WestRock Company (NYSE:WRK), a leading provider of sustainable
paper and packaging solutions, today announced results for its
fiscal first quarter ended December 31, 2022.
First Quarter Highlights and other notable items:
- Net sales of $4.9 billion comparable year-over-year
- Net income of $45 million, Adjusted Net Income of $141
million
- Consolidated Adjusted EBITDA of $652 million, Corrugated
Packaging and Consumer Packaging segments delivered strong
performance and Adjusted EBITDA increased 7.0% and 8.3%
year-over-year, respectively
- Results in the current year impacted by $119 million due to
economic downtime and weather disruptions; additionally, non-cash
pension costs increased $40 million year-over-year and the
unfavorable impact of foreign currency was $17 million
year-over-year
- Earned $0.18 per diluted share (“EPS”) and $0.55 of Adjusted
EPS
- Acquired the remaining 67.7% interest in Gondi, S.A. de C.V.
(“Grupo Gondi”) for $970 million, plus the assumption of
debt
- Divested two uncoated recycled paperboard mills (“URB”)
for $50 million, subject to a working capital adjustment, and
recorded an $11 million pre-tax gain on sale
“I’m pleased to report that WestRock grew packaging revenue and
margins in the first quarter, even in this challenging
environment,” said David B. Sewell, chief executive officer. “We
also finalized the acquisition of Grupo Gondi, which expands our
global footprint and enables us to take a leading position in the
packaging marketplace in Mexico.
“During the quarter, elevated inflation and softening
macroeconomic conditions negatively impacted our Global Paper
business. While we expect these market conditions to continue in
the near-term, we remain committed to executing on our strategy and
delivering on our productivity efforts. WestRock’s broad portfolio
of products provides us with flexibility to manage through changing
market conditions to maximize our performance.”
Consolidated Financial Results
WestRock’s performance for the three months ended December 31,
2022 and 2021 (in millions):
Three Months Ended Dec. 31, 2022 Dec. 31, 2021 $ Var. % Var.
Net sales
$
4,923.1
$
4,952.2
$
(29.1)
-0.6%
Net income
$
45.3
$
182.3
$
(137.0)
(75.2)%
Consolidated Adjusted EBITDA
$
652.1
$
680.3
$
(28.2)
-4.1%
Net sales decreased $29 million, or 0.6%, year-over-year.
Consumer Packaging segment sales increased $76 million, or 6.7%,
Corrugated Packaging segment sales increased $15 million, or 0.7%;
Distribution segment sales decreased $3 million, or 1.0%; Global
Paper segment sales decreased $229 million, or 16.9%; and
intersegment sales decreased $10 million. Net sales in the current
year quarter included $102 million related to the consolidation of
Grupo Gondi.
Net income decreased $137 million year-over-year to $45 million.
The decrease in net income was driven by increased net cost
inflation, lower volumes, economic downtime, the Mahrt mill work
stoppage, increased non-cash pension costs, increased restructuring
and other costs, business systems transformation costs and a
non-cash loss related to the Grupo Gondi acquisition which were
partially offset by the margin impact from higher price/mix and a
gain on sale of two URB mills. The Grupo Gondi loss primarily
relates to the non-cash write-off of prior foreign currency
translation adjustments recorded in accumulated other comprehensive
loss, as well as the difference between the fair value of the
consideration paid and the carrying value of our prior ownership
interest.
Consolidated Adjusted EBITDA decreased $28 million, or 4.1%,
year-over-year, primarily due to lower Global Paper segment
Adjusted EBITDA that was partially offset by increased Adjusted
EBITDA in our Corrugated Packaging and Consumer Packaging segments.
Grupo Gondi contributed $17.3 million of Adjusted EBITDA for the
month of December 2022.
Additional information about the changes in segment sales and
Adjusted EBITDA by segment are included below.
Restructuring and Other Costs
Restructuring and other costs during the first quarter of fiscal
2023 were $33 million. The charges were primarily related to
acquisition, integration and divestiture costs aggregating $17
million, with the balance due primarily to severance related to
reduction in force initiatives and costs associated with previously
announced closures.
Cash Flow Activities
Net cash provided by operating activities was $266 million in
the first quarter of fiscal 2023 compared to $253 million in the
prior year quarter.
