EXHIBIT 99.1
Published on April 24, 2008
Exhibit 99.1
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News
Release
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For
Immediate Release
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http://www.ball.com
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Investor
Contact:
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Ann
T. Scott
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303-460-3537,
ascott@ball.com
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Media
Contact:
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Scott
McCarty
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303-460-2103,
smccarty@ball.com
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Ball
Corporation Announces
First Quarter Results
BROOMFIELD,
Colo., April 24, 2008—Ball Corporation [NYSE:BLL] today reported first quarter
2008 earnings of $83.8 million, or 85 cents per diluted share, on sales of $1.74
billion, compared to $81.2 million, or 78 cents per diluted share, on sales of
$1.69 billion in the first quarter of 2007.
The first
quarter 2008 results include an after-tax gain of $4.4 million, or five cents
per diluted share, on the sale during the quarter of an aerospace engineering
services business in Australia.
The
improvement over what were record results in the first quarter of 2007 was due
to better performance in the company’s metal food and household products,
Americas, segment; modest improvement in the company’s plastic packaging,
Americas, segment; continued sales and earnings growth in the metal beverage
packaging, Europe, segment; and fewer shares outstanding as a result of stock
repurchases. First quarter results in the metal beverage packaging,
Americas/Asia, segment and the aerospace and technologies segment were down from
especially strong performances in the first quarter of 2007.
“We are
pleased with our first quarter performance,” said R. David Hoover, chairman,
president and chief executive officer. “We felt it would be a challenge to equal
our 2007 first quarter performance due to the unusually strong results we
experienced in metal beverage packaging, Americas and Asia, and aerospace and
technologies last year. To see results begin to turnaround in our metal food and
household products packaging, Americas, segment and to have overall results for
the quarter exceed a year ago is gratifying.”
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- -
Ball
Corporation
10 Longs
Peak Drive · P.O. Box
5000 · Broomfield, CO
80021
Ball
Corporation - 2
Metal
Beverage Packaging, Americas/Asia
Earnings
in the corporation’s metal beverage packaging, Americas/Asia, segment were $74
million on sales of $703.9 million, compared to $101.9 million on sales of
$701.8 million in the first quarter of 2007. During the first quarter of 2008,
the company changed its segment reporting to include results from China in what
is now the metal beverage packaging, Americas/Asia, segment. The results for the
quarter ended April 1, 2007, have been adjusted for the change (see note 1 in
the accompanying condensed financials).
“We
announced yesterday that we plan to close our metal beverage container
manufacturing plant in Kent, Wash.,” said John A. Hayes, executive vice
president and chief operating officer. “That will help balance our 12-ounce
beverage can manufacturing capacity in North America to our current and
anticipated needs; redeploy economically unsustainable capacity; and better
utilize the equipment to generate higher returns elsewhere in our worldwide
system.”
Metal
Beverage Packaging, Europe
Earnings
in the metal beverage packaging, Europe, segment were $48 million on sales of
$405.6 million, compared to $36.8 million on sales of $320.7 million in the
first quarter of 2007.
“Can
sales volumes in our metal beverage packaging, Europe, segment were up more than
13 percent over the first quarter of 2007, mainly related to continued market
growth throughout the region and our ability to meet the demand, thanks to the
start up of new lines in Hassloch and Hermsdorf, Germany, during the second
quarter of last year,” Hayes said. “A stronger euro also contributed to the
earnings improvement.”
Metal
Food & Household Products Packaging, Americas
The metal
food and household products packaging, Americas, segment first quarter results
were earnings of $14.8 million on sales of $263.8 million, compared to a loss of
$0.2 million on sales of $278.8 million in the first quarter of
2007.
“The
numerous actions we have taken and are taking are beginning to have a positive
impact on the performance of our metal food and household products packaging
segment,” Hayes said. “We are on target and on schedule toward completing this
year the previously announced restructuring and streamlining of our
manufacturing assets. We are making progress on rebuilding this business, but we
still have a long way to go. We will continue to optimize our cost structure and
pricing and pursue other opportunities to achieve acceptable and sustainable
results in this segment.”
