EXHIBIT 99
NEWS
For further information contact:
[Logo] Fort Howard
Corporation Media:
P.O. Box 19130 Cliff Bowers, Ext. 4087
Green Bay, WI 54307-9130
414/435/8821 Financial:
Mike Lempke, Ext. 2492
FOR RELEASE: IMMEDIATELY
FORT HOWARD ANNOUNCES
SECOND QUARTER, 1995 RESULTS
GREEN BAY, WI - July 26, 1995 - Fort Howard Corporation today reported
net income per share for the second quarter ending June 30, 1995, of $0.15 (on
a proforma basis). The company also announced its second consecutive
quarterly net sales record. Its net sales in the second quarter of 1995
increased 30.7% compared to the same period of 1994. Its sales were up 33.4%
in the first quarter.
For the second quarter, Fort Howard's net sales increased to a record
$412,110,000 compared to second quarter 1994 net sales of $315,299,000.
Domestic tissue sales increased 20.9% for the second quarter of 1995 compared
to 1994. Net selling prices increased 23%, converted products volume increased
1.9% and the company sharply reduced parent roll volume in the second quarter.
Net sales of the company's international operations increased 36.5% for the
second quarter of 1995 compared to 1994 due to a 28.2% 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 169.4% increase in
net sales at the company's wastepaper brokerage subsidiary, principally
reflecting higher selling prices.
- More -
- Ad One -
First half 1995 net sales were a record $779,486,000, an increase of
32.0% over 1994 net sales of $590,629,000 for the same period. Domestic
tissue sales increased 24.3% for the first six months of 1995 compared to 1994
due to a 16.0% increase in net selling prices, a 9.9% increase in converted
products volume and reduced parent roll volume. Net sales of the
company's international operations increased 23.4% for the first half of 1995
compared to 1994 due to a 17.2% 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 172.6% increase in net sales at the
company's wastepaper brokerage subsidiary, principally reflecting higher
selling prices.
Operating income increased 11.7% for the second quarter of 1995 to
$88,091,000 compared to $78,889,000 for the second quarter of 1994. Operating
income increased 14.3% to $158,866,000 in the first six months of 1995
compared to $139,022,000 for the first six months of 1994. The increases
resulted from higher sales and were partially offset by significantly higher
wastepaper costs both domestically and in the company's international
operations.
For the second quarter of 1995, earnings before interest, taxes,
depreciation, and amortization ("EBITDA") increased 10.0% to $112,780,000 from
$102,570,000 in the second quarter of 1994. For the first six months of 1995,
EBITDA increased 12.5% to $207,886,000 from $184,801,000 in the first six
months of 1994.
"Fort Howard's improved results for the second quarter reflect our
success in significantly increasing selling prices," said Don DeMeuse, Fort
Howard Chairman and Chief Executive Officer. "We are also pleased with the
strength of our second quarter volume considering the significant improvement
in pricing that we have implemented to date." DeMeuse said that the company
announced additional price increases that it expects to realize in the third
quarter.
- More -
- Ad Two -
Extraordinary losses related to debt repurchases in 1995 and 1994 (See
Notes to Financial Information) impacted the company's financial performance
in the first quarters of 1995 and 1994.
For the second quarter of 1995, net income was $7,619,000 resulting in a
net loss for the first six months of 1995 of $20,647,000 compared to net
losses of $2,049,000 and $45,391,000 for the same periods in 1994,
respectively. The net income (loss) per share before extraordinary items was
$0.12 and $(0.04) per share for the second quarter and first six months of
1995, compared to $(0.05) and $(0.45) per share for the second quarter and
first six months of 1994, respectively. Net income (loss) per share
after extraordinary items was $0.12 and $(0.39) per share for the second
quarter and first six months of 1995 compared to $(0.05) and $(1.19) per share
for the second quarter and first six months of 1994, respectively.
If the company's IPO had occurred on January 1, 1995, the net income per
share for the second quarter and first six months of 1995 would have been
$0.15 and $0.13 per share based on 63,371,000 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.)
