Exhibit 99.1
FOR FURTHER INFORMATION: | FOR IMMEDIATE RELEASE |
Andrea K. Tarbox | Tuesday, November 1, 2016 |
Vice President and Chief Financial Officer | |
847.239.8812 | |
KAPSTONE REPORTS THIRD QUARTER RESULTS
CASH FLOW FROM OPERATIONS UP OVER 20 PERCENT
NORTHBROOK, IL — November 1, 2016 — KapStone Paper and Packaging Corporation (NYSE:KS) today reported results for the third quarter ended September 30, 2016. As compared to 2015’s third quarter, results for 2016’s third quarter are below:
· Net sales of $777 million down $31 million, or 4 percent
· Net income of $31 million down $3 million, or 9 percent
· Diluted EPS of $0.32 down $0.03 per share, or 9 percent
Non U.S. GAAP financial measures for the 2016 third quarter are as follows:
· Adjusted EBITDA of $108 million down $18 million, or 15 percent
· Adjusted net income of $37 million down $13 million, or 26 percent
· Adjusted diluted EPS of $0.37 down $0.14 per share, or 28 percent
Roger W. Stone, Chairman and Chief Executive Officer, stated, “KapStone’s operations performed well in the third quarter with our mills producing 700,000 tons of paper. Net earnings, however, were lower year-over-year primarily reflecting lower prices and a less favorable product mix. In the third quarter of 2016, we announced price increases on domestic containerboard, corrugated products, and extensible grade export kraft paper. We estimate that these increases should be fully implemented by the end of the first quarter of 2017, providing substantial benefits to KapStone.
“During the third quarter, we made significant progress increasing our future integration between our mills and corrugated operations. Upon attaining the expected run rates, the acquisition of Central Florida Box and additional strategic investments should provide an incremental 85,000 tons of integration over the next eighteen months.
1
“Finally, a very strong operating cash flow of $123 million in the third quarter enabled KapStone to make a $65 million prepayment on our term loans and funded $26 million of strategic investments to increase mill integration.”
Third Quarter Operating Highlights
Consolidated net sales of $777 million in the third quarter of 2016 were $31 million, or 4 percent lower than $808 million for the 2015 third quarter. This decrease was due to $31 million of lower prices and a less favorable mix in the paper and packaging segment. Higher sales volumes in the paper and packaging segment were offset by lower volumes in the distribution segment. The Company’s average mill selling price of $626 per ton in the third quarter of 2016 decreased by $45 per ton, or about 7 percent, compared to the third quarter of 2015 due to index-driven lower domestic containerboard prices, lower export containerboard and kraft paper prices and a less favorable product mix.
Operating income of $55 million for the 2016 third quarter decreased by $7 million, or 11 percent, compared to the 2015 third quarter. The lower operating earnings primarily reflect lower prices for domestic and export containerboard and export kraft paper prices, and a less favorable product mix. These factors were partially offset by lower fiber and fuel costs, lower management incentives, and costs due to the 2015 work stoppage at the Longview mill.
Interest expense, net, was $10 million for the third quarter of 2016, about flat with a year ago. Our weighted average interest rate as of September 30, 2016 was 2.1 percent compared to 1.8 percent as of September 30, 2015.
The effective income tax rate for the 2016 third quarter was 28.9 percent compared to 32.5 percent for the 2015 third quarter. The 2016 third quarter effective income tax rate includes a favorable discrete tax adjustment reflecting higher energy tax credits.
Cash Flow and Working Capital
Cash and cash equivalents increased by $2 million during the 2016 third quarter to $9 million at September 30, 2016. Operating activities provided $123 million during the 2016 third quarter including seasonally improved working capital. Investing activities used $53 million consisting of $27 million of capital expenditures and $26 million of strategic investments. Financing activities used $68 million including a $65 million debt prepayment and $10 million of cash dividends.
On August 17, 2016, our Board of Directors approved a regular $0.10 per share cash dividend which was paid on October 13, 2016.
At September 30, 2016, the Company had approximately $419 million of working capital and $471 million of revolver borrowing capacity.
Conclusion
In summary, Stone commented, “With our strong cash flows, KapStone is in an excellent position to continue growing profitably.”
