- Increased Q1 2015 Adjusted EBITDA by
13.4% to $284 Million or 16.3% of Net Sales
- Q1 2015 Adjusted EPS of $0.54 Increased
64%; Reported EPS of $0.46
Sealed Air Corporation (NYSE:SEE) today announced financial
results for first quarter 2015. Commenting on these results, Jerome
A. Peribere, President and Chief Executive Officer, said, “Our
first quarter 2015 performance was a strong start to the year
despite currency headwinds. Net Sales of $1.7 billion were up 3.5%
on a constant dollar basis as compared to last year with positive
sales across all divisions and regions. Adjusted EBITDA increased
more than 13% compared to last year with Adjusted EBITDA margins
expanding 260 basis points to 16.3% as a result of favorable
price/mix and cost spread and our ongoing commitment to operational
excellence. For the remainder of the year, we will continue to stay
disciplined on our value-added selling approach and focused on
earnings quality improvement initiatives, both of which are
expected to contribute to organic sales growth and margin
expansion.”
Unless otherwise stated, all results compare first quarter 2015
results to first quarter 2014 results. Year-over-year net sales
discussions present both reported and constant dollar performance.
Constant dollar sales performance excludes 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
Core Tax Rate, exclude the impact of special items, such as
restructuring charges, cash-settled stock appreciation rights
(“SARs”) granted as part of the Diversey acquisition and certain
other one-time items. Please refer to the financial statements
included with this press release for a reconciliation of Non-U.S.
GAAP to U.S. GAAP financial measures.
Business and Financial
Highlights
- Food Care net sales of $880 million in
the first quarter decreased 2.7% as reported, and increased 5.8% on
a constant dollar basis. Currency had a negative impact on Food
Care net sales of 8.5%, or $77 million, in the first quarter 2015.
Strength across all regions contributed to favorable product
price/mix of 3.8% and an increase in volume of 2.0%. Food Care’s
Adjusted EBITDA of $191 million or 21.7% of net sales increased
19.8% compared to last year. These results were attributable to
favorable mix and price/cost spread, positive volume trends as well
as cost synergies, partially offset by unfavorable currency
translation and higher Selling, General & Administrative
(“SG&A”) costs.
- Diversey Care net sales of $468 million
in the first quarter decreased 7.4% as reported, and increased 1.5%
on a constant dollar basis. Currency had a negative impact on
Diversey Care net sales of 8.9%, or $45 million, in the quarter.
Favorable price/mix was 1.7% on essentially flat volumes. Positive
volume trends in North America and Asia, Middle East and Africa
(“AMAT”) were offset by a slight decline in Europe and mid-single
digit declines in Latin America. Diversey Care reported Adjusted
EBITDA of $41 million or 8.8% of net sales. The division’s
performance was in line with first quarter 2014 and was
attributable to cost synergies, which were more than offset by
unfavorable currency translation and higher SG&A costs.
- Product Care net sales of $377 million
in the first quarter decreased 4.2% as reported, and increased
approximately 1.1% on a constant dollar basis. Currency had a
negative impact on Product Care net sales of 5.3%, or $21 million.
Favorable product price/mix of 3.4% in the quarter was partially
offset by a volume decline of 2.3%. Volume trends in the quarter
were negatively impacted by rationalization efforts, particularly
in Europe and Latin America. Adjusted EBITDA of $76 million or
20.0% of net sales increased 9.4% compared to first quarter 2014.
The division’s performance in the quarter was attributable to
favorable mix and price/cost spread as well as cost synergies,
partially offset by unfavorable currency translation, higher
SG&A costs and lower volume.
- In alignment with the Company’s
disciplined approach to portfolio management and focus on
innovation, Sealed Air recently announced the sale of its North
American trays and absorbent pad business and the acquisition of
Intellibot Robotics, a U.S. based privately-held company. The trays
and pads business was sold to NOVIPAX, a portfolio company of Atlas
Holdings LLC. This business was included in Sealed Air’s Food Care
division and generated net sales of $214 million in 2014 and $52
million in Q1 2015. Intellibot Robotics, a leading company in the
development and commercialization of robotic commercial floor
cleaning machines, will be integrated into the Diversey Care
division. This acquisition is not material to Sealed Air’s
consolidated financial results.
First Quarter 2015
Summary
First quarter 2015 net sales of $1.7 billion decreased 4.4% on a
reported basis and increased 3.5% on a constant dollar basis.
