Second Quarter
Highlights
- 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.”
Key Financials (1)
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
Δ%
Δ%
2024
2023
Δ%
Δ%
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.
Financial Results – Second Quarter
2024
Consolidated Overview
Net sales decreased 6% to $3.1 billion as the pass-through of
lower resin prices had a 5% negative impact. Volumes declined 2%,
which was in line with our expectations and all four operating
segments showed sequential volume improvement over the first
quarter.
Operating income declined compared to the prior year quarter,
reaching $208 million. The decrease was primarily attributable to
goodwill write-offs related to recent divestitures within our
Consumer Packaging International segment, an unfavorable impact
from volume and an unfavorable impact from price-cost spread
related to the timing of passing through resin costs.
Consumer Packaging – International
Net sales decreased 9% to $968 million due to a negative impact
from the pass-through of lower resin prices and the impact of
completed divestitures. Volumes were relatively flat at 1% lower
than the prior year with both consumer and industrial markets
improving sequentially.
Operating income declined to $3 million, primarily due to
goodwill write-offs related to recent divestitures and a modest
unfavorable impact from volumes.
Consumer Packaging – North America
Net sales decreased 3% to $751 million driven by a 3% volume
decline. Sequentially, volumes improved, led by our food, beverage,
personal care, home care and industrial markets while foodservice
markets saw modest declines. Consumer demand remained soft
primarily due to inflation.
Operating income decreased to $77 million, mainly attributable
to an unfavorable impact from the price-cost spread related to the
timing of passing through resin costs and a modest unfavorable
impact from volumes.
Flexibles
Net sales decreased by 9%, reaching $711 million, resulting from
a 4% volume decline and a negative impact from the pass-through of
lower resin prices. The volume decline was split between our
concentrated effort to improve our product mix, along with softer
demand in our North American markets. However, this was partially
offset by positive growth of 2% in European flexible markets,
particularly led by agricultural films.
Operating income remained similar to the prior year quarter,
coming in at $95 million. While positive mix improvements
contributed, they were partially offset by the volume decline.
Health, Hygiene & Specialties
Net sales decreased by 5% totaling $646 million. The decline was
primarily due to the pass-through of lower resin prices and a 2%
volume decline. Notably, the surgical suite and hard-surface
disinfectant wipe markets delivered solid volume growth. Our
hygiene and specialty markets experienced modest declines compared
to prior year, but demonstrated sequential growth from the December
quarter.
Operating income remained relatively flat compared to the prior
year quarter at $33 million.
Cash Returns to
Shareholders
Berry generates significant cash flow and is committed to
returning capital to shareholders. This annual cash flow provides
substantial capacity to simultaneously reinvest in the business for
organic growth, pay down debt, pursue bolt-on acquisitions, and
return cash to shareholders through a compelling dividend as well
as share repurchases. The Company expects to be within its leverage
target of 2.5x – 3.5x by the end of fiscal 2024, while also
returning cash to shareholders during the year, through continued
share repurchases and dividends, subject to market conditions,
available cash on hand and cash needs, overall financial condition,
and other factors considered relevant by our Board of
Directors.
Dividend and Share Repurchases
As previously announced, Berry’s Board of Directors declared a
quarterly cash dividend of $0.275 per share payable on June 17,
2024 to stockholders of record as of June 3, 2024. During the
second quarter of fiscal 2024, Berry repurchased 1.4 million shares
for $81 million, leaving $354 million authorized for share
repurchases at the end of the second fiscal quarter. Berry may
repurchase shares through the open market, privately negotiated
transactions or other programs, subject to market conditions. The
Company continues to expect to make repurchases during the fiscal
year while primarily focusing on lowering our leverage. Share
repurchases are subject to market conditions, available cash on
hand and cash needs, overall financial condition, and other factors
considered relevant by our Board of Directors.
Announcement of Combination of Berry’s
Health, Hygiene and Specialties Global Nonwovens and Films Business
with Glatfelter Corporation
In February, the Company announced plans for a tax-free spin-off
and merger of the majority of its HH&S segment to include its
global nonwovens and films business with Glatfelter Corporation
(“GLT”) to create a global leader in specialty materials. Upon the
completion of the transaction, Berry shareholders are expected to
own approximately ninety percent of the newly combined company. The
transaction valued the combined company at $3.6 billion on an
enterprise value basis. In April, the Company achieved a regulatory
milestone with the expiration of the required waiting period under
the Hart-Scott-Rodino (HSR) Antitrust Improvements Act. The
transaction is subject to further certain customary closing
conditions and regulatory approvals including, but not limited to,
approval by GLT shareholders, the effective filing of related
registration statements, completion of a tax-free spin-off and
receipt of certain required anti-trust approvals.
