Sealed Air Corporation Reports Third Quarter Results

Saddlebrook, New Jersey, UNITED STATES


SADDLE BROOK, N.J., Oct. 24, 2001 (PRIMEZONE) -- Sealed Air Corporation (NYSE:SEE) reported third quarter operating results today which include Restructuring and other charges. Basic and diluted earnings per common share for the third quarter of 2001, which reflect these charges, were $0.40 and $0.37, respectively.

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. If earnings per share were calculated as if the Company's outstanding preferred stock had been converted into common stock, however, earnings per share, before reflecting the impact of the Restructuring and other charges mentioned above, would have amounted to $0.43 for the third quarter.

Commenting on the Company's performance, William V. Hickey, President and Chief Executive Officer, stated, "While there may be uncertainty surrounding near-term economic conditions, our organization remains focused on managing and improving our business. During the quarter we continued to maintain tight control over expenses and to manage for cash flow. We further reduced expenses in absolute dollars and as a percentage of net sales. We generated EBITDA (a measure of cash flow) of over 21% of net sales, excluding the Restructuring and other charges. We used our substantial free cash flow principally to reduce debt by approximately $56 million and to repurchase over $9 million of the Company's outstanding stock. In addition, our food packaging business in Europe continued to progress as meat supply and consumption returned to more normal levels following disruptions earlier in the year, and our case ready and fluid food packaging businesses continued to show solid growth. In our protective packaging business, despite lower volumes related to current economic conditions, we continued to add new customers and introduce new products which will benefit our future growth.

"As part of our business review initiated in the second quarter, we are continuing to reduce costs and expenses and simplify our business processes and organizational structure. We expect to enter next year as an even stronger company and well positioned to benefit from an upturn in the economy."

Highlights for the Third Quarter of 2001 include:



 -- Net sales increased 2%, excluding the negative effect of foreign
    currency translation, compared to the third quarter of 2000, due
    primarily to the added net sales of acquired businesses and, to a
    lesser extent, higher average selling prices for certain of the
    Company's products, partially offset by lower sales volume for
    certain of the Company's products.  Including the negative effect
    of foreign currency translation, net sales decreased 1% to
    $766,221,000 compared to $773,255,000 for the third quarter of
    2000.

 -- Net sales of the Company's food packaging segment increased 5%,
    excluding the negative effect of foreign currency translation,
    compared to the third quarter of 2000.  This increase was due
    primarily to higher sales volume, the added net sales of acquired
    businesses and, to a lesser extent, higher average selling prices
    for certain products.  Including the negative effect of foreign
    currency translation, net sales for this segment increased 2%
    compared to the third quarter of 2000.

 -- The continuing soft economic conditions in the third quarter
    resulted in lower sales volume of certain of the Company's
    protective packaging products.  Net sales of the Company's
    protective and specialty packaging segment decreased 3%, excluding
    the negative effect of foreign currency translation, compared to
    the third quarter of 2000.  This decrease was due primarily to
    lower sales volume of certain products, partially offset by the
    added net sales of acquired businesses and, to a lesser extent,
    higher average selling prices for certain products.  Including the
    negative effect of foreign currency translation, net sales for
    this segment decreased 5% compared to the third quarter of 2000.

 -- Gross profit was $249,604,000 or 32.6% of net sales compared to
    $253,434,000 or 32.8% of net sales for the third quarter of 2000.
    These decreases were due primarily to the lower sales volume of
    certain protective packaging products and changes in product mix
    compared to the 2000 period, and were partially offset by lower
    costs for certain raw materials.

 -- Marketing, administrative, development and goodwill amortization
    expenses decreased modestly to $140,430,000 or 18.3% of net sales
    compared to $143,228,000 or 18.5% of net sales for the third
    quarter of 2000.

 -- The Company incurred Restructuring and other charges of $3,944,000
    in the third quarter and $10,001,000 through the first nine months
    of 2001.  These charges are associated with the Company's planned
    review of its business, announced at the time of its first quarter
    earnings release, which the Company expects to complete by the end
    of the fourth quarter of 2001.  The Company is undertaking the
    review to reduce costs and expenses, simplify business processes
    and organizational structure and to refine further its
    manufacturing operations and product offerings.  Actions resulting
    from this review should enhance the fundamental strengths and
    growth prospects of the business as the Company continues to focus
    on bringing packaging solutions to its customers.  The
    Restructuring and other charges incurred through the first nine
    months of 2001 were for actions identified and underway and
    include $7,314,000 of employee termination costs, $656,000 of
    facility exit costs and $2,031,000 of asset impairments.  From the
    charges incurred through the first nine months of 2001, the
    Company expects annual savings of approximately $9.8 million by
    the end of 2002.  Based on actions identified to date, the Company
    is eliminating approximately 300 positions, including the 230
    positions already indicated in the second quarter earnings release
    and an additional 70 identified in the third quarter.  The Company
    plans to continue its review and to take additional actions in the
    fourth quarter which will result in additional charges within the
    range of, or greater than, those incurred in the second and third
    quarters of this year.

