Diversey Holdings, Ltd. ("Diversey") (NASDAQ: DSEY) announced
fourth quarter and full year results with continued top line growth
and margin expansion.
- Net loss attributable to common
stockholders was $35.7 million for the fourth quarter and $174.8
million for full-year 2021
- Fourth quarter Adjusted EBITDA grew
13.7% over the prior year period to $109.5 million
- Full-year Adjusted EBITDA increased
2.2% over the prior year to $410.1 million
- Revenues increased approximately 1%
to $672.4 million in the fourth quarter and were approximately flat
at $2.62 billion for the full-year 2021, compared to prior year
periods
- Fourth quarter Adjusted EBITDA
margin expanded 190 bps over the prior year quarter to 16.3%
- Full year Adjusted EBITDA margin
increased 40 bps over the prior year to 15.7%
“We delivered another quarter of sequential and year-over-year
growth in sales and adjusted EBITDA margin as the market supported
our need to take pricing increases given the value placed on our
products and services,” said Phil Wieland, Diversey’s Chief
Executive Officer. “This helped us overcome a challenging
environment marked by significant raw material and freight cost
increases. We are very proud of our team’s ongoing ability to
execute, win new customers and deliver for our shareholders. Our
building pipeline of new wins drove growth in our Food and Beverage
business. Our base Institutional revenue, excluding infection
prevention, grew 17% in the fourth quarter and we are energized by
the fact that we anticipate recapturing more than $220 million of
recovery as countries and businesses reopen over time. We also are
excited that our infection prevention business remains more than
20% ahead of pre-COVID 2019 levels. As we head into 2022,
significant global macro challenges remain, but we are confident
that Diversey is well positioned to deliver annual double-digit
adjusted EBITDA percentage growth long-term once the current
challenges recede during 2022.”
|
Year Ended December 31 |
(millions) |
|
2021 |
|
|
2020 |
|
% Change |
|
2019 |
|
% Change |
Net sales |
$2,618.9 |
|
$2,629.2 |
|
(0.4)% |
$2,623.9 |
|
(0.2)% |
Loss before taxes |
|
(149.5) |
|
|
(29.3) |
|
(410.2)% |
|
(76.3) |
|
(95.9)% |
Net loss |
|
(174.8) |
|
|
(38.5) |
|
(354.0)% |
|
(109.0) |
|
(60.4)% |
Adjusted net income(1) |
|
151.8 |
|
|
123.6 |
|
22.8% |
|
63.5 |
|
139.1% |
|
|
|
|
|
|
Adjusted EBITDA(1) |
|
410.1 |
|
|
401.2 |
|
2.2% |
|
339.8 |
|
20.7% |
% Margin(1) |
|
15.7% |
|
|
15.3% |
|
40 bps |
|
13.0% |
|
270 bps |
Unaudited |
Fourth Quarter Ended December 31 |
(millions) |
|
2021 |
|
|
2020 |
|
% Change |
|
2019 |
|
% Change |
Net sales |
$672.4 |
|
$667.4 |
|
0.7% |
$658.5 |
|
2.1% |
Loss before taxes |
|
(17.4) |
|
|
(86.5) |
|
79.9% |
|
(14.5) |
|
(20.0)% |
Net loss |
|
(35.7) |
|
|
(71.8) |
|
50.3% |
|
(44.6) |
|
20.0% |
Adjusted net income(1) |
|
51.2 |
|
|
27.7 |
|
84.8% |
|
15.7 |
|
226.1% |
|
|
|
|
|
|
Adjusted EBITDA(1) |
|
109.5 |
|
|
96.3 |
|
13.7% |
|
94.3 |
|
16.1% |
% Margin(1) |
|
16.3% |
|
|
14.4% |
|
190 bps |
|
14.3% |
|
200 bps |
(1) See the “Non-GAAP Financial Information and Segment Adjusted
EBITDA” section herein for explanations of these financial
measures.
Fourth Quarter 2021 Consolidated Results
Net sales increased 0.7% versus prior year or
2.1% when adjusting for currency and acquisitions. Both the
Institutional and F&B segments are showing positive momentum.
The F&B segment continues to win new customers and grow revenue
while improving margins. The recovery of base Institutional revenue
is progressing well and the segment continues to win new customers,
with significant recovery still ahead as reopenings progress around
the world. Institutional infection prevention is still more than
20% above pre-pandemic levels even with the significant
normalization related to the strong growth experienced in 2020.
Consolidated reported net sales were 2.1% above pre-COVID 2019
baseline.
Loss before taxes of $17.4 million in the fourth
quarter of 2021 included Special Items (as defined below) impact of
$59.0 million and compared to loss before taxes of $86.5 million in
fourth quarter 2020 including Special Items impact of $100.2
million. Adjusted net income in fourth quarter 2021 was $51.2
million compared to $27.7 million in the same quarter 2020 and
$15.7 million in fourth quarter 2019 with Adjusted EPS of $0.16 in
fourth quarter 2021 compared to $0.11 in fourth quarter 2020 and
$0.06 same quarter 2019.
Adjusted EBITDA for fourth quarter 2021 was $109.5 million,
representing growth of 13.7% versus the period in 2020 and 16.1%
versus pre-COVID 2019. In a challenging environment, Adjusted
EBITDA margin expanded 190 basis points compared to the same period
2020 and 200 basis points versus fourth quarter 2019. Adjusted
EBITDA margin of 16.3% in fourth quarter 2021 continues the strong
sequential margin improvement experienced throughout 2021.
Segment Review
Institutional
Unaudited |
Fourth Quarter Ended December 31 |
(millions) |
|
2021 |
|
|
2020 |
|
% Change |
|
2019 |
|
% Change |
Net sales |
$486.9 |
|
$504.7 |
|
(3.5)% |
$499.1 |
|
(2.4)% |
Adjusted EBITDA |
|
86.3 |
|
|
83.2 |
|
3.7% |
|
85.0 |
|
1.5% |
% Margin |
|
17.7% |
|
|
16.5% |
|
120 bps |
|
17.0% |
|
70 bps |
Reported net sales in the Institutional segment of $486.9
million were 3.5% below Q4 2020 and 2.4% below Q4 2019. The
recovery of the base Institutional business continues to be
encouraging, with strong growth over Q4 2020 from new business
wins, innovation, pricing and reopening in some markets. However,
this was more than offset by infection prevention revenue
normalization versus very strong gains last year. Adjusted EBITDA
margin grew 120 basis points vs Q4 2020 and 70 basis points vs Q4
2019 from ongoing efficiency initiatives.
