CREVE COEUR, Mo., and CHICAGO, April 26, 2011 /CNW/ --
Smurfit-Stone Container Corporation (NYSE: SSCC) today reported net
income of $54 million, or $0.54 per diluted share, for the first
quarter ended March 31, 2011, compared with net income of $49
million, or $0.49 per diluted share, for the fourth quarter of
2010, and a net loss attributable to common stockholders of ($91)
million, or ($0.35) per diluted share, for the first quarter of
2010. (Logo:
http://photos.prnewswire.com/prnh/20070129/SMURFIT-STONELOGO)
Smurfit-Stone's first quarter 2011 adjusted net income was $43
million, or $0.43 per diluted share, compared to adjusted net
income of $62 million, or $0.62 per diluted share, in the fourth
quarter of 2010, and an adjusted net loss of ($59) million, or
($0.23) per diluted share, in the first quarter of 2010. The
primary adjustment in the first quarter of 2011 was the exclusion
of the cellulosic biofuel production income tax credit recognized
in the quarter. The major adjustments in the first and fourth
quarters of 2010 were the exclusion of costs or income related to
reorganization and restructuring. The first quarter of 2010 was
also adjusted to exclude the alternative fuel mixture tax credit
recognized in that quarter. Diluted Earnings Per Share Attributable
to Common Stockholders First Fourth First Quarter Quarter Quarter
2011 2010 2010 ---- ---- ---- Net Income (Loss) Attributable to
Common Stockholders $0.54 $0.49 $(0.35) Adjustments $(0.11) $0.13
$0.12 Adjusted Net Income (loss) $0.43 $0.62 $(0.23) ===== =====
====== Weighted Average Shares (MM) 101 100 258 The Company
reported operating income of $92 million for the first quarter of
2011, compared to operating income of $103 million in the fourth
quarter of 2010, and an operating loss of $31 million in the first
quarter of 2010. Adjusted EBITDA for the first quarter of 2011 was
$179 million, down from $205 million in the fourth quarter of 2010,
and up from $46 million in the first quarter of 2010. The
sequential decline in earnings was the result of the moderate
improvement in pricing and lower scheduled maintenance downtime
costs being more than offset by cost inflation primarily related to
fuels, higher seasonal energy usage, and the impact of benefit cost
timing in the quarter. Net sales for the first quarter of 2011 were
$1.58 billion, down slightly from $1.63 billion in the fourth
quarter of 2010 and up 8 percent compared with sales of $1.46
billion in the first quarter of 2010. The sequential decline in
sales in first quarter 2011 reflects modestly higher selling
prices, more than offset by seasonally lower volumes. First Quarter
Highlights -- The Company achieved solid financial results in line
with its expectations despite the impacts of cost inflation for
freight, energy, and fiber. -- Total debt was $1.17 billion at
March 31, 2011, representing 1.6x LTM adjusted EBITDA or 1.0x on a
net debt basis. -- The Company maintained a strong liquidity
position of just under $1 billion including $446 million of cash at
March 31, 2011. Outlook Smurfit-Stone expects sequentially lower
earnings in the second quarter as operating efficiencies and
seasonal volume improvements will be more than offset by continued
cost inflation and higher maintenance downtime costs.
Forward-Looking Statements & Non-GAAP Measures This press
release contains statements relating to future results, which are
forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Actual results may differ
materially from those projected as a result of certain risks and
uncertainties, including but not limited to changes in general
economic conditions, pricing pressures in key product lines,
seasonality, changes in input costs including recycled fiber and
energy costs, as well as other risks and uncertainties described in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2010, as amended by the Company's Annual Report on
Form 10-K/A filed on March 29, 2011, as updated from time to time
in the Company's Securities and Exchange Commission filings. In
this press release, certain non-U.S. GAAP financial information is
presented. A reconciliation of that information to U.S. GAAP
financial measures and additional disclosure regarding our use of
non-GAAP financial measures are included in the attached schedules.
The Company does not intend to review, revise or update any
particular forward-looking statements in light of future events.
About Smurfit-Stone Smurfit-Stone Container Corporation is one of
the industry's leading integrated containerboard and corrugated
packaging producers and one of the world's largest paper recyclers.
Smurfit-Stone generated revenue of $6.3 billion in 2010, has led
the industry in safety every year since 2001, and conducts its
business in compliance with the environmental, health, and safety
principles of the American Forest & Paper Association. The
company is a member of the Sustainable Forestry Initiative® .
