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BWAY Holding Company Announces Strong Second Quarter Fiscal 2009 Earnings Results and Increases Annual Guidance
Revenues were
Gross margin (excluding depreciation and amortization) for the quarter increased to
- Strong results under the Company's cost reduction program that began during 2007 and was accelerated during 2008 in reaction to continued declines in market demand.
- Improved aerosol operating results.
- Deflation on various categories of cost including energy, freight, and certain other direct materials. Inflationary pressures during fiscal 2008 were absorbed by the Company.
- Favorable benefit of lower cost December inventory consumed during the quarter.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter was
The Company uses non-GAAP financial measures, including but not limited to "EBITDA," "adjusted EBITDA," "EBIT," "adjusted EBIT," "adjusted net income," "adjusted net income per diluted share," and "gross margin (excluding depreciation and amortization)" when presenting and discussing its operating results and those of its segments. Segment earnings (excluding depreciation and amortization) include sales and operating costs directly attributable to the segment, and include certain allocated corporate costs. Non-GAAP financial measures should not be considered in isolation or as a substitute for net income and cash flow data prepared in accordance with GAAP and may not be comparable to calculations of similarly titled measures by other companies. A reconciliation of earnings and segment earnings to the Company's consolidated financial statements as well as a reconciliation of non-GAAP financial measures to GAAP financial measures is included with this news release.
Metal Packaging
Sales for the Company's metal packaging segment were
Metal packaging segment earnings (excluding depreciation and amortization) were
Plastic Packaging
Sales for the Company's plastic packaging segment were
Plastic packaging segment earnings (excluding depreciation and amortization) were
Corporate
Undistributed corporate expense (excluding depreciation and amortization) was
Interest expense for the quarter was
Net debt (total debt less cash on hand) decreased by
Subsequent to the end of the second fiscal quarter, on
Income Net Income
Before Income Per Diluted
Taxes Share
($Million) ($/Share)
------------ ------------
Loss on early extinguishment of debt
- Call premium on old notes ($3.3) ($0.09)
- Write-off of deferred financing
costs associated with old notes ($1.5) ($0.04)
------------ ------------
($4.8) ($0.13)
Interest expense on old notes during
30 day call notice period ($1.7) ($0.04)
------------ ------------
Total ($6.5) ($0.17)
============ ============
The refinancing transaction will use approximately
Commenting on the completed refinancing, Mr. Roessler stated, "We feel good about completing this refinancing given the current tightness in the credit markets, and believe it validates the fundamentals of our business. With this transaction complete, we have no required refinancing for the next four years when the term loans under the Company's credit agreement come due in
Outlook for Fiscal 2009
"As we begin the second half of fiscal 2009, we are seeing only limited improvement in overall market demand for our products," stated Mr. Roessler. "Our current view is that volume will remain weak for the remainder of our fiscal year. Despite continued market weakness we continue to focus on what we can control: our costs, productivity and management of our raw material cost and product pricing equation. We believe that our second quarter results demonstrate the depth and breadth of our recent initiatives, and support our expectations for year-over-year growth in earnings and free cash flow."
With regard to specific guidance, the Company provided the following:
- Third fiscal quarter 2009 (ending
June 28, 2009 ) adjusted net income of$0.42 - $0.44 per diluted shared, excluding the$0.17 per share of refinancing costs described above, compared to an adjusted net income per diluted share of$0.41 for the third quarter of fiscal 2008. Also, the Company expects adjusted EBITDA of$35.0 - $37.0 million compared to$33.0 million for the third quarter last year. Expectations include$0.4 million of non-cash stock-based compensation expense for the third quarter of fiscal 2009 compared to$1.7 million for the same quarter last year. - Previously released guidance for full-year fiscal 2009 (ending
September 27, 2009 ) of adjusted net income per diluted share of$0.85 - $0.90 has been revised upward to$1.04 - $1.08 per diluted share, excluding the$0.17 per share of refinancing costs described above. Fiscal 2008 adjusted net income per diluted share was$0.71 . Adjusted EBITDA guidance has also been increased from$112.0 - $114.0 million to$117.0 - 119.0 million . Fiscal 2008 adjusted EBITDA was$104.6 million . Expectations include$1.7 million of non-cash stock-based compensation expense for fiscal 2009 compared to$6.3 million for fiscal 2008. - Previously released full year fiscal 2009 adjusted free cash flow (net cash provided by operating activities less capital expenditures) guidance of
$42.0 - $44.0 million has been increased to$44.0 to $46.0 million compared to$39.8 million for fiscal 2008. Full year fiscal 2009 capital expenditure guidance is reduced from a range of$20.0 - 22.0 million to a range of$18.0 - $20.0 million .