Food & Beverage
Unaudited |
Fourth Quarter Ended December 31 |
(millions) |
|
2021 |
|
|
2020 |
|
% Change |
|
2019 |
|
% Change |
Net sales |
$185.5 |
|
$162.7 |
|
14.0% |
$159.4 |
|
16.4% |
Adjusted EBITDA |
|
32.4 |
|
|
28.0 |
|
15.7% |
|
28.4 |
|
14.1% |
% Margin |
|
17.5% |
|
|
17.2% |
|
30 bps |
|
17.8% |
|
(30) bps |
The Food & Beverage segment sales continues to grow along
with expanding margins. Net sales of $185.5 million increased 14.0%
in fourth quarter 2021 versus prior year and 16.4% compared to the
same period in 2019. This was driven by very high win rates and
success with the new water treatment offering. Adjusted EBITDA of
$32.4 million grew 15.7% compared to the same 2020 period and 14.1%
compared to the same 2019 period. Margin improved 30 basis points
versus the prior year and was only 30 basis points below fourth
quarter of pre-COVID 2019 due to successful pricing actions and
cost control measures that were started prior to the global
pandemic offset ongoing cost inflation. Acquisitions contributed
$8.3 million to sales growth and $1.1 million to Adjusted
EBITDA.
Outlook
Diversey expects revenue to grow by high single
digit percent from full year 2021 revenue of approximately $2.62
billion. This reflects post-COVID recovery, pricing, accelerating
new business and M&A.
Diversey continues to operate in a challenging environment,
which is further impacted by the conflict in Ukraine. The Company
previously anticipated that these challenges would persist through
the first half of 2022 and begin to show improvement towards the
back half of the year. However, in light of concerns related to the
impact on oil and oil-linked raw materials, the Company is
including an additional $25-35M for an estimated adverse impact of
oil prices on the business. Accordingly, the Company’s 2022
Adjusted EBITDA guidance is $380 to $420 million. This guidance
range is also inclusive of approximately $30 million Adjusted
EBITDA headwind in the first quarter 2022 related to the
normalization of $70 million of infection prevention revenue. While
the Company is confident it can continue to address these
challenges over time through pricing and rigorous cost management,
it will be dependent on the timing in which the current
inflationary and cost pressures begin to abate and the impact of
further actions to mitigate.
Diversey is managing this business for the
long-term and remains confident that it is positioned to maintain
its targeted goal of double-digit percentage Adjusted EBITDA
growth. The business model has shown its resiliency during the past
few years and management is encouraged by the ongoing recovery in
its institutional base business it continues to build as the
markets around the globe stabilize and reopen. This outlook assumes
that for the balance of the year there is a moderation of inflation
by the end of the year, pricing increases continue to be taken as
necessary and country reopenings progress. As the Company enters
2023 it should benefit from sustained price increases, a new plant
in the United States, and continued growth of new business.
While it is not management’s intention to provide quarterly
guidance going forward, given the timing of when Diversey is
reporting, the challenges with inflation and year over year
comparison, the Company is providing a revenue and Adjusted EBITDA
outlook for the first quarter. At this time, the Company expects
revenue to be approximately flat versus first quarter 2021, driven
by the last quarterly headwind of infection prevention
normalization. Adjusted EBITDA for the first quarter is expected to
be $56 to $60 million, assuming no further changes in the current
environment the last three weeks of the quarter. This outlook
reflects approximately 7% to 15% growth over the first quarter 2019
and is similar to the pre-pandemic phasing of Diversey’s business
for the first quarter relative to the remainder of the year. The
first quarter 2022 will be the final year over year comparison
challenge from the normalization of infection prevention in the
Institutional segment.
About Diversey
Diversey’s mission is to protect and care for people through
leading hygiene, infection prevention, and cleaning solutions. We
develop and deliver innovative products, services, and technologies
that save lives and protect our environment. Over the course of 95
years, the Diversey brand has become synonymous with product
quality, service, and innovation.
For more information, visit www.diversey.com or follow us on
LinkedIn, Facebook, or Twitter @diversey.
Diversey Holdings, Ltd.Investor Contact:Grant
Graverir@diversey.com
Conference Call and Webcast Information
Management will host a webcast and conference call today,
March 9, 2022 at 8:30 am ET to discuss the results for Q4
2021.
The event will be available live via webcast which can be
accessed here. Interested parties may also access the conference
call by dialing 1-877-407-0784 (Toll Free) or 1-201-689-8560
(Toll/International) and requesting the Diversey Fourth Quarter and
Full Year 2021 Earnings Conference Call. Participants are asked to
dial in 10 minutes prior to the call in order to register for the
event.
An audio replay of the conference call will be available
approximately three hours after the conference call until 11:59 pm
ET on March 23, 2022 and can be accessed by dialing 1-844-512-2921
(domestic) or 1-412-317-6671 (international) and providing the
passcode 13726338.
Cautionary Statements Regarding Forward-Looking
Information
This communication contains forward-looking statements that are
subject to substantial risks and uncertainties. All statements
other than statements of historical fact included in this
communication, including statements regarding our business
strategy, future operations and results thereof, future financial
position, future revenue, projected costs, prospects, current and
prospective products, current and prospective collaborations,
timing and likelihood of success, plans and objectives of
management, expected market growth and future results of current
and anticipated products are forward-looking statements. You can
identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. These statements
may include words such as “anticipate”, “estimate”, “expect”,
“project”, “plan”, "potential", "predict", “intend”, “believe”,
“may”, "might", “will”, "would", “should”, “can have”, "could",
"continue", "contemplate", "target", “likely” and other words and
terms of similar meaning in connection with any discussion of the
timing or nature of future operating or financial performance or
other events although not all forward-looking statements contain
these identifying words. For example, all statements we make
relating to our estimated and projected costs, expenditures, cash
flows, growth rates and financial results or our plans and
objectives for future operations, growth initiatives, or strategies
are forward-looking statements. All forward-looking statements
involve unknown risks, and other important factors that may cause
actual results performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements,
including:
- the continuation of the COVID-19 pandemic may cause disruptions
to our operations, customer demand, and our suppliers’ ability to
support us;
- uncertain global economic conditions which have had and could
continue to have an adverse effect on our consolidated financial
condition and results of operations;
- the global nature of our operations exposes us to numerous
risks that could materially adversely affect our consolidated
financial condition and results of operations;
- fluctuations between non-U.S. currencies and the U.S. dollar
could materially impact our consolidated financial condition or
results of operations;
- political and economic instability and risk of government
actions affecting our business and our customers or suppliers may
adversely impact our business, results of operations and cash
flows;
- raw material pricing, availability and allocation by suppliers
as well as energy-related costs may negatively impact our results
of operations, including our profit margins;
- if we do not develop new and innovative products or if
customers in our markets do not accept them, our results would be
negatively affected;
- cyber risks and the failure to maintain the integrity of our
operational or security systems or infrastructure;
- the introduction of the Organization for Economic Cooperation
and Development’s Base Erosion and Profit Shifting may adversely
affect our effective rate of tax in future periods;
- the consolidation of customers may adversely affect our
business, consolidated financial condition or results of
operations;
- we experience competition in the markets for our products and
services and in the geographic areas in which we operate;
- instability and uncertainty in the credit and financial markets
could adversely impact the availability of credit that we and our
customers need to operate our business;
- new and stricter regulations may affect our business and
consolidated condition and results of operations; and
- the other risks described under “Risk Factors” in Diversey’s
Form 10-K dated March 9, 2022 filed with the Securities and
Exchange Commission.
