Exhibit 99.1
Investors: Scott Wenhold
Graphic Packaging Holding Company
770-644-3062
Media: Lois Becton
Graphic Packaging Holding Company
770-644-3515
Graphic Packaging Holding Company Reports Fourth Quarter and Full Year 2008 Results
Fourth Quarter Highlights
| |
• |
|
Net sales of $1,047.7 million in the fourth quarter 2008 increased $445.8 million or 74
percent over the prior year quarter. |
| |
| |
• |
|
Adjusted EBITDA was $103.1 million compared to Adjusted EBITDA of $82.7 million in the
prior year quarter. |
| |
| |
• |
|
Annualized synergies exceeded $67 million, well ahead of pace to achieve target of $90
million by 2010. |
| |
| |
• |
|
Net debt was reduced by approximately $119 million since the combination with Altivity
last March. |
MARIETTA, Ga., February 26, 2009. Graphic Packaging Holding Company (NYSE: GPK), a leading
provider of packaging solutions to food, beverage and other consumer products companies, today
reported a Net Loss for the fourth quarter 2008 of $(57.7) million, or $(0.17) per share, based
upon 342.6 million weighted average shares. Excluding $15.5 million of charges primarily related
to the write-off of the company’s #2 paper machine in West Monroe, LA and $3.3 million of charges
associated with the combination with Altivity Packaging, LLC (“Altivity”), Adjusted Net Loss for
the quarter was $(38.9) million, or $(0.11) per share. This compares to a fourth quarter 2007 Net
Loss of $(0.7) million, or $(0.00) per share and a fourth quarter 2007 Adjusted Net Loss of $(7.3)
million, or $(0.04) per share based upon 202.1 million weighted average shares.
For the full year 2008, Net Loss was $(99.7) million, or $(0.32) per share based on 315.8 million
weighted average shares. This compares to a 2007 Net Loss of $(74.6) million or (0.37) per share
based on 201.8 million shares. Excluding the West Monroe #2 paper machine write-off and $42.1
million of charges associated with the combination with Altivity, full year 2008 Adjusted Net Loss
was $(42.1) million or $(0.13) per share compared to a full year 2007 Adjusted Net Loss of $(56.0)
million or $(0.28) per share.
“Despite experiencing $240 million of cost inflation during the year, our 2008 pro forma EBITDA
remained relatively flat to the prior year. We were able to accomplish this through a number of
initiatives, including price increases which totaled approximately $110 million. Additionally, our
cost reduction initiatives contributed another $70 million to 2008 results. This marks the fifth
consecutive year that Graphic has delivered significant cost savings. Finally, the integration of
Altivity is well ahead of our original timeline as we achieved annualized synergies in excess of
$67 million by the end of 2008.”
“We have also reduced net debt by approximately $119 million since closing the combination with
Altivity last March. A major driver of this debt reduction was our focus on working capital in the
second half of the year. In particular, we have been highly focused on inventory control and
remain committed to managing capacity to reflect demand. As a result, in addition to the permanent
shut-down of our #2 SUS paper machine and the idling of our medium machine for the last two weeks
of the year in West Monroe, LA, we also elected to take a total of 43 days of market-related
downtime across our recycled board mill system in the fourth quarter. As a result, we reduced
inventory levels by approximately $37 million, which helped to generate over $140 million of
operating cash flow in the fourth quarter alone.”
Net Sales
Net sales increased 74.0% to $1,047.7 million during fourth quarter 2008, compared to fourth
quarter 2007 net sales of $601.9 million. Full year 2008 net sales were $4,079.4 million, or 68.5%
2
higher than 2007 net sales of $2,421.2 million. When comparing against the prior year quarter,
net sales in the fourth quarter of 2008 were positively impacted by:
| |
• |
|
$470 million from the inclusion of Altivity results; and |
| |
| |
• |
|
$10 million of favorable pricing; |
Net sales were negatively impacted by:
| |
• |
|
$24 million related to volume and mix; and |
| |
| |
• |
|
$10 million due to unfavorable foreign currency exchange rates; |
Attached is supplemental data showing fourth quarter 2008 net sales and net tons sold by each of
the Company’s business segments: Paperboard Packaging, Multi-wall Bag and Specialty Packaging.
Pro forma net sales and pro forma net tons sold are also shown, each assuming that the combination
with Altivity occurred on January 1, 2007 and excluding fourth quarter 2007 results for the two
coated recycled board mills divested in September 2008.
