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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 23, 1998
Owens-Illinois, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-9576 22-2781933
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(State or other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
One SeaGate, Toledo, Ohio 43666
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(Address of principal executive offices) (Zip code)
Registrants' telephone number,
including area code: 419-247-5000
Exhibit Index -- Page 4
Page 1 of 10 pages
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Item 5. Other Events.
On April 23, 1998, Owens-Illinois, Inc. issued a press release
announcing first quarter 1998 results. The press release is set forth as
Exhibit 99 hereto.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit 99 - Owens-Illinois press release dated April 23, 1998.
Page 2 of 10 pages
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SIGNATURES
Pursuant to the requirements of the Securites Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OWENS-ILLINOIS, INC.
By /s/ Lee A. Wesselmann
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Lee A. Wesselmann
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Dated: April 23, 1998
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EXHIBIT INDEX
Exhibit
Number Exhibit Page
99 Owens-Illinois press release dated 5
April 23, 1998.
Page 4 of 10 pages
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Exhibit 99
OWENS-ILLINOIS REPORTS INCREASED SALES AND EARNINGS IN FIRST QUARTER
Toledo, Ohio, April 23, 1998 -- Owens-Illinois, Inc., (NYSE: OI) today
reported increased sales and earnings for the first quarter of 1998.
Owens-Illinois reported first quarter net earnings of $80.4 million or
$0.56 per share (diluted). The net earnings include a one-time benefit of
$0.10 per share (diluted) related to a tax rate reduction in Italy. In the
first quarter of 1997, the company reported net earnings of $54.6 million, or
$0.44 per share (diluted). Excluding the effect of certain unusual items,
1997 first quarter earnings were $0.38 per share (diluted).
Net sales rose to $1.099 billion, up from $1.056 billion in the first
quarter of 1997.
Joseph H. Lemieux, Owens-Illinois chairman and chief executive officer,
said, "Our improved sales and earnings again reflect the results of our focus
on the fundamentals of quality, productivity, and cost control. We will
continue to pursue our strategy to meet the growing worldwide demand for
quality packaging by increasing the capacity of existing operations in key
locations and through strategic acquisitions, including our previously
announced agreement to acquire the worldwide glass and plastics packaging
businesses of BTR plc." Owens-Illinois has achieved double-digit percentage
increases in earnings from continuing operations, excluding the effects of
unusual items, in each of the past six years, with improved year-over-year
results in 25 consecutive quarters.
The domestic glass container operations reported increased sales and
operating profit, reflecting higher unit sales volumes and improved operating
efficiencies. Increased shipments of bottles for the beer, tea and juice, and
liquor and wine industries all contributed to the improved first quarter
results.
The international operations reported increased sales and operating profit
due in part to the effects of the February 1997 acquisition of AVIR S.p.A.,
the largest glass container company in Italy. The performance of the
international operations also benefited from improved results in Latin
America, Central and Eastern Europe, and Asia, exclusive of unusual items.
Higher sales of plastic containers were partially offset by lower sales of
prescription containers, reflecting strong sales in the first quarter of 1997
in advance of a price increase. Lower shipments of prescription and related
closure products resulted in lower 1998 operating profit for plastics
packaging, exclusive of unusual items.
First quarter 1998 interest expense decreased approximately $20 million
from that of the first quarter of 1997. This decrease is the result of the
refinancing initiated in the second quarter of 1997.
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The effective tax rate for the first quarter of 1998, excluding the
effects of the reduction in Italy's statutory income tax rate, was 37.5%.
This compares with 34.1% for the full year 1997, excluding the effect of the
gain on the 1997 sale of the remaining 49% interest in Kimble Glass. The
increase in the 1998 rate is primarily the result of the non-recurrence of
certain foreign tax credits which benefited 1997 results.
Unusual Items
The 1998 net earnings include a tax benefit of $15.1 million, or $0.10 per
share (diluted), to adjust net deferred income tax liabilities as a result of
a reduction in Italy's statutory income tax rate. The 1998 net earnings also
include an unusual gain of $18.5 million ($11.4 million aftertax) related to
the termination of a license agreement under which the company had produced
plastic multipack carriers for beverage cans. This net gain includes charges
for related equipment writeoffs and capacity adjustments. The net gain
realized on the termination of the license agreement was substantially offset
by unusual charges for the settlement of certain environmental litigation and
for severance costs at certain international affiliates totaling $10.1
million, net of tax.
