CCL Industries Reports a 25% Increase in Second Quarter Net Earnings and Declares Dividend
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 08/04/11 -- CCL Industries Inc. (TSX: CCL.A)(TSX: CCL.B)
Results Summary
CCL Industries Inc., a world leader in the development of labelling solutions and specialty packaging for the consumer products and healthcare industries, announced today its consolidated financial results for the second quarter ended June 30, 2011, in accordance with International Financial Reporting Standards ("IFRS"), and the declaration of its quarterly dividend.
Sales for the second quarter of 2011 were $318.9 million, up 5% excluding a nominal positive impact from currency translation, due to solid organic growth across all divisions for the quarter and a small positive impact from acquisitions. Year-to-date, sales increased by 6% on the same basis.
Operating income in the second quarter of 2011 was $43.1 million, up 9%, from $39.7 million in the second quarter of 2010 and up by 8%, excluding currency translation. The majority of the growth was driven by the Container Division, which delivered solid profitability over a significant loss in the prior year quarter. The Tube Division had another quarter of record profitability, while the Label Division declined 5% compared to a strong prior year period. Year-to-date operating income increased by 13% excluding the impact of currency translation.
EBITDA for the second quarter of 2011 was $60.9 million, up 6% from the $57.7 million in the comparable 2010 period and up by 5% excluding currency translation. Year-to-date, EBITDA increased by 8%, excluding the impact of currency translation.
Net earnings in the second quarter of 2011 were $21.8 million, up 25% compared to $17.5 million in last year's second quarter. In addition to the items described above, this increase reflects lower net finance costs and income taxes, and a small favourable impact from currency translation partially offset by higher corporate expenses. Restructuring and other items had no impact on net earnings in the second quarter of 2011 or 2010.
Year-to-date, net earnings were $48.7 million, up 16% from the $42.0 million in the prior year. Restructuring and other items had $0.5 million negative impact on earnings in the first six months of 2011 compared to no impact in 2010.
Basic earnings per Class B share were $0.66 in the second quarter of 2011 compared to $0.53 in the 2010 comparable period. Year-to-date, basic earnings per Class B share were $1.47 in 2011, up 15% over the prior year.
Adjusted basic earnings per Class B share were $0.66 in the second quarter of 2011 compared with $0.53 in the prior year period. Year-to-date, adjusted basic earnings per Class B share were $1.48 in 2011, up 16% over the prior year.
Geoffrey T. Martin, President and Chief Executive Officer commented, "We are pleased to report on a good quarter driven again by significant improvement in our historically underperforming Container and Tube Divisions. Slower market conditions, particularly in developed regions of the world, impacted profit margins slightly in the Label Division compared to a strong prior year quarter. Reduced interest costs on lower debt levels and a favourable tax rate leveraged our overall 9% increase, excluding currency translation, in operating income into a 25% increase in EPS for the quarter."
Mr. Martin also noted, "Sales in our Label Division, excluding currency translation, were up 5% for the second quarter. The consumer product sectors in North America and Europe declined as customers limited marketing initiatives in response to slower demand levels and certain business lines were impacted by inflation and pricing challenges. As expected, our North American Healthcare business improved over the soft first quarter as the U.S. FDA quarantine at a large customer was lifted and overall market conditions improved. We continued to see strong double digit growth rates from emerging market regions although there are some early signs of growth rates moderating over inflation concerns, particularly in China. We expect to see profit growth in the Division over the second half of the year as comparatives ease and our recent acquisitions, Sertech and Pacman, deliver immediate accretion to our results."
Mr. Martin added, "Volume in the Container Division also softened over first quarter levels but price increases and better mix drove a 10% increase in sales excluding currency translation. The Division reported another quarter of solid profitability compared to a sizable loss in the prior year second quarter despite a significant rise in aluminum cost. Our U.S. and Mexican operations were the main drivers of improved performance but the Canadian operation also reported a significantly reduced loss on the back of productivity gains and cost reduction programs. The Container Division will benefit from relatively easy comparatives for the remainder of the year and is expected to continue to contribute significantly to our profit growth for 2011."
