- Net Earnings from Continuing Operations
$83 million (up 187%) or $0.52 per diluted share (up 271%)
- Adjusted Earnings from Continuing
Operations per diluted share increased 88% year-over-year to
$0.64
- Net Sales from Continuing Operations
increased 8% year-over-year to $1.2 billion
- Adjusted EBITDA from Continuing
Operations increased 11% year-over-year to $218 million
- Acquired AFP, Inc., a leading,
U.S.-based fabricator of specialty packaging solutions
- Reaffirm 2018 outlook for Net Sales
approx. $4.75 billion, Adjusted EBITDA $890 to $910 million,
Adjusted EPS $2.45 to $2.55 and Free Cash Flow approx. $400
million
Sealed Air Corporation (NYSE:SEE) today announced financial
results for the second quarter 2018. “In the second quarter, Net
Sales and Adjusted EBITDA increased 8% and 11%, respectively. Our
differentiated and innovative solutions portfolio allows us to
capitalize on the rapidly growing fresh food and e-commerce
markets. This solid top line performance combined with our efforts
to reduce costs and drive operational excellence resulted in
improved operating leverage for the second consecutive quarter
compared to the same period last year,” said Ted Doheny, President
and Chief Executive Officer.
“We are excited to announce the acquisition of AFP, Inc., a
leading, U.S.-based fabricator of specialty packaging solutions.
AFP complements our recent Fagerdala acquisition and expands our
design capabilities for the electronics, transportation and
industrial markets. Building on our first half 2018 results and
continued business momentum, we are on track to deliver our full
year objectives despite anticipated currency headwinds.”
Unless otherwise stated, all results compare second quarter 2018
results to second 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
Food Care second quarter net sales of $713 million increased 5%
as reported and on a constant dollar basis. The 5% increase was
attributable to favorable price/mix of 3% and volume growth of 2%.
Adjusted EBITDA increased 3% to $135 million or 19.0% of net sales.
Adjusted EBITDA performance was primarily due to favorable mix and
price/cost spread, restructuring savings and positive volume trends
partially offset by higher operating costs. Currency had a $1
million unfavorable impact on Adjusted EBITDA.
Product Care second quarter net sales of $442 million increased
13% as reported. Currency had a positive impact on Product Care net
sales of 2%, or $8 million. On a constant dollar basis, net sales
increased 11%, including 6%, or $24 million, from Fagerdala, 5%
from favorable price/mix and a slight increase in volume. Adjusted
EBITDA increased 13% to $79 million or 17.8% of net sales. Adjusted
EBITDA performance was primarily attributable to favorable mix and
price/cost spread, restructuring savings and contributions from the
Fagerdala acquisition partially offset by higher operating costs.
Currency had a $2 million favorable impact on Adjusted EBITDA.
From April 1, 2018 through July 31, 2018, Sealed Air repurchased
approximately $125 million or 2.9 million shares bringing the total
year to date share repurchases to approximately $530 million or
11.7 million shares. The Company has approximately $900 million
remaining under the current share repurchase authorization.
On July 12, 2018, Sealed Air entered into a third amended and
restated syndicated facility agreement whereby its existing
revolver was increased from $700 million to $1.0 billion and
existing term loans were rolled over. The maturity of the new
facilities was extended to July 2023 with more favorable terms.
On August 1, 2018, Sealed Air acquired AFP, Inc.,
a leading, privately held fabricator of foam,
corrugated, molded pulp and wood packaging
solutions. This acquisition expands Sealed Air’s protective
packaging solutions in the electronics, transportation and
industrial markets with custom-engineered applications. Acquiring
the company will allow Sealed Air to better position its fabricated
foam innovations such as EcoPure, a sustainable solution made from
plant-based resin. AFP generated $125 million in net sales in 2017
and operates six facilities across the U.S. with further presence
in Asia and Mexico.
Second Quarter 2018 U.S. GAAP Summary
Net sales of $1.2 billion increased 8% on an as reported basis.
Currency had a positive impact on total net sales of 1%, or $8
million. As reported, net sales increased 4% in North America, 7%
in Latin America, 10% in EMEA and 22% in Asia Pacific.
Net earnings from continuing operations on an as reported basis
was $83 million, or $0.52 per diluted share, which was unfavorably
impacted by $19 million of special items, primarily related to
restructuring charges and charges related to the sale of Diversey.
