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|
(State or Other Jurisdiction of Incorporation)
|
(I.R.S. Employer Identification No.)
|
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
|
Trading
Symbol(s)
|
Name of each exchange on which registered
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Exhibit
Number |
|
Description
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
BERRY GLOBAL. GROUP, INC.
(Registrant)
|
|||
Dated: February 2, 2023
|
By:
|
/s/ Jason K. Greene |
|
Name: |
Jason K. Greene |
||
Title: |
Executive Vice President,
Chief Legal Officer and Secretary
|
||
|
News Release
|
|
|
•
|
Operating income of $210 million; Operating EBITDA of $443 million, up 3% on a comparable basis
|
•
|
Earnings per share of $0.85; Adjusted earnings per share of $1.30, up 11% on a comparable basis
|
•
|
Fiscal 2023 outlook: Reaffirmed adjusted EPS and free cash flow ranges
|
•
|
Returned $211 million to shareholders in the quarter ($178 million via share repurchases and $33 million in dividends)
|
•
|
Reduced long-term leverage target to 2.5x – 3.5x (net debt to adjusted EBITDA)
|
Berry’s Chairman and CEO Tom Salmon said, “Our businesses delivered solid first quarter results, including 3% EBITDA growth and 11% adjusted earnings
per share growth. We have made significant progress recovering inflation along with contributions from our cost reduction initiatives, and delivered strong price cost spread in the quarter. These internal actions helped to offset a 6%
volume decline primarily driven by softer market demand, in line with many of our large global customers. We continued our focus on driving long-term value for our shareholders and repurchased $178 million of shares, or another 2.4% of
shares outstanding, in the quarter, while also paying our first-ever quarterly dividend. We believe our shares remain undervalued and our repurchases reflect our confidence in the outlook of our business, our long-term strategy, and the
strength of our operating model and cash flows.
“Our business model has proven resilient, including one of the broadest portfolios of packaging solutions with strong, dependable, and stable cash flows
to allow us the flexibility to drive strong returns for our shareholders. We will continue our focus on cost reduction efforts while also driving strong cost benefits through efficiencies and asset optimization throughout our global
footprint to offset any demand challenges from the current dynamic global economies.”
|
Dec. Quarter
|
||||||||||||||||
GAAP results
|
2022
|
2021
|
||||||||||||||
Net sales
|
$
|
3,060
|
$
|
3,573
|
||||||||||||
Operating income
|
210
|
229
|
||||||||||||||
EPS (diluted)
|
0.85
|
0.87
|
Dec. Quarter
|
Reported
|
Comparable
|
||||||||||||||
Adjusted non-GAAP results
|
2022
|
2021
|
Δ%
|
Δ%
|
||||||||||||
Net sales
|
$
|
3,060
|
$
|
3,573
|
(14
|
%)
|
(11
|
%)
|
||||||||
Operating EBITDA
|
443
|
457
|
(3
|
%)
|
3
|
%
|
||||||||||
Adjusted EPS (diluted)
|
1.30
|
1.25
|
4
|
%
|
11
|
%
|
(1)
|
Adjusted non-GAAP results exclude items not considered to be ongoing operations. In addition, comparable change
% excludes the impacts of foreign currency and recent divestitures. Further details related to non-GAAP measures and reconciliations can be found under our “Non-GAAP Financial Measures and Estimates” section or in reconciliation tables in
this release. in millions of USD, except per share data
|
•
|
Adjusted earnings per share range of $7.30 - $7.80; 8% expected mid-point growth versus comparable prior year
|
•
|
Cash flow from operations range of $1.4 - $1.5 billion; free cash flow range of $800 - $900 million
|
•
|
Anticipate returning at least $700 million of capital to shareholders through share repurchases and dividends
