News Release

KapStone Reports 2017 Fourth Quarter And Full Year Results

NORTHBROOK, Ill., Feb. 7, 2018 /PRNewswire/ -- KapStone Paper and Packaging Corporation (NYSE:KS) today reported preliminary results for the fourth quarter and year ended December 31, 2017.

As compared to 2016's fourth quarter, results for 2017's fourth quarter:

  • Net sales of $859 million, up $81 million, or 10 percent
  • Net income of $188 million, up $169 million, or 924 percent
  • Diluted EPS of $1.90, up $1.71 per share, or 900 percent

Non U.S. GAAP financial measures for 2017's fourth quarter as compared to 2016's fourth quarter:

  • Adjusted EBITDA of $136 million, up $44 million, or 48 percent
  • Adjusted net income of $50 million, up $27 million, or 115 percent 
  • Adjusted diluted EPS of $0.51, up $0.27 per share, or 113 percent

As compared to the year ended December 31, 2016, results for the year ended December 31, 2017:

  • Net sales of $3,316 million, up $239 million, or 8 percent
  • Net income of $244 million, up $158 million, or 182 percent
  • Diluted EPS of $2.47 up $1.59 per share, or 181 percent

Non U.S. GAAP financial measures for the year ended December 31, 2017 as compared to 2016's year: 

  • Adjusted EBITDA of $437 million, up $53 million, or 14 percent
  • Adjusted net income of $130 million, up $23 million, or 21 percent
  • Adjusted diluted EPS of $1.32, up $0.22 per share, or 20 percent

Matthew Kaplan, President and Chief Executive Officer, stated, "Eleven years ago, we began a journey to build a world-class paper and packaging company with the resources and skills of our largest competitors— that focused on maximization of stockholder value and that treated our customers and employees like a small, family-oriented company. On January 29, 2018, we announced signing a definitive agreement to be acquired by WestRock for $35.00 per share, subject to customary closing conditions, including KapStone stockholder approval. We believe this acquisition is a compelling transaction for our stockholders and an exciting development for both KapStone and WestRock."

Fourth Quarter Operating Highlights

Consolidated net sales of $859 million in the fourth quarter of 2017 were $81 million higher than 2016, reflecting higher prices for containerboard and corrugated products. Tons of paper sold in the paper and packaging segment increased to 731,000 tons during the fourth quarter of 2017 compared to 724,000 tons a year earlier. The Company's average mill selling price of $698 per ton in the fourth quarter of 2017 was higher by $81 per ton compared to the fourth quarter of 2016 due to the combined impact of higher export and domestic containerboard selling prices and kraft paper prices.  Average mill selling prices were flat compared to the third quarter of 2017. Distribution segment sales increased by $14 million compared to the prior year quarter due to higher prices, partially offset by lower volume.

Net income of $188 million for the 2017 fourth quarter increased by $169 million compared to the 2016 fourth quarter. The current quarter includes a provisional tax benefit of $144 million associated with the passage of the Tax Cuts and Jobs Act on December 22, 2017. The tax benefit consists of a non-cash adjustment to re-measure deferred income tax liabilities at the new 21 percent federal statutory income tax rate compared to the prior 35 percent income tax rate.

Adjusted EBITDA for the fourth quarter of 2017 of $136 million increased by $44 million compared to the fourth quarter of 2016 as follows:

  • $57 million due to higher selling prices,
  • Higher sales volume of $3 million,
  • Productivity improvements and cost savings of $10 million, and
  • $6 million due to the impact of Hurricane Matthew in 2016, which did not recur.

These items were partially offset by:

  • Higher compensation and benefit costs of $16 million,
  • $7 million of higher planned maintenance outages, and
  • Inflation of $8 million driven by higher OCC costs.

The effective income tax rate for the fourth quarter of 2017, when excluding the impact of the new tax law, was 31.4 percent compared to 32.6 percent for the fourth quarter of 2016.

Full Year Operating Highlights

Consolidated net sales for the year ended December 31, 2017, were $3,316 million, an increase of 8 percent, compared to 2016 sales of $3,077 million.  The increase was due to higher prices, a better product mix and higher volumes in the paper and packaging segment. The Company's average mill selling price of $677 per ton in 2017 was higher by $54 per ton compared to 2016 due to the combined impact of higher export and domestic containerboard selling prices and kraft paper prices. Distribution segment sales increased by $31 million compared to 2016 due to higher prices, partially offset by lower volume.

