Packaging Corporation of America Reports Third Quarter 2024 Results
Diluted earnings per share attributable to |
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Three Months Ended |
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2024 |
2023 |
Change |
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Reported Diluted EPS |
$ |
2.64 |
$ |
2.03 |
$ |
0.61 |
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Special Items Expense |
0.01 |
0.02 |
(0.01) |
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Diluted EPS excluding Special items (1) |
$ |
2.65 |
$ |
2.05 |
$ |
0.60 |
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(1) Diluted EPS excluding Special Items is a non-GAAP financial measure. For information regarding our use of non-GAAP financial measures and descriptions and amounts of our special items, see the schedules with this release. |
Reported earnings in the third quarter of 2024 include special items primarily for closure costs related to certain corrugated products facilities.
Excluding special items, the
Results were
Financial information by segment is summarized below and in the schedules with this release.
(dollars in millions) |
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Three Months Ended |
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2024 |
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|
2023 |
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Segment operating income (loss) |
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Packaging |
$ |
320.7 |
|
$ |
256.8 |
|
|
Paper |
|
38.5 |
|
|
27.6 |
|
|
Corporate and Other |
|
(32.1 |
) |
|
(25.8 |
) |
|
$ |
327.1 |
|
$ |
258.6 |
|
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Segment operating income (loss) excluding special items (1) |
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Packaging |
$ |
321.6 |
|
$ |
256.7 |
|
|
Paper |
|
38.5 |
|
|
30.2 |
|
|
Corporate and Other |
|
(32.1 |
) |
|
(25.8 |
) |
|
$ |
328.0 |
|
$ |
261.1 |
|
||
EBITDA excluding special items (1) |
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Packaging |
$ |
445.6 |
|
$ |
374.2 |
|
|
Paper |
|
43.1 |
|
|
35.4 |
|
|
Corporate and Other |
|
(28.1 |
) |
|
(21.8 |
) |
|
$ |
460.6 |
|
$ |
387.8 |
|
(1) |
Segment operating income (loss) excluding special items and EBITDA excluding special items are non-GAAP financial measures. We provide information regarding our use of non-GAAP financial measures and reconciliations of historical non-GAAP financial measures presented in this press release to the most comparable measure reported in accordance with GAAP in the schedules to this press release |
In the Packaging segment, corrugated products shipments per day were up 11.1% over last year’s third quarter and total shipments, with one additional shipping day, were up 12.9%. Shipments per day were up 5.8% versus the second quarter of 2024 and total shipments, with one less shipping day, were up 4.1%. Containerboard production was 1,293,000 tons, and containerboard inventory was up 25,000 tons from the third quarter of 2023 and down 3,000 tons compared to the second quarter of 2024. In the Paper segment, sales volume was up 4% versus the third quarter of 2023 and up 5% versus the second quarter of 2024.
Commenting on reported results,
“Looking ahead as we move from the third and into the fourth quarter,”
We present our earnings expectation for the upcoming quarter excluding special items as special items are difficult to predict and quantify and may reflect the effect of future events. We do not currently expect any significant special items during the fourth quarter; however, additional special items may arise due to fourth quarter events.
