Sealed Air Corporation Reports Higher Net Sales And Net Earnings For The Third Quarter And First Nine Months Of 2000

Saddlebrook, New Jersey, UNITED STATES


SADDLE BROOK, N.J., Oct. 26, 2000 (PRIMEZONE) -- Sealed Air Corporation (NYSE:SEE) reported today higher net sales and net earnings for the third quarter and first nine months of 2000 compared with the respective 1999 periods.

Basic and diluted earnings per common share for the third quarter increased to $0.57 and $0.46, respectively, compared to basic and diluted earnings per common share of $0.43 for the third quarter of 1999. The conversion of the Company's outstanding preferred stock is not considered in the calculation of diluted earnings per common share because the effect would be anti-dilutive. However, if earnings per common share were calculated as-if the Company's outstanding preferred stock had been converted into common stock, earnings per common share would have amounted to $0.49 for the third quarter compared to $0.47 for the third quarter of 1999. Analysts who regularly follow the Company generally use this as-if-converted calculation as the method of comparison for their published earnings estimates.

Commenting on the Company's performance, William V. Hickey, President and Chief Executive Officer, stated, "During the third quarter, our unit volume continued to grow in the mid-single digits. Our control of operating expenses resulted in a continuing decline in those expenses as a percentage of net sales, and our cash flow margins remained strong. We continued to position the Company for growth with the completion of several small acquisitions, including the $120 million acquisition of Dolphin Packaging plc which will support our case ready packaging business in Europe. We also took advantage of market conditions to repurchase approximately $158 million of the Company's outstanding stock, bringing our total repurchases for the first nine months to approximately $234 million. These repurchases were largely of preferred stock and reduce the Company's future aggregate dividend obligations and the potential dilution in earnings per common share.

The Company's results in the quarter continued to be affected by higher raw material and energy costs and the weakness of certain foreign currencies, particularly the euro, relative to the U.S. dollar. The third quarter results also include the effects of a factory realignment and rationalization in the U.K., the operating results of the newly acquired Dolphin business, and the receipt of a fee from a third party for the assignment of a contract. As a result of increased borrowings incurred to finance a portion of the Company's acquisitions and share repurchases, interest expense increased in the quarter."

Highlights for the Third Quarter of 2000 include:


 -- Net sales increased 4% to $746,860,000 from $714,755,000 for the
    third quarter of 1999.  The increase in net sales was primarily
    due to higher unit volume, the added net sales of several acquired
    businesses and, to a lesser extent, higher average selling prices
    for certain of the Company's products.  Excluding the negative
    effect of foreign currency translation, net sales would have
    increased 8% compared with the third quarter of 1999.
 
 -- Gross profit was $253,434,000 or 33.9% of net sales compared with
    $257,204,000 or 36.0% of net sales for the third quarter of 1999.
    The decrease in gross profit as a percentage of net sales was due
    primarily to higher raw material costs and, to a limited extent,
    charges in the U.K. relating to the factory realignment and
    rationalization mentioned above and inclusion of the operating
    results of the newly acquired Dolphin business.
 
 -- Operating profit declined to $110,206,000 or 14.8% of net sales
    from $114,205,000 or 16.0% of net sales for the third quarter of
    1999.  The decrease in operating profit was due primarily to the
    change in gross profit discussed above. 
 
 -- Other expense, net, declined compared to the third quarter of
    1999.  Interest expense increased to $17,082,000 from $14,631,000
    for the third quarter of 1999 primarily due to borrowings made in
    connection with the acquisitions and stock repurchases mentioned
    above.  The increased interest expense was more than offset by the
    receipt of a $10,000,000 fee from a third party for the assignment
    of a contract.  The remaining amount in other expense, net,
    primarily represents foreign currency exchange losses attributable
    to the weakness of foreign currencies, particularly the euro,
    relative to the U.S. dollar.
 
 -- Net earnings increased to $54,714,000 from $53,712,000 for the
    third quarter of 1999.  
 
 -- Net earnings ascribed to common shareholders increased 33% to
    $47,637,000 from $35,833,000 for the third quarter of 1999.  This
    increase was primarily due to gains on the repurchase of preferred
    stock below redemption value (the equivalent of an $0.11 gain
    included in the basic earnings per common share) and lower
    aggregate dividends due to the lower number of preferred shares
    outstanding compared to the third quarter of 1999.
 
 -- Assuming conversion of the Company's outstanding preferred stock,
    earnings per common share, excluding goodwill amortization, were
    $0.61. 

-------

Operating Results


 -- Net sales for the first nine months of 2000 increased 5% to
    $2,194,990,000 from $2,088,813,000 for the 1999 period.  This
    increase was due primarily to higher unit volume and, to a lesser
    extent, the added net sales of several acquired businesses and
    higher average selling prices for certain of the Company's
    products.  Excluding the negative effect of foreign currency
    translation, net sales would have increased 8% compared with the
    first nine months of 1999. 
 
