Reynolds Consumer Products Inc
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 30, 2024
REYN$24.11-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001628280-24-035405
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001628280-24-044208
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 126 current paragraphs.
80 unchanged; 41 reworded; 5 added; 4 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Total Net Revenues. Total net revenues decreased by $25 million, or 3%, to $910 million. The decrease was primarily drivenby lower volume.
Current report
Income Tax Expense. We recognized income tax expense of $27 million on income before income taxes of $113 million (an effective tax rate of 24.1%) for the three months ended September 30, 2024 compared to income tax expense of $25 million on income before income taxes of $103 million (an effective tax rate of 24.5%) for the three months ended September 30, 2023.
Current report
Results of Operations – Nine Months Ended September 30, 2024
Current report
Net cash used in financing activities decreased by $13 million to $247 million. The decrease was primarily attributable to $13 million of scheduled amortization payments made on our Term Loan Facility during the nine months ended September 30, 2023, which did not repeat in the current year period as a result of our voluntary prepayments.
Current report
Subsequent to September 30, 2024, we amended our Amended External Debt Facilities to replace the undrawn $250 million revolving facility maturing in February 2026 with an undrawn $700 million revolving facility maturing in October 2029. Our Term Loan Facility under the Credit Agreement continues to mature in February 2027.
Removed paragraphs (4)
Previous report
Total Net Revenues. Total net revenues decreased by $10 million, or 1%, to $930 million. The decrease was drivenby lower volume in our non-retail business. Our retail net revenue increased by $6 million, in contrast to a $16 million decline in our lower-margin non-retail net revenue.
Previous report
Results of Operations – Six Months Ended June 30, 2024
Previous report
Net cash used in financing activities increased by $38 million to $149 million. The increase was primarily attributable to a voluntary principal payment of $50 million related to our Term Loan Facility made during the second quarter of 2024, compared to the scheduled amortization payments in the same prior year period.
Previous report
External Debt Facilities
Reworded paragraphs (41)
Previous wording
Total net revenues decreased 1% in thethree months ended June 30, 2024 compared to the same period in 2023. The revenue decrease was due to lower volume in our non-retail business. Our retail net revenue grew by $6 million, in contrast to a $16 million decline in our lower-margin non-retail net revenue.
Current wording
Total net revenues decreased 3% in thethree months ended September 30, 2024 compared to the same period in 2023. The revenue decrease was primarily due to lower volume.
Previous wording
Total net revenues decreased 3% in the six months ended June 30, 2024 compared to the same period in 2023. The revenue decrease was primarily due to lower volume, 2% of which was in our lower-margin non-retail business and 1% of which was in our retail business.
Current wording
Total net revenues decreased 3% in the nine months ended September 30, 2024 compared to the same period in 2023. The revenue decrease was primarily due to lower volume.
Previous wording
During the three months ended June 30, 2024, our net income increased by 47%, driven by lower material and manufacturing costs, as well as a reduction in interest expense as a result of a lower outstanding principal balance due to repayments made on our term loan facility and lower income tax expense primarily due to a discrete tax benefit in the quarter. These were partially offset by higher selling, general and administrative expenses.
Current wording
During the three months ended September 30, 2024, our net income increased by 10%, primarily driven by lower selling, general and administrative expenses, lower material and manufacturing costs and lower interest expense. These were partially offset by higher income tax expense as a result of higher pre-tax income.
Previous wording
During the six months ended June 30, 2024, our net income increased by 75%, primarily driven by declines in material and manufacturing costs, as well as a reduction in interest expense as a result of a lower outstanding principal balance due to repayments made on our term loan facility. These were partially offset by higher selling, general and administrative expenses.
Current wording
During the nine months ended September 30, 2024, our net income increased by 43%, primarily driven by lower material and manufacturing costs and lower interest expense. These were partially offset by higher income tax expense as a result of higher pre-tax income.