Net income of $244 million for the year ended December 31, 2017 was higher than 2016's $86 million by $158 million.  The increase was mainly due to a provisional tax benefit of $144 million based on the new tax law enacted on December 22, 2017.

Adjusted EBITDA for 2017 of $437 million increased by $53 million compared to 2016 as follows:

  • $155 million due to higher selling prices,
  • Higher sales volume and improved operating performance of $10 million, and
  • $6 million due to the impact of Hurricane Matthew in 2016, which did not recur.

These items were partially offset by:

  • $35 million of higher compensation and benefit costs,
  • Inflation of $43 million driven by higher OCC costs, and
  • Higher planned maintenance outage costs of $14 million.

The effective income tax rate for the year ended December 31, 2017, when excluding the impact of the new tax law, was 33.2 percent compared to 32.7 percent for 2016.    

Cash Flow and Working Capital

Cash and cash equivalents increased by $17 million during the current quarter to $28 million at December 31, 2017. The Company generated $150 million of net cash from operating activities during the fourth quarter of 2017. Capital expenditures in the fourth quarter of 2017 were $30 million. The Company paid $10 million of dividends and made a voluntary debt repayment to reduce term loan borrowings by $80 million in the fourth quarter of 2017. 

Cash and cash equivalents decreased by $1 million during 2017 compared to December 31, 2016, reflecting cash provided by operating activities of $325 million, $138 million for capital expenditures, and $34 million for a strategic investment to increase mill integration. Cash used by financing activities totaled $155 million reflecting $155 million of voluntary debt prepayments and $39 million of cash dividends paid to stockholders, partially offset by $39 million of net proceeds from the receivables credit facility.   

At December 31, 2017, the Company had approximately $405 million of working capital and $486 million of revolver borrowing capacity. 

Cancellation of Conference Call

Due to the signing of a definitive agreement to be acquired by WestRock, the conference call previously scheduled to be held on Thursday, February 8, 2018 is cancelled.

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 has four paper mills, 23 converting plants and 60 distribution centers. The business has approximately 6,400 employees.

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 they are 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 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, 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; (2) market and economic factors; (3) results of legal proceedings and compliance costs; (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; (7) managing labor relations; (8) realizing the synergies and benefits of strategic investments; (9) unanticipated business interruptions; and (10) various factors related to the pending transaction with WestRock, including but not limited to the ability of KapStone and WestRock to receive the required regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction), to receive the required approval of KapStone's stockholders and to satisfy the other conditions to the closing of the transaction on a timely basis or at all; the occurrence of events that may give rise to a right of one or both of the parties to terminate the merger agreement; negative effects of the announcement or the consummation of the transaction on the market price of WestRock's or KapStone's common stock and/or on their respective businesses, financial conditions, results of operations and financial performance; risks relating to the value of the shares that may be issued in the transaction, significant transaction costs and/or unknown liabilities; the possibility that the anticipated benefits from the proposed transaction cannot be realized in full or at all or may take longer to realize than expected; risks associated with third party contracts containing consent and/or other provisions that may be triggered by the proposed transaction; risks associated with transaction-related litigation; the possibility that costs or difficulties related to the integration of KapStone's operations with those of WestRock will be greater than expected; the outcome of legally required consultation with employees, their works councils or other employee representatives; and the ability of KapStone and the combined company to retain and hire key personnel. Further information on these and other risks and uncertainties is provided under Part I, Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 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 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.

