tiprankstipranks
CROWN HOLDINGS, INC. REPORTS FIRST QUARTER 2024 RESULTS
Press Releases

CROWN HOLDINGS, INC. REPORTS FIRST QUARTER 2024 RESULTS

TAMPA, Fla., April 29, 2024 /PRNewswire/ — Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the first quarter ended March 31, 2024.

Net sales in the first quarter were $2,784 million compared to $2,974 million in the first quarter of 2023 reflecting higher beverage can shipments in Americas and European Beverage and favorable foreign currency of $10 million, offset by the pass through of $130 million in lower material costs and lower volumes in most other businesses.

Income from operations was $245 million in the first quarter compared to $269 million in the first quarter of 2023.  Segment income in the first quarter of 2024 was $308 million compared to $320 million in the prior year first quarter driven by improved results in global beverage offset by lower volumes in most other businesses and $12 million in higher corporate costs which includes $8 million of costs related to a facility fire.

Commenting on the quarter, Timothy J. Donahue, Chairman, President and Chief Executive Officer, stated, “The Company began the year with strong performances in each of the beverage can businesses.  Americas Beverage, European Beverage and Asia Pacific combined segment incomes advanced 11% over the prior year’s first quarter.  Global beverage shipments increased 2.5% over the prior year first quarter led by 7% growth in North America and 5% growth in Europe.  Transit Packaging performed as expected during the period with demand anticipated to improve in the back half of the year.

“With both the Mesquite, Nevada and Peterborough, U.K. plants in start-up, the Company has completed its beverage can expansion program that began in 2019 and is now focused on continuous operational improvement. The Company remains well positioned to service current and future demand from its expanded industrial base and, as a result, expects capital expenditures to be no more than $500 million in each of 2024 and 2025.  Our operating teams continue to utilize the Company’s capital wisely as reflected in a $296 million improvement in free cash flow during the first quarter.” 

Net income attributable to Crown Holdings in the first quarter was $67 million compared to $102 million in the first quarter of 2023.  Reported diluted earnings per share were $0.56 in the first quarter of 2024 compared to $0.85 in 2023.  Adjusted diluted earnings per share were $1.02 compared to $1.20 in 2023.

Net cash used for operating activities was $102 million in the first quarter of 2024 compared to $235 million in the first quarter of 2023.  Adjusted free cash flow for the quarter improved by $296 million driven by improved cash from operations, the result of lower working capital, and lower capital spending.  The Company’s adjusted net leverage ratio improved to 3.4 times for the twelve months ended March 31, 2024, compared to 4.1 times for the twelve months ended March 31, 2023.

Outlook

We affirm our full year 2024 guidance of $5.80 to $6.20 of adjusted diluted earnings per share.  The Company expects the adjusted effective income tax rate to be approximately 25% and adjusted net leverage to be at the low end of the target range of 3.0x to 3.5x.

Second quarter adjusted diluted earnings per share is expected to be in the range of $1.55 to $1.65.

