Graphic Packaging Holding Company Reports Third Quarter 2021 Results
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Graphic Packaging Holding Company (NYSE: GPK), (the "Company"), a leading provider of sustainable fiber-based consumer packaging solutions to food, beverage, foodservice, and other consumer products companies, reported Net Income for third quarter 2021 of $73 million, or $0.24 per share, based upon 309 million weighted average diluted shares. This compares to third quarter 2020 Net Income of $64 million, or $0.23 per share, based upon 278 million weighted average diluted shares.
The third quarters of 2021 and 2020 were negatively impacted by a net $32 million and a net $8 million of special charges, respectively. The charges are detailed in the Reconciliation of Non-GAAP Financial Measures table attached. When adjusting for charges, Adjusted Net Income for the third quarter of 2021 was $105 million, or $0.34 per diluted share. This compares to third quarter 2020 Adjusted Net Income of $72 million, or $0.26 per diluted share.
Michael Doss, the Company's President and CEO said, "Demand for sustainable and circular packaging solutions is accelerating globally and we are proud to be the fiber-based consumer packaging provider driving ongoing innovation and meeting the call for more sustainable packaging alternatives. We experienced strong demand trends once again during the third quarter and backlogs remain elevated. Supply chain and labor market constraints impacted our ability to meet customer demand in the quarter, and as a result, we experienced approximately $25 million in delayed sales. Our teams worked tirelessly to minimize the impacts of the challenging supply environment and I am pleased with our overall performance. The Foodservice business continued to recover, with sales improving 11% year over year, while Food, Beverage and Consumer grew 3%. Commodity input cost inflation accelerated during the quarter and, as such, we have been executing multiple price actions to offset the inflation we have encountered this year."
Doss added, "We have received all of the necessary regulatory approvals for our previously announced AR Packaging acquisition, which we expect will close on November 1st. At the same time, our transformational CRB optimization project is on track, with coated recycled paperboard production to begin on our new K2 machine in Kalamazoo, Michigan in the 4th quarter. Completion of these two large, transformational investments extends our industry leadership through increased global reach and market expansion, advanced innovation capabilities and a strengthened competitive position across all three paperboard substrates. Growth and returns from the successful execution of these investments coupled with continued strong demand for fiber-based packaging, provide us confidence in next year's projected Adjusted EBITDA of at least $1.4 billion and the resulting cash flow growth which will allow us to quickly deleverage following the successful close of the AR Packaging transaction."
