Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - KAPSTONE PAPER & PACKAGING CORP | a17-18327_1ex99d2.htm |
| 8-K - 8-K - KAPSTONE PAPER & PACKAGING CORP | a17-18327_18k.htm |
Exhibit 99.1
|
FOR FURTHER INFORMATION: |
FOR IMMEDIATE RELEASE |
|
Andrea K. Tarbox |
Wednesday, July 26, 2017 |
|
Executive Vice President and Chief Financial Officer |
|
|
847.239.8812 |
|
KAPSTONE REPORTS SECOND QUARTER RESULTS
NORTHBROOK, IL — July 26, 2017 — KapStone Paper and Packaging Corporation (NYSE:KS) today reported results for the second quarter ended June 30, 2017. As compared to 2016’s second quarter, results for 2017’s second quarter are below:
· Net sales of $823 million up $38 million, or 5 percent
· Net income of $20 million down $1 million, or 5 percent
· Diluted EPS of $0.20 down $0.01 per share, or 5 percent
Non U.S. GAAP financial measures for the 2017 second quarter compared to 2016 are as follows:
· Adjusted EBITDA of $100 million up $3 million, or 3 percent
· Adjusted net income of $27 million up $1 million, or 3 percent
· Adjusted diluted EPS of $0.27, flat to 2016
Matt Kaplan, President and Chief Executive Officer, stated, “KapStone’s operations performed better in the second quarter with our mills producing 688,000 tons of paper, or nearly three percent more than 2016, despite the loss from an unplanned mill outage. Demand for our products is strong, and we have been able to successfully implement price increases in the majority of our product lines. Product mix continues to improve as we rely less on exports with our growing domestic demand.”
Second Quarter Operating Highlights
Consolidated net sales of $823 million in the second quarter of 2017 increased by $38 million, or 5 percent, compared to $785 million for the 2016 second quarter. Revenue growth in the paper and packaging segment resulted from higher prices and volume. The Company’s average mill selling price of $661 per ton in the second quarter of 2017 increased by $37 per ton, or about 6 percent, compared to the second quarter of 2016 due to higher domestic and export
containerboard prices, higher specialty paper prices and a more favorable product mix. Revenues in the distribution segment increased $8 million, mainly due to higher prices.
Operating income of $41 million for the 2017 second quarter decreased by $2 million, or 5 percent, compared to the 2016 second quarter. The lower operating earnings primarily reflect higher fiber costs due to significantly higher OCC costs, the reinstatement of certain employee benefits, higher stock compensation costs, higher manufacturing costs, higher freight costs due to lower export shipments, and higher management incentives; partially offset by higher prices for domestic and export containerboard and kraft paper and lower severance charges.
Interest expense, net, was $12 million for the second quarter of 2017, up $2 million from a year ago, as a result of higher interest rates and debt levels. Our weighted average interest rate as of June 30, 2017 is 2.8 percent compared to 2.1 percent as of June 30, 2016.
The effective income tax rate for the 2017 second quarter was 33.9 percent compared to 36.5 percent for the 2016 second quarter. Results in the 2016 second quarter included an unfavorable adjustment for a state tax examination.
Cash Flow and Working Capital
Cash and cash equivalents of $7 million as of June 30, 2017 remained consistent with balances at March 31, 2017. Operating activities provided $17 million during the second quarter, while investing activities used $35 million and financing activities provided $18 million. Capital expenditures in the second quarter were $35 million. Financing activities included $28 million of net proceeds from borrowings offset by $10 million of cash dividends.
On May 16, 2017, our Board of Directors approved a regular $0.10 per share cash dividend which was paid on July 12, 2017.
At June 30, 2017, the Company had approximately $456 million of working capital and $463 million of revolver borrowing capacity.
Conclusion
In summary, Kaplan commented, “We are focusing on internal opportunities to increase productivity, integration, and growth. Therefore, I expect to see additional improvement in the third quarter and beyond by lowering operating costs and increasing productivity. Furthermore, we expect to benefit from the full realization of the price increases implemented in the first half of this year across most of our product lines.”
