- Net Sales increased 10% year-over-year
to $1.1 Billion from Continuing Operations
- Including a $290 Million Tax Reform
related expense, GAAP Net Loss from Continuing Operations of $208
Million or $(1.25) per diluted share
- Adjusted EBITDA increased 13%
year-over-year to $205 Million
- Adjusted Earnings Per Diluted Share
increased 19% year-over-year to $0.51
- Reaffirmed 2018 Outlook for Net Sales,
Adjusted EBITDA and Free Cash Flow
- Increased 2018 Adjusted EPS outlook to
$2.45 to $2.55, reflecting year-to-date share repurchases
- Increased share repurchase program
authorization to $1.0 Billion
Sealed Air Corporation (NYSE:SEE) today announced financial
results for the first quarter 2018. Commenting on these results,
Ted Doheny, President and Chief Executive Officer, said, “In the
first three months of the year, Net Sales and Adjusted EBITDA
increased 10% and 13%, respectively. Business momentum continued
with growth across the global protein and e-Commerce markets as
well as our recent acquisition of Fagerdala in Asia. We executed on
our strategy by reducing costs, driving operational excellence and
commercializing new innovations. Our performance in Q1, combined
with favorable global business trends, gives us confidence in our
2018 outlook.”
Unless otherwise stated, all results compare first quarter 2018
results to first quarter 2017 results from continuing operations.
Year-over-year financial discussions present operating results from
continuing operations as reported, and on a constant dollar basis.
Constant dollar refers to unit volume and price/mix performance and
excludes the impact of currency translation from all periods
referenced. 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 Non-U.S. GAAP to U.S. GAAP financial
measures.
Business Highlights
To accelerate productivity improvements and elimination of
operational redundancies, the Company implemented a change in
allocation of Corporate expenses. 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.
Food Care first quarter net sales of $696 million increased 6%
as reported. Currency had a positive impact on Food Care net sales
of 3%, or $20 million. On a constant dollar basis, net sales
increased 3% due to 8% growth in Latin America and 4% in North
America and EMEA. This was offset by a 3% decline in Asia Pacific.
Incorporating the segment change described above, Adjusted EBITDA
increased 10% to $135 million or 19.3% of net sales. Year-over-year
margin expansion of 70 basis points was primarily attributable to
volume trends, restructuring savings and favorable foreign currency
partially offset by higher raw material and freight costs.
Product Care first quarter net sales of $435 million increased
15% as reported. Currency had a positive impact on Product Care net
sales of 4%, or $15 million. On a constant dollar basis, net sales
increased 11%, including $21 million from Fagerdala. Constant
dollar growth was driven by an increase of 8% in North America, 3%
in EMEA and 44% in Asia Pacific. Incorporating the segment change
discussed above, Adjusted EBITDA increased 24% to $78 million or
18.0% of net sales. Year-over-year margin expansion of 120 basis
points was primarily attributable to profitable volume growth and
restructuring savings partially offset by higher raw material and
freight costs.
From January 1, 2018 through April 30, 2018, Sealed Air
repurchased approximately $426 million or 9.3 million shares
through a combination of open market repurchases and the completion
of an Accelerated Share Repurchase program. Additionally, Sealed
Air’s Board of Directors reset the Company’s share repurchase
program authorization on May 2, 2018, to $1 billion, continuing its
commitment to return value to shareholders. This new program
has no expiration date and replaces the previous authorizations,
representing an increase of nearly $500 million.
First Quarter 2018 U.S. GAAP Summary
Net sales of $1.1 billion increased 10% on an as reported basis.
Currency had a positive impact on total net sales of 4%, or $36
million. As reported, net sales increased across all regions.
Net loss from continuing operations on an as reported basis was
$208 million, or $(1.25) per diluted share, as compared to $54
million, or $(0.27) per diluted share, in the first quarter 2017.
Net loss in the first quarter 2018 was unfavorably impacted by $293
million of special items, primarily related to $290 million of
provisional tax expense for one-time tax on unrepatriated foreign
earnings pursuant to the U.S. Tax Cuts and Jobs Act of 2017
("TCJA"). Net income in the first quarter 2017 was unfavorably
impacted by $139 million of special items, including $127 million
of tax expense recorded relating to the sale of Diversey as well as
restructuring and other restructuring associated costs.
