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Form 8-K KAPSTONE PAPER & PACKAGI For: May 04

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May 4, 2015 5:18 PM EDT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

May 4, 2015

Date of Report (Date of earliest event reported)

 

KapStone Paper and Packaging Corporation

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-33494

 

20-2699372

(State or other jurisdiction
of incorporation)

 

(Commission
File Number)

 

(IRS Employer
Identification No.)

 

1101 Skokie Boulevard, Suite 300
Northbrook, Illinois 60062

(Address of principal executive offices)

 

(847) 239-8800

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


 

Item 2.02                                           Results of Operations and Financial Condition.

 

On May 4, 2015, KapStone Paper and Packaging Corporation (“KapStone”) issued a press release announcing first quarter 2015 financial results. A copy of the press release is attached hereto as Exhibit 99.1. In addition, a copy of KapStone’s First Quarter 2015 Financial Review which will be used for the conference call on May 5, 2015 is attached hereto as Exhibit 99.2.

 

The information is being furnished under Item 2.02 “Results of Operations and Financial Condition” of Form 8-K. Such information, including the Exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

 

Item 7.01                                           Regulation FD Disclosure

 

On May 5, 2015, the management of KapStone will participate in a conference call discussing KapStone’s financial results for the quarter ended March 31, 2015.

 

Item 9.01                                           Financial Statements and Exhibits

 

(d)                                 Exhibits

 

Exhibit No.

 

Description

Exhibit 99.1

 

Press release dated May 4, 2015, announcing first quarter 2015 financial results

 

 

 

Exhibit 99.2

 

First Quarter 2015 Financial Review of KapStone Paper and Packaging Corporation, dated May 4, 2015

 

2


 

SIGNATURE

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date:  May 4, 2015

 

 

 

 

KAPSTONE PAPER AND PACKAGING CORPORATION

 

 

 

 

 

By:

/s/ Andrea K. Tarbox

 

Name:

Andrea K. Tarbox

 

Title:

Vice President and Chief Financial Officer

 

3

Exhibit 99.1

 

 

 

FOR FURTHER INFORMATION:

FOR IMMEDIATE RELEASE

Andrea K. Tarbox

Monday, May 4, 2015

Vice President and Chief Financial Officer

 

847.239.8812

 

 

KAPSTONE REPORTS FIRST QUARTER RESULTS

 

KAPSTONE INVESTOR CALL AT 11:30 A.M. ET, MAY 5

 

NORTHBROOK, IL – May 4, 2015 – KapStone Paper and Packaging Corporation (NYSE: KS) today reported results for the first quarter ended March 31, 2015. As compared to 2014’s first quarter, results for 2015’s first quarter are below:

 

·                  Net sales of $546 million down $3 million, or 1 percent

·                  Net income of $26 million down $6 million, or 19 percent

·                  Adjusted net income of $29 million down $6 million, or 17 percent

·                  Adjusted EBITDA of $87 million down $9 million, or 9 percent

·                  Adjusted EBITDA margin of 15.8 percent, down from 17.4 percent

·                  Diluted EPS of $0.27 down $0.06 per share, or 18 percent

·                  Adjusted diluted EPS of $0.30 down $0.06 per share, or 17 percent

 

Roger W. Stone, Chairman and Chief Executive Officer, stated, “KapStone delivered lower first quarter earnings as our mills’ struggled with some temporary operational issues.  Fiber costs were higher, particularly in the Pacific Northwest, and the stronger dollar compared to the euro negatively impacted our sales in Europe and exports.  Once again, the weather affected our operations with almost the same intensity as last year’s Polar Vortex as only the timing and geographic locations impacted changed from last year. On the positive side, our corrugated products performed very well and shipments were up 6.5 percent on an average weekly basis over the first quarter of 2014.”

