bpg8k112712.htm


 
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549



FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934


Date of Report (date of earliest event reported):  November 26, 2012
 
BERRY PLASTICS GROUP, INC.
 (Exact name of Registrant as specified in its charter)
 
Delaware
(State of Incorporation)
 
001-35672
(Commission File Numbers)
 
 
20-5234618
(I.R.S. Employer
Identification No.)

101 Oakley Street
Evansville, Indiana
(Address of principal executive offices)
47710
(Zip Code)

(812) 424-2904
(Registrant’s telephone number, including area code)
 
N.A.
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 
 
 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))


 



 
 
 

 


 
Item 2.02   Results of Operations and Financial Condition.
 
 
On November 26, 2012, Berry Plastics Group, Inc. (the “Company) announced certain information related to its results of operations for the September quarter and fiscal year ending on September 29, 2012.  The press release regarding this announcement is furnished as Exhibit 99.1 hereto.
 
 
The information in Item 2.02 of this Form 8-K and the Exhibits attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
 
 
Item 9.01   Financial Statements and Exhibits
 
 
(d)  
Exhibits
 
 
Exhibit 99.1  News Release issued by the Company dated November 26, 2012.
 

 
   



 
 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

   
BERRY PLASTICS GROUP, INC.
     
 
Date:  November 26, 2012
By:
/s/ James M. Kratochvil
 
   
      Name:    James M. Kratochvil
      Title:      Chief Financial Officer
                     (Principal Financial Accounting Officer)
     


 
 

 

exh991.htm
Exhibit 99.1
 

[Missing Graphic Reference]                                                                                               NEWS RELEASE

Investor Contact:                                                                                                                           Media Contact:
Dustin Stilwell                                                                                                                                Eva Schmitz
812.306.2964                                                                                                                                    812.306.2424
dustinstilwell@berryplastics.com                                                                                               evaschmitz@berryplastics.com
 
 

FOR IMMEDIATE RELEASE

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

EVANSVILLE, Ind. – November 26, 2012 – Berry Plastics Group, Inc. (NYSE: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 Top
    352       307       45       15 %
Engineered Materials
    352       368       (16 )     (4 %)
Flexible Packaging
    182       198       (16 )     (8 %)
    Total Net Sales
  $ 1,204     $ 1,229     $ (25 )     (2 %)


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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 Top
    1,438       1,053       385       37 %
Engineered Materials
    1,362       1,451       (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 credit
    73       73       195  
First Priority Senior Secured Floating Rate Notes
    681       681       681  
8¼%  First Priority Notes
    370       370       370  
Second Priority Senior Secured Floating Rate Notes
    210       210       210  
91/2% Second Priority Notes
    500       500       500  
Senior Unsecured Term Loan
    39       39       56  
9¾% Second Priority Notes
    800       800       800  
10¼% Senior Subordinated Notes
    127       127       127  
11% Senior Subordinated Notes
    455             455  
Debt discount, net
    (9 )     (9 )     (13 )
Capital leases and other
    91       91       100  
Cash and cash equivalents
    (87 )     (58 )     (42 )
Net Debt
  $ 4,384     $ 3,958     $ 4,585  












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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.





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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 sold
    977       1,037       3,949       3,878  
     Selling, general and administrative
    81       75       308       275  
     Amortization of intangibles
    28       26       109       106  
     Restructuring and impairment charges
    1       185       31       221  
     Other operating expenses
    10       13       44       39  
Operating income (loss)
    107       (107 )     325       42  
                                 
Other expense (income)
    (6 )     (6 )     (7 )     61  
Interest expense, net
    81       84       328       327  
Net income (loss) before income taxes
    32       (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 )
     Diluted
    0.26       (2.29 )     0.02       (3.55 )
                                 
Weighted-average number of shares outstanding: (in thousands)
                               
     Basic
    83,202       83,876       83,435       84,121  
     Diluted
    89,131       83,876       86,644       84,121  







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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, net
    455       543  
Inventories
    535       578  
Other current assets
    90       92  
Property, plant and equipment, net
    1,216       1,250  
Goodwill, intangibles and other assets
    2,642       2,712  
        Total assets
  $ 5,025     $ 5,217  
                 
Liabilities and stockholders' deficit
               
Current liabilities, excluding debt
    606       638  
Current and long-term debt
    4,471       4,627  
Other liabilities
    400       403  
 Redeemable shares
    23       16  
 Stockholders’ deficit
    (475 )     (467 )
         Total liabilities and stockholders' deficit
  $ 5,025     $ 5,217  





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Berry Plastics Group, Inc.
   Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in millions)


   
Fiscal Year Ended
 
   
September 29, 2012
   
October 1, 2011
 
             
     Net cash from operating activities
  $ 479     $ 327  
                 
Cash Flows from Investing Activities:
               
Additions to property, plant and equipment
    (230 )     (160 )
Proceeds from sale of assets
    30       5  
Acquisitions of business, net of cash acquired
    (55 )     (368 )
     Net cash from investing activities
    (255 )     (523 )
                 
