WestRock(US:WRK)2022-05-06 18:35Financial Performance - Net sales for Q2 fiscal 2022 were $5,382.1 million, an increase of $944.3 million or 21.3% compared to Q2 fiscal 2021[130] - Consolidated Adjusted EBITDA for Q2 fiscal 2022 was $853.9 million, up $213.4 million or 33.3% from $640.5 million in Q2 fiscal 2021[133] - Net income attributable to common stockholders for Q2 fiscal 2022 was $39.9 million, a decrease of $72.6 million or 64.5% compared to Q2 fiscal 2021[132] - Net cash provided by operating activities for the six months ended March 31, 2022, was $642.7 million, down from $851.6 million in the prior year[135] - Adjusted Earnings Per Diluted Share for Q1 2022 was $1.17, compared to $0.54 in Q1 2021, reflecting a significant increase of 117.0% year-over-year[241] - Consolidated Adjusted EBITDA for the six months ended March 31, 2022, was $1,534.2 million, up from $1,310.3 million for the same period in 2021, representing an increase of 17.1%[245] - Net income attributable to common stockholders for Q1 2022 was $222.2 million, compared to $112.5 million in Q1 2021, indicating a year-over-year growth of 97.7%[245] Restructuring and Costs - The company recorded pre-tax restructuring and other costs of $363.4 million in Q2 fiscal 2022, primarily due to the closure of the Panama City, FL mill[131] - The company reported restructuring and other costs of $363.4 million for Q1 2022, compared to $5.2 million in Q1 2021, highlighting a substantial increase in restructuring expenses[245] - The company anticipates future restructuring charges related to the closure of the Panama City mill, primarily for carrying costs and contract terminations[131] - The company expects to record future restructuring charges associated with the closure of its Panama City, FL mill, primarily related to carrying costs and contract terminations[247] Sales and Revenue Segments - Corrugated Packaging segment net sales increased by $296.6 million in Q2 FY2022 compared to the prior year, driven by $274.0 million from higher selling price/mix and $13.0 million from higher volumes[174] - Consumer Packaging segment net sales rose by $170.0 million in Q2 FY2022, primarily due to $116.6 million from higher selling price/mix and $96.6 million from higher volumes[182] - Paper segment net sales increased by $407.5 million in Q2 FY2022, mainly due to $311.2 million from higher selling price/mix and $130.7 million from higher volumes[190] - For the six months ended March 31, 2022, Corrugated Packaging segment net sales increased by $497.1 million, with $550.4 million from higher selling price/mix partially offset by $64.7 million from lower volumes[175] - Consumer Packaging segment net sales for the six months ended March 31, 2022, increased by $246.2 million, primarily due to $176.2 million from higher selling price/mix[183] - Paper segment net sales for the six months ended March 31, 2022, increased by $669.2 million, mainly due to $557.4 million from higher selling price/mix[191] Costs and Expenses - Cost of goods sold for the second quarter of fiscal 2022 rose by $690.2 million, or 18.9%, compared to the prior year quarter, driven by cost inflation and higher volumes[152] - Selling, general and administrative expenses (SG&A) excluding intangible amortization increased by $34.7 million in the second quarter of fiscal 2022, primarily due to increased compensation and benefits[155] - The company experienced significant cost inflation, with the Corrugated Packaging segment facing $429.7 million and the Consumer Packaging segment facing $169.0 million in increased costs for the six months ended March 31, 2022[177][186] Cash Flow and Debt - Cash and cash equivalents were $360.2 million at March 31, 2022, up from $290.9 million at September 30, 2021, with approximately 75% held outside the U.S.[204] - Total debt increased to $8,374.0 million at March 31, 2022, from $8,194.1 million at September 30, 2021, primarily due to capital expenditures and capital returned to stockholders exceeding net cash provided by operating activities[204] - Net cash provided by operating activities for the six months ended March 31, 2022, was $642.7 million, a decrease of $208.9 million compared to the prior year, primarily due to higher working capital usage[212] - The company had approximately $3.2 billion of availability under long-term committed credit facilities and cash and cash equivalents as of March 31, 2022[205] Future Expectations - The company expects higher sequential earnings in Q3 fiscal 2022, driven by previously published price increases that will offset inflation costs[136] - The company expects to incur capital expenditures of approximately $900 million to $1.0 billion in fiscal 2022, focusing on safety, environmental, and maintenance projects while supporting productivity and growth[248] - The company anticipates higher inflation costs sequentially driven by increased energy, freight, and labor costs, with fiber costs remaining roughly flat[248] - The company expects to recover substantially all remaining ransomware losses from cyber and business interruption insurance in future periods[247] - The company expects its fiscal 2022 cash tax rate to be slightly lower than its income tax rate, with future potential reductions of U.S. federal, state, and foreign cash taxes aggregating approximately $59 million[219] Tax and Pension - The effective tax rate for the three months ended March 31, 2022 was 4.2%, significantly lower than 21.0% for the same period in 2021, due to the impact of research and development tax credits[169] - The company expects to contribute approximately $22 million to its U.S. and non-U.S. pension plans in fiscal 2022[221] - As of March 31, 2022, the company recorded withdrawal liabilities of $232.2 million, down from $247.1 million at the end of fiscal 2021, primarily due to an increase in interest rates[223]