Packaging Corporation of America Reports First Quarter 2002 Results
Lower prices for both containerboard and corrugated products reduced first quarter earnings by about 20 cents per share compared to last year. This reduction was partially offset by lower mill manufacturing costs of about two cents per share, and a dividend of about one cent per share from PCA's retained ownership in Southern Timber Venture, LLC.
During the first quarter, annual maintenance outages were completed at the Counce and Valdosta linerboard mills. Including these outages, as well as other market related downtime, PCA's containerboard production in the first quarter was 520,000 tons, or about 23,000 tons below fourth quarter 2001 production. Our containerboard inventories ended the quarter about 8,000 tons below year end 2001 levels.
PCA's corrugated products volume was up 2.5% on a per workday basis compared to last year's first quarter. This was the largest increase in per workday volume for PCA since the fourth quarter of 1999. Total corrugated products volume was 0.7% below last year because of two less workdays in this year's first quarter.
In recognition of PCA's improved balance sheet and overall stronger financial position, Standard & Poor's raised PCA's corporate credit rating to investment grade during the quarter. This is a significant milestone for PCA, which began as a stand-alone company in April 1999 with 84% net debt to total capital compared to today's 47%.
Paul T. Stecko, Chairman and CEO of PCA, said, "Except for lower pricing, I'm pleased with our operating results during the first quarter. Corrugated products volume was up 2.5% per workday and mill manufacturing costs were down almost 3.5%. We completed our two large, annual mill maintenance outages and reduced our containerboard inventory by 8,000 tons in the seasonally slowest quarter of the year. By the end of April, we will have completed all three of our major mill maintenance outages and will be well positioned to take advantage of any pick up in the economy should it occur."
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.
CONTACT:
Packaging Corporation of America
INVESTOR RELATIONS: (877) 454-2509
PCA's Website: www.packagingcorp.com
Conference Call Information:
WHAT: Packaging Corporation of America Earnings Conference Call
WHEN: Monday, April 15, 2002
10:00 a.m. Eastern Time
NUMBER: (800) 606-8940 (Domestic)
(952) 556-2833 (International)
Dial in by 9:45 a.m. Eastern Time
Conference Call Leader: Mr. Paul Stecko
WEBCAST: http:///www.packagingcorp.com
REBROADCAST DATES: April 15, 2002 12:00 p.m. Eastern Time through
April 19, 2002 5:00 p.m. Eastern Time
REBROADCAST NUMBER: (800) 615-3210 (U.S. and Canada),
or (703) 326-3020 (International)
Passcode: 5910242
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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 March 31,
(in millions, except per share data) 2002 2001
----------- -----------
Net Sales $ 414.7 $ 454.7
--------- ---------
Operating Income (1) 33.2 66.0
--------- ---------
Interest Expense (17.2) (19.6)
Income Tax Expense (6.4) (18.3)
--------- ---------
Income before Cumulative Effect of a
Change in Accounting Principle 9.6 28.1
Cumulative Effect of a Change in
Accounting Principle, Net of Tax (2) - (0.5)
--------- ---------
Net Income Available to
Common Stockholders $ 9.6 $ 27.6
========= =========
Earnings per Share:
Basic Earnings per Share $ 0.09 $ 0.26
========= =========
Diluted Earnings per Share $ 0.09 $ 0.25
========= =========
Net Income Available to Common
Stockholders Excluding the Non-Recurring
Item Related to a Change in Accounting
Principle $ 9.6 $ 28.1
========= =========
Diluted Earnings per Share Excluding the
Non-Recurring Item Related to a Change
In Accounting Principle $ 0.09 $ 0.26
========= =========
EBITDA (3) $ 70.0 $ 100.2
========= =========
Basic Common Shares Outstanding 105.5 106.4
Diluted Common Shares Outstanding 107.8 109.0
Supplemental Financial Items:
($ MM)
Capital Spending 26.2 20.0
Total Debt 777.3 858.3
Cash Balance 77.4 46.3
Notes to Consolidated Earnings Results
(1) "Operating Income" is defined as income before interest, taxes
and extraordinary items.
(2) Represents the impact of the adoption of FAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities"
on January 1, 2001.
(3) "EBITDA" is defined as operating income plus depreciation,
depletion and amortization.
CONTACT: Packaging Corporation of America
INVESTOR RELATIONS, 877/454-2509
www.packagingcorp.com