Delaware
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1-35672
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20-5234618
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(State of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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o
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Written communications pursuant to Rule 425 under the Securities Act.
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act.
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
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99.1
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Press Release dated February 10, 2016
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BERRY PLASTICS GROUP, INC. | |||
Dated: February 10, 2016 | (Registrant) | ||
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By:
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/s/Jason K. Greene | |
Executive Vice President, Chief Legal Officer and Secretary
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NEWS RELEASE
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·
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Reported record net sales of $1,612 million for the December 2015 quarter compared to $1,220 million in the December 2014 quarter
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·
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Posted record Operating EBITDA of $276 million (17.1 percent of net sales) in the December 2015 quarter compared to $182 million (14.9 percent of net sales) in the prior year quarter
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·
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Generated $191 million of cash flow from operations in the December 2015 quarter compared to $100 million in the prior year quarter
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·
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Increased adjusted free cash flow by 25 percent to $45 million in the December 2015 quarter resulting in a total of $445 million for the four quarters ended
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·
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Increased our fiscal year 2016 Operating EBITDA guidance by $20 million to $1,180 million and reaffirmed our adjusted free cash flow guidance of $475 million
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Quarterly Period Ended (Unaudited)
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||||||||||||||||
Net sales (in millions of dollars)
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January 2,
2016
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December 27, 2014
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$ Change
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% Change
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||||||||||||
Consumer Packaging
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$ | 683 | $ | 712 | $ | (29 | ) | (4 | )% | |||||||
Health, Hygiene, & Specialties.
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564 | 129 | 435 | 337 | % | |||||||||||
Engineered Materials
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365 | 379 | (14 | ) | (4 | ) % | ||||||||||
Total net sales
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$ | 1,612 | $ | 1,220 | $ | 392 | 32 | % |
(Unaudited)
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January 2, 2016
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September 26, 2015
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||||||
(in millions of dollars)
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||||||||
Term loans
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$ | 4,426 | $ | 2,388 | ||||
5½% second priority notes
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500 | 500 | ||||||
5⅛% second priority notes
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700 | 700 | ||||||
6% second priority notes
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400 | — | ||||||
Debt discounts and deferred fees
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(72 | ) | (29 | ) | ||||
Capital leases and other
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194 | 126 | ||||||
Total debt
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$ | 6,148 | $ | 3,685 | ||||
Less: cash and cash equivalents
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(282 | ) | (228 | ) | ||||
Net debt (1)
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$ | 5,866 | $ | 3,457 |
(1)
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Increase primarily related to the purchase of Avintiv on October 1, 2015 for approximately $2.3 billion.
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Quarterly Period Ended
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||||||||
January 2, 2016
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December 27, 2014
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|||||||
Net sales
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$ | 1,612 | $ | 1,220 | ||||
Costs and expenses:
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||||||||
Cost of goods sold
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1,320 | 1,037 | ||||||
Selling, general and administrative
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154 | 85 | ||||||
Amortization of intangibles
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36 | 25 | ||||||
Restructuring and impairment charges
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16 | 5 | ||||||
Operating income
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86 | 68 | ||||||
Other expense (income), net
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4 | (1 | ) | |||||
Interest expense, net
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75 | 53 | ||||||
Income before income taxes
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7 | 16 | ||||||
Income tax expense
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3 | 3 | ||||||
Net income
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$ | 4 | $ | 13 |
Net income per share:
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||||||||
Basic
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$ | 0.03 | $ | 0.11 | ||||
Diluted
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0.03 | 0.11 | ||||||
Outstanding weighted-average shares: (in millions)
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||||||||
Basic
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120.1 | 118.2 | ||||||
Diluted
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124.9 | 122.9 |
Quarterly Period Ended
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||||||||
January 2,
2016
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December 27, 2014
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|||||||
Consolidated net income
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$ | 4 | $ | 13 | ||||
Currency translation
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(23 | ) | (14 | ) | ||||
Interest rate hedges
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4 | (7 | ) | |||||
Provision for income taxes related to other comprehensive income items
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(1 | ) | 2 | |||||
Comprehensive loss
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$ | (16 | ) | $ | (6 | ) |
January
2, 2016
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September 26, 2015
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|||||||
Assets:
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||||||||
Cash and cash equivalents
