Exhibit 99.1
Investor Contact: Brad Ankerholz
Graphic Packaging Holding Company
770-644-3062
Media: Cathy Worthy
Graphic Packaging International, Inc.
770-644-3515
Graphic Packaging Holding Company Reports First Quarter 2010 Results
Financial Highlights
| |
• |
|
Q1 earnings per share were $0.02 versus a loss of $(0.08) in the prior year period. |
| |
| |
• |
|
Q1 volume increased 2.0% over the prior year period, with net sales down 1.5%. |
| |
| |
• |
|
Q1 Adjusted EBITDA was $144.8 million, 11.5% higher than the prior year period. |
| |
| |
• |
|
Q1 Adjusted EBITDA margin increased to 14.4% from 12.7% in the prior year period. |
MARIETTA, GA, May 6, 2010. Graphic Packaging Holding Company (NYSE: GPK), 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.
Net Sales
Net sales decreased 1.5% to $1,004.1 million during first quarter 2010, compared to first quarter
2009 net sales of $1,019.2 million. The decline was the result of $21 million of lower pricing
partially offset by $7 million related to favorable foreign currency exchange rates.
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.
EBITDA
EBITDA for first quarter 2010 was $136.3 million. Excluding $8.5 million of charges associated
with the combination with Altivity, Adjusted EBITDA was $144.8 million. This compares to first
quarter 2009 EBITDA of $115.0 million and Adjusted EBITDA of $129.9 million. When comparing
against the prior year quarter, Adjusted EBITDA in the first quarter of 2010 was positively
impacted by $38 million from improved operating performance and cost reduction initiatives. This
was partially offset by $21 million of lower pricing. In total, raw material input inflation was
relatively flat in the first quarter as increased costs for wood and secondary fiber were offset by
lower costs for energy and chemicals.
2
Other Results
At the end of first quarter 2010, the Company’s total debt was $2,800.5 million. The Company had
$105.6 million of Cash and Cash Equivalents and had not drawn on its $400 million revolving credit
facility. The Company’s net leverage ratio decreased from 6.02 times at the end of the first
quarter 2009 to 4.72 times as of March 31, 2010.
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.
3
Earnings Call
The Company will host a conference call at 8:30 am eastern time today (May 6, 2010) to discuss the
results of the first quarter 2010. 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# 67352757). 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, debt reduction and the availability of the Company’s net operating
loss to offset taxable income in the U.S., 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 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 or actions taken by our customers in response
to the difficult economic environment, 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 the continued availability of the Company’s net
operating loss offset to taxable income, and 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.
4
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.
5
GRAPHIC PACKAGING HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
| |
|
March 31, |
| In millions, except per share amounts |