This compares to net earnings in the second quarter 2017 of $29
million, or $0.14 per diluted share, which was unfavorably impacted
by $40 million of special items, including $18 million of tax
expense and $18 million of pre-tax charges related the sale of
Diversey.
The effective tax rate in the second quarter of 2018 was of
28.7%, compared to 66.0% in the second quarter of 2017. The 2017
rate was negatively affected by tax expense related to the
sale of Diversey, an increase in tax related to earnings mix, and
the settlement of an audit in Europe for $3 million.
Second Quarter 2018 Non-U.S. GAAP Summary
On a constant dollar basis, net sales increased 7% reflecting
favorable price/mix of 4%, contribution from the Fagerdala
acquisition of 2%, and an increase in volume of 1%. The Company
experienced increased demand for its differentiated solutions on a
global basis. This was partially offset by a decline in equipment
sales, particularly in Food Care North America due to timing and
strong prior year comparable results. Equipment sales are expected
to grow in the second half of the year. By region, constant dollar
sales increased 4% in North America and EMEA, 19% in Latin America,
and 20% in Asia Pacific.
Adjusted EBITDA increased 11% to $218 million, or 18.8% of net
sales. This compares to $196 million, or 18.3% of net sales for the
second quarter of 2017. Currency had a favorable $2 million, or 1%,
impact on Adjusted EBITDA in the quarter. The year-over-year margin
increase was primarily attributable to favorable mix and price/cost
spread, restructuring savings and contributions from the Fagerdala
acquisition partially offset by higher operating costs.
Adjusted EPS was $0.64 for the second quarter 2018 compared to
$0.34 in the second quarter 2017. The Adjusted Tax Rate was 22.6%
in the second quarter 2018, compared to 38.9% in the second quarter
2017. The 2017 rate was unfavorably impacted by earnings mix.
Cash Flow and Net Debt
Cash flow provided by operating activities in the six months
ended June 30, 2018 was an inflow of $37 million, which
includes the previously announced one-time payment of $42
million in lieu of future royalty payments and $33 million of
payments related to the sale of Diversey and efforts to address
related stranded costs.
Capital expenditures were $74 million in the six months ended
June 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 outflow of $5 million in the six
months ended June 30, 2018.
During the six months ended June 30, 2018, the Company had
cash used in financing activities of $408 million related to share
repurchases and cash dividends of $54 million.
Net Debt, defined as total debt less cash and cash equivalents,
increased to $3.2 billion as of June 30, 2018 from $2.7
billion as of December 31, 2017. This increase resulted from a
use of cash related to working capital and share repurchases.
Outlook for Full Year 2018
For the full year 2018, Sealed Air anticipates Net Sales to be
approximately $4.75 billion, a constant dollar growth rate of
approximately 7%. This compares to previous guidance of constant
dollar sales growth of 4.5%. The company reaffirms its outlook for
Adjusted EBITDA from continuing operations to be in the range of
$890 million to $910 million. The forecast for Adjusted EPS remains
in the range of $2.45 to $2.55, which is based on 161 million
shares outstanding and an anticipated Adjusted Tax Rate of 28.0%.
Full year outlook assumes five months of contribution from AFP.
Currency headwinds are expected to negatively impact Net Sales
and Adjusted EBITDA by $20 million and $5 million, respectively.
This compares to the prior forecast which assumed a favorable
impact from currency of approximately $110 million on Net Sales and
$20 million on Adjusted EBITDA.
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, August 2, 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: 3293157
A supplemental presentation will be available on the Company’s
website at www.sealedair.com/investors.
