EXHIBIT 99
NEWS
For further information contact:
Media:
[Logo] Fort Howard Cliff Bowers, Ext. 4087
Corporation
P. O. Box 19130 Financial:
Green Bay, WI 54307-9130 Mike Lempke Ext. 2492
414/435-8821
FOR RELEASE: IMMEDIATELY
FORT HOWARD ANNOUNCES
FIRST QUARTER, 1995 RESULTS
GREEN BAY, WI - April 26, 1995 - Fort Howard Corporation today announced
financial results for its first quarter ended March 31, 1995.
For the first quarter, Fort Howard's net sales increased 33.4% to a
record $367,376,000 compared to first quarter 1994 net sales of $275,330,000.
Domestic tissue sales increased 28.1% for the first quarter of 1995 compared
to 1994 due to a 17.5% increase in unit sales volume and a 9.0% increase in
net selling prices. Net sales of the company's international operations
increased 11.3% for the first quarter of 1995 compared to 1994 due to a 6.9%
increase in net selling prices on flat volume plus the benefit from the change
in foreign exchange rates. The net sales increase was also attributable to a
176.8% increase in net sales at the company's wastepaper brokerage subsidiary,
principally reflecting higher selling prices.
-- More --
- Ad One -
Operating income increased 17.7% for the first quarter of 1995 to
$70,775,000 compared to $60,133,000 for the first quarter of 1994. The
increase resulted from higher sales and was partially offset by significantly
higher wastepaper costs both domestically and in the company's international
operations. Wastepaper costs for domestic tissue operations were up
approximately 150% in the first quarter of 1995 compared to the first quarter
of 1994. Earnings before interest, taxes, depreciation and amortization
increased 15.7% to $95,106,000 in the first quarter of 1995 from $82,231,000
in the first quarter of 1994.
"Fort Howard's improved results for the quarter reflect both higher
volume and increased selling prices," said Don DeMeuse, Fort Howard Chairman
and Chief Executive Officer. "In light of stronger industry operating
conditions, we have sought and will continue to seek price increases in
response to higher raw material costs."
As previously announced on March 16, 1995, the company issued 25 million
shares of common stock at $12.00 per share in a public stock offering. The
proceeds from the sale, together with the borrowing of new bank debt pursuant
to a new bank credit agreement were used to prepay or repurchase on March 16,
1995 all the outstanding indebtedness under the 1988 Bank Credit Agreement,
the 1993 Term Loan and the Senior Secured Floating Rate Notes. The remaining
proceeds were used to repurchase all outstanding 12 5/8% Subordinated
Debentures and 14 1/8% Junior Subordinated Discount Debentures on April 15,
1995.
- More -
- Ad Two -
Extraordinary losses related to debt repurchases in 1995 and 1994 (See
Note to Financial Information) impacted the company's financial performance in
the first quarters of 1995 and 1994.
The net loss for the first quarter of 1995 decreased to $28,266,000 from
$43,342,000 for the same period in 1994. The net loss per share before
extraordinary items decreased to $0.22 per share in the first quarter of 1995
compared to $0.40 per share for the same period in 1994. Total net loss per
share after extraordinary items decreased to $0.66 per share in the first
quarter of 1995 from $1.14 per share for the same period in 1994.
If the company's IPO had occurred on January 1, 1995, the first
quarter net loss per share would have been $.02 per share based on
63,100,000 shares outstanding.
Fort Howard is a leading manufacturer of tissue products for both the
away-from-home and consumer market place in the United States and United
Kingdom. In the domestic consumer market, its principal brands include Mardi
Gras printed napkins (which hold the leading domestic market position) and
paper towels, Soft 'N Gentle bath and facial tissue, So-Dri paper towels,
Page paper towels, bath tissue and table napkins, and Green Forest, the
leading domestic line of environmentally positioned, recycled tissue paper
products.
(Financial information and notes follow on separate pages. The notes are an
integral part of these statements.)
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FORT HOWARD CORPORATION
CONSOLIDATED STATES OF INCOME
(Unaudited)
Three Months Ended
March 31,
------------------
1995 1994
---- ----
(In thousands, except per share amounts)
Net sales $ 367,376 $ 275,330
Cost of sales 267,856 188,495
--------- ---------
Gross income 99,520 86,835
Selling, general and administrative 28,745 26,702
--------- ---------
Operating income 70,775 60,133
Interest expense 86,770 84,318
Other (income) expense, net (224) 588
--------- ---------
Loss before taxes (15,771) (24,773)
Income taxes (credit) (6,253) (9,601)
--------- ---------
Loss before extraordinary item (9,518) (15,172)
Extraordinary item--loss on
debt repurchases, net (18,748) (28,170)
--------- ---------
Net loss $ (28,266) $ (43,342)
========= =========
Net loss per share:
Before extraordinary item $ (0.22) $ (0.40)
Extraordinary item (0.44) (0.74)
--------- ---------
Total $ (0.66) $ (1.14)
========= =========
FORT HOWARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
1995 1994
---- ----
(In thousands)
Assets
Current assets:
Cash and cash equivalents $ 210 $ 422
Receivables, less allowances of $1,675 in 1995
and $1,589 in 1994 139,284 123,150
Inventories 145,311 130,843
Deferred income taxes 20,000 20,000
Income taxes receivable 8,200 5,200
----------- -----------
Total current assets 313,005 279,615
Property, plant and equipment 1,949,068 1,932,713
Less: Accumulated depreciation 637,574 611,762
----------- -----------
Net property, plant and equipment 1,311,494 1,320,951
Other assets 101,326 80,332
----------- - -----------
Total assets $ 1,725,825 $ 1,680,898
