Crown Cork & Seal Reports First Quarter 2001 Results

Apr 18, 2001, 01:00 ET from Crown Cork & Seal Company, Inc.

    PHILADELPHIA, April 18 /PRNewswire/ -- Crown Cork & Seal Company, Inc.
 (NYSE:   CCK; Paris Bourse) today announced its results for the first quarter
 ended March 31, 2001.  On a continuing operations basis and before the
 cumulative effect of accounting changes, the Company reported a net loss of
 $0.37 per diluted share compared to net income of $0.17 per diluted share in
 the same period last year.  The first quarter results are $0.03 per diluted
 share ahead of expectations issued by management on March 12, 2001.
     John W. Conway, Chairman, President and CEO, commented, "We continue to
 experience the challenges of pricing pressure in certain markets.  We are,
 however, pleased with our increased worldwide unit volume shipments and will
 continue to seek further improvement.  This is a continuing demonstration of
 the Company's commitment to remaining the global leader in consumer packaging.
 In line with this strategy, the Company commercially introduced several new
 technologies during the quarter to both the food and beverage industries.  We
 continue to utilize our leading research and development capability to deliver
 innovative and high quality packaging solutions to our customers."
     First quarter net sales were $1,658 million, 2.4% below the prior year
 period reflecting the continued strength of the U.S. dollar against the euro
 and Pound Sterling.  Excluding the effects of currency translation, net sales
 increased 1.5% over the prior year period, reflecting an overall increase in
 worldwide volumes across most product lines.  Previously noted competitive
 price pressures in the Company's North American beverage businesses have
 resulted in a reduction of gross and operating margins in the quarter.
 Selling, general and administrative (SG&A) expense at 5.2% to net sales in the
 quarter was up $1 million over the prior year, but includes $5 million for
 employee separation costs.  Excluding these costs, SG&A declined 4.7% compared
 to the prior year and was 4.9% to net sales.
     As previously announced, the Company successfully completed the
 refinancing of its $2.5 billion credit facility and raised an additional
 $400 million term loan.  The new money term loan replaces previously existing
 alternative sources of capital and provides the Company with the financial
 strength, flexibility and liquidity to support its businesses and, at the same
 time, execute its strategy of targeted divestitures to further streamline the
 business.  Since the completion of the refinancing, the Company believes that
 the fundamentals of its business have improved as evidenced, among other
 things, by the widespread unit volume growth the Company is experiencing in
 virtually all of its product segments and geographic markets.  As a
 consequence, the Company notes that its forecast for EBITDA of approximately
 $1 billion continues to be its view for the full year 2001.  In addition, the
 recent actions by the Federal Reserve Bank reducing interest rates will have a
 beneficial impact upon interest cost compared to previous assumptions the
 Company had been using.
     The following table reconciles earnings per share as reported with
 earnings per share on a continuing operations basis:
 
                                                        Three Months Ended
                                                            March 31,
 
     (Per diluted share)                                2001           2000
     Net (loss) / income as reported                  ($0.37)          $0.17
     Less: Cumulative effect of accounting change       (.03)
                                                        (.40)
     Add: Provision for restructuring and
      employee separation costs                           .03
     Net (loss) / income from continuing
      operations                                      ($0.37)          $0.17
 