Favorable product price/mix was 3.2% on relatively flat volume.
Currency had a negative impact on net sales of $146 million. The
Company delivered higher sales across all divisions and regions on
a constant dollar basis as compared with the first quarter 2014.
Latin America and Japan, Australia and New Zealand (“JANZ”) were
the fastest growing regions, increasing sales by 6.6% and 4.6% on a
constant dollar basis, respectively. North America delivered
constant dollar net sales growth of 3.1%, Europe increased 3.0% and
AMAT was up 2.9%. Additionally, first quarter 2015 net sales from
Developing Regions1, which accounted for 24.9% of net sales,
decreased 4.9% on a reported basis and increased 7.5% in constant
dollars compared to last year.
First quarter 2015 net earnings on a reported basis were $97.2
million, or $0.46 per diluted share, which included $17.4 million,
or $0.08 per diluted share, of special items primarily consisting
of restructuring and other associated costs. This compared to first
quarter 2014 net earnings on a reported basis of $70.9 million, or
$0.33 per diluted share, which included special items of $0.4
million, primarily consisting of foreign currency exchange losses
related to Venezuelan subsidiaries and costs associated with
previously announced restructuring programs, offset by a gain on
the W. R. Grace & Co. Settlement agreement (“Settlement
agreement”), which primarily consisted of the release of certain
tax and other liabilities.
Adjusted EPS was $0.54 for the first quarter. This compares to
Adjusted EPS of $0.33 in the first quarter 2014. The core tax rate
was 25.2% in the first quarter 2015, compared to 21.1% in the first
quarter 2014. During the first quarter 2015, the Company
repurchased approximately 1.4 million shares for approximately $64
million.
Adjusted EBITDA for the first quarter 2015 was $284 million, or
16.3% of net sales, compared to $251 million, or 13.7% of net
sales, in first quarter 2014. The year-over-year increase in the
first quarter was primarily attributable to favorable mix and
price/cost spread as well as cost synergies, partially offset by
unfavorable currency translation and higher SG&A costs.
Cash Flow and Net Debt
Cash flow provided by operating activities in the first three
months ending 2015 was $319 million. In March 2015, the Company
received a tax refund of $235 million related to the Settlement
agreement payment. Excluding the tax refund, cash flow provided by
operating activities in the first three months ending 2015 was $84
million, which is net of $22 million of restructuring and $4
million of SARs payments. This compares with cash used by operating
activities of $3 million in the first three months ending 2014,
which is net of $27 million of restructuring and $14 million of
SARs payments and $930 million related to the Settlement agreement.
Capital expenditures were $21 million in the first three months
ending 2015 compared to $28 million in the first three months
ending 2014.
Free Cash Flow, defined as net cash used in operating activities
less capital expenditures, was an inflow of $63 million in the
first three months of the year, compared with a use of $31 million
in the first three months ending 2014, excluding the Settlement
agreement. The year-over-year improvement was attributable to
higher earnings, lower interest payments and working capital
management.
Compared to December 31, 2014, the Company’s net debt decreased
$279 million to $3.8 billion as of March 31, 2015. This decrease
was primarily a result of an increase in cash reflecting the tax
refund related to the Settlement agreement payment and cash
generated from operating activities, partially offset by amounts
paid for dividends and share repurchases.
Outlook for Full Year 2015, Adjusted
for Trays and Absorbent Pads Divestiture and
Currency
On February 10, 2015, the Company provided 2015 full year
outlook that included approximately $200 million in sales from
trays and pads. The trays and absorbent pads divestiture closed on
April 1, 2015, and as a result, the outlook provided below includes
one quarter of financial results from this divestiture.
The Company estimates net sales to be approximately $7.1 billion
for the full year 2015. This forecast assumes an unfavorable impact
of approximately 9% from foreign currency translation. Excluding
the impact of foreign currency translation and the impact of the
trays and pads divestiture, organic net sales are expected to
increase approximately 3% on a constant dollar basis. Adjusted EPS
is expected to be in the range of $2.08 to $2.15. Adjusted EPS
guidance excludes the impact of special items. The Company’s core
tax rate for 2015 is expected to be approximately 25%.