Conference Call
KapStone will host a conference call at 10:00 a.m. CDT, Thursday, July 27, 2017, to discuss the Company’s financial results for the 2017 second quarter. All interested parties are invited to listen and may do so by either accessing a simultaneous broadcast webcast on KapStone’s website, http://www.kapstonepaper.com, or for those unable to access the webcast, the following dial-in numbers are available:
Domestic: 888-608-7946
International: 484-747-6633
Participant Passcode: 53832308
A presentation to be viewed in conjunction with the call will also be available on our website, http://www.kapstonepaper.com, in the “Investors” section.
Replay of the webcast will be available for 30 days on the Company’s website following the call.
About the Company
Headquartered in Northbrook, IL, KapStone Paper and Packaging Corporation is the fifth largest producer of containerboard and corrugated packaging products and is the largest kraft paper producer in the United States. The Company has four paper mills, 24 converting plants and 60 distribution centers. The business has approximately 6,400 employees.
Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures, including “EBITDA”, “Adjusted EBITDA”, “Adjusted Net Income”, and “Adjusted Diluted EPS” to measure our operating performance. Management uses these measures to focus on the on-going operations, and believes it is useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The Company believes that EBITDA and Adjusted EBITDA provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency to key measures used to evaluate the performance of the Company. Management uses EBITDA and Adjusted EBITDA for evaluating the Company’s performance against competitors and as a primary measure for employees’ incentive programs. Reconciliations of Net Income to EBITDA, EBITDA to Adjusted EBITDA, Net Income to Adjusted Net Income, and Diluted EPS to Adjusted Diluted EPS are included in the financial schedules contained in this press release. However, these measures should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.
Forward-Looking Statements
Statements in this news release that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can often be identified by words such as “may,” “will,” “should,” “would,’ “expect,” “project,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “potential,” “outlook,” or “continue,” the negative of these terms or other similar expressions. These statements reflect management’s current views and are subject to risks, uncertainties and assumptions, many of which are beyond the Company’s control that could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ materially include, but are not limited to: (1) industry conditions; (2) market and economic factors; (3) results of legal proceedings and compliance costs; (4) the ability to achieve and effectively manage growth; (5) the ability to pay the Company’s debt obligations; (6) the ability to carry out the Company’s strategic initiatives and manage associated costs; (7) managing labor relations; and (8) realizing the synergies and benefits of strategic investments. Further information on these and
