BWAY Holding Company News
BWAY Holding Company Announces First Quarter Results and Affirms Annual Guidance
Gross margin (excluding depreciation and amortization) for the quarter was
"In our metal packaging segment, aerosol can volumes continued to increase as a result of new business gained during fiscal 2007," Roessler added. "As expected, earnings in the metal packaging segment were lower year over year primarily due to an imbalance between steel costs and selling prices. The imbalance resulted from lower cost foreign steel and spot buying opportunities becoming largely unavailable. However, new steel supply agreements are now in place for 2008, and selling price increases have been implemented to reflect higher overall steel costs. We believe these actions will restore our metal packaging segment margins to their historical levels beginning in the second quarter of fiscal 2008."
First Quarter Segment Results
Metal Packaging
Sales for the Company's metal packaging segment were
Metal segment earnings (excluding depreciation and amortization) were
These factors were: - The Company's mix of steel supply, anticipated at the beginning of calendar year 2007 when price increases were passed through to customers, became unfavorable in the second half of the fiscal year when lower-cost foreign sources and opportunistic spot buys largely disappeared. - Competitive pricing pressures, particularly for aerosol cans. - Lower volume and an unfavorable customer mix driven by the housing market downturn.
During December, the Company made adjustments to its steel supplier portfolio and negotiated new steel supply agreements for 2008. In January, the Company implemented product selling price increases to reflect the higher cost of steel and this is expected to restore metal segment margins to their historical levels. Selling price increases are also expected to begin improving margins in the aerosol business.
In reaction to lower volumes driven by the weak housing market, the Company is adjusting production schedules and staffing, and reducing inventory levels. In addition, last quarter we announced our intention to close one of our metal packaging manufacturing plants. We are now finalizing a definitive plan and expect to make a specific announcement by the end of March.
Plastic Packaging
Sales for the Company's plastic packaging segment were
Plastic segment earnings (excluding depreciation and amortization) were
Corporate
Undistributed corporate expenses (excluding depreciation and amortization) were
The benefit from income taxes for the first quarter of fiscal 2008 was
Total debt of
Outlook for Fiscal 2008
"We are in a difficult environment. However, the actions we took in January to rebalance our raw material cost and selling price equation combined with continued positive momentum in our plastic packaging segment provide a good basis for improved financial expectations," stated
With regard to specific guidance the Company provides the following: - Second fiscal quarter 2008 (ending March 30, 2008) diluted EPS of $0.10 - $0.15, and adjusted EBITDA of $24.0 - $26.0 million. Expectations include $1.8 million of non-cash stock- based compensation expense. - Full year fiscal 2008 expectations as previously forecasted. Diluted EPS of $0.68 - $0.78, and adjusted EBITDA of $109.0-$113.0 million. Full year expectations include $7.0 million of non-cash stock-based compensation expense, but exclude potential restructuring charges associated with the Company's planned closure of a manufacturing facility. - Full year fiscal 2008 free cash flow (net cash provided by operating activities less capital expenditures) anticipated at $32.0-$34.0 million as previously forecasted.
Conference Call
The Company will hold a conference call tomorrow,
About BWAY Holding Company
BWAY Holding Company is a leading North American manufacturer of general line rigid metal and plastic containers. The Company operates 22 plants throughout the
Cautionary Note Regarding Forward-Looking Statement
This document contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place reliance on these statements. Forward-looking statements include information concerning our liquidity and our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may" or similar expressions. These statements are based on certain assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. As you read and consider this document, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions. Many factors could affect our actual financial results and could cause actual results to differ materially from those expressed in the forward-looking statements. Some important factors include competitive risk from other container manufacturers or self-manufacture by customers, termination of our customer contracts, loss or reduction of business from key customers, dependence on key personnel, changes in steel, resin, other raw material and energy costs or availability, product liability or product recall costs, lead pigment and lead paint litigation, increased consolidation in our end markets, consolidation of key suppliers, deceleration of growth in our end markets, increased use of alternative packaging, labor unrest, environmental, health and safety costs, management's inability to evaluate and selectively pursue acquisitions, fluctuation of our quarterly operating results, an increase in interest rates, inability to repay or refinance the senior subordinated notes, restrictions in our debt agreements, fluctuations of the Canadian dollar, and the other factors discussed in our filings with the Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, the forward-looking statements contained in this document might not prove to be accurate and you should not place undue reliance upon them. All forward- looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Use of Non-GAAP Financial Measure
The Company provides financial measures and terms not calculated in accordance with accounting principles generally accepted in the
BWAY's calculation of non-GAAP financial measures is not necessarily comparable to similarly titled measures reported by other companies. These non-GAAP measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. Schedules that reconcile non-GAAP financial measures used in this press release to GAAP financial measures are included with this news release.
