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Graphic Packaging Holding Company Reports Fourth Quarter and Full Year 2016 Results

Tuesday, February 07, 2017

Press release from the issuing company

Graphic Packaging Holding Company (NYSE: GPK), (the "Company"), a leading provider of packaging solutions to food, beverage and consumer product companies, today reported Net Income for fourth quarter 2016 of $34.9 million, or $0.11 per share, based upon 317.9 million weighted average diluted shares.  This compares to fourth quarter 2015 Net Income of $57.2 million, or $0.17 per share, based on 329.6 million weighted average diluted shares.

Fourth quarter 2016 Net Income was negatively impacted by $9.8 million (net of a $4.1 million tax benefit) of business combinations and other special charges. When adjusting for these charges, Adjusted Net Income for the fourth quarter of 2016 was $44.7 million, or $0.14 per diluted share. This compares to fourth quarter 2015 Adjusted Net Income of $63.0 million or $0.19 per diluted share.

For the full year 2016, Net Income was $228.0 million, or $0.71 per share, based upon 321.5 million weighted average diluted shares.  This compares to 2015 Net Income of $230.1 million, or $0.70 per share, based on 330.7 million weighted average diluted shares.

Full year 2016 Net Income was negatively impacted by $27.8 million (net of a $12.6 million tax benefit) of business combinations and other special charges, and positively impacted by a $22.4 million discrete tax benefit recorded in the second quarter 2016. When adjusting for these charges, Adjusted Net Income for the full year 2016 was $233.4 million, or $0.73 per diluted share. This compares to full year 2015 Adjusted Net Income of $247.0 million or $0.75 per diluted share.

"While our fourth quarter Adjusted EBITDA was down modestly versus the prior year period due to accelerating commodity input costs and foreign exchange headwinds, we were encouraged by a return of core volume during the quarter and strong operating performance. Volume in our core business improved in the fourth quarter compared to the third quarter, and our mill and converting facilities operated well," said President and CEO Michael Doss. "Net sales were up 3.2% largely driven by acquisitions. Volume in our core business was flat in the fourth quarter versus the prior year period, compared to a 1.4% decline in the third quarter. Adjusted EBITDA was $175.1 million, down 3.1% compared to the prior year period of $180.7 million. For the full year 2016, Adjusted EBITDA was $763.8 million, up 1.7% compared to the prior year period of $751.2 million reflecting the benefits of acquisitions and strong productivity, partly offset by lower pricing, accelerating commodity input costs in the fourth quarter, and foreign exchange headwinds."

"Cash flow generation in the business remains strong as we generated $358 million in 2016. Our focus on growing cash flow and returning more of it to shareholders over time has not changed. We returned $229 million to shareholders in 2016 through dividends and share repurchases, including $59 million in share repurchases during the fourth quarter. Our Board of Directors declared a 50% increase in the quarterly dividend paid in January 2017to $0.075 per share on October 24, 2016 and approved a new $250 million share repurchase authorization on January, 10, 2017. The material increase in the quarterly dividend and new share repurchase authorization demonstrates the confidence we have in our cash flow profile. We remain committed to a balanced capital allocation strategy, which includes reinvesting in our business to drive strong cash returns on cash invested, strategic acquisitions at compelling post-synergy multiples, and returning cash to shareholders through dividends and share repurchases."

Full Release

 

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