other risks and uncertainties is provided under Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and elsewhere in reports that the Company files with the SEC. These filings can be found on KapStone’s Web site at http://www.kapstonepaper.com and the SEC’s Web site at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and the Company disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.
KapStone Paper and Packaging Corporation
Consolidated Statements of Income
(In thousands, except share and per share amounts)
(Unaudited)
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net sales |
|
$ |
822,717 |
|
$ |
784,911 |
|
$ |
1,588,560 |
|
$ |
1,523,126 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cost and expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Cost of sales, excluding depreciation and amortization |
|
592,515 |
|
568,831 |
|
1,153,413 |
|
1,102,108 |
| ||||
|
Depreciation and amortization |
|
46,054 |
|
46,035 |
|
91,402 |
|
90,574 |
| ||||
|
Freight and distribution expenses |
|
75,640 |
|
70,978 |
|
148,628 |
|
136,037 |
| ||||
|
Selling, general and administrative expenses |
|
67,313 |
|
55,554 |
|
133,798 |
|
116,294 |
| ||||
|
Operating income |
|
41,195 |
|
43,513 |
|
61,319 |
|
78,113 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Foreign exchange (gain) / loss |
|
(1,004 |
) |
872 |
|
(1,086 |
) |
975 |
| ||||
|
Equity method investments income |
|
(29 |
) |
— |
|
(706 |
) |
— |
| ||||
|
Interest expense, net |
|
12,311 |
|
10,006 |
|
23,041 |
|
19,817 |
| ||||
|
Income before provision for income taxes |
|
29,917 |
|
32,635 |
|
40,070 |
|
57,321 |
| ||||
|
Provision for income taxes |
|
10,141 |
|
11,913 |
|
14,302 |
|
20,425 |
| ||||
|
Net income |
|
$ |
19,776 |
|
$ |
20,722 |
|
$ |
25,768 |
|
$ |
36,896 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income per share: |
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
$ |
0.20 |
|
$ |
0.21 |
|
$ |
0.27 |
|
$ |
0.38 |
|
|
Diluted |
|
$ |
0.20 |
|
$ |
0.21 |
|
$ |
0.26 |
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted-average number of shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
96,801,906 |
|
96,517,357 |
|
96,750,272 |
|
96,458,354 |
| ||||
|
Diluted |
|
98,520,218 |
|
97,629,786 |
|
98,457,450 |
|
97,561,774 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Effective income tax rate |
|
33.9 |
% |
36.5 |
% |
35.7 |
% |
35.6 |
% | ||||
Supplemental Information
GAAP to Non-GAAP Reconciliations
($ in thousands, except share and per share amounts)
(unaudited)
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| ||||
|
Net Income (GAAP) to EBITDA (Non-GAAP) to Adjusted EBITDA (Non-GAAP): |
|
|
|
|
|
|
|
|
| ||||
|
Net income (GAAP) |
|
$ |
19,776 |
|
$ |
20,722 |
|
$ |
25,768 |
|
$ |
36,896 |
|
|
Interest expense, net |
|