     Review by Division
     The Americas Division generated net sales of $843 million in the first
 quarter, which were $17 million lower than last year's first quarter.
 Beverage can unit volumes were equal to the prior year as strong demand in
 Latin America offset softer volumes in the U.S. and Canada during the northern
 hemisphere's seasonally slower first quarter.  Importantly, North American
 beverage end unit volumes were 2.1% greater than the prior year reflecting the
 early success of the Company's patented SuperEnd(TM) technology.  The Company
 expects this superior performing end to become the industry standard by the
 end of 2002.  Food can volumes in North America were down 8.7% to the prior
 year due in large part to seasonal timing and the June 2000 bankruptcy filing
 by a large food processor.
     Strong sales unit volumes were reported across all of the Division's
 plastics operations.  In particular, PET preforms and plastic beverage and
 specialty closures all reported double-digit volume growth versus the prior
 year.  The Risdon-AMS beauty care packaging business performed well and
 benefited from volume gains in its fragrance pump and eyecare product lines.
     The European Division generated net sales of $741 million in the first
 quarter, which were $27 million lower than in the prior year period.
 Excluding currency translation, net sales in the Division were $29 million or
 3.8% greater than in the prior year period reflecting increased unit volumes
 across all major product lines.
     Beverage can unit volumes were up 2.5% with strong performances throughout
 southern Europe.  Food can volumes across the Division were up 1.0% over the
 same quarter last year, with increases experienced in Benelux, Eastern Europe,
 Germany and the UK.  Aerosol can volumes, up 8.1% over the prior year,
 benefited from improvement throughout all operations.  The plastics sector
 experienced higher sales unit volumes across most product lines, most notably
 beauty care packaging and beverage and specialty closures.
     The Asia-Pacific Division reported sales of $74 million in the first
 quarter, an increase of $3 million or 4.2% compared to the prior year period.
 Demand for all products was exceptionally strong throughout the Division with
 beverage and food cans, plastic closures and PET beverage bottles all
 reporting double-digit growth over the prior year.  Beverage can volume growth
 was particularly notable in China while Singapore, Thailand and Vietnam also
 posted respectable gains over the prior year period.  While pricing remained
 extremely competitive, the Division continued to cut costs and improved its
 net income and business cash flow by 47% and 257%, respectively, compared to
 the same quarter last year.
 
     Conference Call
     The Company will hold a conference call tomorrow, April 19, 2001 at
 11:00 am (EDT) to discuss this news release.  The dial-in numbers for the
 conference call are (712) 257-2280 or toll free (800) 779-1598.  Please be
 prepared to state your name, affiliation, and the access password which is
 "packaging."  A replay of the conference call will be available for a one-week
 period ending at midnight on Thursday, April 26.  The telephone numbers for
 the replay are (402) 220-0329 or toll free (800) 704-0517 and the access code
 is 0197.  A live web cast of the call will be made available to the public on
 the Internet at the Company's website, www.crowncork.com.
     The Company will release its results for the second quarter on July 19 and
 for the third quarter on October 18.
 
     Cautionary Note Regarding Forward-Looking Statements
     Except for historical information, all other information in this press
 release consists of forward-looking statements within the meaning of the
 federal securities laws.  These forward-looking statements involve a number of
 risks, uncertainties and other factors which may cause the actual results to
 be materially different from those expressed or implied in the forward-looking
 statements.  Important factors that could cause the actual results of
 operations or financial condition of the Company to differ include, without
 limitation, competitive pressures affecting the Company, its customers and
 suppliers; the Company's ability to generate significant free cash and
 maintain appropriate debt levels; the Company's ability to maintain adequate
 sources of capital and liquidity, including through the consummation of
 appropriate asset sales; cost reduction efforts and expected savings; the
 Company's ability to innovate new designs and technologies and the market
 acceptance of new products; the outcome of asbestos-related litigation
 (including the level of future claims and the terms of settlements, and the
 impact of bankruptcy filings by other companies with asbestos-related
 liabilities, which could increase the Company's asbestos-related costs over
 time, and the adequacy of reserves established for asbestos-related
 liabilities) and other litigation and contingencies; changes in the
 availability and pricing of raw materials and the Company's ability to pass
 price increases through to its customers; costs and difficulties related to
 the integration of acquired businesses; the impact of any potential
 dispositions or other strategic realignments; and changes or differences in
 U.S. or international economic, monetary or political conditions.  In
 addition, other factors have been discussed under the caption "Forward-Looking
 Statements" in the Company's Form 10-K Annual Report for the year ended
 December 31, 2000 and in subsequent filings.  The Company does not intend to
 review or revise any particular forward-looking statement in light of future
 events.
     Crown Cork & Seal is the leading supplier of packaging products to
 consumer marketing companies around the world.  World headquarters are located
 in Philadelphia, Pennsylvania.
 
