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CCL Industries Reports Adjusted Net Earnings of $2.80 per Basic Share for the Second Quarter


/EINPresswire.com/ -- TORONTO, ON--(Marketwired - August 04, 2016) -

Second Quarter Highlights

  • Record adjusted basic earnings per Class B share(3) of $2.80, up 32.1%; basic earnings per Class B share of $2.06, down 2.8%; includes $0.04 currency tailwind
  • Sales increased 33.1%, supported by 10.4% CCL Label organic sales growth
  • Strong operating income(1) improvements across CCL Label, Avery and CCL Container
  • Closed Checkpoint acquisition, announced bolt-on Healthcare acquisition for CCL Label in Germany
  • Checkpoint results for first seven weeks of ownership in line with expectations

Six-Month Highlights

  • Year-to-date adjusted basic earnings per Class B share(3) of $5.45, up 32.6%; basic earnings per Class B share of $4.63, up 13.2%
  • Sales increased 28.0% supported by 8.9% CCL Label organic sales growth
  • Operating income(1) increased 22.2% driven by strong performances across CCL Label, Avery and CCL Container

CCL Industries Inc. (TSX: CCL.A) (TSX: CCL.B) ("CCL" or "the Company"), a world leader in specialty label and packaging solutions for global corporations, small businesses and consumers, today reported 2016 second quarter results.

Sales for the second quarter of 2016 increased 33.1% to $960.2 million, compared to $721.5 million for the second quarter of 2015, with 6.9% organic growth, 2.8% positive currency translation impact and 23.4% acquisition related growth, primarily driven by the May 13, 2016 acquisition of Checkpoint Systems, Inc. ("Checkpoint") and November 6, 2015 acquisition of Worldmark Ltd. ("Worldmark").

Operating income(1) for the second quarter of 2016 was $143.1 million, an increase of 16.7% compared to $122.6 million for the comparable quarter of 2015. Included in the 2016 second quarter was a $16.6 million non-cash acquisition accounting adjustment related to the acquired finished goods inventory from the Checkpoint and Worldmark businesses that was expensed in the Company's cost of goods sold for the quarter. Excluding this non-cash adjustment, operating income was $159.7 million for the three-month period ended June 30, 2016. Excluding the impact of currency translation and the non-cash accounting adjustment operating income improved 30.3%.

Restructuring and other items of $19.0 million ($13.7 million after tax) was reported for the second quarter of 2016. This consisted of $13.0 million for severance and $4.6 million of other transaction costs associated with the acquisition and re-organization of Checkpoint and $1.4 million for severance and other costs associated with the Worldmark acquisition. There were no expenses for restructuring and other items for the 2015 second quarter.

Net earnings attributable to shareholders of the Company, was $72.3 million for the 2016 second quarter compared to $73.3 million for the 2015 second quarter. Basic and adjusted basic earnings per Class B share(3) were $2.06 and $2.80, respectively, compared to basic and adjusted basic earnings per Class B share(3) of $2.12 in the prior year second quarter.

For the six-month period ended June 30, 2016, sales, operating income and net earnings improved 28.0%, 22.2% and 14.5% to $1,827.0 million, $293.0 million and $161.9 million, respectively, compared to the same six-month period in 2015. Included in the 2016 six-month period was a $16.6 million non-cash acquisition accounting adjustment to the acquired finished goods inventory from the Checkpoint and Worldmark businesses that was expensed in the Company's cost of goods sold for the period. Excluding this non-cash adjustment, operating income was $309.6 million and improved 29.2% for the comparable six month periods. 2016 included results from twelve acquisitions completed since January 1, 2015, delivering acquisition related growth for the period of 17.4%. Organic sales growth of 6.0% provided the foundation for solid profit improvement and foreign currency translation added $0.17 per share. For the six-month period ended June 30, 2016, basic and adjusted basic earnings per Class B share(3) were $4.63 and $5.45, respectively, compared to basic and adjusted basic earnings per Class B share(3) of $4.09 and $4.11, respectively, in the prior year six-month period.

