QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934
|
A
|
(
|
IRS employer identification number
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
|
|
|
Accelerated Filer ☐
|
Non-Accelerated Filer ☐
|
Smaller Reporting Company
|
Emerging Growth Company
|
Part I.
|
Financial Information
|
Page No.
|
|
Item 1.
|
Financial Statements:
|
||
4
|
|||
5
|
|||
6
|
|||
7
|
|||
8
|
|||
Item 2.
|
14
|
||
Item 3.
|
18
|
||
Item 4.
|
18
|
||
Part II.
|
Other Information
|
||
Item 1.
|
19
|
||
Item 1A.
|
19
|
||
Item 2.
|
19
|
||
Item 6.
|
20
|
||
21
|
Item 1. |
Financial Statements
|
Quarterly Period Ended
|
||||||||
December 31, 2022
|
January 1, 2022
|
|||||||
Net sales
|
$
|
|
$
|
|
||||
Costs and expenses:
|
||||||||
Cost of goods sold
|
|
|
||||||
Selling, general and administrative
|
|
|
||||||
Amortization of intangibles
|
|
|
||||||
Restructuring and transaction activities
|
|
|
||||||
Operating income
|
|
|
||||||
Other expense
|
|
|
||||||
Interest expense
|
|
|
||||||
Income before income taxes
|
|
|
||||||
Income tax expense
|
|
|
||||||
Net income
|
$
|
|
$
|
|
||||
Net income per share:
|
||||||||
Basic
|
$
|
|
$
|
|
||||
Diluted
|
|
|
Quarterly Period Ended
|
||||||||
December 31, 2022
|
January 1, 2022
|
|||||||
Net income
|
$
|
|
$
|
|
||||
Other comprehensive income, net of tax:
|
||||||||
Currency translation
|
|
(
|
)
|
|||||
Derivative instruments
|
(
|
)
|
|
|||||
Other comprehensive income
|
|
|
||||||
Comprehensive income
|
$
|
|
$
|
|
December 31, 2022
|
October 1, 2022
|
|||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Accounts receivable
|
|
|
||||||
Finished goods
|
|
|
||||||
Raw materials and supplies
|
|
|
||||||
Prepaid expenses and other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Noncurrent assets:
|
||||||||
Property, plant and equipment
|
|
|
||||||
Goodwill and intangible assets
|
|
|
||||||
Right-of-use assets
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued employee costs
|
|
|
||||||
Other current liabilities
|
|
|
||||||
Current portion of long-term debt
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Noncurrent liabilities:
|
||||||||
Long-term debt
|
|
|
||||||
Deferred income taxes
|
|
|
||||||
Employee benefit obligations
|
|
|
||||||
Operating lease liabilities
|
|
|
||||||
Other long-term liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Stockholders’ equity:
|
||||||||
Common stock (
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
Quarterly Period Ended
|
||||||||
December 31, 2022
|
January 1, 2022
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net cash from operating activities:
|
||||||||
Depreciation
|
|
|
||||||
Amortization of intangibles
|
|
|
||||||
Non-cash interest (income) expense, net
|
(
|
)
|
|
|||||
Deferred income tax
|
(
|
)
|
(
|
)
|
||||
Share-based compensation expense
|
|
|
||||||
Other non-cash operating activities, net
|
(
|
)
|
(
|
)
|
||||
Changes in working capital
|
(
|
)
|
(
|
)
|
||||
Changes in other assets and liabilities
|
(
|
)
|
(
|
)
|
||||
Net cash from operating activities
|
(
|
)
|
(
|
)
|
||||
Cash Flows from Investing Activities:
|
||||||||
Additions to property, plant and equipment, net
|
(
|
)
|
(
|
)
|
||||
Net cash from investing activities
|
(
|
)
|
(
|
)
|
||||
Cash Flows from Financing Activities:
|
||||||||
Repayments on long-term borrowings
|
(
|
)
|
(
|
)
|
||||
Proceeds from issuance of common stock
|
|
|
||||||
Repurchase of common stock
|
(
|
)
|
(
|
)
|
||||
Dividends paid
|
(
|
)
|
|
|||||
Net cash from financing activities
|
(
|
)
|
(
|
)
|
||||
Effect of currency translation on cash
|
|
(
|
)
|
|||||
Net change in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
Cash and cash equivalents at beginning of period
|
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
Common Stock
|
Additional
Paid-in Capital
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
||||||||||||||||
Balance at October 1, 2022
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||||
Net income
|
|
|
|
|
|
|||||||||||||||
Other comprehensive income
|
|
|
|
|
|
|||||||||||||||
Share-based compensation
|
|
|
|
|
|
|||||||||||||||
Proceeds from issuance of common stock
|
|
|
|
|
|
|||||||||||||||
Common stock repurchased and retired
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||||||||||
Dividends paid
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance at December 31, 2022
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||||
Balance at October 2, 2021
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||||
Net income
|
|
|
|
|
|
|||||||||||||||
Other comprehensive income
|
|
|
|
|
|
|||||||||||||||
Share-based compensation
|
|
|
|
|
|
|||||||||||||||
Proceeds from issuance of common stock
|
|
|
|
|
|
|||||||||||||||
Common stock repurchased and retired
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||||||||||
Balance at January 1, 2022
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
Quarterly Period Ended
|
||||||||
December 31, 2022
|
January 1, 2022
|
|||||||
Consumer Packaging International
|
$
|
|
$
|
|
||||
Consumer Packaging North America
|
|
|
||||||
Health, Hygiene & Specialties
|
|
(
|
)
|
|||||
Engineered Materials
|
|
|
||||||
Consolidated
|
$
|
|
$
|
|
Restructuring
|
||||||||||||||||
Employee Severance
and Benefits
|
Facility
Exit Costs
|
Transaction
Activities
|
Total
|
|||||||||||||
Balance at October 1, 2022
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Charges
|
|
|
|
|
||||||||||||
Cash payments
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Balance at December 31, 2022
|
$
|
|
$
|
|
$
|
|
$
|
|
Leases
|
Classification
|
December 31, 2022
|
October 1, 2022
|
||||||
Operating leases:
|
|||||||||
Operating lease right-of-use assets
|
|
$
|
|
$
|
|
||||
Current operating lease liabilities
|
|
|
|
||||||
Noncurrent operating lease liabilities
|
|
|
|
||||||
Finance leases:
|
|||||||||
Finance lease right-of-use assets
|
|
$
|
|
$
|
|
||||
Current finance lease liabilities
|
|
|
|
||||||
Noncurrent finance lease liabilities
|
|
|
|
Quarterly Period Ended
|
||||||||||||
Lease Type
|
Cash Flow Classification
|
Lease Expense Category
|
December 31, 2022
|
January 1, 2022
|
||||||||
Operating
|
Operating
|
Lease cost
|
$
|
|
$
|
|
||||||
Finance
|
Operating
|
Interest expense
|
|
|
||||||||
Finance
|
Financing
|
- |
|
|
||||||||
Finance
|
-
|
Amortization of right-of-use assets
|
|
|
Facility
|
Maturity Date
|
December 31, 2022
|
October 1, 2022
|
||||||
Term loan
|
|
$
|
|
|
|||||
Revolving line of credit
|
|
|
|
||||||
|
|
|
|
||||||
|
|
|
|
||||||
|
|
|
|
||||||
|
|
|
|
||||||
|
|
|
|
||||||
|
|
|
|
||||||
|
|
|
|
||||||
|
|
|
|
||||||
Debt discounts and deferred fees
|
(
|
)
|
(
|
)
|
|||||
Finance leases and other
|
Various
|
|
|
||||||
Total long-term debt
|
|
|
|||||||
Current portion of long-term debt
|
(
|
)
|
(
|
)
|
|||||
Long-term debt, less current portion
|
$
|
|
|
(a) |
|
Derivative Instruments
|
Hedge Designation
|
Balance Sheet Location
|
December 31, 2022
|
October 1, 2022
|
||||||
Cross-currency swaps
|
Designated
|
Other assets
|
|
|
||||||
Cross-currency swaps
|
Designated
|
Other long-term liabilities
|
|
|
||||||
Interest rate swaps
|
Designated
|
Other assets
|
|
|
||||||
Interest rate swaps
|
Designated
|
Other long-term liabilities
|
|
|
||||||
Interest rate swaps
|
Not designated
|
Other long-term liabilities
|
|
|
Quarterly Period Ended
|
|||||||||
Derivative Instruments
|
Statements of Income Location
|
December 31, 2022
|
January 1, 2022
|
||||||
Cross-currency swaps
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Interest rate swaps
|
|
(
|
)
|
|
As of December 31, 2022
|
||||||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
Impairment
|
||||||||||||||||
Indefinite-lived trademarks
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Goodwill
|
|
|
|
|
|
|||||||||||||||
Definite lived intangible assets
|
|
|
|
|
|
|||||||||||||||
Property, plant, and equipment
|
|
|
|
|
|
|||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
As of October 1, 2022
|
||||||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
Impairment
|
||||||||||||||||
Indefinite-lived trademarks
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Goodwill
|
|
|
|
|
|
|||||||||||||||
Definite lived intangible assets
|
|
|
|
|
|
|||||||||||||||
Property, plant, and equipment
|
|
|
|
|
|
|||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Quarterly Period Ended
|
||||||||
December 31, 2022
|
January 1, 2022
|
|||||||
Net sales:
|
||||||||
Consumer Packaging International
|
$
|
|
$
|
|
||||
Consumer Packaging North America
|
|
|
||||||
Health, Hygiene & Specialties
|
|
|
||||||
Engineered Materials
|
|
|
||||||
Total net sales
|
$
|
|
$
|
|
||||
Operating income:
|
||||||||
Consumer Packaging International
|
$
|
|
$
|
|
||||
Consumer Packaging North America
|
|
|
||||||
Health, Hygiene & Specialties
|
|
|
||||||
Engineered Materials
|
|
|
||||||
Total operating income
|
$
|
|
$
|
|
||||
Depreciation and amortization:
|
||||||||
Consumer Packaging International
|
$
|
|
$
|
|
||||
Consumer Packaging North America
|
|
|
||||||
Health, Hygiene & Specialties
|
|
|
||||||
Engineered Materials
|
|
|
||||||
Total depreciation and amortization
|
$
|
|
$
|
|
Quarterly Period Ended
|
||||||||
December 31, 2022
|
January 1, 2022
|
|||||||
Net sales:
|
||||||||
United States and Canada
|
$
|
|
$
|
|
||||
Europe
|
|
|
||||||
Rest of world
|
|
|
||||||
Total net sales
|
$
|
|
$
|
|
Quarterly Period Ended
|
||||||||
(in millions, except per share amounts)
|
December 31, 2022
|
January 1, 2022
|
||||||
Numerator
|
||||||||
Consolidated net income
|
$
|
|
$
|
|
||||
Denominator
|
||||||||
Weighted average common shares outstanding - basic
|
|
|
||||||
Dilutive shares
|
|
|
||||||
Weighted average common and common equivalent shares outstanding - diluted
|
|
|
||||||
Per common share earnings
|
||||||||
Basic
|
$
|
|
$
|
|
||||
Diluted
|
$
|
|
$
|
|
Quarterly Period Ended
|
Currency
Translation
|
Defined Benefit
Pension and Retiree
Health Benefit Plans
|
Derivative
Instruments
|
Accumulated Other
Comprehensive Loss
|
||||||||||||
Balance at October 1, 2022
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
|||||
Other comprehensive income before reclassifications
|
|
|
|
|
||||||||||||
Net amount reclassified from accumulated other comprehensive loss
|
|
|
(
|
)
|
(
|
)
|
||||||||||
Balance at December 31, 2022
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
Currency
Translation
|
Defined Benefit
Pension and Retiree
Health Benefit Plans
|
Derivative
Instruments
|
Accumulated Other
Comprehensive Loss
|
|||||||||||||
Balance at October 2, 2021
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Other comprehensive income before reclassifications
|
(
|
)
|
|
|
|
|||||||||||
Net amount reclassified from accumulated other comprehensive loss
|
|
|
|
|
||||||||||||