EBITDA
EBITDA for fourth quarter 2008 was $84.3 million. Excluding $15.5 million of charges primarily
related to the write-off of the company’s #2 paper machine in West Monroe, LA and $3.3 million of
charges associated with the combination with Altivity, Adjusted EBITDA was $103.1 million. This
compares to fourth quarter 2007 EBITDA of $89.3 million and Adjusted EBITDA of $82.7 million. Full
year 2008 EBITDA was $413.3 million without a pro forma adjustment for the full year benefit of Altivity EBITDA. Excluding the West Monroe #2 paper machine write-off and
$42.1 million of charges associated with the combination with Altivity, full year 2008 Adjusted
EBITDA was $470.9 million compared to 2007 Adjusted EBITDA of $339.1 million. When comparing
against the prior year quarter, Adjusted EBITDA in the fourth quarter of 2008 was positively
impacted by:
| |
• |
|
$45 million from the inclusion of Altivity results; |
3
| |
• |
|
$17 million of lower operating costs as a result of ongoing continuous improvement
programs and lower compensation expense; and |
| |
| |
• |
|
$10 million of favorable pricing; |
Fourth quarter 2008 Adjusted EBITDA was negatively impacted by:
| |
• |
|
$32 million of higher input costs primarily related to increased prices for
chemicals, energy, caustic soda, and virgin fiber; |
| |
| |
• |
|
$13 million of costs primarily resulting from the shutdown of the #2 paper machine; |
| |
| |
• |
|
$4 million related to volume and mix; and |
| |
| |
• |
|
$2 million of unfavorable foreign currency translation. |
Other Results
At the end of the fourth quarter of 2008, the Company’s total debt was $3,183.8 compared to debt of
$1,878.4 million at the end of 2007. Approximately $1.2 billion of debt was assumed in connection
with the combination with Altivity. At December 31, 2008, the Company had $143.2 million drawn
from its $400 million revolving facility. In light of the unprecedented and continuing volatility
in the credit and securities markets, as opposed to reducing debt, the Company kept $160 million
invested in short-term investments that are fully collateralized by U.S. Treasuries. Including
Cash and Cash Equivalents, as of December 31, 2008, the Company had available liquidity of $390.5 million.
Net interest expense was $58.2 million for fourth quarter 2008, as compared to net interest expense
of $40.3 million in fourth quarter 2007. Full year 2008 net interest expense was $215.4 million
compared to $167.8 million in 2007. The increase was primarily due to the additional debt assumed
in the combination with Altivity.
4
Fourth quarter 2008 income tax expense was $9.4 million and full year 2008 income tax expense was
$34.4 million. Both the fourth quarter and full year expense was predominately attributable to the
noncash expense associated with the amortization of goodwill for tax purposes. The Company has a
$1.4 billion net operating loss carry-forward that is available to offset future taxable income in
the United States.
Capital expenditures for fourth quarter 2008 were $56.9 million compared to $34.3 million in the
fourth quarter of 2007. Approximately $4.8 million of fourth quarter 2008 capital expenditures
were related to the inclusion of Altivity results. For the full year 2008, capital expenditures
were $183.3 million compared to $95.9 million in 2007. Approximately $33.0 million of 2008 capital
expenditures were related to the inclusion of Altivity results.
Under the terms of its Credit Agreement, the Company must comply with a maximum consolidated
secured leverage ratio. As of December 31, 2008, the Company’s ratio was 3.60 to 1.00, in
compliance with the required maximum ratio of 5.00 to 1.00. The calculation of this covenant and
the Company’s net debt along with a tabular reconciliation of EBITDA, Adjusted EBITDA, Pro Forma
Adjusted EBITDA, Pro Forma Net Sales, Credit Agreement EBITDA and Adjusted Net Loss to Net Loss is
attached to this release.
Quarterly Pro Forma Comparisons
All pro forma results referenced in this release give effect to the combination with Altivity as if
it had occurred on January 1, 2007 and exclude fourth quarter 2007 results for the two divested
mills. The pro forma information is not necessarily indicative of what the combined companies’
results of operations actually would have been if the combination had been completed on the date
indicated.
| |
• |
|
Fourth quarter 2008 Pro Forma Adjusted Net Loss of $(38.9) million or $(0.11) per
share compares to fourth quarter 2007 Pro Forma Net Loss of $(19.0) million or $(0.06)
per share. Full year 2008 Pro Forma Adjusted Net Loss of $(62.9) million or |
5
| |
|
|
$(0.18) per share compares to 2007 Pro Forma Adjusted Net Loss of $(69.3) million or
$(0.20) per share. |
| |
| |
• |
|
Fourth quarter 2008 Pro Forma Net Sales of $1,047.7 million were 1.5 percent lower
than fourth quarter 2007 Pro Forma Net Sales of $1,063.7 million. Full year 2008 Pro
Forma Net Sales of $4,470.5 million were 2.1% higher than 2007 Pro Forma Net Sales of
$4,378.2 million. |
| |
| |
• |
|
Fourth quarter 2008 Pro Forma Adjusted EBITDA of $103.1 million compares to fourth
quarter 2007 Pro Forma Adjusted EBITDA of $120.5 million. Full year 2008 Pro Forma
Adjusted EBITDA of $501.7 million compares to 2007 Pro Forma Adjusted EBITDA of $510.2
million. |
Earnings Call
The Company will host a conference call at 10:00 am eastern time on Friday, February 27, 2009 to
discuss the results of the fourth quarter and full year 2008. To access the conference call,
listeners calling from within North America should dial 800-392-9489 at least 10 minutes prior to
the start of the conference call (Conference ID# 82549519). Listeners may also access the audio
webcast at the Investor Relations section of the Graphic Packaging website:
http://www.graphicpkg.com. Replays of the call can be accessed for one week by dialing
800-642-1687.
