Pactiv Evergreen Reports Second Quarter 2024 Financial Results
Pactiv Evergreen reported Q2 2024 financial results, highlighting a strategic transformation.
Key financials include Net Revenues of $1,338M, a 6% YoY decrease but a 7% QoQ increase. Net Income was $20M, compared to a net loss of $139M YoY and $10M QoQ. Adjusted EBITDA was $183M, down from $217M YoY but up from $168M QoQ.
The company's Adjusted EPS reached $0.17, compared to $0.20 YoY and $0.14 QoQ. Temporary operational disruptions and end-market weakness impacted results. The sale of Pine Bluff and Waynesville facilities to Suzano is part of a strategic shift, expected to close in Q4 2024.
Q2 results led to revised full-year guidance, reflecting continued market challenges. The company plans to incur substantial restructuring and capital costs through 2025 under its Footprint Optimization initiative.
Pactiv Evergreen's debt reduction efforts include lowering total outstanding debt by $544M YTD and declaring a $0.10 per share dividend for Q2 2024.
Pactiv Evergreen ha riportato i risultati finanziari del secondo trimestre 2024, evidenziando una trasformazione strategica.
I principali dati finanziari includono Entrate nette di 1.338 milioni di dollari, una diminuzione del 6% rispetto all'anno precedente ma un aumento del 7% rispetto al trimestre precedente. Utile netto è stato di 20 milioni di dollari, rispetto a una perdita netta di 139 milioni di dollari rispetto all'anno precedente e 10 milioni di dollari rispetto al trimestre precedente. EBITDA rettificato è stato di 183 milioni di dollari, in calo rispetto ai 217 milioni di dollari dell'anno precedente ma in aumento rispetto ai 168 milioni di dollari del trimestre precedente.
Il EPS rettificato dell'azienda ha raggiunto 0,17 dollari, rispetto a 0,20 dollari dell'anno precedente e 0,14 dollari del trimestre precedente. Le temporanee interruzioni operative e la debolezza dei mercati finali hanno influenzato i risultati. La vendita degli stabilimenti di Pine Bluff e Waynesville a Suzano è parte di un cambiamento strategico, previsto per concludersi nel quarto trimestre del 2024.
I risultati del secondo trimestre hanno portato a una revisione delle previsioni per l'intero anno, riflettendo le sfide di mercato continue. L'azienda prevede di sostenere costi significativi di ristrutturazione e capitale fino al 2025 nell'ambito della sua iniziativa di Ottimizzazione del Footprint.
Gli sforzi di riduzione del debito di Pactiv Evergreen includono la riduzione del debito totale in sospeso di 544 milioni di dollari dall'inizio dell'anno e la dichiarazione di un dividendo di 0,10 dollari per azione per il secondo trimestre del 2024.
Pactiv Evergreen reportó los resultados financieros del segundo trimestre de 2024, destacando una transformación estratégica.
Los principales financieros incluyen Ingresos netos de 1,338 millones de dólares, con una disminución del 6% interanual pero un aumento del 7% intertrimestral. Ingreso neto fue de 20 millones de dólares, en comparación con una pérdida neta de 139 millones de dólares interanual y 10 millones de dólares intertrimestral. EBITDA ajustado fue de 183 millones de dólares, disminuyendo de 217 millones de dólares interanual, pero aumentando de 168 millones de dólares intertrimestral.
El EPS ajustado de la compañía alcanzó 0,17 dólares, en comparación con 0,20 dólares interanual y 0,14 dólares intertrimestral. Las interrupciones operativas temporales y la debilidad del mercado final impactaron los resultados. La venta de las instalaciones de Pine Bluff y Waynesville a Suzano forma parte de un cambio estratégico, que se espera cierre en el cuarto trimestre de 2024.
Los resultados del segundo trimestre llevaron a una revisión de la guía para todo el año, reflejando los continuos desafíos del mercado. La empresa planea incurrir en costos significativos de reestructuración y capital hasta 2025 bajo su iniciativa de Optimización de la Huella.
Los esfuerzos de reducción de deuda de Pactiv Evergreen incluyen la reducción de la deuda total pendiente en 544 millones de dólares desde principios de año y la declaración de un dividendo de 0,10 dólares por acción para el segundo trimestre de 2024.
Pactiv Evergreen는 2024년 2분기 재무 결과를 발표하며 전략적 변화를 강조했습니다.
주요 재무 지표에는 순수익이 13억 3,800만 달러로 연간 6% 감소했지만 분기별로는 7% 증가했습니다. 순이익은 2천만 달러로, 지난해 같은 기간에 비해 1억 3천9백만 달러의 순손실에서 개선되었고, 전분기에 비해 1천만 달러의 증가를 기록했습니다. 조정된 EBITDA는 1억 8천3백만 달러로, 지난해 2억 1천7백만 달러에서 감소했지만 전분기 1억 6천8백만 달러에서 증가했습니다.
회사의 조정된 EPS는 0.17달러로 지난해 0.20달러 및 전분기 0.14달러와 비교되었습니다. 일시적인 운영 중단과 최종 시장의 약세가 결과에 영향을 미쳤습니다. Pine Bluff와 Waynesville 시설의 Suzano에 대한 매각은 전략적 전환의 일환으로, 2024년 4분기에 마무리될 것으로 예상됩니다.