PCA is the third largest producer of containerboard products and a leading producer of uncoated freesheet paper in
Some of the statements in this press release are forward-looking statements. Forward-looking statements include statements about our future earnings and financial condition, expected benefits from acquisitions and restructuring activities, our industry and our business strategy. Statements that contain words such as “will”, “should”, “anticipate”, “believe”, “expect”, “intend”, “estimate”, “hope” or similar expressions, are forward-looking statements. These forward-looking statements are based on the current expectations of PCA. Because forward-looking statements involve inherent risks and uncertainties, the plans, actions and actual results of PCA could differ materially. Among the factors that could cause plans, actions and results to differ materially from PCA’s current expectations include the following: the impact of general economic conditions; conditions in the paper and packaging industries, including competition, product demand and product pricing; fluctuations in wood fiber and recycled fiber costs; fluctuations in purchased energy costs; the possibility of unplanned outages or interruptions at our principal facilities; and legislative or regulatory requirements, particularly concerning environmental matters, as well as those identified under Item 1A. Risk Factors in PCA’s Annual Report on Form 10-K for the year ended
Conference Call Information:
WHAT: |
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Conference ID: |
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WHEN: |
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PRE-REGISTRATION: |
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CALL-IN NUMBER: |
(833) 816-1102 ( |
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Dial in by |
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WEBCAST INFO: |
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REBROADCAST DATES: |
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REBROADCAST NUMBERS: |
(877) 344-7529 ( |
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Passcode: 4213034 |
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Consolidated Earnings Results | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
(dollars in millions, except per-share data) | ||||||||||||||||||||
Three Months Ended |
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Nine Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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Net sales |
$ |
2,182.4 |
|
$ |
1,936.0 |
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$ |
6,237.2 |
|
$ |
5,864.5 |
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Cost of sales |
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(1,677.2 |
) |
(1 |
) |
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(1,523.3 |
) |
(3 |
) |
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(4,923.8 |
) |
(1)(2 |
) |
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(4,575.7 |
) |
(3 |
) |
Gross profit |
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505.2 |
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|
412.7 |
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1,313.4 |
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1,288.8 |
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Selling, general, and administrative expenses |
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(162.0 |
) |
(1 |
) |
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(144.2 |
) |
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(463.3 |
) |
(1 |
) |
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(438.1 |
) |
(3 |
) |
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Other expense, net |
|
(16.1 |
) |
(1 |
) |
|
(9.9 |
) |
(3 |
) |
|
(51.0 |
) |
(1)(2 |
) |
|
(37.1 |
) |
(3 |
) |
Income from operations |
|
327.1 |
|
|
258.6 |
|
|
799.1 |
|
|
813.6 |
|
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Non-operating pension income (expense) |
|
1.2 |
|
|
(1.8 |
) |
|
3.4 |
|
|
(5.8 |
) |
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Interest expense, net |
|
(9.7 |
) |
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(12.3 |
) |
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(29.7 |
) |
|
(42.2 |
) |
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Income before taxes |
|
318.6 |
|
|
244.5 |
|
|
772.8 |
|
|
765.6 |
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Provision for income taxes |
|
(80.5 |
) |
|
(61.3 |
) |
