Wausau-Mosinee Paper Announces Third-Quarter Earnings Up 53%
Press release from the issuing company
MOSINEE, Wis-October 17, 2001--Wausau-Mosinee Paper Corporation today announced third-quarter net earnings of $7.3 million, or $0.14 per share, up 53 percent from $4.7 million, or $0.09 per share, in the prior year, and up sharply from net income of $2.4 million, or $0.05 per share, in the second quarter of 2001. Third-quarter 2001 earnings included stock incentive credits of $0.01 per share, compared with credits of less than $0.01 per sharein the same period last year and expenses of $0.01 per share in the second quarter of 2001.
Net sales for the 2001 third quarter were $235.0 million, compared with $240.7 million for the same period last year and $231.0 million for the second quarter of 2001.
Thomas J. Howatt, president and CEO, said: "We are pleased to report improved third-quarter earnings despite the difficult market conditions faced by all three of our business segments. Market pulp and natural gas price declines, improved operating efficiencies and volume gains generated much of the earnings increase.''
Third-quarter gross profit margins, as a percent of net sales, improved to 13.0 percent from 10.7 percent in 2000 and 10.4 percent in the second quarter of 2001. "Margins improved from the second quarter in all three business segments and from year-earlier levels in all but the Specialty Paper business segment where pricing pressure has been the greatest,'' explained Mr. Howatt.
Mr. Howatt pointed out, "The Printing & Writing segment registered the most dramatic improvement, with operating profits more than tripling to $10.4 million from $3.3 million the year before. This improvement was driven by pulp and natural gas price decreases, unit volume gains and strong mill operations. The Towel & Tissue business continued to display strength, as operating earnings were up nearly 10 percent to $8.0 million from $7.2 million. Our marketing efforts to sustain full operations at the Specialty Paper Group in the face of continuing demand softness have also met with success. These volume gains assisted us in reducing our third-quarter operating loss to $1.2 million from $2.7 million in the second quarter and $4.0 million in the first quarter.''
For the first nine months of 2001, net earnings were $4.9 million, or $0.10 per share, compared with a net loss of $400,000, or $0.01 per share, last year. Adjusted for stock incentives and non-recurring items, the Company reported net earnings of $0.13 per share through nine months, compared with net earnings of $0.35 per share last year.
Mr. Howatt also stated that the Company continues to make significant progress on the aggressive improvement initiatives defined for the Company for the year 2001. "Through nine months, capital spending has been reduced 66% from year-earlier levels and stands at 50% of depreciation. Key components of working capital have been reduced over $35 million since the start of this program in 2000. Coupled with improving earnings, these efforts have allowed us to reduce debt by nearly $60 million from peak levels earlier this year. Our intense product development efforts have also delivered short-term volume gains while positioning us for future growth in strategic areas.''
Commenting on the fourth-quarter outlook, Mr. Howatt said, "Difficult market conditions are expected to persist as we enter the seasonally weak fourth quarter. As a result, we anticipate fourth- quarter earnings will fall below third-quarter levels, but expect full- year earnings to exceed the recently revised analysts' consensus estimate of $0.16 per share.''
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