CCL Industries Reports Strong Organic Sales Growth And a 13.4% Increase in First Quarter 2012 Net Earnings

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TORONTO, ONTARIO--(Marketwire - May 3, 2012) - CCL Industries Inc. (CCL-A.TO - News)(CCL-B.TO - News) -

Results Summary





For periods ended March 31              Three months unaudited              

----------------------------------------------------------------------------

                                                                            

(in millions of Cdn dollars,           2012       2011        %     % Change

except per share data)                                   Change     Excl. FX

                                                                         (i)

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Sales                              $  341.4   $  315.6     8.2%         8.8%

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EBITDA (1)                         $   71.2   $   66.4     7.2%         7.8%

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Operating income (2)               $   52.6   $   48.7     8.0%         8.6%

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Earnings (losses) in equity                                                 

 accounted investments             $    0.8   $      -     n.m.             

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Restructuring and other items -                                             

 net loss                          $      -   $    0.5     n.m.             

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Net earnings                       $   30.4   $   26.8    13.4%        14.8%

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Per Class B non-voting share                                                

                                                                            

  Basic earnings per share         $   0.91   $   0.81    12.3%             

                                                                            

  Diluted earnings per share       $   0.89   $   0.80    11.3%             

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Restructuring and other items -                                             

 net loss                          $      -   $   0.01     n.m.             

Adjusted basic earnings per                                                 

 Class B share (3)                 $   0.91   $   0.82    11.0%             

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Number of outstanding shares (in                                            

 000's)                                                                     

  Weighted average for the                                                  

   period - basic                    33,427     33,030                      

  Actual at period end               33,751     33,324                      

                                                                            

   (i) - Change over prior year's comparative period excludes estimated  

   impact of foreign currency translation.                                  



CCL Industries Inc. ("CCL" or "the Company") is a world leader in the development of label solutions for global producers of consumer brands in the home & personal care, healthcare, durable goods, and premium food & beverage sectors; and a specialty supplier of aluminum containers and plastic tubes for the same customers in North America.

First Quarter 2012 Results

Sales for the first quarter of 2012 were $341.4 million, an increase of 8.2% compared to $315.6 million for the first quarter of 2011. Excluding the impact of foreign currency translation, sales increased 8.0% organically with an additional 0.8% increase from the acquisition of Sertech in April of 2011.

Operating income (a non-IFRS measure; see note 2 below) for the first quarter of 2012 was $52.6 million, an improvement of 8.0% compared to $48.7 million for the first quarter of 2011. Operating income improved 8.6%, excluding the negative impact of foreign currency translation for the comparative quarters. The Label and Tube segments increased operating income, partially offset by a decline at the Container segment, for the first quarter of 2012 compared to the first quarter of 2011.

EBITDA (a non-IFRS measure; see note 1 below) was $71.2 for the first quarter of 2012 compared to $66.4 million for the first quarter of 2011, a 7.8% improvement excluding the impact of foreign currency translation.

Net earnings for the 2012 first quarter increased 13.4% to $30.4 million, compared to $26.8 million posted for the first quarter of 2011. The increase in net earnings is attributable to the above-mentioned improvement in operating income, and a reduction in net finance cost partially offset by an increase in the effective tax rate.

Basic earnings were $0.91 per Class B share in the first quarter of 2012 compared to $0.81 per Class B share in the prior year quarter.

Geoffrey T. Martin, President and Chief Executive Officer commented, "I am pleased to report another solid quarter and excellent start to the 2012 year for CCL. Our Label and Tube segments capitalized on robust organic growth particularly in North America, to post strong results for the quarter. Foreign currency translation effects were nominally negative for the first quarter of the year."

Mr. Martin continued, "CCL Label enjoyed another quarter of strong double digit growth driven by a very good performance in North America where we saw evidence of a solid consumer recovery. Growth rates were compounded by the Healthcare sector with certain customers operating at normal levels in 2012 compared to a regulatory driven hiatus in the prior year period. Asia Pacific continued to deliver strong growth as demand levels in Thailand recovered from the fourth quarter floods. Overall operating income reached record levels and increased 11% in line with sales gains, excluding foreign currency translation. Results were held in check by a small, but not entirely unexpected decline in European profitability given macroeconomic events in the region, although sales were up low single digits. We also faced difficult comparisons in Latin America where currency depreciation and cost inflation affected results compared to the reverse effect in the prior year despite solid sales increases. Overall, CCL Label delivered a return on sales of approximately 17% for the first quarter of 2012, beyond the high end of our target range but not untypical for this period which has favourable seasonality factors."