Forward Looking Statements
Any statements of the Company’s expectations in this press release constitute “forward-looking
statements” as defined in the Private Securities Litigation Reform Act of 1995. Such statements,
including but not limited to, statements regarding availability of the Company’s net operating
loss and our ability to recognize $90 million of annualized synergies by 2010, are based on
currently available information and are subject to various risks and uncertainties that could cause
actual results to differ materially from the Company’s present expectations. These risks and
uncertainties include, but are not limited to, the Company’s substantial amount of debt, inflation
of and volatility
6
in raw material and energy costs, volatility in the credit and securities markets, cutbacks in
consumer spending that could affect demand for the Company’s products, continuing pressure for
lower cost products, the Company’s ability to implement its business strategies, including
productivity initiatives and cost reduction plans, currency movements and other risks of conducting
business internationally, and the impact of regulatory and litigation matters, including those that
impact the Company’s ability to protect and use its intellectual property. Undue reliance should
not be placed on such forward-looking statements, as such statements speak only as of the date on
which they are made and the Company undertakes no obligation to update such statements. Additional
information regarding these and other risks is contained in the Company’s periodic filings with the
SEC.
About Graphic Packaging Holding Company
Graphic Packaging Holding Company (NYSE:GPK), headquartered in Marietta, Georgia, is a leading
provider of packaging solutions for a wide variety of products to food, beverage and other consumer
products companies. The Company is one of the largest producers of folding cartons and holds a
leading market position in coated-recycled boxboard and specialty bag packaging. The Company’s
customers include some of the most widely recognized companies in the world. Additional information
about Graphic Packaging, its business and its products is available on the Company’s web site at
www.graphicpkg.com.
7
GRAPHIC PACKAGING HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| |
|
|
|
|
|
|
|
|
| |
|
December 31, |
|
December 31, |
| In millions, except share and per share amounts |
|
2008 |
|
2007 |
| |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
169.6 |
|
|
$ |
9.3 |
|
Receivables, Net |
|
|
369.6 |
|
|
|
226.7 |
|
Inventories |
|
|
532.0 |
|
|
|
318.6 |
|
Other Current Assets |
|
|
56.9 |
|
|
|
31.7 |
|
| |
Total Current Assets |
|
|
1,128.1 |
|
|
|
586.3 |
|
|
|
|
|
|
|
|
|
|
Property, Plant and Equipment, Net |
|
|
1,935.1 |
|
|
|
1,376.2 |
|
Goodwill |
|
|
1,204.8 |
|
|
|
641.5 |
|
Intangible Assets, Net |
|
|
664.6 |
|
|
|
140.4 |
|
Other Assets |
|
|
50.0 |
|
|
|
32.9 |
|
| |
Total Assets |
|
$ |
4,982.6 |
|
|
$ |
2,777.3 |
|
| |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Short-Term Debt and Current Portion of Long-Term Debt |
|
$ |
18.6 |
|
|
$ |
6.6 |
|
Accounts Payable |
|
|
333.4 |
|
|
|
222.4 |
|
Other Accrued Liabilities |
|
|
333.6 |
|
|
|
177.8 |
|
| |
Total Current Liabilities |
|
|
685.6 |
|
|
|
406.8 |
|
|
|
|
|
|
|
|
|
|
Long-Term Debt |
|
|
3,165.2 |
|
|
|
1,871.8 |
|
Deferred Tax Liabilities |
|
|
187.9 |
|
|
|
141.5 |
|
Accrued Pension and Postretirement Benefits |