“This announcement is the culmination of a comprehensive review
to determine the highest value alternative for Berry shareholders.
We believe these two businesses can drive significant value for
their respective stakeholders with more focused portfolios,
positioning each for greater success. Berry will now become a
pure-play leading supplier of innovative, sustainable global
packaging solutions and we believe this focus will result in an
even more predictable, stable earnings and growth profile for
Berry. This proposed transaction is a significant step in the
optimization of our portfolio and allows Berry’s management team to
be one hundred percent laser-focused on driving consistent
long-term growth with a more simplified and aligned portfolio,”
stated Kevin Kwilinski, Berry’s CEO.
Fiscal Year 2024 Guidance -
Reaffirmed
- 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
Investor Conference Call
The Company will host a conference call today, May 9, 2024, at
10 a.m. U.S. Eastern Time to discuss our second fiscal quarter 2024
results. We expect the call to last approximately one hour. This
call will be webcast live on Berry’s website at
https://ir.berryglobal.com/financials. A new, simplified event
registration and access provides two ways to access the call. A
replay of the webcast will be available via the same link on our
website approximately two hours after the completion of the
call.
By Telephone
Participants may register for the call here now or any time up
to and during the time of the call, and will immediately receive
the dial-in number and a unique pin to access the call. While you
may register at any time up to and during the time of the call, you
are encouraged to join the call 10 minutes prior to the start of
the event.
Via the Internet
The conference call and accompanying webcast slides will also be
broadcast live over the internet. To access the event, click on the
following link: https://ir.berryglobal.com/financials. A replay of
the webcast will be available via the same link on our website
approximately two hours after the completion of the call.
About Berry
At Berry Global Group, Inc. (NYSE: BERY), we create innovative
packaging solutions that we believe make life better for people and
the planet. We do this every day by leveraging our unmatched global
capabilities, sustainability leadership, and deep innovation
expertise to serve customers of all sizes around the world.
Harnessing the strength in our diversity and industry-leading
talent of over 40,000 global employees across more than 250
locations, we partner with customers to develop, design, and
manufacture innovative products with an eye toward the circular
economy. The challenges we solve and the innovations we pioneer
benefit our customers at every stage of their journey. For more
information, visit our website, or connect with us on LinkedIn or
X.
Non-GAAP Financial Measures and
Estimates
This press release includes non-GAAP financial measures such as
operating EBITDA, Adjusted operating income, Adjusted earnings per
share (or adjusted EPS), free cash flow, and comparable basis net
sales, comparable adjusted EPS and comparable operating EBITDA. A
reconciliation of these non-GAAP financial measures to comparable
measures determined in accordance with accounting principles
generally accepted in the United States of America (GAAP) is set
forth at the end of this press release. Information reconciling
forward-looking adjusted EPS and free cash flow is not provided
because such information is not available without unreasonable
effort due to the high variability, complexity, and low visibility
with respect to certain items, including debt refinancing activity
or other non-comparable items. These items are uncertain, depend on
various factors, and could be material to our results computed in
accordance with U.S. GAAP.
Forward Looking Statements
Statements in this release that are not historical, including
statements relating to the expected future performance of the
Company as well as estimates and statements as to the expected
timing, completion and effects of the proposed transaction between
Berry and Glatfelter, are considered “forward looking” within the
meaning of the federal securities laws and are presented pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. You can identify forward-looking statements
because they contain words such as “believes,” “expects,” “may,”
“will,” “should,” “would,” “could,” “seeks,” “approximately,”
“intends,” “plans,” “estimates,” “projects,” “outlook,”
“anticipates” or “looking forward,” or similar expressions that
relate to our strategy, plans, intentions, or expectations. All
statements we make relating to estimates and statements about the
benefits of the Glatfelter transaction, including future financial
and operating results, the combined company’s plans, objectives,
expectations and intentions, and other statements that are not
historical facts, as well as statements we make relating to our
estimated and projected earnings, margins, costs, expenditures,
cash flows, growth rates, and financial results or to our
expectations regarding future industry trends are forward-looking
statements. In addition, we, through our senior management, from
time to time make forward-looking public statements concerning our
expected future operations and performance and other
developments.