Conference Call Replay Information
Date: Thursday, August 2, 2018 at 1:00 p.m. (ET) through
Saturday, September 1, 2018 at 1:00 p.m. (ET) Webcast:
www.sealedair.com/investors
Conference Dial In: (855) 859-2056 (domestic) (404) 537-3406
(international) Participant Code: 3293157
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 Statements of
Operations(1)
Three Months Ended June 30, Six
Months Ended June 30, (unaudited) (unaudited)
(In millions, except per share data) 2018
2017 2018 2017 Net sales $ 1,155.2 $
1,070.3 $ 2,286.2 $ 2,102.5 Cost of sales(2)(3) 791.7 726.8
1,548.7 1,423.6 Gross profit 363.5 343.5 737.5
678.9 Selling, general and administrative expenses(2) 192.8 202.9
386.8 400.3 Amortization expense of intangible assets acquired 3.4
1.1 7.3 6.1 Restructuring and other charges(4) 7.1 1.1
15.7 3.0 Operating profit 160.2 138.4 327.7
269.5 Interest expense, net (44.5 ) (47.7 ) (86.5 ) (94.3 ) Other
income (expense), net(2)(3) 1.1 (5.3 ) (10.9 ) (7.1 )
Earnings before income tax provision 116.8 85.4 230.3 168.1 Income
tax provision(4) 33.5 56.4 355.0 192.8
Net earnings (loss) from continuing operations 83.3 29.0 (124.7 )
(24.7 ) Gain on sale of discontinued operations, net of tax 31.1 —
38.5 — Net earnings from discontinued operations, net of tax(4)(5)
— 75.1 — 85.7
Net earnings
(loss) $ 114.4 $ 104.1
$ (86.2 ) $ 61.0
Basic: Continuing operations $ 0.52 $ 0.14 $ (0.77 ) $ (0.13 )
Discontinued operations(5) 0.19 0.39 0.24 0.44
Net earnings (loss) per common share - basic $
0.71 $ 0.53 $
(0.53 ) $ 0.31 Diluted:
Continuing operations $ 0.52 $ 0.14 $ (0.77 ) $ (0.13 )
Discontinued operations(5) 0.19 0.38 0.24 0.43
Net earnings (loss) per common share - diluted
$ 0.71 $ 0.52 $
(0.53 ) $ 0.30 Dividends per
common share $ 0.16 $ 0.16 $ 0.32 $ 0.32
Weighted average number of common shares outstanding: Basic
159.7 192.5 162.5 192.9 Diluted 160.6
194.8 162.5 195.3
________________
(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) 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 and six months ended June 30,
2017 was $0.6 million and $1.4 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, net to cost of sales. This resulted in a
reclassification of $1.3 million and $3.2 million for the three and
six months ended June 30, 2017, respectively. (4) During the three
and six months ended June 30, 2017, a reclassification of
restructuring expenses from continuing operations to discontinued
operations was made for $0.9 million, approximately $0.6 million
net of taxes. (5) For the three and six months ended June 30, 2017,
there was a revision to net earnings from discontinued operations,
net of tax, related to depreciation and amortization on Diversey
assets held for sale. As a result, net earnings from discontinued
operations, net of tax, increased $16.4 million and increased basic
and diluted shares by $0.09 per share.
Sealed Air
Corporation Supplemental Information
Condensed Consolidated Balance
Sheets(1)
June 30, 2018 December 31,
(In millions)
(unaudited) 2017 Assets Current assets: Cash
and cash equivalents $ 180.1 $ 594.0 Trade receivables, net 495.5
552.4 Income tax receivables 19.9 85.1 Other receivables 100.0 90.2
Inventories, net 580.2 506.8 Current assets held for sale 0.7 4.0
Prepaid expenses and other current assets 154.6 33.9
Total current assets 1,531.0 1,866.4 Property and equipment, net
983.7 998.4 Goodwill 1,932.0 1,939.8 Identifiable intangible
assets, net 85.6 83.6 Deferred taxes 113.6 176.2 Other non-current
assets 213.3 215.9
Total assets $
4,859.2 $ 5,280.3 Liabilities
and Stockholders' Equity Current liabilities: Short-term