Mr. Martin continued, "The Tube Division had another record quarter of profitability, with sales growth of 7% excluding currency translation. We continue to gain share in a flat to down U.S. personal care and cosmetic market and our plant in Pennsylvania improved its operating performance significantly. The outlook for the remainder of the year remains encouraging but comparatives will normalize in the second half as the Division started its recent positive trend at this time last year."
Mr. Martin stated, "Order levels remain stable so far in the third quarter so despite growing concerns about the global economy, we remain cautiously optimistic for the balance of the year. We expect currency translation to remain a challenge at current levels as the Canadian dollar continues to strengthen against the U.S. dollar. At today's exchange rates, European currencies will not sustain the offset we benefitted from in the second quarter as they are now trading approximately in line with prior year levels."
Mr. Martin concluded, "The Company continues to have a strong financial position. Cash balances are solid with over $100 million at the end of the second quarter and net debt to total capital dropped below 24%. Based on our strong cash flow and continued positive outlook for 2011, your Board of Directors has declared a dividend at the same level as the dividend declared last quarter. The dividend rate of $0.175 for the Class B non-voting shares and $0.1625 on the Class A voting shares will be payable to shareholders of record at the close of business on September 16, 2011, to be paid on September 30, 2011. CCL continues its record of paying quarterly dividends without reduction or omission for over 25 years."
With headquarters in Toronto, Canada, CCL Industries now employs approximately 6,000 people and operates 62 production facilities globally located to meet the sourcing needs of large international customers. CCL Label is the world's largest converter of pressure sensitive and film materials for label applications and sells to leading global customers in the consumer packaging, healthcare, automotive and consumer durable markets. CCL Container and CCL Tube are leading producers of aluminum aerosol cans, bottles and extruded plastic tubes for consumer packaged goods customers in the United States, Canada and Mexico.
Note 1 - EBITDA is a critical financial measure used extensively in the packaging industry and other industries to assist in understanding and measuring operating results. It is also considered as a proxy for cash flow and a facilitator for business valuations. This non-IFRS financial measure is defined as earnings before interest, taxes, depreciation and amortization, goodwill impairment loss and restructuring and other items. See section entitled "Supplementary Information" below for a reconciliation of operating income to EBITDA. The Company believes that it is an important measure as it allows management to assess CCL's ongoing business without the impact of interest, depreciation and amortization and income tax expenses, as well as non-operating factors and one- time items. As a proxy for cash flow, it is intended to indicate CCL's ability to incur or service debt and to invest in property, plant and equipment, and it allows management to compare CCL's business to those of CCL's peers and competitors who may have different capital or organizational structures. EBITDA is a measure tracked by financial analysts and investors to evaluate financial performance and is a key metric in business valuations. EBITDA is considered an important measure by lenders to the Company and is included in the financial covenants of CCL's senior notes and bank lines of credit.
Note 2 - Operating Income is a key non-IFRS financial measure to assist in understanding the profitability of the Company's business units. This non-IFRS financial measure is defined as income before corporate expenses, interest, restructuring and other items and taxes.
Note 3 - Adjusted Basic Earnings Per Class B Share is an important non-IFRS financial measure to assist in understanding the ongoing earnings performance of the Company excluding items of a one- time or non-recurring nature. It is not considered a substitute for basic net earnings per Class B share but it does provide additional insight into the ongoing financial results of the Company. This non-IFRS financial measure is defined as basic net earnings per Class B share excluding restructuring and other items and tax adjustments.
This earnings release, which is current as of August 4, 2011, is a summary of our second quarter 2011 results and should be read in conjunction with our second quarter 2011 Management's Discussion and Analysis ("MD&A"), second quarter 2011 Unaudited Consolidated Condensed Interim Financial Statements and Notes thereto, 2010 Annual MD&A, 2010 Annual Audited Consolidated Financial Statements and Notes thereto and other recent securities filings available on and .
