Pactiv Evergreen Inc. (“Pactiv Evergreen” or the “Company”), today
reported results for the third quarter 2021 ended September 30,
2021.
Michael King, Chief Executive Officer of Pactiv Evergreen, “Our
third quarter 2021 results were broadly in line with the revised
full year fiscal 2021 guidance we provided in September. We
continue to see demand recovery with overall volumes up 3% in the
quarter. In addition, our business realized strong price increases
with a 14% improvement in price/mix in the quarter due to
traditional cost pass-through price increases and pricing actions
that partially offset inflationary increases in materials,
conversion costs and higher rates for transportation. While these
industry challenges will likely continue for several quarters, our
hard-working employees remain committed to innovation, increased
productivity and continuing to serve our valued customers. Finally,
I am pleased with the steps we have taken to position the Company
for future growth, including the recent acquisition of Fabri-Kal,
the agreement to sell our interests in Naturepak Beverage and the
nearing completion of our exit of the coated groundwood paper
business. We expect that these actions will enable the Company to
deliver increased value for our employees, customers, and
shareholders.”
Positioning the Company for Future Growth
We recently announced a number of actions expected to better
position the Company for the future:
- On July 21, 2021, we purchased with
pension plan assets a non-participating group annuity contract from
an insurance company and transferred $959 million of pension plan
gross liabilities.
- On September 24, 2021, we completed a
refinancing resulting in the repayment of $1,207 million of debt
that was due in 2023. Our next scheduled significant maturity is
$276 million due December 2025.
- On October 1, we completed our
acquisition of Fabri-Kal, a leading manufacturer of foodservice and
consumer brand packaging solutions. The integration of the business
within our Foodservice segment is well underway. This acquisition
further expands our position in the foodservice and consumer
packaged goods businesses, and provides opportunities to leverage
our combined manufacturing and distribution capabilities to
maximize our service levels.
- On October 12, we announced that
Evergreen Packaging International LLC, a wholly-owned subsidiary of
Pactiv Evergreen Inc. entered into a definitive agreement for
the sale of our 50 percent interest in Naturepak Beverage Packaging
Co, which supplies customers in the Middle East and Africa region
from manufacturing plants in Morocco and Saudi Arabia. The
completion of this transaction will position us to focus on our
growth in North America where we are established as a leading
manufacturer of fresh food and beverage packaging, servicing many
of the world’s most beloved brands.
- On October 31, we ceased manufacturing
coated groundwood paper. The previously announced exit of this
business is on-track to be completed during Q4 of 2021.
Third Quarter 2021 Financial Highlights:
- Net Revenues of $1,394
million for the third quarter of 2021 were up 17% compared to
$1,195 million in the prior year period with 14% growth due to
price/mix and 3% volume improvement.
- Net Income from
continuing operations of $2 million for the third quarter of 2021
compared to a net loss of $143 million in the prior year period.
Net income (loss) from continuing operations included certain
significant and/or unusual items that are not necessarily
representative of underlying operational performance as discussed
in more detail below.
- Adjusted EBITDA1 from
continuing operations of $119 million for the third quarter of 2021
compared to $173 million in the prior year period.
1 Adjusted EBITDA is a non-GAAP measure. Refer to the discussion
on non-GAAP financial measures and reconciliation included in this
press release.
Third Quarter 2021 Results
Net revenues in the third quarter of 2021 were
$1,394 million compared to $1,195 million in the prior year period.
The increase was primarily due to favorable pricing, primarily due
to higher material costs passed through to customers within our
Foodservice and Food Merchandising segments, as well as higher
sales volume within our Beverage Merchandising and Foodservice
segments, largely due to higher demand as the economy continues to
recover from the COVID-19 pandemic.