Non-GAAP Measures

Segment income, adjusted free cash flow, adjusted net leverage ratio, adjusted net income, the adjusted effective tax rate, adjusted diluted earnings per share, net interest expense, EBITDA and adjusted EBITDA are not defined terms under U.S. generally accepted accounting principles (non-GAAP measures).  Non-GAAP measures should not be considered in isolation or as a substitute for income from operations, cash flow, leverage ratio, net income, effective tax rates, diluted earnings per share or interest expense and interest income 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 as the principal measure of the performance of its operations and adjusted free cash flow and adjusted net leverage ratio as the principal measures of its liquidity.  The Company considers all of these measures in the allocation of resources.  Adjusted 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 adjusted free cash flow and adjusted net leverage ratio provide meaningful measures of liquidity and a useful basis for assessing the Company’s ability to fund its activities, including the financing of acquisitions, debt repayments, share repurchases or dividends.  The Company believes that adjusted net income, segment income, the adjusted effective tax rate and adjusted diluted earnings per share are useful in evaluating the Company’s operations as these measures are adjusted for items that affect comparability between periods.  Segment income, adjusted free cash flow, adjusted net leverage ratio, adjusted net income, the adjusted effective tax rate, adjusted diluted earnings per share, net interest expense, EBITDA and adjusted EBITDA are derived from the Company’s Consolidated Statements of Operations, Cash Flows and Consolidated Balance Sheets, as applicable, and reconciliations to segment income, adjusted free cash flow, adjusted net leverage ratio, adjusted net income, the adjusted effective tax rate, adjusted diluted earnings per share and adjusted EBITDA can be found within this release.  Reconciliations of estimated adjusted diluted earnings per share, the adjusted effective tax rates and adjusted net leverage ratio for the second quarter and full year of 2024 to estimated diluted earnings per share, the effective tax rate and income from operations on a GAAP basis are not provided in this release due to the unavailability of estimates of the following, the timing and magnitude of which the Company is unable to reliably forecast without unreasonable efforts, which are excluded from estimated adjusted diluted earnings per share, the adjusted effective tax rates and adjusted net leverage ratio, and could have a significant impact on earnings per share, the effective tax rate and income from operations on a GAAP basis: gains or losses on the sale of businesses or other assets, restructuring and other costs, asset impairment charges, asbestos-related charges, losses from early extinguishment of debt, pension settlement and curtailment charges, the tax and noncontrolling interest impact of the items above, and the impact of tax law changes or other tax matters.

Conference Call

The Company will hold a conference call tomorrow, April 30, 2024, 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 630-395-0194 or toll-free 888-324-8108 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 website, www.crowncork.com.  A replay of the conference call will be available for a one-week period ending at midnight on May 7, 2024.  The telephone numbers for the replay are 203-369-3810 or toll free 800-551-8152.

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 Company’s ability to continue to operate its plants, distribute its products, and  maintain its supply chain; the future impact of currency translation; the continuation of performance and market trends in 2024, including consumer preference for beverage cans and global beverage can demand; the future impact of inflation, including the potential for higher interest rates and energy prices and the Company’s ability to recover raw material and other inflationary costs; future demand for food cans; the Company’s ability to deliver continuous operational improvement; future demand in the Transit Packaging segment; and the Company’s ability to decrease capital expenditures and increase cash flow and to further reduce net leverage, 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, 2023 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 worldwide leader in the design, manufacture and sale of packaging products for consumer goods and industrial products.  World headquarters are located in Tampa, Florida.

For more information, contact:

Kevin C. Clothier, Senior Vice President and Chief Financial Officer, (215) 698-5281

Thomas T. Fischer, Vice President, Investor Relations and Corporate Affairs, (215) 552-3720

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,



2024


2023


Net sales


$2,784


$ 2,974


    Cost of products sold


2,247


2,411


    Depreciation and amortization


115


123


    Selling and administrative expense


154


160


    Restructuring and other


23


11


Income from operations (1)


245


269


    Other pension and postretirement


11


11


    Foreign exchange


7


4


Earnings before interest and taxes


227


254


    Interest expense


113


102


    Interest income


(20)


(9)


Income from operations before income taxes


134


161


    Provision for income taxes


40


42


    Equity earnings


(1)


3


Net income


93


122


    Net income attributable to noncontrolling interests


26


20


Net income attributable to Crown Holdings


$67


$   102








Earnings per share attributable to Crown Holdings

 common shareholders:






 Basic


$  0.56


$  0.86


 Diluted


$  0.56


$  0.85








 Weighted average common shares outstanding:






 Basic


119,574,366


119,238,117


 Diluted


119,815,849


119,643,244


 Actual common shares outstanding at quarter end


120,780,403


120,101,710








(1)  Reconciliation from income from operations to segment income follows.

 

Consolidated Supplemental Financial Data (Unaudited)

(in millions)

Reconciliation from Income from Operations 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 income from operations adjusted to exclude intangibles amortization charges and provisions for restructuring and other.