borrowings $ 117.1 $ 25.3 Current portion of long-term debt 1.5 2.2
Accounts payable 790.7 723.8 Current liabilities held for sale —
2.2 Accrued restructuring costs 20.4 15.4 Income tax payable 64.5
47.3 Other current liabilities 379.9 562.0 Total
current liabilities 1,374.1 1,378.2 Long-term debt, less current
portion 3,217.1 3,230.5 Deferred taxes 19.4 28.5 Other non-current
liabilities 621.0 490.8
Total liabilities
5,231.6 5,128.0 Stockholders’ equity: Preferred stock
— — Common stock 23.2 23.0 Additional paid-in capital 2,035.0
1,939.6 Retained earnings 1,593.2 1,735.2 Common stock in treasury
(3,165.0 ) (2,700.6 ) Accumulated other comprehensive loss, net of
taxes (858.8 ) (844.9 )
Total stockholders’ equity
(372.4 ) 152.3 Total liabilities and
stockholders’ equity $ 4,859.2 $
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)
June 30, 2018 December 31,
(unaudited) 2017 Short-term borrowings $ 117.1 $ 25.3
Current portion of long-term debt 1.5 2.2 Long-term debt, less
current portion 3,217.1 3,230.5 Total debt 3,335.7
3,258.0 Less: cash and cash equivalents (180.1 ) (594.0 )
Net
debt $ 3,155.6 $ 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)
Six Months Ended June 30, (unaudited)
(In millions) 2018 2017 Net (loss)
earnings(1) $ (86.2 ) $ 61.0 Adjustments to reconcile net (loss)
earnings to net cash provided by operating activities(2) 122.0
247.9 Changes in operating assets and liabilities: Trade
receivables, net (24.2 ) (58.3 ) Inventories (92.6 ) (82.8 )
Accounts payable 58.7 145.4 Other assets and liabilities 59.0
(171.9 )
Net cash provided by operating activities
$ 36.7 $ 141.3 Cash flows
from investing activities: Capital expenditures (73.7 ) (93.2 )
Proceeds, net from sale of business and property and equipment 8.3
3.6 Business acquired, net of cash acquired — (3.5 ) Investment in
cost method investments (7.5 ) — Settlement of foreign currency
forward contracts (5.3 ) 11.3 Other investing activities (2.6 ) —
Net cash used in investing activities $
(80.8 ) $ (81.8 ) Cash flows
from financing activities: Changes in short term borrowings 105.7
252.2 Payments of debt extinguishment costs (0.4 ) — Dividends paid
on common stock (54.0 ) (61.8 ) Acquisition of common stock for tax
withholding (6.1 ) (21.5 ) Repurchases of common stock (407.9 )
(305.3 ) Other financing activities — 0.3
Net cash
used in financing activities(3) $ (362.7
) $ (136.1 ) Effect of foreign
currency exchange rate changes on cash and cash equivalents
$ (7.0 ) $ (12.1 ) 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 $ (413.8
) $ (88.7 ) Cash and cash equivalents
180.1 243.0 Restricted cash and cash equivalents(3) — 54.9
Balance, end of period $ 180.1
$ 297.9 Non-U.S. GAAP Free Cash
Flow: Cash flow from operating activities $ 36.7 $ 141.3
Capital expenditures for property and equipment (73.7 ) (93.2 )
Free Cash Flow(4) $ (37.0 )
$ 48.1 Supplemental Cash Flow
Information: Interest payments, net of amounts capitalized $ 95.6
$ 107.0 Income tax payments $ 97.1 $ 92.6
Payments related to the sale of Diversey and efforts to
address related stranded costs(4) $ 32.5 $ 44.8
Restructuring payments including associated costs $ 3.7 $
33.1 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 $66 million, deferred taxes of $51
million, share based compensation expense of $15 million and profit
sharing expense of $10 million partially offset by a gain on the
sale of Diversey of $39 million. 2017 adjustments primarily
consists of $123 million of deferred taxes, depreciation and
amortization $82 million, share based compensation expense of $23