2
Conference Call
KapStone will host a conference call at 10:00 a.m. CDT, Wednesday, November 2, 2016, to discuss the Company’s financial results for the 2016 third quarter. All interested parties are invited to listen and may do so by either accessing a simultaneous broadcast webcast on KapStone’s website, http://www.kapstonepaper.com, or for those unable to access the webcast, the following dial-in numbers are available:
Domestic: 888-608-7946
International: 484-747-6633
Participant Passcode: 98559078
A presentation to be viewed in conjunction with the call will also be available on our website, http://www.kapstonepaper.com, in the “Investors” section.
Replay of the webcast will be available for 30 days on the Company’s website following the call.
About the Company
Headquartered in Northbrook, IL, KapStone Paper and Packaging Corporation is the fifth largest producer of containerboard and corrugated packaging products and is the largest kraft paper producer in the United States. The Company has four paper mills, 21 converting plants and 60 distribution centers. The business has approximately 6,300 employees.
Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures, including “EBITDA”, “Adjusted EBITDA”, “Adjusted Net Income”, and “Adjusted Diluted EPS” to measure our operating performance. Management uses these measures to focus on the on-going operations, and believes it is useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The Company believes that EBITDA and Adjusted EBITDA provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency to key measures used to evaluate the performance of the Company. Management uses EBITDA and Adjusted EBITDA for evaluating the Company’s performance against competitors and as a primary measure for employees’ incentive programs. Reconciliations of Net Income to EBITDA, EBITDA to Adjusted EBITDA, Net Income to Adjusted Net Income, and Diluted EPS to Adjusted Diluted EPS are included in the financial schedules contained in this press release. However, these measures should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.
Forward-Looking Statements
Statements in this news release that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can often be identified by words such as “may,” “will,” “should,” “would,’ “expect,” “project,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “potential,” “outlook,” or “continue,” the negative of these terms or other similar expressions. These statements reflect management’s current views and are subject to risks, uncertainties and assumptions, many of which are beyond
3
the Company’s control that could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ materially include, but are not limited to: (1) industry conditions; (2) market and economic factors; (3) results of legal proceedings and compliance costs; (4) the ability to achieve and effectively manage growth; (5) the ability to pay the Company’s debt obligations; (6) the ability to carry out the Company’s strategic initiatives and manage associated costs; (7) managing labor relations and (8) realizing the synergies and benefits of the Victory Packaging acquisition and other strategic investments. Further information on these and other risks and uncertainties is provided under Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and elsewhere in reports that the Company files with the SEC. These filings can be found on KapStone’s Web site at http://www.kapstonepaper.com and the SEC’s Web site at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and the Company disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.
4
KapStone Paper and Packaging Corporation
Consolidated Statements of Income
(In thousands, except share and per share amounts)
(Unaudited)
| | Quarter Ended September 30, | | Nine Months Ended September 30, | |
| | 2016 | | 2015 | | 2016 | | 2015 | |
| | | | | | | | | |
Net sales | | $ | 776,636 | | $ | 807,563 | | $ | 2,299,762 | | $ | 2,025,107 | |
| | | | | | | | | |
Cost and expenses: | | | | | | | | | |
