PCA(US:PKG)2025-07-24 14:00Financial Data and Key Metrics Changes - The company reported a second quarter net income of $242 million or $2.67 per share, an increase from $199 million or $2.20 per share in 2024 [3] - Excluding special items, net income was $224 million or $2.48 per share compared to $199 million or $2.20 per share in 2024, reflecting a year-over-year increase [3][4] - Second quarter net sales were $2.2 billion in 2025, up from $2.1 billion in 2024 [3] - Total company EBITDA for the second quarter, excluding special items, was $451 million in 2025 compared to $400 million in 2024 [3][4] Business Line Data and Key Metrics Changes - In the Packaging segment, EBITDA excluding special items was $453 million with sales of $2 billion, resulting in a margin of 22.6%, compared to last year's EBITDA of $400 million and sales of $1.9 billion or 21% [4] - The Paper segment reported EBITDA excluding special items of $30 million with sales of $146 million, yielding a margin of 20.8%, compared to $31 million and $150 million in sales in 2024 [11] Market Data and Key Metrics Changes - Domestic containerboard and corrugated products prices and mix were $0.95 per share above 2024, with export containerboard prices up $0.03 per share versus last year's second quarter [7] - Shipments per day in corrugated products plants were up 1.7% compared to last year's strong second quarter [7] Company Strategy and Development Direction - The company announced an agreement to acquire the Greif containerboard business, which is expected to provide a strong growth platform for both containerboard and corrugated products [6] - The acquisition is targeted for completion by the end of the third quarter, subject to regulatory approval [6] Management's Comments on Operating Environment and Future Outlook - Management noted that while corrugated customers remained cautious, there has been steady improvement in bookings and shipments as July progressed [14] - The company expects higher corrugated shipments and containerboard production in the third quarter, despite lower export containerboard sales due to the global trade environment [14][15] - Management anticipates third quarter earnings of $2.80 per share excluding special items, with operating costs near second quarter levels and slightly lower fiber costs [15] Other Important Information - Cash provided by operations was $300 million in the quarter, with free cash flow of $130 million [13] - The company has a quarter-end cash balance, including marketable securities, of $956 million, with liquidity of approximately $1.3 billion [13] Q&A Session Summary Question: Can you discuss bookings and billings to start the new quarter? - Bookings are trending at 2% over Q2 2024, with a good start compared to the previous year [21] Question: What was behind the better performance in operations? - The company operated at approximately 99% uptime performance, executing efficiently despite some smaller machines being down [22][23] Question: Can you clarify the revenue per ton and EBITDA per ton increases? - The increases were primarily due to price increases rather than mix, with export sales contributing to revenue and EBITDA [25][26] Question: What is the outlook for box shipments and containerboard production? - Box shipments are expected to be flat year-over-year, with containerboard production down by 25,000 to 30,000 tons compared to last year [92] Question: How will the Greif acquisition impact capital expenditures? - The acquisition will avoid significant capital expenditures, as the company can utilize existing facilities instead of building new ones [39] Question: What is the expected recycled mix before and after the Greif acquisition? - The recycled mix is expected to increase from around 20% to approximately 30% post-acquisition [82] Question: How has the company been impacted by recent industry closures? - The company has not seen significant changes in business due to closures, as the market for containerboard remains limited [86]