Packaging Corporation of America Reports Third Quarter 2002 Results
Net income for the first nine months of 2002 was $36 million, or $0.33 per share, compared to $88 million, or $0.81 per share, for the first nine months of 2001. Net sales for the first nine months of 2002 were $1.3 billion compared to $1.4 billion in 2001.
Price, volume and recycled fiber costs were the major factors that affected third quarter earnings compared to last year. Lower prices for both containerboard and corrugated products reduced earnings by thirteen cents per share and higher recycled fiber costs reduced earnings by three and one-half cents per share. Higher corrugated products sales volume and higher mill production volume increased earnings by four cents per share.
PCA's corrugated products sales volume per workday was up 6.5% compared to last year's third quarter and was up 4.2% year-to-date through September 30, 2002. With the higher corrugated demand, PCA's containerboard mill production in the third quarter was 578,000 tons, or 17,000 tons above last year's third quarter.
Paul T. Stecko, Chairman and CEO of PCA, said, "We're pleased with our strong third quarter corrugated products volume, which allowed us to increase mill production while maintaining inventory at targeted levels. Containerboard and box prices also improved during the quarter although not as fast or by as much as originally announced."
Mr. Stecko added, "Looking forward to the fourth quarter, we should realize a full quarter's benefit of the recent price increases and we expect lower recycled fiber costs which will also help earnings. Compared to our very strong third quarter volume, we expect lower containerboard and corrugated products volume in the seasonally slower fourth quarter, and mill manufacturing costs will also increase with colder weather. Overall, considering these factors and assuming a steady economy, we would expect earnings of $0.14 to $0.15 per share in the fourth quarter."
PCA is the sixth largest producer of containerboard and corrugated packaging products in the United States with sales of $1.8 billion in 2001. PCA operates four paper mills and 65 corrugated product plants in 25 states across the country.
Conference Call Information:
WHAT: Packaging Corporation of America Earnings Conference Call
WHEN: Monday, October 14, 2002
10:00 a.m. Eastern Time
NUMBER: (877) 679-9045 (Domestic)
(952) 556-2802 (International)
Dial in by 9:45 a.m. Eastern Time
Conference Call Leader: Mr. Paul Stecko
WEBCAST: http:///www.packagingcorp.com
REBROADCAST DATES: October 14, 2002 12:00 p.m. Eastern Time through
October 18, 2002 5:00 p.m. Eastern Time
REBROADCAST NUMBER: (800) 615-3210 (U.S. and Canada), or
(703) 326-3020 (International)
Passcode: 6229417
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 are those identified under the caption "Risk Factors" in
PCA's Registration Statements on Form S-4 and Form S-1 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 Sept. 30
---------------------------
(in millions, except per share data) 2002 2001
------------ ------------
Net Sales $ 455.6 $ 455.2
------------ ------------
Operating Income (1) 40.0 65.4
------------ ------------
Interest Expense (16.7) (17.8)
Income Tax Expense (8.7) (18.4)
------------ ------------
Net Income Available to
Common Stockholders $ 14.6 $ 29.2
============ ============
Earnings per Share:
Basic Earnings per Share $ 0.14 $ 0.27
============ ============
Diluted Earnings per Share $ 0.14 $ 0.27
============ ============
EBITDA (2) $ 77.1 $ 100.9
============ ============
Basic Common Shares Outstanding 104.8 106.6
Diluted Common Shares Outstanding 106.9 109.3
Supplemental Financial Items:
Capital Spending $ 19.7 $ 37.6
Long Term Debt $ 768.2 $ 816.2
Cash Balance $ 129.7 $ 65.3
Packaging Corporation of America
Consolidated Earnings Results
Unaudited
Nine Months Ended Sept. 30
------------ -------------
(in millions, except per share data) 2002 2001
------------ ------------
Net Sales $ 1,317.7 $ 1,376.8
------------ ------------
Operating Income (1) 109.7 200.9
------------ ------------
Interest Expense (51.2) (56.2)
Income Tax Expense (22.7) (56.1)
------------ ------------
Income before Cumulative Effect of a
Change in Accounting Principle 35.8 88.5
Cumulative Effect of a Change in
Accounting Principle, Net of Tax (3) - (0.5)
------------ ------------
Net Income Available to
Common Stockholders $ 35.8 $ 88.0
============ ============
Earnings per Share:
Basic Earnings per Share $ 0.34 $ 0.83
============ ============
Diluted Earnings per Share $ 0.33 $ 0.81
============ ============
Net Income Available to Common
Stockholders Excluding the Non-Recurring
Item Related to a Change in Accounting
Principle $ 35.8 $ 88.5
============ ============
Diluted Earnings per Share Excluding the
Non-Recurring Item Related to a Change
In Accounting Principle $ 0.33 $ 0.81
============ ============
EBITDA (2) $ 220.9 $ 306.1
============ ============
Basic Common Shares Outstanding 105.3 106.5
Diluted Common Shares Outstanding 107.5 109.1
Supplemental Financial Items:
Capital Spending $ 72.4 $ 96.0
Notes to Consolidated Earnings Results
(1) "Operating Income" is defined as income before interest, taxes,
and extraordinary items.
(2) "EBITDA" is defined as operating income plus depreciation,
depletion and amortization.
(3) Represents the impact of the adoption of FAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities" on January 1,
2001.
CONTACT: Packaging Corporation of America
INVESTOR RELATIONS: 877/454-2509
URL: www.packagingcorp.com