|
|
373.6 |
|
|
|
170.3 |
|
Other Noncurrent Liabilities |
|
|
43.4 |
|
|
|
42.9 |
|
| |
Total Liabilities |
|
|
4,455.7 |
|
|
|
2,633.3 |
|
| |
|
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Preferred Stock, par value $.01 per share; 100,000,000 shares
authorized;
no shares issued or outstanding |
|
|
— |
|
|
|
— |
|
Common Stock, par value $.01 per share; 1,000,000,000 shares authorized;
342,522,470 and 200,978,569 shares issued and outstanding at
December 31, 2008 and December 31, 2007, respectively |
|
|
3.4 |
|
|
|
2.0 |
|
Capital in Excess of Par Value |
|
|
1,955.4 |
|
|
|
1,191.6 |
|
Accumulated Deficit |
|
|
(1,075.4 |
) |
|
|
(975.7 |
) |
Accumulated Other Comprehensive Loss |
|
|
(356.5 |
) |
|
|
(73.9 |
) |
| |
Total Shareholders’ Equity |
|
|
526.9 |
|
|
|
144.0 |
|
| |
Total Liabilities and Shareholders’ Equity |
|
$ |
4,982.6 |
|
|
$ |
2,777.3 |
|
| |
GRAPHIC PACKAGING HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Twelve Months Ended |
| |
|
December 31, |
|
December 31, |
| In millions, except per share amounts |
|
2008 |
|
2007 |
|
2008 |
|
2007 |
| |
Net Sales |
|
$ |
1,047.7 |
|
|
$ |
601.9 |
|
|
$ |
4,079.4 |
|
|
$ |
2,421.2 |
|
Cost of Sales |
|
|
945.8 |
|
|
|
513.0 |
|
|
|
3,596.9 |
|
|
|
2,089.4 |
|
Selling, General and Administrative |
|
|
89.2 |
|
|
|
49.5 |
|
|
|
332.7 |
|
|
|
179.2 |
|
Research, Development and Engineering |
|
|
2.0 |
|
|
|
2.5 |
|
|
|
8.0 |
|
|
|
9.2 |
|
Other Income, Net |
|
|
0.7 |
|
|
|
(0.9 |
) |
|
|
(8.1 |
) |
|
|
(7.8 |
) |
| |
Income from Operations |
|
|
10.0 |
|
|
|
37.8 |
|
|
|
149.9 |
|
|
|
151.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income |
|
|
0.3 |
|
|
|
0.1 |
|
|
|
1.3 |
|
|
|
0.4 |
|
Interest Expense |
|
|
(58.5 |
) |
|
|
(40.4 |
) |
|
|
(216.7 |
) |
|
|
(168.2 |
) |
Loss on Early Extinguishment of Debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(9.5 |
) |
| |
Loss before Income Taxes and Equity in Net Earnings of
Affiliates |
|
|
(48.2 |
) |
|
|
(2.5 |
) |
|
|
(65.5 |
) |
|
|
(26.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
|
(9.4 |
) |
|
|
(4.8 |
) |
|
|
(34.4 |
) |
|
|
(23.9 |
) |
| |
Loss before Equity in Net Earnings of Affiliates |
|
|
(57.6 |
) |
|
|
(7.3 |
) |
|
|
(99.9 |
) |
|
|
(50.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Net (Loss) Earnings of Affiliates |
|
|
(0.1 |
) |
|
|
0.2 |
|
|
|
1.1 |
|
|
|
0.9 |
|
| |
Loss from Continuing Operations |
|
|
(57.7 |
) |
|
|
(7.1 |
) |
|
|
(98.8 |
) |
|
|
(49.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from Discontinued Operations, Net of Taxes |
|
|
— |
|
|
|
6.4 |
|
|
|
(0.9 |
) |
|
|
(25.5 |
) |
| |
Net Loss |
|
$ |
(57.7 |
) |
|
$ |
(0.7 |
) |
|
$ |
(99.7 |
) |
|
$ |
(74.6 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income Per Share — Basic & Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations |
|
$ |
(0.17 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.24 |
) |
Discontinued Operations |
|
|
— |
|
|
|
0.03 |
|
|
|
— |
|
|
|
(0.13 |
) |
| |
Total |
|
$ |
(0.17 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.37 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares Outstanding — Basic |
|
|
342.6 |
|
|
|
202.1 |
|
|
|
315.8 |
|
|
|
201.8 |
|
Weighted Average Number of Shares Outstanding — Diluted |
|
|
342.6 |
|
|
|
202.1 |
|
|
|
315.8 |
|
|
|
201.8 |
|
GRAPHIC PACKAGING HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| |
|
|
|
|
|
|
|
|
| |
|
Twelve Months Ended |
| |
|