Mr. Martin commented, "Our two joint ventures, CCL-Kontur in Russia and Pacman-CCL, the Company's third quarter 2011 investment in the Middle East, both contributed positively to first quarter results. Consolidated first quarter net earnings from the joint ventures totalled two cents per share. Acrus-CCL, our new wine label joint venture in Santiago, Chile, will commence trading during the 2012 second quarter."

Mr. Martin then added, "First quarter sales for CCL Container declined 3% and operating income fell compared to the prior year period but improved sequentially over each of the previous three quarters of 2011. The year-over-year decline was driven by significantly lower volumes of beverage bottles at our U.S. operation coupled with an unusual seasonal shift in aerosol demand from the early months of the year to the spring and early summer. The plant is now booked solid for the second quarter. The Canadian operation continues to improve and the Mexican business posted solid performance as volume grows at our new facility. We were also pleased to see Container deliver strong free cash flow for the quarter. CCL Tube continued its outstanding performance, with solid sales growth and strong profitability gains driven by improved mix. Operating income was a record $4 million for the 2012 first quarter."

Mr. Martin continued, "The recent strong performance of our business in North America gives us cause for cautious optimism for the coming quarter and 2012 as a whole. The caution stems from macroeconomic uncertainty in Europe, the recent currency depreciation in Latin America and concerns being raised by some commentators on the near term sustainability of growth rates in Asia. The early part of the 2012 second quarter is influenced by holiday periods but order intake for all three of our business segments has been solid, with North American growth so far offsetting slow markets in Europe. Despite this, the Company will likely see the rate of performance improvement moderate appreciably in the coming quarter as comparisons to a strong prior year period are more challenging. Foreign currency exchange rates to the Canadian dollar could also impact translated earnings while strengthening in the U.S. dollar would affect raw material costs in Latin America."

Mr. Martin concluded, "CCL's balance sheet remains strong at the end of the 2012 first quarter with $142 million of cash on hand, $91 million of unused credit facilities and net debt to total capital down 140 basis points to 19.3% compared to December 31, 2011. Based on our strong cash flow and our prospects for the coming year, your Board of Directors has declared a dividend of $0.1950 per Class B non-voting share and $0.1825 per Class A voting share payable to shareholders of record at the close of business on June 15, 2012, to be paid on June 29, 2012."

Donald G. Lang, CCL's Executive Chairman, added "At our AGM today, we bid farewell to Jon Grant, who has retired from the Board after 17 years of service as a Director. We wish him well. He will be replaced as Lead Director by Alan D. Horn who has been with us since 2008 and is uniquely qualified to serve in this capacity. I also want to welcome Philip M. Gresh who joins the Board effective today. Phil had a lengthy career as a senior executive with Illinois Tool Works and brings specific industry knowledge of global markets to our deliberations. Shareholder interests continue to be represented by a majority of strong independent Directors on the Board who also provide wise counsel to management."

With headquarters in Toronto, Canada, CCL Industries now employs approximately 6,400 people and operates 70 production facilities globally located to meet the sourcing needs of large international customers. CCL Label is the world's largest converter of pressure sensitive and film materials for label applications and sells to leading global customers in the consumer packaging, healthcare, automotive and consumer durable markets. CCL Container and CCL Tube are leading producers of aluminum aerosol cans, bottles and extruded plastic tubes for consumer packaged goods customers in the United States, Canada and Mexico.

(1) 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. It 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, earnings in equity accounted investments and restructuring and other items. See section entitled "Supplementary Information" below for a reconciliation of operating income to EBITDA. The Company believes that it 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 a measure 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.

(2) Operating Income is a key non-IFRS financial measure used to assist in understanding the profitability of the Company's business units. This non-IFRS financial measure is defined as income before corporate expenses, net finance cost, earnings in equity accounted investments, restructuring and other items and taxes.

(3) Adjusted Basic Earnings per Class B Share is an important non-IFRS financial measure used 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 restructuring and other items and tax adjustments.