Net income from continuing operations was $2 million in the
third quarter of 2021 compared to a net loss of $143 million in the
third quarter of 2020. The change was primarily driven by a $55
million change in income taxes, primarily attributable to changes
in the Company’s valuation allowance associated with deferred
interest deductions in the prior year period, $44 million of
related party management fees in the comparative period, $42
million of lower foreign exchange losses on cash, $30 million of
lower interest expense driven by lower average debt outstanding in
the current year quarter and $23 million of higher non-operating
income driven by a pension settlement gain. These items were
partially offset by $81 million lower gross profit, primarily due
to higher manufacturing, logistics and material costs, net of
higher costs passed through to customers.
Adjusted EBITDA1 was $119 million in the third
quarter of 2021 compared to $173 million in the third quarter of
2020. The decrease was primarily due to higher manufacturing,
logistics and material costs, net of higher costs passed through to
customers, partially offset by higher sales volume due to the
continued economic recovery from the COVID-19 pandemic.
Segment Results (compared to the third quarter of
2020)
Foodservice
|
|
For the Three Months Ended September 30, |
|
|
Components of Change in Net Revenues |
|
|
|
2021 |
|
|
2020 |
|
|
Change |
|
|
% change |
|
|
Price/Mix |
|
|
Volume |
|
|
FX |
|
Total segment net revenues |
|
$ |
594 |
|
|
$ |
473 |
|
|
$ |
121 |
|
|
26 |
% |
|
21 |
% |
|
5 |
% |
|
— |
% |
Segment Adjusted EBITDA |
|
$ |
64 |
|
|
$ |
81 |
|
|
$ |
(17 |
) |
|
(21 |
)% |
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA
Margin |
|
|
11 |
% |
|
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The increase in net revenues was primarily due
to favorable pricing, primarily due to higher material costs passed
through to customers, as well as higher sales volume due to the
market recovery from the COVID-19 pandemic.
The decrease in Adjusted EBITDA was primarily
due to higher manufacturing, logistics and material costs, net of
higher costs passed through to customers, partially offset by
higher sales volume.
Food Merchandising
|
|
For the Three Months Ended September 30, |
|
|
Components of Change in Net Revenues |
|
|
|
2021 |
|
|
2020 |
|
|
Change |
|
|
% change |
|
|
Price/Mix |
|
|
Volume |
|
|
FX |
|
Total segment net revenues |
|
$ |
391 |
|
|
$ |
354 |
|
|
$ |
37 |
|
|
10 |
% |
|
15 |
% |
|
(6 |
%) |
|
1 |
% |
Segment Adjusted EBITDA |
|
$ |
49 |
|
|
$ |
72 |
|
|
$ |
(23 |
) |
|
(32 |
)% |
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA
Margin |
|
|
13 |
% |
|
|
20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The increase in net revenues was primarily
driven by favorable pricing, primarily due to higher material costs
passed through to customers, partially offset by lower sales
volume, primarily due to labor shortages.
The decrease in Adjusted EBITDA was primarily
due to higher manufacturing costs, lower sales volume and higher
logistics and material costs, net of higher costs passed through to
customers.
Beverage Merchandising
|
|
For the Three Months Ended September 30, |
|
|
Components of Change in Net Revenues |
|
|
|
2021 |
|
|
2020 |
|
|
Change |
|
|
% change |
|
|
Price/Mix |
|
|
Volume |
|
|
FX |
|
Total segment net revenues |
|
$ |
403 |
|
|
$ |
361 |
|
|
$ |
42 |
|
|
12 |
% |
|
3 |
% |
|
9 |
% |
|
— |
% |
Segment Adjusted EBITDA |
|
$ |
16 |
|
|
$ |
24 |
|
|
$ |
(8 |
) |
|
(33 |
)% |
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA
Margin |
|
|
4 |
% |
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The increase in net revenues was primarily due to higher sales
volume and favorable pricing due to the market recovery from the
COVID-19 pandemic.
The decrease in Adjusted EBITDA was primarily
driven by higher material, manufacturing and logistics costs,
partially offset by higher sales volume and favorable pricing and
customer mix. Higher costs include $7 million of additional costs
incurred related to the impact of Tropical Storm Fred.
