Navigation Links
Pregis Announces Third Quarter 2009 Financial Results
Date:11/12/2009

DEERFIELD, Ill., Nov. 12 /PRNewswire/ -- Pregis Corporation, a leading international manufacturer, marketer, and supplier of protective packaging products and specialty packaging solutions, today announced its 2009 third quarter financial results.

For the third quarter of 2009, the Company generated net sales of $207.0 million, a decrease of 21.9% versus net sales of $265.2 million in the third quarter of 2008. Excluding the impact of unfavorable foreign currency translation, resulting from the U.S. dollar strengthening against the euro and pound sterling on a year-over-year basis, the quarter's net sales were down 17.2% compared to the prior year quarter due to continued global weak economic conditions.

Gross profit margin, as a percent of net sales, was 24.6% in the third quarter of 2009, compared to 22.4% in the third quarter of 2008. The 220 basis point increase in margin percentage was driven by the impact of the Company's aggressive cost reduction initiatives and the impact from lower raw material costs.

The Company generated operating income of $7.4 million in the third quarter of 2009, which included pre-tax restructuring charges of $2.1 million relating to the Company's cost reduction initiatives. This compared to operating income of $10.1 million for the third quarter of 2008 and pre-tax restructuring charges of $5.2 million. Adjusted for the restructuring charges and unfavorable foreign currency translation, operating income for the third quarter of 2009 was $9.5 million compared to $15.3 million in the third quarter of 2008. This decrease was primarily a result of lower volumes, partially offset by the impact of Company's aggressive cost reduction initiatives.

Adjusted EBITDA, or "Consolidated Cash Flow" as defined by our indentures, is a significant operating measure used by the Company to measure its operating performance and liquidity. Adjusted EBITDA was $25.2 million in the third quarter of 2009 compared to $30.2 million for the same period in 2008. The lower year-over-year Adjusted EBITDA was a result of the same drivers impacting operating income as described above.

Commenting on the Company's results, Mike McDonnell, President and Chief Executive Officer, stated, "Our third quarter Adjusted EBITDA performance remained relatively strong, despite continued weakness in demand as well as increased resin costs. Our third quarter Adjusted EBITDA of $25.2 million increased sequentially from the second quarter 2009 amount of $24.2 million, and was at the upper end of the range of $22-$26 million which we communicated during our recent offering of euro-based floating rate notes. While our third quarter Adjusted EBITDA was lower year-over-year, the prior year quarter was one of the strongest quarters from an Adjusted EBITDA standpoint in company history."

Mr. McDonnell continued, "Our sales rates improved sequentially from the second quarter, primarily driven by seasonality along with some modest economic improvement. Regarding raw material costs, we did see further sequential increases in the third quarter for resin. According to their respective indices, resin costs increased during the third quarter by 11% in North America and 17% in Europe sequentially from the second quarter 2009. Our margin improvement initiatives enabled us to partially offset this quarter's increase in resin costs. However, if resin costs continue to increase, which is our current expectation, we will need to respond aggressively with selling price increases."

Segment Performance

Comments on segment net sales and EBITDA performance for the third quarter of 2009 is as follows:

  • Net sales of the protective packaging segment decreased by $43.2 million, or 25.1%. The 2009 third quarter sales decline was driven by significant decreases in volume in both the U.S. and European businesses resulting from continued economic weakness in both markets, as well as unfavorable foreign currency translation. Excluding the impact of unfavorable foreign currency, net sales for the segment decreased 21.3%.
  • EBITDA of the protective packaging segment decreased $4.8 million, or 23.7%. This decrease was due to lower volumes driven by the ongoing recession in North America and Europe as well as unfavorable foreign currency translation. This impact was partially offset by the significant cost savings realized from cost reduction programs as well as year-over-year reductions in the cost of resin and other materials.
  • Net sales of the specialty packaging segment decreased $15.0 million, or 16.1%. This sales decline was driven by unfavorable foreign currency translation, as well as decreased volumes related to the termination of a contract with a significant medical products customer. Excluding the impact of unfavorable foreign currency and sales related to the contract termination, net sales for the segment decreased 3.1%.
  • EBITDA of the specialty packaging segment increased $0.2 million, or 1.9%. This increase was due to savings resulting from our cost reduction program partially offset by decreased volumes and unfavorable foreign currency translation. Excluding the volume impact associated with the contract termination, as described above, EBITDA for this segment would have increased by $2.1 million, or 18.9%, for the three months ended September 30, 2009 compared to the same period 2008.

