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PMF News Graham Packaging Reports 16% Third Quarter Increase YORK, Pennsylvania, USA—Graham Packaging Holdings Company, parent company of Graham Packaging Company, L.P., today said its third-quarter adjusted earnings before interest, taxes, depreciation and amortization were up 16 percent, compared to the same quarter last year. "We’re extremely pleased with our continued earnings growth, especially in light of the difficult economic conditions," Chief Financial Officer John Hamilton said. "Our earnings have continued to improve while debt has remained essentially constant, which has continued to lower the leverage of the company," he noted. "The company is in full compliance with all covenants at the end of the third quarter applicable to its indebtedness. In addition, we ended the third quarter with approximately $100 million of availability on our lines of credit." The increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was achieved on a 6.4 percent increase in unit sales during the quarter, reflecting the company’s continuing global growth across a range of single-serve beverages. Sales in dollars declined compared to the same period last year, primarily due to the company’s restructuring process in Europe, which involves the sale or closure of six locations. The restructuring is focusing the company on key strategic customers in Europe utilizing the most competitive technology. Sales for the quarter were $227.1 million, 1.8 percent below the third quarter of 2001. Excluding locations impacted by the European restructuring, sales in the third quarter of 2002 would have increased approximately 3 percent, as compared to the same period of 2001, and unit volume would have grown approximately 12 percent. Year-to-date sales were $695 million, 2.6 percent below the same period in 2001, while unit sales increased by 7 percent. The decrease in sales year-to-date was primarily due to decreases in the market prices of resin, combined with the European restructuring. Year-to-date adjusted EBITDA was 17.8 percent above the same period in 2001. Year-to-date net income through September 29 totaled $16.1 million, compared to a loss of $7.6 million for the same period last year. This is despite a third quarter $12.2 million unusual charge, primarily for plant restructurings of which $4.0 million is reflected in depreciation and amortization in the table below, causing a $1.1 million net loss for the quarter. Net loss for the third quarter 2001 was $0.3 million, including unusual charges of $2.1 million. Graham has also added three new locations during the quarter. "We’re in the start-up phase at several locations around the world," Chief Executive Officer Phillip R. Yates said. "The positive impact from these plants won’t be seen until 2003." Based in York, Graham Packaging designs and makes customized blow-molded plastic containers for branded food and beverage products, household and personal care products, and automotive lubricants. The company currently operates 57 plants and employs approximately 4,000 people throughout North America, Europe, and Latin America. It produced more than eight billion containers and reported total worldwide sales of approximately $923 million in 2001. Graham’s majority owner is Blackstone Capital Partners of New York. Blackstone recently raised the world’s largest private equity fund—$6.5 billion for its BCP IV fund.
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