(Financial statements follow) SMURFIT-STONE CONTAINER CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Successor
Predecessor --------- ----------- Three Three Three Months Months
Months Ended Ended Ended March December 31, 31, March 31, 2011 2010
2010 ---- ---- ---- Net sales $1,581 $1,628 $1,461 Costs and
expenses Cost of goods sold 1,363 1,379 1,356 Selling and
administrative expenses 122 129 151 Restructuring (income) expense
4 18 (4) Gain on disposal of assets (1) Other operating income (11)
--- Operating income (loss) 92 103 (31) Other income (expense)
Interest expense, net (22) (22) (13) Foreign currency exchange
losses (6) Other, net (4) 2 --- --- Income (loss) before
reorganization items and income taxes 66 81 (48) Reorganization
items (1) (5) (41) --- --- --- Income (loss) before income taxes 65
76 (89) Provision for income taxes (11) (27) --- --- Net income
(loss) 54 49 (89) Preferred stock dividends and accretion (2) ---
Net income (loss) attributable to common stockholders $54 $49 $(91)
--- --- ---- Basic earnings per common share Net income (loss)
attributable to common stockholders $0.54 $0.49 $(0.35) ----- -----
------ Weighted average shares outstanding 100 100 258 --- --- ---
Diluted earnings per common share Net income (loss) attributable to
common stockholders $0.54 $0.49 $(0.35) ----- ----- ------ Weighted
average shares outstanding 101 100 258 ----------------------- ---
--- --- SMURFIT-STONE CONTAINER CORPORATION CONSOLIDATED BALANCE
SHEETS Successor --------- December March 31, 31, (In millions,
except share data) 2011 2010 -------------------------------- ----
---- Assets (Unaudited) Current assets Cash and cash equivalents
$446 $449 Receivables 825 765 Receivable for alternative energy tax
credits 11 11 Inventories 550 496 Refundable income taxes 4 6
Prepaid expenses and other current assets 32 24 --- --- Total
current assets 1,868 1,751 Net property, plant and equipment 4,334
4,374 Goodwill 102 100 Intangible assets, net 74 75 Other assets
156 159 --- --- $6,534 $6,459 ------ ------ Liabilities and
Stockholders' Equity Current liabilities Current maturities of
long-term debt $18 $39 Accounts payable 561 503 Accrued
compensation and payroll taxes 147 180 Interest payable 3 3 Other
current liabilities 80 86 --- --- Total current liabilities 809 811
Long-term debt, less current maturities 1,151 1,155 Pension and
postretirement benefits, net of current portion 1,308 1,300 Other
long-term liabilities 129 129 Deferred income taxes 465 453 --- ---
Total liabilities 3,862 3,848 Stockholders' equity Preferred stock
Common stock Additional paid-in capital 2,369 2,366 Retained
earnings 168 114 Accumulated other comprehensive income 135 131 ---
--- Total stockholders' equity 2,672 2,611 ----- ----- $6,534
$6,459 ------ ------ SMURFIT-STONE CONTAINER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Successor
Predecessor --------- ----------- Three months ended March 31, (In
millions) 2011 2010 ------------------------------------------ ----
---- Cash flows from operating activities Net income (loss) $54
$(89) Adjustments to reconcile net income (loss) to net cash
provided by operating activities Depreciation, depletion and
amortization 87 85 Amortization of deferred debt issuance costs and
original issue discount 3 Deferred income taxes 12 (2) Pension and
postretirement benefits 3 28 Non-cash restructuring income (3)
Non-cash stock-based compensation 3 1 Non-cash foreign currency
exchange losses 6 Non-cash reorganization items 26 Change in
restricted cash for utility deposits 2 Change in operating assets
and liabilities, net of effects from acquisitions and dispositions
Receivables (60) (93) Receivable for alternative energy tax credits
48 Inventories (51) (19) Prepaid expenses and other current assets
(6) (3) Accounts payable and accrued liabilities 18 46 Interest
payable 3 Other, net (6) 14 Net cash provided by operating
activities 57 50 --- --- Cash flows from investing activities
Expenditures for property, plant and equipment (35) (34) Proceeds
from property disposals 1 6 Net cash used for investing activities
(34) (28) --- --- Cash flows from financing activities Net
repayments of long-term debt (26) (1) Debt issuance costs on exit
credit facilities and other financing costs (9) Change in
restricted cash for collateralizing outstanding letters of credit
(15) --- Net cash used for financing activities (26) (25) --- ---
Effect of exchange rate changes on cash 1 --- Decrease in cash and