# # # # #
FORT HOWARD CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- -----------------
1995 1994 1995 1994
---- ---- ---- ----
(In thousands, except per share amounts)
Net sales $412,110 $315,299 $779,486 $590,629
Cost of sales 297,644 208,566 565,500 397,061
-------- -------- -------- --------
Gross income 114,466 106,733 213,986 193,568
Selling, general and
administrative 26,375 27,844 55,120 54,546
-------- -------- -------- --------
Operating income 88,091 78,889 158,866 139,022
Interest expense 76,311 83,035 163,081 167,353
Other expense (income), net (713) (286) (937) 302
------- -------- -------- --------
Income (loss) before taxes 12,493 (3,860) (3,278) (28,633)
Income tax expense (credit) 4,874 (1,811) (1,379) (11,412)
------- -------- -------- --------
Net income (loss) before
extraordinary item 7,619 (2,049) (1,899) (17,221)
Extraordinary item - loss on
debt repurchases, net -- -- (18,748) (28,170)
-------- -------- -------- ---------
Net income (loss) $ 7,619 $ (2,049) $(20,647) $(45,391)
======== ======== ======== ========
Net income (loss) per share:
Before extraordinary item $ 0.12 $ (0.05) $ (0.04) $ (0.45)
Extraordinary item -- -- (0.35) (0.74)
-------- -------- -------- --------
Net income (loss) $ 0.12 $ (0.05) $ (0.39) $ (1.19)
======== ======== ======== ========
FORT HOWARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
1995 1994
-------- ------------
(In thousands)
Assets
Current assets:
Cash and cash equivalents $ 294 $ 422
Receivables, less allowances of $1,734 in 1995
and $1,589 in 1994 150,560 123,150
Inventories 164,127 130,843
Deferred income taxes 20,000 20,000
Income taxes receivable 700 5,200
----------- -----------
Total current assets 335,681 279,615
Property, plant and equipment 1,957,033 1,932,713
Less: Accumulated depreciation 660,361 611,762
----------- -----------
Net property, plant and equipment 1,296,672 1,320,951
Other assets 98,819 80,332
----------- -----------
Total assets $ 1,731,172 $ 1,680,898
=========== ===========
Liabilities and Shareholders' Deficit
Current liabilities:
Accounts payable $ 120,586 $ 100,981
Interest payable 62,833 84,273
Income taxes payable 44 224
Other current liabilities 60,192 75,450
Current portion of long-term debt 11,502 116,203
----------- -----------
Total current liabilities 255,157 377,131
Long-term debt 3,112,969 3,189,644
Deferred and other long-term income taxes 198,343 209,697
Other liabilities 37,018 41,162
Common Stock with put right -- 11,711
Shareholders' deficit:
Common Stock 634 381
Additional paid-in capital 895,652 600,090
Cumulative translation adjustment (1,366) (2,330)
Retained deficit (2,767,235) (2,746,588)
----------- -----------
Total shareholders' deficit (1,872,315) (2,148,447)
----------- -----------
Total liabilities and shareholders' deficit $ 1,731,172 $ 1,680,898
=========== ===========
FORT HOWARD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
--------------------
1995 1994
---- ----
(In thousands)
Cash provided from (used for) operations:
Net income (loss) $ (20,647) $ (45,391)
Depreciation 49,020 45,779
Non-cash interest expense 6,429 42,816
Deferred income tax credit (11,774) (23,627)
Pre-tax loss on debt repurchases 30,734 42,901
Increase in receivables (27,410) (21,043)
Increase in inventories (33,284) (1,832)
(Increase) decrease in income taxes receivable 4,500 (1,500)
Increase (decrease) in accounts payable 19,605 (13,559)
Increase (decrease) in interest payable (21,440) 11,949
Increase (decrease) in income taxes payable (180) 424
All other, net (21,044) (14,858)
---------- ---------
Net cash provided from (used for) operations (25,491) 22,059
Cash used for investment activity -
Additions to property, plant and equipment (23,119) (50,567)
Cash provided from (used for) financing activities:
Proceeds from long-term borrowings 1,428,800 752,600
Repayment of long-term borrowings (1,616,001) (701,809)
Debt issuance costs (48,421) (21,635)
Issuance (repurchase) of Common Stock,
net of offering costs 284,104 (91)
---------- ---------
Net cash provided from financing activities 48,482 29,065
---------- ---------
Increase (decrease) in cash (128) 557
Cash at beginning of period 422 227
---------- ---------
Cash at end of period $ 294 $ 784
========== =========
*****
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 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 receivables 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 second quarter and first six months of
1995, pro forma interest expense would have decreased $2.6 million and
$16.2 million from amounts reported to $73.7 million and $146.9 million,
respectively. After adjusting the income tax (credit) for the decrease in
interest expense at an effective rate of 38.5%, the pro forma net income
(loss) before extraordinary item and pro forma net income (loss) per share
before extraordinary item (assuming that 63,371,000 weighted average
shares were outstanding for the periods) would have been $9.2 million and
$0.15 per share for the second quarter of 1995 and $8.1 million and $0.13
per share for the first six months of 1995, respectively.
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