 

First Quarter Operating Highlights

 

Consolidated net sales of $546 million in the first quarter of 2015 decreased by $3 million, or 1 percent compared to $549 million for the 2014 first quarter. The decrease is primarily due to $3 million reflecting a stronger U.S. dollar compared to the Euro which impacted sales in Europe and exports, and lower sales volume. The Company sold 661,000 tons of paper during the first quarter of 2015 compared to 673,000 tons a year earlier. The Company’s average mill selling price of $683 per ton in the first quarter of 2015 decreased by $2 per ton compared to the first

 

1


 

quarter of 2014 due to the stronger U.S. dollar and lower export prices partially offset by higher kraft paper prices.

 

Operating income of $47 million for the 2015 first quarter decreased by $11 million, or 19 percent, compared to the 2014 first quarter. The lower operating earnings primarily reflects lower productivity, 12,000 tons of lower sales volume, higher fiber costs and compensation costs and the stronger U.S. dollar which impacted prices in Europe and for exports, partially offset by lower planned outage costs.

 

Interest expense, net, was $6 million for the first quarter of 2015, down $3 million from a year ago as a result of a lower borrowings and interest rates. Our weighted average interest rate as of March 31, 2015 is 1.8 percent compared to 2.0 percent as of March 31, 2014.

 

The effective income tax rate for the 2015 first quarter was 34.8 percent compared to 34.3 percent for the 2014 first quarter.

 

Cash Flow and Working Capital

 

Cash and cash equivalents decreased by $18 million in the quarter ended March 31, 2015, from December 31, 2014 to $11 million.    Operating activities used $4 million during the first quarter while financing activities generated $15 million. Capital expenditures in the first quarter were $29 million.

 

At March 31, 2015, the Company had approximately $270 million of working capital and $386 million of revolver borrowing capacity.

 

Conclusion

 

In summary, Stone commented, “I expect to see our operations perform better in the second quarter.”

 

Conference Call

 

KapStone will host a conference call at 11:30 a.m. ET, Tuesday, May 5, 2015, to discuss the Company’s financial results for the 2015 first quarter. All interested parties are invited to listen and may do so by either accessing a simultaneous broadcast webcast on KapStone’s website, http://www.kapstonepaper.com, or for those unable to access the webcast, the following dial-in numbers are available:

 

Domestic:  866-515-2910
International:  617-399-5124
Participant Passcode:  51290081

 

A presentation to be viewed in conjunction with the call will also be available on our website, http://www.kapstonepaper.com, in the “Investors” section.

 

Replay of the webcast will be available for 30 days on the Company’s website following the call.

 

2


 

About the Company

 

Headquartered in Northbrook, IL, KapStone Paper and Packaging Corporation is the fifth largest producer of containerboard and corrugated packaging products and is the largest kraft paper producer in the United States. The Company is the parent company of KapStone Kraft Paper Corporation and KapStone Container Corporation which includes four paper mills and 21 converting plants, respectively, across the US. The business employs approximately 4,600 people.

 

Non-GAAP Financial Measures

 

This press release includes certain non-GAAP financial measures, including “EBITDA”, “Adjusted EBITDA”, “Adjusted Net Income”, and “Adjusted Diluted EPS” to measure our operating performance. Management uses these measures to focus on the on-going operations, and believes it is useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The Company believes that EBITDA and Adjusted EBITDA provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency to key measures used to evaluate the performance and liquidity of the Company. Management uses EBITDA and Adjusted EBITDA for evaluating the Company’s performance against competitors and as a primary measure for employees’ incentive programs. Reconciliations of Net Income to EBITDA, EBITDA to Adjusted EBITDA, Net Income to Adjusted Net Income, Basic EPS to Adjusted Basic EPS, and Diluted EPS to Adjusted Diluted EPS are included in the financial schedules contained in this press release. However, these measures should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.

