YORK, Pa., Aug. 11, 2011 /PRNewswire/ -- Graham Packaging
Company Inc. (NYSE: GRM) today announced results for the quarter
ended June 30, 2011.
Highlights
- Net sales increased 25.8% to $821.2
million as compared to $652.8
million in the second quarter of 2010.
- Operating income decreased to $49.0
million as compared to $90.8
million in the second quarter of 2010.
- Adjusted EBITDA(1) increased to $154.6
million from $133.7 million in
the second quarter of 2010.
- Free Cash Flow(2) for the first half of 2011 was $62.2 million.
- On July 6, 2011, the Company
completed its acquisition of the assets of Techne - Technipack
Engineering Italia S.r.l. ("Techne"), a manufacturer of blow
molding machines, for total consideration of euro 8.8 million.
Second Quarter 2011
Net sales for the second quarter of 2011 improved to
$821.2 million, an increase of 25.8%
compared to the second quarter of 2010. The increase was
driven by the acquisition of Liquid Container, higher resin costs
(which are passed on to customers), and favorable exchange
rates.
Adjusted EBITDA for the quarter increased to $154.6 million, compared to $133.7 million in the second quarter of 2010.
The increase was due to the acquisition of Liquid Container
and related synergy achievement.
"Our second quarter results cap off a solid first half of 2011
despite general softness in global demand and headwinds associated
with an inflating cost environment," said CEO Mark Burgess. "Our Food and Beverage
franchise continued to be relatively strong, and we added
operations in Japan in support of
one of our largest global Food and Beverage customers. We
remain pleased with the legacy Liquid Container business, and are
on track against our integration and synergy achievement goals.
Our acquisition of Techne's assets rounds out our machine
technology platform and gives us another avenue to explore
profitable growth in international markets."
By segment, sales in North
America increased $145.9
million, or 25.4%, due to the Liquid Container acquisition,
the increase in resin costs (which are passed on to customers) and
slightly higher volumes. Sales in Europe were up $10.1
million, or 18.5%, as higher resin costs and favorable
exchange rates offset lower volumes. Sales in South America were up $4.9 million, or 20.1%, as higher resin costs and
favorable exchange rates offset lower volumes. Sales in
Asia were $7.5 million reflecting our new presence in
China and Japan.
SG&A increased to $74.7
million from $28.4 million in
the second quarter of 2010. The increase was due primarily to
a charge of $39.5 million for the
termination of the merger agreement with Silgan Holdings, and
$7.7 million in fees and expenses
related to the merger transactions. Additional SG&A
expenses from the acquisition of Liquid Container were offset by
lower compensation expenses.
Operating income decreased to $49.0
million from $90.8 million in
the second quarter of 2010, primarily due to the merger-related
expenses mentioned above.
Net interest expense was $52.8
million, an increase of $11.1
million over the second quarter of 2010, primarily due to
interest expense on the debt related to the acquisition of Liquid
Container, and the higher effective interest rate on the portion of
our term loans which were extended in September 2010.
Net Debt was $2,660.5 million,
down $19.4 million from the beginning
of the year.
2011 Year to Date
Net sales for the first half of 2011 increased by 27.4% to
$1,577.7 million, primarily due to
the acquisition of Liquid Container, higher resin costs (which are
passed on to customers), higher volumes and favorable exchange
rates. Operating income for the first half of 2011 was
$122.8 million compared to
$123.1 million in the first half of
2010. Adjusted EBITDA for the first half of 2011 increased to
$289.7 million as compared to
$249.2 million in the first half of
2010. Free Cash Flow for the first half of 2011 was
$62.2 million.
Conference Call Information
The Company will hold a conference call to discuss fiscal 2011
second quarter results at 5:00 p.m.
EDT this afternoon. The call will be web cast live over the
Internet from the Company's web site at www.grahampackaging.com
under "Investor Relations." Participants should follow the
instructions provided on the Web site for downloading and
installing the necessary audio applications. The conference call
also is available by dialing 866-383-8003 (domestic) or
617-597-5330 (international) and entering pass code 48396732.
