Packaging Corporation of America (NYSE: PKG) today reported
fourth quarter 2024 net income of $221 million, or $2.45 per share,
and net income of $222 million, or $2.47 per share, excluding
special items. Fourth quarter net sales were $2.1 billion in 2024
and $1.9 billion in 2023. Full year 2024 net income was $805
million, or $8.93 per share, and net income of $814 million, or
$9.04 per share, excluding special items. Full year net sales were
$8.4 billion in 2024 and $7.8 billion in 2023.
Diluted
earnings per share attributable to Packaging Corporation of America
shareholders
Three Months Ended
Full Year Ended
December 31
December 31
2024
2023
Change
2024
2023
Change
Reported Diluted EPS
$
2.45
$
2.10
$
0.35
$
8.93
$
8.48
$
0.45
Special Items Expense (1)
0.02
0.03
(0.01
)
0.11
0.21
(0.10
)
Diluted EPS excluding Special Items (2)
(3)
$
2.47
$
2.13
$
0.34
$
9.04
$
8.70
$
0.34
(1) For descriptions and amounts of our
special items, see the schedules with this release.
(2) Amounts may not foot or crossfoot due
to rounding.
(3) 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 fourth quarter include special items
for closure and other costs related to corrugated products
facilities. Reported earnings for the full year 2024 include
special items primarily for closure and other costs related to
corrugated products facilities and design centers and certain costs
at the Jackson, AL mill for paper-to-containerboard conversion
related activities.
Excluding special items, the $.34 per share increase in fourth
quarter 2024 earnings compared to the fourth quarter of 2023 was
driven primarily by higher prices and mix $.52 and volume $.40 in
the Packaging segment, higher prices and mix $.02 and volume $.02
in the Paper segment, and lower freight and logistics expenses
$.06. These items were partially offset by higher operating costs
($.48), higher scheduled maintenance outage expenses ($.08), higher
depreciation expense ($.06), and higher other expenses ($.06).
Results for the quarter were equal to fourth quarter guidance.
Financial information by segment is summarized below and in the
schedules with this release.
(dollars in millions)
Three Months Ended
Full Year Ended
December 31
December 31
2024
2023
2024
2023
Segment operating income (loss)
Packaging
$
297.2
$
263.8
$
1,101.5
$
1,074.3
Paper
34.8
28.1
129.7
118.9
Corporate and Other
(29.8
)
(30.4
)
(129.9
)
(118.1
)
$
302.2
$
261.5
$
1,101.3
$
1,075.1
Segment operating income (loss)
excluding special items
Packaging
$
298.9
$
265.0
$
1,108.1
$
1,088.7
Paper
34.8
30.7
135.5
130.0
Corporate and Other
(29.8
)
(30.4
)
(129.9
)
(118.1
)
$
303.9
$
265.3
$
1,113.7
$
1,100.6
EBITDA excluding special items
(1)
Packaging
$
425.7
$
384.7
$
1,597.5
$
1,555.7
Paper
39.3
35.2
153.5
150.6
Corporate and Other
(25.7
)
(26.4
)
(113.9
)
(102.5
)
$
439.3
$
393.5
$
1,637.1
$
1,603.8
(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, total corrugated product shipments and
shipments per day were up 9.1% versus last year’s fourth quarter.
Shipments per day were up 3.2% versus the third quarter of 2024.
Containerboard production was 1,310,000 tons, and containerboard
inventory was up 54,000 tons from the fourth quarter of 2023 and up
61,000 tons compared to the third quarter of 2024. In the Paper
segment, sales volume was up 5% compared to the fourth quarter of
2023 and down 5% from the seasonally stronger third quarter of
2024.
Commenting on reported results, Mark W. Kowlzan, Chairman and
CEO, said, “As we have seen throughout the year, demand in our
Packaging segment during the quarter remained very strong. Our
corrugated products plants delivered record fourth quarter total
shipments and an all-time record shipments per day. The plants also
set new annual records for total shipments and shipments per day.
Excellent operations throughout our mill containerboard system set
new quarterly and annual production records as well. This allowed
us to meet our customer’s demand needs in a timely manner as well
as achieve year-end inventory targets ahead of the mill outages
scheduled for the first half of 2025. Although seasonally slower,
volume and price/mix in the Paper segment were above last year’s
levels. Throughout the Company, our employees together with the
benefits of our capital spending program continued to do a great
job to lessen the inflationary impact across most of our cost
structure.”