 -- Net sales for the Company's food packaging segment increased 4%
    for the third quarter and 3% for the first nine months of 2000
    compared with the respective 1999 periods.  The increases in both
    periods were due primarily to higher unit volume, the added net
    sales of Dolphin and other small businesses following their
    acquisitions and, to a lesser extent, certain higher average
    selling prices.  Excluding the negative effect of foreign currency
    translation, net sales for this segment would have increased 8%
    and 7% for the third quarter and first nine months of 2000
    compared with the respective 1999 periods.
 
 -- Net sales for the Company's protective and specialty packaging
    segment increased 5% and 8% for the third quarter and first nine
    months of 2000 compared with the respective 1999 periods.  The
    increases in both periods were due primarily to higher unit
    volume, the added net sales of several small acquired businesses
    and, to a lesser extent, certain higher average selling prices.
    Excluding the negative effect of foreign currency translation, net
    sales for this segment would have increased 8% and 11% for the
    third quarter and first nine months of 2000 compared with the
    respective 1999 periods. 
 
 -- Gross profit for the first nine months of 2000 increased to
    $765,396,000 or 34.9% of net sales from $756,482,000 or 36.2% of
    net sales for the first nine months of 1999 due primarily to the
    higher level of net sales partially offset by higher raw material
    costs.
 
 -- Marketing, administrative and development expenses including
    goodwill amortization declined modestly as a percentage of net
    sales for the third quarter and first nine months of 2000 compared
    with the respective 1999 periods.  These expenses declined to
    19.2% of net sales for the third quarter and 19.4% of net sales
    for the first nine months of 2000 compared with 20.0% and 20.5%
    for each of the respective 1999 periods.  As in the 1999 periods,
    the Company continued to incur information system costs related to
    implementation of its enterprise resource planning system.
 
 -- Operating profit for the first nine months of 2000 increased to
    $338,493,000 or 15.4% of net sales from $328,318,000 or 15.7% of
    net sales for the first nine months of 1999.  The decrease as a
    percentage of net sales was due primarily to the changes in gross
    profit as a percentage of net sales discussed above.
 
 -- Other expense, net, declined for the first nine months of 2000
    compared with the 1999 period.  This decrease was primarily due to
    the receipt of a $10,000,000 fee from a third party for the
    assignment of a contract, largely offset by higher interest
    expense related to additional borrowings incurred to finance a
    portion of the cost of the acquisitions and share repurchases
    mentioned above, and to a lesser extent to foreign exchange losses
    related to the weakness of foreign currencies, particularly the
    euro, relative to the U.S. dollar.
 
 -- The effective tax rate for the third quarter and first nine 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 nine months of 2000 increased to
    $163,528,000 from $151,518,000 for the first nine months of 1999.

---------

Earnings Outlook

Based upon our expectations of mid- to high-single digit net sales growth, continuing higher raw material and energy costs, the weakness of certain foreign currencies and the early signs of softening economies in certain parts of the world, the Company currently expects earnings per share, assuming conversion of the Company's preferred stock, to grow at least 5% in the fourth quarter of 2000 and at least 15% for the full year 2001 over the respective prior year periods. These expectations do not consider the effect of any future stock repurchases on the Company's outstanding debt or its earnings per share, nor do they consider the effect of any future acquisitions by the Company, and are based on the assumption of stable interest rates.

---------

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.1

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 June 30, 2000, could cause actual results to differ materially from such statements.


                        SEALED AIR CORPORATION
               Results for the period ended September 30
                             (Unaudited)
             (In thousands of dollars, except share data)
             CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
 
                                         Quarter Ended September 30
                                         --------------------------
 
                                                           % Increase
                                         2000         1999  (Decrease)
                                         ----         ----   --------
 
 Net sales by business segment: (1)
     Food packaging                  $ 452,215    $ 434,486      4
     Protective and 
      specialty packaging              294,645      280,269      5
                                     ---------    ---------
         Total net sales               746,860      714,755      4
 
 Cost of sales                         493,426      457,551      8
                                     ---------    ---------
 Gross profit                          253,434      257,204     (1)
 
 Marketing, administrative and
  development expenses                 129,790      130,721     (1)
 
 Goodwill amortization                  13,438       12,278      9
                                     ---------    ---------
 Operating profit                      110,206      114,205     (4)
 
 Other (expense), net                   (9,813)     (13,809)   (29)
                                     ---------    ---------
 Earnings before income taxes          100,393      100,396      0
 
