CCL Industries Reports an 8% increase in Third Quarter Net Earnings and Declares Dividend
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 11/03/11 -- CCL Industries Inc. (TSX: CCL.A)(TSX: CCL.B)
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 third quarter ended September 30, 2011, in accordance with International Financial Reporting Standards ("IFRS"), and the declaration of its quarterly dividend.
Sales for the third quarter of 2011 were $316.6 million, an increase of 4.9% from $301.7 million recorded in the third quarter of 2010. Sales, excluding the impact of foreign currency translation, improved 6.4%, primarily driven by organic growth. For the nine months ended September 30, 2011, sales increased 6.2%, excluding the impact of foreign currency translation, compared to the 2010 nine-month period.
Operating income for the third quarter of 2011 was $36.4 million, an increase of 7.7% compared to $33.8 million for the third quarter of 2010 and an increase of 9.2% excluding foreign currency translation. The Container segment again contributed the most significant improvement posting operating income for the third quarter of 2011 compared to an operating loss in the 2010 third quarter. The Tube segment recorded another strong quarter while the Label segment was slightly below last year's record third quarter results. For the nine months ended September 30, 2011, operating income increased 9.7%, with the Container and Tube segments driving the improvement and Label slightly below the comparable nine-month period in 2010.
Earnings before net finance cost, taxes, depreciation and amortization, restructuring and other items ("EBITDA") was $57.0 million for the third quarter of 2011, an increase of 8.6% compared to $52.5 million for the third quarter of 2010. For the nine-month period ended September 30, 2011, EBITDA was $184.2 million, an increase of 6.5% compared to $172.9 million in the comparable 2010 period.
The overall effective income tax rate was 37% for the third quarter of 2011 compared to 29% in the second quarter of 2011 and 31% in the third quarter of 2010. The increase is primarily due to the current quarter reflecting a non-cash accounting reduction related to a tax benefit previously recognized for certain Canadian tax losses. This benefit will fluctuate with the movement in the Canadian dollar versus the U.S. dollar and euro. This accounting adjustment had an estimated negative impact of $0.09 on basic earnings per share in the 2011 third quarter compared to a negative impact of approximately $0.03 per share in the 2010 third quarter. For the nine months of 2011, the negative impact was $0.06 compared to a $0.02 positive impact in the same period of 2010.
Net earnings for the third quarter of 2011 were $17.0 million, an increase of 7.6% compared to $15.8 million for the third quarter of 2010. This resulted in basic and diluted earnings of $0.52 per Class B share in the current quarter compared to basic and diluted earnings of $0.48 and $0.47 per Class B share, respectively, for the prior year third quarter. Restructuring and other items had no impact on net earnings for the third quarter of 2011 or 2010.
Net earnings for the nine-month period of 2011 were $65.7 million, an increase of 13.7% compared to $57.8 million for the same period a year ago. This resulted in basic and diluted earnings of $1.99 and $1.96 per Class B share, respectively, for the 2011 nine-month period compared to basic and diluted earnings of $1.76 and $1.73 per Class B share, respectively, for the prior year nine-month period.
Geoffrey T. Martin, President and Chief Executive Officer commented, "The sudden shifts in the exchange rates of the world's major currencies presented us with some unusual challenges this past quarter. The translation impact compared to last year's third quarter was nominal but the sequential effect on the transaction side, particularly from the strengthening U.S. dollar this summer, was material. In addition to the $0.09 EPS impact from the tax line, some of our operations also faced exchange rate variances that impacted profitability. In most cases, we did a good job mitigating these with pricing and natural hedging strategies but the overall outcome was still negative. However, despite these challenges our Container and Tube businesses both continued to improve performance and CCL Label was flat compared to a record third quarter in 2010, excluding currency translation. Overall, with the benefit of lower finance costs on reduced debt levels and consolidated operating income improvement, the Company posted an 8% increase in net earnings for the 2011 third quarter."
Mr. Martin stated, "Sales in our Label Division, excluding currency translation, increased 7.5% for the third quarter. Our North American business was up slightly as ongoing recovery in the Healthcare sector offset mixed results from consumer related markets. Internationally, a surprisingly robust sales quarter in Europe was offset on the bottom line by unfavorable mix and a tough pricing environment including difficulties in some business lines of passing through raw material inflation from earlier this year. This was offset by strong sales and profitability gains in both Latin America and Asia. The Pacman-CCL transaction closed late in the quarter. Results from this and the Russian joint venture were nominal. Overall profitability was very close to our internal expectations, including the impact of foreign exchange transactions, notably in Canada and Mexico from the stronger U.S. dollar and in the UK and South Africa from local currency movements to the euro."
Mr. Martin added, "Volume in our Container segment declined slightly, but this was more than offset by pricing programs and favourable mix. The segment posted substantial improvement with another quarter of positive operating income compared to significant losses in the prior year period. We are particularly pleased to see the return to profitability at our Canadian plant, which drove most of the improvement this quarter. Rising profitability at the U.S. operation, however, was more than offset by a loss at our new Mexican plant, which was driven entirely by the sudden devaluation of the peso to the U.S. dollar in the quarter. We expect to see the positive trend for the segment overall continue as prior year comparisons remain relatively easy for the fourth quarter of 2011."
Mr. Martin continued, "The Tube segment had another strong quarter and has become one of the better performing businesses in the Company these last two years. The outlook for the final quarter remains positive but comparisons with prior year quarters will become more challenging going forward as we now measure ourselves against previous success."
Mr. Martin noted, "Despite economic uncertainties in Europe and North America, the order picture remains in line with our experience so far in 2011. We believe inflationary pressures in raw materials will ease in the near term and could potentially reverse as we move into 2012. Volatility of foreign currency exchange rates in this uncertain environment remains high on our watch list although it is also worth noting that some of the abnormal impact we have seen in the past quarter would reverse if the U.S. dollar were to weaken from third quarter levels against the Canadian and Mexican currencies. We expect our capital expenditure spending for the year to be in the $80 to $85 million range compared to depreciation and amortization of $90 million."
Mr. Martin concluded, "The Company continues to have a strong financial position. Cash balances are solid at $110 million at the end of the third quarter and net debt to total capital(4) fell more than 400 basis points from prior year to 24%. Based on our strong cash flow and continued outlook for the final quarter of the year, your Board of Directors has declared a dividend at the same level as declared last quarter. The dividend rate of $0.1750 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 December 13, 2011, to be paid on January 3, 2012. 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 6,300 people and operates 68 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.
This earnings release, which is current as of November 3, 2011, is a summary of CCL's third quarter 2011 results and should be read in conjunction with CCL's third quarter 2011 Management's Discussion and Analysis ("MD&A"), third 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 September 30, 2010, comparison amounts in this earnings release, the MD&A and the interim financial statements for the nine months ended September 30, 2011, have been restated to reflect CCL's adoption of IFRS, with effect from January 1, 2010. Further disclosure on the transition to IFRS can be found in section 8 of the September 30, 2011, MD&A and note 10 of the Company's consolidated condensed interim financial statements for the nine months ended September 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 nine months ended September 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.
Sean Washchuk
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: 03.11.2011 - 07:19 Uhr
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