Sealed Air(US:SEE)2025-11-04 22:11Financial Performance - Net earnings from continuing operations for the three months ended September 30, 2025, were $185.7 million, compared to $88.7 million for the same period in 2024, representing a 109% increase [182]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $856.3 million, compared to $839.8 million for the same period in 2024, reflecting a 2.9% increase [182]. - Adjusted Net Earnings for the three months ended September 30, 2025, were $128.3 million, compared to $115.7 million for the same period in 2024, an increase of 10.3% [185]. - Adjusted EPS for the three months ended September 30, 2025, was $0.87, compared to $0.79 for the same period in 2024, indicating a growth of 10.1% [185]. - For the three months ended September 30, 2025, net sales were $1,351.3 million, a 0.5% increase from $1,345.1 million in 2024; for the nine months, net sales decreased by 1.5% to $3,958.8 million from $4,019.8 million [195]. - Gross profit for the three months ended September 30, 2025, was $400.5 million, down 0.2% from $401.5 million in 2024; for the nine months, gross profit decreased by 1.6% to $1,198.4 million from $1,218.3 million [195]. - Net earnings from continuing operations for the three months ended September 30, 2025, were $185.7 million, a 109.4% increase from $88.7 million in 2024; for the nine months, net earnings increased by 47.0% to $396.8 million from $269.9 million [195]. - The company reported a net earnings per common share (basic) of $1.73 for the three months ended September 30, 2025, a 174.6% increase from $0.63 in 2024; for the nine months, it was $3.14, up 67.9% from $1.87 [195]. Segment Performance - Food segment sales on an organic basis for the first nine months of 2025 increased slightly compared to 2024, driven by pricing actions, despite a marginal volume decline, particularly in North America [176]. - Protective segment sales on an organic basis declined in the first nine months of 2025 compared to 2024 due to volume declines and unfavorable pricing, primarily in North America [176]. - For the Food segment, net sales increased by $12 million, or 1%, for the three months ended September 30, 2025, while for the nine months, net sales decreased by $2 million, or less than 1% [201][202]. - In the Protective segment, net sales decreased by $5 million, or 1%, for the three months ended September 30, 2025, and by $59 million, or 4%, for the nine months [204]. - Segment Adjusted EBITDA for the Food segment increased by 4.2% to $214.5 million in Q3 2025 compared to $205.9 million in Q3 2024 [248]. - Segment Adjusted EBITDA for the Protective segment decreased by 6.8% to $229.9 million in the nine months ended September 30, 2025, compared to $246.8 million in the same period of 2024 [248]. Cash Flow and Debt - Net cash provided by operating activities was $334.4 million for the nine months ended September 30, 2025, a decrease of $149.4 million compared to $483.8 million in 2024 [271]. - Net cash used in financing activities was $362.7 million for the nine months ended September 30, 2025, compared to $281.7 million in 2024 [281]. - The company's total debt as of September 30, 2025, was $4,173.6 million, down from $4,403.9 million at December 31, 2024, resulting in a non-GAAP net debt of $3,891.1 million [269]. - Cash and cash equivalents as of September 30, 2025, were $283 million, with approximately 91% located outside the U.S. [257]. - Total cash and cash equivalents decreased from $371.8 million at December 31, 2024, to $282.5 million by September 30, 2025 [258]. Expenses and Cost Management - Cost of sales for Q3 2025 increased by $7 million, or 1%, compared to Q3 2024, with a percentage of net sales rising from 70.2% to 70.4% [206]. - For the nine months ended September 30, 2025, cost of sales decreased by $41 million, or 1%, remaining consistent at 69.7% of net sales compared to 2024 [207]. - Selling, general and administrative (SG&A) expenses decreased by $12 million, or 6%, in Q3 2025 compared to Q3 2024, and by $18 million, or 3%, for the nine months [216][218]. - Amortization expense of intangible assets decreased by $1 million in Q3 2025 and by $2 million for the nine months, primarily due to lower amortization of capitalized software [219][220]. Tax and Special Items - The Adjusted Tax Rate for the three months ended September 30, 2025, was 23.9%, compared to 24.0% for the same period in 2024 [187]. - Effective income tax rate for Q3 2025 was (61)%, significantly improved from 26% in Q3 2024, primarily due to the reversal of accruals for uncertain tax positions related to an IRS audit [231][240]. - The company reported a pre-tax impact of Special Items amounting to $53.0 million for the three months ended September 30, 2025 [182]. - The company recognized a termination fee of $7 million as other income during the nine months ended September 30, 2025, from a lease termination [227]. - A pre-tax loss of $5 million was recognized during the nine months ended September 30, 2025, related to debt redemption and refinancing activities [229]. - Net decreases in unrecognized tax positions were $150 million for Q3 2025, primarily due to the resolution of the IRS audit [235]. Strategic Initiatives - The CTO2Grow Program is expected to deliver annualized savings of $160 million by year-end 2025, with the entire budget already allocated across approved projects [222]. - The company plans to continue monitoring foreign currency impacts and adjusting strategies accordingly, as these fluctuations can significantly affect financial results [196]. Other Financial Metrics - The current ratio improved to 1.3x as of September 30, 2025, compared to 1.2x at December 31, 2024 [284]. - The leverage ratio was 3.16 to 1.00 as of September 30, 2025, below the maximum covenant requirement of 4.50 to 1.00 [264]. - The company paid dividends of $89 million through the first nine months of both 2025 and 2024 [283]. - The company’s non-GAAP Consolidated Adjusted EBITDA from continuing operations was $287.5 million for the three months ended September 30, 2025, a 4.2% increase from $276.0 million in 2024 [195]. - Adjusted EBITDA margin for the Non-GAAP Consolidated Adjusted EBITDA was 21.3% in Q3 2025, up from 20.5% in Q3 2024 [248].