ATLANTA, GA – Graphic Packaging Holding Co. (NYSE:GPK) announced today that two of its executive vice presidents have voluntarily terminated their individual employment agreements. Stephen R. Scherger, Executive Vice President and Chief Financial Officer, and Joseph P. Yost, Executive Vice President and President, International, ended their respective contracts on September 26, 2024.
The terminations follow the recent enhancements to the company's Executive Severance Plan, which now offers improved severance benefits to all Executive Vice Presidents in the event of service termination after a change in control at the company. These improvements have made individual employment agreements for Scherger and Yost unnecessary, according to the company's filing with the Securities and Exchange Commission.
Despite the termination of their individual contracts, both Scherger and Yost remain active employees of Graphic Packaging (NYSE:PKG), continuing their service in their current roles. The company has filed the updated Executive Severance Plan as Exhibit 10.1 in the 8-K filing.
Graphic Packaging Holding Co., headquartered in Atlanta, Georgia, operates within the paperboard containers and boxes manufacturing industry. The company, incorporated in Delaware and formerly known as New Giant Corp, has its fiscal year end on December 31.
In other recent news, Graphic Packaging Holding Company has faced operational disruptions at several of its manufacturing facilities due to severe weather and an electrical substation incident. These setbacks are anticipated to decrease the company's third-quarter adjusted EBITDA by approximately $20-25 million. As a result, Graphic Packaging now projects its full-year 2024 adjusted EBITDA and adjusted EPS to be below the previously forecasted ranges. Despite these challenges, all affected facilities have resumed normal operations.
Analysts at Seaport Global Securities and Citi have maintained their Buy ratings on Graphic Packaging stock, with Seaport Global keeping a price target of $32.00 and Citi maintaining a $34.00 price target. Both firms acknowledged the company's recent challenges but highlighted its competitive advantage and potential for future growth.
In the second quarter of 2024, Graphic Packaging reported a sales figure of $2.2 billion, adjusted EBITDA of $402 million, and adjusted EPS of $0.60. The company's European business is outperforming expectations, with an anticipated innovation sales growth of $200 million in 2024.
InvestingPro Insights
Graphic Packaging Holding Co.'s recent executive changes come at a time when the company is showing strong financial performance. According to InvestingPro data, GPK has a market capitalization of $8.87 billion and is trading at a P/E ratio of 12.52, suggesting a relatively attractive valuation compared to its earnings.
InvestingPro Tips highlight that management has been aggressively buying back shares, which often signals confidence in the company's future prospects. This aligns with the company's decision to enhance its Executive Severance Plan, potentially aiming to retain top talent like Stephen R. Scherger and Joseph P. Yost.
The company's financial health appears robust, with a reported revenue of $9.09 billion in the last twelve months as of Q2 2024. Additionally, GPK has demonstrated profitability with a gross profit margin of 22.91% and an operating income margin of 13.26% over the same period.
Investors might find it reassuring that GPK is trading near its 52-week high, with a strong return over the last five years. The stock's one-year price total return of 34.36% outperforms many of its peers, indicating positive market sentiment.
For those interested in a deeper analysis, InvestingPro offers 9 additional tips for GPK, providing a more comprehensive view of the company's financial position and market performance.
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