KapStone Paper and Packaging Corporation

Consolidated Statements of Income

(In thousands, except share and per share amounts)

(Preliminary and Unaudited)




















Quarter Ended December 31,



Year Ended December 31,


2017


2016



2017


2016










Net sales 

$  858,682


$  777,495



$ 3,315,660


$ 3,077,257










Cost and expenses:









 Cost of sales, excluding depreciation and amortization

588,676


563,953



2,354,523


2,214,872

 Depreciation and amortization

47,937


46,685



186,801


182,213

 Freight and distribution expenses

74,201


71,236



299,872


279,023

 Plant closure costs

1,241


-



10,208


-

 Selling, general and administrative expenses

68,566


51,720



265,131


224,127

 Multiemployer pension plan withdrawal expense

-


6,376



-


6,376

Operating income 

78,061


37,525



199,125


170,646










Foreign exchange (gain) / loss

508


737



(993)


2,255

Equity method investments income

(375)


(548)



(1,752)


(548)

Loss on debt extinguishment

674


-



1,305


679

Interest expense, net

14,077


10,113



52,282


40,078

Income before provision (benefit) for income taxes

63,177


27,223



148,283


128,182

Provision (benefit) for income taxes

(124,532)


8,885



(95,220)


41,930

Net income 

$  187,709


$    18,338



$    243,503


$      86,252










Net income per share:









Basic

$        1.94


$        0.19



$          2.51


$          0.89

Diluted

$        1.90


$        0.19



$          2.47


$          0.88



















Weighted-average number of shares outstanding:        









Basic

97,003,931


96,581,703



96,859,516


96,533,368

Diluted

98,815,063


97,888,469



98,615,101


97,777,066



















Effective income tax rate

-197.1%


32.6%



-64.2%


32.7%

 

Supplemental Information

GAAP to Non-GAAP Reconciliations

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

(unaudited)











Quarter Ended December 31,



Year Ended December 31,


2017


2016



2017


2016

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









Net income (GAAP)

$  187,709


$    18,338



$    243,503


$      86,252

   Interest expense, net

14,077


10,113



52,282


40,078

   Provision (benefit) for income taxes

(124,532)


8,885



(95,220)


41,930

   Depreciation and amortization

47,937


46,685



186,801


182,213

EBITDA (Non-GAAP)

$  125,191


$    84,021



$    387,366


$    350,473










Stock-based compensation expense

2,234


1,750



14,910


8,938

Acquisition, integration, start-up and other expenses

243


2,123



7,440


6,338

Longview piping inspection settlement




2,034


Union contract ratification cost




5,925


Plant closure costs

1,241




10,208


Loss on asset disposals

213




2,173


2,270

Change in fair value of contingent consideration liability

6,134


(2,979)



5,794


1,600

Severance expenses


533




7,560

Multiemployer pension plan withdrawal expense


6,376




6,376

Loss on debt extinguishment

674




1,305


679

Accumulated EBITDA adjustments

10,739


7,803



49,789


33,761

Adjusted EBITDA (Non-GAAP)

$  135,930


$    91,824



$    437,155


$    384,234










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









Net income (GAAP)

$  187,709


$    18,338



$    243,503


$      86,252

Accumulated EBITDA adjustments

10,739


7,803



49,789


33,761

Accumulated tax adjustments

(4,027)


(2,926)



(18,671)


(12,660)

Tax impact of Tax Cuts and Jobs Act

(144,387)


-



(144,387)


-

Adjusted Net Income (Non-GAAP)

$    50,034


$    23,215



$    130,234


$    107,353










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









Diluted earnings per share (GAAP)

$        1.90


$        0.19



$          2.47


$          0.88

Accumulated EBITDA adjustments

0.11


0.08



0.50


0.35

Accumulated tax adjustments

( 0.04)


( 0.03)



( 0.19)


( 0.13)

Tax impact of Tax Cuts and Jobs Act

( 1.46)


-



( 1.46)


-

Adjusted Diluted EPS (Non-GAAP) 

$        0.51


$        0.24



$          1.32


$          1.10

 

KapStone Paper and Packaging Corporation

Consolidated Balance Sheets

(In thousands)







December 31,


December 31,



2017


2016



(Preliminary and Unaudited)




Assets





Current assets:





   Cash and cash equivalents

$                             28,065


$       29,385


   Trade accounts receivable, net of allowances

443,462


392,962


   Other receivables

23,289


13,562


   Inventories

315,575


322,664


   Prepaid expenses and other current assets

17,470


10,247


Total current assets

827,861


768,820







Plant, property and equipment, net

1,453,607


1,441,557


Other assets

24,431


25,468


Intangible assets, net

297,475


314,413


Goodwill

720,611


705,617


Total assets

$                        3,323,985


$  3,255,875












Liabilities and Stockholders' Equity





Current liabilities:





  Capital lease obligation

$                                    30


$               -


Dividend payable

10,302


10,052


Accounts payable

199,574


189,350


Accrued expenses

105,951


76,480


Accrued compensation costs

75,215


48,840


Accrued income taxes

31,458


15,971


Total current liabilities

422,530


340,693







Long-term debt, net of current portion

1,374,502


1,485,323


Long-term financing obligations

82,199



Capital lease obligation

4,595



Pension and post-retirement benefits

14,196


34,207


Deferred income taxes

252,101


405,561


Other liabilities

36,848


85,761


Total other liabilities

1,764,441


2,010,852







Stockholders' equity:





Common stock $0.0001 par value

10


10


Additional paid-in capital

291,629


275,970


Retained earnings

894,061


689,668


Accumulated other comprehensive loss

(48,686)


(61,318)


Total stockholders' equity

1,137,014


904,330


Total liabilities and stockholders' equity

$                        3,323,985


$  3,255,875


 

KapStone Paper and Packaging Corporation

Consolidated Statement of Cash Flows 

(In thousands)

(Preliminary and Unaudited)











Quarter Ended December 31,



Year Ended December 31,


2017


2016



2017


2016

Operating activities:









   Net income

$  187,709


$  18,338



$  243,503


$    86,252

   Adjustments to reconcile net income to net cash provided by









   operating activities:









   Depreciation of plant and equipment

40,193


39,175



155,903


149,318

   Amortization of intangible assets

7,744


7,510



30,898


32,895

   Stock-based compensation expense

2,234


1,750



14,910


8,938

   Pension and postretirement

(1,321)


(2,106)



(3,292)


(3,694)

  Excess tax benefit from stock-based compensation


57




207

   Amortization of debt issuance costs

1,230


1,179



4,787


4,804

   Loss on debt extinguishment

674




1,305


679

   Loss on disposal of assets

1,587


443



5,372


3,599

   Deferred income taxes

(151,678)


(14,660)



(157,918)


(14,440)

   Change in fair value of contingent consideration liability

6,134


(2,979)



5,794


1,600

   Equity method investments income, net of cash received

(375)


(548)



98


(548)

   Plant closure costs

(521)




7,522


   Provision for bad debts

98




3,024


   Multiemployer pension plan withdrawal expense


6,376




6,376

   Changes in operating assets and liabilities

55,841


14,998



13,562


5,934

Net cash provided by operating activities

$  149,549


$  69,533



$  325,468


$  281,920










Investing activities:









    Capital expenditures

(30,346)


(27,619)



(138,358)


(126,865)

    Purchase of intangible assets


(500)




(2,525)

    Acquisition, net of cash acquired




(33,500)


(15,438)

    Equity method investments


(57)




(11,807)

    Proceeds from the sales of assets

472




472


4,881

Net cash (used in) investing activities

$   (29,874)


$(28,176)



$(171,386)


$(151,754)



















Financing activities:









Proceeds from revolving credit facility

$    74,500


$  97,800



$  422,000


$  451,000

Repayments on revolving credit facility

(77,000)


(109,300)



(422,000)


(457,400)

Proceeds from receivables credit facility

14,666


6,445



89,914


43,001

Repayments on receivables credit facility

(23,662)


(6,675)



(50,338)


(39,342)

Proceeds from long-term debt 





Repayments on long-term debt

(80,000)




(155,000)


(64,687)

Repayments on long-term financial obligations

(232)




(495)


Payment of loan amendment costs 




(1,488)


(2,250)

Proceeds from other current borrowings




6,214


Repayments on other current borrowings

(2,084)




(6,214)


Repayments on capital lease obligation

(3)




(22)


Cash dividends paid

(9,696)


(9,735)



(38,722)


(38,736)

Payment of withholding taxes on vested stock awards

(13)


31



(1,884)


(810)

Proceeds from exercises of stock options

645


70



1,686


858

Proceeds from issuance of shares to ESPP




972


971

Other

(25)


(57)



(25)


(207)

Net cash (used in) financing activities

$(102,904)


$(21,421)



$(155,402)


$(107,602)










