Pactiv Evergreen Inc. (“Pactiv Evergreen” or the “Company”) today
reported results for the first quarter of 2024. Michael King,
President and Chief Executive Officer of Pactiv Evergreen, said,
“The first quarter presented us with a challenging business
environment characterized by the cumulative effect of sustained
price inflation on consumer spending and weather related
disruptions. However, I am proud of our dedicated employees who
remained focused on executing and delivering exceptional value to
our customers, enabling us to achieve results at the high end of
our guidance range for the first quarter. We continue to take
decisive actions to navigate these headwinds and position our
business for long-term growth. We expect that our strategy, which
emphasizes innovation, operational excellence and customer service,
will continue to enable us to align with industry leaders and drive
volume growth. As we look to the second quarter and the remainder
of the year, we believe that our resilient team, coupled with our
strategic initiatives and cost initiatives, will allow us to
capitalize on opportunities and deliver results for our
stakeholders.”
Jon Baksht, Chief Financial Officer of Pactiv
Evergreen, added, “The Company remains committed to managing costs
and de-leveraging our balance sheet. On May 1, 2024, we further
amended our credit agreement to increase the capacity on our
revolving credit facility from $250 million to $1,100 million and
extend the maturity date to May 1, 2029. We also amended the
applicable interest rate and other pricing terms, including by
replacing the facility fee with a lower fee on unutilized capacity.
I am optimistic about the actions we are taking to mitigate costs
and drive volume improvement during the second half of the year,
which we believe puts the Company on track to execute on our fiscal
2024 outlook.”
Footprint Optimization
Update
On February 29, 2024, the Company announced the
Footprint Optimization, a strategic initiative to optimize its
manufacturing and warehousing footprint that is expected to improve
operating efficiency and result in meaningful cost savings
beginning in 2025 and continuing beyond. The Company expects to
incur capital expenditures of $40 million to $45 million, total
cash restructuring charges of $50 million to $65 million and total
non-cash charges of $20 million to $40 million, each primarily
during 2024 and 2025, to execute our plan. The Company incurred $8
million and $2 million of cash and non-cash charges, respectively,
during the first quarter of 2024.
Beverage Merchandising Restructuring
Update
On March 6, 2023, the Company announced the
Beverage Merchandising Restructuring, a plan to take significant
restructuring actions related to its legacy Beverage Merchandising
operations. During 2023, the Company closed its Canton, North
Carolina mill and its Olmsted Falls, Ohio converting facility and
reorganized its management structure by combining its Beverage
Merchandising and Food Merchandising businesses. During the first
quarter of 2024, the Company continued to explore strategic
alternatives related to its Pine Bluff, Arkansas mill and
Waynesville, North Carolina facility. The Company expects to incur
total cash and non-cash charges of approximately $160 million and
approximately $330 million, respectively, the majority of which was
incurred during 2023. The Company incurred $8 million and $3
million of cash and non-cash charges, respectively, during the
first quarter of 2024.
These charges for the Footprint Optimization and
Beverage Merchandising Restructuring include certain estimates that
are provisional and include significant management judgments and
assumptions that could change materially as the Company completes
the execution of its plans. Actual results may differ from these
estimates, and the completion of the plans could result in
additional restructuring charges or impairments not reflected
above.
_______________1 Adjusted EBITDA and Adjusted
EPS are non-GAAP measures. Refer to their definitions in the
discussion on non-GAAP financial measures and the accompanying
reconciliations below.
First Quarter 2024 Results vs. First
Quarter 2023 Results
Net revenues in the first quarter of 2024 were
$1,252 million compared to $1,431 million in the first quarter of
2023. The decrease was mostly due to the closure of our Canton,
North Carolina mill during the second quarter of 2023, lower
pricing due to the pass through of lower material costs and lower
sales volume. Lower sales volume was mainly due to a focus on value
over volume in the Food and Beverage Merchandising segment and the
market softening amid inflationary pressures.
Net income was $10 million, or $0.04 per diluted
share, in the first quarter of 2024 compared to a net loss of $133
million, or $0.76 per diluted share, in the first quarter of 2023.
The change in income was impacted by a $106 million increase in
gross profit, largely due to accelerated depreciation expense from
the Beverage Merchandising Restructuring incurred in the prior year
period, partially offset by lower sales volume in the current
period for the reasons discussed above. The improved results also
benefited from a $56 million decrease in restructuring charges
compared to the prior period, primarily related to the Beverage
Merchandising Restructuring, partially offset by the discrete tax
benefit incurred in the prior period related to the aforementioned
restructuring.