Adjusted EBITDA is estimated to be in the range of $1.14 billion
to $1.16 billion, which reflects the disposition of the trays and
absorbent pads business and includes approximately $100 million of
unfavorable currency translation. The Company anticipates capital
expenditures of approximately $210 million and cash restructuring
payments of approximately $120 million. Free Cash Flow is expected
to be approximately $575 million, excluding the tax refund of
approximately $235 million received in March 2015 related to the
Settlement agreement payment.
1 Developing Regions are Africa, Asia (excluding Japan and South
Korea), Central and Eastern Europe, and Latin America.
Conference Call Information Date:
Thursday, April 30, 2015 Time: 8:30am (ET) Webcast:
www.sealedair.com in the Investor Relations section Conference Dial
In: (888) 680-0869 (domestic) (617) 213-4854 (international)
Participant Code:
75329723
Conference Call Replay Information Dates:
Thursday, April 30, 2015 starting at 12:30pm (ET) through Thursday,
May 7, 2015 at 11:59pm (ET) Webcast: www.sealedair.com in the
Investor Relations section Conference Dial In: (888) 286-8010
(domestic) (617) 801-6888 (international) Participant Code:
15740936
Business
Sealed Air Corporation creates a world that feels, tastes and
works better. In 2014, the Company generated revenue of
approximately $7.8 billion by helping our customers achieve their
sustainability goals in the face of today’s biggest social and
environmental challenges. Our portfolio of widely recognized
brands, including Cryovac® brand food packaging solutions, Bubble
Wrap® brand cushioning and Diversey® cleaning and hygiene
solutions, enables a safer and less wasteful food supply chain,
protects valuable goods shipped around the world, and improves
health through clean environments. Sealed Air has approximately
24,000 employees who serve customers in 175 countries. To learn
more, visit www.sealedair.com.
Website Information
We routinely post important information for investors on our
website, www.sealedair.com, in the "Investor Relations" 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 Investor
Relations 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 Adjusted Net Earnings
and EPS, net sales on a "constant dollar" basis, Adjusted Gross
Profit, Adjusted Operating Profit, Free Cash Flow and Adjusted
EBITDA, as our management believes these measures are useful to
investors. We present results and guidance, adjusted to exclude the
effects of certain specified items (“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 non-U.S. GAAP measures to U.S. GAAP 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”), “Reconciliation
of U.S. GAAP Condensed Consolidated Statements of Operations to
Non-U.S. GAAP Adjusted Condensed Consolidated Statements of
Operations and Non-U.S. GAAP Adjusted EBITDA,” “Segment
Information,” and “Components of Change in Net Sales by Segment.”
Information reconciling forward-looking non-U.S. GAAP measures to
U.S. GAAP measures is not available without unreasonable
effort.
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 and results of operations. 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 “anticipates,” “believes,”
“plan,” “assumes,” “could,” “should,” “estimates,” “expects,”
“intends,” “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, 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: the cash tax benefits associated with the Settlement
agreement (as defined in our 2014 Annual Report on Form 10-K),
global economic and political conditions, changes in our credit
ratings, changes in raw material pricing and availability, changes
in energy costs, competitive conditions, success of our
restructuring activities, currency translation and devaluation
effects, the success of our financial growth, profitability, cash
generation and manufacturing strategies and our cost reduction and
productivity efforts, the effects of animal and food-related health
issues, pandemics, consumer preferences, environmental matters,
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 statement made by us are 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.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(1)
(Unaudited)
(In millions, except per share
data)
Three Months Ended March
31, 2015 2014 Revised(2)
Net sales
$ 1,746.4 $ 1,827.7 Cost of sales
1,096.8 1,188.1
Gross profit 649.6
639.6 As a % of total net sales 37.2 % 35.0 % Selling,
general and administrative expenses 427.1 447.4 As a % of total net
sales 24.5 % 24.5 % Amortization expense of intangible assets
acquired 22.6 31.2 Stock appreciation rights expense(3) 2.9 0.5
Integration related costs 0.7 0.9 Restructuring and other charges
12.7 6.1
Operating profit 183.6
153.5 Interest expense (58.5 ) (78.5 ) Foreign currency
exchange gain (loss) related to Venezuelan subsidiaries(4) 0.8
(15.0 ) Gain from Claims Settlement(5) — 21.1 Other income
(expense), net 5.4 —
Earnings before income tax
provision 131.3 81.1 Income tax provision
34.1 10.2 Effective income tax rate 25.9 % 12.6 %
Net
earnings available to common stockholders $ 97.2
$ 70.9 Net earnings per common
share(6): Basic : $ 0.46
$ 0.34 Diluted: $ 0.46
0.33 Dividends per common share $ 0.13
$ 0.13 Weighted average number of common shares
outstanding: Basic 208.9
206.7 Diluted 211.7 215.1
(1) The supplementary information included in this press release
for 2015 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.