2분기의 결과는 연간 가이드를 수정하게 하였으며, 계속되는 시장 문제를 반영합니다. 회사는 풋프린트 최적화 이니셔티브에 따라 2025년까지 상당한 구조조정 및 자본 비용을 발생시킬 계획입니다.
Pactiv Evergreen의 부채 감축 노력은 연초부터 총 5억 4천4백만 달러의 부채를 줄이고 2024년 2분기에 주당 0.10달러의 배당금을 선언하는 것을 포함합니다.
Pactiv Evergreen a rapporté les résultats financiers du deuxième trimestre 2024, mettant en évidence une transformation stratégique.
Les principales données financières incluent Revenus nets de 1,338 milliards de dollars, une diminution de 6 % par rapport à l'année précédente mais une augmentation de 7 % par rapport au trimestre précédent. Résultat net s'élevait à 20 millions de dollars, contre une perte nette de 139 millions de dollars par rapport à l'année précédente et 10 millions de dollars par rapport au trimestre précédent. EBITDA ajusté était de 183 millions de dollars, en baisse par rapport à 217 millions de dollars l'année précédente mais en hausse par rapport à 168 millions de dollars au trimestre précédent.
Le EPS ajusté de l'entreprise a atteint 0,17 dollar, contre 0,20 dollar l'année précédente et 0,14 dollar au trimestre précédent. Des interruptions opérationnelles temporaires et la faiblesse des marchés finaux ont eu un impact sur les résultats. La vente des installations de Pine Bluff et Waynesville à Suzano fait partie d'un changement stratégique, qui devrait se conclure au quatrième trimestre 2024.
Les résultats du deuxième trimestre ont conduit à une révision des prévisions pour l'ensemble de l'année, reflétant les défis continus du marché. L'entreprise prévoit d'encourir des coûts significatifs de restructuration et d'investissement jusqu'en 2025 dans le cadre de son initiative Optimisation du Footprint.
Les efforts de réduction de la dette de Pactiv Evergreen incluent la réduction de la dette totale en cours de 544 millions de dollars depuis le début de l'année et la déclaration d'un dividende de 0,10 dollar par action pour le deuxième trimestre 2024.
Pactiv Evergreen hat die finanziellen Ergebnisse des zweiten Quartals 2024 veröffentlicht und dabei eine strategische Transformation hervorgehoben.
Wichtige Finanzkennzahlen umfassen Netto-Umsätze von 1.338 Millionen Dollar, was einem Rückgang von 6 % im Jahresvergleich, aber einem Anstieg von 7 % im Quartalsvergleich entspricht. Netto-Ergebnis betrug 20 Millionen Dollar, im Vergleich zu einem Nettoverlust von 139 Millionen Dollar im Jahresvergleich und 10 Millionen Dollar im Quartalsvergleich. Bereinigtes EBITDA betrug 183 Millionen Dollar, ein Rückgang von 217 Millionen Dollar im Jahresvergleich, aber ein Anstieg von 168 Millionen Dollar im Quartalsvergleich.
Der bereinigte EPS des Unternehmens erreichte 0,17 Dollar, im Vergleich zu 0,20 Dollar im Jahresvergleich und 0,14 Dollar im Quartalsvergleich. Temporäre Betriebsunterbrechungen und Marktschwächen hatten Auswirkungen auf die Ergebnisse. Der Verkauf der Standorte Pine Bluff und Waynesville an Suzano ist Teil eines strategischen Wandels, der voraussichtlich im vierten Quartal 2024 abgeschlossen wird.
Die Ergebnisse des zweiten Quartals führten zu einer Überarbeitung der Jahresprognose, die anhaltende Marktherausforderungen widerspiegelt. Das Unternehmen plant, bis 2025 erhebliche Umstrukturierungs- und Investitionskosten im Rahmen seiner Fußabdruck-Optimierungs -Initiative zu verursachen.
Die Schuldnerreduzierung -Bemühungen von Pactiv Evergreen umfassen die Reduzierung der gesamten ausstehenden Schulden um 544 Millionen Dollar seit Jahresbeginn und die Erklärung einer Dividende von 0,10 Dollar pro Aktie für das zweite Quartal 2024.
- Net Income of $20M in Q2 2024 compared to a net loss of $139M YoY.
- Adjusted EBITDA of $183M, up from $168M in Q1 2024.
- Net Revenues increased by 7% QoQ.
- Ongoing debt reduction efforts, with total debt reduced by $544M YTD.
- Net Revenues decreased by 6% YoY.
- Adjusted EBITDA down 16% YoY.
- Temporary operational disruptions at Pine Bluff mill increased costs and reduced production.
- Revised full-year guidance due to market challenges and pending divestiture.
Insights
Pactiv Evergreen's Q2 2024 results reveal a mixed financial picture with some concerning trends. Net revenues decreased by 6% year-over-year to
The improvement in net income is largely attributable to the absence of accelerated depreciation expenses related to the Beverage Merchandising Restructuring incurred in the previous year. However, Adjusted EBITDA declined by
The company's decision to sell its Pine Bluff mill and Waynesville extrusion facility for
The revised full-year Adjusted EBITDA guidance of
Pactiv Evergreen's Q2 results highlight significant market headwinds affecting the packaging industry. The company's performance was impacted by end-market weakness and erosion in consumers' ability to absorb inflation, resulting in lower-than-expected sales volumes.
