Sealed Air Reports Third Quarter 2017 Results

Sealed Air Corporation (NYSE:SEE) today announced financial results for the third quarter 2017. Commenting on these results, Jerome A. Peribere, President and Chief Executive Officer, said, “For the third consecutive quarter, we are delivering on our accelerated growth strategy, led by favorable volume trends across all regions. North America was once again our fastest growing region with an increase in volumes of 7%. Our top-line performance continues to be driven by the adoption of our innovative solutions coupled with strong end market demand across all proteins and within the e-commerce and fulfillment sectors. We expect top-line growth to continue into year-end and sequential profitability improvements through operational disciplines and increased sales of value-added solutions.”

Peribere continued, “Our journey as a knowledge-based company continues with many exciting opportunities ahead. We are pleased to have Ted Doheny join Sealed Air as our Chief Operating Officer and CEO-Designate, and will assume the role of President and CEO effective January 1, 2018. Furthermore, we recently announced that our current Chief Accounting Officer and Controller, Bill Stiehl, has assumed the additional position of Acting Chief Financial Officer. Under both Ted and Bill’s leadership, the organization will continue to thrive and generate significant value for our global customers, shareholders and employees.”

Unless otherwise stated, all results compare third quarter 2017 results to third quarter 2016 results from continuing operations. As a result of the sale of Diversey, which refers to Diversey Care and the food hygiene and cleaning business, we have changed our segment reporting structure effective as of January 1, 2017. Food Care now includes the Medical Applications business, which was previously reported under ‘Other.’ Additionally, Food Care now excludes the food hygiene and cleaning business, which is a component of Diversey and classified as discontinued operations. Year-over-year financial discussions present operating results from continuing operations as reported, and on a constant dollar basis. Constant dollar refers to unit volume and price/mix performance and excludes the impact of currency translation from all periods referenced. Additionally, non-U.S. GAAP adjusted financial measures, such as Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), Adjusted Net Earnings, Adjusted Diluted Earnings Per Share (“Adjusted EPS”) and Adjusted Tax Rate, exclude the impact of special items, such as restructuring charges, charges related to the sale of Diversey, charges related to ceasing operations in Venezuela, cash-settled stock appreciation rights (“SARs”) granted as part of the original Diversey acquisition and certain other infrequent or one-time items. Please refer to the supplemental information included with this press release for a reconciliation of Non-U.S. GAAP to U.S. GAAP financial measures.

Summary Highlights:
• Completed sale of Diversey to Bain Capital Private Equity on September 6, 2017 for $3.2 Billion
• Third Quarter 2017 Sales from Continuing Operations of $1.1 Billion, an increase of 6% As Reported
• Net Earnings from Continuing Operations of $62 Million and Reported Net Earnings Per Share from Continuing Operations of $0.33
• Adjusted Net Income from Continuing Operations of $87 Million, Adjusted EPS from Continuing Operations of $0.46 per share and Adjusted EBITDA of $217 Million, or 19.2% of Net Sales
• Outlook for Full Year 2017 includes Net Sales of approximately $4.4 Billion, Adjusted EBITDA of approximately $830 Million, Adjusted EPS of $1.75 to $1.80 from Continuing Operations and Free Cash Flow of $400 Million

Third Quarter 2017 U.S. GAAP Summary, Continuing Operations
Net sales of $1.1 billion increased 6% on an as reported basis. Currency had a positive impact on total net sales of 1%, or $13 million. As reported, net sales increased across all regions.

Net income from continuing operations on a reported basis was $62 million, or $0.33 per diluted share, as compared to net income from continuing operations of $64 million, or $0.32 per diluted share, in the third quarter 2016. Net income in the third quarter 2017 was unfavorably impacted by $24 million of special items, including $9 million of restructuring and other restructuring associated costs, $7 million related to acquisition and divestiture activity and $5 million of tax special items. Net income in the third quarter 2016 included $17 million of special items, including $7 million of charges related to restructuring and other costs associated with our restructuring programs and $9 million related to tax special items.

The effective tax rate in the third quarter of 2017 was 41.2%, compared to the effective tax rate of 45.9% in the third quarter of 2016. The effective tax rate in the third quarter of 2017 was negatively affected by additional tax expenses related to the sale of Diversey. The effective tax rate in the third quarter of 2016 was negatively impacted by an increase in unrecognized tax benefits.
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