|
Quarterly Period Ended
|
||||||||
(in millions of USD, except per share data amounts)
|
December 31, 2022
|
January 1, 2022
|
||||||
Net sales
|
$
|
3,060
|
$
|
3,573
|
||||
Costs and expenses:
|
||||||||
Cost of goods sold
|
2,542
|
3,038
|
||||||
Selling, general and administrative
|
236
|
235
|
||||||
Amortization of intangibles
|
60
|
68
|
||||||
Restructuring and transaction activities
|
12
|
3
|
||||||
Operating income
|
210
|
229
|
||||||
Other expense
|
1
|
-
|
||||||
Interest expense, net
|
71
|
71
|
||||||
Income before income taxes
|
138
|
158
|
||||||
Income tax expense
|
32
|
37
|
||||||
Net income
|
$
|
106
|
$
|
121
|
||||
Basic net income per share
|
0.86
|
$
|
0.89
|
|||||
Diluted net income per share
|
0.85
|
0.87
|
||||||
Outstanding weighted average shares (in millions)
|
||||||||
Basic
|
123.7
|
135.4
|
||||||
Diluted
|
125.2
|
138.9
|
(in millions of USD)
|
December 31, 2022
|
October 1, 2022
|
||||||
Cash and cash equivalents
|
$
|
717
|
$
|
1,410
|
||||
Accounts receivable
|
1,617
|
1,777
|
||||||
Inventories
|
1,901
|
1,802
|
||||||
Other current assets
|
234
|
175
|
||||||
Property, plant, and equipment
|
4,523
|
4,342
|
||||||
Goodwill, intangible assets, and other long-term assets
|
7,459
|
7,450
|
||||||
Total assets
|
$
|
16,451
|
$
|
16,956
|
||||
Current liabilities, excluding current debt
|
2,243
|
2,831
|
||||||
Current and long-term debt
|
9,272
|
9,255
|
||||||
Other long-term liabilities
|
1,677
|
1,674
|
||||||
Stockholders’ equity
|
3,259
|
3,196
|
||||||
Total liabilities and stockholders' equity
|
$
|
16,451
|
$
|
16,956
|
Quarterly Period Ended
|
||||||||
(in millions of USD)
|
December 31, 2022
|
January 1, 2022
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
106
|
$
|
121
|
||||
Depreciation
|
139
|
143
|
||||||
Amortization of intangibles
|
60
|
68
|
||||||
Non-cash interest, net
|
(13
|
)
|
3
|
|||||
Deferred income tax
|
(33
|
)
|
(12
|
)
|
||||
Share-based compensation expense
|
23
|
21
|
||||||
Other non-cash operating activities, net
|
(3
|
)
|
(8
|
)
|
||||
Changes in working capital
|
(512
|
)
|
(640
|
)
|
||||
Net cash from operating activities
|
(233
|
)
|
(304
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Additions to property, plant, and equipment, net
|
(211
|
)
|
(162
|
)
|
||||
Net cash
from investing activities
|
(211
|
)
|
(162
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Repayments on long-term borrowings
|
(84
|
)
|
(5
|
)
|
||||
Proceeds from issuance of common stock
|
5
|
16
|
||||||
Dividends paid
|
(33
|
)
|
-
|
|||||
Repurchase of common stock
|
(166
|
)
|
(51
|
)
|
||||
Net cash
from financing activities
|
(278
|
)
|
(40
|
)
|
||||
Effect of currency translation on cash
|
29
|
(3
|
)
|
|||||
Net change in cash and cash equivalents
|
(693
|
)
|
(509
|
)
|
||||
Cash and cash equivalents at beginning of period
|
1,410
|
1,091
|
||||||
Cash and cash equivalents at end of period
|
$
|
717
|
$
|
582
|
||||
Non-U.S. GAAP Free Cash Flow:
|
||||||||
Cash flow from operating activities
|
$
|
(233
|
)
|
$
|
(304
|
)
|
||
Additions to property, plant, and equipment (net)
|
(211
|
)
|
(162
|
)
|
||||
Non-U.S. GAAP Free Cash Flow
|
$
|
(444
|
)
|
$
|
(466
|
)
|
Quarterly Period Ended December 31, 2022
|
||||||||||||||||||||
(in millions of USD)
|
Consumer Packaging - International
|
Consumer Packaging- North America
|
Health, Hygiene & Specialties
|
Engineered Materials
|
Total
|
|||||||||||||||
Net sales
|
$
|
936
|
$
|
764
|
$
|
663
|
$
|
697
|
$
|
3,060
|
||||||||||
Operating income
|
$
|
47
|
$
|
71
|
$
|
34
|
$
|
58
|
$
|
210
|
||||||||||
Depreciation and amortization
|
74
|
51
|
44
|
30
|
199
|
|||||||||||||||
Restructuring and transaction activities
|
3
|
1
|
3
|
5
|
