NORTHBROOK, Ill., July 26, 2017 /PRNewswire/ -- 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,
|
|
|
2017
|
|
2016
|
|
|
(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-segment
|
|
Total
|
|
Segment Operating
Income (Loss)
|
|
Depreciation and
Amortization
|
|
Capital
Expenditures
|
|
Total Assets at
June 30, 2017
|
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-segment
|
|
Total
|
|
Segment Operating
Income (Loss)
|
|
Depreciation and
Amortization
|
|
Capital
Expenditures
|
|
Total Assets at
June 30, 2016
|
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-segment
|
|
Total
|
|
Segment Operating
Income (Loss)
|
|
Depreciation and
Amortization
|
|
Capital
Expenditures
|
|
|
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-segment
|
|
Total
|
|
Segment Operating
Income (Loss)
|
|
Depreciation and
Amortization
|
|
Capital
Expenditures
|
|
|
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
|
View original
content:http://www.prnewswire.com/news-releases/kapstone-reports-second-quarter-results-300494670.html
SOURCE KapStone Paper and Packaging Corporation