 
                       Consolidated Statements of Income
 
     (In millions, except for share and per share amounts)
 
                                                  Three Months Ended March 31,
                                                       2001            2000
 
     Net sales (A)                                     $1,658         $1,699
 
     Cost of products sold (A)                          1,395          1,352
     Depreciation                                          94             97
     Amortization                                          30             31
     Selling and administrative
      expense                                              86             85
     Provision for restructuring and
      other charges                                         2
     Interest expense                                     115             92
     Interest income                                       (6)            (4)
     Translation and foreign exchange
      adjustments                                           3
     (Loss) / income before income taxes and
      cumulative effect of accounting change              (61)            46
     (Benefit) / provision from/for income taxes          (11)            19
     Minority interests, net of equity earnings                          (4)
     Net (loss) / income before cumulative effect
      of accounting change                                (50)            23
     Cumulative effect of change in accounting
      principle for derivatives and hedging
      activities, net of tax (B)                            4
     Net (loss) / income                                  (46)            23
     Preferred stock dividends                                             2
     Net (loss) / income available to common
      shareholders                                       ($46)           $21
     Earnings / (loss) per average common share:
       Basic and diluted -- before cumulative
                            effect of accounting
                            change                      ($.40)          $.17
                            after cumulative effect
                            of accounting change        ($.37)          $.17
 
               Dividends per common share                               $.25
     Weighted average common shares:
       Basic                                      125,624,056    123,870,438
       Diluted                                    125,624,056    128,569,627
     Actual common shares outstanding             125,628,722    128,106,916
 
     (A) In the fourth quarter of 2000, the Company adopted EITF 00-10,
 "Accounting for Shipping and Handling Fees and Costs."  EITF 00-10 requires
 that shipping and handling costs be excluded from revenues.  The Company, to
 comply with this standard, has reclassified from net sales to cost of products
 sold $59 for the quarter ended March 31, 2000.
     (B) On January 1, 2001, the Company adopted SFAS No. 133, "Accounting for
 Derivative Instruments and Hedging Activities," as amended by SFAS No. 138.
 SFAS No. 133 establishes comprehensive accounting and reporting guidelines for
 derivative instruments and hedging activities.  The Company, to comply with
 this standard, has recognized an after-tax transition adjustment, that is, a
 cumulative effect of an accounting change, in the first quarter of 2001.
 
 

SOURCE Crown Cork & Seal Company, Inc.
    PHILADELPHIA, April 18 /PRNewswire/ -- Crown Cork & Seal Company, Inc.
 (NYSE:   CCK; Paris Bourse) today announced its results for the first quarter
 ended March 31, 2001.  On a continuing operations basis and before the
 cumulative effect of accounting changes, the Company reported a net loss of
 $0.37 per diluted share compared to net income of $0.17 per diluted share in
 the same period last year.  The first quarter results are $0.03 per diluted
 share ahead of expectations issued by management on March 12, 2001.
     John W. Conway, Chairman, President and CEO, commented, "We continue to
 experience the challenges of pricing pressure in certain markets.  We are,
 however, pleased with our increased worldwide unit volume shipments and will
 continue to seek further improvement.  This is a continuing demonstration of
 the Company's commitment to remaining the global leader in consumer packaging.
 In line with this strategy, the Company commercially introduced several new
 technologies during the quarter to both the food and beverage industries.  We
 continue to utilize our leading research and development capability to deliver
 innovative and high quality packaging solutions to our customers."
     First quarter net sales were $1,658 million, 2.4% below the prior year
 period reflecting the continued strength of the U.S. dollar against the euro
 and Pound Sterling.  Excluding the effects of currency translation, net sales
 increased 1.5% over the prior year period, reflecting an overall increase in
 worldwide volumes across most product lines.  Previously noted competitive
 price pressures in the Company's North American beverage businesses have
 resulted in a reduction of gross and operating margins in the quarter.
 Selling, general and administrative (SG&A) expense at 5.2% to net sales in the
 quarter was up $1 million over the prior year, but includes $5 million for
 employee separation costs.  Excluding these costs, SG&A declined 4.7% compared
 to the prior year and was 4.9% to net sales.
     As previously announced, the Company successfully completed the
 refinancing of its $2.5 billion credit facility and raised an additional
 $400 million term loan.  The new money term loan replaces previously existing
 alternative sources of capital and provides the Company with the financial
 strength, flexibility and liquidity to support its businesses and, at the same
 time, execute its strategy of targeted divestitures to further streamline the
 business.  Since the completion of the refinancing, the Company believes that
 the fundamentals of its business have improved as evidenced, among other
 things, by the widespread unit volume growth the Company is experiencing in
 virtually all of its product segments and geographic markets.  As a
 consequence, the Company notes that its forecast for EBITDA of approximately
 $1 billion continues to be its view for the full year 2001.  In addition, the
 recent actions by the Federal Reserve Bank reducing interest rates will have a
 beneficial impact upon interest cost compared to previous assumptions the
 Company had been using.
     The following table reconciles earnings per share as reported with
 earnings per share on a continuing operations basis:
 