The effective tax rate in the first quarter of 2018 was
negatively impacted a provisional tax expense related to the
one-time mandatory tax on unrepatriated foreign earnings pursuant
to the TCJA. This one-time expense was $290 million resulting in an
effective tax rate for the quarter of 283.3%, compared to 164.9% in
the first quarter of 2017. The 2017 rate was negatively affected
by tax expense related to the sale of Diversey.
First Quarter 2018 Non-U.S. GAAP Summary
Net sales on a constant dollar basis increased 6% with positive
sales trends in all regions. On constant dollar basis, net sales
increased 5% in North America, 4% in EMEA, 8% in Latin America and
11% in Asia Pacific.
Adjusted EBITDA for the first quarter 2018 was $205 million, or
18.1% of net sales, compared to $182 million, or 17.6% of net sales
for the first quarter of 2017. The year-over-year margin increase
of 50 basis points was attributable to positive volume trends and
cost reductions.
Adjusted EPS was $0.51 for the first quarter 2018 compared to
$0.43 in the first quarter 2017. The Adjusted Tax Rate was 30.3% in
the first quarter 2018, compared to 13.6% in the first quarter
2017. The 2017 rate was favorably impacted by $9 million of tax
benefit on share-based compensation and $5 million of tax benefit
related to statute of limitation expirations and audit
settlements.
Cash Flow and Net Debt
Cash flow provided by operating activities in the three months
ended March 31, 2018 was an outflow of $34 million, which
includes the previously announced one-time payment in lieu of
future royalty payments and $14 million of payments related to the
sale of Diversey and efforts to address related stranded costs.
Capital expenditures were $43 million in the three months ended
March 31, 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 outflow of $63 million in the three
months ended March 31, 2018.
During the three months ended March 31, 2018, the Company
had a cash outflow of $312 million related to share repurchases,
and paid cash dividends of $28 million.
Net Debt, defined as total debt less cash and cash equivalents,
increased to $3.1 billion as of March 31, 2018 from $2.7
billion as of December 31, 2017. This increase resulted from a
use of working capital and amounts paid for share repurchases.
Reaffirmed Outlook for Full Year 2018
For the full year 2018, the Company reaffirms its previously
provided outlook for Net Sales, Adjusted EBITDA and Free Cash Flow.
The Company anticipates Net Sales to be in the range of
approximately $4.75 to $4.80 billion, a constant dollar growth rate
of approximately 4.5%. Adjusted EBITDA from continuing operations
is expected to be in the range of $890 million to $910 million.
Currency is expected to have a favorable impact of approximately
$110 million on Net Sales and $20 million on Adjusted EBITDA. The
Company increased its forecast for Adjusted EPS to be in the range
of $2.45 to $2.55 from $2.35 to $2.45 to reflect year-to-date share
repurchases. The revised forecast is based on estimated average
diluted shares outstanding of 162 million compared to the previous
guidance of 169 million average diluted shares outstanding.
The outlook for Free Cash Flow continues to be approximately
$400 million, assuming capital expenditures of approximately $160
million and cash restructuring payments of approximately $20
million, which excludes restructuring payments of $30 million to
address related stranded costs.
Conference Call Information
Date: Thursday, May 3, 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: 8876525
A supplemental presentation will be available
on the Company’s website at www.sealedair.com/investors.
Conference Call Replay Information
Date: Thursday, May 3, 2018 at 1:00 p.m. (ET) through
Saturday, June 2, 2018 at 12:59 p.m. (ET) Webcast:
www.sealedair.com/investors
Conference Dial In: (855) 859-2056 (domestic) (404) 537-3406
(international) Participant Code: 8876525
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 Investor Relations
section of our website, in addition to following our press
releases, SEC filings, public conference calls, presentations and
webcasts. The information contained on, or that may be accessed
through, our website is not incorporated by reference into, and is
not a part of, this document.
