Exhibit 99.1
 |
News Release
|
|
|
|
FOR IMMEDIATE RELEASE
Berry Global Group, Inc. Reports Fourth Quarter
and Fiscal Year 2021 Results
|
|
Fourth Quarter and Fiscal Year Highlights
(all comparisons made to the September 2020 quarter and fiscal year 2020)
|
|
•
|
Net sales growth of 22% and 18% in the quarter and fiscal year, respectively
|
|
•
|
Fiscal year organic volume growth of 4%; HHS +5%, CPNA +4%, EM +4% and CPI +3%
|
|
•
|
Fiscal year net income per share (EPS) up 28% to $5.30 and adjusted EPS up 20% to $5.80 ($7.21 including amortization of intangibles from acquisitions)
|
|
•
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Cash flow from operations and free cash flow of $1.6B and $904M, respectively
|
|
•
|
Fiscal 2022 expecting 2% organic volume growth and adjusted EPS of $7.20 - $7.70 (including amortization of intangibles from acquisitions)
|
|
•
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Fiscal 2022 expecting cash flow from operations of $1.7- $1.8B and free cash flow of $900M -$1B
|
EVANSVILLE, Ind. – November 18, 2021 – Berry Global Group, Inc. (NYSE:BERY), a leading supplier of sustainable packaging solutions for consumer goods and industrial products, today reported its
fourth quarter and fiscal year 2021 results, referred to in the following as the September 2021 quarter and fiscal 2021.
Berry’s Chairman and CEO Tom Salmon said, “The strong performance throughout this fiscal year led to a net sales record of $13.9 billon along with 4% organic
volume growth. Adjusted earnings per share was up 20% versus the prior year coming in at a fiscal year record of $5.80 per share along with operating EBITDA of $2.2 billion. All of these strong financial metrics were delivered despite a challenging
backdrop of significant cost inflation along with labor and supply chain challenges. My deepest thanks go to our 47,000 employees who delivered these terrific results in what was a challenging and unpredictable fiscal year. We believe that continued
execution of growing organic volumes, leading the way in sustainability and innovative packaging while maintaining our leverage in the range of 3.0 to 3.9 times, on a go-forward basis, will deliver significant shareholder value.
“We continue to invest in each of our businesses to build and maintain our world-class, low-cost, manufacturing base, with an emphasis on key growth markets and
regions and continue to see incremental opportunity to invest organically in support of our unwavering commitment to global growth. The continued positive momentum from our investments in areas such as health and wellness, e-commerce, and food safety
while driving more sustainable packaging, provide us the path to realize long-term consistent volume and earnings growth just as we delivered over the last several years.”
September 2021 Quarter Results
Consolidated Overview
The net sales growth of 22% is primarily attributed to increased selling prices of $716 million due to the pass through of inflation partially offset by prior
quarter divestiture sales of $60 million. When compared to the strong prior year volumes, organic volumes were down 1% in the quarter primarily due to the negative impact from supply chain and labor challenges.
The operating income decrease is primarily attributed to a $66 million unfavorable impact from price cost spread, prior year divestiture operating income of $7
million partially offset by a decline in business integration expenses and a decrease in selling, general, and administrative expense.
Page 1
Consumer Packaging - International
The net sales growth of 12% is primarily attributed to increased selling prices of $109 million due to the pass through of inflation.
The operating income increase is primarily attributed to a decline in business integration expenses and other non-cash charges along with a decrease in selling,
general, and administrative expense, partially offset by a $15 million negative impact from price cost spread.
Consumer Packaging - North America
The net sales growth of 31% is primarily attributed to increased selling prices of $219 million due to the pass through of inflation, partially offset by a
modest organic volume decline compared to the strong organic volume growth of 6% in the prior year quarter.
The operating income decrease is primarily attributed to a $25 million negative impact from price cost spread, partially offset by a decrease in selling,
general, and administrative expense.
Health, Hygiene, & Specialties
The net sales growth of 21% is primarily attributed to increased selling prices of $161 million due to the pass through of inflation partially offset by prior
quarter divestiture sales and an organic volume decline of 3% compared to the strong organic volume growth of 12% in the prior year quarter.