                                                        Three Months Ended
                                                            March 31,
 
     (Per diluted share)                                2001           2000
     Net (loss) / income as reported                  ($0.37)          $0.17
     Less: Cumulative effect of accounting change       (.03)
                                                        (.40)
     Add: Provision for restructuring and
      employee separation costs                           .03
     Net (loss) / income from continuing
      operations                                      ($0.37)          $0.17
 
     Review by Division
     The Americas Division generated net sales of $843 million in the first
 quarter, which were $17 million lower than last year's first quarter.
 Beverage can unit volumes were equal to the prior year as strong demand in
 Latin America offset softer volumes in the U.S. and Canada during the northern
 hemisphere's seasonally slower first quarter.  Importantly, North American
 beverage end unit volumes were 2.1% greater than the prior year reflecting the
 early success of the Company's patented SuperEnd(TM) technology.  The Company
 expects this superior performing end to become the industry standard by the
 end of 2002.  Food can volumes in North America were down 8.7% to the prior
 year due in large part to seasonal timing and the June 2000 bankruptcy filing
 by a large food processor.
     Strong sales unit volumes were reported across all of the Division's
 plastics operations.  In particular, PET preforms and plastic beverage and
 specialty closures all reported double-digit volume growth versus the prior
 year.  The Risdon-AMS beauty care packaging business performed well and
 benefited from volume gains in its fragrance pump and eyecare product lines.
     The European Division generated net sales of $741 million in the first
 quarter, which were $27 million lower than in the prior year period.
 Excluding currency translation, net sales in the Division were $29 million or
 3.8% greater than in the prior year period reflecting increased unit volumes
 across all major product lines.
     Beverage can unit volumes were up 2.5% with strong performances throughout
 southern Europe.  Food can volumes across the Division were up 1.0% over the
 same quarter last year, with increases experienced in Benelux, Eastern Europe,
 Germany and the UK.  Aerosol can volumes, up 8.1% over the prior year,
 benefited from improvement throughout all operations.  The plastics sector
 experienced higher sales unit volumes across most product lines, most notably
 beauty care packaging and beverage and specialty closures.
     The Asia-Pacific Division reported sales of $74 million in the first
 quarter, an increase of $3 million or 4.2% compared to the prior year period.
 Demand for all products was exceptionally strong throughout the Division with
 beverage and food cans, plastic closures and PET beverage bottles all
 reporting double-digit growth over the prior year.  Beverage can volume growth
 was particularly notable in China while Singapore, Thailand and Vietnam also
 posted respectable gains over the prior year period.  While pricing remained
 extremely competitive, the Division continued to cut costs and improved its
 net income and business cash flow by 47% and 257%, respectively, compared to
 the same quarter last year.
 
     Conference Call
     The Company will hold a conference call tomorrow, April 19, 2001 at
 11:00 am (EDT) to discuss this news release.  The dial-in numbers for the
 conference call are (712) 257-2280 or toll free (800) 779-1598.  Please be
 prepared to state your name, affiliation, and the access password which is
 "packaging."  A replay of the conference call will be available for a one-week
 period ending at midnight on Thursday, April 26.  The telephone numbers for
 the replay are (402) 220-0329 or toll free (800) 704-0517 and the access code
 is 0197.  A live web cast of the call will be made available to the public on
 the Internet at the Company's website, www.crowncork.com.
     The Company will release its results for the second quarter on July 19 and
 for the third quarter on October 18.
 
