Reynolds Consumer Products Reports Fourth Quarter and Fiscal Year 2019 Financial Results
Fourth Quarter and Fiscal Year 2019 Results In-Line with Expectations
Provides Annual 2020 Outlook
Initiates Quarterly Cash Dividend
“I am pleased our fourth quarter and fiscal year 2019 financial results were in-line with our projections,” said
Fiscal Year 2019 Financial Highlights
-
Net Revenues for fiscal year 2019 were
$3.0 billion , compared to$3.1 billion in the prior year period. -
Net Income for fiscal year 2019 was
$225 million compared to$176 million in the prior year period. -
Adjusted EBITDA for fiscal year 2019 was
$655 million compared to$647 million in the prior year period.1
Fourth Quarter 2019 Financial Highlights
-
Net Revenues for the fourth quarter of 2019 were
$835 million , compared to$907 million in the prior year period. -
Net Income for the fourth quarter of 2019 was
$90 million compared to$84 million in the prior year period. -
Adjusted EBITDA for the fourth quarter of 2019 was
$214 million compared to$224 million in the prior year period.1
Fiscal Year 2019 Results
Fiscal year 2019 total net revenues were
Net Income for fiscal year 2019 was
Adjusted EBITDA for fiscal year 2019 was
Fourth Quarter 2019 Results
Total net revenues in the fourth quarter of 2019 were
Net Income for the fourth quarter of 2019 was
Adjusted EBITDA was
Key Segment Results
Reynolds Cooking & Baking
Reynolds Cooking & Baking net revenues in the fourth quarter were
Hefty Waste & Storage
Hefty Waste & Storage net revenues in the fourth quarter were
Hefty Tableware
Hefty Tableware net revenues in the fourth quarter were
Presto Products
Presto Products net revenues in the fourth quarter were
Fiscal Year 2020 Outlook
For the fiscal year ending
-
Net Income to be in the range of
$320 million to$350 million -
Earnings per share to be in the range of
$1.52 to$1.67 per share -
Adjusted Net Income to be in the range of
$350 million to$370 million 1 -
Adjusted earnings per share to be in the range of
$1.67 to$1.76 per share1 -
Adjusted EBITDA to be in the range of
$675 million to$695 million 1 -
Net Debt to be in the range of
$2.0 billion to$2.2 billion
Successful Initial Public Offering
Subsequent to the quarter end, on
Initiates Quarterly Cash Dividend
The Company announced today that its Board of Directors has approved the initiation of a quarterly cash dividend. The initial dividend will be sized at 50% of Adjusted Net Income, paid quarterly. Prorated for the period subsequent to the IPO, the dividend for the first quarter of 2020 will be
Conference Call and Webcast Presentation
The Company will host a conference call and webcast presentation along with the executive management team to discuss these results with additional comments and details today at
About
RCP’s mission is to simplify daily life so consumers can enjoy what matters most. RCP is a market-leading consumer products company with a presence in 95% of households across
Note to Investors Regarding Forward Looking Statements
This press release contains statements reflecting our views about our future performance that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including our fiscal year 2020 guidance. 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” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including but not limited to the risk factors set forth in our most recent Annual Report on Form 10-K.
