- Net Sales from Continuing Operations
increased year-over-year to $1.2 billion (up 5%)
- Net Earnings from Continuing Operations
$76 million (up 21%) or $0.48 per diluted share (up 45%)
- Adjusted Earnings from Continuing
Operations per diluted share of $0.61 (up 33%)
- Reaffirm 2018 Outlook provided on
October 17, 2018
- Existing restructuring program expected
to realize annualized savings of $40 million in 2018 and an
additional $25 million in 2019
Sealed Air Corporation (NYSE:SEE) today announced financial
results for the third quarter 2018.
"Net sales of $1.2 billion and Adjusted EBITDA of $219 million
increased 8% and 4% in constant dollars, respectively. Adjusted
EBITDA fell short of our expectations due to currency headwinds and
higher than expected raw material and freight costs. More
specifically to Product Care, we experienced higher absorption
costs due to lower global volume in our utility business, which
accounts for 30% of the division's sales. We expect these
challenges to continue into year-end, which is reflected in our
full year 2018 outlook," said Ted Doheny, Sealed Air's President
and CEO.
"Given recent business and market dynamics, we accelerated
actions under our existing restructuring program. As a result, we
now expect annualized savings of $40 million in 2018, $10 million
above prior expectations, and an additional $25 million in
annualized savings in 2019. Furthermore, we are identifying
additional opportunities to redesign our operating model and
improve our performance. We expect to announce a more detailed plan
before year-end.
We clearly see the power of our iconic brands, differentiated
technology, leading market positions and deep customer
relationships with more value to be captured in existing and
adjacent markets. We remain committed to an ROIC-focused capital
allocation approach and creating long-term value for our customers,
employees and shareholders."
Unless otherwise stated, all results compare third quarter 2018
results to third quarter 2017 results from continuing operations.
Year-over-year financial discussions present operating results from
continuing operations as reported, on an organic basis and on a
constant dollar basis. Organic refers to changes in unit volume and
price/mix performance and excludes acquisition and divestiture
activity and the impact of currency translation. Constant dollar
refers to changes in unit volume, price/mix performance and
acquisition and divestiture activity and 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 Adjusted Tax Rate, exclude the impact of
specified items ("Special Items"), such as restructuring charges,
charges related to the sale of Diversey, gains and losses related
to acquisition and divestiture of businesses, special tax items
("Tax Special Items") and certain other 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 Highlights
Food Care third quarter net sales of $727
million increased 1% as reported. Currency fluctuations had a
negative impact on Food Care net sales of 5%, or $33 million. On a
constant dollar basis, net sales increased 6%, including favorable
price/mix of over 3% and volume growth of 3%. Adjusted EBITDA
increased 4% to $145 million or 20% of net sales. Adjusted EBITDA
performance was primarily due to favorable mix and price/cost
spread, higher volumes and restructuring savings, partially offset
by higher operating costs. Currency fluctuations had an $8 million
unfavorable impact on Adjusted EBITDA.
Product Care third quarter net sales of $459
million increased 11% as reported. Currency fluctuations had a
negative impact on Product Care net sales of 1%, or $6 million. On
a constant dollar basis, net sales increased 12%, including 10%, or
$42 million, from acquisitions and approximately 4% from favorable
price/mix, partially offset by a 2% decline in volume. Adjusted
EBITDA decreased to $76 million or 17% of net sales. Adjusted
EBITDA was primarily impacted by lower volumes and higher operating
costs, partially offset by favorable mix and price/cost spread and
restructuring savings. Currency fluctuations had a $1 million
unfavorable impact on Adjusted EBITDA.
From July 1, 2018 through October 31, 2018,
Sealed Air repurchased approximately $121 million or 3.0 million
shares bringing the total year to date share repurchases to
approximately $603 million or 13.5 million shares. The Company has
approximately $820 million remaining under the current share
repurchase authorization.
The Company committed to a sustainability and
plastics pledge to deliver 100% recyclable and reusable offerings
by 2025 and became signatory of the Ellen MacArthur Foundation's
New Plastics Economy Global Commitment.
Third Quarter 2018 U.S. GAAP Summary
Net sales of $1.2 billion increased 5% on an
as reported basis. Currency had a negative impact on total net
sales of 3%, or $39 million.
