NORTHBROOK, Ill., Feb. 8, 2017 /PRNewswire/ -- KapStone Paper
and Packaging Corporation (NYSE:KS) today reported preliminary
results for the fourth quarter and year ended December 31, 2016.
As compared to 2015's fourth quarter, results for 2016's fourth
quarter:
- Net sales of $777 million, up
$13 million, or 2 percent
- Net income of $18 million, up
$7 million, or 55 percent
- Diluted EPS of $0.19, up
$0.07 per share, or 58 percent
Non U.S. GAAP financial measures for 2016's fourth quarter as
compared to 2015's fourth quarter:
- Adjusted EBITDA of $92 million,
up $10 million, or 13 percent
- Adjusted net income of $23
million, up $7 million, or 43
percent
- Adjusted diluted EPS of $0.24, up
$0.07 per share, or 41 percent
As compared to the year ended December
31, 2015, results for the year ended December 31, 2016:
- Net sales of $3,077 million, up
$288 million, or 10 percent
- Net income of $86 million, down
$20 million, or 19 percent
- Diluted EPS of $0.88, down
$0.21 per share, or 19 percent
Non U.S. GAAP financial measures for the year ended December 31, 2016 as compared to 2015's
year:
- Adjusted EBITDA of $384 million,
down $20 million, or 5 percent
- Adjusted net income of $107
million, down $30 million, or
22 percent
- Adjusted diluted EPS of $1.10,
down $0.31 per share, or 22
percent
Matthew Kaplan, President and
Chief Executive Officer, stated, "During 2016, we made substantial
progress in our initiatives to improve productivity and reduce
costs. These efforts helped to mitigate the negative impact
of eroding pricing and a less favorable product mix.
"We've made good progress towards our goal to increase
integration. We achieved our goals at Victory while making
several investments / acquisitions, the most recent being the
purchase of Associated Packaging, Inc. on February 1, 2017, that will further increase
integration levels.
"Operating cash flow continues to be strong as we generated
$282 million during 2016, up
$20 million compared to 2015."
Randy Nebel, recently appointed
Executive Vice President of KapStone's Integrated Packaging System,
stated, "2016 operating performance reflected a record
production year for the Company's Longview and Roanoke Rapids mills, while
progress continues on improving reliability and quality at our
other mills. In addition, with the recent capital investments made
at corrugated products plants, we expect that efficiency will be
improved in 2017. In addition, in the fourth quarter we implemented
a $40 per ton containerboard price
increase and began raising prices for corrugated products.
Also, demand was stronger in a quarter when we normally see lower
volumes. Our results were negatively impacted by the impact
of Hurricane Matthew which reduced pre-tax earnings by about
$6 million."
Fourth Quarter Operating Highlights
Consolidated net sales of $777
million in the fourth quarter of 2016 were $13 million higher than 2015, reflecting
higher volumes in the paper and packaging segment as 724,000
tons of paper were shipped during the fourth quarter of 2016
compared to 658,000 tons a year earlier. The Company's average mill
selling price of $617 per ton in the
fourth quarter of 2016 was lower by $29 per ton compared to the fourth quarter of
2015 due to the combined impact of lower export and domestic
containerboard selling prices and lower export kraft paper
prices. Average mill selling prices decreased $9 per ton from the third quarter of 2016,
reflecting seasonal mix, partially offset by the impact from the
October $40 per ton containerboard
price increase. Distribution segment sales declined by $5 million due to lower volume and prices when
compared to the fourth quarter of 2015.
Operating income of $38 million
for the 2016 fourth quarter increased by $9
million, or 30 percent, compared to the 2015 fourth quarter.
Financial performance in the current quarter improved mainly due to
higher sales volumes, lower planned maintenance costs, lower
compensation and benefit costs and a reduction in the fair value of
the contingent consideration for the Victory Packaging acquisition.
These factors were partially offset by lower selling prices, the
impact of Hurricane Matthew and a non-cash charge for withdrawing
from a multiemployer pension plan.
Interest expense was $10 million
for the fourth quarter of 2016, up $1
million from a year ago, as a result of higher interest
rates. At December 31, 2016, the
average interest rate on our debt was 2.1 percent compared to 2.0
percent at the end of 2015.
The effective income tax rate for the fourth quarter of 2016 was
32.6 percent compared to 34.6 percent for the fourth quarter of
2015.
