Berry (US:BERY)2021-05-03 16:00Financial Performance - The Company reported net sales of $3,370 million for the quarter, a 13% increase from the prior quarter's $2,975 million, driven by higher selling prices and organic volume growth of 5%[67] - The Consumer Packaging International segment achieved net sales of $1,060 million, reflecting a 9% increase, primarily due to organic volume growth of 4% and favorable foreign currency impacts of $71 million[71] - The Health, Hygiene & Specialties segment saw net sales rise to $781 million, a 21% increase, attributed to organic volume growth of 8% and increased selling prices of $83 million due to higher resin costs[77] - The Engineered Materials segment reported net sales of $798 million, a 10% increase, driven by increased selling prices of $69 million and organic volume growth of 3%[79] - Net sales in the Consumer Packaging International segment increased to $2.048 billion, an 8% change from the prior year of $1.900 billion, driven by 4% organic volume growth and a $115 million favorable impact from foreign currency changes[89] - Net sales in the Health, Hygiene & Specialties segment reached $1.521 billion, reflecting a 21% increase from $1.254 billion in the prior year, attributed to 12% organic volume growth and a $90 million increase in selling prices[96] - Net sales in the Engineered Materials segment increased to $1.520 billion, a 9% change from the prior year of $1.393 billion, supported by increased selling prices of $83 million[99] Operating Income - Operating income for the quarter was $333 million, a 17% increase from $284 million in the prior quarter, supported by organic volume growth and favorable price cost spread[67] - Operating income for the Consumer Packaging International segment rose to $135 million, a 41% increase from $96 million in the prior year, primarily due to an $81 million increase from organic volume growth[89] - Operating income in the Health, Hygiene & Specialties segment surged to $210 million, an 86% increase from $113 million in the prior year, driven by a $36 million increase from organic volume growth[96] - Operating income in the Engineered Materials segment decreased to $156 million, a 3% decline from $161 million in the prior year, primarily due to a $15 million unfavorable impact from price cost spread[99] Cash Flow and Liquidity - The Company projects cash flow from operations between $1,675 million and $1,575 million for fiscal 2021, with capital spending estimated at $700 million[64] - Net cash from operating activities increased by $105 million from the prior year, primarily due to improved net income prior to non-cash activities[106] - The company had no outstanding balance on its $850 million asset-based revolving line of credit as of the end of the quarter, indicating strong liquidity management[105] - Current assets as of April 2021 were $1.712 billion, an increase from $1.417 billion in September 2020, reflecting improved liquidity[111] Costs and Expenses - The cost of goods sold increased to $5,224 million for the year-to-date, an 11% rise from $4,687 million in the prior year, primarily due to organic volume growth and higher resin costs[84] - Interest expense decreased by 24% to $84 million, attributed to repayments on long-term borrowings and recent refinancing activities[81] Foreign Currency and Debt Management - The company has $3.8 billion in term loans and an $850 million revolving credit facility with no borrowings outstanding[114] - The applicable margin for LIBOR 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] - A 0.25% change in LIBOR would increase the company's annual interest expense by $2 million on variable rate term loans[114] - The company has a $450 million interest rate swap transaction with a fixed annual rate of 1.398% expiring in June 2026[115] - A 10% decline in foreign currency exchange rates would have had an $18 million unfavorable impact on the company's net income for the two quarterly periods ended April 3, 2021[116] - The company is party to cross-currency swaps maturing in May 2022 (€250 million), June 2024 (€1,625 million), and July 2027 (£700 million)[117] - As of April 3, 2021, the company had outstanding long-term debt of €785 million designated as a hedge of its net investment in certain euro-denominated foreign subsidiaries[117] Other Financial Metrics - The Company recorded a net pretax loss of $22 million from divestitures in fiscal 2021, including the sale of its U.S. Flexible Packaging Converting business for $140 million[62] - Comprehensive income improved by $476 million from the prior year, driven by a $138 million improvement in net income and a $170 million favorable change in currency translation[104]