Net earnings from continuing operations on an
as reported basis was $76 million, or $0.48 per diluted share,
which was unfavorably impacted by $21 million of special items,
primarily related to $9 million of charges related to the sale of
Diversey, $7 million of restructuring charges and other associated
costs and $5 million related to acquisition and divestiture
activity. This compares to net earnings in the third quarter 2017
of $63 million, or $0.33 per diluted share, which was unfavorably
impacted by $24 million of special items, including $9 million of
restructuring and other associated costs, $7 million related
acquisition and divestiture activity and $5 million of Tax Special
Items.
The effective tax rate in the third quarter
of 2018 was 30.6%, compared to 41.1% in the third quarter of 2017.
The 2017 rate was negatively affected by tax expense related
to the sale of Diversey.
Third Quarter 2018 Non-U.S. GAAP Summary
On a constant dollar basis, net sales
increased 8% reflecting favorable price/mix of 4%, contribution
from acquisitions of 4% and an increase in volume of 1%. By region,
constant dollar sales increased 24% in Latin America, 18% in Asia
Pacific, 6% in North America and 2% in EMEA.
Adjusted EBITDA was $219 million, or 18.5% of
net sales in the third quarter of 2018 compared to $217 million, or
19.2% in 2017. Currency fluctuations had an unfavorable $7 million,
or 3%, impact on Adjusted EBITDA in the third quarter of 2018.
Adjusted earnings per diluted share was $0.61
for the third quarter 2018 compared to $0.46 in the third quarter
2017. The Adjusted Tax Rate was 27.8% in the third quarter 2018,
compared to 30.7% in the third quarter 2017.
Cash Flow and Net Debt
Cash flow provided by operating activities
for the nine months ended September 30, 2018 was an inflow of
$150 million, which includes the previously announced
one-time payment of $42 million in lieu of future royalty
payments and $45 million of payments related to the sale of
Diversey and efforts to address related stranded costs.
Capital expenditures were $115 million for
the nine months ended September 30, 2018. Free Cash Flow,
defined as net cash provided by operating activities less capital
expenditures and excluding payments related to the sale of Diversey
and efforts to address related stranded costs, was an inflow of $80
million in the nine months ended September 30, 2018.
During the nine months ended
September 30, 2018, the Company had cash used in financing
activities of $534 million related to share repurchases and cash
dividends of $79 million.
Net Debt, defined as total debt less cash and
cash equivalents, increased to $3.4 billion as of
September 30, 2018 from $2.7 billion as of December 31,
2017. The increase in Net Debt resulted from a use of cash related
to working capital, acquisition activity and share repurchases.
Outlook for Full Year 2018
As provided on October 17, 2018, for the full
year 2018, Sealed Air anticipates net sales to be approximately
$4.7 billion, a constant dollar growth rate of approximately 6%.
The Company expects Adjusted EBITDA from continuing operations to
be in the range of $870 million to $880 million, a constant dollar
growth rate of approximately 6% compared to the prior year. The
forecast for Adjusted EPS is in the range of $2.40 to $2.45, which
is based on 161 million shares outstanding and an anticipated
Adjusted Tax Rate of 27%.
Currency headwinds are expected to negatively
impact net sales and Adjusted EBITDA by $40 million and $10
million, respectively.
Free Cash Flow is expected to be
approximately $350 million, assuming cash tax payments of $165
million.
Conference Call Information
Date: Thursday, November 1, 2018 Time: 10:00 a.m. (ET)
Webcast:
www.sealedair.com/investors
Conference Dial In: (855) 472-5411 (domestic) (330) 863-3389
(international) Participant Code: 4695619
A supplemental presentation will be available on the Company’s
website at www.sealedair.com/investors.
Conference Call Replay
Information
Date: Thursday, November 1, 2018 at 1:00 p.m. (ET) through
Saturday, December 1, 2018 at 12:00 p.m. (ET) Webcast:
www.sealedair.com/investors
Conference Dial In: (855) 859-2056 (domestic) (404) 537-3406
(international) Participant Code: 4695619
Business
Sealed Air Corporation is a knowledge-based
company focused on packaging solutions that help 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 and Bubble Wrap® brand cushioning, enable a safer
and less wasteful food supply chain and protect valuable goods
shipped around the world. Sealed Air generated $4.5 billion in
sales in 2017 and has approximately 15,000 employees who serve
customers in 122 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 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”), “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 Total Company
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, 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 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: global economic and political
conditions, currency translation and devaluation effects, changes
in raw material pricing and availability, competitive conditions,
the success of new product offerings, consumer preferences, the
effects of animal and food-related health issues, pandemics,
changes in energy costs, environmental matters, the success of our
restructuring activities, 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 2017 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
statement 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 because of new information, future developments or
otherwise.
