Graphic Packaging(US:GPK)2025-11-04 21:54Financial Performance - Net Sales for Q3 2025 decreased by $26 million, or 1%, to $2,190 million from $2,216 million in Q3 2024, primarily due to lower pricing and volumes in the Americas [138]. - Income from Operations for Q3 2025 decreased by $44 million, or 16%, to $234 million from $278 million in Q3 2024, attributed to lower packaging prices and commodity inflation [139]. - Net Income for Q3 2025 was $142 million, compared to $165 million in Q3 2024, reflecting a decrease of $23 million [137]. - For the first nine months of 2025, Net Sales decreased by $198 million, or 3%, to $6,514 million from $6,712 million in the same period of 2024, impacted by the Augusta Divestiture and reduced paperboard volumes [143]. - Income from Operations for the first nine months of 2025 decreased by $232 million, or 26%, to $648 million from $880 million in the same period of 2024, due to the Augusta Divestiture and commodity inflation [144]. - Total net sales for the third quarter of 2025 were $2,190 million, a decrease of 1.2% compared to $2,216 million in the same period of 2024 [153]. - Income from operations for the third quarter of 2025 was $234 million, down 15.8% from $278 million in the third quarter of 2024 [153]. - The company reported net income of $315 million for the first nine months of 2025, with net sales amounting to $4,994 million [170]. Cash Flow and Investments - For the first nine months of 2025, net cash provided by operating activities was $320 million, a decrease from $351 million in the same period of 2024 [164]. - Net cash used in investing activities for the first nine months of 2025 totaled $736 million, significantly higher than $102 million in the same period of 2024 [165]. - Capital spending for the first nine months of 2025 was $808 million, driven by the construction of a new recycled paperboard manufacturing facility in Waco, Texas [165]. - The company completed a $100 million tax-exempt green bond transaction in May 2025, with net proceeds of $99 million used for facility construction [166]. Debt and Interest Expenses - Interest Expense, Net for Q3 2025 was $53 million, down from $58 million in Q3 2024, primarily due to increased capitalized interest related to the Waco project [140]. - Interest Expense, Net for the first nine months of 2025 was $157 million, compared to $177 million in the same period of 2024, also due to increased capitalized interest [145]. - As of September 30, 2025, the Company maintained a maximum Consolidated Total Leverage Ratio of 3.76 to 1.00, compliant with the covenant limit of less than 4.25 to 1.00 [181]. - The Company reported a minimum Consolidated Interest Expense Ratio of 6.93 to 1.00 as of September 30, 2025, exceeding the required minimum of 3.00 to 1.00 [182]. - The Company had active interest rate swap agreements with a combined notional amount of $500 million, expiring on May 1, 2027, to manage interest rate risk [190]. Operational Highlights - Innovation sales growth contributed $52 million in Q3 2025, driven by sustainable consumer packaging solutions [138]. - The Company is focusing on developing innovative packaging products and expanding market share while reducing costs through operational improvements [135]. - The company experienced a decrease in income from operations due to lower pricing and higher commodity costs, partially offset by cost savings and productivity improvements [155]. - Net sales in the Americas Paperboard Packaging segment decreased due to lower pricing and packaging sales, while the International Paperboard Packaging segment saw an increase driven by innovation and higher volumes [154][156]. Receivables and Payables - Receivables sold and derecognized for the nine months ended September 30, 2025, were $2,725 million, compared to $2,687 million in 2024, representing an increase of 1.4% [176]. - The Company sold receivables related to supply chain financing arrangements amounting to $828 million for the nine months ended September 30, 2025, up from $793 million in 2024, reflecting a growth of 4.4% [177]. - Fees associated with the sale of receivables for the nine months ended September 30, 2025, were $43 million, down from $49 million in 2024, indicating a decrease of 12.2% [178]. - Accounts Payable included $32 million to suppliers participating in the supplier finance program as of September 30, 2025, compared to $30 million at December 31, 2024 [179]. - The deferred purchase price at September 30, 2025, was $47 million, an increase from $35 million in 2024 [176]. - Pledged receivables at September 30, 2025, were $140 million, down from $171 million in 2024, indicating a decrease of 18.1% [176]. Asset Valuation - The Europe reporting unit's fair value exceeded its carrying value by 24%, with goodwill totaling $534 million as of September 30, 2025 [187].