Sylvamo (NYSE: SLVM), the world’s paper company, is releasing
first quarter 2024 earnings.
Financial Highlights - First Quarter vs. Fourth
Quarter
- Net income of $43 million ($1.02 per diluted share) vs. $49
million ($1.16 per diluted share)
- Adjusted operating earnings1 of $45 million ($1.07 per diluted
share) vs. $49 million ($1.16 per diluted share)
- Adjusted EBITDA2 of $118 million (13% margin) vs. $117 million
(12% margin)
- Cash provided by operating activities of $27 million vs. $167
million
- Free cash flow3 of $(33) million vs. $104 million
Commercial and Operational Highlights – First Quarter vs.
Fourth Quarter
- Price and mix were stable
- Volume decreased by $12 million due to expected seasonally
weaker industry demand in Latin America
- Operations and other costs improved by $19 million due
primarily to lower economic downtime
- Planned maintenance outage expenses decreased by $3
million
- Input and transportation costs increased by $9 million, driven
primarily by transportation costs in North America
Second Quarter Outlook
- Adjusted EBITDA of $145 million to $160 million
- Compared to the first quarter:
- Price and mix are expected to increase by $15 million to $20
million, primarily reflecting prior price increases across all
regions and a better mix in Latin America
- Volume is projected to increase by $5 million to $10 million,
with seasonally stronger demand in Latin America and continued
momentum in Europe and North America
- Operations and other costs are expected to improve by $5
million to $10 million due primarily to lower costs in Europe and
North America
- Input and transportation costs are projected to be stable to
improving up to $5 million due to better transportation and energy
costs in North America partially offset by unfavorable fiber costs
in Latin America
- Total planned maintenance outage expenses are expected to
increase by $3 million
Management Summary from Chairman and Chief Executive Officer
Jean-Michel Ribiéras
As uncoated freesheet conditions improved in the first quarter,
we experienced strengthening order books, resulting in less
economic downtime. Price and mix were better than expected while
input costs stabilized. That momentum is expected to continue in
2024, and we are well positioned to capitalize on the opportunities
that lie ahead.
We are making good progress with Project Horizon, our structural
cost reduction program to streamline overhead, manufacturing and
supply chain costs. Before inflation, we are on target to meet run
rate savings of $110 million by the end of 2024.
This year, we repurchased $20 million of shares, including $15
million in April, and have $130 million remaining on our $150
million share repurchase authorization from September 2023. Our
board of directors declared a second quarter dividend of $0.30 per
share, which we paid April 29.
Since the spinoff, we have repurchased $170 million in shares or
8% of our initial shares outstanding. This use of cash resulted in
a 35% return on investment based on a $65.00 share price.
We continue to allocate capital to generate long-term shareowner
value. Since our inception, we have reduced gross debt
significantly and will maintain a strong financial position to
operate and invest throughout industry cycles. We remain committed
to reinvesting in our business. We have identified a pipeline of
more than $200 million of high-return capital projects, which will
allow us to grow our earnings and cash flows as we invest in these
projects in the future. We also plan to continue returning
substantial amounts of cash to shareowners through dividends and
share repurchases at attractive prices.
1 Adjusted Operating Earnings (non-GAAP)
are net income (GAAP), net of tax and net special items. Management
uses this measure to focus on ongoing operations and believes it is
useful to investors because it enables them to perform meaningful
comparisons of past and present combined operating results. The
Company believes that using this information, along with net
income, provides for a more complete analysis of the results of
operations. Net income is the most directly comparable GAAP
measure. For more information regarding net special items, see the
information under the heading Effects of Net Special Items and the
Condensed Consolidated Statement of Operations and related notes
included later in this release.
2 Adjusted EBITDA (non-GAAP) is net income
(GAAP), net of tax, plus the sum of income taxes, net interest
expense (income), depreciation, amortization and cost of timber
harvested, stock-based compensation, and, when applicable for the
periods reported, net special items. Management uses this measure
in managing the operating performance of our business and believes
that Adjusted EBITDA and Adjusted EBITDA Margin provide investors
and analysts meaningful insights into our operating performance and
Adjusted EBITDA is a relevant metric for the third-party debt. The
Company believes that using this information, along with net
income, provides for a more complete analysis of the results of its
operations. Net income is the most directly comparable GAAP
measure. For more information regarding net special items, see the
information under the heading Effects of Net Special Items and the
Condensed Consolidated Statement of Operations and related notes
included later in this release.