cash equivalents (3) (2) Cash and cash equivalents Beginning of
period 449 704 --- --- End of period $446 $702 ------------- ---
--- SMURFIT-STONE CONTAINER CORPORATION EBITDA, As Defined Below
(In millions) (Unaudited) Successor Predecessor ---------
----------- 1Q 11 4Q 10 1Q 10 ----- ----- ----- Net sales $1,581
$1,628 $1,461 Net income (loss) $54 $49 $(89) Provision for income
taxes (Note 1) 11 27 - Interest expense, net 22 22 13 Depreciation,
depletion and amortization 87 85 85 --- --- --- EBITDA 174 183 9
Reorganization items 1 5 41 Restructuring (income) expense 4 18 (4)
Alternative fuel mixture tax credits - - (11) Non-cash foreign
currency exchange losses - - 6 Bankruptcy claims settlement gain
(3) - - Rock-Tenn merger transaction expense 3 - - Gain on disposal
of assets - (1) - Other - - 5 Adjusted EBITDA $179 $205 $46 ----
---- --- Adjusted EBITDA margin 11.3% 12.6% 3.1% ---- ---- ---
Other Financial Information: ---------------------------- Net cash
provided by operating activities $57 $50 $50 Capital expenditures
35 67 34 Pension expense 10 14 31 Pension contributions 7 154 2
Cash taxes refunded 1 14 2 Change in working capital (99) 19 (18)
Containerboard, corrugated containers and reclamation operations
segment operating profit 141 174 34 "EBITDA" is defined as net
income before provision for income taxes, interest expense, net and
depreciation, depletion and amortization. "Adjusted EBITDA" is
defined as EBITDA adjusted as indicated above. EBITDA and Adjusted
EBITDA are non-GAAP financial measures. See disclosure following
regarding the use of non-GAAP financial measures. Note 1: Provision
for income taxes for the three months ended March 31, 2011 is net
of cellulosic biofuel production income tax credit of $14 million.
SMURFIT-STONE CONTAINER CORPORATION STATISTICAL INFORMATION
Successor Predecessor --------- ----------- 1Q 11 4Q 10 1Q 10 -----
----- ----- Containerboard System North American Mill Operating
Rates (Containerboard Only) 97.1% 95.4% 100.0% North American
Containerboard Production -M Tons 1,576 1,534 1,585 Sequential Avg.
Domestic Linerboard Price Change -1.4% -1.5% 6.3% Pulp Production -
M Tons 59 73 62 SBS/SBL Board Production - M Tons 33 28 35 Kraft
Paper Production - M Tons 28 27 29 Total Maintenance Downtime Tons
- M Tons 23 43 20 Corrugated Containers North American Shipments -
BSF 16.2 16.3 16.4 Per Day North American Shipments - MMSF 252.6
267.9 260.9 Sequential Avg. Corrugated Price Change 1.2% 0.5% -0.6%
Fiber Reclaimed and Brokered - M Tons 1,501 1,458 1,423
SMURFIT-STONE CONTAINER CORPORATION ADJUSTED NET INCOME (LOSS) PER
DILUTED SHARE (In Millions, Except Per Share Data) (Unaudited)
Successor Predecessor (Note 1) (Note 1) -------- -------- 1Q 11 4Q
10 1Q 10 ----- ----- ----- Net income (loss) attributable to common
stockholders (GAAP) $54 $49 $(91) Reorganization items, net of
income taxes 1 3 41 Restructuring (income) expense, net of income
taxes 2 11 (4) Alternative fuel mixture tax credits - - (11)
Non-cash foreign currency exchange losses - - 6 Bankruptcy claims
settlement gain, net of income taxes (2) - - Rock-Tenn merger
transaction expense, net of income taxes 2 - - Gain on disposal of
assets, net of income taxes - (1) - Cellulosic biofuel production
income tax credit (14) - - --- --- --- Adjusted net income (loss)
attributable to common stockholders (Note 2) $43 $62 $(59) --- ---
---- Successor Predecessor (Note 1) (Note 1) -------- -------- 1Q
11 4Q 10 1Q 10 ----- ----- ----- Net income (loss) per diluted
share attributable to common stockholders (GAAP) $0.54 $0.49
$(0.35) Reorganization items, net of income taxes 0.01 0.03 0.16
Restructuring (income) expense, net of income taxes 0.02 0.11
(0.02) Alternative fuel mixture tax credits - - (0.04) Non-cash
foreign currency exchange losses - - 0.02 Bankruptcy claims
settlement gain, net of income taxes (0.02) - - Rock-Tenn merger
transaction expense, net of income taxes 0.02 - - Gain on disposal
of assets, net of income taxes - (0.01) - Cellulosic biofuel
production income tax credit (0.14) - - ----- --- --- Adjusted net
income (loss) per diluted share attributable to common stockholders
(Note 2) $0.43 $0.62 $(0.23) ----- ----- ------ Note 1: For the
Predecessor Company, adjustments to GAAP net income were not tax
effected during the three months ended March 31, 2010 because it
was more likely than not that substantially all of the deferred tax
assets that were generated during bankruptcy would not be realized.