 

Forward-Looking Statements

 

Statements in this news release that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can often be identified by words such as “may,” “will,” “should,” “would,’ “expect,” “project,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “potential,” “outlook,” or “continue,” the negative of these terms or other similar expressions. These statements reflect management’s current views and are subject to risks, uncertainties and assumptions, many of which are beyond the Company’s control that could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ materially include, but are not limited to: (1) industry conditions, including changes in cost, competition, changes in the Company’s product mix and demand and pricing for the Company’s products; (2) market and economic factors, including changes in raw material and healthcare costs, exchange rates and interest rates; (3) results of legal proceedings and compliance costs, including unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations; (4) the ability to achieve and effectively manage growth; (5) the ability to pay the Company’s debt obligations; (6) the ability to carry out the Company’s strategic initiatives and manage associated costs and (7) the integration of the Longview acquisition. Further information on these and other risks and uncertainties is provided under Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and elsewhere in reports that the Company files with the SEC. These filings can be found on KapStone’s Web site at http://www.kapstonepaper.com and the SEC’s Web site at www.sec.gov. Forward-looking

 

3


 

statements included herein speak only as of the date hereof and the Company disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.

 

4


 

KapStone Paper and Packaging Corporation

Consolidated Statements of Income

(In thousands, except share and per share amounts)

(unaudited)

 

 

 

 

 

 

 

Fav / (Unfav)

 

 

 

Quarter Ended March 31,

 

Variance

 

 

 

2015

 

2014

 

%

 

 

 

 

 

 

 

 

 

Net sales

 

$

546,289

 

$

548,952

 

-0.5

%

 

 

 

 

 

 

 

 

Cost and expenses:

 

 

 

 

 

 

 

Cost of sales, excluding depreciation and amortization

 

382,198

 

383,248

 

0.3

%

Depreciation and amortization

 

35,121

 

32,709

 

-7.4

%

Freight and distribution expenses

 

43,427

 

40,732

 

-6.6

%

Selling, general and administrative expenses

 

38,194

 

34,145

 

-11.9

%

Operating income

 

47,349

 

58,118

 

-18.5

%

 

 

 

 

 

 

 

 

Foreign exchange loss

 

885

 

24

 

-3587.5

%

Interest expense, net

 

6,413

 

9,229

 

30.5

%

Income before provision for income taxes

 

40,051

 

48,865

 

-18.0

%

Provision for income taxes

 

13,951

 

16,766

 

16.8

%

Net income

 

$

26,100

 

$

32,099

 

-18.7

%

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

 

$

0.27

 

$

0.34

 

 

 

Diluted

 

$

0.27

 

$

0.33

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding:

 

 

 

 

 

 

 

Basic

 

96,123,351

 

95,720,328

 

 

 

Diluted

 

97,662,608

 

97,315,766

 

 

 

 

 

 

 

 

 

 

 

Effective income tax rate

 

34.8

%

34.3

%

 

 

 

Supplemental Information

GAAP to Non-GAAP Reconciliations

($ in thousands, except share and per share amounts)

(unaudited)

 

 

 

Quarter Ended March 31,

 

 

 

2015

 

2014

 

Net Income (GAAP) to EBITDA (Non-GAAP) to Adjusted EBITDA (Non-GAAP):

 

 

 

 

 

Net income (GAAP)

 

$

26,100

 

$

32,099

 

Interest expense, net

 

6,413

 

9,229

 

Provision for income taxes

 

13,951

 

16,766

 

Depreciation and amortization

 

35,121

 

32,709

 

EBITDA (Non-GAAP)

 

$

81,585

 

$

90,803

 

 

 

 

 

 

 

Acquisition, start up and other expenses

 

1,207

 

1,814

 

Stock-based compensation expense

 

3,780

 

2,918

 

Adjusted EBITDA (Non-GAAP)

 

$

86,572

 

$

95,535

 

 

 

 

 

 

 

Net Income (GAAP) to Adjusted Net Income (Non-GAAP):

 

 

 

 

 

Net income (GAAP)

 

$

26,100

 

$

32,099

 

Acquisition, start up and other expenses

 

794

 

1,188

 