12
|
|||||||||||||||
Other non-cash charges
|
6
|
7
|
4
|
5
|
22
|
|||||||||||||||
Operating EBITDA
|
$
|
130
|
$
|
130
|
$
|
85
|
$
|
98
|
$
|
443
|
Quarterly Period Ended January 1, 2022
|
||||||||||||||||||||
(in millions of USD)
|
Consumer Packaging - International
|
Consumer Packaging - North America
|
Health, Hygiene & Specialties
|
Engineered Materials
|
Total
|
|||||||||||||||
Reported net sales
|
$
|
1,056
|
$
|
852
|
$
|
818
|
$
|
847
|
$
|
3,573
|
||||||||||
Foreign currency and divestitures
|
(104
|
)
|
—
|
(18
|
)
|
(25
|
)
|
(147
|
)
|
|||||||||||
Comparable net sales (1)
|
$
|
952
|
$
|
852
|
$
|
800
|
$
|
822
|
$
|
3,426
|
||||||||||
Operating income
|
$
|
69
|
$
|
46
|
$
|
62
|
$
|
52
|
$
|
229
|
||||||||||
Depreciation and amortization
|
82
|
54
|
45
|
30
|
211
|
|||||||||||||||
Restructuring and transaction activities
|
2
|
1
|
(1
|
)
|
1
|
3
|
||||||||||||||
Other non-cash charges
|
—
|
5
|
5
|
4
|
14
|
|||||||||||||||
Foreign currency and divestitures
|
(21
|
)
|
—
|
(4
|
)
|
(2
|
)
|
(27
|
)
|
|||||||||||
Comparable operating EBITDA (1)
|
$
|
132
|
$
|
106
|
$
|
107
|
$
|
85
|
$
|
430
|
(1)
|
The prior year comparable basis change excludes the impacts of foreign currency and recent divestitures. Further details related
to non-GAAP measures and reconciliations can be found under our “Non-GAAP Financial Measures and Estimates” section or in reconciliation tables in this release.
|
Quarterly Period Ended
|
||||||||
December 31, 2022
|
January 1, 2022
|
|||||||
Net income
|
$
|
106
|
$
|
121
|
||||
Add: other expense
|
1
|
—
|
||||||
Add: interest expense
|
71
|
71
|
||||||
Add: income tax expense
|
32
|
37
|
||||||
Operating income
|
$
|
210
|
$
|
229
|
||||
Add: restructuring and transaction activities
|
12
|
3
|
||||||
Add: other non-cash charges
|
22
|
14
|
||||||
Adjusted operating income (2)
|
$
|
244
|
$
|
246
|
||||
Add: depreciation
|
139
|
143
|
||||||
Add: amortization of intangibles
|
60
|
68
|
||||||
Operating EBITDA (2)
|
$
|
443
|
$
|
457
|
||||
Net income per diluted share
|
$
|
0.85
|
$
|
0.87
|
||||
Other expense, net
|
0.01
|
—
|
||||||
Restructuring and transaction activities
|
0.09
|
0.02
|
||||||
Amortization of intangibles from acquisitions (1)
|
0.48
|
0.49
|
||||||
Income tax impact on items above
|
(0.13
|
)
|
(0.13
|
)
|
||||
Foreign currency and divestitures
|
—
|
(0.08
|
)
|
|||||
Adjusted net income per diluted share (2)
|
$
|
1.30
|
$
|
1.17
|
Estimated Fiscal 2023
|
||||||||
Cash flow from operating activities
|
$
|
1,400-$1,500
|
||||||
Net additions to property, plant, and equipment
|
(600
|
)
|
||||||
Free cash flow (2)
|
$
|
800-$900
|
(1)
|
Amortization of intangibles from acquisition are added back to better align our calculation of adjusted EPS with peers.
|
(2)
|
Supplemental financial measures that are not required by, or presented in accordance with, accounting principles generally
accepted in the United States (“GAAP”). These non-GAAP financial measures should not be considered as alternatives to operating or net income or cash flows from operating activities, in each case determined in accordance with GAAP.
Organic sales growth and comparable basis measures exclude the impact of currency translation effects and acquisitions. These non-GAAP financial measures may be calculated differently by other companies, including other companies in our
industry, limiting their usefulness as comparative measures. Berry’s management believes that adjusted net income and other non-GAAP financial measures are useful to our investors because they allow for a better period-over-period
comparison of operating results by removing the impact of items that, in management’s view, do not reflect our core operating performance.
|