12,311 |
|
10,006 |
|
23,041 |
|
19,817 |
| ||||
|
Provision for income taxes |
|
10,141 |
|
11,913 |
|
14,302 |
|
20,425 |
| ||||
|
Depreciation and amortization |
|
46,054 |
|
46,035 |
|
91,402 |
|
90,574 |
| ||||
|
EBITDA (Non-GAAP) |
|
$ |
88,282 |
|
$ |
88,676 |
|
$ |
154,513 |
|
$ |
167,712 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Acquisition, integration, start-up and other expenses |
|
3,577 |
|
1,312 |
|
5,382 |
|
2,541 |
| ||||
|
Longview piping inspection settlement |
|
2,034 |
|
— |
|
2,034 |
|
— |
| ||||
|
Union contract ratification cost |
|
— |
|
— |
|
4,979 |
|
— |
| ||||
|
Change in fair value of contingent consideration liability |
|
1,054 |
|
1,526 |
|
3,570 |
|
3,052 |
| ||||
|
Severance expenses |
|
— |
|
3,116 |
|
— |
|
6,164 |
| ||||
|
Stock-based compensation expense |
|
4,761 |
|
1,941 |
|
10,026 |
|
5,362 |
| ||||
|
Accumulated EBITDA adjustments |
|
11,426 |
|
7,895 |
|
25,991 |
|
17,119 |
| ||||
|
Adjusted EBITDA (Non-GAAP) |
|
$ |
99,708 |
|
$ |
96,571 |
|
$ |
180,504 |
|
$ |
184,831 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net Income (GAAP) to Adjusted Net Income (Non-GAAP): |
|
|
|
|
|
|
|
|
| ||||
|
Net income (GAAP) |
|
$ |
19,776 |
|
$ |
20,722 |
|
$ |
25,768 |
|
$ |
36,896 |
|
|
Accumulated EBITDA adjustments |
|
11,426 |
|
7,895 |
|
25,991 |
|
17,119 |
| ||||
|
Accumulated tax adjustments |
|
(4,285 |
) |
(2,597 |
) |
(9,747 |
) |
(5,760 |
) | ||||
|
Adjusted Net Income (Non-GAAP) |
|
$ |
26,917 |
|
$ |
26,020 |
|
$ |
42,012 |
|
$ |
48,255 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted EPS (GAAP) to Adjusted Diluted EPS (Non-GAAP): |
|
|
|
|
|
|
|
|
| ||||
|
Diluted earnings per share (GAAP) |
|
$ |
0.20 |
|
$ |
0.21 |
|
$ |
0.26 |
|
$ |
0.38 |
|
|
Accumulated EBITDA adjustments |
|
0.11 |
|
0.08 |
|
0.27 |
|
0.17 |
| ||||
|
Accumulated tax adjustments |
|
(0.04 |
) |
(0.02 |
) |
(0.10 |
) |
(0.06 |
) | ||||
|
Adjusted Diluted EPS (Non-GAAP) |
|
$ |
0.27 |
|
$ |
0.27 |
|
$ |
0.43 |
|
$ |
0.49 |
|
KapStone Paper and Packaging Corporation
Consolidated Balance Sheets
(In thousands)
|
|
|
June 30, |
|
December 31, |
| ||
|
|
|
(Unaudited) |
|
|
| ||
|
Assets |
|
|
|
|
| ||
|
Current assets: |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
7,456 |
|
$ |
29,385 |
|
|
Trade accounts receivable, net of allowances |
|
453,320 |
|
392,962 |
| ||
|
Other receivables |
|
14,565 |
|
13,562 |
| ||
|
Inventories |
|
348,784 |
|
322,664 |
| ||
|
Prepaid expenses and other current assets |
|
15,871 |
|
10,247 |
| ||
|
Total current assets |
|
839,996 |
|
768,820 |
| ||
|
|
|
|
|
|
| ||
|
Plant, property and equipment, net |
|
1,473,343 |
|
1,441,557 |
| ||
|
Other assets |
|
25,660 |
|
25,468 |
| ||
|
Intangible assets, net |
|
312,962 |
|
314,413 |
| ||
|
Goodwill |
|
720,611 |
|
705,617 |
| ||
|
Total assets |
|
$ |
3,372,572 |
|
$ |
3,255,875 |
|
|
|
|
|
|
|
| ||
|
Liabilities and Stockholders’ Equity |
|
|
|
|
| ||
|
Current liabilities: |
|
|
|
|
| ||
|
Short-term borrowings |
