WestRock Reports Strong Results in Third Quarter Fiscal 2016

WestRock Company (WestRock) (NYSE:WRK), a leading provider of differentiated paper and packaging solutions, today announced results for its third quarter ended June 30, 2016.

Third Quarter 2016 Highlights
•Earned $0.59 per diluted share from continuing operations and $0.71 of adjusted earnings per diluted share from continuing operations
•Generated net cash provided by operating activities of $532 million and adjusted free cash flow of $373 million
•Achieved $105 million in year-over-year productivity improvements and annual run rate of $425 million of synergy and performance improvements
•Reduced North American containerboard inventory levels by 152,000 tons, while improving customer service levels
•Successfully completed the Specialty Chemicals (Ingevity) separation

Revenues for the third quarter totaled $3.6 billion, a decline of $103 million, or 2.8%, compared to $3.7 billion of combined revenues in the third quarter of 2015. Prior year results presented on a combined basis represent the addition of Rock-Tenn Company’s and MeadWestvaco Corporation’s individual results – see “Presentation of Financial Statements”. Earnings from continuing operations per diluted share were $0.59 and adjusted earnings from continuing operations per diluted share were $0.71, both of which exclude any contribution from Specialty Chemicals.

Steve Voorhees, chief executive officer of WestRock, said, “I’m pleased with the WestRock team’s execution during the third quarter, which delivered strong cash flow, lower inventories and solid earnings per share. We continue to make significant progress toward achieving our synergy and performance improvement goals and are now at a $425 million annual run-rate as of the end of June. Our performance this quarter demonstrates the success of our differentiated strategy that is creating value for our customers, stockholders and employees.”

Net sales declined $103 million compared to the combined prior year quarter.  Of this decline, $44 million was due to net sales between RockTenn and MeadWestvaco in the prior year quarter prior to the strategic combination that were not eliminated in the combined net sales data, while similar net sales are now eliminated as intercompany sales. The balance of the decline was primarily attributable to the impact of $42 million of volume, price and mix in the Corrugated and Consumer Packaging segments; a $26 million decline due to the impact of foreign currency; and $11 million of lower Consumer Packaging segment net sales due to MeadWestvaco’s sale of its European tobacco converting business in April 2015. These declines were partially offset by $20 million of higher Land and Development segment sales.

Segment income including Non-allocated expenses decreased $69 million compared to the prior year quarter primarily as a result of $44 million of increased depreciation and amortization expense predominantly due to the step-up of assets in purchase accounting. Adjusted Segment EBITDA including Non-allocated expenses decreased by $23 million compared to the prior year quarter primarily due to a decrease of $24 million in the Corrugated Packaging segment’s Adjusted Segment EBITDA and $14 million of increased Non-allocated expenses, which were primarily a result of lower non-service pension income. These items were partially offset by an increase of $19 million in the Consumer Packaging segment’s Adjusted Segment EBITDA. The decrease in Adjusted Segment EBITDA including Non-allocated expenses was due primarily to synergy and performance improvements and lower energy costs being more than offset by lower price/mix, volume and other cost inflation.
more at:  http://ir.westrock.com/phoenix.zhtml?c=254016&p=irol-newsArticle&ID=2192851

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