UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
December 10, 1998
(Date of earliest event reported)
Commission file number 1-7349
BALL CORPORATION
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(Exact name of Registrant as specified in its charter)
Indiana 1-7349 35-0160610
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(State of (Commission (IRS Employer
Incorporation) File No.) Identification No.)
10 Longs Peak Drive, P.O. Box 5000, Broomfield, CO 80021-2510
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(Address of principal executive offices, including zip code)
(303) 469-5511
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
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Ball Corporation
Current Report on Form 8-K
Dated December 17, 1998
Item 5. Other Events.
On December 10, 1998, Ball Corporation, an Indiana corporation (the "Company" or
"Ball"), announced that it will close four plants that produce metal cans, two
in the United States and two in the People's Republic of China (PRC), and will
supply customers of the closed facilities from other Ball plants. The plant
closings are part of the Company's comprehensive program to improve profits and
operating efficiencies.
The plant closings in the U.S. will be accounted for as part of Ball's
acquisition in August, 1998 of the North American beverage can manufacturing
assets of Reynolds Metals Company and, therefore, will not result in a charge to
earnings. The plants are expected to be closed during the first quarter of 1999
and include a beverage can manufacturing plant in Hayward, California, and a
beverage can lid manufacturing plant in Rocklin, California. The Company also
stated that additional capacity rationalization and cost savings will likely
occur in North America in 1999 as the Company continues to integrate the assets
acquired from Reynolds.
The PRC plant closings and other actions in China are being taken to improve
overall profitability and cash flow through headcount reductions and lower
manufacturing costs. The Company expects that these actions in the PRC will
result in a fourth quarter pretax charge of approximately $56 million
(approximately $31 million after tax or 95 cents per share on a diluted basis).
The plants to be closed in the PRC include one beverage can plant and one food
can plant and are expected to occur in the early part of 1999.
The text of the press release disseminated by the Company on December 10, 1998
is filed with this report as Exhibit 99.1.
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Ball Corporation
Current Report on Form 8-K
Dated December 17, 1998
EXHIBIT INDEX
Description Exhibit
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Text of Press Release Disseminated by the Registrant on
December 10, 1998 (Filed herewith) EX-99.1
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Ball Corporation
(Registrant)
By: /s/ R. David Hoover
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Name: R. David Hoover
Title: Vice Chairman and
Chief Financial Officer
Date: December 17, 1998
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Exhibit 99.1
To Improve Profits And Operating Efficiencies,
Ball Consolidates Can Manufacturing Operations in U.S., PRC
BROOMFIELD, Colo., Dec. 10, 1998--Ball Corporation, as part of its
comprehensive program to improve profits and operating efficiencies, announced
today that it will close four plants that produce metal cans, two in the United
States and two in the People's Republic of China (PRC), and will supply
customers of the closed facilities from other Ball plants.
The company said the U.S. plant closings will be accounted for as part of
Ball's acquisition earlier this year of the North American beverage can
manufacturing assets of Reynolds Metals Company and thus will not result in a
charge to earnings. The PRC plant closings and other actions in China are being
taken to improve overall profitability and cash flow through headcount
reductions and lower manufacturing costs. These actions in the PRC, which will
provide positive cash flow of more than $21 million to Ball, will result in a
fourth quarter after-tax charge of approximately $31 million.
Ball said that during the first quarter of 1999 it will close a beverage
can manufacturing plant in Hayward, Calif., and a beverage can lid manufacturing
plant in Rocklin, Calif. The plants are two of 16 acquired by Ball from Reynolds
in August. In the PRC, the facilities to be closed are one beverage can plant
and one food can plant.
George A. Matsik, president of Ball Corporation and chief operating
officer, packaging, said the actions the company is taking in the U.S. and the
PRC will further reduce costs and improve operating efficiencies.
"Our Fairfield, Calif., plant has shown tremendous improvement in its
production in 1998, and we will have increased output from our Torrance, Calif.,
plant by more than two million cans a day by the end of 1999 from when we
acquired it in August 1998. The result is that we have sufficient beverage can
production capacity on the West Coast from those two facilities and from our
plants in Seattle and in Richmond, British Columbia. As for can lids, it will be
more efficient for us to serve our customers primarily from our larger lid
production centers in Golden, Colo.; Findlay, Ohio; and Bristol, Va.," Matsik
said. "Additional capacity rationalization and cost savings in our North
American metal beverage container production system likely will occur in 1999,
as we further integrate the assets acquired from Reynolds. These steps and the
resulting savings are consistent with our overall expectations when we acquired
the Reynolds assets.
"In the PRC, the two plant closings are the latest in a series of moves we
have made to improve results," Matsik said. "As the largest beverage can
supplier in the PRC, we have ample production capacity there for current needs
and to meet near term growth projections. As a part of these current plant
shutdowns, we will consolidate certain beverage can production capacity and
operations. In about a two-year period since we acquired MC Packaging, we will
have idled or removed more than a billion cans a year in production capacity in
the PRC and reduced manning there by more than 1,500."
George A. Sissel, Ball's chairman and chief executive officer, said the
company is committed to achieving the savings identified in connection with its
recent acquisitions and other corporate actions. "First we relocated our
corporate headquarters, with annual savings of $4 million. Then we moved quickly
to consolidate metal container staff functions following our acquisition from
Reynolds, and now we are beginning the process of consolidating North American
production operations," Sissel said. "Also, in the PRC we intend to maintain our
strong market position while we continue to take aggressive actions to improve
results. We are determined to be an effective competitor and a low-cost producer
wherever we operate."
Ball produces packaging products, primarily for beverages and foods, and
provides aerospace and other technologies and services to governmental and
commercial customers. The company had 1997 sales, pro forma for the acquisition
from Reynolds in August 1998, of $3.6 billion.
Note: This news release contains forward-looking statements. Actual results
could differ materially from those that may be projected. Please refer to the
Form 10-Q filed by Ball Corporation on Nov. 5, 1998, for a summary of key risk
factors that could affect actual results.
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