Adjusted EBITDA1 was $168 million and Adjusted
EPS1 was $0.14 in the first quarter of 2024 compared to $189
million and $0.13, respectively, in the first quarter of 2023. The
decrease in Adjusted EBITDA1 reflects lower sales volume, lower
pricing, net of material costs passed through, and higher
employee-related costs, partially offset by lower manufacturing and
transportation costs. Adjusted EPS1 was largely consistent with the
prior year quarter.
Segment Results
Foodservice
|
|
For the Three Months Ended March 31, |
|
|
Components of Change in Net Revenues |
|
(In millions, except for %) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
Change % |
|
|
Price/Mix |
|
|
Volume |
|
Total segment net revenues |
|
$ |
597 |
|
|
$ |
614 |
|
|
$ |
(17 |
) |
|
|
(3 |
)% |
|
|
(2 |
)% |
|
|
(1 |
)% |
Segment Adjusted EBITDA |
|
$ |
90 |
|
|
$ |
106 |
|
|
$ |
(16 |
) |
|
|
(15 |
)% |
|
|
|
|
|
|
Segment Adjusted EBITDA
margin2 |
|
|
15 |
% |
|
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
2 For each segment, segment Adjusted EBITDA
margin is calculated as segment Adjusted EBITDA divided by total
segment net revenues.
The decrease in net revenues was mainly due to
lower pricing, largely due to the pass through of lower material
costs, and unfavorable product mix.
The decrease in Adjusted EBITDA reflects
unfavorable product mix, higher manufacturing costs and lower
pricing, net of material costs passed through.
Food and Beverage Merchandising
|
|
For the Three Months Ended March 31, |
|
|
Components of Change in Net Revenues |
|
(In millions, except for %) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
Change % |
|
|
Price/Mix |
|
|
Volume |
|
|
FX |
|
|
Mill Closure |
|
Total segment net revenues |
|
$ |
660 |
|
|
$ |
850 |
|
|
$ |
(190 |
) |
|
|
(22 |
)% |
|
|
(5 |
)% |
|
|
(4 |
)% |
|
|
1 |
% |
|
|
(14 |
)% |
Segment Adjusted EBITDA |
|
$ |
100 |
|
|
$ |
101 |
|
|
$ |
(1 |
) |
|
|
(1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA
margin |
|
|
15 |
% |
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The decrease in net revenues was primarily due
to the closure of our Canton, North Carolina mill, lower pricing,
largely due to the pass through of lower material costs,
and lower sales volume. Sales volume was lower mainly due to a
focus on value over volume and the market softening amid
inflationary pressures.
The decrease in Adjusted EBITDA reflects lower
sales volume, unfavorable product mix and lower pricing, net of
material costs passed through, partially offset by lower
manufacturing costs.
First Quarter 2024 Results vs. Fourth
Quarter 2023 Results
Net revenues in the first quarter of 2024 were
$1,252 million compared to $1,274 million in the fourth quarter of
2023. The decrease was mostly due to lower sales volume due to
seasonal trends in the Foodservice segment.
Net income was $10 million, or $0.04 per diluted
share, in the first quarter of 2024 compared to net income of $22
million, or $0.12 per diluted share, in the fourth quarter of 2023.
The lower net income reflects a $32 million decrease in gross
profit which was largely due to lower sales volume in the current
period for the reasons discussed above, partially offset by a $21
million decrease in restructuring charges compared to the prior
period primarily related to the Beverage Merchandising
Restructuring.
Adjusted EBITDA1 was $168 million and Adjusted
EPS1 was $0.14 in the first quarter of 2024 compared to $207
million and $0.33, respectively, in the fourth quarter of 2023. The
decrease in Adjusted EBITDA1 and Adjusted EPS1 was mainly due to
higher manufacturing and material costs and lower sales volume
mostly due to seasonal trends in the Foodservice segment.