The Food and Beverage Merchandising segment saw a
The company's strategic pivot, including the sale of its Pine Bluff mill and Waynesville facility, indicates a shift away from paper production towards focusing on converting operations. This move could potentially reduce exposure to volatile raw material markets but may also limit vertical integration benefits.
Management's actions to reduce overhead costs through targeted headcount reductions and curtailed spending reflect a defensive posture in response to challenging market conditions. The revised full-year guidance suggests that the company anticipates these market challenges to persist through the remainder of 2024.
Investors should closely monitor consumer spending trends and inflationary pressures, as these factors will likely continue to impact Pactiv Evergreen's performance in the near term.
Pactiv Evergreen's Q2 performance was significantly impacted by operational challenges, particularly at the Pine Bluff mill. The temporary operational disruptions following a planned outage in April led to higher-than-expected operating costs and reduced production, negatively affecting the quarter's results.
The company's Footprint Optimization initiative, aimed at improving operating efficiency, is expected to incur substantial costs:
The planned divestiture of the Pine Bluff mill and Waynesville facility marks a significant shift in Pactiv Evergreen's manufacturing strategy. By exiting mill operations, the company aims to reduce volatility across economic cycles and improve its long-term cash flow profile. However, this move also introduces risks related to supply chain dependencies and potential loss of vertical integration benefits.
The increase in manufacturing costs across both the Foodservice and Food and Beverage Merchandising segments is concerning. Management will need to focus on operational efficiency and cost control measures to mitigate these pressures, especially given the challenging market environment.
The success of Pactiv Evergreen's transformation will largely depend on its ability to smoothly transition away from mill operations while maintaining production efficiency in its core converting operations.
Announced sale represents exit from paper mills furthering strategic transformation
Second quarter impacted by end-market weakness and temporary operational disruptions at Pine Bluff mill
Revising 2024 guidance
Second Quarter 2024 Financial Highlights:
- Net Revenues of
$1,338 million for the second quarter of 2024 were down6% compared to$1,426 million in the second quarter of 2023 and up7% compared to$1,252 million in the first quarter of 2024. - Net Income of
$20 million for the second quarter of 2024 compared to a net loss of$139 million in the second quarter of 2023 and net income of$10 million in the first quarter of 2024. - Adjusted EBITDA1 of
$183 million for the second quarter of 2024 compared to$217 million in the second quarter of 2023 and$168 million in the first quarter of 2024. - Diluted earnings per share of
$0.10 for the second quarter of 2024 compared to diluted loss per share of$0.78 in the second quarter of 2023 and diluted earnings per share of$0.04 in the first quarter of 2024. - Adjusted EPS1 of
$0.17 for the second quarter of 2024 compared to$0.20 in the second quarter of 2023 and$0.14 in the first quarter of 2024.
LAKE FOREST, Ill., July 31, 2024 (GLOBE NEWSWIRE) -- Pactiv Evergreen Inc. (“Pactiv Evergreen” or the “Company”) today reported results for the second quarter of 2024. Michael King, President and Chief Executive Officer of Pactiv Evergreen, said, “This past quarter marked a significant milestone in our transformational journey as we announced an agreement to sell our Pine Bluff mill and Waynesville extrusion facility to Suzano. This is a great outcome for Pactiv Evergreen and upon closing of the transaction, we will exit our final remaining mill, allowing us to focus on our core North American converting operations. Our second quarter results were below our expectations, largely driven by two factors. First, in our previous quarterly earnings announcement we highlighted the end-market related risks to our second quarter and full year results, which were predicated on an improvement in fundamentals and consumer demand. As we close a challenging first half of the year, some of the risks we underscored have begun to materialize. We experienced a lower-than-expected sequential uplift in sales volumes, which we believe was caused by further erosion in consumers’ ability to absorb the multi-year impact of elevated inflation. Second, we experienced temporary operational disruptions at our Pine Bluff mill following the planned outage in April. While we were able to identify and resolve the issues quickly, higher-than-expected operating costs and reduced production at the mill during the second quarter impacted results. In response to the current market environment, we are taking action to reduce overhead costs through targeted headcount reductions and curtailing spend. We remain optimistic in our ability to drive operational improvements through the remainder of the year.”
Jon Baksht, Chief Financial Officer of Pactiv Evergreen, added, “We launched our strategic alternatives review for Pine Bluff over a year ago. At closing, the sale will effectively complete the restructuring of our Beverage Merchandising operations, and is expected to improve the long-term cash flow profile of our business, while also reducing volatility across economic cycles. During the quarter, we also announced the repricing and upsizing of our term loans due in 2028, which will lower interest expense and enhance our financial flexibility. As we shift our focus to the remainder of the year, we are lowering our full year guidance to reflect our second quarter results and a slower than anticipated end market demand recovery, partially offset by the expected benefits from the cost curtailment actions. Our revised full year guidance also reflects the pending sale of our Pine Bluff and Waynesville facilities, which is expected to close during the fourth quarter of this year.”
