Coveris Reports First Quarter 2015 Financial Results

  • Reports volume increases of 3% versus the prior year
  • Reports gross margin of 15.3%, an improvement of 140 basis points and the highest level achieved thus far by the company
  • Combined Adjusted EBITDA, on a constant currency basis, of $82 million, was a 6.3% increase from the prior year

CHICAGO--()--Coveris Holdings S.A. reported first quarter 2015 net sales of $634 million. Combined net sales for the first quarter of 2014 were $705 million. Excluding the impact of foreign exchange and lower resin prices, net sales for the first quarter of 2015 would have been $717 million, an increase of 1.7% from the combined net sales for the first quarter of 2014. Combined Adjusted EBITDA for the first quarter was $73.7 million, down from $77.1 million in the prior year. On a constant currency basis, the Combined Adjusted EBITDA would have been $82 million, which is up $4.9 million or 6.3% from the prior year.

“I am pleased with our start to the new year,” said Gary Masse, President and Chief Executive Officer. “While the first quarter was influenced by foreign currency fluctuations, raw material price and supply changes, we remained focused on our strategy and implementing key initiatives using the tools and processes provided by the Coveris Business System. This focus allowed us to continue to improve our margins, deliver volume improvements and enhance our cash flow. ”

Please see our Combined Adjusted 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 May 22, 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 May 22 until June 5, by dialing 877-660-6853 (domestic) or 201-612-7415 (international) with the conference ID of 13610676.

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 NET INCOME (LOSS) TO NON-GAAP Combined ADJUSTED EBITDA
(Expressed in millions of U.S. dollars)
   
     
Three Months Three Months
Ended Ended
31-Mar-15   31-Mar-14
 
U.S. GAAP Net income (loss)(a) $ (20.3 ) $ (14.9 )
Interest expense, net $ 31.2 $ 31.5
(Benefit) provision for income taxes $ (5.1 ) $ (1.7 )
Depreciation and amortization $ 35.9     $ 38.5  
Non-GAAP EBITDA(a) $ 41.7     $ 53.4  
 
Acquisitions(b):
Unadjusted Exopack EBITDA prior to Fund V acquisition $ - $ -
Unadjusted Closures EBITDA prior to Fund V acquisition $ - $ -
Unadjusted Intelicoat EBITDA prior to Fund V acquisition $ - $ -
Unadjusted St. Neots EBITDA prior to Fund V acquisition $ - $ 1.4
Unadjusted Learoyd EBITDA prior to Fund V acquisition $ -     $ 0.7  
Total Acquisitions: $ -     $ 2.2  
 
Special Items:
PPA Adjustments and FX translation $ 15.2 $ 1.9
Restructuring and related relocation costs(c) $ 4.7 $ 6.6
Management fees and expenses $ 2.4 $ 2.9
Transaction related expenses(d) $ 0.4 $ 0.5
Business improvement consulting cost $ 6.2 $ 1.1
(Gain) loss on disposal of assets $ (1.5 ) $ 0.2
Pension revaluation $ 0.2 $ 0.3
Other expenses(e) $ 4.3     $ 8.0  
Total Special Items: $ 32.0     $ 21.5  
Non-GAAP Combined Adjusted EBITDA(a) $ 73.7     $ 77.1  

(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), EBITDA and reconciliation to Combined Adjusted EBITDA in both the current and prior
year results.

(b) Adjustments to retrospectively include results of certain entities prior to the Company's acquisition of the entity.
(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 or non-recurring expenses.

Contacts

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

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