Segment Results
Foodservice
|
|
For the Three Months Ended |
|
|
Components of Change in Net Revenues |
|
(In millions, except for %) |
|
March 31,2024 |
|
|
December 31,2023 |
|
|
Change |
|
|
Change % |
|
|
Price/Mix |
|
|
Volume |
|
Total segment net revenues |
|
$ |
597 |
|
|
$ |
626 |
|
|
$ |
(29 |
) |
|
|
(5 |
)% |
|
|
— |
% |
|
|
(5 |
)% |
Segment Adjusted EBITDA |
|
$ |
90 |
|
|
$ |
112 |
|
|
$ |
(22 |
) |
|
|
(20 |
)% |
|
|
|
|
|
|
Segment Adjusted EBITDA
margin |
|
|
15 |
% |
|
|
18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The decrease in net revenues was largely due to
lower sales volume which was attributable to seasonal trends.
The decrease in Adjusted EBITDA was primarily
due to lower sales volume, as discussed above, and higher
manufacturing costs.
Food and Beverage Merchandising
|
|
For the Three Months Ended |
|
|
Components of Change in Net Revenues |
|
(In millions, except for %) |
|
March 31,2024 |
|
|
December 31,2023 |
|
|
Change |
|
|
Change % |
|
|
Price/Mix |
|
|
Volume |
|
Total segment net revenues |
|
$ |
660 |
|
|
$ |
653 |
|
|
$ |
7 |
|
|
|
1 |
% |
|
|
— |
% |
|
|
1 |
% |
Segment Adjusted EBITDA |
|
$ |
100 |
|
|
$ |
113 |
|
|
$ |
(13 |
) |
|
|
(12 |
)% |
|
|
|
|
|
|
Segment Adjusted EBITDA
margin |
|
|
15 |
% |
|
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues increased slightly due to a
marginal improvement in sales volume while pricing and mix were
consistent over the prior period.
The decrease in Adjusted EBITDA reflects higher
manufacturing and material costs, partially offset by lower
transportation costs.
Balance Sheet and Cash Flow
Highlights
The Company continues to deliver on its
commitment to strengthen its balance sheet. Since December 31,
2022, the Company reduced its total outstanding debt by $551
million, and Net Debt3 also declined. Net cash flow from operating
activities and Free Cash Flow3 were negatively impacted by an
increase in inventory levels during the first quarter of 2024. The
Company’s Board of Directors declared a first quarter 2024 dividend
on April 30, 2024 of $0.10 per share of common stock, payable on
June 14, 2024 to shareholders of record as of May 31, 2024.
(In
millions) |
|
As of March 31, 2024 |
|
|
(In
millions) |
|
For the Three Months Ended March 31,
2024 |
|
Total outstanding debt |
|
$ |
3,585 |
|
|
Net cash flow used in operating activities |
|
$ |
(33 |
) |
Cash and cash equivalents |
|
|
(71 |
) |
|
Capital expenditures |
|
|
(41 |
) |
Net Debt3 |
|
$ |
3,514 |
|
|
Free Cash Flow3 |
|
$ |
(74 |
) |
|
|
|
|
|
|
|
|
|
|
|
Outlook
“Looking ahead, we are cautiously optimistic
about the macroeconomic backdrop and its potential impact on the
consumer. The actions we are taking to build volume momentum,
coupled with our cost improvement initiatives, give us confidence
in our ability to drive progress throughout the year and deliver on
our financial targets. The Company reiterates the existing range
for full year 2024 Adjusted EBITDA1 guidance of $850 million to
$870 million. The Company also reiterates its guidance for full
year 2024 Free Cash Flow,”3 said Mr. King.
The Company has not reconciled the non-GAAP
measure Adjusted EBITDA to the GAAP measure net income (loss) on a
forward-looking basis in this release because the Company does not
provide guidance for certain of the reconciling items on a
consistent basis, including but not limited to items relating to
restructuring, asset impairment and other related charges,
depreciation and amortization expense, net interest expense and
income taxes, which would be required to include a reconciliation
of Adjusted EBITDA to GAAP net income (loss), as the Company is
unable to quantify these amounts without unreasonable efforts.
Conference Call and Webcast Presentation
The Company will host a conference call and
webcast presentation to discuss these results on May 3, 2024 at
8:30 a.m. U.S. Eastern Time. Investors interested in participating
in the live call may register for the call here. Participants may
also access the live webcast and supplemental presentation on the
Pactiv Evergreen Investor Relations website at
https://investors.pactivevergreen.com/financial-information/sec-filings
under “News & Events.” The Company may from time to time use
this Investor Relations website as a means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD.