For additional information on these and other factors that could cause our actual results to materially differ from those set forth herein, please see our filings with the
REYN-F
|
||||||||||||||||||||
Statement of Income |
||||||||||||||||||||
($ in millions) |
||||||||||||||||||||
|
|
Three months ended |
|
|
Year ended |
|
||||||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
2018 |
||||||||||
Net revenues |
|
$ |
|
800 |
|
|
$ |
|
868 |
|
|
$ |
|
2,883 |
|
|
$ |
|
2,981 |
|
Related party net revenues |
|
|
35 |
|
|
|
39 |
|
|
|
149 |
|
|
|
161 |
|
||||
Total net revenues |
|
|
835 |
|
|
|
907 |
|
|
|
3,032 |
|
|
|
3,142 |
|
||||
Cost of sales |
|
|
(572 |
) |
|
|
(641 |
) |
|
|
(2,152 |
) |
|
|
(2,310 |
) |
||||
Gross profit |
|
|
263 |
|
|
|
266 |
|
|
|
880 |
|
|
|
832 |
|
||||
Selling, general and administrative expenses |
|
|
(74 |
) |
|
|
(70 |
) |
|
|
(305 |
) |
|
|
(288 |
) |
||||
Other expense, net |
|
|
(31 |
) |
|
|
(11 |
) |
|
|
(65 |
) |
|
|
(31 |
) |
||||
Income from operations |
|
|
158 |
|
|
|
185 |
|
|
|
510 |
|
|
|
513 |
|
||||
Non-operating expense, net |
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
||||
Interest expense, net |
|
|
(35 |
) |
|
|
(68 |
) |
|
|
(209 |
) |
|
|
(280 |
) |
||||
Income before income taxes |
|
|
122 |
|
|
|
117 |
|
|
|
301 |
|
|
|
233 |
|
||||
Income tax (expense) benefit |
|
|
(32 |
) |
|
|
(33 |
) |
|
|
(76 |
) |
|
|
(57 |
) |
||||
Net income |
|
$ |
|
90 |
|
|
$ |
|
84 |
|
|
$ |
|
225 |
|
|
$ |
|
176 |
|
Adjusted EBITDA (Non-GAAP) |
|
$ |
|
214 |
|
|
$ |
|
224 |
|
|
$ |
|
655 |
|
|
$ |
|
647 |
|
|
||||||||||||||||||||||||||||||
Segment Results |
||||||||||||||||||||||||||||||
($ in millions) |
||||||||||||||||||||||||||||||
|
|
Reynolds
|
|
|
Hefty
|
|
|
Hefty
|
|
|
Presto
|
|
|
Unallocated |
|
|
Total |
|
||||||||||||
Revenues |
|
|
|
|||||||||||||||||||||||||||
Three months ended |
|
$ |
|
332 |
|
|
$ |
|
176 |
|
|
$ |
|
206 |
|
|
$ |
|
124 |
|
|
$ |
|
(3 |
) |
|
$ |
|
835 |
|
Three months ended |
|
|
379 |
|
|
|
188 |
|
|
|
205 |
|
|
|
137 |
|
|
|
(2 |
) |
|
|
907 |
|
||||||
Year ended |
|
|
1,076 |
|
|
|
709 |
|
|
|
751 |
|
|
|
511 |
|
|
|
(15 |
) |
|
|
3,032 |
|
||||||
Year ended |
|
|
1,159 |
|
|
|
696 |
|
|
|
757 |
|
|
|
539 |
|
|
|
(9 |
) |
|
|
3,142 |
|
||||||
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Three months ended |
|
|
93 |
|
|
|
48 |
|
|
|
52 |
|
|
|
24 |
|
|
|
(3 |
) |
|
|
214 |
|
||||||
Three months ended |
|
|
95 |
|
|
|
59 |
|
|
|
50 |
|
|
|
24 |
|
|
|
(4 |
) |
|
|
224 |
|
||||||
Year ended |
|
|
209 |
|
|
|
190 |
|
|
|
178 |
|
|
|
91 |
|
|
|
(13 |
) |
|
|
655 |
|
||||||
Year ended |
|
|
234 |
|
|
|
172 |
|
|
|
168 |
|
|
|
85 |
|
|
|
(12 |
) |
|
|
647 |
|
Use of Non-GAAP Financial Measures
We use non-GAAP financial measures “Adjusted EBITDA,” “Adjusted Net Income,” and “Adjusted Earnings Per Share” in evaluating our past results and future prospects. We define Adjusted EBITDA as net income calculated in accordance with GAAP, plus the sum of income tax expense, net interest expense, depreciation and amortization and further adjusted to exclude unrealized gains and losses on derivatives, costs associated with rationalizing operations and administrative functions, factoring discounts, defined benefit plan settlement losses, amortization of actuarial gains, the allocated related party management fee and transaction-related costs. We define Adjusted Net Income and Adjusted Earnings Per Share as Net Income and Earnings Per Share calculated in accordance with GAAP, plus the sum of initial public offering transaction-related costs, net of tax benefit.
