Graphic Packaging Holding Company reported a net loss for first quarter 2020 of $12.7 million, or a net loss per share of $0.04, based upon 288.9 million weighted average diluted shares. This compares to first quarter 2019 net income of $57.9 million, or $0.19 per share, based upon 298.2 million weighted average diluted shares.
Net sales increased by 6.2% to $1,599.1 million in the first quarter of 2020, compared to $1,505.9 million in the prior year period. The $93.2 million increase was driven by $14.1 million of higher pricing and $89 million of improved volume/mix related to acquisitions and conversions to the company's paperboard packaging solutions. These benefits were partially offset by $9.9 million of unfavorable foreign exchange.
First quarter 2020 net income was negatively impacted by a net $103.9 million of special charges including a net $89.7 million non-cash charge related to the settlement of a US pension plan. Adjusted net income for the first quarter of 2020 was $91.2 million, or $0.31 per diluted share. This compares to first quarter 2019 adjusted net income of $61.7 million or $0.21 per diluted share.
“We had a very strong start to 2020 with positive net organic volume growth of 5% and solid productivity driving meaningful improvement to our key financial metrics. To date, we have successfully met the increased and changing needs of our customers, while effectively keeping our employees safe and healthy. I am exceptionally proud of the work our teams around the world are doing to meet the essential packaging needs of our customers and the consumer” said president and CEO Michael Doss. “Importantly, we are also taking decisive actions today to accelerate our strategic agenda to meet the paperboard packaging needs of the consumer, balance supply and demand to optimize cash flow, all while positioning our business to capture profitable growth consistent with the goals we established in our Vision 2025.
“I am also pleased that our Board of Directors has reviewed and remains committed to the existing return of capital to stakeholders through dividends and distributions,” Doss added. “Separately, we have decided to suspend our annual adjusted EBITDA and cash flow guidance to allow time to as-sess potential shifts in consumer behavior and spending patterns related to the COVID-19 crisis.”
Graphic Packaging Holding Company completed and began the integration of a converting facility acquired from Quad/Graphics, Inc. and seven converting facilities acquired from Greif, Inc. These strategic tuck-under acquisitions strengthen the core business and will meaningfully increase the company’s paperboard integration rate over time.
The company announced the planned closure of the 70,000 ton White Pigeon, MI CRB mill and the 120,000 ton PM1 containerboard machine in West Monroe, LA. Both closures will be effective June 30, 2020. The CRB mill closure at White Pigeon is enabled by the operating strength of the current CRB mill network and a new CRB supply agreement with Greif, Inc.