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

ATLANTA, May 15, 2012 /PRNewswire/ -- BWAY Intermediate Company, a leading North American supplier of general line rigid containers, today reported net sales for the second quarter ended March 31, 2012 of $309.7 million, an increase of 2.5% compared to $302.3 million for the same quarter last year. The increase is primarily attributable to higher selling prices resulting in part from the pass-through of higher raw material costs and an improved mix, partially offset by a 2.6% decline in overall volume compared to a relatively strong second quarter last year. Net income for the quarter ended March 31, 2012 was $11.9 million compared to $1.5 million for the second quarter last year.

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 second quarter of fiscal 2012 of $43.2 million compared to $40.6 million for the second quarter of fiscal 2011. The increase was primarily attributable to improved manufacturing efficiencies and cost management, effective pass-through of raw material price changes, and synergies realized from recent acquisitions. Improvements were partially offset by the effect of lower volume.

Selling and administrative expense for the quarter was $6.2 million compared to $4.3 million for the second quarter of fiscal 2011. The increase is largely attributable to higher bonus expense based on financial performance.

Second quarter interest expense was $12.5 million for fiscal 2012, compared to $13.9 million for the same period last year. The decrease is primarily attributable to a lower average debt balance and 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.

The Company recorded $0.9 million of restructuring charges during the quarter compared to $0.5 million during the second quarter last year. Charges resulted primarily from previously announced plant closures.

During the quarter the Company sold its blow molded plastic bottle business which resulted in a gain of $9.4 million. The Company had a minimal market share in this business and considered it as non-core. Proceeds from the sale were used to repay term loan debt.

Other income, which is primarily foreign exchange gain, was $1.1 million for the second quarter compared to $0.4 million for the same quarter last year.

Business Segments

Metal Packaging

Sales for the Company's metal packaging segment were $188.8 million for the second quarter of fiscal 2012, compared to $180.9 million in the year-earlier period. The increase in sales was driven largely by product mix and higher selling prices driven in part by changes in raw material costs, partially offset by lower volume. Overall volumes decreased approximately 2.4% as the result of weak market conditions, particularly early in the quarter, compared to a relatively strong second quarter last year.

Metal packaging segment earnings (excluding depreciation and amortization) were $37.7 million for the second quarter of fiscal 2012, compared to $35.7 million for the same quarter of fiscal 2011. The increase in segment earnings is primarily attributable to higher selling prices related to the pass-through of higher raw material cost, improved manufacturing efficiencies, and acquisition synergies, partially offset by the effect of lower volume.

Plastic Packaging

Sales for the Company's plastic packaging segment were $120.9 million for the second quarter of fiscal 2012, compared to $121.4 million for the year-earlier period. The decrease resulted in part from lower volume which declined by 2.9% compared to the second quarter last year, which was partially offset by higher selling prices driven by higher raw material costs.

Plastic packaging segment earnings (excluding depreciation and amortization) for the quarter were $7.7 million, compared to $7.3 million for the second quarter of fiscal 2011. The increase resulted from favorable timing and effect of raw material price changes and the associated selling price pass-through and acquisition synergies, partially offset by the effect of lower volume.

Corporate

Corporate undistributed expenses were $3.2 million for the quarter compared to $2.5 million for the second quarter last year. The increase is largely due to higher bonus expense.

Cash and cash equivalents increased from $4.7 million at the beginning of the second quarter to $29.1 million at the end of the quarter. The increase resulted from cash provided from operating activities and the proceeds from the sale of the Company's plastic bottle business discussed above.  During the quarter the Company repaid the $17.5 million revolving loan balance that was outstanding at the end of the first fiscal quarter.

Capital expenditures for the second quarter of fiscal 2012 were $7.8 million, compared to $9.4 million for the second quarter last year. The decrease was primarily due to a lower level of spending on the Company's SAP implementation initiative 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.

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SOURCE BWAY Intermediate Company