Increasing full year 2020 financial outlook
Net sales of $1.2 billion, up 2% as
reported; up 3% constant currency Net earnings of $132
million, up 66%; EPS of $0.85, up 67%
Adjusted EBITDA of $259 million, up 8%; Adjusted
EPS of $0.82, up 28% Year to date cash flow from operations
of $410 million, up 63%
Sealed Air Corporation (NYSE: SEE) today announced financial
results for the third quarter 2020.
“We continue to navigate through the pandemic with a focus on
Zero Harm, business continuity and our purpose: ‘to protect, to
solve critical packaging challenges, and to leave our world better
than we found it’. Our broad portfolio, global scale and agility
have enabled us to effectively address evolving demands across our
end markets and geographies.
Despite challenges, earnings and cash flow from operations in
the first nine months of year are up significantly versus 2019,
which is a credit to our people, our customer relationships and the
strength and resilience of our business,” said Ted Doheny, Sealed
Air’s President and CEO.
“Our performance in 2020 reflects continued execution of our
Reinvent SEE business transformation. With markets moving to a more
‘touchless environment’, we are expanding our ‘SEE Automation’ and
sustainability solutions, which includes differentiated packaging
equipment, services, and materials. The direction we are taking the
business is strengthening our global leadership in food safety,
minimizing waste and protecting valuable goods.
We are increasing our full year 2020 sales, earnings and cash
flow guidance based on strong execution to date and higher growth
in e-Commerce, fulfillment and automated equipment,” continued
Doheny.
Unless otherwise stated, all results compare third quarter 2020
to third quarter 2019 results from continuing operations.
Year-over-year financial discussions present operating results from
continuing operations as reported. Year-over-year comparisons are
also made on an organic basis or constant dollar basis, which are
non-U.S. GAAP measures. Organic refers to changes in unit volume
and price performance and excludes acquisitions in the first year
after closing, divestiture activity and the impact of currency
translation. Constant dollar refers to changes in net sales and
earnings, excluding the impact of currency translation.
Additionally, non-U.S. GAAP adjusted financial measures, such as
Adjusted Earnings Before Interest Expense, Taxes, Depreciation and
Amortization ("Adjusted EBITDA"), Adjusted Net Earnings, Adjusted
Diluted Earnings Per Share ("Adjusted EPS") and Adjusted Tax Rate,
exclude the impact of specified items ("Special Items"), such as
restructuring charges, restructuring associated costs, gains and
losses related to acquisition and divestiture of businesses,
special tax items ("Tax Special Items") and certain infrequent or
one-time items. Please refer to the supplemental information
included with this press release for a reconciliation of U.S. GAAP
to Non-U.S. GAAP financial measures.
Business Highlights
In the third quarter, net sales in Food were $705 million, a
decrease of 3% as reported. Currency negatively impacted Food sales
by $15 million, or approximately 2%. On a constant dollar basis,
net sales were down 1%. Volume was down $14 million, or 2%, largely
due to softness in food service, partially offset by strength in
equipment. Price was favorable $4 million or 1%, due to US dollar
based-indexed pricing in South America. Adjusted EBITDA decreased
5% to $152 million, or 21.6% of net sales. The decrease in Adjusted
EBITDA was primarily attributable to lower sales volume and
unfavorable product mix, partially offset by Reinvent SEE
initiatives and favorable price/cost spread.
Third quarter net sales in Protective were $533 million, an
increase of 9% as reported. Currency had a positive impact on
Protective sales of $3 million, or 1%. On a constant dollar basis,
net sales increased $41 million, or 8%. The increase in net sales
was driven by higher organic volume of $21 million, or 4%, due to
strength in e-Commerce, fulfillment and automated equipment,
partially offset by declines in industrial segments. The Automated
Packaging Systems (“Automated”) acquisition contributed $24
million, or 5%, in acquisition sales, which represents one
incremental month of sales compared to the third quarter 2019
(acquisition closed in August 2019). Adjusted EBITDA of $109
million, or 20.4% of sales, increased 29% due to Reinvent SEE
initiatives, contributions from the Automated acquisition and
higher volume. In the third quarter 2019, Adjusted EBITDA of $84
million, or 17.2% of sales, included a $7 million non-cash
inventory step-up charge associated with the acquisition.
Third Quarter 2020 U.S. GAAP Summary
Net sales of $1.2 billion increased 2% as reported. Currency had
a negative impact on total net sales of $12 million or
approximately 1%.
Net earnings were $132 million, or $0.85 per diluted share.
Special Items, which were largely due to one-time net tax related
benefits, contributed $5 million to net earnings. This compares to
third quarter 2019 net earnings of $80 million, or $0.51 per
diluted share, which were unfavorably impacted by $20 million of
Special Items, including restructuring and restructuring associated
costs of $15 million, net of tax.
The effective tax rate in the third quarter 2020 was 11.7%,
compared to 22.3% in the third quarter 2019. The lower tax rate was
primarily the result of recently issued U.S. global intangible low
taxed income (GILTI) regulations.
