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·	Reported record net sales of $1,612 million for the December 2015 quarter compared to $1,220 million in the December 2014 quarter

·	Posted record Operating EBITDA of $276 million (17.1 percent of net sales) in the December 2015 quarter compared to $182 million (14.9 percent of net sales) in the prior year quarter

·	Generated $191 million of cash flow from operations in the December 2015 quarter compared to $100 million in the prior year quarter

·	Increased adjusted free cash flow by 25 percent to $45 million in the December 2015 quarter resulting in a total of $445 million for the four quarters ended

·	Increased our fiscal year 2016 Operating EBITDA guidance by $20 million to $1,180 million and reaffirmed our adjusted free cash flow guidance of $475 million

 
 

		Quarterly Period Ended (Unaudited)
Net sales  (in millions of dollars)		January 2, 2016				December 27, 2014				$ Change				% Change
Consumer Packaging		$	683			$	712			$	(29	)			(4	)%
Health, Hygiene, & Specialties.			564				129				435				337	%
Engineered Materials			365				379				(14	)			(4	) %
Total net sales		$	1,612			$	1,220			$	392				32	%

The ratio of net debt of $5,866 million to pro forma adjusted EBITDA of $1,206 million for the four quarters ended January 2, 2016 was 4.9, representing a 0.3 improvement (reduction) from our June 2015 quarter end pro forma ratio of 5.2.  The Company’s adjusted free cash flow for the December 2015 quarter was $45 million, an increase of 25 percent, compared to $36 million in the prior year period.  Additionally, the current quarter included $30 million of cash uses associated with the acquisition of Avintiv.  Excluding these items, adjusted free cash flow would have been $75 million or 108 percent over the prior year quarter. 

(1)	Increase primarily related to the purchase of Avintiv on October 1, 2015 for approximately $2.3 billion.

 
 Investor Conference Call

Berry Plastics Group, Inc. is a leading provider of value-added plastic consumer packaging and engineered materials delivering high-quality customized solutions to our customers, with pro forma net sales of $6.7 billion in fiscal 2015.  The Company’s common stock is listed on the New York Stock Exchange under the ticker symbol BERY and its world headquarters is located in Evansville, Indiana.  For additional information, visit the Company’s website at www.berryplastics.com.

		Quarterly Period Ended
		January 2, 2016				December 27, 2014
Net sales		$	1,612			$	1,220
Costs and expenses:
Cost of goods sold			1,320				1,037
Selling, general and administrative			154				85
Amortization of intangibles			36				25
Restructuring and impairment charges			16				5
Operating income			86				68
Other expense (income), net			4				(1	)
Interest expense, net			75				53
Income before income taxes			7				16
Income tax expense			3				3
Net income		$	4			$	13

Net income per share:
Basic		$	0.03			$	0.11
Diluted			0.03				0.11
Outstanding weighted-average shares: (in millions)
Basic			120.1				118.2
Diluted			124.9				122.9

Berry Plastics Group, Inc.

		Quarterly Period Ended
		January 2,  2016				December 27, 2014
Consolidated net income		$	4			$	13
Currency translation			(23	)			(14	)
Interest rate hedges			4				(7	)
Provision for income taxes related to other  comprehensive income items			(1	)			2
Comprehensive loss		$	(16	)		$	(6	)

 

 

 (in millions of dollars)

		January 2, 2016				September 26, 2015
Assets:
Cash and cash equivalents		$	282			$	228
Accounts receivable, net			625				434
Inventories			681				522
Other current assets			104				199
Property, plant, and equipment, net			2,297				1,294
Goodwill, intangible assets, and other long-term assets			3,721				2,351
Total assets		$	7,710			$	5,028
Liabilities and stockholders' equity (deficit)
Current liabilities, excluding debt		$	964			$	668
Current and long-term debt			6,148				3,685
Other long-term liabilities			665				728
Redeemable non-controlling interest			12				12
Stockholders’ deficit			(79	)			(65	)
Total liabilities and stockholders' equity (deficit)		$	7,710			$	5,028

 

 

 

Berry Plastics Group, Inc.