Three Months Ended

March 31,



2024


2023


Income from operations                              

$

245


$

269


Intangibles amortization


40



40


Restructuring and other


23



11


Segment income

$

308


$

320


 

 

Segment Information






Net Sales


Three Months Ended

March 31,





2024



2023


Americas Beverage


$

1,222


$

1,261


European Beverage



482



479


Asia Pacific



279



338


Transit Packaging



520



564


Other (1)



281



332


       Total net sales


$

2,784


$

2,974










Segment Income 
















Americas Beverage


$

189


$

178


European Beverage (2)



51



39


Asia Pacific



42



36


Transit Packaging



68



78


Other (1)



8



27


Corporate and other unallocated items (2)



(50)



(38)


       Total segment income


$

308


$

320










(1)  Includes the Company’s food can, aerosol can and closures businesses in North America, and beverage tooling and equipment operations in the U.S. and United Kingdom.

(2)  During the fourth quarter of 2023, the Company recast its segment reporting to reclassify European corporate costs that were previously included in Corporate and other unallocated items into the European Beverage segment.  The change was effective December 31, 2023, and segment results for prior periods were recast to conform to the new presentation.

 

 

 

 

Consolidated Supplemental Data (Unaudited)

(in millions, except per share data)

Reconciliation from Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share

The following table reconciles reported net income and diluted earnings per share attributable to the Company to adjusted net income and adjusted diluted earnings per share, as used elsewhere in this release. 

















 


            Three Months Ended

                     March 31,


















2024



2023


Net income/diluted earnings per share

  attributable to Crown Holdings, as reported















 

$

 

67



 

$

 

0.56



 

$

 

102



 

$

 

0.85


    Intangibles amortization (1)















40



0.33



40



0.33


    Restructuring and other (2)















23



0.19



11



0.09


    Income taxes (3)















(11)



(0.09)



(12)



(0.10)


    Equity earnings (4)















3



0.03



3



0.03


Adjusted net income/diluted earnings

 per share















 

$

 

122



 

$

 

1.02



 

$

 

144



 

$

 

1.20




























     Effective tax rate as reported















29.9 %






26.1 %





     Adjusted effective tax rate















25.9 %






25.5 %





 

Adjusted net income, adjusted diluted earnings per share and the adjusted effective tax rate are non-GAAP measures and are not meant to be considered in isolation or as a substitute for net income, diluted earnings per 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 quarters of 2024 and 2023, the Company recorded charges of $40 million ($31 million net of tax) for intangibles amortization arising from prior acquisitions.



(2)

In the first quarters of 2024 and 2023, the Company recorded net restructuring and other charges of $23 million ($22 million net of tax) and $11 million ($9 million net of tax) for business reorganization activities.



(3)

The Company recorded income tax benefits of $11 million and $12 million in the first quarters of 2024 and 2023, primarily related to the items described above.



(4)

In the first quarters of 2024 and 2023, the Company recorded its proportional share of intangible amortization and restructuring charges, net of tax, recorded by its European tinplate equity method investment, in the line Equity earnings.

 

 

Consolidated Balance Sheets (Condensed & Unaudited)

(in millions)

March 31,

2024


2023

Assets









Current assets









    Cash and cash equivalents


$

1,123



$

403


    Receivables, net



1,637




1,957


    Inventories



1,610




2,058


    Prepaid expenses and other current assets



211




244


            Total current assets



4,581




4,662











Goodwill and intangible assets, net



4,290




4,339


Property, plant and equipment, net



5,049




4,704


Other non-current assets



771




707


            Total assets


$

14,691



$

14,412











Liabilities and equity









Current liabilities









    Short-term debt


$

87



$

163


    Current maturities of long-term debt



743




124


 Accounts payable and accrued liabilities



3,034




3,289


            Total current liabilities



3,864




3,576











Long-term debt, excluding current maturities



6,623




7,046


Other non-current liabilities



1,272




1,308











Noncontrolling interests



462




452


Crown Holdings shareholders’ equity



2,470




2,030


Total equity



2,932




2,482


            Total liabilities and equity


$

14,691



$

14,412


 