The operating income decrease is primarily attributed to a $14 million negative impact from price cost spread partially offset by a decrease in selling,
general, and administrative expense.
Engineered Materials
The net sales growth of 30% is primarily attributed to increased selling prices of $226 million due to the pass through of inflation partially offset by prior
quarter divestiture sales of $39 million.
The operating income decrease is primarily attributed to a $13 million negative impact from price cost spread.
Fiscal Year 2021 Results
|
Consolidated Overview
|
||||||||||||||||
|
Fiscal Year
|
||||||||||||||||
|
(in millions of dollars)
|
Current
|
Prior
|
$ Change
|
% Change
|
||||||||||||
|
Net sales
|
$
|
13,850
|
$
|
11,709
|
$
|
2,141
|
18
|
%
|
||||||||
|
Operating income
|
1,292
|
1,179
|
113
|
10
|
%
|
|||||||||||
The operating income increase is primarily attributed to a $100 million increase from the organic volume growth, a $55 million favorable impact from foreign
currency changes, a $37 million decrease in business integration, and a $22 million benefit from extra shipping days in fiscal 2021. These improvements are partially offset by a $75 million impact from inflation and product mix, a $19 million increase
in depreciation and amortization, and prior year divestiture operating income of $18 million.
|
Consumer Packaging – International
|
||||||||||||||||
|
Fiscal Year
|
||||||||||||||||
|
(in millions of dollars)
|
Current
|
Prior
|
$ Change
|
% Change
|
||||||||||||
|
Net sales
|
$
|
4,242
|
$
|
3,789
|
$
|
453
|
12
|
%
|
||||||||
|
Operating income
|
317
|
273
|
44
|
16
|
%
|
|||||||||||
Page 2
The net sales growth in the Consumer Packaging International segment is primarily attributed to increased selling prices of $130 million due to the pass through
of inflation, organic volume growth of 3%, and a $227 million favorable impact from foreign currency changes, partially offset by prior year divestiture sales of $22 million.
The operating income increase is primarily attributed to a $23 million increase from the organic volume growth, a $40 million favorable impact from foreign
currency, and an $18 million decrease in business integration activities, partially offset by a $33 million unfavorable impact from price cost spread.
|
Consumer Packaging – North America
|
||||||||||||||||
|
Fiscal Year
|
||||||||||||||||
|
(in millions of dollars)
|
Current
|
Prior
|
$ Change
|
% Change
|
||||||||||||
|
Net sales
|
$
|
3,141
|
$
|
2,560
|
$
|
581
|
23
|
%
|
||||||||
|
Operating income
|
276
|
275
|
1
|
-
|
%
|
|||||||||||
The net sales growth in the Consumer Packaging North America segment is primarily attributed to organic volume growth of 4%, increased selling prices due of
$439 million due to the pass through of inflation, and a $40 million increase from extra shipping days in fiscal 2021.
The operating income being flat is primarily attributed to a $27 million increase from the organic volume growth, an $11 million decrease in business
integration activities, and a decrease in depreciation and amortization, partially offset by a $43 million unfavorable impact from price cost spread.
|
Health, Hygiene & Specialties
|
||||||||||||||||
|
Fiscal Year
|
||||||||||||||||
|
(in millions of dollars)
|
Current
|
Prior
|
$ Change
|
% Change
|
||||||||||||
|
Net sales
|
$
|
3,158
|
$
|
2,594
|
$
|
564
|
22
|
%
|
||||||||
|
Operating incom
|
398
|
295
|
103
|
35
|
%
|
|||||||||||
The net sales growth in the Health, Hygiene & Specialties segment is primarily attributed to organic volume growth of 5%, increased selling prices of $385
million due to the pass through of inflation, a $42 million increase from extra shipping days in fiscal 2021, and a $41 million favorable impact from foreign currency changes, partially offset by prior year divestiture sales of $34 million.