Geoffrey T. Martin, President and Chief Executive Officer, commented, "Second quarter results were driven by exceptional organic growth in our CCL Label business throughout the world with performance in Europe and Latin America fueled by the timing of Easter falling in March 2016. Continued cost savings, new product initiatives and pricing delivered solid profit improvement at Avery on flat sales excluding foreign exchange translation benefits. Results for CCL Container improved meaningfully on strong volume overall and excellent profitability in Mexico. We also announced during the second quarter, and subsequently closed in early July, an important Healthcare acquisition for CCL Label in Germany."

Mr. Martin added, "In addition, with substantial majority support from its shareholders, we completed the acquisition of Checkpoint, now a new reportable operating segment of CCL. For the seven-week period post acquisition, Checkpoint posted sales of $92.6 million with an operating profit of $9.9 million before the non-cash acquisition accounting adjustment. Results were in line with our expectations. In addition, we recorded restructuring charges of $13.0 million as part of our previously announced $40 million restructuring plan and remain committed to $40 million in annualized cost reductions. Our ability to convert these savings to reportable profits is predicated on maintaining sales levels in a challenging environment for retailers."

Mr. Martin continued, "Foreign currency translation added $0.04 per share for the quarter with the comparatively stronger U.S. dollar and euro partly offset by weaker Latin American currencies and the U.K. pound. The impact of "BREXIT" on this quarter's results was moderately positive with transaction gains more than offsetting the modest negative impact of lower average translation rates. At today's Canadian dollar exchange rates, currency translation would be a modest headwind for the second half of the year, if sustained."

Mr. Martin concluded, "Despite closing six acquisitions, with aggregate purchases of approximately $623 million in the first six months of this year, CCL's leverage ratio(4) remains a modest 1.8 times EBITDA(2). Our syndicated credit facility has current undrawn capacity of $119 million and we have $422 million of cash-on-hand, giving CCL ample capacity to execute future growth plans. Given the Company's outlook and strong free cash flow, the Board of Directors declared a continuation of the $0.50 per Class B non-voting share and $0.4875 per Class A voting share dividend, payable to shareholders of record at the close of business on September 16, 2016, to be paid on September 30, 2016."

2016 Second Quarter Highlights

CCL Label

  • Sales increased 28.8% to $604.0 million, with 10.4% organic growth, 15.8% acquisitions and 2.6% positive currency translation
  • Regional organic sales growth: high single digit in North America and Asia Pacific, double digit in Europe and Latin America
  • 15.1% operating income margin(1) excluding non-cash acquisition accounting adjustment related to Worldmark finished goods inventory
  • Label joint ventures added $0.04 earnings per Class B share

Avery

  • Sales increased 4.6% to $207.4 million, 1.1% from acquisitions and 4.5% positive currency translation partially offset by 1.0% organic sales decline
  • Operating income(1) increased 11.7% on positive currency translation, cost savings, new products and pricing
  • Modest back-to-school related profit decline expected for the coming quarter, predicting 2016 to be another year of progress overall

Checkpoint

  • Sales of $92.6 million, stronger international versus domestic results
  • Operating income(1) of $9.9 million excluding $14.6 million non-cash acquisition accounting adjustment related to finished goods inventory
  • Restructuring plan well underway, heading into the stronger second half retail season

CCL Container

  • Sales increased 3.3% to $56.2 million with 4.6% organic growth and 1.3% negative currency translation
  • Strong volume overall and robust profit performance in Mexico resulted in a 46.3% increase in operating income(1)
  • Start-up losses at the Rheinfelden Americas aluminum slug joint venture reduced earnings by $0.01 per Class B share

CCL Taisei Joint Venture

Today, CCL acquired the remaining minority 25% interest in its tube manufacturing joint venture in Bangkok, Thailand, from its former partner Taisei Kako Co., Ltd. of Japan for proceeds of $1.9 million. From this point forward the entity will be a fully consolidated subsidiary of CCL.

CCL will hold a conference call at 8:00 a.m. EDT on August 4, 2016, to discuss these results. The analyst presentation will be posted on the Company's website.