Sealed Air Corporation
Supplemental Information
Condensed Consolidated Statements of
Operations(1)
Three Months Ended September 30, Nine Months Ended
September 30, (unaudited) (unaudited) (In
millions, except per share data) 2018
2017 2018 2017 Net sales $
1,186.2 $ 1,131.3 $ 3,472.4 $ 3,233.8 Cost of sales(2)(3) 820.7
770.6 2,369.4 2,194.2 Gross profit
365.5 360.7 1,103.0 1,039.6 Selling, general and administrative
expenses(2) 192.1 207.9 578.9 608.2 Amortization expense of
intangible assets acquired 3.6 3.1 10.9 9.2 Restructuring and other
charges 6.6 6.2 22.3 9.2 Operating
profit 163.2 143.5 490.9 413.0 Interest expense, net (44.8 ) (49.1
) (131.3 ) (143.4 ) Other (expense) income, net(2)(3) (9.4 ) 11.8
(20.3 ) 4.7 Earnings before income tax provision
109.0 106.2 339.3 274.3 Income tax provision 33.4 43.7
388.4 236.5 Net earnings (loss) from
continuing operations 75.6 62.5 (49.1 ) 37.8 Gain on sale of
discontinued operations, net of tax 3.4 699.3 41.9 699.3 Net
earnings from discontinued operations, net of tax — 25.7
— 111.3
Net earnings (loss) $
79.0 $ 787.5 $
(7.2 ) $ 848.4 Basic: Continuing
operations $ 0.48 $ 0.33 $ (0.31 ) $ 0.20 Discontinued operations
0.02 3.86 0.26 4.22
Net earnings
(loss) per common share - basic $ 0.50
$ 4.19 $ (0.05 ) $
4.42 Diluted: Continuing operations $ 0.48 $ 0.33 $
(0.31 ) $ 0.19 Discontinued operations 0.02 3.82 0.26
4.18
Net earnings (loss) per common share -
diluted $ 0.50 $ 4.15
$ (0.05 ) $ 4.37
Dividends per common share $ 0.16 $ 0.16 $ 0.48
$ 0.48 Weighted average number of common shares
outstanding: Basic 157.2 186.9 160.8 190.9
Diluted 158.0 188.9 160.8 192.9
_________________________
(1)
The supplementary information included in
this press release for 2018 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)
Due to the adoption of ASU 2017-07,
certain amounts related to defined benefit and other
post-employment benefit plans were reclassified from cost of sales
and selling, general and administrative expenses to other (expense)
income, net. The total impact for the three and nine months ended
September 30, 2017 was $14.5 million and $15.9 million,
respectively.
(3)
As part of our review of costs included in
the corporate segment, amounts related to division operations were
identified and reclassified out of other (expense) income, net to
cost of sales. This resulted in a reclassification of $2.1 million
and $5.3 million for the three and nine months ended September 30,
2017, respectively.
