Net sales of $1.38 billion, down 1% as reported; flat at
constant currency
Net earnings of $58 million, down 57%
Adjusted EBITDA of $285 million, down 3% as
reported; down 6% constant currency
Earnings per share (Diluted) of $0.40, down 56%
Adjusted EPS (Diluted) of $0.77, down 21% as
reported; down 27% constant currency
Cash flow from operations (YTD) of $193 million
Free cash flow of $183 million (YTD,
excluding the $175 million tax deposit) is up 33% in 2023
SEE (NYSE: SEE) announced financial results for Q3 2023.
“Our third quarter results were in line with
our expectations and reflect continued weakness in our
end-markets,” said Emile Chammas, SEE’s Interim Co-CEO and COO.
“While our long-term strategy remains intact, we are focused on
improving execution across our innovation, supply chain and
commercial efforts. Our business has faced challenges in the past
and we have persevered. I am confident that we can navigate the
current cyclical market conditions and position SEE for long-term
growth.”
“We delivered strong free cash flow in the
third quarter and began to strengthen our balance sheet,” said
Dustin Semach, SEE’s Interim Co-CEO and CFO. “While we are making
good progress on cost take-out to grow and portfolio optimization,
we plan to accelerate our efforts as we close out 2023 and head
into 2024. I am excited to partner with Emile as we continue to
build a culture of execution and accountability.”
Unless otherwise stated, all results compare third quarter 2023
to third quarter 2022 results from continuing operations.
Year-over-year financial discussions present operating results from
continuing operations as reported. Year-over-year comparisons are
also made on an organic basis and constant dollar basis, which are
non-U.S. GAAP measures. Organic refers to changes in unit volume
and price performance and excludes acquisitions in the first year
after closing, divestiture activity and the impact of currency
translation. Constant dollar refers to changes in net sales and
earnings, excluding the impact of currency translation.
Additionally, non-U.S. GAAP adjusted financial measures, such as
Adjusted Earnings Before Interest Expense, Taxes, Depreciation and
Amortization ("Adjusted EBITDA"), Adjusted Net Earnings, Adjusted
Diluted Earnings Per Share ("Adjusted EPS") and Adjusted Tax Rate,
exclude the impact of specified items ("Special Items"), such as
restructuring charges, restructuring associated costs, amortization
of intangible assets and inventory step-up expense related to the
acquisition of Liquibox, adjustments in the valuation of our "SEE
Ventures" portfolio (which may include debt, equity method, or
equity investments), gains and losses related to acquisition and
divestiture of businesses, special tax items ("Tax Special Items")
and certain infrequent or one-time items. Please refer to the
supplemental information included with this press release for a
reconciliation of U.S. GAAP to Non-U.S. GAAP financial
measures.
Business Segment Highlights
Third quarter net sales in Food were $893 million, an increase
of 8% as reported. Currency fluctuations had an unfavorable impact
of $19 million, or 2%. On a constant dollar basis, net sales
increased $83 million, or 10%. The Liquibox acquisition had a
favorable impact of $82 million, or 10%, and price had a favorable
impact of $8 million, or 1%. Volumes decreased $7 million, or 1%,
resulting from continued food retail market declines, partially
offset by growth in our food automation solutions. Adjusted EBITDA
of $194 million, or 21.7% of net sales, increased 5% from $185
million, or 22.3% of net sales. The increase in Adjusted EBITDA was
primarily attributable to the Liquibox acquisition.
Third quarter net sales in Protective were $488 million, a
decrease of 14% as reported. Currency fluctuations had a favorable
impact of $5 million, or 1%. On a constant dollar basis, net sales
decreased $87 million, or 15%. Volumes decreased $75 million, or
13%, resulting from continued market pressures and destocking in
the industrial and fulfillment sectors. Price had an unfavorable
impact of $12 million, or 2%. Adjusted EBITDA decreased 13% to $95
million, or 19.5% of net sales, as compared to $109 million, or
19.2% of net sales. The decrease in Adjusted EBITDA was primarily
attributable to lower volumes.
Third Quarter 2023 U.S. GAAP Summary
Net sales of $1.38 billion decreased 1% as reported, with EMEA
increasing 3%, the Americas decreasing 2% and APAC decreasing
3%.
Net earnings were $58 million, or $0.40 per diluted share, as
compared to net earnings of $133 million, or $0.91 per diluted
share in the prior year period. The current year results were
unfavorably impacted as a result of business closure activity of
$51 million, including $34 million of other restructuring
associated costs, primarily related to non-cash asset impairment
and inventory obsolescence charges, $15 million of contract
termination charges and $2 million of severance and other closure
related costs. The current year results were also unfavorably
impacted by $29 million of higher net interest expense as a result
of incremental debt incurred to finance the Liquibox
transaction.
Income tax expense was $20 million, resulting in an effective
tax rate of 26.1% in the quarter. This compares to an income tax
expense of $51 million in the prior year period, or an effective
tax rate of 27.9%. The effective tax rate in third quarter 2023
benefited from excess foreign tax credits.