Full Year Operating Highlights
Consolidated net sales for the year ended December 31, 2016, were $3,077 million, an increase of 10 percent,
compared to 2015 sales of $2,789
million. The increase was due to twelve months of
Victory Packaging results in 2016 compared to seven months in 2015,
partially offset by lower selling prices and a less favorable
product mix.
Operating income of $171 million
for the year ended December 31, 2016
was lower than 2015's $199 million by
14%. The decrease was due to lower selling prices, a less
favorable product mix, higher depreciation charges, the impact of
Hurricane Matthew and a non-cash charge for withdrawing from a
multiemployer pension plan. These factors were partially offset by
twelve months of operating results for Victory Packaging and
related synergies with KapStone's mill and plant system, the cost
associated with the 2015 Longview mill work stoppage, lower
incentive compensation due to lower earnings and lower benefit
costs.
Interest expense for the year ended December 31, 2016 was $40
million, up $6 million from a
year ago, mainly due to the full-year effect of borrowings relating
to the Victory Packaging acquisition. Also, interest rates were
higher in 2016 compared to 2015. The average interest rate was
about 2.1 percent for 2016 compared to 1.9 percent for 2015.
Loss on debt extinguishment totaled $0.7 million in 2016 compared to $1.2 million in 2015, reflecting lower voluntary
debt prepayments in 2016.
The effective income tax rate for the year ended December 31, 2016 was 32.7 percent compared to
34.2 percent for 2015.
Cash Flow and Working Capital
Cash and cash equivalents increased by $20 million during the current quarter to
$29 million at December 31, 2016. The Company generated
$70 million of net cash from
operating activities during the fourth quarter of 2016. Capital
expenditures in the fourth quarter were $28
million. The Company paid $10
million of dividends and reduced borrowings by $11 million in the fourth quarter of
2016.
Cash and cash equivalents increased by $23 million during 2016 compared to December 31, 2015, reflecting cash provided by
operating activities of $282 million,
cash used for capital expenditures of $127
million and $27 million of
strategic investments mainly to increase mill integration. Cash
used by financing activities totaled $108
million reflecting $39 million
of cash dividends paid to shareholders and a $65 million debt prepayment.
At December 31, 2016, the Company
had approximately $428 million of
working capital and $483 million of
revolver borrowing capacity.
Conclusion
In summary, Kaplan commented, "Our selling prices are increasing
and we are generating more cash flow. We have
implemented the October containerboard price increase based on
contractual agreements. We anticipate improved performance in
2017."
Conference Call
KapStone will host a conference call at 11 a.m. ET, Thursday,
February 9, 2017, to discuss the Company's financial results
for the 2016 fourth quarter and full year. 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: 52791124
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 Part I, Item 1A "Risk Factors"
in the Company's Annual Report on Form 10-K for the year ended
December 31, 2015 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)
|
(Preliminary and
Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$
777,495
|
|
$
764,238
|
|
|
$
3,077,257
|
|
$
2,789,345
|
|
|
|
|
|
|
|
|
|
Cost and
expenses:
|
|
|
|
|
|
|
|
|
Cost of sales,
excluding depreciation and amortization
|
563,953
|
|
560,743
|
|
|
2,214,872
|
|
1,982,686
|
Depreciation