The effective rate in the nine months ending September 30, 2020
was 21.5% compared to 27.9% for the same period in 2019. The
current year to date effective tax rate was favorably impacted by
the recently issued U.S. GILTI regulations and the resolution of
uncertain tax positions.
Third Quarter 2020 Non-U.S. GAAP Summary
Net sales increased 3% on a constant dollar basis. Contributions
from the Automated acquisition were $24 million or approximately
2%. Organic volume increased $8 million or 1%. North America and
Asia Pacific volumes were up 2% and 1%, respectively, while EMEA
and South America were down 2% and 3%, respectively.
Adjusted EBITDA was $259 million, or 21.0% of net sales in the
third quarter 2020 compared to $241 million, or 19.8% in 2019.
Currency fluctuations had an unfavorable impact of $2 million, or
1% in the third quarter 2020. The improvement in Adjusted EBITDA
was largely due to Reinvent SEE initiatives and favorable
price/cost spread.
The Adjusted Tax Rate was 20.6% in the third quarter 2020,
compared to 28.5% in the third quarter 2019. The adjusted tax rate
was favorably impacted by the recently issued U.S. GILTI
regulations.
The Adjusted Tax Rate was 25.3% in the nine months ending
September 30, 2020 compared to 25.5% for the same period in
2019.
Adjusted earnings per diluted share was $0.82 for the third
quarter 2020 compared to $0.64 in the third quarter 2019. The
increase in Adjusted EPS was attributable to higher Adjusted
EBITDA, lower Adjusted Tax Rate and lower net interest expense.
Cash Flow and Net Debt
Cash flow provided by operating activities for the nine months
ended September 30, 2020 was an inflow of $410 million, compared to
an inflow of $251 million for the nine months ended September 30,
2019. The increase in cash from operating activities was primarily
due to higher earnings and lower restructuring payments, partially
offset by increased net trade working capital investment. Capital
expenditures were $118 million for the nine months ended September
30, 2020 compared to $142 million in the same period last year.
Free Cash Flow, defined as net cash provided by operating
activities less capital expenditures was an inflow of $292 million
in the nine months ended September 30, 2020, compared to an inflow
of $110 million in the nine months ended September 30, 2019.
During the nine months ended September 30, 2020, the Company
paid cash dividends of $76 million and repurchased approximately
521,000 shares for $20 million.
Net Debt, defined as total debt less cash and cash equivalents,
was $3.4 billion as of September 30, 2020 compared to $3.6 billion
at December 31, 2019. As of September 30, 2020, Sealed Air had
approximately $1.4 billion of liquidity available, comprised of
$317 million of cash and $1,132 million of undrawn, committed
credit facilities. The Company does not have any debt maturities
until August 2022.
2020 Full Year Guidance
For the full year 2020, Sealed Air expects net sales of
approximately $4.85 billion, which is up 1% as reported and up 3%
in constant dollars. Foreign currency is now expected to have a
negative impact on net sales of approximately $90 million. This
compares to previous sales guidance of $4.725 billion to $4.775
billion, which included an estimated unfavorable currency impact of
approximately $120 million.
Adjusted EBITDA is expected to be approximately $1.04 billion,
which now includes an estimated unfavorable currency impact of $20
million. This compares to previous Adjusted EBITDA guidance of
$1.01 billion to $1.03 billion, which included an estimated
unfavorable currency impact of approximately $25 million.
Adjusted EPS is expected to be approximately $3.05, which is
based on approximately 156 million shares outstanding and an
anticipated Adjusted Tax Rate of approximately 26%. This compares
to previous guidance of $2.85 to $2.95 earnings per share and an
Adjusted Tax Rate of approximately 27%.
Free cash flow is expected to be approximately $450 million,
which compares to previous guidance of $350 million to $375
million. Capital expenditures are expected to be approximately $175
million compared to the previously provided range of $175 million
to $190 million. Restructuring payments are now expected to be
approximately $85 million compared to previously provided guidance
of approximately $100 million.
Conference Call Information
Sealed Air Corporation will host a conference call and webcast
on Wednesday, October 28, 2020 at 10:00 a.m. (ET) to discuss our
Third Quarter 2020 Results. The conference call will be webcast
live on the Investors homepage at www.sealedair.com/investors. A
replay of the webcast will also be available thereafter.
Business
Sealed Air is in business to protect, to solve critical
packaging challenges, and to leave our world better than we found
it. Our portfolio of leading packaging solutions includes CRYOVAC®
brand food packaging, SEALED AIR® brand protective packaging,
AUTOBAG® brand automated systems, and BUBBLE WRAP® brand packaging,
which collectively enable a safer, more efficient food supply chain
and protect valuable goods shipped around the world. Sealed Air
generated $4.8 billion in sales in 2019 and has approximately
16,500 employees who serve customers in 124 countries. To learn
more, visit www.sealedair.com.
