For the first quarter of 2004, net sales increased 16.7 percent to $189.6 million, from $162.4 million in the prior year, reflecting the impact of our new business awards and the continuation of the strong sales growth in all categories that began in the second half of 2003. Net loss in the first quarter of 2004 was $4.3 million, or 17 cents per share (basic and diluted), as compared with a net loss of $11.9 million for the first quarter of 2003.
The improvement in sales was due primarily to the strong increase in shipping volumes, up 18.8 percent over the same period 2003 levels. Incremental volume from new business accounted for nearly half of the year-over-year increase, with all other segments showing solid growth, particularly the beer category.
The decline in net loss resulted from the gains due to sales volume, increased manufacturing productivity due to our betterment initiatives, lower interest cost and reduced rent expense as a result of the 2003 lease buyouts. These positive factors were partially offset by increased energy costs and higher freight expense.
"We are excited to have initiated shipping under our new contracts and we continue to see strong growth in all segments, particularly the beer category. In addition, the plant upgrades we completed last year are showing the results we expected as productivity in the first quarter showed significant improvement over last year," said Richard M. Deneau, president and chief executive officer.
Capital spending for the quarter totaled $20.9 million as the Company performed a major reconstruction on one of the two furnaces in the Shakopee, Minnesota factory. This project has been completed and the new furnace is now fully operational. The Shakopee rebuild is the only major maintenance capital project planned for 2004.
The Board of Directors of Anchor declared a quarterly dividend of $0.04 per share of its common stock. The dividend is payable June 15, 2004 to stockholders of record at the close of business on June 1, 2004.
First Quarter Conference Call
Anchor Glass will discuss first quarter 2004 results during a conference call Thursday, May 6, 2004 at 8:30 a.m. Eastern Time. Interested parties may listen to the call through Shareholder.com investor center at www.shareholder.com/anchor/medialist.cfm or by phone at (800) 289-0572.
EBITDA is an amount equal to net loss plus interest expense; income taxes; depreciation and amortization; loss (gain) on fixed asset sales; and other non-cash items. EBITDA is not a presentation made in accordance with generally accepted accounting principles (GAAP) and is not intended to present a superior measure of financial condition or profitability from those determined under GAAP. EBITDA is a primary component of financial covenants under Anchor's debt agreements. Although management uses this measure, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.
This press release includes forward-looking statements. Forward- looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements. Forward-looking statements involve risks and uncertainties faced by the Company including, but not limited to, economic, competitive, governmental and technological factors outside the control of the Company that may cause actual results to differ materially from the forward-looking statements. These risks and uncertainties may include the highly competitive nature of the glass container industry and the intense competition from makers of alternative forms of packaging; fluctuations in the prices for energy, particularly natural gas, and other raw materials; the Company's focus on the beer industry and its dependence on certain key customers; the seasonal nature of brewing and other beverage industries; volatility in demand from emerging new markets; the Company's dependence on certain executive officers; and changes in environmental and other government regulations. The Company operates in a changing environment in which new risk factors can emerge from time to time. It is not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in forward-looking statements. All forward-looking statements are subject to risks and uncertainties, including without limitation those identified in the Company's annual report on Form 10-K, which could cause actual results to differ from those projected. The Company disclaims any obligation to update any forward-looking statements.