Sealed Air Reports First Quarter 2014 Results

Sealed Air Corporation announced financial results for the first quarter 2014. First quarter 2014 net sales of $1.8 billion were unchanged on a reported basis compared with first quarter 2013. On a constant dollar basis, net sales increased 2.8%.

Adjusted EBITDA for the first quarter 2014 increased 8.9% to $252 million, or 13.8% of net sales. This compares to first quarter 2013 of $231 million, or 12.7% of net sales. The 110 basis point improvement in Adjusted EBITDA margin in the first quarter 2014 was primarily attributable to a more favorable mix and price/cost spread and cost synergies, partially offset by non-material inflation, lower volumes and $8 million negative currency translation.

“First quarter 2014 net sales of $1.8 billion increased 2.8% on a constant dollar basis compared to last year primarily due to favorable price/mix of 3.4%,” said Jerome A. Peribere, President and CEO. “We delivered favorable product price/mix across all divisions and all regions, which contributed to a year-over-year improvement of 160 basis points in gross profit margin. We also increased Adjusted EBITDA margin by 110 basis points to 13.8% as compared to 12.7% in the previous year.

“We have made tremendous progress engaging our customers on our value-added solutions and how we ‘Re-imagine the industries they serve.’ We will continue to focus on improving our product mix and delivering the most innovative solutions to the marketplace. Our first quarter performance is a true testament to our strong market leadership position and commitment to improving the quality of earnings. We are on track to achieve the high-end of the range we previously provided for full year Adjusted EBITDA of $1.050 billion to $1.070 billion. We are also increasing our Free Cash Flow outlook to approximately $425 million,” Peribere continued.

Net sales in the Food Care division of $904 million were unchanged compared to last year. On a constant dollar basis, Food Care net sales increased by 3.9% primarily due to favorable price/mix of 4.1%, partially offset by a slight decline in volume. Adjusted EBITDA increased 9.5% to $160 million or 17.6% of net sales. This compares to Adjusted EBITDA in the first quarter 2013 of $146 million or 16.1% of net sales. The 150 basis point improvement in Adjusted EBITDA margin was due to favorable mix and price/cost spread as well as cost synergies, partially offset by non-material inflation and negative currency translation.
   
The Diversey Care division reported net sales of $505 million, a 1.5% decline compared to last year. On a constant dollar basis, net sales increased 1.2% with favorable price/mix of 3.2% partially offset by a 2.0% decline in volume. Adjusted EBITDA increased 4.5% to $45 million or 8.8% of net sales. This compares to Adjusted EBITDA in the first quarter 2013 of $43 million or 8.3% of net sales. The 50 basis point improvement was primarily attributable to a more favorable customer mix, improved pricing trends and cost synergies, partially offset by lower volumes, non-material inflation and negative currency translation.
   
The Product Care division reported net sales of $394 million, a 1.7% increase compared to last year. On a constant dollar basis, net sales increased by 2.6% primarily due a favorable price/mix of 2.1% and a slight increase in volume. Adjusted EBITDA increased 12.0% to $70 million or 17.8% of net sales. This compares to Adjusted EBITDA in the first quarter 2013 of $63 million or 16.2% of net sales. The 160 basis point improvement was largely attributable to favorable mix and price/cost spread as well as cost synergies.