Third Quarter 2023 Non-U.S. GAAP Summary
Net sales decreased $4 million, or less than 1%, on a constant
dollar basis. Volumes decreased by $82 million, or 6%, and price
had an unfavorable impact of $4 million, or less than 1%, while the
Liquibox acquisition had a favorable impact of $82 million, or
6%.
Adjusted EBITDA was $285 million, or 20.6% of net sales, as
compared to $293 million, or 20.9% in the prior year period. The
decrease in Adjusted EBITDA was primarily due to lower volumes,
partially offset by earnings generated from Liquibox.
The Adjusted Tax Rate was 25.7% in third quarter 2023, as
compared to 25.6% in the prior year period.
Adjusted earnings per diluted share decreased to $0.77, from
$0.98 in the prior year period, primarily due to lower Adjusted
EBITDA and higher interest expense, partially offset by the
operating income generated from Liquibox.
Cash Flow and Net Debt
Cash flow from operating activities during the first nine months
of 2023 was a source of $193 million, as compared to a source of
$321 million during the prior year period. Excluding the $175
million tax deposit, cash flow provided by operating activities was
$368 million for the first nine months of 2023, up 15% as compared
to the prior year period.
Capital expenditures in the first nine months of 2023 were $185
million, as compared to $184 million during the prior year period.
Free Cash Flow, defined as net cash from operating activities less
capital expenditures, was a source of $8 million for the first nine
months of 2023, as compared to a source of $137 million during the
prior year period. Excluding the $175 million tax deposit, Free
Cash Flow was a source of $183 million for the first nine months of
2023, up 33% as compared to the prior year period.
Dividend payments for the nine months of 2023 were $89 million,
as compared to approximately $90 million during the prior year
period.
Total debt was $4.9 billion as of September 30, 2023 and $3.7
billion as of December 31, 2022. Net Debt, defined as total debt
less cash and cash equivalents, was $4.6 billion as of September
30, 2023, as compared to $3.2 billion as of December 31, 2022. As
of September 30, 2023, SEE had approximately $1.19 billion of
available liquidity comprised of $281 million of cash and $911
million of available and unused lines of credit under our committed
credit facilities.
Updated 2023 Full Year Outlook
For the full year 2023, SEE continues to expect net sales in the
range of $5.40 to $5.60 billion and Adjusted EBITDA to be in the
range of $1.075 to $1.125 billion.
The Company continues to forecast full year Adjusted EPS to be
in the range of $2.75 to $2.95, which is based on approximately 145
million shares outstanding and an anticipated Adjusted Tax Rate of
approximately 27%.
Excluding full year 2023 payments related to the IRS settlement,
the Company continues to expect Free Cash Flow in 2023 in the range
of $325 to $375 million.
Adjusted EBITDA, Adjusted EPS and Free Cash Flow are non-U.S.
GAAP financial measures. We have not provided guidance for the most
directly comparable U.S. GAAP financial measures, as they are not
available without unreasonable effort due to the high variability,
complexity, and low visibility with respect to certain Special
Items, including adjustments in the valuation of our "SEE Ventures"
portfolio (which may include debt, equity method, or equity
investments), amortization of intangible assets and inventory
step-up expense related to the acquisition of Liquibox, gains and
losses related to acquisition and divestiture of businesses, the
ultimate outcome of certain legal or tax proceedings, and other
unusual gains and losses. These items are uncertain, depend on
various factors, and could be material to our results computed in
accordance with U.S. GAAP.
Conference Call Information
SEE will host a conference call and webcast on Thursday,
November 2, 2023 at 10:00 a.m. (ET) to discuss our Third Quarter
2023 Results. The conference call will be webcast live on the
Investors homepage at www.sealedair.com/investors. A replay of the
webcast will also be available thereafter.
About SEE
SEE (NYSE: SEE), is in business to protect, to solve critical
packaging challenges, and to make our world better than we find it.
Our automated packaging solutions promote a safer, more resilient,
and less wasteful global food, fluids and liquids supply chain,
enable e-commerce, and protect goods in transit from damage.
The company, under its former trade name, Sealed Air, announced
its new SEE corporate brand and logo in May 2023.
Our globally recognized solution brands include CRYOVAC®
food packaging, LIQUIBOX® fluids and liquids systems,
SEALED AIR® protective packaging, AUTOBAG® automated
packaging systems, BUBBLE WRAP® packaging, SEE
Automation™ and prismiq™ digital packaging and
printing.
Our partnership with customers creates value through
sustainable, automated, and digital packaging solutions, leveraging
our industry-leading expertise in materials, automation systems,
engineering and technology.
Our SEE Net Positive Circular Ecosystem is leading the packaging
industry in creating a more environmentally, socially, and
economically sustainable future. We have pledged to design or
advance 100% of our packaging materials to be recyclable or
reusable by 2025, with a bolder goal to reach net-zero carbon
emissions in our global operations by 2040.