(2) During the fourth quarter of 2014, we changed the method of
valuing our inventories that used the Last In First Out (“LIFO”)
method to the First In First Out (“FIFO”) method, so that all of
our inventories are now valued at FIFO. We applied this change in
accounting principle retrospectively. Accordingly all previously
reported financial information has been revised. The impact of the
change on net earnings was not material.
(3) The remaining amount of unvested cash-settled stock
appreciation rights (“SARs”) fully vested March 31, 2015. However,
we will continue to incur expense related to these SARs until the
last expiration date of these awards (March 2021). The amount of
related future expense will fluctuate based on exercise and
forfeiture activity and changes in the assumptions used in the
valuation model, including the price of Sealed Air common
stock.
(4) Based on changes to the Venezuelan currency exchange rate
mechanisms, we changed the exchange rate we used to remeasure our
Venezuelan subsidiary’s financial statements into U.S. dollars. As
a result of the change in our excess cash position in our
Venezuelan subsidiaries being remeasured, we recorded a
remeasurement gain of $1 million in the three months ended March
31, 2015 and a remeasurement loss $15 million in the three months
ended March 31, 2014.
(5) As previously disclosed in our Quarterly Report on
Form 10-Q for the three months ended March 31, 2014, on
February 3, 2014 we funded the cash consideration
($930 million) and issued the shares reserved under the
Settlement agreement as defined therein. As a result, we recognized
a gain on Claims Settlement of $21 million, which primarily
consisted of the release of certain tax and other liabilities.
(6) Net earnings per common share is calculated under two-class
method. See our Annual Report on Form 10-K for period ended
December 31, 2014 for further details.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED BALANCE
SHEETS(1)
(Unaudited)
(In millions)
March 31,
December 31, 2015 2014 Assets
Current assets: Cash and cash equivalents $ 536.3 $ 322.6 Trade
receivables, net 975.5 1,002.2 Other receivables 188.7 404.0
Inventories 744.3 695.3 Assets held for sale(2) 47.3 69.3 Other
current assets 184.5 227.7
Total current
assets 2,676.6 2,721.1 Property and equipment,
net 913.7 970.6 Goodwill 2,954.6 2,998.6 Intangible assets, net
837.5 872.2 Other assets, net 471.1 479.2
Total
assets $ 7,853.5 $ 8,041.7
Liabilities and stockholders' equity Current liabilities:
Short-term borrowings $ 85.2 $ 130.4 Current portion of long-term
debt 1.3 1.1 Accounts payable 686.8 638.7 Liabilities held for sale
(2) 2.4 6.1 Other current liabilities 818.5 954.6
Total current liabilities 1,594.2 1,730.9
Long-term debt, less current portion 4,261.8 4,282.5 Other
liabilities 847.8 865.5
Total liabilities
6,703.8 6,878.9 Stockholders' equity
1,149.7 1,162.8
Total liabilities and
stockholders' equity $ 7,853.5 $
8,041.7
CALCULATION OF NET DEBT
(1)
March 31, December
31, 2015 2014 Short-term borrowings
$ 85.2 $ 130.4 Current portion of long-term debt 1.3 1.1 Long-term
debt, less current portion 4,261.8 4,282.5 Total debt
4,348.3 4,414.0 Less: cash and cash equivalents (536.3 )
(322.6 )
Net debt $ 3,812.0 $
4,091.4
(1) The supplementary information included in this press release
for 2015 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.
