CHICAGO--(BUSINESS WIRE)--Coveris Holdings S.A. reported second quarter 2014 pro forma net sales of $746 million. Pro forma net sales for the second quarter of 2013 were $757 million. Adjusted pro forma EBITDA for the quarter was $93 million versus $74 million in the same period last year, up 25%.
“I am pleased to report a new quarterly record for adjusted pro forma EBITDA,” said Gary Masse, Chief Executive Officer. “During the quarter, we remained committed to implementing the Coveris Business System in order to progress our strategic initiatives. We are building a ‘best in class’ global organization providing added value to our customers. We delivered on the four cornerstones of Commercial Excellence, Operational Excellence, Talent & Leadership and finally, Acquisition Integration, resulting in good margin expansion during the quarter.”
BUSINESS SEGMENT RESULTS
Coveris is divided into two reporting segments – Flexible and Rigid. The Flexible segment had pro forma net sales of $536 million for the quarter, which was down 1% on a like for like basis from $541 million from the same period last year. The decrease is the result of de-emphasizing our resin trade business in 2014 offset by favorable foreign exchange impacts and strong performance in some areas, particularly our coatings, insulation overwrap and salt bag businesses.
The Rigid segment had pro forma net sales of $209 million for the quarter, which was down 3% from the same period last year. Economic challenges and intense competition continue in Europe for Rigid products, particularly in Southern Europe. Operating income for the segment increased due to savings associated with capital spending, restructuring and procurement savings, for the second quarter.
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.
A conference call hosted by management to discuss these financial results will be held on August 19, at 10:00 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 August 19 until September 2, by dialing 877-660-6853 (domestic) or 201-612-7415 (international) with the conference ID of 13589090.
Coveris is the sixth largest global 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$2.9B, the company manages 66 plants across North America, Europe, the Middle East, and China. Coveris is an affiliated portfolio company of Sun Capital Partners, Inc.
Statements in this release that are not historical are "forward-looking statements." Forward-looking statements may be identified by the use of forward-looking terminology such as the words "should," "would," "could," "will," "may," "expect," "believe," "anticipate," "attempt," "project" and other terms with similar meaning indicating possible future events or potential impact on our business. You are cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are based on management's current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially. The forward-looking statements in this release are subject to uncertainty and changes in circumstances and involve risks and uncertainties that may affect Coveris’ operations, markets, products, services, prices and other factors. Significant risks and uncertainties may relate to, but are not limited to, financial, economic, competitive, environmental, political, legal, regulatory and technological factors. In addition, any forward-looking statements are made only as of the date of this release, and Coveris does not intend and does not assume any obligation to update any statements set forth in this release.
COVERIS HOLDINGS S.A.
RECONCILIATION OF PRO FORMA NET INCOME (LOSS) TO ADJUSTED PRO FORMA EBITDA
(Expressed in millions of U.S. dollars)
|U.S. GAAP Net income (loss)||$||(5.1||)||$||(6.8||)||$||(20.0||)||$||(28.2||)|
|Interest expense, net||$||32.6||$||18.6||$||64.2||$||33.0|
|Benefit (provision) for income taxes||$||4.9||$||(1.5||)||$||3.2||$||0.7|
|Depreciation and amortization||$||39.5||$||28.0||$||78.0||$||52.2|
|PPA Adjustments and FX translation||$||(3.9||)||$||0.8||$||(2.0||)||$||6.3|
|Unadjusted EBITDA, net of PPA adjustments(e)||$||68.1||$||39.1||$||123.4||$||63.9|
|Pro Forma adjustments to reflect full year results(a):|
|Unadjusted Exopack EBITDA prior to Fund V acquisition||$||-||$||14.1||$||-||$||35.5|
|Unadjusted Closures EBITDA prior to Fund V acquisition||$||-||$||2.5||$||-||$||4.4|
|Unadjusted Intelicoat EBITDA prior to Fund V acquisition||$||-||$||0.6||$||-||$||1.0|
|Unadjusted St. Neots EBITDA prior to Fund V acquisition||$||1.6||$||1.5||$||3.0||$||2.5|
|Unadjusted Pro Forma EBITDA, net of PPA adjustments||$||69.6||$||57.8||$||126.4||$||107.3|
|Restructuring and related relocation costs(b)||$||7.9||$||5.9||$||16.3||$||15.8|
|Management fees and expenses||$||2.3||$||4.5||$||5.2||$||8.2|
|Transaction related expenses(c)||$||2.7||$||0.3||$||3.4||$||0.5|
|Business improvement consulting cost||$||2.9||$||1.1||$||6.2||$||1.8|
|(Gain) loss on disposal of assets||$||0.2||$||(0.1||)||$||0.9||$||(5.1||)|
|Adjusted Pro Forma EBITDA||$||93.2||$||74.3||$||169.7||$||136.4|
|(a) Pro forma adjustments to retrospectively include results of certain entities prior to Fund V acquisition for US GAAP reporting purposes|
|(b) Costs associated primarily with various restructuring activities, employee relocation expenses or employee serverance costs.|
(c) Costs associated with the Combination, Dividend recapitalization transaction and acquisition costs.
|(d) Costs associated with information technology, consulting, rebranding and other infrequent or non-recurring expenses.|
(e) KubeTech was accounted for as a business combination under common control, therefore KubeTech's historical results were included in the U.S. GAAP section in both the current and prior year results