Pactiv Evergreen Inc. (“Pactiv Evergreen” or the “Company”) today
reported results for the fourth quarter of 2022. Michael King,
President and Chief Executive Officer of Pactiv Evergreen, said,
“the Company exited the year on solid footing with results
exceeding its prior guidance with continued focus on operational
performance and delivering high service levels to customers. The
Company reported an expected sequential decline in its operating
results amid ongoing inflationary pressure on the consumer,
combined with seasonal trends and the sale of its Beverage
Merchandising Asia business in the third quarter. Net income from
continuing operations declined compared to the third quarter
primarily due to the gain recognized from the sale of Beverage
Merchandising Asia. Adjusted EBITDA1 declined as expected, driven
by the aforementioned volume softness and higher manufacturing
spend mostly related to cost impacts of Winter Storm Elliott and a
scheduled mill outage.
The Company completed another productive year
during 2022 by executing on its strategy to focus on its core
business, completing the integration of Fabri-Kal and exceeding
targeted synergies, stabilizing its labor force, investing in
inventory to return to target levels, improving equipment
effectiveness and production throughput and managing price amid a
challenging inflationary environment, all while continuing to
improve service levels and de-lever the balance sheet. The Company
remains cautious due to the continued elevated levels of inflation
and resulting pressures in the market as well as their potential
impact on end market demand. In addition, today we announced that
we are taking actions to restructure our Beverage Merchandising
segment and reorganize the Company’s management structure. These
actions are consistent with our stated strategy of focusing on our
distinctive core strength to enhance and accelerate our position as
the market-leading North American Food & Beverage packaging
company.”
Jon Baksht, Chief Financial Officer of Pactiv
Evergreen, added, “the Company continues to focus on deleveraging
the balance sheet by both improving its operations across the
enterprise and managing its cash and outstanding debt levels. The
Company took additional actions to de-lever and reduce interest
rate risk during the fourth quarter of 2022 by repurchasing a total
of $92 million in aggregate principal of its 7.95% and 8.375%
debentures due in 2025 and 2027 at 97% of par. As of year-end 2022,
the Company’s total debt was $4.1 billion, and its Net Debt2 was
$3.6 billion, down from prior year levels. While the path of future
interest rates remains uncertain, the Company also executed $1
billion of notional amount in interest rate swaps to lock in
certain portions of its variable rate debt thereby reducing cash
flow volatility. This focus has continued into 2023 as the Company
repaid and repurchased an aggregate of $110 million of its U.S.
term loans Tranche B-2 during January and February of
2023.”
1 Adjusted EBITDA is a non-GAAP measure. All
references to Adjusted EBITDA are references to Adjusted EBITDA
from continuing operations. Refer to its definition in the
discussion on non-GAAP financial measures and the accompanying
reconciliation below.
2 Net Debt is a non-GAAP measure. Refer to its
definition in the discussion on non-GAAP financial measures and the
accompanying reconciliation below.
Beverage Merchandising Restructuring
Pactiv Evergreen plans to take significant
restructuring actions related to its Beverage Merchandising
operations. The Company expects to close its Canton, North Carolina
mill and its converting facility in Olmsted Falls, Ohio with
operations at both facilities expected to end during the second
quarter of 2023. Production from the Olmsted Falls facility will be
reallocated to other sites. The Company also continues to explore
strategic alternatives for its Pine Bluff, Arkansas mill and
Waynesville, North Carolina facility. The Company has not set a
timetable in relation to this process. In addition, the Company
plans to reorganize its management structure by combining the
Beverage Merchandising and Food Merchandising businesses effective
April 1, 2023.
“As we continue to confront a challenging market
environment for our Beverage Merchandising business, we are faced
with these difficult decisions that directly impact our employees,”
said Mr. King. “We assess all changes to the business with
considerable thought for our employees, customers, shareholders and
communities, and do not take these decisions lightly. We remain
committed to doing what's right, treating everyone with respect,
and delivering on all of our commitments to our people, customers,
shareholders and the communities where we operate.”
Approximately 1,300 positions will be eliminated
as a result of these actions. The Company will provide outplacement
assistance and severance to impacted employees, consistent with
Company policy and labor union agreements.
As a result of the closures and change in
management structure, we expect to incur non-cash charges in the
range of $310 million to $330 million primarily during 2023 related
to the acceleration of depreciation of plant and equipment and
other asset impairments. We also expect to incur and pay cash
charges in the range of $130 million to $185 million primarily
during 2023 and 2024 related to severance and associated benefits
and exit and disposal and other transition costs.
All the above estimates are provisional and
include significant management judgments and assumptions that could
change materially as we execute our plans. Actual results may
differ from these estimates, and the execution of our plan
could result in additional restructuring charges or impairments not
reflected above.
“The strategic actions we are announcing today
will reduce our capital expenditures and overhead costs. We expect
these proactive steps to position us to remain competitive in the
liquid packaging market and gain additional synergies from the
further integration of our businesses. We are targeting an
annualized reduction in our costs of approximately $30 million and
a reduction of approximately $50 million in capital expenditures,
with full annualized run rate of these benefits expected to be
realized beginning in 2024,” concluded Mr. King.