About Pactiv Evergreen Inc.
Pactiv Evergreen Inc. (NASDAQ: PTVE) is a leading manufacturer and
distributor of fresh foodservice and food merchandising products
and fresh beverage cartons in North America. 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.
_______________3 Net Debt and Free Cash Flow are
non-GAAP measures. Refer to their definitions in the discussion on
non-GAAP financial measures below.
Note to Investors Regarding
Forward-Looking Statements
This press release contains forward-looking
statements. All statements contained in this press release other
than statements of historical fact are forward-looking statements,
including statements regarding our guidance as to our future
financial and operational results and growth prospects, our
expectations regarding the impact of the macroeconomic backdrop on
the consumer and the expected timelines and amount and type of cash
and non-cash charges that we expect to incur in connection with the
Footprint Optimization and the Beverage Merchandising Restructuring
and the timing thereof. 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,” “likely” or “continue,” the
negative of these terms and other comparable terminology. These
statements are only predictions based on our expectations and
projections about future events as of the date of this press
release and are subject to a number of risks, uncertainties and
assumptions that may prove incorrect, any of which could cause
actual results to differ materially from those expressed or implied
by such statements, including, among others, those described under
the heading “Risk Factors” in our Annual Report on Form 10-K for
the year ended December 31, 2023 filed with the Securities and
Exchange Commission, or SEC, and our Quarterly Report on Form 10-Q
for the quarter ended March 31, 2024 to be filed with the SEC. New
risks emerge from time to time, and it is not possible for our
management to predict all risks, nor can management assess the
impact of all factors on our business or the extent to which any
factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statement the Company makes. Investors are cautioned not to place
undue reliance on any such forward-looking statements, which speak
only as of the date they are made. Except as otherwise required by
law, the Company undertakes no obligation to update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
Use of Non-GAAP Financial Measures
The Company uses the following financial
measures that are not calculated in accordance with generally
accepted accounting principles in the United States (“GAAP”):
Adjusted EBITDA, Adjusted EPS, Free Cash Flow and Net Debt.
The Company defines Adjusted EBITDA as net
income (loss) 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,
including but not limited to restructuring, asset impairment and
other related charges, gains or losses on the sale of businesses
and noncurrent assets, non-cash pension income or expense,
unrealized gains or losses on derivatives, foreign exchange gains
or losses on cash and gains or losses on certain legal
settlements.
The Company defines Adjusted EPS as diluted
(loss) earnings per share (“EPS”) calculated in accordance with
GAAP adjusted for the after-tax effect of certain items, including
but not limited to restructuring, asset impairment and other
related charges, gains on the sale of businesses and noncurrent
assets, non-cash pension income or expense, unrealized gains or
losses on derivatives, foreign exchange losses on cash and gains or
losses on certain legal settlements.
The Company defines Free Cash Flow as net cash
provided by operating activities, less capital expenditures.
The Company defines Net Debt as the sum of
current and long-term debt, less cash and cash equivalents.
The Company has provided herein a reconciliation
of (i) net income (loss) to Adjusted EBITDA, (ii) diluted (loss)
EPS to Adjusted EPS, (iii) net cash provided by operating
activities to Free Cash Flow and (iv) total debt to Net Debt, in
each case representing the most directly comparable GAAP financial
measures.
The Company presents Adjusted EBITDA to assist
in comparing performance from period to period and as a measure of
operational performance. It is a key measure used by its management
team to generate future operating plans, make strategic decisions
and incentivize and reward its employees. In addition, its
management and Chief Operating Decision Maker, who is the President
and Chief Executive Officer, use the Adjusted EBITDA of each
reportable segment to evaluate its respective operating
performance. Accordingly, the Company believes that Adjusted EBITDA
provides useful information to investors and others in
understanding and evaluating the Company’s operating results in the
same manner as its management and board of directors. Like Adjusted
EBITDA, management believes Adjusted EPS is useful to investors,
analysts and others to facilitate operating performance comparisons
on a period-to-period basis because it excludes variations
primarily caused by changes in the items noted above.
