Graphic Packaging Holding Co., a leading provider of packaging solutions to food, beverage, foodservice, and other consumer products companies, today reported Net Income for Q3 2018 of $94.3 million, or $0.30 per share, based upon 311.5 million weighted average diluted shares. This compares to Q3 2017 Net Income of $47.3 million, or $0.15 per share, based on 310.9 million weighted average diluted shares.
"We are encouraged by our overall progress in the third quarter. Specifically, the integration of the SBS mill and foodservice assets is on track and the pricing to commodity input cost relationship for the CRB and CUK mill and global converting assets turned $6 million positive during the quarter. We announced the Letica Foodservice assets acquisition, which closed on Sept. 30, and will extend our leading position in the growing North America paperboard-based foodservice market. We also invested $30 million to install a curtain coater on our Macon No. 2 CUK paperboard machine, which we expect will add $10 million of annualized EBITDA," says President and CEO Michael Doss.
"Third quarter Adjusted EBITDA of $256 million was up $68 million year over year. The SBS mill and foodservice assets generated $63 million of Adjusted EBITDA. We are driving improved profitability across these new assets by successfully executing on our synergy plans. Our CRB and CUK mill and global converting assets generated $6 million of improvement in the quarter driven by increased pricing and the benefits from tuck-under acquisitions. The improvement was partially offset by commodity input cost inflation, specifically, increased freight, chemicals, wood, purchased external paper, and pulp substitute recycled fiber costs, along with labor and benefits inflation. While our profitability improved during the quarter, we were impacted by continued commodity input cost inflation pressures, with wood fiber, chemicals, and resins accelerating during the quarter, hurricane related costs, and reliability issues at our SBS paperboard mills."
"Pricing improved during the quarter reflecting the benefits of recent pricing initiatives. Importantly, we successfully implemented a second open market price increase this year for our CUK and SBS paperboard during the quarter. We expect the successful open market paperboard price increases we achieved across our CRB, CUK, and SBS paperboard grades over the course of 2018 will drive strong pricing momentum as we turn to 2019. Despite the difficult commodity inflation environment, we are well positioned to generate continued profitability improvement driven by our pricing, new product development, and productivity initiatives."
Net Sales
Net Sales increased 35% to $1,530.0 million in the third quarter of 2018, compared to $1,137.6 million in the prior year period. The $392.4 million increase was driven by $352.7 million of revenue from the SBS mill and foodservice assets, $28.2 million of improved volume/mix related primarily to acquisitions, and $17.6 million of higher pricing. These benefits were partially offset by $6.1 million of unfavorable foreign exchange.
"We are encouraged by our overall progress in the third quarter. Specifically, the integration of the SBS mill and foodservice assets is on track and the pricing to commodity input cost relationship for the CRB and CUK mill and global converting assets turned $6 million positive during the quarter. We announced the Letica Foodservice assets acquisition, which closed on Sept. 30, and will extend our leading position in the growing North America paperboard-based foodservice market. We also invested $30 million to install a curtain coater on our Macon No. 2 CUK paperboard machine, which we expect will add $10 million of annualized EBITDA," says President and CEO Michael Doss.
"Third quarter Adjusted EBITDA of $256 million was up $68 million year over year. The SBS mill and foodservice assets generated $63 million of Adjusted EBITDA. We are driving improved profitability across these new assets by successfully executing on our synergy plans. Our CRB and CUK mill and global converting assets generated $6 million of improvement in the quarter driven by increased pricing and the benefits from tuck-under acquisitions. The improvement was partially offset by commodity input cost inflation, specifically, increased freight, chemicals, wood, purchased external paper, and pulp substitute recycled fiber costs, along with labor and benefits inflation. While our profitability improved during the quarter, we were impacted by continued commodity input cost inflation pressures, with wood fiber, chemicals, and resins accelerating during the quarter, hurricane related costs, and reliability issues at our SBS paperboard mills."
"Pricing improved during the quarter reflecting the benefits of recent pricing initiatives. Importantly, we successfully implemented a second open market price increase this year for our CUK and SBS paperboard during the quarter. We expect the successful open market paperboard price increases we achieved across our CRB, CUK, and SBS paperboard grades over the course of 2018 will drive strong pricing momentum as we turn to 2019. Despite the difficult commodity inflation environment, we are well positioned to generate continued profitability improvement driven by our pricing, new product development, and productivity initiatives."
Net Sales
Net Sales increased 35% to $1,530.0 million in the third quarter of 2018, compared to $1,137.6 million in the prior year period. The $392.4 million increase was driven by $352.7 million of revenue from the SBS mill and foodservice assets, $28.2 million of improved volume/mix related primarily to acquisitions, and $17.6 million of higher pricing. These benefits were partially offset by $6.1 million of unfavorable foreign exchange.
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