Stock-based compensation expense

 

2,485

 

1,911

 

Adjusted Net Income (Non-GAAP)

 

$

29,379

 

$

35,198

 

 

 

 

 

 

 

Basic EPS (GAAP) to Adjusted Basic EPS (Non-GAAP):

 

 

 

 

 

Basic EPS (GAAP)

 

$

0.27

 

$

0.34

 

Acquisition, start up and other expenses

 

0.01

 

0.01

 

Stock-based compensation expense

 

0.03

 

0.02

 

Adjusted Basic EPS (Non-GAAP)

 

$

0.31

 

$

0.37

 

 

 

 

 

 

 

Diluted EPS (GAAP) to Adjusted Diluted EPS (Non-GAAP):

 

 

 

 

 

Diluted earnings per share (GAAP)

 

$

0.27

 

$

0.33

 

Acquisition, start up and other expenses

 

0.01

 

0.01

 

Stock-based compensation expense

 

0.02

 

0.02

 

Adjusted Diluted EPS (Non-GAAP)

 

$

0.30

 

$

0.36

 

 


 

KapStone Paper and Packaging Corporation

Consolidated Balance Sheets

(In thousands)

 

 

 

March 31,

 

December 31,

 

 

 

2015

 

2014

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

10,545

 

$

28,467

 

Trade accounts receivable, net of allowances

 

255,435

 

228,740

 

Other receivables

 

13,779

 

12,833

 

Inventories

 

255,507

 

238,329

 

Prepaid expenses and other current assets

 

16,814

 

7,172

 

Total current assets

 

552,080

 

515,541

 

 

 

 

 

 

 

Plant, property and equipment, net

 

1,384,786

 

1,386,670

 

Other assets

 

10,296

 

10,135

 

Intangible assets, net

 

106,662

 

110,077

 

Goodwill

 

533,851

 

533,851

 

Total assets

 

$

2,587,675

 

$

2,556,274

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Short-term borrowings

 

$

10,000

 

$

—

 

Other current borrowings

 

6,615

 

—

 

Dividend payable

 

9,721

 

9,911

 

Accounts payable

 

150,788

 

149,600

 

Accrued expenses

 

46,972

 

48,340

 

Accrued compensation costs

 

46,012

 

62,491

 

Accrued income taxes

 

9,668

 

6,477

 

Deferred income taxes

 

1,804

 

1,990

 

Total current liabilities

 

281,580

 

278,809

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

1,055,014

 

1,046,063

 

Pension and post-retirement benefits

 

29,582

 

32,800

 

Deferred income taxes

 

415,067

 

412,293

 

Other liabilities

 

7,895

 

8,182

 

Total other liabilities

 

1,507,558

 

1,499,338

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock $0.0001 par value

 

10

 

10

 

Additional paid-in capital

 

259,260

 

255,505

 

Retained earnings

 

591,053

 

574,601

 

Accumulated other comprehensive (loss) income

 

(51,786

)

(51,989

)

Total stockholders’ equity

 

798,537

 

778,127

 

Total liabilities and stockholders’ equity

 

$

2,587,675

 

$

2,556,274

 

 


 

KapStone Paper and Packaging Corporation

Consolidated Statement of Cash Flows

(In thousands)

(unaudited)

 

 

 

Quarter Ended March 31,

 

 

 

2015

 

2014

 

Operating activities:

 

 

 

 

 

Net income

 

$

26,100

 

$

32,099

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

35,121

 

32,709

 

Stock-based compensation expense

 

3,780

 

2,918

 

Pension and postretirement

 

(2,892

)

(4,080

)

Excess tax benefit for stock-based compensation

 

(1,391

)

(2,221

)

Amortization of debt issuance costs

 

1,007

 

1,452

 

Loss on disposal of fixed assets

 

178

 

979

 

Deferred income taxes

 

1,864

 

3,323

 

Changes in operating assets and liabilities

 

(67,679

)

(28,228

)

