Kapstone (KS) Misses on Top and Bottom Line

Kapstone (NYSE: KS) reported Q4 EPS of $0.17, $0.19 worse than the analyst estimate of $0.36. Revenue for the quarter came in at $764 million versus the consensus estimate of $773.38 million.

Roger W. Stone, Chairman and Chief Executive Officer, stated, "2015 was another transformational year for KapStone with the successful integration of Victory Packaging, and we are right on target for achieving our synergies. Our corrugated products volume grew over three percent year-over-year. However, the year also provided many challenges for us, including the impact of a stronger U.S. dollar resulting in lower export containerboard and extensible grade paper prices with increased competition in certain export markets.

"Fourth quarter 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 fourth quarter 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.

"KapStone's strength continues to be its operating free cash flows which generated $54 million in the fourth quarter despite economic and operational challenges. The strong cash flows were used to make a $52 million debt prepayment."

For earnings history and earnings-related data on Kapstone (KS) click here.

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