Coveris Reports Fourth Quarter and Full Year 2014 Financial Results

CHICAGO--()--Coveris Holdings S.A. reported full year 2014 pro forma net sales of $2,809 million. Pro forma net sales for 2013 were $2,792 million. Adjusted pro forma EBITDA for 2014 was $322 million, up 17% from the prior year, which was $274 million. The fourth quarter 2014 pro forma net sales were $664 million which were down from 2013 pro forma net sales of $686 million Adjusted pro forma EBITDA for the quarter was $71.8 million versus $66.3 million in the same period 2013, up 8%.

“I am pleased with our strong fourth quarter and full year EBITDA performance,” said Gary Masse, President and Chief Executive Officer. “Implementation of the Coveris Business System delivered significant savings throughout the year and strategically positioned our business units for growth in key end markets. We have established 2015 as the Year of Executing our Strategy. The Coveris Business System, introduced in 2014, provides the tools and processes to drive manufacturing best practices around commercial excellence, operational excellence, talent and leadership, and acquisition integration.”

Coveris is divided into two reporting segments – Flexible and Rigid. The Flexible segment had pro forma net sales of $2,036 million for the year, which is up 2.5% from the prior year. This increase is mainly due to favorable currency impacts as well as favorable volumes, particularly in the North America salt and seasonal seed bag business as well as our UK labels business. For the quarter, this segment had pro forma net sales of $488 million, which was down from $506 million in the prior year.

The Rigid segment had pro forma net sales of $773 million for the year, which is down 4% from the prior year due to continued economic challenges and intense competition in Europe for rigid products, particularly in Southern Europe. For the quarter, this segment had pro forma net sales of $176 million versus $180 million in the same quarter of the prior year.

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 Investor Relations section.

EARNINGS CALL

A conference call hosted by management to discuss these financial results will be held on March 27, at 8:30 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 March 27 until April 10, by dialing 877-660-6853 (domestic) or 201-612-7415 (international) with the conference ID of 13604332.

ABOUT COVERIS™

As a leading international manufacturing company, Coveris is dedicated to providing solutions that enhance the safety, quality and convenience of products we use every day. In partnership with the most respected brands in the world, Coveris develops vital products that protect everything from the food we eat, to medical supplies, to the touch screen device in our pockets, contributing to the lives of millions every day.

Coveris is an affiliated portfolio company of Sun Capital Partners, Inc.

www.coveris.com

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.

COVERIS 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-14   31-Dec-13 31-Dec-14   31-Dec-13
 
U.S. GAAP Net income (loss) $ (40.4 ) $ (100.1 ) $ (100.3 ) $ (151.8 )
Interest expense, net $ 32.0 $ 62.2 $ 128.8 $ 123.2
(Benefit) provision for income taxes $ (17.9 ) $ (31.3 ) $ (16.1 ) $ (33.4 )
Depreciation and amortization $ 39.0 $ 113.7 $ 156.3 $ 197.5
PPA Adjustments and FX translation $ 11.6     $ (21.7 ) $ 28.6     $ (6.8 )
Unadjusted (a) $ 24.2 $ 22.8 $ 197.3 $ 128.7
 
Pro Forma adjustments to reflect full year results(b):
Unadjusted Exopack EBITDA prior to Fund V acquisition $ - $ - $ - $ 35.4
Unadjusted Closures EBITDA prior to Fund V acquisition $ - $ 1.2 $ - $ 7.7
Unadjusted Intelicoat EBITDA prior to Fund V acquisition $ - $ (0.8 ) $ - $ (1.5 )
Unadjusted St. Neots EBITDA prior to Fund V acquisition $ - $ (1.3 ) $ 3.0 $ 5.7
Unadjusted Learoyd EBITDA prior to Fund V acquisition $ -     $ 0.9     $ 2.3     $ 3.2  
Unadjusted Pro Forma EBITDA $ 24.2 $ 22.8 $ 202.6 $ 179.2
 
 
Adjustments:
Restructuring and related relocation costs(c) $ 18.8 $ 15.1 $ 45.2 $ 42.8
Management fees and expenses $ 2.2 $ 4.8 $ 9.8 $ 16.4
Transaction related expenses(d) $ 2.4 $ 3.3 $ 10.1 $ 11.1
Business improvement consulting cost $ 8.0 $ 5.3 $ 20.7 $ 7.9
(Gain) loss on disposal of assets $ 3.9 $ 0.7 $ 5.4 $ (4.3 )
Pension revaluation $ (0.1 ) $ 1.7 $ 1.1 $ 2.2
Other expenses(e) $ 12.3     $ 12.5   $ 26.7     $ 18.5  
Adjusted Pro Forma EBITDA $ 71.8     $ 66.3   $ 321.7     $ 273.8  
 
(a) KubeTech was accounted for as a business combination under common control; therefore, KubeTech's historical results were included in the
U.S. GAAP net income (loss) and reconciliation to Unadjusted EBITDA in both the current and prior year results.
(b) Pro Forma adjustments to retrospectively include results of certain entities prior to the Company's acquisitions.
(c) Costs associated primarily with various restructuring activities, employee relocation expenses or employee severance costs.
(d) Costs associated with the Combination, transactions and acquisition costs.
(e) Costs associated with information technology, consulting, rebranding and other infrequent expenses.

Contacts

Coveris
Investor Contact:
Duane A. Owens, 864-641-4710
Treasurer
duane.ownens@coveris.com
or
Media Contact:
Chris Swalm, 864-504-6145
Marketing Communications Manager
chris.swalm@coveris.com

Contacts

Coveris
Investor Contact:
Duane A. Owens, 864-641-4710
Treasurer
duane.ownens@coveris.com
or
Media Contact:
Chris Swalm, 864-504-6145
Marketing Communications Manager
chris.swalm@coveris.com