|
(188.8 |
) |
|
(189.6 |
) |
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Net income |
$ |
238.1 |
|
$ |
183.2 |
|
$ |
584.0 |
|
$ |
576.0 |
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Earnings per share: | ||||||||||||||||||||
Basic |
$ |
2.65 |
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$ |
2.04 |
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$ |
6.51 |
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$ |
6.41 |
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Diluted |
$ |
2.64 |
|
$ |
2.03 |
|
$ |
6.48 |
|
$ |
6.38 |
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Computation of diluted earnings per share under the two class method: | ||||||||||||||||||||
Net income |
$ |
238.1 |
|
$ |
183.2 |
|
$ |
584.0 |
|
$ |
576.0 |
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Less: Distributed and undistributed income available to participating securities |
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(1.7 |
) |
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(1.4 |
) |
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(4.1 |
) |
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(4.8 |
) |
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Net income attributable to PCA shareholders |
$ |
236.4 |
|
$ |
181.8 |
|
$ |
579.9 |
|
$ |
571.2 |
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Diluted weighted average shares outstanding |
|
89.5 |
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|
89.5 |
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|
89.5 |
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|
89.5 |
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Diluted earnings per share |
$ |
2.64 |
|
$ |
2.03 |
|
$ |
6.48 |
|
$ |
6.38 |
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Supplemental financial information: | ||||||||||||||||||||
Capital spending |
$ |
146.7 |
|
$ |
89.8 |
|
$ |
468.4 |
|
$ |
328.6 |
|
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Cash, cash equivalents, and marketable debt securities |
$ |
841.3 |
|
$ |
726.5 |
|
$ |
841.3 |
|
$ |
726.5 |
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(1) |
The three and nine months ended |
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(2) |
The nine months ended |
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(3) |
The three and nine months ended |
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b. |
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Segment Information | |||||||||||||||
Unaudited | |||||||||||||||
(dollars in millions) | |||||||||||||||
Three Months Ended |
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Nine Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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Segment sales | |||||||||||||||
Packaging |
$ |
2,008.7 |
|
$ |
1,759.8 |
|
$ |
5,715.3 |
|
$ |
5,358.7 |
|
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Paper |
|
159.3 |
|
|
157.9 |
|
|
473.2 |
|
|
451.6 |
|
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Corporate and Other |
|
14.4 |
|
|
18.3 |
|
|
48.7 |
|
|
54.2 |
|
|||
$ |
2,182.4 |
|
$ |
1,936.0 |
|
$ |
6,237.2 |
|
$ |
5,864.5 |
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Segment operating income (loss) | |||||||||||||||
Packaging |
$ |
320.7 |
|
$ |
256.8 |
|
$ |
804.3 |
|
$ |
810.5 |
|
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Paper |
|
38.5 |
|
|
27.6 |
|
|
94.9 |
|
|
90.8 |
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Corporate and Other |
|
(32.1 |
) |
|
(25.8 |
) |
|
(100.1 |
) |
|
(87.7 |
) |
|||
Income from operations |
|
327.1 |
|
|
258.6 |
|
|
799.1 |
|
|
813.6 |
|
|||
Non-operating pension income (expense) |
|
1.2 |
|
|
(1.8 |
) |
|
3.4 |
|
|
(5.8 |
) |
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Interest expense, net |
|
(9.7 |
) |
|
(12.3 |
) |
|
(29.7 |
) |
|
(42.2 |
) |
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Income before taxes |
$ |
318.6 |
|
$ |
244.5 |
|
$ |
772.8 |
|
$ |
765.6 |
|
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Segment operating income (loss) excluding special items (1) | |||||||||||||||
Packaging |
$ |
321.6 |
|
$ |
256.7 |
|
$ |
809.2 |
|
$ |
823.7 |
|
|||
Paper |
|
38.5 |
|
|
30.2 |
|
|
100.7 |
|
|
99.3 |
|
|||
Corporate and Other |
|
(32.1 |
) |
|
(25.8 |
) |
|
(100.1 |
) |
|
(87.7 |
) |
|||
$ |
328.0 |
|
$ |
261.1 |
|
$ |
809.8 |
|
$ |
835.3 |
|
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EBITDA excluding special items (1) | |||||||||||||||
Packaging |
$ |
445.6 |
|
$ |
374.2 |
|
$ |
1,171.8 |