The Company presents Free Cash Flow to assist in
comparing liquidity from period to period and to provide a more
comprehensive view of the Company’s core operations and ability to
generate cash flow, and also, as with Adjusted EBITDA, to generate
future operating plans, make strategic decisions and incentivize
and reward its employees. The Company believes that this measure is
useful to investors in evaluating cash available to service and
repay debt, make other investments and pay dividends. The Company
presents Net Debt as a supplemental measure to review the liquidity
of its operations and measure the Company’s credit position and
progress toward leverage targets. The Company also believes that
investors find this measure useful in evaluating its debt
levels.
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, our non-GAAP metrics
may not be the same as or comparable to similar non-GAAP financial
measures presented by other companies. Because of these and other
limitations, you should consider them alongside other financial
performance measures, including our net income and other GAAP
results. In addition, in evaluating Adjusted EBITDA, Adjusted EPS
and other metrics derived from them, you should be aware that in
the future the Company will incur expenses such as those that are
the subject of adjustments in deriving Adjusted EBITDA and Adjusted
EPS and you should not infer from our presentation of Adjusted
EBITDA and Adjusted EPS that our future results will not be
affected by these expenses or any unusual or non-recurring
items.
Contact:Curt
Worthington847.482.2040InvestorRelations@pactivevergreen.com
Pactiv Evergreen Inc.Condensed
Consolidated Statements of Income (Loss)(in
millions, except per share
amounts)(unaudited) |
|
|
|
For the Three Months Ended |
|
|
|
March 31,2024 |
|
|
December 31,2023 |
|
|
March 31,2023 |
|
Net revenues |
|
$ |
1,172 |
|
|
$ |
1,184 |
|
|
$ |
1,323 |
|
Related party net
revenues |
|
|
80 |
|
|
|
90 |
|
|
|
108 |
|
Total net
revenues |
|
|
1,252 |
|
|
|
1,274 |
|
|
|
1,431 |
|
Cost of sales |
|
|
(1,031 |
) |
|
|
(1,021 |
) |
|
|
(1,316 |
) |
Gross
profit |
|
|
221 |
|
|
|
253 |
|
|
|
115 |
|
Selling, general and
administrative expenses |
|
|
(133 |
) |
|
|
(133 |
) |
|
|
(130 |
) |
Restructuring, asset
impairment and other related charges |
|
|
(17 |
) |
|
|
(38 |
) |
|
|
(73 |
) |
Other income, net |
|
|
3 |
|
|
|
1 |
|
|
|
— |
|
Operating income
(loss) |
|
|
74 |
|
|
|
83 |
|
|
|
(88 |
) |
Non-operating expense,
net |
|
|
— |
|
|
|
(2 |
) |
|
|
(1 |
) |
Interest expense, net |
|
|
(59 |
) |
|
|
(57 |
) |
|
|
(63 |
) |
Income (loss) before
tax |
|
|
15 |
|
|
|
24 |
|
|
|
(152 |
) |
Income tax (expense)
benefit |
|
|
(5 |
) |
|
|
(2 |
) |
|
|
19 |
|
Net income
(loss) |
|
|
10 |
|
|
|
22 |
|
|
|
(133 |
) |
Income attributable to
non-controlling interests |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
Net income (loss)
attributable to Pactiv Evergreen Inc. common
shareholders |
|
$ |
9 |
|
|
$ |
21 |
|
|
$ |
(134 |
) |
Earnings (loss) per
share attributable to Pactiv Evergreen Inc. common
shareholders |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.04 |
|
|
$ |
0.12 |
|
|
$ |
(0.76 |
) |
Diluted |
|
$ |
0.04 |
|
|
$ |
0.12 |
|
|
$ |
(0.76 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding - basic |
|
|
179.4 |
|
|
|
179.1 |
|
|
|
178.4 |
|
Weighted-average shares outstanding - diluted |
|
|
180.8 |
|
|
|
180.0 |
|
|
|