 -- Operating profit was $105,230,000 compared to $110,206,000 for the
    third quarter of 2000.  This decrease was due primarily to the
    lower gross profit and to the Restructuring and other charges,
    both discussed above.  Excluding the Restructuring and other
    charges, operating profit was 14.2% of net sales compared to 14.3%
    of net sales for the third quarter of 2000.

 -- Other expense, net, which consists primarily of interest expense,
    increased due primarily to the higher level of debt outstanding
    compared to the third quarter of 2000.  In addition, the third
    quarter of 2000 included income from a one-time fee of $10 million
    received from a third party for the assignment of a contract.

 -- The effective tax rate was 46.8%.  This effective tax rate was
    higher than applicable statutory rates due primarily to non-
    deductible goodwill amortization.  The Company expects that its
    effective tax rate will remain higher than statutory rates for
    2001.

 -- Net earnings were $44,410,000 compared to $54,714,000 for the
    third quarter of 2000.

 -- Assuming conversion of the Company's outstanding preferred stock,
    and excluding goodwill amortization and the impact of the
    Restructuring and other charges discussed above, earnings per
    common share were $0.56 for the third quarter.

Commenting on the Company's outlook, Mr. Hickey stated, "Although it may be too early to fully assess the short-term implications that recent events may have on the economy in the fourth quarter and next year, we remain confident in the long-term future of our business and our leadership position in the industry. Based on current business conditions, we expect full year earnings in the range of $1.62 to $1.72 per share, assuming conversion of the Company's outstanding preferred stock and excluding Restructuring and other charges and the debt guarantee provision incurred in the first quarter. This outlook assumes a continuing soft but stable economy, steady raw material and energy prices, and stable foreign exchange rates."

Business

Sealed Air is a leading global manufacturer of a wide range of food, protective and specialty packaging materials and systems including such widely recognized brands as Bubble Wrap(r) air cellular cushioning, Jiffy(r) protective mailers and Cryovac(r) food packaging products. For more information about Sealed Air Corporation, please visit the Company's Web site at www.sealedair.com.

Certain statements made by the Company in this press release may be forward-looking. These statements include comments as to future events and trends affecting the Company's business, which are based upon management's current expectations and are necessarily subject to risks and uncertainties, many of which are outside the control of the Company. Forward-looking statements can be identified by such words as "expects," "intends," "plans," "estimates" and similar expressions. Actual results may differ materially from these expectations due to a number of factors, including changes in economic, political, business and market conditions in the geographic areas in which the Company conducts business, acts of war or terrorism, factors affecting customers, exchange rates, the success of new products, raw material and energy costs and legal proceedings, including those related to W. R. Grace & Co. A more extensive list and description of these factors can be found 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 most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and in the Company's other publicly available filings with the Securities and Exchange Commission.


                       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
                                        2001         2000   (Decrease)
                                     ---------    ---------  --------
 Net sales by business
 segment: (a)
  Food packaging                     $ 472,505    $ 464,195      2
  Protective and specialty
   packaging                           293,716      309,060     (5)
                                     ---------    ---------   ----
          Total net sales              766,221      773,255     (1)

 Cost of sales (a)                     516,617      519,821     (1)
                                     ---------    ---------   ----
 Gross profit                          249,604      253,434     (2)

 Marketing, administrative and
  development expenses                 126,341      129,790     (3)

 Goodwill amortization                  14,089       13,438      5

 Restructuring and other charges         3,944            0     NA
                                     ---------    ---------   ----
 Operating profit                      105,230      110,206     (5)

 Other (expense), net                  (21,725)      (9,813)    NA
                                     ---------    ---------   ----
 Earnings before income taxes           83,505      100,393    (17)

 Income taxes                           39,095       45,679    (14)
                                     ---------    ---------   ----
 Net earnings                        $  44,410    $  54,714    (19)
                                     =========    =========   ====
 Net earnings ascribed to
  common shareholders                $  33,647    $  47,637    (29)
                                     =========    =========   ====
 Basic earnings per
  common share (b)                   $    0.40    $    0.57
                                     =========    =========
 Diluted earnings per
  common share (b)                   $    0.37    $    0.46
                                     =========    =========
 Weighted average number of
  common shares outstanding
  (000's):
   Basic                                83,712       83,723
                                     =========    =========
   Diluted                              83,905       85,116
                                     =========    =========