Previous wording
Cost of Sales. Cost of sales decreased by $124 million, or 9%, to $1,306 million. The decrease was driven by lower material and manufacturing costs, as well as lower volume.
Current wording
Cost of Sales. Cost of sales decreased by $15 million, or 2%, to $671 million. The decrease was primarily driven by lower material and manufacturing costs, as well as lower volume.
Previous wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $15 million, or 7%, to $227 million primarily due to higher personnel and advertising costs.
Current wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased by $14 million, or 12%, to $101 million, primarily due to lower personnel costs.
Previous wording
Other Expense, Net. Other expense, net was zero in the three months ended June 30, 2024 compared to $1 million in the three months ended June 30, 2023.
Current wording
Other Expense, Net. Other expense, net was zero in each of the three months ended September 30, 2024 and 2023.
Previous wording
Adjusted EBITDA. Adjusted EBITDA increased by $22 million, or 15%, to $172 million. The increase in Adjusted EBITDA was primarily due to lower material and manufacturing costs, partially offset by higher selling, general and administrative expenses.
Current wording
Adjusted EBITDA. Adjusted EBITDA increased by $6 million, or 4%, to $171 million. The increase in Adjusted EBITDA was primarily due to lower selling, general and administrative expenses as well as lower material and manufacturing costs, partially offset by lower volume.
Previous wording
Total Segment Net Revenues. Reynolds Cooking & Baking total segment net revenues decreased by $36 million, or 6%, to $568 million. The decrease in net revenues was primarily due to a $35 million decline in our lower-margin non-retail net revenues driven by lower volume.
Current wording
Total Segment Net Revenues. Reynolds Cooking & Baking total segment net revenues decreased by $7 million, or 2%, to $305 million. The decrease in net revenues was primarily due to lower retail volume.
Previous wording
Adjusted EBITDA. Reynolds Cooking & Baking Adjusted EBITDA increased by $16 million, or 40%, to $56 million. The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs.
Current wording
Adjusted EBITDA. Reynolds Cooking & Baking Adjusted EBITDA was $51 million in each period. This was driven by lower material and manufacturing costs, offset by the impact of lower revenue.
Previous wording
Total Segment Net Revenues. Hefty Waste & Storage total segment net revenues increased $9 million, or 4%, to $238 million. The increase in net revenues was primarily due to higher pricing due to timing of promotional spend and increased volume.
Current wording
Total Segment Net Revenues. Hefty Waste & Storage total segment net revenues increased $4 million, or 2%, to $248 million. The increase in net revenues was primarily due to higher volume.
Previous wording
Adjusted EBITDA. Hefty Waste & Storage Adjusted EBITDA increased by $7 million, or 11%, to $69 million. The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs and the benefit from increased revenue, partially offset by higher advertising costs.
Current wording
Adjusted EBITDA. Hefty Waste & Storage Adjusted EBITDA was $71 million in each period. This was driven by the benefit of increased revenue, offset by increased advertising costs.
Previous wording
Total Segment Net Revenues. Hefty Tableware total segment net revenues decreased by $6 million, or 2%, to $245 million. The decrease in net revenues was primarily due to lower pricing and volume.
Current wording
Total Segment Net Revenues. Hefty Tableware total segment net revenues decreased by $16 million, or 7%, to $217 million. The decrease in net revenues was primarily due to lower foam volume and lower pricing, which was primarily related to the timing of promotional activities.
Previous wording
Adjusted EBITDA. Hefty Tableware Adjusted EBITDA decreased by $6 million, or 13%, to $39 million. The decrease in Adjusted EBITDA was primarily driven by higher material and manufacturing costs and the impact of lower revenue.
Current wording
Adjusted EBITDA. Hefty Tableware Adjusted EBITDA decreased by $15 million, or 37%, to $26 million. The decrease in Adjusted EBITDA was primarily driven by the impact of lower revenue and higher material and manufacturing costs.