Website Information
We routinely post important information for investors on our
website, www.sealedair.com, in the Investors section. We use this
website as a means of disclosing material, non-public information
and for complying with our disclosure obligations under Regulation
FD. Accordingly, investors should monitor the Investors section of
our website, in addition to following our press releases, SEC
filings, public conference calls, presentations and webcasts. The
information contained on, or that may be accessed through, our
website is not incorporated by reference into, and is not a part
of, this document.
Non-U.S. GAAP Information
In this press release and supplement, we have included several
non-U.S. GAAP financial measures, including Net Debt, Adjusted Net
Earnings and Adjusted EPS, net sales on an "organic" and a
“constant dollar” basis, Free Cash Flow, Adjusted EBITDA and
Adjusted Tax Rate, as our management believes these measures are
useful to investors. We present results and guidance, adjusted to
exclude the effects of Special Items and their related tax impact
that would otherwise be included under U.S. GAAP, to aid in
comparisons with other periods or prior guidance. In addition,
non-U.S. GAAP measures are used by management to review and analyze
our operating performance and, along with other data, as internal
measures for setting annual budgets and forecasts, assessing
financial performance, providing guidance and comparing our
financial performance with our peers and may also be used for
purposes of determining incentive compensation. The non-U.S. GAAP
information has limitations as an analytical tool and should not be
considered in isolation from or as a substitute for U.S. GAAP
information. It does not purport to represent any similarly titled
U.S. GAAP information and is not an indicator of our performance
under U.S. GAAP. Non-U.S. GAAP financial measures that we present
may not be comparable with similarly titled measures used by
others. Investors are cautioned against placing undue reliance on
these non-U.S. GAAP measures. For a reconciliation of these U.S.
GAAP measures to non-U.S. GAAP measures and other important
information on our use of non-U.S. GAAP financial measures, see the
attached supplementary information entitled “Condensed Consolidated
Statements of Cash Flows” (under the section entitled “Non-U.S.
GAAP Free Cash Flow”), “Reconciliation of Net Earnings and Net
Earnings Per Common Share to Non-U.S. GAAP Adjusted Net Earnings
and Non-U.S. GAAP Adjusted Net Earnings Per Common Share,”
“Reconciliation of Net Earnings to Non-U.S. GAAP Total Company
Adjusted EBITDA,” “Components of Change in Net Sales by Segment”
and “Components of Change in Net Sales by Region.” Information
reconciling forward-looking U.S. GAAP measures to non-U.S. GAAP
measures is not available without unreasonable effort.
We have not provided guidance for the most directly comparable
U.S. GAAP financial measures, as they are not available without
unreasonable effort due to the high variability, complexity, and
low visibility with respect to certain Special Items, including
restructuring charges, gains and losses related to acquisition and
divestiture of businesses, the ultimate outcome of certain legal or
tax proceedings, and other unusual gains and losses. 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
This press release contains “forward-looking statements” within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 concerning our business, consolidated
financial condition and results of operations. Forward-looking
statements are subject to risks and uncertainties, many of which
are outside our control, which could cause actual results to differ
materially from these statements. Therefore, you should not rely on
any of these forward-looking statements. Forward-looking statements
can be identified by such words as “anticipate,” “believe,” “plan,”
“assume,” “could,” “should,” “estimate,” “expect,” “intend,”
“potential,” “seek,” “predict,” “may,” “will” and similar
references to future periods. All statements other than statements
of historical facts included in this press release regarding our
strategies, prospects, financial condition, operations, costs,
plans and objectives are forward-looking statements. Examples of
forward-looking statements include, among others, statements we
make regarding expected future operating results, expectations
regarding the results of restructuring and other programs,
anticipated levels of capital expenditures and expectations of the
effect on our financial condition of claims, litigation,
environmental costs, contingent liabilities and governmental and
regulatory investigations and proceedings.
The following are important factors that we believe could cause
actual results to differ materially from those in our
forward-looking statements: global economic and political
conditions, currency translation and devaluation effects, changes
in raw material pricing and availability, competitive conditions,
the success of new product offerings, consumer preferences, the
effects of animal and food-related health issues, the effects of
epidemics or pandemics, including the Coronavirus Disease 2019
(COVID-19), changes in energy costs, environmental matters, the
success of our restructuring activities, the success of our
financial growth, profitability, cash generation and manufacturing
strategies and our cost reduction and productivity efforts, changes
in our credit ratings, the tax benefit associated with the
Settlement agreement (as defined in our 2019 Annual Report on Form
10-K), regulatory actions and legal matters and the other
information referenced in the “Risk Factors” section appearing in
our most recent Annual Report on Form 10-K, as filed with the
Securities and Exchange Commission, and as revised and updated by
our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Any forward-looking statement made by us is based only on
information currently available to us and speaks only as of the
date on which it is made. We undertake no obligation to publicly
update any forward-looking statement, whether written or oral, that
may be made from time to time, whether because of new information,
future developments or otherwise.