Footprint Optimization Update
On February 29, 2024, the Company announced the Footprint Optimization, a strategic initiative to optimize its manufacturing and warehousing footprint that is expected to improve operating efficiency and result in meaningful cost savings beginning in 2025 and beyond. The Company expects to incur capital expenditures of
Beverage Merchandising Restructuring Update
On March 6, 2023 we announced the Beverage Merchandising Restructuring, which included the exploration of strategic alternatives for our Pine Bluff, Arkansas mill and our Waynesville, North Carolina extrusion facility. Following authorization by our Board of Directors on July 12, 2024, we entered into a definitive agreement to sell these facilities. The purchase price is
We are currently evaluating the financial statement impacts of the transaction. Based on estimated net proceeds, we currently expect to record a non-cash impairment charge of approximately
Taking into account the impact of this new transaction, we now expect to incur total cash charges of approximately
These charges for the Footprint Optimization and Beverage Merchandising Restructuring include certain estimates that are provisional and include significant management judgments and assumptions that could change materially as the Company completes the execution of its plans. Actual results may differ from these estimates, and the completion of the plans could result in additional restructuring charges or impairments not reflected above.
__________________
1 Adjusted EBITDA and Adjusted EPS are non-GAAP measures. Refer to their definitions in the discussion on non-GAAP financial measures and the accompanying reconciliations below.
Second Quarter 2024 Results vs. Second Quarter 2023 Results
Net revenues in the second quarter of 2024 were
Net income was
Adjusted EBITDA1 was
Segment Results
Foodservice
| For the Three Months Ended June 30, | Components of Change in Net Revenues | ||||||||||||||||||||
| (In millions, except for %) | 2024 | 2023 | Change | Change % | Price/Mix | Volume | |||||||||||||||
| Total segment net revenues | $ | 668 | $ | 656 | $ | 12 | 2 | % | 2 | % | — | % | |||||||||
| Segment Adjusted EBITDA | $ | 109 | $ | 128 | $ | (19 | ) | (15 | )% | ||||||||||||
| Segment Adjusted EBITDA margin2 | 16 | % | 20 | % | |||||||||||||||||
2 For each segment, segment Adjusted EBITDA margin is calculated as segment Adjusted EBITDA divided by total segment net revenues.
The increase in net revenues was mainly due to higher pricing, largely due to the pass through of higher material costs, partially offset by unfavorable product mix.
The decrease in Adjusted EBITDA reflects higher manufacturing costs and unfavorable product mix, partially offset by higher pricing, net of material costs passed through, and lower incentive based compensation costs.
Food and Beverage Merchandising
| For the Three Months Ended June 30, | Components of Change in Net Revenues | |||||||||||||||||||||||
| (In millions, except for %) | 2024 | 2023 | Change | Change % | Price/Mix | Volume | Mill Closure | |||||||||||||||||
| Total segment net revenues | $ | 674 | $ | 805 | $ | (131 | ) | (16 | )% | (1 | )% | (5 | )% | (10 | )% | |||||||||
| Segment Adjusted EBITDA | $ | 93 | $ | 109 | $ | (16 | ) | (15 | )% | |||||||||||||||
| Segment Adjusted EBITDA margin | 14 | % | 14 | % | ||||||||||||||||||||
The decrease in net revenues was primarily due to the closure of our Canton, North Carolina mill, and lower sales volume. Lower sales volume was due to strategically exiting certain business and the market softening amid inflationary pressures.
The decrease in Adjusted EBITDA reflects higher manufacturing costs, lower sales volume and lower pricing, net of material costs passed through, partially offset by lower incentive based compensation costs.
Second Quarter 2024 Results vs. First Quarter 2024 Results
Net revenues in the second quarter of 2024 were
Net income was
Adjusted EBITDA1 was
Segment Results
Foodservice
| For the Three Months Ended | Components of Change in Net Revenues | ||||||||||||||||||||
| (In millions, except for %) | June 30, 2024 | March 31, 2024 | Change | Change % | Price/Mix | Volume | |||||||||||||||
| Total segment net revenues | $ | 668 | $ | 597 | $ | 71 | 12 | % | 1 | % | 11 | % | |||||||||
| Segment Adjusted EBITDA | $ | 109 | $ | 90 | $ | 19 | 21 | % | |||||||||||||
| Segment Adjusted EBITDA margin | 16 | % | 15 | % | |||||||||||||||||
The increase in net revenues was largely due to higher sales volume which was attributable to seasonal trends and higher pricing due to the pass through of higher material costs.
The increase in Adjusted EBITDA was primarily due to higher sales volume and lower incentive based compensation costs, partially offset by higher manufacturing costs.
Food and Beverage Merchandising
| For the Three Months Ended | Components of Change in Net Revenues | ||||||||||||||||||||
| (In millions, except for %) | June 30, 2024 | March 31, 2024 | Change | Change % | Price/Mix | Volume | |||||||||||||||
| Total segment net revenues | $ | 674 | $ | 660 | $ | 14 | 2 | % | (1 | )% | 3 | % | |||||||||
| Segment Adjusted EBITDA | $ | 93 | $ | 100 | $ | (7 | ) | (7 | )% | ||||||||||||
| Segment Adjusted EBITDA margin | 14 | % | 15 | % | |||||||||||||||||
Net revenues increased due to higher sales volume which was attributable to seasonal trends, partially offset by unfavorable product mix.