We derive many of our forward-looking statements from our
operating budgets and forecasts, which are based on many detailed
assumptions. While we believe that our assumptions are reasonable,
we caution that it is very difficult to predict the impact of known
factors, and it is impossible for us to anticipate all factors that
could affect our actual results. All written and oral
forward-looking statements attributable to us, or persons acting on
our behalf, are expressly qualified in their entirety by these
cautionary statements as well as other cautionary statements that
are made from time to time in our other SEC filings and public
communications. You should evaluate all forward-looking statements
in the context of these risks and uncertainties.
We caution you that the important factors referenced above may
not contain all of the factors that are important to you. In
addition, we cannot assure you that we will realize the results or
developments we expect or anticipate or, even if substantially
realized, that they will result in the consequences or affect us or
our operations in the way we expect. The forward-looking statements
included herein are made only as of the date hereof. 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.
Non-GAAP Financial Information
We present financial information that conforms to generally
accepted accounting principles in the United States (“U.S. GAAP").
We also present financial information that does not conform to U.S.
GAAP ("Non-GAAP"), as our management believes it is useful to
investors.
The Non-GAAP financial metrics exclude items that we consider to
be certain specified items (“Special Items”), such as restructuring
charges, transition and transformation costs, certain transaction
and other charges related to acquisitions and divestitures, gains
and losses related to acquisitions and divestitures, and certain
other items. We evaluate unusual or Special Items on an individual
basis. Our evaluation of whether to exclude an unusual or Special
Item for purposes of determining our Non-GAAP financial measures
considers both the quantitative and qualitative aspects of the
item, including among other things (i) its nature, (ii) whether or
not it relates to our ongoing business operations, and (iii)
whether or not we expect it to occur as part of our normal business
on a regular basis.
EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA are supplemental measures that are
not required by, or presented in accordance with, U.S. GAAP. We
define EBITDA as income (loss) before income tax provisions
(benefit), interest expense, and depreciation and amortization, and
Adjusted EBITDA, as EBITDA adjusted for other items to (i)
eliminate certain non-operating income or expense items, (ii)
eliminate the impact of certain non-cash and other items that are
included in net income (loss) that we do not consider indicative of
our ongoing operating performance, and (iii) eliminate certain
unusual and non-recurring items impacting results in a particular
period.
EBITDA and Adjusted EBITDA are not measures of our financial
performance under U.S. GAAP and should not be considered as an
alternative to revenues, net income (loss), income (loss) before
income tax provision or any other performance measures derived in
accordance with U.S. GAAP, nor should they be considered as
alternatives to cash flows from operating activities as a measure
of liquidity in accordance with U.S. GAAP. In addition, our method
of calculating EBITDA and Adjusted EBITDA may vary from the methods
used by other companies.
Our management considers EBITDA and Adjusted EBITDA to be key
indicators of our financial performance. Additionally, we believe
EBITDA and Adjusted EBITDA are frequently used by securities
analysts, investors and other interested parties in the evaluation
of companies in our industry. We also believe that investors,
analysts and rating agencies consider EBITDA and Adjusted EBITDA
useful means of measuring our ability to meet our debt service
obligations and evaluating our financial performance, and
management uses these measures for one or more of these purposes.
Our presentation of EBITDA and Adjusted EBITDA should not be
construed as an inference that our future results will be
unaffected by unusual or nonrecurring items. EBITDA and Adjusted
EBITDA have important limitations as analytical tools and you
should not consider them in isolation or as a substitute for
analysis of our results as reported under U.S. GAAP. The use of
EBITDA and Adjusted EBITDA instead of net income has limitations as
an analytical tool.
Adjusted Net Income
Adjusted Net Income (as defined below) and Adjusted Earnings
(Loss) Per Share (“Adjusted EPS”) are Non-GAAP financial measures.
We define Adjusted Net Income as net income (loss) adjusted to (i)
eliminate certain non-operating income or expense items, (ii)
eliminate the impact of certain non-cash and other items that are
included in net income that we do not consider indicative of our
ongoing operating performance, (iii) eliminate certain unusual and
non-recurring items impacting results in a particular period, and
(iv) reflect the tax effect of items (i) through (iii) and other
tax special items.
We believe that in addition to our results determined in
accordance with GAAP, Adjusted Net Income and Adjusted EPS are
useful in evaluating our business, results of operations and
financial condition. We believe that Adjusted Net Income and
Adjusted EPS may be helpful to investors because they provide
consistency and comparability with past financial performance and
facilitate period to period comparisons of our operations and
financial results, as they eliminate the effects of certain
variables from period to period for reasons that we do not believe
reflect our underlying operating performance or are unusual or
infrequent in nature. However, Adjusted Net Income and Adjusted EPS
are presented for supplemental informational purposes only and
should not be considered in isolation or as a substitute or
alternative for financial information presented in accordance with
GAAP.
Adjusted Net Income and Adjusted EPS have limitations as
analytical tools.