The operating income increase is primarily attributed to a $36 million increase from the organic volume growth, a $48 million favorable impact from price cost
spread, and an $8 million benefit from extra shipping days in fiscal 2021 and a favorable impact from foreign currency changes.
|
Engineered Materials
|
||||||||||||||||
|
Fiscal Year
|
||||||||||||||||
|
(in millions of dollars)
|
Current
|
Prior
|
$ Change
|
% Change
|
||||||||||||
|
Net sales
|
$
|
3,309
|
$
|
2,766
|
$
|
543
|
20
|
%
|
||||||||
|
Operating income
|
301
|
336
|
(35
|
)
|
(10
|
)%
|
||||||||||
The net sales growth in the Engineered Materials segment is primarily attributed to increased selling prices of $475 million due to the pass through of
inflation, organic volume growth of 4%, a $63 million favorable impact from foreign currency changes, and a $44 million increase from extra shipping days in fiscal 2021, partially offset by prior year divestiture sales of $134 million.
The operating income decrease is primarily attributed to a $49 million unfavorable impact from price cost spread and prior year divestiture operating income of
$14 million, partially offset by a $14 million improvement from the organic volume growth and a $6 million benefit from extra shipping days in fiscal 2021.
Cash Flow and Balance Sheet
Our cash flow from operating activities increased to $1.58 billion for the fiscal year ended September 2021 compared to $1.53 billion in the prior year
primarily attributed to the growth in operating EBITDA and timing of working capital items partially offsetting with higher working capital from inflation. The Company’s free cash flow for the fiscal year ended October 2, 2021, was $904 million.
Our total debt less cash and cash equivalents (or “net debt”) at the end of fiscal 2021 quarter was $8,369 million. Adjusted EBITDA for fiscal 2021 was $2,194
million.
Page 3
Fiscal Year 2022 Guidance
For fiscal year 2022 Berry expects adjusted earnings per share (EPS) to be $7.20 - $7.70, which is based on 141 million shares outstanding, an expected tax rate
of 25% and an operating EBITDA range of $2.25 – $2.35 billion. Depreciation is expected to be $590 million and amortization from intangibles, which will be added back to adjusted EPS, is expected to be $275 million. Additionally we are targeting 2%
organic volume growth for fiscal 2022, as this guidance builds on our last two years of strong performance and is supported by our robust and growing pipeline, increased level of capital expenditures, and the positive trends and momentum we are seeing
in each of our businesses. While we remain committed to recovering the significant cost inflation we witnessed in fiscal 2021, we do anticipate, from both an earnings and volume perspective, a softer first half of the fiscal year with a stronger
second half on both recovery of inflation and volume comparisons versus prior year. We are targeting free cash flow of $900 million – $1.0 billion with includes cash flow from operations of $1.7 -$1.8 billion partially offset by capital expenditures
of $800 million. We intend to use our strong, dependable, and consistent free cash flow primarily to invest around driving sustainable long-term organic growth, optimizing our portfolio and enhancing our organic growth potential through strategic
acquisitions and divestitures, staying in our leverage range, and opportunistically repurchasing shares.
Investor Conference Call
The Company will host a conference call today, November 18, 2021, at 10 a.m. U.S. Eastern Time to discuss our fourth quarter and fiscal year 2021 results. The
telephone number to access the conference call is (866) 244-4530 (domestic), or (209) 313-0728 (international), conference ID 8289932. We expect the call to last approximately one hour. Interested parties are invited to listen to a live webcast and view the accompanying slides by visiting
the Company’s Investor page at www.berryglobal.com. A replay of the conference call can also be accessed on the
Investor page of the website beginning November 18, 2021, at 1 p.m. U.S. Eastern Time, to December 2, 2021, by calling (855) 859-2056 (domestic), or (404) 537-3406 (international), access code 8289932.
About Berry
At Berry Global Group, Inc. (NYSE:BERY), we create innovative packaging and engineered products that we believe make life better for people and the planet. We
do this every day by leveraging our unmatched global capabilities, sustainability leadership, and deep innovation expertise to serve customers of all sizes around the world. Harnessing the strength in our diversity and industry leading talent of 47,000
global employees across more than 300 locations, we partner with customers to develop, design, and manufacture innovative products with an eye toward the circular economy. The challenges we solve and the innovations we pioneer benefit our customers at
every stage of their journey. For more information, visit our website, or connect with us on LinkedIn or Twitter.
