Exhibit 99
NEWS
For further information contact:
(FORT HOWARD LOGO here)
Media:
Cliff Bowers, Ext. 4087
Financial:
Mike Lempke, Ext. 2492
P. O. Box 19130
Green Bay, WI 54307-9130
414/435-8821
FOR RELEASE: IMMEDIATELY
FORT HOWARD EPS MORE THAN DOUBLES
TO $0.58 FOR 3RD QUARTER,
OPERATING INCOME RISES 42%
GREEN BAY, WI - October 23, 1996 - Fort Howard Corporation today reported
its seventh consecutive year-over-year quarterly increase in operating income.
Net income per share reached $0.58 for the third quarter ending September 30,
1996, compared to net income per share of $0.23 in the same period of 1995.
"Our strong market positions, supported by Fort Howard's unique operating
efficiencies, have propelled our positive performance for this quarter as they
have for the past several," said Fort Howard President and Chief Executive
Officer, Michael T. Riordan. "Very strong order flow for our at-home
products, stable pricing in our away-from-home business and low recovered
fiber costs were key factors."
Fort Howard's operating income rose 42% in the third quarter of 1996
compared to the third quarter of 1995. Its operating income margin for the
quarter was 33% compared to 22% for the third quarter of 1995 and 31% for the
second quarter of 1996.
-- More --
-- Ad One --
According to Riordan, the growing demand for the company's at-home
branded and private label tissue products, combined with its plans for
continued product enhancements, led to its capacity-expansion announcement
last month.
Fort Howard will add a state-of-the-art, 270-inch paper machine at either
its Rincon, GA, operation near Savannah, or its Muskogee, OK, facility.
Start-up is expected in 1999.
NET SALES PERFORMANCE
Although volume increased in the 3rd quarter, domestic tissue revenues
declined slightly from the same quarter of 1995 due primarily to lower selling
prices for Fort Howard's at-home products. Net sales of the company's
international operations increased 4% for the third quarter of 1996 compared
to third quarter 1995 due to higher volume at the company's U.K. facilities,
offset by lower selling prices. For the third quarter, Fort Howard's
consolidated net sales decreased to $408,163,000 compared to third quarter
1995 net sales of $426,116,000. This is principally due to lower sales from
the company's recovered fiber brokerage operations that experienced
significantly lower prices for commodity wastepaper.
Domestic tissue sales increased 5% for the first nine months of 1996
compared to 1995. Net sales of the company's international operations
increased 9% for the first nine months of 1996 compared to 1995 due to an
increase in both net selling prices and volume at the company's United
Kingdom facilities. Offsetting sales increases at domestic and international
tissue operations were lower sales from the company's recovered fiber
brokerage operations resulting from lower prices. First nine months 1996
consolidated net sales were $1,196,307,000, a decrease of 0.8% from 1995 net
sales of $1,205,602,000 for the same period.
-- Ad Two --
OPERATING INCOME INCREASES
Operating income increased 42% to $135,299,000 for the third quarter
compared to $95,369,000 for the third quarter of 1995. Operating income
increased 47% to $374,201,000 in the first nine months of 1996 compared to
$254,235,000 for the first nine months of 1995. The year-to-date increase was
primarily due to higher volume and selling prices and lower recovered fiber
costs in both the company's domestic and international operations.
NET INCOME NEARLY TRIPLES
For the third quarter of 1996, net income was $43,074,000 resulting in
net income for the first nine months of 1996 of $103,051,000 compared to net
income of $14,500,000 and net loss of $6,147,000 (after extraordinary item)
for the same periods in 1995, respectively. The net income per share was
$0.58 for the third quarter of 1996 compared to $0.23 for the third quarter of
1995. Net income per share before extraordinary items were $1.55 and $0.22
for the first nine months of 1996 and 1995, respectively. For the first nine
months of 1996, net income per share after extraordinary item was $1.50
compared to a net loss per share after extraordinary item of $0.11 for the
first nine months of 1995.
In April 1995, the company completed a recapitalization, including an IPO
of 25 million shares of common stock. Had the recapitalization been completed
on January 1, 1995, net income per share for the first nine months of 1995
would have been $0.36 per share on a pro forma basis based on 63,371,000
shares outstanding.
Extraordinary losses related to debt repurchases in 1996 and 1995 (see
Notes to Financial Information) impacted the company's financial performance
during the first nine months of 1996 and 1995.
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.
-- More --
-- Ad Three --
In the domestic at-home market, its principal consumer brands include
Mardi Gras printed napkins (which holds 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.