and amortization
|
46,685
|
|
47,562
|
|
|
182,213
|
|
162,179
|
Freight and
distribution expenses
|
71,236
|
|
66,528
|
|
|
279,023
|
|
234,469
|
Selling,
general and administrative expenses
|
51,720
|
|
60,592
|
|
|
224,127
|
|
210,844
|
Multiemployer
pension plan withdrawal expense
|
6,376
|
|
–
|
|
|
6,376
|
|
–
|
Operating
income
|
37,525
|
|
28,813
|
|
|
170,646
|
|
199,167
|
|
|
|
|
|
|
|
|
|
Foreign exchange
loss
|
737
|
|
852
|
|
|
2,255
|
|
2,556
|
Equity method
investments income
|
(548)
|
|
-
|
|
|
(548)
|
|
-
|
Loss on debt
extinguishment
|
-
|
|
590
|
|
|
679
|
|
1,218
|
Interest expense,
net
|
10,113
|
|
9,303
|
|
|
40,078
|
|
33,759
|
Income before
provision for income taxes
|
27,223
|
|
18,068
|
|
|
128,182
|
|
161,634
|
Provision for income
taxes
|
8,885
|
|
6,244
|
|
|
41,930
|
|
55,248
|
Net
income
|
$
18,338
|
|
$
11,824
|
|
|
$
86,252
|
|
$
106,386
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.19
|
|
$
0.12
|
|
|
$
0.89
|
|
$
1.11
|
Diluted
|
$
0.19
|
|
$
0.12
|
|
|
$
0.88
|
|
$
1.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
96,633,431
|
|
96,321,138
|
|
|
96,533,368
|
|
96,257,749
|
Diluted
|
98,257,232
|
|
97,663,564
|
|
|
97,777,066
|
|
97,635,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate
|
32.6%
|
|
34.6%
|
|
|
32.7%
|
|
34.2%
|
Supplemental
Information
|
GAAP to Non-GAAP
Reconciliations
|
($ in thousands,
except share and per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
Net Income (GAAP)
to EBITDA (Non-GAAP) to Adjusted EBITDA (Non-GAAP):
|
|
|
|
|
|
|
|
|
Net income
(GAAP)
|
$
18,338
|
|
$
11,824
|
|
|
$
86,252
|
|
$
106,386
|
Interest
expense, net
|
10,113
|
|
9,303
|
|
|
40,078
|
|
33,759
|
Provision for income taxes
|
8,885
|
|
6,244
|
|
|
41,930
|
|
55,248
|
Depreciation and amortization
|
46,685
|
|
47,562
|
|
|
182,213
|
|
162,179
|
EBITDA
(Non-GAAP)
|
$
84,021
|
|
$
74,933
|
|
|
$
350,473
|
|
$
357,572
|
|
|
|
|
|
|
|
|
|
Victory Packaging
inventory step-up expense
|
–
|
|
–
|
|
|
–
|
|
5,800
|
Acquisition,
casualty, impairment and other expenses
|
2,123
|
|
1,989
|
|
|
8,608
|
|
6,082
|
Change in fair value
of contingent consideration liability
|
(2,979)
|
|
1,647
|
|
|
1,600
|
|
3,700
|
Severance
expenses
|
533
|
|
102
|
|
|
7,560
|
|
5,076
|
Longview work
stoppage
|
–
|
|
673
|
|
|
–
|
|
15,137
|
Loss on debt
extinguishment
|
–
|
|
590
|
|
|
679
|
|
1,218
|
Multiemployer pension
plan withdrawal expense
|
6,376
|
|
–
|
|
|
6,376
|
|
–
|
Stock-based
compensation expense
|
1,750
|
|
1,713
|
|
|
8,938
|
|
9,835
|
Accumulated EBITDA
adjustments
|
7,803
|
|
6,714
|
|
|
33,761
|
|
46,848
|
Adjusted EBITDA
(Non-GAAP)
|
$
91,824
|
|
$
81,647
|
|
|
$
384,234
|
|
$
404,420
|
|
|
|
|
|
|
|
|
|
Net Income (GAAP)
to Adjusted Net Income (Non-GAAP):
|
|
|
|
|
|
|
|
|
Net income
(GAAP)
|
$
18,338
|
|
$
11,824
|
|
|
$
86,252
|
|
$
106,386
|
Accumulated EBITDA
adjustments
|
7,803
|
|
6,714
|
|
|
33,761
|
|
46,848
|
Accumulated tax
adjustments*
|
(2,926)
|
|
(2,323)
|
|
|
(12,660)
|
|
(15,806)
|
Adjusted Net
Income (Non-GAAP)
|
$
23,215
|
|
$
16,215
|
|
|
$
107,353
|
|
$
137,424
|
|
|
|
|
|
|
|
|
|
Diluted EPS (GAAP)
to Adjusted Diluted EPS (Non-GAAP):
|
|
|
|
|
|
|
|
|
Diluted earnings per
share (GAAP)
|
$
0.19
|
|
$
0.12
|
|
|
$
0.88
|
|
$
1.09
|
Accumulated EBITDA
adjustments
|
0.08
|
|
0.07
|
|
|
0.35
|
|
0.48
|
Accumulated tax
adjustments
|
( 0.03)
|
|
( 0.02)
|
|
|
( 0.13)
|
|
( 0.16)
|
Adjusted Diluted
EPS (Non-GAAP)
|
$
0.24
|
|
$
0.17
|
|
|
$
1.10
|
|
$
1.41
|
|
* Accumulated tax
adjustments in 2016 reflect Accumulated EBITDA adjustments tax
affected at 37.5 percent, the Company's marginal income tax
rate.