The decrease in Adjusted EBITDA reflects higher manufacturing costs, mostly due to a planned annual mill outage, and unfavorable product mix, partially offset by higher sales volume and lower incentive based compensation costs.
Balance Sheet and Cash Flow Highlights
The Company continues to deliver on its commitment to strengthen its balance sheet. Since December 31, 2022, the Company reduced its total outstanding debt by
| (In millions) | As of June 30, 2024 | (In millions) | For the Three Months Ended June 30, 2024 | |||||||
| Total outstanding debt | $ | 3,592 | Net cash flow provided by operating activities | $ | 94 | |||||
| Cash and cash equivalents | (95 | ) | Capital expenditures | (57 | ) | |||||
| Net Debt3 | $ | 3,497 | Free Cash Flow3 | $ | 37 | |||||
Outlook
Due to the Company’s second quarter results and the expected continuation of end-market related risks, as well as the pending divestiture of the Pine Bluff mill and Waynesville extrusion facility, the Company is revising its full year Adjusted EBITDA1 outlook to a range of
The Company has not reconciled the non-GAAP measure Adjusted EBITDA1 to the GAAP measure net income (loss) on a forward-looking basis in this release because the Company does not provide guidance for certain of the reconciling items on a consistent basis, including but not limited to items relating to restructuring, asset impairment and other related charges, depreciation and amortization expense, net interest expense and income taxes, which would be required to include a reconciliation of Adjusted EBITDA1 to GAAP net income (loss), as the Company is unable to quantify these amounts without unreasonable efforts.
Conference Call and Webcast Presentation
The Company will host a conference call and webcast presentation to discuss these results on August 1, 2024 at 8:30 a.m. U.S. Eastern Time. Investors interested in participating in the live call may register for the call here. Participants may also access the live webcast and supplemental presentation on the Pactiv Evergreen Investor Relations website at https://investors.pactivevergreen.com/financial-information/sec-filings under “News & Events.” The Company may from time to time use this Investor Relations website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
About Pactiv Evergreen Inc. Pactiv Evergreen Inc. (NASDAQ: PTVE) is a leading manufacturer and distributor of fresh foodservice and food merchandising products and fresh beverage cartons in North America. The Company produces a broad range of on-trend and feature-rich products that protect, package and display food and beverages for today’s consumers. Its products, many of which are made with recycled, recyclable or renewable materials, are sold to a diversified mix of customers, including restaurants, foodservice distributors, retailers, food and beverage producers, packers and processors. Learn more at www.pactivevergreen.com.
__________________
3 Net Debt and Free Cash Flow are non-GAAP measures. Refer to their definitions in the discussion on non-GAAP financial measures below.
Note to Investors Regarding Forward-Looking Statements
This press release contains forward-looking statements. All statements contained in this press release other than statements of historical fact are forward-looking statements, including statements regarding our guidance as to our future financial and operational results, our expectations regarding the timing for the closing of the sale of our Pine Bluff and Waynesville facilities and the long-term impact of that sale on the cash flow profile, and volatility across economic cycles, of our business, the expected timelines and amount and type of capital expenditures and cash and non-cash restructuring charges that we expect to incur in connection with the Footprint Optimization and the Beverage Merchandising Restructuring (including the sale of the Pine Bluff and Waynesville facilities) and the timing thereof, the effect of the Footprint Optimization on our operating efficiency and its ability to generate the anticipated savings on the anticipated timeframes and our ability to drive operational improvement in the remainder of the year. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “likely” or “continue,” the negative of these terms and other comparable terminology. These statements are only predictions based on our expectations and projections about future events as of the date of this press release and are subject to a number of risks, uncertainties and assumptions that may prove incorrect, any of which could cause actual results to differ materially from those expressed or implied by such statements, including, among others, those described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission, or SEC, and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024 filed with the SEC. New risks emerge from time to time, and it is not possible for our management to predict all risks, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement the Company makes. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. Except as otherwise required by law, the Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
Use of Non-GAAP Financial Measures
The Company uses the following financial measures that are not calculated in accordance with generally accepted accounting principles in the United States (“GAAP”): Adjusted EBITDA, Adjusted EPS, Free Cash Flow and Net Debt.
The Company defines Adjusted EBITDA as net income (loss) calculated in accordance with GAAP plus the sum of income tax expense (benefit), net interest expense, depreciation and amortization and further adjusted to exclude certain items, including but not limited to restructuring, asset impairment and other related charges, gains or losses on the sale of businesses and noncurrent assets, non-cash pension income or expense, unrealized gains or losses on derivatives, foreign exchange gains or losses on cash and gains or losses on certain legal settlements.
The Company defines Adjusted EPS as diluted (loss) earnings per share (“EPS”) calculated in accordance with GAAP adjusted for the after-tax effect of certain items, including but not limited to restructuring, asset impairment and other related charges, gains on the sale of businesses and noncurrent assets, non-cash pension income or expense, unrealized gains or losses on derivatives, foreign exchange losses on cash, gains or losses on certain legal settlements and gains or losses on debt extinguishments.
The Company defines Free Cash Flow as net cash provided by operating activities, less capital expenditures.
The Company defines Net Debt as the sum of current and long-term debt, less cash and cash equivalents.