Year to Date Financial Results (Nine Months Ended
September 30, 2021):
- Net Revenues of $3,910
million for the nine months ended September 30, 2021 compared to
$3,514 million in the prior year period.
- Net Loss from
continuing operations of $1 million for the nine months ended
September 30, 2021 compared to a net loss of $28 million in the
prior year period. Net loss from continuing operations included
certain significant and/or unusual items that are not necessarily
representative of underlying operational performance as discussed
in more detail below.
- Adjusted EBITDA1 from
continuing operations of $326 million for the nine months ended
September 30, 2021 compared to $445 million in the prior year
period. Adjusted EBITDA1 for the nine months ended September 30,
2021 includes additional costs incurred related to the impact of
Winter Storm Uri.
Net revenues for the nine months ended September
30, 2021 were $3,910 million compared to $3,514 million in the
prior year period. The increase was primarily due to higher sales
volume within our Foodservice and Beverage Merchandising segments,
largely due to higher demand as markets continue to recover from
the COVID-19 pandemic, as well as favorable pricing, primarily due
to higher material costs passed through to customers within our
Foodservice and Food Merchandising segments.
Net loss from continuing operations was $1 million for the nine
months ended September 30, 2021 compared to a net loss of $28
million in the prior year period. The change was primarily driven
by $134 million of lower interest expense driven by lower average
debt outstanding in the current year period, $49 million of related
party management fees in the comparative period and $38 million of
higher non-operating income driven by a pension settlement gain.
These increases were partially offset by $171 million of lower
gross profit due to higher manufacturing costs, including $50
million of additional costs incurred related to the impact of
Winter Storm Uri, higher logistics and material costs, net of
higher costs passed through to customers, and a $69 million lower
income tax benefit driven primarily by the impacts of the CARES Act
in the prior year.
Adjusted EBITDA1 was $326 million for the nine months ended
September 30, 2021 compared to $445 million in the prior year
period. The decline was primarily due to higher manufacturing,
logistics and material costs, net of higher costs passed through to
customers. These decreases were partially offset by higher sales
volume. Adjusted EBITDA for the nine months ended September 30,
2021 included $50 million of additional costs incurred related to
the impact of Winter Storm Uri.
Balance Sheet and Cash Flow Highlights
- Cash and cash equivalents were $627
million as of September 30, 2021.
- Total outstanding debt was $4,277
million at September 30, 2021.
- For the quarter ended September 30,
2021, capital expenditures related to the Company’s Strategic
Investment Program (“SIP”) totaled $21 million.
- The Company paid dividends to
shareholders of $0.30 per share during the nine months ended
September 30, 2021. The Company’s board of directors approved its
fourth quarter dividend on November 2, 2021 for $0.10 per share of
common stock, payable on December 15, 2021 to shareholders of
record as of December 1, 2021.
Outlook
Our performance in the third quarter demonstrated the resiliency
of our business as we saw continued volume recovery and effective
pricing action. The Company is maintaining its full year 2021
guidance provided in its September 2021 earnings update conference
call and expects the remainder of 2021 to continue to see
sequential and year over year volume recovery and further pricing
actions and pass-through contract price increases help us recover
margins and profitability. While we expect profitability to
continue to improve, we continue to see sustained pressure from
high raw materials costs along with a difficult labor environment
which makes the trajectory of the recovery difficult to
predict.
Conference Call and Webcast Presentation
The Company will host a conference call and webcast presentation
to discuss these results on November 4, 2021 at 8:30 a.m. U.S.
Eastern Time. Investors interested in participating in the live
call may dial (844) 825-9789 from the U.S. or (412) 317-5180
internationally and using access code 1016238. Participants may
also access the live webcast and supplemental presentation on the
Pactiv Evergreen Investor Relations website at
https://investors.pactivevergreen.com under “Events.”
