Coveris Reports Fourth Quarter and Full Year 2013 Financial Results

  • Reports Pro Forma Net Sales of $691 million for Q4, a 1.4% increase over 2012
  • Adjusted Pro Forma EBITDA of $66 million, a 8% increase from the prior year
  • Expects continued improvement in earnings in Q1

GREENVILLE, S.C.--()--Coveris Holdings S.A. reported fourth quarter 2013 pro forma net sales of $691 million and full year 2013 pro forma net sales of $2.8 billion. Adjusted pro forma EBITDA for the quarter was $66 million versus $61 million in the same period last year, up 8%. For the year, adjusted pro forma EBITDA was $274 million versus $266 million in the prior year, up 3%.

“We are pleased to report year over year improvements in our sales and cash generation for both the quarter and the full year,” said Mike Alger, Chief Financial Officer. “This comes even with the difficult fourth quarter in which we experienced headwinds related to resin prices and lower North American volumes. Our financial results demonstrate the significant synergies this business is achieving as a result of the combination.”

BUSINESS SEGMENT RESULTS

Coveris is divided into two reporting segments – Flexible and Rigid. The Flexible segment had pro forma net sales of $2.1 billion for the full year 2013, which was up 1% on a like for like basis from $2.0 billion for the full year of 2012. Pro forma volumes were relatively flat compared to the fourth quarter of last year, with some strength in the German and French Food businesses as well as the Coatings business in the U.S.

The Rigid segment had pro forma net sales of $714 million for the full year 2013, which was up 2.1% on a like for like basis from $699 million for the full year of 2012. The increase is due to volume growth.

Please see our Adjusted Pro Forma EBITDA Reconciliation attached to this press release. Additional financial information may be found on www.coveris.com under the Investors section.

EARNINGS CALL

A conference call hosted by management to discuss these financial results will be held tomorrow, April 15, at 11:00 am, Eastern. The conference call number is 877-407-8031 (domestic) or 201-689-8031 (international). A replay of the call will be available after 1:30 pm, Eastern on April 15 until May 29, by dialing 877-660-6853 (domestic) or 201-612-7415 (international) with the conference ID of 13580302.

ABOUT COVERIS™

Coveris is the sixth largest global plastic packaging company in the world. Formed by the combination of Exopack, Britton Group, Kobusch, PACCOR and Paragon Print & Packaging, the company is an established leader in the development, manufacture, and sourcing of flexible and rigid plastic and paper packaging, as well as coatings solutions for various consumer and industrial end-use markets. With aggregate revenues of more than US$2.8B, the company manages 65 plants across North America, Europe, the Middle East, and China. Coveris is an affiliated portfolio company of Sun Capital Partners, Inc.

FORWARD-LOOKING STATEMENTS:

Statements in this release that are not historical are "forward-looking statements." Forward-looking statements may be identified by the use of forward-looking terminology such as the words "should," "would," "could," "will," "may," "expect," "believe," "anticipate," "attempt," "project" and other terms with similar meaning indicating possible future events or potential impact on our business. You are cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are based on management's current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially. The forward-looking statements in this release are subject to uncertainty and changes in circumstances and involve risks and uncertainties that may affect Coveris’ operations, markets, products, services, prices and other factors. Significant risks and uncertainties may relate to, but are not limited to, financial, economic, competitive, environmental, political, legal, regulatory and technological factors. In addition, any forward-looking statements are made only as of the date of this release, and Coveris does not intend and does not assume any obligation to update any statements set forth in this release.

EXOPACK HOLDINGS S.A.
RECONCILIATION OF PRO FORMA NET INCOME (LOSS) TO ADJUSTED PRO FORMA EBITDA
(Expressed in millions of U.S. dollars)
       
           
Three Months Three Months Twelve Months Twelve Months
Ended Ended Ended Ended
31-Dec-13   31-Dec-12 31-Dec-13   31-Dec-12
 
U.S. GAAP Net income (loss) $ (92.2 ) $ (23.2 ) $ (130.7 ) $ (34.0 )
Interest expense, net $ 62.0 $ 13.5 $ 121.1 $ 40.5
Benefit (provision) for income taxes $ (35.0 ) $ (2.8 ) $ (30.7 ) $ (3.2 )
Depreciation and amortization $ 113.3 $ 21.7 $ 195.8 $ 74.3
PPA Adjustments and FX translation $ (21.9 )   $ 7.3   $ (6.8 )   $ 0.2  
Unadjusted EBITDA, net of PPA adjustments $ 26.2 $ 16.5 $ 148.7 $ 77.8
 
Pro Forma adjustments to reflect full year results:(a)
Unadjusted Exopack EBITDA prior to Fund V acquisition $ - $ 13.4 $ 35.4 $ 70.4
Unadjusted Paragon EBITDA prior to Fund V acquisition $ - $ 8.4 $ - $ 37.4
Unadjusted Closures EBITDA prior to Fund V acquisition $ 0.8 $ 2.8 $ 7.7 $ 9.4
Unadjusted Intellicoat EBITDA prior to Fund V acquisition $ -     $ (1.1 )   $ (1.5 )   $ 1.4  
Unadjusted Pro Forma EBITDA, net of PPA adjustments $ 27.0 $ 40.0 $ 190.3 $ 196.4
 
 
Adjustments:
Restructuring and related relocation costs(b) $ 15.1 $ 11.3 $ 34.5 $ 33.6
Management fees and expenses $ 3.6 $ 5.1 $ 15.9 $ 17.9
Transaction related expenses(c) $ 2.3 $ (0.3 )

$

6.1

$ 2.6
Business improvement consulting cost $ 4.1 $ 3.0 $ 6.7 $ 6.3
(Gain) loss on disposal of assets $ (0.0 ) $ 0.1 $ (5.0 ) $ (0.8 )
Pension revaluation $ 1.5 $ (2.0 ) $ 2.0 $ (1.5 )
Other non-operating expenses(d) $ 12.1 $ 4.0 $ 23.2 $ 11.6
Negative goodwill related to business combination $ (0.1 )   $ -   $ -     $ -  
Adjusted Pro Forma EBITDA $ 65.6     $ 61.3   $ 273.7     $ 266.2  
 

Certain items may have been reclassed to conform to the current quarter's presentation.

 
(a) Pro Forma adjustments to retrospectively include results of certain entities prior to Fund V acquisition for U.S. GAAP reporting purposes.
(b) Costs associated primarily with PACCOR restructuring, Paragon restructuring, Exopack US press installation excess costs and additional second half restructuring projects planned.
(c) Costs associated with project SunPak at Exopack US, Dividend recapitalization transaction, acquisition costs.
(d) Costs associated with SOX and other SEC compliance, ERP system implementation, legal fees, non-cash share-based compensation expense, Mt. Gilead fair value adjustments, other non-recurring expenses

Contacts

Coveris
Investor Contact:
Duane A. Owens, 864-641-4710
Treasurer
or
Media Contact:
Chris Swalm, 864-596-7364
Marketing Communications Manager

Sharing

Contacts

Coveris
Investor Contact:
Duane A. Owens, 864-641-4710
Treasurer
or
Media Contact:
Chris Swalm, 864-596-7364
Marketing Communications Manager