“The WestRock team executed well and delivered strong financial results for both the fourth quarter and the fiscal year,” says CEO Steve Voorhees. “As we move forward into fiscal year 2020, we remain focused on organic growth, including partnering with our customers to develop fiber-based packaging solutions that help them meet their sustainability goals. With uncertain macro-economic conditions, we are acting to deliver on our productivity and cash flow generation goals.”
Net sales increased $415 million compared to the prior year quarter, primarily due to the acquisition of KapStone Paper and Packaging Corp. The KapStone acquisition-related increase in sales was partially offset by lower corrugated volumes and prices. The increase in net sales was also partially offset by the absence of $106 million of recycling net sales compared to the prior year quarter since the Company transitioned recycling to a procurement function and ceased recording recycling net sales at the beginning of fiscal 2019. Consumer Packaging segment net sales were lower by $41 million, primarily due to lower volumes and unfavorable foreign currency impacts.
Segment income increased $72 million compared to the prior year quarter, primarily due to $64 million of increased Corrugated Packaging segment income. Consumer Packaging segment income increased $5 million. The increase in consolidated segment income was primarily due to insurance proceeds related to the receipt of Hurricane Michael that were primarily associated with the Panama City, FL, mill, the contribution from the acquired KapStone operations, productivity improvements and cost deflation. This was partially offset by lower selling price/mix and volumes.
During the Q4 of FY 2019, the Company announced a plan to reconfigure the North Charleston, SC, mill. The Company expects to shut down one paper machine in fiscal 2020 and reduce linerboard capacity by approximately 288,000 tons. After this shutdown, the mill will focus on manufacturing differentiated DuraSorb® and KraftPak® products.