Non-U.S. GAAP Information
In this press release and supplement, we have included several
non-U.S. GAAP financial measures, including Net Debt, Adjusted Net
Earnings and Adjusted EPS, net sales on 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 Common Per 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 Changes 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 Statement of
Operations(1)
Three Months Ended March
31,(unaudited)
(In millions, except per share data) 2018
2017 Net sales $ 1,131.0 $ 1,032.2 Cost of sales(2)(3) 757.0
696.8 Gross profit 374.0 335.4 Selling, general and
administrative expenses 194.0 197.4 Amortization expense of
intangible assets acquired 3.9 5.0 Restructuring and other charges
8.6 1.9 Operating profit 167.5 131.1 Interest
expense, net (42.0 ) (46.6 ) Other expense, net(2)(3) (12.0 ) (1.8
) Earnings before income tax provision 113.5 82.7 Income tax
provision 321.5 136.4 Net loss from continuing
operations (208.0 ) (53.7 ) Gain on sale of discontinued
operations, net of tax 7.4 — Net earnings from discontinued
operations, net of tax — 10.5
Net loss
$ (200.6 ) $ (43.2 )
Basic: Continuing operations $ (1.25 ) $ (0.27 ) Discontinued
operations 0.04 0.05
Net loss per common share -
basic
$ (1.21 ) $ (0.22 )
Diluted: Continuing operations $ (1.25 ) $ (0.27 ) Discontinued
operations 0.04 0.05
Net loss per common share -
diluted $ (1.21 ) $ (0.22
) Dividends per common share $ 0.16 $ 0.16
Weighted average number of common shares outstanding: Basic 165.3
193.4 Diluted
165.3
195.7
_____________
(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, net. The total impact for
the three months ended March 31, 2017 was $0.8 million.
(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, net to cost of sales. This
resulted in a reclassification of $1.9 million for the three months
ended March 31, 2017.
Sealed Air Corporation
Supplemental Information
Condensed Consolidated Balance
Sheets(1)
(In millions)
March 31,
2018(unaudited)
December 31,2017
Assets Current assets: Cash and cash equivalents $ 326.9 $
594.0 Trade receivables, net 465.1 552.4 Income tax receivables
13.4 85.1 Other receivables 99.3 90.2 Inventories, net 563.8 506.8
Current assets held for sale 1.7 4.0 Prepaid expenses and other
current assets 195.0 33.9 Total current assets
1,665.2 1,866.4 Property and equipment, net 1,013.6 998.4 Goodwill
1,943.3 1,939.8 Identifiable intangible assets, net 87.2 83.6
Deferred taxes 127.0 176.2 Other non-current assets 204.8
215.9
Total assets $ 5,041.1
$ 5,280.3 Liabilities and Stockholders'
Equity Current liabilities: Short-term borrowings $ 155.7 $
25.3 Current portion of long-term debt 1.6 2.2 Accounts payable
729.9 723.8 Current liabilities held for sale — 2.2 Accrued
restructuring costs 20.6 15.4 Income tax payable 46.2 47.3 Other
current liabilities 468.8 562.0 Total current
liabilities 1,422.8 1,378.2 Long-term debt, less current portion
3,247.9 3,230.5 Deferred taxes 27.4 28.5 Other non-current
liabilities 707.8 490.8
Total liabilities
5,405.9 5,128.0 Stockholders’ equity: Preferred stock
— — Common stock 23.2 23.0 Additional paid-in capital 2,025.8
1,939.6 Retained earnings 1,502.9 1,735.2 Common stock in treasury
(3,090.9 ) (2,700.6 ) Accumulated other comprehensive loss, net of
taxes (825.8 ) (844.9 )
Total stockholders’ equity
(364.8 ) 152.3 Total liabilities and
stockholders’ equity $ 5,041.1 $
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)
March 31,
2018(unaudited)
December 31,2017
Short-term borrowings $ 155.7 $ 25.3 Current portion of long-term
debt 1.6 2.2 Long-term debt, less current portion 3,247.9
3,230.5 Total debt 3,405.2 3,258.0 Less: cash and cash
equivalents (326.9 ) (594.0 )
Net debt $
3,078.3 $ 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)
Three Months Ended March
31,(unaudited)
(In millions) 2018 2017 Net loss $
(200.6 ) $ (43.2 ) Adjustments to reconcile net earnings to net
cash (used in) provided by operating activities(2) 81.1
184.9
Changes in operating assets and liabilities: Trade receivables, net
3.8 (3.3 ) Inventories (50.6 ) (64.3 ) Accounts payable 7.3 56.1
Other assets and liabilities 125.3 (113.0 )
Net cash
(used in) provided by operating activities $
(33.7 ) $ 17.2 Cash flows from
investing activities: Capital expenditures (43.4 ) (50.4 )