Cost of sales, excluding depreciation and amortization | | 548,811 | | 569,267 | | 1,650,919 | | 1,421,943 | |
Depreciation and amortization | | 44,954 | | 42,500 | | 135,528 | | 114,617 | |
Freight and distribution expenses | | 71,750 | | 70,623 | | 207,787 | | 167,941 | |
Selling, general and administrative expenses | | 56,113 | | 63,577 | | 172,407 | | 150,252 | |
Operating income | | 55,008 | | 61,596 | | 133,121 | | 170,354 | |
| | | | | | | | | |
Foreign exchange (loss) | | (543 | ) | (766 | ) | (1,518 | ) | (1,704 | ) |
Loss on debt extinguishment | | 679 | | 628 | | 679 | | 628 | |
Interest expense, net | | 10,148 | | 9,528 | | 29,965 | | 24,456 | |
Income before provision for income taxes | | 43,638 | | 50,674 | | 100,959 | | 143,566 | |
Provision for income taxes | | 12,620 | | 16,468 | | 33,045 | | 49,004 | |
Net income | | $ | 31,018 | | $ | 34,206 | | $ | 67,914 | | $ | 94,562 | |
| | | | | | | | | |
Net income per share: | | | | | | | | | |
Basic | | $ | 0.32 | | $ | 0.36 | | $ | 0.70 | | $ | 0.98 | |
Diluted | | $ | 0.32 | | $ | 0.35 | | $ | 0.70 | | $ | 0.97 | |
| | | | | | | | | |
Weighted-average number of shares outstanding: | | | | | | | | | |
Basic | | 96,581,703 | | 96,310,998 | | 96,499,771 | | 96,235,404 | |
Diluted | | 97,888,469 | | 97,629,641 | | 97,639,370 | | 97,631,247 | |
| | | | | | | | | |
Effective income tax rate | | 28.9 | % | 32.5 | % | 32.7 | % | 34.1 | % |
Supplemental Information
GAAP to Non-GAAP Reconciliations
($ in thousands, except per share amounts)
(unaudited)
| | Quarter Ended September 30, | | Nine Months Ended September 30, | |
| | 2016 | | 2015 | | 2016 | | 2015 | |
Net Income (GAAP) to EBITDA (Non-GAAP) to Adjusted EBITDA (Non-GAAP): | | | | | | | | | |
Net income (GAAP) | | $ | 31,018 | | $ | 34,206 | | $ | 67,914 | | $ | 94,562 | |
Interest expense, net | | 10,148 | | 9,528 | | 29,965 | | 24,456 | |
Provision for income taxes | | 12,620 | | 16,468 | | 33,045 | | 49,004 | |
Depreciation and amortization | | 44,954 | | 42,500 | | 135,528 | | 114,617 | |
EBITDA (Non-GAAP) | | $ | 98,740 | | $ | 102,702 | | $ | 266,452 | | $ | 282,639 | |
| | | | | | | | | |
Victory Packaging inventory step-up expense | | — | | 1,930 | | — | | 5,800 | |
Acquisition, casualty, impairment and other expenses | | 3,944 | | 752 | | 6,485 | | 4,093 | |
Change in fair value of contingent consideration liability | | 1,527 | | 1,500 | | 4,579 | | 2,053 | |
Severance expenses | | 863 | | 2,310 | | 7,027 | | 4,974 | |
Longview work stoppage | | — | | 14,464 | | — | | 14,464 | |
Loss on debt extinguishment | | 679 | | 628 | | 679 | | 628 | |
Stock-based compensation expense | | 1,826 | | 1,585 | | 7,188 | | 8,122 | |
Accumulated EBITDA adjustments | | 8,839 | | 23,169 | | 25,958 | | 40,134 | |
| | | | | | | | | |
Adjusted EBITDA (Non-GAAP) | | $ | 107,579 | | $ | 125,871 | | $ | 292,410 | | $ | 322,773 | |
| | | | | | | | | |
Net Income (GAAP) to Adjusted Net Income (Non-GAAP): | | | | | | | | | |
Net income (GAAP) | | $ | 31,018 | | $ | 34,206 | | $ | 67,914 | | $ | 94,562 | |
Accumulated EBITDA adjustments | | 8,839 | | 23,169 | | 25,958 | | 40,134 | |
Accumulated tax adjustments* | | (3,315 | ) | (8,016 | ) | (12,035 | ) | (13,489 | ) |
Adjusted Net Income (Non-GAAP) | | $ | 36,542 | | $ | 49,359 | | $ | 81,837 | | $ | 121,207 | |
| | | | | | | | | |
Diluted EPS (GAAP) to Adjusted Diluted EPS (Non-GAAP): | | | | | | | | | |
Diluted earnings per share (GAAP) | | $ | 0.32 | | $ | 0.35 | | $ | 0.70 | | $ | 0.97 | |
Accumulated EBITDA adjustments | | 0.09 | | 0.24 | | 0.27 | | 0.41 | |
Accumulated tax adjustments | | (0.04 | ) | (0.08 | ) | (0.13 | ) | (0.14 | ) |
Adjusted Diluted EPS (Non-GAAP) | | $ | 0.37 | | $ | 0.51 | | $ | 0.84 | | $ | 1.24 | |
| | | | | | | | | |
* Accumulated tax adjustments in 2016 reflect Accumulated EBITDA adjustments tax affected at 37.5 percent, the Company’s marginal income tax rate offset by an unfavorable $0.6 million state tax examination adjustment in Q2 2016. 2015 Accumulated EBITDA adjustments were tax affected at 34.5 percent.