(2) In January 2015, we completed the sale relating to our
building located in Racine, Wisconsin. As of December 31, 2014, the
building and certain related assets were included in assets held
for sale. Accordingly, we transferred $26 million from assets
held for sale as of March 31, 2014. In addition, during the quarter
we announced the sale of our Trays and Absorbent Pads business. As
of March 31, 2015 the assets and liabilities met the criteria of
held for sale classification. Accordingly, we reclassified $43
million of assets and $2 million of liabilities to held for sale as
of March 31, 2015. We also reclassified $42 million of assets and
$6 million of liabilities to held for sale as of December 31,
2014.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(1)
(Unaudited)
(In millions)
Three Months Ended March 31, 2015
2014 Revised(2) Net earnings available to common
stockholders $ 97.2 $ 70.9 Adjustments to reconcile net earnings to
net cash (used in) provided by operating
activities(3)
100.3 76.7 Changes in: Trade receivables, net 8.5 (9.1 )
Inventories (83.8 ) (90.5 ) Accounts payable 75.3 53.4 Income tax
receivables, net (3.2 ) (24.5 ) Settlement agreement, and related
items (4) 235.2 (929.7 ) Changes in all other operating assets and
liabilities (110.4 ) (79.7 )
Cash flow provided by
(used in) operating activities 319.1 (932.5
) Capital expenditures for property and equipment
(20.7 ) (28.4 ) Proceeds from sale of property and equipment 23.9 —
Business acquired in purchase transactions, net of cash and cash
equivalents acquired (8.5 ) — Other investing activities 1.4
1.4
Cash flow used in investing activities
(3.9 ) (27.0 ) (Payments of) net
proceeds from short-term borrowings and long-term debt (39.3 )
403.0 Repurchase of common stock (69.2 ) — Dividends paid on common
stock (27.4 ) (28.4 ) Acquisition of common stock for tax
withholding obligations under our Omnibus stock plan and 2005
Contingent Stock Plan (6.2 ) (2.6 ) Other financing activities
(0.2 ) —
Cash flow used in financing
activities (142.3 ) 372.0 Effect
of foreign currency exchange rates on cash and cash equivalents
40.8 8.2 Cash and cash
equivalents beginning of period $ 322.6 $
992.4 Net change in cash and cash equivalents 213.7
(579.3 )
Cash and cash equivalents end of period
$ 536.3 $ 413.1 Non-U.S. GAAP
Free Cash Flow: Cash flow from operating activities(4) $ 319.1
$ (932.5 ) Capital expenditures for property and equipment
(20.7 ) (28.4 )
Free Cash Flow(5)
$
298.4 $ (960.9 ) Settlement agreement
and related items (4) (235.2 ) 929.7
Free Cash
Flow excluding Settlement agreement and related accrued
interest $ 63.2 $ (31.2 )
Additional Cash Flow Information: Interest payments, net of
amounts capitalized(6) $ 58.7 $ 519.1 Income tax payments $ 23.8 $
14.7 SARs payments (less amounts included in restructuring
payments) $ 3.7 $ 14.2 Restructuring payments (including associated
costs) $ 22.0 $ 26.6
(1) The supplementary information included in this press release
for 2015 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.
(2) During the fourth quarter of 2014, we changed the method of
valuing our inventories that used the LIFO method to the FIFO
method, so that all of our inventories are now valued at FIFO. We
applied this change in accounting principle retrospectively.
Accordingly all previously reported financial information has been
revised. The impact of the change to net earnings was not
material.
(3) 2015 primarily consists of depreciation and amortization of
$73 million and profit sharing expense of $10 million. 2014
primarily consists of depreciation and amortization of $83 million,
and profit sharing expense of $10 million, partially offset by gain
on Settlement agreement of $(21) million.
(4) During the first quarter of 2015, the Company received the
tax refund of $235 million related to the Settlement agreement
payment. During the first quarter of 2014, we used
$930 million of cash to fund the cash portion of the
Settlement agreement and related accrued interest. To fund the cash
payment, we used $555 million of cash and cash equivalents and
utilized borrowings of $260 million from our revolving credit
facility and $115 million from our accounts receivable
securitization programs.
(5) Free cash flow does not represent residual cash available
for discretionary expenditures, including mandatory debt servicing
requirements or non-discretionary expenditures that are not
deducted from this measure.
(6) Interest payments in 2014 include $417 million related to
the Settlement agreement.