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$ | 282 | $ | 228 | ||||
Accounts receivable, net
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625 | 434 | ||||||
Inventories
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681 | 522 | ||||||
Other current assets
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104 | 199 | ||||||
Property, plant, and equipment, net
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2,297 | 1,294 | ||||||
Goodwill, intangible assets, and other long-term assets
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3,721 | 2,351 | ||||||
Total assets
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$ | 7,710 | $ | 5,028 | ||||
Liabilities and stockholders' equity (deficit)
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||||||||
Current liabilities, excluding debt
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$ | 964 | $ | 668 | ||||
Current and long-term debt
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6,148 | 3,685 | ||||||
Other long-term liabilities
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665 | 728 | ||||||
Redeemable non-controlling interest
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12 | 12 | ||||||
Stockholders’ deficit
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(79 | ) | (65 | ) | ||||
Total liabilities and stockholders' equity (deficit)
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$ | 7,710 | $ | 5,028 |
Quarterly Period Ended
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||||||||
January
2, 2016
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December 27, 2014
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|||||||
Cash flows from operating activities:
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||||||||
Consolidated net income
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$ | 4 | $ | 13 | ||||
Depreciation
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103 | 66 | ||||||
Amortization of intangibles
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36 | 25 | ||||||
Other non-cash items
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6 | 12 | ||||||
Other assets and liabilities
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5 | (2 | ) | |||||
Working capital
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37 | (14 | ) | |||||
Net cash from operating activities
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191 | 100 | ||||||
Cash flows from investing activities:
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||||||||
Additions to property, plant, and equipment
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(93 | ) | (35 | ) | ||||
Proceeds from sale of assets
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4 | 10 | ||||||
Acquisitions of businesses, net of cash acquired
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(2,286 | ) | — | |||||
Net cash from investing activities
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(2,375 | ) | (25 | ) | ||||
Cash flows from financing activities:
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Proceeds from long-term borrowings
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2,492 | — | ||||||
Repayment of long-term borrowings
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(100 | ) | (116 | ) | ||||
Proceeds from issuance of common stock
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7 | 7 | ||||||
Debt financing costs
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(36 | ) | — | |||||
Payment of tax receivable agreement
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(57 | ) | (39 | ) | ||||
Purchase of non-controlling interest
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(66 | ) | — | |||||
Net cash from financing activities
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2,240 | (148 | ) | |||||
Effect of exchange rate changes on cash
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(2 | ) | (3 | ) | ||||
Net change in cash and cash equivalents
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54 | (76 | ) | |||||
Cash and cash equivalents at beginning of period
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228 | 129 | ||||||
Cash and cash equivalents at end of period
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$ | 282 | $ | 53 |
Quarterly Period Ended
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January 2, 2016
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December 27, 2014
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Net sales:
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Consumer Packaging
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$ | 683 | $ | 712 | ||||
Health, Hygiene, & Specialties
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564 | 129 | (1) | |||||
Engineered Materials
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365 | 379 | ||||||
Total net sales
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$ | 1,612 | $ | 1,220 | (1) | |||
Operating income:
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Consumer Packaging
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$ | 43 | $ | 30 | ||||
Health, Hygiene, & Specialties
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5 | 7 | ||||||
Engineered Materials
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38 | 31 | ||||||
Total operating income
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$ | 86 | $ | 68 | ||||
Depreciation and amortization:
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Consumer Packaging
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$ | 67 | $ | 63 | ||||
Health, Hygiene, & Specialties
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54 | 7 | ||||||
Engineered Materials
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18 | 21 | ||||||
Total depreciation and amortization
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$ | 139 | $ | 91 | ||||
Restructuring and impairment charges:
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Consumer Packaging
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$ | 3 | $ | 2 | ||||
Health, Hygiene, & Specialties
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12 | 3 | ||||||
Engineered Materials
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1 | — | ||||||
Total restructuring and impairment charges (3)
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$ | 16 | $ | 5 | ||||
Business optimization costs (2) :
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Consumer Packaging
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$ | 3 | $ | 14 | ||||
Health, Hygiene, & Specialties
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24 | 1 | ||||||
Engineered Materials
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8 | 3 | ||||||
Total business optimization costs (3)
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$ | 35 | $ | 18 | ||||
Operating EBITDA:
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Consumer Packaging
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$ | 116 | $ | 109 | ||||
Health, Hygiene, & Specialties
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95 | 18 | (4) | |||||
Engineered Materials
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65 | 55 | ||||||
Total operating EBITDA
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$ | 276 | $ | 182 | (4) |
(1)
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Net sales for Avintiv in the December 2014 quarter was $499 million. Pro forma net sales within the HH&S segment, including Avintiv for the December 27, 2014 quarter, would be $628 million and total pro forma net sales for the December 27, 2014 quarter would be $1,719 million.