5
KapStone Paper and Packaging Corporation
Consolidated Balance Sheets
(In thousands)
| | September 30, | | December 31, | |
| | 2016 | | 2015 | |
| | (Unaudited) | | | |
Assets | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 9,449 | | $ | 6,821 | |
Trade accounts receivable, net of allowances | | 388,520 | | 363,869 | |
Other receivables | | 16,398 | | 18,732 | |
Inventories | | 347,450 | | 335,903 | |
Prepaid expenses and other current assets | | 12,911 | | 28,932 | |
Total current assets | | 774,728 | | 754,257 | |
| | | | | |
Plant, property and equipment, net | | 1,419,035 | | 1,406,146 | |
Other assets | | 22,765 | | 12,532 | |
Intangible assets, net | | 321,923 | | 344,583 | |
Goodwill | | 705,617 | | 704,592 | |
Total assets | | $ | 3,244,068 | | $ | 3,222,110 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
Current liabilities: | | | | | |
Short-term borrowings | | $ | 11,500 | | $ | 6,400 | |
Dividend payable | | 9,987 | | 9,862 | |
Accounts payable | | 210,987 | | 196,491 | |
Accrued expenses | | 66,501 | | 73,138 | |
Accrued compensation costs | | 48,680 | | 64,149 | |
Accrued income taxes | | 8,052 | | 15 | |
Total current liabilities | | 355,707 | | 350,055 | |
| | | | | |
Long-term debt, net of current portion | | 1,484,373 | | 1,543,748 | |
Pension and post-retirement benefits | | 36,443 | | 40,510 | |
Deferred income taxes | | 420,669 | | 418,479 | |
Other liabilities | | 53,336 | | 24,038 | |
Total other liabilities | | 1,994,821 | | 2,026,775 | |
| | | | | |
Stockholders’ equity: | | | | | |
Common stock $0.0001 par value | | 10 | | 10 | |
Additional paid-in capital | | 274,176 | | 266,220 | |
Retained earnings | | 681,061 | | 642,306 | |
Accumulated other comprehensive (loss) income | | (61,707 | ) | (63,256 | ) |
Total stockholders’ equity | | 893,540 | | 845,280 | |
Total liabilities and stockholders’ equity | | $ | 3,244,068 | | $ | 3,222,110 | |
6
KapStone Paper and Packaging Corporation
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
| | Quarter Ended September 30, | | Nine Months Ended September 30, | |
| | 2016 | | 2015 | | 2016 | | 2015 | |
Operating activities: | | | | | | | | | |
Net income | | $ | 31,018 | | $ | 34,206 | | $ | 67,914 | | $ | 94,562 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
Depreciation of plant and equipment | | 37,442 | | 34,351 | | 110,143 | | 98,010 | |
Amortization of intangible assets | | 7,512 | | 8,149 | | 25,385 | | 16,607 | |
Stock-based compensation expense | | 1,826 | | 1,585 | | 7,188 | | 8,122 | |
Pension and postretirement | | (561 | ) | (2,963 | ) | (1,588 | ) | (8,379 | ) |
Excess tax benefit from stock-based compensation | | — | | (7 | ) | 150 | | (1,518 | ) |
Amortization of debt issuance costs | | 1,250 | | 1,317 | | 3,625 | | 4,364 | |
(Gain) / Loss on disposal of fixed assets | | 2,503 | | (205 | ) | 3,156 | | 5 | |
Loss on debt extinguishment | | 679 | | 628 | | 679 | | 628 | |
Deferred income taxes | | (484 | ) | 3,990 | | 220 | | 6,441 | |
Change in fair value of contingent consideration liability | | 1,527 | | 553 | | 4,579 | | 2,053 | |