Following the live conference call, a replay will be available
one hour after the call. The replay also will be available on the
Company's Web site or by dialing 888-286-8010 (domestic) or
617-801-6888 (international) and entering pass code 53809098. The
telephonic replay will be available for thirty days.
About Graham Packaging
Graham Packaging, based in York, Pennsylvania, is a worldwide leader in the
design, manufacture and sale of technology-based, customized blow
molded plastic containers for the branded food and beverage,
household, personal care/specialty and automotive lubricants
product categories. The Company has an extensive blue-chip customer
base that includes many of the world's largest branded consumer
products companies. It produces more than 20 billion container
units annually at 97 plants in North
America, Europe,
South America, and Asia.
Graham Packaging is a leading U.S. supplier of plastic
containers for hot-fill juice and juice drinks, sports drinks,
drinkable yogurt and smoothies, nutritional supplements, wide-mouth
food, dressings, condiments and beers; the leading global supplier
of plastic containers for yogurt drinks; a leading supplier of
plastic containers for liquid fabric care products, dish care
products and hard-surface cleaners; and the leading supplier in the
U.S., Canada and Brazil of one-quart/liter plastic motor oil
containers.
To learn more about Graham Packaging, please visit the Company's
Web site at http://www.grahampackaging.com/. Graham Packaging uses
its Web site as a channel of distribution for material Company
information. Financial and other material information regarding
Graham Packaging is routinely posted on the Company's Web site and
is readily accessible.
Forward Looking Statements
Information provided and statements contained in this press
release that are not purely historical are forward-looking
statements within the meaning of Section 27A of the Securities Act,
Section 21E of the Exchange Act and the Private Securities
Litigation Reform Act of 1995. Such forward-looking
statements only speak as of the date of this press release and
Graham Packaging assumes no obligation to update the information
included in this press release. Such forward-looking
statements include information concerning Graham Packaging's
possible or assumed future results of operations. These
statements often include words such as "approximate," "believe,"
"expect," "anticipate," "outlook," "intend," "plan," "estimate,"
"guidance" or similar expressions. These forward-looking
statements are not historical facts, and are based on current
expectations, estimates and projections about Graham Packaging's
industry, management's beliefs and certain assumptions made by
management, many of which, by their nature, are inherently
uncertain and beyond Graham Packaging's control. Accordingly,
readers are cautioned that any such forward-looking statements are
not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict,
including, without limitation, specific factors discussed herein
and in other releases and public filings made by the Company
(including the Company's filings with the Securities and Exchange
Commission, more specifically the Risk Factors section of the
Company's Annual Report on Form 10-K and Quarterly Reports on Form
10-Q). Although Graham Packaging believes that the
expectations reflected in such forward-looking statements are
reasonable as of the date made, expectations may prove to have been
materially different from the results expressed or implied by such
forward-looking statements. Forward-looking statements only
speak as of the date of this press release or the date they were
made and, unless otherwise required by law, Graham Packaging
disclaims any obligation to update its view of any such risks or
uncertainties or to announce publicly the result of any revisions
to the forward-looking statements made in this press release.
