Kapstone Paper & Packaging Announces Robust Q1 Results

SEATTLE (Scrap Monster): Northbrook, Illinois-based Kapstone Paper and Packaging has announced robust operating results for the first quarter ended March 31, 2018. The company reported 4% jump in net sales during the quarter. Adjusted EBITDA surged higher by 42% when compared with the first quarter of 2017.

Commenting on the quarterly performance, Matt Kaplan, President and Chief Executive Officer stated that the company has been able to build on the positive momentum reported during the latter half of the previous year. Despite price increases, the demand for containerboard, corrugated boxes, and kraft paper continued to remain strong. The company had recently announced fresh investment of $6 million at its Cowpens, S.C. paper mill. Also, the company is pursuing its merger with WestRock, Kaplan noted.

Kapstone reported consolidated net sales of $799 million in the first quarter of 2018. This is higher by 4% when compared with $766 million during the first quarter of 2017. The jump in net sales is mainly on account of higher prices. Meantime, the total paper sales volume during the quarter dropped to 662,000 tons in Q1 2018, as compared with 699,000 tons a year before. The boiler upgrade works at the Charleston mill impacted the production volumes by nearly 26,000 tons, the company noted.

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Meantime, the net income surged multi-fold to $33 million during first quarter of 2018. This was on account of several factors including higher selling price, better product-mix, lower recycled fiber costs and lower income tax structure to name a few. The huge rise in income was partially offset by merger expenses, maintenance costs, decline in sales volume, unexpected weather-related costs and higher interest charges.

The adjusted EBITDA was up sharply by 42% to $115 million. Adjusted net income surged 181% to total $42 million. Also, adjusted diluted EPS, at $0.43, was up by 187% over the previous year.