Offsetting weaker volumes amid destocking trends that hit the sector in the second half of 2022, ProAmpac improved its working capital through inventory sell down and halted M&A activity, generating S&P Global Ratings'-adjusted free cash flow of $23 million. The outperformance resulted in improved credit metrics, with leverage coming in at just over 8x in 2022. In a leverage-neutral transaction, ProAmpac issued a $100 million first-lien term loan in the first quarter to pay down the outstanding balance on the revolver. Industry-wide destocking significantly affected volumes in the first half of the year, but we expect a more normalized trend through the back half, which should support better credit metrics. Volumes in certain segments have been more affected than others.