Diversey Holdings,
Ltd.Consolidated Balance Sheets
(in
millions except per share amounts) |
December 31, 2021 |
December 31, 2020 |
Assets |
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
207.6 |
|
$ |
192.9 |
|
|
Trade receivables, net of
allowance for doubtful accounts of $23.5 and $28.7 |
|
414.3 |
|
|
342.0 |
|
|
Other receivables |
|
59.3 |
|
|
71.0 |
|
|
Inventories |
|
337.6 |
|
|
282.4 |
|
|
Prepaid expenses and other
current assets |
|
69.4 |
|
|
62.0 |
|
|
Total current assets |
|
1,088.2 |
|
|
950.3 |
|
|
Property and equipment,
net |
|
210.7 |
|
|
188.3 |
|
|
Goodwill |
|
471.5 |
|
|
467.0 |
|
|
Intangible assets, net |
|
2,147.3 |
|
|
2,311.4 |
|
|
Other non-current assets |
|
382.3 |
|
|
369.1 |
|
|
Total assets |
$ |
4,300.0 |
|
$ |
4,286.1 |
|
|
|
|
|
Liabilities and
stockholders' equity |
|
|
Current liabilities: |
|
|
|
Short-term borrowings |
$ |
10.7 |
|
$ |
0.4 |
|
|
Current portion of long-term
debt |
|
10.9 |
|
|
13.2 |
|
|
Accounts payable |
|
434.3 |
|
|
404.6 |
|
|
Accrued restructuring
costs |
|
16.7 |
|
|
26.3 |
|
|
Other current liabilities |
|
384.5 |
|
|
512.4 |
|
|
Total current liabilities |
|
857.1 |
|
|
956.9 |
|
|
Long-term debt, less current
portion |
|
1,973.0 |
|
|
2,686.7 |
|
|
Preferred equity
certificates |
|
— |
|
|
641.7 |
|
|
Deferred taxes |
|
164.3 |
|
|
181.1 |
|
|
Other non-current
liabilities |
|
520.0 |
|
|
328.3 |
|
|
Total liabilities |
|
3,514.4 |
|
|
4,794.7 |
|
|
Commitments and
contingencies |
|
|
Stockholders' equity: |
|
|
|
Common stock, $0.01 par value
per share, 0 and 243,163,947 shares authorized and outstanding in
2021 and 2020, respectively |
|
— |
|
|
2.2 |
|
|
Ordinary shares, $0.0001 par
value per share; 1,000,000,000 and 0 shares authorized, 318,639,592
and 0 shares outstanding in 2021 and 2020, respectively |
|
— |
|
|
— |
|
|
Preferred shares, $0.0001 par
value per share, 200,000,000 and 0 shares authorized, 0 and 0
shares outstanding in 2021 and 2020, respectively |
|
— |
|
|
— |
|
|
Additional paid-in
capital |
|
1662.7 |
|
|
247.2 |
|
|
Accumulated deficit |
|
(720.1 |
) |
|
(545.3 |
) |
|
Accumulated other
comprehensive loss |
|
(157.0 |
) |
|
(212.7 |
) |
|
Total stockholders' equity |
|
785.6 |
|
|
(508.6 |
) |
|
Total liabilities and stockholders' equity |
$ |
4,300.0 |
|
$ |
4,286.1 |
|
Diversey Holdings,
Ltd.Consolidated Statements of
Operations
|
Three Months Ended December 31, |
Year Ended December 31, |
(in millions except per share amounts) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Net sales |
$ |
672.4 |
|
$ |
667.4 |
|
$ |
2,618.9 |
|
$ |
2,629.2 |
|
Cost of sales |
|
429.9 |
|
|
409.4 |
|
|
1,603.4 |
|
|
1,559.4 |
|
Gross profit |
|
242.5 |
|
|
258.0 |
|
|
1,015.5 |
|
|
1,069.8 |
|
Selling, general and
administrative expenses |
|
185.8 |
|
|
252.8 |
|
|
828.3 |
|
|
835.7 |
|
Transition and transformation
costs |
|
19.2 |
|
|
22.5 |
|
|
52.3 |
|
|
42.5 |
|
Management fee |
|
— |
|
|
1.9 |
|
|
19.4 |
|
|
7.5 |
|
Amortization of intangible
assets |
|
24.1 |
|
|
24.2 |
|
|
96.7 |
|
|
98.2 |
|
Restructuring and exit
costs |
|
5.0 |
|
|
20.3 |
|
|
27.4 |
|
|
25.6 |
|
Merger and acquisition related
costs |
|
1.2 |
|
|
0.1 |
|
|
1.2 |
|
|
1.0 |
|
Operating income (loss) |
|
7.2 |
|
|
(63.8 |
) |
|
(9.8 |
) |
|
59.3 |
|
Interest expense |
|
28.9 |
|
|
32.9 |
|
|
126.3 |
|
|
127.7 |
|
Foreign currency (gain) loss
related to Argentina subsidiaries |
|
0.6 |
|
|
1.3 |
|
|
(2.1 |
) |
|
1.6 |
|
Loss on extinguishment of
debt |
|
— |
|
|
— |
|
|
15.6 |
|
|
— |
|
Other (income) expense,
net |
|
(4.9 |
) |
|
(11.5 |
) |
|
(0.1 |
) |
|
(40.7 |
) |
Loss before income tax provision (benefit) |
|
(17.4 |
) |
|
(86.5 |
) |
|
(149.5 |
) |
|
(29.3 |
) |
Income tax provision
(benefit) |
|
18.3 |
|
|
(14.7 |
) |
|
25.3 |
|
|
9.2 |
|
Net loss |
$ |
(35.7 |
) |
$ |
(71.8 |
) |
$ |
(174.8 |
) |
$ |
(38.5 |
) |
|
|
|
|
|
Basic and diluted loss per
share |
$ |
(0.11 |
) |
$ |
(0.30 |
) |
$ |
(0.60 |
) |
$ |
(0.16 |
) |
Basic and diluted weighted
average shares outstanding |
|
310.9 |
|
|
243.2 |
|
|
290.4 |
|
|
243.2 |
|
|
|
|
|
|
Reconciliation of gross margin
to adjusted gross margin: |
|
|
|
|
Net sales |
$ |
672.4 |
|
$ |
667.4 |
|
$ |
2,618.9 |
|
$ |
2,629.2 |
|
|
|
|
|
|
Cost of sales, as
reported |
|
429.9 |
|
|
409.4 |
|
|
1,603.4 |
|
|
1,559.4 |
|
Less share-based compensation
included in cost of sales |
|
(0.6 |
) |
|
— |
|
|
(7.5 |
) |
|
— |
|
Less inventory reserves |
|
(13.9 |
) |
|
— |
|
|
(13.9 |
) |
|
— |
|
Non-GAAP adjusted cost of sales |
$ |
415.4 |
|
$ |
409.4 |
|
$ |
1,582.0 |
|
$ |
1,559.4 |
|
|
|
|
|
|
Gross margin |
|
|
|
|
Reported gross margin |
|
36.1 |
% |
|
38.7 |
% |
|
38.8 |
% |
|
40.7 |
% |
Non-GAAP adjusted gross margin |
|
38.2 |
% |
|
38.7 |
% |
|
39.6 |
% |
|
40.7 |
% |
Diversey Holdings,
Ltd.Consolidated Statements of Cash
Flows
(in
millions) |
Year Ended December 31, 2021 |
Year Ended December 31, 2020 |
