|
|
(State or Other Jurisdiction of Incorporation)
|
(I.R.S. Employer Identification No.)
|
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange on which registered
|
||
Exhibit
Number |
|
Description
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
BERRY GLOBAL GROUP, INC.
(Registrant)
|
|||
Dated: May 9, 2024
|
By:
|
/s/ Jason K. Greene |
|
Name: |
Jason K. Greene |
||
Title: |
Executive Vice President, Chief Legal Officer and Secretary |
||
•
|
GAAP: Net sales of $3.1 billion; Operating income of $208 million; Earnings per share of $0.98
|
•
|
Non-GAAP: Operating EBITDA of $522 million; Adjusted earnings per share of $1.95
|
•
|
Second quarter volume and earning results in-line with expectations; Strong April volumes provides confidence for low-single digit volume growth
outlook in 2H
|
•
|
Increased cost savings program target by 18% or an additional $25 million
|
•
|
Continued progress in portfolio optimization with two divestitures closed; proceeds could exceed $2 billion in cash from strategic divestitures over
the next year ($1 billion from previously announced merger and $1 billion from future portfolio optimization opportunities)
|
•
|
Reaffirming fiscal 2024 outlook: Adjusted EPS of $7.35 - $7.85 and free cash flow of $800 - $900 million
|
Kevin Kwilinski, Berry’s CEO said, “Berry once again produced solid financial results, consistent with our expectations. Our teams executed well,
offsetting an extended period of sluggish macroeconomic demand along with persistent inflation in our primary raw material to start fiscal 2024. We undertook additional structural enhancements across our businesses and increased our
original cost savings target of $140 million to $165 million. We continue to expect a $55 million contribution from the program in fiscal 2024 with the additional $25 million to be realized in fiscal 2025. Moving forward, we remain
steadfast in our commitment to prudent management and strategic advancement.
During the quarter, operating EBITDA margins demonstrated sequential improvement compared to the prior quarter across all four business segments.
Our year-to-date results reinforce our trajectory toward achieving our fiscal 2024 guidance—a reaffirmation we made today. We maintain confidence in the underlying strength of our businesses. Reinforced by strong April volumes, we continue
to expect low-single digit volume growth in the second half of this fiscal year. As market volumes continue to recover, we anticipate incremental earnings benefits from more efficient asset utilization. I am excited by the tremendous
growth and operational excellence opportunities ahead. We’re focusing on three key efforts: optimizing our portfolio to accelerate growth and deleveraging, implementing our lean transformation, and driving growth by enhancing our commercial
excellence.
Our firm dedication lies in delivering long-term value to our shareholders. In 2024, we will continue our focus on driving shareholder value and
prioritizing debt repayment. Additionally, we remain committed to returning capital to shareholders through further share repurchases and dividend payments.”
|
|
March Quarter
|
March YTD
|
|||||||||||||||
GAAP results
|
2024
|
2023
|
2024
|
2023
|
||||||||||||
Net sales
|
$
|
3,076
|
$
|
3,288
|
$
|
5,929
|
$
|
6,348
|
||||||||
Operating income
|
208
|
301
|
365
|
511
|
||||||||||||
EPS (diluted)
|
0.98
|
1.42
|
1.48
|
2.27
|
March Quarter
|
Reported
|
Comparable
|
March YTD
|
Reported
|
Comparable
|
|||||||||||||||||||||||||||
Adjusted non-GAAP results
|
2024
|
2023
|
%
|
%
|
2024
|
2023
|
%
|
%
|
||||||||||||||||||||||||
Net sales
|
$
|
3,076
|
$
|
3,288
|
(6
|
%)
|
(7
|
%)
|
$
|
5,929
|
$
|
6,348
|
(7
|
%)
|
(8
|
%)
|
||||||||||||||||
Operating EBITDA
|
522
|
541
|
(4
|
%)
|
(5
|
%)
|
953
|
984
|
(3
|
%)
|
(5
|
%)
|
||||||||||||||||||||
Adjusted EPS (diluted)
|
1.95
|
1.96
|
(1
|
%)
|
(2
|
%)
|
3.17
|
3.26
|
(3
|
%)
|
(5
|
%)
|
(1)
|
Adjusted non-GAAP results exclude items not considered to be ongoing operations. March 2024 quarter included a $57
million loss on divestitures and business integration expenses primarily associated with our cost reduction efforts process of $30 million. In addition, comparable change % excludes the impacts of foreign currency, acquisitions, and recent
divestitures. Further details related to non-GAAP measures and reconciliations can be found under our “Non-GAAP Financial Measures and Estimates” section and in reconciliation tables in this release. In millions of USD, except per share
data.