The Company has provided herein a reconciliation of (i) net income (loss) to Adjusted EBITDA, (ii) diluted (loss) EPS to Adjusted EPS, (iii) net cash provided by operating activities to Free Cash Flow and (iv) total debt to Net Debt, in each case representing the most directly comparable GAAP financial measures.
The Company presents Adjusted EBITDA to assist in comparing performance from period to period and as a measure of operational performance. It is a key measure used by its management team to generate future operating plans, make strategic decisions and incentivize and reward its employees. In addition, its management and Chief Operating Decision Maker, who is the President and Chief Executive Officer, use the Adjusted EBITDA of each reportable segment to evaluate its respective operating performance. Accordingly, the Company believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating the Company’s operating results in the same manner as its management and board of directors. Like Adjusted EBITDA, management believes Adjusted EPS is useful to investors, analysts and others to facilitate operating performance comparisons on a period-to-period basis because it excludes variations primarily caused by changes in the items noted above.
The Company presents Free Cash Flow to assist in comparing liquidity from period to period and to provide a more comprehensive view of the Company’s core operations and ability to generate cash flow, and also, as with Adjusted EBITDA, to generate future operating plans, make strategic decisions and incentivize and reward its employees. The Company believes that this measure is useful to investors in evaluating cash available to service and repay debt, make other investments and pay dividends. The Company presents Net Debt as a supplemental measure to review the liquidity of its operations and measure the Company’s credit position and progress toward leverage targets. The Company also believes that investors find this measure useful in evaluating its debt levels.
Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, our non-GAAP metrics may not be the same as or comparable to similar non-GAAP financial measures presented by other companies. Because of these and other limitations, you should consider them alongside other financial performance measures, including our net income and other GAAP results. In addition, in evaluating Adjusted EBITDA, Adjusted EPS and other metrics derived from them, you should be aware that in the future the Company will incur expenses such as those that are the subject of adjustments in deriving Adjusted EBITDA and Adjusted EPS and you should not infer from our presentation of Adjusted EBITDA and Adjusted EPS that our future results will not be affected by these expenses or any unusual or non-recurring items.
Contact:
Curt Worthington
847.482.2040
InvestorRelations@pactivevergreen.com
| Pactiv Evergreen Inc. Condensed Consolidated Statements of Income (Loss) (in millions, except per share amounts) (unaudited) | ||||||||||||
| For the Three Months Ended | ||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | ||||||||||
| Net revenues | $ | 1,255 | $ | 1,172 | $ | 1,331 | ||||||
| Related party net revenues | 83 | 80 | 95 | |||||||||
| Total net revenues | 1,338 | 1,252 | 1,426 | |||||||||
| Cost of sales | (1,115 | ) | (1,031 | ) | (1,342 | ) | ||||||
| Gross profit | 223 | 221 | 84 | |||||||||
| Selling, general and administrative expenses | (122 | ) | (133 | ) | (136 | ) | ||||||
| Restructuring, asset impairment and other related charges | (6 | ) | (17 | ) | (32 | ) | ||||||
| Other income, net | 2 | 3 | 4 | |||||||||
| Operating income (loss) | 97 | 74 | (80 | ) | ||||||||
| Non-operating expense, net | — | — | (3 | ) | ||||||||
| Interest expense, net | (66 | ) | (59 | ) | (64 | ) | ||||||
| Income (loss) before tax | 31 | 15 | (147 | ) | ||||||||
| Income tax (expense) benefit | (11 | ) | (5 | ) | 8 | |||||||
| Net income (loss) | 20 | 10 | (139 | ) | ||||||||
| Income attributable to non-controlling interests | (1 | ) | (1 | ) | — | |||||||
| Net income (loss) attributable to Pactiv Evergreen Inc. common shareholders | $ | 19 | $ | 9 | $ | (139 | ) | |||||
| Earnings (loss) per share attributable to Pactiv Evergreen Inc. common shareholders | ||||||||||||
| Basic | $ | 0.11 | $ | 0.04 | $ | (0.78 | ) | |||||
| Diluted | $ | 0.10 | $ | 0.04 | $ | (0.78 | ) | |||||
| Weighted-average shares outstanding - basic | 179.7 | 179.4 | 178.5 | |||||||||
| Weighted-average shares outstanding - diluted | 181.0 | 180.8 | 178.5 | |||||||||
| Pactiv Evergreen Inc. Condensed Consolidated Balance Sheets (in millions) (unaudited) | ||||||||||||