Operating
activities: |
|
|
|
Net loss |
$ |
(174.8 |
) |
$ |
(38.5 |
) |
|
Adjustments to reconcile net
loss to cash provided by (used in) operating activities: |
|
|
|
Depreciation and amortization |
|
187.5 |
|
|
195.6 |
|
|
Amortization of deferred financing costs and original issue
discount |
|
27.3 |
|
|
11.3 |
|
|
Loss on extinguishment of debt |
|
15.6 |
|
|
— |
|
|
(Gain) loss on cash flow hedges |
|
4.1 |
|
|
(3.2 |
) |
|
Deferred taxes |
|
(25.3 |
) |
|
(28.8 |
) |
|
Unrealized foreign exchange (gain) loss |
|
12.9 |
|
|
(25.1 |
) |
|
Share-based compensation |
|
81.7 |
|
|
67.5 |
|
|
Impact of highly inflationary economy - Argentina |
|
(2.1 |
) |
|
1.6 |
|
|
Provision for (recovery of) bad debts |
|
(1.2 |
) |
|
11.1 |
|
|
Provision for slow moving inventory |
|
12.0 |
|
|
13.4 |
|
|
Non-cash pension benefit |
|
(15.7 |
) |
|
(12.9 |
) |
|
Non-cash restructuring and exit costs |
|
16.1 |
|
|
— |
|
|
Gain on sale of property and equipment |
|
(3.4 |
) |
|
(0.6 |
) |
|
Changes in operating assets
and liabilities: |
|
|
|
Trade receivables, net |
|
(126.8 |
) |
|
17.0 |
|
|
Inventories, net |
|
(69.6 |
) |
|
(70.4 |
) |
|
Accounts payable |
|
41.8 |
|
|
(33.5 |
) |
|
Income taxes, net |
|
3.8 |
|
|
(34.0 |
) |
|
Other assets and liabilities, net |
|
(72.6 |
) |
|
32.5 |
|
Cash provided by
(used in) operating activities |
|
(88.7 |
) |
|
103.0 |
|
Investing
activities: |
|
|
|
Business acquired in purchase
transactions, net of cash acquired |
|
(56.3 |
) |
|
(51.2 |
) |
|
Acquisition of intellectual
property |
|
(3.0 |
) |
|
— |
|
|
Proceeds from sale of property
and equipment and other assets |
|
4.0 |
|
|
0.5 |
|
|
Dosing and dispensing
equipment |
|
(64.6 |
) |
|
(45.6 |
) |
|
Capital expenditures |
|
(54.6 |
) |
|
(41.4 |
) |
|
Collection of deferred
factored receivables |
|
40.1 |
|
|
66.9 |
|
Cash used in
investing activities |
|
(134.4 |
) |
|
(70.8 |
) |
Financing
activities: |
|
|
|
Contingent consideration
payments |
|
(3.2 |
) |
|
(5.4 |
) |
|
Proceeds (payments)/from
short-term borrowings |
|
11.8 |
|
|
(0.4 |
) |
|
Proceeds from revolving credit
facility |
|
140.0 |
|
|
90.0 |
|
|
Payments on revolving credit
facility |
|
(140.0 |
) |
|
(210.0 |
) |
|
Proceeds from long-term
borrowings |
|
2,000.0 |
|
|
169.0 |
|
|
Payments on long-term
borrowings |
|
(2,668.8 |
) |
|
(22.9 |
) |
|
Payment of deferred financing
costs and original issue discount |
|
(35.1 |
) |
|
(1.7 |
) |
|
Payment of bond redemption
premium |
|
(7.6 |
) |
|
— |
|
|
Issuance of ordinary shares
sold in IPO, net of offering costs |
|
725.7 |
|
|
— |
|
|
Issuance of additional
ordinary shares, net of offering costs |
|
214.4 |
|
|
— |
|
|
Equity contributions |
|
— |
|
|
5.0 |
|
Cash provided by
financing activities |
|
237.2 |
|
|
23.6 |
|
Effect of exchange
rate changes on cash, cash equivalents and restricted cash |
|
(7.6 |
) |
|
3.6 |
|
|
Increase in cash, cash
equivalents and restricted cash |
|
6.5 |
|
|
59.4 |
|
Cash, cash
equivalents and restricted cash at beginning of period(a) |
|
201.7 |
|
|
142.3 |
|
Cash, cash
equivalents and restricted cash at end of period(a) |
$ |
208.2 |
|
$ |
201.7 |
|
|
|
|
Supplemental Cash
Flow Information: |
|
|
|
Interest payments |
$ |
111.9 |
|
$ |
117.1 |
|
|
Income tax payments |
$ |
48.1 |
|
$ |
56.4 |
|
|
Conversion of preferred equity
certificates to equity |
$ |
620.9 |
|
$ |
— |
|
|
Beneficial interest obtained
in exchange for factored receivables |
$ |
25.6 |
|
$ |
65.7 |
|
Adjusted EBITDA for each of our reportable
segments and in total is as follows:
(millions,
unaudited) |
Three Months Ended December 31, 2021 |
Three Months Ended December 31, 2020 |
Three Months Ended December 31, 2019 |
Institutional |
$ |
86.3 |
|
$ |
83.2 |
|
$ |
85.0 |
|
Food & Beverage |
|
32.4 |
|
|
28.0 |
|
|
28.4 |
|
Total Segment Adjusted EBITDA |
|
118.7 |
|
|
111.2 |
|
|
113.4 |
|
Corporate costs |
|
(9.2 |
) |
|
(14.9 |
) |
|
(19.1 |
) |
Consolidated Adjusted
EBITDA |
$ |
109.5 |
|
$ |
96.3 |
|
$ |
94.3 |
|
(millions) |
Year Ended December 31, 2021 |
Year Ended December 31, 2020 |
Year Ended December 31, 2019 |
Institutional |
$ |
319.8 |
|
$ |
336.4 |
|
$ |
296.4 |
|
Food & Beverage |
|
133.7 |
|
|
111.9 |
|
|
101.9 |
|
Total Segment Adjusted EBITDA |
|
453.5 |
|
|
448.3 |
|
|
398.3 |
|
Corporate costs |
|
(43.4 |
) |
|
(47.1 |
) |
|
(58.5 |
) |
Consolidated Adjusted
EBITDA |
$ |
410.1 |
|
$ |
401.2 |
|
$ |
339.8 |
|
The following tables reconcile net loss before income tax
provision to EBITDA and Adjusted EBITDA for the periods
presented:
(in
millions) |
Three Months Ended December 31, 2021 |
Three Months Ended December 31, 2020 |
Three Months Ended December 31, 2019 |
Loss before income tax provision |
$ |
(17.4 |
) |
$ |
(86.5 |
) |
$ |
(14.5 |
) |
Interest expense |
|
28.9 |
|
|
32.9 |
|
|
36.0 |
|
Interest income |
|
(7.0 |
) |
|
(1.3 |
) |
|
(2.4 |
) |
Amortization expense of