Contact:
David Bullock
Chief Financial Officer
(717) 849-8500
Jeff Grossman
(717) 771-3220
InvestorRelations@grahampackaging.com
Adjusted EBITDA and free cash flow are not intended to
represent, and should not be considered more meaningful than, or as
an alternative to, net (loss) income and net cash provided by
operating activities, respectively, in both cases as calculated in
accordance with generally accepted accounting principles. The
Company believes that the presentation of adjusted EBITDA and free
cash flow provides investors with useful analytical indicators of
its performance. Additionally, the Company uses adjusted EBITDA and
free cash flow as key internal metrics and two components, among
several, of management incentive compensation. Because not
all companies use identical calculations, these presentations of
adjusted EBITDA may not be comparable to other similarly titled
measures of other companies. A reconciliation of net (loss)
income to adjusted EBITDA is as follows:
|
(1)
Reconciliation of net (loss) income to EBITDA:
|
|
|
|
|
|
|
|
|
|
|
Four
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
Ended
|
|
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
2011
|
|
|
|
|
(In
millions)
|
|
|
|
Net (loss) income
|
|
$
|
(26.6)
|
|
$
|
37.8
|
|
$
|
(18.5)
|
|
$
|
13.3
|
|
$
|
30.0
|
|
|
|
Interest income
|
|
|
(0.5)
|
|
|
(0.2)
|
|
|
(0.7)
|
|
|
(0.3)
|
|
|
(1.0)
|
|
|
|
Interest expense
|
|
|
53.3
|
|
|
41.9
|
|
|
106.2
|
|
|
87.3
|
|
|
204.5
|
|
|
|
Income tax provision
(benefit)
|
|
|
14.6
|
|
|
7.3
|
|
|
23.7
|
|
|
12.1
|
|
|
(39.1)
|
|
|
|
Depreciation and
amortization
|
|
|
51.7
|
|
|
39.1
|
|
|
104.7
|
|
|
77.6
|
|
|
198.1
|
|
|
|
EBITDA
|
|
$
|
92.5
|
|
$
|
125.9
|
|
$
|
215.4
|
|
$
|
190.0
|
|
$
|
392.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of EBITDA to
adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Four
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
Ended
|
|
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
2011
|
|
|
|
|
(In
millions)
|
|
|
|
EBITDA
|
|
$
|
92.5
|
|
$
|
125.9
|
|
$
|
215.4
|
|
$
|
190.0
|
|
$
|
392.5
|
|
|
|
Asset impairment
charges
|
|
|
1.4
|
|
|
0.6
|
|
|
2.5
|
|
|
2.8
|
|
|
9.3
|
|
|
|
Increase in
income tax receivable obligations
|
|
|
8.0
|
|
|
3.6
|
|
|
12.6
|
|
|
4.9
|
|
|
12.6
|
|
|
|
Other non-cash charges
(a)
|
|
|
(0.6)
|
|
|
1.2
|
|
|
0.3
|
|
|
1.7
|
|
|
3.6
|
|
|
|
Fees related to monitoring
agreements (b)
|
|
|
0.2
|
|
|
0.2
|
|
|
0.5
|
|
|
0.9
|
|
|
1.0
|
|
|
|
Net loss on debt
extinguishment
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
28.5
|
|
|
|
Write-off of
amounts in accumulated other comprehensive income related to
interest rate swaps
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.0
|
|
|
|
Contract
termination fee and IPO-related expenses (c)
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
39.4
|
|
|
0.2
|
|
|
|
Acquisition and integration
expenses (d)
|
|
|
1.1
|
|
|
0.7
|
|
|
3.3
|
|
|
0.9
|
|
|
22.7
|
|
|
|
Transaction-related costs
(e)
|
|
|
47.2
|
|
|
—
|
|
|
48.3
|
|
|
—
|
|
|
48.4
|
|
|
|
Venezuelan hyper-inflationary
accounting
|
|
|
—
|
|
|
(0.3)
|
|
|
(0.1)
|
|
|
2.5
|
|
|
(0.3)
|
|
|
|
Reorganization and other costs
(f)
|
|
|
4.8
|
|
|
1.4
|
|
|
6.9
|
|
|
3.4
|
|
|
19.4
|
|
|
|
Adjusted EBITDA (g)
|
|
$
|
154.6
|
|
$
|
133.7
|
|
$
|
289.7
|
|
$
|
249.2
|
|
$
|
544.9
|
|
|
|
Covenant compliance
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Represents the net (gain) loss
on disposal of fixed assets, stock-based compensation expense and
equity income from unconsolidated subsidiaries.
|
|
|
(b)
|
Represents management fees paid
to Blackstone and a limited partner of Holdings.
|
|
|
(c)
|
Represents costs related to the
termination of the Monitoring Agreement between the Company,
Blackstone and the Graham Family, IPO bonus payments and other
IPO-related costs.
|
|
|
(d)
|
Represents costs related to the
acquisition and integration of Liquid Container, China Roots
and other entities.
|
|
|
(e)
|
Represents costs related to the
aborted merger with Silgan Holdings Inc. and the proposed merger
with Reynolds.