Net increase (decrease) in cash and cash equivalents 

16,771


19,936



(1,320)


22,564

Cash and cash equivalents-beginning of period

11,294


9,449



29,385


6,821

Cash and cash equivalents-end of period

$    28,065


$  29,385



$    28,065


$    29,385

 

KapStone Paper and Packaging Corporation

Operating Segment Information

(In thousands)

(Preliminary and Unaudited)
















Net Sales









Three Months Ended December 31, 2017

Trade


Inter-
segment


Total


Segment
Operating
Income
(Loss)


Depreciation
and
Amortization


Capital
Expenditures


Total Assets
at Dec. 31,
2017

Paper and Packaging

$    608,298


$ 18,397


$    626,695


$    85,379


$         40,280


$         27,665


$   2,620,391

Distribution 

250,384


-


250,384


11,046


5,853


397


652,544

Corporate 

-


-


-


(18,364)


1,804


2,284


51,050

Intersegment eliminations

-


(18,397)


(18,397)


-


-


-


-


$    858,682


$         -


$    858,682


$    78,061


$         47,937


$         30,346


$   3,323,985






























Net Sales









Three Months Ended December 31, 2016

Trade


Inter-
segment


Total


Segment
Operating
Income
(Loss)


Depreciation
and
Amortization


Capital
Expenditures


Total Assets
at Dec. 31,
2016

Paper and Packaging

$    541,047


$ 16,422


$    557,469


$    36,103


$         38,716


$         24,502


$   2,541,634

Distribution 

236,448


-


236,448


7,349


5,869


415


658,208

Corporate 

-


-


-


(5,927)


2,100


2,702


56,033

Intersegment eliminations

-


(16,422)


(16,422)


-


-


-


-


$    777,495


$         -


$    777,495


$    37,525


$         46,685


$         27,619


$   3,255,875






























Net Sales









Year Ended December 31, 2017

Trade


Inter-
segment


Total


Segment
Operating
Income
(Loss)


Depreciation
and
Amortization


Capital
Expenditures



Paper and Packaging

$ 2,335,114


$ 86,509


$ 2,421,623


$  227,388


$       155,605


$       129,360



Distribution 

980,546


-


980,546


30,204


23,667


2,258



Corporate 

-


-


-


(58,467)


7,529


6,740



Intersegment eliminations

-


(86,509)


(86,509)


-


-


-




$ 3,315,660


$         -


$ 3,315,660


$  199,125


$       186,801


$       138,358
































Net Sales









Year Ended December 31, 2016

Trade


Inter-segment


Total


Segment
Operating
Income
(Loss)


Depreciation
and
Amortization


Capital
Expenditures



Paper and Packaging

$ 2,127,220


$ 72,089


$ 2,199,309


$  181,157


$       151,506


$       116,022



Distribution 

950,037


-


950,037


29,296


23,027


4,349



Corporate 

-


-


-


(39,807)


7,680


6,494



Intersegment eliminations

-


(72,089)


(72,089)


-


-


-




$ 3,077,257


$         -


$ 3,077,257


$  170,646


$       182,213


$       126,865



 

KapStone Paper and Packaging Corporation

Operating Segment EBITDA and Adjusted EBITDA

(In thousands)

(Preliminary and Unaudited)












Quarter Ended December 31,


Year Ended December 31,

Paper and Packaging


2017


2016


2017


2016

Segment operating income


$   85,379


$ 36,103


$ 227,388


$ 181,157

Equity method investments income


(375)


(548)


(1,752)


(548)

Foreign exchange (gain) / loss


(110)


479


(919)


461

Loss on debt extinguishment


674


-


1,305


-

Depreciation and amortization


40,280


38,716


155,605


151,506

EBITDA


125,470


74,888


384,359


332,750

Severance expenses


-


(448)


-


5,550

Acquisition, integration, start-up and other expenses


1,075


(550)