Changes in operating assets and liabilities | | 40,050 | | 22,457 | | (9,064 | ) | (44,247 | ) |
Net cash provided by operating activities | | $ | 122,762 | | $ | 104,061 | | $ | 212,387 | | $ | 176,648 | |
| | | | | | | | | |
Investing activities: | | | | | | | | | |
Equity method investments | | (10,500 | ) | — | | (11,750 | ) | — | |
Purchase of intangible assets | | (500 | ) | — | | (2,025 | ) | — | |
Acquisitions, net of cash acquired | | (15,438 | ) | (482 | ) | (15,438 | ) | (617,046 | ) |
Capital expenditures | | (26,873 | ) | (31,184 | ) | (99,246 | ) | (94,895 | ) |
Proceeds from the sales of assets | | 25 | | — | | 4,881 | | — | |
Net cash used in investing activities | | $ | (53,286 | ) | $ | (31,666 | ) | $ | (123,578 | ) | $ | (711,941 | ) |
| | | | | | | | | |
Financing activities: | | | | | | | | | |
Proceeds from revolving credit facility | | 89,500 | | $ | 2,000 | | $ | 353,200 | | $ | 268,200 | |
Repayments on revolving credit facility | | (94,000 | ) | (15,000 | ) | (348,100 | ) | (266,200 | ) |
Proceeds from receivables credit facility | | 15,462 | | 9,226 | | 36,556 | | 112,961 | |
Repayments on receivables credit facility | | (5,497 | ) | (13,487 | ) | (32,667 | ) | (18,449 | ) |
Proceeds from long-term debt | | — | | — | | — | | 519,763 | |
Repayments on long-term debt | | (64,687 | ) | (64,688 | ) | (64,687 | ) | (64,688 | ) |
Payment of loan amendment costs and debt issuance fees | | 138 | | — | | (2,250 | ) | (10,790 | ) |
Proceeds from other current borrowings | | — | | — | | — | | 6,615 | |
Payment from other current borrowings | | — | | (2,206 | ) | — | | (4,401 | ) |
Cash dividend paid | | (9,653 | ) | (9,634 | ) | (29,001 | ) | (29,098 | ) |
Payment of withholding taxes on vested stock awards | | (55 | ) | (12 | ) | (841 | ) | (2,460 | ) |
Proceeds from exercises of stock options | | 367 | | — | | 788 | | 778 | |
Proceeds from issuance of shares to ESPP | | 508 | | 429 | | 971 | | 844 | |
Excess tax benefit from stock-based compensation | | — | | 7 | | (150 | ) | 1,518 | |
Net cash provided (used in) / provided by financing activities | | $ | (67,917 | ) | $ | (93,365 | ) | $ | (86,181 | ) | $ | 514,593 | |
| | | | | | | | | |
Net increase in cash and cash equivalents | | 1,559 | | (20,970 | ) | 2,628 | | (20,700 | ) |
Cash and cash equivalents-beginning of period | | 7,890 | | 28,737 | | 6,821 | | 28,467 | |
Cash and cash equivalents-end of period | | $ | 9,449 | | $ | 7,767 | | $ | 9,449 | | $ | 7,767 | |
7
KapStone Paper and Packaging Corporation
Operating Segment Information
(In thousands)
(Unaudited)
| | Net Sales | | Operating
Income | | Depreciation
and | | Capital | | Total Assets
at Sept. 30, | |
Three Months Ended September 30, 2016 | | Trade | | Intersegment | | Total | | (Loss) | | Amortization | | Expenditures | | 2016 | |
Paper and Packaging | | $ | 533,562 | | $ | 18,674 | | $ | 552,236 | | $ | 57,731 | | $ | 37,491 | | $ | 24,900 | | $ | 2,526,342 | |
Distribution | | 243,074 | | — | | 243,074 | | 8,230 | | 5,795 | | 936 | | 676,350 | |
Corporate | | — | | — | | — | | (10,953 | ) | 1,668 | | 1,037 | | 41,376 | |