To access this call, please dial:

416-340-2219 - Local
1-866-225-2055 - Toll Free

For more information on CCL, visit our website - www.cclind.com.

Forward-looking Statements

This press release contains forward-looking information and forward-looking statements (hereinafter collectively referred to as "forward-looking statements"), as defined under applicable securities laws, that involve a number of risks and uncertainties. Forward-looking statements include all statements that are predictive in nature or depend on future events or conditions. Forward-looking statements are typically identified by the words "believes," "expects," "anticipates," "estimates," "intends," "plans" or similar expressions. Statements regarding the operations, business, financial condition, priorities, ongoing objectives, strategies and outlook of the Company, other than statements of historical fact, are forward-looking statements. Specifically, this press release contains forward-looking statements regarding the anticipated growth in sales, income and profitability of the Company's segments; and the Company's expectations regarding general business and economic conditions.

Forward-looking statements are not guarantees of future performance. They involve known and unknown risks and uncertainties relating to future events and conditions including, but not limited to, the after-effects of the global financial crisis and its impact on the world economy and capital markets; the impact of competition; consumer confidence and spending preferences; general economic and geopolitical conditions; currency exchange rates; interest rates and credit availability; technological change; changes in government regulations; risks associated with operating and product hazards; and CCL's ability to attract and retain qualified employees. Do not unduly rely on forward-looking statements as the Company's actual results could differ materially from those anticipated in these forward-looking statements. Forward-looking statements are also based on a number of assumptions, which may prove to be incorrect, including, but not limited to, assumptions about the following: global economic recovery and higher consumer spending; improved customer demand for the Company's products; continued historical growth trends, market growth in specific sectors and entering into new sectors; the Company's ability to provide a wide range of products to multinational customers on a global basis; the benefits of the Company's focused strategies and operational approach; the achievement of the Company's plans for improved efficiency and lower costs, including stable aluminum costs; the availability of cash and credit; fluctuations of currency exchange rates; the Company's continued relations with its customers; the Company's estimated annual cost reductions from the restructuring of the Checkpoint Systems, Inc. acquisition, the Company's expectations regarding back-to-school profitability; general business and economic conditions. Should one or more risks materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking statements. Further details on key risks can be found in the 2015 Annual Report, Management's Discussion and Analysis, particularly under Section 4: "Risks and Uncertainties." CCL's annual and quarterly reports can be found online at www.cclind.com and www.sedar.com or are available upon request.

Except as otherwise indicated, forward-looking statements do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made may have on CCL's business. Such statements do not, unless otherwise specified by the Company, reflect the impact of dispositions, sales of assets, monetizations, mergers, acquisitions, other business combinations or transactions, asset write-downs or other charges announced or occurring after forward-looking statements are made. The financial impact of these transactions and non-recurring and other special items can be complex and depends on the facts particular to each of them and therefore cannot be described in a meaningful way in advance of knowing specific facts. The forward-looking statements are provided as of the date of this press release and the Company does not assume any obligation to update or revise the forward-looking statements to reflect new events or circumstances, except as required by law.

The financial information presented herein has been prepared on the basis of IFRS for financial statements and is expressed in Canadian dollars unless otherwise stated.

Financial Information

                                                                            
CCL Industries Inc.                                                         
Consolidated statements of financial position                               
Unaudited                                                                   
                                                                            
