Wausau-Mosinee Paper Reports Increased Third-Quarter Earnings
Press release from the issuing company
MOSINEE, Wis.--Oct. 16, 2002--Wausau-Mosinee Paper Corporation today announced third-quarter net earnings of $7.6 million, or $.15 per share, compared to $7.3 million, or $.14 per share, in the same period last year. Third-quarter earnings included stock incentive credits of $.02 per share in 2002 and $.01 per share in 2001. Third quarter net sales were $251.1 million compared with $245.1 million last year.
Net earnings for the first nine months of 2002 were $16.7 million, or $.32 per share, compared to $4.2 million, or $.08 per share, last year. Year-to-date net earnings included stock incentive credits of $.01 per share in 2002 and expenses of $.05 per share in 2001. Net sales through the first three quarters were $714.9 million compared to $719.9 million last year.
"We are pleased that two of our three business segments achieved profit improvements despite competitive market conditions and increased raw material costs," said Thomas J. Howatt, President and CEO. "Continued market share gains helped increase our Towel & Tissue Group operating profits by 25 percent compared to last year, while successful cost reduction efforts enabled the Specialty Paper Group to report slightly-better-than breakeven results compared to a $1.3 million loss in the third quarter of 2001."
Towel & Tissue Group operating profits of $9.2 million compared favorably with 2001 third-quarter profits of $7.3 million, and shipments increased 5 percent over last year, reaching record levels. "Market share gains continue to drive both top- and bottom-line growth in our towel and tissue business," said Mr. Howatt. "Our gains were especially strong in the region serviced by our West Coast distribution center that opened earlier this year." Selling price increases implemented in late second and early third quarter for towel and tissue products helped push average selling price 4 percent higher compared to second quarter prices, although competitive pressures have since eroded some of the selling price gains.
The Specialty Paper Group posted third-quarter operating profits of $59,000 compared to a loss of $1.3 million during the same period last year. "Intense cost reduction efforts and continuing product development successes allowed Specialty Paper to report its first operating profit since the fourth quarter of 2000, despite higher market pulp costs," continued Mr. Howatt. Improved product mix offset product selling price declines for specialty grades, resulting in a slight improvement in average selling price.
Printing & Writing Group operating profits declined to $6.0 million from $10.4 million last year as market pulp cost increases and selling price decreases outweighed sales volume gains. "Uncoated free-sheet market demand remained sluggish through the quarter with continued double-digit declines in demand for premium papers," said Mr. Howatt. "Despite these declines we have succeeded in growing premium papers volume in 2002, led by continued strong growth in the retail sector. We also expect that our recent selling price increases will improve margins in the fourth quarter."
Commenting on the fourth-quarter outlook, Mr. Howatt stated, "We expect little help from the marketplace in the fourth quarter with market demand increasing only in our towel and tissue business. As a result we will again look to our internal initiatives in the areas of new product development, cost-effective operations, and benchmark customer service to drive profitability. Coupled with signs of decline in market pulp costs, we expect fourth-quarter earnings to modestly exceed prior year results, exclusive of stock incentive credits or expenses."
Wausau-Mosinee's third-quarter conference call is scheduled for 11:00 a.m. (EDT) on Thursday, October 17, and can be accessed through the Company's web site at www.wausaumosinee.com under "Investor Information." A replay of the webcast will be available at the same site through October 25.
Wausau-Mosinee Paper Corporation produces fine printing and writing papers, technical specialty papers, and "away-from-home" towel and tissue products.
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