Berry (US:BERY)2025-04-30 11:05Financial Performance - Net sales for the quarter ended March 29, 2025, were $2,520 million, essentially flat compared to the prior quarter's $2,519 million, with a $50 million increase due to higher selling prices and 2% organic volume growth, offset by $62 million from divestitures[80]. - Operating income for the quarter increased to $391 million, a 115% increase from $182 million in the prior quarter, primarily due to a $175 million gain from the divestiture of the Tapes business[80][83]. - Year-to-date net sales increased by 1% to $4,905 million, with a $196 million increase in operating income to $543 million, attributed to higher selling prices and improved volumes[92][95]. - For the two quarterly periods ended March 29, 2025, net sales were $2.732 billion, with a gross profit of $556 million and earnings from continuing operations of $270 million[112]. - The company reported net income of $270 million, which includes $43 million of income associated with intercompany activity with non-guarantor subsidiaries[112]. Segment Performance - The Consumer Packaging International segment reported net sales of $970 million, flat year-over-year, with a 1% organic volume growth and a 1,280% increase in operating income to $69 million[84][85]. - The Consumer Packaging North America segment saw net sales rise by 5% to $789 million, driven by 2% organic volume growth and higher selling prices, although operating income decreased by 8% to $69 million[86][87]. - The Flexibles segment experienced a 5% decline in net sales to $761 million, primarily due to a $58 million decline from the divested Tapes business, while operating income surged by 148% to $253 million[88][89]. Cash Flow and Liquidity - Free cash flow for the year-to-date was $(469) million, a decline from $(247) million in the prior year, indicating increased cash used in operating activities[108]. - As of March 29, 2025, the company's cash balance was $483 million, with plans to refinance long-term debt obligations prior to maturity[109]. - The company had no outstanding balance on its $800 million asset-based revolving line of credit as of the end of the quarter, maintaining compliance with all covenants[103]. Assets and Liabilities - Current assets decreased from $1.775 billion on September 28, 2024, to $1.343 billion as of March 29, 2025, while noncurrent assets decreased from $5.553 billion to $2.382 billion[113]. - Current liabilities decreased from $2.081 billion to $1.092 billion, while noncurrent liabilities decreased from $8.843 billion to $8.032 billion during the same period[113]. - The company has $1.0 billion in term loans and an $800 million revolving credit facility, with no borrowings outstanding under the latter[114]. Interest Rate and Currency Risk - A 0.25% change in floating interest rates would increase annual interest expense by approximately $1 million[114]. - A 10% decline in foreign currency exchange rates would have resulted in a $6 million unfavorable impact on net income for the two quarterly periods ended March 29, 2025[115]. - The applicable margin for SOFR rate borrowings under the revolving credit facility ranges from 1.25% to 1.50%, while the margin for term loans is 1.75% per annum[114]. - The SOFR rate applicable to term loans was approximately 4.34% at the end of the period[114]. - The company aims to minimize interest rate volatility risk through regular operating and financing activities and the use of derivative financial instruments when appropriate[115]. Comprehensive Income - The company reported a $207 million improvement in comprehensive income from the prior quarter, mainly due to a favorable change in currency translation[90].