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Ball
Corporation
10 Longs
Peak Drive · P.O. Box
5000 · Broomfield, CO
80021
Ball
Corporation - 3
Plastic
Packaging, Americas
Earnings
in the plastic packaging, Americas, segment were $4.8 million on sales of $188.9
million, compared to $2.3 million on sales of $186.6 million in the first
quarter of 2007.
“We
continue to work on improving results in our plastic packaging, Americas,
segment,” Hayes said. “The improvement in the first quarter was largely the
result of our ongoing efforts to take costs out of our system and a better mix
of custom products. We continue to focus on those factors and on additional ways
to make this business segment economically sustainable.”
Aerospace
and Technologies
Results
in the aerospace and technologies segment were earnings of $22 million on sales
of $178 million compared to $19.6 million on sales of $206.3 million in the
first quarter of 2007. The first quarter 2008 results include a pre-tax gain of
$7.1 million from the sale of the unit in Australia.
“We have
several major projects and numerous smaller ones in various stages of bid and
proposal,” Hayes said. “The timing on some of those projects is stretching out
due to government budgets and funding priorities, but we feel good about our
prospects.”
Outlook
Raymond
J. Seabrook, executive vice president and chief financial officer, said, “Ball’s
credit quality is strong, as demonstrated by a recent upgrading of our bank
loans to investment grade by one of the rating agencies.
“We
remain on track to repurchase $300 million of our common stock in 2008, having
bought back a net $125 million worth through the first quarter,” Seabrook said.
“Our full year cash flow is somewhat of a moving target this early in the year
due in part to the timing of our capital spending on growth projects, but our
current target is in the range of $300 million.”
“Our
first quarter results provide a good start on what will be a busy year for Ball
Corporation,” Hoover said. “We are building new facilities internationally,
redeploying assets to achieve greater returns on them, consolidating operations
to improve results and generally working to have leaner, more efficient
businesses.
“The
management structure we put in place at the beginning of the year is providing
energy and focus throughout the company,” Hoover said. “That, along with the
solid start, makes us optimistic about prospects for 2008.”
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- -
Ball
Corporation
10 Longs
Peak Drive · P.O. Box
5000 · Broomfield, CO
80021
Ball
Corporation - 4
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 15,500 people worldwide and reported 2007
sales of $7.4 billion.
Conference Call
Details
Ball will
hold its regular quarterly conference call on the company’s results and
performance today at 9 a.m. Mountain Time (11 a.m. Eastern). The North
American toll-free number for the call is 800-732-6870. International callers
should dial 212-231-2902. 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&eventID=1808135
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 May 1, 2008. To access the
replay, call 800-633-8284 (North American callers) or 402-977-9140
(international callers) and use reservation number 21379244.
A written
transcript of the call will be posted within 48 hours of the call’s conclusion
to Ball’s Web site at 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 www.sec.gov. Factors
that might affect our packaging segments include fluctuation in product demand
and preferences; availability and cost of raw materials, including recent
significant increases in resin, steel, aluminum and energy costs, and the
ability to pass such increases on to customers; 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, including our beverage can end
project; 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, tax rates and activities of foreign
subsidiaries. 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; 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 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.
