Operating income of $29 million for the 4Q 2015 decreased by $33 million, or 54%, compared to the 4Q 2014.
The Company sold 658,000 tons of paper during the 4Q 2015 compared to 687,000 tons a year earlier.
Roger W. Stone, Chairman and CEO, stated, "4Q was particularly disappointing due primarily to December's results. Seasonally weaker demand resulted in an eight-day market shutdown at our Longview mill and box plant, and product mix deteriorated. Our results were further negatively impacted by poor start-ups after Longview's outage and at Charleston after completion of a machine upgrade. Together, the market and maintenance downtimes resulted in a loss of 41,000 tons in the 4Q with an estimated EBITDA impact of $10 to $12 million. Although operationally our Charleston mill weathered the 1,000-year storm very well, fiber prices in the region soared but are expected to gradually be reduced as the region dries out.”
Consolidated net sales for the year ended December 31, 2015, were $2,789 million, an increase of 21%, compared to 2014 sales of $2,301 million.
Operating income of $199 million for the year ended December 31, 2015 was lower than 2014's $300 million by 34%. The decrease was due to lower selling prices, a less favorable product mix, a stronger U.S. dollar, lower productivity, inflation on compensation and benefits and fiber prices, and higher depreciation charges partially offset by seven months of operating results for Victory Packaging and related synergies with KapStone's mill and plant system, and lower incentive compensation.
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.