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
RECONCILIATION OF U.S. GAAP CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS TO
NON-U.S. GAAP ADJUSTED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND
NON-U.S. GAAP ADJUSTED
EBITDA(1)
(Unaudited)
(In millions, except per share
data)
Three Months Ended March 31,
2015 2014 U.S. GAAP
As Reported
Less:
Special Items(2)
Non-U.S. GAAP Adjusted U.S. GAAP
As Reported
Less:
Special Items(2)
Non-U.S. GAAP Adjusted
Revised(3)
Revised(3)
Net sales $ 1,746.4 $
— $ 1,746.4 $
1,827.7 $ — $
1,827.7 Cost of sales 1,096.8 (0.9 )
1,095.9 1,188.1 (1.1 ) 1,187.0
Gross
profit 649.6 0.9 650.5 639.6
1.1 640.7 As a % of total net sales 37.2 % 37.2 %
35.0 % 35.1 % Selling, general and administrative expenses 427.1
(8.0 ) 419.1 447.4 (3.5 ) 443.9 As a % of total net sales 24.5 %
24.0 % 24.5 % 24.3 % Amortization expense of intangible assets
acquired 22.6
— 22.6 31.2
— 31.2 Stock appreciation
rights expense 2.9 (2.9 )
— 0.5 (0.5 )
— Integration
related costs 0.7 (0.7 )
— 0.9 (0.9 )
— Restructuring
and other charges 12.7 (12.7 ) — 6.1
(6.1 ) —
Operating profit 183.6
25.2 208.8 153.5 12.1 165.6 As a
% of total net sales 10.5 % 12.0 % 8.4 % 9.1 % Interest expense
(58.5 ) — (58.5 ) (78.5 ) — (78.5 ) Foreign currency exchange gain
(loss) related to Venezuelan subsidiaries 0.8 (0.8 ) — (15.0 ) 15.0
— Gain from Claims Settlement — — — 21.1 (21.1 ) — Other income
(expense), net 5.4 (2.5 ) 2.9 —
2.3 2.3
Earnings before income tax provision
131.3 21.9 153.2 81.1 8.3
89.4 Income tax provision 34.1 4.5 38.6
10.2 8.7 18.9 Effective income tax rate
25.9 % 25.2 % 12.6 %
21.1 %
Net earnings available to common stockholders
$ 97.2 $ 17.4 $ 114.6
$ 70.9 $ (0.4 ) $
70.5 Net earnings per common share(4):
Diluted $ 0.46 $
0.08 $ 0.54 $ 0.33 $
(0.00 ) $ 0.33 Weighted
average number of common shares
outstanding:
Diluted 211.7 211.7
211.7 215.1 215.1
215.1 Non-U.S. GAAP Adjusted EBITDA: Non-U.S. GAAP
Adjusted Operating Profit $ 208.8 $
165.6 Other income (expense), net 2.9 2.3 Depreciation and
amortization(5) 73.1 82.8 Write down of non-strategic assets,
included in depreciation and amortization (0.6 ) —
Non-U.S. GAAP Adjusted EBITDA $ 284.2 $
250.7 As a % of total net sales 16.3 % 13.7 %
(1) The supplementary information included in this press release
for 2015 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.
(2) Special items consist of certain one-time costs or
charges/credits that are included in our U.S. GAAP reported
results. These special items include restructuring and other
associated costs related to our previously announced Fusion program
(“Fusion”), Earnings Quality Improvement Program (“EQIP”) and the
Integration and Optimization Program (“IOP”) restructuring
programs, foreign currency exchange losses related to Venezuelan
subsidiaries, stock appreciation rights (“SARs”) expense, and
losses recorded on debt redemption and refinancing activities.
(3) During the fourth quarter of 2014, we changed the method of
valuing our inventories that used the LIFO method to the FIFO
method, so that all of our inventories are now valued at FIFO. We
applied this change in accounting principle retrospectively.
Accordingly all previously reported financial information has been
revised. The impact of the change to net earnings to net earnings
was not material.
(4) Net earnings per common share is calculated under two-class
method. See our Annual Report on Form 10-K for period ended
December 31, 2014 for further details.