|
|
|
(f)
|
Represents costs recorded in the
second half of 2010 related to a settlement to OnTech Operations,
Inc. for claims against us, plant closures, employee severance and
other costs defined in the Company's senior secured credit
agreement.
|
|
|
(g)
|
We use adjusted EBITDA as one
factor in the setting of incentive compensation.
|
|
|
|
|
|
|
(2)
Reconciliation of cash flow from operations to free cash
flow:
|
|
|
|
Six Months
Ended
June
30,
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
Net cash provided by operating
activities
|
|
$
|
92.0
|
|
$
|
99.2
|
|
|
|
Cash paid for property, plant
and equipment
|
|
|
(80.6)
|
|
|
(75.9)
|
|
|
|
Contract termination fee and
IPO-related expenses (a)
|
|
|
—
|
|
|
39.4
|
|
|
|
Acquisition and integration
expenses (b)
|
|
|
6.0
|
|
|
0.2
|
|
|
|
Transaction-related costs
(c)
|
|
|
44.8
|
|
|
—
|
|
|
|
Free cash flow
|
|
$
|
62.2
|
|
$
|
62.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Represents costs related to the
termination of the Monitoring Agreement between the Company,
Blackstone and the Graham Family, IPO bonus payments and other
IPO-related costs.
|
|
|
(b)
|
Represents costs related to the
acquisition and integration of Liquid Container, China Roots
and other entities.
|
|
|
(c)
|
Represents costs related to the
aborted merger with Silgan Holdings Inc. and the proposed merger
with Reynolds.
|
|
|
|
|
|
|
GRAHAM
PACKAGING COMPANY INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
|
June
30,
2011
|
|
December
31,
2010
|
|
|
|
|
(In
thousands)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
162,059
|
|
$
|
152,964
|
|
|
|
Accounts receivable,
net
|
|
|
315,769
|
|
|
216,368
|
|
|
|
Inventories
|
|
|
272,330
|
|
|
247,166
|
|
|
|
Deferred income
taxes
|
|
|
30,796
|
|
|
14,616
|
|
|
|
Prepaid expenses and other
current assets
|
|
|
40,545
|
|
|
42,363
|
|
|
|
Total current assets
|
|
|
821,499
|
|
|
673,477
|
|
|
|
Property, plant and equipment,
net
|
|
|
1,207,593
|
|
|
1,203,142
|
|
|
|
Intangible assets,
net
|
|
|
186,639
|
|
|
195,780
|
|
|
|
Goodwill
|
|
|
658,255
|
|
|
643,064
|
|
|
|
Other non-current
assets
|
|
|
73,549
|
|
|
91,364
|
|
|
|
Total assets
|
|
$
|
2,947,535
|
|
$
|
2,806,827
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
(DEFICIT)
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
31,599
|
|
$
|
34,007
|
|
|
|
Accounts
payable
|
|
|
245,257
|
|
|
142,585
|
|
|
|
Accrued expenses and other
current liabilities
|
|
|
205,897
|
|
|
196,432
|
|
|
|
Deferred
revenue
|
|
|
40,294
|
|
|
32,471
|
|
|
|
Total current
liabilities
|
|
|
523,047
|
|
|
405,495
|
|
|
|
Long-term debt
|
|
|
2,790,984
|
|
|
2,798,824
|
|
|
|
Deferred income taxes
|
|
|
41,214
|
|
|
32,428
|
|
|
|
Other non-current
liabilities
|
|
|
113,140
|
|
|
100,804
|
|
|
|
Commitments and contingent
liabilities
|
|
|
|
|
|
|
|
|
|
Equity (deficit):
|
|
|
|
|
|
|
|
|
|
Graham
Packaging Company Inc. stockholders' equity (deficit):
|
|
|
|
|
|
|
|
|
|
Preferred
