Exhibit 99
NEWS ----------
______________________________________________________________________________
For further information contact:
(Fort Howard logo here) Media:
Cliff Bowers, Ext. 4087
P. O. Box 19130 Financial:
Green Bay, WI 54307-9130 Mike Lempke, Ext. 2492
414/435-8821
FOR RELEASE: IMMEDIATELY
FORT HOWARD OPERATING INCOME
INCREASES 61% FOR FIRST QUARTER
GREEN BAY, WI - April 23, 1996 - Fort Howard Corporation today reported
increased sales, operating income and margin for the first quarter of 1996.
"Our strategies to extend Fort Howard's market penetration and
profitability are paying off," said Fort Howard Chairman and CEO, Donald H.
DeMeuse. "Proof of that is our 61.4% increase in operating income compared to
the first three months of last year."
Fort Howard's operating income margin for the quarter was 29.6% compared
to 19.3% for the first quarter of 1995 and 25.5% in the fourth quarter of
1995.
"Improved pricing in both the consumer and commercial markets, lower
wastepaper costs, and the continuing growth of our branded and private label
consumer products all contributed to our strong start for the year compared to
the first quarter of '95," DeMeuse said.
-- More --
-- Ad One --
For the first quarter of 1996, net income was $26,940,000 compared to a
net loss for the first quarter of 1995 of $28,266,000. The net income was
$0.43 per share in the first quarter of 1996 compared to a net loss before
extraordinary items of $(0.22) per share in the first quarter of 1995.
The company completed a recapitalization, including an IPO of 25 million
shares of common stock, in April 1995. Had the recapitalization been
completed on January 1, 1995, net loss per share before extraordinary items
for the first quarter of 1995 would have been $(0.02) on a pro forma basis.
"We're focused on continuing this momentum," DeMeuse said. "Our first-
quarter entry into the premium segment of the commercial market with our
Preference Ultra product line is part of our core strategy for building
shareholder value. The early reaction of the marketplace to these products
has been very positive."
In addition, the company's joint venture project in Shanghai, China,
began shipping tissue products during the first quarter, DeMeuse said.
For the first quarter, Fort Howard's net sales increased 5.0% to
$385,747,000 compared to first quarter 1995 net sales of $367,376,000.
Domestic tissue sales increased 10.5% for the first quarter of 1996 compared
to first quarter 1995. Also, net sales of the company's international
operations increased 21.1% for the first quarter of 1996 compared to first
quarter 1995. Offsetting sales increases at domestic and international tissue
operations were lower sales from the company's wastepaper brokerage operations
resulting from lower wastepaper prices.
Operating income increased to $114,203,000 for the first quarter compared
to $70,775,000 for the first quarter of 1995. The increase was due to higher
net selling prices and lower wastepaper costs in both the company's domestic
and international operations.
-- More --
-- Ad Two --
Extraordinary losses related to debt repurchases in 1995 (see Note to
Financial Information) impacted the company's financial performance in the
first quarter of 1995.
On March 14, 1996, the company announced that, subject to market
conditions, it intends to sell approximately 10 million primary shares of
common stock in a registered public offering. The net proceeds of the
offering, which is expected to take place in the second quarter and will be
made only by means of a prospectus, will be used to reduce outstanding bank
debt. It is also anticipated that the offering will include up to
approximately 6 million additional secondary shares of common stock which may
be sold by certain shareholders of Fort Howard. The company will not receive
any proceeds from the sale of shares by the selling shareholders.
Fort Howard is a leading manufacturer and marketer of consumer tissue
products for both the away-from-home and at-home markets in the United States
and United Kingdom. In the domestic at-home 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, and Green Forest, the leading domestic line of environmentally
positioned recycled tissue paper products.
-- More --
-- Ad Three --
(Financial information and note follow on separate pages. The note is an
integral part of these statements.)
A registration statement relating to the company's common stock has been
filed with the Securities and Exchange Commission but has not yet become
effective. These securities may not be sold nor any offers to buy be accepted
prior to the time of the registration statement becoming effective. This
financial release shall not constitute an offer to sell or a solicitation of
an offer to buy nor shall there by any sale of these securities in any State
in which such offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities law of such State.