Prominent away-from-home market brands include the Preference Ultra line
of premium products, Preference near-premium products, and the Envision line
of environmentally positioned 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 STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ------------------
1996 1995 1996 1995
---- ---- ---- ----
(In thousands, except per share amounts)
Net sales $408,163 $426,116 $1,196,307 $1,205,602
Cost of sales 234,007 299,974 715,863 865,474
-------- -------- ---------- ----------
Gross income 174,156 126,142 480,444 340,128
Selling, general and
administrative 38,857 30,773 106,243 85,893
-------- -------- ---------- ----------
Operating income 135,299 95,369 374,201 254,235
Interest expense 61,867 74,177 198,841 237,258
Other expense
(income), net 2,545 (1,600) 3,583 (2,537)
-------- -------- ---------- ----------
Income before taxes 70,887 22,792 171,777 19,514
Income tax expense 27,813 8,292 65,386 6,913
-------- -------- ---------- ----------
Net income before
extraordinary item 43,074 14,500 106,391 12,601
Extraordinary item -
loss on debt
repurchases, net -- -- (3,340) (18,748)
-------- -------- ---------- ----------
Net income (loss) $ 43,074 $ 14,500 $ 103,051 $ (6,147)
======== ======== ========== ==========
Net income (loss) per share:
Before extraordinary
item $ 0.58 $ 0.23 $ 1.55 $ 0.22
Extraordinary item -- -- (0.05) (0.33)
-------- -------- ---------- ----------
Net income (loss) $ 0.58 $ 0.23 $ 1.50 $ (0.11)
======== ======== ========== ==========
FORT HOWARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1996 1995
------------ ------------
(In thousands)
Assets
Current assets:
Cash and cash equivalents $ 693 $ 946
Receivables, less allowances of $3,304 in 1996
and $2,883 in 1995 90,157 97,707
Inventories 136,696 163,076
Deferred income taxes 51,000 29,000
Income taxes receivable 400 700
---------- ----------
Total current assets 278,946 291,429
Property, plant and equipment 2,009,804 1,971,641
Less: Accumulated depreciation 778,953 706,394
---------- ----------
Net property, plant and equipment 1,230,851 1,265,247
Other assets 77,905 95,761
---------- ----------
Total assets $1,587,702 $1,652,437
========== ==========
Liabilities and Shareholders' Deficit
Current liabilities:
Accounts payable $ 121,179 $ 112,384
Interest payable 23,481 64,375
Income taxes payable 6,145 1,339
Other current liabilities 90,530 85,351
Current portion of long-term debt 69,865 62,720
---------- ----------
Total current liabilities 311,200 326,169
Long-term debt 2,500,695 2,903,299
Deferred and other long-term income taxes 270,227 225,043
Other liabilities 34,970 36,355
Shareholders' deficit:
Common Stock 740 634
Additional paid-in capital 1,100,884 895,652
Cumulative translation adjustment (2,194) (2,844)
Retained deficit (2,628,820) (2,731,871)
---------- ----------
Total shareholders' deficit (1,529,390) (1,838,429)
---------- ----------
Total liabilities and shareholders' deficit $1,587,702 $1,652,437
========== ==========
FORT HOWARD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
--------------------
1996 1995
---- ----
(In thousands)
Cash provided from (used for) operations:
Net income (loss) $ 103,051 $ (6,147)
Depreciation 75,727 73,751
Non-cash interest expense 10,103 9,634
Deferred income tax (credit) expense 23,228 (3,967)
Pre-tax loss on debt repurchases 5,520 30,734
Decrease in receivables 7,550 17,972
(Increase) decrease in inventories 26,380 (41,820)
Decrease in income taxes receivable 300 4,500
Increase in accounts payable 8,795 26,623
Decrease in interest payable (40,894) (58,538)
Increase in income taxes payable 4,806 429
All other, net 7,435 (12,228)
--------- ---------
Net cash provided from operations 232,001 40,943
Cash used for investment activity:
Additions to property, plant and equipment (40,876) (32,150)
Cash provided from (used for) financing activities:
Proceeds from long-term borrowings -- 1,438,900
Repayment of long-term borrowings (395,227) (1,682,623)
Debt issuance costs (1,489) (49,155)
Issuance of Common Stock, net of offering costs 205,338 284,104
--------- ---------
Net cash (used for)financing activities (191,378) (8,774)
--------- ---------
Increase (decrease) in cash (253) 19
Cash at beginning of period 946 422
--------- ---------
Cash at end of period $ 693 $ 441
========= =========
*****
FORT HOWARD CORPORATION
NOTES TO FINANCIAL INFORMATION
(Unaudited)
1. In May and June 1996 the company sold 10.52 million primary shares of
common stock in a registered public offering. The net proceeds of the
offering were used to reduce outstanding bank debt. Also included in the
offering were 6.52 million secondary shares of common stock sold by
certain shareholders of Fort Howard. The company did not receive any of
the proceeds from the sale of shares by the selling shareholders. In
connection with the offering in the second quarter of 1996, the company
reported an extraordinary loss of $3 million (net of income taxes of $2
million) representing write-offs of deferred loan costs associated with
the prepayment of indebtedness outstanding under the company's 1995 Bank
Credit Agreement on May 15, 1996.
2. The company completed a recapitalization, including an IPO of 25 million
shares of common stock, in April 1995.
A. In connection with the April 1995 recapitalization, 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.
B. Assuming that all components of the recapitalization had been
consummated as of January 1, 1995, for the first nine months of 1995,
pro forma interest expense would have decreased $16 million from $237
million to $221 million. 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 period)
would have been $22.6 million and $0.36 per share for the first nine
months of 1995, respectively.
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