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Crown Holdings Inc. Reports Operating Results (10-Q)

November 06, 2012 | About:
10qk

10qk

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Crown Holdings Inc. (CCK) filed Quarterly Report for the period ended 2012-09-30.

Crown Holdings Inc has a market cap of $5.67 billion; its shares were traded at around $38.82 with a P/E ratio of 13.7 and P/S ratio of 0.7. Crown Holdings Inc had an annual average earning growth of 3.3% over the past 10 years.

Highlight of Business Operations:

For the nine months ended September 30, 2012 compared to 2011, cost of products sold (excluding depreciation and amortization) decreased from $5,395 to $5,304 primarily due to $205 from the impact of foreign currency translation partially offset by the impact of increased global beverage can sales unit volumes.

Cash used for operating activities decreased from $134 for the nine months ended September 30, 2011 to $117 in 2012 primarily due to lower net working capital which offset lower segment income and higher pension contributions. Days sales outstanding for working capital decreased from 47 for the three months ended September 30, 2011 to 44 in 2012.

Receivables increased from $948 at December 31, 2011 to $1,397 at September 30, 2012 and used cash of $419 for the nine months ended September 30, 2011 compared to $489 in 2012. Sales in September 2012 were higher than in December 2011 as sales generally increase each month of the year until peaking in the third quarter. In addition, payment terms for certain of the company's food can operations result in receivables increasing throughout the year and being paid down in the fourth quarter. As a result, receivables generally increase through the third quarter of each year. Days sales outstanding for trade receivables increased from 44 for three months ended September 30, 2011 to 47 in 2012. The increase is primarily due to seasonality and mix of receivables and is not due to a significant increase in overdue receivables.

Cash used for investing activities decreased from $248 for the nine months ended September 30, 2011 to $205 in 2012 primarily due to $59 from lower capital expenditures and $33 from the receipt of insurance proceeds related to flooding at the Company's beverage can plant in Thailand partially offset by $24 from an increase in restricted cash included in other and $22 from lower proceeds from asset sales. Currently, the Company expects capital expenditures of approximately $300 in 2012 excluding the cost to rebuild beverage can capacity lost to flooding which the Company expects will be reimbursed by insurance. Upon reaching an agreement with its insurance provider, the Company may record additional gains for insurance proceeds in excess of losses recorded in its financial statements.

As disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, the estimated fair value of the Company's European Aerosols reporting unit was 35% higher than its carrying value. In the fourth quarter of 2011, the Company initiated a restructuring action to improve profitability in its European Aerosols reporting unit by consolidating operations through reducing headcount and capacity. During the first nine months of 2012, results of operations in the European Aerosols reporting unit were impacted by the economic downturn in Europe. Based on current projections, the Company continues to believe that the estimated fair value of its European Aerosols reporting unit exceeds its carrying value. If the Company determines that goodwill is impaired, it is possible that an impairment charge of up to $149 could be recorded.

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