KapStone Paper and Packaging Corporation's consolidated net sales of $777 million in the 4Q 2016 were $13 million higher than 2015, reflecting higher volumes in the paper and packaging segment as 724,000 tons of paper were shipped during the 4Q 2016 compared to 658,000 tons a year earlier.
Operating income of $38 million for the 4Q 2016 increased by $9 million, or 30%, compared to the 4Q 2015. Financial performance in the current quarter improved mainly due to higher sales volumes, lower planned maintenance costs, lower compensation and benefit costs and a reduction in the fair value of the contingent consideration for the Victory Packaging acquisition. These factors were partially offset by lower selling prices, the impact of Hurricane Matthew and a non-cash charge for withdrawing from a multiemployer pension plan.
Consolidated net sales for the FY 2016, were $3,077 million, an increase of 10%, compared to 2015 sales of $2,789 million. The increase was due to twelve months of Victory Packaging results in 2016 compared to seven months in 2015, partially offset by lower selling prices and a less favorable product mix.
Operating income of $171 million for the year ended December 31, 2016 was lower than 2015's $199 million by 14%. The decrease was due to lower selling prices, a less favorable product mix, higher depreciation charges, the impact of Hurricane Matthew and a non-cash charge for withdrawing from a multiemployer pension plan. These factors were partially offset by twelve months of operating results for Victory Packaging and related synergies with KapStone's mill and plant system, the cost associated with the 2015 Longview mill work stoppage, lower incentive compensation due to lower earnings and lower benefit costs.
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.