|
2010 |
|
2009 |
| |
Net Sales |
|
$ |
1,004.1 |
|
|
$ |
1,019.2 |
|
Cost of Sales |
|
|
858.3 |
|
|
|
892.9 |
|
Selling, General and Administrative |
|
|
77.4 |
|
|
|
78.7 |
|
Other Expense (Income), Net |
|
|
0.3 |
|
|
|
(0.4 |
) |
Restructuring and Other Special Charges |
|
|
8.5 |
|
|
|
14.9 |
|
| |
Income from Operations |
|
|
59.6 |
|
|
|
33.1 |
|
|
|
|
|
|
|
|
|
|
Interest Expense, Net |
|
|
(45.0 |
) |
|
|
(52.2 |
) |
| |
Income (Loss) before Income Taxes and Equity in Net
Earnings of Affiliates |
|
|
14.6 |
|
|
|
(19.1 |
) |
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
|
(8.6 |
) |
|
|
(9.3 |
) |
| |
Income (Loss) before Equity in Net Earnings of Affiliates |
|
|
6.0 |
|
|
|
(28.4 |
) |
|
|
|
|
|
|
|
|
|
Equity in Net Earnings of Affiliates |
|
|
0.3 |
|
|
|
0.2 |
|
| |
Net Income (Loss) |
|
$ |
6.3 |
|
|
$ |
(28.2 |
) |
| |
|
|
|
|
|
|
|
|
|
Income (Loss) Per Share — Basic and Diluted |
|
$ |
0.02 |
|
|
$ |
(0.08 |
) |
Weighted Average Number of Shares Outstanding — Basic |
|
|
343.4 |
|
|
|
342.6 |
|
Weighted Average Number of Shares Outstanding — Diluted |
|
|
346.9 |
|
|
|
342.6 |
|
6
GRAPHIC PACKAGING HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| |
|
|
|
|
|
|
|
|
| |
|
March 31, |
|
December 31, |
| In millions, except share and per share amounts |
|
2010 |
|
2009 |
| |
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
105.6 |
|
|
$ |
149.8 |
|
Receivables, Net |
|
|
429.6 |
|
|
|
382.3 |
|
Inventories, Net |
|
|
462.1 |
|
|
|
436.5 |
|
Other Current Assets |
|
|
56.8 |
|
|
|
52.7 |
|
| |
Total Current Assets |
|
|
1,054.1 |
|
|
|
1,021.3 |
|
|
|
|
|
|
|
|
|
|
Property, Plant and Equipment, Net |
|
|
1,750.3 |
|
|
|
1,797.4 |
|
Goodwill |
|
|
1,205.9 |
|
|
|
1,204.6 |
|
Intangible Assets, Net |
|
|
609.4 |
|
|
|
620.0 |
|
Other Assets |
|
|
58.6 |
|
|
|
58.5 |
|
| |
Total Assets |
|
$ |
4,678.3 |
|
|
$ |
4,701.8 |
|
| |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Short-Term Debt and Current Portion of Long-Term Debt |
|
$ |
17.3 |
|
|
$ |
17.6 |
|
Accounts Payable |
|
|
336.2 |
|
|
|
350.8 |
|
Interest Payable |
|
|
37.2 |
|
|
|
42.7 |
|
Other Accrued Liabilities |
|
|
220.1 |
|
|
|
233.2 |
|
| |
Total Current Liabilities |
|
|
610.8 |
|
|
|
644.3 |
|
|
|
|
|
|
|
|
|
|
Long-Term Debt |
|
|
2,783.2 |
|
|
|
2,782.6 |
|
Deferred Income Tax Liabilities |
|
|
235.1 |
|
|
|
226.9 |
|
Other Noncurrent Liabilities |
|
|
319.3 |
|
|
|
319.2 |
|
| |
Total Liabilities |
|
|
3,948.4 |
|
|
|
3,973.0 |
|
| |
|
|
|
|
|
|
|
|
|
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;
343,260,732 and 343,245,250 shares issued and outstanding at
March 31, 2010 and December 31, 2009, respectively |
|
|
3.4 |
|
|
|
3.4 |
|
Capital in Excess of Par Value |
|
|
1,959.1 |
|
|
|
1,958.2 |
|
Accumulated Deficit |
|
|
(1,012.7 |
) |
|
|
(1,019.0 |
) |
Accumulated Other Comprehensive Loss |
|
|
(219.9 |
) |
|
|
(213.8 |
) |
| |
Total Shareholders’ Equity |
|
|
729.9 |
|
|
|
728.8 |
|
| |
Total Liabilities and Shareholders’ Equity |
|
$ |
4,678.3 |
|
|
$ |
4,701.8 |
|
| |
7
GRAPHIC PACKAGING HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
| |
|
March 31, |
| In millions |
|
2010 |
|
2009 |
| |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