Fourth Quarter 2022 Results vs. Fourth
Quarter 2021 Results
Net revenues in the fourth quarter of 2022 were
$1,476 million compared to $1,527 million in the fourth quarter of
2021. The decrease was primarily due to lower sales volume, largely
due to the market softening amid inflationary pressures across all
segments, a focus on value over volume and the strategic exit from
the coated groundwood business in the Beverage Merchandising
segment in December 2021. In addition, the disposition of Beverage
Merchandising Asia on August 2, 2022 contributed to the decrease in
net revenues. These decreases were partially offset by favorable
pricing, due to the contractual pass-through of higher material
costs and pricing actions across all segments.
Net income from continuing operations was $27
million in the fourth quarter of 2022 compared to $34 million in
the fourth quarter of 2021. The decrease was primarily due to a $27
million increase in selling, general and administrative expenses,
primarily driven by higher employee-related costs, $16 million of
lower income associated with our pension plans and a $10 million
increase in interest expense, primarily driven by higher interest
rates on our variable rate term loans. These decreases were
partially offset by a $33 million decrease in tax expense and $12
million of higher gross profit, largely driven by favorable
pricing, net of higher material and manufacturing costs and lower
sales volume.
Adjusted EBITDA1 was $167 million in the fourth
quarter of 2022 compared to $205 million in the fourth quarter of
2021. The decrease reflects higher manufacturing costs, lower sales
volume and higher employee-related costs, partially offset by
favorable pricing, net of material costs passed through. Higher
costs included $8 million related to the impact of Winter Storm
Elliott and $8 million related to a scheduled cold mill outage.
Segment Results
Foodservice
|
For the Three Months Ended December 31, |
|
|
Components of Change in Net Revenues |
|
(In millions, except
for %) |
2022 |
|
|
2021 |
|
|
Change |
|
|
% Change |
|
|
Price/Mix |
|
|
Volume |
|
|
FX |
|
Total segment net revenues |
$ |
673 |
|
|
$ |
722 |
|
|
$ |
(49 |
) |
|
(7 |
)% |
|
6 |
% |
|
(12 |
)% |
|
(1 |
)% |
Segment Adjusted EBITDA |
$ |
90 |
|
|
$ |
104 |
|
|
$ |
(14 |
) |
|
(13 |
)% |
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA
margin |
|
13 |
% |
|
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The decrease in net revenues was primarily due
to lower sales volume due to a continued focus on value over volume
and the market softening amid inflationary pressures. The decrease
was partially offset by favorable pricing, primarily due to the
contractual pass-through of higher material costs and pricing
actions taken to offset higher input costs.
The decrease in Adjusted EBITDA was primarily
due to lower sales volume and higher manufacturing and
employee-related costs, partially offset by favorable pricing, net
of material costs passed through.
Food Merchandising
|
For the Three Months Ended December 31, |
|
|
Components of Change in Net Revenues |
|
(In millions, except
for %) |
2022 |
|
|
2021 |
|
|
Change |
|
% Change |
|
|
Price/Mix |
|
|
Volume |
|
|
FX |
|
Total segment net revenues |
$ |
447 |
|
|
$ |
410 |
|
|
$ |
37 |
|
9 |
% |
|
16 |
% |
|
(8 |
)% |
|
1 |
% |
Segment Adjusted EBITDA |
$ |
83 |
|
|
$ |
69 |
|
|
$ |
14 |
|
20 |
% |
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA
margin |
|
19 |
% |
|
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The increase in net revenues was primarily due
to favorable pricing, due to pricing actions taken to offset higher
input costs and the contractual pass-through of higher material
costs, partially offset by lower sales volume, primarily due to the
market softening amid inflationary pressures.
The increase in Adjusted EBITDA was primarily
due to favorable pricing, net of material costs passed through,
partially offset by higher manufacturing costs, lower sales volume
and higher employee-related costs.
Beverage Merchandising
|
For the Three Months Ended December 31, |
|
|
Components of Change in Net Revenues |
|
(In millions, except
for %) |
2022 |
|
|
2021 |
|
|
Change |
|
|
% Change |
|
|
Price/Mix |
|
|
Volume |
|
|
Dispositions |
|
Total segment net revenues |
$ |
385 |
|
|
$ |
412 |
|
|
$ |
(27 |
) |
|
(7 |
)% |
|
13 |
% |
|
(10 |
)% |
|
(10 |
)% |
Segment Adjusted EBITDA |
$ |
21 |
|
|
$ |
45 |
|
|
$ |
(24 |
) |
|
(53 |
)% |
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA
margin |
|
5 |
% |
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The decrease in net revenues was primarily due
to the impact from the disposition of Beverage Merchandising Asia
and lower sales volume, primarily due to the market softening amid
inflationary pressures and the strategic exit from the coated
groundwood business in December 2021. The decrease was partially
offset by favorable pricing, due to pricing actions taken to offset
higher input costs and the contractual pass-through of higher
material costs.
The decrease in Adjusted EBITDA was primarily
due to higher manufacturing and employee-related costs and the
impact from the disposition of Beverage Merchandising Asia. These
items were partially offset by favorable pricing, net of material
costs passed through. Higher costs included $8 million of
additional costs incurred related to the impact of Winter Storm
Elliott and $8 million related to a scheduled cold mill outage.
