BWAY Intermediate Company Reports Sales and Earnings for the First Quarter of Fiscal 2012

ATLANTA, Feb. 14, 2012 /PRNewswire/ -- BWAY Intermediate Company, a leading North American supplier of general line rigid containers, today reported net sales for the first quarter ended December 31, 2011 of $248.4 million, an increase of 3.2% compared to $240.7 million for the same quarter last year. The increase is primarily attributable to the acquisition of Phoenix Container during the first quarter of fiscal 2011 and higher selling prices driven by higher raw material prices, partially offset by lower overall volume.

The Company also reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, and certain other items noted in the accompanying GAAP reconciliation) for the first quarter of fiscal 2012 of $29.0 million compared to $16.8 million for the first quarter of fiscal 2011. The increase was attributable to improved performance in both the Company's plastic packaging and metal packaging segments as discussed below.

First quarter gross margin (excluding depreciation and amortization) was $34.1 million compared to $22.3 million for the same period last year.  The increase was driven by three primary factors:

• Higher selling prices which were partially offset by higher raw material cost, and favorable timing of cost change pass-through on certain products.
• The Company continued to realize improvements in productivity across the entire manufacturing system including lower spoilage, improved labor utilization, and lower spending.
• Improved results from recent acquisitions and continued realization of synergies including the closure of two plastic manufacturing facilities, overhead reduction, and purchasing efficiencies.

First quarter interest expense was $12.6 million for fiscal 2012, compared to $13.7 million for the same period last year. The decrease is primarily attributable to lower interest rates on the Company's term loans as a result of an amendment to the Company's credit agreement completed in February 2011 which, among other changes, lowered the borrowing rate.

During the first fiscal quarter of 2011, the Company recorded $0.5 million of business acquisition costs associated with the October 2010 acquisition of Plastican, Inc. and the December 2010 acquisition of Phoenix Container, Inc.  

Other income, which is primarily foreign exchange gain, was $0.7 million for the first quarter compared to $1.1 million for the same quarter last year.

Net loss for the quarter was $2.9 million compared to a net loss of $10.7 million for the first quarter last year. The change is primarily attributable to the improvement in gross margin and other items discussed above.

Business Segments

Metal Packaging

Sales for the Company's metal packaging segment were $153.8 million for the first quarter of fiscal 2012, compared to $144.7 million in the year-earlier period. The increase in sales was driven largely by the acquisition of Phoenix Container, and higher selling prices driven by higher raw material prices, partially offset by lower volume. Excluding the effects of the Phoenix Container acquisition, overall volumes decreased approximately 3.9% compared to the first quarter last year as the result of weak market conditions and customer supply chain inventory reductions.

Metal packaging segment earnings (excluding depreciation and amortization) were $29.0 million, or 18.9% of segment sales for the first quarter of fiscal 2012, compared to $20.1 million, or 13.9% of segment sales for the same quarter of fiscal 2011. The increase in segment earnings is largely attributable to higher selling prices related to the pass-through of higher raw material cost, improvements in productivity, and the Phoenix Container acquisition including synergies, partially offset by the effect of lower volume.

Plastic Packaging

Sales for the Company's plastic packaging segment were $94.6 million for the first quarter of fiscal 2012, compared to $96.0 million for the year-earlier period. The decrease resulted from lower volumes, partially offset by higher selling prices driven by higher raw material prices. Excluding the effect of the Plastican acquisition, volume decreased approximately 8.8% compared to the first quarter last year.

Plastic packaging segment earnings (excluding depreciation and amortization) for the quarter were $2.5 million, compared to a segment loss of $0.2 million for the first quarter of fiscal 2011. The increase resulted from higher levels of productivity, favorable timing and effect of raw material price changes and the associated selling price pass-through, and improved results for the Plastican acquisition including synergies. These gains were partially offset by the effect of lower volume.  

Corporate

Cash and cash equivalents decreased from $82.5 million at the beginning of the first quarter to $4.7 million at the end of the quarter. The decrease in cash and cash equivalents resulted from a $35.0 million term loan repayment during the quarter and from typical first fiscal quarter increases in working capital.

Long-term debt decreased during the first quarter by $17.4 million primarily as the result of the $35.0 million term loan repayment, partially offset in part by $17.5 million in short-term borrowings at quarter end under the Company's revolving credit facility. At the end of the first quarter, the Company had approximately $51.6 million of revolver capacity.

Capital expenditures for the first quarter of fiscal 2012 were $6.0 million, compared to $9.1 million for the first quarter last year. The decrease was primarily due to a lower level of spending on the Company's SAP implementation initiative, lower spending on plant rationalizations, and general timing of capital projects.

About BWAY Intermediate Company

BWAY Intermediate Company, through its primary operating subsidiary, BWAY Corporation, is a leading North American supplier of general line rigid containers. The Company operates 22 plants throughout the United States and Canada serving industry leading customers on a national basis.

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to substantial risks, uncertainties and assumptions. You should not place reliance on these statements. Forward-looking statements include information concerning our liquidity and our possible or assumed future results of operations, including descriptions of our 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 we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe 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. Many factors could affect our actual performance and results and could cause actual results to differ materially from those expressed in the forward-looking statements. Please refer to our filings with the United States Securities and Exchange Commission, for a discussion of other factors that may affect future performance or results.

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 us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and we undertake 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 the United States (GAAP).  Presentation of non-GAAP financial measures such as, but not limited to "EBITDA," "adjusted EBITDA," "EBIT," "adjusted EBIT," "gross margin (excluding depreciation and amortization)" and "adjusted net income (loss)," provide investors with an alternative method for assessing the Company's operating results in a manner that enables them to more thoroughly evaluate the Company's performance. These non-GAAP financial measures provide a baseline for assessing the Company's future earnings expectations. The Company's management uses these non-GAAP financial measures for the same purpose. The non-GAAP financial measures included in this news release are provided to give investors access to the types of measures that the Company uses in analyzing its results.

The Company's calculation of non-GAAP financial measures is not necessarily comparable to similarly titled measures reported by other companies. 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.

SOURCE BWAY Intermediate Company