WestRock Company (NYSE:WRK) announced results for its fiscal third quarter ended June 30, 2023.
"We delivered impressive results under challenging market conditions," said David B. Sewell, chief executive officer. "Our accelerated transformation strategy is exceeding expectations. We expect to exit the year with a cost savings run-rate of over $450 million. We remain focused on partnering with our customers, streamlining our portfolio, investing in our assets and further reducing costs. I'm excited about our execution as we continue to transform WestRock into a more efficient and more profitable company."
Consolidated Financial Results
The year-over-year decline in net sales was driven primarily by a $545 million, or 33.8%, decrease in Global Paper segment sales, which was partially offset by a $183 million, or 7.7%, increase in Corrugated Packaging segment sales. The increase in segment sales in the Corrugated Packaging segment in the current year quarter includes the operations of our former joint venture in Mexico since its December 2022 consolidation ("Mexico Acquisition").
Net income declined in the third quarter of fiscal 2023 compared to the prior year quarter primarily due to lower volumes excluding the Mexico Acquisition, the impact of increased economic downtime and planned maintenance outages, higher restructuring costs, increased non-cash pension costs, higher net interest expense and business systems transformation costs. These costs were partially offset by the impact of higher selling price/mix, increased cost savings, contribution from the Mexico Acquisition, net cost deflation and the gain on sale of an unconsolidated entity.
Consolidated Adjusted EBITDA decreased $204 million, or 20.2%, year-over-year, primarily due to lower Global Paper segment Adjusted EBITDA that was partially offset by higher Adjusted EBITDA in our Corrugated Packaging segment.
Restructuring and Other Costs
Restructuring and other costs during the third quarter of fiscal 2023 were $48 million. The charges were primarily costs associated with the consolidation of converting facilities, ongoing costs related to previously closed operations, and acquisition, integration and divestiture costs.
Cash Flow Activities
Net cash provided by operating activities was $694 million in the third quarter of fiscal 2023 compared to $837 million in the prior year quarter primarily due to lower earnings.
Total debt was $9.0 billion at March 31, 2023, and Adjusted Net Debt was $8.6 billion. Total debt decreased $479 million compared to the second quarter of fiscal 2023. The Company had approximately $3.5 billion of available liquidity from long-term committed credit facilities and cash and cash equivalents at June 30, 2023.
During the third quarter of fiscal 2023, WestRock invested $255 million in capital expenditures and returned $71 million in capital to stockholders in dividend payments.
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