In thousands of Canadian dollars                                            
                                             As at June 30,   As at December
                                                       2016         31, 2015
                                             -------------- ----------------
Assets                                                                      
Current assets                                                              
  Cash and cash equivalents                  $      421,683 $        405,692
  Trade and other receivables                       727,777          524,621
  Inventories                                       426,318          260,600
  Prepaid expenses                                   31,826           20,562
  Income taxes recoverable                            4,661           18,389
----------------------------------------------------------------------------
Total current assets                              1,612,265        1,229,864
----------------------------------------------------------------------------
Non-current assets                                                          
  Property, plant and equipment                   1,203,869        1,085,506
  Goodwill                                        1,050,496          876,838
  Intangible assets                                 575,090          285,340
  Deferred tax assets                                38,431           12,293
  Equity accounted investments                       62,246           61,502
  Other assets                                       35,532           30,962
----------------------------------------------------------------------------
Total non-current assets                          2,965,664        2,352,441
----------------------------------------------------------------------------
Total assets                                 $    4,577,929 $      3,582,305
============================================================================
Liabilities                                                                 
Current liabilities                                                         
  Bank indebtedness                          $          979 $              -
  Trade and other payables                          789,973          710,999
  Current portion of long-term debt                  61,927          167,103
  Income taxes payable                               62,351           33,652
  Derivative instruments                                352            1,095
----------------------------------------------------------------------------
Total current liabilities                           915,582          912,849
----------------------------------------------------------------------------
Non-current liabilities                                                     
  Long-term debt                                  1,630,998          838,416
  Deferred tax liabilities                           71,042           59,860
  Employee benefits                                 257,990          135,216
  Provisions and other long-term liabilities         59,233           13,833
  Derivative instruments                                  -              253
----------------------------------------------------------------------------
Total non-current liabilities                     2,019,263        1,047,578
----------------------------------------------------------------------------
Total liabilities                                 2,934,845        1,960,427
----------------------------------------------------------------------------
Equity                                                                      
  Share capital                                     255,141          276,882
  Contributed surplus                                53,917           50,584
  Retained earnings                               1,309,946        1,182,686
  Accumulated other comprehensive income             21,939          111,726
----------------------------------------------------------------------------
Total equity attributable to shareholders of                                
 the Company                                      1,640,943        1,621,878
----------------------------------------------------------------------------
  Non-controlling interest                            2,141                -
----------------------------------------------------------------------------
Total equity                                      1,643,084        1,621,878
----------------------------------------------------------------------------
Total liabilities and equity                 $    4,577,929 $      3,582,305
============================================================================
                                                                            
                                                                            
CCL Industries Inc.                                                         
Consolidated income statements                                              
Unaudited                                                                   
                                                                            
                             Three Months Ended June   Six Months Ended June
                                                  30                      30
                             ----------------------- -----------------------
                                                                            
In thousands of Canadian                                                    
 dollars, except per share                                              2015
 information                        2016        2015        2016            
                                                                            
Sales                        $   960,208 $   721,494 $ 1,827,026 $ 1,427,364
Cost of sales                    678,781     514,706   1,294,287   1,022,354
----------------------------------------------------------------------------
Gross profit                     281,427     206,788     532,739     405,010
Selling, general and                                                        
 administrative expenses         152,393      97,216     264,623     191,705
Restructuring and other           18,950           -      21,930         940
 items                                                                      
Earnings in equity accounted     (1,057)                                    
 investments                                   (245)     (1,865)       (763)
----------------------------------------------------------------------------
                                 111,141     109,817     248,051     213,128
----------------------------------------------------------------------------
Finance cost                       8,388       6,718      17,170      13,424
Finance income                     (594)       (505)     (1,473)       (901)
----------------------------------------------------------------------------
Net finance cost                   7,794       6,213      15,697      12,523
----------------------------------------------------------------------------
Earnings before income tax       103,347     103,604     232,354     200,605
Income tax expense                31,169      30,336      70,452      59,191
----------------------------------------------------------------------------
Net earnings                 $    72,178 $    73,268 $   161,902 $   141,414
============================================================================
Attributable to:                                                            
  Shareholders of the             72,317      73,268     162,236     141,414
   Company                   $           $           $           $          
  Non-controlling interest         (139)           -       (334)           -
----------------------------------------------------------------------------
Net earnings                 $    72,178 $    73,268 $   161,902 $   141,414
============================================================================
Earnings per share                                                          
Basic earnings per Class B                                                  
 share                       $      2.06 $      2.12 $      4.63 $      4.09
============================================================================
Diluted earnings per Class B                                                
 share                       $      2.03 $      2.09 $      4.57 $      4.02
============================================================================
                                                                            
