PHILADELPHIA, April 16, 2015 /PRNewswire/ -- Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the first quarter ended March 31, 2015.

First Quarter Highlights


    --  Income per diluted share $0.32; Before Certain Items $0.53, including
        $0.06 of unfavorable currency translation impact
    --  Global beverage can volumes grew 4% versus 2014; food can volumes grew
        17%
    --  Empaque acquisition completed on February 18, 2015
    --  Mivisa and Empaque integrations progressing as planned

Net sales in the first quarter grew to $1,997 million over the $1,993 million in the first quarter of 2014, primarily due to the impact of the Mivisa and Empaque acquisitions offset by $172 million of unfavorable currency translation impact.

Segment income (a non-GAAP measure defined by the Company as gross profit excluding the impact of fair value adjustments to inventory acquired in an acquisition and timing impact of hedge ineffectiveness, less selling and administrative expense) was $192 million in the first quarter compared to $200 million in the first quarter of 2014, and included $16 million of unfavorable currency translation impact primarily due to the strength of the U.S. dollar against the euro.

Commenting on the quarter, John W. Conway, Chairman and Chief Executive Officer, stated, "We started off the year as expected, and the fundamentals underlying our businesses remain strong. On a currency neutral basis, the Company's segment income for the first quarter increased by 4% over 2014, despite significantly elevated aluminum premiums in Europe and political conflict in parts of the Middle East, which resulted in lower regional sales volumes.

"On February 18, we completed our acquisition of Empaque, a leading Mexican manufacturer of aluminum cans and ends, bottle caps and glass bottles for the beverage industry. We are pleased that Empaque's excellent management team and highly efficient manufacturing facilities are integrating smoothly into the Crown organization. Also on February 18, we announced the construction of a new beverage can plant in Monterrey, Mexico to meet the growing demand for both beer and non-alcoholic beverages in the market surrounding this metropolitan area of more than four million people.

"The integration of Mivisa, a leading Spanish producer of two- and three-piece food cans and ends which we acquired during the second quarter of 2014, is proceeding as planned, as demonstrated in our first quarter European Food results."

Interest expense increased to $65 million in the first quarter of 2015 over the $58 million in 2014 primarily due to increased borrowings to fund the Empaque and Mivisa acquisitions.

Net income attributable to Crown Holdings in the first quarter was $44 million compared to $24 million in the first quarter of 2014. Reported earnings per diluted share were $0.32 in the first quarter of 2015 compared to $0.17 in the 2014 first quarter. Net income per diluted share before certain items was $0.53 compared to $0.57 in 2014.

A reconciliation from net income and income per diluted share to net income before certain items and income per diluted share before certain items is provided below.

Non-GAAP Measures
Segment income and free cash flow are not defined terms under U.S. generally accepted accounting principles (non-GAAP measures). In addition, the information presented excluding the impact of currency translation, regarding net income before certain items and regarding income before certain items per diluted share does not conform to GAAP and includes non-GAAP measures. Non-GAAP measures should not be considered in isolation or as a substitute for net income, income per diluted share or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to calculations of similarly titled measures by other companies.

The Company views segment income and free cash flow as the principal measures of performance of its operations and for the allocation of resources. Free cash flow has certain limitations, however, including that it does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure. The amount of mandatory versus discretionary expenditures can vary significantly between periods. The Company believes that net income before certain items and income before certain items per diluted share are useful in evaluating the Company's operations. Segment income, free cash flow, net income before certain items and income before certain items per diluted share are derived from the Company's Consolidated Statements of Operations and Cash Flows and Consolidated Balance Sheets, as applicable, and reconciliations to segment income, free cash flow, net income before certain items and income before certain items per diluted share can be found within this release.

Conference Call
The Company will hold a conference call tomorrow, April 17, 2015 at 9:00 a.m. (EDT) to discuss this news release. Forward-looking and other material information may be discussed on the conference call. The dial-in numbers for the conference call are (517) 308-9237 or toll-free (888) 469-0976 and the access password is "packaging." A live webcast of the call will be made available to the public on the internet at the Company's web site, www.crowncork.com. A replay of the conference call will be available for a one-week period ending at midnight on April 24. The telephone numbers for the replay are (203) 369-1026 or toll free (866) 435-5406.

