Coveris Reports Third Quarter 2016 Financial Results

  • Operating income of $22.8 million for the quarter, up 31% year-to-date
  • Adjusted EBITDA of $77.1 million for the quarter, up 1% year-to-date or 4% on a constant currency basis
  • Adjustments to EBITDA for special items reduced to $18 million for the quarter, down 33% year-to-date
  • Announced completion of term loan addition to provide additional liquidity and repay 10% bonds, the nearest term maturity

CHICAGO--()--Coveris Holdings S.A. reported third quarter 2016 net sales of $616 million, compared to net sales for the third quarter of 2015 of $677 million. Adjusted EBITDA for the third quarter was $77 million, compared to $83 million in the third quarter of 2015. On a year-to-date constant currency basis, net sales for 2016 of $1.9 billion is $17 million higher than the previous year. Adjusted EBITDA on a year-to-date basis of $243 million, is approximately 1% above the prior year. On a constant currency basis, adjusted EBITDA is 4% ahead of the prior year.

“We continue to follow our strategy and implementation of our key initiatives. While we saw many key metrics improve, our volumes were lower than planned,” said Gary Masse, President and Chief Executive Officer. “We are on a continuous improvement journey and we remain very optimistic about the company we are building.”

In the quarter, the Company successfully priced and closed on a $350 million term loan addition. The proceeds repaid its nearest term bond maturity, which was due May 2018, and provided additional liquidity. The refinancing of these bonds will save approximately $13 million in cash interest annually.

Please see our 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 November 8, 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 November 8 until November 22, 2016, by dialing 877-660-6853 (domestic) or 201-612-7415 (international) with the conference ID of 13648632.

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.

 

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 ADJUSTED EBITDA
(Expressed in millions of U.S. dollars)
         
 
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
30-Sep-16 30-Sep-15 30-Sep-16 30-Sep-15
 
U.S. GAAP Net income (loss) $ (27.8 ) $ (4.1 ) $ (69.5 ) $ (37.2 )
Interest expense, net 39.0 33.4 107.0 95.1
(Benefit) provision for income taxes (12.4 ) 2.8 (10.5 ) (4.6 )
Depreciation and amortization   37.6       38.0     112.0       109.5  
Non-GAAP EBITDA $ 36.4     $ 70.1   $ 139.0     $ 162.8  
 
Non-Operational Adjustments:
Accounting Manual Compliance - - 0.4 -
(Gain) loss on disposal of assets 4.9 (0.1 ) 6.0 (1.2 )
Pension revaluation - 0.2 - 0.6
Foreign currency exchange (gain) loss 17.0 (8.5 ) 55.4 18.2
Other   0.9       -     1.7       -  
Total Non-Operational Adjustments $ 22.8     $ (8.4 ) $ 63.5     $ 17.6  
 
Special Items:
Restructuring and related relocation costs(a) 6.6 6.6 16.9 22.1
Management fees and expenses 2.1 1.8 6.4 6.4
Transaction related expenses(b) 0.7 2.7 1.2 6.5
Business improvement consulting cost 2.1 5.0 5.5 16.2
Other expenses(c)   6.4       4.8     10.1       8.3  
Total Special Items:   17.9       20.9     40.1       59.5  
Non-GAAP Adjusted EBITDA $ 77.1     $ 82.6   $ 242.6     $ 239.9  
 
(a) Costs associated primarily with various restructuring activities, employee relocation expenses or employee severance costs.
(b) Costs associated with transactions and acquisition costs.
(c) Costs associated with information technology, consulting, rebranding and other infrequent expenses.

Contacts

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

Contacts

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