Net cash (used in) provided by operating activities

 

$

(3,912

)

$

38,951

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

Capital expenditures

 

(28,762

)

(32,420

)

Net cash used in investing activities

 

$

(28,762

)

$

(32,420

)

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

Proceeds from revolving credit facility

 

$

86,400

 

$

56,500

 

Repayments on revolving credit facility

 

(76,400

)

(56,500

)

Proceeds from receivables credit facility

 

12,962

 

—

 

Repayments on receivables credit facility

 

(4,962

)

—

 

Payments on long-term debt

 

—

 

(1,175

)

Proceeds from other current borrowings

 

6,615

 

6,300

 

Repayments on other current borrowings

 

—

 

(1,673

)

Cash dividend paid

 

(9,838

)

—

 

Payment of withholding taxes on vested stock awards

 

(2,322

)

(1,641

)

Proceeds from exercises of stock options

 

491

 

214

 

Proceeds from issuance of shares to ESPP

 

415

 

205

 

Excess tax benefit from stock-based compensation

 

1,391

 

2,221

 

Net cash provided by (used in) financing activities

 

$

14,752

 

$

4,451

 

 

 

 

 

 

 

Net (decrease) / increase in cash and cash equivalents

 

(17,922

)

10,982

 

Cash and cash equivalents-beginning of period

 

28,467

 

12,967

 

Cash and cash equivalents-end of period

 

$

10,545

 

$

23,949

 

 

Exhibit 99.2

 

1 2015 First Quarter Review Roger W. Stone Chairman and Chief Executive Officer Andrea K. Tarbox Vice President and Chief Financial Officer May 4, 2015

 

Forward Looking Statements The information in this presentation and statements made during this presentation may contain certain forward-looking statements within the meaning of federal securities laws. These statements reflect expectations regarding future events and operating performance. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to differ materially from those expressed in, or underlying, any forward-looking statements can be found in the filings with the Securities and Exchange Commission, such as its annual and quarterly reports. The Company disclaims any obligation to revise or update such statements to reflect the occurrence of events after the date of this presentation. This presentation refers to non-U.S. GAAP financial information. A reconciliation of non-U.S. GAAP to U.S. GAAP financial measures is available on the website at KapStonepaper.com under Investors. Forward-Looking Statements 2 Risk Factors Non-GAAP Financial Measures

 

($ in Millions, except per share) Q1 2015 Q1 2014 Inc/(Dec) (1) Inc/(Dec) (1) Net Sales $ 546 $ 549 ($3) ( 1%) EBITDA $ 82 $ 91 ($9) ( 10%) Adj. EBITDA(2) $ 87 $ 96 ($9) ( 9%) Net Income $ 26 $ 32 ($6) ( 19%) Adj. Net Income(3) $ 29 $ 35 ($6) ( 17%) Diluted EPS $ 0.27 $ 0.33 ($0.06) ( 18%) Adj. Diluted EPS(3) $ 0.30 $ 0.36 ($0.06) ( 17%) First Quarter Financial Results 3 (1) Percentage change calculations made using unrounded source financials (2) Adjusted to exclude non-cash stock compensation and acquisition, start up and other costs (3) Adjusted to exclude items above net of tax

 

$96 $1 $4 $3 $6 $9 $87 $ in Millions Adjusted EBITDA $549 $1 $3 $546 Net Sales Lower Productivity and FX Drive Down Results Compared to 2014 4 Q1 2015 Compared to Q1 2014 Price changes include: Higher kraft paper prices (2014 $50 per ton increase went into effect in late Q2 2014) offset by lower export and medium prices FX reflects weaker Euro impact on specialty product (Durasorb) and export containerboard sales (1.37x in 2014 compared to 1.12x in 2015) Sales volume/mix flat reflecting lower specialty paper volume offset by higher corrugated products, up 6.5% Inflation unfavorable by $3 million due to $8 million increase in virgin fiber and $5 million for compensation and benefit costs, offset by $6 million of lower OCC costs Productivity includes lower mill production (13,000 tons) and $3 million of higher freight costs due to port issues and mix changes $ in Millions $1

