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Berry Plastics Group, Inc. Reports Second Quarter Fiscal 2014 Results

Stocks in this article: BERY

Berry Plastics Group, Inc. (NYSE:BERY) today reported results for its second quarter fiscal 2014, referred to in the following as the March 2014 quarter:

  • Increased net sales by 5 percent to $1,210 million for the March 2014 quarter compared to $1,150 million in the March 2013 quarter
  • Recorded net income of $12 million ($0.10 per diluted share) for the March 2014 quarter
  • Achieved Operating EBITDA of $191 million for the March 2014 quarter and LTM Adjusted EBITDA of $807 million
  • LTM Adjusted free cash flow of $288 million, representing an 11 percent adjusted free cash flow yield
  • Adjusted net income per share of $0.27 for the March 2014 quarter compared to $0.28 in the March 2013 quarter

“The March 2014 quarter was impacted by challenges related to this year’s winter season in the United States and increases in the costs of our raw materials,” said Jon Rich, Chairman and CEO of Berry Plastics. “Despite those effects we still achieved a 5 percent increase in net sales and had similar free cash flow versus the prior year. We took actions on pricing and cost reductions in the quarter and are encouraged by recent increases in demand.”

March 2014 Quarter ResultsFor the March 2014 quarter, the Company’s net sales increased by 5 percent to $1,210 million from $1,150 million in the March 2013 quarter. The year-over-year increase was primarily attributed to increased selling prices due to higher material costs along with sales from our acquisitions of Graphic Packaging’s Flexible Plastics and Film business and Qingdao P&B.

        Quarterly Period Ended (Unaudited)
Net sales (in millions) March 29, 2014     March 30, 2013    

$ Change

    % Change
Rigid Open Top $ 256     $ 257     $ (1 )     (- )%
Rigid Closed Top   360       353       7       2 %

Rigid Packaging

616 610 6 1 %
Engineered Materials 368 354 14 4 %
Flexible Packaging   226       186       40       22 %
Total net sales $ 1,210     $ 1,150     $ 60       5 %
 

March 2014 Fiscal YTD ResultsFor March 2014 Fiscal YTD, the Company’s net sales increased by 6 percent to $2,350 million as compared to $2,222 million for the same period of fiscal 2013. The increase was primarily attributed to increased selling prices due to higher material costs along with sales from our acquisitions of Graphic Packaging’s Flexible Plastics and Film business and Qingdao P&B.

        Two Quarterly Periods Ended (Unaudited)
Net sales (in millions) March 29, 2014     March 30, 2013    

$ Change

    % Change
Rigid Open Top $ 517     $ 516     $ 1     - %
Rigid Closed Top   692       666       26     4 %

Rigid Packaging

1,209 1,182 27 2 %
Engineered Materials 710 679 31 5 %
Flexible Packaging   431       361       70     19 %
Total net sales $ 2,350     $ 2,222     $ 128     6 %
 

Capital Structure and Adjusted Free Cash FlowAt the close of the March 2014 quarter, the ratio of net debt of $3,817 million to LTM Adjusted EBITDA of $807 million was 4.7x, an improvement of 0.1x from the September 2013 quarter. The Company’s LTM Adjusted free cash flow was $288 million.

       

March 29, 2014

   

September 28, 2013

(in millions) (Unaudited)
 
Term Loans $ 2,514 $ 2,522
Revolving line of credit
9½% Second Priority Notes 500 500
9¾% Second Priority Notes 800 800
Senior Unsecured Term Loan 18 18
Debt discount, net (16 ) (8 )
Capital leases and other   127     114  
Total debt $ 3,943 $ 3,946
Less: Cash and cash equivalents   (126 )   (142 )
Net debt $ 3,817   $ 3,804  
 

Outlook“In late March we announced that we had entered into agreements to acquire Rexam’s Healthcare Containers and Closures business. The proposed acquisition is directly aligned with our key strategic initiatives and is expected to be deleveraging after achieving synergies,” stated Rich.

“As we look ahead to the remainder of fiscal 2014, based on trends we are seeing, we believe that business will improve in the coming quarters and despite the earnings challenges we had in our March ending quarter, we are reconfirming our initial plan of $270 million of adjusted free cash flow,” said Rich.

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