December 31, |
| In millions |
|
2008 |
|
2007 |
| |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(99.7 |
) |
|
$ |
(74.6 |
) |
Noncash Items Included in Net Loss: |
|
|
|
|
|
|
|
|
Depreciation and Amortization |
|
|
264.3 |
|
|
|
194.8 |
|
Loss on Early Extinguishment of Debt |
|
|
— |
|
|
|
9.5 |
|
Deferred Income Taxes |
|
|
28.0 |
|
|
|
19.0 |
|
Pension, Postemployment and Postretirement Benefits
Expense, Net of Contributions |
|
|
(38.4 |
) |
|
|
(7.2 |
) |
Amortization of Deferred Debt Issuance Costs |
|
|
7.9 |
|
|
|
6.9 |
|
Inventory Step Up Related to Activity |
|
|
24.4 |
|
|
|
— |
|
Write-off #2 Paper Machine |
|
|
12.6 |
|
|
|
— |
|
Loss on Disposal of Assets |
|
|
2.3 |
|
|
|
2.4 |
|
Impairment Charge |
|
|
— |
|
|
|
18.6 |
|
Other, Net |
|
|
1.8 |
|
|
|
8.2 |
|
Changes in Operating Assets & Liabilities |
|
|
(20.4 |
) |
|
|
(35.9 |
) |
| |
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities |
|
|
182.8 |
|
|
|
141.7 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Capital Spending |
|
|
(183.3 |
) |
|
|
(95.9 |
) |
Acquisition Costs Related to Activity |
|
|
(30.3 |
) |
|
|
— |
|
Cash Acquired Related to Activity |
|
|
60.2 |
|
|
|
— |
|
Proceeds from Sales of Assets, Net of Selling Costs |
|
|
20.3 |
|
|
|
9.5 |
|
Other, Net |
|
|
(9.3 |
) |
|
|
(4.4 |
) |
| |
Net Cash Used in Investing Activities |
|
|
(142.4 |
) |
|
|
(90.8 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from Issuance of Debt |
|
|
1,200.0 |
|
|
|
1,135.0 |
|
Payments on Debt |
|
|
(1,195.9 |
) |
|
|
(1,180.0 |
) |
Borrowings under Revolving Credit Facilities |
|
|
985.8 |
|
|
|
848.4 |
|
Payments on Revolving Credit Facilities |
|
|
(853.4 |
) |
|
|
(846.3 |
) |
Debt Issuance Costs |
|
|
(16.3 |
) |
|
|
(7.0 |
) |
Other, Net |
|
|
(0.4 |
) |
|
|
(0.1 |
) |
| |
Net Cash Provided by (Used in) Financing Activities |
|
|
119.8 |
|
|
|
(50.0 |
) |
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
|
|
0.1 |
|
|
|
1.1 |
|
| |
Net Increase in Cash and Cash Equivalents |
|
|
160.3 |
|
|
|
2.0 |
|
| |
Cash and Cash Equivalents at Beginning of Period |
|
|
9.3 |
|
|
|
7.3 |
|
| |
Cash and Cash Equivalents at End of Period |
|
$ |
169.6 |
|
|
$ |
9.3 |
|
| |
Reconciliation of Non-GAAP Financial Measures
The table below sets forth the Company’s earnings before interest expense, income tax expense, equity in the net
earnings of the Company’s affiliates, loss on early extinguishment of debt, depreciation and amortization
(“EBITDA”), Adjusted EBITDA, and Adjusted Net Income (Loss). Adjusted EBITDA and Adjusted Net Income (Loss) exclude
charges associated with the Company’s combination with Activity Packaging, LLC, the retirement of machinery, and
other strategic plant and machinery mobilization. Adjusted EBITDA and Adjusted Net Income (Loss) for the prior year
periods exclude impairment charges related to Graphic Packaging International Sweden. The Company’s management
believes that the presentation of EBITDA, Adjusted EBITDA and Adjusted Net Income (Loss) provides useful information
to investors because these measures are important measures that management uses in assessing the Company’s
performance. EBITDA, Adjusted EBITDA and Adjusted Net Income (Loss) are financial measures not calculated in
accordance with generally accepted accounting principles in the United States (“GAAP”), and are not measures of net
income, operating income, operating performance or liquidity presented in accordance with GAAP.