6.3 |
|
|
$ |
(28.2 |
) |
Noncash Items Included in Net Income (Loss): |
|
|
|
|
|
|
|
|
Depreciation and Amortization |
|
|
74.3 |
|
|
|
76.4 |
|
Deferred Income Taxes |
|
|
7.9 |
|
|
|
9.3 |
|
Amount of Postemployment Expense (Less) Greater Than Funding |
|
|
(1.4 |
) |
|
|
12.2 |
|
Other, Net |
|
|
7.0 |
|
|
|
7.3 |
|
Changes in Operating Assets & Liabilities |
|
|
(119.3 |
) |
|
|
(73.7 |
) |
| |
Net Cash (Used in) Provided by Operating Activities |
|
|
(25.2 |
) |
|
|
3.3 |
|
| |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Capital Spending |
|
|
(18.2 |
) |
|
|
(36.0 |
) |
Other, Net |
|
|
(1.1 |
) |
|
|
(0.4 |
) |
| |
Net Cash Used in Investing Activities |
|
|
(19.3 |
) |
|
|
(36.4 |
) |
| |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Borrowings under Revolving Credit Facilities |
|
|
96.0 |
|
|
|
105.4 |
|
Payments on Revolving Credit Facilities |
|
|
(95.8 |
) |
|
|
(60.9 |
) |
| |
Net Cash Provided by Financing Activities |
|
|
0.2 |
|
|
|
44.5 |
|
| |
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
|
|
0.1 |
|
|
|
(0.5 |
) |
| |
Net (Decrease) Increase in Cash and Cash Equivalents |
|
|
(44.2 |
) |
|
|
10.9 |
|
Cash and Cash Equivalents at Beginning of Period |
|
|
149.8 |
|
|
|
170.1 |
|
| |
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
105.6 |
|
|
$ |
181.0 |
|
| |
8
GRAPHIC PACKAGING HOLDING COMPANY
Reconciliation of Non-GAAP Financial Measures
The tables below set forth the calculation of the Company’s earnings before interest expense,
income tax expense, equity in the net earnings of the Company’s affiliates, depreciation and
amortization (“EBITDA”), Adjusted EBITDA, Adjusted Net Income (Loss) and Net Leverage Ratio. Adjusted EBITDA and
Adjusted Net Income (Loss) exclude charges associated with the Company’s combination with Altivity
Packaging, LLC and other Restructuring and Other Special Charges. The Company’s management
believes that the presentation of EBITDA, Adjusted EBITDA, Adjusted Net Income (Loss) and Net Leverage Ratio provides
useful information to investors because these measures are regularly used by management in
assessing the Company’s performance. EBITDA, Adjusted EBITDA, Adjusted Net Income (Loss) and Net Leverage Ratio 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, Adjusted Net Income (Loss) and Net Leverage Ratio 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, Adjusted Net Income (Loss) and Net Leverage Ratio 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 |
| |
|
March 31, |
| In millions |
|
2010 |
|
2009 |
| |
Net Income (Loss) |
|
$ |
6.3 |
|
|
$ |
(28.2 |
) |
Add (Subtract): |
|
|
|
|
|
|
|
|
Income Tax Expense |
|
|
8.6 |
|
|
|
9.3 |
|
Equity in Net Earnings of Affiliates |
|
|
(0.3 |
) |
|
|
(0.2 |
) |
Interest Expense, Net |
|
|
45.0 |
|
|
|
52.2 |
|
Depreciation and Amortization |
|
|
76.7 |
|
|
|
81.9 |
|
| |
EBITDA |
|
|
136.3 |
|
|
|
115.0 |
|
Charges Associated with Combination with Altivity |
|
|
8.5 |
|
|
|
12.6 |
|
Grenoble Plant Shutdown Charges |
|
|
— |
|
|
|
2.3 |
|
| |
Adjusted EBITDA |
|
$ |
144.8 |
|
|
$ |
129.9 |
|
| |
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
6.3 |
|
|
$ |
(28.2 |
) |
