Exhibit 99.1
Solo Cup Company and Subsidiaries
Consolidated Statements of Operations
(In millions)
Thirteen weeks ended | Thirty-nine weeks ended | |||||||||||||||
September 26, 2010 | September 27, 2009 | September 26, 2010 | September 27, 2009 | |||||||||||||
Net sales | $ | 409.6 | $ | 370.1 | $ | 1,173.7 | $ | 1,115.5 | ||||||||
Cost of goods sold | 382.2 | 316.3 | 1,075.4 | 960.0 | ||||||||||||
Gross profit | 27.4 | 53.8 | 98.3 | 155.5 | ||||||||||||
Selling, general and administrative expenses | 36.5 | 38.6 | 112.1 | 112.7 | ||||||||||||
Impairment of goodwill | — | 17.2 | — | 17.2 | ||||||||||||
Loss on asset disposals | 0.7 | 5.0 | 2.6 | 7.4 | ||||||||||||
Asset impairment | 3.4 | — | 16.7 | — | ||||||||||||
Operating (loss) income | (13.2 | ) | (7.0 | ) | (33.1 | ) | 18.2 | |||||||||
Interest expense, net of interest income | 18.3 | 17.5 | 52.8 | 45.4 | ||||||||||||
Reclassification of unrealized loss on cash flow hedges to interest expense | — | — | — | 9.1 | ||||||||||||
Loss on debt extinguishment | — | 2.5 | — | 2.5 | ||||||||||||
Foreign currency exchange (gain) loss, net | (0.8 | ) | 0.1 | 0.6 | (2.3 | ) | ||||||||||
Gain from bargain purchase | — | — | (1.7 | ) | — | |||||||||||
Loss before income taxes | (30.7 | ) | (27.1 | ) | (84.8 | ) | (36.5 | ) | ||||||||
Income tax provision (benefit) | — | 0.8 | 2.2 | (5.4 | ) | |||||||||||
Net loss | $ | (30.7 | ) | $ | (27.9 | ) | $ | (87.0 | ) | $ | (31.1 | ) | ||||
Reconciliation of net loss to EBITDA (non-GAAP measure)
Thirteen weeks ended | Thirty-nine weeks ended | |||||||||||||||
September 26, 2010 | September 27, 2009 | September 26, 2010 | September 27, 2009 | |||||||||||||
Net loss(1) | $ | (30.7 | ) | $ | (27.9 | ) | $ | (87.0 | ) | $ | (31.1 | ) | ||||
Interest expense, net (includes reclassification of unrealized loss on cash flow hedges) | 18.3 | 20.0 | 52.8 | 57.0 | ||||||||||||
Income tax provision (benefit) | — | 0.8 | 2.2 | (5.4 | ) | |||||||||||
Depreciation and amortization (excluding accelerated depreciation) | 17.2 | 17.4 | 53.4 | 51.9 | ||||||||||||
Accelerated depreciation | 18.1 | — | 28.6 | — | ||||||||||||
EBITDA (non-GAAP measure) | $ | 22.9 | $ | 10.3 | $ | 50.0 | $ | 72.4 | ||||||||
(1) | Net loss includes the following items, which are listed here to provide information for purposes of additional analysis. |
Thirteen weeks ended | Thirty-nine weeks ended | |||||||||||||||
September 26, 2010 | September 27, 2009 | September 26, 2010 | September 27, 2009 | |||||||||||||
Plant closure expenses and severance costs | $ | 1.4 | $ | 4.1 | $ | 7.9 | $ | 11.5 | ||||||||
Pension plan curtailment loss | 1.5 | — | 1.5 | — | ||||||||||||
Closed plant inefficiencies | 0.9 | — | 0.9 | 1.0 | ||||||||||||
Impairment of goodwill | — | 17.2 | — | 17.2 | ||||||||||||
Asset impairment | 3.4 | — | 16.7 | — | ||||||||||||
Gain from bargain purchase | — | — | (1.7 | ) | — | |||||||||||
Loss on asset disposals | 0.7 | 5.0 | 2.6 | 7.4 | ||||||||||||
Foreign currency exchange (gain) loss , net | (0.8 | ) | 0.1 | 0.6 | (2.3 | ) | ||||||||||
Long-term incentive plan | (1.2 | ) | (0.2 | ) | (1.1 | ) | 0.4 | |||||||||
Contractual resolution charge | — | — | — | 3.9 |
Solo Cup Company and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
September 26, 2010 | December 27, 2009 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 24.6 | $ | 30.0 | ||||