 

De-Levering Debt and Reducing Interest Rate Cash Flows, Debt and Liquidity 5 Debt to EBITDA leverage ratio (1) 3.80 times - July 18, 2013 (2) 2.38 times - December 31, 2014 2.53 times - March 31, 2015 Net debt at March 31, 2015 - $1,076 million $11 million in cash $664 million term loan A-1 at 1.92% $231 million term loan A-2 at 2.17% $175 million receivables securitization facility at 0.92% $17 million of short-term borrowings at 1.90% Available revolver balance is $386 million in addition to $300 million accordion Cash flow from operations down $4 million from year end 2014 (higher receivables and inventories, payment of 2014 incentives) Adjusted free cash flow was ($33 million) for Q1 2015, down $39 million compared to Q1 2014. ($0.33) per diluted share Capex for Q1 2015 was $29 million. Full year estimate is $135 million (1) Calculated per bank agreement (2) Closing date of Longview acquisition

 

Summary of Key Assumptions for Q2 2015 6 .FX trending to negatively impact results by $4 million compared to Q2 2014 .Kraft paper price increase of $50 per ton .Full benefit expected in Q2 2015 compared to partial benefit in Q2 2014 .Continued seasonal improvement of product mix from Q1 2015 .Production and shipping .Resolution of west coast port slowdown .One more mill production calendar day .Production in Q2 2015 should benefit from improved mill operations .Reduction of Longview’s Q1 2015 seasonal inventory build .Planned outage maintenance expense approximately $2 million higher than Q1 2015 due to timing change of Roanoke Rapids mill annual outage (moved from October). Loss of 10,400 production tons .Continued higher fiber costs as seen in Q1 2015. OCC costs expected to increase after hitting recent lows in Q1 2015 .CAPEX is expected to be $ 35 million for Q2 2015, and $135 million for the full year

 

Appendix

 

385 658 657 420 673 661 Q1 2013 Q1 2014 Q1 2015 Tons (000) Tons Produced and Sold (2) Produced Sold Components of Quarterly Net Sales $653 $685 $683 Q1 2013 Q1 2014 Q1 2015 Avg Revenue per Mill Ton (1) (1) Average price per external ton sold from mills – excludes corrugated sales (2) Tons Produced represents saleable tons produced from four paper mills; Tons Sold is external sales from paper mills and corrugated container plants (3) Mix is based on a percentage of total external tons sold from paper mills and corrugated container plants 33% 24% 24% 9% 9% 7% 23% 30% 31% Q1 2013 Q1 2014 Q1 2015 Q1 2013 Q1 2014 Q1 2015 Q1 2013 Q1 2014 Q1 2015 Domestic Containerboard Export Containerboard Corrugated Product Mix (3) 13% 24% 23% 6% 4% 5% 16% 9% 10% Q1 2013 Q1 2014 Q1 2015 Q1 2013 Q1 2014 Q1 2015 Q1 2013 Q1 2014 Q1 2015 Kraft Paper KraftPak Durasorb 8

 

Financial Impact ($ in Millions) Q1 Q2 Q3 Q4 Year 2014 Actual $ 14.8 $ 5.2 $ 5.2 $ 10.9 $36.1 2015 Expected $ 8.6 $ 10.6 $ 6.9 $ 5.4 $31.5 Maintenance Outage Expense & Production Impact 9 Production Impact (Tons) Q1 Q2 Q3 Q4 Year 2014 Actual 14,300* 5,400 - 14,500 34,200 2015 Expected 1,700 10,400** 2,500 1,700 16,300 * The 14,300 ton impact is due to the paper machine #3 upgrade in Charleston ** The 10,400 ton impact is due to the Roanoke Rapids mill annual outage. In 2014 this outage occurred in Q4

 

 


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