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(2)
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Includes integration expenses, non-cash charges, and other business optimization costs.
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(3)
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Increase from prior year quarter is primarily related to the Avintiv acquisition.
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(4)
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Operating EBITDA for Avintiv in the December 2014 quarter was $57 million. Operating EBITDA, including Avintiv for the HH&S segment in the December 27, 2014 quarter, would be $75 million and total operating EBITDA for the December 27, 2014 quarter would be $239 million. Avintiv’s operating EBITDA of $57 million includes $13 million of operating income, plus $28 million of depreciation and amortization, plus $16 million of other business optimization and restructuring costs.
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Four Quarters
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Quarterly Period Ended
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Ended
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|||||||||||
January 2, 2016
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December 27, 2014
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January 2, 2016
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||||||||||
Operating income
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$ | 86 | $ | 68 | $ | 426 | ||||||
Add: non-cash amortization from 2006 private sale
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8 | 8 | 33 | |||||||||
Add: restructuring and impairment
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16 | 5 | 25 | |||||||||
Add: business optimization costs (2)
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35 | 18 | 60 | |||||||||
Adjusted operating income (5)
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$ | 145 | $ | 99 | $ | 544 | ||||||
Add: depreciation
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103 | 66 | 296 | |||||||||
Add: amortization of intangibles (3)
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28 | 17 | 70 | |||||||||
Operating EBITDA (5)
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$ | 276 | $ | 182 | $ | 910 | ||||||
Add: pro forma acquisitions (4)
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— | 224 | ||||||||||
Add: unrealized cost savings (4)
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13 | 72 | ||||||||||
Adjusted EBITDA (5)
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$ | 289 | $ | 1,206 |
Cash flow from operating activities
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$ | 191 | $ | 100 | $ | 728 | ||||||
Net additions to property, plant, and equipment
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(89 | ) | (25 | ) | (226 | ) | ||||||
Payment of tax receivable agreement
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(57 | ) | (39 | ) | (57 | ) | ||||||
Adjusted free cash flow (5)
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$ | 45 | $ | 36 | $ | 445 | ||||||
Net income per diluted share
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$ | 0.03 | (1) | $ | 0.11 | |||||||
Non-cash amortization from 2006 private sale (net of tax)
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0.04 | 0.04 | ||||||||||
Restructuring and impairment (net of tax)
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0.09 | 0.02 | ||||||||||
Business optimization costs (2) (net of tax)
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0.19 | 0.10 | ||||||||||
Adjusted net income per diluted share (5)
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$ | 0.35 | $ | 0.27 |
(1)
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Includes the estimated step-up depreciation and amortization expense related to the Avintiv acquisition of $0.07. Excluding this estimated step-up our net income and adjusted net income per diluted share would be $0.10 and $0.42, respectively.
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(2)
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Includes integration expenses, non-cash charges, and other business optimization costs.
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(3)
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Amortization excludes non-cash amortization from the 2006 private sale of $8 million for both the January 2, 2016 and December 27, 2014 quarters and $33 million for the four quarters ended January 2, 2016.
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(4)
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Four quarters ended pro forma acquisitions represents Operating EBITDA for Avintiv for the period of January 2015 to September 2015. Unrealized cost savings primarily represents unrealized cost savings related to the Avintiv acquisition.
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(5)
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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. These non-GAAP financial measures are among the indicators used by management to measure the performance of the Company’s operations, and also among the criteria upon which performance-based compensation may be based. Adjusted EBITDA also is used by our lenders for debt covenant compliance purposes. We use Adjusted Free Cash Flow as a measure of liquidity because it assists us in assessing our Company’s ability to fund its growth through its generation of cash. Our projected Adjusted Free Cash flow for fiscal 2016 assumes $817 million of cash flow from operations less $285 million of net additions to property, plant, and equipment and $57 million of payments under our tax receivable agreement.
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