Sealed Air Corp., which recently named a new CEO, is looking to close two plants this year, but is not publicly revealing the sites just yet.
On a conference call to discuss quarterly earnings, CEO Dustin Semach told stock analysts about the move for the food and protective packaging maker that uses both plastic and paper fiber.
"As a part of our ongoing cost takeout efforts, we will close two plants by the end of the year to further optimize our footprint," he said.
When asked for additional detail about the planned closures during the call, the CEO characterized the move as consolidation of manufacturing assets as opposed to reduction "from an individual product line."
"It's all about improving your cost position relative to those particular products," he said, and maximizing productivity within the company's production facilities.
"And in terms of where we're at today, there's always potential for more network optimization, and we're very thoughtful about how we evaluate that," adding they are "very big decisions that we spend a lot of time really thinking through."
Sealed Air is not looking at plant closures in terms of simply reducing costs but instead viewing them as part of a bigger picture for the company. "It's got to create long-term value," Semach said.
The company also does not want to exclude itself from a specific geographic region that could provide long-term growth even if the company is having short-term challenges.
News of the plant closings comes as Sealed Air has spent recent years trying to improve the financial condition of the company. This includes a series of changes in the CEO seat.
Semach, who at one point was interim co-CEO before Patrick Kivits was appointed to that position last year, returned as the company's sole CEO earlier in February. Kivits lasted less than a year at Sealed Air.
Charlotte, N.C.-based Sealed Air had full-year adjusted net earnings of $270 million, or $1.84 per diluted share, on revenue of $5.39 billion. That compares with a profit of $339 million, or $2.34 per diluted share, on revenue of $5.49 billion in 2023.
For the fourth quarter, the company did not have a profit or loss, with zero diluted earnings per share, on sales of $1.373 billion. That compares with a profit of $125 million, or 86 cents per diluted share, on sales of $1.378 billion for the fourth quarter of 2023.