Operating income for the first quarter of 2018 was $200.6 million, an increase of 26.2% compared to $158.9 million for the comparable quarter of 2017. Net earnings were $118.7 million for the 2018 first quarter compared to $87.8 million for the 2017 first quarter.
“Our newly defined CCL Segment delivered strong results for the quarter with 3.8% organic sales growth; somewhat impacted comparatively by the timing of Easter,” Geoffrey T. Martin, president and CEO, said. “Emerging Markets outpaced North America and Europe in line with results at many customers. Home & Personal Care and Food & Beverage both outperformed while our Healthcare & Specialty and CCL Design sectors faced slower end markets. CCL Secure results were much stronger than expected, but in the coming quarter face tough comparisons as the prior year period included large launch volume for an important customer, which will not repeat in 2018.
“Checkpoint significantly exceeded expectations on chain wide technology roll outs for two important retailers on top of solid performance in the base business,” Martin added. “Innovia results improved sequentially but were below planned levels on higher resin costs, a weaker US dollar and a supply interruption at our large UK plant. Avery results declined as certain North American customers advanced first quarter purchases to late 2017 ahead of a January 1, 2018, price increase, aggravating soft conditions in traditional office supply channels in Avery’s seasonally slowest quarter.
“We finished the first quarter of 2018, with a solid balance sheet,” Martin concluded. “The company’s net leverage ratio was 1.86 times EBITDA with $517 million cash-on-hand, US$383 million undrawn capacity on our syndicated revolving credit facility and an additional US$100 million bilateral credit commitment strengthening liquidity positions. The company hopes to announce the closing of the Treofan Americas acquisition on final regulatory approval, expected by June. Given the Company’s outlook and strong free cash flow expectation for 2018, the Board of Directors declared a dividend of $0.13 per Class B non-voting share and a dividend of $0.1275 per Class A voting share, payable to shareholders of record at the close of business on June 15, 2018, to be paid on June 29, 2018.”
CCL sales increased 11.9% to $807.7 million, with 3.8% organic growth, 6.9% acquisition contribution and 1.2% positive currency translation, as well as 18.1% operating margin.
Avery wales were $146.3 million, down 9%, with 2.5% acquisition contribution offset by 10.1% organic decline and 1.4% negative currency translation. Operating income was $24 million, a 16.4% operating margin.
Checkpoint sales increased 18.8% to $177.4 million, with 16.8% organic growth and 2% positive currency translation. Operating income was $22.8 million, a 12.9% operating margin.
Innovia sales were $95.7 million, with operating income of $7.5 million and 7.8% operating margin.