Our SEE Impact Report highlights how we are shaping the future
of the packaging industry. We are committed to a diverse workforce
and a caring, inclusive culture through our 2025 Diversity, Equity
and Inclusion pledge.
SEE generated $5.6 billion in sales in 2022 and has
approximately 17,300 employees (including Liquibox employees) who
serve customers in 120 countries/territories. To learn more, visit
sealedair.com.
Website Information
We routinely post important information for investors on our
website, www.sealedair.com, in the Investors section. We use this
website as a means of disclosing material, non-public information
and for complying with our disclosure obligations under Regulation
FD. Accordingly, investors should monitor the Investors section of
our website, in addition to following our press releases, SEC
filings, public conference calls, presentations and webcasts. The
information contained on, or that may be accessed through, our
website is not incorporated by reference into, and is not a part
of, this document.
Non-U.S. GAAP Information
In this press release and supplement, we have included several
non-U.S. GAAP financial measures, including Net Debt, Adjusted Net
Earnings and Adjusted EPS, net sales on an "organic" and a
“constant dollar” basis, Free Cash Flow, Adjusted EBITDA and
Adjusted Tax Rate, as our management believes these measures are
useful to investors. We present results and guidance, adjusted to
exclude the effects of Special Items and their related tax impact
that would otherwise be included under U.S. GAAP, to aid in
comparisons with other periods or prior guidance. In addition,
non-U.S. GAAP measures are used by management to review and analyze
our operating performance and, along with other data, as internal
measures for setting annual budgets and forecasts, assessing
financial performance, providing guidance and comparing our
financial performance with our peers and may also be used for
purposes of determining incentive compensation. The non-U.S. GAAP
information has limitations as an analytical tool and should not be
considered in isolation from or as a substitute for U.S. GAAP
information. It does not purport to represent any similarly titled
U.S. GAAP information and is not an indicator of our performance
under U.S. GAAP. Non-U.S. GAAP financial measures that we present
may not be comparable with similarly titled measures used by
others. Investors are cautioned against placing undue reliance on
these non-U.S. GAAP measures. For a reconciliation of these U.S.
GAAP measures to non-U.S. GAAP measures and other important
information on our use of non-U.S. GAAP financial measures, see the
attached supplementary information entitled “Condensed Consolidated
Statements of Cash Flows” (under the section entitled “Non-U.S.
GAAP Free Cash Flow”), "Calculation of Net Debt", “Reconciliation
of Net Earnings and Net Earnings Per Common Share to Non-U.S. GAAP
Adjusted Net Earnings and Non-U.S. GAAP Adjusted Net Earnings Per
Common Share,” “Reconciliation of Net Earnings to Non-U.S. GAAP
Consolidated Adjusted EBITDA,” “Components of Change in Net Sales
by Segment” and “Components of Change in Net Sales by Region.”
Information reconciling forward-looking U.S. GAAP measures to
non-U.S. GAAP measures is not available without unreasonable
effort.
We have not provided guidance for the most directly comparable
U.S. GAAP financial measures, as they are not available without
unreasonable effort due to the high variability, complexity, and
low visibility with respect to certain Special Items, including
restructuring charges, adjustments in the valuation of our "SEE
Ventures" portfolio (which may include debt, equity method, or
equity investments), amortization of intangible assets and
inventory step-up expense related to the acquisition of Liquibox,
gains and losses related to acquisition and divestiture of
businesses, the ultimate outcome of certain legal or tax
proceedings, and other unusual gains and losses. These items are
uncertain, depend on various factors, and could be material to our
results computed in accordance with U.S. GAAP.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 concerning our business, consolidated
financial condition, results of operations and cash flows.
Forward-looking statements are subject to risks and uncertainties,
many of which are outside our control, which could cause actual
results to differ materially from these statements. Therefore, you
should not rely on any of these forward-looking statements.
Forward-looking statements can be identified by such words as
“anticipate,” “believe,” “plan,” “assume,” “could,” “should,”
“estimate,” “expect,” “intend,” “potential,” “seek,” “predict,”
“may,” “will” and similar references to future periods. All
statements other than statements of historical facts included in
this press release regarding our strategies, prospects, financial
condition, operations, costs, plans and objectives are
forward-looking statements. Examples of forward-looking statements
include, among others, statements we make regarding expected future
operating results, expectations regarding the results of
restructuring and other programs, expectations regarding future
impacts resulting from the Liquibox acquisition, anticipated levels
of capital expenditures and expectations of the effect on our
financial condition of claims, litigation, environmental costs,
contingent liabilities and governmental and regulatory
investigations and proceedings.