Previous wording
Total Segment Net Revenues. Presto Products total segment net revenues increased by $5 million, or 3%, to $150 million. The increase in net revenues was primarily due to higher volume and higher pricing associated with the contractual pass through of commodity costs.
Current wording
Total Segment Net Revenues. Presto Products total segment net revenues decreased by $3 million, or 2%, to $149 million. The decrease in net revenues was primarily due to lower volume.
Previous wording
Adjusted EBITDA. Presto Products Adjusted EBITDA increased by $9 million, or 32%, to $37 million. The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs and the benefit from increased revenue.
Current wording
Adjusted EBITDA. Presto Products Adjusted EBITDA increased by $2 million, or 6%, to $33 million. The increase in Adjusted EBITDA was primarily driven by product portfolio optimization.
Previous wording
Six Months Ended June 30, 2024 Compared with the Six Months Ended June 30, 2023
Current wording
Nine Months Ended September 30, 2024 Compared with the Nine Months Ended September 30, 2023
Previous wording
Components of Change in Net Revenues for the Six Months Ended June 30, 2024 vs. the Six Months Ended June 30, 2023
Current wording
Components of Change in Net Revenues for the Nine Months Ended September 30, 2024 vs. the Nine Months Ended September 30, 2023
Previous wording
Total Net Revenues. Total net revenues decreased by $50 million, or 3%, to $1,764 million. The decrease was driven by a $35 million decline in our lower-margin non-retail net revenue as well as a $15 million decline in our retail net revenue.
Current wording
Total Net Revenues. Total net revenues decreased by $75 million, or 3%, to $2,675 million. The decrease was driven by lower volume in our retail and non-retail businesses.
Previous wording
Cost of Sales. Cost of sales decreased by $38 million, or 5%, to $674 million. The decrease was primarily driven by lower material and manufacturing costs and lower volume.
Current wording
Cost of Sales. Cost of sales decreased by $140 million, or 7%, to $1,977 million. The decrease was driven by the impact of lower revenue as well as lower material and manufacturing costs.
Previous wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $9 million, or 8%, to $116 million, primarily due to higher personnel and advertising costs.
Current wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $2 million, or 1%, to $329 million primarily due to higher advertising costs.
Previous wording
Other Expense, Net. Other expense, net was zero in the six months ended June 30, 2024 compared to $1 million in the six months ended June 30, 2023.
Current wording
Other Expense, Net. Other expense, net was zero in each of the nine months ended September 30, 2024 and 2023.
Previous wording
Interest Expense, Net. Interest expense, net decreased by $9 million, or 15%, to $51 million. The decrease was primarily due to a lower outstanding principal balance as a result of voluntary principal payments made on our term loan facility.
Current wording
Interest Expense, Net. Interest expense, net decreased by $15 million, or 16%, to $76 million. The decrease was primarily due to a lower outstanding principal balance on our external debt facilities as a result of principal payments made on our term loan facility throughout 2023 and in the first nine months of 2024.
Previous wording
Income Tax Expense. Our effective tax rate declined by 9.4%, from 25.4% for the three months ended June 30, 2023 to 16.0% for the three months ended June 30, 2024. The decrease was primarily due to the recognition of a discrete tax benefit for the remeasurement of deferred tax liabilities.
Current wording
Income Tax Expense. Our effective tax rate declined by 3.8%, from 24.9% for the nine months ended September 30, 2023 to 21.1% for the nine months ended September 30, 2024. The decrease was primarily due to the recognition of a discrete tax benefit for the remeasurement of deferred tax liabilities in the second quarter of 2024.
Previous wording
Adjusted EBITDA. Adjusted EBITDA increased by $62 million, or 27%, to $294 million. The increase in Adjusted EBITDA was primarily attributable to lower material and manufacturing costs, partially offset by higher selling, general and administrative expenses.
Current wording
Adjusted EBITDA. Adjusted EBITDA increased by $67 million, or 17%, to $465 million. The increase in Adjusted EBITDA was primarily attributable to lower material and manufacturing costs, partially offset by the impact of lower revenue and higher advertising costs.
