PKG 8-K
Packaging Corp Of America (PKG)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT |
Pursuant to Section 13 OR 15(d) |
of The Securities Exchange Act of 1934 |
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction |
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(Commission |
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(IRS Employer Identification No.) |
(Address of Principal Executive Offices, including Zip Code)
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(Registrants' Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2 (b)) |
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Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4 (c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Item 2.02. Results of Operations and Financial Condition.
The information furnished in this Item 2.02, including the exhibit described below, shall not be deemed “filed” hereunder for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Exchange Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On April 22, 2025, Packaging Corporation of America issued a press release announcing first quarter financial results. The press release is furnished as Exhibit 99.1 and is incorporated into this Item 2.02 by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
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PACKAGING CORPORATION OF AMERICA |
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(Registrant) |
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By: |
/s/ ROBERT P. MUNDY |
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Executive Vice President and Chief Financial Officer |
Date: April 22, 2025
Exhibit 99.1
PACKAGING CORPORATION OF AMERICA REPORTS FIRST QUARTER 2025 RESULTS
Lake Forest, IL, April 22, 2025 – Packaging Corporation of America (NYSE: PKG) today reported first quarter 2025 net income of $204 million, or $2.26 per share, and net income of $208 million, or $2.31 per share, excluding special items. First quarter net sales were $2.1 billion in 2025 and $2.0 billion in 2024.
Diluted earnings per share attributable to Packaging Corporation of America shareholders |
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Three Months Ended |
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March 31, |
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2025 |
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2024 |
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Change |
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Reported Diluted EPS |
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$ |
2.26 |
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$ |
1.63 |
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$ |
0.63 |
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Special Items Expense (1) |
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0.05 |
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0.09 |
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(0.04 |
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Diluted EPS excluding Special Items (2) |
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$ |
2.31 |
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$ |
1.72 |
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$ |
0.59 |
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(1) For descriptions and amounts of our special items, see the schedules with this release. |
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(2) 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. |
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Reported earnings in the first quarter of 2025 include special items primarily for closure costs related to corrugated products facilities.
Excluding special items, the $.59 per share increase in first quarter 2025 earnings compared to the first quarter of 2024 was driven primarily by higher prices and mix $.78 and volume $.27 in the Packaging segment, higher prices and mix in the Paper segment $.01, lower freight and logistics expenses $.01, and lower scheduled outage costs $.01. These items were partially offset by higher operating costs ($.37), lower volume in the Paper segment ($.02), higher depreciation and other expenses ($.03), higher tax rate ($.04), and higher interest expense ($.03).
Results were $.10 above first quarter guidance of $2.21 per share primarily due to higher prices and mix in the Packaging segment.
Financial information by segment is summarized below and in the schedules with this release.
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(dollars in millions) |
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Three Months Ended |
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March 31, |
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2025 |
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2024 |
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Segment operating income (loss) |
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Packaging |
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$ |
278.1 |
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$ |
203.8 |
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Paper |
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35.6 |
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29.7 |
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Corporate and Other |
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(33.4 |
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(37.5 |
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$ |
280.3 |
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$ |
196.0 |
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Segment operating income (loss) excluding special items (1) |
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Packaging |
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$ |
284.0 |
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$ |
207.7 |
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Paper |
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35.6 |
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36.1 |
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Corporate and Other |
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(33.4 |
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(37.5 |
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$ |
286.2 |
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$ |
206.3 |
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EBITDA excluding special items (1) |
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Packaging |
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$ |
409.3 |
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$ |
326.2 |
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Paper |
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40.2 |
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40.6 |
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Corporate and Other |
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(28.4 |
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(33.6 |
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$ |
421.1 |
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$ |
333.2 |
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(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. |
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In the Packaging segment, total corrugated products shipments and shipments per day were up 2.5% compared to the first quarter of 2024. Containerboard production was 1,250,000 tons, and containerboard inventory was up 75,000 tons from the first quarter of 2024 and down 3,000 tons compared to the fourth quarter of 2024. In the Paper segment, sales volume was down 7% from the first quarter of 2024 and up 2% compared to the fourth quarter of 2024.