Cash Flows from Financing Activities:
               
Proceeds from long-term borrowings
    2       995  
Purchase of common stock
    (6 )     (2 )
Repayment of long-term borrowings
    (175 )     (880 )
Debt financing costs
          (23 )
     Net cash from financing activities
    (179 )     90  
Effect of currency translation on cash
           
Net increase (decrease) in cash and cash equivalents
    45       (106 )
Cash and cash equivalents at beginning of period
    42       148  
Cash and cash equivalents at end of period
  $ 87     $ 42  






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Berry Plastics Group, Inc.
Condensed Consolidated Financial Statements
Segment Information
(Unaudited)
(in millions)

   
Quarterly Period Ended
   
Fiscal Year Ended
 
   
September 29, 2012
   
October 1, 2011
   
September 29, 2012
   
October 1, 2011
 
Net Sales:
                       
Rigid Open Top
  $ 318     $ 356     $ 1,229     $ 1,261  
Rigid Closed Top
    352       307       1,438       1,053  
Engineered Materials
    352       368       1,362       1,451  
Flexible Packaging
    182       198       737       796  
     Total
  $ 1,204     $ 1,229     $ 4,766     $ 4,561  
                                 
Operating Income (Loss):
                               
Rigid Open Top
  $ 46     $ 53     $ 159     $ 155  
Rigid Closed Top
    32       20       95       77  
Engineered Materials
    28       (85 )     70       (71 )
Flexible Packaging
    1       (95 )     1       (119 )
     Total
  $ 107     $ (107 )   $ 325     $ 42  
                                 
Depreciation and Amortization:
                               
Rigid Open Top
  $ 23     $ 28     $ 90     $ 102  
Rigid Closed Top
    34       26       135       95  
Engineered Materials
    20       17       71       72  
Flexible Packaging
    16       20       59       75  
     Total
  $ 93     $ 91     $ 355     $ 344  

Restructuring and Impairment Charges:
                       
Rigid Open Top
  $     $ 1     $     $ 2  
Rigid Closed Top
    1       6       10       8  
Engineered Materials
          101       21       124  
Flexible Packaging
          77             87  
     Total
  $ 1     $ 185     $ 31     $ 221  
                                 
Other Operating Expenses:
                               
Rigid Open Top
  $ 1     $ (10 )   $ 6     $ (13 )
Rigid Closed Top
    4       2       28       18  
Engineered Materials
    4       10       13       23  
Flexible Packaging
    2       17       13       21  
     Total
  $ 11     $ 19     $ 60     $ 49  
                                 
Operating  EBITDA:
                               
Rigid Open Top
  $ 70     $ 72     $ 255     $ 246  
Rigid Closed Top
    71       54       268       198  
Engineered Materials
    52       43       175       148  
Flexible Packaging
    19       19       73       64  
     Total
  $ 212     $ 188     $ 771     $ 656  

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Berry Plastics Group, Inc.
Reconciliation Schedules
(Unaudited)
(in millions)

   
Quarterly Period Ended
   
Fiscal Year Ended
 
   
September 29, 2012
   
October 1, 2011
   
September 29, 2012
   
October 1, 2011
 
                         
                         
Net income (loss)
  $ 23     $ (192 )   $ 2     $ (299 )
                                 
  Add: interest expense
    81       84       328       327  
  Add: income tax expense (benefit)
    9       7       2       (47 )
EBIT
  $ 113       (101 )   $ 332       (19 )
                                 
  Add: depreciation and amortization
    93       91       355       344  
  Add: restructuring and impairment
    1       185       31       221  
  Add: other expense
    5       13       53       110  
Operating EBITDA (1)
  $ 212       188     $ 771       656  
                                 
  Add: pro forma acquisitions
                  6          
  Add: unrealized cost savings
    3               26          
Adjusted EBITDA (1)
  $ 215             $ 803          
                                 


  Cash flow from operating activities
  $ 201     $ 122     $ 479     $ 327  
  Additions to property, plant, and equipment, net
    (42 )     (31 )     (200 )     (155 )
Adjusted free cash flow
  $ 159     $ 91     $ 279     $ 172  
                                 


  Net income (loss) per share-diluted:
  $ 0.26     $ (2.29 )
  Restructuring and impairment charges (net of tax)
    0.01       2.11  
  Other operating expenses (net of tax)
    0.07       0.14  
Adjusted net income (loss) per share
  $ 0.34     $ (0.04 )
                 




(1) Adjusted EBITDA should not be considered in isolation or construed as an alternative to our net income (loss) or other measures as determined in accordance with GAAP.  In addition, other companies in our industry or across different industries may calculate Adjusted EBITDA and the related definitions differently than we do, limiting the usefulness of our calculation of Adjusted EBITDA as a comparative measure.  EBIT, Operating EBITDA and Adjusted EBITDA are among the indicators used by the Company’s management to measure the performance of the Company’s operations and thus the Company’s management believes such information may be useful to investors.  Such measures are also among the criteria upon which performance-based compensation may be based.



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