                                 Nine Months Ended September 30     
                                 ------------------------------ 
                                                            % Increase
                                     2001          2000     (Decrease)
                                 -----------    -----------  --------
 Net sales by business
 segment:(a)
  Food packaging                 $ 1,389,756    $ 1,354,778      3
  Protective and specialty
   packaging                         896,336        916,782     (2)
                                 -----------    -----------    ---
          Total net sales          2,286,092      2,271,560      1

 Cost of sales (a)                 1,554,089      1,506,164      3
                                 -----------    -----------    ---
 Gross profit                        732,003        765,396     (4)

 Marketing, administrative and
  development expenses               385,185        388,774     (1)

 Goodwill amortization                42,453         38,129     11

 Restructuring and other charges      10,001              0     NA
                                 -----------    -----------    ---
 Operating profit                    294,364        338,493    (13)

 Other (expense), net                (72,180)       (38,441)    88
                                 -----------    -----------    ---
 Earnings before income taxes        222,184        300,052    (26)

 Income taxes                        103,950        136,524    (24)
                                 -----------    -----------    ---
 Net earnings                    $   118,234    $   163,528    (28)
                                 ===========    ===========    ===
 Net earnings ascribed to
  common shareholders            $    83,948    $   125,163    (33)
                                 ===========    ===========    ===
 Basic earnings per
  common share (b)               $      1.00    $      1.50
                                 ===========    ===========
 Diluted earnings per
  common share (b)               $      0.92    $      1.36
                                 ===========    ===========
 Weighted average number of
  common shares outstanding
  (000's):
   Basic                              83,674         83,675
                                 ===========    ===========
   Diluted                            83,913         86,367
                                 ===========    ===========

     (a)  Prior period net sales and cost of sales have been
          reclassified to conform to the current year's presentation
          with respect to Emerging Issues Task Force Issue No. 00-10,
          "Accounting for Shipping and Handling Fees and Costs," which
          the Company adopted during the fourth quarter of 2000.
 
     (b)  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        Nine Months Ended 
                               September 30          September 30
                           -------------------    -------------------
                             2001       2000       2001        2000
                           --------   --------    --------   --------
 Net earnings              $ 44,410   $ 54,714    $118,234   $163,528

 Add: Excess of book
  value over repurchase
  price of preferred
  stock                       3,041      8,914       7,076     11,725

 Less: Preferred
  dividend                  (13,804)   (15,991)    (41,362)   (50,090)
                           --------   --------    --------   --------

 Net earnings ascribed
  to common shareholders   $ 33,647   $ 47,637    $ 83,948   $125,163
                           ========   ========    ========   ========

 Weighted average number
  of common shares
  outstanding (000's):
   Basic                     83,712     83,723      83,674     83,675
                           ========   ========    ========   ========
   Diluted                   83,905     85,116      83,913     86,367
                           ========   ========    ========   ========

 EPS - Basic (a)           $   0.40   $   0.57    $   1.00   $   1.50
                           ========   ========    ========   ========
 EPS - Diluted (a)(b)      $   0.37   $   0.46    $   0.92   $   1.36
                           ========   ========    ========   ========
 EPS - As If Converted
   (a)(c)                  $   0.41   $   0.49    $   1.09   $   1.44
                           ========   ========    ========   ========

 (a) The basic earnings per common share calculations for the quarters
     ended September 30, 2001 and 2000 include $0.04 and $0.11 per
     share gains, respectively, and for the nine months ended
     September 30, 2001 and 2000 include $0.08 and $0.14 per share
     gains, respectively, attributable to the repurchase of preferred
     stock. Such gains are not included in the calculations of diluted
     earnings per common share or as if converted earnings per common
     share for the quarter and nine months ended September 30, 2001
     and 2000.

 (b) 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.

 (c) 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, 2001 and 2000
     to $0.41 and $0.49, respectively, and for the nine months ended
     September 30, 2001 and 2000 to $1.09 and $1.44, respectively).
     The weighted average number of common shares outstanding,
     assuming conversion of the outstanding convertible preferred
     stock, was 108,105,000 and 112,287,000 for the quarters ended
     September 30, 2001 and 2000, respectively, and 108,113,000 and
     113,538,000 for the nine months ended September 30, 2001 and
     2000, respectively.


        

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