Packaging Corporation of America (NYSE: PKG) today reported
record first quarter net income of $104 million, or $1.09 per
share. Earnings included charges for special items related to
facilities closure costs of $1.9 million. Excluding special items,
first quarter 2016 net income was $106 million, or a record $1.11
per share, compared to first quarter 2015 net income of $100
million, or $1.01 per share. First quarter net sales were $1.4
billion in both 2015 and 2016.
Excluding special items, the $.10 per share increase in first
quarter 2016 earnings, compared to the first quarter of 2015, was
driven primarily by higher containerboard and corrugated products
volumes ($.03), lower annual mill outage costs ($.08), lower costs
for fiber ($.06), energy ($.06), and freight ($.04) as well as a
lower share count ($.04) resulting from share repurchases. These
items were partially offset by lower white paper prices and mix
($.04), lower containerboard export prices ($.03), lower domestic
containerboard and corrugated products prices and mix ($.03), lower
pulp volume ($.02), higher labor costs ($.01), higher depreciation
($.03), higher interest expense ($.02), and a state incentive
received in 2015 related to investments at our DeRidder mill
($.02).
Packaging segment EBITDA, excluding special items, in the first
quarter of 2016 was $235 million with sales of $1.1 billion
compared to first quarter 2015 EBITDA of $222 million with sales of
$1.1 billion. Corrugated products shipments were up 3.4% in total
and up 1.7% per workday compared to the first quarter of 2015.
Containerboard production was 897,000 tons which was a 15,000 ton
increase compared to the first quarter of 2015. Containerboard
inventories ended the quarter flat with the first quarter of 2015
and year-end 2015 levels.
Paper segment EBITDA, excluding special items, in the first
quarter of 2016 was a record $51 million with sales of $281 million
compared to first quarter 2015 EBITDA of $49 million with sales of
$297 million. White paper sales volume was flat with the first
quarter of 2015 while price and mix were lower. Sales volume and
mix were favorable compared to the fourth quarter of 2015 while
prices were slightly lower.
Commenting on reported results, Mark W. Kowlzan, Chairman and
CEO, said, “Overall, our operations performed exceptionally well
despite annual maintenance outages at three of our containerboard
mills. Our corrugated products demand was strong, and
containerboard inventories ended the quarter flat with last
quarter. Manufacturing and freight costs across our packaging and
paper mills as well as our box plants were outstanding, and white
paper volume and mix showed positive trends from the fourth quarter
and achieved an EBITDA margin of 18.2%. Our white paper customers
were notified of price increases for printing and converting grades
and cutsize office papers with effective dates beginning in the
second quarter. Finally, we repurchased $100 million of our stock
which completed our $150 million share repurchase program that was
authorized in July of 2015. The Board of Directors authorized a new
$200 million share repurchase program that we announced in
February.”
“Looking ahead to the second quarter,” Mr. Kowlzan added, “we
expect seasonally higher containerboard and corrugated products
shipments. White paper prices should begin to improve late in the
second quarter as a result of our paper price increases, but the
vast majority of any price increase will not be realized until the
third quarter. We also expect some seasonal improvement in our
energy costs as we move into warmer weather and our share count
will be lower due to our repurchases in the first quarter. Prices
for containerboard and corrugated products are expected to be
slightly lower as a result of the published price decreases. Our
annual maintenance outage costs will be about $.08 per share higher
as we have four scheduled mill outages compared to three in the
first quarter. Everything considered, we currently expect second
quarter earnings of $1.18 per share.”
PCA is the fourth largest producer of containerboard and
corrugated packaging products in the United States and the third
largest producer of uncoated freesheet paper in North America. PCA
operates eight mills and 93 corrugated products plants and related
facilities.
Conference Call
Information:
WHAT:
Packaging Corporation of America’s 1st Quarter 2016 Earnings
Conference Call
WHEN:
Thursday, April 21, 2016 at 10:00 a.m. Eastern Time
CALL-IN
(855) 730-0288 (U.S. and Canada) or (832) 412-2295 (International)
NUMBER:
Dial in by 9:45 a.m. Eastern Time Conference Call Leader: Mr. Mark
Kowlzan
WEBCAST:
http://www.packagingcorp.com
REBROADCAST DATES:
April 21, 2016 1:00 p.m. Eastern Time through May 5, 2016 11:59
p.m. Eastern Time
REBROADCAST NUMBERS:
(855) 859-2056 (U.S. and Canada) or (404) 537-3406 (International)
Passcode: 55067552
Some of the statements in this press release are forward-looking
statements. Forward-looking statements include statements about our
future earnings and financial condition, our industry and our
business strategy. Statements that contain words such as “ will”,
“should”, “anticipate”, “believe”, “expect”, “intend”, “estimate”,
“hope” or similar expressions, are forward-looking statements.