Fourth Quarter 2022 Results vs. Third Quarter 2022
Results
Net revenues in the fourth quarter of 2022 were
$1,476 million compared to $1,609 million in the third quarter of
2022. The decrease was primarily due to lower sales volumes,
primarily due to the market softening amid inflationary pressures
across all segments as well as seasonal trends in the Foodservice
and Food Merchandising segments. In addition, the disposition of
Beverage Merchandising Asia on August 2, 2022 contributed to the
decrease in net revenues. These decreases were partially offset by
favorable pricing, primarily due to the contractual pass-through of
higher material costs, in the Food Merchandising and Beverage
Merchandising segments.
Net income from continuing operations was $27
million in the fourth quarter of 2022 compared to $175 million in
the third quarter of 2022. The decrease was primarily due to the
$239 million gain on the sale of Beverage Merchandising Asia and a
$47 million pension settlement gain in the third quarter that did
not recur. These decreases were partially offset by a $90 million
decrease in tax expense, primarily attributable to the third
quarter gain on the sale of Beverage Merchandising Asia, and a $56
million asset impairment charge related to the strategic decision
to exit the remaining closures businesses in the third quarter that
did not recur.
Adjusted EBITDA1 was $167 million in the fourth
quarter of 2022 compared to $187 million in the third quarter of
2022. The decrease was due to lower sales volume and higher
manufacturing costs, partially offset by favorable pricing. Higher
costs included $8 million related to the impact of Winter Storm
Elliott and $8 million related to a scheduled cold mill outage.
Segment Results
Foodservice
|
For the Three Months Ended |
|
|
|
|
|
|
|
December 31, |
|
|
September 30, |
|
|
|
|
|
|
|
|
Components of Change in Net Revenues |
|
(In millions, except
for %) |
2022 |
|
|
2022 |
|
|
Change |
|
|
% Change |
|
|
Price/Mix |
|
Volume |
|
Total segment net revenues |
$ |
673 |
|
|
$ |
756 |
|
|
$ |
(83 |
) |
|
(11 |
)% |
|
(2 |
)% |
(9 |
)% |
Segment Adjusted EBITDA |
$ |
90 |
|
|
$ |
113 |
|
|
$ |
(23 |
) |
|
(20 |
)% |
|
|
|
|
|
Segment Adjusted EBITDA
margin |
|
13 |
% |
|
|
15 |
% |
|
|
|
|
|
|
|
|
|
|
|
The decrease in net revenues was primarily due
to lower sales volume due to the market softening amid inflationary
pressures and seasonal trends.
The decrease in Adjusted EBITDA was primarily
due to lower sales volume.
Food Merchandising
|
For the Three Months Ended |
|
|
|
|
|
|
|
|
December 31, |
|
|
September 30, |
|
|
|
|
|
|
|
|
Components of Change in Net Revenues |
|
(In millions, except
for %) |
2022 |
|
|
2022 |
|
|
Change |
|
|
% Change |
|
|
Price/Mix |
|
|
Volume |
|
Total segment net revenues |
$ |
447 |
|
|
$ |
455 |
|
|
$ |
(8 |
) |
|
(2 |
)% |
|
4 |
% |
|
(6 |
)% |
Segment Adjusted EBITDA |
$ |
83 |
|
|
$ |
70 |
|
|
$ |
13 |
|
|
19 |
% |
|
|
|
|
|
|
Segment Adjusted EBITDA
margin |
|
19 |
% |
|
|
15 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
The decrease in net revenues was primarily due
to lower sales volume, primarily due to seasonal trends and the
market softening amid inflationary pressures, partially offset by
favorable pricing, arising from the contractual pass-through of
higher material costs and pricing actions taken to offset higher
input costs.
The increase in Adjusted EBITDA was primarily
due to favorable pricing, partially offset by lower sales
volume.
Beverage Merchandising
|
For the Three Months Ended |
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
September 30, |
|
|
|
|
|
|
|
|
Components of Change in Net Revenues |
|
(In millions, except
for %) |
2022 |
|
|
2022 |
|
|
Change |
|
|
% Change |
|
|
Price/Mix |
|
|
Volume |
|
|
Dispositions |
|
Total segment net revenues |
$ |
385 |
|
|
$ |
422 |
|
|
$ |
(37 |
) |
|
(9 |
)% |
|
2 |
% |
|
(8 |
)% |
|
(3 |
)% |
Segment Adjusted EBITDA |
$ |
21 |
|
|
$ |
26 |
|
|
$ |
(5 |
) |
|
(19 |
)% |
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA
margin |
|
5 |
% |
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The decrease in net revenues was primarily due
to lower sales volume, primarily due to the market softening amid
inflationary pressures, and the impact from the disposition of
Beverage Merchandising Asia, partially offset by favorable pricing,
arising from the contractual pass through of higher material
costs.
The decrease in Adjusted EBITDA was primarily
due to higher manufacturing costs and lower sales volume, partially
offset by favorable pricing and insurance proceeds related to
Winter Storm Uri. Higher costs included $8 million of additional
costs incurred related to the impact of Winter Storm Elliott and $8
million related to a scheduled cold mill outage.
Balance Sheet and Cash Flow
Highlights
The Company continues to focus on strengthening
its balance sheet. The Company’s Free Cash Flow3 improved compared
to the third quarter of 2022, primarily due to the completion of
the strategic inventory build and the timing of cash collections.