4,381


1,269

Longview piping inspection settlement


-


-


2,034


-

Plant closure costs


1,241


-


10,208


-

Loss on asset disposals


213


-


858


1,710

Union contract ratification costs


-


-


5,925


-

Loss on debt extinguishment


674


-


1,305


-

Multiemployer pension plan withdrawal expense


-


6,376


-


6,376

Adjusted EBITDA


$ 128,673


$ 80,266


$ 409,070


$ 347,655

Adjusted EBITDA margin


20.5%


14.4%


16.9%


15.8%












Quarter Ended December 31,


Year Ended December 31,

Distribution


2017


2016


2017


2016

Segment operating income


$   11,046


$   7,349


$   30,204


$   29,296

Foreign exchange (gain) / loss


618


258


(74)


1,794

Depreciation and amortization


5,853


5,869


23,667


23,027

EBITDA


16,281


12,960


53,945


50,529

Acquisition, integration, start-up and other expenses


(1,343)


2,126


371


3,780

Loss on asset disposals


-


-


1,315


-

Severance expenses


-


981


-


1,614

Adjusted EBITDA


$   14,938


$ 16,067


$   55,631


$   55,923

Adjusted EBITDA margin


6.0%


6.8%


5.7%


5.9%












Quarter Ended December 31,


Year Ended December 31,

Corporate


2017


2016


2017


2016

Segment operating (loss)


$ (18,364)


$ (5,927)


$ (58,467)


$ (39,807)

Loss on debt extinguishment


-


-


-


679

Depreciation and amortization


1,804


2,100


7,529


7,680

EBITDA


(16,560)


(3,827)


(50,938)


(32,806)

Stock-based compensation expense


2,234


1,750


14,910


8,938

Acquisition, integration, start-up and other expenses


511


547


2,688


1,289

Loss on asset disposals


-


-


-


560

Change in fair value of contingent consideration liability


6,134


(2,979)


5,794


1,600

Loss on debt extinguishment


-


-


-


679

Severance expenses


-


-


-


396

Adjusted EBITDA


$   (7,681)


$ (4,509)


$ (27,546)


$ (19,344)












Quarter Ended December 31,


Year Ended December 31,

Consolidated


2017


2016


2017


2016

Segment operating income


$   78,061


$ 37,525


$ 199,125


$ 170,646

Equity method investments income


(375)


(548)


(1,752)


(548)

Foreign exchange (gain) / loss


508


737


(993)


2,255

Loss on debt extinguishments


674


-


1,305


679

Depreciation and amortization


47,937


46,685


186,801


182,213

EBITDA


125,191


84,021


387,366


350,473

Stock-based compensation expense


2,234


1,750


14,910


8,938

Acquisition, integration, start-up and other expenses


243


2,123


7,440


6,338

Longview piping inspection settlement


-


-


2,034


-

Union contract ratification costs


-


-


5,925


-

Plant closure costs


1,241


-


10,208


-

Loss on asset disposals


213


-


2,173


2,270

Change in fair value of contingent consideration liability


6,134


(2,979)


5,794


1,600

Loss on debt extinguishment


674


-


1,305


679

Severance expenses


-


533


-


7,560

Multiemployer pension plan withdrawal expense


-


6,376


-


6,376

Adjusted EBITDA


$ 135,930


$ 91,824


$ 437,155


$ 384,234

 

KapStone Paper and Packaging Corporation

Summary of Interest Expense, net

(In thousands)

(Preliminary and Unaudited)












Quarter Ended December 31,


Year Ended December 31,



2017


2016


2017


2016

Interest on term loans and revolver


$   9,862


$   7,496


$ 39,009


$ 31,599

Interest on receivables securitization facility


1,681


1,500


5,618


3,940

Sub-total


11,543


8,996


44,627


35,539










Amortization of debt issuance costs


1,230


1,179


4,787


4,804

Implicit interest on long-term financing obligations


1,529


-


3,305


-

Interest on capital lease obligation


133


-


489


-

Other interest


13


16


76


7

Capitalized interest


(326)


(36)


(816)


(187)

Interest income


(45)


(42)


(186)


(85)

Total interest expense, net


$ 14,077


$ 10,113


$ 52,282


$ 40,078

 

Cision View original content:http://www.prnewswire.com/news-releases/kapstone-reports-2017-fourth-quarter-and-full-year-results-300594730.html

SOURCE KapStone Paper and Packaging Corporation

Andrea K. Tarbox, Executive Vice President and Chief Financial Officer, 847.239.8812