stock, $0.01 par value, 100,000,000 shares authorized, 0 shares
issued and outstanding
|
|
|
—
|
|
|
—
|
|
|
|
Common
stock, $0.01 par value, 500,000,000 shares authorized, shares
issued and outstanding 67,754,824 and 63,311,512
|
|
|
678
|
|
|
633
|
|
|
|
Additional
paid-in capital
|
|
|
466,373
|
|
|
459,422
|
|
|
|
Retained
earnings (deficit)
|
|
|
(992,662)
|
|
|
(977,318)
|
|
|
|
Notes
and interest receivable for ownership interests
|
|
|
(5,037)
|
|
|
(4,838)
|
|
|
|
Accumulated
other comprehensive income (loss)
|
|
|
188
|
|
|
(22,508)
|
|
|
|
Graham Packaging Company
Inc. stockholders' equity (deficit)
|
|
|
(530,460)
|
|
|
(544,609)
|
|
|
|
Noncontrolling
interests
|
|
|
9,610
|
|
|
13,885
|
|
|
|
Equity
(deficit)
|
|
|
(520,850)
|
|
|
(530,724)
|
|
|
|
Total liabilities and
equity (deficit)
|
|
$
|
2,947,535
|
|
$
|
2,806,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GRAHAM
PACKAGING COMPANY INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
Three Months
Ended
June
30,
|
|
|
|
Six Months
Ended
June
30,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands, except share and per share data)
|
|
|
|
Net sales
|
$
|
821,238
|
|
$
|
652,832
|
|
|
$
|
1,577,735
|
|
$
|
1,238,408
|
|
|
|
Cost of goods sold
|
|
696,896
|
|
|
532,234
|
|
|
|
1,338,307
|
|
|
1,015,492
|
|
|
|
Gross profit
|
|
124,342
|
|
|
120,598
|
|
|
|
239,428
|
|
|
222,916
|
|
|
|
Selling, general and
administrative expenses
|
|
74,738
|
|
|
28,414
|
|
|
|
114,238
|
|
|
95,941
|
|
|
|
Asset impairment
charges
|
|
1,369
|
|
|
554
|
|
|
|
2,478
|
|
|
2,792
|
|
|
|
Net (gain)
loss on disposal of property, plant and equipment
|
|
(795)
|
|
|
826
|
|
|
|
(95)
|
|
|
1,053
|
|
|
|
Operating income
|
|
49,030
|
|
|
90,804
|
|
|
|
122,807
|
|
|
123,130
|
|
|
|
Interest expense
|
|
53,261
|
|
|
41,891
|
|
|
|
106,190
|
|
|
87,275
|
|
|
|
Interest income
|
|
(471)
|
|
|
(178)
|
|
|
|
(664)
|
|
|
(298)
|
|
|
|
Net loss on debt
extinguishment
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
2,664
|
|
|
|
Increase in
income tax receivable obligations
|
|
7,993
|
|
|
3,600
|
|
|
|
12,567
|
|
|
4,900
|
|
|
|
Other expense (income),
net
|
|
211
|
|
|
349
|
|
|
|
(424)
|
|
|
3,212
|
|
|
|
(Loss) income before income
taxes
|
|
(11,964)
|
|
|
45,142
|
|
|
|
5,138
|
|
|
25,377
|
|
|
|
Income tax provision
|
|
14,640
|
|
|
7,342
|
|
|
|
23,644
|
|
|
12,088
|
|
|
|
Net (loss) income
|
|
(26,604)
|
|
|
37,800
|
|
|
|
(18,506)
|
|
|
13,289
|
|
|
|
Net income
attributable to noncontrolling interests
|
|
1,835
|
|
|
4,264
|
|
|
|
2,849
|
|
|
1,974
|
|
|
|
Net (loss) income attributable
to Graham Packaging Company Inc. stockholders
|
$
|
(28,439)
|
|
$
|
33,536
|
|
|
$
|
(21,355)
|
|
$
|
11,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable
to Graham Packaging Company Inc. stockholders per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.43)
|
|
$
|
0.54
|
|
|
$
|
(0.32)
|
|
$
|
0.20
|
|
|
|
Diluted
|
$
|
(0.43)
|
|
$
|
0.53
|
|
|
$
|
(0.32)
|
|
$
|
0.19
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
