Packaging

Graphic Packaging Holding Company Announces 47.0 Million Share Common Stock Offering, Acquisition of Sierra Pacific Packaging, and Preliminary First Quarter Results

Monday 11. April 2011 - Graphic Packaging Holding Company ("Graphic Packaging") (NYSE: GPK) today announced the commencement of a 47.0 million share public offering of its common stock, to be underwritten by Goldman, Sachs & Co., BofA Merrill Lynch, J.P. Morgan and Deutsche Bank Securities as joint book-running managers, and Robert W. Baird & Co. and Oppenheimer & Co. Inc. as co-managers.

Graphic Packaging intends to grant the underwriters a 30-day option to purchase up to an additional 15% of the shares sold to cover over-allotments, if any.
Graphic Packaging intends to use the net proceeds from the offering to repurchase 6.5 million shares of common stock held by the Grover C. Coors Trust, or 7.475 million shares if the underwriters exercise their option to purchase additional shares of our common stock in full. Additionally, Graphic Packaging intends to use approximately $53.5 million of the proceeds from the offering to acquire substantially all of the assets of Sierra Pacific Packaging, Inc., a producer of folding cartons, beverage carriers and corrugated boxes for the consumer packaged goods industry. The Company will use any remaining net proceeds to reduce its indebtedness and for general corporate purposes.
The shares will be issued pursuant to a prospectus supplement filed as part of an existing shelf registration statement filed with the Securities and Exchange Commission (the “SEC”) on Form S-3 (File No. 333-166324).
This announcement shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any offer or sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification of these securities under the securities laws of any such jurisdiction.
Graphic Packaging has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement, including any prospectus supplement, and other documents Graphic Packaging has filed with the SEC for more complete information about Graphic Packaging and this offering. You may get these documents for free by visiting EDGAR on the SEC Web Site at www.sec.gov. Alternatively, Graphic Packaging, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you contact any of the following:
Goldman, Sachs & Co., Attention: Prospectus Department, 200 West Street, New York, NY 10282, telephone: 866-471-2526, facsimile: 212-902-9316 or by email: prospectus-ny@ny.email.gs.com
BofA Merrill Lynch, 4 World Financial Center, New York, NY 10080, Attn: Prospectus Department or email: dg.prospectus_requests@baml.com
J.P. Morgan Securities LLC, Attention: Broadridge Financial Solutions at 1155 Long Island Avenue, Edgewood, New York 11717, or by telephone at 866-803-9204
Deutsche Bank Securities Inc., Attention: Prospectus Department, Harborside Financial Center, 100 Plaza One, Jersey City, New Jersey 07311-3988, telephone: 800-503-4611, email: prospectus.cpdg@db.com
Preliminary First Quarter Results
In addition, Graphic Packaging has announced preliminary first quarter results. For the first quarter 2011, the Company expects to report net sales of $1,000.6 million, down 0.3% from the $1,004.1 million reported in the first quarter of 2010. The decrease was primarily due to a decline in product volumes sold during February as a result of strong storms affecting a large portion of the United States. The storms caused the Company and its customers to close manufacturing facilities as the storms disrupted operations and its customers’ ability to deliver products was curtailed. The Company expects to report net income for the first quarter 2011 of $26.7 million, compared to $6.3 million in the first quarter of 2010. The improvement over the prior year period was due to lower restructuring, interest and tax expenses. Net (loss) income before income tax expense, equity income of unconsolidated entities, interest expense, net, and depreciation and amortization (including noncash pension amortization) (“EBITDA”) for first quarter 2011 is expected to be $142.7 million, an increase from the first quarter 2010 EBITDA but down 1.5% from first quarter 2010 Adjusted EBITDA of $144.8 million, as a result of the volume decrease. The table below sets forth the calculation of the Company’s EBITDA and Adjusted EBITDA for the first quarter of 2010 and the first quarter of 2011. The Company expects to report net cash provided by operating activities of $6.1 million for first quarter 2011 compared to net cash used by operating activities of ($25.2) million in the first quarter of 2010.
Reconciliation of Non-GAAP Financial Measures


Three Months Ended


March 31,

In millions
2011

2010

Net income
$ 26.7

$ 6.3

Add (subtract):




Income tax expense
2.9

8.6

Equity income of unconsolidated entities
(0.3)

(0.3)

Interest expense, net
39.3

45.0

Depreciation and amortization
74.1

76.7

EBITDA
142.7

136.3

Charges associated with combination with Altivity
–

8.5

Adjusted EBITDA
$ 142.7

$ 144.8

The numbers provided above are preliminary and represent the most current information available to management. The Company’s normal quarter-end closing and financial statement preparation process has not yet been completed. As a result, the Company’s actual financial results could be different from the results provided above and the differences could be material.