Our actual results may differ materially from those that we
expected due to a variety of factors, including without limitation:
(1) risks associated with our substantial indebtedness and debt
service; (2) changes in prices and availability of resin and other
raw materials and our ability to pass on changes in raw material
prices to our customers on a timely basis; (3) risks related to
acquisitions or divestitures and integration of acquired businesses
and their operations, and realization of anticipated cost savings
and synergies; (4) risks related to international business,
including transactional and translational foreign currency exchange
rate risk and the risks of compliance with applicable export
controls, sanctions, anti-corruption laws and regulations; (5)
increases in the cost of compliance with laws and regulations,
including environmental, safety, and climate change laws and
regulations; (6) labor issues, including the potential labor
shortages, shutdowns or strikes, or the failure to renew effective
bargaining agreements; (7) risks related to disruptions in the
overall global economy, persistent inflation, supply chain
disruptions, and the financial markets that may adversely impact
our business; (8) risk of catastrophic loss of one of our key
manufacturing facilities, natural disasters, and other unplanned
business interruptions; (9) risks related to weather-related events
and longer-term climate change patterns; (10) risks related to the
failure of, inadequacy of, or attacks on our information technology
systems and infrastructure; (11) risks that our restructuring
programs may entail greater implementation costs or result in lower
cost savings than anticipated; (12) risks related to future
write-offs of substantial goodwill; (13) risks of competition,
including foreign competition, in our existing and future markets;
(14) risks related to market conditions associated with our share
repurchase program; (15) risks related to market disruptions and
increased market volatility; (16) the occurrence of any event,
change or other circumstances that could give rise to the
termination of the proposed transaction; (17) the risk that
Glatfelter shareholder may not approve the transaction proposals;
(18) the risk that the necessary regulatory approvals may not be
obtained or may be obtained subject to conditions that are not
anticipated; (19) risks that any of the other closing conditions to
the proposed transaction may not be satisfied in a timely manner;
(20) risks that the anticipated tax treatment of the proposed
transaction is not obtained; (21) risks related to potential
litigation brought in connection with the proposed transaction;
(22) uncertainties as to the timing of the consummation of the
proposed transaction; (23) risks and costs related to the
implementation of the separation of the Berry Spinco from Berry.,
including timing anticipated to complete the separation, any
changes to the configuration of the businesses included in the
separation if implemented, as well as unexpected costs, charges or
expenses resulting from the proposed transaction; (24) the risk
that the integration of the combined companies is more difficult,
time consuming or costly than expected; (25) risks related to
financial community and rating agency perceptions of each of Berry
and Glatfelter and its business, operations, financial condition
and the industry in which they operate; (26) risks related to
disruption of management time from ongoing business operations due
to the proposed transaction; (27) failure to realize the benefits
expected from the proposed transaction; (28) the effects of the
announcement, pendency or completion of the proposed transaction on
the ability of the parties to retain customers and retain and hire
key personnel and maintain relationships with their counterparties,
and on their operating results and businesses generally; and (29)
the other factors and uncertainties discussed in the section titled
“Risk Factors” in our Annual Report on Form 10-K and subsequent
filings with the Securities and Exchange Commission (“SEC”). These
risks, as well as other risks associated with the proposed
transaction, will be more fully discussed in the registration
statements, proxy statement/prospectus and other documents that
will be filed with the SEC in connection with the proposed
transaction. We caution you that the foregoing list of important
factors may not contain all of the material factors that are
important to you. New factors may emerge from time to time, and it
is not possible for us to predict new factors, nor can we assess
the potential effect of any new factors on us. Accordingly, readers
should not place undue reliance on those statements. All
forward-looking statements are based upon information available to
us on the date hereof. All forward-looking statements are made only
as of the date hereof and we undertake no obligation to update or
revise any forward-looking statement as a result of new
information, future events or otherwise, except as otherwise
required by law.
Additional Information and Where to Find
It
This communication may be deemed to be solicitation material in
respect of the proposed transaction between Berry and Glatfelter.