3 Free Cash Flow is a non-GAAP measure and
the most directly comparable GAAP measure is cash provided by
operating activities. Management utilizes this measure in
connection with managing our business and believes that Free Cash
Flow is useful to investors as a liquidity measure because it
measures the amount of cash generated that is available, after
reinvesting in the business, to maintain a strong balance sheet and
service debt, and return cash to shareowners. It should not be
inferred that the entire Free Cash Flow amount is available for
discretionary expenditures. Free Cash Flow also enables investors
to perform meaningful comparisons between past and present
periods.
Select Financial
Measures
(In millions)
First Quarter 2024
Fourth Quarter 2023
First Quarter 2023
Net Sales
$
905
$
964
$
941
Net Income
43
49
97
Business Segment Operating Profit
72
77
166
Adjusted Operating Earnings
45
49
108
Adjusted EBITDA
118
117
208
Cash Provided By Operating Activities
27
167
63
Free Cash Flow
(33
)
104
2
Segment Information
Sylvamo uses business segment operating profit to measure the
earnings performance of its businesses and is calculated as set
forth in footnote (f) under the "Sales and Earnings by Business
Segment" table (page 7). First quarter 2024 net sales by business
segment and operating profit by business segment compared with the
fourth quarter of 2023 and the first quarter of 2023 are as
follows:
Business Segment
Results
(In millions)
First Quarter 2024
Fourth Quarter 2023
First Quarter 2023
Net Sales by Business Segment
Europe
$
207
$
197
$
230
Latin America
216
288
222
North America
490
496
505
Inter-segment Sales
(8
)
(17
)
(16
)
Net Sales
$
905
$
964
$
941
Operating Profit by Business
Segment
Europe
$
(4
)
$
(23
)
$
23
Latin America
14
48
46
North America
62
52
97
Business Segment Operating
Profit
$
72
$
77
$
166
Operating profits in the first quarter of 2024:
Europe - $(4) million compared with $(23) million
in the fourth quarter of 2023. Earnings were higher due to higher
price and mix, slightly higher volumes, lower planned maintenance
outages, lower operating costs and lower economic downtime.
Latin America - $14 million compared with $48 million in
the fourth quarter of 2023. Earnings were lower due to lower
volumes, lower price and mix, higher operating and input costs and
higher planned maintenance outages.
North America - $62 million compared with $52
million in the fourth quarter of 2023. Earnings were higher as
higher volumes, lower economic downtime and lower planned
maintenance outages more than offset lower price and mix and lower
operating and input costs.
Effective Tax Rate
The reported effective tax rate for the first quarter of 2024
was 28%, compared to 27% for the fourth quarter of 2023. The higher
rate for the first quarter was due to the mix of earnings in our
regions.
Excluding net special items, the effective tax rate for the
first quarter of 2024 was 28%, compared with 27% for the fourth
quarter of 2023.
The effective tax rate excluding net special items is a non-GAAP
financial measure and is calculated by adjusting the income tax
provision and rate to exclude the tax effect at the applicable
statutory rate of net special items. Management believes that this
presentation provides useful information to investors by providing
a more meaningful comparison of the income tax rate between past
and present periods.
Effects of Net Special Items
Net special items in the first quarter of 2024 amounted to a net
after-tax charge of $2 million ($0.05 per diluted share), compared
with a net after-tax charge of $0 million ($0.00 per diluted share)
in the fourth quarter of 2023.
Earnings Webcast
The company will host an audio webcast at 10 a.m. EST / 9 a.m.
CDT. All interested parties are invited to listen at
investors.sylvamo.com.
Parties who wish to participate should call +1-877-336-4440
(U.S.) or +1-409-207-6984 (international) and use access code
763504. Participants should call in no later than 9:45 a.m. EST /
8:45 a.m. CDT.
Replays are available at investors.sylvamo.com for one year and
by phone for 90 days, beginning at approximately 2 p.m. EST / 1
p.m. CDT the day of the call. To listen to the replay by phone,
call +1-866-207-1041 (U.S.) or +1-402-970-0847 (international) and
use access code 2604061.
