LAKE FOREST, Ill.--(BUSINESS WIRE)--April 17, 2007--Packaging
Corporation of America (NYSE: PKG) today reported record first quarter
2007 net income of $31 million, or $0.30 per share, compared to first
quarter 2006 net income of $11 million, or $0.10 per share. First
quarter 2006 earnings have been favorably restated by $2 million, or
$0.01 per share, for comparative purposes to reflect new accounting
guidance for planned major maintenance activities. Net sales for the
first quarter increased 10% to $559 million, also a first quarter
record, compared to $508 million in the first quarter of 2006.
Higher earnings compared to last year's first quarter were driven
primarily by better pricing and mix, and lower energy costs, which in
total improved earnings by $0.32 per share. This improvement was
partially offset by increased labor and benefits, fiber, and
transportation costs, and the timing of annual mill outage costs,
which in total reduced earnings by $0.12 per share.
PCA's containerboard production was 584,000 tons, up 0.9% from
last year's first quarter. Corrugated products shipments were down
2.7%, or about 15,000 tons, while outside sales of containerboard were
up about 33,000 tons compared to last year's first quarter.
Containerboard inventories ended the quarter down about 2,000 tons
compared to year-end 2006 levels.
Paul T. Stecko, Chairman and CEO of PCA said, "The value of our
operating flexibility was clearly demonstrated this quarter. We were
able to achieve record earnings despite cost pressures from much
higher recycled fiber prices and the limited availability of residual
wood chips from sawmills. This was possible because of our relatively
low dependence on recycled fiber and our flexibility to increase the
production of wood chips in our paper mills. Our two annual mill
maintenance outages this quarter were well executed, and our box
plants continued to improve their product and customer mix. Corrugated
products volume was lower than we anticipated, but this was offset by
our strong containerboard sales volume."
"Looking forward to the second quarter," Mr. Stecko added, "our
Tomahawk mill will take its annual maintenance outage in April which
will impact earnings by about $0.02 per share less than for our two
mill outages in the first quarter. Although recycled fiber prices
decreased in April, we expect that our average cost of recycled fiber
will remain the same as in the first quarter. We should see some
seasonal improvement in volume and energy costs, but also expect an
increase in transportation costs as a result of higher fuel prices.
Considering all of these items, we currently expect second quarter
earnings of about $0.36 per share."
PCA is the sixth largest producer of containerboard and corrugated
packaging products in the United States with sales of $2.2 billion in
2006. PCA operates four paper mills and 68 corrugated product plants
in 26 states across the country.
Conference Call Information:
WHAT: Packaging Corporation of America 1st Quarter 2007
Earnings Conference Call
WHEN: Wednesday, April 18, 2007
10:00 a.m. Eastern Time
NUMBER: (866) 238-0638 (U.S. and Canada) or (703) 639-1157
(International)
Dial in by 9:45 a.m. Eastern Time
Conference Call Leader: Mr. Paul Stecko
WEBCAST: http://www.packagingcorp.com
REBROADCAST DATES: April 18, 2007 1:00 p.m. Eastern Time through
May 3, 2007 11:59 p.m. Eastern Time
REBROADCAST NUMBER: (888) 266-2081 (U.S. and Canada) or (703) 925-2533
(International)
Passcode: 1069311
Some of the statements in this press release are forward-looking
statements. Forward-looking statements include statements about our
future financial condition, 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; containerboard
and corrugated products general industry conditions, including
competition, product demand and product pricing; fluctuations in wood
fiber and recycled fiber costs; fluctuations in purchased energy
costs; 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 December 31, 2006 filed with the Securities and Exchange
Commission and available at the SEC's website at "www.sec.gov".
Packaging Corporation of America
Consolidated Earnings Results
Unaudited
Three Months Ended March 31,
----------------------------
(in millions, except per share data) 2007 2006
------------- -------------
Net sales $ 559.2 $ 507.9
Cost of sales (446.2) (431.3)
------------- -------------
Gross profit 113.0 76.6
Selling and administrative expenses (42.0) (37.7)
Other expense, net (1.4) (2.2)
Corporate overhead (12.9) (11.2)
------------- -------------
Income before interest and taxes 56.7 25.5
Interest expense, net (7.1) (8.1)
------------- -------------
Income before taxes 49.6 17.4
Provision for income taxes (18.4) (6.5)
------------- -------------
Net income $ 31.2 $ 10.9
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Earnings per share:
Basic earnings per share $ 0.30 $ 0.11
============= =============
Diluted earnings per share $ 0.30 $ 0.10
============= =============
Basic common shares outstanding 104.2 103.4
Diluted common shares outstanding 105.1 104.2
Supplemental financial information:
Capital spending $ 20.8 $ 17.3
Long term debt, including current
maturities 687.0 695.3
Cash balance 147.3 67.9
CONTACT: Packaging Corporation of America
Investor Relations:
Barbara Sessions, 877-454-2509
PCA's Website: www.packagingcorp.com
SOURCE: Packaging Corporation of America
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