Consolidated Statements of Cash Flows (Condensed & Unaudited)

(in millions)



Three months ended March 31,



2024


2023










Cash flows from operating activities









      Net income



$

93



$

122


      Depreciation and amortization 




115




123


      Restructuring and other




23




11


      Pension and postretirement expense




16




17


      Pension contributions




4




1


      Stock-based compensation




12




11


      Working capital changes and other




(365)




(520)












           Net cash used for operating activities 




(102)




(235)












Cash flows from investing activities










      Capital expenditures




(94)




(233)


      Equity method investment distribution








56


      Other




13




16












           Net cash used for investing activities




(81)




(161)












Cash flows from financing activities










      Net change in debt




60




307


      Dividends paid to shareholders




(30)




(29)


      Common stock repurchased




(5)




(6)


      Dividends paid to noncontrolling interests




(15)




(11)


      Other, net




(1)




1












           Net cash provided by financing activities




9




262












Effect of exchange rate changes on cash and cash equivalents




(8)




(3)












Net change in cash and cash equivalents




(182)




(137)


Cash and cash equivalents at January 1




1,400




639












Cash, cash equivalents and restricted cash at March 31 (1)



$

1,218



$

502


 

(1) Cash and cash equivalents include $95 million and $99 million of restricted cash at March 31, 2024 and 2023.

 

Adjusted free cash flow is defined by the Company as net cash from operating activities less capital expenditures and certain other

items.  A reconciliation of net cash used for operating activities to adjusted free cash flow for the three months ended March 31, 2024

and 2023 follows.






 

Three Months Ended

March 31,



2024



2023


Net cash used for operating activities

$

(102)



$

(235)


Interest included in investing activities (2)  

13



13


Capital expenditures

(94)



(233)


Other (3)




(24)


Adjusted free cash flow

$

(183)



$

(479)












(2) Interest benefit of cross currency swaps included in investing activities.

(3) Includes $23 million of insurance proceeds received in the first quarter of 2023 related to a tornado at the Bowling Green plant and $1 million repayment of the

contribution the Company made in 2021 to settle the U.K. defined pension plan.

 


                                                        

 

Consolidated Supplemental Data (Unaudited)

(in millions)

 

 



 

 

Impact of Foreign Currency Translation – Favorable/(Unfavorable) (1)








Three Months Ended

March 31, 2024




 

Net Sales


Segment

Income


Americas Beverage

$

7


$

1


European Beverage

6




Asia Pacific

(6)


(1)


Transit Packaging

1


1


Corporate and other

2





$

10


$

1








(1) The impact of foreign currency translation represents the difference between actual current year U.S. dollar results and pro forma amounts assuming constant foreign currency exchange rates for translation in both periods.  In order to compute the difference, the Company compares actual U.S. dollar results to an amount calculated by dividing the current U.S. dollar results by current year average foreign exchange rates and then multiplying those amounts by the applicable prior year average foreign exchange rates.

 

 

Reconciliation of Adjusted EBITDA and Adjusted Net Leverage Ratio




















Twelve Months

Ended




Q1 2024


Q1 2023


Full Year 2023


March 31, 2024












Income from operations


$

245


$

269


$

1,269


$

1,245


Add:










   Intangibles amortization


40


40


163


163


   Restructuring and other


23


11


114


126


Segment income


308


320


1,546


1,534


Depreciation


75


83


336


328


Adjusted EBITDA


$

383


$

403


$

1,882


$

1,862












Total debt






$

7,474


$

7,453


Less cash






1,310


1,123


Net debt






$

6,164


$

6,330












Adjusted net leverage ratio






3.3x


3.4x


 

Cision View original content:https://www.prnewswire.com/news-releases/crown-holdings-inc-reports-first-quarter-2024-results-302130510.html

SOURCE Crown Holdings, Inc.

Get real-time notifications on news & analysis, curated for your stock watchlist. Download the TipRanks app today! Get the App