Amcor plc Form 10-Q Summary
Reporting period: Quarter ended March 31, 2019. Although the request identifies “2018 Q3,” the filing is a Form 10-Q for the March 31, 2019 quarter. The company was incorporated on July 31, 2018 and had not commenced operating activities.
Business Context and Reporting Period
Amcor plc was formed as a Jersey holding company solely to facilitate the proposed combination of Amcor Limited and Bemis Company, Inc. It had no products, customers, manufacturing operations, or sales during the period. The proposed transactions were expected to close in May 2019, subject to customary closing conditions.
Financial Results and Position
| Metric | Three months ended March 31, 2019 | Since incorporation, July 31, 2018 to March 31, 2019 |
|---|---|---|
| Net sales | $0 | $0 |
| Operating expenses | $34 | $34 |
| Net loss | $(34) | $(34) |
| Net loss per share | $(0.0026) | $(0.0026) |
| Net cash used in operating activities | Not separately provided for the quarter | $(34) |
Balance sheet at March 31, 2019: Cash and cash equivalents were $130; short-term debt was $34, representing bank overdrafts related to incorporation fees; and shareholders’ equity was $96. The filing does not provide meaningful operating or gross margins because the company had no revenue or operating business.
Financing: Financing cash inflows totaled $164 since incorporation, consisting of $130 from share subscriptions and $34 from short-term debt. The company had no secured credit facilities.
Material Changes Versus the Prior Comparable Period
A meaningful operating comparison is not available because Amcor plc was newly formed and had no operating activity in either the quarterly period or the period since incorporation. The $34 loss consisted of general and administrative expenses associated with incorporation.
During the period, the company’s authorized and issued share capital was redenominated and subdivided, resulting in 13,001 issued ordinary shares as presented retroactively in the financial statements.
Outlook, Transactions, Risks, and Unusual Items
- The Amcor Limited–Bemis transaction was expected to close in May 2019. Following completion, former Amcor Limited shareholders were expected to own approximately 71% of Amcor and former Bemis shareholders approximately 29%.
- The transaction agreement included reciprocal $130 million termination fees under specified circumstances. The agreement could be terminated if the transaction was not completed by August 6, 2019, subject in certain circumstances to an extension to February 6, 2020 for regulatory approvals.
- Expected post-transaction actions included Amcor’s NYSE listing under the symbol AMCR, the delisting of Amcor Limited from the ASX, and the delisting and deregistration of Bemis.
- Key disclosed risks include failure or delay in completing the merger, realization of transaction benefits, global economic and political conditions, raw-material costs, foreign exchange, interest rates, credit ratings, litigation and regulatory matters, cybersecurity, integration of acquisitions, and pension obligations.
- Management stated that there were no material changes to the risk factors in the March 25, 2019 Form S-4. No subsequent events were reported.
- Management concluded that disclosure controls and procedures were effective and that no material change occurred in internal control over financial reporting during the quarter.
Investor Verification Items
- Verify the actual closing date and final terms of the Amcor Limited–Bemis transaction.
- Confirm whether the stated $130 million termination-fee provisions were triggered or amended.
- Reconcile the 13,001 issued shares and the retroactive capital-structure adjustments with the post-transaction share count.
- Confirm the source and intended use of the $130 cash balance and the settlement of the $34 short-term bank overdraft.
- Review the Form S-4 risk factors and subsequent filings for changes in regulatory approvals, transaction timing, integration plans, and financing arrangements.