Conference Call
The Company will hold a conference call tomorrow morning,
About BWAY Holding Company
BWAY Holding Company is a leading North American supplier of general line rigid containers. The Company operates 20 plants throughout
Cautionary Note Regarding Forward-Looking Statements
This document contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place reliance on these statements. Forward-looking statements include information concerning the Company's liquidity and its possible or assumed future results of operations, including descriptions of its business strategies. These statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may" or similar expressions. These statements are based on certain assumptions that management has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors management believes are appropriate in these circumstances. As you read and consider this document, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions. Many factors could affect the Company's actual financial results and could cause actual results to differ materially from those expressed in the forward-looking statements. Some important factors include competitive risk from other container manufacturers or self-manufacture by customers, termination of customer contracts, loss or reduction of business from key customers, dependence on key personnel, changes in steel, resin, other raw material and energy costs or availability, product liability or product recall costs, lead pigment and lead paint litigation, increased consolidation in end markets, consolidation of key suppliers, deceleration of growth in end markets, increased use of alternative packaging, labor unrest, environmental, health and safety costs, management's inability to evaluate and selectively pursue acquisitions, fluctuation of quarterly operating results, an increase in interest rates, restrictions in debt agreements, fluctuations of the Canadian dollar, and the other factors discussed in the Company's filings with the Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, the forward-looking statements contained in this document might not prove to be accurate and you should not place undue reliance upon them. All forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Use of Non-GAAP Financial Measures
The Company provides financial measures and terms not calculated in accordance with accounting principles generally accepted in
BWAY's calculation of non-GAAP financial measures is not necessarily comparable to similarly titled measures reported by other companies, or to financial measures as defined in the Company's debt agreements. These non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. Schedules that reconcile these non-GAAP financial measures to GAAP financial measures are included with this news release.
BWAY Holding Company and Subsidiaries
Summary Consolidated Financial Data (Unaudited)
(Dollars in millions, except per share data)
Three Months Ended Six Months Ended
------------------ ------------------
Mar. 29, Mar. 30, Mar. 29, Mar. 30,
2009 2008 2009 2008
-------- -------- -------- --------
Statements of Operations:
-------------------------
Net sales $206.1 $243.6 $418.6 $461.0
Cost of products sold
(excluding depr. and amort.) 166.7 211.4 358.8 408.3
----- ----- ----- -----
Gross margin (excluding depr.
and amort.) 39.4 32.2 59.8 52.7
---- ---- ---- ----
Other costs and expenses
Depreciation and amortization 10.8 11.5 21.9 22.6
Selling and administrative
expense 6.4 5.6 12.0 11.5
Restructuring charge 0.7 4.2 1.4 4.2
Interest expense, net 7.4 9.3 15.6 18.8
Other 0.2 0.1 (0.6) 0.2
--- --- ---- ---
Total other costs and
expenses 25.5 30.7 50.3 57.3
---- ---- ---- ----
Income (loss) before income taxes 13.9 1.5 9.5 (4.6)
Provision for (benefit from)
income taxes 5.2 0.4 3.5 (1.8)
--- --- --- ----
Net income (loss) $8.7 $1.1 $6.0 $(2.8)
==== ==== ==== =====
Net income (loss) per share
