Graphic Packaging Holding Company Reports Third Quarter 2017 Results

Q3 Net Sales were $1,137.6 million versus $1,103.7 million in the prior year period.
Q3 Net Tons Sold were 743.1 thousand tons versus 721.6 thousand tons in the prior year period.
Q3 Earnings per Diluted Share were $0.15 versus $0.18 in the prior year period.
Q3 Adjusted Earnings per Diluted Share were $0.18 versus $0.20 in the prior year period.
Q3 Net Income was $47.3 million versus $57.8 million in the prior year period.
Q3 Adjusted EBITDA was $188.3 million versus $200.1 million in the prior year period.
Returned $25.8 million to stockholders in Q3 through dividends and share repurchases.

Graphic Packaging Holding Company (NYSE: GPK), (the “Company”), a leading provider of packaging solutions to food, beverage and consumer product companies, today reported Net Income for third quarter 2017 of $47.3 million, or $0.15 per share, based on 310.9 million weighted average diluted shares.  This compares to third quarter 2016 Net Income of $57.8 million, or $0.18 per share, based on 320.4 million weighted average diluted shares.

Third quarter 2017 Net Income was negatively impacted by $7.5 million (net of a $3.8 million tax benefit) of charges associated with business combinations, shutdown and other special charges, and accelerated depreciation related to the announced shutdown of the Santa Clara, California mill. When adjusting for these charges, Adjusted Net Income for the third quarter of 2017 was $54.8 million, or $0.18 per diluted share. This compares to third quarter 2016 Adjusted Net Income of $64.0 million or $0.20 per diluted share.

“Third quarter Adjusted EBITDA met our expectations at $188 million compared to $200 million in the prior year period. Net Tons Sold were up 3.0%, reflecting an acquisition and modestly positive core volumes. Despite challenges from the hurricanes that resulted in higher freight and chemicals costs, the business performed well in the quarter with a continued emphasis on operating efficiencies and cost reduction” said President and CEO Michael Doss.

“We completed the Carton Craft acquisition on July 10, 2017, and the Norgraft acquisition on October 4, 2017. We also announced the closure of our Santa Clara, California coated recycled paperboard mill in early September. This action was enabled by strategic capital investments that have greatly enhanced the flexibility across our Midwest coated recycled paperboard mills, as well as our West Monroe, Louisiana and Macon, Georgia coated unbleached kraft paperboard mills. We remain committed to a balanced capital allocation strategy, which includes reinvesting in our business to drive strong cash returns on cash invested, strategic acquisitions at compelling post-synergy multiples, and returning cash to stockholders.”

Operating Results
Net Sales
Net Sales increased 3.1% to $1,137.6 million in the third quarter of 2017, compared to $1,103.7 million in the prior year period.  When comparing against the prior year quarter, net sales were positively impacted by $29.7 million of improved volume/mix related to an acquisition and modestly positive core volumes, and $7.8 million of favorable foreign exchange.  These benefits were partially offset by $3.6 million of lower pricing.

Attached is supplemental data showing Net Tons Sold for the first, second, and third quarters of 2017 and each quarter of 2016.

EBITDA
EBITDA for the third quarter of 2017 was $184.1 million, or $7.1 million lower than the third quarter of 2016.  After adjusting both periods for expenses associated with business combinations and other special charges, Adjusted EBITDA decreased as expected to $188.3 million in the third quarter of 2017 from $200.1 million in the third quarter of 2016.  When comparing against the prior year quarter, Adjusted EBITDA in the third quarter of 2017 was positively impacted by $9.9 million of improved net operating performance and $6.4 million of favorable volume/mix. These benefits were more than offset by $17.7 million of commodity input cost inflation, $6.7 million of other inflation (primarily labor and benefits), $3.6 million of lower pricing, and $0.1 million of unfavorable foreign exchange rates.
more detail at:  http://investors.graphicpkg.com/investor-relations/press-releases/press-release-details/2017/Graphic-Packaging-Holding-Company-Reports-Third-Quarter-2017-Results/default.aspx

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