Commenting on reported results, Mark W. Kowlzan, Chairman and CEO, said, “A new first quarter revenue record was achieved to begin the new year. In the Packaging segment we had excellent implementation of our previously announced price increases and, although we began to see some pullback in the middle of the quarter related to the uncertainty created by global trade tensions, box demand was solid and exceeded a very strong comparative period in last year’s first quarter. Outstanding operational performance and scheduled outage execution at our mills delivered record first quarter containerboard production to meet this demand, and we ended the quarter at targeted inventory levels. Our Paper segment continued to achieve impressive margins with both volume and prices slightly above original estimates. Across the Company, continued emphasis on operational efficiency, cost reduction initiatives, and capital project execution helped minimize the persistent inflation we see throughout most of our cost structure.”
“Looking ahead as we move from the first and into the second quarter,” Mr. Kowlzan added, “as always, our attention will remain on what we can control. Our North American focus together with our balance sheet strength, well-capitalized mills and plants, commitment to strategic goals, and proven ability to respond quickly and effectively to external factors will serve us well during this period of economic uncertainty. We anticipate continued ambiguity relative to domestic and foreign tariff actions and their effect on global trade and our demand trends. Therefore, we have made certain assumptions in our guidance to recognize potential negative impacts to volume and costs from this uncertainty. In the Packaging segment, we expect domestic prices to improve with continued implementation of our price increases, along with fairly flat export prices. Although we see box shipments improving, operating costs will be negatively impacted due to lower containerboard volume as we run our operations to match demand assumptions. We have also adjusted our planned maintenance outage schedule and pulled up an outage that was scheduled for later in the year resulting in higher second quarter costs than what we had provided previously. In the Paper segment, implementation of the higher published index prices from the first quarter will continue, although volume will be lower with the planned maintenance outage at our International Falls, MN mill. Rail contract rate increases at six of our mills during the first and second quarters will result in higher freight and logistics expenses, and depreciation expense is assumed to be higher as well. Considering these items, we expect second quarter earnings of $2.41 per share.”
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 second quarter; however, additional special items may arise due to second quarter events.
PCA is the third largest producer of containerboard products and a leading producer of uncoated freesheet paper in North America. PCA operates eight mills and 85 corrugated products plants and related facilities.
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 December 31, 2024 filed with the Securities and Exchange Commission and available at the SEC’s website at “www.sec.gov”.
CONTACT:
Barbara Sessions
Packaging Corporation of America
INVESTOR RELATIONS: (877) 454-2509
PCA’s Website: www.packagingcorp.com
Conference Call Information:
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WHAT: |
Packaging Corporation of America’s 1st Quarter 2025 Earnings Conference Call |
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Conference ID: Packaging Corporation of America |
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WHEN: |
Wednesday, April 23, 2025 at 9:00am Eastern Time |
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PRE-REGISTRATION: |
https://dpregister.com/sreg/10195046/fe1a151bf0 |
OR |
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CALL-IN NUMBER: |
(833) 816-1102 (U.S.); (866) 605-3852 (Canada) or (412) 317-0684 (International) |
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Dial in by 8:45am Eastern Time |
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WEBCAST INFO: |
www.packagingcorp.com |
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REBROADCAST DATES: |
April 23, 2025 through May 7, 2025 |
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REBROADCAST NUMBERS: |
(877) 344-7529 (U.S.); (855) 669-9658 (Canada) or (412) 317-0088 (International) |
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Passcode: 4321410 |
Packaging Corporation of America
Consolidated Earnings Results
Unaudited
(dollars in millions, except per-share data)
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Three Months Ended |
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March 31, |
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2025 |
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2024 |
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Net sales |
$ |
2,141.0 |
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$ |
1,979.5 |
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Cost of sales |
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(1,686.3 |
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(1) |
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(1,609.1 |
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(2) |
Gross profit |
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454.7 |
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370.4 |
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Selling, general, and administrative expenses |
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(161.4 |
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(151.9 |
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Other expense, net |
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(13.0 |
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(1) |
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(22.5 |
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(2) |
Income from operations |
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280.3 |
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196.0 |
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Non-operating pension income |
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— |
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1.1 |
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Interest expense, net |
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(12.9 |
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(9.6 |
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Income before taxes |
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267.4 |
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187.5 |
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Provision for income taxes |
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(63.6 |
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(40.6 |
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Net income |
$ |
203.8 |
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$ |
146.9 |
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Earnings per share: |
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Basic |
$ |
2.27 |
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$ |
1.64 |
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Diluted |
$ |
2.26 |
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$ |
1.63 |
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Computation of diluted earnings per share under the two class method: |
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Net income |
$ |
203.8 |
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$ |
146.9 |