The Company paid dividends to shareholders of $0.40 per share
during the year ended December 31, 2022. The Company’s Board
of Directors declared a fourth quarter 2022 dividend on March 2,
2023 of $0.10 per share of common stock, payable on March 24, 2023
to shareholders of record as of March 17, 2023.
(In
millions) |
As of December 31, 2022 |
|
|
(In
millions) |
For the Three Months Ended December 31, 2022 |
|
Total outstanding debt |
$ |
4,136 |
|
|
Net cash flow provided by operating activities |
$ |
173 |
|
Cash and cash equivalents |
|
(531 |
) |
|
Capital expenditures |
|
(89 |
) |
Net Debt2 |
$ |
3,605 |
|
|
Free Cash Flow3 |
$ |
84 |
|
Outlook
The Company is unable to provide a
reconciliation of forward-looking Adjusted EBITDA without
unreasonable effort because of the uncertainty and potential
variability in amount and timing of our restructuring, asset
impairment and other related charges (such as those we expect to
arise from the anticipated Beverage Merchandising Restructuring),
non-cash pension income or expense, unrealized gains or losses on
derivatives and foreign exchange gains or losses on cash, which are
reconciling items between GAAP net income from continuing
operations and Adjusted EBITDA and could significantly impact GAAP
results.
“I am pleased with the Company's performance
during 2022 and excited about our opportunities for growth. While
we expect to be faced with many challenges during 2023 such as
ongoing inflationary pressures on the consumer and the potential
for a slowdown in the broader economy, we continue to take actions
to further enhance our business. The announced restructuring of our
business will likely also come with a unique set of challenges, but
we expect it to enable us to further grow our business and improve
our operating results upon completion. With this context in mind,
the Company is providing Adjusted EBITDA1 guidance in the range of
$755 million to $780 million for full year 2023 and approximately
$160 million for the first quarter of 2023,” said Mr. King.
Conference Call and Webcast Presentation
The Company will host a conference call and
webcast presentation to discuss these results on March 7, 2023
at 8:30 a.m. U.S. Eastern Time. Investors interested in
participating in the live call may dial (877) 300-9306 from the
U.S. or (412) 542-4176 internationally and use access code 1063220.
Participants may also access the live webcast and supplemental
presentation on the Pactiv Evergreen Investor Relations website at
https://investors.pactivevergreen.com/financial-information/sec-filings
under “News & Events.” The Company may from time to time use
this Investor Relations website as a means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD.
About Pactiv Evergreen Inc.
Pactiv Evergreen Inc. (NASDAQ: PTVE) is a leading manufacturer and
distributor of fresh foodservice and food merchandising products
and fresh beverage cartons in North America. With a team of
approximately 16,000 employees, the Company produces a broad range
of on-trend and feature-rich products that protect, package and
display food and beverages for today’s consumers. Its products,
many of which are made with recycled, recyclable or renewable
materials, are sold to a diversified mix of customers, including
restaurants, foodservice distributors, retailers, food and beverage
producers, packers and processors. Learn more at
www.pactivevergreen.com.
3 Free Cash Flow is a non-GAAP measure. Refer to
its definition in the discussion on non-GAAP financial measures
below.
Note to Investors Regarding
Forward-Looking Statements
This press release contains forward-looking
statements. All statements contained in this press release other
than statements of historical fact are forward-looking statements,
including statements regarding our guidance as to our future
financial and operational results, our expectations regarding
consumers’ demand and the duration and severity of ongoing
macroeconomic challenges and our plans regarding the restructuring
of our Beverage Merchandising operations announced today, including
as they relate to the impacted facilities, planned restructuring
activities, expected timelines, affected positions, amount and type
of cash and non-cash charges that we expect to incur and the timing
thereof and the impact of the restructuring on our competitive
position and realization of synergies. In some cases, you can
identify these statements by forward-looking words such as “may,”
“might,” “will,” “should,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential,” “likely” or
“continue,” the negative of these terms and other comparable
terminology. These statements are only predictions based on our
expectations and projections about future events as of the date of
this press release and are subject to a number of risks,
uncertainties and assumptions that may prove incorrect, any of
which could cause actual results to differ materially from those
expressed or implied by such statements, including, among others,
those described under the heading “Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2021 filed with
the Securities and Exchange Commission, or SEC, our Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2022, June
30, 2022 and September 30, 2022 filed with the SEC and our Annual
Report on Form 10-K for the year ended December 31, 2022 to be
filed with the SEC. New risks emerge from time to time, and it is
not possible for our management to predict all risks, nor can
management assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statement the Company makes. Investors are
cautioned not to place undue reliance on any such forward-looking
statements, which speak only as of the date they are made. Except
as otherwise required by law, the Company undertakes no obligation
to update any forward-looking statement, whether as a result of new
information, future events or otherwise.
Use of Non-GAAP Financial Measures
The Company uses the following financial
measures that are not calculated in accordance with generally
accepted accounting principles in the United States (“GAAP”):
Adjusted EBITDA, Free Cash Flow and Net Debt. The Company defines
Adjusted EBITDA as net income from continuing operations calculated
in accordance with GAAP plus the sum of income tax expense
(benefit), net interest expense, depreciation and amortization and
further adjusted to exclude certain items, including but not
limited to restructuring, asset impairment and other related
charges, gains on the sale of businesses and noncurrent assets,
non-cash pension income or expense, operational process
engineering-related consultancy costs, business acquisition and
integration costs and purchase accounting adjustments, unrealized
gains or losses on derivatives, foreign exchange losses on cash,
executive transition charges and gains or losses on certain legal
settlements. The Company defines Free Cash Flow as net cash
provided by operating activities less capital expenditures. The
Company defines Net Debt as the sum of current and long-term debt,
less cash and cash equivalents.