For the Successor Company periods, we recorded a provision for
income taxes related to the statements of operations. As a result,
the Successor period adjustments to net income are presented on a
net of tax basis. Note 2: Exclusive of reorganization items,
restructuring (income) expense, alternative fuel mixture tax
credits, non-cash foreign currency exchange losses, bankruptcy
claims settlement gain, Rock- Tenn merger transaction expense, gain
on disposal of assets and cellulosic biofuel production income tax
credit. Adjusted net income (loss) attributable to common
stockholders and adjusted net income (loss) per diluted share
attributable to common stockholders are non-GAAP financial
measures. See disclosure following regarding the use of non-GAAP
financial measures. RESULTS OF OPERATIONS Non-GAAP Financial
Measures In the accompanying analysis of financial information, we
use the financial measures "adjusted net income (loss) attributable
to common stockholders" ("adjusted net income (loss)"), "adjusted
net income (loss) per diluted share attributable to common
stockholders" ("adjusted net income (loss) per diluted share"),
"EBITDA" and "adjusted EBITDA" which are derived from our
consolidated financial information but are not presented in our
financial statements prepared in accordance with U.S. generally
accepted accounting principles ("GAAP"). These measures are
considered "non-GAAP financial measures" under the U.S. Securities
and Exchange Commission rules. Adjusted net income (loss) and
adjusted net income (loss) per diluted share are non-GAAP financial
measures that exclude from net income (loss) attributable to common
stockholders the effects of reorganization items, restructuring
(income) expense, alternative fuel mixture tax credits, non-cash
foreign currency exchange losses, bankruptcy claims settlement
gain, Rock-Tenn merger transaction expense, gain on disposal of
assets and cellulosic biofuel production income tax credit. EBITDA
is defined as net income (loss) before provision for income taxes,
interest expense, net and depreciation, depletion and amortization.
Adjusted EBITDA is defined as EBITDA adjusted for reorganization
items, restructuring (income) expense, alternative fuel mixture tax
credits, non-cash foreign currency exchange losses, bankruptcy
claims settlement gain, Rock-Tenn merger transaction expense, gain
on disposal of assets and other adjustments. We use these
supplemental non-GAAP measures to evaluate performance period over
period, to analyze the underlying trends in our business, to assess
our performance relative to our competitors and to establish
operational goals and forecasts that are used in allocating
resources. These non-GAAP measures of operating results are
reported to our board of directors and chief executive officer and
are used to make strategic and operating decisions and assess
performance. These non-GAAP measures are presented to enhance an
understanding of our operating results and are not intended to
represent cash flows or results of operations. We also believe
these non-GAAP measures are beneficial to investors, potential
investors and other key stakeholders, including analysts and
creditors who use these measures in their evaluations of our
performance from period to period and against the performance of
other companies in our industry. The use of these non-GAAP
financial measures is beneficial to these stakeholders because they
exclude certain items that management believes are not indicative
of the ongoing operating performance of our business, and including
them would distort comparisons to our past operating performance.
