Exopack increases revolver borrowings in Q1; results meet expectations

By Jennifer Lanning Drey

Savannah, Ga., May 13 - Exopack Holding Corp.'s borrowings under its revolving credit facility increased by $19.1 million in the first quarter due primarily to the payment of semiannual interest on its bonds and capital expenditures related to margin-enhancement initiatives, Eric Lynch, Exopack's chief financial officer, reported Friday during the company's quarterly earnings conference call.

Exopack had $76 million outstanding under the revolving credit facility at March 31 versus $56.9 million outstanding at year-end 2010.

Availability was $44.8 million at March 31, Lynch reported.

As previously reported, Exopack announced a recapitalization on May 6 that included plans to offer new notes and enter into a new secured term loan facility, as well as an amendment to its senior credit facility.

If the transactions are successfully completed, proceeds will be used to repay the existing senior credit facility, purchase existing notes and make a distribution to shareholders, Jack Knott, Exopack's chief executive officer, said during the call.

Exopack had $1.3 million of cash at March 31, according to its form 10-Q filed with the Securities and Exchange Commission.

Q1 meets expectations

Knott also said on Friday that Exopack's sales and adjusted EBITDA came in as expected for the first quarter. The company reported first-quarter net sales of $224.5 million, compared with net sales of $172.9 million in the same period of 2010.

Sales growth was largely driven by Exopack's acquisition of certain retail natural cheese and fresh red meat performance plastic packaging business assets from Bemis Co. in July 2010, Knott said.

First-quarter adjusted EBITDA was $27.4 million, up $10.2 million from adjusted EBITDA in the first quarter of 2010. Excluding the acquisition, first-quarter adjusted EBITDA was up $5.1 million over the same period of 2010, the CEO noted.

The improvement in EBITDA continues to be driven by 2010 initiatives including increased productivity, the commercialization of new technologies, the installation of more efficient assets and adjustments to customer and product mix to better fit the company's asset base and strategic targets.

Based in Spartanburg, S.C., Exopack is a flexible packaging company and provider of paper and plastic packaging products.

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