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Sealed Air's CEO Discusses Q1 2012 Results - Earnings Call Transcript

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Let me take a minute to look at some of the key metrics that we are following. In the quarter, we achieved an adjusted EBITDA of $236 million, or about 12.3% adjusted EBITDA margin for the quarter. This represents steady performance on $1 and margin basis versus pro forma results in the first quarter of 2011, even though market conditions and input costs have become more challenging in the first quarter of 2012. We're also comfortable with our free cash flow and net debt outlook and continue to expect to generate $450 million to $475 million of free cash flow in 2012. Tod will discuss additional details on our cash flow after my comments.

Lastly, we prepay $31 million of our outstanding term loans in the quarter, staying a year ahead on our payment installments and remaining committed on using cash to pay down debt. Looking at earnings per share, we did report a loss of $0.03 per share in the quarter but that did include the impact of $0.21 of special items including integration costs and restructuring costs. Excluding the impact of the special items, adjusted earnings per share was $0.18 and of course, that does include the effect of purchase price amortization, which on an after-tax basis, approximately $0.11 per share.

Reported sales for the quarter were $1.92 billion, reflecting a 4% increase in constant dollar sales from our legacy Sealed Air business. Two of that came from higher price, and 2% of that came from higher volumes. I'm particularly pleased that we're able to report positive volume in all of our businesses in what many industry peers have not been able to do.

On a pro forma basis, sales increased 1% or approximately 3% on a constant dollar basis as currency was a headwind for us in the quarter. All regions reported growth with 2% constant dollar sales in the North America, 1% growth in the EMEA region and developing regions achieved a 9% growth with solid performance in Latin America, Southeast Asia, India and the Middle East, which includes Turkey, Egypt and the UAE. Our volume growth reflected our ability to hold or expand our market presence in each of our businesses and largely perform above industry and customer production rates, as our market-facing teams continue to execute on their growth programs. These include achieving our targeted top line synergies where we have achieved just under $10 million to date on an annual rate, but we are tracking above plan as we only expected top line synergies to materialize in the second quarter and beyond.

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