BWAY Holding Company and Subsidiaries Summary Consolidated Financial Data (Unaudited) (Amounts in thousands, except per share data) Three Months Ended Dec. 30, 2007 Dec. 31, 2006 Statements of Operations: Net sales $217,387 $202,376 Cost of products sold (excluding depreciation and amortization) 196,872 178,350 Gross margin (excluding depreciation and amortization) 20,515 24,026 Other costs and expenses Depreciation and amortization 11,127 11,398 Selling and administrative expenses 5,880 4,215 Restructuring charge 24 39 Interest expense, net 9,455 9,403 Other expense, net 134 57 Total other costs and expenses 26,620 25,112 Net (loss) before benefit from income taxes (6,105) (1,086) (Benefit) from income taxes (2,202) (479) Net (loss) $(3,903) $(607) Net (loss) per share Basic and Diluted $(0.18) $(0.03) Shares - Basic and Diluted 21,661 20,525 Reconciliation of EBITDA and EBIT to Net Loss Net (loss) $(3,903) $(607) Interest expense, net 9,455 9,403 (Benefit) from income taxes (2,202) (479) Depreciation and amortization 11,127 11,398 EBITDA $14,477 $19,715 Less: Depreciation and amortization 11,127 11,398 EBIT $3,350 $8,317 BWAY Holding Company and Subsidiaries Summary Consolidated Financial Data (Unaudited) (Amounts in thousands) Three Months Ended Dec. 30, 2007 Dec. 31, 2006 Business Segment Information: Net sales Metal segment $124,400 $118,874 Plastic segment 92,987 83,502 Consolidated net sales 217,387 202,376 (Loss) before income taxes Segment earnings (excluding depr. and amort.) Metal segment 10,508 14,385 Plastic segment 8,061 7,323 Total segment earnings (excluding depr. and amort.) 18,569 21,708 Depreciation and amortization Metal segment 5,667 5,535 Plastic segment 5,275 5,397 Total segment depreciation and amortization 10,942 10,932 Corporate depreciation 185 466 Total depreciation and amortization 11,127 11,398 Corporate and other expenses Corporate undistributed expense 3,934 1,897 Restructuring charge 24 39 Interest expense, net 9,455 9,403 Other expense, net 134 57 (Loss) before income taxes $(6,105) $(1,086) Condensed Balance Sheets: As of Dec. 30, 2007 Sept. 30, 2007 Assets Cash and cash equivalents $23,772 $53,423 Accounts receivable, net of allow. for doubtful accts. 96,052 107,151 Inventories, net 130,544 111,792 Other current assets 22,837 19,879 Total current assets 273,205 292,245 Property, plant and equipment, net 144,920 141,750 Goodwill and other intangible assets, net 410,439 412,832 Other assets 10,971 11,106 Total Assets $839,535 $857,933 Liabilities and Stockholders' Equity Accounts payable $121,970 $132,890 Accrued expenses 28,611 33,309 Current portion of long-term debt 2,699 2,284 Other current liabilities 14,332 17,269 Total current liabilities 167,612 185,752 Long-term debt (excluding current portion) 423,377 423,314 Total other long-term liabilities 93,341 91,611 Stockholders' equity 155,205 157,256 Total Liabilities and Stockholders' Equity $839,535 $857,933 BWAY Holding Company and Subsidiaries Summary Consolidated Financial Data (Unaudited) (Amounts in thousands) Fiscal Year Ended Statements of Cash Flows: Dec. 30, 2007 Dec. 31, 2006 Cash Flows From Operating Activities Net (loss) $(3,903) $(607) Adjustments to reconcile net loss to net cash used in operating activities Depreciation 7,123 7,517 Amortization of other intangible assets 4,004 3,881 Amortization of deferred financing costs 533 525 Provision for (benefit from) doubtful accounts 143 (391) Loss (gain) on disposition of property, plant and equipment 28 (5) Deferred income taxes (137) (1,601) Stock-based compensation expense 1,768 223 Changes in assets and liabilities Accounts receivable 11,113 18,170 Inventories (18,656) (6,261) Other assets 533 (1,538) Accounts payable (9,364) (27,332) Accrued and other liabilities (6,954) (7,724) Income taxes (3,219) 1,079 Net Cash Used In Operating Activities (16,988) (14,064) Cash Flows From Investing Activities Capital expenditures (12,306) (5,273) Other 2 1 Net Cash Used In Investing Activities (12,304) (5,272) Cash Flows From Financing Activities Repayments of term loans (144) (20,122) Principal repayments under capital leases (41) (55) Net Cash Used In Financing Activities (185) (20,177) Effect Of Exchange Rate Changes On Cash and Cash Equivalents (174) (263) Net (Decrease) in Cash And Cash Equivalents (29,651) (39,776) Cash And Cash Equivalents, Beginning Of Period 53,423 50,979 Cash And Cash Equivalents, End Of Period $23,772 $11,203
SOURCE BWAY Holding Company
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