Packaging

Smurfit-Stone Reports First Quarter 2011 Results

Wednesday 27. April 2011 - Smurfit-Stone Container Corporation (NYSE: SSCC) today reported net income of $54 million, or $0.54 per diluted share, for the first quarter ended March 31, 2011, compared with net income of $49 million, or $0.49 per diluted share, for the fourth quarter of 2010, and a net loss attributable to common stockholders of ($91) million, or ($0.35) per diluted share, for the first quarter of 2010.

Smurfit-Stone’s first quarter 2011 adjusted net income was $43 million, or $0.43 per diluted share, compared to adjusted net income of $62 million, or $0.62 per diluted share, in the fourth quarter of 2010, and an adjusted net loss of ($59) million, or ($0.23) per diluted share, in the first quarter of 2010. The primary adjustment in the first quarter of 2011 was the exclusion of the cellulosic biofuel production income tax credit recognized in the quarter. The major adjustments in the first and fourth quarters of 2010 were the exclusion of costs or income related to reorganization and restructuring. The first quarter of 2010 was also adjusted to exclude the alternative fuel mixture tax credit recognized in that quarter.
Diluted Earnings Per Share Attributable to Common Stockholders











First

Fourth

First



Quarter

Quarter

Quarter



2011

2010

2010

Net Income (Loss) Attributable to






Common Stockholders
$ 0.54

$ 0.49

$ (0.35)









Adjustments

$ (0.11)

$ 0.13

$ 0.12









Adjusted Net Income (loss)
$ 0.43

$ 0.62

$ (0.23)









Weighted Average Shares (MM)
101

100

258

The Company reported operating income of $92 million for the first quarter of 2011, compared to operating income of $103 million in the fourth quarter of 2010, and an operating loss of $31 million in the first quarter of 2010. Adjusted EBITDA for the first quarter of 2011 was $179 million, down from $205 million in the fourth quarter of 2010, and up from $46 million in the first quarter of 2010. The sequential decline in earnings was the result of the moderate improvement in pricing and lower scheduled maintenance downtime costs being more than offset by cost inflation primarily related to fuels, higher seasonal energy usage, and the impact of benefit cost timing in the quarter.
Net sales for the first quarter of 2011 were $1.58 billion, down slightly from $1.63 billion in the fourth quarter of 2010 and up 8 percent compared with sales of $1.46 billion in the first quarter of 2010. The sequential decline in sales in first quarter 2011 reflects modestly higher selling prices, more than offset by seasonally lower volumes.
First Quarter Highlights
The Company achieved solid financial results in line with its expectations despite the impacts of cost inflation for freight, energy, and fiber.
Total debt was $1.17 billion at March 31, 2011, representing 1.6x LTM adjusted EBITDA or 1.0x on a net debt basis.
The Company maintained a strong liquidity position of just under $1 billion including $446 million of cash at March 31, 2011.
Outlook
Smurfit-Stone expects sequentially lower earnings in the second quarter as operating efficiencies and seasonal volume improvements will be more than offset by continued cost inflation and higher maintenance downtime costs.