About Pactiv Evergreen Inc. Pactiv Evergreen
Inc. (NASDAQ: PTVE) is one of the largest manufacturers of fresh
food and beverage packaging in North America. With a team of nearly
16,000 employees, the Company produces a broad range of on-trend
and feature-rich products that protect, package and display food
and beverages for today’s consumers. Its products, many of which
are made with recycled, recyclable or renewable materials, are sold
to a diversified mix of customers, including restaurants,
foodservice distributors, retailers, food and beverage producers,
packers and processors. Learn more at www.pactivevergreen.com.
Note to Investors Regarding Forward Looking
Statements
This press release contains statements reflecting our views
about the Company’s future performance that constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including the Company’s
fiscal year 2021 guidance. In some cases, you can identify these
statements by forward-looking words such as “may,” “might,” “will,”
“should,” “expects,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential” or “continue,” the negative of
these terms and other comparable terminology. These forward-looking
statements, which are subject to risks, uncertainties and
assumptions about the Company, may include projections of the
Company’s future financial performance, its anticipated growth
strategies and anticipated trends in its business. These statements
are only predictions based on the Company’s current expectations
and projections about future events. There are important factors
that could cause the Company’s actual results, level of activity,
performance or achievements to differ materially from the results,
level of activity, performance or achievements expressed or implied
by the forward-looking statements. For additional information on
these and other factors that could cause the Company’s actual
results to materially differ from those set forth herein, refer to
those factors discussed under the “Risk Factors” section in PTVE’s
Form 10-K for the year ended December 31, 2020, and within other
filings with the SEC. Investors are cautioned not to place undue
reliance on any such forward-looking statements, which speak only
as of the date they are made. The Company undertakes no obligation
to update any forward-looking statement, whether as a result of new
information, future events or otherwise.
Contact:Dhaval
Patel732.501.9657dhaval.patel@pactivevergreen.com
Pactiv Evergreen
Inc.Condensed Consolidated Statements of
Loss(in millions, except per share
amounts)(unaudited)
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Net revenues |
|
$ |
1,394 |
|
|
$ |
1,195 |
|
|
$ |
3,910 |
|
|
$ |
3,514 |
|
Cost of sales |
|
|
(1,291 |
) |
|
|
(1,011 |
) |
|
|
(3,549 |
) |
|
|
(2,982 |
) |
Gross
profit |
|
|
103 |
|
|
|
184 |
|
|
|
361 |
|
|
|
532 |
|
Selling, general and
administrative expenses |
|
|
(104 |
) |
|
|
(116 |
) |
|
|
(345 |
) |
|
|
(358 |
) |
Goodwill impairment charges |
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
|
|
(6 |
) |
Restructuring, asset impairment
and other related charges |
|
|
— |
|
|
|
(14 |
) |
|
|
(8 |
) |
|
|
(18 |
) |
Other income (expense), net |
|
|
7 |
|
|
|
(79 |
) |
|
|
18 |
|
|
|
(48 |
) |
Operating income (loss)
from continuing operations |
|
|
6 |
|
|
|
(31 |
) |
|
|
26 |
|
|
|
102 |
|
Non-operating income, net |
|