|
* Accumulated tax
adjustments in 2015 reflect Accumulated EBITDA adjustments tax
affected at 34.6 percent and 33.7 percent, respectively.
|
KapStone Paper and
Packaging Corporation
|
Consolidated
Balance Sheets
|
(In
thousands)
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2016
|
|
2015
|
|
|
(Preliminary and
Unaudited)
|
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and
cash equivalents
|
$
29,385
|
|
$
6,821
|
|
Trade
accounts receivable, net of allowances
|
392,962
|
|
363,869
|
|
Other
receivables
|
13,562
|
|
18,732
|
|
Inventories
|
322,664
|
|
335,903
|
|
Prepaid
expenses and other current assets
|
10,247
|
|
28,932
|
|
Total current
assets
|
768,820
|
|
754,257
|
|
|
|
|
|
|
Plant, property and
equipment, net
|
1,441,557
|
|
1,406,146
|
|
Other
assets
|
25,468
|
|
12,532
|
|
Intangible assets,
net
|
314,413
|
|
344,583
|
|
Goodwill
|
705,617
|
|
704,592
|
|
Total
assets
|
$
3,255,875
|
|
$
3,222,110
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term
borrowings
|
$
–
|
|
$
6,400
|
|
Dividend
payable
|
10,052
|
|
9,862
|
|
Accounts
payable
|
189,350
|
|
196,491
|
|
Accrued
expenses
|
76,480
|
|
73,138
|
|
Accrued compensation
costs
|
48,840
|
|
64,149
|
|
Accrued income
taxes
|
15,971
|
|
15
|
|
Total current
liabilities
|
340,693
|
|
350,055
|
|
|
|
|
|
|
Long-term debt, net
of current portion
|
1,485,323
|
|
1,543,748
|
|
Pension and
post-retirement benefits
|
34,207
|
|
40,510
|
|
Deferred income
taxes
|
405,561
|
|
418,479
|
|
Other
liabilities
|
85,761
|
|
24,038
|
|
Total other
liabilities
|
2,010,852
|
|
2,026,775
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock $0.0001
par value
|
10
|
|
10
|
|
Additional paid-in
capital
|
275,970
|
|
266,220
|
|
Retained
earnings
|
689,668
|
|
642,306
|
|
Accumulated other
comprehensive loss
|
(61,318)
|
|
(63,256)
|
|
Total stockholders'
equity
|
904,330
|
|
845,280
|
|
Total liabilities and
stockholders' equity
|
$
3,255,875
|
|
$
3,222,110
|
|
KapStone Paper and
Packaging Corporation
|
Consolidated
Statement of Cash Flows
|
(In
thousands)
|
(Preliminary and
Unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Operating
activities:
|
|
|
|
|
|
|
|
Net
income
|
$
18,338
|
|
$
11,824
|
|
$
86,252
|
|
$
106,386
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation of plant and equipment
|
39,175
|
|
38,876
|
|
149,318
|
|
136,886
|
Amortization of intangible assets
|
7,510
|
|
8,686
|
|
32,895
|
|
25,293
|
Stock-based compensation expense
|
1,750
|
|
1,713
|
|
8,938
|
|
9,835
|
Pension
and postretirement
|
(2,106)
|
|
(2,803)
|
|
(3,694)
|
|
(11,182)
|
Excess
tax benefit from stock-based compensation
|
57
|
|
(131)
|
|
207
|
|
(1,649)
|
Amortization of debt issuance costs
|
1,179
|
|
1,182
|
|
4,804
|
|
5,546
|
Loss on
disposal of fixed assets
|
443
|
|
946
|
|
3,599
|
|
951
|
Loss on
debt extinguishment
|
–
|
|
590
|
|
679
|
|
1,218
|
Inventory step-up expense
|
–
|
|
–
|
|
–
|
|
5,800
|
Deferred
income taxes
|
(14,660)
|
|
4,601
|
|
(14,440)
|
|
11,042
|
Change
in fair value of contingent consideration liability
|
(2,979)
|
|
1,647
|
|
1,600
|
|
3,700
|
