Sealed Air(SEE) - 2025 Q4 - Annual Results

Financial Performance - Net sales for Q4 2025 were $1.40 billion, a 2.1% increase compared to Q4 2024, while full year 2025 net sales were $5.36 billion, a decrease of 0.6% year-over-year[3][12] - Net earnings for Q4 2025 were $44 million, or $0.30 per diluted share, compared to a net loss of less than $1 million in Q4 2024; full year net earnings were $441 million, or $2.99 per diluted share, up 63.7% from $270 million in 2024[9][14] - Adjusted EBITDA for Q4 2025 was $278 million, representing 19.8% of net sales, an increase from $271 million or 19.7% in Q4 2024; full year adjusted EBITDA was $1,134 million, or 21.2% of net sales, up from $1,111 million in 2024[10][16] - Gross profit for Q4 2025 was $398.4 million, compared to $406.8 million in Q4 2024, resulting in a gross margin of approximately 28.4%[34] - Operating profit for the year ended December 31, 2025, was $725.7 million, a decrease from $735.9 million in 2024[34] - Net earnings from continuing operations for Q4 2025 were $44.4 million, compared to a loss of $0.4 million in Q4 2024, with net earnings for the year at $505.5 million, up from $264.7 million in 2024[34] - The company reported a basic net earnings per share of $0.30 for Q4 2025, compared to a loss of $0.05 in Q4 2024, and $3.44 for the full year 2025, up from $1.82 in 2024[34] - Non-GAAP adjusted net earnings for Q4 2025 were $113.5 million, resulting in adjusted diluted EPS of $0.77, reflecting a 3.5% increase compared to the previous year[47] - The adjusted net earnings for the year ended December 31, 2025, were $493.2 million, with adjusted diluted EPS of $3.34[47] Cash Flow and Debt - Free cash flow for full year 2025 was $459 million, a slight increase from $454 million in 2024, despite a decrease in cash flow from operations to $628 million from $728 million[20] - The company generated $628.0 million in net cash from operating activities for the year ended December 31, 2025, compared to $728.0 million in 2024[39] - The company experienced a significant reduction in interest expense, net, to $218.9 million for the year 2025, compared to $247.6 million in 2024[34] - Net debt decreased to $3.7 billion as of December 31, 2025, down from $4.0 billion in 2024, with a net leverage ratio of 3.2x compared to 3.6x in the previous year[22] - The company’s total debt decreased to $4,009.7 million as of December 31, 2025, down from $4,403.9 million in 2024[49] - Non-GAAP net debt stood at $3,665.7 million, with a net leverage ratio of 3.2x, improved from 3.6x in the previous year[49] Segment Performance - The Protective segment saw a 3% increase in net sales to $464 million in Q4 2025, while the Food segment increased by 2% to $937 million; however, both segments experienced volume decreases[7][18][19] - The adjusted EBITDA margin for food in Q4 2025 was 21.6%, while for protective it was 17.3%[44] - The company experienced a volume decline of 1.4% in food products for Q4 2024, while protective products saw a volume increase of 1.3%[41] - For the year ended December 31, 2025, total net sales are projected to be $5,359.8 million, with food at 67.1% and protective at 32.9%[41] Tax and Special Items - The effective tax rate for Q4 2025 was 56.6%, significantly lower than 100.5% in the prior year, influenced by updates related to tax audits and accruals[8] - The effective income tax rate for GAAP was 56.6% for Q4 2025, while the non-GAAP adjusted income tax rate was 30.0%[45] - Special items impacted net earnings by $69.1 million in Q4 2025, with a loss per share impact of $0.47[47] Corporate Actions - The company announced an acquisition agreement with CD&R for an enterprise value of $10.3 billion, with stockholders set to receive $42.15 per share in cash[5][6] - The company will not host a conference call to discuss the results due to the pending acquisition, indicating a shift in corporate structure post-acquisition[23] Asset and Liability Management - Total current assets increased to $1,919.5 million as of December 31, 2025, from $1,891.8 million in 2024, driven by higher trade receivables and inventories[37] - Total liabilities decreased to $5,775.3 million as of December 31, 2025, from $6,397.6 million in 2024, primarily due to a reduction in long-term debt[37] - Capital expenditures for full year 2025 were $170 million, down from $220 million in 2024, reflecting a focus on cost management[20] Currency Impact - The total change in net sales for 2024 was impacted by a foreign currency translation gain of $32.7 million, representing a 0.6% increase[41] - The company reported a total constant currency change (non-GAAP) of $(65.5) million for the year ended December 31, 2024, indicating a 1.2% decline[41] - The company experienced a foreign currency exchange loss of $4.5 million in Q4 2025 due to highly inflationary economies[47]