Financial Data and Key Metrics Changes - The company reported net revenues of $818 million for Q1 2025, with retail revenues of $767 million, reflecting a decrease of $28 million compared to Q1 2024, primarily due to retailer destocking and declines in the foam category [13][14] - Adjusted EBITDA for the quarter was $117 million, down from $122 million in the prior year, driven by lower retail sales [14] - Adjusted earnings per share (EPS) remained unchanged at $0.23 compared to Q1 2024 [14] Business Line Data and Key Metrics Changes - The company outperformed its categories by two points at retail, capturing market share in household foil, waste bags, food bags, and non-foam disposable tableware [7][8] - Non-retail revenues increased by $12 million, indicating growth in segments outside traditional retail channels [14] Market Data and Key Metrics Changes - The company anticipates net revenues for 2025 to decline by low single digits compared to 2024, with adjusted EBITDA expected in the range of $650 million to $670 million [15][16] - The impact of tariffs is estimated to create cost headwinds of $100 million to $200 million annually, with pricing strategies expected to offset these costs [16][38] Company Strategy and Development Direction - The company is focused on driving growth above category levels, expanding margins, and investing in a stable earnings growth model [6][7] - Strategic initiatives include targeted distribution gains, prioritizing larger-scale innovations, and optimizing supply chain efficiencies [11][12] - The company has updated its segment reporting to better align international business with product categories, reflecting a shift in strategy to enhance growth [18][40] Management's Comments on Operating Environment and Future Outlook - Management noted that retailer destocking is expected to persist throughout the year, impacting revenue expectations [23][24] - The company remains committed to innovation and distribution gains, despite challenges from tariffs and a dynamic retail environment [12][20] - Management expressed confidence in the underlying health of the business and the ability to recover gross profit through pricing and productivity measures [9][10] Other Important Information - The company successfully refinanced its term loan facility, enhancing financial flexibility and supporting strategic priorities [19] - Capital spending is expected to increase by $20 million to $40 million in 2025 to drive growth and margin expansion [19] Q&A Session Summary Question: Can you discuss the retailer destocking impact? - Management indicated that retailer destocking is expected to be a permanent adjustment rather than a temporary phenomenon, affecting the full year outlook [23][24] Question: What is the guidance for category growth? - The guidance reflects lower expectations for retail volumes due to destocking and consumer pressure, with pricing adjustments factored in [30][31] Question: Can you elaborate on tariff pressures? - Direct tariff exposure is a single-digit percentage of overall COGS, with significant indirect impacts from commodities like aluminum [36][38] Question: How is the innovation pipeline looking? - The company is optimistic about its innovation pipeline, with new product launches such as hefty compostable cutlery and additional scents in existing product lines [63][64] Question: What are the pricing mechanics and impact of destocking? - Pricing adjustments typically take two to six months to reflect in retail, and destocking has altered the usual timeline for pricing realization [67][71]

Q1 2025 Earnings Call April 30, 2025 This presentation 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 second quarter and fiscal year 2025 guidance. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expects," "intends," "outlook," "forecast", "position", "committed," "plans," "anticipate ...

Financial Performance - Net Income decreased to $31 million in Q1 2025 from $49 million in Q1 2024, impacted by $10 million in refinancing costs and $8 million in CEO transition costs[4] - Net Revenues were $818 million in Q1 2025, down 1.8% from $833 million in Q1 2024, with Retail Net Revenues decreasing 3% to $767 million[7] - Adjusted EBITDA decreased to $117 million in Q1 2025 from $122 million in Q1 2024, reflecting lower volume and higher operational costs[4] - Net income for the three months ended March 31, 2025, was $31 million, down from $49 million in the same period of 2024, representing a decrease of 36.7%[35] - Total revenues for the three months ended March 31, 2025, were $818 million, a decrease of 1.8% compared to $833 million in the same period of 2024[37] - Adjusted EBITDA for the three months ended March 31, 2025, was $117 million, down from $122 million in the same period of 2024, reflecting a decrease of 4.1%[47] - The company reported a net cash provided by operating activities of $56 million for the three months ended March 31, 2025, compared to $99 million in the same period of 2024, a decline of 43.4%[35] Future Guidance - The Company expects 2025 Net Revenues to decline low single digits compared to 2024, with Adjusted EBITDA projected between $650 million and $670 million[20] - Second quarter 2025 Net Revenues are anticipated to decrease by 2% to 5% compared to Q2 2024, with Adjusted EBITDA expected to be between $155 million and $165 million[21] - Adjusted EPS for 2025 is expected to be between $1.54 and $1.61, with two to four points of positive pricing anticipated to offset cost increases[20] - Future guidance for fiscal year 2025 indicates expected adjustments for Adjusted EBITDA and Adjusted EPS, but specific reconciliations cannot be provided at this time due to uncertainties[44] Debt and Cash Management - Cash and cash equivalents were $58 million as of March 31, 2025, with total debt at $1,637 million, resulting in Net Debt of $1,579 million[17] - The Company refinanced $1.645 billion of its term loan, extending maturity to 2032 and enhancing financial flexibility[5] - The company executed a debt refinancing in March 2025, incurring a debt refinancing expense of $13 million[47] - Net debt as of March 31, 2025, was $1,579 million, with a Net Debt to Trailing Twelve Months Adjusted EBITDA ratio of 2.3x[54] Segment Performance - The Reynolds Cooking & Baking segment generated revenues of $259 million, a slight increase of 1.2% from $256 million in the same period of 2024[37] - The Hefty Waste & Storage segment saw a revenue increase of 2.6% to $240 million from $234 million in the same period of 2024[37] - The Hefty Tableware segment experienced a revenue decline of 13.5%, with revenues of $179 million compared to $208 million in the same period of 2024[37] Dividends - The Company declared a quarterly dividend of $0.23 per common share, payable on May 30, 2025[23]

