Adjusted net income for the second quarter of 2013 was $44.1 million, or $0.13 per diluted share, when adjusted for a $16.0 million loss on modification or extinguishment of debt (net of tax) and $6.9 million in restructuring and other special Charges (net of tax). This compares to second quarter 2012 adjusted net income of $45.6 million or $0.11 per diluted share.
"Our second quarter results were in line with our expectations in a tough operating environment," said CEO David Scheible. "Strong operating performance offset lower pricing and sluggish demand, particularly in our beverage folding carton business. Volumes in both beer and soft drink were undoubtedly impacted by cooler and wetter than normal weather during the Memorial Day weekend through the end of June. At the same time, year over year pricing was down about $16 million, mostly due to contractual resets related to 2012 commodity input deflation. We were able to offset these headwinds by delivering $29 million of benefit from improved operating performance and cost reductions, which keeps us on track to achieve our full year savings target of $100-$120 million."
Net sales increased 2.5% to $1,139.7 million during second quarter 2013, compared to second quarter 2012 net sales of $1,111.9 million. The $27.8 million increase resulted from $48.9 million of favorable volume/mix, partially offset by $15.7 million of lower pricing and $5.4 million of unfavorable exchange rates. The favorable volume/mix was primarily driven by the fourth quarter 2012 acquisitions of Contego Packaging Holdings Limited and A&R Carton Holding B.V.
On a segment basis, Paperboard Packaging sales, which comprised 85.3% of total second quarter net sales, increased 4.7% compared to the second quarter of 2012. The increase primarily reflected the addition of the two acquisitions. Net sales in the Flexible Packaging segment decreased 8.9% compared to the second quarter of 2012. The decline was primarily the result of the planned shift from external sales to internal consumption of kraft paper produced at its Pine Bluff, AR mill.
EBITDA for second quarter 2013 decreased 18.4% to $139.7 million from $171.2 million in the second quarter last year.