Coveris Reports Second Quarter 2017 Financial Results
Coveris Holdings S.A. reported net sales of $638 million for the second quarter of 2017 versus $669 million in the second quarter of 2016. Excluding a $31 million impact of currency, the second quarter sales were flat compared with the same quarter in the prior year.
Adjusted EBITDA for the quarter was $70 million, compared to $91 million for the same period in the prior year. Currency accounted for approximately $5 million of the decline. The decline is primarily related to softer volumes and product mix, particularly in the Company’s flexibles business in the US and UK.
“In the second quarter, we took several steps to address the underperforming areas of Coveris,” said David Mezzanotte, Chairman and Interim Chief Executive Officer. “These steps included organizational changes as well as commercial and operational initiatives designed to strengthen our sales pipelines and lower manufacturing costs. We expect to see the benefits from these changes in the second half of the year.”
Please see our Adjusted EBITDA Reconciliation attached to this press release. Additional financial information may be found on www.coveris.com under the Investor Relations section.
EARNINGS CALL
A conference call hosted by management to discuss these financial results will be held on August 23, at 9:00 am, Eastern. The conference call number is 877-407-8031 (domestic) or 201-689-8031 (international). A replay of the call will be available after 1:30 pm, Eastern on August 23 until September 6, 2017, by dialing 877-481-4010 (domestic) or 919-882-2331 (international) with the conference ID of 19906.
ABOUT COVERIS
As a leading international manufacturing company, Coveris is dedicated to providing solutions that enhance the safety, quality and convenience of products we use every day. In partnership with the most respected brands in the world, Coveris develops vital products that protect everything from the food we eat, to medical supplies, to the touch screen device in our pockets, contributing to the lives of millions every day. Coveris is an affiliated portfolio company of Sun Capital Partners, Inc.
FORWARD-LOOKING STATEMENTS:
Statements in this release that are not historical are "forward-looking statements." Forward-looking statements may be identified by the use of forward-looking terminology such as the words "should," "would," "could," "will," "may," "expect," "believe," "anticipate," "attempt," "project" and other terms with similar meaning indicating possible future events or potential impact on our business. You are cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are based on management's current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially. The forward-looking statements in this release are subject to uncertainty and changes in circumstances and involve risks and uncertainties that may affect Coveris’ operations, markets, products, services, prices and other factors. Significant risks and uncertainties may relate to, but are not limited to, financial, economic, competitive, environmental, political, legal, regulatory and technological factors. In addition, any forward-looking statements are made only as of the date of this release, and Coveris does not intend and does not assume any obligation to update any statements set forth in this release.
| COVERIS HOLDINGS S.A. | |||||||||||||
| RECONCILIATION OF NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA | |||||||||||||
| (Expressed in millions of U.S. dollars) | |||||||||||||
| Three Months | Three Months | Six Months | Six Months | ||||||||||
| Ended | Ended | Ended | Ended | ||||||||||
| 30-Jun-17 | 30-Jun-16 | 30-Jun-17 | 30-Jun-16 | ||||||||||
| U.S. GAAP Net income (loss) | $ (12.4) | $ (19.3) | $ (30.6) | $ (41.7) | |||||||||
| Interest expense, net | 30.3 | 34.4 | 59.8 | 68.2 | |||||||||
| (Benefit) provision for income taxes | (4.3) | (2.1) | (8.2) | 2.4 | |||||||||
| Depreciation and amortization | 38.0 | 38.1 | 75.0 | 74.6 | |||||||||
| Non-GAAP EBITDA | $ 51.6 | $ 51.1 | $ 96.0 | $ 103.5 | |||||||||
| Non-Operational Adjustments: | |||||||||||||
| Accounting Manual Compliance | - | 0.3 | - | 0.3 | |||||||||
| (Gain) loss on disposal of assets | 0.5 | (0.6) | 0.5 | 1.1 | |||||||||
| Pension revaluation | - | - | - | - | |||||||||
| Foreign currency exchange (gain) loss | (2.7) | 27.2 | (4.4) | 38.3 | |||||||||
| Other | (1.6) | - | (1.5) | 0.9 | |||||||||
| Total Non-Operational Adjustments | $ (3.8) | $ 26.9 | $ (5.4) | $ 40.6 | |||||||||
| Special Items: | |||||||||||||
| Restructuring and related relocation costs(a) | 8.1 | 6.3 | 11.2 | 9.1 | |||||||||
| Management fees and expenses | 1.8 | 2.2 | 4.2 | 4.3 | |||||||||
| Transaction related expenses(b) | 1.7 | 0.2 | 2.2 | 0.4 | |||||||||
| Business improvement consulting cost | 8.6 | 2.1 | 16.8 | 3.9 | |||||||||
| Other expenses(c) | 1.9 | 2.3 | 3.9 | 4.5 | |||||||||
| Total Special Items: | 22.1 | 13.1 | 38.3 | 22.2 | |||||||||
| Non-GAAP Adjusted EBITDA | $ 69.9 | $ 91.1 | $ 128.9 | $ 166.3 | |||||||||
| (a) Costs associated primarily with various restructuring activities, employee relocation expenses or employee severance costs. | |||||||||||||
| (b) Costs associated with transactions and acquisition costs. | |||||||||||||
| (c) Costs associated with information technology, consulting, rebranding and other infrequent expenses. | |||||||||||||
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