“Looking ahead as we move from the fourth and into the first
quarter,” Mr. Kowlzan continued, “in our Packaging segment,
although seasonally slower, we expect volume in our corrugated
products plants to set new first quarter records for total
shipments and shipments-per-day. Containerboard volume will be
lower with two less operating days and scheduled maintenance
outages at our Counce, TN and Valdosta, GA mills. Domestic prices
will be higher with an improved product mix together with our
previously announced price increases. Export prices are assumed to
be stable. In our Paper segment, we forecast slightly lower volume
with two less mill operating days and prices and mix to be fairly
flat. With the exception of recycled fiber prices, we expect price
inflation across most of our direct, indirect and fixed operating
and converting costs along with a higher cost mix of mill
operations. In addition, wood, energy, and chemical costs will also
increase due to the unusually cold seasonal weather negatively
impacting usages and yields for these items. Labor and benefits
costs will be higher due to timing-related items that occur at the
beginning of a new year for annual increases, the restart of
payroll taxes, and share-based compensation expenses. First quarter
rail rate increases at three of our mills will impact freight and
logistics expenses and we expect higher depreciation expense.
Lastly, scheduled outage expenses should be slightly lower and we
assume a lower corporate tax rate. Considering these items, we
expect first quarter earnings of $2.21 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 first
quarter; however, additional special items may arise due to first
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 86 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, 2023, and in subsequent quarterly reports on Form
10-Q, filed with the Securities and Exchange Commission and
available at the SEC’s website at “www.sec.gov”.
Conference Call
Information:
WHAT:
Packaging Corporation of America’s 4th
Quarter 2024 Earnings Conference Call
Conference ID: Packaging Corporation of
America
WHEN:
Wednesday, January 29, 2025 at 9:00am
Eastern Time
PRE-REGISTRATION:
https://dpregister.com/sreg/10195036/fe19693604
CALL-IN NUMBER:
(833) 816-1102 (U.S.); (866) 605-3852
(Canada) or (412) 317-0684 (International)
Dial in by 8:45am Eastern Time
WEBCAST INFO:
www.packagingcorp.com;
REBROADCAST DATES:
January 29, 2025 through February 12,
2025
REBROADCAST NUMBERS:
(877) 344-7529 (U.S.); (855) 669-9658
(Canada) or (412) 317-0088 (International)
Passcode: 9444032
Packaging Corporation of America Consolidated Earnings
Results Unaudited (dollars in millions, except per-share
data)
Three Months Ended
Full Year Ended
December 31,
December 31,
2024
2023
2024
2023
Net sales
$
2,146.1
$
1,937.9
$
8,383.3
$
7,802.4
Cost of sales
(1,676.4
)
(1)
(1,527.8
)
(3)
(6,600.2
)
(1)(2)
(6,103.5
)
(3)
Gross profit
469.7
410.1
1,783.1
1,698.9
Selling, general, and administrative expenses
(147.0
)
(142.8
)
(610.3
)
(1)
(580.9
)
(3)
Other expense, net
(20.5
)
(1)
(5.8
)
(3)
(71.5
)
(1)(2)
(42.9
)
(3)
Income from operations
302.2
261.5
1,101.3
1,075.1
Non-operating pension income (expense)
1.1
(1.9
)
4.5
(7.7
)
Interest expense, net
(11.7
)
(11.1
)
(41.4
)
(53.3
)
Income before taxes
291.6
248.5
1,064.4
1,014.1
Provision for income taxes
(70.5
)
(59.3
)
(259.3
)
(248.9
)
Net income
$
221.1
$
189.2
$
805.1
$
765.2
Earnings per share: Basic
$
2.46
$
2.11
$
8.97
$
8.52
Diluted
$
2.45
$
2.10
$
8.93
$
8.48
Computation of diluted earnings per share under the two
class method: Net income
$
221.1
$
189.2
$
805.1
$
765.2
Less: Distributed and undistributed income available to
participating securities
(1.5
)
(1.4
)
(5.6
)
(6.2
)
Net income attributable to PCA shareholders
$
219.6
$
187.8
$
799.5
$
759.0
Diluted weighted average shares outstanding
89.5
89.3
89.5
89.5
Diluted earnings per share
$
2.45
$
2.10
$
8.93
$
8.48
Supplemental financial information: Capital spending
$
201.3
$
141.1
$
669.7
$
469.7
Cash, cash equivalents, and marketable debt securities
$
852.2
$
1,205.6
$
852.2
$
1,205.6
(1)
The three and twelve months ended December 31, 2024 include $1.7
million and $2.7 million of charges, respectively, consisting of
closure costs related to corrugated products facilities. For the
twelve months ended December 31, 2024, these charges were partially
offset by income primarily related to a favorable lease buyout for
a closed corrugated products facility during the first quarter of
2024. These items were recorded in "Cost of sales", "Selling,
general, and administrative expenses", and "Other expense, net", as
appropriate.