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FORT HOWARD CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
----------------------
1996 1995
---- ----
In thousands, except per share amounts)
Net sales $385,747 $367,376
Cost of sales 238,369 267,856
-------- --------
Gross income 147,378 99,520
Selling, general and administrative 33,175 28,745
-------- --------
Operating income 114,203 70,775
Interest expense 70,773 86,770
Other (income) expense, net 563 (224)
-------- --------
Income (loss) before taxes 42,867 (15,771)
Income taxes (credit) 15,927 (6,253)
-------- --------
Income (loss) before extraordinary item 26,940 (9,518)
Extraordinary item - loss on debt
repurchases, net -- (18,748)
-------- --------
Net income (loss) $ 26,940 $(28,266)
======== ========
Net income (loss) per share:
Before extraordinary item $ 0.43 $ (0.22)
Extraordinary item -- (0.44)
-------- --------
Net income (loss) $ 0.43 $ (0.66)
======== ========
FORT HOWARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
1996 1995
------------ ------------
(In thousands)
Assets
Current assets:
Cash and cash equivalents $ 594 $ 946
Receivables, less allowances of $2,994 in 1996
and $2,883 in 1995 83,488 97,707
Inventories 158,347 163,076
Deferred income taxes 38,000 29,000
Income taxes receivable 700 700
---------- ----------
Total current assets 281,129 291,429
Property, plant and equipment 1,976,841 1,971,641
Less: Accumulated depreciation 729,804 706,394
---------- ----------
Net property, plant and equipment 1,247,037 1,265,247
Other assets 93,608 95,761
---------- ----------
Total assets $1,621,774 $1,652,437
========== ==========
Liabilities and Shareholders' Deficit
Current liabilities:
Accounts payable $ 103,685 $ 112,384
Interest payable 23,731 64,375
Income taxes payable 9,470 1,339
Other current liabilities 59,099 85,351
Current portion of long-term debt 84,109 62,720
---------- ----------
Total current liabilities 280,094 326,169
Long-term debt 2,877,638 2,903,299
Deferred and other long-term income taxes 240,322 225,043
Other liabilities 35,976 36,355
Shareholders' deficit:
Common Stock 634 634
Additional paid-in capital 895,860 895,652
Cumulative translation adjustment (3,819) (2,844)
Retained deficit (2,704,931) (2,731,871)
---------- ----------
Total shareholders' deficit (1,812,256) (1,838,429)
---------- ----------
Total liabilities and shareholders' deficit $1,621,774 $1,652,437
========== ==========
FORT HOWARD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
--------------------
1996 1995
---- ----
(In thousands)
Cash provided from (used for) operations:
Net income (loss) $ 26,940 $ (28,266)
Depreciation 25,112 24,331
Non-cash interest expense 3,294 3,223
Deferred income tax credit 6,295 (16,191)
Pre-tax loss on debt repurchases -- 30,734
(Increase) decrease in receivables 14,219 (16,134)
(Increase) decrease in inventories 4,729 (14,468)
Increase in income taxes receivable -- (3,000)
Increase (decrease) in accounts payable (8,699) 25,828
Decrease in interest payable (40,644) (21,081)
Increase (decrease) in income taxes payable 8,131 (112)
All other, net (27,277) (30,281)
--------- ---------
Net cash provided from (used for) operations 12,100 (45,417)
Cash used for investment activity:
Additions to property, plant and equipment (8,873) (10,845)
Cash provided from (used for) financing activities:
Proceeds from long-term borrowings 22,324 655,800
Repayment of long-term borrowings (26,111) (832,596)
Debt issuance costs -- (48,201)
Issuance of Common Stock, net of offering costs 208 281,047
--------- ---------
Net cash provided from (used for)
financing activities (3,579) 56,050
--------- ---------
Decrease in cash (352) (212)
Cash at beginning of period 946 422
--------- ---------
Cash at end of period $ 594 $ 210
========= =========
*****
FORT HOWARD CORPORATION
NOTE TO FINANCIAL INFORMATION
(Unaudited)
1. The company completed a recapitalization, including an IPO of 25 million
shares of common stock, in April 1995.
A. In connection with the recapitalization 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 of the company's outstanding 12
5/8% Subordinated Debentures at a 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.
B. 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 income taxes
(credit) for the decrease in interest expense at an effective rate
of 39%, the pro forma net loss before extraordinary item and 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, respectively.
# # # # #