SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
FORM 10-Q
(Mark One)
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________to_______
Commission file number 1-7834
SEALED AIR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-1682767
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
Park 80 East 07663-5291
Saddle Brook, New Jersey (Zip Code)
(Address of Principal
Executive Offices)
Registrant's telephone number, including area code (201) 791-7600
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
There were 21,054,291 shares of the registrant's common stock, par
value $0.01 per share, outstanding as of July 31, 1995.
<TABLE>
PART I
FINANCIAL INFORMATION
SEALED AIR CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings
For the Three Months and Six Months Ended June 30, 1995 and 1994
(In thousands of dollars except per share data)
(Unaudited)
<CAPTION>
For the For the
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $182,087 $126,761 $355,441 $244,222
Cost of sales 118,933 79,007 231,480 152,010
Gross profit 63,154 47,754 123,961 92,212
Marketing, administrative and
development expenses 36,296 26,179 72,181 51,115
Operating profit 26,858 21,575 51,780 41,097
Other income (expense):
Interest income 312 423 530 605
Interest expense (5,253) (6,229) (10,290) (12,425)
Other, net (1,053) (1,410) (2,027) (2,338)
Other income (expense), net (5,994) (7,216) (11,787) (14,158)
Earnings before income taxes 20,864 14,359 39,993 26,939
Income taxes 8,241 5,690 15,797 10,722
Earnings before early redemption
of subordinated notes 12,623 8,669 24,196 16,217
Early redemption of subordinated
notes, net of income taxes - (5,576) - (5,576)
Net earnings $ 12,623 $ 3,093 $ 24,196 $ 10,641
Earnings per common share:
Before early redemption of
subordinated notes $ .60 $ .43 $ 1.15 $ .81
Early redemption of subordinated
notes, net of income taxes - (.28) - (.28)
Net earnings per common share $ .60 $ .15 $ 1.15 $ .53
Weighted average number of
shares outstanding (000) 21,037 19,929 20,963 19,914
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
SEALED AIR CORPORATION
Consolidated Balance Sheets
June 30, 1995 and December 31, 1994
(In thousands of dollars except share data)
(Unaudited)
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8,660 $ 11,153
Accounts receivable, less allowance for
doubtful accounts of $4,922 in 1995 and
$3,970 in 1994 120,985 91,321
Other receivables 7,183 3,866
Inventories 53,768 38,259
Prepaid expenses 2,021 1,009
Deferred taxes 6,398 6,223
Total current assets 199,015 151,831
Property and equipment:
Land and buildings 77,111 67,226
Machinery and equipment 172,615 141,981
Leasehold improvements 5,775 5,029
Furniture and fixtures 11,294 12,224
Construction in progress 9,763 5,864
276,558 232,324
Less accumulated depreciation and amortization 108,201 96,154
Property and equipment, net 168,357 136,170
Patents, patent applications and rights, less
accumulated amortization of $12,726 in 1995
$11,819 in 1994 15,011 9,647
Excess of cost over fair value of net assets
acquired, less accumulated amortization of
$6,423 in 1995 and $4,715 in 1994 43,026 19,710
Other assets 25,240 13,759
$450,649 $331,117
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
SEALED AIR CORPORATION
Consolidated Balance Sheets
June 30, 1995 and December 31, 1994 (Continued)
(In thousands of dollars except share data)
(Unaudited)
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable and current
installments of long-term debt $ 48,352 $ 30,508
Accounts payable 48,386 43,009
Accrued interest 1,939 1,323
Other accrued liabilities 45,602 44,647
Income taxes payable 17,051 16,577
Total current liabilities 161,330 136,064
Long-term debt, less current
installments 185,972 155,293
Deferred income taxes 18,401 17,215
Other non-current liabilities 11,630 11,533
Total liabilities 377,333 320,105
Shareholders' equity:
Common stock, $.01 par value. Authorized
60,000,000 shares in 1995 and 35,000,000
shares in 1994, issued 21,104,670 shares
in 1995 and 20,086,518 shares in 1994 212 201
Additional paid-in capital 153,481 114,686
Retained earnings (deficit) (81,840) (106,036)
Accumulated translation adjustment 7,207 6,126
79,060 14,977
Less deferred compensation and cost ($226
in 1995 and $248 in 1994) of 119,306 shares
in 1995 and 112,379 in 1994 of common
stock held as treasury stock 5,744 3,965
Shareholders' equity 73,316 11,012
$450,649 $331,117
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
SEALED AIR CORPORATION AND SUBSIDIARIES