=========== ===========
Liabilitites and Shareholders' Deficit
Current liabilities:
Accounts payable $ 126,809 $ 100,981
Interest payable 63,192 84,273
Income taxes payable 112 224
Other current liabilities 50,595 75,450
Current portion of long-term debt 11,669 116,203
----------- -----------
Total current liabilities 252,377 377,131
Long-term debt 3,123,994 3,189,644
Deferred and other long-term income taxes 194,231 209,697
Other liabilities 37,332 41,162
Common Stock with put right -- 11,711
Shareholders' deficit:
Common Stock 631 381
Additional paid-in capital 892,598 600,090
Cumulative translation adjustment (484) (2,330)
Retained deficit (2,774,854) (2,746,588)
----------- -----------
Total shareholders' deficit (1,882,109) (2,148,447)
----------- -----------
Total liabilities and shareholders' deficit $ 1,725,825 $ 1,680,898
=========== ===========
FORT HOWARD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
------------------
1995 1994
---- ----
(In thousands)
Cash provided from (used for) operations:
Net loss $ (28,266) $(43,342)
Depreciation 24,331 22,098
Non-cash interest expense 3,223 21,287
Deferred income tax credit (16,191) (21,760)
Pre-tax loss on debt repurchases 30,734 42,901
Increase in receivables (16,134) (6,954)
Increase in inventories (14,468) (3,320)
Increase in income taxes receivable (3,000) (2,100)
Increase (decrease) in accounts payable 25,828 (2,402)
Decrease in interest payable (21,081) (22,123)
Increase (decrease) in income taxes payable (112) 133
All other, net (30,281) (28,646)
-------- --------
Net cash used for operations (45,417) (44,228)
Cash used for investment activity --
Additions to property, plant and equipment (10,845) (30,411)
Cash provided from (used for) financing activities:
Proceeds from long-term borrowings 655,800 800,600
Repayment of long-term borrowings (832,596) (703,770)
Debt issuance costs (48,201) (21,635)
Issuance of Common Stock, net of offering costs 281,047 --
---------- ---------
Net cash provided from financing activities 56,050 75,195
---------- ---------
Increase (decrease) in cash (212) 556
Cash at beginning of period 422 227
---------- ---------
Cash at end of period $ 210 $ 783
========== =========
*****
FORT HOWARD CORPORATION
NOTES TO FINANCIAL INFORMATION
(Unaudited)
1. On April 15, 1995, the company completed a recapitalization plan (the
"Recapitalization") to prepay or redeem a substantial portion of its
indebtedness in order to reduce the level and overall cost of its debt,
extend certain debt maturities, increase shareholders' equity and enhance
its access to capital markets.
The Recapitalization included the following components:
(1) The offer and sale by the company of 25,000,000 shares of Common
Stock on March 16, 1995 and an additional 269,555 shares of Common Stock
on April 12, 1995 at $12.00 per share (the "Offering");
(2) Entering into a bank credit agreement (the "New Bank Credit
Agreement") consisting of a $300 million revolving credit facility
(the "1995 Revolving Credit Facility"), an $810 million term loan
(the "1995 Term Loan A") and a $330 million term loan (the "1995
Term Loan B" and, together with the 1995 Term Loan A, the "New Term
Loans"); and entering into a receivable credit agreement consisting
of a $60 million term loan (the "1995 Receivables Facility");
(3) The application on March 16, 1995 of the net proceeds of the sale of
25,000,000 shares of Common Stock pursuant to the Offering, together
with borrowings under the New Term Loans, to prepay or redeem all
the Company's indebtedness outstanding under the 1988 Bank Credit
Agreement, 1993 Term Loan and Senior Secured Notes.
(4) The application on April 15, 1995 of borrowings under the New Term
Loans, the 1995 Receivables Facility and the 1995 Revolving Credit
Facility to redeem all outstanding 14 1/8% Debentures (at par) and
12 5/8% Debentures (at 102.5% of the principal amount thereof).
2. In the first quarter of 1995, the company reported an extraordinary loss
of $19 million (net of income taxes of $12 million) representing the
redemption premiums on the repurchases of all the company's outstanding
12 5/8% Subordinated Debentures at the redemption price of 102.5% of the
principal amount thereof and write-offs of deferred loan costs associated
with the prepayment or repurchases of all indebtedness outstanding under
the company's 1988 Bank Credit Agreement, the 1993 Term Loan and the
Senior Secured Floating Rate Notes on March 16, 1995, and the repurchase
of all outstanding 12 5/8% Subordinated Debentures and 14 1/8% Junior
Subordinated Discount Debentures on April 15, 1995. In the first quarter
of 1994, the company reported an extraordinary loss of $28 million (net
of income taxes of $15 million) representing the redemption premiums and
write-offs of deferred loan costs associated with the repayment of $100
million of term loan indebtedness under the company's 1988 Bank Credit
Agreement on February 10, 1994 and the repurchases of all the company's
remaining 12 3/8% Senior Subordinated Notes and $238 million of the company's
12 5/8% Subordinated Debentures on March 11, 1994.
3. Assuming that all components of the recapitalization had been consummated
as of January 1, 1995, for the first quarter of 1995, pro forma interest
expense would have decreased $14 million from amounts reported to $73
million. After adjusting the income tax (credit) for the decrease in
interest expense at an effective rate of 39%, the pro forma net loss before
extraordinary item and the pro forma net loss per share before extraordinary
item (assuming that 63,101,239 weighted average shares were outstanding for
the quarter) would have been $1 million and $0.02 per share for the first
quarter of 1995.
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