Berry Plastics Group, Inc. Reports September Quarter and Fiscal Year 2012 Results

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Berry Plastics Group, Inc. Reports September Quarter and Fiscal Year 2012 Results

EVANSVILLE, Ind.--(BUSINESS WIRE)-- Berry Plastics Group, Inc. (NYS: BERY) today reported results for the September quarter and fiscal year 2012:

  • Net sales decrease of 2 percent versus September 2011 quarter
  • Adjusted free cash flow of $159 million for the September 2012 quarter
  • Fiscal year 2012 Adjusted EBITDA of $803 million with the leverage ratio (net debt/Adjusted EBITDA) at 4.9x (pro forma for the IPO), a reduction of 1.2x from fiscal year 2011
  • Operating EBITDA increased 13 percent and Operating EBITDA margin increased to 17.6 percent from 15.3 percent in the September 2011 quarter
  • Adjusted net income (loss) per share of $0.34 for the quarter compared to ($0.04) in September 2011

"Berry's improved product mix, aggressive cost reduction initiatives, and lower costs for raw materials, coupled with higher prices in certain of our product segments, allowed us to achieve record earnings and reduce our leverage," said Jon Rich, Chairman and CEO of Berry Plastics. "While we are pleased with our overall performance, the weakening global economic environment will present challenges to our industry and to Berry."


September Quarter and Fiscal Year 2012 Results
For the quarter ended September 2012, the Company's net sales declined by 2 percent to $1,204 million from $1,229 million. The decrease in sales was related to the pass through of lower raw material costs and our decision to exit certain low margin business partially offset by sales from acquired businesses and a slight market share gain in certain segments.

     Quarterly Period Ended(Unaudited)
Net Sales (in millions)September 29, 2012  October 1, 2011  

$ Change

  % Change
Rigid Open Top$318  $356  $(38)  (11%)
Rigid Closed Top3523074515%
Engineered Materials352368(16)(4%)
Flexible Packaging 182   198   (16)  (8%)
Total Net Sales$1,204  $1,229  $(25)  (2%)
 

For fiscal year 2012, net sales increased by 4 percent to $4,766 million from $4,561 million in fiscal year 2011. The increase in sales was primarily related to acquisitions, partially offset by the Company's decision to exit certain low margin business.

     Fiscal Year Ended(Unaudited)
Net Sales (in millions)September 29, 2012  October 1, 2011  

$ Change

  % Change
Rigid Open Top$1,229  $1,261  $(32)  ( 3%)
Rigid Closed Top1,4381,05338537%
Engineered Materials1,3621,451(89)( 6%)
Flexible Packaging 737   796   (59)  ( 7%)
Total Net Sales$4,766  $4,561  $205   4%
 

Capital Structure and Adjusted Free Cash Flow
In October 2012 the Company used the proceeds from its IPO to repurchase its 11 percent Senior Subordinated Notes due in September 2016. The ratio of net debt of $3,958 million to the Adjusted EBITDA for the four quarters ended September 29, 2012 of $803 million was 4.9x at the end of the September 2012 quarter when factoring in the impact from the IPO. The actual ratio at the end of September 29, 2012 quarter was 5.5x. Adjusted free cash flow was $159 million for the September 2012 quarter and $279 million for fiscal year 2012.

    September 29, 2012  October 1, 2011
(in millions) (Unaudited)Actual Pro Forma
Term loan$ 1,134 $ 1,134$1,146
Revolving line of credit7373195
First Priority Senior Secured Floating Rate Notes681681681

8¼% First Priority Notes

370370370
Second Priority Senior Secured Floating Rate Notes210210210

9½% Second Priority Notes

500500500

Senior Unsecured Term Loan

393956
9¾% Second Priority Notes800800800
10¼% Senior Subordinated Notes127127127
11% Senior Subordinated Notes455455
Debt discount, net(9)(9)(13)
Capital leases and other9191100
Cash and cash equivalents  (87)   (58) (42)
Net Debt$ 4,384  $ 3,958 $4,585 
 

Outlook
"Our strategic actions are allowing us to continue to strengthen the Company's balance sheet, maintain significant liquidity, and generate substantial free cash flow," said Rich. "Going forward, we will continue to execute on our strategies to further reduce our overall debt leverage, pursue innovative organic growth opportunities, identify value adding acquisitions that can be accretive to shareholder value, and take steps to grow our business internationally."