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Less: Distributed and undistributed income available to participating securities |
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(1.4 |
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(1.0 |
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Net income attributable to PCA shareholders |
$ |
202.4 |
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$ |
145.9 |
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Diluted weighted average shares outstanding |
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89.6 |
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89.4 |
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Diluted earnings per share |
$ |
2.26 |
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$ |
1.63 |
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Supplemental financial information: |
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Capital spending |
$ |
148.1 |
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$ |
76.7 |
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Cash, cash equivalents, and marketable debt securities |
$ |
914.4 |
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$ |
1,253.2 |
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1
Packaging Corporation of America
Segment Information
Unaudited
(dollars in millions)
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Three Months Ended |
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March 31, |
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2025 |
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2024 |
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Segment sales |
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Packaging |
$ |
1,970.3 |
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$ |
1,798.3 |
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Paper |
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154.2 |
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163.8 |
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Corporate and Other |
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16.5 |
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17.4 |
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$ |
2,141.0 |
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$ |
1,979.5 |
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Segment operating income (loss) |
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Packaging |
$ |
278.1 |
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$ |
203.8 |
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Paper |
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35.6 |
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29.7 |
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Corporate and Other |
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(33.4 |
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(37.5 |
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Income from operations |
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280.3 |
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196.0 |
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Non-operating pension income |
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— |
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1.1 |
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Interest expense, net |
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(12.9 |
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(9.6 |
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Income before taxes |
$ |
267.4 |
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$ |
187.5 |
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Segment operating income (loss) excluding special items (1) |
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Packaging |
$ |
284.0 |
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$ |
207.7 |
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Paper |
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35.6 |
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36.1 |
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Corporate and Other |
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(33.4 |
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(37.5 |
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$ |
286.2 |
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$ |
206.3 |
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EBITDA excluding special items (1) |
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Packaging |
$ |
409.3 |
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$ |
326.2 |
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Paper |
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40.2 |
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40.6 |
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Corporate and Other |
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(28.4 |
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(33.6 |
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$ |
421.1 |
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$ |
333.2 |
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____________
2
Packaging Corporation of America
Reconciliation of Non-GAAP Financial Measures
Unaudited
(dollars in millions)
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Three Months Ended |
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March 31, |
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2025 |
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2024 |
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Packaging |
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Segment operating income |
$ |
278.1 |
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$ |
203.8 |
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Facilities closure and other costs (income) |
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5.9 |
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(0.1 |
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Jackson mill conversion-related activities |
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— |
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4.0 |
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Segment operating income excluding special items (1) |
$ |
284.0 |
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$ |
207.7 |
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Paper |
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Segment operating income |
$ |
35.6 |
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$ |
29.7 |
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Jackson mill conversion-related activities |
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— |
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6.4 |
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Segment operating income excluding special items (1) |
$ |
35.6 |
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$ |
36.1 |
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Corporate and Other |
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Segment operating loss |
$ |
(33.4 |
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$ |
(37.5 |
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Segment operating loss excluding special items (1) |
$ |
(33.4 |
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$ |
(37.5 |
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Income from operations |
$ |
280.3 |
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$ |
196.0 |
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Income from operations, excluding special items (1) |
$ |
286.2 |
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$ |