Core Viewpoint - Reynolds Consumer Products (NASDAQ: REYN) is a manufacturer of waste and storage, cooking, and tableware products, which has been trading at high multiples since its listing. The company has recently released guidance that is below market expectations, leading to a focus on investment ideas that involve companies paying healthy dividends while awaiting capital appreciation [1]. Group 1 - The company is identified as a potential investment opportunity due to its ability to reward shareholders through dividends and capital appreciation [1]. - The current market turmoil has resulted in the company's shares being temporarily undervalued compared to its fundamentals, peers, and historical levels [1]. - There is an emphasis on finding businesses with high odds for capital appreciation, preferably driven by foreseeable catalysts [1].

Group 1 - The core viewpoint is that Reynolds Consumer Products (NASDAQ: REYN) is expected to face demand headwinds in the near term, which will pressure its FY25 performance, leading to a hold rating recommendation [1] - The investment approach emphasizes a fundamentals-based strategy, focusing on companies with long-term durability, steady growth, and strong balance sheets, rather than merely low multiple stocks [1] - There is an acknowledgment of the risks involved in investing in successful companies, particularly the potential to overpay, highlighting the importance of valuation [1] Group 2 - The article does not contain any disclosures related to stock positions or business relationships with the companies mentioned [2] - It is noted that past performance does not guarantee future results, and no specific investment recommendations are provided [3]

This presentation 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 first quarter and fiscal year 2025 guidance. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expects," "intends," "outlook," "forecast", "position", "committed," "plans," "anticipates," "believes," "estimates," "predicts ...

Financial Data and Key Metrics Changes - Net revenues for 2024 reached $3.695 billion, exceeding initial guidance, with a 1% increase in retail volume [33][34] - Adjusted EBITDA for 2024 was $678 million, a $42 million or 7% increase from 2023, with a margin expansion of 140 basis points [34] - Free cash flow for the year was $369 million, contributing to a reduction in leverage to 2.3 times trailing 12 months adjusted EBITDA [34][35] - Adjusted earnings per share increased to $1.67, up 18% from $1.42 in 2023 [35] Business Line Data and Key Metrics Changes - All four business segments showed accelerating volume growth in Q4, with Hefty Waste & Storage and Reynolds Cooking & Baking each delivering 3 points of volume growth [36] - The tableware segment showed improving volume and share trends, while the Presto business unit remained flat [36] Market Data and Key Metrics Changes - Consolidated retail volume increased by 1% in Q4, with each business unit contributing to this growth [9] - The foam plate business, representing less than 10% of revenue, is facing secular headwinds, contributing to inconsistent earnings growth [17] Company Strategy and Development Direction - The company aims to expand its brands into new categories and enhance its portfolio of affordable, sustainable solutions [14] - A comprehensive program of action is being implemented to drive growth, expand margins, and improve shareholder value [18] - The focus is on increasing automation, enhancing production capabilities, and investing in productivity improvements [23][29] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging consumer environment, with no significant catalysts for change in consumer behavior [123] - The company expects retail volume to perform at or better than category expectations, driven by increased investment in growth programs [42] - For 2025, net revenues are expected to decline low-single digits, primarily due to a projected double-digit decline in the foam category [40][41] Other Important Information - The company plans to invest in strategic initiatives in 2025, with expected annualized returns starting to benefit results late in the year [39] - The anticipated CEO transition costs and investments in strategic initiatives are estimated to be between $25 million to $35 million [39][130] Q&A Session Summary Question: What are the biggest changes required by the new program? - The company is focusing on a more targeted approach across the retail landscape and prioritizing innovation [53][54] Question: What are the input cost expectations for this year? - Commodities are expected to be a significant headwind, but the company has tools to offset these costs [58] Question: Can you comment on the competitive environment in the trash category? - The promotional environment has increased, but pricing in Waste & Storage remained flat [60][61] Question: What changes prompted the new management approach? - The company is focusing on strategic investments to drive growth in light of category forecasts [68] Question: How does the company plan to manage pricing in light of potential tariffs? - Pricing actions are designed to stay within key thresholds, with productivity also being a tool to offset costs [76][128] Question: Can you clarify the breakdown of the CEO transition costs? - Approximately half of the estimated costs are for CEO transition, with the other half for targeted investments [130]

For the quarter ended December 2024, Reynolds Consumer Products (REYN) reported revenue of $1.02 billion, up 1.4% over the same period last year. EPS came in at $0.58, compared to $0.65 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $974.33 million, representing a surprise of +4.79%. The company has not delivered EPS surprise, with the consensus EPS estimate being $0.58.While investors scrutinize revenue and earnings changes year-over-year and how they compare with ...