Balance at January 1, 2022
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
Consolidated Overview
|
||||||||||||||||
Quarter
|
Prior Quarter
|
$ Change
|
% Change
|
|||||||||||||
Net sales
|
$
|
3,060
|
$
|
3,573
|
$
|
(513
|
)
|
(14
|
)%
|
|||||||
Cost of goods sold
|
2,542
|
3,038
|
(496
|
)
|
(16
|
)%
|
||||||||||
Other operating expenses
|
308
|
306
|
2
|
1
|
%
|
|||||||||||
Operating income
|
$
|
210
|
$
|
229
|
$
|
(19
|
)
|
(8
|
)%
|
Consumer Packaging International
|
||||||||||||||||
Quarter
|
Prior Quarter
|
$ Change
|
% Change
|
|||||||||||||
Net sales
|
$
|
936
|
$
|
1,056
|
$
|
(120
|
)
|
(11
|
)%
|
|||||||
Operating income
|
$
|
47
|
$
|
69
|
$
|
(22
|
)
|
(32
|
)%
|
Consumer Packaging North America
|
||||||||||||||||
Quarter
|
Prior Quarter
|
$ Change
|
% Change
|
|||||||||||||
Net sales
|
$
|
764
|
$
|
852
|
$
|
(88
|
)
|
(10
|
)%
|
|||||||
Operating income
|
$
|
71
|
$
|
46
|
$
|
25
|
54
|
%
|
Health, Hygiene & Specialties
|
||||||||||||||||
Quarter
|
Prior Quarter
|
$ Change
|
% Change
|
|||||||||||||
Net sales
|
$
|
663
|
$
|
818
|
$
|
(155
|
)
|
(19
|
)%
|
|||||||
Operating income
|
$
|
34
|
$
|
62
|
$
|
(28
|
)
|
(45
|
)%
|
Engineered Materials
|
||||||||||||||||
Quarter
|
Prior Quarter
|
$ Change
|
% Change
|
|||||||||||||
Net sales
|
$
|
697
|
$
|
847
|
$
|
(150
|
)
|
(18
|
)%
|
|||||||
Operating income
|
$
|
58
|
$
|
52
|
$
|
6
|
12
|
%
|
December 31, 2022
|
January 1, 2022
|
|||||||
Cash flow from operating activities
|
$
|
(233
|
)
|
$
|
(304
|
)
|
||
Additions to property, plant and equipment, net
|
(211
|
)
|
(162
|
)
|
||||
Free cash flow
|
$
|
(444
|
)
|
$
|
(466
|
)
|
Quarterly Period Ended
|
||||
December 31, 2022
|
||||
Net sales
|
$
|
1,649
|
||
Gross profit
|
310
|
|||
Earnings from continuing operations
|
76
|
|||
Net income
|
$
|
76
|
December 31, 2022
|
October 1, 2022
|
|||||||
Assets
|
||||||||
Current assets
|
$
|
1,736
|
$
|
2,432
|
||||
Noncurrent assets
|
5,986
|
6,137
|
||||||
Liabilities
|
||||||||
Current liabilities
|
$
|
1,102
|
$
|
1,536
|
||||
Noncurrent liabilities
|
10,651
|
10,630
|
Fiscal Period
|
Total Number of
Shares Purchased
|
Average Price
Paid Per Share
|
Total Number of Shares
Purchased as Part of Publicly
Announced Programs
|
Dollar Value of Shares that
May Yet be Purchased Under
the Program (in millions) (a)
|
||||||||||||
October
|
-
|
$
|
-
|
-
|
$
|
1,042
|
||||||||||
November
|
942,588
|
57.86
|
942,588
|
988
|
||||||||||||
December
|
2,046,480
|
60.10
|
2,046,480
|
865
|
||||||||||||
Total
|
2,989,068
|
$
|
59.39
|
2,989,068
|
$
|
865
|
(a) |
All open market purchases during the quarter were made under the 2023 authorization from our board of directors.
|
Exhibit No.
|
Description of Exhibit
|
|
10.1†*
|
Berry Global Group, Inc. 2022 Dividend Equivalent Rights Plan.
|
|
10.2†*
|
Form of Notice of Dividend Equivalent Rights Award under the Berry Global Group, Inc. 2022 Dividend Equivalent Rights Plan.
|
|
22.1*
|
Subsidiary Guarantors.
|
|
31.1*
|
Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.
|
|
31.2*
|
Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.
|
|
32.1**
|
Section 1350 Certification of the Chief Executive Officer.
|
|
32.2**
|
Section 1350 Certification of the Chief Financial Officer.
|
|
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline
XBRL document).
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
104
|
Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101).
|
* |
Filed herewith
|
** |
Furnished herewith
|
Berry Global Group, Inc.
|
|||
February 2, 2023
|
By:
|
/s/ Mark W. Miles
|
|
Mark W. Miles
|
|||
Chief Financial Officer
|