On July 31, 2024, Pactiv Evergreen Inc (PTVE, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Pactiv Evergreen Inc is a leading manufacturer and distributor of fresh foodservice and food merchandising products and fresh beverage cartons, operating in two segments: Foodservice and Food and Beverage Merchandising. The company generates the majority of its revenue from the Food and Beverage Merchandising segment, with a significant portion of its revenue coming from the United States.
Performance Overview
Pactiv Evergreen Inc (PTVE, Financial) reported net revenues of $1,338 million for Q2 2024, a 6% decrease from $1,426 million in Q2 2023, but a 7% increase from $1,252 million in Q1 2024. The company posted a net income of $20 million, or $0.10 per diluted share, compared to a net loss of $139 million, or $0.78 per diluted share, in Q2 2023. Adjusted EBITDA was $183 million, down from $217 million in Q2 2023, and adjusted EPS was $0.17, compared to $0.20 in the same period last year.
Challenges and Strategic Moves
The company faced significant challenges, including end-market weakness and operational disruptions at its Pine Bluff mill. These factors contributed to lower-than-expected sales volumes and higher operating costs. Despite these hurdles, Pactiv Evergreen Inc (PTVE, Financial) announced the sale of its Pine Bluff mill and Waynesville extrusion facility to Suzano, marking a strategic shift to focus on core North American converting operations.
Michael King, President and CEO, stated, “This past quarter marked a significant milestone in our transformational journey as we announced an agreement to sell our Pine Bluff mill and Waynesville extrusion facility to Suzano. This is a great outcome for Pactiv Evergreen and upon closing of the transaction, we will exit our final remaining mill, allowing us to focus on our core North American converting operations.”
Financial Achievements and Metrics
Despite the challenges, Pactiv Evergreen Inc (PTVE, Financial) achieved notable financial milestones. The company reduced its total outstanding debt by $544 million since December 31, 2022, and declared a second-quarter dividend of $0.10 per share. The company’s balance sheet showed a net debt of $3,497 million as of June 30, 2024.
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Net Revenues | $1,338 million | $1,252 million | $1,426 million |
| Net Income | $20 million | $10 million | $(139) million |
| Adjusted EBITDA | $183 million | $168 million | $217 million |
| Adjusted EPS | $0.17 | $0.14 | $0.20 |
Segment Performance
In the Foodservice segment, net revenues increased by 2% to $668 million, driven by higher pricing. However, segment adjusted EBITDA decreased by 15% to $109 million due to higher manufacturing costs. In the Food and Beverage Merchandising segment, net revenues decreased by 16% to $674 million, primarily due to the closure of the Canton, North Carolina mill and lower sales volume. Segment adjusted EBITDA also decreased by 15% to $93 million.
Outlook and Future Actions
Given the second-quarter results and ongoing market challenges, Pactiv Evergreen Inc (PTVE, Financial) revised its full-year guidance. The company now expects adjusted EBITDA to range between $800 million and $820 million. The sale of the Pine Bluff and Waynesville facilities is expected to close in Q4 2024, which will further impact the company's financials.
Jon Baksht, CFO, commented, “At closing, the sale will effectively complete the restructuring of our Beverage Merchandising operations, and is expected to improve the long-term cash flow profile of our business, while also reducing volatility across economic cycles.”
For more detailed financial information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Pactiv Evergreen Inc for further details.