                                                                            
CCL Industries Inc.                                                         
Consolidated statements of cash flows                                       
Unaudited                                                                   
                                                                            
                             Three Months Ended June   Six Months Ended June
                                                  30                      30
                             -----------------------------------------------
                                                                            
In thousands of Canadian                                                    
 dollars                            2016        2015        2016        2015
Cash provided by (used for)                                                 
Operating activities                                                        
Net earnings                 $    72,178 $    73,268 $   161,902 $   141,414
Adjustments for:                                                            
  Depreciation and                                                          
   amortization                   48,491      39,279      95,311      78,684
  Earnings in equity                                                        
   accounted investments,                                                   
   net of dividends received       (835)        (34)     (1,643)       (552)
  Net finance costs                7,794       6,213      15,697      12,523
  Current income tax expense      45,513      34,340      72,666      56,780
  Deferred taxes                (14,344)     (4,004)     (2,214)       2,411
  Equity-settled share-based                                                
   payment transactions            6,187       3,851       7,659       6,274
  Gain on sale of property,                                                 
   plant and equipment             (105)       (642)       (833)       (958)
----------------------------------------------------------------------------
                                 164,879     152,271     348,545     296,576
  Change in inventories          (3,063)    (16,382)    (10,006)    (36,469)
  Change in trade and other                                                 
   receivables                  (29,699)    (15,042)    (40,072)    (94,014)
  Change in prepaid expenses    (14,505)    (13,422)    (10,486)    (12,652)
  Change in trade and other                                                 
   payables                     (21,348)      24,219   (149,451)      36,999
  Change in income taxes                                                    
   receivable and payable          4,593         445       5,453       (292)
  Change in employee                                                        
   benefits                      (7,239)       3,309     (4,238)      11,186
  Change in other assets and                                                
   liabilities                    31,680     (7,427)      26,415     (5,927)
----------------------------------------------------------------------------
                                 125,298     127,971     166,160     195,407
Net interest paid                (4,860)     (1,394)    (17,792)    (11,840)
Income taxes paid               (30,929)    (15,228)    (44,006)    (24,905)
----------------------------------------------------------------------------
Cash provided by operating                                                  
 activities                       89,509     111,349     104,362     158,662
----------------------------------------------------------------------------
Financing activities                                                        
Proceeds on issuance of                                                     
 long-term debt                  598,500         341     831,894      47,023
Repayment of debt               (11,358)    (38,686)   (159,600)    (52,519)
Proceeds from issuance of                                                   
 shares                              446       2,403         446       6,005
Purchase of shares held in                                                  
 trust                          (28,836)           -    (28,836)           -
Dividends paid                  (17,525)    (13,044)    (35,044)    (26,065)
----------------------------------------------------------------------------
Cash provided by financing                                                  
 activities                      541,227    (48,986)     608,860    (25,556)
----------------------------------------------------------------------------
Investing activities                                                        
Additions to property, plant                                                
 and equipment                  (75,128)    (34,928)   (145,636)    (91,593)
Proceeds on disposal of                                                     
 property, plant and                                                        
 equipment                           277       1,834       5,863       2,445
Business acquisitions and                                                   
 other long-term investments   (441,741)         189   (527,825)    (38,623)
----------------------------------------------------------------------------
Cash used for investing                                                     
 activities                    (516,592)    (32,905)   (667,598)   (127,771)
----------------------------------------------------------------------------
Net increase in cash and                                                    
 cash equivalents                114,144      29,458      45,624       5,335
Cash and cash equivalents at                                                
 beginning of period             320,140     205,993     405,692     221,873
Translation adjustments on                                                  
 cash and cash equivalents      (12,601)       (731)    (29,633)       7,512
----------------------------------------------------------------------------
Cash and cash equivalents at                                                
 end of the period           $   421,683 $   234,720 $   421,683 $   234,720
============================================================================
                                                                            
                                                                            
CCL Industries Inc.                                                         
Segment Information                                                         
Unaudited                                                                   
In thousands of Canadian dollars                                            
                                                                            
