O-I Glass, Inc. provided a business update in lieu of management’s previously scheduled presentation at the JP Morgan investor conference which was cancelled by the organizers due to COVID-19. Additionally, a presentation originally intended for the conference that is primarily focused on the longer term strategy of the business has been posted on its website at www.o-i.com.
“O-I’s operating performance through February has been solid, and pacing in-line with the company’s most recent earnings guidance for the first quarter of 2020,” said Andres Lopez, CEO at O-I Glass. “Overall, sales volume has been flat with the prior year. Higher shipments in Asia-Pacific (including China) and the benefit from the Nueva Fanal acquisition offset continued lower beer demand in North America which has been in-line with our expectations. We benefited from higher average selling prices as well as favourable sales mix and cost performance, especially at the company’s focus factories. We are pleased with the progress of our turnaround initiatives and overall business performance to date.”
Lopez continued, “Despite the challenges associated with COVID-19 and resulting economic disruption, O-I’s business continues to operate without interruption and recent demand patterns remain stable through early March. O-I continues to closely follow guidance from the World Health Organization, U.S. Centers for Disease Control and Prevention as well as federal and state governments in appropriate jurisdictions related to COVID-19.
“The company has been working with customers and suppliers alike to develop preparedness plans in response to this rapidly evolving situation. We are better integrated as an enterprise and prepared than ever to move with speed and agility to execute any contingency plans if required.”
CFO John Haudrich added, “O-I continues to advance its strategic portfolio review, as expected, and the company’s balance sheet is sound. Following refinancing activity last year and given proceeds from recent divestitures, the company’s liquidity position is strong with cash and available lines of credit of approximately 2 billion USD at December 31, 2019 and no near-term bond maturities. Year-to-date through February 2020, cash flows compare favourably to the same period last year given lower working capital levels, lower capital expenditures and suspension of asbestos related payments.
“The Chapter 11 process of O-I’s subsidiary Paddock Enterprises is proceeding as expected. Paddock has opposed a request by the U.S. Trustee to examine its Corporate Modernization transaction, which is a strategy that has been widely and successfully used by other companies and which we believe enhances Paddock’s ability to resolve its liabilities fairly and in way that maximizes value for all stakeholders. We are confident that the Corporate Modernization transaction fully complies with Delaware law and will be validated through the bankruptcy process. Paddock remains committed to addressing its legacy liabilities in a just and appropriate manner and is continuing work with its creditor constituencies towards achieving a consensual Plan of Reorganization.”