66,457,589
|
|
|
62,555,962
|
|
|
|
65,873,577
|
|
|
57,780,042
|
|
|
|
Diluted
|
|
66,457,589
|
|
|
62,555,962
|
|
|
|
65,873,577
|
|
|
57,780,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GRAHAM
PACKAGING COMPANY INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
Six Months
Ended
June 30,
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
Operating activities:
|
|
(In
thousands)
|
|
|
|
Net (loss)
income
|
|
$
|
(18,506)
|
|
$
|
13,289
|
|
|
|
Adjustments
to reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
104,723
|
|
|
77,645
|
|
|
|
Amortization of debt
issuance fees
|
|
|
2,636
|
|
|
3,184
|
|
|
|
Accretion of senior
unsecured notes
|
|
|
236
|
|
|
238
|
|
|
|
Net loss on debt
extinguishment
|
|
|
—
|
|
|
2,664
|
|
|
|
Net (gain) loss on
disposal of property, plant and equipment
|
|
|
(95)
|
|
|
1,053
|
|
|
|
Pension expense
|
|
|
1,500
|
|
|
1,577
|
|
|
|
Asset impairment
charges
|
|
|
2,478
|
|
|
2,792
|
|
|
|
Unrealized (gain) loss on
termination of cash flow hedge accounting
|
|
|
(6,502)
|
|
|
359
|
|
|
|
Stock compensation
expense
|
|
|
498
|
|
|
656
|
|
|
|
Equity income from
unconsolidated subsidiaries
|
|
|
(34)
|
|
|
(40)
|
|
|
|
Deferred tax
provision
|
|
|
14,231
|
|
|
7,263
|
|
|
|
Increase in income tax
receivable obligations
|
|
|
12,567
|
|
|
4,900
|
|
|
|
Foreign currency
transaction (gain) loss
|
|
|
(300)
|
|
|
507
|
|
|
|
Interest receivable on
loans to owners
|
|
|
(199)
|
|
|
(151)
|
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(95,345)
|
|
|
(47,419)
|
|
|
|
Inventories
|
|
|
(22,212)
|
|
|
2,397
|
|
|
|
Prepaid expenses and other
current assets
|
|
|
2,998
|
|
|
20,490
|
|
|
|
Other non-current
assets
|
|
|
(12,434)
|
|
|
(4,769)
|
|
|
|
Accounts payable and
accrued expenses
|
|
|
108,536
|
|
|
15,015
|
|
|
|
Pension
contributions
|
|
|
(2,468)
|
|
|
(2,916)
|
|
|
|
Other non-current
liabilities
|
|
|
(270)
|
|
|
468
|
|
|
|
Net cash provided by operating
activities
|
|
|
92,038
|
|
|
99,202
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
Cash paid
for property, plant and equipment
|
|
|
(80,580)
|
|
|
(75,937)
|
|
|
|
Proceeds from sale of
property, plant and equipment
|
|
|
2,004
|
|
|
255
|
|
|
|
Cash paid for sale of
business
|
|
|
(61)
|
|
|
—
|
|
|
|
Net cash used in investing
activities
|
|
|
(78,637)
|
|
|
(75,682)
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of
long-term debt
|
|
|
27,072
|
|
|
42,518
|
|
|
|
Payment of long-term
debt
|
|
|
(38,899)
|
|
|
(240,478)
|
|
|
|
Debt issuance
fees
|
|
|
(462)
|
|
|
(648)
|
|
|
|
Proceeds from the issuance
of common stock, net of underwriting discount of $11.3
million
|
|
|
—
|
|
|
171,055
|
|
|
|
Payment of other expenses
for the issuance of common stock
|
|
|
—
|
|
|
(5,419)
|
|
|
|
Proceeds from issuance of
ownership interests
|
|
|
6,421
|
|
|
—
|
|
|
|
Net cash used in financing
activities
|
|
|
(5,868)
|
|
|
(32,972)
|
|
|
|
Effect of exchange rate changes
on cash and cash equivalents
|
|
|
1,562
|
|
|