# #
#
Ball
Corporation
10 Longs
Peak Drive · P.O. Box
5000 · Broomfield, CO
80021
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Condensed Financials
(March
2008)
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||||||||
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Unaudited
Statements of Consolidated Earnings
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||||||||
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Three
months ended
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||||||||
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($
in millions, except per share amounts)
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March
30, 2008
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April
1, 2007
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||||||
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Net sales (Note
1)
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$ | 1,740.2 | $ | 1,694.2 | ||||
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Costs
and expenses
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||||||||
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Cost
of sales (excluding depreciation and amortization)
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1,437.7 | 1,394.3 | ||||||
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Depreciation
and amortization
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74.6 | 65.0 | ||||||
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Gain
on sale of subsidiary (Note 2)
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(7.1 | ) | - | |||||
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Selling,
general and administrative
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81.6 | 82.2 | ||||||
| 1,586.8 | 1,541.5 | |||||||
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Earnings before interest and
taxes (Note 1)
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153.4 | 152.7 | ||||||
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Interest
expense
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(36.2 | ) | (37.9 | ) | ||||
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Tax
provision
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(37.2 | ) | (36.7 | ) | ||||
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Minority
interests
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(0.1 | ) | (0.1 | ) | ||||
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Equity
in results of affiliates
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3.9 | 3.2 | ||||||
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Net
earnings
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$ | 83.8 | $ | 81.2 | ||||
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Earnings per share (Note
2):
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||||||||
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Basic
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$ | 0.86 | $ | 0.79 | ||||
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Diluted
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$ | 0.85 | $ | 0.78 | ||||
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Weighted
average shares outstanding (000s):
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||||||||
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Basic
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97,199 | 102,110 | ||||||
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Diluted
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98,589 | 103,815 | ||||||
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Condensed Financials
(March
2008)
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||||||||
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Unaudited
Statements of Consolidated Cash Flows
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||||||||
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Three months ended
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||||||||
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($
in millions)
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March
30, 2008
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April
1, 2007
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Cash
Flows From Operating Activities:
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Net
earnings
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$ | 83.8 | $ | 81.2 | ||||
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Depreciation
and amortization
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74.6 | 65.0 | ||||||
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Gain
on sale of subsidiary (Note 2)
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(7.1 | ) | – | |||||
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Income
taxes
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8.7 | 19.2 | ||||||
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Pension
funding and expense, net
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4.5 | 4.2 | ||||||
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Other
changes in working capital
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(381.1 | ) | (281.3 | ) | ||||
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Other
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2.0 | 4.0 | ||||||
| (214.6 | ) | (107.7 | ) | |||||
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Cash
Flows From Investing Activities:
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||||||||
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Additions
to property, plant and equipment
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(74.5 | ) | (88.1 | ) | ||||
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Proceeds
from sale of subsidiary
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8.7 | – | ||||||
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Property
insurance proceeds
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- | 48.6 | ||||||
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Other
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(2.3 | ) | 2.4 | |||||
| (68.1 | ) | (37.1 | ) | |||||
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Cash
Flows From Financing Activities:
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||||||||
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Net
change in borrowings
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352.1 | 139.2 | ||||||
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Dividends
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(9.6 | ) | (10.2 | ) | ||||
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Purchases
of common stock, net
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(125.1 | ) | (87.5 | ) | ||||
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Other
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0.4 | 3.0 | ||||||
| 217.8 | 44.5 | |||||||
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Effect
of exchange rate changes on cash
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3.2 | – | ||||||
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Change
in cash
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(61.7 | ) | (100.3 | ) | ||||
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Cash–beginning
of period
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151.6 | 151.5 | ||||||
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Cash–end
of period
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$ | 89.9 | $ | 51.2 | ||||
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Condensed Financials
(March
2008)
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||||||||
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Unaudited
Consolidated Balance Sheets
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||||||||
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($
in millions)
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March
30, 2008
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April
1, 2007
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||||||
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Assets
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||||||||
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Current
assets
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||||||||
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Cash
and cash equivalents
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$ | 89.9 | $ | 51.2 | ||||
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Receivables,
net
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675.1 | 698.6 | ||||||
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Inventories,
net
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1,134.0 | 1,018.7 | ||||||
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Deferred
taxes and other current assets
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220.6 | 90.7 | ||||||
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Total
current assets
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2,119.6 | 1,859.2 | ||||||
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Property,
plant and equipment, net
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1,999.9 | 1,889.2 | ||||||
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Goodwill
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1,952.6 | 1,770.4 | ||||||
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Other
assets
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374.1 | 399.2 | ||||||
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Total
assets
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$ | 6,446.2 | $ | 5,918.0 | ||||
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Liabilities
and Shareholders’ Equity
|
||||||||
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Current
liabilities
|
||||||||
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Short-term
debt and current portion of long-term debt
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$ | 309.1 | $ | 238.2 | ||||
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Payables
and accrued liabilities
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1,231.7 | 1,095.8 | ||||||
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Total
current liabilities
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1,540.8 | 1,334.0 | ||||||
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Long-term
debt
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2,450.5 | 2,360.7 | ||||||
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Other
liabilities and minority interests
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997.6 | 1,007.9 | ||||||
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Shareholders’
equity
|
1,457.3 | 1,215.4 | ||||||
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Total
liabilities and shareholders’ equity
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$ | 6,446.2 | $ | 5,918.0 | ||||
Notes to Condensed
Financials (March
2008)
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1. Business
Segment Information
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Due to
first quarter 2008 management reporting changes, Ball’s China operations are
included in the metal beverage packaging, America and Asia,
segment. The results for the quarter ended April 1, 2007, have
been retrospectively adjusted to conform to the current year
presentation.