Equity
method investments income
|
(548)
|
|
–
|
|
(548)
|
|
–
|
Multiemployer pension plan withdrawal expense
|
6,376
|
|
–
|
|
6,376
|
|
–
|
Changes
in operating assets and liabilities
|
14,998
|
|
18,678
|
|
5,934
|
|
(31,369)
|
Net cash provided by
operating activities
|
$
69,533
|
|
$
85,809
|
|
$
281,920
|
|
$
262,457
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Equity method investments
|
(57)
|
|
–
|
|
(11,807)
|
|
–
|
Purchase of intangible assets
|
(500)
|
|
–
|
|
(2,525)
|
|
–
|
Acquisitions, net of cash acquired
|
–
|
|
–
|
|
(15,438)
|
|
(617,046)
|
Capital expenditures
|
(27,619)
|
|
(31,861)
|
|
(126,865)
|
|
(126,756)
|
Proceeds from the sales of assets
|
–
|
|
–
|
|
4,881
|
|
–
|
Net cash used in
investing activities
|
$(28,176)
|
|
$(31,861)
|
|
$(151,754)
|
|
$(743,802)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Proceeds from
revolving credit facility
|
97,800
|
|
$
81,800
|
|
$
451,000
|
|
$
350,000
|
Repayments on
revolving credit facility
|
(109,300)
|
|
(77,400)
|
|
(457,400)
|
|
(343,600)
|
Proceeds from
receivables credit facility
|
6,445
|
|
21,740
|
|
43,001
|
|
134,701
|
Repayments on
receivables credit facility
|
(6,675)
|
|
(17,639)
|
|
(39,342)
|
|
(36,088)
|
Proceeds from
long-term debt
|
–
|
|
-
|
|
-
|
|
519,763
|
Repayments on
long-term debt
|
–
|
|
(51,750)
|
|
(64,687)
|
|
(116,438)
|
Payment of loan
amendment costs and debt issuance fees
|
–
|
|
–
|
|
(2,250)
|
|
(10,790)
|
Proceeds from other
current borrowings
|
–
|
|
–
|
|
–
|
|
6,615
|
Payment from other
current borrowings
|
–
|
|
(2,214)
|
|
–
|
|
(6,615)
|
Cash dividends
paid
|
(9,735)
|
|
(9,631)
|
|
(38,736)
|
|
(38,729)
|
Payment of
withholding taxes on vested stock awards
|
31
|
|
(48)
|
|
(810)
|
|
(2,508)
|
Proceeds from
exercises of stock options
|
70
|
|
118
|
|
858
|
|
896
|
Proceeds from
issuance of shares to ESPP
|
–
|
|
(1)
|
|
971
|
|
843
|
Excess tax benefit
from stock-based compensation
|
(57)
|
|
131
|
|
(207)
|
|
1,649
|
Net cash provided
(used in) / provided by financing activities
|
$(21,421)
|
|
$(54,894)
|
|
$(107,602)
|
|
$
459,699
|
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
19,936
|
|
(946)
|
|
22,564
|
|
(21,646)
|
Cash and cash
equivalents-beginning of period
|
9,449
|
|
7,767
|
|
6,821
|
|
28,467
|
Cash and cash
equivalents-end of period
|
$
29,385
|
|
$
6,821
|
|
$
29,385
|
|
$
6,821
|
KapStone Paper and
Packaging Corporation
|
Operating Segment
Information
|
(In
thousands)
|
(Preliminary and
Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2016
|
Trade
|
|
Inter-
segment
|
|
Total
|
|
Segment
Operating
Income
(Loss)
|
|
Depreciation
and
Amortization
|
|
Capital
Expenditures
|
|
Total Assets
at December
31, 2016
|
Paper and
Packaging
|
$
541,047
|
|
$ 16,422
|
|
$
557,469
|
|
$
36,103
|
|
$
38,716
|
|
$
24,502
|
|
$
2,541,634
|
Distribution
|
236,448
|
|
-
|
|
236,448
|
|
7,349
|
|
5,869
|
|
415
|
|
658,208
|
Corporate
|
-
|
|
-
|
|
-
|
|
(5,927)
|
|
2,100
|
|
2,702
|
|
56,033
|
Intersegment
eliminations
|
-
|
|
(16,422)
|
|
(16,422)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$