Proceeds, net from sale of business and property and equipment 8.1
2.3 Business acquired, net of cash acquired 0.9 — Settlement of
foreign currency forward contracts 1.0 (7.3 ) Other investing
activities (2.6 ) 0.1
Net cash used in investing
activities $ (36.0 ) $ (55.3
) Cash flows from financing activities: Changes in short
term borrowings 129.6 10.2 Dividends paid on common stock (27.8 )
(31.4 ) Acquisition of common stock for tax withholding (6.3 )
(21.5 ) Repurchases of common stock (311.7 ) — Other financing
activities — (1.8 )
Net cash used in financing
activities(4) $ (216.2 ) $
(44.5 ) Effect of foreign currency exchange rate
changes on cash and cash equivalents $ 18.8
$ 8.5 Cash and cash equivalents 594.0
333.7 Restricted cash and cash equivalents(4) — 52.9
Balance, beginning of period $ 594.0
$ 386.6 Net change during the period
$ (267.1 ) $ (74.1 ) Cash
and cash equivalents 326.9 258.4 Restricted cash and cash
equivalents(4) — 54.1
Balance, end of period
$ 326.9 $ 312.5
Non-U.S. GAAP Free Cash Flow: Cash flow from operating
activities $ (33.7 ) $ 17.2 Capital expenditures for property and
equipment (43.4 ) (50.4 )
Free Cash Flow(3) $
(77.1 ) $ (33.2 )
Supplemental Cash Flow Information: Interest payments, net of
amounts capitalized $ 37.6 $ 48.0 Income tax payments
$ 19.3 $ 46.2 Payments related to the sale of
Diversey and efforts to address related stranded costs(3) $ 14.3
$ 2.4 Restructuring payments including associated
costs $ 2.8 $ 15.2 Non-cash items: Transfers of
shares of common stock from treasury for 2017 and 2016
profit-sharing contributions $ 20.7 $ 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 primarily
consists of $57 million of deferred taxes, depreciation and
amortization of $33 million, share based compensation expense of $6
million and profit sharing expense of $5 million. 2017 primarily
consists of $112 million of deferred taxes, including $127 million
of tax expense recorded in accordance with the pending sale of
Diversey, depreciation and amortization of $53 million, share based
compensation expense of $9 million and profit sharing expense of $9
million. (3) Free cash flow was an outflow of $63 million in
2018 excluding the payment of charges related to the sale of
Diversey and efforts to address related stranded costs of $14
million. (4) The Company adopted ASU 2016-18, Restricted
Cash, in the current year. As a result, there was an increase in
cash flows from financing activities of $1.2 million due to the
reclassification of restricted cash to a change in the total cash
balance.
Sealed Air Corporation
Supplemental Information
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(1)
(Unaudited)
Three Months Ended March 31, 2018
2017 (In millions, except per share data)
NetEarnings Diluted EPS
NetEarnings Diluted EPS U.S. GAAP
net loss and diluted EPS from continuing operations(2)
$ (208.0 ) $ (1.25 )
$ (53.7 ) (0.27 ) Special
Items(3) 293.4 1.76 138.5 0.70
Non-U.S. GAAP adjusted net earnings and adjusted diluted EPS
from continuing operations $ 85.4 $
0.51 $ 84.8 0.43
Weighted average number of common shares outstanding -
Diluted 165.3 195.7
_____________
(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 per
common share is calculated under the two-class method. (3)
Special Items include the following:
Three Months Ended
March 31, (In millions, except per share data)
2018 2017 Special Items: Restructuring and
other charges $ (8.6 ) $ (1.9 ) Other restructuring associated
costs (2.2 ) (3.9 ) (Loss) gain on acquisition and divestiture
activity (4.0 ) 2.3 Charges due to the sale of Diversey (6.8 )
(16.1 ) Gain from class-action litigation settlement 12.7 — Other
Special Items(1) (0.2 ) 4.2
Pre-tax impact of Special
Items (9.1 ) (15.4 ) Tax impact of
Special Items and Tax Special Items(2) (284.3 ) (123.1 )
Net
impact of Special Items $ (293.4 )
$ (138.5 ) Weighted average number of
common shares outstanding - Diluted 165.3 195.7
Loss per share impact from Special Items $
(1.76 ) $ (0.70 )
_____________
(1) Other Special Items for the three months ended March 31,
2017 primarily included a reduction in a non-income tax reserve
following the completion of a governmental audit partially offset
by legal fees associated with restructuring and acquisitions.