206.3 |
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____________
3
Packaging Corporation of America
Reconciliation of Non-GAAP Financial Measures
Unaudited
(dollars in millions)
Net Income Excluding Special Items and EPS Excluding Special Items (1)
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Three Months Ended |
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March 31, |
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2025 |
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2024 |
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Income before Taxes |
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Income Taxes |
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Net Income |
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Diluted EPS |
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Income before Taxes |
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Income Taxes |
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Net Income |
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Diluted EPS |
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As reported in accordance with GAAP |
$ |
267.4 |
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$ |
(63.6 |
) |
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$ |
203.8 |
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$ |
2.26 |
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$ |
187.5 |
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$ |
(40.6 |
) |
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$ |
146.9 |
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$ |
1.63 |
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Special items (2): |
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Facilities closure and other costs (income) |
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5.9 |
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(1.5 |
) |
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4.4 |
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0.05 |
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(0.1 |
) |
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— |
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(0.1 |
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— |
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Jackson mill conversion-related activities |
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— |
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— |
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— |
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— |
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10.4 |
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(2.6 |
) |
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7.8 |
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0.09 |
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Total special items |
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5.9 |
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(1.5 |
) |
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4.4 |
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0.05 |
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10.3 |
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(2.6 |
) |
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7.7 |
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0.09 |
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Excluding special items |
$ |
273.3 |
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$ |
(65.1 |
) |
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$ |
208.2 |
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$ |
2.31 |
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$ |
197.8 |
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$ |
(43.2 |
) |
|
$ |
154.6 |
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$ |
1.72 |
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____________
4
Packaging Corporation of America
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, interest, income taxes, and depreciation, amortization, and depletion. The following table reconciles net income to EBITDA and EBITDA excluding special items:
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Three Months Ended |
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March 31, |
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2025 |
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2024 |
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Net income |
$ |
203.8 |
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$ |
146.9 |
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Non-operating pension income |
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— |
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(1.1 |
) |
Interest expense, net |
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12.9 |
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9.6 |
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Provision for income taxes |
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63.6 |
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40.6 |
|
Depreciation, amortization, and depletion |
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138.0 |
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|
128.4 |
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EBITDA (1) |
$ |
418.3 |
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$ |
324.4 |
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Special items: |
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Facilities closure and other costs (income) |
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2.8 |
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(0.1 |
) |
Jackson mill conversion-related activities |
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— |
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|
8.9 |
|
EBITDA excluding special items (1) |
$ |
421.1 |
|
|
$ |
333.2 |
|
____________
5
Packaging Corporation of America
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:
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Three Months Ended |
|
|||||
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March 31, |
|
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2025 |
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2024 |
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Packaging |
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Segment operating income |
$ |
278.1 |
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$ |
203.8 |
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Depreciation, amortization, and depletion |
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128.4 |
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|
118.5 |
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EBITDA (1) |
|
406.5 |
|
|
|
322.3 |
|
Facilities closure and other costs (income) |
|
2.8 |
|
|
|
(0.1 |
) |
Jackson mill conversion-related activities |
|
— |
|
|
|
4.0 |
|
EBITDA excluding special items (1) |
$ |
409.3 |
|
|
$ |
326.2 |
|
|
|
|
|
|
|
||
Paper |
|
|
|
|
|
||
Segment operating income |
$ |
35.6 |
|
|
$ |
29.7 |
|
Depreciation, amortization, and depletion |
|
4.6 |
|
|
|
6.0 |
|
EBITDA (1) |
|
40.2 |
|
|
|
35.7 |
|
Jackson mill conversion-related activities |
|
— |
|
|
|
4.9 |
|
EBITDA excluding special items (1) |
$ |
40.2 |
|
|
$ |
40.6 |
|
|
|
|
|
|
|
||
Corporate and Other |
|
|
|
|
|
||
Segment operating loss |
$ |
(33.4 |
) |
|
$ |
(37.5 |
) |
Depreciation, amortization, and depletion |
|
5.0 |
|
|
|
3.9 |
|
EBITDA (1) |
|
(28.4 |
) |
|
|
(33.6 |
) |
EBITDA excluding special items (1) |
$ |
(28.4 |
) |
|
$ |
(33.6 |
) |
|
|
|
|
|
|
||
EBITDA excluding special items (1) |
$ |
421.1 |
|
|
$ |
333.2 |
|
____________
6