(5) Depreciation and amortization includes:
Three
Months Ended March 31, 2015
2014 Depreciation of property, plant and equipment $ 32.2 $
37.1 Amortization of intangible assets acquired 22.6 31.2
Amortization of deferred share-based compensation 18.3
14.5
Total $ 73.1 $ 82.8
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
SEGMENT INFORMATION(1)
(Unaudited)
(In millions)
Three Months Ended
March 31, % 2015 2014
Change Net Sales: Food Care $ 879.8 $
904.3 (2.7 ) % As a % of Total Company net sales 50.4 % 49.5 %
Diversey Care 467.9 505.1 (7.4 ) % As a % of Total Company net
sales 26.8 % 27.6 % Product Care 377.1 393.8 (4.2 ) % As a % of
Total Company net sales 21.6 % 21.5 %
Total Reportable Segments Net Sales 1,724.8
1,803.2 (4.3 ) % Other 21.6 24.5
(11.8 ) %
Total Company Net Sales $
1,746.4 $ 1,827.7 (4.4 )
%
Three Months Ended
March 31, % 2015 2014
Change Revised(2)
Adjusted EBITDA: Food Care $ 190.5
$ 159.0 19.8 % Adjusted EBITDA Margin 21.7 % 17.6 % Diversey Care
41.0 44.4 (7.7 ) % Adjusted EBITDA Margin 8.8 % 8.8 % Product Care
75.6 69.1 9.4 % Adjusted EBITDA Margin 20.0 % 17.5 %
Total Reportable Segments Adjusted
EBITDA
307.1 272.5 12.7 % Other (22.9 )
(21.8 ) 5.0 %
Non-U.S. GAAP Total Company
Adjusted EBITDA
$ 284.2 $ 250.7 13.4 %
Adjusted EBITDA Margin 16.3 % 13.7 %
(1) As previously announced, effective as of January 1,
2014, the Company changed its segment reporting structure in order
to reflect the way management now makes operating decisions and
manages the growth and profitability of the business. See our
Current Report on Form 8-K filed with the SEC on
April 16, 2014 for further details. The supplementary
information included in this press release for 2015 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.
(2) During the fourth quarter of 2014, we changed the method of
valuing our inventories that used the LIFO method to the FIFO
method, so that all of our inventories are now valued at FIFO. We
applied this change in accounting principle retrospectively.
Accordingly all previously reported financial information has been
revised. The impact of the change to net earnings was not
material.
SEALED AIR CORPORATION
SEGMENT INFORMATION – CONTINUED
SUPPLEMENTARY
INFORMATION(1)
RECONCILIATION OF NON-U.S. GAAP TOTAL
COMPANY ADJUSTED EBITDA TO
U.S. GAAP NET EARNINGS FROM CONTINUING
OPERATIONS
(Unaudited)
(In millions)
Three Months Ended March
31, 2015 2014 Revised(2)
Non-U.S. GAAP Total Company Adjusted EBITDA $
284.2 $ 250.7 Depreciation and amortization
(3) (73.1 ) (82.8 ) Special items(4): Accelerated
depreciation of non-strategic assets related to restructuring
programs 0.6 — Restructuring and other charges(5) (12.7 ) (6.1 )
Other restructuring associated costs included in cost of
sales and selling, general and
administrative expenses
(6.4
) (4.6 ) Relocation costs included in cost of sales and selling,
general and administrative expenses (2.6 ) — Gain from sale of
building in connection with relocation 3.5 — SARs (2.9 ) (0.5 )
Integration related costs (0.7 ) (0.9 ) Foreign currency exchange
(loss) gains related to
Venezuelan subsidiaries
0.8 (15.0 ) Gain from Claims Settlement in 2014 and related costs —
21.1 Other income (expense), net
(0.9
)
(2.3 ) Interest expense (58.5 ) (78.5 ) Income tax (benefit)
provision 34.1 10.2
U.S. GAAP net earnings
available to common stockholders $ 97.2 $
70.9
(1) The supplementary information included in this press release
for 2015 is preliminary and subject to change prior to the filing
of our upcoming Annual Report on Form 10-Q with the Securities
and Exchange Commission.
(2) During the fourth quarter of 2014, we changed the method of
valuing our inventories that used the LIFO method to the FIFO
method, so that all of our inventories are now valued at FIFO. We
applied this change in accounting principle retrospectively.
Accordingly all previously reported financial information has been
revised. The impact of the change to net earnings was not
material.
(3) Depreciation and amortization by segment is as follows:
Three Months Ended March 31,
2015 2014 Food Care $
28.5 $ 32.0 Diversey Care 26.1 32.3 Product Care 10.1
10.6
Total reportable segments 64.7 74.9 Other
8.4 7.9
Total Company depreciation and
amortization $ 73.1 $ 82.8
(4) Includes items we consider unusual or special items. See
Note 2 of “Reconciliation of U.S. GAAP Condensed Consolidated
Statements of Operations to Non-U.S. GAAP Adjusted Condensed
Consolidated Statements of Operations and Non-U.S. GAAP Adjusted
EBITDA,” for further information.
