Owens-Illinois, Inc.: O-I REPORTS FIRST QUARTER 2014 RESULTS; Earnings
Increase Bolstered by Sales Volume Growth
FOR IMMEDIATE RELEASE
O-I REPORTS FIRST QUARTER 2014 RESULTS
Earnings Increase Bolstered by Sales Volume Growth
PERRYSBURG, Ohio (Apr. 29, 2014) - Owens-Illinois, Inc. (NYSE: OI) today
reported financial results for the first quarter ending March 31, 2014.
oFirst quarter 2014 earnings from continuing operations attributable to the
Company were $0.62 per share (diluted), compared with $0.48 per share in
the same period of 2013. Excluding certain items management considers not
representative of ongoing operations, adjusted earnings^ were $0.62 per
share compared with $0.60 per share in the prior year.
oGlobal volumes were up 2 percent for the third consecutive quarter.
Broad-based gains in Europe and North America, and flat shipments in South
America were partially offset by declines in Asia Pacific.
oSegment operating profit margin expanded more than 300 basis points in
Europe, driven by volume and structural cost improvements from the asset
optimization program. Operating profit declined in North America primarily
due to logistics headwinds from adverse weather. Profitability in both
South America and Asia Pacific suffered from double digit declines in key
currencies and lower production volumes.
oInterest expense declined in the quarter as the Company benefited from
ongoing deleveraging efforts, which continue to enhance financial
Commenting on the Company's first quarter results, Chairman and Chief
Executive Officer Al Stroucken said, "In Europe, we were especially pleased to
see a positive volume impact coupled with the clear benefits from our
restructuring efforts. Record-setting snow and cold in North America dampened
profitability in the quarter, despite modest volume growth. Demand in South
America exceeded our previous guidance, where strong volume gains in Brazil
offset declines in the Andean countries. Financial performance in Asia Pacific
suffered from expected volume declines and delayed recovery of cost inflation
in mature markets. Overall, higher year-on-year earnings demonstrate our
ability to deliver strong financial results in the face of external
Net sales in the first quarter of 2014 were $1.6 billion, on par with the
prior year first quarter. Price was up modestly on a global basis, as a slight
decline in Europe was offset by broad-based price gains in the Americas.
Currency was an overall headwind as a weaker Brazilian real and Australian
dollar more than offset a stronger Euro.
Sales volume, in terms of tonnes shipped, increased 2 percent year-over-year.
Europe volume increased 6 percent, driven by strong beer performance, as well
as wine. Adverse weather conditions in North America did not materially impede
sales volumes, which grew 2 percent. This was driven by beer and non-alcoholic
beverages, such as juices and iced coffees. In South America, Brazil reported
higher sales volumes, which were offset by weakness in the Andean countries.
Within Asia Pacific, the Company's smaller footprint in China and ongoing weak
demand in mature markets caused a nearly 10 percent decline in volumes in the
Segment operating profit was $218 million, down $8 million compared with the
prior year first quarter. Europe's operating profit expanded nearly 50
percent, driven by volume gains across most categories. As expected, the
region continues to benefit from asset optimization. In North America sales
and production volumes were higher. However, those gains were more than offset
by substantially higher supply chain costs due to extreme weather conditions.
Lower profitability in South America was primarily due to a higher level of
planned furnace rebuild activity and a double digit devaluation of the
Brazilian real. Asia Pacific profit was dampened by lower volume and higher
costs, particularly energy. The region will begin recovering this inflation in
the second half of 2014.
Net interest expense^ was $3 million lower than the prior year, primarily
due to lower interest rates and to the Company's ongoing efforts to reduce
Commenting on the Company's outlook for the second quarter, Stroucken said,
"Conditions in Europe continue to slowly stabilize. In North America, the
lingering impact of logistics challenges will likely weigh on profitability in
the second quarter. In South America, we anticipate modest recovery over the
lackluster demand in the prior year period. We expect sales in China to
continue to decline due to our plant closures there, and do not yet see
recovery in the mature markets of Asia Pacific. We will stay the course to
deliver our long-term financial commitments by continuing to focus on taking
out costs while maintaining disciplined capital allocation."
The Company's expected adjusted EPS range of $2.80 to $3.20 per share in 2014
remains unchanged, as does its free cash flow projection of approximately $350
million for the year.
Owens-Illinois, Inc. (NYSE: OI) is the world's largest glass container
manufacturer and preferred partner for many of the world's leading food and
beverage brands. The Company had revenues of $7.0 billion in 2013 and employs
approximately 22,500 people at 77 plants in 21 countries. With global
headquarters in Perrysburg, Ohio, USA, O-I delivers safe, sustainable, pure,
iconic, brand-building glass packaging to a growing global marketplace. For
more information, visit www.o-i.com.
O-I's Glass Is Life(TM) movement promotes the widespread benefits of glass
packaging in key markets around the globe. Join us in the #betteringlass
conversation at www.glassislife.com.