intangible assets acquired |
|
24.1 |
|
|
24.2 |
|
|
25.1 |
|
Depreciation expense included
in cost of sales |
|
20.7 |
|
|
25.1 |
|
|
22.9 |
|
Depreciation expense included
in selling, general and administrative expenses |
|
1.2 |
|
|
1.7 |
|
|
3.1 |
|
EBITDA |
|
50.5 |
|
|
(3.9 |
) |
|
70.2 |
|
Transition and transformation
costs and non-recurring costs(1) |
|
19.2 |
|
|
22.5 |
|
|
15.3 |
|
Restructuring and exit
costs(2) |
|
5.0 |
|
|
20.3 |
|
|
10.1 |
|
Foreign currency loss (gain)
related to Argentina subsidiaries(3) |
|
0.6 |
|
|
1.3 |
|
|
4.7 |
|
Adjustment for tax
indemnification asset(4) |
|
5.5 |
|
|
1.4 |
|
|
6.2 |
|
Merger and acquisition-related
cost (5) |
|
1.2 |
|
|
0.1 |
|
|
0.3 |
|
Acquisition accounting
adjustments(6) |
|
— |
|
|
— |
|
|
— |
|
Bain Capital management
fee(7) |
|
— |
|
|
1.9 |
|
|
1.9 |
|
Non-cash pension and other
post-employment benefit plan(8) |
|
(3.7 |
) |
|
(3.2 |
) |
|
(1.8 |
) |
Unrealized foreign currency
exchange loss (gain)(9) |
|
7.7 |
|
|
(7.5 |
) |
|
(1.1 |
) |
Factoring and securitization
fees(10) |
|
1.1 |
|
|
1.1 |
|
|
0.6 |
|
Share-based
compensation(11) |
|
15.9 |
|
|
66.3 |
|
|
3.0 |
|
Tax receivable agreement
adjustments(12) |
|
(14.2 |
) |
|
— |
|
|
— |
|
Gain on sale of business and
investments(13) |
|
— |
|
|
— |
|
|
(13.0 |
) |
Loss on extinguishment of
debt(14) |
|
— |
|
|
— |
|
|
— |
|
Realized foreign currency
exchange loss on debt refinancing(15) |
|
— |
|
|
— |
|
|
— |
|
COVID-19 inventory
charges(16) |
|
13.9 |
|
|
— |
|
|
— |
|
Other items(18) |
|
6.8 |
|
|
(4.0 |
) |
|
(2.1 |
) |
Consolidated Adjusted
EBITDA |
$ |
109.5 |
|
$ |
96.3 |
|
$ |
94.3 |
|
(in
millions) |
Year Ended December 31, 2021 |
Year Ended December 31, 2020 |
Year Ended December 31, 2019 |
Loss before income tax provisions |
|
(149.5 |
) |
$ |
(29.3 |
) |
$ |
(76.3 |
) |
Interest expense |
|
126.3 |
|
|
127.7 |
|
|
141.0 |
|
Interest income |
|
(9.9 |
) |
|
(5.9 |
) |
|
(7.5 |
) |
Amortization expense of
intangible assets acquired |
|
96.7 |
|
|
98.2 |
|
|
93.7 |
|
Depreciation expense included
in cost of sales |
|
82.7 |
|
|
89.5 |
|
|
84.4 |
|
Depreciation expense included
in selling, general and administrative expenses |
|
8.1 |
|
|
7.9 |
|
|
7.4 |
|
EBITDA |
|
154.4 |
|
|
288.1 |
|
|
242.7 |
|
Transition and transformation
costs and non-recurring costs(1) |
|
52.3 |
|
|
42.5 |
|
|
52.8 |
|
Restructuring and exit
costs(2) |
|
27.4 |
|
|
25.6 |
|
|
19.8 |
|
Foreign currency loss (gain)
related to Argentina subsidiaries(3) |
|
(2.1 |
) |
|
1.6 |
|
|
11.4 |
|
Adjustment for tax
indemnification asset(4) |
|
6.9 |
|
|
2.8 |
|
|
7.1 |
|
Merger and acquisition-related
cost (5) |
|
1.2 |
|
|
1.0 |
|
|
0.3 |
|
Acquisition accounting
adjustments(6) |
|
— |
|
|
— |
|
|
1.9 |
|
Bain Capital management
fee(7) |
|
19.4 |
|
|
7.5 |
|
|
7.5 |
|
Non-cash pension and other
post-employment benefit plan(8) |
|
(15.7 |
) |
|
(12.9 |
) |
|
(8.8 |
) |
Unrealized foreign currency
exchange loss (gain)(9) |
|
12.9 |
|
|
(25.1 |
) |
|
10.8 |
|
Factoring and securitization
fees(10) |
|
4.7 |
|
|
4.3 |
|
|
3.4 |
|
Share-based
compensation(11) |
|
115.2 |
|
|
67.5 |
|
|
3.0 |
|
Tax receivable agreement
adjustments(12) |
|
(10.1 |
) |
|
— |
|
|
— |
|
Gain on sale of business and
investments(13) |
|
— |
|
|
— |
|
|
(13.0 |
) |
Loss on extinguishment of
debt(14) |
|
15.6 |
|
|
— |
|
|
— |
|
Realized foreign currency
exchange loss on debt refinancing(15) |
|
4.5 |
|
|
— |
|
|
— |
|
COVID-19 inventory
charges(16) |
|
13.9 |
|
|
— |
|
|
— |
|
Other items(18) |
|
9.6 |
|
|
(1.7 |
) |
|
0.9 |
|
Consolidated Adjusted
EBITDA |
$ |
410.1 |
|
$ |
401.2 |
|
$ |
339.8 |
|
The following tables reconcile net loss to Adjusted Net Income
and basic and diluted loss per share to Adjusted EPS for the
periods presented:
|
Three Months Ended December 31, 2021 |
Three Months Ended December 31, 2020 |
Three Months Ended December 31, 2019 |
(in millions, except
per share amounts) |
Net Income (Loss) |
Basic and diluted EPS(21) |
Net Income (Loss) |
Basic and diluted EPS(21) |
Net Income (Loss) |
Basic and diluted EPS(21) |
Reported (GAAP) |
$ |
(35.7 |
) |
$ |
(0.11 |
) |
$ |
(71.8 |
) |
$ |
(0.30 |
) |
$ |
(44.6 |
) |
$ |
(0.18 |
) |
Amortization expense of
intangible assets acquired |
|
24.1 |
|
|
0.08 |
|
|
24.2 |
|
|
0.10 |
|
|
25.1 |
|
|
0.10 |
|
Transition and transformation
costs and non-recurring costs(1) |
|
19.2 |
|
|
0.06 |
|
|
22.5 |
|
|
0.09 |
|
|
15.3 |
|
|
0.06 |
|
Restructuring and exit
costs(2) |
|
5.0 |
|
|
0.02 |
|
|
20.3 |
|
|
0.08 |
|
|
10.1 |
|
|
0.04 |
|
Foreign currency loss (gain)
related to Argentina subsidiaries(3) |
|
0.6 |
|
|
— |
|
|
1.3 |
|
|
0.01 |
|
|
4.7 |
|
|
0.02 |
|
Adjustment for tax
indemnification asset(4) |
|
5.5 |
|
|
0.02 |
|
|
1.4 |
|
|
0.01 |
|
|
6.2 |
|
|
0.03 |
|
Merger and acquisition-related
cost (5) |
|
1.2 |
|
|
— |
|
|
0.1 |
|
|
— |
|
|
0.3 |
|
|
— |
|
Acquisition accounting
