KapStone Paper and Packaging Corporation’s consolidated net sales of $766 million in the 1Q 2017 increased by $28 million, or 4% compared to $738 million for the 1Q 2016. The increase is primarily due to a better product mix, higher containerboard prices and higher sales volume, as the company says in the press release received by Lesprom Network.
Operating income of $20 million for the 1Q 2017 decreased by $14 million, or 42%, compared to the 1Q 2016.
The lower operating earnings primarily reflect higher fiber costs due to the rapid increase in OCC costs over the last six months.
Matt Kaplan, President and CEO, stated, "While 1Q results were disappointing, we are experiencing exceptional positive momentum. Demand for containerboard, corrugated boxes, and kraft paper is strong. Pricing across our important product lines is rapidly increasing. Our product mix has improved as domestic containerboard and box sales have increased while exports have declined.
"Victory Packaging, our distribution business, had a solid first quarter and is entering its seasonally strong portion of the year. Our operations, after a slow start in January and February, are improving. All of these factors combined contributed to a strong March which accounted for about 45% of our adjusted quarterly EBITDA and point to an improved 2Q and a strong back half of 2017."
KapStone Paper and Packaging Corporation is the fifth largest producer of containerboard and corrugated packaging products and is the largest kraft paper producer in the United States. The Company has four paper mills, 24 converting plants and over 60 distribution centers.