777,495
|
|
$
-
|
|
$
777,495
|
|
$
37,525
|
|
$
46,685
|
|
$
27,619
|
|
$
3,255,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2015
|
Trade
|
|
Inter-
segment
|
|
Total
|
|
Segment
Operating
Income
(Loss)
|
|
Depreciation
and
Amortization
|
|
Capital
Expenditures
|
|
Total Assets
at December
31, 2015
|
Paper and
Packaging
|
$
522,815
|
|
$ 13,864
|
|
$
536,679
|
|
$
33,691
|
|
$
40,640
|
|
$
26,627
|
|
$
2,489,683
|
Distribution
|
241,423
|
|
-
|
|
241,423
|
|
7,860
|
|
5,641
|
|
1,664
|
|
675,204
|
Corporate
|
-
|
|
-
|
|
-
|
|
(12,738)
|
|
1,281
|
|
3,570
|
|
57,223
|
Intersegment
eliminations
|
-
|
|
(13,864)
|
|
(13,864)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$
764,238
|
|
$
-
|
|
$
764,238
|
|
$
28,813
|
|
$
47,562
|
|
$
31,861
|
|
$
3,222,110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2016
|
Trade
|
|
Inter-
segment
|
|
Total
|
|
Segment
Operating
Income
(Loss)
|
|
Depreciation
and
Amortization
|
|
Capital
Expenditures
|
|
|
Paper and
Packaging
|
$
2,127,220
|
|
$ 72,089
|
|
$
2,199,309
|
|
$
181,157
|
|
$
151,506
|
|
$
116,022
|
|
|
Distribution
|
950,037
|
|
-
|
|
950,037
|
|
29,296
|
|
23,027
|
|
4,349
|
|
|
Corporate
|
-
|
|
-
|
|
-
|
|
(39,807)
|
|
7,680
|
|
6,494
|
|
|
Intersegment
eliminations
|
-
|
|
(72,089)
|
|
(72,089)
|
|
-
|
|
-
|
|
-
|
|
|
|
$
3,077,257
|
|
$
-
|
|
$
3,077,257
|
|
$
170,646
|
|
$
182,213
|
|
$
126,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2015
|
Trade
|
|
Inter-
segment
|
|
Total
|
|
Segment
Operating
Income
(Loss)
|
|
Depreciation
and
Amortization
|
|
Capital
Expenditures
|
|
|
Paper and
Packaging
|
$
2,206,396
|
|
$ 22,280
|
|
$
2,228,676
|
|
$
224,012
|
|
$
145,363
|
|
$
108,599
|
|
|
Distribution
(a)
|
582,949
|
|
-
|
|
582,949
|
|
20,719
|
|
13,108
|
|
3,190
|
|
|
Corporate
|
-
|
|
-
|
|
-
|
|
(45,564)
|
|
3,708
|
|
14,967
|
|
|
Intersegment
eliminations
|
-
|
|
(22,280)
|
|
(22,280)
|
|
-
|
|
-
|
|
-
|
|
|
|
$
2,789,345
|
|
$
-
|
|
$
2,789,345
|
|
$
199,167
|
|
$
162,179
|
|
$
126,756
|
|
|
|
(a) Reflects results
of Victory Packaging which KapStone acquired on June 1,
2015
|
KapStone Paper and
Packaging Corporation
|
Operating Segment
EBITDA and Adjusted EBITDA
|
(In
thousands)
|
(Preliminary and
Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
Paper and
Packaging
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Segment operating
income
|
|
$ 36,103
|
|
$
33,691
|
|
$ 181,157
|
|
$ 224,012
|
Equity method
investments income
|
|
548
|
|
-
|
|
548
|
|
-
|
Foreign exchange
loss
|
|
(479)
|
|
(466)
|
|
(461)
|
|
(1,168)
|
Depreciation and
amortization
|
|
38,716
|
|
40,640
|
|
151,506
|
|
145,363
|
EBITDA
|
|
74,888
|
|
73,865
|
|
332,750
|
|
368,207
|
Victory Packaging
inventory step-up expense
|
|
-
|
|
-
|
|
-
|
|
-
|
Acquisition,
casualty, impairment and other expenses
|
|
(550)
|
|
423
|
|
2,979
|
|
1,450
|
Longview
work stoppage
|
|
-
|
|
673
|
|
-
|
|
15,137
|
Multiemployer pension
plan withdrawal expense
|
|
6,376
|
|
-
|
|
6,376
|
|
-
|
Severance
expenses
|
|
(448)
|
|
37
|
|
5,550
|
|
4,908
|
Adjusted
EBITDA
|
|
$ 80,266
|
|
$
74,998
|
|
$ 347,655