|
40 |
|
|
|
17 |
|
|
|
88 |
|
|
|
50 |
|
Interest expense, net |
|
|
(57 |
) |
|
|
(87 |
) |
|
|
(141 |
) |
|
|
(275 |
) |
Loss from continuing
operations before tax |
|
|
(11 |
) |
|
|
(101 |
) |
|
|
(27 |
) |
|
|
(123 |
) |
Income tax benefit (expense) |
|
|
13 |
|
|
|
(42 |
) |
|
|
26 |
|
|
|
95 |
|
Income (loss) from
continuing operations |
|
|
2 |
|
|
|
(143 |
) |
|
|
(1 |
) |
|
|
(28 |
) |
Loss from discontinued
operations, net of income taxes |
|
|
(2 |
) |
|
|
(216 |
) |
|
|
(6 |
) |
|
|
(234 |
) |
Net loss |
|
|
— |
|
|
|
(359 |
) |
|
|
(7 |
) |
|
|
(262 |
) |
Income attributable to
non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
Net loss attributable to
Pactiv Evergreen Inc. common shareholders |
|
$ |
— |
|
|
$ |
(359 |
) |
|
$ |
(8 |
) |
|
$ |
(263 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share
attributable to Pactiv Evergreen Inc. common
shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From continuing operations - basic & diluted |
|
$ |
0.01 |
|
|
$ |
(1.03 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.22 |
) |
From discontinued operations - basic & diluted |
|
$ |
(0.01 |
) |
|
$ |
(1.56 |
) |
|
$ |
(0.03 |
) |
|
$ |
(1.72 |
) |
Total - basic & diluted |
|
$ |
— |
|
|
$ |
(2.59 |
) |
|
$ |
(0.04 |
) |
|
$ |
(1.94 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shared outstanding - basic |
|
|
177.5 |
|
|
|
138.9 |
|
|
|
177.4 |
|
|
|
135.9 |
|
Weighted-average shared outstanding - diluted |
|
|
177.8 |
|
|
|
138.9 |
|
|
|
177.4 |
|
|
|
135.9 |
|
Pactiv Evergreen
Inc.Condensed Consolidated Balance
Sheets(in
millions)(unaudited)
|
|
As of September 30,2021 |
|
|
As of December 31,2020 |
|
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
627 |
|
|
$ |
458 |
|
Accounts receivable, net |
|
|
473 |
|
|
|
375 |
|
Related party receivables |
|
|
47 |
|
|
|
55 |
|
Inventories |
|
|
801 |
|
|
|
784 |
|
Other current assets |
|
|
120 |
|
|
|
175 |
|
Assets held for sale |
|
|
— |
|
|
|
26 |
|
Total current
assets |
|
|
2,068 |
|
|
|
1,873 |
|
Property, plant and equipment, net |
|
|
1,693 |
|
|
|
1,685 |
|
Operating lease right-of-use assets, net |
|
|
254 |
|
|
|
260 |
|
Goodwill |
|
|
1,760 |
|
|
|
1,760 |
|
Intangible assets, net |
|
|
1,052 |
|
|
|
1,092 |
|
Deferred income taxes |
|
|
10 |
|
|
|
7 |
|
Other noncurrent assets |
|
|
170 |
|
|
|
166 |
|
Total
assets |
|
$ |
7,007 |
|
|
$ |
6,843 |
|
Liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
390 |
|
|
$ |
313 |
|
Related party payables |
|
|
10 |
|
|
|
10 |
|
Current portion of long-term debt |
|
|
27 |
|
|
|
15 |
|
Current portion of operating lease liabilities |
|
|
58 |
|
|
|
57 |
|
Income taxes payable |
|
|
10 |
|
|
|
10 |
|
Accrued and other current liabilities |
|
|
354 |
|
|
|
322 |
|
Liabilities held for sale |
|
|
— |
|
|
|
12 |
|
Total current
liabilities |
|
|
849 |
|
|
|
739 |
|
Long-term debt |
|
|
4,220 |
|
|
|
3,965 |
|
Long-term operating lease liabilities |
|
|
213 |
|
|
|
217 |
|
Deferred income taxes |
|
|
217 |
|
|
|
193 |
|
Long-term employee benefit obligations |
|
|
152 |
|
|
|
519 |
|
Other noncurrent liabilities |
|
|
142 |
|
|
|
136 |
|
Total
liabilities |
|
$ |
5,793 |
|
|
$ |
5,769 |
|
Total equity attributable
to Pactiv Evergreen Inc. common shareholders |
|
|
1,210 |
|
|
|
1,071 |
|
Non-controlling interests |
|
|
4 |
|
|
|
3 |
|
Total
equity |
|
$ |
1,214 |
|
|
$ |
1,074 |
