Sales for the third quarter of 2017 increased 10.8% to $1,206.8 million, compared to $1,089.3 million for the third quarter of 2016, with 0.5% organic growth and 12.4% acquisition-related growth, primarily driven by the Innovia Group of Companies acquired on Feb. 28, 2017.
Operating income for the third quarter of 2017 was $185.3 million, an increase of 23.8% compared to $149.7 million for the comparable quarter of 2016. Net earnings were $106.9 million for the 2017 third quarter compared to $86.1 million for the 2016 third quarter.
For the nine-month period ended Sept. 30, 2017, sales, operating income and net earnings improved 20.7%, 20.3% and 22.9% to $3.5 billion, $532.5 million and $304.7 million, respectively, compared to the same nine-month period in 2016.
Geoffrey T. Martin, president and CEO, said that 4.6% organic sales growth underpinned solid performance in legacy CCL operations driven by strong gains in Europe and Asia Pacific.
“As expected, CCL Secure’s polymer banknote business experienced a short term hiatus in demand levels for the third quarter reducing profitability; pro-forma results for the nine calendar months of 2017 remain solidly ahead of the same period in 2016 and demand for the fourth quarter is strong,” Martin added. “Container profitability for the quarter improved sequentially and comparatively on the benefits of consolidating volume into our US operation and strong double-digit organic sales gains in Mexico.
“Avery delivered solid profitability improvement on sequentially better performance in Printable Media, organic and acquisition sales growth in direct to consumer product lines and richer Back-to-School sales mix,” Martin reported. “Checkpoint posted a slightly improved 13.3% third quarter operating margin despite challenging comparatives to the prior year period. Although Innovia profitability improved sequentially on higher volume and richer mix, comparisons to pre-acquisition results in 2016 continue to be impacted by significantly increased resin costs. Hurricane Harvey and its short-term effect on resin prices will be a headwind for the fourth quarter. Trailing twelve months free cash flow for the company continues to be a highlight.
“Through the first nine months of 2017, debt repayments totaled $215.3 million,” Martin concluded. “At the end of the third quarter, improved profitability measures including the trailing results of the acquired business, reduced the company’s leverage ratio, to 2.0 times EBITDA.”