178.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pactiv Evergreen Inc.Condensed
Consolidated Balance Sheets(in
millions)(unaudited) |
|
|
|
As of March 31,2024 |
|
|
As of December 31,2023 |
|
|
As of March 31,2023 |
|
Assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
71 |
|
|
$ |
164 |
|
|
$ |
427 |
|
Accounts receivable, net |
|
|
475 |
|
|
|
426 |
|
|
|
484 |
|
Related party receivables |
|
|
35 |
|
|
|
35 |
|
|
|
66 |
|
Inventories |
|
|
911 |
|
|
|
852 |
|
|
|
983 |
|
Other current assets |
|
|
111 |
|
|
|
112 |
|
|
|
109 |
|
Total current
assets |
|
|
1,603 |
|
|
|
1,589 |
|
|
|
2,069 |
|
Property, plant and equipment, net |
|
|
1,488 |
|
|
|
1,511 |
|
|
|
1,675 |
|
Operating lease right-of-use assets, net |
|
|
282 |
|
|
|
263 |
|
|
|
255 |
|
Goodwill |
|
|
1,815 |
|
|
|
1,815 |
|
|
|
1,815 |
|
Intangible assets, net |
|
|
989 |
|
|
|
1,004 |
|
|
|
1,049 |
|
Other noncurrent assets |
|
|
209 |
|
|
|
213 |
|
|
|
172 |
|
Total
assets |
|
|
6,386 |
|
|
|
6,395 |
|
|
|
7,035 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
334 |
|
|
$ |
300 |
|
|
$ |
379 |
|
Related party payables |
|
|
8 |
|
|
|
7 |
|
|
|
17 |
|
Current portion of long-term debt |
|
|
17 |
|
|
|
15 |
|
|
|
18 |
|
Current portion of operating lease liabilities |
|
|
66 |
|
|
|
64 |
|
|
|
64 |
|
Income taxes payable |
|
|
23 |
|
|
|
11 |
|
|
|
8 |
|
Accrued and other current liabilities |
|
|
344 |
|
|
|
399 |
|
|
|
430 |
|
Total current
liabilities |
|
|
792 |
|
|
|
796 |
|
|
|
916 |
|
Long-term debt |
|
|
3,568 |
|
|
|
3,571 |
|
|
|
4,004 |
|
Long-term operating lease liabilities |
|
|
232 |
|
|
|
217 |
|
|
|
205 |
|
Deferred income taxes |
|
|
235 |
|
|
|
244 |
|
|
|
278 |
|
Long-term employee benefit obligations |
|
|
57 |
|
|
|
57 |
|
|
|
59 |
|
Other noncurrent liabilities |
|
|
154 |
|
|
|
161 |
|
|
|
163 |
|
Total
liabilities |
|
$ |
5,038 |
|
|
$ |
5,046 |
|
|
$ |
5,625 |
|
Total equity
attributable to Pactiv Evergreen Inc. common
shareholders |
|
|
1,344 |
|
|
|
1,345 |
|
|
|
1,406 |
|
Non-controlling interests |
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
Total
equity |
|
|
1,348 |
|
|
|
1,349 |
|
|
|
1,410 |
|
Total liabilities and
equity |
|
$ |
6,386 |
|
|
$ |
6,395 |
|
|
$ |
7,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pactiv Evergreen Inc.Condensed
Consolidated Statements of Cash Flows(in
millions)(unaudited) |
|
|
|
For the Three Months Ended |
|
|
|
March 31,2024 |
|
|
December 31,2023 |
|
|
September 30,2023 |
|
|
June 30,2023 |
|
|
March 31,2023 |
|
Operating
Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
10 |
|
|
$ |
22 |
|
|
$ |
30 |
|
|
$ |
(139 |
) |
|
$ |
(133 |
) |
Adjustments to reconcile net
income (loss) to operating cash flows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
79 |
|
|
|
82 |
|
|
|
85 |
|
|
|
259 |
|
|
|
174 |
|
Deferred income taxes |
|
|
(11 |
) |
|
|
(26 |
) |
|
|
— |
|
|
|
(28 |
) |
|
|
(39 |
) |
Asset impairment and restructuring related non-cash charges (net of
reversals) |
|
|
1 |
|
|
|
12 |
|
|
|
3 |
|
|
|
9 |
|
|
|
32 |
|
Non-cash portion of operating lease expense |
|
|
21 |
|
|
|
20 |
|
|
|
20 |
|
|
|
19 |
|
|
|
21 |
|
Other non-cash items, net |
|
|
5 |
|
|
|
12 |
|
|
|
13 |
|
|
|
13 |
|
|
|
9 |
|
Change in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(51 |
) |
|
|
51 |
|
|
|
(3 |
) |
|
|
46 |
|
|
|
(53 |
) |
Inventories |
|
|
(60 |
) |
|
|
(7 |
) |
|
|
75 |
|
|
|
47 |
|
|
|
61 |
|
Accounts payable |
|
|
35 |
|
|
|
(28 |
) |
|
|
(15 |
) |
|
|
(38 |
) |
|
|
11 |
|