Previous wording
Total Segment Net Revenues. Reynolds Cooking & Baking total segment net revenues decreased by $17 million, or 5%, to $304 million. The decrease in net revenues was primarily due to a $16 million decline in our non-retail business.
Current wording
Total Segment Net Revenues. Reynolds Cooking & Baking total segment net revenues decreased by $43 million, or 5%, to $873 million. The decrease in net revenues was primarily due to lower volume in the segment's non-retail and retail businesses.
Previous wording
Adjusted EBITDA. Reynolds Cooking & Baking Adjusted EBITDA increased by $46 million, or 107%, to $89 million. The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs.
Current wording
Adjusted EBITDA. Reynolds Cooking & Baking Adjusted EBITDA increased by $46 million, or 49%, to $140 million. The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs.
Previous wording
Total Segment Net Revenues. Hefty Waste & Storage total segment net revenues increased by $5 million, or 1%, to $468 million. The increase in net revenues was primarily driven by higher pricing due to timing of promotional spend.
Current wording
Total Segment Net Revenues. Hefty Waste & Storage total segment net revenues increased by $10 million, or 1%, to $715 million. The increase in net revenues was primarily driven by higher pricing due to the timing of trade promotional activities.
Previous wording
Adjusted EBITDA. Hefty Waste & Storage Adjusted EBITDA increased by $17 million, or 15%, to $134 million. The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs and the benefit of higher revenue, partially offset by higher advertising costs.
Current wording
Adjusted EBITDA. Hefty Waste & Storage Adjusted EBITDA increased by $17 million, or 9%, to $205 million. The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs and the benefit of increased revenue.
Previous wording
Total Segment Net Revenues. Hefty Tableware total segment net revenues decreased by $25 million, or 5%, to $450 million. The decrease in net revenues was primarily driven by lower volume and lower pricing.
Current wording
Total Segment Net Revenues. Hefty Tableware total segment net revenues decreased by $41 million, or 6%, to $667 million. The decrease in net revenues was primarily driven by lower volume as well as lower pricing, primarily driven by the timing of trade promotional activities.
Previous wording
Adjusted EBITDA. Hefty Tableware Adjusted EBITDA decreased by $6 million, or 8%, to $70 million. The decrease in Adjusted EBITDA was primarily driven by the impact of lower revenue, partially offset by lower material and manufacturing costs.
Current wording
Adjusted EBITDA. Hefty Tableware Adjusted EBITDA decreased by $22 million, or 19%, to $95 million. The decrease in Adjusted EBITDA was primarily driven by the impact of lower revenue.
Previous wording
Total Segment Net Revenues. Presto Products total segment net revenues increased by $5 million, or 2%, to $293 million. The increase in net revenues was primarily driven by higher volume and higher pricing associated with the contractual pass through of commodity costs.
Current wording
Total Segment Net Revenues. Presto Products total segment net revenues increased by $2 million, to $443 million. The increase in net revenues was primarily driven by higher pricing associated with the contractual pass through of commodity costs, partially offset by lower volume.
Previous wording
Adjusted EBITDA. Presto Products Adjusted EBITDA increased by $19 million, or 40%, to $66 million. The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs and the benefit of increased revenue.
Current wording
Adjusted EBITDA. Presto Products Adjusted EBITDA increased by $22 million, or 28%, to $100 million. The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs and the benefit of product portfolio optimization.
Previous wording
Net cash from operating activities decreased by $24 million to $183 million in the six months ended June 30, 2024. The decrease was primarily driven by higher net investment in inventory during the current period and higher income tax payments due to higher taxable income, partially offset by higher net income and higher accounts payable due to working capital initiatives.
Current wording
Net cash from operating activities decreased by $116 million to $307 million in the nine months ended September 30, 2024. The decrease was primarily driven by higher net investment in inventory during the current period and higher income tax payments due to higher taxable income, partially offset by higher net income, higher accounts payable due to working capital initiatives and lower interest payments.