The following are important factors that we believe could cause
actual results to differ materially from those in our
forward-looking statements: global economic and political
conditions, including recessionary and inflationary pressures,
currency translation and devaluation effects, changes in raw
material pricing and availability, competitive conditions, the
success of new product offerings, failure to realize synergies and
other financial benefits from the acquisition of Liquibox within
the expected time frames, greater than expected costs or
difficulties related to the integration of Liquibox, consumer
preferences, the effects of animal and food-related health issues,
the effects of epidemics or pandemics, including the Coronavirus
Disease 2019, negative impacts related to the ongoing conflicts
between Russia and Ukraine and related sanctions, export
restrictions and other counteractions thereto, uncertainties
relating to existing or potential increased hostilities in the
Middle East, changes in energy costs, environmental matters, the
success of our restructuring activities, the success of our merger,
acquisition and equity investment strategies, the success of our
financial growth, profitability, cash generation and manufacturing
strategies and our cost reduction and productivity efforts, changes
in our credit ratings, the tax benefit associated with the
Settlement agreement (as defined in our most recent Annual Report
on Form 10-K), regulatory actions and legal matters and the other
information referenced in the “Risk Factors” section appearing in
our most recent Annual Report on Form 10-K, as filed with the
Securities and Exchange Commission, and as revised and updated by
our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Any forward-looking statements made by us is based only on
information currently available to us and speaks only as of the
date on which it is made. We undertake no obligation to publicly
update any forward-looking statement, whether written or oral, that
may be made from time to time, whether as a result of new
information, future developments or otherwise.
The supplementary information included for 2023 in this press
release on the current and subsequent pages is preliminary and
subject to change prior to the filing of our upcoming Quarterly
Report on Form 10-Q with the Securities and Exchange
Commission.
Sealed Air Corporation
Condensed Consolidated
Statements of Operations
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(In USD millions, except per share
data)
2023
2022
2023
2022
Net sales
$
1,381.8
$
1,400.4
$
4,111.4
$
4,236.0
Cost of sales
968.5
966.8
2,875.0
2,887.1
Gross profit
413.3
433.6
1,236.4
1,348.9
Selling, general and administrative
expenses
181.8
196.0
582.6
605.6
(Loss) Gain on disposal of businesses and
property and equipment, net
(48.7
)
(0.3
)
(55.2
)
5.1
Amortization expense of intangible
assets
15.4
8.7
46.0
27.0
Restructuring charges
9.8
0.6
9.2
4.6
Operating profit
157.6
228.0
543.4
716.8
Interest expense, net
(70.1
)
(40.9
)
(196.6
)
(119.3
)
Other expense, net
(9.6
)
(3.1
)
(33.0
)
(47.4
)
Earnings before income tax provision
77.9
184.0
313.8
550.1
Income tax provision
20.3
51.4
99.4
153.5
Net earnings from continuing
operations
57.6
132.6
214.4
396.6
(Loss) Gain on sale of discontinued
operations, net of tax
(1.0
)
1.6
3.2
0.7
Net earnings
$
56.6
$
134.2
$
217.6
$
397.3
Basic:
Continuing operations
$
0.40
$
0.91
$
1.49
$
2.71
Discontinued operations
(0.01
)
0.01
0.02
0.01
Net earnings per common share -
basic
$
0.39
$
0.92
$
1.51
$
2.72
Weighted average common shares outstanding
- basic
144.5
145.2
144.3
146.3
Diluted:
Continuing operations
$
0.40
$
0.91
$
1.48
$
2.68
Discontinued operations
(0.01
)
0.01
0.02
0.01
Net earnings per common share -
diluted
$
0.39
$
0.92
$
1.50
$
2.69
Weighted average common shares outstanding
- diluted
144.9
146.6
144.8
147.8
Sealed Air Corporation
Condensed Consolidated Balance
Sheets
(Unaudited)
(In USD millions)
September 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
281.3
$
456.1
Trade receivables, net
479.8
592.4
Income tax receivables
46.8
40.3
Other receivables
86.0
91.5
Advances and deposits
198.7
12.7
Inventories, net
834.2
866.3
Current assets held for sale
1.0
—
Prepaid expenses and other current
assets
195.0
57.5
Total current assets
2,122.8
2,116.8
Property and equipment, net
1,386.2
1,275.9
Goodwill
2,913.3
2,174.5
Identifiable intangible assets, net
445.8
138.4
Deferred taxes
119.5
141.5
Operating lease right-of-use-assets
86.0
70.2
Other non-current assets
294.1
297.4
Total assets
$
7,367.7
$
6,214.7
Liabilities and Stockholders'
Equity
Current liabilities:
Short-term borrowings
$
211.6
$
6.6
Current portion of long-term debt
28.1
434.0
Current portion of operating lease