The Company has provided herein a reconciliation
of (i) net income from continuing operations to Adjusted EBITDA,
(ii) net cash provided by operating activities to Free Cash Flow
and (iii) total debt to Net Debt, in each case representing the
most directly comparable GAAP financial measures.
The Company presents Adjusted EBITDA to assist
it in comparing performance from period to period and as a measure
of operational performance. It is also a key measure used by its
management team to generate future operating plans, make strategic
decisions and incentivize and reward its employees. In addition,
its management uses the Adjusted EBITDA of each reportable segment
to evaluate its respective operating performance. Accordingly, the
Company believes that Adjusted EBITDA provides useful information
to investors and others in understanding and evaluating the
Company’s operating results in the same manner as its management
and board of directors. The Company also believes that using
Adjusted EBITDA facilitates operating performance comparisons on a
period-to-period basis because it excludes variations primarily
caused by changes in the items noted above. The Company presents
Free Cash Flow to assist it in comparing liquidity from period to
period and to obtain a more comprehensive view of the Company’s
core operations and ability to generate cash flow, and also, as
with Adjusted EBITDA, to generate future operating plans, make
strategic decisions and incentivize and reward its employees. The
Company believes that this measure is useful to investors in
evaluating cash available to service and repay debt, make other
investments and pay dividends. The Company presents Net Debt as a
supplemental measure to review the liquidity of its operations and
measure the Company’s credit position and progress toward leverage
targets. The Company also believes that investors find this measure
useful in evaluating its debt levels.
Non-GAAP information should be considered as
supplemental in nature and is not meant to be considered in
isolation or as a substitute for the related financial information
prepared in accordance with GAAP. In addition, our non-GAAP metrics
may not be the same as or comparable to similar non-GAAP financial
measures presented by other companies. Because of these and other
limitations, you should consider them alongside other financial
performance measures, including our net income and other GAAP
results. In addition, in evaluating Adjusted EBITDA and other
metrics derived from it, you should be aware that in the future the
Company will incur expenses such as those that are the subject of
adjustments in deriving Adjusted EBITDA and you should not infer
from our presentation of Adjusted EBITDA that our future results
will not be affected by these expenses or any unusual or
non-recurring items.
Contact:Curt
Worthington847.482.2040InvestorRelations@pactivevergreen.com
Pactiv Evergreen
Inc.Condensed Consolidated Statements of
Income(in millions, except per share
amounts)(unaudited)
|
For the Three Months Ended |
|
|
For the Years Ended |
|
|
December 31, |
|
|
September 30, |
|
|
December 31, |
|
|
December 31, |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net revenues |
$ |
1,476 |
|
|
$ |
1,609 |
|
|
$ |
1,527 |
|
|
$ |
6,220 |
|
|
$ |
5,437 |
|
Cost of sales |
|
(1,251 |
) |
|
|
(1,377 |
) |
|
|
(1,314 |
) |
|
|
(5,223 |
) |
|
|
(4,863 |
) |
Gross
profit |
|
225 |
|
|
|
232 |
|
|
|
213 |
|
|
|
997 |
|
|
|
574 |
|
Selling, general and
administrative expenses |
|
(148 |
) |
|
|
(145 |
) |
|
|
(121 |
) |
|
|
(583 |
) |
|
|
(466 |
) |
Restructuring, asset impairment
and other related charges |
|
— |
|
|
|
(57 |
) |
|
|
(1 |
) |
|
|
(58 |
) |
|
|
(9 |
) |
Other income, net |
|
2 |
|
|
|
239 |
|
|
|
2 |
|
|
|
281 |
|
|
|
20 |
|
Operating income from
continuing operations |
|
79 |
|
|
|
269 |
|
|
|
93 |
|
|
|
637 |
|
|
|
119 |
|
Non-operating (expense) income,
net |
|
(3 |
) |
|
|
44 |
|
|
|
13 |
|
|
|
49 |
|
|
|
101 |
|