million and profit sharing expense of $13 million. (3) 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 $2 million due to the reclassification of restricted
cash to a change in the total cash balance. (4) Free cash flow was
an outflow of $5 million in 2018 excluding the payment of charges
related to the sale of Diversey and efforts to address related
stranded costs of $33 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 June 30, Six
Months Ended June 30, 2018 2017
2018 2017 (In millions, except per share
data)
NetEarnings
DilutedEPS
NetEarnings
DilutedEPS
NetEarnings
DilutedEPS
NetEarnings
DilutedEPS
U.S. GAAP net earnings (loss) and diluted EPS from continuing
operations(2) $ 83.3 $ 0.52
$ 29.0 $ 0.14 $ (124.7
) $ (0.77 ) $ (24.7
) $ (0.13 ) Special Items(3) 19.1
0.12 39.5 0.20 312.5 1.92
177.9 0.91
Non-U.S. GAAP adjusted net earnings and
adjusted diluted EPS from continuing operations $
102.4 $ 0.64 $
68.5 $ 0.34 $
187.8 $ 1.15 $
153.2 $ 0.78 Weighted average
number of common shares outstanding - Diluted 160.6
194.8 162.5 195.3
________________ (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) Net
earnings (loss) per common share is calculated under the two-class
method. (3) Special Items include the following:
Three
Months Ended Six Months Ended June 30,
June 30, (In millions, except per share data)
2018 2017 2018 2017
Special Items: Restructuring and other charges $ (7.1 ) $ (1.1 ) $
(15.7 ) $ (3.0 ) Other restructuring associated costs 0.4 (5.9 )
(1.8 ) (9.8 ) Loss on debt redemption (0.4 ) — (0.4 ) — (Loss) gain
on acquisition and divestiture activity (1.2 ) (0.4 ) (5.2 ) 1.9
Charges due to the sale of Diversey (5.8 ) (17.8 ) (12.6 ) (33.9 )
(Loss) gain from class-action litigation settlement (0.1 ) — 12.6 —
Other Special Items(i) (1.3 ) (1.6 ) (1.5 ) 2.6
Pre-tax
impact of Special Items (15.5 ) (26.8
) (24.6 ) (42.2 ) Tax impact of
Special Items and Tax Special Items(ii) (3.6 ) (12.7 ) (287.9 )
(135.7 )
Net impact of Special Items $ (19.1
) $ (39.5 ) $ (312.5
) $ (177.9 ) Weighted average number
of common shares outstanding - Diluted 160.6
194.8 162.5 195.3 Loss per share impact
from Special Items $ (0.12 ) $
(0.20 ) $ (1.92 ) $
(0.91 ) ________________ (i) Other
Special Items for the three months ended June 30, 2017 primarily
included an expense related to the recovered wage tax reserve as
well as legal fees associated with restructuring and acquisitions.
Other Special Items for the six months ended June 30, 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. (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 EndedJune
30,
Six Months EndedJune 30,
(In millions) 2018 2017 2018
2017 U.S. GAAP Earnings before income tax provision
from continuing operations $ 116.8 $ 85.4 $ 230.3 $ 168.1 Pre-tax
impact of special items (15.5 ) (26.8 ) (24.6 ) (42.2 )
Non-U.S. GAAP Adjusted Earnings before
income tax provision from continuing operations
$ 132.3 $ 112.2 $ 254.9 $ 210.3
U.S. GAAP Income tax provision from continuing operations $ 33.5 $
56.4 $ 355.0 $ 192.8 Tax Special Items(1) (6.7 ) (21.6 ) (293.9 )
(149.9 ) Tax impact of Special Items 3.1 8.9 6.0
14.2 Non-U.S. GAAP Adjusted Income tax provision from
continuing operations $ 29.9 $ 43.7 $ 67.1 $
57.1 U.S. GAAP Effective income tax rate 28.7 % 66.0
% 154.1 % 114.7 % Non-U.S. GAAP Adjusted income tax rate 22.6 %
38.9 % 26.3 % 27.2 % ________________ (1) For the
three and six months ended June 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 three and six months ended June 30, 2017, Tax
Special Items included $18 million and $127 million of tax expense,
respectively, recorded in accordance with the sale of Diversey.