| As of June 30, 2024 | As of March 31, 2024 | As of June 30, 2023 | ||||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 95 | $ | 71 | $ | 302 | ||||||
| Accounts receivable, net | 486 | 475 | 468 | |||||||||
| Related party receivables | 37 | 35 | 38 | |||||||||
| Inventories | 881 | 911 | 927 | |||||||||
| Other current assets | 116 | 111 | 114 | |||||||||
| Total current assets | 1,615 | 1,603 | 1,849 | |||||||||
| Property, plant and equipment, net | 1,473 | 1,488 | 1,488 | |||||||||
| Operating lease right-of-use assets, net | 272 | 282 | 268 | |||||||||
| Goodwill | 1,815 | 1,815 | 1,815 | |||||||||
| Intangible assets, net | 974 | 989 | 1,034 | |||||||||
| Other noncurrent assets | 213 | 209 | 176 | |||||||||
| Total assets | $ | 6,362 | $ | 6,386 | $ | 6,630 | ||||||
| Liabilities | ||||||||||||
| Accounts payable | $ | 367 | $ | 334 | $ | 352 | ||||||
| Related party payables | 7 | 8 | 8 | |||||||||
| Current portion of long-term debt | 20 | 17 | 18 | |||||||||
| Current portion of operating lease liabilities | 66 | 66 | 62 | |||||||||
| Income taxes payable | 12 | 23 | 3 | |||||||||
| Accrued and other current liabilities | 321 | 344 | 402 | |||||||||
| Total current liabilities | 793 | 792 | 845 | |||||||||
| Long-term debt | 3,572 | 3,568 | 3,822 | |||||||||
| Long-term operating lease liabilities | 223 | 232 | 220 | |||||||||
| Deferred income taxes | 226 | 235 | 255 | |||||||||
| Long-term employee benefit obligations | 57 | 57 | 59 | |||||||||
| Other noncurrent liabilities | 155 | 154 | 144 | |||||||||
| Total liabilities | $ | 5,026 | $ | 5,038 | $ | 5,345 | ||||||
| Total equity attributable to Pactiv Evergreen Inc. common shareholders | 1,332 | 1,344 | 1,282 | |||||||||
| Non-controlling interests | 4 | 4 | 3 | |||||||||
| Total equity | 1,336 | 1,348 | 1,285 | |||||||||
| Total liabilities and equity | $ | 6,362 | $ | 6,386 | $ | 6,630 | ||||||
| Pactiv Evergreen Inc. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) | ||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||
| June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||||||||
| Operating Activities: | ||||||||||||||||||||
| Net income (loss) | $ | 20 | $ | 10 | $ | 22 | $ | 30 | $ | (139 | ) | |||||||||
| Adjustments to reconcile net income (loss) to operating cash flows: | ||||||||||||||||||||
| Depreciation and amortization | 80 | 79 | 82 | 85 | 259 | |||||||||||||||
| Deferred income taxes | (5 | ) | (11 | ) | (26 | ) | — | (28 | ) | |||||||||||
| Asset impairment and restructuring related non-cash charges (net of reversals) | 1 | 1 | 12 | 3 | 9 | |||||||||||||||
| Non-cash portion of operating lease expense | 21 | 21 | 20 | 20 | 19 | |||||||||||||||
| Other non-cash items, net | 8 | 5 | 12 | 13 | 13 | |||||||||||||||
| Change in assets and liabilities: | ||||||||||||||||||||
| Accounts receivable, net | (17 | ) | (51 | ) | 51 | (3 | ) | 46 | ||||||||||||
| Inventories | 30 | (60 | ) | (7 | ) | 75 | 47 | |||||||||||||
| Accounts payable | 39 | 35 | (28 | ) | (15 | ) | (38 | ) | ||||||||||||
| Operating lease payments | (21 | ) | (21 | ) | (20 | ) | (19 | ) | (20 | ) | ||||||||||
| Accrued and other current liabilities | (35 | ) | (55 | ) | (52 | ) | 43 | (28 | ) | |||||||||||
| Other assets and liabilities | (27 | ) | 14 | 15 | 6 | (13 | ) | |||||||||||||
| Net cash provided by (used in) operating activities | 94 | (33 | ) | 81 | 238 | 127 | ||||||||||||||
| Investing Activities: | ||||||||||||||||||||
| Acquisition of property, plant and equipment | (57 | ) | (41 | ) | (107 | ) | (62 | ) | (53 | ) | ||||||||||
| Purchase of investments | — | (23 | ) | — | — | — | ||||||||||||||
| Receipt of refundable exclusivity payment | 10 | — | — | — | — | |||||||||||||||
| Other investing activities | 5 | 6 | 2 | 9 | (1 | ) | ||||||||||||||
| Net cash used in investing activities | (42 | ) | (58 | ) | (105 | ) | (53 | ) | (54 | ) | ||||||||||
| Financing Activities: | ||||||||||||||||||||
| Term loan debt proceeds | 372 | — | — | — | — | |||||||||||||||
| Term loan debt repayments | (725 | ) | — | (24 | ) | (229 | ) | (182 | ) | |||||||||||
| Revolver proceeds | 373 | 18 | — | — | — | |||||||||||||||
| Revolver repayments | (18 | ) | (18 | ) | — | — | — | |||||||||||||
| Deferred financing transaction costs | (7 | ) | — | — | — | — | ||||||||||||||
| Dividends paid to common shareholders | (18 | ) | (18 | ) | (17 | ) | (18 | ) | (18 | ) | ||||||||||
| Other financing activities | (3 | ) | (8 | ) | (5 | ) | (3 | ) | (2 | ) | ||||||||||
| Net cash used in financing activities | (26 | ) | (26 | ) | (46 | ) | (250 | ) | (202 | ) | ||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2 | ) | 1 | — | (4 | ) | 4 | |||||||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 24 | (116 | ) | (70 | ) | (69 | ) | (125 | ) | |||||||||||
