SADDLE BROOK, N.J., July 26, 2000 (PRIMEZONE) -- Sealed Air Corporation (NYSE:SEE) reported today higher net sales, operating profit and net earnings for the second quarter and first six months of 2000 compared with the respective 1999 periods.
Commenting on the Company's performance, William V. Hickey, President and Chief Executive Officer, stated, "Our business fundamentals remain strong with mid- to high-single digit unit growth, on-target operating expense levels and solid cash flow. Although the rapid increase in raw material costs is having a negative effect on our profit margins in the short term, we are confident in the continuing positive outlook for our business."
Highlights for the Second Quarter of 2000 include:
-- Net sales increased 5% to $731,542,000 from $695,121,000 for the
second quarter of 1999. The increase in net sales for the quarter
was primarily due to higher unit volume and, to a lesser extent,
higher average selling prices for certain of the Company's
products and the added net sales of several small acquired
businesses. Excluding the negative effect of foreign currency
translation, net sales would have increased 9% compared with the
second quarter of 1999.
-- Gross profit was $253,973,000 or 34.7% of net sales compared with
$253,580,000 or 36.5% of net sales for the second quarter of
1999. The decrease in gross profit as a percentage of net sales
was due primarily to higher raw material costs.
-- Operating profit increased to $112,366,000 or 15.4% of net sales
from $109,280,000 or 15.7% of net sales for the second quarter of
1999. The decrease in operating profit as a percentage of net
sales was due primarily to the relative decrease in gross profit
discussed above.
-- Net earnings increased to $53,831,000 from $51,192,000 for the
second quarter of 1999.
-- Basic and diluted earnings per common share increased to $0.44
from $0.40 for the second quarter of 1999.
-- Earnings per common share, computed as if the Company's
outstanding preferred stock had been converted, increased to
$0.47 from $0.44 for the second quarter of 1999.
-- Assuming conversion of the Company's outstanding preferred stock,
earnings per common share, excluding goodwill amortization, were
$0.59 for the second quarter of 2000.
-------
Operating Results
-- Net sales for the first six months of 2000 increased 5% to
$1,448,130,000 from $1,374,058,000 for the 1999 period. This
increase in net sales was due primarily to higher unit volume
and, to a lesser extent, higher average selling prices for
certain of the Company's products and the added net sales of
several small acquired businesses. Excluding the negative effect
of foreign currency translation, net sales would have increased
9% compared with the first six months of 1999.
-- Net sales for the Company's food packaging segment increased 3%
for the second quarter and first six months of 2000 compared with
the respective 1999 periods. This was due primarily to higher
unit volume. For the second quarter, net sales for this segment
also benefited from certain higher average selling prices.
Excluding the negative effect of foreign currency translation,
net sales for this segment would have increased 7% and 6% for the
second quarter and first six months compared with the respective
1999 periods.
-- Net sales for the Company's protective and specialty packaging
segment increased 9% and 10% for the second quarter and first six
months of 2000 compared with the respective 1999 periods. The
increases in both periods were due primarily to higher unit
volume and, to a lesser extent, certain higher average selling
prices and the added net sales of several small acquired
businesses. Excluding the negative effect of foreign currency
translation, net sales for this segment would have increased 11%
and 13% for the second quarter and first six months compared with
the respective 1999 periods.
-- Gross profit for the first six months of 2000 increased to
$511,962,000 or 35.4% of net sales from $499,278,000 or 36.3% of
net sales for the first six months of 1999 due primarily to the
higher level of net sales partially offset by higher raw material
costs. These higher costs led to the decline in gross profit as a
percentage of net sales.
-- Marketing, administrative and development expenses including
goodwill amortization declined modestly as a percentage of net
sales for the second quarter and first six months of 2000
compared with the respective 1999 periods. These expenses
declined to 19.4% of net sales for the second quarter and 19.6%
of net sales for the first six months compared with 20.8% for
each of the respective 1999 periods. As in the second quarter and
first six months of 1999, the Company continued to incur
information system costs related to implementation of its
enterprise resource planning system.
-- Operating profit for the first six months of 2000 increased to
$228,287,000 or 15.8% of net sales from $214,113,000 or 15.6% of
net sales for the first six months of 1999. This increase as a
percentage of net sales was due primarily to the changes in costs
and operating expenses discussed above.
-- Other expense, net, which consists primarily of interest expense,
was essentially unchanged for the second quarter and declined
modestly for the first six months of 2000 compared with the
respective 1999 periods.
-- The effective tax rate for the second quarter and first six
months of 2000 was 45.5%. The Company's effective tax rate is
higher than applicable statutory rates primarily due to the
non-deductibility for tax purposes of goodwill amortization. The
Company expects that its effective tax rate will remain higher
than statutory rates for 2000.
-- Net earnings for the first six months of 2000 increased to
$108,814,000 from $97,806,000 for the first six months of 1999.
---------
Business
Sealed Air is a leading global manufacturer of a wide range of food, protective and specialty packaging materials and systems. To view the Company's latest financial news online via the World Wide Web, visit http://www.cfonews.com/see.
Certain statements made by the Company in this press release are forward-looking statements. These statements include comments as to the Company's beliefs and expectations as to future events and trends affecting the Company's business. These forward-looking statements are based upon management's current expectations concerning future events and trends and are necessarily subject to uncertainties, many of which are outside the control of the Company. The factors stated under the heading "Forward-Looking Statements" in Management's Discussion and Analysis of Results of Operations and Financial Condition, which appears in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, could cause actual results to differ materially from such statements.