		Quarterly Period Ended
		January 2, 2016				December 27, 2014
Net sales:
Consumer Packaging		$	683			$	712
Health, Hygiene, & Specialties			564				129	(1)
Engineered Materials			365				379
Total net sales		$	1,612			$	1,220	(1)
Operating income:
Consumer Packaging		$	43			$	30
Health, Hygiene, & Specialties			5				7
Engineered Materials			38				31
Total operating income		$	86			$	68
Depreciation and amortization:
Consumer Packaging		$	67			$	63
Health, Hygiene, & Specialties			54				7
Engineered Materials			18				21
Total depreciation and amortization		$	139			$	91
Restructuring and impairment charges:
Consumer Packaging		$	3			$	2
Health, Hygiene, & Specialties			12				3
Engineered Materials			1				—
Total restructuring and impairment charges (3)		$	16			$	5
Business optimization costs (2) :
Consumer Packaging		$	3			$	14
Health, Hygiene, & Specialties			24				1
Engineered Materials			8				3
Total business optimization costs (3)		$	35			$	18
Operating EBITDA:
Consumer Packaging		$	116			$	109
Health, Hygiene, & Specialties			95				18	(4)
Engineered Materials			65				55
Total operating EBITDA		$	276			$	182	(4)

 

(1)	Net sales for Avintiv in the December 2014 quarter was $499 million.  Pro forma net sales within the HH&S segment, including Avintiv for the December 27, 2014 quarter, would be $628 million and total pro forma net sales for the December 27, 2014 quarter would be $1,719 million.

(2)	Includes integration expenses, non-cash charges, and other business optimization costs.

(3)	Increase from prior year quarter is primarily related to the Avintiv acquisition.

(4)

Operating EBITDA for Avintiv in the December 2014 quarter was $57 million.  Operating EBITDA, including Avintiv for the HH&S segment in the December 27, 2014 quarter, would be $75 million and total operating EBITDA for the December 27, 2014 quarter would be $239 million.  Avintiv’s  operating EBITDA of $57 million includes $13 million of operating income, plus $28 million of depreciation and amortization, plus $16 million of other business optimization and restructuring costs.

 

 

(in millions of dollars, except per share data)

										Four Quarters
		Quarterly Period Ended								Ended
		January 2, 2016				December 27, 2014				January 2, 2016
Operating income		$	86			$	68			$	426
Add: non-cash amortization from 2006 private sale			8				8				33
Add: restructuring and impairment			16				5				25
Add: business optimization costs (2)			35				18				60
Adjusted operating income (5)		$	145			$	99			$	544
Add: depreciation			103				66				296
Add: amortization of intangibles (3)			28				17				70
Operating EBITDA (5)		$	276			$	182			$	910
Add: pro forma acquisitions (4)			—								224
Add: unrealized cost savings (4)			13								72
Adjusted EBITDA (5)		$	289							$	1,206

Cash flow from operating activities		$	191			$	100			$	728
Net additions to property, plant, and equipment			(89	)			(25	)			(226	)
Payment of tax receivable agreement			(57	)			(39	)			(57	)
Adjusted free cash flow (5)		$	45			$	36			$	445

 

 

(1)	Includes the estimated step-up depreciation and amortization expense related to the Avintiv acquisition of $0.07.  Excluding this estimated step-up our net income and adjusted net income per diluted share would be $0.10 and $0.42, respectively.

 

(2)	Includes integration expenses, non-cash charges, and other business optimization costs.

 

(3)	Amortization excludes non-cash amortization from the 2006 private sale of $8 million for both the January 2, 2016 and December 27, 2014 quarters and $33 million for the four quarters ended January 2, 2016.

(4)	Four quarters ended pro forma acquisitions represents Operating EBITDA for Avintiv for the period of January 2015 to September 2015.  Unrealized cost savings primarily represents unrealized cost savings related to the Avintiv acquisition.

(5)

Supplemental financial measures that are not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”).  These non-GAAP financial measures should not be considered as alternatives to operating or net income or cash flows from operating activities, in each case determined in accordance with GAAP. These non-GAAP financial measures are among the indicators used by management to measure the performance of the Company’s operations, and also among the criteria upon which performance-based compensation may be based.  Adjusted EBITDA also is used by our lenders for debt covenant compliance purposes. We use Adjusted Free Cash Flow as a measure of liquidity because it assists us in assessing our Company’s ability to fund its growth through its generation of cash.  Our projected Adjusted Free Cash flow for fiscal 2016 assumes $817 million of cash flow from operations less $285 million of net additions to property, plant, and equipment and $57 million of payments under our tax receivable agreement.

 

 

 

 

 

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