Non-GAAP Financial Measures and Estimates
This press release includes non-GAAP financial measures such as operating EBITDA, Adjusted EBITDA, Adjusted net income, and free cash flow. A reconciliation of
these non-GAAP financial measures to comparable measures determined in accordance with accounting principles generally accepted in the United States of America (GAAP) is set forth at the end of this press release. Information reconciling
forward-looking operating EBITDA is not provided because such information is not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain Items, including debt refinancing activity or
other non-comparable items. These items are uncertain, depend on various factors, and could be material to our results computed in accordance with U.S. GAAP. Our estimates of the impact of COVID-19 are based on product mix and prior internal sales
estimates compared to actual sales.
Page 4
Forward Looking Statements
Statements in this release that are not historical, including statements relating to the expected future performance of the Company, are
considered “forward looking” within the meaning of the federal securities laws and are presented pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements because they
contain words such as “believes,” “expects,” “may,” “will,” “should,” “would,” “could,” “seeks,” “approximately,” “intends,” “plans,” “projects,” “estimates,” “projects,” “outlook,” “anticipates” or “looking forward,” or similar expressions that relate
to our strategy, plans, intentions, or expectations. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates, and financial results or to our expectations regarding future
industry trends are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments.
Our actual results may differ materially from those that we expected due to a variety of factors, including without limitation: (1) risks
associated with our substantial indebtedness and debt service; (2) changes in prices and availability of resin and other raw materials and our ability to pass on changes in raw material prices to our customers on a timely basis; (3) risks related to
acquisitions or divestitures and integration of acquired businesses and their operations, and realization of anticipated cost savings and synergies; (4) risks related to international business, including foreign currency exchange rate risk and the
risks of compliance with applicable export controls, sanctions, anti-corruption laws and regulations; (5) increases in the cost of compliance with laws and regulations, including environmental, safety, and climate change laws and regulations; (6) labor
issues, including the potential labor shortages, shutdowns or strikes or the failure to renew effective bargaining agreements; (7) risks related to disruptions in the overall economy [,supply chains] and the financial markets that may adversely impact
our business, including as a result of the COVID-19 pandemic; (8) risk of catastrophic loss of one of our key manufacturing facilities, natural disasters, and other unplanned business interruptions; (9) risks related to the failure of, inadequacy of,
or attacks on our information technology systems and infrastructure; (10) risks that our restructuring programs may entail greater implementation costs or result in lower cost savings than anticipated; (11) risks related to future write-offs of
substantial goodwill; (12) risks of competition, including foreign competition, in our existing and future markets; and (13) the other factors discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K and subsequent filings with
the Securities and Exchange Commission. We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. Accordingly, readers should not place undue reliance on those statements. All
forward-looking statements are based upon information available to us on the date hereof. All forward-looking statements are made only as of the date hereof and we undertake no obligation to update or revise any forward-looking statement as a result
of new information, future events or otherwise, except as otherwise required by law.
Page 5
Berry Global Group, Inc.