(2,244)
|
|
|
|
Increase (decrease) in cash and
cash equivalents
|
|
|
9,095
|
|
|
(11,696)
|
|
|
|
Cash and cash equivalents at
beginning of period
|
|
|
152,964
|
|
|
147,808
|
|
|
|
Cash and cash equivalents at end
of period
|
|
$
|
162,059
|
|
$
|
136,112
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures:
|
|
|
|
|
|
|
|
|
|
Cash paid for interest,
net of amounts capitalized
|
|
$
|
99,953
|
|
$
|
74,401
|
|
|
|
Cash paid for income taxes
(net of refunds)
|
|
|
8,349
|
|
|
9,686
|
|
|
|
Non-cash investing and
financing activities:
|
|
|
|
|
|
|
|
|
|
Accruals for purchases of
property, plant and equipment
|
|
|
18,621
|
|
|
6,051
|
|
|
|
Accruals for debt issuance
fees
|
|
|
1
|
|
|
136
|
|
|
|
Accruals related to
acquisitions
|
|
|
676
|
|
|
—
|
|
|
|
Accruals for fees related
to the initial public offering
|
|
|
—
|
|
|
250
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company is organized and managed on a geographical basis in
four operating segments: North America, Europe, South
America and Asia. The
Company began accounting for its new Asian operations as a new
operating segment as of July 1, 2010,
with the acquisition of China Roots Packaging PTE Ltd. Segment
information for the three and six months ended June 30, 2011 and 2010, and as of June 30, 2011, and December 31, 2010, representing the reportable
segments currently utilized by the chief operating decision makers,
was as follows:
|
|
|
|
|
|
|
North
America
|
|
|
Europe
|
|
|
South
America
|
|
|
Asia
|
|
|
Eliminations
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
Net sales
|
|
Three months ended June 30,
2011
|
|
$
|
721,145
|
|
$
|
64,648
|
|
$
|
29,285
|
|
$
|
7,471
|
|
$
|
(1,311)
|
|
$
|
821,238
|
|
|
|
|
Three months ended June 30,
2010
|
|
|
574,136
|
|
|
54,527
|
|
|
24,413
|
|
|
—
|
|
|
(244)
|
|
|
652,832
|
|
|
|
|
Six months ended June 30,
2011
|
|
|
1,385,121
|
|
|
123,626
|
|
|
57,890
|
|
|
12,956
|
|
|
(1,858)
|
|
|
1,577,735
|
|
|
|
|
Six months ended June 30,
2010
|
|
|
1,079,290
|
|
|
112,791
|
|
|
46,861
|
|
|
—
|
|
|
(534)
|
|
|
1,238,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
Three months ended June 30,
2011
|
|
$
|
44,619
|
|
$
|
4,930
|
|
$
|
(340)
|
|
$
|
(179)
|
|
$
|
—
|
|
$
|
49,030
|
|
|
|
|
Three months ended June 30,
2010
|
|
|
83,844
|
|
|
5,693
|
|
|
1,267
|
|
|
—
|
|
|
—
|
|
|
90,804
|
|
|
|
|
Six months ended June 30,
2011
|
|
|
113,769
|
|
|
11,866
|
|
|
(2,364)
|
|
|
(464)
|
|
|
—
|
|
|
122,807
|
|
|
|
|
Six months ended June 30,
2010
|
|
|
106,507
|
|
|
13,043
|
|
|
3,580
|
|
|
—
|
|
|
—
|
|
|
123,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
Three months ended June 30,
2011
|
|
$
|
45,006
|
|
$
|
4,101
|
|
$
|
2,069
|
|
$
|
516
|
|
$
|
—
|
|
$
|
51,692
|
|
|
|
|
Three months ended June 30,
2010
|
|
|
33,555
|
|
|
4,109
|
|
|
1,408
|
|
|
—
|
|
|
—
|
|
|
39,072
|
|
|
|
|
Six months ended June 30,
2011
|
|
|
89,927
|
|
|
8,024
|
|
|
5,802
|
|
|
970
|
|
|
—
|
|
|
104,723
|
|
|
|
|
Six months ended June 30,