                                                          

Supplementary Information                                 

                                                          

For periods ended March 31st                              

Reconciliation of Operating Income to EBITDA              

                                                          

Unaudited                                                 

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(In millions of Canadian dollars)                         

                                                          

                                  Three months ended March

                                                      31st

                              ----------------------------

                              ----------------------------

Operating Income                       2012          2011 

--------------------                  -----         ----- 

                                                          

Label                                $ 46.2        $ 41.9 

                                                          

Container                               2.4           3.7 

                                                          

Tube                                    4.0           3.1 

                              ----------------------------

                              ----------------------------

                                                          

Total operating income                 52.6          48.7 

                                                          

Less: Corporate expenses               (6.5)         (6.3)

                                                          

Add: Depreciation &                                       

 amortization                          25.1          24.0 

                              ----------------------------

                              ----------------------------

                                                          

EBITDA                               $ 71.2        $ 66.4 

                                                          

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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.

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; and 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 Management's Discussion and Analysis section of CCL's 2011 Annual Report, 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.





Note:  CCL will hold a conference call at 3:00 p.m. EDT on Thursday, May 3, 

       2012, 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                                                 

       1-866-226-1793 - Toll Free                                           

                                                                            

       Audio replay service will be available from Thursday, May 3, 2012, at

       6:00 p.m. EDT until Thursday, May 17, 2012, at 11:59 p.m. EDT.       

                                                                            

       To access Conference Replay, please dial:                            

       905-694-9451- Local                                                  

       1-800-408-3053 - Toll Free                                           

       Access Code: 5270712                                                 

                                                                            

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

                                                                            

CCL Industries Inc.                                                         

Consolidated condensed interim statements of financial position             

Unaudited                                                                   

                                                                            

In thousands of Canadian dollars                                            

                                      As at March 31      As at December 31 

                                                2012                   2011 

                                      --------------      ------------------

Assets                                                                      

Current assets                                                              

  Cash and cash equivalents          $       141,924     $          140,698 

  Trade and other receivables                218,711                192,003 

  Inventories                                 90,708                 86,932 

  Prepaid expenses                             4,343                  5,304 

  Income tax recoverable                           -                    802 

  Derivative instruments                         767                    820 

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Total current assets                         456,453                426,559 

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  Property, plant and equipment              691,482                688,099 

  Goodwill                                   355,045                355,788 

  Deferred tax assets                         54,008                 54,152 

  Equity accounted investments                39,048                 38,464 

  Intangible assets                           32,295                 34,853 

  Other assets                                15,112                 15,566 

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Total non-current assets                   1,186,990              1,186,922 

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Total assets                         $     1,643,443     $        1,613,481 

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Liabilities                                                                 

Current liabilities                                                         

  Trade and other payables           $       226,500     $          233,963 

  Current portion of long-term                                              

   debt                                       19,296                 19,750 

  Income taxes payable                        10,169                      - 

  Derivative instruments                       1,642                  2,530 

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Total current liabilities                    257,607                256,243 

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  Long-term debt                             327,051                334,218 

  Deferred tax liabilities                   114,160                118,827 

  Employee benefits                           80,392                 77,806 

  Provisions and other long-term                                            

   liabilities                                10,087                  9,507 

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Total non-current liabilities                531,690                540,358 

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Total liabilities                            789,297                796,601 

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Equity                                                                      

  Share capital                              220,642                218,663 

  Contributed surplus                         10,373                  9,421 

  Retained earnings                          653,387                629,469 

  Accumulated other comprehensive                                           

   loss                                      (30,256)               (40,673)

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Total equity attributable to                                                

 shareholders of the Company                 854,146                816,880 

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Total liabilities and equity         $     1,643,443     $        1,613,481 

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CCL Industries Inc.                                                         

Consolidated condensed interim income statements                            

Unaudited                                                                   

                                                                            

In thousands of Canadian dollars, except per share data                     

                                                                            

                                                 Three months ended March 31

                                                                            

                                                                           %

                                                 2012         2011    Change

                                            ----------   --------- ---------

                                                                            

Revenue                                    $  341,396   $  315,625       8.2

Cost of sales                                 257,620      238,037          

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Gross profit                                   83,776       77,588          

Selling, general and administrative            37,720       35,053          

Restructuring and other items                       -          542          

(Earnings) loss in equity accounted                                         

 investments                                     (830)          89          

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Results from operating activities              46,886       41,904          

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Finance cost                                    5,511        5,989          

Finance income                                   (308)        (324)         

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Net finance cost                                5,203        5,665          

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Earnings before income taxes                   41,683       36,239      15.0

