Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line Claudia Hueston - J.P. Morgan.
Claudia Hueston - J.P. Morgan
Just with regard to the guidance, you talked about volume declines of 10% to 12%, how should we think about the distribution? Is that pretty much even between the metal business and the plastics? And are there any material differences within those segments?
Ken Roessler
Yes, I think that sitting here today that we would say there about even. I think that’s probably the best way to look at it at this point. Metal was a little better or a little less worse as we won’t say in Q1 we see that probably, reversing a little bit as the year goes. So, thinking about it now I would say it’s probably about even.
Claudia Hueston - J.P. Morgan
Okay and then. You did a nice job on costs in the quarter and with regard to your earnings expectations, how do further cost reductions factor into your earnings guidance for the full year? How should we think about that’s sort of coming in?
Ken Roessler
Well, I think it’d be useful Claudia, if I gave you just kind of a bridge to get you from here to there, so you can see the elements of it. We’re looking at an EBITDA growth kind of in the midpoint of the range of about $4 million for the year. So, we’ve got to get $4 million. If you look at the 10% to 12% losses on volume on about $1 billion in sales that would equate to, call it a $100 million in sales and roughly about $20 million of EBITDA.
So, the harder we have to go over, if you will is about $24 million. So the bridge to that would be the first element of it is, as you recall last year we had an imbalance between steel costs and our selling prices which was correct, that represents about $4 million of it.
The other as we’ve discussed numerous times that our aerosol cans business has been under performing. We believe that recent actions on both the manufacturing commercial sides confirm a $6 million improvement in this business. The elimination of the fixed costs from the two plant closures completed in fiscal 2008 will contribute $6 million.
So, that gives you about $16 million towards the $24 million. The rest of that is $8 million which comes from cost reduction initiatives that I shared during my prepared comments and we’re very, very comfortable with that $8 million number.
- To read the full transcript on Seeking Alpha, click here »