A summary of Adjusted EBITDA, a significant measure required by the Company's indentures and used by the Company to measure its operating performance and liquidity, is presented in the supplemental information at the end of this release.

Conference Call:

The Company will conduct an investor conference call to review its 2009 third quarter results on Friday, November 13, 2009 at 10:00 a.m. ET (9:00 a.m. CT). The call can be accessed through the following dial-in numbers: Domestic: 866-783-2141; International: 857-350-1600; Participant Passcode: 32563971. A replay of the conference call will be available through November 27, 2009. The replay may be accessed using the following dial-in information: Domestic: 888-286-8010; International: 617-801-6888; Passcode: 10764014.

About Pregis:

Pregis Corporation is a leading global provider of innovative protective, flexible, and foodservice packaging and hospital supply products. The specialty-packaging leader currently operates 46 facilities in 18 countries around the world. Pregis Corporation is a wholly owned subsidiary of Pregis Holding II Corporation. For more information about Pregis, visit the Company's web site at www.pregis.com.

Safe Harbor Statement:

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by the Company's use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "seek," "should," or "will," or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company's control. For a discussion of key risk factors, please see the risk factors disclosed in the Company's annual report, which is available on its website, www.pregis.com. These risks may cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risk and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. The Company undertakes no duty to update its forward-looking statements.

                            Pregis Holding II Corporation
                             Consolidated Balance Sheets
                                     Unaudited
                                (dollars in thousands)

                                                 September 30,   December 31,
                                                        2009           2008
                                                 -------------   ------------
    Assets                                         (Unaudited)
    Current assets
      Cash and cash equivalents                       $100,202        $41,179
      Accounts receivable
        Trade, net of allowances of $6,205 and
         $5,357 respectively                           123,250        121,736
        Other                                            7,944         13,829
      Inventories, net                                  85,751         87,867
      Deferred income taxes                              4,867          4,336
      Due from Pactiv                                    1,166          1,399
      Prepayments and other current assets               8,788          8,435
                                                         -----          -----
          Total current assets                         331,968        278,781
    Property, plant and equipment, net                 238,193        245,124
    Other assets
      Goodwill                                         128,015        127,395
      Intangible assets, net                            39,540         41,254
      Deferred financing costs, net                      4,506          7,734
      Due from Pactiv, long-term                        10,025         13,234
      Pension and related assets                        25,973         22,430
      Other                                                406            424
                                                           ---            ---
          Total other assets                           208,465        212,471
                                                       -------        -------
    Total assets                                      $778,626       $736,376
                                                      --------       --------
    Liabilities and stockholder's equity
    Current liabilities
      Current portion of long-term debt                   $258         $4,902
      Accounts payable                                  89,401         79,092
      Accrued income taxes                               4,672          6,964
      Accrued payroll and benefits                      15,994         11,653
      Accrued interest                                  10,337          6,905
      Other                                             19,067         21,740
                                                        ------         ------
          Total current liabilities                    139,729        131,256
    Long-term debt                                     510,531        460,714
    Deferred income taxes                               23,915         24,913
    Long-term income tax liabilities                     8,281         11,310
    Pension and related liabilities                      4,831          6,119
    Other                                               13,409         11,963
    Stockholder's equity:
        Common stock - $0.01 par value;
         1,000 shares authorized, 149.0035 shares
         issued and outstanding at September 30,
         2009 and December 31, 2008                          -              -
        Additional paid-in capital                     151,671        150,610
        Accumulated deficit                            (75,004)       (64,318)
        Accumulated other comprehensive income           1,263          3,809
                                                         -----          -----
          Total stockholder's equity                    77,930         90,101
                                                        ------         ------
    Total liabilities and stockholder's equity        $778,626       $736,376
                                                      --------       --------