|
$ |
1,171.0 |
|
|||
Paper |
|
43.1 |
|
|
35.4 |
|
|
114.3 |
|
|
115.3 |
|
|||
Corporate and Other |
|
(28.1 |
) |
|
(21.8 |
) |
|
(88.3 |
) |
|
(76.1 |
) |
|||
$ |
460.6 |
|
$ |
387.8 |
|
$ |
1,197.8 |
|
$ |
1,210.2 |
|
(1) |
Income (loss) from operations excluding special items, segment operating income (loss) excluding special items, earnings before non-operating pension income (expense), interest, income taxes, and depreciation, amortization, and depletion (EBITDA), segment EBITDA, EBITDA excluding special items, and segment EBITDA excluding special items are non-GAAP financial measures. Management excludes special items as it believes these items are not necessarily reflective of the ongoing results of operations of our business. 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, because these measures assist in providing a meaningful comparison between periods presented 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" on the following pages 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. |
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Reconciliation of Non-GAAP Financial Measures | |||||||||||||||
Unaudited | |||||||||||||||
(dollars in millions) | |||||||||||||||
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
|
|
|||||||||||||
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Packaging | |||||||||||||||
Segment operating income |
$ |
320.7 |
|
$ |
256.8 |
|
$ |
804.3 |
|
$ |
810.5 |
|
|||
Facilities closure and other costs (income) |
|
0.9 |
|
|
(0.1 |
) |
|
1.0 |
|
|
13.5 |
|
|||
|
|
- |
|
|
- |
|
|
3.9 |
|
|
(0.3 |
) |
|||
Segment operating income excluding special items (1) |
$ |
321.6 |
|
$ |
256.7 |
|
$ |
809.2 |
|
$ |
823.7 |
|
|||
Paper | |||||||||||||||
Segment operating income |
$ |
38.5 |
|
$ |
27.6 |
|
$ |
94.9 |
|
$ |
90.8 |
|
|||
|
|
- |
|
|
2.6 |
|
|
5.8 |
|
|
8.5 |
|
|||
Segment operating income excluding special items (1) |
$ |
38.5 |
|
$ |
30.2 |
|
$ |
100.7 |
|
$ |
99.3 |
|
|||
Corporate and Other | |||||||||||||||
Segment operating loss |
$ |
(32.1 |
) |
$ |
(25.8 |
) |
$ |
(100.1 |
) |
$ |
(87.7 |
) |
|||
Segment operating loss excluding special items (1) |
$ |
(32.1 |
) |
$ |
(25.8 |
) |
$ |
(100.1 |
) |
$ |
(87.7 |
) |
|||
Income from operations |
$ |
327.1 |
|
$ |
258.6 |
|
$ |
799.1 |
|
$ |
813.6 |
|
|||
Income from operations, excluding special items (1) |
$ |
328.0 |
|
$ |
261.1 |
|
$ |
809.8 |
|
$ |
835.3 |
|
(1) See footnote (1) on page 2, for a discussion of non-GAAP financial measures. |
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Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||||||
Net Income Excluding Special Items and EPS Excluding Special Items (1) | |||||||||||||||||||||||||||
Three Months Ended |
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2024 |
2023 |
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Income
|
|
Income
|
|
Net
|
|
Diluted
|
|
Income
|
|
Income
|
|
Net
|
|
Diluted
|
|||||||||||||
As reported in accordance with GAAP |
$ |
318.6 |
$ |
(80.5 |
) |
$ |
238.1 |
$ |
2.64 |
$ |
244.5 |
|
$ |
(61.3 |
) |
$ |
183.2 |
|
$ |
2.03 |
|||||||
Special items (2): | |||||||||||||||||||||||||||
Facilities closure and other costs (income) |
|
0.9 |
|
(0.2 |
) |
|
0.7 |
|
0.01 |
|
(0.1 |
) |
|
- |
|
|
(0.1 |
) |
|
- |
|||||||
|
|
- |
|
- |
|
|
- |
|
- |
|
2.6 |
|
|
(0.6 |
) |
|
2.0 |
|
|
0.02 |
|||||||
Total special items |
|
0.9 |
|
(0.2 |
) |
|
0.7 |
|
0.01 |
|
2.5 |
|
|
(0.6 |
) |
|
1.9 |
|
|
0.02 |
|||||||
Excluding special items |
$ |
319.5 |
$ |
(80.7 |
) |
$ |
238.8 |
$ |
2.65 |
$ |
247.0 |
|
$ |
(61.9 |
) |
$ |
185.1 |
|
$ |
2.05 |
|||||||
Nine Months Ended |
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2024 |
2023 |
||||||||||||||||||||||||||
Income
|
|
Income
|
|
Net
|
|
Diluted
|
|
Income
|
|
Income
|
|
Net
|
|
Diluted
|
|||||||||||||
As reported in accordance with GAAP |
$ |
772.8 |
$ |
(188.8 |
) |
$ |
584.0 |
$ |
6.48 |
$ |
765.6 |
|
$ |
(189.6 |
) |
$ |
576.0 |
|
$ |
6.38 |
|||||||
Special items (2): | |||||||||||||||||||||||||||
|
|
9.7 |
|
(2.4 |
) |
|
7.3 |
|
0.08 |
|
8.2 |
|
|
(2.0 |
) |
|
6.2 |
|
|
0.07 |
|||||||
Facilities closure and other costs |
|
1.0 |
|
(0.3 |
) |
|
0.7 |
|
0.01 |
|
13.5 |
|
|
(3.4 |
) |
|
10.1 |
|
|
0.11 |
|||||||
Total special items |
|
10.7 |
|
(2.7 |
) |
|
8.0 |
|
0.09 |
|
21.7 |
|
|
(5.4 |
) |
|
16.3 |
|
|
0.18 |
|||||||
Excluding special items |
$ |
783.5 |
$ |
(191.5 |
) |
$ |
592.0 |
$ |
6.57 |
$ |
787.3 |
|
$ |
(195.0 |
) |
$ |
592.3 |
|
$ |
6.56 |
(1) |