Cautionary Note Regarding Forward-Looking Statements
Except for historical information, all other information in this press release consists of forward-looking statements. These forward-looking statements involve a number of risks, uncertainties and other factors, including the future impact of currency translation, aluminum premiums in Europe and political conflicts in the Middle East on the Company's operations, the level of demand for the Company's products in 2015 and beyond, the Company's ability to successfully integrate the operations of Mivisa and Empaque, the ability of Empaque's management team to continue to operate its operations efficiently and to successfully complete the construction of a new plant in Monterrey, and the level of future demand for beverage cans in Monterrey that may cause actual results to be materially different from those expressed or implied in the forward-looking statements. Important factors that could cause the statements made in this press release or the actual results of operations or financial condition of the Company to differ are discussed under the caption "Forward Looking Statements" in the Company's Form 10-K Annual Report for the year ended December 31, 2014 and in subsequent filings made prior to or after the date hereof. The Company does not intend to review or revise any particular forward-looking statement in light of future events.

Crown Holdings, Inc., through its subsidiaries, is a leading supplier of packaging products to consumer marketing companies around the world. World headquarters are located in Philadelphia, Pennsylvania.

For more information, contact:
Thomas A. Kelly, Senior Vice President and Chief Financial Officer, (215) 698-5341
Thomas T. Fischer, Vice President, Investor Relations and Corporate Affairs, (215) 552-3720
Edward Bisno, Bisno Communications, (212) 717-7578

Unaudited Consolidated Statements of Operations, Balance Sheets, Statements of Cash Flows, Segment Information and Supplemental Data follow.



                    Consolidated Statements of Operations (Unaudited)
                    ------------------------------------------------

                     (in millions, except share and per share data)


                                                     Three Months Ended March 31,
                                                   ----------------------------

                                                            2015                        2014
                                                            ----                        ----

    Net sales                                             $1,997                      $1,993
                                                          ------                      ------

    Cost of
     products
     sold                                                  1,660                       1,661

    Depreciation
     and
     amortization                                             51                          35
                                                             ---                         ---

    Gross profit
     (1)                                                    286                         297

    Selling and
     administrative
     expense                                                  98                         104

    Restructuring
     and other                                                20                          52

    Foreign
     exchange                                                  6                           6

    Interest
     expense                                                  65                          58

    Interest
     income                                                  (2)                        (2)

    Income before
     income taxes                                             99                          79

    Provision for
     income taxes                                             37                          33

    Net income                                                62                          46

    Net income
     attributable
     to
     noncontrolling
     interests                                              (18)                       (22)
                                                             ---                         ---

    Net income
     attributable
     to Crown
     Holdings                                                $44                         $24
                                                             ===                         ===

    Earnings per share attributable to Crown
     Holdings

         common shareholders:

         Basic                                             $0.32                       $0.18
                                                           =====                       =====

         Diluted                                           $0.32                       $0.17
                                                           =====                       =====


    Weighted average common shares outstanding:

          Basic                                      137,697,898                 136,819,400

          Diluted                                    138,953,440                 137,910,635

    Actual common
     shares
     outstanding                                     139,194,766                 138,431,312

(1) A reconciliation from gross profit to segment income follows.

Consolidated Supplemental Financial Data (Unaudited)
(in millions)

Reconciliation from Gross Profit to Segment Income
The Company views segment income, as defined below, as a principal measure of performance of its operations and for the allocation of resources. Segment income is defined by the Company as gross profit excluding the impact of fair value adjustments to inventory acquired in an acquisition and timing impact of hedge ineffectiveness, less selling and administrative expense.