EBITDA, Adjusted EBITDA and Adjusted Net Income (Loss) should be considered in addition to results prepared in
accordance with GAAP, but should not be considered substitutes for or superior to GAAP results. In addition, our
EBITDA, Adjusted EBITDA and Adjusted Net Income (Loss) may not be comparable to Adjusted EBITDA or similarly titled
measures utilized by other companies since such other companies may not calculate such measures in the same manner
as we do.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Twelve Months Ended |
| |
|
December 31, |
|
December 31, |
| In Millions |
|
2008 |
|
2007 |
|
2008 |
|
2007 |
| |
Net Loss |
|
$ |
(57.7 |
) |
|
$ |
(0.7 |
) |
|
$ |
(99.7 |
) |
|
$ |
(74.6 |
) |
Add (Subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
|
9.4 |
|
|
|
4.8 |
|
|
|
34.4 |
|
|
|
23.9 |
|
Equity in Net Earnings of Affiliates |
|
|
0.1 |
|
|
|
(0.2 |
) |
|
|
(1.1 |
) |
|
|
(0.9 |
) |
Interest Expense, Net |
|
|
58.2 |
|
|
|
40.3 |
|
|
|
215.4 |
|
|
|
167.8 |
|
Loss on Early Extinguishment of Debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9.5 |
|
Depreciation and Amortization |
|
|
74.3 |
|
|
|
45.1 |
|
|
|
264.3 |
|
|
|
194.8 |
|
| |
EBITDA |
|
|
84.3 |
|
|
|
89.3 |
|
|
|
413.3 |
|
|
|
320.5 |
|
Charges Associated with Combination with Activity |
|
|
3.3 |
|
|
|
— |
|
|
|
42.1 |
|
|
|
— |
|
#2 Paper Machine Write-off at West Monroe and Other
Charges |
|
|
15.5 |
|
|
|
— |
|
|
|
15.5 |
|
|
|
— |
|
Impairment Charge |
|
|
— |
|
|
|
(6.6 |
) |
|
|
— |
|
|
|
18.6 |
|
| |
Adjusted EBITDA |
|
$ |
103.1 |
|
|
$ |
82.7 |
|
|
$ |
470.9 |
|
|
$ |
339.1 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(57.7 |
) |
|
$ |
(0.7 |
) |
|
$ |
(99.7 |
) |
|
$ |
(74.6 |
) |
Charges Associated with Combination with Activity |
|
|
3.3 |
|
|
|
— |
|
|
|
42.1 |
|
|
|
— |
|
#2 Paper Machine Write-off at West Monroe and Other
Charges |
|
|
15.5 |
|
|
|
— |
|
|
|
15.5 |
|
|
|
— |
|
Impairment Charge |
|
|
— |
|
|
|
(6.6 |
) |
|
|
— |
|
|
|
18.6 |
|
| |
Adjusted Net Loss |
|
$ |
(38.9 |
) |
|
$ |
(7.3 |
) |
|
$ |
(42.1 |
) |
|
$ |
(56.0 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share — Basic & Diluted
Net Loss |
|
$ |
(0.17 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.37 |
) |
Charges Associated with Combination with Activity |
|
|
0.01 |
|
|
|
— |
|
|
|
0.14 |
|
|
|
— |
|
#2 Paper Machine Write-off at West Monroe and
Other Charges |
|
|
0.05 |
|
|
|
— |
|
|
|
0.05 |
|
|
|
— |
|
Impairment Charge |
|
|
— |
|
|
|
(0.04 |
) |
|
|
— |
|
|
|
0.09 |
|
| |
Adjusted Net Loss |
|
$ |
(0.11 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.28 |
) |
| |
| |
|
|
|
|
|
|
|
|
| Calculation of Net Debt: |
|
2008 |
| |
|
December31, |
|
March31, |
| |
|
|
Short-Term Debt and Current Portion of Long-Term Debt |
|
$ |
18.6 |
|
|
$ |
20.3 |
|
Long-Term Debt |
|
|
3,165.2 |
|
|
|
3,134.4 |
|
Less: |
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
|
(169.6 |
) |
|
|
(21.9 |
) |
| |
Total Net Debt |
|
$ |
3,014.2 |
|
|
$ |
3,132.8 |
|
| |
GRAPHIC PACKAGING HOLDING COMPANY
Reconciliation of Non-GAAP Financial Measures (continued)
Pro Forma Results
The following pro forma results for the three months and twelve months ended December 31, 2007, respectively, and the
twelve months ended December 31, 2008, give effect to Graphic Packaging Corporation’s combination with Activity Packaging,
LLC as if it had occurred on January 1, 2007 and excludes the fourth quarter 2007 results for the two coated recycled board
mills divested in September 2008. The Company’s management believes that the pro forma presentation provides useful
information to investors that in light of the Company’s recent combination with Activity Packaging, LLC. The pro forma
information is not necessarily indicative of what the combined companies’ results of operations actually would have been if
the transaction had been completed on the date indicated.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Twelve Months Ended |
| |
|
December 31, |
|
December 31, |
| In Millions |
|
2008 |
|
2007 |
|
2008 |
|
2007 |
| |
Net Sales |
|
$ |
1,047.7 |
|
|
$ |
601.9 |
|
|
$ |
4,079.4 |
|
|
$ |
2,421.2 |
|
Activity Net Sales |
|
|
— |
|
|
|
461.8 |
|
|
|
391.1 |
|
|
|
1,957.0 |
|
| |