(2)
The twelve months ended December 31, 2024 include $9.7 million of
charges related to the announced discontinuation of production of
uncoated freesheet paper grades on the No. 3 machine at the
Jackson, Alabama mill associated with the permanent conversion of
the machine to produce linerboard and other paper-to-containerboard
conversion related activities. The costs were recorded in “Cost of
sales” and “Other expense, net”, as appropriate.
(3)
The three and twelve months ended December 31, 2023 include the
following: a. $2.9 million and $11.1 million, respectively, of
charges related to the announced discontinuation of production of
uncoated freesheet paper grades on the No. 3 machine at the
Jackson, Alabama mill associated with the permanent conversion of
the machine to produce linerboard and other paper-to-containerboard
conversion related activities. The costs were recorded in “Cost of
sales” and “Other expense, net”, as appropriate. b. $0.9 million
and $14.4 million, respectively, of charges related to the closure
of corrugated products facilities and design centers. For the
twelve months ended December 31, 2023, these costs were partially
offset by a gain on sale of a corrugated products facility. These
items were recorded in "Cost of sales", "Selling, general, and
administrative expenses", and "Other expense, net", as appropriate.
Packaging Corporation of America Segment Information
Unaudited (dollars in millions)
Three Months Ended
Full Year Ended
December 31,
December 31,
2024
2023
2024
2023
Segment sales Packaging
$
1,975.6
$
1,776.9
$
7,690.9
$
7,135.6
Paper
151.5
143.8
624.7
595.4
Corporate and Other
19.0
17.2
67.7
71.4
$
2,146.1
$
1,937.9
$
8,383.3
$
7,802.4
Segment operating income (loss) Packaging
$
297.2
$
263.8
$
1,101.5
$
1,074.3
Paper
34.8
28.1
129.7
118.9
Corporate and Other
(29.8
)
(30.4
)
(129.9
)
(118.1
)
Income from operations
302.2
261.5
1,101.3
1,075.1
Non-operating pension income (expense)
1.1
(1.9
)
4.5
(7.7
)
Interest expense, net
(11.7
)
(11.1
)
(41.4
)
(53.3
)
Income before taxes
$
291.6
$
248.5
$
1,064.4
$
1,014.1
Segment operating income (loss) excluding special items
(1) Packaging
$
298.9
$
265.0
$
1,108.1
$
1,088.7
Paper
34.8
30.7
135.5
130.0
Corporate and Other
(29.8
)
(30.4
)
(129.9
)
(118.1
)
$
303.9
$
265.3
$
1,113.7
$
1,100.6
EBITDA excluding special items (1) Packaging
$
425.7
$
384.7
$
1,597.5
$
1,555.7
Paper
39.3
35.2
153.5
150.6
Corporate and Other
(25.7
)
(26.4
)
(113.9
)
(102.5
)
$
439.3
$
393.5
$
1,637.1
$
1,603.8
(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.
Packaging Corporation of America
Reconciliation of Non-GAAP Financial Measures
Unaudited (dollars in millions)
Three Months Ended
Full Year Ended
December 31,
December 31,
2024
2023
2024
2023
Packaging Segment operating income
$
297.2
$
263.8
$
1,101.5
$
1,074.3
Facilities closure and other costs
1.7
0.9
2.7
14.4
Jackson mill conversion-related activities
-
0.3
3.9
-
Segment operating income excluding special items (1)
$
298.9
$
265.0
$
1,108.1
$
1,088.7
Paper Segment operating income
$
34.8
$
28.1
$
129.7
$
118.9
Jackson mill conversion-related activities
-
2.6
5.8
11.1
Segment operating income excluding special items (1)
$
34.8
$
30.7
$
135.5
$
130.0
Corporate and Other Segment operating loss
$
(29.8
)
$
(30.4
)
$
(129.9
)
$
(118.1
)
Segment operating loss excluding special items (1)
$
(29.8
)
$
(30.4
)
$
(129.9
)
$
(118.1
)
Income from operations
$
302.2
$
261.5
$
1,101.3
$
1,075.1
Income from operations, excluding special items (1)
$
303.9
$
265.3
$
1,113.7
$
1,100.6
(1) See footnote (1) on page 2, for a discussion of non-GAAP
financial measures.