Sealed Air Corporation
Supplemental
Information(1)
Components of Change in Net Sales by Segment
(Unaudited) Three Months Ended June 30,
(In millions) Food Care Product Care
Total Company 2017 Net Sales $ 679.5
63.5 % $ 390.8 36.5 % $ 1,070.3 Volume
- Units 13.1 1.9 % 1.0 0.3 % 14.1 1.3 % Price/mix(2) 20.4 3.0 %
19.3 4.9 % 39.7 3.7 % Acquisitions — — %
23.6
6.0 % 23.6 2.2 % Total constant dollar change
(Non-U.S. GAAP)(3) 33.5 4.9 % 43.9 11.2 % 77.4 7.2 % Foreign
currency translation — — % 7.5 1.9 % 7.5 0.7 %
Total change (U.S. GAAP) 33.5 4.9 %
51.4 13.1 % 84.9 7.9 %
2018 Net Sales $ 713.0
61.7 %
$ 442.2 38.3 %
$
1,155.2 Six Months Ended June
30, (In millions) Food Care Product Care
Total Company 2017 Net Sales $ 1,335.1 63.5 % $ 767.4 36.5 %
$ 2,102.5 Volume - Units 26.0 1.9 % 12.3 1.6 % 38.3 1.8 %
Price/mix(2) 27.9 2.1 % 29.5 3.8 % 57.4 2.7 % Acquisitions —
— % 44.8 5.8 % 44.8 2.1 % Total constant dollar
change (Non-U.S. GAAP)(3) 53.9 4.0 % 86.6 11.2 % 140.5 6.6 %
Foreign currency translation 20.3 1.5 % 22.9 3.0 %
43.2 2.1 %
Total change (U.S. GAAP) 74.2
5.5 % 109.5 14.2 % 183.7
8.7 % 2018 Net Sales
$ 1,409.3 61.6 %
$ 876.9
38.4 %
$ 2,286.2 ________________ (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 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 June 30,
(In millions) North America
EMEA(2) Latin America
APAC(3) Total 2017 Net Sales $ 591.1
55.2 % $ 238.3 22.3 % $ 96.1 9.0 % $
144.8 13.5 % $ 1,070.3 Volume - Units
(9.5 ) (1.6 )% 5.3 2.2 % 11.1 11.6 % 7.2 5.0 % 14.1 1.3 %
Price/mix(4) 28.1 4.8 % 4.4 1.8 % 7.0 7.3 % 0.2 0.1 % 39.7 3.7 %
Acquisitions 2.1 0.4 % — — % 0.5 0.5 % 21.0
14.5 % 23.6 2.2 % Total constant dollar change
(Non-U.S. GAAP)(5) 20.7 3.6 % 9.7 4.0 % 18.6 19.4 % 28.4 19.6 %
77.4 7.2 % Foreign currency translation 1.6 0.3 % 14.0
5.9 % (11.9 ) (12.4 )% 3.8 2.6 % 7.5 0.7 %
Total change (U.S. GAAP) 22.3 3.9 %
23.7 9.9 % 6.7 7.0 %
32.2 22.2 % 84.9 7.9 %
2018 Net Sales $
613.4 53.1 %
$ 262.0 22.7 %
$ 102.8 8.9 %
$ 177.0
15.3 %
$ 1,155.2 Six Months
Ended June 30, (In millions) North America
EMEA(2) Latin America
APAC(3) Total 2017 Net Sales $ 1,154.7
54.9 % $ 458.8 21.8 % $ 192.8
9.2 % $ 296.2 14.1 % $ 2,102.5 Volume - Units
3.7 0.3 % 10.8 2.4 % 17.7 9.2 % 6.1 2.1 % 38.3 1.8 % Price/mix(4)
43.7 3.8 % 6.9 1.5 % 7.6 3.9 % (0.8 ) (0.3 )% 57.4 2.7 %
Acquisitions 3.8 0.3 % — — % 0.9 0.5 % 40.1
13.5 % 44.8 2.1 % Total constant dollar change
(Non-U.S. GAAP)(5) 51.2 4.4 % 17.7 3.9 % 26.2 13.6 % 45.4 15.3 %
140.5 6.6 % Foreign currency translation 3.1 0.3 % 43.2
9.4 % (13.2 ) (6.8 )% 10.1 3.4 % 43.2 2.1 %
Total change (U.S. GAAP) 54.3 4.7 %
60.9 13.3 % 13.0 6.8 %
55.5 18.7 % 183.7 8.7 %
2018 Net Sales $
1,209.0 52.9 %
$ 519.7 22.7 %
$ 205.8 9.0 %
$ 351.7
15.4 %
$ 2,286.2 ________________ (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 take into account the effects of
foreign currency translation when we view our results and plan our
strategies. Nonetheless, we cannot control changes in foreign
currency exchange rates. Consequently, when our management looks at
our financial results to measure the core performance of our
business, we exclude the impact of foreign currency translation by
translating our current period results at prior period foreign
currency exchange rates. We also may exclude the impact of foreign
currency translation when making incentive compensation
determinations. As a result, our management believes that these
presentations are useful internally and may be useful to our
investors.