                                        Three Months Ended June 30          
                             -----------------------------------------------
                                      Sales              Operating income   
                             ----------------------- -----------------------
                                 2016        2015        2016        2015   
                             ----------- ----------- ----------- -----------
Label                        $   603,962 $   468,900 $    89,390 $    72,001
Avery                            207,384     198,168      50,590      45,277
Checkpoint                        92,635           -     (4,743)           -
Container                         56,227      54,426       7,868       5,354
                             -----------------------------------------------
Total operations             $   960,208 $   721,494     143,105     122,632
                             ========================                       
                                                                            
Corporate expense                                       (14,071)    (13,060)
Restructuring and other items                           (18,950)           -
Earnings in equity accounted investments                   1,057         245
Finance cost                                             (8,388)     (6,718)
Finance income                                               594         505
Income tax expense                                      (31,169)    (30,336)
                                                     -----------------------
Net earnings                                         $    72,178 $    73,268
                                                     =======================
                                                                            
                                                                            
                                         Six Months Ended June 30           
                             -----------------------------------------------
                                      Sales              Operating income   
                             ----------------------- -----------------------
                                 2016        2015        2016        2015   
                             ----------- ----------- ----------- -----------
Label                        $ 1,226,273 $   955,031 $   193,251 $   153,793
Avery                            387,009     358,358      85,985      71,837
Checkpoint                        92,635           -     (4,743)           -
Container                        121,109     113,975      18,483      14,068
                            ------------------------------------------------
Total operations             $ 1,827,026 $ 1,427,364     292,976     239,698
                             ========================                       
                                                                            
Corporate expense                                       (24,860)    (26,393)
Restructuring and other                                                     
 items                                                  (21,930)       (940)
Earnings in equity accounted                                                
 investments                                               1,865         763
Finance cost                                            (17,170)    (13,424)
Finance income                                             1,473         901
Income tax expense                                      (70,452)    (59,191)
                                                     -----------------------
Net earnings                                         $   161,902 $   141,414
                                                     =======================
                                                                            
                                                                            
                                   Total assets         Total liabilities   
                             ----------------------- -----------------------
                                                                            
                                                                            
                                 June 30 December 31     June 30 December 31
                             ----------- ----------- ----------- -----------
                                    2016        2015        2016        2015
                             ----------- ----------- ----------- -----------
                                                                            
Label                        $ 2,319,885 $ 2,285,169 $   567,385 $   596,902
Avery                            647,000     615,893     212,973     230,293
Checkpoint                       909,713           -     451,723           -
Container                        167,707     173,688      43,782      50,929
Equity accounted investments      62,246      61,502           -           -
Corporate                        471,378     446,053   1,658,982   1,082,303
                             -----------------------------------------------
Total                        $ 4,577,929 $ 3,582,305 $ 2,934,845 $ 1,960,427
                             ===============================================
                                                                            
                                                                            
                                 Depreciation and                           
                                   amortization        Capital expenditures 
                             ----------------------- -----------------------
                                                                            
                                                                            
                               Six Months Ended June   Six Months Ended June
                                                  30                      30
                             ----------------------- -----------------------
                                    2016        2015        2016        2015
                             ----------------------- -----------------------
                                                                            
Label                        $    76,239 $    63,588 $   118,435 $    79,729
Avery                              7,873       7,098      11,983       8,676
Checkpoint                         3,338           -       1,130           -
Container                          7,364       7,520      14,088       3,188
Equity accounted investments           -           -           -           -
Corporate                            497         478           -           -
                            ------------------------------------------------
Total                        $    95,311 $    78,684 $   145,636 $    91,593
                            ================================================
                                                                            

Non-IFRS Measures

(1) Operating income and operating income margin are key non-IFRS financial measures used to assist in understanding the profitability of the Company's business units. Operating income is defined as earnings before corporate expenses, net finance cost, goodwill impairment loss, earnings in equity accounted investments, restructuring and other items, and taxes. Operating income margin is defined as operating income over sales.

