Reynolds Consumer Products(REYN) - 2022 Q3 - Quarterly Report

Financial Performance - Total net revenues increased by 7% and 8% for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021, primarily due to higher pricing[76] - Total net revenues increased by $62 million, or 7%, to $967 million for the three months ended September 30, 2022, driven primarily by higher pricing[92] - Total net revenues for the nine months ended September 30, 2022, increased by $195 million, or 8%, to $2,729 million, primarily due to higher pricing[113] - Net income for the three months ended September 30, 2022, was $48 million, compared to $66 million in the same period of 2021[86] - Adjusted Net Income for the nine months ended September 30, 2022, was $160 million, compared to $228 million in the same period of 2021[86] - Net income fell by $18 million, or 27%, to $48 million, reflecting a decrease in income before income taxes[92] Segment Performance - The Reynolds Cooking & Baking segment holds the 1 market position in the U.S. consumer foil market with over 50% market share in virtually all categories[74] - Hefty Waste & Storage segment has the 1 branded market share in the U.S. large black trash bag and slider bag segments[74] - The Hefty Tableware segment includes the 1 party cup brand in America, emphasizing quality and value[74] - Presto Products segment is a market leader in food storage bags, providing category management and consumer insights[74] - Hefty Tableware segment net revenues increased by $119 million, or 20%, to $701 million, driven by higher pricing and volume[123] - Hefty Waste & Storage segment net revenues increased by $53 million, or 8%, to $704 million, primarily due to higher pricing[121] - Reynolds Cooking & Baking segment net revenues decreased by $13 million, or 1%, to $889 million, driven by lower household foil and non-retail volumes[119] - Presto Products segment net revenues increased by $27 million, or 6%, to $447 million, primarily due to pricing actions[125] Cost and Expenses - The company experienced significant increases in material costs, manufacturing, logistics, and advertising costs, impacting profitability[77] - Cost of sales rose by $66 million, or 9%, to $789 million, mainly due to an $81 million increase in material costs[94] - Selling, general and administrative expenses increased by $20 million, or 8%, to $264 million, mainly due to higher advertising and personnel costs[114] - Interest expense increased by $12 million, or 33%, to $48 million, primarily due to higher interest rates[116] EBITDA Analysis - Adjusted EBITDA for the three months ended September 30, 2022, was $116 million, down from $132 million in the same period of 2021[90] - Adjusted EBITDA decreased by $16 million, or 12%, to $116 million, attributed to lower volume and higher personnel and advertising costs[97] - Adjusted EBITDA decreased by $74 million, or 18%, to $346 million, primarily due to lower volume and increased costs[117] - Hefty Waste & Storage segment Adjusted EBITDA increased by $7 million, or 19%, to $44 million, primarily due to the timing of price increases[102] - Presto Products segment Adjusted EBITDA rose by $9 million, or 64%, to $23 million, driven by price increases to recover higher costs[107] Cash Flow and Financing - Net cash provided by operating activities decreased by $4 million to $118 million for the nine months ended September 30, 2022[130] - Net cash used in investing activities decreased by $15 million to $86 million, primarily due to a prior year purchase that did not repeat[131] - Net cash used in financing activities decreased by $100 million to $163 million, attributable to a prior year voluntary debt payment[132] - As of September 30, 2022, the outstanding balance under the Term Loan Facility was $2,113 million, with no borrowings under the Revolving Facility[134] - Cash dividends of $0.23 and $0.69 per share were declared and paid for the three and nine months ended September 30, 2022, respectively[149] Operational Changes - The company is implementing operational changes to address unplanned equipment downtime in the Reynolds Cooking & Baking segment[78]