Sealed Air Corporation
Supplemental
Information
Condensed Consolidated
Statements of Operations(1)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(In USD millions, except per share
data)
2020
2019
2020
2019
Net sales
$
1,237.2
$
1,218.5
$
3,562.3
$
3,492.2
Cost of sales
832.7
826.5
2,377.4
2,356.7
Gross profit
404.5
392.0
1,184.9
1,135.5
Selling, general and administrative
expenses
199.3
221.6
577.9
699.9
Amortization expense of intangible assets
acquired
9.7
9.5
28.0
18.5
Restructuring charges
1.0
6.9
11.7
43.6
Operating profit
194.5
154.0
567.3
373.5
Interest expense, net
(43.0
)
(48.5
)
(130.7
)
(136.6
)
Foreign currency exchange loss due to
highly inflationary economies
(1.1
)
(1.3
)
(3.2
)
(3.4
)
Other (expense) income, net
(1.2
)
(1.9
)
7.9
1.3
Earnings before income tax provision
149.2
102.3
441.3
234.8
Income tax provision
17.4
22.8
94.7
65.5
Net earnings from continuing
operations
131.8
79.5
346.6
169.3
Gain (Loss) on sale of discontinued
operations, net of tax
2.2
(11.5
)
14.1
(10.6
)
Net earnings
$
134.0
$
68.0
$
360.7
$
158.7
Basic:
Continuing operations
$
0.85
$
0.52
$
2.23
$
1.10
Discontinued operations
0.01
(0.08
)
0.09
(0.07
)
Net earnings per common share -
basic
$
0.86
$
0.44
$
2.32
$
1.03
Diluted:
Continuing operations
$
0.85
$
0.51
$
2.22
$
1.09
Discontinued operations
0.01
(0.07
)
0.09
(0.07
)
Net earnings per common share -
diluted
$
0.86
$
0.44
$
2.31
$
1.02
Weighted average number of common shares
outstanding:
Basic
155.5
154.0
155.2
154.4
Diluted
156.1
154.8
155.8
155.2
(1)
The supplementary information included in
this press release for 2020 is preliminary and subject to change
prior to the filing of our upcoming Quarterly Report on Form 10-Q
with the Securities and Exchange Commission.
Sealed Air Corporation
Supplemental
Information
Condensed Consolidated Balance
Sheets(1)
(Unaudited)
(In USD millions)
September 30, 2020
December 31, 2019
Assets
Current assets:
Cash and cash equivalents
$
316.8
$
262.4
Trade receivables, net
582.7
556.5
Income tax receivables
15.2
32.8
Other receivables
65.9
80.3
Inventories, net
630.9
570.3
Current assets held for sale
0.7
2.8
Prepaid expenses and other current
assets
55.2
58.9
Total current assets
1,667.4
1,564.0
Property and equipment, net
1,136.4
1,141.9
Goodwill
2,207.7
2,216.9
Identifiable intangible assets, net
167.6
182.1
Deferred taxes
246.3
238.6
Operating lease right-of-use-assets
77.3
90.1
Other non-current assets
325.5
331.6
Total assets
$
5,828.2
$
5,765.2
Liabilities and Stockholders' Equity
(Deficit)
Current liabilities:
Short-term borrowings
$
7.4
$
98.9
Current portion of long-term debt
21.8
16.7
Current portion of operating lease
liabilities
24.3
26.2
Accounts payable
718.8
738.5
Accrued restructuring costs
17.0
29.5
Income tax payable
42.9
12.3
Other current liabilities
481.0
514.1
Total current liabilities
1,313.2
1,436.2
Long-term debt, less current portion
3,710.1
3,698.6
Long-term operating lease liabilities,
less current portion
54.5
65.7
Deferred taxes
31.5
30.7
Other non-current liabilities
694.4
730.2
Total liabilities
5,803.7
5,961.4
Stockholders’ equity (deficit):
Preferred stock
—
—
Common stock
23.2
23.2
Additional paid-in capital
2,082.7
2,073.5
Retained earnings
2,283.8
1,998.5
Common stock in treasury
(3,366.3
)
(3,382.4
)
Accumulated other comprehensive loss, net
of taxes
(998.9
)
(909.0
)
Total stockholders’ equity
(deficit)
24.5
(196.2
)
Total liabilities and stockholders’
equity (deficit)
$
5,828.2
$
5,765.2
(1)
The supplementary information included in
this press release for 2020 is preliminary and subject to change
prior to the filing of our upcoming Quarterly Report on Form 10-Q
with the Securities and Exchange Commission.
Calculation of Net
Debt(1)
(Unaudited)
(In USD millions)
September 30, 2020
December 31, 2019
Short-term borrowings
$
7.4
$
98.9
Current portion of long-term debt
21.8
16.7
Long-term debt, less current portion
3,710.1
3,698.6
Total debt
3,739.3
3,814.2
Less: cash and cash equivalents
(316.8
)
(262.4
)
Net Debt
$
3,422.5
$
3,551.8
(1)
The supplementary information included in
this press release for 2020 is preliminary and subject to change
prior to the filing of our upcoming Quarterly Report on Form 10-Q
with the Securities and Exchange Commission.
