Berry Plastics Profit Drops Despite Record Sales

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Evansville-based Berry Plastics Group Inc. (NYSE: BERY) is reporting fiscal third quarter net income of $15 million, compared to $40 million for the same period last year. Chief Executive Officer Jon Rich says the company broke its sales record in the quarter. In June, Berry Plastics completed the $135 million acquisition of England-based Rexam's Healthcare Containers and Closures business. August 1, 2014

News Release

EVANSVILLE, Ind. - Berry Plastics Group, Inc. (NYSE:BERY) today reported results for its third quarter fiscal 2014, referred to in the following as the June 2014 quarter:

Increased net sales by 6 percent to $1,298 million for the June 2014 quarter compared to $1,221 million in the June 2013 quarter

Achieved Operating EBITDA of $212 million for the June 2014 quarter and LTM Adjusted EBITDA of $835 million

Increased cash from operating activities for the three fiscal quarters ended June 2014 to $370 million from $297 million in the prior year three fiscal quarters

LTM Adjusted free cash flow of $291 million, representing a 10 percent adjusted free cash flow yield

Recorded net income of $15 million ($0.12 per diluted share) for the June 2014 quarter versus $40 million ($0.33 per diluted share) for the June 2013 quarter

Adjusted net income per diluted share of $0.51 for the June 2014 quarter compared to $0.35 in the June 2013 quarter

"In the June 2014 quarter we reported record sales for any quarterly period in the Company's history, in the face of weak packaged food demand," said Jon Rich, Chairman and CEO of Berry Plastics. "We also matched our Operating EBITDA record for any quarterly period of $212 million."

June 2014 Quarter Results

For the June 2014 quarter, the Company's net sales increased by 6 percent to $1,298 million from $1,221 million in the June 2013 quarter. The year-over-year increase was primarily attributed to increased selling prices due to higher material costs along with sales from businesses we acquired in the last 12 months.

June 2014 Fiscal YTD Results

For June 2014 Fiscal YTD, the Company’s net sales increased by 6 percent to $3,648 million as compared to $3,443 million for the same period of fiscal 2013. The increase was primarily attributed to increased selling prices due to higher material costs along with sales from businesses we acquired in the last 12 months.

Capital Structure and Adjusted Free Cash Flow

At the close of the June 2014 quarter, the ratio of net debt of $3,910 million to LTM Adjusted EBITDA of $835 million was 4.7x. The Company’s LTM Adjusted free cash flow was $291 million.

Outlook

"We are reconfirming our guidance of $270 million of adjusted free cash flow for fiscal 2014 and anticipate our September 2014 quarter Operating EBITDA to exceed the prior year quarter by more than 10 percent and exceed our previous record for any quarterly period. We expect to achieve these results based on our assumption that demand will remain similar to the June ending quarter, which is consistent with what we have experienced thus far in the quarter. Recent acquisitions, our restructuring actions, the non resin related price increases we implemented, and our ongoing cost savings plans are all currently expected to have a positive impact on our financial results in the September 2014 quarter," said Rich.

About Berry Plastics

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 annual net sales of over $4.6 billion in fiscal 2013. With world headquarters in Evansville, Indiana, the Company’s common stock is listed on the New York Stock Exchange under the ticker symbol BERY. For additional information, visit the Company’s website at www.berryplastics.com.

Source: Berry Plastics Group Inc.