Intersegment eliminations | | — | | (18,674 | ) | (18,674 | ) | — | | — | | — | | — | |
| | $ | 776,636 | | $ | — | | $ | 776,636 | | $ | 55,008 | | $ | 44,954 | | $ | 26,873 | | $ | 3,244,068 | |
| | Net Sales | | Operating
Income | | Depreciation
and | | Capital | | Total Assets
at Sept. 30, | |
Three Months Ended September 30, 2015 | | Trade | | Intersegment | | Total | | (Loss) | | Amortization | | Expenditures | | 2015 | |
Paper and Packaging | | $ | 559,435 | | $ | 7,628 | | $ | 567,063 | | $ | 60,185 | | $ | 36,059 | | $ | 25,448 | | $ | 2,524,562 | |
Distribution | | 248,128 | | — | | 248,128 | | 11,139 | | 5,522 | | 1,283 | | 683,555 | |
Corporate | | — | | — | | — | | (9,728 | ) | 919 | | 4,453 | | 41,818 | |
Intersegment eliminations | | — | | (7,628 | ) | (7,628 | ) | — | | — | | — | | — | |
| | $ | 807,563 | | $ | — | | $ | 807,563 | | $ | 61,596 | | $ | 42,500 | | $ | 31,184 | | $ | 3,249,935 | |
| | Net Sales | | Operating
Income | | Depreciation
and | | Capital | |
Nine Months Ended September 30, 2016 | | Trade | | Intersegment | | Total | | (Loss) | | Amortization | | Expenditures | |
Paper and Packaging | | $ | 1,586,173 | | $ | 55,667 | | $ | 1,641,840 | | $ | 145,054 | | $ | 112,790 | | $ | 91,520 | |
Distribution (a) | | 713,589 | | — | | 713,589 | | 21,947 | | 17,158 | | 3,934 | |
Corporate | | — | | — | | — | | (33,880 | ) | 5,580 | | 3,792 | |
Intersegment eliminations | | — | | (55,667 | ) | (55,667 | ) | — | | — | | — | |
| | $ | 2,299,762 | | $ | — | | $ | 2,299,762 | | $ | 133,121 | | $ | 135,528 | | $ | 99,246 | |
| | Net Sales | | Operating
Income | | Depreciation
and | | Capital | |
Nine Months Ended September 30, 2015 | | Trade | | Intersegment | | Total | | (Loss) | | Amortization | | Expenditures | |
Paper and Packaging | | $ | 1,683,581 | | $ | 8,416 | | $ | 1,691,997 | | $ | 190,321 | | $ | 104,723 | | $ | 81,954 | |
Distribution (a) | | 341,526 | | — | | 341,526 | | 12,859 | | 7,467 | | 1,526 | |
Corporate | | — | | — | | — | | (32,826 | ) | 2,427 | | 11,415 | |
Intersegment eliminations | | — | | (8,416 | ) | (8,416 | ) | — | | — | | — | |
| | $ | 2,025,107 | | $ | — | | $ | 2,025,107 | | $ | 170,354 | | $ | 114,617 | | $ | 94,895 | |
(a) Reflects results of Victory Packaging which KapStone acquired on June 1, 2015
8
KapStone Paper and Packaging Corporation
Operating Segment EBITDA and Adjusted EBITDA
(In thousands)
(Unaudited)
| | Quarter Ended September 30, | | Nine Months Ended September 30, | |
Paper and Packaging | | 2016 | | 2015 | | 2016 | | 2015 | |
Segment income | | $ | 57,731 | | $ | 60,185 | | $ | 145,054 | | $ | 190,321 | |
Foreign exchange (loss) / gain | | 18 | | 37 | | 18 | | (702 | ) |
Depreciation and amortization | | 37,491 | | 36,059 | | 112,790 | | 104,723 | |
EBITDA | | 95,240 | | 96,281 | | 257,862 | | 294,342 | |
Victory Packaging inventory step-up expense | | — | | — | | — | | — | |
Acquisition, casualty, impairment and other expenses | | 1,710 | | 177 | | 3,529 | | 1,027 | |
Longview work stoppage | | — | | 14,464 | | — | | 14,464 | |
