Spokane -- 4/17/01 - Potlatch Corporation (NYSE: PCH) today reported a loss for the first quarter of 2001, due largely to continuing high energy costs and poor market conditions for most of its products. The results for the quarter include an after-tax charge of $2.6 million, or $.09 per diluted common share, related to a workforce reduction plan at its pulp, paperboard and consumer products operations in Idaho.
For the first quarter of 2001 the company incurred a net loss of $28.8 million, or $1.02 per diluted common share, before the workforce reduction charge. Including the charge, the loss was $31.4 million or $1.11 per diluted common share. Net earnings for the first quarter of 2000 were $2.4 million or $.08 per diluted common share. Net sales for the first quarter of 2001 were $444.0 million, compared to $474.6 million recorded a year ago.
The resource segment reported earnings of $7.9 million for the first quarter, compared to the $12.8 million earned in the first quarter of 2000. The unfavorable comparison to the prior year was primarily due to lower log production in Idaho and Arkansas combined with lower net sales realizations for log sales in Idaho.
The wood products segment reported an operating loss of $20.7 million for the first quarter of 2001, versus earnings of $15.7 million recorded in 2000's first quarter. “Net sales realizations for all of the company’s wood products were considerably lower than first quarter 2000 levels, especially oriented strand board, which were down over 40 percent,” said L. Pendleton Siegel, Potlatch chairman and chief executive officer. “Oriented strand board shipments declined during the current quarter, largely due to the temporary shutdown of the Cook, Minnesota, plant to complete a modernization and expansion project; while lower plywood shipments reflect the permanent closure of the Jaype, Idaho, plant last fall.” The Cook plant has been operating well since its startup in late January. Markets for lumber and panel products continue to reflect the effects of foreign imports.
The printing papers segment reported a first quarter 2001 operating loss of $2.2 million, a slight improvement over the $4.1 million loss in the first quarter of 2000. “Increased production at the pulp mill in Cloquet, Minnesota, helped to reduce costs and led to significantly increased pulp shipments compared to the first quarter of 2000,” Siegel said. “Those benefits were partially offset by lower net sales realizations for printing papers and pulp and higher energy costs.” Markets for the company’s printing papers remain soft.
The pulp and paper segment reported an operating loss for 2001’s first quarter of $15.1 million, compared to earnings of $3.3 million in 2000's first quarter. “High energy costs, particularly in the northwest, severely affected the segment’s financial performance,” Siegel said. “The company is actively working to mitigate these costs through conservation initiatives and enhancement of its internal electrical generation capabilities.” Results were also adversely affected by lower net sales realizations for paperboard and pulp and a decline in pulp shipments. Consumer tissue product shipments and net sales realizations showed modest increases for the quarter compared to the first quarter of 2000.
Potlatch is a diversified forest products company with timberlands in Arkansas, Idaho and Minnesota.
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