Packaging Corporation of America (PKG) investor relations material

Executive summary

• First quarter 2026 net income was $171 million ($1.91/share); excluding special items, net income was $215 million ($2.40/share), up from $208 million ($2.31/share) in Q1 2025.

• Net sales reached $2.4 billion, up from $2.1 billion year-over-year; EBITDA excluding special items was $486 million, up from $421 million.

• Special items included $0.49/share in expenses for Wallula mill restructuring, Greif acquisition/integration, and facility closures.

• The acquired Greif operations generated a $0.06 per share loss in the quarter.

• Operational performance was strong, with record production at Jackson and improved efficiency across mills.

Financial highlights

• Adjusted EPS increased by $0.09 year-over-year, driven by higher prices/mix, lower fiber and maintenance costs, and improved operational efficiency.

• Packaging segment EBITDA (ex-special items) was $482 million on $2.2 billion sales (22% margin), up from $409 million on $2 billion sales (20.8% margin) in Q1 2025.

• Paper segment EBITDA (ex-special items) was $38 million on $160 million sales (23.6% margin), compared to $40 million on $154 million sales (26.1% margin) in Q1 2025.

• Free cash flow was $164 million after $165 million CapEx; $112 million paid in dividends and $59 million in share repurchases.

• Gross profit was $452.9 million, nearly flat year-over-year; EBITDA margin excluding special items was about 20.5%.

Outlook and guidance

• Q2 2026 earnings expected at $2.33/share (ex-special items), with higher prices and improved mix in Packaging and Paper segments.

• Price increases for containerboard and corrugated products to benefit results mainly in Q3.

• Higher costs expected for freight, fiber, chemicals, and stock compensation in Q2; energy costs seasonally lower.

• CapEx forecasted at $840–$870 million and DD&A at $700 million for 2026.

• Tax rate will be higher in Q2 due to the absence of Q1 share-based compensation benefits.