Reynolds Consumer Products Inc 10-Q for FY2024 Q3

Reynolds Consumer Products Inc. (REYN)

10-Q 2024-10-30 For: 2024-09-30

Added on April 07, 2026

About this 10-Q

Reynolds Consumer Products Inc filed this 10-Q on October 30, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).

Headline figures

Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $910M; down 2.7% from $935M a year earlier
Net income: $86M; up 10.3% from net income of $78M a year earlier
Diluted EPS: $0.41; up 10.8% from $0.37 a year earlier

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Delaware			45-3464426
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification Number)


		Page
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023	2
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023	3
	Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II.	OTHER INFORMATION	29
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
	Signatures	32


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Net revenues	$	892	$	914	$	2,618	$	2,689
Related party net revenues	18		21		57		61
Total net revenues	910		935		2,675		2,750
Cost of sales	(671)		(686)		(1,977)		(2,117)
Gross profit	239		249		698		633
Selling, general and administrative expenses	(101)		(115)		(329)		(327)
Other income (expense), net	—		—		—		—
Income from operations	138		134		369		306
Interest expense, net	(25)		(31)		(76)		(91)
Income before income taxes	113		103		293		215
Income tax expense	(27)		(25)		(62)		(54)
Net income	$	86	$	78	$	231	$	161

Earnings per share:
Basic	$	0.41	$	0.37	$	1.10	$	0.77
Diluted	$	0.41	$	0.37	$	1.10	$	0.77

Weighted average shares outstanding:
Basic	210.1		210.0		210.1		210.0
Effect of dilutive securities	0.2		—		0.1		—
Diluted	210.3		210.0		210.2		210.0


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Net income	$	86	$	78	$	231	$	161
Other comprehensive (loss) income, net of income taxes:
Currency translation adjustment	1		—		—		—
Employee benefit plans	(1)		(1)		(4)		(3)
Derivative instruments	(17)		1		(12)		3
Other comprehensive loss, net of income taxes	(17)		—		(16)		—
Comprehensive income	$	69	$	78	$	215	$	161


	(Unaudited) As of September 30, 2024		As of December 31, 2023
Assets
Cash and cash equivalents	$	96	$	115
Accounts receivable (net of allowance for doubtful accounts of $1 and $1)	339		347
Other receivables	3		7
Related party receivables	6		7
Inventories	624		524
Other current assets	37		41
Total current assets	1,105		1,041
Property, plant and equipment (net of accumulated depreciation of $946 and $897)	734		732
Operating lease right-of-use assets, net	74		56
Goodwill	1,895		1,895
Intangible assets, net	980		1,001
Other assets	55		55
Total assets	$	4,843	$	4,780
Liabilities
Accounts payable	$	335	$	219
Related party payables	28		34
Current operating lease liabilities	19		16
Income taxes payable	1		22
Accrued and other current liabilities	160		187
Total current liabilities	543		478
Long-term debt	1,735		1,832
Long-term operating lease liabilities	59		42
Deferred income taxes	344		357
Long-term postretirement benefit obligation	16		16
Other liabilities	81		72
Total liabilities	$	2,778	$	2,797
Commitments and contingencies (Note 7)
Stockholders’ equity
Common stock, $0.001 par value; 2,000 shares authorized; 210.1 shares issued and outstanding	—		—
Additional paid-in capital	1,409		1,396
Accumulated other comprehensive income	34		50
Retained earnings	622		537
Total stockholders’ equity	2,065		1,983
Total liabilities and stockholders’ equity	$	4,843	$	4,780


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Equity
Balance as of December 31, 2022	$	—	$	1,385	$	431	$	52	$	1,868
Net income	—		—		17		—		17
Other comprehensive loss, net of income taxes	—		—		—		(13)		(13)
Dividends ($0.23 per share declared and paid)	—		—		(48)		—		(48)
Other	—		1		—		—		1
Balance as of March 31, 2023	$	—	$	1,386	$	400	$	39	$	1,825
Net income	—		—		66		—		66
Other comprehensive income, net of income taxes	—		—		—		13		13
Dividends ($0.23 per share declared and paid)	—		—		(48)		—		(48)
Other	—		3		—		—		3
Balance as of June 30, 2023	$	—	$	1,389	$	418	$	52	$	1,859
Net income	—		—		78		—		78
Dividends ($0.23 per share declared and paid)	—		—		(48)		—		(48)
Other	—		3		—		—		3
Balance as of September 30, 2023	$	—	$	1,392	$	448	$	52	$	1,892

Balance as of December 31, 2023	$	—	$	1,396	$	537	$	50	$	1,983
Net income	—		—		49		—		49
Other comprehensive income, net of income taxes	—		—		—		3		3
Dividends ($0.23 per share declared and paid)	—		—		(48)		—		(48)
Other	—		3		(1)		—		2
Balance as of March 31, 2024	$	—	$	1,399	$	537	$	53	$	1,989
Net income	—		—		97		—		97
Other comprehensive loss, net of income taxes	—		—		—		(2)		(2)
Dividends ($0.23 per share declared and paid)	—		—		(48)		—		(48)
Other	—		5		(1)		—		4
Balance as of June 30, 2024	$	—	$	1,404	$	585	$	51	$	2,040
Net income	—		—		86		—		86
Other comprehensive loss, net of income taxes	—		—		—		(17)		(17)
Dividends ($0.23 per share declared and paid)	—		—		(48)		—		(48)
Other	—		5		(1)		—		4
Balance as of September 30, 2024	$	—	$	1,409	$	622	$	34	$	2,065


	Nine Months Ended September 30,
	2024		2023
Cash provided by operating activities
Net income	$	231	$	161
Adjustments to reconcile net income to operating cash flows:
Depreciation and amortization	96		92
Deferred income taxes	(10)		(3)
Stock compensation expense	14		10
Change in assets and liabilities:
Accounts receivable, net	8		3
Other receivables	4		11
Related party receivables	1		(2)
Inventories	(100)		146
Accounts payable	119		(5)
Related party payables	(6)		(16)
Income taxes payable / receivable	(20)		(11)
Accrued and other current liabilities	(26)		39
Other assets and liabilities	(4)		(2)
Net cash provided by operating activities	307		423
Cash used in investing activities
Acquisition of property, plant and equipment	(79)		(77)
Net cash used in investing activities	(79)		(77)
Cash used in financing activities
Repayment of long-term debt	(100)		(113)
Dividends paid	(144)		(144)
Other financing activities	(3)		(3)
Net cash used in financing activities	(247)		(260)
Net (decrease) increase in cash and cash equivalents	(19)		86
Cash and cash equivalents at beginning of period	115		38
Cash and cash equivalents at end of period	$	96	$	124

Cash paid:
Interest - long-term debt, net of interest rate swaps	76		86
Income taxes	91		65


	September 30, 2024		December 31, 2023
	(in millions)
Raw materials	$	139	$	153
Work in progress	53		60
Finished goods	375		260
Spare parts	57		51
Inventories	$	624	$	524


(In millions)	Notional Amount		Annual Rate	Weighted Average Annual Effective Rate		Fair Value - Other Current Assets		Fair Value - Other Assets
As of September 30, 2024	$	1,150	2.15% to 5.15%	4.38	%	$	14	$	—
As of December 31, 2023	$	1,150	2.15% to 5.15%	4.38	%	$	23	$	7


(In millions)	Currency Translation Adjustments		Employee Benefit Plans		Derivative Instruments		Accumulated Other Comprehensive Income
Balance as of December 31, 2022	$	(7)	$	23	$	36	$	52
Loss arising during the period	—		—		(10)		(10)
Reclassification to earnings	—		(1)		(6)		(7)
Effect of deferred taxes	—		—		4		4
Balance as of March 31, 2023	$	(7)	$	22	$	24	$	39
Gain arising during the period	—		—		25		25
Reclassification to earnings	—		(1)		(7)		(8)
Effect of deferred taxes	—		—		(4)		(4)
Balance as of June 30, 2023	$	(7)	$	21	$	38	$	52
Gain arising during the period	—		—		9		9
Reclassification to earnings	—		(1)		(8)		(9)
Effect of deferred taxes	—		—		—		—
Balance as of September 30, 2023	$	(7)	$	20	$	39	$	52

Balance as of December 31, 2023	$	(7)	$	34	$	23	$	50
Gain (loss) arising during the period	(1)		—		15		14
Reclassification to earnings	—		(1)		(8)		(9)
Effect of deferred taxes	—		—		(2)		(2)
Balance as of March 31, 2024	(8)		33		28		53
Gain arising during the period	—		—		8		8
Reclassification to earnings	—		(2)		(8)		(10)
Effect of deferred taxes	—		—		—		—
Balance as of June 30, 2024	(8)		31		28		51
Gain (loss) arising during the period	1		—		(13)		(12)
Reclassification to earnings	—		(1)		(9)		(10)
Effect of deferred taxes	—		—		5		5
Balance as of September 30, 2024	$	(7)	$	30	$	11	$	34


	Reynolds Cooking & Baking		Hefty Waste & Storage		Hefty Tableware		Presto Products		Segment Total		Unallocated(1)		Total
Three Months Ended September 30, 2024	(in millions)
Net revenues	$	305	$	245	$	217	$	146	$	913	$	(3)	$	910
Intersegment revenues	—		3		—		3		6		(6)		—
Total segment net revenues	$	305	$	248	$	217	$	149	$	919	$	(9)	$	910
Adjusted EBITDA	51		71		26		33		181
Depreciation and amortization	8		6		6		5		25		8		33

	Reynolds Cooking & Baking		Hefty Waste & Storage		Hefty Tableware		Presto Products		Segment Total		Unallocated(1)		Total
Three Months Ended September 30, 2023	(in millions)
Net revenues	$	312	$	241	$	233	$	147	$	933	$	2	$	935
Intersegment revenues	—		3		—		5		8		(8)		—
Total segment net revenues	$	312	$	244	$	233	$	152	$	941	$	(6)	$	935
Adjusted EBITDA	51		71		41		31		194
Depreciation and amortization	8		5		4		5		22		9		31


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(in millions)				(in millions)
Segment Adjusted EBITDA	$	181	$	194	$	540	$	477
Corporate / unallocated expenses	(10)		(29)		(75)		(79)
	171		165		465		398
Adjustments to reconcile to GAAP income before income taxes
Depreciation and amortization	(33)		(31)		(96)		(92)
Interest expense, net	(25)		(31)		(76)		(91)
Consolidated GAAP income before income taxes	$	113	$	103	$	293	$	215


(in millions)	Reynolds Cooking & Baking		Hefty Waste & Storage		Hefty Tableware		Presto Products		Unallocated⁽1⁾		Total Reynolds Consumer Products
Net revenues for the three months ended September 30:
2024	$	305	$	248	$	217	$	149	$	(9)	$	910
2023	312		244		233		152		(6)		935
Adjusted EBITDA⁽²⁾ for the three months ended September 30:
2024	$	51	$	71	$	26	$	33	$	(10)	$	171
2023	51		71		41		31		(29)		165


REYNOLDS CONSUMER PRODUCTS INC.
(Registrant)

By:			/s/ Chris Mayrhofer
			Chris Mayrhofer
			Senior Vice President and Controller (Principal Accounting Officer)
			October 30, 2024


	For the Three Months Ended September 30,
(in millions, except for %)	2024		% of Revenue		2023		% of Revenue		Change		% Change
Net revenues	$	892	98	%	$	914	98	%	$	(22)	(2)	%
Related party net revenues	18		2	%	21		2	%	(3)		(14)	%
Total net revenues	910		100	%	935		100	%	(25)		(3)	%
Cost of sales	(671)		(74)	%	(686)		(73)	%	15		2	%
Gross profit	239		26	%	249		27	%	(10)		(4)	%
Selling, general and administrative expenses	(101)		(11)	%	(115)		(12)	%	14		12	%
Other expense, net	—		—	%	—		—	%	—		NM
Income from operations	138		15	%	134		14	%	4		3	%
Interest expense, net	(25)		(3)	%	(31)		(3)	%	6		19	%
Income before income taxes	113		12	%	103		11	%	10		10	%
Income tax expense	(27)		(3)	%	(25)		(3)	%	(2)		(8)	%
Net income	$	86	9	%	$	78	8	%	$	8	10	%
Adjusted EBITDA ⁽¹⁾	$	171	19	%	$	165	18	%	$	6	4	%


	Price		Volume/Mix				Total
			Retail		Non-Retail
Reynolds Cooking & Baking	—	%	(3)	%	1	%	(2)	%
Hefty Waste & Storage	—	%	2	%	—	%	2	%
Hefty Tableware	(3)	%	(4)	%	—	%	(7)	%
Presto Products	—	%	(2)	%	—	%	(2)	%
Total RCP	(1)	%	(2)	%	—	%	(3)	%


	For the Nine Months Ended September 30,
(in millions, except for %)	2024		% of Revenue		2023		% of Revenue		Change		% Change
Net revenues	$	2,618	98	%	$	2,689	98	%	$	(71)	(3)	%
Related party net revenues	57		2	%	61		2	%	(4)		(7)	%
Total net revenues	2,675		100	%	2,750		100	%	(75)		(3)	%
Cost of sales	(1,977)		(74)	%	(2,117)		(77)	%	140		7	%
Gross profit	698		26	%	633		23	%	65		10	%
Selling, general and administrative expenses	(329)		(12)	%	(327)		(12)	%	(2)		(1)	%
Other expense, net	—		—	%	—		—	%	—		NM	%
Income from operations	369		14	%	306		11	%	63		21	%
Interest expense, net	(76)		(3)	%	(91)		(3)	%	15		16	%
Income before income taxes	293		11	%	215		8	%	78		36	%
Income tax expense	(62)		(2)	%	(54)		(2)	%	(8)		(15)	%
Net income	$	231	9	%	$	161	6	%	$	70	43	%
Adjusted EBITDA ⁽¹⁾	$	465	17	%	$	398	14	%	$	67	17	%


Exhibit Number						Description

3.1						Amended and Restated Certificate of Incorporation, conformed version that includes all amendments through April 25, 2024 (incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 7, 2024)
3.2						Amended and Restated By-Laws (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 4, 2020)
10.1						Amendment No. 3, dated as of October 17, 2024, to the Credit Agreement, dated as of February 4, 2020, between Reynolds Consumer Products LLC, as borrower, Reynolds Consumer Products Inc., as parent, and certain lenders party thereto (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K filed with the SEC on October 17, 2024)
31.1*						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS						Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


Date: October 30, 2024	By:	/s/ Lance Mitchell
		Lance Mitchell
		President and Chief Executive Officer


Date: October 30, 2024	By:	/s/ Scott Huckins
		Scott Huckins
		Chief Financial Officer