adjustments(6) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Bain Capital management
fee(7) |
|
— |
|
|
— |
|
|
1.9 |
|
|
0.01 |
|
|
1.9 |
|
|
0.01 |
|
Non-cash pension and other
post-employment benefit plan(8) |
|
(3.7 |
) |
|
(0.01 |
) |
|
(3.2 |
) |
|
(0.01 |
) |
|
(1.8 |
) |
|
(0.01 |
) |
Unrealized foreign currency
exchange loss (gain)(9) |
|
7.7 |
|
|
0.02 |
|
|
(7.5 |
) |
|
(0.03 |
) |
|
(1.1 |
) |
|
— |
|
Share-based
compensation(11) |
|
15.9 |
|
|
0.05 |
|
|
66.3 |
|
|
0.27 |
|
|
3.0 |
|
|
0.01 |
|
Tax receivable agreement
adjustments(12) |
|
(14.2 |
) |
|
(0.05 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Gain on sale of business and
investments(13) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(13.0 |
) |
|
(0.05 |
) |
Loss on extinguishment of
debt(14) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Realized foreign currency
exchange loss on debt refinancing(15) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
COVID-19 inventory
charges(16) |
|
13.9 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Accelerated expense of
deferred financing and original issue discount costs(17) |
|
4.9 |
|
|
0.02 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Other items(18) |
|
6.8 |
|
|
0.02 |
|
|
(4.0 |
) |
|
(0.02 |
) |
|
(2.1 |
) |
|
(0.01 |
) |
Tax effects related to
non-GAAP adjustments(19) |
|
(26.7 |
) |
|
(0.09 |
) |
|
(14.1 |
) |
|
(0.06 |
) |
|
(8.8 |
) |
|
(0.04 |
) |
Discrete tax
adjustments(20) |
|
26.7 |
|
|
0.09 |
|
|
(9.7 |
) |
|
(0.04 |
) |
|
20.5 |
|
|
0.08 |
|
Adjusted
(Non-GAAP) |
$ |
51.2 |
|
$ |
0.16 |
|
$ |
27.7 |
|
$ |
0.11 |
|
$ |
15.7 |
|
$ |
0.06 |
|
|
Year Ended December 31, 2021 |
Year Ended December 31, 2020 |
Year Ended December 31, 2019 |
(in millions, except
per share amounts) |
Net Income (Loss) |
Basic and diluted EPS(21) |
Net Income (Loss) |
Basic and diluted EPS(21) |
Net Income (Loss) |
Basic and diluted EPS(21) |
Reported (GAAP) |
$ |
(174.8 |
) |
$ |
(0.60 |
) |
$ |
(38.5 |
) |
$ |
(0.16 |
) |
$ |
(109.0 |
) |
$ |
(0.45 |
) |
Amortization expense of
intangible assets acquired |
|
96.7 |
|
|
0.33 |
|
|
98.2 |
|
|
0.40 |
|
|
93.7 |
|
|
0.39 |
|
Transition and transformation
costs and non-recurring costs(1) |
|
52.3 |
|
|
0.18 |
|
|
42.5 |
|
|
0.17 |
|
|
52.8 |
|
|
0.22 |
|
Restructuring and exit
costs(2) |
|
27.4 |
|
|
0.09 |
|
|
25.6 |
|
|
0.11 |
|
|
19.8 |
|
|
0.08 |
|
Foreign currency loss (gain)
related to Argentina subsidiaries(3) |
|
(2.1 |
) |
|
(0.01 |
) |
|
1.6 |
|
|
0.01 |
|
|
11.4 |
|
|
0.05 |
|
Adjustment for tax
indemnification asset(4) |
|
6.9 |
|
|
0.02 |
|
|
2.8 |
|
|
0.01 |
|
|
7.1 |
|
|
0.03 |
|
Merger and acquisition-related
cost (5) |
|
1.2 |
|
|
— |
|
|
1.0 |
|
|
— |
|
|
0.3 |
|
|
— |
|
Acquisition accounting
adjustments(6) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1.9 |
|
|
0.01 |
|
Bain Capital management
fee(7) |
|
19.4 |
|
|
0.07 |
|
|
7.5 |
|
|
0.03 |
|
|
7.5 |
|
|
0.03 |
|
Non-cash pension and other
post-employment benefit plan(8) |
|
(15.7 |
) |
|
(0.05 |
) |
|
(12.9 |
) |
|
(0.05 |
) |
|
(8.8 |
) |
|
(0.04 |
) |
Unrealized foreign currency
exchange loss (gain)(9) |
|
12.9 |
|
|
0.04 |
|
|
(25.1 |
) |
|
(0.10 |
) |
|
10.8 |
|
|
0.04 |
|
Share-based
compensation(11) |
|
115.2 |
|
|
0.40 |
|
|
67.5 |
|
|
0.28 |
|
|
3.0 |
|
|
0.01 |
|
Tax receivable agreement
adjustments(12) |
|
(10.1 |
) |
|
(0.03 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Gain on sale of business and
investments(13) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(13.0 |
) |
|
(0.05 |
) |
Loss on extinguishment of
debt(14) |
|
15.6 |
|
|
0.05 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Realized foreign currency
exchange loss on debt refinancing(15) |
|
4.5 |
|
|
0.02 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
COVID-19 inventory
charges(16) |
|
13.9 |
|
|
0.05 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Accelerated expense of
deferred financing and original issue discount costs(17) |
|
18.9 |
|
|
0.07 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Other items(18) |
|
9.6 |
|
|
0.03 |
|
|
(1.7 |
) |
|
(0.01 |
) |
|
0.9 |
|
|
— |
|
Tax effects related to
non-GAAP adjustments(19) |
|
(69.3 |
) |
|
(0.24 |
) |
|
(33.3 |
) |
|
(0.14 |
) |
|
(38.8 |
) |
|
(0.16 |
) |
Discrete tax
adjustments(20) |
|
29.3 |
|
|
0.10 |
|
|
(11.6 |
) |
|
(0.04 |
) |
|
23.9 |
|
|
0.10 |
|
Adjusted
(Non-GAAP) |
$ |
151.8 |
|
$ |
0.52 |
|
$ |
123.6 |
|
$ |
0.51 |
|
$ |
63.5 |
|
$ |
0.26 |
|
(1) In the period following the Diversey
Acquisition, we incurred costs primarily consisting of professional
and consulting services in such areas as information technology,
controllership, tax, treasury, transformation services, human
resources, procurement and supply chain in establishing ourselves
as a standalone company and to position ourselves for future
growth. Costs incurred in 2021 include those necessary in becoming
a publicly traded Company.