Basic $0.40 $0.05 $0.27 $(0.13)
===== ===== ===== ======
Diluted $0.38 $0.05 $0.26 $(0.13)
===== ===== ===== ======
Shares - Basic 21,907 21,679 21,886 21,670
Shares - Diluted 22,995 24,150 22,907 21,670
Reconciliation of Adjusted EBITDA
to Net Income (Loss)
---------------------------------
Net income (loss) $8.7 $1.1 $6.0 $(2.8)
Interest expense, net 7.4 9.3 15.6 18.8
Provision for (benefit from)
income taxes 5.2 0.4 3.5 (1.8)
Depreciation and amortization 10.8 11.5 21.9 22.6
---- ---- ---- ----
EBITDA $32.1 $22.3 $47.0 $36.8
Adjustments:
Restructuring charge 0.7 4.2 1.4 4.2
Adjustment to the allowance for
doubtful accounts - (1.0) - (1.0)
--- ---- --- ----
Adjusted EBITDA 32.8 25.5 48.4 40.0
Less: Depreciation and
amortization 10.8 11.5 21.9 22.6
---- ---- ---- ----
Adjusted EBIT $22.0 $14.0 $26.5 $17.4
===== ===== ===== =====
Reconciliation of Net Income (Loss)
to Adjusted Net Income (Loss)
-----------------------------------
Net income (loss) $8.7 $1.1 $6.0 $(2.8)
Adjustments:
Restructuring charge 0.7 4.2 1.4 4.2
Adjustment to the allowance for
doubtful accounts - (1.0) - (1.0)
Additional depreciation expense
associated with plant shutdown (1) - 0.5 - 0.5
Benefit from income taxes related
to the above adjustments (0.3) (1.2) (0.5) (1.2)
---- ---- ---- ----
Adjusted net income (loss) $9.1 $3.6 $6.9 $(0.3)
==== ==== ==== =====
Adjusted net income (loss) per
diluted share $0.40 $0.15 $0.30 $(0.02)
===== ===== ===== ======
Shares - Diluted 22,995 24,150 22,907 21,670
(1) Accelerated depreciation associated with shortened useful lives of
certain equipment taken out of service as the result of the previously
announced closure of the Company's Franklin Park, Il. metal packaging
plant.
BWAY Holding Company and Subsidiaries
Summary Consolidated Financial Data (Unaudited)
(Dollars in millions)
Three Months Six Months
Ended Ended
------------ -----------
Mar. 29, Mar. 30, Mar. 29, Mar. 30,
2009 2008 2009 2008
-------- -------- -------- --------
Business Segment Information:
-----------------------------
Net sales
Metal segment $133.6 $140.5 $264.5 $264.9
Plastic segment 72.5 103.1 154.1 196.1
---- ----- ----- -----
Consolidated net sales 206.1 243.6 418.6 461.0
Income (loss) before income taxes
Segment earnings (excluding
depr. and amort.)
Metal segment 22.3 19.9 33.8 30.4
Plastic segment 14.7 10.3 21.5 18.4
---- ---- ---- ----
Total segment earnings
(excluding depr. and
amort.) 37.0 30.2 55.3 48.8
Depreciation and amortization
Metal segment 5.0 5.9 10.4 11.5
Plastic segment 5.4 5.4 10.8 10.7
--- --- ---- ----
Total segment
depreciation and
amortization 10.4 11.3 21.2 22.2
Corporate
depreciation and
amortization 0.4 0.2 0.7 0.4
--- --- --- ---
Consolidated
depreciation and
amortization 10.8 11.5 21.9 22.6
Corporate and other expenses
Corporate undistributed
expense 4.0 3.6 7.5 7.6
Restructuring charge 0.7 4.2 1.4 4.2
Interest expense, net 7.4 9.3 15.6 18.8
Other 0.2 0.1 (0.6) 0.2
----- ---- ---- -----
Consolidated income (loss)
before income taxes $13.9 $1.5 $9.5 $(4.6)
===== ==== ==== =====
As of
-----
Mar. 29, Sept. 28,
2009 2008
-------- ---------
Condensed Balance Sheets:
-------------------------
Assets
Cash and cash equivalents $44.7 $92.1
Accounts receivable, net of
allow. for doubtful accts. 98.2 113.3
Inventories, net 93.3 112.2
Other current assets 13.0 20.7
---- ----
Total current assets 249.2 338.3
Property, plant and
equipment, net 132.6 141.9
Goodwill and other
intangible assets, net 376.1 393.2
Other assets 7.4 9.0
--- ---
Total Assets $765.3 $882.4
====== ======
Liabilities and Stockholders' Equity
Accounts payable $62.2 $149.8
Other current liabilities 47.3 52.4
Current portion of
long-term debt 1.0 18.9
--- ----
Total current liabilities 110.5 221.1
Long-term debt 393.2 402.4
Other long-term liabilities 85.0 85.2
Stockholders' equity 176.6 173.7
----- -----
Total Liabilities and
Stockholders' Equity $765.3 $882.4
====== ======
SOURCE BWAY Holding Company