About Sylvamo
Sylvamo Corporation (NYSE: SLVM) is the world's paper company
with mills in Europe, Latin America and North America. Our vision
is to be the employer, supplier and investment of choice. We
transform renewable resources into papers that people depend on for
education, communication and entertainment. Headquartered in
Memphis, Tennessee, we employ more than 6,500 colleagues. Net sales
for 2023 were $3.7 billion. For more information, please visit
Sylvamo.com.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, including the
information under the headings "Second Quarter Outlook" and
"Management Summary from Chairman and Chief Executive Officer
Jean-Michel Ribiéras." Any or all forward-looking statements may
turn out to be incorrect, and our actual actions and results could
differ materially from what they express or imply, because they
involve known and unknown risks, uncertainties and other factors,
many of which are beyond our control. These risks, uncertainties,
and other factors include those disclosed in the heading "Risk
Factors" in our Annual Report on Form 10-K for the year ended Dec.
31, 2023, filed with the U.S. Securities and Exchange Commission
(SEC) and in our subsequent filings with the SEC, available on our
website, Sylvamo.com. These forward-looking statements reflect our
current expectations, and we undertake no obligation to publicly
update any forward-looking statements, whether because of new
information, future events or otherwise.
SYLVAMO CORPORATION
Condensed Consolidated
Statement of Operations
Preliminary and Unaudited
(In millions, except per share
amounts)
Three Months Ended
March 31,
Three Months Ended
December 31, 2023
2024
2023
Net Sales
$
905
$
941
$
964
Costs and Expenses
Cost of products sold
716
(a)
670
(c)
762
(f)
Selling and administrative expenses
74
(b)
82
(d)
87
(g)
Depreciation, amortization and cost of
timber harvested
39
35
38
Taxes other than payroll and income
taxes
7
6
4
Interest expense (income), net
9
7
(e)
6
(h)
Income Before Income Taxes
60
141
67
Income tax provision
17
44
18
Net Income
$
43
$
97
$
49
Earnings Per Share
Basic
$
1.04
$
2.28
$
1.18
Diluted
$
1.02
$
2.25
$
1.16
Average Shares of Common Stock
Outstanding - Diluted
42
43
42
The accompanying notes are an
integral part of this condensed consolidated statement of
operations.
Three Months Ended March 31, 2024
(a)
Includes pre-tax loss of $1 million ($1
million after taxes) for other charges.
(b)
Includes pre-tax loss of $2 million ($1
million after taxes) for integration costs related to the Nym�lla
acquisition.
Three Months Ended March 31, 2023
(c)
Includes incremental expense of $9 million
($7 million after taxes) related to the impact of the step-up of
acquired Nym�lla inventory sold during the quarter.
(d)
Includes pre-tax loss of $4 million ($3
million after taxes) for transaction and integration costs related
to the Nym�lla acquisition and pre-tax loss of $4 million ($3
million after taxes) for professional and legal fees related to
negotiations resulting in a shareholder cooperation agreement.
(e)
Includes $9 million ($6 million after
taxes) of interest income related to tax settlements and a pre-tax
loss of $5 million ($4 million after taxes) related to debt
extinguishment costs.
Three Months Ended December 31, 2023
(f)
Includes a pre-tax gain of $5 million ($4
million after taxes) to adjust the recognition of a foreign
value-added tax refund in Brazil.
(g)
Includes pre-tax loss of $9 million ($7
million after taxes) for transaction and integration costs related
to the Nym�lla acquisition.
(h)
Includes a pretax gain of $4 million ($4
million after taxes) to adjust interest income associated with the
recognition of a foreign value-added tax refund in Brazil.