Consolidated Statements of Income
(Unaudited)
(in millions of dollars, except per share data amounts)
|
Quarterly Period Ended
|
Fiscal Year Ended
|
|||||||||||||||
|
October 2,
2021
|
September 26,
2020
|
October 2,
2021
|
September 26,
2020
|
|||||||||||||
|
Net sales
|
$
|
3,669
|
$
|
3,008
|
$
|
13,850
|
$
|
11,709
|
||||||||
|
Costs and expenses:
|
||||||||||||||||
|
Cost of goods sold
|
3,078
|
2,342
|
11,352
|
9,301
|
||||||||||||
|
Selling, general and administrative
|
199
|
219
|
867
|
850
|
||||||||||||
|
Amortization of intangibles
|
69
|
74
|
288
|
300
|
||||||||||||
|
Restructuring and transaction activities
|
11
|
24
|
51
|
79
|
||||||||||||
|
Operating income
|
312
|
349
|
1,292
|
1,179
|
||||||||||||
|
Other expense (income), net
|
6
|
25
|
51
|
31
|
||||||||||||
|
Interest expense, net
|
79
|
96
|
336
|
435
|
||||||||||||
|
Income before income taxes
|
227
|
228
|
905
|
713
|
||||||||||||
|
Income tax (benefit) expense
|
(1
|
)
|
33
|
172
|
154
|
|||||||||||
|
Net income
|
$
|
228
|
$
|
195
|
$
|
733
|
$
|
559
|
||||||||
|
Net income per share:
|
||||||||||||||||
|
Basic
|
$
|
1.68
|
$
|
1.47
|
$
|
5.45
|
$
|
4.22
|
||||||||
|
Diluted
|
1.64
|
1.44
|
5.30
|
4.14
|
||||||||||||
|
Outstanding weighted-average shares: (in millions)
|
||||||||||||||||
|
Basic
|
135.4
|
133.1
|
134.6
|
132.6
|
||||||||||||
|
Diluted
|
138.7
|
135.4
|
138.3
|
135.1
|
||||||||||||
Page 6
Berry Global Group, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions of dollars)
|
October 2, 2021
|
September 26, 2020
|
|||||||
|
Assets:
|
||||||||
|
Cash and cash equivalents
|
$
|
1,091
|
$
|
750
|
||||
|
Accounts receivable, net
|
1,879
|
1,469
|
||||||
|
Inventories
|
1,907
|
1,268
|
||||||
|
Other current assets
|
217
|
330
|
||||||
|
Property, plant, and equipment, net
|
4,677
|
4,561
|
||||||
|
Goodwill, intangible assets, and other long-term assets
|
8,111
|
8,323
|
||||||
|
Total assets
|
$
|
17,882
|
$
|
16,701
|
||||
|
Liabilities and Stockholders' Equity:
|
||||||||
|
Current liabilities, excluding debt
|
$
|
3,165
|
$
|
2,108
|
||||
|
Current and long-term debt
|
9,460
|
10,237
|
||||||
|
Other long-term liabilities
|
2,077
|
2,264
|
||||||
|
Stockholders’ equity
|
3,180
|
2,092
|
||||||
|
Total liabilities and stockholders' equity
|
$
|
17,882
|
$
|
16,701
|
||||
Page 7
Berry Global Group, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in millions of dollars)
|
Fiscal Year Ended
|
||||||||
|
October 2, 2021
|
September 26, 2020
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Net income
|
$
|
733
|
$
|
559
|
||||
|
Adjustments to reconcile net cash provided by operating activities:
|
||||||||
|
Depreciation
|
566
|
545
|
||||||
|
Amortization of intangibles
|
288
|
300
|
||||||
|
Non-cash interest
|
32
|
27
|
||||||
|
Deferred income tax
|
(73
|
)
|
(96
|
)
|
||||
|
Share-based compensation expense
|
40
|
33
|
||||||
|
Other non-cash operating activities, net
|
49
|
53
|
||||||
|
Changes in working capital
|
(55
|
)
|
109
|
|||||
|
Net cash from operating activities
|
1,580
|
1,530
|
||||||
|
Cash flows from investing activities:
|
||||||||
|
Additions to property, plant, and equipment, net
|
(676
|
)
|
(583
|
)
|
||||
|
Divestiture of businesses
|
165
|
—
|
||||||
|
Settlement of net investment hedges
|
—
|
281
|
||||||
|
Other investing activities
|
—
|
(14
|
)
|
|||||
|
Net cash from investing activities
|
(511
|
)
|
(316
|
)
|
||||
|
Cash flows from financing activities:
|
||||||||
|
Repayments on long-term borrowings
|
(3,496
|
)
|
(2,436
|
)
|
||||
|
Proceeds from long-term borrowings
|
2,716
|
1,202
|
||||||
|
Proceeds from issuance of common stock
|
60
|
30
|
||||||
|
Debt financing costs
|
(21
|
)
|
(16
|
)
|
||||
|
Net cash from financing activities
|
(741
|
)
|
(1,220
|
)
|
||||
|
Effect of currency translation on cash
|
13
|
6
|
||||||
|
Net change in cash and cash equivalents
|
341
|
—
|
||||||
|
Cash and cash equivalents at beginning of period
|
750
|
750
|
||||||
|
Cash and cash equivalents at end of period
|
$
|
1,091
|
$
|
750
|
||||
Page 8
Berry Global Group, Inc.