|
•
|
Adjusted earnings per share range of $7.35 - $7.85
|
•
|
Cash flow from operations range of $1.35 - $1.45 billion; free cash flow range of $800-$900 million
|
•
|
Committed to debt reduction along with returning capital to shareholders through share repurchases and dividends
|
Quarterly Period Ended
|
Two Quarterly Periods Ended
|
|||||||||||||||
March 30, 2024
|
April 1, 2023
|
March 30, 2024
|
April 1, 2023
|
|||||||||||||
Net sales
|
$
|
3,076
|
$
|
3,288
|
$
|
5,929
|
$
|
6,348
|
||||||||
Costs and expenses:
|
||||||||||||||||
Cost of goods sold
|
2,509
|
2,682
|
4,888
|
5,224
|
||||||||||||
Selling, general and administrative
|
213
|
220
|
448
|
456
|
||||||||||||
Amortization of intangibles
|
59
|
60
|
119
|
120
|
||||||||||||
Restructuring and transaction activities
|
87
|
25
|
109
|
37
|
||||||||||||
Operating income
|
208
|
301
|
365
|
511
|
||||||||||||
Other expense
|
1
|
1
|
13
|
2
|
||||||||||||
Interest expense, net
|
76
|
79
|
148
|
150
|
||||||||||||
Income before income taxes
|
131
|
221
|
204
|
359
|
||||||||||||
Income tax expense
|
15
|
47
|
29
|
79
|
||||||||||||
Net income
|
$
|
116
|
$
|
174
|
$
|
175
|
$
|
280
|
||||||||
Basic net income per share
|
$
|
1.00
|
$
|
1.44
|
$
|
1.51
|
$
|
2.29
|
||||||||
Diluted net income per share
|
0.98
|
1.42
|
1.48
|
2.27
|
||||||||||||
Outstanding weighted average shares (in millions)
|
||||||||||||||||
Basic
|
115.6
|
120.7
|
115.6
|
122.2
|
||||||||||||
Diluted
|
118.2
|
122.5
|
118.5
|
123.3
|
||||||||||||
(in millions of USD)
|
March 30, 2024
|
September 30, 2023
|
||||||
Cash and cash equivalents
|
$
|
494
|
$
|
1,203
|
||||
Accounts receivable
|
1,590
|
1,568
|
||||||
Inventories
|
1,694
|
1,557
|
||||||
Other current assets
|
286
|
205
|
||||||
Property, plant, and equipment
|
4,576
|
4,576
|
||||||
Goodwill, intangible assets, and other long-term assets
|
7,341
|
7,478
|
||||||
Total assets
|
$
|
15,981
|
$
|
16,587
|
||||
Current liabilities, excluding current debt
|
2,317
|
2,703
|
||||||
Current and long-term debt
|
8,714
|
8,980
|
||||||
Other long-term liabilities
|
1,656
|
1,688
|
||||||
Stockholders’ equity
|
3,294
|
3,216
|
||||||
Total liabilities and stockholders' equity
|
$
|
15,981
|
$
|
16,587
|
||||
Two Quarterly Periods Ended
|
||||||||
(in millions of USD)
|
March 30, 2024
|
April 1, 2023
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
175
|
$
|
280
|
||||
Depreciation
|
309
|
279
|
||||||
Amortization of intangibles
|
119
|
120
|
||||||
Non-cash interest, net
|
(41
|
)
|
(27
|
)
|
||||
Settlement of derivatives
|
23
|
36
|
||||||
Deferred income tax
|
(51
|
)
|
(51
|
)
|
||||
Share-based compensation expense
|
30
|
30
|
||||||
Debt extinguishment
|
3
|
-
|
||||||
Loss on divestitures
|
57
|
-
|
||||||
Other non-cash operating activities, net
|
17
|
8
|
||||||
Changes in working capital
|
(641
|
)
|
(507
|
)
|
||||
Net cash from operating activities
|
-
|
168
|
||||||
Cash flows from investing activities:
|
||||||||
Additions to property, plant, and equipment, net
|
(333
|
)
|
(385
|
)
|
||||
Divestitures, acquisitions and other activities
|
47
|
(88
|
)
|
|||||
Net cash from investing activities
|
(286
|
)
|
(473
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Repayments on long-term borrowings
|
(2,640
|
)
|
(583
|
)
|
||||
Proceeds from long-term borrowings
|
2,350
|
500
|
||||||
Repurchase of common stock
|
(88
|
)
|
(333
|
)
|
||||
Proceeds from issuance of common stock
|
24
|
18
|
||||||
Dividends paid
|
(70
|
)
|
(65
|
)
|
||||
Other, net
|
(12
|
)
|
11
|
|||||
Net cash from financing activities
|
(436
|
)
|
(452
|
)
|
||||
Effect of currency translation on cash
|
13
|
43
|
||||||
Net change in cash and cash equivalents
|
(709
|
)
|
(714
|
)
|
||||
Cash and cash equivalents at beginning of period
|
1,203
|
1,410
|
||||||
Cash and cash equivalents at end of period
|
$
|
494
|
$
|
696
|
||||
Non-U.S. GAAP Free Cash Flow:
|
||||||||
Cash flow from operating activities
|
$
|
-
|
$
|
(168
|
)
|
|||
Additions to property, plant, and equipment (net)
|
(333
|
)
|
(385
|
)
|
||||
Non-U.S. GAAP Free Cash Flow
|
$
|
(333
|
)
|
$
|
(217
|
)
|
Quarterly Period Ended March 30, 2024
|
||||||||||||||||||||
(in millions of USD)
|
Consumer Packaging - International
|
Consumer Packaging- North America
|
Health, Hygiene & Specialties
|
Flexibles
|
Total
|
|||||||||||||||
Net sales
|
$
|
968
|
$
|
751
|
$
|
646
|
$
|
711
|
$
|
3,076
|
||||||||||
Operating income
|
$
|
3
|
$
|
77
|
$
|
33
|
$
|
95
|
$
|
208
|
||||||||||
Depreciation and amortization
|
81
|
57
|
45
|
31
|
214
|
|||||||||||||||
Restructuring and transaction activities
|
76
|
7
|
5
|
(1
|
)
|
87
|
||||||||||||||
Other non-cash charges
|
6
|
3
|
2
|
2
|
13
|
|||||||||||||||
Operating EBITDA
|
$
|
166
|
$
|
144
|
$
|
85
|
$
|
127
|
$
|
522
|
||||||||||
Quarterly Period Ended April 1, 2023
|
||||||||||||||||||||
Reported net sales
|
$
|
1,059
|
$
|
774
|
$
|
677
|
$
|
778
|
$
|
3,288
|
||||||||||
Foreign currency, acquisitions & divestitures
|
(5
|
)
|
12
|
8
|
5
|
20
|
||||||||||||||
Comparable net sales (1)
|
$
|
1,054
|
$
|
786
|
$
|
685
|
$
|
783
|
$
|
3,308
|
||||||||||
Operating income
|
$
|
75
|
$
|
93
|
$
|
34
|
$
|
99
|
$
|
301
|
||||||||||
Depreciation and amortization
|
77
|
54
|
44
|
25
|
200
|
|||||||||||||||
Restructuring and transaction activities
|
12
|
7
|
5
|
1
|
25
|
|||||||||||||||
Other non-cash charges
|
10
|
2
|
1
|
2
|
15
|
|||||||||||||||
Foreign currency, acquisitions & divestitures
|
(1
|
)
|
5
|
2
|
-
|
6
|
||||||||||||||
Comparable operating EBITDA (1)
|
$
|
173
|
$
|
161
|
$
|
86
|
$
|
127
|
$
|
547
|
||||||||||
(1)
|
The prior year comparable basis change excludes the impacts of foreign currency, acquisitions, and 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
|
Two Quarterly Periods Ended
|
|||||||||||||||
March 30, 2024
|
April 1, 2023
|
March 30, 2024
|
April 1, 2023
|
|||||||||||||
Net income
|
$
|
116
|
$
|
174
|
$
|
175
|
$
|
280
|
||||||||
Add: other expense
|
1
|
1
|
13
|
2
|
||||||||||||
Add: interest expense
|
76
|
79
|
148
|
150
|
||||||||||||
Add: income tax expense
|
15
|
47
|
29
|
79
|
||||||||||||
Operating income
|
$
|
208
|
$
|
301
|
$
|
365
|
$
|
511
|
||||||||
Add: restructuring and transaction activities
|
87
|
25
|
109
|
37
|
||||||||||||
Add: Impact of hyperinflation
|
—
|
—
|
15
|
—
|
||||||||||||
Add: other non-cash charges (1)
|
13
|
15
|
36
|
37
|
||||||||||||
Adjusted operating income (3)
|
$
|
308
|
$
|
341
|
$
|
525
|
$
|
585
|
||||||||
Add: depreciation
|
155
|
140
|
309
|
279
|
||||||||||||
Add: amortization of intangibles
|
59
|
60
|
119
|
120
|
||||||||||||
Operating EBITDA (3)
|
$
|
522
|
$
|
541
|
$
|
953
|
$
|
984
|
||||||||
Net income per diluted share
|
$
|
0.98
|
$
|
1.42
|
$
|
1.48
|
$
|
2.27
|
||||||||
Other expense, net
|
0.01
|
0.01
|
0.11
|
0.02
|
||||||||||||
Restructuring and transaction activities
|
0.74
|
0.20
|
0.93
|
0.29
|
||||||||||||
Impact of hyperinflation
|
—
|
—
|
0.13
|
—
|
||||||||||||
Amortization of intangibles from acquisitions (2)
|
0.50
|
0.49
|
1.01
|
0.97
|
||||||||||||
Income tax impact on items above
|
(0.27
|
)
|
(0.16
|
)
|
(0.48
|
)
|
(0.29
|
)
|
||||||||
Foreign currency, acquisitions, and divestitures
|
0.02
|
0.06
|
||||||||||||||
Adjusted net income per diluted share (3)
|
$
|
1.95
|
$
|
1.98
|
$
|
3.17
|
$
|
3.32
|
||||||||
Estimated Fiscal 2024
|
||||
Cash flow from operating activities
|
$
|
1,350-$1,450
|
||
Net additions to property, plant, and equipment
|
(550
|
)
|
||
Free cash flow (3)
|
$
|
800-$900
|
(1)
|
Other non-cash charges are primarily stock compensation expense
|
(2)
|
Amortization of intangibles from acquisition are added back to better align our calculation of
adjusted EPS with peers.
|
(3)
|
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.
|