Sealed Air Corporation
Supplemental
Information
Condensed Consolidated
Statements of Cash Flows(1)
(Unaudited)
Nine Months Ended September
30,
(In USD millions)
2020
2019
Net earnings
$
360.7
$
158.7
Adjustments to reconcile net earnings to
net cash provided by operating activities(2)
178.2
172.7
Changes in operating assets and
liabilities:
Trade receivables, net
(35.2
)
(2.5
)
Inventories, net
(76.6
)
(44.0
)
Accounts payable
(14.9
)
(56.2
)
Customer advance payments
8.1
3.7
Income tax receivable/payable
47.8
16.6
Other assets and liabilities
(57.9
)
2.2
Net cash provided by operating
activities
$
410.2
$
251.2
Cash flows from investing activities:
Capital expenditures
(118.3
)
(141.6
)
Receipts (payments) associated with sale
of business and property and equipment
7.3
(2.7
)
Business acquired, net of cash
acquired
1.5
(452.6
)
Investment in marketable securities
13.9
(10.3
)
Settlement of foreign currency forward
contracts
(3.6
)
(8.2
)
Other investing activities
(1.9
)
—
Net cash used in investing
activities
$
(101.1
)
$
(615.4
)
Cash flows from financing activities:
Net (payments) proceeds of short-term
borrowings
(98.5
)
(19.7
)
Proceeds from long-term debt
—
474.6
Payments of long-term debt
(2.8
)
—
Dividends paid on common stock
(75.6
)
(74.4
)
Impact of tax withholding on share-based
compensation
(11.5
)
(10.8
)
Repurchases of common stock
(20.0
)
(67.3
)
Principal payments related to financing
leases
(8.7
)
(6.5
)
Other financing activities
—
(0.5
)
Net cash (used in) provided by
financing activities
$
(217.1
)
$
295.4
Effect of foreign currency exchange
rate changes on cash and cash equivalents
$
(37.6
)
$
(2.9
)
Cash and cash equivalents
262.4
271.7
Restricted cash and cash equivalents
—
—
Balance, beginning of period
$
262.4
$
271.7
Net change during the period
$
54.4
$
(71.7
)
Cash and cash equivalents
316.8
200.0
Restricted cash and cash equivalents
—
—
Balance, end of period
$
316.8
$
200.0
Non-U.S. GAAP Free Cash Flow:
Cash flow from operating activities
$
410.2
$
251.2
Capital expenditures for property and
equipment
(118.3
)
(141.6
)
Free Cash Flow
$
291.9
$
109.6
Supplemental Cash Flow Information:
Interest payments, net of amounts
capitalized
$
140.5
$
138.7
Income tax payments, net of cash
refunds
$
53.0
$
46.7
Restructuring payments including
associated costs
$
58.7
$
76.9
Non-cash items:
Transfers of shares of common
stock from treasury for profit-sharing contributions
$
24.4
$
21.9
(1)
The supplementary information included in
this press release for 2020 is preliminary and subject to change
prior to the filing of our upcoming Quarterly Report on Form 10-Q
with the Securities and Exchange Commission.
(2)
2020 adjustments primarily consist of
depreciation and amortization of $130 million, share based
compensation expense of $31 million and profit sharing expense of
$21 million. 2019 adjustments primarily consist of depreciation and
amortization of $107 million, share based compensation expense of
$24 million and profit sharing expense of $15 million.
Sealed Air Corporation
Supplemental
Information(1)
Reconciliation of Net Earnings
and Net Earnings Per Common Share to Non-U.S. GAAP Adjusted
Net Earnings and Non-U.S. GAAP
Adjusted Net Earnings Per Common Share
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
(In USD millions, except per share
data)
Net Earnings
Diluted EPS
Net Earnings
Diluted EPS
Net Earnings
Diluted EPS
Net Earnings
Diluted EPS
U.S. GAAP net earnings and diluted EPS
from continuing operations(2)
$
131.8
$
0.85
$
79.5
$
0.51
$
346.6
$
2.22
$
169.3
$
1.09
Special Items(3)
(4.7
)
(0.03
)
20.2
0.13
12.2
0.08
147.9
0.95
Non-U.S. GAAP adjusted net earnings and
adjusted diluted EPS from continuing operations
$
127.1
$
0.82
$
99.7
$
0.64
$
358.8
$
2.30
$
317.2
$
2.04
Weighted average number of common
shares outstanding - Diluted
156.1
154.8
155.8
155.2
(1)
The supplementary information included in
this press release for 2020 is preliminary and subject to change
prior to the filing of our upcoming Quarterly Report on Form 10-Q
with the Securities and Exchange Commission.