|
$ |
22,000 |
|
$ |
— |
|
|
Other current borrowings |
|
4,117 |
|
— |
| ||
|
Capital lease obligation |
|
28 |
|
— |
| ||
|
Dividend payable |
|
10,126 |
|
10,052 |
| ||
|
Accounts payable |
|
204,545 |
|
189,350 |
| ||
|
Accrued expenses |
|
92,824 |
|
76,480 |
| ||
|
Accrued compensation costs |
|
50,299 |
|
48,840 |
| ||
|
Accrued income taxes |
|
327 |
|
15,971 |
| ||
|
Total current liabilities |
|
384,266 |
|
340,693 |
| ||
|
|
|
|
|
|
| ||
|
Long-term debt, net of current portion |
|
1,516,266 |
|
1,485,323 |
| ||
|
Long-term financing obligation |
|
43,633 |
|
— |
| ||
|
Capital lease obligation |
|
4,611 |
|
— |
| ||
|
Pension and post-retirement benefits |
|
31,321 |
|
34,207 |
| ||
|
Deferred income taxes |
|
407,711 |
|
405,561 |
| ||
|
Other liabilities |
|
61,776 |
|
85,761 |
| ||
|
Total other liabilities |
|
2,065,318 |
|
2,010,852 |
| ||
|
|
|
|
|
|
| ||
|
Stockholders’ equity: |
|
|
|
|
| ||
|
Common stock $0.0001 par value |
|
10 |
|
10 |
| ||
|
Additional paid-in capital |
|
286,461 |
|
275,970 |
| ||
|
Retained earnings |
|
695,893 |
|
689,668 |
| ||
|
Accumulated other comprehensive loss |
|
(59,376 |
) |
(61,318 |
) | ||
|
Total stockholders’ equity |
|
922,988 |
|
904,330 |
| ||
|
Total liabilities and stockholders’ equity |
|
$ |
3,372,572 |
|
$ |
3,255,875 |
|
KapStone Paper and Packaging Corporation
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| ||||
|
Operating activities: |
|
|
|
|
|
|
|
|
| ||||
|
Net income |
|
$ |
19,776 |
|
$ |
20,722 |
|
$ |
25,768 |
|
$ |
36,896 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
| ||||
|
Depreciation of plant and equipment |
|
38,234 |
|
37,098 |
|
75,992 |
|
72,701 |
| ||||
|
Amortization of intangible assets |
|
7,820 |
|
8,937 |
|
15,410 |
|
17,873 |
| ||||
|
Stock-based compensation expense |
|
4,761 |
|
1,941 |
|
10,026 |
|
5,362 |
| ||||
|
Pension and postretirement |
|
(654 |
) |
(579 |
) |
(1,226 |
) |
(1,027 |
) | ||||
|
Excess tax benefit from stock-based compensation |
|
— |
|
10 |
|
— |
|
150 |
| ||||
|
Amortization of debt issuance costs |
|
1,179 |
|
1,251 |
|
2,358 |
|
2,375 |
| ||||
|
Loss on disposal of fixed assets |
|
460 |
|
715 |
|
986 |
|
653 |
| ||||
|
Deferred income taxes |
|
7 |
|
(360 |
) |
1,528 |
|
704 |
| ||||
|
Change in fair value of contingent consideration liability |
|
1,054 |
|
1,526 |
|
3,570 |
|
3,052 |
| ||||
|
Equity method investments income |
|
275 |
|
— |
|
108 |
|
— |
| ||||
|
Changes in operating assets and liabilities |
|
(56,084 |
) |
(40,241 |
) |
(85,023 |
) |
(49,114 |
) | ||||
|
Net cash provided by operating activities |
|
$ |
16,828 |
|
$ |
31,020 |
|
$ |
49,497 |
|
$ |
89,625 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Investing activities: |
|
|
|
|
|
|
|
|
| ||||
|
Capital expenditures |
|
(35,109 |
) |
(36,210 |
) |
(73,778 |
) |
(72,373 |
) | ||||
|
Purchase of intangible assets |
|
— |
|
(1,025 |
) |
— |
|
(1,525 |
) | ||||
|
API acquisition |
|
— |
|
— |
|
(33,500 |
) |
— |
| ||||