liabilities
29.3
24.0
Accounts payable
746.1
865.6
Accrued restructuring costs
22.4
14.7
Income tax payable
19.8
19.9
Other current liabilities
662.6
717.0
Total current liabilities
1,719.9
2,081.8
Long-term debt, less current portion
4,630.9
3,237.9
Long-term operating lease liabilities,
less current portion
64.5
49.6
Deferred taxes
58.3
33.4
Other non-current liabilities
485.7
467.9
Total liabilities
6,959.3
5,870.6
Stockholders’ equity:
Preferred stock
—
—
Common stock
23.4
23.3
Additional paid-in capital
2,167.8
2,155.3
Retained earnings
3,293.7
3,163.4
Common stock in treasury
(4,076.0
)
(4,019.1
)
Accumulated other comprehensive loss, net
of taxes
(1,000.5
)
(978.8
)
Total stockholders’ equity
408.4
344.1
Total liabilities and stockholders’
equity
$
7,367.7
$
6,214.7
Calculation of Net
Debt
(Unaudited)
(In USD millions)
September 30, 2023
December 31, 2022
Short-term borrowings
$
211.6
$
6.6
Current portion of long-term debt
28.1
434.0
Long-term debt, less current portion
4,630.9
3,237.9
Total debt
4,870.6
3,678.5
Less: cash and cash equivalents
(281.3
)
(456.1
)
Non-U.S. GAAP Net Debt
$
4,589.3
$
3,222.4
Sealed Air Corporation
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Nine Months Ended September
30,
(In USD millions)
2023
2022
Net earnings
$
217.6
$
397.3
Adjustments to reconcile net earnings to
net cash provided by operating activities(1)
279.7
264.7
Changes in operating assets and
liabilities:
Trade receivables, net
18.1
(65.7
)
Inventories, net
60.2
(289.0
)
Accounts payable
(132.7
)
4.8
Customer advance payments
(9.8
)
7.0
Income tax receivable/payable
(9.9
)
12.9
Tax deposit
(175.0
)
—
Other assets and liabilities
(55.7
)
(11.2
)
Net cash provided by operating
activities
$
192.5
$
320.8
Cash flows from investing activities:
Capital expenditures
(185.0
)
(183.5
)
Proceeds related to sale of business and
property and equipment, net
1.9
9.2
Business acquired in purchase
transactions, net of cash acquired
(1,162.9
)
(9.7
)
Proceeds (payments) associated with debt,
equity and equity method investments
3.3
(2.6
)
Settlement of foreign currency forward
contracts
15.1
2.8
Proceeds from cross-currency swaps
1.6
—
Net cash used in investing
activities
$
(1,326.0
)
$
(183.8
)
Cash flows from financing activities:
Net proceeds from short-term
borrowings
206.6
1.5
Proceeds from long-term debt
1,411.4
423.2
Payments of long-term debt
(433.2
)
(425.0
)
Payments of debt
modification/extinguishment costs and other
(14.1
)
(15.1
)
Dividends paid on common stock
(88.9
)
(89.5
)
Impact of tax withholding on share-based
compensation
(21.3
)
(26.2
)
Repurchases of common stock
(79.9
)
(280.2
)
Principal payments related to financing
leases
(6.4
)
(7.7
)
Net cash provided by (used in)
financing activities
$
974.2
$
(419.0
)
Effect of foreign currency exchange
rate changes on cash and cash equivalents
$
(15.5
)
$
(30.2
)
Cash and cash equivalents
456.1
561.0
Restricted cash and cash equivalents
—
—
Balance, beginning of period
$
456.1
$
561.0
Net change during the period
$
(174.8
)
$
(312.2
)
Cash and cash equivalents
281.3
248.8
Restricted cash and cash equivalents
—
—
Balance, end of period
$
281.3
$
248.8
Non-U.S. GAAP Free Cash Flow:
Cash flow from operating activities
$
192.5
$
320.8
Capital expenditures for property and
equipment
(185.0
)
(183.5
)
Non-U.S. GAAP Free Cash Flow
$
7.5
$
137.3
Nine Months Ended September
30,
(In USD millions)
2023
2022
Supplemental Cash Flow
Information:
Interest payments, net of amounts
capitalized
$
201.7
$
128.7
Income tax payments, net of cash
refunds(2)
$
310.1
$
133.6
Restructuring payments including
associated costs
$
12.4
$
19.1
Non-cash items:
Transfers of shares of common stock from
treasury for profit-sharing contributions
$
23.9
$
22.7
_________________
(1)
2023 adjustments primarily
consist of depreciation and amortization of $175 million, net loss
associated with the disposal of businesses of $53 million,
share-based compensation expense of $31 million, profit sharing
expense of $19 million, provision for inventory obsolescence of $15
million, and loss on debt redemption and refinancing activities of
$5 million. 2022 adjustments primarily consist of depreciation and
amortization of $138 million, share-based compensation expense of
$40 million, impairment of equity investment of $32 million, profit
sharing expense of $21 million, provision for inventory
obsolescence of $14 million, and loss on debt redemption and
refinancing activities of $11 million.
(2)
Includes the $175.0 million tax
deposit related to a tentative agreement to settle a dispute with
the IRS made during the second quarter of 2023. Excluding the
$175.0 million tax deposit, Income tax payments, net of cash
refunds were $135.1 million for the nine months ended September 30,
2023.