The financial information presented herein has been prepared on the basis of IFRS for interim financial statements and is expressed in Canadian dollars unless otherwise stated.
The amounts in this earnings release, MD&A and interim financial statements for the six months ended June 30, 2010, have been restated to reflect CCL's adoption of IFRS, with effect from January 1, 2010. Further disclosure on the transition to IFRS can found in section 8 of the June 30, 2011, MD&A and note 11 of the Company's consolidated condensed interim financial statements for the six months ended June 30, 2011. This disclosure contains a description of the IFRS adjustments and reclassifications on transition and a reconciliation of the Company's financial statements previously prepared under Canadian GAAP to those prepared under IFRS for the six months ended June 30, 2010, and for the year ended December 31, 2010.
This press release contains forward-looking information and forward-looking statements, as defined under applicable securities laws, (hereinafter collectively referred to as "forward-looking statements") that involve a number of risks and uncertainties. Forward-looking statements include all statements that are predictive in nature or depend on future events or conditions. Forward-looking statements are typically identified by the words "believes," "expects," "anticipates," "estimates," "intends," "plans" or similar expressions. Statements regarding the operations, business, financial condition, priorities, ongoing objectives, strategies and outlook of the Company, other than statements of historical fact, are forward-looking statements. Specifically, this press release contains forward-looking statements regarding the anticipated growth in sales, income and profitability of the Company's divisions; and the Company's expectations regarding general business and economic conditions.
Forward-looking statements are not guarantees of future performance. They involve known and unknown risks and uncertainties relating to future events and conditions including, but not limited to, the after-effects of the global financial crisis and its impact on the world economy and capital markets; the impact of competition; consumer confidence and spending preferences; general economic and geopolitical conditions; currency exchange rates; interest rates and credit availability; technological change; changes in government regulations; risks associated with operating and product hazards; and CCL's ability to attract and retain qualified employees. Do not unduly rely on forward-looking statements as the Company's actual results could differ materially from those anticipated in these forward-looking statements. Forward-looking statements are also based on a number of assumptions, which may prove to be incorrect, including, but not limited to, assumptions about the following: global economic recovery and higher consumer spending; improved customer demand for the Company's products; continued historical growth trends, market growth in specific segments and entering into new segments; the Company's ability to provide a wide range of products to multinational customers on a global basis; the benefits of the Company's focused strategies and operational approach; the achievement of the Company's plans for improved efficiency and lower costs, including stable aluminum costs; the availability of cash and credit; fluctuations of currency exchange rates; the Company's continued relations with its customers; and general business and economic conditions. Should one or more risks materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward- looking statements. Further details on key risks can be found in the Management's Discussion and Analysis section of CCL's 2010 Annual Report, particularly under Section 4: "Risks and Uncertainties." CCL's annual and quarterly reports can be found online at and or are available upon request.
Except as otherwise indicated, forward-looking statements do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made may have on CCL's business. Such statements do not, unless otherwise specified by the Company, reflect the impact of dispositions, sales of assets, monetizations, mergers, acquisitions, other business combinations or transactions, asset write-downs or other charges announced or occurring after forward-looking statements are made. The financial impact of these transactions and non-recurring and other special items can be complex and depends on the facts particular to each of them and therefore cannot be described in a meaningful way in advance of knowing specific facts.
The forward-looking statements are provided as of the date of this press release and the Company does not assume any obligation to update or revise the forward-looking statements to reflect new events or circumstances, except as required by law.
Contacts:
CCL Industries Inc.
Gaston Tano
Senior Vice President and Chief Financial Officer
416-756-8526
CCL Industries Inc.
Janis M. Wade
Senior Vice President, Human Resources
and Corporate Communications
416-756-8509
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Datum: 04.08.2011 - 12:15 Uhr
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