Sealed Air Corporation
Supplemental Information
Condensed Consolidated Balance
Sheets(1)
September 30, 2018 (In millions)
(unaudited) December 31, 2017 Assets Current
assets: Cash and cash equivalents $ 191.3 $ 594.0 Trade
receivables, net 508.8 552.4 Income tax receivables 32.7 85.1 Other
receivables 88.7 90.2 Inventories, net 605.4 506.8 Current assets
held for sale 0.6 4.0 Prepaid expenses and other current assets
167.9 33.9
Total current assets
1,595.4 1,866.4 Property and equipment, net 1,022.0 998.4 Goodwill
1,951.9 1,939.8 Identifiable intangible assets, net 102.3 83.6
Deferred taxes 113.6 176.2 Other non-current assets 211.8
215.9
Total assets $ 4,997.0
$ 5,280.3 Liabilities and Stockholders'
Equity Current liabilities: Short-term borrowings $ 308.3 $
25.3 Current portion of long-term debt 5.1 2.2 Accounts payable
775.3 723.8 Current liabilities held for sale — 2.2 Accrued
restructuring costs 19.3 15.4 Income tax payable 58.6 47.3 Other
current liabilities 400.0 562.0 Total current
liabilities 1,566.6 1,378.2 Long-term debt, less current portion
3,242.5 3,230.5 Deferred taxes 18.5 28.5 Other non-current
liabilities 615.1 490.8
Total liabilities
5,442.7 5,128.0 Stockholders’ equity: Preferred stock
— — Common stock 23.2 23.0 Additional paid-in capital 2,043.2
1,939.6 Retained earnings 1,646.7 1,735.2 Common stock in treasury
(3,288.1 ) (2,700.6 ) Accumulated other comprehensive loss, net of
taxes (870.7 ) (844.9 )
Total stockholders’ (deficit) equity
(445.7 ) 152.3 Total liabilities and
stockholders’ (deficit) equity $ 4,997.0
$ 5,280.3
_________________________
(1)
The supplementary information included in
this press release for 2018 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.
Calculation of Net
Debt(1)
September 30, 2018 (unaudited) December 31,
2017 Short-term borrowings $ 308.3 $ 25.3 Current portion of
long-term debt 5.1 2.2 Long-term debt, less current portion 3,242.5
3,230.5 Total debt 3,555.9 3,258.0 Less: cash and
cash equivalents (191.3 ) (594.0 )
Net Debt $
3,364.6 $ 2,664.0
______________________
(1)
The supplementary information included in
this press release for 2018 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
Supplemental Information
Condensed Consolidated Statements of
Cash Flows(1)
Nine Months Ended September 30, (unaudited)
(In millions) 2018 2017 Net
(loss) earnings $ (7.2 ) $ 848.4 Adjustments to reconcile net
(loss) earnings to net cash provided by operating activities(2)
173.7 (332.7 ) Changes in operating assets and liabilities: Trade
receivables, net (31.0 ) (87.5 ) Inventories (113.2 ) (100.5 )
Accounts payable 45.0 135.2 Other assets and liabilities 82.7
(130.4 )
Net cash provided by operating activities
$ 150.0 $ 332.5 Cash
flows from investing activities: Capital expenditures (114.8 )
(126.5 ) Proceeds, net from sale of business and property and
equipment 6.6 4.4 Business acquired, net of cash acquired (67.8 )
(25.4 ) Impact of sale of Diversey(3) (19.6 ) 2,025.5 Investment in
cost method investments (7.5 ) — Settlement of foreign currency
forward contracts (5.5 ) (1.1 ) Other investing activities (2.6 ) —
Net cash (used in) provided by investing
activities(3) $ (211.2 ) $
1,876.9 Cash flows from financing activities: Changes
in short term borrowings 293.3 (21.5 ) Payments of borrowings —
(369.5 ) Payments of debt modification/extinguishment costs (6.1 )
— Proceeds from cross currency swap — 17.4 Dividends paid on common
stock (79.3 ) (92.4 ) Acquisition of common stock for tax
withholding (7.8 ) (21.9 ) Repurchases of common stock (534.3 )
(757.3 )
Net cash used in financing activities(3)
$ (334.2 ) $ (1,245.2 )
Effect of foreign currency exchange rate changes on cash and
cash equivalents $ (7.3 ) $
(18.9 ) Cash and cash equivalents 594.0 333.7
Restricted cash and cash equivalents(3) — 52.9
Balance, beginning of period $ 594.0
$ 386.6 Net change during the period
$ (402.7 ) $ 945.3 Cash and cash
equivalents 191.3 1,304.7 Restricted cash and cash equivalents(3) —
27.2
Balance, end of period $
191.3 $ 1,331.9
Non-U.S. GAAP Free Cash Flow: Cash flow from operating
activities $ 150.0 $ 332.5 Capital expenditures for property and
equipment (114.8 ) (126.5 )
Free Cash Flow(4)
$ 35.2 $ 206.0
Supplemental Cash Flow Information: Interest payments, net of
amounts capitalized $ 137.4 $ 156.5 Income tax
payments, net of cash refunds $ 137.5 $ 126.6
Payments related to the sale of Diversey and efforts to address
related stranded costs(4) $ 44.9 $ 61.2 Restructuring
payments including associated costs $ 7.4 $ 48.7
Non-cash items: Transfers of shares of common stock from treasury
for 2017 and 2016 profit-sharing contributions $ 23.8 $ 22.3
________________________
(1)
The supplementary information included in
this press release for 2018 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)
2018 adjustments primarily consists of
depreciation and amortization of $98 million, deferred taxes of $51
million, share based compensation expense of $23 million and profit
sharing expense of $16 million partially offset by a gain on the
sale of Diversey of $42 million. 2017 primarily consists of $699
million related to the gain on sale from Diversey partially offset
by $161 million of deferred taxes, depreciation and amortization
$114 million, share based compensation expense of $39 million and
profit sharing expense of $19 million.