The 1997 unusual items include a net gain of $16.3 million on the sale of
the remaining 49% interest in Kimble Glass, partially offset by unusual
charges, net of tax, totaling $8.7 million. The net aftertax amount of the
1997 unusual items was a credit of $7.6 million, or $0.06 per share (diluted).
Company Profile
Owens-Illinois is the largest manufacturer of glass containers in North
America, South America, and India, and the second-largest in Europe. O-I also
manufactures plastic containers, plastic closures, plastic prescription
containers, labels, and multipack plastic carriers for beverage containers.
CONTACT: Owens-Illinois, John Hoff, 419-247-1203
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OWENS-ILLINOIS, INC.
Condensed Consolidated Results of Operations
(Millions of dollars, except per share amounts)
Three Months ended March 31,
--------------------------------
1998 1997
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Net sales $1,098.5 $1,056.3
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Earnings before interest expense,
income taxes and minority
share owners' interests (a) $ 182.3 $ 170.3
Interest expense 65.2 85.9
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Earnings before items below 117.1 84.4
Provision for income taxes (b) 28.8 23.4
Minority share owners' interests
in earnings of subsidiaries 7.9 6.4
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Net earnings $ 80.4 $ 54.6
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Basic net earnings per share
of common stock $ 0.57 $ 0.44
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Weighted average shares
outstanding (000s) (c) 140,620 121,813
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Diluted net earnings per share
of common stock $ 0.56 $ 0.44
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Weighted diluted average
shares (000s) (c) 142,405 124,469
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(a) Amount for 1998 includes: (1) a gain of $18.5 million ($11.4 million
aftertax) related to the termination of a licensing agreement, including
charges for related equipment writeoffs and capacity adjustments, and
(2) charges totaling $16.3 million ($10.1 million aftertax) for the settlement
of certain environmental litigation and severance costs at certain
international affiliates.
Amount for 1997 includes: (1) a gain of $16.3 million ($16.3 million
aftertax) on the sale of the remaining 49% interest in Kimble Glass, and
(2) charges of $14.1 million ($8.7 million aftertax) principally for
guarantees of certain obligations of a business divested several years ago.
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(b) Amount for 1998 includes a credit of $15.1 million, or $0.10 per share
(diluted), to adjust net deferred income tax liabilities as a result of a
reduction in Italy's statutory income tax.
(c) The increase in average shares outstanding from 1997 to 1998 resulted
primarily from the issuance of approximately 16.9 million shares in the
second quarter of 1997 in connection with a refinancing.
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OWENS-ILLINOIS, INC.
Consolidated Supplemental Financial Data
(Preliminary - subject to change)
Millions of Dollars
Three Months Ended
March 31,
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1998 1997
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Net sales:
Glass Containers $ 812.4 $ 775.6
Plastics Packaging 285.7 280.4
Eliminations and other .4 .3
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Consolidated total $1,098.5 $1,056.3
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Operating profit (a):
Glass Containers $ 111.5 $ 101.1
Plastics Packaging 67.3 51.7
Eliminations and other
retained costs (b) (7.1) .9
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Consolidated total $ 171.7 $ 153.7
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Equity earnings $ 4.7 $ 8.8
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Amortization of
deferred costs $ 15.1 $ 14.3
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Depreciation $ 74.9 $ 67.7
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Additions to property,
plant, and equipment $ 112.0 $ 76.6
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March 31, March 31,
1998 1997
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Total debt $3,387.9 $3,569.6
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Share owners' equity $1,385.3 $ 757.3
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(a) Operating profit for 1998 includes: (1) a gain of $18.5 million ($11.4
million aftertax) related to the termination of a licensing agreement,
including charges for related equipment writeoffs and capacity adjustments,
and (2) charges totaling $16.3 million ($10.1 million aftertax) for the
settlement of certain environmental litigation and severance costs at certain
international affiliates, as follows:
Glass Containers $(7.8)
Plastics Packaging 18.5
Eliminations and other
retained costs (8.5)
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Total $ 2.2
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(b) Operating profit for 1997 includes: (1) a gain of $16.3 million ($16.3
million aftertax) on the sale of the remaining 49% interest in Kimble Glass,
and (2) charges of $14.1 million ($8.7 million aftertax) principally for
guarantees of certain obligations of a business divested several years ago.
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