(2)
Net earnings per common share is
calculated under the two-class method.
(3)
Special Items include the following:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In USD millions, except per share
data)
2020
2019
2020
2019
Special Items:
Restructuring charges
$
1.0
$
6.9
$
11.7
$
43.6
Other restructuring associated
costs(i)
7.2
12.8
15.0
50.8
Foreign currency exchange loss due to
highly inflationary economies
1.1
1.3
3.2
3.4
Charges related to the Novipax settlement
agreement
—
—
—
59.0
Charges related to acquisition and
divestiture activity
1.0
6.0
5.1
9.2
Other Special Items
0.6
10.1
4.3
24.8
Pre-tax impact of Special Items
10.9
37.1
39.3
190.8
Tax impact of Special Items and Tax
Special Items
(15.6
)
(16.9
)
(27.1
)
(42.9
)
Net impact of Special Items
$
(4.7
)
$
20.2
$
12.2
$
147.9
Weighted average number of common
shares outstanding - Diluted
156.1
154.8
155.8
155.2
Loss per share impact from Special
Items
$
0.03
$
(0.13
)
$
(0.08
)
$
(0.95
)
(i)
Restructuring associated costs for the
three and nine months ended September 30, 2020 primarily relate to
fees paid to third-party consultants in support of Reinvent SEE.
Restructuring associated costs for the three and nine months ended
September 30, 2019 primarily relate to fees paid to third-party
consultants in support of Reinvent SEE and costs associated with
property consolidations and machinery and equipment relocations
resulting from Reinvent SEE.
The calculation of the non-U.S. GAAP Adjusted income tax rate is
as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In USD millions)
2020
2019
2020
2019
U.S. GAAP Earnings before income tax
provision from continuing operations
$
149.2
$
102.3
$
441.3
$
234.8
Pre-tax impact of special items
10.9
37.1
39.3
190.8
Non-U.S. GAAP Adjusted Earnings before
income tax provision from continuing operations
$
160.1
$
139.4
$
480.6
$
425.6
U.S. GAAP Income tax provision from
continuing operations
$
17.4
$
22.8
$
94.7
$
65.5
Tax Special Items
12.6
7.9
18.0
(3.8)
Tax impact of Special Items
3.0
9.0
9.1
46.7
Non-U.S. GAAP Adjusted Income tax
provision from continuing operations
$
33.0
$
39.7
$
121.8
$
108.4
U.S. GAAP Effective income tax rate
11.7
%
22.3
%
21.5
%
27.9
%
Non-U.S. GAAP Adjusted income tax rate
20.6
%
28.5
%
25.3
%
25.5
%
Sealed Air Corporation
Supplemental
Information(1)
Components of Change in Net
Sales by Segment
(Unaudited)
Three Months Ended September
30,
(In USD millions)
Food
Protective
Total Company
2019 Net Sales
$
729.6
59.9
%
$
488.9
40.1
%
$
1,218.5
Price
4.0
0.5
%
(4.7)
(1.0)
%
(0.7)
—
%
Volume(2)
(13.7)
(1.8)
%
21.4
4.4
%
7.7
0.6
%
Total organic change (non-U.S.
GAAP)(3)
(9.7)
(1.3)
%
16.7
3.4
%
7.0
0.6
%
Acquisitions
—
—
%
24.1
4.9
%
24.1
2.0
%
Total constant dollar change (non-U.S.
GAAP)(3)
(9.7)
(1.3)
%
40.8
8.3
%
31.1
2.6
%
Foreign currency translation
(15.3)
(2.1)
%
2.9
0.6
%
(12.4)
(1.1)
%
Total change (U.S. GAAP)
(25.0)
(3.4)
%
43.7
8.9
%
18.7
1.5
%
2020 Net Sales
$
704.6
57.0
%
$
532.6
43.0
%
$
1,237.2
Nine Months Ended September
30,
(In USD millions)
Food
Protective
Total Company
2019 Net Sales
$
2,120.6
60.7
%
$
1,371.6
39.3
%
$
3,492.2
Price
12.7
0.6
%
(10.9)
(0.8)
%
1.8
0.1
%
Volume(2)
4.5
0.2
%
(24.2)
(1.8)
%
(19.7)
(0.6)
%
Total organic change (non-U.S.
GAAP)(3)
17.2
0.8
%
(35.1)
(2.6)
%
(17.9)
(0.5)
%
Acquisitions
6.5
0.3
%
165.9
12.1
%
172.4
4.9
%
Total constant dollar change (non-U.S.
GAAP)(3)
23.7
1.1
%
130.8
9.5
%
154.5
4.4
%
Foreign currency translation
(76.2)
(3.6)
%
(8.2)
(0.6)
%
(84.4)
(2.4)
%
Total change (U.S. GAAP)
(52.5)
(2.5)
%
122.6
8.9
%
70.1
2.0
%
2020 Net Sales
$
2,068.1
58.1
%
$
1,494.2
41.9
%
$
3,562.3
(1)
The supplementary information included in
this press release for 2020 is preliminary and subject to change
prior to the filing of our upcoming Quarterly report on Form 10-Q
with the Securities and Exchange Commission.