Accounts receivable, net | 125.1 | 124.9 | ||||||
Inventories | 291.0 | 232.6 | ||||||
Deferred income taxes | 16.7 | 19.1 | ||||||
Other current assets | 37.9 | 29.8 | ||||||
Total current assets | 495.3 | 436.4 | ||||||
Property, plant and equipment, net | 456.2 | 509.0 | ||||||
Other assets | 28.2 | 42.0 | ||||||
Total assets | $ | 979.7 | $ | 987.4 | ||||
Liabilities and Shareholder’s (Deficit) Equity | ||||||||
Accounts payable | $ | 76.1 | $ | 82.0 | ||||
Accrued expenses | 53.2 | 55.6 | ||||||
Current maturities of long-term debt | 0.5 | 0.8 | ||||||
Other current liabilities | 62.7 | 47.1 | ||||||
Total current liabilities | 192.5 | 185.5 | ||||||
Long-term debt, net of current maturities | 718.3 | 635.3 | ||||||
Deferred income taxes | 20.1 | 22.7 | ||||||
Other liabilities | 114.3 | 125.7 | ||||||
Total liabilities | 1,045.2 | 969.2 | ||||||
Total shareholder’s (deficit) equity | (65.5 | ) | 18.2 | |||||
Total liabilities and shareholder’s (deficit) equity | $ | 979.7 | $ | 987.4 | ||||
Solo Cup Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
Thirty-nine weeks ended | ||||||||
September 26, 2010 | September 27, 2009 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (87.0 | ) | $ | (31.1 | ) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization | 82.0 | 51.9 | ||||||
Deferred financing fee amortization | 5.2 | 4.3 | ||||||
Impairment of goodwill | — | 17.2 | ||||||
Loss on asset disposals | 2.6 | 7.4 | ||||||
Loss on debt extinguishment | — | 2.5 | ||||||
Gain from bargain purchase | (1.7 | ) | — | |||||
Reclassification of unrealized loss on cash flow hedges | — | 9.1 | ||||||
Asset impairment | 16.7 | — | ||||||
Deferred income taxes | (0.1 | ) | (5.2 | ) | ||||
Foreign currency exchange loss (gain), net | 0.6 | (2.4 | ) | |||||
Changes in operating assets and liabilities, net of business acquisition | (51.1 | ) | 63.4 | |||||
Other, net | 3.3 | 1.7 | ||||||
Net cash (used in) provided by operating activities | (29.5 | ) | 118.8 | |||||
Cash flows from investing activities | ||||||||
Purchase of property, plant and equipment | (37.6 | ) | (52.7 | ) | ||||
Proceeds from sale of property, plant and equipment | 0.1 | 16.6 | ||||||
Business acquisition, net of cash acquired | (23.7 | ) | — | |||||
Decrease (increase) in restricted cash | 5.8 | (11.5 | ) | |||||
Increase in cash escrow | — | (0.5 | ) | |||||
Proceeds from insurance reimbursement | 1.2 | — | ||||||
Net cash used in investing activities | (54.2 | ) | (48.1 | ) | ||||
Cash flows from financing activities | ||||||||
Net borrowings (repayments) under revolving credit facilities | 79.0 | (18.3 | ) | |||||
Borrowings under the 10.5% Senior Secured Notes | — | 293.8 | ||||||
Repayments of term notes | (0.4 | ) | (362.9 | ) | ||||
Repayments of other debt | (0.3 | ) | (0.3 | ) | ||||
Return of capital to parent | (0.1 | ) | — | |||||
Debt issuance costs | (0.5 | ) | (17.8 | ) | ||||
Net cash provided by (used in) financing activities | 77.7 | (105.5 | ) | |||||
Effect of exchange rate changes on cash | 0.6 | 0.9 | ||||||
Net decrease in cash and cash equivalents | (5.4 | ) | (33.9 | ) | ||||
Cash and cash equivalents, beginning of period | 30.0 | 57.5 | ||||||
Cash and cash equivalents, end of period | $ | 24.6 | $ | 23.6 | ||||