EVANSVILLE, INDIANA, May 15, 2007 - Berry Plastics Holding Corporation today announced the results of the second fiscal quarter ended March 30, 2007 for Covalence Specialty Materials Corp. ("Covalence" or the "Company").
The Company reported net revenue for the three months ended March 30, 2007 of $377.0 million and a net loss for the same period of $13.0 million. Adjusted EBITDA (as defined below under "Non-GAAP Financial Measures") for the second fiscal quarter of 2007 was $21.5 million. Management believes that presenting this non-GAAP measure is important for investors to better understand the Company's underlying operational and financial performance, to facilitate comparison of results between periods and to monitor the Company's compliance with certain financial covenants in its credit agreements.
Merger with Berry Plastics Group, Inc.
As previously announced, on April 3, 2007, Berry Plastics Group, Inc. completed its stock-for-stock merger (the "Covalence Merger") with Covalence Specialty Materials Holding Corp. The resulting company retained the name Berry Plastics Group, Inc. ("Berry Group"). Immediately following the Covalence Merger, Berry Plastics Holding Corporation and Covalence Specialty Materials Corp. were combined as a direct subsidiary of Berry Group. The resulting company retained the name Berry Plastics Holding Corporation ("Berry Holding").
Non-GAAP Financial Measures
In addition to disclosing financial results that are determined in accordance with GAAP, Covalence discloses Adjusted EBITDA, a non-GAAP measure. The Company's credit agreements have certain covenants that use ratios utilizing Adjusted EBITDA. You should not consider Adjusted EBITDA as an alternative to operating or net income, determined in accordance with GAAP, as an indicator of Covalence's operating performance, or as an alternative to cash flows from operating activities, determined in accordance with GAAP. The adjustments to derive Adjusted EBITDA as noted in the following reconciliation may not be in accordance with current SEC practices or the rules and regulations adopted by the SEC that apply to periodic reports filed under the Securities Exchange Act of 1934. Accordingly, the SEC may require that Adjusted EBITDA be presented differently in filings made with the SEC than as presented in this release, or not be presented at all. The most directly comparable GAAP measure to Adjusted EBITDA is net loss. Included in this release is a reconciliation of net loss to Adjusted EBITDA.
| COVALENCE SPECIALTY MATERIALS CORP.CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited, In Millions) | |
|---|---|
| Quarter ended March 30, 2007 | |
| Net Revenue | 377.0 |
| Cost of goods sold | 337.0 |
| Gross profit | 40.0 |
| Selling, general and administrative expenses | 41.7 |
| restructuring and impairment charges | 3.9 |
| Operating loss | (5.6) |
| Other income | (0.1) |
| Interest expense, net | 16.5 |
| Loss before income tax benefit | (22.0) |
| Income tax benefit | (9.0) |
| Net loss | (13.0) |
|
COVALENCE SPECIALTY MATERIALS CORP.RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (*)(Unaudited, In Millions) | |
|---|---|
| Quarter ended March 30, 2007 | |
| Net loss | (13.0) |
| Add | |
| Depreciation and amortization | 20.5 |
| Income tax benefit | (9.0) |
| Interest expense, net | 16.5 |
| Restructuring and impairment charges | 3.9 |
| Management fees | (0.6) |
| Non-cash and/or non-recurring benefits | 0.5 |
| Transition and other, net | 1.5 |
| Adjusted EBITDA | 21.5 |
(*)Adjusted EBITDA is a non-GAAP financial measure. For more information regarding Adjusted EBITDA and non-GAAP financial measures, generally, see "Non-GAAP Financial Measures."
Certain statements and information included in this release may constitute "forward looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of Berry Group and Covalence Holding to be materially different from any future results, performance, or achievements expressed or implied in such forward looking statements. Additional discussion of factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations is contained in the companies' SEC filings. The companies do not undertake any obligation to update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
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