tCall/ -- BWAY Holding Company (NYSE: BWY), a leading North American supplier of general line rigid containers, today reported net income for the second quarter of fiscal 2008 of $1.1 million, or $0.05 per diluted share, compared to $5.4 million or $0.22 per diluted share for the second quarter of fiscal 2007. Adjusted net income for the quarter was $3.5 million, or $0.16 per diluted share, excluding a pre-tax restructuring charge of $4.2 million, $0.5 million of accelerated depreciation expense associated with the previously announced closure of the Company's Franklin Park, IL metal packaging manufacturing facility and a $1.0 million favorable adjustment reflecting a reduction in the Company's allowance for doubtful accounts.

Revenues were up 4.0% to $243.6 million for the second quarter of fiscal 2008 compared to $234.3 million for the same quarter of fiscal 2007. The year-over-year improvement in sales was driven primarily by higher raw material-driven selling price pass-through, which was partially offset by lower volumes resulting from the slower economic growth environment and continued deterioration of the housing market.

Gross margin (excluding depreciation and amortization) for the quarter was $32.2 million compared to $37.0 million in the year-earlier period. The reduction in gross margin was primarily attributable to lower volumes in certain products and to favorable timing of resin cost pass-through in the Company's plastic packaging segment during the second quarter of fiscal 2007. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter was $25.6 million compared to $30.2 million in the year-ago period. EBITDA for the quarter includes $1.8 million of non-cash stock based compensation expense ($0.5 million included in cost of products sold and $1.3 million included in selling and administrative expense) associated with modifications made to pre-IPO stock options at the completion of the Company's June 2007 IPO.

Kenneth Roessler, President and Chief Executive Officer, stated, 'Despite continued macroeconomic headwinds and weaker-than-expected demand, our reported results were at the high end of the range of our prior guidance. We are pleased with the results of our metal packaging segment for the quarter, as segment earnings reflected the success of our January 1, 2008 selling price increase initiative. Our plastic packaging segment also operated well during the quarter, although earnings were lower in that segment than in the prior year due to weaker volumes and the favorable timing of resin cost pass-through during the second quarter of fiscal 2007, which made for a challenging year- over-year comparison. In reaction to softness in demand, we continue to focus on adjusting our cost base. As such, operating schedules and headcount have and will be monitored closely and adjusted accordingly.'

Mr. Roessler went on to say that, 'Consistent with our ongoing strategy to create larger, more efficient and cost competitive plants, we have now initiated the closure of one of our plastic packaging segment plants located in Cleveland, Ohio. Productivity gains throughout our plastic packaging system have increased our capacity and now allow us to serve our customers with a smaller manufacturing footprint.' Mr. Roessler concluded by saying that, 'The previously announced closure of our Franklin Park, IL metal packaging segment plant is on schedule and on budget.'

Second Quarter Segment Results

The Company uses non-GAAP financial measures when presenting and discussing the operating results of its segments. Segment operating margin (excluding depreciation and amortization) includes sales and operating costs directly attributable to its segments, and includes certain allocated corporate costs. Non-GAAP measures should not be considered in isolation or as a substitute for net income and cash flow data prepared in accordance with GAAP and may not be comparable to calculations of similarly titled measures by other companies. A reconciliation of segment operating income to the Company's consolidated financial statements is included with this report.

Metal Packaging

Sales for the Company's metal packaging segment were $140.5 million for the second quarter of fiscal 2008, which was essentially flat compared to sales of $140.6 million for the same quarter last year. Sales increases due to higher raw material-driven selling prices were essentially offset by lower volumes recorded during the quarter. While the Company experienced modest growth in certain product categories, volume declines in metal paint cans adversely impacted segment results during the quarter. Product demand continues to be affected by slowness in the housing market and manufacturers' concerns over the economy.

Metal packaging segment earnings (excluding depreciation and amortization) were $19.9 million, or 14.2% of sales for the second quarter of fiscal 2008 compared to $20.7 million, or 14.7% of sales for the second quarter of fiscal 2007. Selling price increases implemented on January 1, 2008 were successful in passing through increases in the cost of steel as well as recovering the steel cost/selling price imbalance experienced in recent quarters.

Plastic Packaging

Sales for the Company's plastic packaging segment were $103.1 million for the second quarter of fiscal 2008, an increase of 10.0% compared to $93.7 million for the same quarter last year. The increase was attributable to higher raw material-driven selling prices, which were partially offset by lower overall volume.

Plastic packaging segment earnings (excluding depreciation and amortization) were $10.3 million for the second quarter of fiscal 2008 compared to $13.6 million for the second quarter of fiscal 2007. The decrease is primarily attributable to lower volume and the favorable timing of resin cost pass-through during the second quarter last year, which was not recognized during the most recent quarter.

Plastic Packaging Plant Closure

The Company also announced today that it will close its Cleveland, OH plastic packaging plant by the end of the year as part of its continuing efforts to improve asset utilization and operating margins. One of the Company's eleven North American plastic packaging manufacturing plants, the Cleveland facility produces injection molded plastic pails. All production from this facility and certain pieces of production equipment will be shifted to other plastic packaging facilities. The plant closure is expected to result in overall greater production efficiencies, better utilization of working capital and significant cost savings. The Company's remaining plastic packaging manufacturing plants have ample capacity to meet market growth for the foreseeable future.

Mr. Roessler stated, 'The decision to close the Cleveland, Ohio production facility was part of the Company's continual analysis of our overall cost structure along with the implementation of measures aimed at improving operational efficiencies. By shifting production to other facilities with current manufacturing capacity, we have taken another important step towards achieving a more efficient business model and building a stronger manufacturing base for long-term shareholder value creation. While we understand the impact this decision has on our employees, we felt it necessary to maintain the long-term competitive cost position of our business and products.'

The Company expects to realize $3.3 million in annual pre-tax savings from the facility closure, beginning in fiscal 2009. Restructuring charges (pre-tax) associated with the closure are estimated at $3.1 million, of which $2.2 million is expected to be recognized in fiscal 2008, and the remaining $0.9 million in fiscal years 2009-2011.