(2) 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
Ended March 31, (In millions) 2018
2017 U.S. GAAP Earnings before income tax provision from
continuing operations $ 113.5 $ 82.7 Pre-tax impact of special
items (9.1 ) (15.4 ) Non-U.S. GAAP Adjusted Earnings before income
tax provision from continuing operations $ 122.6 $ 98.1
U.S. GAAP Income tax provision from continuing
operations $ 321.5 $ 136.4 Tax Special Items(1) (287.2 ) (128.3 )
Tax impact of Special Items 2.9 5.2 Non-U.S. GAAP
Adjusted Income tax provision from continuing operations $ 37.2
$ 13.3 U.S. GAAP Effective income tax rate
283.3 % 164.9 % Non-U.S. GAAP Adjusted income tax rate 30.3 % 13.6
%
_____________
(1) For the three months ended March 31, 2018, the Tax
Special Items included $290 million of provisional tax expense for
one-time tax on unrepatriated foreign earnings pursuant to the
TCJA. For the three months ended March 31, 2017, Tax Special Items
included $127 million of tax expense recorded in accordance with
the sale of Diversey.
Sealed Air Corporation
Supplemental Information
Components of Change in Net Sales by
Segment and Region(1)
Three Months Ended March 31, (Unaudited) (In
millions) Food Care Product Care
Total Company 2017 Net Sales $ 655.6 63.5 % $
376.6 36.5 % $ 1,032.2 Volume - Units
12.9 2.0 % 11.3 3.0 % 24.2 2.3 % Price/mix(4) 7.5 1.1 % 10.2 2.7 %
17.7 1.7 % Acquisition — — % 21.2 5.6 % 21.2
2.1 % Total constant dollar change (Non-U.S. GAAP)(5) 20.4 3.1 %
42.7 11.3 % 63.1 6.1 % Foreign currency translation 20.3 3.2
% 15.4 4.1 % 35.7 3.5 %
Total change (U.S.
GAAP) 40.7 6.3 % 58.1 15.4
% 98.8 9.6 %
2018 Net Sales $ 696.3 61.6 %
$
434.7 38.4 %
$ 1,131.0
Three Months Ended March 31, (Unaudited) (In
millions) North America EMEA(2)
Latin America APAC(3)
Total 2017 Net Sales $ 563.6 54.6 % $ 220.5
21.4 % $ 96.7 9.4 % $ 151.4 14.7 % $
1,032.2 Volume - Units 13.2 2.3 % 5.5 2.5 % 6.6 6.8 %
(1.1 ) (0.7 )% 24.2 2.3 % Price/mix(4) 15.6 2.8 % 2.5 1.1 % 0.6 0.6
% (1.0 ) (0.7 )% 17.7 1.7 % Acquisition 1.7 0.3 % — —
% 0.4 0.4 % 19.1 12.6 % 21.2 2.1 % Total
constant dollar change (Non-U.S. GAAP)(5) 30.5 5.4 % 8.0 3.6 % 7.6
7.8 % 17.0 11.2 % 63.1 6.1 % Foreign currency translation 1.5
0.3 % 29.2 13.2 % (1.3 ) (1.3 )% 6.3 4.2 %
35.7 3.5 %
Total change (U.S. GAAP) 32.0
5.7 % 37.2 16.8 % 6.3
6.5 % 23.3 15.4 % 98.8
9.6 % 2018 Net
Sales $ 595.6 52.7 %
$ 257.7
22.8 %
$ 103.0 9.1 %
$
174.7 15.4 %
$ 1,131.0
_____________
(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) 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 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
Reconciliation of Net Earnings to
Non-U.S. GAAP Total Company Adjusted EBITDA(1)
(Unaudited)
To accelerate productivity improvements
and elimination of operational redundancies, the Company
implemented a change in allocation of Corporate expenses. 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 Ended Year Ended
March 31,
March 31, June 30, September
30, December 31, December 31, (In
millions) 2018 2017 2017 2017
2017 2017 U.S. GAAP Net (loss) earnings from
continuing operations $ (208.0 ) $
(53.7 ) $ 29.0 $ 62.5
$ 25.0 $ 62.8 Adjusted EBITDA from
continuing operations: Food Care $ 134.7 $ 122.0 $ 131.8 $