Charges Associated with Combination with Altivity |
|
|
8.5 |
|
|
|
12.6 |
|
Grenoble Plant Shutdown Charges |
|
|
— |
|
|
|
2.3 |
|
| |
Adjusted Net Income (Loss) |
|
$ |
14.8 |
|
|
$ |
(13.3 |
) |
| |
|
|
|
|
|
|
|
|
|
Per Share — Basic and Diluted |
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
0.02 |
|
|
$ |
(0.08 |
) |
Charges Associated with Combination with Altivity |
|
|
0.02 |
|
|
|
0.04 |
|
Grenoble Plant Shutdown Charges |
|
|
— |
|
|
|
0.01 |
|
| |
Adjusted Net Income (Loss) * |
|
$ |
0.04 |
|
|
$ |
(0.04 |
) |
| |
|
|
|
| * |
|
May not foot due to rounding |
9
GRAPHIC PACKAGING HOLDING COMPANY
Reconciliation of Non-GAAP Financial Measures
(Continued)
| |
|
|
|
|
|
|
|
|
| |
|
Twelve Months Ended |
| |
|
March 31, |
| In millions |
|
2010 |
|
2009 |
| |
Net Income (Loss) |
|
$ |
90.9 |
|
|
$ |
(104.6 |
) |
Add (Subtract): |
|
|
— |
|
|
|
— |
|
Income Tax Expense |
|
|
23.4 |
|
|
|
37.3 |
|
Equity in Net Earnings of Affiliates |
|
|
(1.4 |
) |
|
|
(1.0 |
) |
Interest Expense, Net |
|
|
189.2 |
|
|
|
224.9 |
|
Depreciation and Amortization |
|
|
321.6 |
|
|
|
299.3 |
|
| |
EBITDA |
|
|
623.7 |
|
|
|
455.9 |
|
Charges Associated with Combination with Altivity |
|
|
67.6 |
|
|
|
20.5 |
|
Inventory Step Up Related to Altivity |
|
|
— |
|
|
|
11.9 |
|
Loss on Early Extinguishment of Debt |
|
|
7.1 |
|
|
|
— |
|
Alternative Fuel Tax Credits Net of Expenses |
|
|
(137.8 |
) |
|
|
— |
|
Asset Impairment and Shutdown Charges |
|
|
10.7 |
|
|
|
17.8 |
|
| |
Adjusted EBITDA |
|
$ |
571.3 |
|
|
$ |
506.1 |
|
| |
| |
|
|
|
|
|
|
|
|
| |
|
March 31, |
|
March 31, |
| Calculation of Net Debt: |
|
2010 |
|
2009 |
| |
Short-Term Debt and Current Portion of Long-Term Debt |
|
$ |
17.3 |
|
|
$ |
18.9 |
|
Long-Term Debt |
|
|
2,783.2 |
|
|
|
3,208.5 |
|
Less: |
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
|
(105.6 |
) |
|
|
(181.0 |
) |
| |
Total Net Debt |
|
$ |
2,694.9 |
|
|
$ |
3,046.4 |
|
| |
|
|
|
|
|
|
|
|
|
Net Leverage Ratio |
|
|
4.72 |
|
|
|
6.02 |
|
10
GRAPHIC PACKAGING HOLDING COMPANY
Reconciliation of Non-GAAP Financial Measures
(Continued)
The Credit Agreement dated May 15, 2007, as amended (“the Credit Agreement”) and the indentures
governing the Company’s 9.5% Senior Notes due 2017 and 9.5% Senior Subordinated Notes due 2013
(“the Notes”) limit the Company’s ability to incur additional indebtedness. Additional covenants
contained in the Credit Agreement, among other things, restrict the ability of the Company to
dispose of assets, incur guarantee obligations, prepay other indebtedness, make dividends and other
restricted payments, create liens, make equity or debt investments, make acquisitions, modify terms
of the indentures under which the Notes are issued, engage in mergers or consolidations, change the
business conducted by the Company and its subsidiaries, and engage in certain transactions with
affiliates. Such restrictions, together with the highly leveraged nature of the Company and recent
disruptions in the credit markets, could limit the Company’s ability to respond to changing market
conditions, fund its capital spending program, provide for unexpected capital investments or take
advantage of business opportunities.