(3)
The Company adopted ASU 2016-18,
Restricted Cash, in 2018 As a result, for the nine months ended
September 30, 2017, there was an increase in cash flows from
financing activities of $1.8 million due to the reclassification of
restricted cash and a decrease in cash flows from investing
activities of $27.5 million due to the reclassification of
restricted cash sold in the sale of Diversey to change in the total
cash balance.
(4)
Free cash flow was an inflow of $80
million in 2018 excluding the payment of charges related to the
sale of Diversey and efforts to address related stranded costs of
$45 million. Free cash flow was an inflow of $267 million in 2017
excluding the payment of charges related to the sale of Diversey of
$61 million.
Sealed Air Corporation
Supplemental
Information(1)
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, 2018 2017 2018
2017 (In millions, except per share
Net Diluted Net
Diluted Net Diluted Net
Diluted data) Earnings EPS
Earnings EPS Earnings EPS
Earnings EPS U.S. GAAP net earnings (loss) and
diluted EPS from continuing operations(2) $
75.6 $ 0.48 $ 62.5 $
0.33 $ (49.1 ) $ (0.31
) $ 37.8 $ 0.19 Special Items(3)
20.5 0.13 24.1 0.13 333.0 2.07
201.7 1.05
Non-U.S. GAAP adjusted net earnings and
adjusted diluted EPS from continuing operations $
96.1 $ 0.61 $ 86.6
$ 0.46 $ 283.9
$ 1.76 $ 239.5 $
1.24 Weighted average number of common shares outstanding
- Diluted 158.0 188.9 160.8
192.9
____________________________
(1)
The supplementary information included in
this press release for 2018 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)
Net earnings (loss) per common share is
calculated under the two-class method.
(3)
Special Items include the following:
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30, (In
millions, except per share data) 2018
2017 2018 2017 Special Items:
Restructuring and other charges $ (6.6 ) $ (6.2 ) $ (22.3 ) $ (9.2
) Other restructuring associated costs (0.7 ) (2.9 ) (2.5 ) (12.7 )
Debt modification/extinguishment costs (1.5 ) — (1.9 ) — Charges
related to acquisition and divestiture activity (4.8 ) (6.7 ) (10.0
) (4.8 ) Charges due to the sale of Diversey (8.7 ) (13.7 ) (21.3 )
(47.6 ) Gain from class-action litigation settlement — — 12.6 —
Settlement/curtailment benefits related to retained Diversey
retirement plans — 13.5 — 13.5 Other Special Items(i) (1.8 ) (2.8 )
(3.3 ) (0.2 )
Pre-tax impact of Special Items (24.1
) (18.8 ) (48.7 ) (61.0
) Tax impact of Special Items and Tax Special Items(ii) 3.6
(5.3 ) (284.3 ) (140.7 )
Net impact of Special Items
$ (20.5 ) $ (24.1 )
$ (333.0 ) $ (201.7 )
Weighted average number of common shares outstanding -
Diluted 158.0 188.9 160.8 192.9
Loss per share impact from Special
Items
$ (0.13 ) $ (0.13 )
$ (2.07 ) $ (1.05 )
______________________
(i)
Other Special Items for the three and nine
months ended September 30, 2018, primarily included fees related to
professional services. Other Special Items for the three and nine
months ended September 30, 2017, primarily included transaction
fees related to various divestitures and acquisitions.
(ii)
Refer to Note 1 to the table below for a
description of Special Items related to tax.