In connection with the proposed transaction, Berry and Glatfelter
intend to file relevant materials with the SEC, including a
registration statement for Spinco in connection with the separation
and spin-off as well as a registration statement on Form S-4 by
Glatfelter that will contain a proxy statement/prospectus of
Glatfelter relating to the proposed transaction. This communication
is not a substitute for the registration statements, proxy
statement/prospectus or any other document which Berry and/or
Glatfelter may file with the SEC. STOCKHOLDERS OF BERRY AND
GLATFELTER ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE
SEC, INCLUDING THE REGISTRATION STATEMENTS AND PROXY
STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security
holders will be able to obtain copies of the registration
statements and proxy statement/prospectus (when available) as well
as other filings containing information about Berry and Glatfelter,
as well as Spinco, without charge, at the SEC’s website,
http://www.sec.gov. Copies of documents filed with the SEC by Berry
or Spinco will be made available free of charge on Berry’s investor
relations website at https://ir.berryglobal.com. Copies of
documents filed with the SEC by Glatfelter will be made available
free of charge on Glatfelter's investor relations website at
https://www.glatfelter.com/investors.
No Offer or Solicitation
This communication is for informational purposes only and is not
intended to and does not constitute an offer to sell, or the
solicitation of an offer to sell, subscribe for or buy, or a
solicitation of any vote or approval in any jurisdiction, nor shall
there be any sale, issuance or transfer of securities in any
jurisdiction in which such offer, sale or solicitation would be
unlawful, prior to registration or qualification under the
securities laws of any such jurisdiction. No offer or sale of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended, and otherwise in accordance with applicable law.
Participants in Solicitation
Berry and its directors and executive officers, and Glatfelter
and its directors and executive officers, may be deemed to be
participants in the solicitation of proxies from the holders of
Glatfelter capital stock and/or the offering of securities in
respect of the proposed transaction. Information about the
directors and executive officers of Berry, including a description
of their direct or indirect interests, by security holdings or
otherwise, is set forth under the caption “Security Ownership of
Beneficial Owners and Management” in the definitive proxy statement
for Berry’s 2024 Annual Meeting of Stockholders, which was filed
with the SEC on January 4, 2024
(https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0001378992/000110465924001073/tm2325571d6_def14a.htm).
Information about the directors and executive officers of
Glatfelter, including a description of their direct or indirect
interests, by security holdings or otherwise, is set forth under
the caption “Ownership of Company Stock” in the proxy statement for
Glatfelter's 2024 Annual Meeting of Shareholders, which was filed
with the SEC on March 26, 2024
(https://www.sec.gov/ix?doc=/Archives/edgar/data/0000041719/000004171924000013/glt-20240322.htm).
In addition, Curt Begle, the current President of Berry’s Health,
Hygiene & Specialties Division, will be appointed as Chief
Executive Officer of the combined company. Investors may obtain
additional information regarding the interest of such participants
by reading the proxy statement/prospectus regarding the proposed
transaction when it becomes available.
Berry Global Group,
Inc.
Consolidated Statements of
Income (Unaudited)
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
Condensed Consolidated Balance
Sheets (Unaudited)
(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
Condensed Consolidated
Statements of Cash Flows (Unaudited)
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
)
Segment and Supplemental
Comparable Basis Information (Unaudited)
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
Reconciliation of Non-GAAP
Measures
Reconciliation of Net income and
earnings per share (EPS) to adjusted operating income, operating
earnings before interest, tax, depreciation and amortization
(EBITDA), and adjusted earnings per share (adjusted EPS)
(in millions of USD, except per share data
amounts)
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.
We define “free cash flow” as cash flow
from operating activities, less net additions to property, plant,
and equipment. We believe free cash flow is useful to an investor
in evaluating our liquidity because free cash flow and similar
measures are widely used by investors, securities analysts, and
other interested parties in our industry to measure a company’s
liquidity. We also believe free cash flow is useful to an investor
in evaluating our liquidity as it can assist in assessing a
company’s ability to fund its growth through its generation of
cash.
We also use Adjusted operating income,
Operating EBITDA, adjusted EPS and comparable basis measures, among
other measures, to evaluate management performance and in
determining performance-based compensation. Operating EBITDA is a
measure widely used by investors, securities analysts, and other
interested parties in our industry to measure a company’s
performance. We also believe EBITDA and Adjusted operating income
are useful to an investor in evaluating our performance without
regard to revenue and expense recognition, which can vary depending
upon accounting methods.
(BERY-F)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240509842025/en/
Dustin Stilwell VP, Investor Relations +1 (812) 306 2964
ir@berryglobal.com
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