|
|
$ 389,702
|
Adjusted EBITDA
margin
|
|
14.8%
|
|
14.3%
|
|
16.3%
|
|
17.7%
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
Distribution
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Segment operating
income
|
|
$
7,349
|
|
$
7,860
|
|
$
29,296
|
|
$
20,719
|
Foreign exchange
loss
|
|
(258)
|
|
(386)
|
|
(1,794)
|
|
(1,388)
|
Depreciation and
amortization
|
|
5,869
|
|
5,641
|
|
23,027
|
|
13,108
|
EBITDA
|
|
12,960
|
|
13,115
|
|
50,529
|
|
32,439
|
Victory Packaging
inventory step-up expense
|
|
-
|
|
-
|
|
-
|
|
5,800
|
Acquisition,
casualty, impairment and other expenses
|
|
2,126
|
|
620
|
|
3,780
|
|
620
|
Severance
expenses
|
|
981
|
|
65
|
|
1,614
|
|
168
|
Adjusted
EBITDA
|
|
$ 16,067
|
|
$
13,800
|
|
$
55,923
|
|
$
39,027
|
Adjusted EBITDA
margin
|
|
6.8%
|
|
5.7%
|
|
5.9%
|
|
6.7%
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
Corporate
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Segment operating
(loss)
|
|
$ (5,927)
|
|
$ (12,738)
|
|
$ (39,807)
|
|
$ (45,564)
|
Loss on debt
extinguishment
|
|
-
|
|
(590)
|
|
(679)
|
|
(1,218)
|
Depreciation and
amortization
|
|
2,100
|
|
1,281
|
|
7,680
|
|
3,708
|
EBITDA
|
|
(3,827)
|
|
(12,047)
|
|
(32,806)
|
|
(43,074)
|
Victory Packaging
inventory step-up expense
|
|
-
|
|
-
|
|
-
|
|
-
|
Acquisition,
casualty, impairment and other expenses
|
|
547
|
|
946
|
|
1,849
|
|
4,012
|
Change in fair value
of contingent consideration liability
|
|
(2,979)
|
|
1,647
|
|
1,600
|
|
3,700
|
Severance
expenses
|
|
-
|
|
-
|
|
396
|
|
-
|
Stock-based
compensation
|
|
1,750
|
|
1,713
|
|
8,938
|
|
9,835
|
Loss on debt
extinguishment
|
|
-
|
|
590
|
|
679
|
|
1,218
|
Adjusted
EBITDA
|
|
$ (4,509)
|
|
$
(7,151)
|
|
$ (19,344)
|
|
$ (24,309)
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
Consolidated
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Operating
income
|
|
$ 37,525
|
|
$
28,813
|
|
$ 170,646
|
|
$ 199,167
|
Loss on debt
extinguishment
|
|
-
|
|
(590)
|
|
(679)
|
|
(1,218)
|
Foreign exchange
loss
|
|
(737)
|
|
(852)
|
|
(2,255)
|
|
(2,556)
|
Equity method
investments income
|
|
548
|
|
-
|
|
548
|
|
-
|
Depreciation and
amortization
|
|
46,685
|
|
47,562
|
|
182,213
|
|
162,179
|
EBITDA
|
|
84,021
|
|
74,933
|
|
350,473
|
|
357,572
|
Victory Packaging
inventory step-up expense
|
|
-
|
|
-
|
|
-
|
|
5,800
|
Acquisition,
casualty, impairment and other expenses
|
|
2,123
|
|
1,989
|
|
8,608
|
|
6,082
|
Longview work
stoppage
|
|
-
|
|
673
|
|
-
|
|
15,137
|
Severance
expenses
|
|
533
|
|
102
|
|
7,560
|
|
5,076
|
Change in fair value
of contingent consideration liability
|
|
(2,979)
|
|
1,647
|
|
1,600
|
|
3,700
|
Stock-based
compensation
|
|
1,750
|
|
1,713
|
|
8,938
|
|
9,835
|
Multiemployer pension
plan withdrawal expense
|
|
6,376
|
|
-
|
|
6,376
|
|
-
|
Loss on debt
extinguishment
|
|
-
|
|
590
|
|
679
|
|
1,218
|
Adjusted
EBITDA
|
|
$ 91,824
|
|
$
81,647
|
|
$ 384,234
|
|
$ 404,420
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/kapstone-reports-fourth-quarter-and-full-year-results-300404506.html
SOURCE KapStone Paper and Packaging Corporation