Core Insights - Atlantic Investment Management, Inc. has completely exited its position in Graphic Packaging, selling all 645,584 shares for an estimated $12.63 million [2][10] - The exit reflects a strategic shift away from Graphic Packaging, which had previously represented 7.3% of the fund's 13F reportable assets under management [8] Company Overview - Graphic Packaging is a leading provider of fiber-based packaging solutions, with a global customer base and a diverse product portfolio [6] - The company focuses on innovation and operational efficiency, leveraging integrated manufacturing capabilities and a broad distribution network [6] Financial Performance - As of February 17, 2026, Graphic Packaging's stock price was $12.37, down 53.2% over the past year, significantly underperforming the S&P 500's approximately 13% gain [8] - In 2025, net sales decreased by 2% to $8.6 billion, while net income fell to $444 million from $658 million the previous year, indicating compressed margins [11] - The company's net leverage increased to 3.8x from 3.0x, despite $935 million in capital expenditures primarily related to its $1.67 billion Waco project [11] Future Outlook - Management is targeting adjusted free cash flow of $700 million to $800 million in 2026, alongside guidance for lower adjusted EBITDA and EPS of $0.75 to $1.15, reflecting operational challenges [12] - The exit by Atlantic Investment Management may indicate a preference for reallocating capital towards businesses with stronger earnings momentum amid rising leverage and shrinking margins [12]

Core Insights - Supremex experienced a significant 77.6% decrease in net earnings for Q4 2025, reporting $1.3 million compared to $5.8 million in Q4 2024 [1] - Quarterly revenue increased by 5.6% year-on-year, reaching $72.9 million [1] - The envelope segment generated $48.9 million in revenue, slightly up from $48.8 million a year earlier, but its contribution to total revenue decreased from 70.6% to 67.1% [1][2] Revenue Breakdown - The envelope segment accounted for 67.1% of total revenue, down from 70.6% [2] - The volume of units sold increased by 5.3%, driven by contributions from Enveloppe Laurentide and Elite Envelope, as well as new contracts and market share gains in the US [2] - Revenue from packaging and specialty products rose to $24 million, an 18.3% increase from $20.3 million in the previous year, making up 32.9% of total revenue compared to 29.4% previously [2] Business Performance - The increase in packaging revenue was attributed to higher folding carton sales, new business wins, and growth with international consumer packaged goods clients, along with the acquisition of Trans-Graphique in July 2025 [3] - Total debt was reduced to $4.1 million at the end of December 2025, down from $43.1 million a year earlier, due to repayments supported by cash flow and proceeds from a sale and leaseback transaction [3] - On February 18, 2026, Supremex extended the maturity of its secured revolving credit facility to July 2028 [3] Annual Overview - For the full year 2025, Supremex reported net earnings of $12 million, reversing the loss from the previous year [4] - Annual revenue was $274.8 million, representing a 2.2% decline from the previous year [4] - The CEO noted sequential revenue and Adjusted EBITDA margin growth for both businesses in Q4 2025 compared to Q3 2025 [4] Market Conditions - The company indicated that the significant headwinds from Canada Post labor disruptions in the first three quarters had diminished, allowing for continued penetration into the US market and improved operational efficiency [5] - Strong performance in folding carton activities and sustained momentum in e-commerce packaging solutions contributed to nearly 20% revenue growth, both sequentially and year-over-year in the packaging and specialty products segment [6]

Company Overview - Graphic Packaging Holding Company is a leading provider of fiber-based packaging solutions, focusing on sustainable and innovative packaging for food, beverage, and consumer goods sectors [6] - The company has a market capitalization of $4.51 billion and reported revenue of $8.61 billion with a net income of $511 million for the trailing twelve months [4] Recent Developments - On January 16, Howard Capital Management Group sold its entire holding of 1,069,223 shares in Graphic Packaging, with an estimated transaction value of $20.92 million [2] - Following this transaction, Graphic Packaging comprised 1.32% of the fund's reportable 13F assets [3] Financial Performance - As of January 16, shares of Graphic Packaging were priced at $15.28, reflecting a decline of 43.51% over the past year, significantly underperforming the S&P 500 by approximately 60 percentage points [3] - In the third quarter, packaging volumes decreased by 2% year over year, with sales slipping 1% to $2.19 billion, and adjusted EBITDA fell 11% year over year due to pricing pressure and cost inflation [7] Market Position and Strategy - Graphic Packaging offers a diverse range of products including coated paperboard, folding cartons, cups, lids, and food containers, and also provides packaging machinery and support services [8] - The company serves a wide array of clients including consumer packaged goods companies, quick-service restaurants, and foodservice providers across multiple regions [8] Operational Challenges - The company is experiencing increased net leverage, which climbed to 3.9 times adjusted EBITDA from 3.0 times at the end of the previous year, attributed to heavy capital spending on long-term projects [9] - The current operational environment shows that consumer demand has stalled, leading to compressed margins and increased balance sheet risk [9]