Pro Forma Net Sales |
|
$ |
1,047.7 |
|
|
$ |
1,063.7 |
|
|
$ |
4,470.5 |
|
|
$ |
4,378.2 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Net Loss |
|
$ |
(57.7 |
) |
|
$ |
(12.4 |
) |
|
$ |
(120.5 |
) |
|
$ |
(87.9 |
) |
Add (Subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
|
9.4 |
|
|
|
6.2 |
|
|
|
35.1 |
|
|
|
26.9 |
|
Equity in Net Earnings of Affiliates |
|
|
0.1 |
|
|
|
(0.2 |
) |
|
|
(1.1 |
) |
|
|
(0.9 |
) |
Interest Expense, Net |
|
|
58.2 |
|
|
|
58.7 |
|
|
|
246.9 |
|
|
|
244.9 |
|
Loss on Early Extinguishment of Debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9.5 |
|
Depreciation and Amortization |
|
|
74.3 |
|
|
|
74.8 |
|
|
|
283.7 |
|
|
|
299.1 |
|
| |
Pro Forma EBITDA |
|
|
84.3 |
|
|
|
127.1 |
|
|
|
444.1 |
|
|
|
491.6 |
|
Charges Associated with Combination with Activity |
|
|
3.3 |
|
|
|
— |
|
|
|
42.1 |
|
|
|
— |
|
#2 Paper Machine Write-off at West Monroe and Other
Charges |
|
|
15.5 |
|
|
|
— |
|
|
|
15.5 |
|
|
|
— |
|
Impairment Charges |
|
|
— |
|
|
|
(6.6 |
) |
|
|
— |
|
|
|
18.6 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Adjusted EBITDA |
|
$ |
103.1 |
|
|
$ |
120.5 |
|
|
$ |
501.7 |
|
|
$ |
510.2 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Net Loss |
|
$ |
(57.7 |
) |
|
$ |
(12.4 |
) |
|
$ |
(120.5 |
) |
|
$ |
(87.9 |
) |
Charges Associated with Combination with Activity |
|
|
3.3 |
|
|
|
— |
|
|
|
42.1 |
|
|
|
— |
|
#2 Paper Machine Write-off at West Monroe and Other
Charges |
|
|
15.5 |
|
|
|
— |
|
|
|
15.5 |
|
|
|
— |
|
Impairment Charge |
|
|
— |
|
|
|
(6.6 |
) |
|
|
— |
|
|
|
18.6 |
|
| |
Pro Forma Adjusted Net Loss |
|
$ |
(38.9 |
) |
|
$ |
(19.0 |
) |
|
$ |
(62.9 |
) |
|
$ |
(69.3 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share — Basic & Diluted
Pro Forma Net Loss |
|
$ |
(0.17 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.25 |
) |
Charges Associated with Combination with Activity |
|
|
0.01 |
|
|
|
— |
|
|
|
0.12 |
|
|
|
— |
|
#2 Paper Machine Write-off at West Monroe and
Other Charges |
|
|
0.05 |
|
|
|
— |
|
|
|
0.05 |
|
|
|
— |
|
Impairment Charge |
|
|
— |
|
|
|
(0.02 |
) |
|
|
|
|
|
|
0.05 |
|
| |
Pro Forma Adjusted Net Loss |
|
$ |
(0.11 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.20 |
) |
| |
GRAPHIC PACKAGING HOLDING COMPANY
Unaudited Supplemental Data
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
| |
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
| |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Tons Sold (000’s): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paperboard Packaging |
|
|
535.7 |
|
|
|
705.5 |
|
|
|
748.4 |
|
|
|
640.0 |
|
Multi-wall Bag |
|
|
27.8 |
|
|
|
75.2 |
|
|
|
75.3 |
|
|
|
67.3 |
|
Specialty Packaging (1) |
|
|
1.6 |
|
|
|
7.4 |
|
|
|
7.5 |
|
|
|
5.7 |
|
| |
Total |
|
|
565.1 |
|
|
|
788.1 |
|
|
|
831.2 |
|
|
|
713.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales ($ Millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paperboard Packaging |
|
$ |
657.1 |
|
|
$ |
928.5 |
|
|
$ |
946.9 |
|
|
$ |
844.9 |
|
Multi-wall Bag |
|
|
50.0 |
|
|
|
143.5 |
|
|
|
145.3 |
|
|
|
139.3 |
|
Specialty Packaging |
|
|
17.2 |
|
|
|
69.7 |
|
|
|
73.5 |
|
|
|
63.5 |
|
| |
Total |
|
$ |
724.3 |
|
|
$ |
1,141.7 |
|
|
$ |
1,165.7 |
|
|
$ |
1,047.7 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tonnage is not applicable to the majority of the Specialty Packaging segment due to the nature of products sold (e.g. inks, labels, etc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Tons Sold (000’s): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Paperboard Packaging |
|
|
462.3 |
|
|
|
484.9 |
|
|
|
470.6 |
|
|
|
456.1 |
|
Multi-wall Bag |
|
|
12.4 |
|
|
|
12.0 |
|
|
|
13.7 |
|
|
|
13.5 |
|
| |
Total |
|
|
474.7 |
|
|
|
496.9 |
|
|
|
484.3 |
|
|
|
469.6 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales ($ Millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paperboard Packaging |
|
$ |
565.0 |
|
|
$ |
604.7 |
|
|
$ |
590.6 |
|
|
$ |
580.3 |
|
Multi-wall Bag |
|
|
19.1 |
|
|
|
18.4 |
|
|
|
21.5 |
|
|
|
21.6 |
|
| |
Total |
|
$ |
584.1 |
|
|
$ |
623.1 |
|
|
$ |
612.1 |
|
|
$ |
601.9 |
|
| |
|
|
|
| Note: |
|
Tonnage and net sales amounts have been retrospectively adjusted for discontinued operations.
