WestRock Reports Strong Fiscal 2018 Second Quarter Results

WestRock Company (NYSE:WRK), a leading provider of differentiated paper and packaging solutions, today announced results for its fiscal second quarter ended March 31, 2018.

Second Quarter 2018 Highlights
•Earned $0.86 per diluted share and $0.83 of adjusted earnings per diluted share compared to $0.40 per diluted share and $0.54 of adjusted earnings per diluted share in the prior year quarter, up 115% and 54%, respectively.
•Segment EBITDA increased $122 million, or 22%, compared to the prior year quarter.
•Corrugated Packaging Segment EBITDA increased 39% compared to the prior year quarter. The segment delivered a Segment EBITDA margin of 18.9% and a North American Adjusted Segment EBITDA margin of 20.5%, up 410 and 460 basis points, respectively, compared to the prior year quarter.
•Pulp & Paper Week published North American price increases across all of WestRock’s major grades, including containerboard, SBS, CNK, CRB and URB.
•Achieved $64 million in year-over-year productivity and a run rate of $975 million of synergy and performance improvements since the creation of WestRock.
•The effective tax rate was 7.7%, including an income tax benefit of $31.5 million, or $0.12 per diluted share. This benefit was due to a refinement of the estimated impact on deferred tax balances related to the corporate tax rate reduction under the Tax Cuts and Jobs Act (as defined below). This benefit has been excluded from adjusted earnings per diluted share, and the adjusted tax rate on adjusted earnings per diluted share was 21.3%.
•Acquired substantially all of the assets of Plymouth Packaging, Inc. (“Plymouth”), including its “Box on Demand” systems that enhance our platform and drive differentiation and innovation. The systems produce packaging that is accurately sized for any product type according to customers’ specifications.
•Initiated integration planning for the planned acquisition of KapStone Paper and Packaging Corporation (“KapStone”), which is expected to close by the end of the September quarter or during the December quarter, subject to customary closing conditions.

“The WestRock team performed well and delivered a strong second quarter. With our acquisition of Plymouth and the agreement to acquire KapStone, we are further strengthening our capabilities and solutions offerings for our customers,” said Steve Voorhees, WestRock’s chief executive officer. “Paper and packaging markets remain attractive and, with the momentum that we have across our businesses, we expect to exceed our previously announced financial goals for fiscal 2018. As a result, we have raised our guidance for annual sales and EBITDA.”

The $361 million increase in net sales compared to the prior year quarter was primarily attributable to $179 million of increased Corrugated Packaging segment sales driven by higher selling price/mix and $250 million of increased Consumer Packaging segment sales, primarily due to the contribution from the Multi Packaging Solutions acquisition. Those increases were partially offset by the absence of net sales from WestRock’s former Home Health & Beauty business (“HH&B”) due to the sale of HH&B in April 2017. In addition, Land and Development segment sales were $73 million lower than the prior year quarter due to the timing of real estate sales.

The $72 million increase in segment income was primarily due to $93 million of increased Corrugated Packaging segment income, which was partially offset by $20 million of decreased Consumer Packaging segment income, including the absence of $24 million of income due to sale of HH&B. Adjusted Segment EBITDA increased 22% compared to the prior year quarter.
more detail at:  http://ir.westrock.com/press-releases/press-release-details/2018/WestRock-Reports-Strong-Fiscal-2018-Second-Quarter-Results/default.aspx

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