Operating lease payments |
|
|
(21 |
) |
|
|
(20 |
) |
|
|
(19 |
) |
|
|
(20 |
) |
|
|
(21 |
) |
Accrued and other current liabilities |
|
|
(55 |
) |
|
|
(52 |
) |
|
|
43 |
|
|
|
(28 |
) |
|
|
10 |
|
Other assets and liabilities |
|
|
14 |
|
|
|
15 |
|
|
|
6 |
|
|
|
(13 |
) |
|
|
16 |
|
Net cash (used in)
provided by operating activities |
|
|
(33 |
) |
|
|
81 |
|
|
|
238 |
|
|
|
127 |
|
|
|
88 |
|
Investing
Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property, plant and equipment |
|
|
(41 |
) |
|
|
(107 |
) |
|
|
(62 |
) |
|
|
(53 |
) |
|
|
(63 |
) |
Purchase of investments |
|
|
(23 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other investing activities |
|
|
6 |
|
|
|
2 |
|
|
|
9 |
|
|
|
(1 |
) |
|
|
3 |
|
Net cash used in
investing activities |
|
|
(58 |
) |
|
|
(105 |
) |
|
|
(53 |
) |
|
|
(54 |
) |
|
|
(60 |
) |
Financing
Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt repayments |
|
|
— |
|
|
|
(24 |
) |
|
|
(229 |
) |
|
|
(182 |
) |
|
|
(112 |
) |
Revolver proceeds |
|
|
18 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Revolver repayments |
|
|
(18 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Dividends paid to common shareholders |
|
|
(18 |
) |
|
|
(17 |
) |
|
|
(18 |
) |
|
|
(18 |
) |
|
|
(18 |
) |
Other financing activities |
|
|
(8 |
) |
|
|
(5 |
) |
|
|
(3 |
) |
|
|
(2 |
) |
|
|
(5 |
) |
Net cash used in
financing activities |
|
|
(26 |
) |
|
|
(46 |
) |
|
|
(250 |
) |
|
|
(202 |
) |
|
|
(135 |
) |
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
|
1 |
|
|
|
— |
|
|
|
(4 |
) |
|
|
4 |
|
|
|
1 |
|
Decrease in cash, cash
equivalents and restricted cash |
|
|
(116 |
) |
|
|
(70 |
) |
|
|
(69 |
) |
|
|
(125 |
) |
|
|
(106 |
) |
Cash, cash equivalents and
restricted cash, including amounts classified as held for sale, as
of beginning of the period |
|
|
187 |
|
|
|
257 |
|
|
|
326 |
|
|
|
451 |
|
|
|
557 |
|
Cash, cash equivalents
and restricted cash as of end of the period |
|
$ |
71 |
|
|
$ |
187 |
|
|
$ |
257 |
|
|
$ |
326 |
|
|
$ |
451 |
|
Cash, cash equivalents
and restricted cash are comprised of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
71 |
|
|
|
164 |
|
|
|
233 |
|
|
|
302 |
|
|
|
427 |
|
Restricted cash classified as
other current assets |
|
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Restricted cash classified as
other noncurrent assets |
|
|
— |
|
|
|
21 |
|
|
|
24 |
|
|
|
24 |
|
|
|
24 |
|
Cash, cash equivalents
and restricted cash as of end of the period |
|
$ |
71 |
|
|
$ |
187 |
|
|
$ |
257 |
|
|
$ |
326 |
|
|
$ |
451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pactiv Evergreen Inc.Reconciliation of
Reportable Segment Net Revenues to Total Net
Revenues(in
millions)(unaudited) |
|
|
|
For the Three Months Ended |
|
|
|
March 31,2024 |
|
|
December 31,2023 |
|
|
March 31,2023 |
|
Reportable segment net revenues |
|
|
|
|
|
|
|
|
|
Foodservice |
|
$ |
597 |
|
|
$ |
626 |
|
|
$ |
614 |
|
Food and Beverage Merchandising |
|
|
660 |
|
|
|
653 |
|
|
|
850 |
|
Other |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
Intersegment revenues |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
(35 |
) |
Total net revenues |
|
$ |
1,252 |
|
|
$ |
1,274 |
|
|
$ |
1,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pactiv Evergreen Inc.Reconciliation of
Reportable Segment Adjusted EBITDA to Adjusted
EBITDA(in
millions)(unaudited) |
|
|
|
For the Three Months Ended |
|
|
|
March 31,2024 |
|
|
December 31,2023 |
|
|
March 31,2023 |
|