| Cash, cash equivalents and restricted cash, including amounts classified as held for sale, as of beginning of the period | 71 | 187 | 257 | 326 | 451 | |||||||||||||||
| Cash, cash equivalents and restricted cash as of end of the period | $ | 95 | $ | 71 | $ | 187 | $ | 257 | $ | 326 | ||||||||||
| Cash, cash equivalents and restricted cash are comprised of: | ||||||||||||||||||||
| Cash and cash equivalents | 95 | 71 | 164 | 233 | 302 | |||||||||||||||
| Restricted cash classified as other current assets | — | — | 2 | — | — | |||||||||||||||
| Restricted cash classified as other noncurrent assets | — | — | 21 | 24 | 24 | |||||||||||||||
| Cash, cash equivalents and restricted cash as of end of the period | $ | 95 | $ | 71 | $ | 187 | $ | 257 | $ | 326 | ||||||||||
| Pactiv Evergreen Inc. Reconciliation of Reportable Segment Net Revenues to Total Net Revenues (in millions) (unaudited) | ||||||||||||
| For the Three Months Ended | ||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | ||||||||||
| Reportable segment net revenues | ||||||||||||
| Foodservice | $ | 668 | $ | 597 | $ | 656 | ||||||
| Food and Beverage Merchandising | 674 | 660 | 805 | |||||||||
| Intersegment revenues | (4 | ) | (5 | ) | (35 | ) | ||||||
| Total net revenues | $ | 1,338 | $ | 1,252 | $ | 1,426 | ||||||
| Pactiv Evergreen Inc. Reconciliation of Reportable Segment Adjusted EBITDA to Adjusted EBITDA (in millions) (unaudited) | ||||||||||||
| For the Three Months Ended | ||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | ||||||||||
| Reportable segment Adjusted EBITDA | ||||||||||||
| Foodservice | $ | 109 | $ | 90 | $ | 128 | ||||||
| Food and Beverage Merchandising | 93 | 100 | 109 | |||||||||
| Unallocated | (19 | ) | (22 | ) | (20 | ) | ||||||
| Adjusted EBITDA (Non-GAAP) | $ | 183 | $ | 168 | $ | 217 | ||||||
| Pactiv Evergreen Inc. Reconciliations of Net Income (Loss) to Adjusted EBITDA and Diluted EPS to Adjusted EPS (in millions, except per share amounts) (unaudited) | ||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | ||||||||||||||||||||||
| Net income to Adjusted EBITDA | Diluted EPS to Adjusted EPS | Net income to Adjusted EBITDA | Diluted EPS to Adjusted EPS | Net loss to Adjusted EBITDA | Diluted EPS to Adjusted EPS | |||||||||||||||||||
| Net income (loss) / Diluted EPS (Reported GAAP Measure) | $ | 20 | $ | 0.10 | $ | 10 | $ | 0.04 | $ | (139 | ) | $ | (0.78 | ) | ||||||||||
| Income tax expense (benefit) | 11 | 5 | (8 | ) | ||||||||||||||||||||
| Interest expense, net (excluding loss on extinguishment of debt) | 60 | 59 | 64 | |||||||||||||||||||||
| Loss on extinguishment of debt | 6 | 0.02 | — | — | — | — | ||||||||||||||||||
| Depreciation and amortization (excluding restructuring-related charges) | 75 | 75 | 82 | |||||||||||||||||||||
| Beverage Merchandising Restructuring charges(1) | 7 | 0.03 | 11 | 0.05 | 216 | 0.98 | ||||||||||||||||||
| Footprint Optimization charges(2) | 3 | 0.01 | 10 | 0.05 | — | — | ||||||||||||||||||
| Other restructuring and asset impairment charges (reversals) | 2 | 0.01 | — | — | 1 | — | ||||||||||||||||||
| Loss (gain) on sale of businesses and noncurrent assets | 1 | — | (1 | ) | — | 1 | — | |||||||||||||||||
| Non-cash pension expense(3) | — | — | — | — | 3 | 0.01 | ||||||||||||||||||
| Unrealized gains on commodity derivatives | (1 | ) | — | (1 | ) | — | (1 | ) | — | |||||||||||||||
| Foreign exchange gains on cash | (1 | ) | — | — | — | (2 | ) | (0.01 | ) | |||||||||||||||
| Adjusted EBITDA / Adjusted EPS(4) (Non-GAAP Measure) | $ | 183 | $ | 0.17 | $ | 168 | $ | 0.14 | $ | 217 | $ | 0.20 | ||||||||||||
| (1) | Reflects charges related to the Beverage Merchandising Restructuring, including | |
| (2) | Reflects charges related to the Footprint Optimization, including | |
| (3) | Reflects the non-cash pension expense related to our employee benefit plans. | |
| (4) | Income tax expense (benefit), interest expense, net (excluding loss on extinguishment of debt) and depreciation and amortization (excluding restructuring-related charges) are not adjustments from diluted EPS to calculate Adjusted EPS. Adjustments were tax effected using the applicable effective income tax rate for each period. For the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, the tax effect of the adjustments were income of |
FAQ
What were Pactiv Evergreen's net revenues for Q2 2024?
What is Pactiv Evergreen's adjusted EBITDA for Q2 2024?
How did Pactiv Evergreen's net income change in Q2 2024?
What is the expected closing date for the sale of Pine Bluff and Waynesville facilities?
What is Pactiv Evergreen's revised full-year guidance?