2010
|
|
|
66,669
|
|
|
8,440
|
|
|
2,536
|
|
|
—
|
|
|
—
|
|
|
77,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairment
charges
|
|
Three months ended June 30,
2011
|
|
$
|
229
|
|
$
|
152
|
|
$
|
988
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,369
|
|
|
|
|
Three months ended June 30,
2010
|
|
|
515
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
554
|
|
|
|
|
Six months ended June 30,
2011
|
|
|
961
|
|
|
529
|
|
|
988
|
|
|
—
|
|
|
—
|
|
|
2,478
|
|
|
|
|
Six months ended June 30,
2010
|
|
|
2,414
|
|
|
322
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
2,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
Three months ended June 30,
2011
|
|
$
|
51,680
|
|
$
|
331
|
|
$
|
637
|
|
$
|
142
|
|
$
|
—
|
|
$
|
52,790
|
|
|
|
|
Three months ended June 30,
2010
|
|
|
40,654
|
|
|
307
|
|
|
752
|
|
|
—
|
|
|
—
|
|
|
41,713
|
|
|
|
|
Six months ended June 30,
2011
|
|
|
103,118
|
|
|
587
|
|
|
1,542
|
|
|
279
|
|
|
—
|
|
|
105,526
|
|
|
|
|
Six months ended June 30,
2010
|
|
|
85,123
|
|
|
638
|
|
|
1,216
|
|
|
—
|
|
|
—
|
|
|
86,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense,
net
|
|
Three months ended June 30,
2011
|
|
$
|
(1,033)
|
|
$
|
1,737
|
|
$
|
(142)
|
|
$
|
(351)
|
|
$
|
—
|
|
$
|
211
|
|
|
|
|
Three months ended June 30,
2010
|
|
|
(1,309)
|
|
|
1,829
|
|
|
(171)
|
|
|
—
|
|
|
—
|
|
|
349
|
|
|
|
|
Six months ended June 30,
2011
|
|
|
(3,429)
|
|
|
3,622
|
|
|
(415)
|
|
|
(202)
|
|
|
—
|
|
|
(424)
|
|
|
|
|
Six months ended June 30,
2010
|
|
|
(2,651)
|
|
|
3,352
|
|
|
2,511
|
|
|
—
|
|
|
—
|
|
|
3,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
|
Three months ended June 30,
2011
|
|
$
|
13,293
|
|
$
|
665
|
|
$
|
801
|
|
$
|
(119)
|
|
$
|
—
|
|
$
|
14,640
|
|
|
|
|
Three months ended June 30,
2010
|
|
|
5,606
|
|
|
1,764
|
|
|
(28)
|
|
|
—
|
|
|
—
|
|
|
7,342
|
|
|
|
|
Six months ended June 30,
2011
|
|
|
20,733
|
|
|
2,076
|
|
|
1,198
|
|
|
(363)
|
|
|
—
|
|
|
23,644
|
|
|
|
|
Six months ended June 30,
2010
|
|
|
8,784
|
|
|
3,098
|
|
|
206
|
|
|
—
|
|
|
—
|
|
|
12,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Identifiable assets
|
|
As of June 30,
2011
|
|
$
|
985,639
|
|
$
|
130,492
|
|
$
|
66,710
|
|
$
|
24,752
|
|
$
|
—
|
|
$
|
1,207,593
|
|
|
|
|
As of December 31,
2010
|
|
|
991,676
|
|
|
125,433
|
|
|
69,044
|
|
|
16,989
|
|
|
—
|
|
|
1,203,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
As of June 30, 2011
|
|
$
|
639,989
|
|
$
|
16,769
|
|
$
|
7
|
|
$
|
1,490
|
|
$
|
—
|
|
$
|
658,255
|
|
|
|
|
As of December 31,
2010
|
|
|
626,156
|
|
|
15,449
|
|
|
7
|
|
|
1,452
|
|
|
—
|
|
|
643,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for property, plant
and equipment
|
|
Six months ended June 30,
2011
|
|
$
|
67,299
|
|
$
|
4,889
|
|
$
|
1,857
|
|
$
|
6,535
|
|
$
|
—
|
|
$
|
80,580
|
|
|
|
|
Six months ended June 30,
2010
|
|
|
50,269
|
|
|
8,323
|
|
|
17,345
|
|
|
—
|
|
|
—
|
|
|
75,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Graham Packaging Company Inc.