Packaging Corporation of America (NYSE:PKG) Q1 2024 Earnings Call Transcript April 23, 2024 9:00 AM ET
Company Participants
Mark Kowlzan - Chairman and CEO
Tom Hassfurther - EVP, Corrugated Products
Bob Mundy - CFO
Conference Call Participants
George Staphos - Bank of America Securities
Nicco Piccini - Truist
Mark Weintraub - Seaport Research Partners
Gabe Hajde - Wells Fargo
Anthony Pettinari - Citi
Philip Ng - Jefferies LLC
Ryan Fox - Bloomberg
Operator
Good morning, everyone, and thank you for joining Packaging Corporation of America's First Quarter 2024 Earnings Results Conference Call. Your host today will be Mark Kowlzan, Chairman, Chief Executive Officer of PCA. Upon conclusion of his narrative, there will be a question-and-answer session. And please also note today's event is being recorded.
At this time, I'd like to turn the floor over to Mr. Kowlzan. Please proceed when you are ready.
Mark Kowlzan
Thank you, Jamie. Good morning, everyone, and thank you for participating in Packaging Corporation of America's first quarter 2024 earnings release conference call. Again, I'm Mark Kowlzan, Chairman and CEO of Packaging Corporation of America. And with me on the call today is Tom Hassfurther, Executive Vice President who runs the Packaging business, and Bob Mundy, our Chief Financial Officer.
I'll begin the call with an overview of our first quarter results, and then I'll be turning it over to Tom and Bob, who will provide further details. And then I'll wrap things up and we'd be glad to take questions.
Yesterday, we reported first quarter net income of $147 million or $1.63 per share. Excluding special items, first quarter 2024 net income was $155 million or $1.72 per share compared to the first quarter of 2023's net income of $198 million or $2.20 per share. Our first quarter net sales were $2 billion in 2024 and 2023. Total company EBITDA for the first quarter, excluding special items, was $333 million in 2024 and $405 million in 2023.
First quarter net income included special items expenses of $0.09 per share, primarily for certain costs at our Jackson, Alabama mill for the paper to containerboard conversion-related activities. Details of special items for both the first quarter of 2024 and 2023 were included in the schedules that accompanied our earnings press release. Excluding the special items, the $0.48 per share decrease in first quarter 2024 earnings compared to the first quarter of 2023 was driven primarily by lower prices and mix in the Packaging segment for $1.33, and Paper segment $0.08, higher scheduled mill outage expense $0.10, higher depreciation $0.03, higher expenses related to corrugated plant capital projects of $0.02 and other expenses $0.04. These items were partially offset by higher volumes in the Packaging segment for $0.71, and Paper segment $0.06. We also had lower operating and converting costs of $0.15 driven by very good process efficiencies and control over other usages of fiber, chemicals, energy, materials and labor. Although energy prices were lower versus last year's first quarter, they were more than offset by higher recycled fiber prices. In addition, we had lower freight and logistics expenses for $0.04, lower interest expense $0.07 and lower tax rate $0.09. The results were $0.18 above the first quarter guidance of $1.54 per share, primarily due to the strong volume in both the Packaging and Paper segments, along with the continued emphasis on cost management and process efficiencies across our manufacturing and converting facilities. This drove operating and converting costs lower even with the persistent inflation we continue to experience across most of the cost structure. Executing the conversion outage at our Jackson, Alabama mill better than planned resulted in lower scheduled mill maintenance outages, expenses and freight and logistics expenses were less than guidance as well.