Accordingly, we have excluded the adjustments, as detailed below,
for the purpose of calculating these non-GAAP measures. The
following is an explanation of each of the adjustments that we have
made to arrive at these non-GAAP measures for the three months
ended March 31, 2011 and December 31, 2010 of the Successor and the
three months ended March 31, 2010 of the Predecessor, as well as
the reasons management believes each of these items is not
indicative of operating performance: -- Reorganization items -
These expense items are directly related to the process of our
reorganizing under Chapter 11 and the CCAA. The items include a
provision for rejected/settled executory contracts and leases,
accounts payable settlement gains and professional fees. These
items are not considered indicative of ongoing operating
performance and are not used by us to assess our operating
performance. -- Restructuring (income) expense - These adjustments
primarily represent severance costs and other costs associated with
our restructuring activities, net of gains related to the sale of
previously closed facilities. These income and expense items are
not considered indicative of ongoing operating performance and are
not used by us to assess our operating performance. -- Alternative
fuel mixture tax credits - These amounts represent an excise tax
credit for alternative fuel mixtures produced by a taxpayer for
sale, or for use as a fuel in a taxpayer's trade or business,
through December 31, 2009, at which time the credit expired. These
items are not considered indicative of ongoing operating
performance and are not used by us to assess our operating
performance. -- Non-cash foreign currency exchange losses - Through
June 30, 2010, the functional currency for our Canadian operations
was the U.S. dollar. Fluctuations in Canadian dollar-denominated
monetary assets and liabilities resulted in non-cash losses. We
excluded the impact of foreign currency exchange losses because the
impact of foreign exchange is highly variable and difficult to
predict from period to period and is not tied to our operating
performance. These losses are not considered indicative of ongoing
operating performance and are not used by us to assess our
operating performance. -- Bankruptcy claims settlement gain - These
amounts represent the return of reserved funds due to the favorable
resolution of bankruptcy claims. These items are not considered
indicative of ongoing operating performance and are not used by us
to assess our operating performance. -- Rock-Tenn merger
transaction expense - These amounts represent charges for legal,
consulting and other direct expenses related to the announced
merger with Rock-Tenn. These items are not considered indicative of
ongoing operating performance and are not used by us to assess our
operating performance. -- Gain on disposal of assets - These
amounts represent gains we recognized related to the sale of
non-strategic assets. These gains are not considered indicative of
ongoing operating performance and are not used by us to assess our
operating performance. -- Cellulosic biofuel production income tax
credit - These amounts represent an income tax credit for
registered cellulosic biofuel producers which did not otherwise
qualify for the alternative fuel mixture credit. Under current law,
this tax credit can be utilized to offset income tax through
December 31, 2015. These items are not considered indicative of
ongoing operating performance and are not used by us to assess our
operating performance. -- Other - These adjustments principally
represent amounts accrued under our 2009 long-term incentive plan.
These income and expense items are not considered indicative of
ongoing operating performance and are not used by us to assess our
operating performance. Adjusted net income (loss), adjusted net
income (loss) per diluted share, EBITDA and adjusted EBITDA have
certain material limitations associated with their use as compared
to net income (loss). These limitations are primarily due to the
exclusion of certain amounts that are material to our consolidated
results of operations, as discussed above. In addition, these
adjusted net income (loss) and EBITDA measures may differ from
adjusted net income (loss) and EBITDA calculations of other
companies in our industry, limiting their usefulness as comparative
measures. Because of these limitations, adjusted net income (loss),
adjusted net income (loss) per diluted share, EBITDA and adjusted
EBITDA should be read in conjunction with our consolidated
financial statements prepared in accordance with GAAP. We
compensate for these limitations by relying primarily on our GAAP
results and using adjusted net income (loss), adjusted net income
(loss) per diluted share, EBITDA and adjusted EBITDA only as
supplemental measures of our operating performance. The
presentation of this additional information is not meant to be
considered in isolation or as a substitute for financial statements
prepared in accordance with GAAP. We believe that providing these
non-GAAP measures in addition to the related GAAP measures provides
investors greater transparency to the information our management
uses for financial and operational decision-making and allows
investors to see our results as management sees them. We also
believe that providing this information better enables investors to
understand our operating performance and to evaluate the
methodology used by our management to evaluate and measure our
operating performance, and the methodology and financial measures
used by our board of directors to assess management's performance.
The following financial presentation includes a reconciliation of
net income (loss) attributable to common stockholders and net
income (loss) per diluted share attributable to common
stockholders, the most directly comparable GAAP financial measures,
to adjusted net income (loss) attributable to common stockholders
and adjusted net income (loss) per diluted share attributable to
common stockholders, respectively. The adjustments to GAAP net
income (loss) attributable to common stockholders for the
Predecessor period for the three months ended March 31, 2010 were
not tax effected because it was more likely than not that
substantially all of the deferred tax assets that were generated
during bankruptcy would not be realized. For the three months ended
March 31, 2011, we recorded a provision for income taxes related to
the Successor statement of operations. As a result, the Successor
period adjustments to net income (loss) attributable to common
stockholders are presented on a net of tax basis. A reconciliation
of net income (loss) to EBITDA and adjusted EBITDA is also
presented. media, Lisa Esneault, +1-314-656-5827, or investors, Tim
Griffith, or Scott Dudley, +1-314-656-5553 Web Site:
http://www.smurfit-stone.com
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