|
GRAPHIC PACKAGING HOLDING COMPANY
Unaudited Supplemental Data (continued)
Pro Forma Results
The following pro forma results for the three months and twelve months ended December 31, 2007, respectively, and the twelve
months ended December 31, 2008, give effect to Graphic Packaging Corporation’s acquisition of Altivity Packaging, LLC as if it
had occurred on January 1, 2007 and excludes the fourth quarter 2007 results for the two coated recycled board mills divested
in September 2008. The Company’s management believes that the pro forma presentation provides useful information to investors
that in light of the Company’s recent combination with Altivity Packaging, LLC. The pro forma information is not necessarily
indicative of what the combined companies’ results of operations actually would have been if the transaction had been
completed on the date indicated.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
| |
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
| |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Tons Sold (000’s): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paperboard Packaging |
|
|
723.4 |
|
|
|
705.5 |
|
|
|
748.4 |
|
|
|
640.0 |
|
Multi-wall Bag |
|
|
73.3 |
|
|
|
75.2 |
|
|
|
75.3 |
|
|
|
67.3 |
|
Specialty Packaging (1) |
|
|
7.1 |
|
|
|
7.4 |
|
|
|
7.5 |
|
|
|
5.7 |
|
| |
Total |
|
|
803.8 |
|
|
|
788.1 |
|
|
|
831.2 |
|
|
|
713.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales ($ Millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paperboard Packaging |
|
$ |
900.9 |
|
|
$ |
928.5 |
|
|
$ |
946.9 |
|
|
$ |
844.9 |
|
Multi-wall Bag |
|
|
144.2 |
|
|
|
143.5 |
|
|
|
145.3 |
|
|
|
139.3 |
|
Specialty Packaging |
|
|
70.3 |
|
|
|
69.7 |
|
|
|
73.5 |
|
|
|
63.5 |
|
| |
Total |
|
$ |
1,115.4 |
|
|
$ |
1,141.7 |
|
|
$ |
1,165.7 |
|
|
$ |
1,047.7 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tonnage is not applicable to the majority of the Specialty Packaging segment due to the nature of products sold (e.g. inks, labels, etc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Tons Sold (000’s): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paperboard Packaging |
|
|
700.4 |
|
|
|
727.5 |
|
|
|
718.8 |
|
|
|
665.8 |
|
Multi-wall Bag |
|
|
71.4 |
|
|
|
71.0 |
|
|
|
74.8 |
|
|
|
73.4 |
|
Specialty Packaging |
|
|
6.2 |
|
|
|
6.5 |
|
|
|
6.9 |
|
|
|
6.1 |
|
| |
Total |
|
|
778.0 |
|
|
|
805.0 |
|
|
|
800.5 |
|
|
|
745.3 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales ($ Millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Paperboard Packaging |
|
$ |
868.8 |
|
|
$ |
916.7 |
|
|
$ |
914.9 |
|
|
$ |
856.5 |
|
Multi-wall Bag |
|
|
138.3 |
|
|
|
133.8 |
|
|
|
141.5 |
|
|
|
140.1 |
|
Specialty Packaging |
|
|
62.5 |
|
|
|
65.4 |
|
|
|
72.6 |
|
|
|
67.1 |
|
| |
Total |
|
$ |
1,069.6 |
|
|
$ |
1,115.9 |
|
|
$ |
1,129.0 |
|
|
$ |
1,063.7 |
|
| |
|
|
|
| Note: |
|
Tonnage and net sales amounts have been retrospectively adjusted for discontinued operations. |