---------
SEALED AIR CORPORATION
Results for the period ended June 30
(Unaudited)
(In thousands of dollars, except share data)
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Quarter Ended June 30
---------------------
% Increase
2000 1999 (Decrease)
---- ---- ----------
Net sales by business
segment: (1)
Food packaging $ 439,298 $ 425,868 3
Protective and specialty
packaging 292,244 269,253 9
--------- ---------
Total net sales 731,542 695,121 5
Cost of sales 477,569 441,541 8
--------- ---------
Gross profit 253,973 253,580 -
Marketing, administrative and
development expenses 129,226 131,969 (2)
Goodwill amortization 12,381 12,331 -
--------- ---------
Operating profit 112,366 109,280 3
Other (expense), net (13,594) (13,595) -
--------- ---------
Earnings before income
taxes 98,772 95,685 3
Income taxes 44,941 44,493 1
--------- ---------
Net earnings $ 53,831 $ 51,192 5
========= =========
Basic earnings per
common share (2) $ 0.44 $ 0.40
========= =========
Diluted earnings per
common share (2) $ 0.44 $ 0.40
========= =========
Weighted average
number of common
shares outstanding
(000's)
Basic 83,674 83,626
========= =========
Diluted 83,831 83,758
========= =========
Six Months Ended June 30
------------------------
% Increase
2000 1999 (Decrease)
---- ---- ----------
Net sales by
business segment: (1)
Food packaging $ 868,699 $ 845,561 3
Protective and
specialty packaging 579,431 528,497 10
----------- -----------
Total net sales 1,448,130 1,374,058 5
Cost of sales 936,168 874,780 7
----------- -----------
Gross profit 511,962 499,278 3
Marketing,
administrative and
development expenses 258,984 260,583 (1)
Goodwill amortization 24,691 24,582 -
----------- -----------
Operating profit 228,287 214,113 7
Other (expense), net (28,628) (30,478) (6)
----------- -----------
Earnings before
income taxes 199,659 183,635 9
Income taxes 90,845 85,829 6
----------- -----------
Net earnings $ 108,814 $ 97,806 11
=========== ===========
Basic earnings per
common share (2) $ 0.93 $ 0.74
=========== ===========
Diluted earnings per
common share (2) $ 0.89 $ 0.74
=========== ===========
Weighted average number of
common shares outstanding (000's)
Basic 83,651 83,505
=========== ===========
Diluted 84,134 83,637
=========== ===========
(1) Certain prior period amounts have been reclassified to conform
to the current year's presentation.
(2) See the Supplementary Information included with this release for
the calculation of basic and diluted earnings per common share.
---------
Supplementary Information
SEALED AIR CORPORATION
Results for the period ended June 30
(Unaudited)
(In thousands of dollars, except share data)
CALCULATION OF EARNINGS PER COMMON SHARE
Quarter Ended June 30
---------------------
2000 1999
---- ----
Net earnings $ 53,831 $ 51,192
Add: Excess of book value
over repurchase price of
preferred stock 32 29
Less: Preferred dividend (17,002) (17,879)
-------- --------
Net earnings ascribed to
common shareholders $ 36,861 $ 33,342
======== ========
Weighted average common
shares outstanding (000's):
Basic 83,674 83,626
======== ========
Diluted 83,831 83,758
======== ========
EPS - Basic (1) $ 0.44 $ 0.40
======== ========
EPS - Diluted (1)(2) $ 0.44 $ 0.40
======== ========
EPS - As If Converted (1)(3) $ 0.47 $ 0.44
======== ========
Six Months Ended June 30
------------------------
2000 1999
---- ----
Net earnings $ 108,814 $ 97,806
Add: Excess of book value
over repurchase price of
preferred stock 2,811 39
Less: Preferred dividend (34,099) (35,789)
--------- ---------
Net earnings ascribed to
common shareholders $ 77,526 $ 62,056
========= =========
Weighted average common
shares outstanding (000's):
Basic 83,651 83,505
========= =========
Diluted 84,134 83,637
========= =========
EPS - Basic (1) $ 0.93 $ 0.74
========= =========
EPS - Diluted (1)(2) $ 0.89 $ 0.74
========= =========
EPS - As If Converted (1)(3) $ 0.95 $ 0.85
========= =========
(1) The basic earnings per common share calculation for the six
months ended June 30, 2000 includes a $0.03 per share gain
attributable to the repurchase of preferred stock. Such gain is
not included in the calculation of diluted earnings per common
share or as if converted earnings per common share for the
quarter and six months ended June 30, 2000. The gain attributable
to the repurchase of preferred stock was not significant in the
quarter ended June 30, 2000 and the 1999 periods.
(2) For the purpose of calculating diluted earnings per common
share, net earnings ascribed to common shareholders have been
adjusted to exclude the gain attributable to the repurchase of
preferred stock and to add back dividends attributable to such
repurchased preferred stock in each period, and the weighted
average common shares outstanding have been adjusted to assume
conversion of the shares of preferred stock repurchased during
each period in accordance with the Financial Accounting Standards
Board's Emerging Issues Task Force Topic D-53 guidance.
(3) The assumed conversion of the outstanding convertible preferred
stock is not considered in the calculation of diluted earnings
per common share for all periods presented as the effect is
antidilutive (i.e., would increase the diluted earnings per
common share for the quarters ended June 30, 2000 and 1999 to
$0.47 and $0.44, respectively, and for the six months ended June
30, 2000 and 1999 to $0.95 and $0.85, respectively).