|
Equity method investments |
|
— |
|
(1,250 |
) |
— |
|
(1,250 |
) | ||||
|
Proceeds from the sales of assets |
|
— |
|
— |
|
— |
|
4,856 |
| ||||
|
Net cash used in investing activities |
|
$ |
(35,109 |
) |
$ |
(38,485 |
) |
$ |
(107,278 |
) |
$ |
(70,292 |
) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Financing activities: |
|
|
|
|
|
|
|
|
| ||||
|
Proceeds from revolving credit facility |
|
$ |
145,512 |
|
$ |
129,100 |
|
$ |
268,500 |
|
$ |
263,700 |
|
|
Repayments on revolving credit facility |
|
(149,500 |
) |
(123,100 |
) |
(246,500 |
) |
(254,100 |
) | ||||
|
Proceeds from receivables credit facility |
|
33,363 |
|
14,424 |
|
50,394 |
|
21,094 |
| ||||
|
Repayments on receivables credit facility |
|
— |
|
(2,470 |
) |
(21,621 |
) |
(27,170 |
) | ||||
|
Proceeds from long-term debt |
|
— |
|
— |
|
— |
|
— |
| ||||
|
Repayments on long-term debt |
|
— |
|
— |
|
— |
|
— |
| ||||
|
Payment of loan amendment costs and debt issuance fees |
|
(187 |
) |
(138 |
) |
(187 |
) |
(2,388 |
) | ||||
|
Proceeds from other current borrowings |
|
— |
|
— |
|
6,214 |
|
— |
| ||||
|
Payment on other current borrowings |
|
(2,059 |
) |
— |
|
(2,059 |
) |
— |
| ||||
|
Payment on capital lease obligation |
|
(11 |
) |
— |
|
(11 |
) |
— |
| ||||
|
Cash dividends paid |
|
(9,679 |
) |
(9,652 |
) |
(19,343 |
) |
(19,348 |
) | ||||
|
Payment of withholding taxes on vested stock awards |
|
(19 |
) |
(94 |
) |
(875 |
) |
(786 |
) | ||||
|
Proceeds from exercises of stock options |
|
402 |
|
211 |
|
853 |
|
420 |
| ||||
|
Proceeds from issuance of shares to ESPP |
|
— |
|
— |
|
487 |
|
464 |
| ||||
|
Excess tax benefit from stock-based compensation |
|
— |
|
(10 |
) |
— |
|
(150 |
) | ||||
|
Net cash provided (used in) / provided by financing activities |
|
$ |
17,822 |
|
$ |
8,271 |
|
$ |
35,852 |
|
$ |
(18,264 |
) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net increase in cash and cash equivalents |
|
(459 |
) |
806 |
|
(21,929 |
) |
1,069 |
| ||||
|
Cash and cash equivalents-beginning of period |
|
7,915 |
|
7,084 |
|
29,385 |
|
6,821 |
| ||||
|
Cash and cash equivalents-end of period |
|
$ |
7,456 |
|
$ |
7,890 |
|
$ |
7,456 |
|
$ |
7,890 |
|
KapStone Paper and Packaging Corporation
Operating Segment Information
(In thousands)
(Unaudited)
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
| |||||||||||
|
Three Months Ended June 30, 2017 |
|
Trade |
|
Inter- |
|
Total |
|
Segment |
|
Depreciation |
|
Capital |
|
Total Assets |
| |||||||
|
Paper and Packaging |
|
$ |
561,917 |
|
$ |
25,681 |
|
$ |
587,598 |
|
$ |
44,260 |
|
$ |
38,192 |
|
$ |
33,703 |
|
$ |
2,642,143 |
|
|
Distribution |
|
260,800 |
|
— |
|
260,800 |
|
10,785 |
|
5,972 |
|
1,064 |
|
694,099 |
| |||||||
|
Corporate |
|
— |
|
— |
|
— |
|
(13,850 |
) |
1,890 |
|
342 |
|
36,330 |
| |||||||
|
Intersegment eliminations |
|
— |
|
(25,681 |
) |
(25,681 |
) |
— |
|
— |
|
— |
|
— |
| |||||||
|
|
|
$ |
822,717 |
|
$ |
— |
|
$ |
822,717 |
|
$ |
41,195 |
|
$ |
46,054 |
|