These forward-looking statements are based on the current
expectations of PCA. Because forward-looking statements involve
inherent risks and uncertainties, the plans, actions and actual
results of PCA could differ materially. Among the factors that
could cause plans, actions and results to differ materially from
PCA’s current expectations include the following: the impact of
general economic conditions; conditions in the paper and packaging
industries, including competition, product demand and product
pricing; fluctuations in wood fiber and recycled fiber costs;
fluctuations in purchased energy costs; the possibility of
unplanned outages or interruptions at our principal facilities; and
legislative or regulatory requirements, particularly concerning
environmental matters, as well as those identified under Item 1A.
Risk Factors in PCA’s Annual Report on Form 10-K for the year ended
December 31, 2015 filed with the Securities and Exchange Commission
and available at the SEC’s website at “www.sec.gov”.
Non-GAAP measures used in this press release are reconciled to
the most comparable measure reported in accordance with GAAP in the
schedules to this press release.
Packaging Corporation of America Consolidated
Earnings Results Unaudited (dollars in millions, except
per-share data)
Three Months Ended March
31 2016 2015 Net sales $ 1,401.0 $ 1,425.7 Cost
of sales (1,102.4 )
(1)
(1,148.7 )
(2)
Gross profit 298.6 277.0 Selling, general, and administrative
expenses (113.9 ) (117.3 ) Other expense, net (3.9 )
(1)
(2.6 )
(2)
Income from operations 180.8 157.1 Interest expense, net
(21.6 ) (19.2 ) Income before taxes 159.2 137.9 Provision
for income taxes (55.5 ) (47.1 ) Net income $ 103.7
$ 90.8 Earnings per share: Basic $ 1.09 $ 0.92
Diluted $ 1.09 $ 0.92
Computation of diluted earnings per share under the two class
method: Net income $ 103.7 $ 90.8 Less: Distributed and
undistributed income available to participating securities
(1.1 ) (1.2 ) Net income attributable to PCA shareholders $
102.6 $ 89.6 Diluted weighted average shares
outstanding 94.2 97.2 Diluted earnings
per share $ 1.09 $ 0.92 Supplemental
financial information: Capital spending $ 52.9 $ 55.6 Cash balance
$ 162.3 $ 126.4 (1) The three months ended March 31, 2016
include $2.8 million of facilities closure costs related to a
corrugated products facility and a paper products facility. The
closure costs are recorded within "Other expense, net" and "Cost of
sales", as appropriate. (2) The three months ended March 31,
2015 include $10.3 million of restructuring charges at our mill in
DeRidder, Louisiana. The restructuring charges primarily related to
accelerated depreciation and were mostly recorded in "Cost of
sales".
The three months ended March 31, 2015 also
includes a $3.6 million tax credit from the State of Louisiana
related to our capital investment and the jobs retained at the
DeRidder, Louisiana mill, which was recorded as a benefit in "Other
expense, net".
The period ended March 31, 2015 includes
$3.5 million of Boise acquisition integration-related and other
costs, primarily recorded in "Other expense, net". These costs
primarily related to professional fees, severance, retention,
relocation, travel, and other integration-related costs.
Packaging Corporation of America Segment
Information Unaudited (dollars in millions)
Three Months Ended March 31 2016
2015 Segment sales Packaging $ 1,095.5 $ 1,099.3
Paper 280.5 297.3 Intersegment eliminations and other 25.0
29.1 $ 1,401.0 $ 1,425.7
Segment income (loss) Packaging $ 159.6 $ 141.1 Paper 36.1
35.6 Corporate and Other (14.9 ) (19.6 ) Income from
operations
180.8 157.1
Interest expense, net (21.6 ) (19.2 ) Income before
taxes
$ 159.2 $ 137.9
Segment income (loss) excluding special items
(1) Packaging $ 161.5 $ 152.3 Paper 37.0 35.6 Corporate and
Other (14.9 ) (17.0 )
$ 183.6
$ 170.9 EBITDA (1)
Packaging $ 232.9 $ 219.8 Paper 50.3 49.3 Corporate and Other
(13.7 ) (18.6 )
$ 269.5 $
250.5 EBITDA excluding special items
(1) Packaging $ 234.8 $ 222.0 Paper 51.1 49.3 Corporate and
Other (13.7 ) (16.0 )
$ 272.2
$ 255.3 (1) Income from operations
excluding special items, segment income (loss) excluding special
items, earnings before interest, income taxes, and depreciation,
amortization, and depletion (EBITDA), and EBITDA excluding special
items are non-GAAP financial measures. We present these measures
because they provide a means to evaluate the performance of our
segments and our company on an ongoing basis using the same
measures that are used by our management and because these measures
are frequently used by investors and other interested parties in
the evaluation of companies and the performance of their segments.
The tables included in "Reconciliation of Non-GAAP Financial
Measures" on the following pages reconcile the non-GAAP measures
with the most directly comparable GAAP measures. Any analysis of
non-GAAP financial measures should be done only in conjunction with
results presented in accordance with GAAP. The non-GAAP measures
are not intended to be substitutes for GAAP financial measures and
should not be used as such.