Condensed Consolidated Financial Statements
Segment Information
(Unaudited)
(in millions of dollars)
|
Quarterly Period Ended October 2, 2021
|
||||||||||||||||||||
|
Consumer Packaging - International
|
Consumer Packaging- North America
|
Health, Hygiene & Specialties
|
Engineered Materials
|
Total
|
||||||||||||||||
|
Net sales
|
$
|
1,099
|
$
|
878
|
$
|
809
|
$
|
883
|
$
|
3,669
|
||||||||||
|
Operating income
|
$
|
102
|
$
|
64
|
$
|
76
|
$
|
70
|
$
|
312
|
||||||||||
|
Depreciation and amortization
|
83
|
60
|
47
|
25
|
215
|
|||||||||||||||
|
Restructuring and transaction activities (1)
|
12
|
(1
|
)
|
—
|
—
|
11
|
||||||||||||||
|
Other non-cash charges
|
(11
|
)
|
1
|
1
|
1
|
(8
|
)
|
|||||||||||||
|
Operating EBITDA
|
$
|
186
|
$
|
124
|
$
|
124
|
$
|
96
|
$
|
530
|
||||||||||
|
Quarterly Period Ended September 26, 2020
|
||||||||||||||||||||
|
Consumer Packaging - International
|
Consumer Packaging - North America
|
Health, Hygiene & Specialties
|
Engineered Materials
|
Total
|
||||||||||||||||
|
Net sales
|
$
|
985
|
$
|
672
|
$
|
671
|
$
|
680
|
$
|
3,008
|
||||||||||
|
Operating income
|
$
|
97
|
$
|
83
|
$
|
88
|
$
|
81
|
$
|
349
|
||||||||||
|
Depreciation and amortization
|
76
|
57
|
46
|
28
|
207
|
|||||||||||||||
|
Restructuring and transaction activities (1)
|
18
|
5
|
—
|
1
|
24
|
|||||||||||||||
|
Other non-cash charges
|
2
|
1
|
1
|
2
|
6
|
|||||||||||||||
|
Operating EBITDA
|
$
|
193
|
$
|
146
|
$
|
135
|
$
|
112
|
$
|
586
|
||||||||||
|
(1)
|
Primarily includes transaction activity costs related to the RPC acquisition.
|
Note: For comparison purposes to the September 2020 quarter, Operating EBITDA margins for the quarterly period ended October 2, 2021 would be increased by 350
basis points (to 17.9%) when adjusted for the impact of inflation on net sales of $716 million.
Page 9
Berry Global Group, Inc.