139.6 $ 144.9 $ 538.3 Adjusted EBITDA Margin 19.3 % 18.6 % 19.4 %
19.5 % 19.0 % 19.1 % Product Care 78.4 63.3 69.4 77.8 81.6 292.1
Adjusted EBITDA Margin 18.0 % 16.8 % 17.8 % 18.7 % 17.6 % 17.7 %
Corporate (8.3) (3.4) (4.9) (0.6) 11.8 2.9
Non-U.S. GAAP Total
Company Adjusted EBITDA from continuing operations $
204.8 $ 181.9 $
196.3 $ 216.8 $
238.3 $ 833.3 Adjusted EBITDA
Margin 18.1 % 17.6 % 18.3 % 19.2 % 19.4 % 18.7 %
_____________
(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 Ended Year Ended March
31, March 31, June 30, September 30,
December 31, December 31, (In millions)
2018 2017 2017 2017 2017
2017 U.S. GAAP Net (loss) earnings from continuing
operations $ (208.0 ) $
(53.7 ) $ 29.0 $ 62.5
$ 25.0 $ 62.8 Interest expense, net
(42.0 ) (46.6 ) (47.7 ) (49.1 ) (40.8 ) (184.2 ) Income tax
provision 321.5 136.4 56.4 43.7 94.0 330.5 Depreciation and
amortization(2) (40.4 ) (37.2 ) (36.4 ) (42.7 ) (42.0 ) (158.3 )
Depreciation and amortization adjustments 0.2 — — — — — Special
Items: — Restructuring and other charges(3) (8.6 ) (1.9 ) (1.1 )
(6.2 ) (2.9 ) (12.1 ) Other restructuring associated costs (2.2 )
(3.9 ) (5.9 ) (2.9 ) (1.6 ) (14.3 ) (Loss) gain on acquisition and
divestiture activity (4.0 ) 2.3 (0.4 ) (6.7 ) (10.7 ) (15.5 )
Charges incurred due to the sale of Diversey (6.8 ) (16.1 ) (17.8 )
(13.7 ) (21.0 ) (68.6 ) Settlement/curtailment benefits related to
retained Diversey retirement plans — — — 13.5 — 13.5 Gain from
class-action litigation settlement 12.7 — — — — — Other Special
Items(1) (0.2 ) 4.2 (1.6 ) (2.8 ) (0.3 ) (0.5 ) Pre-tax
impact of Special items (9.1 ) (15.4 ) (26.8 ) (18.8 ) (36.5 )
(97.5 )
Non-U.S. GAAP Total Company Adjusted EBITDA from
continuing operations $ 204.8 $
181.9 $ 196.3 $
216.8 $ 238.3 $
833.3
_____________
(1) Other Special Items for the three months ended March 31,
2017 primarily included a reduction in a non-income tax reserve
following the completion of a governmental audit partially offset
by legal fees associated with restructuring and acquisitions.
(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 Ended Year Ended March
31, March 31, June 30,
September 30, December 31, December 31,
(In millions) 2018 2017 2017
2017 2017 2017 Food Care $ 26.9 $ 24.7 $ 25.8
$ 29.8 $ 28.7 $ 109.0 Product Care 13.5 12.5 10.6 12.9 13.3 49.3
Total Company depreciation and amortization(i)
$ 40.4 $ 37.2 $
36.4 $ 42.7 $ 42.0
$ 158.3
_____________
(i) Includes share-based incentive compensation of $7.6
million and $8.0 million for the three months ended March 31, 2018
and 2017, respectively. (3) Restructuring and other charges
by segment is as follows:
Three Months Ended
Year Ended March 31, March 31,
June 30, September 30, December
31, December 31, (In millions) 2018
2017 2017 2017 2017 2017 Food
Care $ 4.6 $ 1.2 $ 0.7 $ 3.9 $ 1.8 $ 7.6 Product Care 4.0
0.7 0.4 2.3 1.1 4.5
Total Company
restructuring and other charges $ 8.6
$ 1.9 $ 1.1 $
6.2 $ 2.9 $ 12.1
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version on businesswire.com: https://www.businesswire.com/news/home/20180503005311/en/
Sealed Air CorporationInvestor RelationsLori Chaitman,
201-712-7310
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