Total debt was $9.5 billion at December 31, 2022, $9.3 billion
excluding $171 million of unamortized fair market value step-up of
debt acquired in mergers and acquisitions, and $8.9 billion after
further excluding cash and cash equivalents of $415 million. Total
debt increased $1.7 billion in the first quarter of fiscal 2023,
primarily due to the acquisition of the remaining 67.7% interest in
Grupo Gondi including the assumption of debt. The Company had
approximately $3.3 billion of available liquidity from long-term
committed credit facilities and cash and cash equivalents at
December 31, 2022.
During the first quarter of fiscal 2023, WestRock invested $282
million in capital expenditures and returned $70 million in capital
to stockholders in dividend payments.
Segment Results
Due to the timing of the Grupo Gondi acquisition, it was not
practicable to allocate its results to our operating segments for
the first quarter of fiscal 2023. As a result, we included the
results for the month of December 2022 in "Other unallocated".
WestRock’s segment performance for the three months ended
December 31, 2022 and 2021 was as follows (in millions):
Corrugated Packaging Segment
Three Months Ended Dec. 31, 2022 Dec. 31, 2021 Var. % Var.
Segment sales
$
2,235.2
$
2,220.0
$
15.2
0.7%
Adjusted EBITDA
$
309.2
$
288.9
$
20.3
7.0%
Adjusted EBITDA Margin
13.8%
13.0%
80 bps
Corrugated Packaging segment sales increased $15 million, or
0.7%, primarily due to higher selling price/mix that was largely
offset by lower volumes. The first quarter of fiscal 2023 had one
less shipping day than the prior year quarter.
Corrugated Packaging Adjusted EBITDA increased $20 million, or
7.0%, primarily due to the margin impact from higher selling
price/mix, that was largely offset by increased net cost inflation,
lower volumes and higher operating costs, including economic
downtime. Corrugated Packaging Adjusted EBITDA margin was 13.8% and
Adjusted EBITDA margin excluding trade sales was 14.2%.
Consumer Packaging Segment
Three Months Ended Dec. 31, 2022 Dec. 31, 2021 Var. % Var.
Segment sales
$
1,215.0
$
1,138.7
$
76.3
6.7%
Adjusted EBITDA
$
183.3
$
169.3
$
14.0
8.3%
Adjusted EBITDA Margin
15.1%
14.9%
20 bps
Consumer Packaging segment sales increased $76 million, or 6.7%,
primarily due to higher selling price/mix that was partially offset
by the unfavorable impact of foreign currency.
Consumer Packaging Adjusted EBITDA increased $14 million, or
8.3%, primarily due to the margin impact from higher selling
price/mix that was largely offset by increased net cost inflation,
higher operating costs, the unfavorable impact of foreign currency
and increased non-cash pension costs. Consumer Packaging Adjusted
EBITDA margin was 15.1%.
Global Paper Segment
Three Months Ended Dec. 31, 2022 Dec. 31, 2021 Var. % Var.
Segment sales
$
1,123.6
$
1,352.6
$
(229.0)
-16.9%
Adjusted EBITDA
$
157.3
$
232.4
$
(75.1)
-32.3%
Adjusted EBITDA Margin
14.0%
17.2%
-320 bps
Global Paper segment sales decreased $229 million, or 16.9%,
primarily due to lower volumes that were partially offset by higher
selling price/mix.
Global Paper Adjusted EBITDA decreased $75 million, or 32.3%,
primarily due to lower volumes, increased net cost inflation,
higher operating costs, including economic downtime, increased
non-cash pension costs and weather disruptions which were partially
offset by the margin impact from higher selling price/mix. Global
Paper Adjusted EBITDA margin was 14.0%.
Distribution Segment
Three Months Ended
Dec. 31, 2022 Dec. 31, 2021 Var. % Var.
Segment sales
$
321.5
$
324.8
$
(3.3)
-1.0%
Adjusted EBITDA
$
10.8
$
6.5
$
4.3
66.2%
Adjusted EBITDA Margin
3.4%
2.0%
140 bps
Distribution segment sales decreased $3 million, or 1.0%,
primarily due to lower volumes that were largely offset by higher
selling price/mix.
Distribution Adjusted EBITDA increased $4 million, or 66.2%,
primarily due to the margin impact of higher selling price/mix that
was largely offset by increased cost inflation and lower
volumes.