                            Pregis Holding II Corporation
                        Consolidated Statements of Operations
                                      Unaudited
                               (dollars in thousands)

                                    Three Months Ended   Nine Months Ended
                                       September 30,       September 30,
                                    ------------------   -----------------
                                      2009      2008      2009      2008
                                      ----      ----      ----      ----
    Net Sales                       $207,047  $265,188  $588,594  $799,726
    Operating costs and expenses:
      Cost of sales, excluding
       depreciation and
       amortization                  156,088   205,673   444,144   624,443
      Selling, general and
       administrative                 28,660    31,232    83,059   100,407
      Depreciation and amortization   12,607    13,584    35,383    40,734
      Other operating expense, net     2,267     4,601    13,602     8,500
                                       -----     -----    ------     -----
    Total operating costs and
     expenses                        199,622   255,090   576,188   774,084
                                     -------   -------   -------   -------
    Operating income                   7,425    10,098    12,406    25,642
    Interest expense                   9,192    13,392    28,072    37,293
    Interest income                      (54)      (92)     (176)     (518)
    Foreign exchange loss (gain), net   (886)    9,562    (5,817)    6,641
                                        ----     -----    ------     -----
    Loss before income taxes            (827)  (12,764)   (9,673)  (17,774)
    Income tax expense (benefit)       2,514      (802)    1,013     3,029
                                       -----      ----     -----     -----
    Net loss                         $(3,341) $(11,962) $(10,686) $(20,803)
                                     -------  --------  --------  --------



                            Pregis Holding II Corporation
                        Consolidated Statements of Cash Flows
                                      Unaudited
                               (dollars in thousands)

                                                          Nine Months Ended
                                                            September 30,
                                                          -----------------
                                                            2009      2008
                                                            ----      ----
    Operating activities
    Net loss                                              $(10,686) $(20,803)
    Adjustments to reconcile net loss to
    cash provided by operating activities:
      Depreciation and amortization                         35,383    40,734
      Deferred income taxes                                 (1,483)   (1,419)
      Unrealized foreign exchange loss (gain)               (5,552)    6,814
      Amortization of deferred financing costs               1,781     1,781
      Gain on disposal of property, plant and equipment       (249)     (246)
      Stock compensation expense                             1,061       678
      Impairment of interest rate swap asset                     -     1,299
      Changes in operating assets and liabilities
        Accounts and other receivables, net                  9,874   (12,024)
        Due from Pactiv                                      3,792     6,630
        Inventories, net                                     5,364    (9,738)
        Prepayments and other current assets                 1,961      (143)
        Accounts payable                                     6,771     7,568
        Accrued taxes                                       (5,637)   (4,778)
        Accrued interest                                     3,547     4,577
        Other current liabilities                              856     1,871
        Pension and related assets and liabilities, net     (2,931)   (2,815)
        Other, net                                          (2,395)      177
                                                            ------       ---
    Cash provided by operating activities                   41,457    20,163
                                                            ------    ------

    Investing activities
    Capital expenditures                                   (17,644)  (25,270)
    Proceeds from sale of assets                               692     1,042
    Insurance proceeds                                           -     1,868
    Other, net                                                   -      (593)
                                                               ---      ----
    Cash used in investing activities                      (16,952)  (22,953)
                                                           -------   -------

    Financing activities
    Proceeds from revolving credit facility                 38,700         -
    Financing fees                                          (1,284)        -
    Repayment of debt                                       (4,312)   (1,435)
    Other, net                                                (125)       62
                                                              ----       ---
    Cash provided (used in) financing activities            32,979    (1,373)
    Effect of exchange rate changes on cash
     and cash equivalents                                    1,539      (788)
                                                             -----      ----
    Increase (decrease) in cash and cash equivalents        59,023    (4,951)
    Cash and cash equivalents, beginning of period          41,179    34,989
                                                            ------    ------