Sealed Air Corporation
Reconciliation of Net Earnings
and Net Earnings Per Common Share to Non-U.S. GAAP Adjusted
Net Earnings and Non-U.S. GAAP
Adjusted Net Earnings Per Common Share
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
(In USD millions, except per share
data)
Net Earnings
Diluted EPS
Net Earnings
Diluted EPS
Net Earnings
Diluted EPS
Net Earnings
Diluted EPS
U.S. GAAP net earnings and diluted EPS
from continuing operations
$
57.6
$
0.40
$
132.6
$
0.91
$
214.4
$
1.48
$
396.6
$
2.68
Special Items(1)
53.9
0.37
10.4
0.07
119.5
0.83
63.3
0.43
Non-U.S. GAAP adjusted net earnings and
adjusted diluted EPS
$
111.5
$
0.77
$
143.0
$
0.98
$
333.9
$
2.31
$
459.9
$
3.11
Weighted average number of common
shares outstanding - Diluted
144.9
146.6
144.8
147.8
Reconciliation of Adjusted EPS decline
to comparable constant currency decline
% decline - Adjusted EPS
(21.4
)%
(25.7
)%
% currency impact
(5.1
)%
(1.6
)%
% comparable constant currency
(26.5
)%
(27.3
)%
_________________
(1) Special Items include items in the
table below.
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In USD millions, except per share
data)
2023
2022
2023
2022
Special Items:
Liquibox intangible amortization
$
7.4
$
—
$
19.9
$
—
Liquibox inventory step-up expense
—
—
10.8
—
Restructuring charges
9.8
0.6
9.2
4.6
Other restructuring associated
costs(i)
34.6
1.6
34.5
8.5
Foreign currency exchange loss due to
highly inflationary economies
4.9
2.2
10.6
5.9
Loss on debt redemption and refinancing
activities
—
—
4.9
11.2
Impairment loss on equity investments
—
—
—
31.6
Contract terminations(ii)
15.3
—
15.3
—
Charges related to acquisition and
divestiture activity
2.8
0.3
24.5
(0.8
)
Other Special Items(iii)
(2.7
)
3.6
5.1
3.6
Pre-tax impact of Special Items
72.1
8.3
134.8
64.6
Tax impact of Special Items and Tax
Special Items
(18.2
)
2.1
(15.3
)
(1.3
)
Net impact of Special Items
$
53.9
$
10.4
$
119.5
$
63.3
Weighted average number of common
shares outstanding - Diluted
144.9
146.6
144.8
147.8
Loss per share impact from Special
Items
$
(0.37
)
$
(0.07
)
$
(0.83
)
$
(0.43
)
_________________
(i)
Other restructuring associated costs for
the three and nine months ended September 30, 2023 primarily
consists of impairment of property and equipment and inventory
obsolescence charges related to business closure activity.
(ii)
Contract terminations for the three and
nine months ended September 30, 2023 primarily relates to charges
associated with business closure activity.
(iii)
Other Special items for the three months
ended September 30, 2023 primarily relate to a gain associated with
a legal settlement. Other Special Items for the nine months ended
September 30, 2023 primarily relate to a one-time, non-cash
cumulative translation adjustment (CTA) loss recognized due to the
wind-up of one of our legal entities, partially offset by a gain
associated with a legal settlement. Other Special Items for the
three and nine months ended September 30, 2022 relate to fees paid
for professional services, including legal fees, directly
associated with Special Items of events that are considered
one-time or infrequent in nature. For the nine months ended
September 30, 2022, the professional fees are offset primarily due
to a one-time gain on the disposal of land in the United
Kingdom.
The calculation of the non-U.S. GAAP Adjusted income tax
rate is as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In USD millions)
2023
2022
2023
2022
U.S. GAAP Earnings before income tax
provision from continuing operations
$
77.9
$
184.0
$
313.8
$
550.1
Pre-tax impact of Special Items
72.1
8.3
134.8
64.6
Non-U.S. GAAP Adjusted Earnings before
income tax provision
$
150.0
$
192.3
$
448.6
$
614.7
U.S. GAAP Income tax provision from
continuing operations
$
20.3
$
51.4
$
99.4
$
153.5
Tax Special Items(1)
1.4
(3.6
)
(10.6
)
(13.4
)
Tax impact of Special Items
16.8
1.5
25.9
14.7
Non-U.S. GAAP Adjusted Income tax
provision
$
38.5
$
49.3
$
114.7
$
154.8
U.S. GAAP Effective income tax rate
26.1
%
27.9
%
31.7
%
27.9
%
Non-U.S. GAAP Adjusted income tax rate
25.7
%
25.6
%
25.6
%
25.2
%
_________________ (1)
For the three and nine months ended
September 30, 2023, Tax Special Items reflect accruals for
uncertain tax positions and utilization of excess foreign tax
credits. For the three months ended September 30, 2022, Tax Special
Items reflect accruals for uncertain tax positions. For the nine
months ended September 30, 2022, Tax Special Items reflect accruals
for uncertain tax positions and nonrecurring intercompany dividend
distributions.