Reportable segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
Foodservice |
|
$ |
90 |
|
|
$ |
112 |
|
|
$ |
106 |
|
Food and Beverage Merchandising |
|
|
100 |
|
|
|
113 |
|
|
|
101 |
|
Unallocated |
|
|
(22 |
) |
|
|
(18 |
) |
|
|
(18 |
) |
Adjusted EBITDA (Non-GAAP) |
|
$ |
168 |
|
|
$ |
207 |
|
|
$ |
189 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pactiv Evergreen Inc.Reconciliations of
Net Income (Loss) to Adjusted EBITDA and Diluted EPS to Adjusted
EPS(in millions, except per share
amounts)(unaudited) |
|
|
|
For the Three Months Ended |
|
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
|
March 31, 2023 |
|
|
|
Net income to Adjusted EBITDA |
|
|
Diluted EPS to Adjusted EPS |
|
|
Net income to Adjusted EBITDA |
|
|
Diluted EPS to Adjusted EPS |
|
|
Net loss to Adjusted EBITDA |
|
|
Diluted EPS to Adjusted EPS |
|
Net income (loss) / Diluted EPS (Reported GAAP
Measure) |
|
$ |
10 |
|
|
$ |
0.04 |
|
|
$ |
22 |
|
|
$ |
0.12 |
|
|
$ |
(133 |
) |
|
$ |
(0.76 |
) |
Income
tax expense (benefit) |
|
|
5 |
|
|
|
|
|
|
2 |
|
|
|
|
|
|
(19 |
) |
|
|
|
Interest
expense, net |
|
|
59 |
|
|
|
|
|
|
57 |
|
|
|
|
|
|
63 |
|
|
|
|
Depreciation and amortization (excluding restructuring-related
charges) |
|
|
75 |
|
|
|
|
|
|
80 |
|
|
|
|
|
|
84 |
|
|
|
|
Beverage
Merchandising Restructuring charges(1) |
|
|
11 |
|
|
|
0.05 |
|
|
|
35 |
|
|
|
0.16 |
|
|
|
187 |
|
|
|
0.87 |
|
Footprint Optimization charges(2) |
|
|
10 |
|
|
|
0.05 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other
restructuring and asset impairment charges (reversals) |
|
|
— |
|
|
|
— |
|
|
|
6 |
|
|
|
0.03 |
|
|
|
(1 |
) |
|
|
— |
|
(Gain)
loss on sale of businesses and noncurrent assets |
|
|
(1 |
) |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Non-cash
pension expense(3) |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
0.01 |
|
|
|
1 |
|
|
|
— |
|
Unrealized (gains) losses on commodity derivatives |
|
|
(1 |
) |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
Foreign
exchange losses on cash |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
0.01 |
|
|
|
4 |
|
|
|
0.01 |
|
Gain on
legal settlement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
0.01 |
|
Other |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted EBITDA / Adjusted EPS(4)
(Non-GAAP Measure) |
|
$ |
168 |
|
|
$ |
0.14 |
|
|
$ |
207 |
|
|
$ |
0.33 |
|
|
$ |
189 |
|
|
$ |
0.13 |
|
(1) Reflects charges related to the
Beverage Merchandising Restructuring, including $3 million, $4
million and $90 million of accelerated depreciation expense for the
three months ended March 31, 2024, December 31, 2023 and March 31,
2023, respectively.(2) Reflects charges related to the
Footprint Optimization, including $1 million of accelerated
depreciation expense for the three months ended March 31,
2024.(3) Reflects the non-cash pension expense related to our
employee benefit plans.(4) Income tax expense (benefit),
interest expense, net and depreciation and amortization (excluding
restructuring-related charges) are not adjustments from diluted EPS
to calculate Adjusted EPS. Adjustments were tax effected using the
applicable effective income tax rate for each period. For the three
months ended March 31, 2024, December 31, 2023 and March 31, 2023,
the tax effect of the adjustments were income of $0.01 per diluted
share, income of $0.05 per diluted share and income of $0.20 per
diluted share, respectively.
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