Income tax expense                             11,261        9,419          

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Net earnings                               $   30,422   $   26,820      13.4

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Attributable to:                                                            

  Shareholders of the Company              $   30,422   $   26,820          

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Net earnings for the period                $   30,422   $   26,820          

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Basic earnings per Class B share           $     0.91   $     0.81      12.3

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Diluted earnings per Class B share         $     0.89   $     0.80      11.3

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CCL Industries Inc.                                                         

Consolidated condensed interim statements of cash flows                     

Unaudited                                                                   

                                                                            

In thousands of Canadian dollars                                            

                                                       Three months ended   

                                                            March 31        

                                                         2012          2011 

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Cash provided by (used for)                                                 

Operating activities                                                        

  Net earnings                                     $   30,422    $   26,820 

  Adjustments for:                                                          

    Depreciation and amortization                      25,109        23,950 

    Restructuring and other items                           -           542 

    Net finance cost                                    5,203         5,665 

    Current income tax expense                         14,386         9,408 

    Equity-settled share-based payment                                      

     transactions                                       1,081         1,090 

    Deferred taxes                                     (3,125)           11 

    Loss on sale of property, plant and                                     

     equipment                                           (114)         (453)

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                                                       72,962        67,033 

    Change in inventories                              (3,776)       (4,448)

    Change in trade and other receivables             (26,708)      (29,607)

    Change in prepaid expenses                            961         1,174 

    Change in trade and other payables                 (2,332)       (5,781)

    Change in income taxes                              1,565           (49)

    Change in employee benefits                         2,586         2,816 

    Change in other assets and liabilities                169         1,500 

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                                                       45,427        32,638 

  Interest paid                                       (10,332)      (11,557)

  Income taxes paid                                    (4,980)       (3,216)

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Cash provided by operating activities                  30,115        17,865 

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Financing activities                                                        

  Proceeds on issuance of long-term debt                    -         1,040 

  Repayment of long-term debt                          (1,246)      (68,472)

  Increase in bank advance                                  -           172 

  Proceeds from issuance of shares                      1,552         1,073 

  Repayment of executive share purchase plan                                

   loans                                                  233             - 

  Dividends                                            (6,550)       (5,802)

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Cash used for financing activities                     (6,011)      (71,989)

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Investing activities                                                        

  Additions to property, plant and equipment          (23,300)      (25,841)

  Proceeds on disposal of property, plant and                               

   equipment                                              572           664 

  Business acquisitions                                     -        (1,955)

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Cash used for investing activities                    (22,728)      (27,132)

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  Net increase (decrease) in cash and cash                                  

   equivalents                                          1,376       (81,256)

  Cash and cash equivalents at beginning of                                 

   period                                             140,698       173,197 

  Translation adjustment on cash and cash                                   

   equivalents                                           (150)          193 

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Cash and cash equivalents at end of period         $  141,924    $   92,134 

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CCL Industries Inc.                                                         

Segment information                                                         

Unaudited                                                                   

                                                                            

In thousands of Canadian dollars                                            

                                                                            

                                          Three months ended March 31       

                                   -----------------------------------------

                                                                            

                                      Sales                Operating income 

                                   -----------            ------------------

                                                                            

                                       2012       2011       2012      2011 

                                   --------   --------    --------  --------

                                                                            

Label                             $ 273,876  $ 247,756   $ 46,193  $ 41,935 

                                                                            

Container                            46,146     47,651      2,416     3,740 

                                                                            

Tube                                 21,374     20,218      3,995     3,098 

                                 -------------------------------------------

Total operations                  $ 341,396  $ 315,625     52,604    48,773 

                                 ---------------------                      

                                 ---------------------                      

                                                                            

                                                                            

Corporate expense                                          (6,548)   (6,238)

                                                                            

Restructuring and other items                                   -      (542)

                                                                            

Earnings (loss) in equity                                                   

 accounted investments                                        830       (89)

                                                                            

Finance cost                                               (5,511)   (5,989)

                                                                            

Finance income                                                308       324 

                                                                            

Income taxes                                              (11,261)   (9,419)

                                                        --------------------

Net earnings                                             $ 30,422  $ 26,820 

                                                        --------------------

                                                        --------------------



Contact:
Sean Washchuk
CCL Industries Inc.
Senior Vice President and Chief Financial Officer
416-756-8526
www.cclind.com

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