Condensed Consolidated Financial Statements
Segment Information
(Unaudited)
(in millions of dollars)
|
Fiscal Year Ended October 2, 2021
|
||||||||||||||||||||
|
Consumer Packaging - International
|
Consumer Packaging- North America
|
Health, Hygiene & Specialties
|
Engineered Materials
|
Total
|
||||||||||||||||
|
Net sales
|
$
|
4,242
|
$
|
3,141
|
$
|
3,158
|
$
|
3,309
|
$
|
13,850
|
||||||||||
|
Operating income
|
$
|
317
|
$
|
276
|
$
|
398
|
$
|
301
|
$
|
1,292
|
||||||||||
|
Depreciation and amortization
|
341
|
224
|
177
|
112
|
854
|
|||||||||||||||
|
Restructuring and transaction activities (1)
|
56
|
—
|
(1
|
)
|
(4
|
)
|
51
|
|||||||||||||
|
Other non-cash charges (2)
|
—
|
10
|
9
|
8
|
27
|
|||||||||||||||
|
Operating EBITDA
|
$
|
714
|
$
|
510
|
$
|
583
|
$
|
417
|
$
|
2,224
|
||||||||||
|
Fiscal Year Ended September 26, 2020
|
||||||||||||||||||||
|
Consumer Packaging - International
|
Consumer Packaging - North America
|
Health, Hygiene & Specialties
|
Engineered Materials
|
Total
|
||||||||||||||||
|
Net sales
|
$
|
3,789
|
$
|
2,560
|
$
|
2,594
|
$
|
2,766
|
$
|
11,709
|
||||||||||
|
Operating income
|
$
|
273
|
$
|
275
|
$
|
295
|
$
|
336
|
$
|
1,179
|
||||||||||
|
Depreciation and amortization
|
315
|
230
|
184
|
116
|
845
|
|||||||||||||||
|
Restructuring and transaction activities (1)
|
55
|
11
|
6
|
7
|
79
|
|||||||||||||||
|
Other non-cash charges (2)
|
31
|
10
|
5
|
8
|
54
|
|||||||||||||||
|
Operating EBITDA
|
$
|
674
|
$
|
526
|
$
|
490
|
$
|
467
|
$
|
2,157
|
||||||||||
|
(1)
(2)
|
Primarily includes transaction activity costs related to the RPC acquisition.
Other non-cash charges, for the current and prior years, primarily include stock compensation expense.
|
Note: For comparison purposes to the 2020 fiscal year, Operating EBITDA margins for the fiscal year ended October 2, 2021 would be increased by 180 basis points
(to 17.9%) when adjusted for the impact of inflation on net sales of $1.43 billion.
Page 10
Berry Global Group, Inc.
Reconciliation Schedules
(Unaudited)
(in millions of dollars, except per share data)
|
Quarterly Period Ended
|
Fiscal Year Ended
|
|||||||||||||||
|
October 2, 2021
|
September 26, 2020
|
October 2, 2021
|
September 26, 2020
|
|||||||||||||
|
Net income
|
$
|
228
|
$
|
195
|
$
|
733
|
$
|
559
|
||||||||
|
Add: other expense, net
|
6
|
25
|
51
|
31
|
||||||||||||
|
Add: interest expense, net
|
79
|
96
|
336
|
435
|
||||||||||||
|
Add: income tax (benefit) expense
|
(1
|
)
|
33
|
172
|
154
|
|||||||||||
|
Operating income
|
$
|
312
|
$
|
349
|
$
|
1,292
|
$
|
1,179
|
||||||||
|
Add: non-cash amortization from 2006 private sale
|
6
|
6
|
24
|
25
|
||||||||||||
|
Add: restructuring and transaction activities
|
11
|
24
|
51
|
79
|
||||||||||||
|
Add: other non-cash charges
|
(8
|
)
|
6
|
27
|
54
|
|||||||||||
|
Adjusted operating income (6)
|
$
|
321
|
$
|
385
|
$
|
1,394
|
$
|
1,337
|
||||||||
|
Add: depreciation
|
146
|
133
|
566
|
545
|
||||||||||||
|
Add: amortization of intangibles
|
63
|
68
|
264
|
275
|
||||||||||||
|
Operating EBITDA (6)
|
$
|
530
|
$
|
586
|
$
|
2,224
|
$
|
2,157
|
||||||||
|
Less: divestitures and prior year extra days (1)
|
(30
|
)
|
||||||||||||||
|
Adjusted EBITDA (6)
|
$
|
2,194
|
||||||||||||||
|
Cash flow from operating activities
|
$
|
668
|
$
|
552
|
$
|
1,580
|
||||||||||
|
Net additions to property, plant, and equipment
|
(156
|
)
|
(165
|
)
|
(676
|
)
|
||||||||||
|
Free cash flow (6)
|
$
|
512
|
$
|
387
|
$
|
904
|
|
Net income per diluted share
|
$
|
1.64
|
$
|
1.44
|
$
|
5.30
|
$
|
4.14
|
||||||||
|
Other expense, net
|
0.04
|
0.18
|
0.37
|
0.23
|
||||||||||||
|
Non-cash amortization from 2006 private sale (2)
|
0.04
|
0.04
|
0.18
|
0.19
|
||||||||||||
|
Restructuring and transaction activities
|
0.08
|
0.18