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($
in millions)
|
Three months ended
|
|||||||
|
March
30, 2008
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April
1, 2007
|
|||||||
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Sales–
|
||||||||
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Metal
beverage packaging, Americas & Asia
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$ | 703.9 | $ | 701.8 | ||||
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Metal
beverage packaging, Europe
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405.6 | 320.7 | ||||||
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Metal
food & household packaging, Americas
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263.8 | 278.8 | ||||||
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Plastic
packaging, Americas
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188.9 | 186.6 | ||||||
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Aerospace
& technologies
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178.0 | 206.3 | ||||||
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Consolidated
net sales
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$ | 1,740.2 | $ | 1,694.2 | ||||
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Earnings
before interest and taxes–
|
||||||||
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Metal
beverage packaging, Americas & Asia
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$ | 74.0 | $ | 101.9 | ||||
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Metal
beverage packaging, Europe
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48.0 | 36.8 | ||||||
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Metal
food & household packaging, Americas
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14.8 | (0.2 | ) | |||||
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Plastic
packaging, Americas
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4.8 | 2.3 | ||||||
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Aerospace
& technologies
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14.9 | 19.6 | ||||||
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Gain
on sale of subsidiary (Note 2)
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7.1 | - | ||||||
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Total aerospace &
technologies
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22.0 | 19.6 | ||||||
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Segment earnings before interest
and taxes
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163.6 | 160.4 | ||||||
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Undistributed
corporate costs
|
(10.2 | ) | (7.7 | ) | ||||
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Earnings
before interest and taxes
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$ | 153.4 | $ | 152.7 | ||||
Notes to Condensed
Financials (March 2008)
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2. Sale
of Subsidiary
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On
February 15, 2008, Ball Aerospace & Technologies Corp. (BATC) completed
the sale of its shares in Ball Solutions Group Pty Ltd (BSG) to QinetiQ Pty Ltd
for approximately $10.5 million. BSG was previously a wholly
owned Australian subsidiary of BATC that provided services to the Australian
department of defense and related government agencies. After an
adjustment for working capital items, the sale resulted in a pretax gain of
$7.1 million ($4.4 million after tax).
A
summary of the effects of the above transaction on after-tax earnings
follows:
|
Three
months ended
|
||||||||
|
($
in millions, except per share amounts)
|
March
30, 2008
|
April
1, 2007
|
||||||
|
Net
earnings as reported
|
$ | 83.8 | $ | 81.2 | ||||
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Gain
on sale of subsidiary, net of tax
|
(4.4 | ) | – | |||||
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Net earnings before gain
on sale of subsidiary
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$ | 79.4 | $ | 81.2 | ||||
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Per diluted share before gain
on sale of subsidiary
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$ | 0.80 | $ | 0.78 | ||||
Ball’s
management segregates the above item 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.
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3. Subsequent
Event
|
On
April 23, 2008, the company announced plans to close a U.S. metal beverage
packaging plant in Kent, Washington. The plant operates two, 12-ounce
aluminum beverage can manufacturing lines that produce approximately
1.1 billion cans annually. Those lines will be redeployed to
generate higher returns elsewhere in Ball’s worldwide system. A
pretax charge of approximately $12 million ($7 million after tax) will
be recorded in the second quarter results. On final disposition of
the facilities, the closure is expected to be approximately $4 million cash
positive inclusive of income tax benefits.