Graphic Packaging Holding Company reports first quarter 2010 results
Friday, May 07, 2010
Press release from the issuing company
Marietta, GA - Graphic Packaging Holding Company, a leading provider of packaging solutions to food, beverage and other consumer products companies, today reported Net Income for first quarter 2010 of $6.3 million, or $0.02 per diluted share based upon 346.9 million weighted average diluted shares. This compares to a first quarter 2009 Net Loss of $(28.2) million, or $(0.08) per share based upon 342.6 million weighted average shares. Adjusted Net Income for the quarter, which excludes $8.5 million of charges associated with the combination with Altivity Packaging, LLC ("Altivity"), was $14.8 million, or $0.04 per diluted share. This compares to a first quarter 2009 Adjusted Net Loss of $(13.3) million, or $(0.04) per share.
"The persistent high unemployment in the US continues to negatively impact recovery in some sectors, but I am pleased our overall execution has generated improved earnings and higher margins, positioning us well for continued debt reduction in 2010," said David W. Scheible, President and Chief Executive Officer.
On a segment basis, in Paperboard Packaging, tons sold increased 1.7% but net sales declined 0.7% compared to the first quarter of 2009. The decline in net sales was driven by lower pricing primarily related to contractual deflationary pass-throughs. Net sales in the Multi-wall Bag and Specialty segments declined 5.2%. Volume increases were offset by lower pricing primarily related to contractual deflationary pass-throughs and the divestiture of the Handschy ink business.
Attached is supplemental data showing first quarter 2010 net sales and net tons sold by each of the Company's business segments: Paperboard Packaging, Multi-wall Bag and Specialty Packaging.
Net interest expense was $45.0 million for first quarter 2010, as compared to net interest expense of $52.2 million in first quarter 2009. The decrease was due to both lower interest rates and lower debt balances.
First quarter 2010 income tax expense was $8.6 million, predominately attributable to the noncash expense associated with the amortization of goodwill for tax purposes. The Company has a $1.3 billion net operating loss carry-forward which may be available to offset future taxable income in the United States.
Capital expenditures for first quarter 2010 were $18.2 million compared to $36.0 million in the first quarter of 2009 reflecting the higher level of capital expenditures last year as a result of integration activities.
Under the terms of its Credit Agreement, the Company must comply with a maximum consolidated secured leverage ratio. As of March 31, 2010, the Company's ratio was 2.89 to 1.00, in compliance with the required maximum ratio of 4.75 to 1.00. The calculation of this covenant, along with a tabular reconciliation of EBITDA, Adjusted EBITDA, Credit Agreement EBITDA and Adjusted Net Income (Loss), is attached to this release.
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