|
Total liabilities and
equity |
|
$ |
7,007 |
|
|
$ |
6,843 |
|
Pactiv Evergreen
Inc.Condensed Consolidated Statements of Cash
Flows(in
millions)(unaudited)
|
|
For the Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
Cash provided by operating activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(7 |
) |
|
$ |
(262 |
) |
Adjustments to reconcile net loss
to operating cash flows: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
253 |
|
|
|
391 |
|
Deferred income taxes |
|
|
(48 |
) |
|
|
310 |
|
Unrealized loss (gain) on derivatives |
|
|
5 |
|
|
|
(3 |
) |
Goodwill impairment charges |
|
|
— |
|
|
|
6 |
|
Other asset impairment charges |
|
|
— |
|
|
|
15 |
|
Gain on disposal of businesses and other assets |
|
|
— |
|
|
|
(8 |
) |
Non-cash portion of employee benefit obligations |
|
|
(83 |
) |
|
|
(44 |
) |
Non-cash portion of operating lease expense |
|
|
57 |
|
|
|
78 |
|
Amortization of OID and DIC |
|
|
4 |
|
|
|
15 |
|
Loss on extinguishment of debt |
|
|
2 |
|
|
|
15 |
|
Other non-cash items, net |
|
|
8 |
|
|
|
(2 |
) |
Change in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(98 |
) |
|
|
(4 |
) |
Inventories |
|
|
(20 |
) |
|
|
(29 |
) |
Other current assets |
|
|
2 |
|
|
|
— |
|
Accounts payable |
|
|
87 |
|
|
|
24 |
|
Operating lease payments |
|
|
(57 |
) |
|
|
(75 |
) |
Income taxes payable/receivable |
|
|
49 |
|
|
|
(121 |
) |
Accrued and other current liabilities |
|
|
34 |
|
|
|
(76 |
) |
Employee benefit obligation contributions |
|
|
(3 |
) |
|
|
(6 |
) |
Other assets and liabilities |
|
|
5 |
|
|
|
46 |
|
Net cash provided by
operating activities |
|
|
190 |
|
|
|
270 |
|
Cash used in investing
activities |
|
|
|
|
|
|
|
|
Acquisition of property, plant and equipment and intangible
assets |
|
|
(199 |
) |
|
|
(329 |
) |
Proceeds from sale of property, plant and equipment |
|
|
1 |
|
|
|
1 |
|
Disposal of businesses, net of cash disposed |
|
|
(6 |
) |
|
|
8 |
|
Insurance recoveries |
|
|
3 |
|
|
|
— |
|
Net cash used in
investing activities |
|
|
(201 |
) |
|
|
(320 |
) |
Cash provided by
financing activities |
|
|
|
|
|
|
|
|
Long-term debt proceeds |
|
|
1,510 |
|
|
|
5,614 |
|
Long-term debt repayments |
|
|
(1,275 |
) |
|
|
(5,473 |
) |
Deferred financing transaction costs on long-term debt |
|
|
(5 |
) |
|
|
(35 |
) |
Premium on redemption of long-term debt |
|
|
(1 |
) |
|
|
(2 |
) |
Net proceeds from issuance of shares |
|
|
— |
|
|
|
546 |
|
Dividends paid to common shareholders |
|
|
(53 |
) |
|
|
— |
|
Cash held by Reynolds Consumer Products and Graham Packaging
Company at time of distribution |
|
|
— |
|
|
|
(110 |
) |
Other financing activities |
|
|
(3 |
) |
|
|
(4 |
) |
Net cash provided by
financing activities |
|
|
173 |
|
|
|
536 |
|
Effect of exchange rate changes
on cash, cash equivalents and restricted cash |
|
|
(3 |
) |
|
|
(15 |
) |
Increase in cash, cash equivalents and restricted cash |
|
|
159 |
|
|
|
471 |
|
Cash, cash equivalents and restricted cash as of beginning of the
period1 |
|
|
468 |
|
|
|
1,294 |
|
Cash, cash equivalents
and restricted cash as of end of the
period1 |
|
$ |
627 |
|
|
$ |
1,765 |
|
1– includes $10 million, $9 million and $139 million and of cash
and cash equivalents and restricted cash classified as current
assets held for sale or distribution as of December 31, 2020,
September 30, 2020 and December 31, 2019, respectively.