SYLVAMO CORPORATION
Reconciliation of Net Income
to Adjusted Operating Earnings
Preliminary and Unaudited
(In millions, except per share
amounts)
Three Months Ended
March 31,
Three Months Ended
December 31, 2023
2024
2023
Net Income
$
43
$
97
$
49
Add back: Net special items expense
(income)
2
11
—
Adjusted Operating Earnings
$
45
$
108
$
49
Three Months Ended
March 31,
Three Months Ended
December 31, 2023
2024
2023
Diluted Earnings Per Common Share as
Reported
$
1.02
$
2.25
$
1.16
Add back: Net special items expense
(income)
0.05
0.26
—
Adjusted Operating Earnings Per
Share
$
1.07
$
2.51
$
1.16
SYLVAMO CORPORATION
Sales and Earnings by Business
Segment
Preliminary and Unaudited
(In millions)
Net Sales by Business Segment
Three Months Ended
March 31,
Three Months Ended
December 31, 2023
2024
2023
Europe
$
207
$
230
$
197
Latin America
216
222
288
North America
490
505
496
Inter-segment Sales
(8
)
(16
)
(17
)
Net Sales
$
905
$
941
$
964
Operating Profit by Business
Segment
Three Months Ended
March 31,
Three Months Ended
December 31, 2023
2024
2023
Europe
$
(4
)
$
23
$
(23
)
Latin America
14
46
48
North America
62
97
52
Business Segment Operating
Profit
$
72
$
166
$
77
Income Before Income Taxes
$
60
$
141
$
67
Interest expense (income), net
9
7
(b)
6
(d)
Net special items expense (income)
3
(a)
18
(c)
4
(e)
Business Segment Operating Profit
(f)
$
72
$
166
$
77
Three Months Ended March 31, 2024
(a)
Includes pre-tax loss of $2 million ($1
million after taxes) for integration costs related to the Nym�lla
acquisition and pre-tax loss of $1 million ($1 million after taxes)
for other charges.
Three Months Ended March 31, 2023
(b)
Includes $9 million ($6 million after
taxes) of interest income related to tax settlements and a pre-tax
loss of $5 million ($4 million after taxes) related to debt
extinguishment costs.
(c)
Includes pre-tax loss of $4 million ($3
million after taxes) for integration costs related to the Nym�lla
acquisition, a pre-tax loss of $4 million ($3 million after taxes)
for professional and legal fees related to negotiations resulting
in a shareholder cooperation agreement and incremental expense of
$9 million ($7 million after taxes) related to the impact of the
step-up of acquired Nym�lla inventory sold during the quarter.
Three Months December 31, 2023
(d)
Includes a pretax gain of $4 million ($4
million after taxes) for the three months and twelve months ended
December 31, 2023, to adjust interest income associated with the
recognition of a foreign value-added tax refund in Brazil.
(e)
Includes a pre-tax gain of $5 million ($4
million after taxes) to adjust the recognition of a foreign
value-added tax refund in Brazil and a pre-tax loss of $9 million
($7 million after taxes) for transaction and integration costs
related to the Nym�lla acquisition.
(f)
As set forth in the chart above, business
segment operating profit is defined as income before income taxes,
but excluding net interest expense (income) and net special items.
Business segment operating profit is a measure reported to our
management for purposes of making decisions about allocating
resources to our business segments and assessing the performance of
our business segments.
Reconciliation of Net Income
to Adjusted EBITDA and Adjusted EBITDA Margin
Preliminary and Unaudited
(In millions)
Three Months Ended
March 31,
Three Months Ended
December 31, 2023
2024
2023
Net Income
$
43
$
97
$
49
Adjustments:
Income tax provision
17
44
18
Interest expense (income), net
9
7
6
Depreciation, amortization and cost of
timber harvested
39
35
38
Stock-based compensation
7
7
2
Net special items expense (income)
3
18
4
Adjusted EBITDA
$
118
$
208
$
117
Net Sales
$
905
$
941
$
964
Adjusted EBITDA Margin
13.0
%
22.1
%
12.1
%
Adjusted EBITDA and Adjusted EBITDA
Margin by Business Segment
Three Months Ended
March 31,
Three Months Ended
December 31, 2023
2024
2023
Adjusted EBITDA
Europe
$
5
$
31
$
(16
)
Latin America
34
63
67
North America
79
114
66
Total Business Segment Adjusted
EBITDA
$
118
$
208
$
117
Net Sales (excluding inter-segment
sales eliminations)
Europe
$
207
$
230
$
197
Latin America
216
222
288
North America
490
505
496
Total Business Segment Net
Sales
$
913
$
957
$
981
Adjusted EBITDA Margin
Europe
2
%
13
%
(8
)%
Latin America
16
%
28
%
23
%
North America
16
%
23
%
13
%
SYLVAMO CORPORATION
Condensed Consolidated Balance
Sheet
Preliminary and Unaudited
(In millions)
March 31, 2024
December 31, 2023