Interest expense, net |
|
(60 |
) |
|
|
(59 |
) |
|
|
(50 |
) |
|
|
(218 |
) |
|
|
(191 |
) |
Income from continuing
operations before tax |
|
16 |
|
|
|
254 |
|
|
|
56 |
|
|
|
468 |
|
|
|
29 |
|
Income tax benefit (expense) |
|
11 |
|
|
|
(79 |
) |
|
|
(22 |
) |
|
|
(149 |
) |
|
|
4 |
|
Net income from
continuing operations |
|
27 |
|
|
|
175 |
|
|
|
34 |
|
|
|
319 |
|
|
|
33 |
|
Income (loss) from discontinued
operations, net of income taxes |
|
— |
|
|
|
1 |
|
|
|
(2 |
) |
|
|
1 |
|
|
|
(8 |
) |
Net income |
|
27 |
|
|
|
176 |
|
|
|
32 |
|
|
|
320 |
|
|
|
25 |
|
Income attributable to
non-controlling interests |
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
Net income attributable
to Pactiv Evergreen Inc. common shareholders |
$ |
26 |
|
|
$ |
176 |
|
|
$ |
31 |
|
|
$ |
318 |
|
|
$ |
23 |
|
Earnings (loss) per share
attributable to Pactiv Evergreen Inc. common
shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.15 |
|
|
$ |
0.98 |
|
|
$ |
0.19 |
|
|
$ |
1.77 |
|
|
$ |
0.17 |
|
Diluted |
$ |
0.15 |
|
|
$ |
0.98 |
|
|
$ |
0.19 |
|
|
$ |
1.77 |
|
|
$ |
0.17 |
|
From discontinued
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
(0.02 |
) |
|
$ |
0.01 |
|
|
$ |
(0.04 |
) |
Diluted |
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.02 |
) |
|
$ |
- |
|
|
$ |
(0.04 |
) |
Total: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.15 |
|
|
$ |
0.99 |
|
|
$ |
0.17 |
|
|
$ |
1.78 |
|
|
$ |
0.13 |
|
Diluted |
$ |
0.15 |
|
|
$ |
0.98 |
|
|
$ |
0.17 |
|
|
$ |
1.77 |
|
|
$ |
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding - basic |
|
178.2 |
|
|
|
177.9 |
|
|
|
177.5 |
|
|
|
177.8 |
|
|
|
177.4 |
|
Weighted-average shares outstanding - diluted |
|
179.0 |
|
|
|
178.7 |
|
|
|
177.9 |
|
|
|
178.4 |
|
|
|
177.7 |
|
Pactiv Evergreen
Inc.Condensed Consolidated Balance
Sheets(in
millions)(unaudited)
|
As of December 31, 2022 |
|
As of September 30, 2022 |
|
As of December 31, 2021 |
Assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
531 |
|
$ |
559 |
|
$ |
197 |
Accounts receivable, net |
|
448 |
|
|
523 |
|
|
474 |
Related party receivables |
|
46 |
|
|
46 |
|
|
48 |
Inventories |
|
1,062 |
|
|
1,123 |
|
|
854 |
Other current assets |
|
126 |
|
|
117 |
|
|
127 |
Assets held for sale |
|
6 |
|
|
— |
|
|
162 |
Total current
assets |
|
2,219 |
|
|
2,368 |
|
|
1,862 |
Property, plant and equipment, net |
|
1,773 |
|
|
1,735 |
|
|
1,786 |
Operating lease right-of-use assets, net |
|
262 |
|
|
275 |
|
|
278 |
Goodwill |
|
1,815 |
|
|
1,815 |
|
|
1,812 |
Intangible assets, net |
|
1,064 |
|
|
1,079 |
|
|
1,127 |
Other noncurrent assets |
|
173 |
|
|
153 |
|
|
156 |
Total
assets |
$ |
7,306 |
|
$ |
7,425 |
|
$ |
7,021 |
Liabilities |
|
|
|
|
|
Accounts payable |
$ |
388 |
|
$ |
411 |
|
$ |
364 |
Related party payables |
|
6 |
|
|
10 |
|
|
10 |
Current portion of long-term debt |
|
31 |
|
|
31 |
|
|
30 |
Current portion of operating lease liabilities |
|
65 |
|
|
64 |
|
|
61 |
Income taxes payable |
|
6 |
|
|
5 |
|
|
8 |
Accrued and other current liabilities |
|
415 |
|
|
437 |
|
|
315 |
Liabilities held for sale |
|
3 |
|
|
24 |
|
|
31 |
Total current
liabilities |
|
914 |
|
|
982 |
|
|
819 |
Long-term debt |
|
4,105 |
|
|
4,202 |
|
|
4,220 |
Long-term operating lease liabilities |
|
209 |
|
|
222 |
|
|
229 |
Deferred income taxes |
|
319 |
|
|
318 |
|
|
246 |
Long-term employee benefit obligations |
|
60 |
|
|
97 |
|
|
79 |
Other noncurrent liabilities |
|
146 |
|
|
137 |
|
|
140 |
Total
liabilities |
$ |
5,753 |
|
$ |
5,958 |
|
$ |
5,733 |
Total equity attributable
to Pactiv Evergreen Inc. common shareholders |
|
1,548 |
|
|
1,462 |
|
|
1,284 |
Non-controlling interests |
|
5 |
|
|
5 |
|
|
4 |
Total
equity |
$ |
1,553 |
|
$ |
1,467 |
|
$ |
1,288 |
Total liabilities and
equity |
$ |
7,306 |
|
$ |
7,425 |
|
$ |
7,021 |
Pactiv Evergreen
Inc.Condensed Consolidated Statements of Cash
Flows(in
millions)(unaudited)
|
For the Three Months Ended |
|
|
December 31, |
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
Operating
Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
27 |
|
|
$ |
176 |
|
|
$ |
74 |
|
|
$ |
43 |
|
|
$ |
32 |
|
Adjustments to reconcile net
income to operating cash flows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
84 |
|
|
|
85 |
|
|
|
86 |
|
|
|
84 |
|
|
|
91 |
|
Deferred income taxes |
|
(14 |
) |
|
|
50 |
|
|
|
27 |
|
|
|
18 |
|
|
|
21 |
|
Unrealized losses (gains) on derivatives |
|
— |
|
|
|
10 |
|
|
|
(1 |
) |
|
|
(5 |
) |
|
|
2 |
|
Asset impairment charges |
|
— |
|
|
|
56 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gain on sale of businesses and noncurrent assets |
|
— |
|
|
|
(239 |
) |
|
|
— |
|
|
|
(27 |
) |
|
|
— |
|
Non-cash portion of employee benefit obligations |
|
3 |
|
|
|
(44 |
) |
|
|
3 |
|
|
|
(10 |
) |
|
|
(12 |
) |
Non-cash portion of operating lease expense |
|
20 |
|
|
|
21 |
|
|
|
22 |
|
|
|
19 |
|
|
|
20 |
|
Amortization of OID and DIC |
|
— |
|
|
|
2 |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
Gain on extinguishment of debt |
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Equity based compensation |
|
8 |
|
|
|
6 |
|
|
|
6 |
|
|
|
4 |
|
|
|
2 |
|
Other non-cash items, net |
|
2 |
|
|
|
3 |
|
|
|
9 |
|
|
|
2 |
|
|
|
(1 |
) |
Change in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
79 |
|
|
|
4 |
|
|
|
(43 |
) |
|
|
(11 |
) |
|
|
21 |
|
Inventories |
|
58 |
|
|
|
(35 |
) |
|
|
(154 |
) |
|
|
(115 |
) |
|
|
12 |
|
Other current assets |
|
7 |
|
|
|
7 |
|
|
|
(21 |
) |
|
|
9 |
|
|
|
(4 |
) |
Accounts payable |
|
(45 |
) |
|
|
(66 |
) |
|
|
61 |
|
|
|
66 |
|
|
|
(37 |
) |
Operating lease payments |
|
(20 |
) |
|
|
(21 |
) |
|
|
(21 |
) |
|
|
(19 |
) |
|
|
(18 |
) |
Income taxes payable/receivable |
|
(6 |
) |
|
|
(1 |
) |
|
|
1 |
|
|
|
(1 |
) |
|
|
(8 |
) |
Accrued and other current liabilities |
|
(21 |
) |
|
|
67 |
|
|
|
(1 |
) |
|
|
59 |
|
|
|
(47 |
) |
Employee benefit obligation contributions |
|
(2 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
Other assets and liabilities |
|
(5 |
) |
|
|
(5 |
) |
|
|
(1 |
) |
|
|
4 |
|
|
|
(1 |
) |
Net cash provided by
operating activities |
|
173 |
|
|
|
75 |
|
|
|
46 |
|
|
|
120 |
|
|
|
71 |
|
Investing
Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property, plant and equipment |
|
(89 |
) |
|
|
(55 |
) |
|
|
(64 |
) |
|
|
(50 |
) |
|
|
(83 |
) |
Acquisition of business, net of cash acquired |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
(374 |
) |
Disposal of businesses and joint venture equity interests, net of
cash disposed |
|
(6 |
) |
|
|
317 |
|
|
|
— |
|
|
|
47 |
|
|
|
— |
|
Other investing activities |
|
1 |
|
|
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net cash (used in)
provided by investing activities |
|
(94 |
) |
|
|
265 |
|
|
|
(64 |
) |
|
|
(5 |
) |
|
|
(457 |
) |
Financing
Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt repayments |
|
(95 |
) |
|
|
(6 |
) |
|
|
(5 |
) |
|
|
(6 |
) |
|
|
(5 |
) |
Dividends paid to common shareholders |
|
(17 |
) |
|
|
(18 |
) |
|
|
(18 |
) |
|
|
(18 |
) |
|
|
(18 |
) |
Other financing activities |
|
(2 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
Net cash used in
financing activities |
|
(114 |
) |
|
|
(26 |
) |
|
|
(26 |
) |
|
|
(27 |
) |
|
|
(26 |
) |
Effect of exchange rate changes
on cash and cash equivalents |
|
2 |
|
|
|
(3 |
) |
|
|
(3 |
) |
|
|
— |
|
|
|
(1 |
) |
(Decrease) increase in cash and cash equivalents |
|
(33 |
) |
|
|
311 |
|
|
|
(47 |
) |
|
|
88 |
|
|
|
(413 |
) |
Cash and cash equivalents, including amounts classified as held for
sale, as of beginning of the period(1) |
|
566 |
|
|
|
255 |
|
|
|
302 |
|
|
|
214 |
|
|
|
627 |
|
Cash and cash equivalents
as of end of the period(1) |
$ |
533 |
|
|
$ |
566 |
|
|
$ |
255 |
|
|
$ |
302 |
|
|
$ |
214 |
|
(1) Includes $2 million, $7 million, $9 million, $19 million and
$17 million of cash and cash equivalents classified as current
assets held for sale as of December 31, 2022, September 30, 2022,
June 30, 2022, March 31, 2022 and December 31, 2021,
respectively.