The calculation of the non-U.S. GAAP
Adjusted income tax rate is as follows:
Three Months EndedSeptember 30, Nine Months
EndedSeptember 30, (In millions) 2018
2017 2018 2017
U.S. GAAP Earnings before income tax provision from continuing
operations $ 109.0 $ 106.2 $ 339.3 $ 274.3 Pre-tax impact of
special items 24.1 18.8 48.7 61.0
Non-U.S. GAAP Adjusted Earnings before income tax provision from
continuing operations $ 133.1 $ 125.0 $ 388.0
$ 335.3 U.S. GAAP Income tax provision from
continuing operations $ 33.4 $ 43.7 $ 388.4 $ 236.5 Tax Special
Items(1) (1.1 ) (0.4 ) (295.0 ) (150.3 ) Tax impact of Special
Items 4.7 (4.9 ) 10.7 9.6 Non-U.S. GAAP
Adjusted Income tax provision from continuing operations $ 37.0
$ 38.4 $ 104.1 $ 95.8 U.S. GAAP
Effective income tax rate 30.6 % 41.1 % 114.5 % 86.2 % Non-U.S.
GAAP Adjusted income tax rate 27.8 % 30.7 % 26.8 % 28.6 %
______________________________
(1)
For the nine months ended September 30,
2018, the Tax Special Items included $290 million of provisional
tax expense for one-time tax on unrepatriated foreign earnings
pursuant to the Tax Cut and Jobs Act ("TCJA"). For the nine months
ended September 30, 2017, the Tax Special Items included $145
million of tax expense recorded in accordance with the pending sale
of Diversey.
Sealed Air Corporation
Supplemental
Information(1)
Components of Change in Net Sales by
Segment
(Unaudited)
Three Months Ended September 30, (In millions)
Food Care Product Care
Total Company 2017 Net Sales $ 716.0 63.3 % $
415.3 36.7 % $ 1,131.3 Volume - Units
19.2 2.7 % (8.3 ) (2.0 )% 10.9 1.0 % Price/mix(2) 25.1 3.5 %
15.3 3.7 % 40.4 3.6 % Total organic change (Non-U.S.
GAAP)(3) 44.3 6.2 % 7.0 1.7 % 51.3 4.6 % Acquisitions — — %
42.4 10.2 % 42.4 3.7 % Total constant dollar change
(Non-U.S. GAAP)(3) 44.3 6.2 % 49.4 11.9 % 93.7 8.3 % Foreign
currency translation (33.1 ) (4.6 )% (5.7 ) (1.4 )% (38.8 ) (3.4 )%
Total change (U.S. GAAP) 11.2 1.6 %
43.7 10.5 % 54.9 4.9 %
2018 Net Sales $ 727.2
61.3 %
$ 459.0 38.7 %
$
1,186.2 Nine Months
Ended September 30, (In millions) Food Care
Product Care Total
Company 2017 Net Sales $ 2,051.1 63.4 % $ 1,182.7
36.6 % $ 3,233.8 Volume -
Units 45.2 2.2 % 4.0 0.3 % 49.2 1.5 % Price/mix(2) 53.0 2.6
% 44.8 3.8 % 97.8 3.0 % Total organic change
(Non-U.S. GAAP)(3) 98.2 4.8 % 48.8 4.1 % 147.0 4.5 % Acquisitions —
— % 87.2 7.4 % 87.2 2.7 % Total constant
dollar change (Non-U.S. GAAP)(3) 98.2 4.8 % 136.0 11.5 % 234.2 7.2
% Foreign currency translation (12.8 ) (0.6 )% 17.2 1.5 %
4.4 0.1 %
Total change (U.S. GAAP) 85.4
4.2 % 153.2 13.0 % 238.6
7.3 % 2018 Net Sales
$ 2,136.5 61.5 %
$ 1,335.9
38.5 %
$ 3,472.4
_________________________
(1)
The supplementary information included in
this press release for 2018 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 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 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)
Total organic change is a non-U.S. GAAP
financial measure which excludes acquisition and divestiture
activity 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 consider 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
Supplemental
Information(1)
Components of Change in Net Sales by
Region
(Unaudited)
Three Months Ended September 30, (In millions)
North America EMEA(2)
Latin America APAC(3)
Total 2017 Net Sales $ 623.2
55.1 % $ 247.9 21.9 % $ 101.4 9.0 % $
158.8 14.0 % $ 1,131.3 Volume - Units
(4.4 ) (0.7 )% 4.0 1.6 % 7.5 7.4 % 3.8 2.4 % 10.9 1.0 %
Price/mix(4) 23.1 3.7 % 1.5 0.6 % 16.1 15.9 %
(0.3 ) (0.2 )% 40.4 3.6 % Total organic change (Non-U.S.