The information presented above regarding adjusted net earnings relates to net
earnings from continuing operations attributable to the Company exclusive of
items management considers not representative of ongoing operations and does
not conform to U.S. generally accepted accounting principles (GAAP). It should
not be construed as an alternative to the reported results determined in
accordance with GAAP. Management has included this non-GAAP information to
assist in understanding the comparability of results of ongoing operations.
Further, the information presented above regarding free cash flow does not
conform to GAAP. Management defines free cash flow as cash provided by
continuing operating activities less capital spending (both as determined in
accordance with GAAP) and has included this non-GAAP information to assist in
understanding the comparability of cash flows. Management uses non-GAAP
information principally for internal reporting, forecasting, budgeting and
calculating compensation payments. Management believes that the non-GAAP
presentation allows the board of directors, management, investors and analysts
to better understand the Company's financial performance in relationship to
core operating results and the business outlook.
The Company routinely posts important information on its website -
Forward looking statements
This document contains "forward looking" statements within the meaning of
Section 21E of the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933. Forward looking statements reflect the Company's
current expectations and projections about future events at the time, and thus
involve uncertainty and risk. The words "believe," "expect," "anticipate,"
"will," "could," "would," "should," "may," "plan," "estimate," "intend,"
"predict," "potential," "continue," and the negatives of these words and other
similar expressions generally identify forward looking statements. It is
possible the Company's future financial performance may differ from
expectations due to a variety of factors including, but not limited to the
following: (1) foreign currency fluctuations relative to the U.S. dollar,
specifically the Euro, Brazilian real and Australian dollar, (2) changes in
capital availability or cost, including interest rate fluctuations and the
ability of the Company to refinance debt at favorable terms, (3) the general
political, economic and competitive conditions in markets and countries where
the Company has operations, including uncertainties related to the economic
conditions in Australia, Europe and South America, disruptions in capital
markets, disruptions in the supply chain, competitive pricing pressures,
inflation or deflation, and changes in tax rates and laws, (4) consumer
preferences for alternative forms of packaging, (5) cost and availability of
raw materials, labor, energy and transportation, (6) the Company's ability to
manage its cost structure, including its success in implementing restructuring
plans and achieving cost savings, (7) consolidation among competitors and
customers, (8) the ability of the Company to acquire businesses and expand
plants, integrate operations of acquired businesses and achieve expected
synergies, (9) unanticipated expenditures with respect to environmental,
safety and health laws, (10) the Company's ability to further develop its
sales, marketing and product development capabilities, and (11) the timing and
occurrence of events which are beyond the control of the Company, including
any expropriation of the Company's operations, floods and other natural
disasters, events related to asbestos-related claims, and the other risk
factors discussed in the Company's Annual Report on Form 10-K for the year
ended December 31, 2013 and any subsequently filed Quarterly Report on Form
10-Q. It is not possible to foresee or identify all such factors. Any forward
looking statements in this document are based on certain assumptions and
analyses made by the Company in light of its experience and perception of
historical trends, current conditions, expected future developments, and other
factors it believes are appropriate in the circumstances. Forward looking
statements are not a guarantee of future performance and actual results or
developments may differ materially from expectations. While the Company
continually reviews trends and uncertainties affecting the Company's results
of operations and financial condition, the Company does not assume any
obligation to update or supplement any particular forward looking statements
contained in this document.
Conference call scheduled for April 30, 2014
O-I CEO Al Stroucken and CFO Steve Bramlage will conduct a conference call to
discuss the Company's latest results on Wednesday, April 30, 2014, at 8:00
a.m., Eastern Time. A live webcast of the conference call, including
presentation materials, will be available on the O-I website,
www.o-i.com/investors, in the Presentations & Webcast section.
The conference call also may be accessed by dialing 888-733-1701 (U.S. and
Canada) or 706-634-4943 (international) by 7:50 a.m., Eastern Time, on April
30. Ask for the O-I conference call. A replay of the call will be available on
the O-I website, www.o-i.com/investors, for 90 days following the call.
Contact: Sasha Sekpeh, 567-336-5128 - O-I Investor Relations
Lisa Babington, 567-336-1445 - O-I Corporate Communications
O-I news releases are available on the O-I website at www.o-i.com.
O-I's second quarter 2014 earnings conference call is currently scheduled for
Wednesday, July 30, 2014, at 8:00 a.m., Eastern Time.
 Adjusted earnings refers to earnings from continuing operations
attributable to the Company, excluding items management does not consider
representative of ongoing operations, as cited in the table entitled
Reconciliation to Adjusted Earnings in this release.
 Excluding charges of $11 million during the first quarter of 2013 for note
repurchase premiums and the write-off of finance fees related to debt that was
repaid prior to its maturity.
1Q14 Earnings Presentation
1Q14 Earnings Release
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf
of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for
the content, accuracy and originality of the information contained therein.
Source: Owens-Illinois, Inc. via Globenewswire
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