Sealed Air Corporation
Components of Change in Net
Sales by Segment
(Unaudited)
Three Months Ended September
30,
(In USD millions)
Food
Protective
Total Company
2022 Net Sales
$
829.8
59.3
%
$
570.6
40.7
%
$
1,400.4
100.0
%
Price
7.6
0.9
%
(11.9
)
(2.1
)%
(4.3
)
(0.3
)%
Volume(1)
(6.8
)
(0.8
)%
(75.4
)
(13.2
)%
(82.2
)
(5.9
)%
Total organic change (non-U.S.
GAAP)(2)
0.8
0.1
%
(87.3
)
(15.3
)%
(86.5
)
(6.2
)%
Acquisition
82.1
9.9
%
—
—
%
82.1
5.9
%
Total constant dollar change (non-U.S.
GAAP)(2)
82.9
10.0
%
(87.3
)
(15.3
)%
(4.4
)
(0.3
)%
Foreign currency translation
(19.3
)
(2.3
)%
5.1
0.9
%
(14.2
)
(1.0
)%
Total change (U.S. GAAP)
63.6
7.7
%
(82.2
)
(14.4
)%
(18.6
)
(1.3
)%
2023 Net Sales
$
893.4
64.7
%
$
488.4
35.3
%
$
1,381.8
100.0
%
Nine Months Ended September
30,
(In USD millions)
Food
Protective
Total Company
2022 Net Sales
$
2,443.3
57.7
%
$
1,792.7
42.3
%
$
4,236.0
100.0
%
Price
64.2
2.6
%
3.8
0.2
%
68.0
1.6
%
Volume(1)
(29.6
)
(1.2
)%
(301.8
)
(16.8
)%
(331.4
)
(7.8
)%
Total organic change (non-U.S.
GAAP)(2)
34.6
1.4
%
(298.0
)
(16.6
)%
(263.4
)
(6.2
)%
Acquisition
215.3
8.8
%
—
—
%
215.3
5.1
%
Total constant dollar change (non-U.S.
GAAP)(2)
249.9
10.2
%
(298.0
)
(16.6
)%
(48.1
)
(1.1
)%
Foreign currency translation
(66.1
)
(2.7
)%
(10.4
)
(0.6
)%
(76.5
)
(1.8
)%
Total change (U.S. GAAP)
183.8
7.5
%
(308.4
)
(17.2
)%
(124.6
)
(2.9
)%
2023 Net Sales
$
2,627.1
63.9
%
$
1,484.3
36.1
%
$
4,111.4
100.0
%
Components of Change in Net
Sales by Region
(Unaudited)
Three Months Ended September
30,
(In USD millions)
Americas
EMEA
APAC
Total
2022 Net Sales
$
930.4
66.4
%
$
276.0
19.7
%
$
194.0
13.9
%
$
1,400.4
100.0
%
Price
(14.3
)
(1.5
)%
5.1
1.8
%
4.9
2.5
%
(4.3
)
(0.3
)%
Volume(1)
(53.0
)
(5.7
)%
(16.9
)
(6.1
)%
(12.3
)
(6.3
)%
(82.2
)
(5.9
)%
Total organic change (non-U.S.
GAAP)(2)
(67.3
)
(7.2
)%
(11.8
)
(4.3
)%
(7.4
)
(3.8
)%
(86.5
)
(6.2
)%
Acquisition
60.8
6.5
%
13.9
5.1
%
7.4
3.8
%
82.1
5.9
%
Total constant dollar change (non-U.S.
GAAP)(2)
(6.5
)
(0.7
)%
2.1
0.8
%
—
—
%
(4.4
)
(0.3
)%
Foreign currency translation
(15.9
)
(1.7
)%
7.3
2.6
%
(5.6
)
(2.9
)%
(14.2
)
(1.0
)%
Total change (U.S. GAAP)
(22.4
)
(2.4
)%
9.4
3.4
%
(5.6
)
(2.9
)%
(18.6
)
(1.3
)%
2023 Net Sales
$
908.0
65.7
%
$
285.4
20.7
%
$
188.4
13.6
%
$
1,381.8
100.0
%
Nine Months Ended September
30,
(In USD millions)
Americas
EMEA
APAC
Total
2022 Net Sales
$
2,808.7
66.3
%
$
856.7
20.2
%
$
570.6
13.5
%
$
4,236.0
100.0
%
Price
(1.1
)
—
%
47.9
5.6
%
21.2
3.7
%
68.0
1.6
%
Volume(1)
(221.7
)
(7.9
)%
(74.8
)
(8.7
)%
(34.9
)
(6.1
)%
(331.4
)
(7.8
)%
Total organic change (non-U.S.
GAAP)(2)
(222.8
)
(7.9
)%
(26.9
)
(3.1
)%
(13.7
)
(2.4
)%
(263.4
)
(6.2
)%
Acquisition
154.1
5.5
%
39.4
4.6
%
21.8
3.8
%
215.3
5.1
%
Total constant dollar change (non-U.S.