Severance expenses | | 701 | | 2,207 | | 5,998 | | 4,871 | |
Adjusted EBITDA | | $ | 97,651 | | $ | 113,129 | | $ | 267,389 | | $ | 314,704 | |
Adjusted EBITDA margin | | 18.3 | % | 20.2 | % | 16.9 | % | 18.7 | % |
| | Quarter Ended September 30, | | Nine Months Ended September 30, | |
Distribution | | 2016 | | 2015 | | 2016 | | 2015 | |
Segment income | | $ | 8,230 | | $ | 11,139 | | $ | 21,947 | | $ | 12,859 | |
Foreign exchange (loss) / gain | | (561 | ) | (803 | ) | (1,536 | ) | (1,002 | ) |
Depreciation and amortization | | 5,795 | | 5,522 | | 17,158 | | 7,467 | |
EBITDA | | 13,464 | | 15,858 | | 37,569 | | 19,324 | |
Victory Packaging inventory step-up expense | | — | | 1,930 | | — | | 5,800 | |
Acquisition, casualty, impairment and other expenses | | 1,129 | | — | | 1,654 | | — | |
Severance expenses | | 153 | | 103 | | 633 | | 103 | |
Adjusted EBITDA | | $ | 14,746 | | $ | 17,891 | | $ | 39,856 | | $ | 25,227 | |
Adjusted EBITDA margin | | 6.1 | % | 7.2 | % | 5.6 | % | 7.4 | % |
| | Quarter Ended September 30, | | Nine Months Ended September 30, | |
Corporate | | 2016 | | 2015 | | 2016 | | 2015 | |
Segment (loss) | | $ | (10,953 | ) | $ | (9,728 | ) | $ | (33,880 | ) | $ | (32,826 | ) |
Loss on debt extinguishment | | (679 | ) | (628 | ) | (679 | ) | (628 | ) |
Depreciation and amortization | | 1,668 | | 919 | | 5,580 | | 2,427 | |
EBITDA | | (9,964 | ) | (9,437 | ) | (28,979 | ) | (31,027 | ) |
Victory Packaging inventory step-up expense | | — | | — | | — | | — | |
Acquisition, casualty, impairment and other expenses | | 1,105 | | 575 | | 1,302 | | 3,066 | |
Change in fair value of contingent consideration liability | | 1,527 | | 1,500 | | 4,579 | | 2,053 | |
Severance expenses | | 9 | | — | | 396 | | — | |
Stock-based compensation | | 1,826 | | 1,585 | | 7,188 | | 8,122 | |
Loss on debt extinguishment | | 679 | | 628 | | 679 | | 628 | |
Adjusted EBITDA | | $ | (4,818 | ) | $ | (5,149 | ) | $ | (14,835 | ) | $ | (17,158 | ) |
| | Quarter Ended September 30, | | Nine Months Ended September 30, | |
Consolidated | | 2016 | | 2015 | | 2016 | | 2015 | |
Operating income | | $ | 55,008 | | $ | 61,596 | | $ | 133,121 | | $ | 170,354 | |
Loss on debt extinguishment | | (679 | ) | (628 | ) | (679 | ) | (628 | ) |
Foreign exchange (loss) / gain | | (543 | ) | (766 | ) | (1,518 | ) | (1,704 | ) |
Depreciation and amortization | | 44,954 | | 42,500 | | 135,528 | | 114,617 | |
EBITDA | | 98,740 | | 102,702 | | 266,452 | | 282,639 | |
Victory Packaging inventory step-up expense | | — | | 1,930 | | — | | 5,800 | |
Acquisition, casualty, impairment and other expenses | | 3,944 | | 752 | | 6,485 | | 4,093 | |
Longview work stoppage | | — | | 14,464 | | — | | 14,464 | |
Severance expenses | | 863 | | 2,310 | | 7,027 | | 4,974 | |
Change in fair value of contingent consideration liability | | 1,527 | | 1,500 | | 4,579 | | 2,053 | |
Stock-based compensation | | 1,826 | | 1,585 | | 7,188 | | 8,122 | |
Loss on debt extinguishment | | 679 | | 628 | | 679 | | 628 | |
Adjusted EBITDA | | $ | 107,579 | | $ | 125,871 | | $ | 292,410 | | $ | 322,773 | |
9
