Sealed Air Reports Third Quarter 2013 Results

Sealed Air Corporation announced financial results for third quarter 2013. Net sales for the third quarter 2013 totaled $1.9 billion. Adjusted EPS was $0.39 for the third quarter and adjusted EBITDA was $282 million, or 14.5% of net sales. On a reported basis, net income was $37.7 million, or $0.18 per share.

“During the third quarter, not only have we delivered a strong financial quarter, we are continuing to re-invent the new Sealed Air,” Jerome A. Peribere, president and CEO, said. “This quarter we rebranded the company, reorganized Diversey Care, hired a new chief technology officer, and launched major initiatives in line with our Get Fit and Change the Game strategy. Our transformation is well underway and moving at an accelerated pace.

“We generated $195 million of free cash flow in the nine months ended September 30, 2013 and, excluding the impact of SARs, reported a third quarter Aadjusted EBITDA margin of 15.0%,” Peribere continued. “ We are pleased to report favorable price/mix trends across our three core divisions, but we still have more work to do. We are committed to our overall strategy and are confident that it will enable us to continue investing in our product offerings and innovation to better serve our customers. Based on our third quarter results and estimated performance for the remainder of the year, we are pleased to increase our adjusted EBITDA, adjusted EPS and free cash flow guidance for the full year 2013, demonstrating our ongoing commitment to improve the quality of our earnings.”

Third quarter net sales of $1.9 billion increased 2.9% on a constant dollar basis and 2.0% on a reported basis. Volume and product price/mix increased by 1.4% and 1.5%, respectively. Reported regional net sales increased 6.9% for AMAT (Asia, Middle East, Africa and Turkey), 3.5% for Europe, 1.9% for North America, 1.3% for Latin America, partially offset by 9.3% lower net sales in JANZ (Japan/Australia/New Zealand).

Adjusted EBITDA for the third quarter increased 2.7% to $282 million, or 14.5% of net sales, primarily driven by cost synergies and higher volumes. Excluding the impact of SARs, Adjusted EBITDA increased 4.8% to $290.7, or 15.0% of net sales, compared to $277.5 million, or 14.6% of net sales, in 2012. Reported operating profit was $139.9 million for third quarter 2013 compared with an operating loss of $1.2 billion in 2012, which included $1.4 billion of special items, primarily consisting of an estimated $1.3 billion non-cash pre-tax charge for impairment of goodwill and certain intangible assets associated with the Diversey acquisition.
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Food Care net sales of $950.5 million increased 3.2% on a constant dollar basis and 1.7% on a reported basis. Diversey Care net sales of $534.6 million increased 1.6% on a constant dollar basis and 1.4% on a reported basis. Product Care net sales of $402.7 million increased 4.0% on a constant dollar basis and 3.6% on a reported basis. Medical Applications and New Ventures (Other Category) net sales of $50.8 million increased 1.1% on a constant dollar basis and 4.3% on a reported basis.