Packaging Corporation of America's (PKG) CEO Mark Kowlzan on Q2 2022 Results - Earnings Call Transcript

Packaging Corporation of America (NYSE:PKG) Q2 2022 Earnings Conference Call July 26, 2022 9:00 AM ET

Company Participants

Mark Kowlzan – Chairman and Chief Executive Officer

Tom Hassfurther – Executive Vice President, Corrugated Products

Bob Mundy – Chief Financial Officer

Conference Call Participants

George Staphos – Bank of America Securities

Mike Roxland – Truist

Mark Wilde – Bank of Montreal

Mark Weintraub – Seaport Research Partners

Adam Josephson – KeyBanc Capital Markets

Phillip Ng – Jefferies

Gabe Hajde – Wells Fargo

John Tumazos – John Tumazos Very Independent Research

Cleve Rueckert – UBS

Kyle White – Deutsche Bank

Operator

Thank you for joining the Packaging Corporation of America's Second Quarter 2022 Earnings Results Conference Call. Your host today will be Mark Kowlzan, Chairman and Chief Executive Officer of PCA. Upon conclusion of his narrative, there will be a Q&A session.

I will now turn the conference over to Mr. Kowlzan. Please proceed when you are ready.

Mark Kowlzan

Good morning, and thank you for participating in Packaging Corporation of America's second quarter 2022 earnings release conference call. I'm Mark Kowlzan, Chairman and CEO of PCA. And with me on the call today is Tom Hassfurther, the Executive Vice President, who runs our Packaging Business; and Bob Mundy, our Chief Financial Officer. I'll begin the call with an overview of our second quarter results, and then I'll be turning the call over to Tom and Bob, who will provide more details. I'll then wrap things up, and then we'd be glad to take questions.

Yesterday, we reported second quarter net income of $301 million or $3.20 per share. Second quarter net income included special items expenses of $0.02 per share, primarily for certain costs at the Jackson, Alabama mill for paper to containerboard conversion-related activities. The details of the special items for both the second quarter of 2022 and 2021 were included in the schedules that accompanied their earnings press release. Excluding special items, second quarter 2022 net income was $304 million, or $3.23 per share, compared to the second quarter 2021 net income of $207 million, or $2.17 per share.

Second quarter net sales were $2.2 billion in 2022 and $1.9 billion in 2021. Total company EBITDA for the second quarter, excluding the special items, was $533 million in 2022 and $397 million in 2021. Excluding the special items, the $1.06 per share increase in second quarter of 2022 earnings compared to the second quarter of 2021 was driven primarily by higher prices and mix of $2.04 and volume, $0.12 in the Packaging segment, and higher prices and mix in the Paper segment of $0.18. Scheduled outage expenses were favorable by $0.08 per share.