 Income taxes                           45,679       46,684     (2)
                                     ---------    --------- 
 Net earnings                        $  54,714    $  53,712      2
                                     =========    =========
 Net earnings ascribed
  to common shareholders             $  47,637    $  35,833     33
                                     =========    =========
 Basic earnings 
  per common share (2)               $    0.57    $    0.43
                                     =========    ========= 
 Diluted earnings 
  per common share (2)               $    0.46    $    0.43 
                                     =========    ========= 
 Weighted average number of common
    shares outstanding (000's):
             Basic                      83,723       83,648 
                                     =========    ========= 
             Diluted                    85,116       83,784 
                                     =========    ========= 
 
 
 
                                      Nine Months Ended September 30 
                                      ------------------------------ 
                                         
                                                           % Increase
                                       2000          1999   (Decrease)
                                       ----          ----   ---------
 
 Net sales by business segment: (1)
     Food packaging                $ 1,320,914  $ 1,280,047     3
     Protective and
      specialty packaging              874,076      808,766     8
                                   -----------  -----------
         Total net sales             2,194,990    2,088,813     5
 
 Cost of sales                       1,429,594    1,332,331     7
                                   -----------  -----------
 Gross profit                          765,396      756,482     1
 
 Marketing, administrative and
  development expenses                 388,774      391,304    (1)
 
 Goodwill amortization                  38,129       36,860     3
                                   -----------  -----------
 Operating profit                       338,493      328,318    3
 
 Other (expense), net                  (38,441)     (44,287)  (13)
                                   -----------  -----------
 Earnings before income taxes          300,052      284,031     6
 
 Income taxes                          136,524      132,513     3
                                   -----------  -----------
 Net earnings                      $   163,528  $   151,518     8
                                   ===========  ===========
 Net earnings ascribed to
  common shareholders              $   125,163  $    97,889    28
                                   ===========    =========
 Basic earnings per
  common share (2)                 $      1.50  $      1.17
                                   ===========    ========= 
 Diluted earnings per
  common share (2)                 $      1.36  $      1.17 
                                   ===========    ========= 
 Weighted average number of 
  common shares outstanding (000's): 
          Basic                         83,675       83,552 
                                   ===========    ========= 
          Diluted                       86,367       83,688    
                                    ==========    ========= 
 
 
 (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 September 30
                             (Unaudited)
             (In thousands of dollars, except share data)
               CALCULATION OF EARNINGS PER COMMON SHARE
 
                                           Quarter Ended September 30
                                           --------------------------
                                              2000           1999
                                           -----------     ---------
 Net earnings                              $    54,714     $  53,712
 Add: Excess of redemption value
  over repurchase price of
  preferred stock                                8,914             0
 Less:  Preferred dividend                     (15,991)      (17,879)
                                           ===========     =========
 Net earnings ascribed
  to common shareholders                   $    47,637     $  35,833
                                           ===========     =========
 Weighted average number
  of common shares
  outstanding (000's):
      Basic                                     83,723        83,648
                                           ===========     =========
      Diluted                                   85,116        83,784
                                           ===========     =========
 EPS - Basic (1)                           $      0.57     $    0.43
                                           ===========     =========
 EPS - Diluted (1) (2)                     $      0.46     $    0.43
                                           ===========     =========
 EPS - As If Converted (1) (3)             $      0.49     $    0.47
                                           ===========     =========
 
 
                                      Nine Months Ended September 30
                                      ------------------------------
                                             2000          1999
                                           -----------     ---------
 Net earnings                              $   163,528     $ 151,518
 Add: Excess of redemption value
  over repurchase price of
  preferred stock                               11,725            39
 Less:  Preferred dividend                     (50,090)      (53,668)
                                           ===========     =========
 Net earnings ascribed
  to common shareholders                   $   125,163     $  97,889
                                           ===========     ========= 
 Weighted average number
  of common shares
  outstanding (000's):
      Basic                                     83,675        83,552
                                           ===========     =========
      Diluted                                   86,367        83,688
                                           ===========     =========
 EPS - Basic (1)                           $      1.50     $    1.17
                                           ===========     =========
 EPS - Diluted (1) (2)                     $      1.36     $    1.17
                                           ===========     =========
 EPS - As If Converted (1) (3)             $      1.44     $    1.31
                                           ===========     =========
 
 (1) The basic earnings per common share calculation for the quarter
     and nine months ended September 30, 2000 includes an $0.11 and
     $0.14 per share gain, respectively, 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 nine
     months ended September 30, 2000. The gain attributable to the
     repurchase of preferred stock was not significant in 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 September 30, 2000 and 1999
     to $0.49 and $0.47, respectively, and for the nine months ended
     September 30, 2000 and 1999 to $1.44 and $1.31, respectively).
     The weighted average number of shares outstanding, assuming
     converstion of the outstanding convertible preferred stock, is
     112,287,000 and 113,538,000 for the quarter and nine months ended
     September 30, 2000, respectively.


        

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