaction costs pertaining
to the acquisition discussed in Note 3. In the third quarter,
restructuring charges of $13.6 million ($8.8 million after tax)
were recorded for accelerated depreciation and other costs
primarily related to the closure of the two plastic manufacturing
plants announced in the second quarter. Also in the quarter, an
additional $9.1 million ($5.5 million after tax) of acquisition
transaction costs were recorded (see Note 3). 2008 In the first
quarter, Ball Aerospace & Technologies Corp. sold its shares in
an Australian subsidiary for $8.7 million, net of cash sold, that
resulted in a pretax gain of $7.1 million ($4.4 million after tax).
In the second quarter, a net restructuring charge of $11.5 million
($8.1 million after tax) was recorded primarily for the closure of
a North American metal beverage plant, the closure of a Canadian
plastic packaging manufacturing plant and clean-up costs related to
previously closed and sold facilities. In the third quarter, $9.1
million ($7.2 million after tax) was recorded primarily for lease
cancellation and accelerated depreciation costs pertaining to
announced plant closures in prior periods. A summary of the effects
of the above transactions on after-tax earnings follows: Three
months ended Nine months ended ------------------ -----------------
($ in millions, September September September September except per
share 27, 2009 28, 2008 27, 2009 28, 2008 amounts) ----------
---------- ---------- ---------- Net earnings as reported $103.7
$101.9 $306.5 $285.7 Business consolidation costs, net of tax 8.8
7.2 21.7 15.3 Gain on sales of investments, net of tax - - (30.7)
(4.4) Acquisition transaction costs, net of tax 5.5 - 7.3 - --- ---
--- --- Net earnings before above transactions $118.0 $109.1 $304.8
$296.6 ====== ====== ====== ====== Per diluted share before above
transactions $1.24 $1.13 $3.21 $3.03 ===== ===== ===== ===== 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. Unaudited Notes to
Condensed Financials (September 2009)
-------------------------------------------------------- 3.
Subsequent Events Acquisition On October 1, 2009, the company
acquired four plants from Anheuser-Busch InBev for $577 million,
subject to customary post-closing adjustments. The plants consist
of three beverage can manufacturing plants and one beverage can end
plant, all of which are located in the U.S. These plants produce
about 10 billion aluminum cans and 10 billion easy-open can ends
annually. The transaction is expected to generate revenue and
earnings before interest, taxes, depreciation and amortization of
approximately $680 million and $94 million, respectively, in the
first full year of operation. Disposition On October 23, 2009, Ball
closed the sale of its plastic pail assets to BWAY Corporation for
$32 million, subject to customary post-closing adjustments. The
transaction largely involves the sale of a pail manufacturing plant
in Newnan, Georgia, which Ball acquired in 2006 as part of its
purchase of U.S. Can Corporation and is included in the plastics
packaging, Americas, segment. The plant produces injection molded
plastic pails and drums for products such as building materials and
pool chemicals. The company estimates the transaction will result
in an insignificant loss on an after-tax basis. 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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