BWAY Intermediate Company, Inc. Reports Financial Results For The Three Months Ended December 31, 2013 And Full Year 2013

ATLANTA, April 1, 2014 /PRNewswire/ -- BWAY Intermediate Company, Inc. (the "Company"), a leading North American supplier of general line rigid containers, today reported net sales of $320.4 million and net income of $2.3 million for the 2013 fourth quarter ended December 31, 2013.  The following compares 2013 fourth quarter results with those of the prior year period.  In the fourth quarter, the Company:

• Increased net sales $83.9 million to $320.4 million from $236.5 million
• Net income improved to $2.3 million compared to a net loss of $36.7 million
• Increased adjusted EBITDA 76% to $53.6 million from $30.5 million

The Company's net sales for the year ended December 31, 2013 increased to $1.431 billion compared to $1.168 billion in the prior year and net loss was $1.9 million compared to a net loss of $12.0 million in 2012.  Full year 2013 adjusted EBITDA was $236.0 million compared to $168.8 million in 2012.

Fourth quarter and full year 2013 results were favorably impacted by the results from the Ropak Acquisition in January 2013 and implementation of related synergies, partially offset by lower volumes, additional depreciation and amortization expense, restructuring charges and a favorable tax benefit from a worthless stock loss taken on a foreign subsidiary.  The fourth quarter and full year 2012 results were negatively impacted by $45.4 million of pre-tax acquisition costs and $11.3 million of additional pre-tax purchase accounting expenses related to the Platinum Transaction in November 2012.

Fourth Quarter Business Segment Results

Metal Packaging
Fourth quarter sales were $156.5 million compared to $149.5 million in 2012 primarily due to higher volumes and to a lesser extent favorable mix and selling price.

Metal packaging segment earnings (excluding depreciation and amortization) for the 2013 fourth quarter were $37.4 million compared to $21.7 million for the same period in 2012.  Excluding $6.5 million of non-cash expense resulting from purchase accounting adjustments to inventory in the 2012 period, metal segment earnings were $28.2 million.  The improvement in 2013 was primarily due to the effective pass-through of raw material costs, higher volumes and costs savings associated with productivity initiatives.

Plastic Packaging 
Sales for the plastic packaging segment for the fourth quarter 2013 were $163.9 million compared to $87.0 million in 2012. The increase is primarily from the Ropak Acquisition.  Excluding the impact of the Ropak Acquisition, plastic segment net sales were down as a result of lower volumes driven by actions taken to reduce or eliminate lower margin accounts, and lower market demand. 

Plastic packaging segment earnings (excluding depreciation and amortization) for the 2013 fourth quarter were $18.7 million compared to $2.7 million in the same period last year.  Excluding $1.9 million of non-cash expense resulting from purchase accounting adjustments to inventory in the 2012 period, plastic segment earnings were $4.6 million. The increase in segment earnings over 2012 was primarily attributable the Ropak Acquisition and synergies associated with closing four legacy plastic facilities, consolidating a substantial portion of their operations into Ropak facilities and other operational synergies including supply chain initiatives and elimination of certain general and administrative costs.  Improvements also resulted from actions taken by the Company to improve margins in this segment, including productivity improvement initiatives, changes in policies and practices with regard to passing through changes in resin prices, and proactive actions related to lower margin accounts. 

Corporate
Undistributed corporate expenses for the 2013 fourth quarter were $4.9 million compared to $16.3 million for the same period last year.  Excluding professional fees related to identifying and executing business performance initiatives of $1.9 million in 2013 and share-based compensation expense of $13.5 million in 2012, corporate expenses were essentially flat. 

Interest Expense
Interest expense for the fourth quarter of 2013 was $14.5 million, compared to $11.4 million.  The increase was due to higher overall debt balances as a result of the Ropak Acquisition and the Platinum Transaction.

Income Tax Benefit
The effective tax rate for the fourth quarter of 2013 was 140% due to a worthless stock loss taken on a foreign subsidiary.

Capital Expenditures
Capital expenditures for fiscal 2013 were $66.3 million compared to $38.1 million in the comparable 2012 period.  In addition to routine maintenance capital, expenditures focused on new injection molding machines, completing the plant consolidation projects undertaken as a result of the Ropak Acquisition, completing the implementation of our ERP system at the Ropak facilities, and various other cost reduction and productivity improvement projects.

Debt
Net debt (total debt less cash) at December 31, 2013 was $905.2 million.  Full year interest expense for 2013 increased by $10.4 million compared to the comparable 2012 period primarily due to increased borrowings used to finance the Ropak Acquisition and the Platinum Transaction, partially offset by a lower overall cost of debt.  The ratio of net debt to adjusted EBITDA (leverage) at December 31, 2013 was 3.8x. The Company had total liquidity, cash plus undrawn revolver capacity, of approximately $197 million at December 31, 2013.

About BWAY Intermediate Company

The Company is a leading North American supplier of general line rigid containers. The Company currently operates 24 plants throughout the United States and Canada serving industry leading customers on a national basis.

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to substantial risks, uncertainties and assumptions. 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. Many factors could affect our actual performance and results and could cause actual results to differ materially from those expressed in the forward-looking statements. Please refer to our filings with the United States Securities and Exchange Commission, for a discussion of other factors that may affect future performance or results.

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 Measures

The Company provides financial measures and terms not calculated in accordance with accounting principles generally accepted in the United States (GAAP).  Presentation of non-GAAP financial measures such as, but not limited to "EBITDA," "adjusted EBITDA," "EBIT," "adjusted EBIT," gross margin (excluding depreciation and amortization) and "adjusted net income (loss)," provide investors with an alternative method for assessing the Company's operating results in a manner that enables them to more thoroughly evaluate the Company's performance. These non-GAAP financial measures provide a baseline for assessing the Company's future earnings expectations. The Company's management uses these non-GAAP financial measures for the same purpose. The non-GAAP financial measures included in this document are provided to give investors access to the types of measures that the Company uses in analyzing its results.

The Company's calculation of non-GAAP financial measures is not necessarily comparable to similarly titled measures reported by other companies. These non-GAAP financial 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 these non-GAAP financial measures to GAAP financial measures are included with this document.

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SOURCE BWAY Intermediate Company, Inc.