Consolidated Statements (abbreviated) of Cash Flows
For the Six Months Ended June 30, 1995 and 1994
(In thousands of dollars)
(Unaudited)
<CAPTION>
1995 1994
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $ 24,196 $10,641
Adjustments to net earnings to reconcile to
net cash provided by operating activities:
Early redemption of subordinated notes - 5,576
Depreciation and amortization 17,202 12,357
Deferred credits - income taxes and other 761 898
Net losses on disposals of fixed assets 110 260
Other, net (2,823) (1,965)
Cash provided (used) by changes in:
Receivables (19,037) (9,832)
Inventories (5,612) (1,799)
Prepaid expenses (1,012) 171
Accounts payable (5,204) 5,181
Accrued interest 616 137
Other accrued liabilities 3,759 (1,652)
Income taxes payable 1,114 7,130
Net cash provided by operating activities 14,070 27,103
Cash Flows From Investing Activities:
Capital expenditures for property and equipment (8,929) (8,738)
Proceeds from sales of property and equipment 249 65
Net cash utilized in purchase of subsidiaries (24,157) (400)
Net cash used in investing activities (32,837) (9,073)
Cash Flows From Financing Activities:
Proceeds from long-term debt 64,039 5,015
Payments of long-term debt (57,058) (18,885)
Net proceeds (payments) on notes payable 8,778 (635)
Net cash provided (used) by financing activities 15,759 (14,505)
Effect of exchange rate changes on cash and cash
equivalents 515 220
Cash and Cash Equivalents:
(Decrease) increase during the period (2,493) 3,745
Balance, beginning of period 11,153 19,392
Balance, end of period $ 8,660 $ 23,137
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest $ 9,526 $ 11,921
Income taxes $ 15,323 $ 3,592
See accompanying notes to consolidated financial statements.
</TABLE>
SEALED AIR CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1995 and 1994
(Unaudited)
(1) Principles of Consolidation
The consolidated financial statements include the accounts of
Sealed Air Corporation and its subsidiaries (collectively, the
"Company"). All significant intercompany transactions and
balances have been eliminated in consolidation. In management's
opinion, all adjustments (consisting only of normal recurring
accruals) necessary for a fair presentation of the results of
operations for the quarter ended June 30, 1995 have been made.
Where appropriate, financial statement amounts for prior periods
have been reclassified to conform with their 1995 presentation.
(2) Acquisition
On January 10, 1995, the Company acquired Trigon Industries
Limited ("Trigon"), a privately owned, New Zealand based
manufacturer of flexible packaging materials, for 882,930 newly
issued shares of common stock valued at $35.70 per share and
$25,496,000 in cash primarily provided by proceeds from
borrowings under the Company's credit facility with Bankers Trust
Company, as agent for a syndicate of banks, representing a
purchase price of approximately $57 million. The net assets of
Trigon acquired included property and equipment of approximately
$28,400,000, intangible assets of approximately $43,000,000
including trademarks, non-compete agreements, and the excess of
cost over the fair value of net assets acquired, $20,000,000 of
net indebtedness, and working capital of approximately
$12,000,000. Such acquisition is being accounted for as a
purchase.
The following table presents selected financial information
(unaudited) for the Company and Trigon on a pro forma basis as if
such acquisition had occurred on January 1, 1994. Such
information combines consolidated earnings statement data for the
Company for the year ended December 31, 1994 with consolidated
income statement data of Trigon for the twelve months ended
September 30, 1994. Such information gives effect to pro forma
adjustments necessary to account for the acquisition as a
purchase, principally for the amortization of the excess of cost
over fair value of net assets acquired and other intangible
assets, specific cost reductions which management expects to
realize from the combined operations, interest expense on
borrowings incurred to finance the acquisition, and additional
shares issued in the acquisition.
(Amount in thousands, except per common share data) 1994
Net sales $591,529
Earnings(1) 39,050
Earnings per common share(1) 1.88
(1) Before reflecting the after-tax charge of $5,576,000, or $0.28
per share, to the Company's earnings in 1994 arising from the
early redemption in July 1994 of the Company's 12-5/8% Senior
Subordinated Notes.
Pro forma results are not necessarily indicative of future
results or of the results that would have occurred had the
acquisition actually taken place on January 1, 1994.
SEALED AIR CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1995 and 1994
(Unaudited)
(3) Income Taxes
An explanation of the difference between the effective income
tax rate and statutory U.S. federal income tax rate expressed as
a percentage of earnings before income taxes for the six months
ended June 30, 1995 and 1994 follows:
1995 1994
Statutory U.S. federal income tax rate 35.0% 35.0%
Provision for foreign withholding taxes and
additional U.S. taxes on the accumulated
earnings of foreign subsidiaries 1.4 2.1
Tax effect of U.S. expenses not subject to
tax benefit 1.0 0.1
State income taxes, net of U.S. federal
income tax benefit 4.1 3.8
Taxes on foreign earnings at other than the
statutory U.S. federal income tax rate (1.0) (1.6)
Other miscellaneous items (1.0) 0.4
Effective income tax rate 39.5% 39.8%
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
The Company's net sales increased 44% in the second quarter and
46% in the first six months of 1995 compared with the second
quarter and first six months of 1994. Approximately one-third of
the increase in net sales reflects the net sales of products of
Trigon Industries Limited ("Trigon"), which the Company acquired
in early January 1995. Trigon is a New Zealand-based manufacturer
of flexible packaging materials primarily sold for food packaging
and durable mailers and bags as well as specialty adhesive
products. The increase in net sales also reflects higher average
selling prices for certain products, increased unit volume in the
Company's major classes of products, and the additional net sales
of other businesses acquired in 1994. Foreign currency
translation contributed modestly to the increase in net sales in
the second quarter and first six months of 1995.
Net sales from domestic operations increased 22% in the second
quarter and 24% in the first six months of 1995 compared to the
second quarter and first six months of 1994 primarily due to higher
average selling prices for certain products, higher unit volume in
the Company's major classes of products and the added net sales of
Trigon's U.S. operations.
Net sales from foreign operations increased 99% in the second
quarter and 102% in the first six months of 1995 compared to the
second quarter and first six months of 1994. Such increase was due
primarily to the added net sales of Trigon's operations outside of
the United States, higher average selling prices for certain
products, increased unit volume in the Company's major classes of
products, the added net sales of other foreign businesses acquired
during 1994 as discussed below, and the modest contribution of
foreign currency translation.
Net sales of engineered products, primarily Instapak(R) products
and thick polyethylene foams, increased 24% in the second quarter
and 25% in the first six months of 1995 primarily due to increased
unit volume of Instapak(R) products and thick polyethylene foams,
higher average selling prices for certain products and, to a
lesser extent, the added net sales of fabricated packaging
materials produced by a small French company that the Company
acquired in May 1994.
Net sales of surface protection and other cushioning products,
primarily air cellular products, other polyethylene foam products
and protective and durable mailers and bags, increased 47% in the
second quarter and 50% in the first six months of 1995 due
primarily to higher average selling prices for certain products,
the added net sales of Trigon's durable mailer and bag products,
increased unit volume of certain products, and the added net sales
of businesses acquired during 1994, including air cellular and
other protective packaging products produced by companies in
Norway and Italy, which the Company acquired in September 1994 and
late in December 1994, respectively.
Net sales of food packaging products increased 98% in the second
quarter and 96% in the first six months of 1995 primarily due to
the added net sales of Trigon's food packaging products, the added
net sales of an English manufacturer of absorbent food pads that
the Company acquired in July 1994, and increased unit volume of
the Company's Dri-Loc(R) products.
Net sales of other products increased to $6,435,000 from
$3,604,000 in the second quarter of 1994 and to $11,126,000 from
$5,777,000 in the first six months of 1994 primarily due to the
added net sales of Trigon's specialty adhesive products.
Cost of sales increased 51% in the second quarter and 52% in the
first six months of 1995 primarily reflecting the Company's higher
level of net sales and certain higher raw material costs.
Gross profit increased 32% in the second quarter and 34% in the
first six months of 1995 reflecting the Company's higher level of
net sales partially offset by the higher cost of sales discussed
above. As a percent of net sales, gross profit declined from
37.7% to 34.7% in the second quarter and from 37.8% to 34.9% in
the first six months primarily due to certain higher raw material
costs and changes in product mix, including the effect of the
added products of Trigon and the businesses that the Company
acquired in 1994.
Marketing, administrative and development expenses increased 39%
in the second quarter and 41% in the first six months of 1995,
primarily reflecting the Company's higher level of net sales, the
added marketing, administrative and development expenses of Trigon
and other acquired businesses, and costs associated with
integrating the Trigon acquisition and other recent acquisitions.
As a percentage of net sales, marketing, administrative and
development expenses declined modestly in the 1995 periods
compared with the 1994 periods.
Operating profit increased 25% in the second quarter and 26% in the
first six months of 1995 primarily reflecting the Company's higher
net sales and the effect of the changes in costs and expenses
discussed above.
Interest expense, which is the principal component of other
expense, net, decreased to $5,253,000 in the second quarter and
$10,290,000 in the first six months of 1995 compared to $6,229,000
and $12,425,000 in the second quarter and first six months of 1994.
Although the amount of the Company's outstanding indebtedness
increased in the 1995 periods for the reasons discussed below under
"Liquidity and Capital Resources", such borrowings bear lower
effective interest rates than those to which the Company was
subject in the 1994 periods.
The Company's effective income tax rate decreased to 39.5% in the
first six months of 1995 from 39.8% for the first six months of
1994 primarily reflecting lower tax provisions required.
Earnings for the second quarter of 1995 increased 46% to
$12,623,000, or $.60 per share, and earnings for the first six
months of 1995 increased 49% to $24,196,000, or $1.15 per share,
compared with earnings, before reflecting the effect in the second
quarter of 1994 of the early redemption of the Company's 12-5/8%
Senior Subordinated Notes (the "12-5/8% Notes"), of $8,669,000, or
$.43 per share, for the second quarter of 1994 and earnings of
$16,217,000, or $0.81 per share, for the first six months of 1994.
The Company incurred an extraordinary charge to earnings of
$5,576,000, or $0.28 per share, after taxes in the second quarter
of 1994 in connection with the early redemption of the 12-5/8%
Notes which reduced net earnings in the second quarter and first
six months of 1994.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Liquidity and Capital Resources
The Company's principal sources of liquidity are cash flows from
operations and amounts available under the Company's existing lines
of credit. The Company has met, and currently expects that it will
continue to meet, substantially all of its working capital and
capital expenditure requirements as well as its debt servicing
requirements with funds provided by operations and borrowings made
either under its available lines of credit or otherwise.
Cash flows from operating activities amounted to $14,070,000 in the
first six months of 1995 compared with $27,103,000 for the 1994
period primarily due to changes in operating assets and liabilities
which partially offset the effect of the Company's increased net
earnings and higher levels of depreciation and amortization arising
out of the Company's operations during the 1995 period. Among the
Company's operating assets and liabilities, accounts receivable and
inventories increased during the first six months of 1995 due
primarily to the Company's higher level of net sales, the
additional amounts attributable to Trigon's operations and the
timing of payments. Accounts payable, excluding the amount
attributable to Trigon's opening balance at the date of
acquisition, declined primarily due to the timing of payments.
Notes payable and current installments of long-term debt increased
to $48,352,000 at June 30, 1995 from $30,508,000 at December 31,
1994 primarily due to the addition of Trigon's operations to the
Company's financial statements and the timing of maturities.
Net cash used in investing activities amounted to $32,837,000 in
the first six months of 1995 compared with $9,073,000 for the first
six months of 1994. The increase in net cash used in investing
activities primarily reflects net cash used in connection with the
Trigon acquisition. Cash used for capital expenditures amounted to
$8,929,000 in the first six months of 1995 compared with $8,738,000
in the 1994 period.
Net cash provided by financing activities amounted to $15,759,000
in the first six months of 1995 compared with net cash used in
financing activities of $14,505,000 in the 1994 period. In the
1994 period, net repayments of indebtedness exceeded net
borrowings. Long-term debt, less current installments, increased
to $185,972,000 at June 30, 1995 from $155,293,000 at December 31,
1994, primarily due to additional net borrowings of $25,496,000
incurred in connection with the Trigon acquisition, the assumption
of approximately $20,000,000 of Trigon's indebtedness and
borrowings made primarily for working capital purposes, partially
offset by certain repayments made in the first six months of 1995.
At June 30, 1995, the Company had working capital of $37,685,000,
or 8% of total assets, compared with $15,767,000, or 5% of total
assets, at December 31, 1994. The increase in working capital was
due primarily to increases in accounts receivable and inventories
which were partially offset by increases in notes payable, current
installments of long-term debt and accounts payable, which were
primarily due to the effect of the Trigon acquisition, the
Company's higher level of operations and the timing of payments and
debt maturities as discussed above.
The Company's ratio of current assets to current liabilities
(current ratio) was 1.2 at June 30, 1995 and 1.1 at December 31,
1994. The Company's ratio of current assets less inventory to
current liabilities (quick ratio) was 0.9 at June 30, 1995 and 0.8
at December 31, 1994.
The Company's principal credit facility is an unsecured 1994 credit
agreement, as amended, with Bankers Trust Company, as agent for a
syndicate of banks (the "1994 Credit Facility"), which provides for
a $200 million revolving credit facility (the "1994 Revolving
Credit Facility") and a term loan (the "1994 Term Loan") in the
original aggregate principal amount of $100 million, both of which
terminate on June 30, 1999. At June 30, 1995, the Company's
available lines of credit (including the 1994 Revolving Credit
Facility) amounted to approximately $238,000,000 of which
approximately $112,000,000 were unused. Such lines of credit
permit the Company and certain of its subsidiaries to make
borrowings for working capital and other corporate purposes.
The 1994 Term Loan is repayable at the rate of $20,000,000
aggregate principal amount each year in equal quarterly
installments through June 30, 1999. There is no required annual
minimum paydown provision under the 1994 Revolving Credit Facility,
but the available commitment under that Facility will be reduced by
$25 million on each of June 30, 1997 and June 30, 1998. The
Company currently intends to make principal payments due under the
1994 Credit Facility primarily out of funds provided by operations.
The Company's obligations under the 1994 Credit Facility and
certain other loans and other lines of credit bear interest at
floating rates. The Company has entered into certain interest rate
cap agreements that are designed to limit the Company's exposure to
rising interest rates. The 1994 Credit Facility provides for
changes in interest rate margins based on certain financial
criteria and imposes certain limitations on the operations of the
Company that include restrictions on the incurrence of additional
indebtedness, the creation of liens, the making of investments and
capital expenditures, dispositions of property or assets, certain
transactions with affiliates, and the payment by the Company of
cash dividends to its stockholders as well as certain financial
covenants including requirements as to interest coverage and debt
leverage. The Company was in compliance with these requirements as
of June 30, 1995.
The Company expects that the payment of principal and interest on
its indebtedness will remain a significant use of the Company's
funds for the foreseeable future. The ability of the Company to
make payments of principal and interest on its indebtedness, and to
comply with the financial covenants (discussed above) to which it
is subject is dependent on the Company's future performance and
business growth, which are subject to financial, economic,
competitive and other factors affecting the Company, many of which
may be beyond the Company's control.
The Company's shareholders' equity increased to $73,316,000 at June
30, 1995 from $11,012,000 at December 31, 1994 primarily as a
result of the Company's net earnings for the first six months of
1995, the value of shares of common stock issued in connection with
the Trigon acquisition, and the value of shares of common stock
issued during the first six months of 1995 for non-cash
compensation. The Company's deficit in retained earnings arose
from the payment in 1989 of a special cash dividend to the
Company's shareholders, which deficit has been reduced by
accumulated earnings subsequent to the payment of such dividend.
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
On May 19, 1995, the Company held its annual meeting of
stockholders, at which the stockholders elected the whole Board of
Directors for the ensuing year, approved an amendment to the
Company's certificate of incorporation increasing the number of
authorized shares of the Company's Common Stock from 35,000,000 to
60,000,000, and ratified the appointment of KPMG Peat Marwick LLP
as the Company's independent public accountants for 1995. One of
the nominees for election to the Board of Directors listed in the
Company's proxy statement, Dr. Shirley A. Jackson, resigned from
the Board of Directors prior to the Annual Meeting as a consequence
of her appointment to public office.
A total of 17,642,737 shares of common stock were voted
in person or by proxy at the annual meeting, representing
approximately 84% of the shares entitled to vote at such meeting.
There were no broker non-votes. The votes cast on the matters
before the meeting were as follows:
Nominees for Election Number of Votes
to Board of Directors: In Favor Withheld
John K. Castle 17,551,266 91,471
Lawrence R. Codey 17,561,672 81,065
T. J. Dermot Dunphy 17,603,982 38,755
Charles F. Farrell, Jr. 17,400,193 242,544
David Freeman 17,548,989 93,748
Alan H. Miller 17,548,257 94,480
Robert L. San Soucie 17,540,256 102,481
Number of Votes
Approval of proposed For 16,436,632
amendment to certificate Against 1,158,176
of incorporation Abstentions 47,929
Ratification of KPMG For 17,410,054
Peat Marwick LLP as Against 210,355
independent auditors Abstentions 22,328
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit Number Description
3.1 Amendment to Certificate of Incorporation of the Company
effective May 19, 1995.
3.2 Unofficial Composite Certificate of Incorporation of the
Company as currently in effect.
27 Financial Data Schedule.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during
the quarter ended June 30, 1995.
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SEALED AIR CORPORATION
Date: August 10, 1995 By s/Warren H. McCandless
Warren H. McCandless
Senior Vice President-Finance
(Authorized Executive Officer
and Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED
STATEMENT OF EARNINGS FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND THE
CONSOLIDATED BALANCE SHEET AT JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000088204
<NAME> SEALED AIR CORPORATION
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 8,660,000
<SECURITIES> 0
<RECEIVABLES> 125,907,000
<ALLOWANCES> 4,922,000
<INVENTORY> 53,768,000
<CURRENT-ASSETS> 199,015,000
<PP&E> 276,558,000
<DEPRECIATION> 108,201,000
<TOTAL-ASSETS> 450,649,000
<CURRENT-LIABILITIES> 161,330,000
<BONDS> 0
<COMMON> 212,000
0
0
<OTHER-SE> 73,104,000
<TOTAL-LIABILITY-AND-EQUITY> 450,649,000
<SALES> 355,441,000
<TOTAL-REVENUES> 355,441,000
<CGS> 231,480,000
<TOTAL-COSTS> 231,480,000
<OTHER-EXPENSES> 72,181,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,290,000
<INCOME-PRETAX> 39,993,000
<INCOME-TAX> 15,797,000
<INCOME-CONTINUING> 24,196,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,196,000
<EPS-PRIMARY> 1.15
<EPS-DILUTED> 0
</TABLE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
* * * * *
SEALED AIR CORPORATION, a corporation organized and
existing under and by virtue of the General Corporation Law of
the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY
THAT:
FIRST: At a meeting of the Board of Directors of the
Corporation resolutions were duly adopted setting forth a
proposed amendment to the Certificate of Incorporation of the
Corporation, declaring such amendment to be advisable and
directing that such amendment be considered at the next annual
meeting of the stockholders of the Corporation. The resolution
setting forth such proposed amendment is as follows:
RESOLVED that this Board of Directors declares
advisable the amendment of the first sentence of
Article Fourth of the Certificate of Incorporation of
the Corporation so that, as amended, said sentence
shall read in its entirety as follows:
"FOURTH: The total number of shares of stock
which the Corporation shall have authority to
issue is sixty-one million (61,000,000), sixty
million (60,000,000) of which shall be common
stock with a par value of One Cent ($.01) per
share, amounting in the aggregate to Six Hundred
Thousand Dollars ($600,000), and one million
(1,000,000) of which shall be preferred stock
without par value."
SECOND: Thereafter, pursuant to resolution of its
Board of Directors, the annual meeting of the stockholders of the
Corporation was duly called and held, upon notice in accordance
with Section 222 of the General Corporation Law of the State of
Delaware, at which meeting the necessary number of shares as
required by statute were voted in favor of such amendment.
THIRD: Such amendment was duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be signed by T. J. Dermot Dunphy, its President,
and attested by Robert M. Grace, Jr., its Secretary, this 19th
day of May, 1995.
SEALED AIR CORPORATION
By s/T. J. Dermot Dunphy
T. J. Dermot Dunphy
President
[SEAL]
ATTEST:
s/Robert M. Grace, Jr.
Robert M. Grace, Jr.
Secretary
UNOFFICIAL COMPOSITE
CERTIFICATE OF INCORPORATION
OF
SEALED AIR CORPORATION
(as amended through May 19, 1995)
FIRST: The name of the corporation is Sealed Air
Corporation.
SECOND: The registered office of the corporation in
the State of Delaware is to be located at Corporation Trust
Center, 1209 Orange Street, Wilmington, New Castle County,
Delaware 19801. Its registered agent at such address is The
Corporation Trust Company.
THIRD: The purpose of the corporation is to engage in
any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is sixty-one million
(61,000,000), sixty million (60,000,000) of which shall be common
stock with a par value of One Cent ($.01) per share, amounting in
the aggregate to Six Hundred Thousand Dollars ($600,000), and one
million (1,000,000) of which shall be preferred stock without par
value.
FIFTH: The name of the incorporator is Edward Beuchert
and his mailing address is Room 1410, 25 Broad Street, New York,
New York 10004.
SIXTH: The corporation is to have perpetual
existence.
SEVENTH: The private property of the stockholders
shall not be subject to the payment of the corporate debts to any
extent whatever except as otherwise provided by law.
EIGHTH: In furtherance, and not in limitation of the
powers conferred by statute, the board of directors is expressly
authorized:
A. To make, alter or repeal the by-laws of the
corporation;
B. To authorize and cause to be executed
mortgages and liens, with or without limit as to
amount, upon the real and personal property of the
corporation;
C. To authorize the guaranty by the corporation
of securities, evidences of indebtedness and obligation
of other persons, corporations and business entities;
D. By resolution adopted by a majority of the
whole board, to designate one or more committees, each
committee to consist of two or more of the directors of
the corporation, which, to the extent provided in the
resolution, shall have and may exercise the powers of
the board of directors in the management of the
business and affairs of the corporation and may
authorize the seal of the corporation to be affixed to
all papers which may require it. Such committee or
committees shall have such name or names as may be
determined from time to time by resolution adopted by
the board of directors. The board may designate one or
more directors as alternate members of any committee,
who may replace any absent or disqualified member at
any meeting of the committee. The members of any such
committee present at any meeting and not disqualified
from voting may, whether or not they constitute a
quorum, unanimously appoint another member of the board
of directors to act at the meeting in the place of any
absent or disqualified member.
All corporate powers of the corporation shall be exercised by the
board of directors except as otherwise provided herein or by law.
NINTH: Any property of the corporation less than all
of its assets including goodwill and its corporate franchise,
deemed by the board of directors to be not essential to the
conduct of the business of the corporation, may be sold, leased,
exchanged or otherwise disposed of by authority of the board of
directors. All of the property and assets of the corporation
including its goodwill and its corporate franchises, may be sold,
leased or exchanged upon such terms and conditions and for such
consideration (which may be in whole or in part shares of stock
and/or other securities of any other corporation or corporations)
as the board of directors shall deem expedient and for the best
interests of the corporation, when and as authorized by the
affirmative vote of the holders of a majority of the stock issued
and outstanding having voting power given at a stockholders'
meeting duly called for that purpose upon at least 20 days'
notice containing notice of the proposed sale, lease or exchange,
or when authorized by the written consent of the holders of a
majority of the voting stock issued and outstanding.
TENTH: A director or officer of the corporation shall
not be disqualified by his office from dealing or contracting
with the corporation either as a vendor, purchaser or otherwise,
nor shall any transaction or contract of the corporation be void
or voidable by reason of the fact that any director or officer or
any firm of which any director or officer is a member or any
corporation of which any director or officer is a stockholder,
officer or director, is in any way interested in such transaction
or contract, provided that such transaction or contract is or
shall be authorized, ratified or approved either (1) by a vote of
a majority of a quorum of the board of directors or of a
committee thereof, without counting in such majority any director
so interested (although any director so interested may be
included in such quorum), or (2) by a majority of a quorum of the
stockholders entitled to vote at any meeting. No director or
officer shall be liable to account to the corporation for any
profits realized from any such transaction or contract
authorized, ratified or approved as aforesaid by reason of the
fact that he, or any firm of which he is a member or any
corporation of which he is a stockholder, officer or director,
was interested in such transaction or contract. Nothing herein
contained shall create liability in the events above described or
prevent the authorization, ratification or approval of such
contracts in any other manner permitted by law.
ELEVENTH: No person shall be liable to the corporation
for any loss or damage suffered by it on account of any action
taken or omitted to be taken by him as a director or officer of
the corporation in good faith, if such person (i) exercised or
used the same degree of diligence, care and skill as an
ordinarily prudent man would have exercised or used under the
circumstances in the conduct of his own affairs, or (ii) took, or
omitted to take, such action in reliance upon advice of counsel
for the corporation, or upon statements made or information
furnished by officers or employees of the corporation which he
had reasonable grounds to believe to be true, or upon a financial
statement of the corporation prepared by an officer or employee
of the corporation in charge of its accounts or certified by a
public accountant or firm of public accountants.
TWELFTH: Any contract, transaction or act of the
corporation or of the board of directors which shall be approved
or ratified by a majority of a quorum of the stockholders
entitled to vote at any meeting shall be as valid and binding as
though approved or ratified by every stockholder of the
corporation; but any failure of the stockholders to approve or
ratify such contract, transaction or act, when and if submitted,
shall not be deemed in any way to invalidate the same or to
deprive the corporation, its directors or officers of their right
to proceed with such contract, transaction or act.
THIRTEENTH: Every person who was or is a party or is
threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by
reason of the fact that he or a person of whom he is the legal
representative is or was a director or officer of the corporation
or is or was serving at the request of the corporation as a
director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other
enterprise, shall be indemnified and held harmless by the
corporation to the fullest extent legally permissible under the
General Corporation Law of the State of Delaware against all
expenses, liability and loss (including attorney's fees,
judgments, fines and amounts paid or to be paid in settlement)
reasonably incurred or suffered by him in connection therewith.
Such right of indemnification shall be a contract right which may
be enforced in any manner desired by such person. Such right of
indemnification shall not be exclusive of any other right which
such directors, officers or representatives may have or hereafter
acquire and, without limiting the generality of such statement,
they shall be entitled to their respective rights of
indemnification under any by-law, agreement, vote of
stockholders, provision of law or otherwise, as well as their
rights under this Article.
The Board of Directors may adopt by-laws from time to
time with respect to indemnification to provide at all times the
fullest indemnification permitted by the General Corporation Law
of the State of Delaware and may cause the corporation to
purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation, as a
director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other
enterprise against any liability asserted against such person and
incurred in any such capacity or arising out of such status,
whether or not the corporation would have the power to indemnify
such person against such liability.
FOURTEENTH: Whenever a compromise or arrangement is
proposed between this corporation and its creditors or any class
of them and/or between this corporation and its stockholders or
any class of them, any court of equitable jurisdiction within the
State of Delaware may, on the application in a summary way of
this corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for this
corporation under the provisions of Section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or
of any receiver or receivers appointed for this corporation under
the provisions of Section 279 of Title 8 of the Delaware Code,
order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as
the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in
value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the
case may be, agree to any compromise or arrangement and to any
reorganization of this corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and
the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders
or class of stockholders, of this corporation, as the case may
be, and also on this corporation.
FIFTEENTH: Meetings of stockholders and directors may
be held within or without the State of Delaware, as the by-laws
may provide. The books of account of the corporation may be kept
(subject to any provision contained in the statutes) outside the
State of Delaware at such place or places as may be designated
from time to time by the board of directors or in the by-laws of
the corporation. Elections of directors need not be by written
ballot unless the by-laws of the corporation shall so provide.
SIXTEENTH: Whenever the vote of stockholders at a
meeting thereof is required or permitted to be taken for or in
connection with any corporate action, the meeting and vote of
stockholders may be dispensed with if a written consent to such
corporate action is signed by the holders of 51% of the stock who
would have been entitled to vote upon such corporate action if a
meeting were held; provided that in no case shall a written
consent be by the holders of stock having less than the minimum
percentage of the vote required herein or by statute for the
proposed corporate action, and provided that prompt notice must
be given to all stockholders of the taking of corporate action
without a meeting and by less than unanimous written consent.
SEVENTEENTH: The corporation reserves the right to
amend, alter, change or repeal any provision contained in this
certificate of incorporation, in the manner now or hereafter
prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
EIGHTEENTH: A director of the corporation shall not be
liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except to the
extent such exemption from liability or the limitation thereof is
not permitted under the Delaware General Corporation Law as the
same exists or may hereafter be amended.
Any repeal or modification of the foregoing paragraph
of this Article EIGHTEENTH shall not adversely affect any right
or protection of a director of the corporation existing hereunder
with respect to any act or omission occurring prior to or at the
time of such repeal or modification.
IN WITNESS WHEREOF the undersigned, being the
incorporator hereinbefore named, for the purpose of forming a
corporation pursuant to the General Corporation Law of the State
of Delaware, does make this certificate February 13, 1969.