Other Unallocated
Other unallocated net sales before intersegment eliminations for
the month of December were $102.2 million and Adjusted EBITDA was
$17.3 million.
Earnings Guidance
In light of uncertain macroeconomic conditions, we are removing
our fiscal 2023 earnings guidance. We will continue to provide a
quarterly earnings outlook.
Conference Call
WestRock will host a conference call to discuss its results of
operations for the fiscal first quarter ended December 31, 2022 and
other topics that may be raised during the discussion at 8:30 a.m.,
Eastern Time, on Wednesday, February 1, 2023. The conference call,
which will be webcast live, an accompanying slide presentation, and
this release can be accessed at ir.westrock.com.
Investors who wish to participate in the webcast via
teleconference should dial 833-630-1583 (inside the U.S.) or +1
412-317-1822 (outside the U.S.) at least 15 minutes prior to the
start of the call and ask to be joined into the WestRock Company
call. Replays of the call can be accessed at ir.westrock.com.
About WestRock
WestRock (NYSE:WRK) partners with our customers to provide
differentiated, sustainable paper and packaging solutions that help
them win in the marketplace. WestRock’s team members support
customers around the world from locations spanning North America,
South America, Europe, Asia and Australia. Learn more at
www.westrock.com.
Cautionary Statements
This release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on our current expectations,
beliefs, plans or forecasts and are typically identified by words
or phrases such as "may," "will," "could," "should," "would,"
"anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," "target," "prospects," "potential" and "forecast," and
other words, terms and phrases of similar meaning. Forward-looking
statements involve estimates, expectations, projections, goals,
forecasts, assumptions, risks and uncertainties. A forward-looking
statement is not a guarantee of future performance, and actual
results could differ materially from those contained in the
forward-looking statement.
Forward-looking statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond our
control, such as developments related to pricing cycles and
volumes; economic, competitive and market conditions generally,
including macroeconomic uncertainty, customer inventory
rebalancing, the impact of inflation and increases in energy, raw
materials, shipping, labor and capital equipment costs; reduced
supply of raw materials, energy and transportation, including from
supply chain disruptions and labor shortages; intense competition;
results and impacts of acquisitions, including operational and
financial effects from the acquisition of Grupo Gondi, and
divestitures as well as risks related to our joint ventures;
business disruptions, including from public health crises such as a
resurgence of COVID, the occurrence of severe weather or a natural
disaster or other unanticipated problems, such as labor
difficulties, equipment failure or unscheduled maintenance and
repair; failure to respond to changing customer preferences; the
amount and timing of capital expenditures, including installation
costs, project development and implementation costs, and costs
related to resolving disputes with third parties with which we work
to manage and implement capital projects; risks related to
international sales and operations; the production of faulty or
contaminated products; the loss of certain customers; adverse
legal, reputational, operational and financial effects resulting
from cyber incidents and the effectiveness of business continuity
plans during a ransomware or other cyber incident; work stoppages
and other labor relations difficulties; inability to attract,
motivate, train and retain qualified personnel; risks associated
with sustainability and climate change, including our ability to
achieve our environmental, social and governance targets and goals
on announced timelines or at all; our inability to successfully
identify and make performance and productivity improvements and
risks associated with completing strategic projects on the
anticipated timelines and realizing anticipated financial or
operational improvements on announced timelines or at all,
including with respect to our business systems transformation;
risks related to our indebtedness; the scope, costs, timing and
impact of any restructuring of our operations and corporate and tax
structure; our desire or ability to repurchase company stock; and
the scope, timing and outcome of any litigation, claims or other
proceedings or dispute resolutions and the impact of any such
litigation (including with respect to the Brazil tax liability
matter). Such risks and other factors that may impact
forward-looking statements are discussed in Item 1A “Risk Factors”
in our Annual Report on Form 10-K for the fiscal year ended
September 30, 2022, as well as the other risks discussed in our
subsequent filings with the Securities and Exchange Commission. The
information contained herein speaks as of the date hereof, and the
Company does not have or undertake any obligation to update or
revise its forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent
required by law.
WestRock Company Condensed Consolidated Statements of
Income In millions, except per share amounts (unaudited)
Three Months Ended
December 31,
2022
2021
Net sales
$
4,923.1
$
4,952.2
Cost of goods sold
4,157.9
4,155.6
Gross profit
765.2
796.6
Selling, general and administrative excluding intangible
amortization
479.1
452.9
Selling, general and administrative intangible amortization
86.6
88.0
Gain on disposal of assets
(1.7
)
(13.9
)
Multiemployer pension withdrawal income
-
(3.3
)
Restructuring and other costs
33.0
2.3
Operating profit
168.2
270.6
Interest expense, net
(97.3
)
(86.7
)
Pension and other postretirement non-service (cost) income
(5.0
)
39.9
Other income, net
25.2
0.2
Equity in (loss) income of unconsolidated entities
(36.0
)
18.4
Income before income taxes
55.1
242.4
Income tax expense
(8.3
)
(58.6
)
Consolidated net income
46.8
183.8
Less: Net income attributable to noncontrolling interests
(1.5
)
(1.5
)
Net income attributable to common stockholders
$
45.3
$
182.3
Computation of diluted earnings per share under the
two-class method (in millions, except per share data): Net
income attributable to common stockholders
$
45.3
$
182.3
Diluted weighted average shares outstanding
256.7
266.9
Diluted earnings per share
$
0.18
$
0.68
WestRock Company Segment Information In millions
(unaudited)
Three Months Ended
December 31,
2022
2021
Net sales: Corrugated Packaging
$
2,235.2
$
2,220.0
Consumer Packaging
1,215.0
1,138.7
Global Paper
1,123.6
1,352.6
Distribution
321.5
324.8
Other unallocated
102.2
-
Intersegment Eliminations
(74.4
)
(83.9
)
Total
$
4,923.1
$
4,952.2
Adjusted EBITDA: Corrugated Packaging
$
309.2
$
288.9
Consumer Packaging
183.3
169.3
Global Paper
157.3
232.4
Distribution
10.8
6.5
Other unallocated
17.3
-
Total
677.9
697.1
Depreciation, depletion and amortization
(373.2
)
(366.5
)
Gain on sale of certain closed facilities
0.9
14.4
Multiemployer pension withdrawal income
-
3.3
Restructuring and other costs
(33.0
)
(2.3
)
Non-allocated expenses
(25.8
)
(16.8
)
Interest expense, net
(97.3
)
(86.7
)
Other income, net
25.2
0.2
Other adjustments
(119.6
)
(0.3
)
Income before income taxes
$
55.1
$
242.4
Depreciation, depletion and amortization: Corrugated
Packaging
$
181.4
$
167.0
Consumer Packaging
84.1
86.3
Global Paper
89.1
106.2
Distribution
6.9
5.8
Other unallocated
9.6
-
Corporate
2.1
1.2
Total
$
373.2
$
366.5
Other adjustments: Corrugated Packaging
$
46.8
$
-
Consumer Packaging
31.6
0.2
Global Paper
17.5
0.1
Other unallocated
3.0
-
Corporate
20.7
-
Total
$
119.6
$
0.3
WestRock Company Condensed Consolidated Statements of
Cash Flows In millions (unaudited)
Three Months Ended
December 31,
2022
2021
Cash flows from operating activities: Consolidated net
income
$
46.8
$
183.8
Adjustments to reconcile consolidated net income to net cash
provided by operating activities: Depreciation, depletion and
amortization
373.2
366.5
Deferred income tax benefit
(19.5
)
(14.0
)
Share-based compensation expense
9.6
15.2
401(k) match and company contribution in common stock
-
2.5
Pension and other postretirement funding more (less) than cost
(income)
3.6
(32.4
)
Cash surrender value increase in excess of premiums paid
(13.1
)
(16.6
)
Equity in loss (income) of unconsolidated entities
36.0
(18.4
)
Gain on sale of businesses
(11.1
)
-
Other impairment adjustments
(0.7
)
0.9
Gain on disposal of plant and equipment and other, net
(1.7
)
(13.9
)
Other, net
0.7
5.5
Changes in operating assets and liabilities, net of acquisitions /
divestitures: Accounts receivable
284.9
60.4
Inventories
(53.8
)
(117.5
)
Other assets
(64.3
)
(44.1
)
Accounts payable
(113.9
)
5.4
Income taxes
0.2
62.0
Accrued liabilities and other
(211.0
)
(192.5
)
Net cash provided by operating activities
265.9
252.8
Investing activities: Capital expenditures
(282.2
)
(173.1
)
Cash paid for purchase of businesses, net of cash acquired
(853.5
)
(7.0
)
Proceeds from corporate owned life insurance
2.2
2.0
Proceeds from sale of businesses
25.9
-
Proceeds from currency forward contracts
23.2
-
Proceeds from sale of property, plant and equipment
4.5
22.4
Proceeds from property, plant and equipment insurance settlement
-
1.7
Other, net
(0.3
)
(0.8
)
Net cash used for investing activities
(1,080.2
)
(154.8
)
Financing activities: Additions to revolving credit
facilities
10.2
-
Repayments of revolving credit facilities
(116.3
)
-
Additions to debt
1,389.8
31.3
Repayments of debt
(510.7
)
(52.2
)
Changes in commercial paper, net
301.5
-
Other debt (repayments) additions, net
(23.6
)
69.0
Issuances of common stock, net of related tax withholdings
2.4
6.2
Purchases of common stock
-
(100.1
)
Cash dividends paid to stockholders
(70.0
)
(66.3
)
Other, net
(0.4
)
7.8
Net cash provided by (used for) financing activities
982.9
(104.3
)
Effect of exchange rate changes on cash and cash equivalents, and
restricted cash
(5.7
)
6.7
Changes in cash and cash equivalents, and restricted cash in assets
held-for-sale
(7.9
)
-
Increase in cash and cash equivalents and restricted cash
155.0
0.4
Cash and cash equivalents, and restricted cash at beginning of
period
260.2
290.9
Cash and cash equivalents, and restricted cash at end of period
$
415.2
$
291.3
Supplemental disclosure of cash flow information:
Cash paid during the period for: Income taxes, net of refunds
$
28.6
$
9.9
Interest, net of amounts capitalized
$
68.1
$
56.8
Non-cash additions to property, plant and equipment
$
159.8
$
101.9
WestRock Company Condensed Consolidated Balance
Sheets In millions (unaudited)
December 31,
September 30,
2022
2022
Assets Current assets: Cash and
cash equivalents
$
415.2
$
260.2
Accounts receivable (net of allowances of $61.0 and $66.3)
2,665.5
2,683.9
Inventories
2,570.9
2,317.1
Other current assets
1,713.9
689.8
Assets held for sale
214.6
34.4
Total current assets
7,580.1
5,985.4
Property, plant and equipment, net
11,398.7
10,081.4
Goodwill
6,073.4
5,895.2
Intangibles, net
2,855.4
2,920.6
Prepaid pension asset
453.7
440.3
Other assets
1,980.4
3,082.6
Total Assets
$
30,341.7
$
28,405.5
Liabilities and Equity
Current liabilities: Current portion of debt
$
497.0
$
212.2
Accounts payable
2,270.6
2,252.1
Accrued compensation and benefits
410.9
627.9
Other current liabilities
1,767.4
810.6
Liabilities held for sale
66.1
-
Total current liabilities
5,012.0
3,902.8
Long-term debt due after one year
8,965.8
7,575.0
Pension liabilities, net of current portion
211.9
189.4
Postretirement medical liabilities, net of current portion
106.9
105.4
Deferred income taxes
2,814.1
2,761.9
Other long-term liabilities
1,671.8
2,445.8
Redeemable noncontrolling interests
6.9
5.5
Total stockholders' equity
11,534.5
11,402.0
Noncontrolling interests
17.8
17.7
Total Equity
11,552.3
11,419.7
Total Liabilities and Equity
$
30,341.7
$
28,405.5
Non-GAAP Financial Measures and
Reconciliations
WestRock reports its financial results in accordance with
accounting principles generally accepted in the United States
("GAAP"). However, management believes certain non-GAAP financial
measures provide WestRock’s management, board of directors,
investors, potential investors, securities analysts and others with
additional meaningful financial information that should be
considered when assessing our ongoing performance. Management also
uses these non-GAAP financial measures in making financial,
operating and planning decisions, and in evaluating WestRock’s
performance. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, WestRock’s GAAP
results. The non-GAAP financial measures we present may differ from
similarly captioned measures presented by other companies.
Business Systems
Transformation Costs
In the fourth quarter of fiscal 2022,
WestRock launched a multi-year phased business systems
transformation project. Due to the nature, scope and magnitude of
this investment, management believes these incremental
transformation costs are above the normal, recurring level of
spending for information technology to support operations. Since
these strategic investments, including incremental nonrecurring
operating costs, will cease at the end of the investment period,
are not expected to recur in the foreseeable future, and are not
considered representative of our underlying operating performance,
management believes presenting these costs as an adjustment in the
non-GAAP results provides additional information to investors about
trends in our operations and is useful for period-over-period
comparisons. This presentation also allows investors to view our
underlying operating results in the same manner as they are viewed
by management.
We discuss below details of the non-GAAP financial measures
presented by us and provide reconciliations of these non-GAAP
financial measures to the most directly comparable financial
measures calculated in accordance with GAAP.
Consolidated Adjusted EBITDA and
Adjusted EBITDA
WestRock uses the non-GAAP financial measure “Consolidated
Adjusted EBITDA”, along with other factors such as “Adjusted
EBITDA” (a GAAP measure of segment performance the Company uses to
evaluate our segment results), to evaluate our overall performance.
Management believes that the most directly comparable GAAP measure
to “Consolidated Adjusted EBITDA” is “Net income attributable to
common stockholders”. It can also be derived by adding together
each segment’s “Adjusted EBITDA” plus “Non-allocated expenses”.
Management believes this measure provides WestRock’s management,
board of directors, investors, potential investors, securities
analysts and others with useful information to evaluate WestRock’s
performance because it excludes restructuring and other costs,
business systems transformation costs and other specific items that
management believes are not indicative of the ongoing operating
results of the business. WestRock’s management and board use this
information to evaluate WestRock’s performance relative to other
periods.
Adjusted EBITDA, a GAAP measure of segment performance, is
defined as pretax earnings of a reportable segment before
depreciation, depletion and amortization, and excludes the
following items the Company does not consider part of our segment
performance: gain on sale of certain closed facilities,
multiemployer pension withdrawal income, restructuring and other
costs, non-allocated expenses, interest expense, net, other income,
net, and other adjustments - each as outlined in the table on page
7 ("Adjusted EBITDA").
Adjusted Segment Sales and Adjusted
EBITDA Margins, Excluding Trade Sales
WestRock uses the non-GAAP financial measures “Adjusted Segment
Sales” and “Adjusted EBITDA Margins, excluding trade sales”.
Management believes that adjusting segment sales for trade sales is
consistent with how our peers present their sales for purposes of
computing segment margins and helps WestRock’s management, board of
directors, investors, potential investors, securities analysts and
others compare companies in the same peer group. Management
believes that the most directly comparable GAAP measure to
“Adjusted Segment Sales” is “segment sales”. Additionally, the most
directly comparable GAAP measure to “Adjusted EBITDA Margin,
excluding trade sales” is “Adjusted EBITDA Margin”. “Adjusted
EBITDA Margin, excluding trade sales” is calculated by dividing
that segment’s Adjusted EBITDA by Adjusted Segment Sales. “Adjusted
EBITDA Margin” is a GAAP profitability measure, and it is
calculated for each segment by dividing that segment’s Adjusted
EBITDA by segment sales.
Adjusted Net Income and Adjusted
Earnings Per Diluted Share
WestRock uses the non-GAAP financial measures “Adjusted Net
Income” and “Adjusted Earnings Per Diluted Share”. Management
believes these measures provide WestRock’s management, board of
directors, investors, potential investors, securities analysts and
others with useful information to evaluate WestRock’s performance
because they exclude restructuring and other costs, business
systems transformation costs and other specific items that
management believes are not indicative of the ongoing operating
results of the business. WestRock and its board of directors use
this information to evaluate WestRock’s performance relative to
other periods. WestRock believes that the most directly comparable
GAAP measures to Adjusted Net Income and Adjusted Earnings Per
Diluted Share are Net income attributable to common
stockholders.
This release includes reconciliations of our non-GAAP financial
measures to their respective directly comparable GAAP measures, as
identified above, for the periods indicated (in millions, except
percentages).
Reconciliations of Consolidated
Adjusted EBITDA
Three Months Ended
December 31,
2022
2021
Net Income attributable to common stockholders
$
45.3
$
182.3
Adjustments: (1) Less: Net Income
attributable to noncontrolling interests
1.5
1.5
Income tax expense
8.3
58.6
Other income, net
(25.2
)
(0.2
)
Interest expense, net
97.3
86.7
Restructuring and other costs
33.0
2.3
Multiemployer pension withdrawal income
-
(3.3
)
Gain on sale of certain closed facilities
(0.9
)
(14.4
)
Depreciation, depletion and amortization
373.2
366.5
Other adjustments
119.6
0.3
Consolidated Adjusted EBITDA
$
652.1
$
680.3
(1) Schedule adds back expense or subtracts income for
certain financial statement and segment footnote items to compute
Consolidated Adjusted EBITDA.
Reconciliations of Adjusted Net
Income
Three
Months Ended December 31, 2022
Consolidated Results Pre-Tax Tax Net of Tax As
reported (1)
$
55.1
$
(8.3)
$
46.8
Mahrt mill work stoppage (2)
41.6
(10.2)
31.4
Restructuring and other costs
33.0
(8.0)
25.0
Loss on sale of previously held equity
method investment net of deferred taxes (2)
46.8
(22.2)
24.6
Business systems transformation costs (2)
20.2
(4.9)
15.3
Purchase accounting inventory related adjustments (2)
8.5
(2.1)
6.4
Losses at closed facilities, transition and start-up costs (2)
2.5
(0.5)
2.0
Gain on sale of two uncoated recycled paperboard
mills
(11.1)
2.8
(8.3)
Gain on sale of certain closed facilities
(0.9)
0.2
(0.7)
Other (2)
0.5
(0.1)
0.4
Adjusted Results
$
196.2
$
(53.3)
$
142.9
Noncontrolling interests
(1.5)
Adjusted Net Income
$
141.4
(1) The as reported results for Pre-Tax, Tax and Net of Tax are
equivalent to the line items "Income before income taxes", "Income
tax expense" and "Consolidated net income", respectively, as
reported on the Condensed Consolidated Statements of Income.
(2) These footnoted items are the “Other adjustments” called out
in the Segment Information table on page 7. The “Losses at closed
facilities, transition and start-up costs” line includes $0.5
million of depreciation and amortization.
Three
Months Ended December 31, 2021
Consolidated Results Pre-Tax Tax Net of Tax As
reported (1)
$
242.4
$
(58.6)
$
183.8
Restructuring and other costs
2.3
(0.5)
1.8
Losses at closed facilities, transition and start-up costs (2)
0.3
(0.1)
0.2
Gain on sale of certain closed facilities
(14.4)
3.6
(10.8)
Adjusted Results
$
230.6
$
(55.6)
$
175.0
Noncontrolling interests
(1.5)
Adjusted Net Income
$
173.5
(1) The as reported results for Pre-Tax, Tax and Net of Tax are
equivalent to the line items "Income before income taxes", "Income
tax expense" and "Consolidated net income", respectively, as
reported on the Condensed Consolidated Statements of Income.
(2) These footnoted items are the “Other adjustments” called out
in the Segment Information table on page 7.
Reconciliation of Adjusted Earnings Per
Diluted Share
Three Months Ended December 31,2022
December 31,2021
Earnings per diluted share
$
0.18
$
0.68
Mahrt mill work stoppage
0.12
-
Restructuring and other costs
0.10
0.01
Loss on sale of previously held equity
method investment net of deferred taxes
0.09
-
Business systems transformation costs
0.06
-
Purchase accounting inventory related adjustments
0.02
-
Losses at closed facilities, transition and start-up costs
0.01
-
Gain on sale of two uncoated recycled paperboard
mills
(0.03)
-
Gain on sale of certain closed facilities
-
(0.04)
Adjusted Earnings Per Diluted Share
$
0.55
$
0.65
Reconciliations of Adjusted Segment
Sales and Adjusted EBITDA Margins, Excluding Trade
Sales
Corrugated Packaging Segment
Three Months Ended December
31,2022 December 31,2021 Segment sales
$
2,235.2
$
2,220.0
Less: Trade Sales
(65.0)
(76.1)
Adjusted Segment Sales
$
2,170.2
$
2,143.9
Adjusted EBITDA
$
309.2
$
288.9
Adjusted EBITDA Margins
13.8%
13.0%
Adjusted EBITDA Margin, excluding Trade Sales
14.2%
13.5%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230131005750/en/
Investors:
Robert Quartaro, 470-328-6979 Senior Vice President, Investor
Relations robert.quartaro@westrock.com
Media:
Robby Johnson, 470-328-6397 Manager, Corporate Communications
s-crp-mediainquiries@westrock.com
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