    Cash and cash equivalents, end of period              $100,202   $30,038
                                                          --------   -------



                            Pregis Holding II Corporation
                              Supplemental Information
                                    (Unaudited)

              Calculation of Adjusted EBITDA ("Consolidated Cash Flow")
              ---------------------------------------------------------

                                                           Three Months Ended
    (unaudited)                                               September 30,
                                                           ------------------
    (dollars in thousands)                                   2009      2008
                                                             ----      ----

    Net loss of Pregis Holding II Corporation               $(3,340) $(11,962)
    Interest expense, net of interest income                  9,138    13,300
    Income tax expense (benefit)                              2,514      (802)
    Depreciation and amortization                            12,606    13,584
                                                             ------    ------
    EBITDA                                                   20,918    14,120

    Other non-cash charges (income):
      Unrealized foreign currency transaction losses
       (gains), net                                            (859)   10,246
      Non-cash stock based compensation expense                 327       244
    Net unusual or nonrecurring gains or losses:
      Restructuring, severance and related expenses           2,769     5,489
      Other unusual or nonrecurring (gains) or losses         1,609      (239)
    Other adjustments:
      Amounts paid pursuant to management agreement with
       Sponsor                                                  472       324
                                                                ---       ---

    Adjusted EBITDA ("Consolidated Cash Flow")              $25,236   $30,184
                                                            -------   -------


    Note to above:
    --------------
    EBITDA is defined as net income before interest expense, interest income,
    income tax expense, depreciation and amortization.  Adjusted EBITDA,
    referred to as Consolidated Cash Flow within the context of the Company's
    indentures, is presented herein because it is a material element of the
    fixed charge coverage ratio and secured indebtedness leverage ratio
    included in the Company's indentures and is a significant operating
    measure used by the Company to measure its operating performance and
    liquidity.



                            Pregis Holding II Corporation
                              Supplemental Information
                                    (Unaudited)

              Calculation of Adjusted EBITDA ("Consolidated Cash Flow")
              ---------------------------------------------------------

                                                          Twelve Months Ended
    (unaudited)                                               September 30,
                                                          -------------------
    (dollars in thousands)                                   2009      2008
                                                             ----      ----

    Net loss of Pregis Holding II Corporation              $(37,613) $(28,092)
    Interest expense, net of interest income                 39,315    48,300
    Income tax (benefit) expense                             (3,881)    2,533
    Depreciation and amortization                            46,992    55,797
                                                             ------    ------
    EBITDA                                                   44,813    78,538

    Other non-cash charges (income):
      Unrealized foreign currency transaction losses, net     2,370     7,846
      Non-cash stock based compensation expense               1,344       902
      Non-cash asset impairment charge                       20,101       403
      Other non-cash expenses, primarily fixed asset
       disposals and write-offs                                   -       427
    Net unusual or nonrecurring gains or losses:
      Restructuring, severance and related expenses          13,251    12,409
      Nonrecurring charges related to acquisitions and
       dispositions                                               -     4,512
      Other unusual or nonrecurring gains or losses           2,524       123
    Other adjustments:
      Amounts paid pursuant to management agreement with
       Sponsor                                                2,040     1,834
    Pro forma earnings and costs savings                          -       454
                                                                ---       ---

    Adjusted EBITDA ("Consolidated Cash Flow")              $86,443  $107,448
                                                            -------  --------


    Note to above:
    --------------
    EBITDA is defined as net income before interest expense, interest income,
    income tax expense, depreciation and amortization.  Adjusted EBITDA,
    referred to as Consolidated Cash Flow within the context of the Company's
    indentures, is presented herein because it is a material element of the
    fixed charge coverage ratio and secured indebtedness leverage ratio
    included in the Company's indentures and is a significant operating
    measure used by the Company to measure its operating performance and
    liquidity.