     Cautionary Note Regarding Forward-Looking Statements
     Except for historical information, all other information in this press
 release consists of forward-looking statements within the meaning of the
 federal securities laws.  These forward-looking statements involve a number of
 risks, uncertainties and other factors which may cause the actual results to
 be materially different from those expressed or implied in the forward-looking
 statements.  Important factors that could cause the actual results of
 operations or financial condition of the Company to differ include, without
 limitation, competitive pressures affecting the Company, its customers and
 suppliers; the Company's ability to generate significant free cash and
 maintain appropriate debt levels; the Company's ability to maintain adequate
 sources of capital and liquidity, including through the consummation of
 appropriate asset sales; cost reduction efforts and expected savings; the
 Company's ability to innovate new designs and technologies and the market
 acceptance of new products; the outcome of asbestos-related litigation
 (including the level of future claims and the terms of settlements, and the
 impact of bankruptcy filings by other companies with asbestos-related
 liabilities, which could increase the Company's asbestos-related costs over
 time, and the adequacy of reserves established for asbestos-related
 liabilities) and other litigation and contingencies; changes in the
 availability and pricing of raw materials and the Company's ability to pass
 price increases through to its customers; costs and difficulties related to
 the integration of acquired businesses; the impact of any potential
 dispositions or other strategic realignments; and changes or differences in
 U.S. or international economic, monetary or political conditions.  In
 addition, other factors have been discussed under the caption "Forward-Looking
 Statements" in the Company's Form 10-K Annual Report for the year ended
 December 31, 2000 and in subsequent filings.  The Company does not intend to
 review or revise any particular forward-looking statement in light of future
 events.
     Crown Cork & Seal is the leading supplier of packaging products to
 consumer marketing companies around the world.  World headquarters are located
 in Philadelphia, Pennsylvania.
 
 
                       Consolidated Statements of Income
 
     (In millions, except for share and per share amounts)
 
                                                  Three Months Ended March 31,
                                                       2001            2000
 
     Net sales (A)                                     $1,658         $1,699
 
     Cost of products sold (A)                          1,395          1,352
     Depreciation                                          94             97
     Amortization                                          30             31
     Selling and administrative
      expense                                              86             85
     Provision for restructuring and
      other charges                                         2
     Interest expense                                     115             92
     Interest income                                       (6)            (4)
     Translation and foreign exchange
      adjustments                                           3
     (Loss) / income before income taxes and
      cumulative effect of accounting change              (61)            46
     (Benefit) / provision from/for income taxes          (11)            19
     Minority interests, net of equity earnings                          (4)
     Net (loss) / income before cumulative effect
      of accounting change                                (50)            23
     Cumulative effect of change in accounting
      principle for derivatives and hedging
      activities, net of tax (B)                            4
     Net (loss) / income                                  (46)            23
     Preferred stock dividends                                             2
     Net (loss) / income available to common
      shareholders                                       ($46)           $21
     Earnings / (loss) per average common share:
       Basic and diluted -- before cumulative
                            effect of accounting
                            change                      ($.40)          $.17
                            after cumulative effect
                            of accounting change        ($.37)          $.17
 
               Dividends per common share                               $.25
     Weighted average common shares:
       Basic                                      125,624,056    123,870,438
       Diluted                                    125,624,056    128,569,627
     Actual common shares outstanding             125,628,722    128,106,916
 
     (A) In the fourth quarter of 2000, the Company adopted EITF 00-10,
 "Accounting for Shipping and Handling Fees and Costs."  EITF 00-10 requires
 that shipping and handling costs be excluded from revenues.  The Company, to
 comply with this standard, has reclassified from net sales to cost of products
 sold $59 for the quarter ended March 31, 2000.
     (B) On January 1, 2001, the Company adopted SFAS No. 133, "Accounting for
 Derivative Instruments and Hedging Activities," as amended by SFAS No. 138.
 SFAS No. 133 establishes comprehensive accounting and reporting guidelines for
 derivative instruments and hedging activities.  The Company, to comply with
 this standard, has recognized an after-tax transition adjustment, that is, a
 cumulative effect of an accounting change, in the first quarter of 2001.
 
 SOURCE  Crown Cork & Seal Company, Inc.