05.10.17
CCL Industries Inc. reported 2017 first quarter results. Sales for the first quarter of 2017 increased 22.5% to $1,061.5 million, compared to $866.8 million for the first quarter of 2016, with 2.1% organic growth, 4.7% negative currency translation impact and 25.1% acquisition-related growth, primarily driven by the acquisition of Checkpoint Systems, Inc. on May 13, 2016, and Innovia on February 28, 2017.
Operating income for the first quarter of 2017 was $158.9 million, an increase of 6.0% compared to $149.9 million for the comparable quarter of 2016. Included in the 2017 first quarter was an $8.8 million non-cash acquisition accounting adjustment related to the acquired finished goods inventory from the Innovia acquisition that was expensed in the company’s cost of sales for the quarter. Excluding this non-cash adjustment, operating income was $167.7 million for the first quarter of 2017. Excluding the impact of currency translation and the non-cash accounting adjustment, operating income improved 17.1%.
Net earnings were $87.8 million for the 2017 first quarter compared to $89.7 million for the 2016 first quarter.
“First quarter results were highlighted by solid profitability from our newly configured CCL Segment on 6.8% organic growth over a strong prior year period, albeit aided by the timing of Easter in 2017; results especially strong at CCL Design and in Food & Beverage markets,” Geoffrey T. Martin, president and CEO, said. “Avery performance was below prior year in the US on soft sales to the superstore and wholesaler channels, but prospects for 2017’s back-to-school peak season are comparatively improved over recent years. CCL Container began the exit process from our Canadian plant on the previously announced loss of a large Homecare application; we expect this challenging transition to continue for another quarter or two, stabilizing before the end of 2017. Checkpoint’s solid profit in their seasonally low quarter confirms the success of our reorganization initiative; the plan completes this summer.
“We closed the acquisition of the Innovia Group on February 28, 2017, for $1.15 billion with customers and employees pleased to see the business under long-term ownership,” Martin added. “First results for the month of March met expectations. A modest $5.0 million restructuring plan focused on eliminating duplicate corporate functions will complete over the balance of the year. We continue to be excited by the opportunities for Innovia and our new CCL Secure business.
“With the $1.15 billion acquisition of Innovia complete, the Company’s net leverage ratio, including the trailing results of the acquired business, increased to 2.4 times EBITDA, at the end of the first quarter,” Martin concluded. “With cash-on-hand of $519 million, undrawn capacity of US$213 million on our syndicated revolving credit facility, the balance sheet and liquidity positions of the company remain strong.”
Operating income for the first quarter of 2017 was $158.9 million, an increase of 6.0% compared to $149.9 million for the comparable quarter of 2016. Included in the 2017 first quarter was an $8.8 million non-cash acquisition accounting adjustment related to the acquired finished goods inventory from the Innovia acquisition that was expensed in the company’s cost of sales for the quarter. Excluding this non-cash adjustment, operating income was $167.7 million for the first quarter of 2017. Excluding the impact of currency translation and the non-cash accounting adjustment, operating income improved 17.1%.
Net earnings were $87.8 million for the 2017 first quarter compared to $89.7 million for the 2016 first quarter.
“First quarter results were highlighted by solid profitability from our newly configured CCL Segment on 6.8% organic growth over a strong prior year period, albeit aided by the timing of Easter in 2017; results especially strong at CCL Design and in Food & Beverage markets,” Geoffrey T. Martin, president and CEO, said. “Avery performance was below prior year in the US on soft sales to the superstore and wholesaler channels, but prospects for 2017’s back-to-school peak season are comparatively improved over recent years. CCL Container began the exit process from our Canadian plant on the previously announced loss of a large Homecare application; we expect this challenging transition to continue for another quarter or two, stabilizing before the end of 2017. Checkpoint’s solid profit in their seasonally low quarter confirms the success of our reorganization initiative; the plan completes this summer.
“We closed the acquisition of the Innovia Group on February 28, 2017, for $1.15 billion with customers and employees pleased to see the business under long-term ownership,” Martin added. “First results for the month of March met expectations. A modest $5.0 million restructuring plan focused on eliminating duplicate corporate functions will complete over the balance of the year. We continue to be excited by the opportunities for Innovia and our new CCL Secure business.
“With the $1.15 billion acquisition of Innovia complete, the Company’s net leverage ratio, including the trailing results of the acquired business, increased to 2.4 times EBITDA, at the end of the first quarter,” Martin concluded. “With cash-on-hand of $519 million, undrawn capacity of US$213 million on our syndicated revolving credit facility, the balance sheet and liquidity positions of the company remain strong.”
