Berry Plastics Group reported results for its first fiscal 2016 quarter, referred to in the following as the December 2015 quarter.
"During the quarter we achieved record net sales and operating EBITDA for any quarter in the Company's history and successfully closed the Avintiv acquisition on October 1. The significantly improved results and volume growth in certain key product categories are an outcome of our strategy and a testament to the focus on execution by everyone at Berry. With a very good start to the fiscal year and only a few short months since the Avintiv acquisition, the initial report card has exceeded our expectations," said Jon Rich, Chairman and CEO of Berry Plastics.
December 2015 Quarter Results
For the December 2015 quarter, the Company recorded net sales of $1,612 million compared to $1,220 million in the same prior year period. The year-over-year increase was primarily attributed to net sales from the acquisition of AVINTIV, Inc. ("Avintiv") along with an increase in base volumes partially offset by decreased selling prices as a result of the pass-through of lower raw material costs and unfavorable currency translation.
For the December 2015 quarter, the Company had operating income of $86 million compared to $68 million in the same prior year quarter. The 26 percent year-over-year increase was primarily attributed to an improvement in the relationship of net selling price to raw material and freight costs, an improvement in operating performance in manufacturing, realization of synergies and the increase in net sales noted above. These positive contributions were partially offset by increases in depreciation and amortization expense, business integration expenses, and selling, general, and administrative expenses, along with unfavorable currency translation.
Capital Structure and Adjusted Free Cash Flow
The ratio of net debt of $5,866 million to pro forma adjusted EBITDA of $1,206 million for the four quarters ended January 2, 2016 was 4.9, representing a 0.3 improvement (reduction) from our June 2015 quarter end pro forma ratio of 5.2. The Company's adjusted free cash flow for the December 2015 quarter was $45 million, an increase of 25 percent, compared to $36 million in the prior year period. Additionally, the current quarter included $30 million of cash uses associated with the acquisition of Avintiv. Excluding these items, adjusted free cash flow would have been $75 million or 108 percent over the prior year quarter.