(2) Includes costs related to restructuring
programs and business exit activities. See Note 19 — Restructuring
and Exit Activities in the Notes to our Consolidated Financial
Statements included in our Annual Report on Form 10-K for
additional information.
(3) Effective July 1, 2018, Argentina was deemed
to have a highly inflationary economy and the functional currency
for our Argentina operations was changed from the Argentine Peso to
the United States dollar and remeasurement charges/credits are
recorded in our Consolidated Statements of Operations rather than
as a component of Cumulative Translation Adjustment on our
Consolidated Balance Sheets.
(4) In connection with the Diversey Acquisition,
the purchase agreement governing the transaction includes
indemnification provisions with respect to tax liabilities. The
offset to this adjustment is included in income tax provision. See
Note 15 - Income Taxes in the Notes to our Consolidated Financial
Statements included in our Annual Report on Form 10-K for
additional information.
(5) These costs consisted primarily of
investment banking, legal and other professional advisory services
costs.
(6) In connection with various acquisitions we
recorded fair value increases to our inventory. These amounts
represent the amortization of this increase.
(7) Represents fees paid to Bain Capital
pursuant a management agreement whereby we have received general
business consulting services; financial, managerial and operational
advice; advisory and consulting services with respect to selection
of advisors; advice in different fields; and financial and
strategic planning and analysis. The management agreement was
terminated in March 2021 pursuant to its terms upon the
consummation of the IPO, and we recorded a termination fee of $17.5
million during 2021.
(8) Represents the net impact of the expected
return on plan assets, interest cost, and settlement cost
components of net periodic defined benefit income related to our
defined benefit pension plans. See Note 14 - Retirement Plans in
the Notes to our Consolidated Financial Statements included in our
Annual Report on Form 10-K for additional information.
(9) Represents the unrealized foreign currency
exchange impact on our operations, primarily attributed to the
valuation of the U.S. Dollar-denominated debt held by our European
entity and our tax receivable agreement.
(10) On November 15, 2018, we entered into a
factoring Master Agreement with Factofrance, S.A. Additionally, on
April 22, 2020, the Company entered into a securitization
arrangement with PNC Bank to sell certain North American customer
receivables without recourse on a revolving basis. This amount
represents the fees to complete the sale of the receivables without
recourse. See Note 6 - Financial Statement Details to our
Consolidated Financial Statements included in our Annual Report on
Form 10-K for additional information.
(11) Represents compensation expense associated
with our Management Equity Incentive Plan and Long-Term Incentive
Plan awards. See Note 18 — Share-Based Compensation in the Notes to
our Consolidated Financial Statements included in our Annual Report
on Form 10-K for additional information.
(12) Represents the adjustment to our tax
receivable agreement liability primarily due to changes in tax laws
and changes in valuation allowances that impact the realizability
of the attributes of the tax receivable agreement. See Note 15 —
Income Taxes in the Notes to our Consolidated Financial Statements
included in our Annual Report on Form 10-K for additional
information
(13) Represents non-cash gain on sale of our
shares in connection with the Virox IP Acquisition. See Note 5 —
Acquisitions in the Notes to our Consolidated Financial Statements
included in our Annual Report on Form 10-K for additional
information.
(14) Represents the costs incurred in connection
with the redemption of the 2017 Senior Notes on September 29, 2021.
See Note 10 — Debt and Credit Facilities in the Notes to our
Consolidated Financial Statements included in our Annual Report on
Form 10-K for additional information.
(15) During 2021 the Company incurred a realized
foreign currency exchange loss of $4.5 million related to the
refinancing of the Senior Secured Credit Facilities. See Note 10 —
Debt and Credit Facilities in the Notes to our Consolidated
Financial Statements included in our Annual Report on Form 10-K for
additional information.
(16) Customer demand for COVID-related products
surged at the outset of COVID-19, and we met the rapidly increasing
demand and sold the vast majority of this inventory. However,
COVID-19 variant-related delays of customer reopenings and consumer
activity resulted in a small portion of excess inventory. The
Company recorded a charge of $13.9 million in the fourth quarter of
2021 for excess inventory and estimated disposal costs.
(17) Represents accelerated non-cash expense of
deferred financing costs and original issue discount costs as the
Company's U.S. Dollar Incremental Loan was fully repaid and the
Euro Term Loan was paid down significantly using proceeds from the
IPO.
(18) Includes other costs associated with
restructuring which are recorded within Cost of sales.
(19) The tax rate used to calculate the tax
impact of the pre-tax adjustments is based on the jurisdiction in
which the charge was recorded. (20) Represents adjustments related
to discrete tax items including uncertain tax positions, impacts
from rate changes in certain jurisdictions and changes in our
valuation allowance.
(21) For purposes of calculating earnings (loss)
per share the Company has retrospectively presented earnings (loss)
per share as if the Reorganization Transactions had occurred at the
beginning of the earliest period presented. Such retrospective
presentation reflects an increase of approximately 47.4 million
shares due to the exchange of shares in Constellation for shares in
the Company.
The following table represents net sales by segment:
(in millions, except
percentages) |
Institutional |
Food & Beverage |
Total |
Q4 2020 Net
Sales |
$ |
504.7 |
|
75.6 |
% |
$ |
162.7 |
|
24.4 |
% |
$ |
667.4 |
|
|
Organic change (non-U.S. GAAP) |
|
(6.9 |
) |
(1.4 |
)% |
|
21.1 |
|
13.0 |
% |
|
14.2 |
|
2.1 |
% |
Acquisition |
|
1.5 |
|
0.3 |
% |
|
8.3 |
|
5.1 |
% |
|
9.8 |
|
1.5 |
% |
Constant dollar change
(non-U.S. GAAP) |
|
(5.4 |
) |
(1.1 |
)% |
|
29.4 |
|
18.1 |
% |
|
24.0 |
|
3.6 |
% |
Foreign currency
translation |
|
(12.4 |
) |
(2.5 |
)% |
|
(6.6 |
) |
(4.1 |
)% |
|
(19.0 |
) |
(2.8 |
)% |
Total change |
|
(17.8 |
) |
(3.5 |
)% |
|
22.8 |
|
14.0 |
% |
|
5.0 |
|
0.7 |
% |
Q4 2021 Net
Sales |
$ |
486.9 |
|
72.4 |
% |
$ |
185.5 |
|
27.6 |
% |
$ |
672.4 |
|
|
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