Previous wording
Net cash used in investing activities decreased by $3 million to $48 million. The decrease was driven by a decrease in cash outlays for capital expenditures.
Current wording
Net cash used in investing activities increased by $2 million to $79 million. The increase was driven by an increase in cash outlays for capital expenditures.
Previous wording
In February 2020, we entered into the External Debt Facilities which consist of a $2,475 million Term Loan Facility and a Revolving Facility that provides for additional borrowing capacity of up to $250 million, reduced by amounts used for letters of credit. In February 2023, we amended the External Debt Facilities (“Amendment No.1”) which replaced the interest rate benchmark from LIBOR to the SOFR. Additionally, in November 2023, we further amended the External Debt Facilities (“Amendment No. 2”) to extend the maturity of the Revolving Facility by one year. Other than the foregoing, the material terms of the agreement remained unchanged.
Current wording
In February 2020, we entered into the External Debt Facilities which consist of a $2,475 million Term Loan Facility and a Revolving Facility that provided for additional borrowing capacity of up to $250 million, reduced by amounts used for letters of credit. In February 2023, we amended the External Debt Facilities (“Amendment No.1”) which replaced the interest rate benchmark from LIBOR to the SOFR. Additionally, in November 2023, we further amended the External Debt Facilities (“Amendment No. 2”) to extend the maturity of the Revolving Facility by one year. Other than the foregoing, the material terms of the agreement remained unchanged.
Previous wording
As of June 30, 2024, the outstanding balance under the Term Loan Facility was $1,795 million. As of June 30, 2024, we had no outstanding borrowings under the Revolving Facility, and we had $6 million of letters of credit outstanding, which reduces the borrowing capacity under the Revolving Facility.
Current wording
As of September 30, 2024, the outstanding balance under the Term Loan Facility was $1,745 million. As of September 30, 2024, we had no outstanding borrowings under the Revolving Facility, and we had $6 million of letters of credit outstanding, which reduces the borrowing capacity under the Revolving Facility.
Previous wording
During the three months ended June 30, 2024, we made a voluntary principal payment of $50 million related to our Term Loan Facility, which was applied to the outstanding principal balance due at maturity. Subsequent to June 30, 2024, we made an additional voluntary principal payment of $50 million related to the Term Loan Facility.
Current wording
During the three and nine months ended September 30, 2024, we made voluntary principal payments of $50 million and $100 million related to our Term Loan Facility, which was applied to the outstanding principal balance due at maturity. Subsequent to September 30, 2024, we made an additional voluntary principal payment of $50 million related to the Term Loan Facility.
Previous wording
As amended, the Revolving Facility matures in February 2026.
Current wording
As amended effective October 17, 2024, the Revolving Facility matures in October 2029.
Previous wording
All outstanding amounts related to suppliers participating in the SCF are recorded within accounts payable in our condensed consolidated balance sheet and associated payments are included as an operating cash flow in the condensed consolidated statement of cash flows. As of June 30, 2024, the amount of obligations outstanding that we have confirmed as valid under the SCF was $9 million. As of December 31, 2023, the amount of obligations outstanding that we had confirmed as valid under the SCF was $19 million.
Current wording
All outstanding amounts related to suppliers participating in the SCF are recorded within accounts payable in our condensed consolidated balance sheet and associated payments are included as an operating cash flow in the condensed consolidated statement of cash flows. As of September 30, 2024, the amount of obligations outstanding that we have confirmed as valid under the SCF was $8 million. As of December 31, 2023, the amount of obligations outstanding that we had confirmed as valid under the SCF was $19 million.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Income Tax Expense. Our effective tax rate declined by 6.1%, from 25.3% for the six months ended June 30, 2023 to 19.2% for the six months ended June 30, 2024. The decrease was primarily due to the recognition of a discrete tax benefit for the remeasurement of deferred tax liabilities.