Investor Conference Call
The Company will host a conference call on Tuesday, November 27, 2012, at 9:00 a.m. CST to discuss its September quarter and fiscal year 2012 results. The telephone number to access the conference call is (866) 847-7864 (domestic), or (703) 639-1430 (international), and use conference ID 1596079. The call will last approximately one hour. Interested parties are invited to listen to a live webcast by visiting the Company's Investor Relations page at www.berryplastics.com. Replay of the conference call can also be accessed on the Investor Relations page of the website.

About Berry Plastics
Berry Plastics Group, Inc. is a leading provider of value-added plastic consumer packaging and engineered materials delivering high-quality customized solutions to our customers with annual net sales of $4.8 billion in fiscal 2012. With world headquarters in Evansville, Indiana, the Company's common stock is listed on the New York Stock Exchange under the ticker symbol BERY. For additional information, visit the Company's website at www.berryplastics.com.

Forward Looking Statements
Statements in this release that are not historical, including statements relating to the expected future performance of the Company, are considered "forward looking" and are presented pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995.Forward-looking statements include statements concerning the Company's plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends, and other information that is not historical information.Actual results in future periods may differ materially from forward-looking statements made today because of a number of risks and uncertainties, including various economic and competitive factors, the Company's ability to pass through raw material price increases to its customers, its ability to service debt, the availability and cost of plastic resin, the impact of changing environmental laws, changes in the level of the Company's capital investment, the results and integration of acquired business, our reliance on unpatented know-how and trade secrets and the risks set forth in the "Risk Factors," "Cautionary Statement Regarding Forward-Looking Statements" and other sections of our reports filed or furnished with the Securities Exchange Commission.You should not place undue reliance on our forward-looking statements.We undertake no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.Additional important information about the Company's business is set forth in the Company's various filings with the SEC and the information discussed today should be considered alongside the information contained in those filings.

 
 

Berry Plastics Group, Inc.

Consolidated Statements of Operations

(Unaudited)


(in millions, except per share data)

 
 
    Quarterly Period Ended  Fiscal Year Ended

September 29,
2012

 

October 1,
2011

September 29,
2012

 

October 1,
2011

Net sales$1,204 $1,229$4,766 $4,561
Costs and expenses:
Cost of goods sold9771,0373,9493,878
Selling, general and administrative8175308275
Amortization of intangibles2826109106
Restructuring and impairment charges118531221
Other operating expenses 10  13  44  39 
Operating income (loss)107(107)32542
 
Other expense (income)(6)(6)(7)61
Interest expense, net 81  84  328  327 
Net income (loss) before income taxes32(185)4(346)
Income tax expense (benefit) 9  7  2  (47)
Net income (loss)$23 $(192)$2 $(299)
 
 
Net income (loss) per share:
Basic$0.28$(2.29)$0.02(3.55)
Diluted0.26(2.29)0.02(3.55)
 
Weighted-average number of shares outstanding: (in thousands)
Basic83,20283,87683,43584,121
Diluted89,13183,87686,64484,121
 
      
 

Berry Plastics Group, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)

 
 

September 29,
2012

October 1,
2011

Assets:
Cash and cash equivalents$87$42
Accounts receivable, net455543
Inventories535578
Other current assets9092
Property, plant and equipment, net1,2161,250
Goodwill, intangibles and other assets 2,642  2,712 
Total assets$5,025 $5,217 
 
Liabilities and stockholders' deficit
Current liabilities, excluding debt606638
Current and long-term debt4,4714,627
Other liabilities
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