Sealed Air Corporation
Supplemental
Information(1)
Segment Information
Reconciliation 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 EndedJune 30,
Six Months EndedJune 30, (In millions)
2018 2017 2018 2017
Net Sales: Food Care $ 713.0 $ 679.5 $ 1,409.3 $ 1,335.1 As
a % of Total Company net sales 61.7 % 63.5 % 61.6 % 63.5 % Product
Care 442.2 390.8 876.9 767.4 As a % of Total Company net sales 38.3
% 36.5 % 38.4 % 36.5 %
Total Company Net Sales $
1,155.2 $ 1,070.3 $
2,286.2 $ 2,102.5
Three Months EndedJune 30, Six Months
EndedJune 30, (In millions) 2018
2017 2018 2017 Adjusted EBITDA from
continuing operations: Food Care $ 135.4 $ 131.8 $ 270.1 $
253.8 Adjusted EBITDA Margin 19.0 % 19.4 % 19.2 % 19.0 % Product
Care 78.5 69.4 156.9 132.7 Adjusted EBITDA Margin 17.8 % 17.8 %
17.9 % 17.3 % Corporate 3.6 (4.9 ) (4.7 ) (8.3 )
Non-U.S.
GAAP Total Company Adjusted EBITDA from continuing operations
$ 217.5 $ 196.3 $
422.3 $ 378.2 Adjusted EBITDA
Margin 18.8 % 18.3 % 18.5 % 18.0 % ________________ (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.
Three Months EndedJune
30,
Six Months EndedJune 30, (In millions)
2018 2017 2018 2017
U.S. GAAP Net earnings (loss) from continuing operations
$ 83.3 $ 29.0 $ (124.7
) $ (24.7 ) Interest expense, net (44.5
) (47.7 ) (86.5 ) (94.3 ) Income tax provision 33.5 56.4 355.0
192.8 Depreciation and amortization(2) (40.8 ) (36.4 ) (81.2 )
(73.6 ) Depreciation and amortization adjustments 0.1 — 0.3 —
Special Items: Restructuring and other charges(3) (7.1 ) (1.1 )
(15.7 ) (3.0 ) Other restructuring associated costs 0.4 (5.9 ) (1.8
) (9.8 ) Loss on debt redemption (0.4 ) — (0.4 ) — (Loss) gain on
acquisition and divestiture activity (1.2 ) (0.4 ) (5.2 ) 1.9
Charges incurred due to the sale of Diversey (5.8 ) (17.8 ) (12.6 )
(33.9 ) (Loss) gain from class-action litigation settlement (0.1 )
— 12.6 — Other Special Items(4) (1.3 ) (1.6 ) (1.5 ) 2.6
Pre-tax impact of Special items (15.5 ) (26.8 ) (24.6 ) (42.2 )
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing
operations $ 217.5 $ 196.3
$ 422.3 $ 378.2
________________ (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 EndedJune 30, Six Months
EndedJune 30, (In millions) 2018
2017 2018 2017 Food Care $ 27.2 $ 25.8
$ 54.1 $ 50.5 Product Care 13.6 10.6 27.1 23.1
Total Company
depreciation and amortization(i) $ 40.8
$ 36.4 $ 81.2
$ 73.6 ________________ (i) Includes
share-based incentive compensation of $7.7 million and $15.3
million for the three and six months ended June 30, 2018,
respectively, and $10.9 million and $18.9 million for the three and
six months ended June 30, 2017, respectively. (3)
Restructuring and other charges by segment is as follows:
Three Months EndedJune 30, Six Months
EndedJune 30, (In millions) 2018
2017 2018 2017 Food Care $ 1.5 $ 0.7 $
6.1 $ 1.9 Product Care 5.6 0.4 9.6 1.1
Total Company restructuring and other charges $
7.1 $ 1.1 $ 15.7
$ 3.0 ________________ (4) Other
Special Items for the three months ended June 30, 2017 primarily
included expense related to the recovered wage tax reserve as well
as legal fees associated with restructuring and acquisitions. Other
Special Items for the six months ended June 30, 2017, primarily
included a recovered wage tax as the result of a court ruling
partially offset by legal fees associated with restructuring and
acquisitions.
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version on businesswire.com: https://www.businesswire.com/news/home/20180802005142/en/
Sealed Air CorporationInvestors:Lori Chaitman,
704-503-8841orMedia:Julianna Jacobson, 571-236-4256
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