(2)
Our volume reported above includes the net
impact of changes in unit volume as well as the period-to-period
change in the mix of products sold.
(3)
Total organic change is a non-U.S. GAAP
financial measure which excludes acquisition and divestiture
activity and the impact of foreign currency translation. Total
constant dollar change is a non-U.S. GAAP financial measure which
excludes the impact of foreign currency translation. Since we are a
U.S. domiciled company, we translate our foreign currency
denominated financial results into U.S. dollars. Due to changes in
the value of foreign currencies relative to the U.S. dollar,
translating our financial results from foreign currencies to U.S.
dollars may result in a favorable or unfavorable impact. It is
important that we consider the effects of foreign currency
translation when we view our results and plan our strategies.
Nonetheless, we cannot control changes in foreign currency exchange
rates. Consequently, when our management looks at our financial
results to measure the core performance of our business, we exclude
the impact of foreign currency translation by translating our
current period results at prior period foreign currency exchange
rates. We also may exclude the impact of foreign currency
translation when making incentive compensation determinations. As a
result, our management believes that these presentations are useful
internally and may be useful to our investors.
Sealed Air Corporation
Supplemental
Information(1)
Components of Change in Net
Sales by Region
(Unaudited)
Three Months Ended September
30,
(In USD millions)
North America
EMEA
APAC
South America
Total
2019 Net Sales
$
729.4
59.9
%
$
250.0
20.5
%
$
180.8
14.8
%
$
58.3
4.8
%
$
1,218.5
Price
(10.8)
(1.5)
%
0.9
0.4
%
(0.1)
(0.1)
%
9.3
16.0
%
(0.7)
—
%
Volume(2)
12.9
1.8
%
(5.7)
(2.3)
%
2.3
1.3
%
(1.8)
(3.1)
%
7.7
0.6
%
Total organic change (non-U.S.
GAAP)(3)
2.1
0.3
%
(4.8)
(1.9)
%
2.2
1.2
%
7.5
12.9
%
7.0
0.6
%
Acquisitions
19.0
2.6
%
4.6
1.8
%
0.5
0.3
%
—
—
%
24.1
2.0
%
Total constant dollar change (non-U.S.
GAAP)(3)
21.1
2.9
%
(0.2)
(0.1)
%
2.7
1.5
%
7.5
12.9
%
31.1
2.6
%
Foreign currency translation
(5.3)
(0.7)
%
5.9
2.4
%
3.8
2.1
%
(16.8)
(28.9)
%
(12.4)
(1.1)
%
Total change (U.S. GAAP)
15.8
2.2
%
5.7
2.3
%
6.5
3.6
%
(9.3)
(16.0)
%
18.7
1.5
%
2020 Net Sales
$
745.2
60.2
%
$
255.7
20.7
%
$
187.3
15.1
%
$
49.0
4.0
%
$
1,237.2
Nine Months Ended September
30,
(In USD millions)
North America
EMEA
APAC
South America
Total
2019 Net Sales
$
2,070.2
59.3
%
$
732.4
21.0
%
$
520.3
14.9
%
$
169.3
4.8
%
$
3,492.2
Price
(25.5)
(1.2)
%
(0.4)
—
%
(1.2)
(0.2)
%
28.9
17.1
%
1.8
0.1
%
Volume(2)
(10.4)
(0.5)
%
(15.1)
(2.1)
%
4.1
0.8
%
1.7
1.0
%
(19.7)
(0.6)
%
Total organic change (non-U.S.
GAAP)(3)
(35.9)
(1.7)
%
(15.5)
(2.1)
%
2.9
0.6
%
30.6
18.1
%
(17.9)
(0.5)
%
Acquisitions
133.5
6.4
%
33.0
4.5
%
5.6
1.0
%
0.3
0.2
%
172.4
4.9
%
Total constant dollar change (non-U.S.
GAAP)(3)
97.6
4.7
%
17.5
2.4
%
8.5
1.6
%
30.9
18.3
%
154.5
4.4
%
Foreign currency translation
(16.3)
(0.8)
%
(8.8)
(1.2)
%
(9.3)
(1.8)
%
(50.0)
(29.6)
%
(84.4)
(2.4)
%
Total change (U.S. GAAP)
81.3
3.9
%
8.7
1.2
%
(0.8)
(0.2)
%
(19.1)
(11.3)
%
70.1
2.0
%
2020 Net Sales
$
2,151.5
60.4
%
$
741.1
20.8
%
$
519.5
14.6
%
$
150.2
4.2
%
$
3,562.3
(1)
The supplementary information included in
this press release for 2020 is preliminary and subject to change
prior to the filing of our upcoming Quarterly Report on Form 10-Q
with the Securities and Exchange Commission.