GAAP)(5) 18.7 3.0 % 5.5 2.2 % 23.6 23.3 % 3.5 2.2 % 51.3 4.6 %
Acquisitions 17.0 2.7 % — — % 0.5 0.5 % 24.9
15.7 % 42.4 3.7 % Total constant dollar change
(Non-U.S. GAAP)(5) 35.7 5.7 % 5.5 2.2 % 24.1 23.8 % 28.4 17.9 %
93.7 8.3 % Foreign currency translation (1.4 ) (0.2 )% (6.2 ) (2.5
)% (23.6 ) (23.3 )% (7.6 ) (4.8 )% (38.8 ) (3.4 )%
Total change
(U.S. GAAP) 34.3 5.5 % (0.7
) (0.3 )% 0.5 0.5 %
20.8 13.1 % 54.9 4.9 %
2018 Net Sales $
657.5 55.4 %
$ 247.2 20.8 %
$ 101.9 8.6 %
$ 179.6
15.1 %
$ 1,186.2
Nine Months Ended September 30, (In millions)
North America EMEA(2)
Latin America APAC(3)
Total 2017 Net Sales $ 1,777.9
55.0 % $ 706.7 21.9 % $ 294.2
9.1 % $ 455.0 14.1 % $ 3,233.8
Volume - Units (0.7 ) — % 14.8 2.1 % 25.2 8.6 % 9.9 2.2 % 49.2 1.5
% Price/mix(4) 66.8 3.8 % 8.4 1.2 % 23.7 8.1 %
(1.1 ) (0.2 )% 97.8 3.0 % Total organic change (Non-U.S.
GAAP)(5) 66.1 3.8 % 23.2 3.3 % 48.9 16.7 % 8.8 2.0 % 147.0 4.5 %
Acquisitions 20.8 1.2 % — — % 1.4 0.5 % 65.0
14.3 % 87.2 2.7 % Total constant dollar change
(Non-U.S. GAAP)(5) 86.9 5.0 % 23.2 3.3 % 50.3 17.2 % 73.8 16.3 %
234.2 7.2 % Foreign currency translation 1.7 0.1 % 37.0
5.2 % (36.8 ) (12.5 )% 2.5 0.5 % 4.4 0.1 %
Total change (U.S. GAAP) 88.6 5.1 %
60.2 8.5 % 13.5 4.7 %
76.3 16.8 % 238.6 7.3 %
2018 Net Sales $
1,866.5 53.8 %
$ 766.9 22.1 %
$ 307.7 8.9 %
$ 531.3
15.3 %
$ 3,472.4
__________________________
(1)
The supplementary information included in
this press release for 2018 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)
EMEA consists of Europe, Middle East,
Africa and Turkey.
(3)
APAC refers collectively to our Asia
Pacific region. This region consists of i) Greater China, ii)
India/Southeast Asia and iii) Australia, New Zealand, Japan and
Korea.
(4)
Our 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 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.
(5)
Total organic change is a non-U.S. GAAP
financial measure which excludes acquisition and divestiture
activity 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 CorporationSupplemental
Information(1)Segment
InformationReconciliation of Net Earnings to Non-U.S. GAAP
Total Company Adjusted EBITDA(Unaudited)
To accelerate productivity improvements and elimination of
operational redundancies, the Company implemented a change in
allocation of Corporate expenses, effective January 1, 2018. These
expenses are now allocated to Food Care and Product Care segments.
For comparison purposes, the Company presented 2017 results to
reflect the revised allocation of these costs. This segment
reporting change has no impact on Total Company Adjusted
EBITDA.