GAAP)(2)
(68.7
)
(2.4
)%
12.5
1.5
%
8.1
1.4
%
(48.1
)
(1.1
)%
Foreign currency translation
(44.4
)
(1.6
)%
(5.3
)
(0.7
)%
(26.8
)
(4.7
)%
(76.5
)
(1.8
)%
Total change (U.S. GAAP)
(113.1
)
(4.0
)%
7.2
0.8
%
(18.7
)
(3.3
)%
(124.6
)
(2.9
)%
2023 Net Sales
$
2,695.6
65.6
%
$
863.9
21.0
%
$
551.9
13.4
%
$
4,111.4
100.0
%
_________________
(1)
Our volume reported above includes the net
impact of changes in unit volume as well as the period-to-period
change in the mix of products sold.
(2)
Total organic change is a non-U.S. GAAP
financial measure which excludes acquisitions within the first
twelve months after acquisition, divestiture activity from the time
of the sale, and the impact of foreign currency translation. Total
constant dollar change is a non-U.S. GAAP financial measure which
excludes the impact of foreign currency translation. Since we are a
U.S. domiciled company, we translate our foreign currency
denominated financial results into U.S. dollars. Due to changes in
the value of foreign currencies relative to the U.S. dollar,
translating our financial results from foreign currencies to U.S.
dollars may result in a favorable or unfavorable impact. It is
important that we take into account the effects of foreign currency
translation when we view our results and plan our strategies.
Nonetheless, we cannot control changes in foreign currency exchange
rates. Consequently, when our management looks at our financial
results to measure the core performance of our business, we exclude
the impact of foreign currency translation by translating our
current period results at prior period foreign currency exchange
rates. We also may exclude the impact of foreign currency
translation when making incentive compensation determinations. As a
result, our management believes that these presentations are useful
internally and may be useful to our investors.
Sealed Air Corporation
Segment Information
Reconciliation of Net Earnings
to Non-U.S. GAAP Consolidated Adjusted EBITDA
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In USD millions)
2023
2022
2023
2022
Adjusted EBITDA from continuing
operations:
Food
$
194.3
$
185.3
$
580.1
$
553.4
Adjusted EBITDA Margin
21.7
%
22.3
%
22.1
%
22.6
%
Protective
95.0
109.5
271.3
363.2
Adjusted EBITDA Margin
19.5
%
19.2
%
18.3
%
20.3
%
Corporate
(4.6
)
(2.2
)
(19.1
)
(3.6
)
Non-U.S. GAAP Consolidated Adjusted
EBITDA
$
284.7
$
292.6
$
832.3
$
913.0
Adjusted EBITDA Margin
20.6
%
20.9
%
20.2
%
21.6
%
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In USD millions)
2023
2022
2023
2022
U.S. GAAP Net earnings from continuing
operations
$
57.6
$
132.6
$
214.4
$
396.6
Interest expense, net
70.1
40.9
196.6
119.3
Income tax provision
20.3
51.4
99.4
153.5
Depreciation and amortization, net of
adjustments(1)
64.6
59.4
187.1
179.0
Special Items:
Liquibox intangible amortization
7.4
—
19.9
—
Liquibox inventory step-up expense
—
—
10.8
—
Restructuring charges
9.8
0.6
9.2
4.6
Other restructuring associated costs
34.6
1.6
34.5
8.5
Foreign currency exchange loss due to
highly inflationary economies
4.9
2.2
10.6
5.9
Loss on debt redemption and refinancing
activities
—
—
4.9
11.2
Impairment loss on equity investments
—
—
—
31.6
Contract terminations
15.3
—
15.3
—
Charges related to acquisition and
divestiture activity
2.8
0.3
24.5
(0.8
)
Other Special Items
(2.7
)
3.6
5.1
3.6
Pre-tax impact of Special items
72.1
8.3
134.8
64.6
Non-U.S. GAAP Consolidated Adjusted
EBITDA
$
284.7
$
292.6
$
832.3
$
913.0
Reconciliation of Adjusted EBITDA
decline to comparable constant currency decline
% decline - Adjusted EBITDA
(2.7
)%
(8.8
)%
% currency impact
(3.3
)%
(0.9
)%
% comparable constant currency
(6.0
)%
(9.7
)%
_________________ (1) Depreciation and amortization by segment are
as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In USD millions)
2023
2022
2023
2022
Food
$
48.1
$
34.4
$
135.8
$
103.7
Protective
23.9
25.0
71.2
75.3
Consolidated depreciation and
amortization(i)
$
72.0
$
59.4
$
207.0
$
179.0
Liquibox intangible amortization
(7.4
)
—
(19.9
)
—
Depreciation and amortization, net of
adjustments
$
64.6
$
59.4
$
187.1
$
179.0
(i)
Includes share-based incentive
compensation of $12.1 million and $32.3 million for the three and
nine months ended September 30, 2023, respectively, and $12.7
million and $41.3 million for the three and nine months ended
September 30, 2022, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102202444/en/
Investors Brian Sullivan brian.c.sullivan@sealedair.com
704.503.8841 Louise Lagache Louise.lagache@sealedair.com
Media Christina Griffin christina.griffin@sealedair.com
704.430.5742
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