(2)
Our volume reported above includes the net
impact of changes in unit volume as well as the period-to-period
change in the mix of products sold.
(3)
Total organic change is a non-U.S. GAAP
financial measure which excludes acquisition and divestiture
activity and the impact of foreign currency translation. Total
constant dollar change is a non-U.S. GAAP financial measure which
excludes the impact of foreign currency translation. Since we are a
U.S. domiciled company, we translate our foreign currency
denominated financial results into U.S. dollars. Due to changes in
the value of foreign currencies relative to the U.S. dollar,
translating our financial results from foreign currencies to U.S.
dollars may result in a favorable or unfavorable impact. It is
important that we take into account the effects of foreign currency
translation when we view our results and plan our strategies.
Nonetheless, we cannot control changes in foreign currency exchange
rates. Consequently, when our management looks at our financial
results to measure the core performance of our business, we exclude
the impact of foreign currency translation by translating our
current period results at prior period foreign currency exchange
rates. We also may exclude the impact of foreign currency
translation when making incentive compensation determinations. As a
result, our management believes that these presentations are useful
internally and may be useful to our investors.
Sealed Air Corporation
Supplemental
Information(1)
Segment Information
Reconciliation of Net Earnings
to Non-U.S. GAAP Total Company Adjusted EBITDA
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In USD millions)
2020
2019
2020
2019
Net Sales:
Food
$
704.6
$
729.6
$
2,068.1
$
2,120.6
As a % of Total Company net sales
57.0
%
59.9
%
58.1
%
60.7
%
Protective
532.6
488.9
1,494.2
1,371.6
As a % of Total Company net sales
43.0
%
40.1
%
41.9
%
39.3
%
Total Company Net Sales
$
1,237.2
$
1,218.5
$
3,562.3
$
3,492.2
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In USD millions)
2020
2019
2020
2019
Adjusted EBITDA from continuing
operations:
Food
$
152.4
$
159.6
$
477.8
$
458.1
Adjusted EBITDA Margin
21.6
%
21.9
%
23.1
%
21.6
%
Protective
108.7
84.0
293.0
243.0
Adjusted EBITDA Margin
20.4
%
17.2
%
19.6
%
17.7
%
Corporate
(1.8
)
(2.5
)
1.6
(7.5
)
Non-U.S. GAAP Total Company Adjusted
EBITDA from continuing operations
$
259.3
$
241.1
$
772.4
$
693.6
Adjusted EBITDA Margin
21.0
%
19.8
%
21.7
%
19.9
%
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In USD millions)
2020
2019
2020
2019
U.S. GAAP Net earnings from continuing
operations
131.8
79.5
346.6
169.3
Interest expense, net
43.0
48.5
130.7
136.6
Income tax provision
17.4
22.8
94.7
65.5
Depreciation and amortization, net of
adjustments(2)
56.2
53.2
161.1
131.4
Special Items:
Restructuring charges(3)
1.0
6.9
11.7
43.6
Other restructuring associated costs
7.2
12.8
15.0
50.8
Foreign currency exchange loss due to
highly inflationary economies
1.1
1.3
3.2
3.4
Charges related to the Novipax settlement
agreement
—
—
—
59.0
Charges related to acquisition and
divestiture activity
1.0
6.0
5.1
9.2
Other Special Items
0.6
10.1
4.3
24.8
Pre-tax impact of Special items
10.9
37.1
39.3
190.8
Non-U.S. GAAP Total Company Adjusted
EBITDA from continuing operations
$
259.3
$
241.1
$
772.4
$
693.6
(1)
The supplementary information included in
this press release for 2020 is preliminary and subject to change
prior to the filing of our upcoming Quarterly Report on Form 10-Q
with the Securities and Exchange Commission.
(2)
Depreciation and amortization by segment
are as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In USD millions)
2020
2019
2020
2019
Food
$
31.7
$
30.6
$
90.9
$
81.8
Protective
24.5
22.7
70.2
50.7
Total Company depreciation and
amortization(i)
$
56.2
$
53.3
$
161.1
$
132.5
Depreciation and amortization
adjustments
—
(0.1
)
—
(1.1
)
Depreciation and amortization, net of
adjustments
$
56.2
$
53.2
$
161.1
$
131.4
(i)
Includes share-based incentive
compensation of $12.3 million and $31.3 million for the three and
nine months ended September 30, 2020, respectively, and $12.0
million and $25.2 million for the three and nine months ended
September 30, 2019, respectively.
(3)
Restructuring charges by segment is as
follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In USD millions)
2020
2019
2020
2019
Food
$
(1.4
)
$
3.9
$
3.8
$
26.3
Protective
2.4
3.0
7.9
17.3
Total Company restructuring
charges
$
1.0
$
6.9
$
11.7
$
43.6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201028005357/en/
Company Contacts Investor Relations Lori Chaitman
lori.chaitman@sealedair.com 516.458.4455 Media Christina
Griffin christina.griffin@sealedair.com 704.430.5742
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