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30, (In
millions) 2018 2017 2018
2017 Net Sales: Food Care $ 727.2 $
716.0 $ 2,136.5 $ 2,051.1 As a % of Total Company net sales 61.3 %
63.3 % 61.5 % 63.4 % Product Care 459.0 415.3 1,335.9 1,182.7 As a
% of Total Company net sales 38.7 % 36.7 % 38.5 % 36.6 %
Total
Company Net Sales $ 1,186.2 $
1,131.3 $ 3,472.4 $
3,233.8 Three Months EndedSeptember
30, Nine Months EndedSeptember 30, (In
millions) 2018 2017 2018 2017
Adjusted EBITDA from continuing operations: Food Care $
145.4 $ 139.6 $ 415.5 $ 393.4 Adjusted EBITDA Margin 20.0 % 19.5 %
19.4 % 19.2 % Product Care 76.4 77.9 233.3 210.6 Adjusted EBITDA
Margin 16.6 % 18.8 % 17.5 % 17.8 % Corporate (2.9 ) (0.7 ) (7.6 )
(9.0 )
Non-U.S. GAAP Total Company Adjusted EBITDA from
continuing operations $ 218.9 $
216.8 $ 641.2 $
595.0 Adjusted EBITDA Margin 18.5 % 19.2 % 18.5 %
18.4 %
______________________________
(1)
The supplementary information included in
this press release for 2018 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.
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30, (In
millions) 2018 2017 2018
2017 U.S. GAAP Net earnings (loss) from
continuing operations $ 75.6 $ 62.5
$ (49.1 ) $ 37.8 Interest
expense, net (44.8 ) (49.1 ) (131.3 ) (143.4 ) Income tax provision
33.4 43.7 388.4 236.5 Depreciation and amortization(2) (41.1 )
(42.7 ) (122.3 ) (116.3 ) Depreciation and amortization adjustments
0.1 — 0.4 — Special Items: Restructuring and other charges(3) (6.6
) (6.2 ) (22.3 ) (9.2 ) Other restructuring associated costs (0.7 )
(2.9 ) (2.5 ) (12.7 ) Debt modification/extinguishment costs (1.5 )
— (1.9 ) — Charges related to acquisition and divestiture activity
(4.8 ) (6.7 ) (10.0 ) (4.8 ) Charges incurred due to the sale of
Diversey (8.7 ) (13.7 ) (21.3 ) (47.6 ) Gain from class-action
litigation settlement — — 12.6 — Settlement/curtailment benefits
related to retained Diversey retirement plans — 13.5 — 13.5 Other
Special Items(4) (1.8 ) (2.8 ) (3.3 ) (0.2 ) Pre-tax impact of
Special items (24.1 ) (18.8 ) (48.7 ) (61.0 )
Non-U.S. GAAP
Total Company Adjusted EBITDA from continuing operations
$ 218.9 $ 216.8 $
641.2 $ 595.0
_________________________
(1)
The supplementary information included in
this press release for 2018 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)
The depreciation and amortization
previously reclassified to the Corporate segment has been allocated
to the divisions. Depreciation and amortization by segment are as
follows:
Three Months
EndedSeptember 30, Nine Months EndedSeptember
30, (In millions) 2018 2017
2018 2017 Food Care $ 25.6 $ 29.8 $
79.8 $ 80.3 Product Care 15.5 12.9 42.5 36.0
Total Company
depreciation and amortization(i) $ 41.1
$ 42.7 $ 122.3
$ 116.3
____________________________________________
(i)
Includes share-based incentive
compensation of $8.3 million and $23.6 million for the three and
nine months ended September 30, 2018, respectively, and $12.3
million and $31.2 million for the three and nine months ended
September 30, 2017, respectively.
(3) Restructuring and other charges by
segment is as follows:
Three Months EndedSeptember 30, Nine Months
EndedSeptember 30, (In millions) 2018
2017 2018 2017
Food Care $ 2.3 $ 3.9 $ 8.4 $ 5.8 Product Care 4.3 2.3
13.9 3.4
Total Company restructuring and other
charges $ 6.6 $ 6.2
$ 22.3 $ 9.2
_______________________________
(4)
Other Special Items for the three and nine
months ended September 30, 2018, primarily included fees related to
professional services. Other Special Items for the three and nine
months ended September 30, 2017, primarily included transaction
fees related to various divestitures and acquisitions.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181101005246/en/
Sealed Air CorporationInvestors:Lori Chaitman,
704-503-8841orMedia:Julianna Jacobson, 571-236-4256
Sealed Air (NYSE:SEE)
Historical Stock Chart
From Mar 2024 to May 2024
Sealed Air (NYSE:SEE)
Historical Stock Chart
From May 2023 to May 2024