|
0.37
|
0.58
|
||||||||||||
|
Other non-cash charges (3)
|
—
|
—
|
—
|
0.14
|
||||||||||||
|
Non-comparable tax items (4)
|
(0.22
|
)
|
(0.15
|
)
|
(0.22
|
)
|
(0.15
|
)
|
||||||||
|
Income tax impact on items above
|
(0.03
|
)
|
(0.10
|
)
|
(0.20
|
)
|
(0.28
|
)
|
||||||||
|
Adjusted net income per diluted share (6)
|
$
|
1.55
|
$
|
1.59
|
$
|
5.80
|
$
|
4.85
|
||||||||
|
Comparable for Fiscal 2022
|
||||||||||||||||
|
Adjustment for additional days in fiscal 2021
|
—
|
—
|
(0.02
|
)
|
—
|
|||||||||||
|
Amortization of intangibles from acquisitions (5)(tax affected)
|
0.34
|
0.38
|
1.43
|
1.53
|
||||||||||||
|
Adjusted net income per diluted share (6)
|
$
|
1.89
|
$
|
1.97
|
$
|
7.21
|
$
|
6.38
|
||||||||
|
Estimated
Fiscal 2022
|
||||||||||||||||
|
Cash flow from operating activities
|
$
|
1,700 - 1,800
|
||||||||||||||
|
Additions to property, plant, and equipment
|
(800
|
)
|
||||||||||||||
|
Free cash flow (6)
|
$
|
900 - 1,000
|
||||||||||||||
Page 11
(1) Represents operating EBITDA related to divestments within the last twelve months and extra days in the prior fiscal
year.
(2) Amortization excludes non-cash amortization from the 2006 private sale of $6 million, $6 million, $24 million and $25
million, for the September 2021 quarter, September 2020 quarter, fiscal year ended October 2, 2021, and fiscal year ended September 26, 2020, respectively.
(3) Represents an adjustment for a $19 million inventory step-up charge related to the RPC acquisition in the prior fiscal
year.
(4) During the current and prior fiscal years, the Company obtained certain tax benefits of $30 million and $20 million,
respectively, deemed as non-comparable.
(5) Amortization of intangibles from acquisition will be added back for fiscal year 2022 and going forward to better align
our calculation of adjusted EPS with peers.
(6) 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. Organic
sales growth excludes the impact of currency translation effects and acquisitions. These non-GAAP financial measures may be calculated differently by other companies, including other companies in our industry, limiting their usefulness as comparative
measures. Berry’s management believes that adjusted net income and other non-GAAP financial measures are useful to our investors because they allow for a better period-over-period comparison of operating results by removing the impact of items that,
in management’s view, do not reflect our core operating performance.
We define “free cash flow” as cash flow from operating activities less additions to property, plant, and equipment. We believe free cash flow is useful to an
investor in evaluating our liquidity because free cash flow and similar measures are widely used by investors, securities analysts, and other interested parties in our industry to measure a company’s liquidity. We also believe free cash flow is useful
to an investor in evaluating our liquidity as it can assist in assessing a company’s ability to fund its growth through its generation of cash.
Adjusted EBITDA is used by our lenders for debt covenant compliance purposes. We also use Adjusted EBITDA and Operating EBITDA among other measures to evaluate
management performance and in determining performance-based compensation. Adjusted EBITDA and Operating EBITDA and similar measures are widely used by investors, securities analysts, and other interested parties in our industry to measure a company’s
performance. We also believe EBITDA and Adjusted net income are useful to an investor in evaluating our performance without regard to revenue and expense recognition, which can vary depending upon accounting methods.
Company Contact:
Dustin Stilwell
Director, Head of Investor Relations
+1 (812) 306 2964
ir@berryglobal.com
Page 12
###