Under the terms of the Credit Agreement, the Company must comply with a maximum consolidated
secured leverage ratio, which is defined as the ratio of: (a) total long-term and short-term
indebtedness of the Company and its consolidated subsidiaries as determined in accordance with
generally accepted accounting principles in the United States (“U.S. GAAP”), plus the aggregate
cash proceeds received by the Company and its subsidiaries from any receivables or other
securitization but excluding therefrom (i) all unsecured indebtedness, (ii) all subordinated
indebtedness permitted to be incurred under the Credit Agreement, and (iii) all secured
indebtedness of foreign subsidiaries to (b) Adjusted EBITDA, which we refer to as Credit Agreement
EBITDA(1). Pursuant to this financial covenant, the Company must maintain a maximum consolidated
secured leverage ratio of less than the following:
| |
|
|
|
|
| |
|
Maximum Consolidated |
| |
|
Secured Leverage Ratio(1) |
| |
October 1, 2009 and thereafter |
|
|
4.75 to 1.00 |
|
Note:
| |
|
|
| (1) |
|
Credit Agreement EBITDA is defined in the Credit Agreement as consolidated net income before
consolidated net interest expense, non-cash expenses and charges, total income tax expense,
depreciation expense, expense associated with amortization of intangibles and other assets,
non-cash provisions for reserves for discontinued operations, extraordinary, unusual or
non-recurring gains or losses or charges or credits, gain or loss associated with sale or
write-down of assets not in the ordinary course of business, any income or loss accounted for
by the equity method of accounting, and projected run rate cost savings, prior to or within a
twelve month period. |
At March 31, 2010, the Company was in compliance with the financial covenant in the
Credit Agreement and the ratio was as follows:
Consolidated Secured Leverage Ratio — 2.89 to 1.00
The Company’s management believes that presentation of the consolidated secured leverage ratio and
Credit Agreement EBITDA herein provides useful information to investors because borrowings under
the Credit Agreement are a key source of the Company’s liquidity, and the Company’s ability to
borrow under the Credit Agreement is dependent on, among other things, its compliance with the
financial ratio covenant. Any failure by the Company to comply with this financial covenant could
result in an event of default, absent a waiver or amendment from the lenders under such agreement,
in which case the lenders may be entitled to declare all amounts owed to be due and payable
immediately.
Credit Agreement EBITDA is a financial measure not calculated in accordance with U.S. GAAP, and is
not a measure of net income, operating income, operating performance or liquidity presented in
accordance with U.S. GAAP. Credit Agreement EBITDA should be considered in addition to results
prepared in accordance with U.S. GAAP, but should not be considered a substitute for or superior to
U.S. GAAP results. In addition, Credit Agreement EBITDA may not be comparable to EBITDA or
similarly titled measures utilized by other companies because other companies may not calculate
Credit Agreement EBITDA in the same manner as the Company does.
11
The calculations of the components of the maximum consolidated secured leverage ratio for and
as of the period ended March 31, 2010 are listed below:
| |
|
|
|
|
| |
|
Twelve Months Ended |
| In millions |
|
March 31, 2010 |
| |
Net Income |
|
$ |
90.9 |
|
Income Tax Expense |
|
|
23.4 |
|
Interest Expense, Net |
|
|
189.2 |
|
Depreciation and Amortization |
|
|
303.3 |
|
Dividends Received, Net of Earnings of Equity Affiliates |
|
|
(0.3 |
) |
Non-Cash Provisions for Reserves for Discontinued Operations |
|
|
— |
|
Other Non-Cash Charges |
|
|
52.0 |
|
Merger Related Expenses |
|
|
48.8 |
|
Losses Associated with Sale/Write-Down of Assets |
|
|
37.0 |
|
Other Non-Recurring/Extraordinary/Unusual Items |
|
|
(132.0 |
) |
Projected Run Rate Cost Savings (a) |
|
|
61.2 |
|
| |
Credit Agreement EBITDA |
|
$ |
673.5 |
|
| |
| |
|
|
|
|
| |
|
As of |
| In millions |
|
March 31, 2010 |
| |
Short-Term Debt |
|
$ |
17.3 |
|
Long-Term Debt |
|
|
2,783.2 |
|
| |
Total Debt |
|
$ |
2,800.5 |
|
Less Adjustments(b) |
|
|
857.3 |
|
| |
Consolidated Secured Indebtedness |
|
$ |
1,943.2 |
|
| |
|
|
|
| |
|
Note: |
| |
| (a) |
|
As defined by the Credit Agreement, this represents projected cost savings expected by the
Company to be realized as a result of specific actions taken or expected to be taken prior to
or within twelve months of the period in which Credit Agreement EBITDA is to be calculated,
net of the amount of actual benefits realized or expected to be realized from such actions. |
| |
| |
|
The terms of the Credit Agreement limit the amount of projected run rate cost savings that may
be used in calculating Credit Agreement EBITDA by stipulating that such amount may not exceed
the lesser of (i) ten percent of EBITDA as defined in the Credit Agreement for the last
twelve-month period (before giving effect to projected run rate cost savings) or (ii) $100
million. As a result, in calculating Credit Agreement EBITDA above, the Company used projected
run rate cost savings of $61.2 million, or ten percent of EBITDA, as calculated in accordance
with the Credit Agreement, which amount is lower than total projected cost savings identified by
the Company, net of actual benefits realized for the twelve month period ended March 31, 2010.