$ |
35,109 |
|
$ |
3,372,572 |
|
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
| |||||||||||
|
Three Months Ended June 30, 2016 |
|
Trade |
|
Inter- |
|
Total |
|
Segment |
|
Depreciation |
|
Capital |
|
Total Assets |
| |||||||
|
Paper and Packaging |
|
$ |
532,571 |
|
$ |
20,524 |
|
$ |
553,095 |
|
$ |
41,082 |
|
$ |
38,163 |
|
$ |
34,265 |
|
$ |
2,507,161 |
|
|
Distribution |
|
252,340 |
|
— |
|
252,340 |
|
12,336 |
|
5,702 |
|
932 |
|
686,997 |
| |||||||
|
Corporate |
|
— |
|
— |
|
— |
|
(9,905 |
) |
2,170 |
|
1,013 |
|
42,292 |
| |||||||
|
Intersegment eliminations |
|
— |
|
(20,524 |
) |
(20,524 |
) |
— |
|
— |
|
— |
|
— |
| |||||||
|
|
|
$ |
784,911 |
|
$ |
— |
|
$ |
784,911 |
|
$ |
43,513 |
|
$ |
46,035 |
|
$ |
36,210 |
|
$ |
3,236,450 |
|
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
| ||||||||||
|
Six Months Ended June 30, 2017 |
|
Trade |
|
Inter- |
|
Total |
|
Segment |
|
Depreciation |
|
Capital |
|
|
| ||||||
|
Paper and Packaging |
|
$ |
1,109,561 |
|
$ |
46,878 |
|
$ |
1,156,439 |
|
$ |
78,575 |
|
$ |
75,598 |
|
$ |
71,408 |
|
|
|
|
Distribution |
|
478,999 |
|
— |
|
478,999 |
|
13,382 |
|
11,950 |
|
1,743 |
|
|
| ||||||
|
Corporate |
|
— |
|
— |
|
— |
|
(30,638 |
) |
3,854 |
|
627 |
|
|
| ||||||
|
Intersegment eliminations |
|
— |
|
(46,878 |
) |
(46,878 |
) |
— |
|
— |
|
— |
|
|
| ||||||
|
|
|
$ |
1,588,560 |
|
$ |
— |
|
$ |
1,588,560 |
|
$ |
61,319 |
|
$ |
91,402 |
|
$ |
73,778 |
|
|
|
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
| ||||||||||
|
Six Months Ended June 30, 2016 |
|
Trade |
|
Inter- |
|
Total |
|
Segment |
|
Depreciation |
|
Capital |
|
|
| ||||||
|
Paper and Packaging |
|
$ |
1,052,611 |
|
$ |
36,993 |
|
$ |
1,089,604 |
|
$ |
87,323 |
|
$ |
75,299 |
|
$ |
66,620 |
|
|
|
|
Distribution |
|
470,515 |
|
— |
|
470,515 |
|
13,717 |
|
11,363 |
|
2,998 |
|
|
| ||||||
|
Corporate |
|
— |
|
— |
|
— |
|
(22,927 |
) |
3,912 |
|
2,755 |
|
|
| ||||||
|
Intersegment eliminations |
|
— |
|
(36,993 |
) |
(36,993 |
) |
— |
|
— |
|
— |
|
|
| ||||||
|
|
|
$ |
1,523,126 |
|
$ |
— |
|
$ |
1,523,126 |
|
$ |
78,113 |
|
$ |
90,574 |
|
$ |
72,373 |
|
|
|
KapStone Paper and Packaging Corporation
Operating Segment EBITDA and Adjusted EBITDA
(In thousands)
(Unaudited)
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||
|
Paper and Packaging |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| ||||
|
Segment operating income |
|
$ |
44,260 |
|
$ |
41,082 |
|
$ |
78,575 |
|
$ |
87,323 |
|
|
Equity method investments income |
|
(29 |
) |
— |
|
(706 |
) |
— |
| ||||
|
Foreign exchange (gain) / loss |
|
(591 |
) |
288 |
|
(636 |
) |
— |
| ||||
|
Depreciation and amortization |
|
38,192 |
|
38,163 |
|
75,598 |
|
75,299 |
| ||||
|
EBITDA |
|
83,072 |
|
78,957 |
|
155,515 |
|
162,622 |
| ||||
|
Severance expenses |
|
— |
|
3,035 |
|
— |
|
5,297 |
| ||||
|
Acquisition, integration, start-up and other expenses |
|
952 |
|
935 |
|
2,318 |
|
1,819 |
| ||||
|
Longview piping inspection settlement |
|
2,034 |
|