Pactiv Evergreen
Inc.Reconciliation of Reportable Segment Net
Revenues to Total Net Revenues(in
millions)(unaudited)
|
For the Three Months Ended |
|
|
December 31, |
|
|
September 30, |
|
|
December 31, |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
Reportable segment net
revenues |
|
|
|
|
|
|
|
|
Foodservice |
$ |
673 |
|
|
$ |
756 |
|
|
$ |
722 |
|
Food Merchandising |
|
447 |
|
|
|
455 |
|
|
|
410 |
|
Beverage Merchandising |
|
385 |
|
|
|
422 |
|
|
|
412 |
|
Other |
|
6 |
|
|
|
26 |
|
|
|
21 |
|
Intersegment revenues |
|
(35 |
) |
|
|
(50 |
) |
|
|
(38 |
) |
Total net
revenues |
$ |
1,476 |
|
|
$ |
1,609 |
|
|
$ |
1,527 |
|
Pactiv Evergreen
Inc.Reconciliation of Reportable Segment Adjusted
EBITDA to Adjusted EBITDA(in
millions)(unaudited)
|
For the Three Months Ended |
|
|
December 31, |
|
|
September 30, |
|
|
December 31, |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
Reportable segment
Adjusted EBITDA |
|
|
|
|
|
|
|
|
Foodservice |
$ |
90 |
|
|
$ |
113 |
|
|
$ |
104 |
|
Food Merchandising |
|
83 |
|
|
|
70 |
|
|
|
69 |
|
Beverage Merchandising |
|
21 |
|
|
|
26 |
|
|
|
45 |
|
Other |
|
(1 |
) |
|
|
1 |
|
|
|
1 |
|
Unallocated |
|
(26 |
) |
|
|
(23 |
) |
|
|
(14 |
) |
Adjusted EBITDA
(Non-GAAP) |
$ |
167 |
|
|
$ |
187 |
|
|
$ |
205 |
|
Pactiv Evergreen
Inc.Reconciliation of Net Income from Continuing
Operations to Adjusted EBITDA(in
millions)(unaudited)
|
For the Years Ended |
|
|
For the Three Months Ended |
|
|
December 31, |
|
|
December 31, |
|
|
September 30, |
|
|
December 31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
Net
income from continuing operations (GAAP) |
$ |
319 |
|
|
$ |
33 |
|
|
$ |
27 |
|
|
$ |
175 |
|
|
$ |
34 |
|
Income tax expense (benefit) |
|
149 |
|
|
|
(4 |
) |
|
|
(11 |
) |
|
|
79 |
|
|
|
22 |
|
Interest expense, net |
|
218 |
|
|
|
191 |
|
|
|
60 |
|
|
|
59 |
|
|
|
50 |
|
Depreciation and
amortization |
|
339 |
|
|
|
344 |
|
|
|
84 |
|
|
|
85 |
|
|
|
91 |
|
Restructuring, asset impairment
and other related charges(1) |
|
58 |
|
|
|
9 |
|
|
|
— |
|
|
|
57 |
|
|
|
1 |
|
Gain on sale of business and
noncurrent assets(2) |
|
(266 |
) |
|
|
— |
|
|
|
— |
|
|
|
(239 |
) |
|
|
— |
|
Non-cash pension (income)
expense(3) |
|
(49 |
) |
|
|
(101 |
) |
|
|
3 |
|
|
|
(44 |
) |
|
|
(13 |
) |
Operational process
engineering-related consultancy costs(4) |
|
9 |
|
|
|
21 |
|
|
|
2 |
|
|
|
3 |
|
|
|
5 |
|
Business acquisition costs and
purchase accounting adjustments(5) |
|
6 |
|
|
|
15 |
|
|
|
— |
|
|
|
— |
|
|
|
13 |
|
Unrealized losses on
derivatives |
|
4 |
|
|
|
7 |
|
|
|
— |
|
|
|
10 |
|
|
|
2 |
|
Foreign exchange losses on
cash |
|
3 |
|
|
|
2 |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
Executive transition
charges(6) |
|
2 |
|
|
|
10 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gain on legal settlement(7) |
|
(15 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Costs associated with legacy
facility(8) |
|
6 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other |
|
2 |
|
|
|
4 |
|
|
|
1 |
|
|
|
2 |
|
|
|
(1 |
) |
Adjusted EBITDA
(Non-GAAP) |
$ |
785 |
|
|
$ |
531 |
|
|
$ |
167 |
|
|
$ |
187 |
|
|
$ |
205 |
|
(1) |
Reflects
restructuring, asset impairment and other related charges primarily
associated with the decision to exit our remaining closures
businesses and our closure of Beverage Merchandising’s coated
groundwood operations. |
(2) |
Reflects the gain from the sale of businesses and noncurrent
assets, primarily related to the sale of Beverage Merchandising
Asia and the sale of our equity interests in Naturepak Beverage
Packaging Co. Ltd. |
(3) |
Reflects the non-cash pension (income) expense related to our
employee benefit plans, including the pension settlement gains of
$47 million, $10 million and $22 million recognized during the
third quarter of 2022, the first quarter of 2022 and the third
quarter of 2021, respectively. |
(4) |
Reflects the costs incurred to evaluate and improve the
efficiencies of our manufacturing and distribution operations. |
(5) |
Reflects amounts related to the acquisition of Fabri-Kal,
including a $12 million inventory fair value step-up that was
expensed within cost of sales during 2021. |
(6) |
Reflects charges relating to key executive separation
agreements. |
(7) |
Reflects the gain, net of costs, arising from the settlement of
a historical legal action. |
(8) |
Reflects costs related to a closed facility, sold prior to our
acquisition of the entity. |
Pactiv Evergreen (NASDAQ:PTVE)
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De May 2024 a Jun 2024
Pactiv Evergreen (NASDAQ:PTVE)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024