(2) EBITDA is a critical non-IFRS financial measure used extensively in the packaging industry and other industries to assist in understanding and measuring operating results. EBITDA is also considered as a proxy for cash flow and a facilitator for business valuations. This non-IFRS financial measure is defined as earnings before net finance cost, taxes, depreciation and amortization, goodwill impairment loss, non-cash acquisition accounting adjustments to finished goods inventory, earnings in equity accounted investments and restructuring and other items. Calculations are provided below to reconcile operating income to EBITDA. The Company believes that this is an important measure as it allows management to assess CCL's ongoing business without the impact of net finance cost, depreciation and amortization and income tax expenses, as well as non-operating factors and one-time items. As a proxy for cash flow, it is intended to indicate CCL's ability to incur or service debt and to invest in property, plant and equipment, and it allows management to compare CCL's business to those of CCL's peers and competitors who may have different capital or organizational structures. EBITDA is tracked by financial analysts and investors to evaluate financial performance and is a key metric in business valuations. EBITDA is considered an important measure by lenders to the Company and is included in the financial covenants of CCL's senior notes and bank lines of credit.

                                                                            
Reconciliation of operating income to EBITDA                                
                                                                            
Unaudited                                                                   
----------------------------------------------------------------------------
(In millions of Canadian dollars)                                           
                             Three months ended June   Six months ended June
                                                  30                      30
                             ----------------------- -----------------------
Sales                               2016        2015        2016        2015    
---------------------------- ----------- ----------- ----------- -----------
Label                        $     604.0 $     468.9 $   1,226.3 $     955.0
Avery                              207.4       198.2       387.0       358.4
Checkpoint                          92.6           -        92.6           -
Container                           56.2        54.4       121.1       114.0
----------------------------------------------------------------------------
Total sales                  $     960.2 $     721.5 $   1,827.0 $   1,427.4
----------------------------------------------------------------------------
Operating Income                                                            
----------------------------                                                
Label                        $      89.3 $      71.9 $     193.2 $     153.8
Avery                               50.6        45.3        86.0        71.8
Checkpoint                         (4.7)           -       (4.7)           -
Container                            7.9         5.4        18.5        14.1
----------------------------------------------------------------------------
Total operating income             143.1       122.6       293.0       239.7
Less: Corporate expenses          (14.1)      (13.0)      (24.9)      (26.4)
Add: Depreciation &                                                         
 amortization                       48.5        39.3        95.3        78.7
Add: Non-cash acquisition                                                   
 accounting adjustment to                                                   
 finished goods inventory           16.6           -        16.6           -
----------------------------------------------------------------------------
                                                                            
EBITDA                       $     194.1 $     148.9 $     380.0 $     292.0
----------------------------------------------------------------------------
                                                                            

(3) Adjusted basic earnings per Class B share is an important non-IFRS measure to assist in understanding the ongoing earnings performance of the Company excluding items of a one-time or non-recurring nature. It is not considered a substitute for basic net earnings per Class B share but it does provide additional insight into the ongoing financial results of the Company. This non-IFRS financial measure is defined as basic net earnings per Class B share excluding gains on business dispositions, goodwill impairment loss, non-cash acquisition accounting adjustments to finished goods inventory, restructuring and other items, and tax adjustments.

                                                                        
Reconciliation of Basic Earnings per Class B Share to                   
Adjusted Basic Earnings per Class B Share                               
                                                                        
Unaudited                                                               
------------------------------------------------------------------------
                                                                        
                                                                        
                                        Three months    Six months ended
                                       ended June 30        June 30     
                                     ----------------- -----------------
                                                                        
                                         2016     2015     2016     2015
                                     -------- -------- -------- --------
Basic earnings per Class B Share     $   2.06 $   2.12 $   4.63 $   4.09
Net loss from restructuring and                                         
 other items                             0.39        -     0.47     0.02
Non-cash acquisition accounting                                         
 adjustment related to finished                                         
 goods inventory                         0.35        -     0.35     0.02
========================================================================
                                                                        
Adjusted Basic Earnings per Class B                                     
 Share                               $   2.80 $   2.12 $   5.45 $   4.11
========================================================================
                                                                        

(4) Leverage ratio is a measure that indicates the Company's ability to service its existing debt. Leverage ratio is calculated as net debt divided by EBITDA.