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)
Three Months Ended December
31,
2024
2023
Income before taxes
Income Taxes
Net Income
Diluted EPS
Income before taxes
Income Taxes
Net Income
Diluted EPS
As reported in accordance with GAAP
$
291.6
$
(70.5
)
$
221.1
$
2.45
$
248.5
$
(59.3
)
$
189.2
$
2.10
Special items (2): Facilities closure and other costs
1.7
(0.4
)
1.3
0.02
0.9
(0.2
)
0.7
0.01
Jackson mill conversion-related activities
-
-
-
-
2.9
(0.7
)
2.2
0.02
Total special items
1.7
(0.4
)
1.3
0.02
3.8
(0.9
)
2.9
0.03
Excluding special items
$
293.3
$
(70.9
)
$
222.4
$
2.47
$
252.3
$
(60.2
)
$
192.1
$
2.13
Full Year Ended December
31,
2024
2023
Income before taxes
Income Taxes
Net Income
Diluted EPS
Income before taxes
Income Taxes
Net Income
Diluted EPS
As reported in accordance with GAAP
$
1,064.4
$
(259.3
)
$
805.1
$
8.93
$
1,014.1
$
(248.9
)
$
765.2
$
8.48
Special items (2): Jackson mill conversion-related activities
9.7
(2.4
)
7.3
0.08
11.1
(2.7
)
8.4
0.09
Facilities closure and other costs
2.7
(0.6
)
2.1
0.03
14.4
(3.6
)
10.8
0.12
Total special items
12.4
(3.0
)
9.4
0.11
25.5
(6.3
)
19.2
0.21
Excluding special items
$
1,076.8
$
(262.3
)
$
814.5
$
9.04
$
1,039.6
$
(255.2
)
$
784.4
$
8.70 (3
)
(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. (3) Amount may not foot due to rounding.
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) 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
Full Year Ended
December 31,
December 31,
2024
2023
2024
2023
Net income
$
221.1
$
189.2
$
805.1
$
765.2
Non-operating pension (income) expense
(1.1
)
1.9
(4.5
)
7.7
Interest expense, net
11.7
11.1
41.4
53.3
Provision for income taxes
70.5
59.3
259.3
248.9
Depreciation, amortization, and depletion
136.0
130.8
525.6
517.7
EBITDA (1)
$
438.2
$
392.3
$
1,626.9
$
1,592.8
Special items: Facilities closure and other costs
1.1
0.9
1.9
8.9
Jackson mill conversion-related activities
-
0.3
8.3
2.1
EBITDA excluding special items (1)
$
439.3
$
393.5
$
1,637.1
$
1,603.8
(1) See footnote (1) on page 2, for a discussion of non-GAAP
financial measures.
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:
Three Months Ended
Full Year Ended
December 31,
December 31,
2024
2023
2024
2023
Packaging Segment operating income
$
297.2
$
263.8
$
1,101.5
$
1,074.3
Depreciation, amortization, and depletion
127.4
119.7
490.1
472.5
EBITDA (1)
424.6
383.5
1,591.6
1,546.8
Facilities closure and other costs
1.1
0.9
1.9
8.9
Jackson mill conversion-related activities
-
0.3
4.0
-
EBITDA excluding special items (1)
$
425.7
$
384.7
$
1,597.5
$
1,555.7
Paper Segment operating income
$
34.8
$
28.1
$
129.7
$
118.9
Depreciation, amortization, and depletion
4.5
7.1
19.5
29.6
EBITDA (1)
39.3
35.2
149.2
148.5
Jackson mill conversion-related activities
-
-
4.3
2.1
EBITDA excluding special items (1)
$
39.3
$
35.2
$
153.5
$
150.6
Corporate and Other Segment operating loss
$
(29.8
)
$
(30.4
)
$
(129.9
)
$
(118.1
)
Depreciation, amortization, and depletion
4.1
4.0
16.0
15.6
EBITDA (1)
(25.7
)
(26.4
)
(113.9
)
(102.5
)
EBITDA excluding special items (1)
$
(25.7
)
$
(26.4
)
$
(113.9
)
$
(102.5
)
EBITDA excluding special items (1)
$
439.3
$
393.5
$
1,637.1
$
1,603.8
(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/20250128391014/en/
Barbara Sessions Packaging Corporation of America INVESTOR
RELATIONS: (877) 454-2509 PCA’s Website: www.packagingcorp.com
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