We present Adjusted EBITDA because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans and make strategic decisions. In addition, our chief operating decision maker uses Adjusted EBITDA of each reportable segment to evaluate the operating performance of such segments. We use Adjusted Net Income and Adjusted Earnings Per Share as a supplemental metrics to evaluate our business’ performance in way that also considers our ability to generate profit without the impact of certain items. Accordingly, we believe presenting these metrics provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors.
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 financial measures may not be the same as or comparable to similar non-GAAP financial measures presented by other companies.
Guidance for fiscal year 2020, where adjusted, is provided on a non-GAAP basis, which the Company will continue to identify as it reports its future financial results. The Company cannot reconcile its expected Adjusted EBITDA to net income under “Fiscal Year 2020 Guidance” without unreasonable effort because certain items that impact net income and other reconciling metrics are out of the Company's control and/or cannot be reasonably predicted at this time.
Please see reconciliations of Non-GAAP measures used in this release (with the exception of our 2020 Adjusted EBITDA outlook, as described above) to the most directly comparable GAAP measures, beginning on the following page.
|
||||||||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA |
||||||||||||||||||||
($ in millions) |
||||||||||||||||||||
|
|
Three months ended |
|
|
Year ended |
|
||||||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||||||
|
|
(in millions) |
|
|
(in millions) |
|
||||||||||||||
Net income – GAAP |
|
$ |
|
90 |
|
|
$ |
|
84 |
|
|
$ |
|
225 |
|
|
$ |
|
176 |
|
Income tax expense (benefit) |
|
|
32 |
|
|
|
33 |
|
|
|
76 |
|
|
|
57 |
|
||||
Interest expense, net |
|
|
35 |
|
|
|
68 |
|
|
|
209 |
|
|
|
280 |
|
||||
Depreciation and amortization |
28 |
21 |
91 |
87 |
||||||||||||||||
Factoring discount |
|
|
10 |
|
|
|
8 |
|
|
|
25 |
|
|
|
22 |
|
||||
Allocated related party management fee |
|
|
3 |
|
|
|
4 |
|
|
|
10 |
|
|
|
10 |
|
||||
Transaction-related costs |
|
|
19 |
|
|
|
— |
|
|
|
31 |
|
|
|
— |
|
||||
Unrealized losses (gains) on derivatives |
|
|
— |
|
|
|
6 |
|
|
|
(9 |
) |
|
|
14 |
|
||||
Business rationalization costs |
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
4 |
|
||||
Other |
|
|
(2 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
(3 |
) |
||||
Adjusted EBITDA (Non-GAAP) |
|
$ |
|
214 |
|
|
$ |
|
224 |
|
|
$ |
|
655 |
|
|
$ |
|
647 |
|
|
|||||||||||
Reconciliation of 2020 Net Income Guidance to Adjusted Net Income Guidance |
|||||||||||
(amounts in millions, except per share data) |
|||||||||||
Net Income |
Diluted
|
Diluted Earnings
|
|||||||||
low |
high |
low |
high |
||||||||
Fiscal Year 2020 - Guidance |
$ |
320 |
$ |
350 |
|
210.1 |
|
$ |
1.52 |
$ |
1.67 |
Adjustments: |
|||||||||||
IPO Transaction-related costs, net of
|
|
30 |
|
20 |
|
210.1 |
|
|
0.15 |
|
0.09 |
Fiscal Year 2020 - Adjusted Guidance |
$ |
350 |
$ |
370 |
210.1 |
$ |
1.67 |
$ |
1.76 |
||
(1) Includes 209.7 million shares outstanding as of |
1 Adjusted Net Income, Adjusted Earnings Per Share and Adjusted EBITDA are non-GAAP measures. Refer to the discussion on non-GAAP financial measures and reconciliation included in this press release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200310005323/en/
Media
Kate.OttavioKent@icrinc.com
203-682-8276
Investors
Investors@ReynoldsBrands.com
646-277-1228
Source: