Delaware | 1-15399 | 36-4277050 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01. Financial Statements and Exhibits. | |||
(D) | Exhibits | ||
99.1 | First Quarter 2014 Earnings Press Release dated April 22, 2014. |
PACKAGING CORPORATION OF AMERICA | ||||
(Registrant) | ||||
By: | /s/ MARK W. KOWLZAN | |||
Chief Executive Officer | ||||
By: | /s/ RICHARD B. WEST | |||
Senior Vice President and Chief Financial Officer |
WHAT: | Packaging Corporation of America’s 1st Quarter 2014 Earnings |
WHEN: | Wednesday, April 23, 2014 |
CALL-IN | (855) 730-0288 (U.S. and Canada) or (832) 412-2295 (International) |
NUMBER: | Dial in by 9:45 a.m. Eastern Time |
WEBCAST: | http://www.packagingcorp.com |
REBROADCAST DATES: | April 23, 2014 1:00 p.m. Eastern Time through |
REBROADCAST NUMBER: | (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (International) |
Three Months Ended | ||||||||
March 31 | ||||||||
2014 (1) | 2013 (2) | |||||||
Net sales | $ | 1,431.3 | $ | 755.2 | ||||
Cost of sales | (1,129.9 | ) | (3) | (570.0 | ) | |||
Gross profit | 301.4 | 185.2 | ||||||
Selling, general, and administrative expenses | (116.5 | ) | (75.3 | ) | ||||
Other expense, net | (24.0 | ) | (3) | (3.9 | ) | |||
Income from operations | 160.9 | 106.0 | ||||||
Interest expense, net | (20.8 | ) | (9.3 | ) | ||||
Income before taxes | 140.1 | 96.7 | ||||||
Provision for income taxes | (50.0 | ) | (34.4 | ) | ||||
Net income | $ | 90.1 | $ | 62.3 | ||||
Earnings per share: | ||||||||
Basic | $ | 0.92 | $ | 0.65 | ||||
Diluted | $ | 0.92 | $ | 0.64 | ||||
Supplemental financial information: | ||||||||
Capital spending | $ | 50.9 | $ | 27.3 | ||||
Cash balance | $ | 185.7 | $ | 268.0 |
(1) | On October 25, 2013, we acquired Boise Inc. (Boise). The first quarter 2014 consolidated earnings results include Boise for the full period. |
(2) | Effective January 1, 2014, the Company elected to change its method of accounting for inventories from lower of cost, as determined by the LIFO method, or market, to lower of cost, as determined by the average cost method, or market. The Company has applied this change in method of inventory costing retrospectively to all prior periods presented herein in accordance with US generally accepted accounting principles relating to accounting changes. For more information, see Note 2, Change in Accounting Principle, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in our March 31, 2014, Form 10-Q which we plan to file on or about May 8, 2014. |
(3) | The three months ended March 31, 2014, includes $4.1 million of integration-related costs recorded in "Other expense, net". |
Three Months Ended | ||||||||
March 31 | ||||||||
2014 (1) | 2013 (2) | |||||||
Segment sales (3) | ||||||||
Packaging | $ | 1,097.4 | $ | 755.2 | ||||
Paper | 309.3 | — | ||||||
Intersegment eliminations and other | 24.6 | — | ||||||
$ | 1,431.3 | $ | 755.2 | |||||
Segment income (loss) (3) | ||||||||
Packaging | $ | 170.7 | $ | 117.9 | ||||
Paper | 27.7 | — | ||||||
Corporate and Other | (37.5 | ) | (11.9 | ) | ||||
Income from operations | 160.9 | 106.0 | ||||||
Interest expense, net | (20.8 | ) | (9.3 | ) | ||||
Income before taxes | $ | 140.1 | $ | 96.7 | ||||
Segment income (loss) excluding special items (3)(4) | ||||||||
Packaging | $ | 174.7 | $ | 117.9 | ||||
Paper | 28.4 | — | ||||||
Corporate and Other | (16.5 | ) | (11.9 | ) | ||||
$ | 186.6 | $ | 106.0 | |||||
EBITDA (3)(4) | ||||||||
Packaging | $ | 240.3 | $ | 160.2 | ||||
Paper | 39.7 | — | ||||||
Corporate and Other | (35.7 | ) | (11.5 | ) | ||||
$ | 244.3 | $ | 148.7 | |||||
EBITDA excluding special items (3)(4) | ||||||||
Packaging | $ | 244.3 | $ | 160.2 | ||||
Paper | 40.4 | — | ||||||
Corporate and Other | (14.7 | ) | (11.5 | ) | ||||
$ | 270.0 | $ | 148.7 |
(1) | On October 25, 2013, we acquired Boise Inc. (Boise). The first quarter 2014 consolidated earnings results include Boise for the full period. |
(2) | See footnote (2) on page 1, for a discussion of the change in our method of accounting for inventories. |
(3) | Prior to the acquisition of Boise in fourth quarter 2013, we reported our results in one reportable segment. After the acquisition, we began reporting our business in three reportable segments: Packaging, Paper, and Corporate and Other. These segments represent distinct businesses that we manage separately because of differing products and services. In accordance with Accounting Standards Codification 280, "Segment Reporting," we recast prior period segment information to conform with current period information. For more information, see Note 19, Segment Information, of the Notes to Consolidated Financial Statements in our 2013 Form 10-K. |
(4) | Segment income (loss) excluding special items, earnings before interest, income taxes, and depreciation, amortization, and depletion (EBITDA), and EBITDA excluding special items are non-GAAP financial measures. We present these measures because they provide a means to evaluate the performance of our segments and our company on an ongoing basis using the same measures that are used by our management and because these measures are frequently used by investors and other interested parties in the evaluation of companies and the performance of their segments. The tables included in "Reconciliation of Non-GAAP Financial Measures" reconcile the non-GAAP measures with the most directly comparable GAAP measures. Any analysis of non-GAAP financial measures should be done only in conjunction with results presented in accordance with GAAP. The non-GAAP measures are not intended to be substitutes for GAAP financial measures and should not be used as such. |
Three Months Ended | ||||||||
March 31 | ||||||||
2014 (1) | 2013 (2) | |||||||
Packaging | ||||||||
Segment income (3) | $ | 170.7 | $ | 117.9 | ||||
DeRidder restructuring | 4.0 | — | ||||||
Segment income excluding special items (4) | $ | 174.7 | $ | 117.9 | ||||
Paper | ||||||||
Segment income (3) | $ | 27.7 | $ | — | ||||
Integration-related costs | 0.7 | — | ||||||
Segment income excluding special items (4) | $ | 28.4 | $ | — | ||||
Corporate and Other | ||||||||
Segment loss (3) | $ | (37.5 | ) | $ | (11.9 | ) | ||
Containerboard lawsuit settlement | 17.6 | — | ||||||
Integration-related costs | 3.4 | — | ||||||
Segment loss excluding special items (4) | $ | (16.5 | ) | $ | (11.9 | ) | ||
Income from operations | $ | 160.9 | $ | 106.0 | ||||
Income from operations, excluding special items (4) | $ | 186.6 | $ | 106.0 |
(1) | On October 25, 2013, we acquired Boise Inc. (Boise). The first quarter 2014 consolidated earnings results include Boise for the full period. |
(2) | See footnote (2) on page 1, for a discussion of the change in our method of accounting for inventories. |
(3) | See footnote (3) on page 2, for a discussion of our segment reporting. |
(4) | See footnote (4) on page 2, for a discussion of non-GAAP financial measures. |
Three Months Ended March 31 | ||||||||||||||||
2014 (2) | 2013 (3) | |||||||||||||||
Net Income | Diluted EPS | Net Income | Diluted EPS | |||||||||||||
As reported | $ | 90.1 | $ | 0.92 | $ | 62.3 | $ | 0.64 | ||||||||
Special items (4): | ||||||||||||||||
Containerboard lawsuit settlement | 11.2 | 0.11 | — | — | ||||||||||||
Integration-related costs | 2.6 | 0.03 | — | — | ||||||||||||
DeRidder restructuring | 2.6 | 0.02 | — | — | ||||||||||||
Total special items | 16.4 | 0.16 | — | — | ||||||||||||
Excluding special items | $ | 106.5 | $ | 1.08 | $ | 62.3 | $ | 0.64 |
(1) | Net income and earnings per share excluding special items are non-GAAP financial measures. The after-tax effect of special items are presented because they provide a means to evaluate the performance of our company on an ongoing basis using the same measures that are used by our management and because these measures are frequently used by investors and other interested parties in the evaluation of companies and their performance. Any analysis of non-GAAP financial measures should be done only in conjunction with results presented in accordance with GAAP. The non-GAAP measures are not intended to be substitutes for GAAP financial measures and should not be used as such. |
(2) | On October 25, 2013, we acquired Boise, Inc. (Boise). The first quarter 2014 results include Boise for the full period. |
(3) | See footnote (2) on page 1, for a discussion of the change in our method of accounting for inventories. |
(4) | Special items are tax-affected at a combined federal and state income tax rate in effect for the period the special items were recorded. For more information related to these items, see the footnotes to the Consolidated Earnings Results on page one and our 2014 Form 10-Q for the quarter ended March 31, 2014, which we plan to file on or about May 8, 2014. |
Three Months Ended | ||||||||
March 31 | ||||||||
2014 | 2013 (1) | |||||||
Net income | $ | 90.1 | $ | 62.3 | ||||
Interest expense, net | 20.8 | 9.3 | ||||||
Provision for income taxes | 50.0 | 34.4 | ||||||
Depreciation, amortization, and depletion | 83.4 | 42.7 | ||||||
EBITDA (2) | $ | 244.3 | $ | 148.7 | ||||
Special items: | ||||||||
Containerboard lawsuit settlement | $ | 17.6 | $ | — | ||||
Integration-related costs | 4.1 | — | ||||||
DeRidder restructuring | 4.0 | — | ||||||
EBITDA excluding special items (2) | $ | 270.0 | $ | 148.7 |
(1) | See footnote (2) on page 1, for a discussion of the change in our method of accounting for inventories. |
(2) | See footnote (4) on page 2, for a discussion of non-GAAP financial measures. |
Three Months Ended | ||||||||
March 31 | ||||||||
2014 | 2013 (1) | |||||||
Packaging | ||||||||
Segment income | $ | 170.7 | $ | 117.9 | ||||
Depreciation, amortization, and depletion | 69.6 | 42.3 | ||||||
EBITDA (2) | 240.3 | 160.2 | ||||||
DeRidder restructuring | 4.0 | — | ||||||
EBITDA excluding special items (2) | $ | 244.3 | $ | 160.2 | ||||
Paper | ||||||||
Segment income | $ | 27.7 | $ | — | ||||
Depreciation, amortization, and depletion | 12.0 | — | ||||||
EBITDA (2) | 39.7 | — | ||||||
Integration-related costs | 0.7 | — | ||||||
EBITDA excluding special items (2) | $ | 40.4 | $ | — | ||||
Corporate and Other | ||||||||
Segment loss | $ | (37.5 | ) | $ | (11.9 | ) | ||
Depreciation, amortization, and depletion | 1.8 | 0.4 | ||||||
EBITDA (2) | (35.7 | ) | (11.5 | ) | ||||
Containerboard lawsuit settlement | 17.6 | — | ||||||
Integration-related costs | 3.4 | — | ||||||
EBITDA excluding special items (2) | $ | (14.7 | ) | $ | (11.5 | ) | ||
EBITDA (2) | $ | 244.3 | $ | 148.7 | ||||
EBITDA excluding special items (2) | $ | 270.0 | $ | 148.7 |
(1) | See footnote (2) on page 1, for a discussion of the change in our method of accounting for inventories. |
(2) | See footnote (4) on page 2, for a discussion of non-GAAP financial measures. |
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