— |
|
2,034 |
|
— |
| ||||
|
Union contract ratification costs |
|
— |
|
— |
|
4,979 |
|
— |
| ||||
|
Adjusted EBITDA |
|
$ |
86,058 |
|
$ |
82,927 |
|
$ |
164,846 |
|
$ |
169,738 |
|
|
Adjusted EBITDA margin |
|
14.6 |
% |
15.0 |
% |
14.3 |
% |
15.6 |
% | ||||
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||
|
Distribution |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| ||||
|
Segment operating income |
|
$ |
10,785 |
|
$ |
12,336 |
|
$ |
13,382 |
|
$ |
13,717 |
|
|
Foreign exchange (gain) / loss |
|
(413 |
) |
584 |
|
(450 |
) |
975 |
| ||||
|
Depreciation and amortization |
|
5,972 |
|
5,702 |
|
11,950 |
|
11,363 |
| ||||
|
EBITDA |
|
17,170 |
|
17,454 |
|
25,782 |
|
24,105 |
| ||||
|
Acquisition, integration, start-up and other expenses |
|
1,500 |
|
262 |
|
1,663 |
|
525 |
| ||||
|
Severance expenses |
|
— |
|
89 |
|
— |
|
480 |
| ||||
|
Adjusted EBITDA |
|
$ |
18,670 |
|
$ |
17,805 |
|
$ |
27,445 |
|
$ |
25,110 |
|
|
Adjusted EBITDA margin |
|
7.2 |
% |
7.1 |
% |
5.7 |
% |
5.3 |
% | ||||
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||
|
Corporate |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| ||||
|
Segment operating (loss) |
|
$ |
(13,850 |
) |
$ |
(9,905 |
) |
$ |
(30,638 |
) |
$ |
(22,927 |
) |
|
Depreciation and amortization |
|
1,890 |
|
2,170 |
|
3,854 |
|
3,912 |
| ||||
|
EBITDA |
|
(11,960 |
) |
(7,735 |
) |
(26,784 |
) |
(19,015 |
) | ||||
|
Stock-based compensation expense |
|
4,761 |
|
1,941 |
|
10,026 |
|
5,362 |
| ||||
|
Acquisition, integration, start-up and other expenses |
|
1,125 |
|
115 |
|
1,401 |
|
197 |
| ||||
|
Change in fair value of contingent consideration liability |
|
1,054 |
|
1,526 |
|
3,570 |
|
3,052 |
| ||||
|
Severance expenses |
|
— |
|
(8 |
) |
— |
|
387 |
| ||||
|
Adjusted EBITDA |
|
$ |
(5,020 |
) |
$ |
(4,161 |
) |
$ |
(11,787 |
) |
$ |
(10,017 |
) |
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||
|
Consolidated |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| ||||
|
Segment operating income |
|
$ |
41,195 |
|
$ |
43,513 |
|
$ |
61,319 |
|
$ |
78,113 |
|
|
Equity method investments income |
|
(29 |
) |
— |
|
(706 |
) |
— |
| ||||
|
Foreign exchange (gain) / loss |
|
(1,004 |
) |
872 |
|
(1,086 |
) |
975 |
| ||||
|
Depreciation and amortization |
|
46,054 |
|
46,035 |
|
91,402 |
|
90,574 |
| ||||
|
EBITDA |
|
88,282 |
|
88,676 |
|
154,513 |
|
167,712 |
| ||||
|
Stock-based compensation expense |
|
4,761 |
|
1,941 |
|
10,026 |
|
5,362 |
| ||||
|
Acquisition, integration, start-up and other expenses |
|
3,577 |
|
1,312 |
|
5,382 |
|
2,541 |
| ||||
|
Longview piping inspection settlement |
|
2,034 |
|
— |
|
2,034 |
|
— |
| ||||
|
Union contract ratification costs |
|
— |
|
— |
|
4,979 |
|
— |
| ||||
|
Change in fair value of contingent consideration liability |
|
1,054 |
|
1,526 |
|
3,570 |
|
3,052 |
| ||||
|
Severance expenses |
|
— |
|
3,116 |
|
— |
|
6,164 |
| ||||
|
Adjusted EBITDA |
|
$ |
99,708 |
|
$ |
96,571 |
|
$ |
180,504 |
|
$ |
184,831 |
|