(5) Restructuring and other charges by segment is as
follows:
Three Months Ended March 31,
2015 2014 Food Care $ 6.9
$ 4.1 Diversey Care 3.2 0.4 Product Care 2.6 1.5
Total reportable segments 12.7 6.0 Other
— 0.1
Total Company restructuring and other
charges $ 12.7 $ 6.1
SEALED AIR CORPORATION
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
SEGMENT(1)
(Unaudited)
(In millions)
Three Months Ended March 31,
Food Care Diversey Care Product
Care Other Total
Company
2014 Net Sales $ 904.3 $ 505.1 $ 393.8
$ 24.5 $ 1,827.7 Volume -
Units 18.3 2.0 % (0.9 ) (0.2 ) % (9.2 ) (2.3 ) % (2.0 ) (8.2 ) %
6.2 0.3 % Product price/mix (2) 34.6 3.8 % 8.5
1.7 % 13.5 3.4 1.6 6.6 %
58.2 3.2 %
Total constant dollar change (Non-U.S.
GAAP)(3)
52.9 5.8 % 7.6 1.5
% 4.3 1.1 % (0.4 )
(1.6 ) % 64.4 3.5 %
Foreign currency translation (77.4 ) (8.5 ) %
(44.8 ) (8.9 ) % (21.0 ) (5.3 ) (2.5 )
(10.2 ) % (145.7 ) (7.9 ) %
Total change
(U.S. GAAP) (24.5 ) (2.7
) % (37.2 ) (7.4
) % (16.7 ) (4.2
) % (2.9 ) (11.8
) % (81.3 ) (4.4
) %
2015 Net Sales $ 879.8
$ 467.9 $ 377.1 $ 21.6
$ 1,746.4
(1) The supplementary information included in this press release
for 2015 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.
(2) Our product price/mix reported above includes the net impact
of our pricing actions and rebates as well as the period-to-period
change in the mix of products sold. Also included in our reported
product price/mix is the net effect of some of our customers
purchasing our products in non-U.S. dollar or euro denominated
countries at selling prices denominated in U.S. dollars or
euros. This primarily arises when we export products from the U.S.
and euro-zone countries.
(3) Changes in these items excluding the impact of foreign
currency translation are non-U.S. GAAP financial measures. 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
SUPPLEMENTARY INFORMATION
COMPONENTS OF CHANGE IN NET SALES BY
REGION(1)
(Unaudited)
(In millions)
Three Months Ended March 31,
North America Europe
Latin America AMAT(2)
JANZ(3) Total 2014 Net Sales(1) $ 721.1
$ 586.2 $ 187.4 $ 198.8
$ 134.2 $ 1,827.7 Volume
- Units 2.4 0.3 % 2.3 0.4 % (9.0 ) (4.8 ) % 4.9 2.5 % 5.6 4.2 % 6.2
0.3 % Product price/mix 20.3 2.8 % 15.2
2.6 % 21.4 11.4 % 0.8 0.4 % 0.5
0.4 % 58.2 3.2 %
Total constant dollar
change (Non-U.S. GAAP) 22.7 3.1 %
17.5 3.0 % 12.4 6.6 %
5.7 2.9 % 6.1 4.6 %
64.4 3.5 % Foreign currency translation
(6.5 ) (0.9 ) % (95.9 ) (16.4 ) % (22.1
) (11.8 ) % (7.5 ) (3.8 ) % (13.7 )
(10.2 ) % (145.7 ) (7.9 ) %
Total change
(U.S. GAAP) 16.2 2.2 %
(78.4 ) (13.4 ) %
(9.7 ) (5.2 ) %
(1.8 ) (0.9 ) %
(7.6 ) (5.6 ) %
(81.3 ) (4.4 ) %
2015 Net Sales $ 737.3
$ 507.8 $ 177.7 $ 197.0
$ 126.6 $ 1,746.4
(1) The supplementary information included in this press release
for 2015 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.
(2) AMAT consists of Asia, Middle East, Africa and Turkey.
(3) JANZ consists of Japan, Australia and New Zealand.
Sealed Air CorporationInvestors:Lori Chaitman,
201-703-4161orMedia:Ken Aurichio, 201-703-4164
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