                                           Three Months Ended

                                               March 31,
                                               ---------

                                                    2015          2014
                                                    ----          ----

    Gross profit                                             $286        $297

    Fair value adjustment to inventory (1)                      6

    Impact of hedge ineffectiveness (1)                       (2)          7

    Selling and administrative expense                       (98)      (104)
                                                              ---        ----

                                                             $192        $200
                                                             ====        ====

(1) Included in cost of products sold



                                   Segment Information
                                   -------------------


                                        Three Months Ended March 31,
                                        ----------------------------

    Net Sales                                             2015         2014
    ---------                                             ----         ----


    Americas Beverage                                     $617         $549

    North America Food                                     160          179

    European Beverage                                      324          388

    European Food                                          431          373

    Asia Pacific                                           310          298
                                                           ---          ---

         Total reportable segments                       1,842        1,787

    Non-reportable segments                                155          206
                                                           ---          ---

           Total net sales                              $1,997       $1,993
                                                        ======       ======



    Segment Income
    --------------


    Americas Beverage                                      $85          $79

    North America Food                                      24           29

    European Beverage                                       38           59

    European Food                                           42           26

    Asia Pacific                                            35           34
                                                           ---          ---

         Total reportable segments                         224          227

    Non-reportable segments                                 17           24

    Corporate and other
     unallocated items                                    (49)        (51)
                                                           ---          ---

           Total segment income                           $192         $200
                                                          ====         ====

Consolidated Supplemental Data (Unaudited)
(in millions, except per share data)

Reconciliation from Net Income and Income Per Diluted Common Share to Net Income before Certain Items and Income Per Diluted Common Share before Certain Items
The following table reconciles reported net income and diluted earnings per share attributable to the Company to net income before certain items and income per diluted common share before certain items, as used elsewhere in this release.




                           Three Months Ended
                                March 31,
                                ---------

                            2015                2014
                            ----                ----

     Net income
      attributable
      to Crown
      Holdings, as
      reported               $44                 $24

     Items:

          Fair value
           adjustment to
           inventory (1)       6

          Hedge
           ineffectiveness
           (2)               (2)                  7

          Provision for
           restructuring
           and other  (3)     20                  52

          Income taxes
           (4)                 5                 (4)


      Net income
      before the
      above items            $73                 $79
                             ===                 ===


      Income per
      diluted common
      share as
      reported             $0.32               $0.17

     Income per
      diluted common
      share before
      the above
      items                $0.53               $0.57

      Effective tax
      rate as
      reported             37.4%              41.8%

      Effective tax
      rate before
      the above
      items                26.0%              26.8%

Net income before certain items, income per diluted common share before certain items and the effective tax rate before certain items are non-GAAP measures and are not meant to be considered in isolation or as a substitute for net income, income per diluted common share and effective tax rates determined in accordance with U.S. generally accepted accounting principles. The Company believes these non-GAAP measures provide useful information to evaluate the performance of the Company's ongoing business.

(1) In the first quarter of 2015, the Company recorded a charge of $6 million in cost of products sold for fair value adjustments related to the sale of inventory acquired in its acquisition of Empaque.

(2) In the first quarter of 2015, the Company recorded a benefit of $2 million in cost of products sold related to hedge ineffectiveness caused primarily by volatility in the metal premium component of aluminum prices. In the first quarter of 2014, the Company recorded a charge of $7 million for hedge ineffectiveness.

(3) In the first quarter of 2015, the Company recorded restructuring and other charges of $15 million primarily for costs related to its acquisition of Empaque. In the first quarter of 2014, the Company recorded restructuring and other charges of $8 million.

In the first quarter of 2015, the Company recorded charges of $5 million primarily for asset sales and impairments related to the sale of four industrial specialty packaging plants in Europe. In the first quarter of 2014, the Company recorded charges of $44 million primarily for asset sales and impairments related to the planned divestment of the industrial specialty packaging operations and transaction costs incurred in connection with its acquisition of Mivisa.

(4) In the first quarter of 2015, the Company recorded income tax benefits of $2 million related to the items described above, and a charge of $7 million to record a potential liability arising from a recent unfavorable tax court ruling in Spain. In the first quarter of 2014, the Company recorded income tax benefits of $4 million related to the items described above.