Assets
Current Assets
Cash and temporary investments
$
149
$
220
Restricted cash
60
60
Accounts and notes receivable, net
413
428
Contract assets
35
27
Inventories
407
404
Other current assets
51
54
Total Current Assets
1,115
1,193
Plants, Properties and Equipment, Net
986
1,002
Forestlands
385
364
Goodwill
134
139
Right of Use Assets
64
58
Deferred Charges and Other Assets
113
116
Total Assets
$
2,797
$
2,872
Liabilities and Equity
Current Liabilities
Accounts payable
$
404
$
421
Notes payable and current maturities of
long-term debt
28
28
Accrued payroll and benefits
52
63
Other current liabilities
165
183
Total Current Liabilities
649
695
Long-Term Debt
921
931
Deferred Income Taxes
180
189
Other Liabilities
158
156
Equity
Common stock, $1 par value, 200.0 shares
authorized, 44.9 shares and 44.5 shares issued and 41.4 shares and
41.2 shares outstanding at March 31, 2024 and December 31, 2023,
respectively
45
45
Paid-In Capital
54
48
Retained Earnings
2,253
2,222
Accumulated Other Comprehensive Loss
(1,293
)
(1,256
)
1,059
1,059
Less: Common stock held in treasury, at
cost, 3.5 shares and 3.3 shares at March 31, 2024 and December 31,
2023, respectively
(170
)
(158
)
Total Equity
889
901
Total Liabilities and Equity
$
2,797
$
2,872
Condensed Consolidated
Statement of Cash Flows
Preliminary and Unaudited
(In millions)
Three Months Ended
March 31,
2024
2023
Operating Activities
Net income
$
43
$
97
Depreciation, amortization, and cost of
timber harvested
39
35
Deferred income tax provision (benefit),
net
2
5
Stock-based compensation
7
7
Changes in operating assets and
liabilities and other
Accounts and notes receivable
8
82
Inventories
(5
)
(81
)
Accounts payable and accrued
liabilities
(45
)
(100
)
Other
(22
)
18
Cash Provided By Operating
Activities
27
63
Investment Activities
Invested in capital projects
(60
)
(61
)
Acquisition of business, net of cash
acquired
—
(167
)
Other
—
—
Cash Provided By (Used for) Investment
Activities
(60
)
(228
)
Financing Activities
Dividends paid
(12
)
(10
)
Issuance of debt
6
427
Reduction of debt
(17
)
(407
)
Repurchases of common stock
(5
)
(10
)
Other
(7
)
(8
)
Cash Provided By (Used for) Financing
Activities
(35
)
(8
)
Effect of Exchange Rate Changes on
Cash
(3
)
4
Change in Cash, Temporary Investments
and Restricted Cash
(71
)
(169
)
Cash, Temporary Investments and
Restricted Cash
Beginning of the period
280
360
End of the period
$
209
$
191
SYLVAMO CORPORATION
Reconciliation of Cash
Provided by Operations to Free Cash Flow
Preliminary and Unaudited
(In millions)
Three Months Ended
March 31,
Three Months Ended
December 31, 2023
2024
2023
Cash Provided By Operating
Activities
$
27
$
63
$
167
Adjustments:
Cash invested in capital projects
(60
)
(61
)
(63
)
Free Cash Flow
$
(33
)
$
2
$
104
SYLVAMO CORPORATION
Reconciliation of Net Income
to Adjusted EBITDA - Second Quarter 2024 Outlook
Estimates
(In millions)
Three Months Ended June
30, 2024
Net Income
$62 - $72
Adjustments:
Income tax provision
27 - 32
Interest expense (income), net
10
Depreciation, amortization and cost of
timber harvested
38
Stock-based compensation
8
Adjusted EBITDA
$145 - $160
The non-GAAP financial measures presented in this release have
limitations as analytical tools and should not be considered in
isolation or as a substitute for an analysis of our results
calculated in accordance with GAAP. In addition, because not all
companies use identical calculations, the Company’s presentation of
non-GAAP measures in this release may not be comparable to
similarly titled measures disclosed by other companies, including
companies in the same industry as Sylvamo.
Management believes certain non-U.S. GAAP financial measures,
when used in conjunction with information presented in accordance
with U.S. GAAP, can facilitate a better understanding of the impact
of various factors and trends on the Company’s financial condition
and results of operations. Management also uses these non-U.S. GAAP
financial measures in making financial, operating and planning
decisions and in evaluating the Company’s performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240510402806/en/
Investor Contact: Hans Bjorkman, 901-519-8030,
hans.bjorkman@sylvamo.com Media Contact: Adam Ghassemi,
901-519-8115, adam.ghassemi@sylvamo.com
Sylvamo (NYSE:SLVM)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Sylvamo (NYSE:SLVM)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024