Projected run rate cost savings were calculated by the Company solely for its use in calculating
Credit Agreement EBITDA for purposes of determining compliance with the maximum consolidated
secured leverage ratio contained in the Credit Agreement and should not be used for any other
purpose. |
| |
| (b) |
|
Represents consolidated indebtedness/securitization that is either (i) unsecured, or (ii)
Permitted Subordinated Indebtedness as defined in the Credit Agreement, or secured
indebtedness permitted to be incurred by the Company’s foreign subsidiaries per the Credit
Agreement. |
If inflationary pressures on key inputs resume, or depressed selling prices, lower sales volumes,
increased operating costs or other factors have a negative impact on the Company’s ability to
increase its profitability, the Company may not be able to maintain its compliance with the
financial covenant in its Credit Agreement. The Company’s ability to comply in future periods with
the financial covenant in the Credit Agreement will depend on its ongoing financial and operating
performance, which in turn will be subject to economic conditions and to financial, business and
other factors, many of which are beyond the Company’s control, and will be substantially dependent
on the selling prices for the Company’s products, raw material and energy costs, and the Company’s
ability to successfully implement its overall business strategies and meet its profitability
objective. If a violation of the financial covenant or any of the other covenants occurred, the
Company would attempt to obtain a waiver or an amendment from its lenders, although no assurance
can be given that the Company would be successful in this regard. The Credit Agreement and the
indentures governing the Notes have certain cross-default or cross-acceleration provisions; failure
to comply with these covenants in any agreement could result in a violation of such agreement which
could, in turn, lead to violations of other agreements pursuant to such cross-default or
cross-acceleration provisions. If an event of default occurs, the lenders are entitled to declare
all amounts owed to be due and payable immediately. The Credit Agreement is collateralized by
substantially all of the Company’s domestic assets.
12
GRAPHIC PACKAGING HOLDING COMPANY
Unaudited Supplemental Data
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
| |
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Tons Sold (000’s): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paperboard Packaging |
|
|
627.6 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Multi-wall Bag |
|
|
62.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Specialty Packaging (1) |
|
|
6.0 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| |
Total |
|
|
696.1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales ($ Millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paperboard Packaging |
|
$ |
834.6 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Multi-wall Bag |
|
|
118.9 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Specialty Packaging |
|
|
50.6 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| |
Total |
|
$ |
1,004.1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Tons Sold (000’s): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paperboard Packaging |
|
|
617.1 |
|
|
|
648.3 |
|
|
|
655.9 |
|
|
|
614.8 |
|
Multi-wall Bag |
|
|
60.3 |
|
|
|
60.0 |
|
|
|
63.3 |
|
|
|
60.4 |
|
Specialty Packaging (1) |
|
|
5.2 |
|
|
|
4.8 |
|
|
|
6.1 |
|
|
|
4.8 |
|
| |
Total |
|
|
682.6 |
|
|
|
713.1 |
|
|
|
725.3 |
|
|
|
680.0 |
|
| |
| |
Net Sales ($ Millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paperboard Packaging |
|
$ |
840.4 |
|
|
$ |
879.3 |
|
|
$ |
886.2 |
|
|
$ |
817.6 |
|
Multi-wall Bag |
|
|
124.8 |
|
|
|
115.3 |
|
|
|
117.5 |
|
|
|
114.0 |
|
Specialty Packaging |
|
|
54.0 |
|
|
|
49.2 |
|
|
|
50.5 |
|
|
|
47.0 |
|
| |
Total |
|
$ |
1,019.2 |
|
|
$ |
1,043.8 |
|
|
$ |
1,054.2 |
|
|
$ |
978.6 |
|
| |
|
|
|
| (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.) |
13