                                  Consolidated Balance Sheets (Condensed & Unaudited)

                                                     (in millions)

     March
     31,                     2015                                  2014
     -----                   ----                                  ----

    Assets

     Current
     assets

         Cash
         and
         cash
         equivalents                                              $280                  $267

         Receivables,
         net                                                     1,039                 1,199

        Inventories                                              1,446                 1,334

         Prepaid
         expenses
         and
         other
         current
         assets                                                    312                   279

                 Total
                 current
                 assets                                          3,077                 3,079
                                                                 -----                 -----


     Goodwill
     and
     intangible
     assets                                                      3,746                 2,016

     Property,
     plant
     and
     equipment,
     net                                                         2,619                 2,160

     Other
     non-
     current
     assets                                                        702                   630
                                                                   ---                   ---

                Total                                          $10,144                $7,885
                                                               =======                ======



     Liabilities
     and
     equity

     Current
     liabilities

         Short-
         term
         debt                                                      $72                  $252

         Current
         maturities
         of
         long-
         term
         debt                                                      172                    87

         Accounts
         payable
         and
         accrued
         liabilities                                             2,369                 2,222

                 Total
                 current
                 liabilities                                     2,613                 2,561


     Long-
     term
     debt,
     excluding
     current
     maturities                                                  5,746                 3,765

     Other
     non-
     current
     liabilities                                                 1,537                 1,301


     Noncontrolling
     interests                                                     275                   255

     Crown
     Holdings
     shareholders'
     equity/
     (deficit)                                                    (27)                    3
                                                                   ---                   ---

     Total
     equity                                                        248                   258
                                                                   ---                   ---

                Total                                          $10,144                $7,885
                                                               =======                ======


                                Consolidated Statements of Cash Flows (Condensed & Unaudited)

                                                        (in millions)
                                                         ------------

    Three months ended March
     31,                                                                                      2015         2014
                                                                                              ----         ----


    Cash flows from operating
     activities

    Net income                                                                                         $62         $46

    Depreciation and
     amortization                                                                                       51          35

    Provision for restructuring
     and other                                                                                          20          52

    Pension expense                                                                                     11          16

    Pension contributions                                                                             (17)       (22)

    Stock-based compensation                                                                            11           9

    Working capital changes and
     other                                                                                           (428)      (631)


    Net cash used for operating
     activities (A)                                                                                  (290)      (495)
                                                                                                      ----        ----


    Cash flows from investing
     activities

    Purchase of business                                                                           (1,206)

    Capital expenditures                                                                              (52)       (84)

    Proceeds from sale of
     business                                                                                           21

    Other                                                                                              (9)         11


    Net cash used for investing
     activities                                                                                    (1,246)        (73)
                                                                                                    ------         ---


    Cash flows from financing
     activities

    Net change in debt                                                                                 943         259

    Dividends paid to
     noncontrolling interests                                                                          (9)       (23)

    Purchase of noncontrolling
     interests                                                                                                   (93)

    Other, net                                                                                        (45)          4
                                                                                                       ---         ---


    Net cash provided by
     financing activities                                                                              889         147
                                                                                                       ---         ---


    Effect of exchange rate
     changes on cash and cash
     equivalents                                                                                      (38)        (1)
                                                                                                       ---         ---


    Net change in cash and cash
     equivalents                                                                                     (685)      (422)

    Cash and cash equivalents
     at January 1                                                                                      965         689
                                                                                                       ---         ---


    Cash and cash equivalents
     at March 31                                                                                      $280        $267
                                                                                                      ====        ====

(A) Free cash flow is defined by the Company as net cash used for operating activities less capital expenditures. A reconciliation from net cash used for operating activities to free cash flow for the three months ended March 31, 2015 and 2014 follows:



    Three months ended March 31,             2015    2014
                                             ----    ----

    Net cash used for operating activities ($290) ($495)

    Capital expenditures                    ( 52)   ( 84)

    Free cash flow                         ($342) ($579)
                                            =====   =====

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SOURCE Crown Holdings, Inc.