                            Pregis Holding II Corporation
                                 Third Quarter 2009
                               Supplemental Information
                                     (Unaudited)
       (Amounts and percentage changes are approximations due to rounding.)

                               Gross Margin Calculations
                               -------------------------

                        Three Months Ended            Nine Months Ended
                           September 30,                September 30,
                        ------------------            -----------------
    (dollars in      2009      2008      Change    2009      2008      Change
     thousands)      ----      ----      ------    ----      ----      ------

    Net sales      $207,047  $265,188  $(58,141) $588,594  $799,726 $(211,132)
    Cost of sales,
     excluding
     depreciation
     and
     amortization  (156,088) (205,673)   49,585  (444,144) (624,443)  180,299
                   --------  --------    ------  --------  --------   -------
    Gross margin    $50,959   $59,515   $(8,556) $144,450  $175,283  $(30,833)
                    -------   -------   -------  --------  --------  --------
    Gross margin,
     as a percent
     of net sales      24.6%     22.4%      2.2%     24.5%     21.9%      2.7%
                       ----      ----       ---      ----      ----       ---


                                   Net Sales by Segment
                                   --------------------

                             Three Months Ended
                               September 30,
                             ------------------
                              2009        2008       $ Change    % Change
                              ----        ----       --------    --------
                           (dollars in thousands)
    Segment:
    Protective Packaging    $128,930    $172,088     $(43,158)    (25.1)%
    Specialty Packaging       78,117      93,100      (14,983)    (16.1)%
                              ------      ------      -------     -----
    Total                   $207,047    $265,188     $(58,141)    (21.9)%
                            --------    --------     --------     -----

                                      Change Attributable to the
                                          Following Factors
                                      --------------------------
                             Price /                             Currency
                               Mix              Volume          Translation
                             -------            ------          -----------
    Segment:
    Protective Packaging $(9,055) (5.3)%  $(27,676)  (16.1)%  $(6,427)  (3.7)%
    Specialty Packaging   (2,497) (2.7)%    (6,317)   (6.8)%   (6,169)  (6.6)%
                          ------  ----      ------    ----     ------   ----
    Total               $(11,552) (4.4)%  $(33,993)  (12.8)% $(12,596)  (4.7)%
                        --------  ----    --------   -----   --------   ----


                             Nine Months Ended
                               September 30,
                             -----------------
                              2009        2008       $ Change    % Change
                              ----        ----       --------    --------
                           (dollars in thousands)
    Segment:
    Protective Packaging    $363,107    $520,226    $(157,119)    (30.2)%
    Specialty Packaging      225,487     279,500      (54,013)    (19.3)%
                             -------     -------      -------     -----
    Total                   $588,594    $799,726    $(211,132)    (26.4)%
                            --------    --------    ---------     -----

                                      Change Attributable to the
                                          Following Factors
                                      --------------------------
                             Price /                             Currency
                               Mix              Volume          Translation
                             -------            ------          -----------
    Segment:
    Protective Packaging $(12,133) (2.3)% $(115,448) (22.2)%  $(29,538) (5.7)%
    Specialty Packaging    (3,105) (1.1)%   (17,290)  (6.2)%   (33,618)(12.0)%
                           ------  ----     -------   ----     ------- -----
    Total                $(15,238) (1.9)% $(132,738) (16.6)%  $(63,156) (7.9)%
                         --------  ----   ---------  -----    --------  ----



                            Pregis Holding II Corporation
                              Supplemental Information
                                    (Unaudited)
        (Amounts and percentage changes are approximations due to rounding.)