Net income excluding special items and earnings per share excluding special items are non-GAAP financial measures. Management excludes special items as it believes these items are not necessarily reflective of the ongoing results of operations of our business. We present these measures 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, because these measures assist in providing a meaningful comparison between periods presented 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) |
Pre-tax special items are tax-effected at a combined federal and state income tax rate in effect for the period the special items were recorded and this rate is adjusted for each subsequent quarter to be consistent with the estimated annual effective tax rate, in accordance with ASC 270, Interim Reporting, and ASC 740-270, Income Taxes – Intra Period Tax Allocation. For all periods presented, income taxes on pre-tax special items represent the current amount of tax. For more information related to these items, see the footnotes to the Consolidated Earnings Results on page 1. |
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Reconciliation of Non-GAAP Financial Measures | ||||||||||||||
Unaudited | ||||||||||||||
(dollars in millions) | ||||||||||||||
EBITDA and EBITDA Excluding Special Items (1) | ||||||||||||||
EBITDA represents income before non-operating pension (income) expense, interest, income taxes, and depreciation, amortization, and depletion. The following table reconciles net income to EBITDA and EBITDA excluding special items: | ||||||||||||||
Three Months Ended |
|
Nine Months Ended |
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|
|
|
||||||||||||
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income |
$ |
238.1 |
|
$ |
183.2 |
|
$ |
584.0 |
|
$ |
576.0 |
|||
Non-operating pension (income) expense |
|
(1.2 |
) |
|
1.8 |
|
|
(3.4 |
) |
|
5.8 |
|||
Interest expense, net |
|
9.7 |
|
|
12.3 |
|
|
29.7 |
|
|
42.2 |
|||
Provision for income taxes |
|
80.5 |
|
|
61.3 |
|
|
188.8 |
|
|
189.6 |
|||
Depreciation, amortization, and depletion |
|
132.7 |
|
|
129.3 |
|
|
389.6 |
|
|
386.8 |
|||
EBITDA (1) |
$ |
459.8 |
|
$ |
387.9 |
|
$ |
1,188.7 |
|
$ |
1,200.4 |
|||
Special items: | ||||||||||||||
Facilities closure and other costs (income) |
|
0.8 |
|
|
(0.1 |
) |
|
0.8 |
|
|
8.1 |
|||
|
|
- |
|
|
- |
|
|
8.3 |
|
|
1.7 |
|||
EBITDA excluding special items (1) |
$ |
460.6 |
|
$ |
387.8 |
|
$ |
1,197.8 |
|
$ |
1,210.2 |
(1) See footnote (1) on page 2, for a discussion of non-GAAP financial measures. |
|
|||||||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||
Unaudited | |||||||||||||||
(dollars in millions) | |||||||||||||||
The following table reconciles segment operating income (loss) to segment EBITDA and segment EBITDA excluding special items: | |||||||||||||||
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
|
|
|||||||||||||
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Packaging | |||||||||||||||
Segment operating income |
$ |
320.7 |
|
$ |
256.8 |
|
$ |
804.3 |
|
$ |
810.5 |
|
|||
Depreciation, amortization, and depletion |
|
124.1 |
|
|
117.5 |
|
|
362.7 |
|
|
352.7 |
|
|||
EBITDA (1) |
|
444.8 |
|
|
374.3 |
|
|
1,167.0 |
|
|
1,163.2 |
|
|||
Facilities closure and other costs (income) |
|
0.8 |
|
|
(0.1 |
) |
|
0.8 |
|
|
8.1 |
|
|||
|
|
- |
|
|
- |
|
|
4.0 |
|
|
(0.3 |
) |
|||
EBITDA excluding special items (1) |
$ |
445.6 |
|
$ |
374.2 |
|
$ |
1,171.8 |
|
$ |
1,171.0 |
|
|||
Paper | |||||||||||||||
Segment operating income |
$ |
38.5 |
|
$ |
27.6 |
|
$ |
94.9 |
|
$ |
90.8 |
|
|||
Depreciation, amortization, and depletion |
|
4.6 |
|
|
7.8 |
|
|
15.1 |
|
|
22.5 |
|
|||
EBITDA (1) |
|
43.1 |
|
|
35.4 |
|
|
110.0 |
|
|
113.3 |
|
|||
|
|
- |
|
|
- |
|
|
4.3 |
|
|
2.0 |
|
|||
EBITDA excluding special items (1) |
$ |
43.1 |
|
$ |
35.4 |
|
$ |
114.3 |
|
$ |
115.3 |
|
|||
Corporate and Other | |||||||||||||||
Segment operating loss |
$ |
(32.1 |
) |
$ |
(25.8 |
) |
$ |
(100.1 |
) |
$ |
(87.7 |
) |
|||
Depreciation, amortization, and depletion |
|
4.0 |
|
|
4.0 |
|
|
11.8 |
|
|
11.6 |
|
|||
EBITDA (1) |
|
(28.1 |
) |
|
(21.8 |
) |
|
(88.3 |
) |
|
(76.1 |
) |
|||
EBITDA excluding special items (1) |
$ |
(28.1 |
) |
$ |
(21.8 |
) |
$ |
(88.3 |
) |
$ |
(76.1 |
) |
|||
EBITDA excluding special items (1) |
$ |
460.6 |
|
$ |
387.8 |
|
$ |
1,197.8 |
|
$ |
1,210.2 |
|
(1) See footnote (1) on page 2, for a discussion of non-GAAP financial measures. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241022657337/en/
INVESTOR RELATIONS: (877) 454-2509
PCA’s Website: www.packagingcorp.com
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