Graphic Packaging, a provider of packaging solutions to food, beverage and consumer product companies, reported Net Income for fourth quarter 2017 of $173.9m, or $0.56 per share, based upon 311.2 million weighted average diluted shares.
This compares to fourth quarter 2016 Net Income of $34.9 million, or $0.11 per share, based on 317.9 million weighted average diluted shares.
Fourth quarter 2017 Net Income was negatively impacted by $14.9 million (net of a $7.6 million tax benefit) of business combinations and other special charges and accelerated depreciation related to the shutdown of the Santa Clara, California mill, and positively impacted by a $136.0 million benefit related to the Tax Cuts and Jobs Act of 2017. When adjusting for these charges, Adjusted Net Income for the fourth quarter of 2017 was $52.8 million, or $0.17 per diluted share. This compares to fourth quarter 2016 Adjusted Net Income of $44.7 million or $0.14 per diluted share.
For the full year 2017, Net Income was $300.2 million, or $0.96 per share, based upon 311.9 million weighted average diluted shares. This compares to 2016 Net Income of $228.0 million, or $0.71 per share, based on 321.5 million weighted average diluted shares.
Full year 2017 Net Income was negatively impacted by $32.5 million (net of a $16.0 million tax benefit) of business combinations and other special charges and accelerated depreciation related to the shutdown of the Santa Clara, California mill, and positively impacted by the $136.0 million tax benefit recorded in the fourth quarter 2017. When adjusting for these charges, Adjusted Net Income for the full year 2017 was $196.7 million, or $0.63 per diluted share. This compares to full year 2016 Adjusted Net Income of $233.4 million or $0.73 per diluted share.
"Fourth quarter Adjusted EBITDA met our expectations at $192 million compared to $175 million in the prior year period. Net tons sold were up 1.9%, driven by acquisitions and the continuation of modestly positive core volume. The business operated well in the quarter reflecting a continued emphasis on production efficiencies and cost reductions generating $24 million in performance improvements," said President and CEO Michael Doss. "While recycled fiber input costs moderated significantly during the quarter, we incurred escalating logistics and chemicals input costs. We remain focused on offsetting our commodity input cost inflation with pricing initiatives, consistent with our long term track record."
"We completed the Norgraft acquisition on October 4, 2017 and the Seydaco acquisition on December 1, 2017. We also closed our Santa Clara, California coated recycled paperboard mill as planned on December 1, 2017. This action was enabled by strategic capital investments at our Midwest coated recycled paperboard mills, as well as our Louisiana and Georgia coated unbleached kraft paperboard mills. We have successfully integrated these mills into our West Coast supply chain. We announced the transformative combination with International Paper's North America Consumer Packaging business on October 24, 2017 and closed the transaction on January 1, 2018, reflecting the significant effort of all those involved. Looking ahead, we are well positioned to leverage the investments we made in 2017 and our enhanced mill and converting footprint to deliver significant value to all our stakeholders."