Pactiv Evergreen
Inc.Reconciliation of Reportable Segment Net
Revenues to Total Net Revenues(in
millions)(unaudited)
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Reportable segment net revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foodservice |
|
$ |
594 |
|
|
$ |
473 |
|
|
$ |
1,619 |
|
|
$ |
1,351 |
|
Food merchandising |
|
|
391 |
|
|
|
354 |
|
|
|
1,121 |
|
|
|
1,046 |
|
Beverage merchandising |
|
|
403 |
|
|
|
361 |
|
|
|
1,147 |
|
|
|
1,106 |
|
Other |
|
|
28 |
|
|
|
30 |
|
|
|
81 |
|
|
|
87 |
|
Inter-segment revenues |
|
|
(22 |
) |
|
|
(23 |
) |
|
|
(58 |
) |
|
|
(76 |
) |
Total net
revenues |
|
$ |
1,394 |
|
|
$ |
1,195 |
|
|
$ |
3,910 |
|
|
$ |
3,514 |
|
Pactiv Evergreen
Inc.Reconciliation of Reportable Segment Adjusted
EBITDA from Continuing Operations to Total Adjusted EBITDA from
Continuing Operations1(in
millions)(unaudited)
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Reportable segment Adjusted EBITDA from continuing
operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foodservice |
|
$ |
64 |
|
|
$ |
81 |
|
|
$ |
187 |
|
|
$ |
170 |
|
Food merchandising |
|
|
49 |
|
|
|
72 |
|
|
|
163 |
|
|
|
186 |
|
Beverage merchandising |
|
|
16 |
|
|
|
24 |
|
|
|
(1 |
) |
|
|
112 |
|
Other |
|
|
3 |
|
|
|
2 |
|
|
|
6 |
|
|
|
6 |
|
Unallocated |
|
|
(13 |
) |
|
|
(6 |
) |
|
|
(29 |
) |
|
|
(29 |
) |
Total Adjusted EBITDA
from continuing operations (Non-GAAP) |
|
$ |
119 |
|
|
$ |
173 |
|
|
$ |
326 |
|
|
$ |
445 |
|
Use of Non-GAAP Financial Measures
The Company uses the non-GAAP financial measure “Adjusted
EBITDA” in evaluating its past results and future prospects. The
Company defines Adjusted EBITDA as net income (loss) from
continuing operations calculated in accordance with GAAP plus the
sum of income tax expense (benefit), net interest expense,
depreciation and amortization and further adjusted to exclude
certain items of a significant or unusual nature, including but not
limited to foreign exchange gains or losses on cash, goodwill
impairment charges, related party management fees, unrealized gains
or losses on derivatives, gains or losses on the sale of businesses
and non-current assets, restructuring, asset impairment and other
related charges, operational process engineering-related
consultancy costs, non-cash pension income or expense, strategic
review and transaction-related costs, executive transition charges
and business acquisition costs.
The Company presents Adjusted EBITDA because it is a key measure
used by its management team to evaluate its operating performance,
generate future operating plans and make strategic decisions. In
addition, the Company’s chief operating decision maker uses
Adjusted EBITDA of each reportable segment to evaluate the
operating performance of such segments. Accordingly, the Company
believes presenting this metric provides useful information to
investors and others in understanding and evaluating its operating
results in the same manner as the management team and board of
directors.
Non-GAAP information should be considered as supplemental in
nature and is not meant to be considered in isolation or as a
substitute for the related financial information prepared in
accordance with GAAP. In addition, the Company’s non-GAAP financial
measure may not be the same as or comparable to similar non-GAAP
financial measures presented by other companies.