Reynolds Consumer Products (REYN) came out with quarterly earnings of $0.58 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.65 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this company would post earnings of $0.42 per share when it actually produced earnings of $0.41, delivering a surprise of -2.38%.Over the last four quarters, the company has surpassed consensus EPS estimates two times.Reynolds Consumer Pr ...

Customer Concentration and Sales - In 2024, sales to the top ten customers accounted for 72% of total revenue, with Walmart and Sam's Club contributing 31% and 17% respectively[68]. - The company relies on a relatively small number of customers, and the loss of any significant customer could materially impact financial condition and results[68]. Cost and Pricing Pressures - The company experienced significant increases in raw material costs in 2022, particularly in resin and aluminum prices, negatively impacting results[72]. - Labor costs in the United States continue to rise, and labor shortages could adversely affect operating expenses and growth[77]. - The company implemented multiple rounds of price increases in 2022, but these typically lagged behind material cost increases[74]. - Economic downturns could lead to decreased demand for products, impacting sales and profitability[80]. - Global supply chain issues have resulted in an inflationary environment, impacting gross margin and operating results[82]. Competition and Market Dynamics - The company faces competition from major players like The Clorox Company and S.C. Johnson, which increases pricing pressure and necessitates continuous innovation[70]. - Future regulatory changes regarding environmental concerns could affect product demand and operational costs[79]. Financial Performance and Projections - Total net revenues for the year ended December 31, 2024, were $3,695 million, a decrease of 1.6% from $3,756 million in 2023[304]. - Gross profit increased to $978 million in 2024, up from $942 million in 2023, reflecting a gross margin improvement[304]. - Net income for 2024 was $352 million, representing a 17.9% increase compared to $298 million in 2023[304]. - Earnings per share (EPS) for 2024 were $1.68, up from $1.42 in 2023, indicating a 18.3% growth[304]. Debt and Interest Rate Risks - The company had $1,695 million in outstanding indebtedness under its senior secured term loan facility maturing in 2027 and $694 million of borrowing capacity under its senior secured revolving credit facility maturing in 2029[106]. - As of December 31, 2024, the unhedged portion of the company's Term Loan Facility was approximately $545 million, exposing it to interest rate risk[110]. - Higher interest rates during the year ended December 31, 2023, increased the company's debt service obligations on unhedged variable rate indebtedness, leading to a decrease in net income and cash flows[111]. - A 100-basis point increase in interest rates would result in a $5 million increase in annual interest expense on unhedged borrowings[284]. - Interest expense, net for 2024 was $98 million, a decrease from $119 million in 2023, attributed to lower interest rates and effective hedging[382]. Operational and Compliance Risks - Approximately 20% of the company's employees are covered by collective bargaining agreements, which could impact operations if work stoppages occur[102]. - The company is subject to various environmental, health, and safety laws, which could lead to significant liabilities and compliance costs[113]. - Increased regulatory requirements related to ESG matters may result in higher compliance and operational costs, impacting profitability[117]. - Stakeholders are increasingly focused on ESG issues, which could affect the company's access to capital and consumer demand for its products[115]. Asset Management and Financial Health - Total assets increased to $4,873 million in 2024 from $4,780 million in 2023, representing a growth of 1.95%[310]. - Cash and cash equivalents rose to $137 million in 2024, up from $115 million in 2023, marking an increase of 19.13%[310]. - Total stockholders' equity increased to $2,142 million in 2024 from $1,983 million in 2023, a rise of 8.02%[310]. - Long-term debt decreased to $1,686 million in 2024 from $1,832 million in 2023, a reduction of 7.99%[310]. Corporate Governance and Ownership Structure - PFL controls approximately 74% of the company's outstanding shares, allowing it to determine the outcome of corporate actions requiring stockholder approval[135]. - The company is classified as a "controlled company" under Nasdaq rules, which allows it to rely on exemptions from certain corporate governance requirements[144]. - Potential conflicts of interest may arise due to directors holding positions with PEI Group entities, affecting decision-making processes[149]. Product and Quality Risks - The company may incur liabilities and experience harm to its reputation due to product quality issues, which could lead to recalls and loss of market share[88]. - The company relies on intellectual property rights to protect its business, but there is a risk of infringement claims that could adversely affect operations[100]. Research and Development - Research and development expenses for the year ended December 31, 2024, were $45 million, up from $44 million in 2023 and $38 million in 2022[346]. Miscellaneous Financial Information - The company paid dividends of $192 million in both 2024 and 2023, maintaining a consistent dividend policy[316]. - The company recorded a depreciation and amortization expense of $129 million in 2024, compared to $124 million in 2023, an increase of 4.03%[316].