Packaging Corporation of
America Reconciliation of Non-GAAP Financial Measures
Unaudited (dollars in millions)
Three
Months Ended March 31 2016 2015
Packaging Segment income $ 159.6 $ 141.1 Facilities closure
costs 1.9 — DeRidder restructuring — 10.3 Integration-related and
other costs — 0.9 Segment income
excluding special items (1)
$ 161.5 $
152.3 Paper Segment income $
36.1 $ 35.6 Facilities closure costs 0.9 —
Segment income excluding special items (1)
$
37.0 $ 35.6 Corporate
and Other Segment loss $ (14.9 ) $ (19.6 ) Integration-related
and other costs — 2.6 Segment loss
excluding special items (1)
$ (14.9 ) $
(17.0 ) Income from operations
$ 180.8 $ 157.1
Income from operations, excluding special items
(1) $ 183.6 $ 170.9
(1) See footnote (1) on page 2, for a discussion of
non-GAAP financial measures.
Packaging Corporation of
America Reconciliation of Non-GAAP Financial Measures
Unaudited (dollars in millions)
Net Income and EPS
Excluding Special Items (1)
Three Months Ended March 31 2016 2015
Net Diluted
Net
Diluted Income EPS
Income
EPS As reported $ 103.7 $ 1.09 $ 90.8 $ 0.92 Special items
(2): Facilities closure costs 1.9 0.02 — — DeRidder restructuring —
— 6.6 0.07 Integration-related and other costs — —
2.2 0.02 Total special items 1.9 0.02
8.8 0.09 Excluding special items
$
105.6 $ 1.11 $ 99.6 $
1.01 (1) Net income and earnings per share excluding
special items are non-GAAP financial measures. The after-tax effect
of special items are presented because they provide a means to
evaluate the performance of our company on an ongoing basis using
the same measures that are used by our management and because these
measures are frequently used by investors and other interested
parties in the evaluation of companies and their performance. Any
analysis of non-GAAP financial measures should be done only in
conjunction with results presented in accordance with GAAP. The
non-GAAP measures are not intended to be substitutes for GAAP
financial measures and should not be used as such. (2)
Special items are tax-effected at a combined federal and state
income tax rate in effect for the period the special items were
recorded. For more information related to these items, see the
footnotes to the Consolidated Earnings Results on page 1.
Packaging Corporation of America
Reconciliation of Non-GAAP Financial Measures
Unaudited (dollars in millions)
EBITDA and EBITDA
Excluding Special Items (1)
EBITDA represents income before interest (interest expense and
interest income), income taxes, and depreciation, amortization, and
depletion. The following table reconciles net income to EBITDA and
EBITDA excluding special items:
Three Months Ended March 31 2016
2015 Net income $ 103.7 $ 90.8 Interest expense, net 21.6
19.2 Provision for income taxes 55.5 47.1 Depreciation,
amortization, and depletion 88.7 93.4
EBITDA
(1) $ 269.5 $ 250.5 Special
items: Facilities closure costs 2.7 — DeRidder restructuring — 1.3
Integration-related and other costs — 3.5
EBITDA
excluding special items (1) $ 272.2
$ 255.3 (1) See footnote (1) on page 2, for a
discussion of non-GAAP financial measures.
Packaging
Corporation of America Reconciliation of Non-GAAP Financial
Measures Unaudited (dollars in millions)
The following table reconciles segment income (loss) to EBITDA and
EBITDA excluding special items:
Three Months Ended
March 31 2016 2015 Packaging Segment
income $ 159.6 $ 141.1 Depreciation, amortization, and depletion
73.3 78.7 EBITDA (1) 232.9
219.8 Facilities closure costs 1.9 — DeRidder
restructuring — 1.3 Integration-related and other costs —
0.9 EBITDA excluding special items (1)
$ 234.8 $ 222.0
Paper Segment income $ 36.1 $ 35.6 Depreciation,
amortization, and depletion 14.2 13.7
EBITDA (1) 50.3 49.3 Facilities closure
costs 0.8 — EBITDA excluding special
items (1)
$ 51.1 $ 49.3
Corporate and Other Segment loss $ (14.9 ) $ (19.6 )
Depreciation, amortization, and depletion 1.2
1.0 EBITDA (1) (13.7 ) (18.6 )
Integration-related and other costs — 2.6
EBITDA excluding special items (1)
$ (13.7
) $ (16.0 ) EBITDA
(1) $ 269.5 $ 250.5
EBITDA excluding special items
(1) $ 272.2 $ 255.3
(1) See footnote (1) on page 2, for a discussion of
non-GAAP financial measures.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160420006575/en/
Barbara SessionsPackaging Corporation of AmericaINVESTOR
RELATIONS: (877) 454-2509PCA’s Website: www.packagingcorp.com
Packaging (NYSE:PKG)
Historical Stock Chart
From Feb 2024 to Mar 2024
Packaging (NYSE:PKG)
Historical Stock Chart
From Mar 2023 to Mar 2024