Financial comparisons to the prior year's results in the third quarter have been negatively affected by the significant appreciation of the Canadian dollar relative to the US dollar and, to a lesser degree, most other currencies, the company says. Sales increased for the quarter by 15 percent due to organic growth and an acquisition offset in part by foreign exchange and a disposition of 2 percent. On a comparative basis with last year's third quarter, sales increased significantly in the Label Division and ColepCCL, but were down slightly in the Container Division due to currency translation, and were also down significantly in the Tube Division partly due to currency translation.
Donald G. Lang, vice chairman and CEO, says, “The Label Division continues to reflect strong global market conditions with good overall growth in sales and increased profitability. Rapid international sales growth has resulted, in part, from the beer industry conversion from paper labels to our clear film pressure sensitive labels including our patented system for returnable bottles. Our recently acquired shrink and stretch sleeve business purchased from Illinois Tool Works in January of this year has generated sales and income at levels well above our expectations.
“Our strategy to become a world-class global specialty packaging company is now complete,” Lang says. “Although our focus is narrower, it allows us to totally concentrate on the specific businesses that will add long-term shareholder value. Our finances are in excellent shape with the net debt to total capitalization ratio at 38 percent, well below our target level of 45 percent. Proceeds from the ColepCCL disposition (set for later this year), the $76 million of cash on hand and additional financial leverage available put us in a good position to aggressively grow both organically and through accretive acquisition opportunities that meet our valuation criteria to enhance our global businesses.”
Earnings for the third quarter of 2007 were $23.8 million, up 75 percent from the $13.6 million recorded in the third quarter of 2006. This improvement, the company reports, was due primarily to the substantial sales and operating income increases in the business, the favorable impact of tax adjustments, a recovery of restructuring costs in 2007 and restructuring and other items incurred in 2006.
CCL Industries Inc. manufactures pressure sensitive, shrink sleeve and in-mold labels, aluminum containers and plastic tubes for leading global companies in the home and personal care, healthcare and specialty food and beverage sectors. The company employs approximately 5,000 people and operates 49 production facilities in North America, Europe, Latin America, and Asia.