                                 EBITDA by Segment
                                 -----------------

                               Three Months Ended
                                  September 30,
                               ------------------
                                2009        2008       $ Change   % Change
                                ----        ----       --------   --------
                              (dollars in thousands)
    Segment:
    Protective Packaging       $15,462     $20,271      $(4,809)    (23.7)%
    Specialty Packaging         11,363      11,147          216       1.9%
                                ------      ------          ---
       Total segment EBITDA    $26,825     $31,418      $(4,593)    (14.6)%
                               -------     -------      -------


                                Nine Months Ended
                                  September 30,
                                -----------------
                                2009        2008       $ Change   % Change
                                ----        ----       --------   --------
                              (dollars in thousands)
    Segment:
    Protective Packaging       $42,201     $49,813      $(7,612)    (15.3)%
    Specialty Packaging         30,792      33,574       (2,782)     (8.3)%
                                ------      ------       ------
       Total segment EBITDA    $72,993     $83,387     $(10,394)    (12.5)%
                               -------     -------     --------


SOURCE Pregis Corporation


'/>"/>
SOURCE Pregis Corporation
Copyright©2009 PR Newswire.
All rights reserved


Related medicine news :

1. Pregis Announces Second Quarter 2009 Financial Results
2. Pregis Announces First Quarter 2009 Financial Results
3. Pregis Announces Fourth Quarter and Full Year 2008 Financial Results
4. Pregis Announces Investor Conference Call to Review Fourth Quarter and Full Year 2008 Financial Results
5. Pregis Announces Third Quarter 2008 Financial Results
6. Pregis Announces Investor Conference Call to Review 2008 Third Quarter Financial Results
7. Pregis Announces Second Quarter 2008 Financial Results
8. Pregis Announces First Quarter 2008 Financial Results
9. Pregis Announces Fouth Quarter and Full Year 2007 Financial Results
10. Pregis Announces Investor Conference Call to Review 2007 Fourth Quarter and Full Year Financial Results
11. Pregis Corporation Appoints New President of Protective Packaging North America
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:2/13/2016)... ... February 13, 2016 , ... Valentine’s Day is nearly upon us, ... big day. A great outfit, flawless hair, and a sparkling personality are all well ... themselves to a night at home with Rover. (Actually, man’s best friend might not ...
(Date:2/13/2016)... ... ... individuals looking to lead a healthy lifestyle have decreased carbohydrate consumption and increased their ... delved into this niche allowing those giving up their beloved pasta a chance to ... of protein and only 7 grams of carbohydrates per 50 gram serving--a ratio that ...
(Date:2/13/2016)... ... February 13, 2016 , ... The producers of Enterprises TV ... , The increasingly modern world of instantaneous consumption proves very convenient for businesses. ... such as oil and coal, which pollutes our air, water, and soil. It can ...
(Date:2/13/2016)... ... 13, 2016 , ... Christie Medical Holdings, Inc. presented the ... VeinViewer® Vision vein finder for the nursing school simulation lab. This ... draw blood, combining technology with traditional technique. , “VeinViewer is a wonderful new ...
(Date:2/13/2016)... Montreal, Canada (PRWEB) , ... February 13, 2016 , ... ... best foot forward. They’ll groom themselves to perfection, go out of their way to ... their date – just take a look at any online dating profile. , ...
Breaking Medicine News(10 mins):
(Date:2/12/2016)... SAO PAULO , Feb. 12, 2016 /PRNewswire/ ... has commenced a cash tender offer (the "Tender ... U.S.$312.6 million outstanding aggregate principal amount of its ... P5246AAF0 and ISIN Nos. US44915JAA88/ USP5246AAF05) (the "Notes"). ... also soliciting (the "Consent Solicitation") consents (the "Consents") ...
(Date:2/12/2016)... , February 12, 2016 /PRNewswire/ ... nicht anders vermerkt)   http://www.sedar.com ... http://www.telestatherapeutics.com abrufbar.    --> ... des Unternehmens http://www.telestatherapeutics.com abrufbar.    ... (TSX:TST; PNK:BNHLF) veröffentlichte heute seinen Konzernabschluss des ...
(Date:2/12/2016)... HOUSTON , Feb. 12, 2016  Memorial Hermann ... center Dwight Howard to bring a one-of-a-kind ... Hospital . Using cutting-edge technologies such as 360-degree video ... kids both virtually, then literally – giving the patients ... – and it was all caught on video ...
Breaking Medicine Technology: