Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the fourth quarter ended December 31, 2014.
2014 Highlights
- Full year income per diluted share $2.79 versus $2.30 in 2014; before certain items $3.41 versus $2.99
- Q4 income per diluted share $0.09 versus $0.36 in 2013; before certain items $0.48 in both 2014 and 2013
- Full year free cash flow of $612 million; $1.25 billion in 2014 and 2013
- Completed Mivisa acquisition in April 2014
- Entered into a definitive agreement to acquire EMPAQUE in September 2014
Twelve Month Results
- For the full year, net sales grew to $9,097 million compared to $8,656 million in 2013, primarily due to the impact of the Mivisa acquisition and increased global beverage can volumes, partially offset by $52 million of unfavorable currency translation.
- Gross profit for 2014 rose to $1,382 million versus $1,342 million in 2013 primarily reflecting the impact of the Mivisa acquisition.
- Selling and administrative expense for 2014 decreased to $398 million from $425 million as the 2013 expense included charges to reserve for outstanding receivable balances due from two food can customers.
- Segment income (a non-GAAP measure) in 2014 grew to $1,004 million from $917 million in 2013 primarily due to contributions from the Mivisa acquisition and lower selling and administrative expense.
Commenting on the year, John W. Conway, Chairman and Chief Executive Officer, stated, "We had an excellent 2014 in spite of challenges in certain of our markets. Net sales grew 5% compared to 2013, segment income increased 9% and net income per diluted share before certain items rose 14%. For the second year in a row, we generated more than $600 million in free cash flow, making solid progress toward our deleveraging goals following the Mivisa acquisition. We experienced global volume growth in food cans, food closures, and beverage cans. In addition to the acquisition of Mivisa, the harvest season was favorable in both North America and Europe, boosting food can shipments. In beverage cans, demand was robust throughout our developing market portfolio and was particularly strong in Brazil, Southeast Asia and Turkey.
"Looking ahead to 2015, in addition to anticipated continued global beverage can growth, we are pleased that the integration of Mivisa is proceeding as expected and that we will benefit from a full year of these very efficient operations. We are also looking forward to completing the acquisition of EMPAQUE, a leading Mexican manufacturer of aluminum cans and ends, bottle caps and glass bottles for the beverage industry, from Heineken N.V. This acquisition will significantly enhance Crown's overall position in beverage cans, as Mexico represents an important and expanding market for both beer and non-alcoholic beverages."
Interest expense for 2014 was $253 million compared to $236 million in 2013, primarily reflecting higher average debt outstanding from the Mivisa acquisition.
Net income attributable to Crown Holdings for 2014 was $387 million compared to $324 million in 2013. Income per diluted share for 2014 was $2.79 compared to $2.30 last year. Net income per diluted share before certain items increased to $3.41 from $2.99 in 2013.
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.
The Company generated free cash flow of $612 million and $641 million, in 2014 and 2013 respectively.
In September 2014 the Company announced that it had entered into a definitive agreement to acquire Mexican beverage packaging company EMPAQUE in a transaction valued at $1.2 billion.
In April 2014, the Company completed its acquisition of Mivisa Envases, SAU, a leading Spanish manufacturer of two- and three-piece food cans and ends in a transaction valued at €1.2 billion.
Fourth Quarter Results
Net sales in the fourth quarter grew to $2,127 million over the $2,071 million in the fourth quarter of 2013, reflecting the impact of the Mivisa acquisition and increased beverage can volumes, partially offset by $90 million of unfavorable currency translation.
Fourth quarter gross profit increased to $287 million compared to $274 million in the 2013 fourth quarter, primarily due to improved results in the European Food and Americas Beverage segments offset by $13 million of unfavorable currency impact.
Selling and administrative expense decreased to $96 million in the fourth quarter of 2014 compared to $106 million in the prior year fourth quarter, including $5 million of decrease due to currency translation.
Segment income rose to $191 million in the fourth quarter compared to $168 million in the fourth quarter of 2013 as improved results in the European Food and Americas Beverage segments were offset by $8 million of unfavorable currency translation.
Interest expense was $65 million in the quarter compared to $57 in the prior year quarter primarily due to higher average debt outstanding from the Mivisa acquisition.
Net income attributable to Crown Holdings in the fourth quarter was $13 million compared to $49 million in the fourth quarter last year. Income per diluted share was $0.09 in the fourth quarter compared to $0.36 in the fourth quarter of 2013. Net income per diluted share before certain items was $0.48 in the fourth quarter of both 2014 and 2013.