                                                                            
Unaudited                                                                   
----------------------------------------------------------------------------
(In millions of Canadian dollars)                                           
                                                               June 30, 2016
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Current debt                                                   $        62.9
Long-term debt                                                       1,631.0
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Total debt                                                           1,693.9
Cash and cash equivalents                                              421.7
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Net debt                                                       $     1,272.2
EBITDA for 12 months ending June 30, 2016 (see below)          $       696.4
============================================================================
Leverage Ratio                                                           1.8
============================================================================
                                                                            
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EBITDA for 12 months ended December 31, 2015                   $       608.4
  less: EBITDA for six months ended June 30, 2015                    (292.0)
  add: EBITDA for six months ended June 30, 2016                       380.0
============================================================================
                                                                            
EBITDA for 12 months ended June 30, 2016                       $       696.4
============================================================================
                                                                            

Supplemental Financial Information

                                                                            
Sales Change Analysis                                                       
Revenue Growth Rates (%)                                                    
                                                                            
                      Three Months Ended June 30, 2016                      
----------------------------------------------------------------------------
                            Organic    Acquisition      FX                  
                            Growth       Growth     Translation     Total   
                                                                            
Label                           10.4%        15.8%         2.6%        28.8%
Avery                          (1.0%)         1.1%         4.5%         4.6%
Checkpoint                          -       100.0%            -            -
Container                        4.6%         0.0%       (1.3%)         3.3%
CCL                              6.9%        23.4%         2.8%        33.1%
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                                            
Sales Change Analysis                                                       
Revenue Growth Rates (%)                                                    
                                                                            
 Three Months Ended June                                                    
         30, 2016                   Six Months Ended June 30, 2016          
----------------------------------------------------------------------------
                            Organic    Acquisition      FX                  
                            Growth       Growth     Translation     Total   
                                                                            
Label                            8.9%        15.1%         4.4%        28.4%
Avery                          (1.4%)         3.1%         6.3%         8.0%
Checkpoint                          -       100.0%            -            -
Container                        5.1%         0.0%         1.1%         6.2%
CCL                              6.0%        17.4%         4.6%        28.0%
                                                                            
----------------------------------------------------------------------------
                                                                            

Business Description

CCL Industries employs more than 19,000 people operating 149 production facilities in 35 countries on 6 continents with corporate offices in Toronto, Canada and Framingham, Massachusetts. CCL Label is the world's largest converter of pressure sensitive and extruded film materials for a wide range of decorative, instructional and functional applications for large global customers in the consumer packaging, healthcare and chemicals, consumer durable, electronic device and automotive markets. Extruded and laminated plastic tubes, folded instructional leaflets, precision decorated and die cut components, electronic displays and other complementary products and services are sold in parallel to specific end-use markets. Avery is the world's largest supplier of labels, specialty converted media and software solutions to enable short-run digital printing in businesses and homes alongside complementary products sold through distributors and mass market retailers. CCL Container is a leading producer of impact extruded aluminum aerosol cans and bottles for consumer packaged goods customers in the United States and Mexico. Checkpoint is a leading manufacturer of technology-driven, loss prevention, inventory management and labeling solutions, including RF and RFID-based, to the retail & apparel industry. CCL partly backward integrates into materials science with capabilities in polymer extrusion, adhesive development and coating, surface engineering and metallurgy that are deployed across all three business segments.

Audio replay service will be available from August 4, 2016, at 10:00 a.m. EDT until September 4, 2016, at 11:59 p.m. EDT.

To access Conference Replay, please dial:
905-694-9451 - Local
1-800-408-3053 - Toll Free
Access Code: 1811222

Sean Washchuk
Senior Vice President and Chief Financial Officer
416-756-8526


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