Please see the reconciliation of the Company’s Non-GAAP measure
used in this release to the most directly comparable GAAP measure,
beginning on the following page.
Pactiv Evergreen
Inc.Reconciliation of Net Income (Loss) from
Continuing Operations to Adjusted EBITDA from Continuing
Operations(in
millions)(unaudited)
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Net income (loss) from continuing operations
(GAAP) |
|
$ |
2 |
|
|
$ |
(143 |
) |
|
$ |
(1 |
) |
|
$ |
(28 |
) |
Income tax (benefit) expense |
|
|
(13 |
) |
|
|
42 |
|
|
|
(26 |
) |
|
|
(95 |
) |
Interest expense, net |
|
|
57 |
|
|
|
87 |
|
|
|
141 |
|
|
|
275 |
|
Depreciation and
amortization |
|
|
103 |
|
|
|
73 |
|
|
|
253 |
|
|
|
213 |
|
Goodwill impairment
charges(1) |
|
|
— |
|
|
|
6 |
|
|
|
— |
|
|
|
6 |
|
Restructuring, asset impairment
and other related charges(2) |
|
|
— |
|
|
|
14 |
|
|
|
8 |
|
|
|
18 |
|
Loss on sale of businesses and
noncurrent assets(3) |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
Non-cash pension income(4) |
|
|
(40 |
) |
|
|
(18 |
) |
|
|
(88 |
) |
|
|
(55 |
) |
Operational process
engineering-related consultancy costs(5) |
|
|
6 |
|
|
|
3 |
|
|
|
16 |
|
|
|
12 |
|
Related party management
fee(6) |
|
|
— |
|
|
|
44 |
|
|
|
— |
|
|
|
49 |
|
Strategic review and
transaction-related costs(7) |
|
|
— |
|
|
|
24 |
|
|
|
— |
|
|
|
39 |
|
Foreign exchange losses on
cash(8) |
|
|
— |
|
|
|
42 |
|
|
|
1 |
|
|
|
14 |
|
Unrealized losses (gains) on
derivatives(9) |
|
|
1 |
|
|
|
(1 |
) |
|
|
5 |
|
|
|
(3 |
) |
Executive transition
charges(10) |
|
|
— |
|
|
|
— |
|
|
|
10 |
|
|
|
— |
|
Business acquisition
costs(11) |
|
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
Other |
|
|
1 |
|
|
|
(1 |
) |
|
|
5 |
|
|
|
(1 |
) |
Adjusted EBITDA from
continuing operations (Non-GAAP) |
|
$ |
119 |
|
|
$ |
173 |
|
|
$ |
326 |
|
|
$ |
445 |
|
(1) Reflects goodwill impairment charges in
respect of our remaining closures operations.(2) Reflects
asset impairment, restructuring and other related charges (net of
reversals) primarily associated with the closure of Beverage
Merchandising’s coated groundwood operations and our remaining
closures businesses that are not reported within discontinued
operations.(3) Reflects the loss from the sale of businesses
and noncurrent assets, primarily in our Other
segment.(4) Reflects the non-cash pension income related to
our employee benefit plans.(5) Reflects the costs incurred to
evaluate and improve the efficiencies of our manufacturing and
distribution operations.(6) Reflects the related party
management fee charged by Rank to us. Following our IPO, we are no
longer charged the related party management fee.(7) Reflects
costs incurred for strategic reviews of our businesses, as well as
costs related to our IPO that could not be offset against the
proceeds of the IPO.(8) Reflects foreign exchange losses on
cash, primarily on U.S. dollar amounts held in non-U.S. dollar
functional currency entities.(9) Reflects the mark-to-market
movements in our commodity derivatives.(10) Reflects charges
relating to key executive retirement and separation agreements in
the first half of 2021.(11) Reflects costs incurred related to
the acquisition of Fabri-Kal.
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