Exhibit 99
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NEWS
For further information contact:
Media:
Cliff Bowers, Ext. 4087
(FORT HOWARD LOGO here)
P. O. Box 19130 Financial:
Green Bay, WI 54307-9130 Mike Lempke, Ext. 2492
414/435-8821
FOR RELEASE: IMMEDIATELY
FORT HOWARD EARNINGS PER SHARE
INCREASE 56% FOR FIRST QUARTER
GREEN BAY, WI - April 21, 1997 - Fort Howard Corporation today reported
that net income per share reached $0.67 before an extraordinary item for the
first quarter ending March 31, 1997, an increase of 56% compared to $0.43 in
the same period of 1996.
Net sales, operating income, operating margin and earnings per share all
increased in the first quarter of 1997. Quarterly operating income increased
year-on-year for the ninth consecutive quarter.
"Every aspect of our business is performing superbly," said Fort Howard
Chairman, President and CEO, Michael T. Riordan. "Our results confirm our
strategies as a successful consumer products business and distinguish us from
the broader paper and forest products sector.
"As we look through the balance of this year, raw material costs,
pricing, operating rates and overall economic growth appear positive. In
light of this strong environment, we believe Fort Howard can continue to
perform at very high levels," Riordan said.
- More -
- Ad One -
Operating Income Increases
Operating income increased 21% to $138,237,000 for the first quarter
compared to $114,203,000 for the first quarter of 1996. The increase was due
to higher sales volume and lower wastepaper costs in both the company's
domestic and international operations. Fort Howard's operating income margin
for the quarter was 34.5% compared to 29.6% for the first quarter of 1996 and
31.3% in the fourth quarter of 1996 before the 1996 environmental charge.
Net Income
For the first quarter of 1997, net income before an extraordinary item
was $49,747,000, an increase of 85% compared to first quarter 1996 net income
of $26,940,000. The net income after an extraordinary item was $0.65 per
share in the first quarter of 1997 compared to $0.43 per share in the first
quarter of 1996. Extraordinary losses related to debt prepayments in 1997 (see
Note to Financial Information) impacted the company's financial performance in
the first quarter of 1997.
Net Sales Performance
For the first quarter, Fort Howard's net sales increased 3.9% to
$400,759,000 compared to first quarter 1996 net sales of $385,747,000.
Domestic tissue sales increased 3.7% for the first quarter of 1997 compared to
first quarter 1996. Sales volume of converted products increased 8.6% but
this was partially offset by lower selling prices resulting from industry-wide
price decreases in the at-home tissue market which occurred in mid-1996.
Also, net sales of the company's international operations and the company's
wastepaper brokerage operations increased for the first quarter of 1997
compared to first quarter 1996.
- More -
- Ad Two -
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 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 note follow on separate pages. The note is an
integral part of these statements.)
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FORT HOWARD CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
--------------------
1997 1996
---- ----
(In thousands, except per share amounts)
Net sales $400,759 $385,747
Cost of sales 229,040 238,369
-------- --------
Gross income 171,719 147,378
Selling, general and administrative 33,482 33,175
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Operating income 138,237 114,203
Interest expense 57,862 70,773
Other expense, net 780 563
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Income before taxes 79,595 42,867
Income tax expense 29,848 15,927
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Income before extraordinary item 49,747 26,940
Extraordinary item - loss on
debt repurchases, net (1,327) --
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Net income $ 48,420 $ 26,940
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Net income per share:
Before extraordinary item $ 0.67 $ 0.43
Extraordinary item (0.02) --
-------- --------
Net income $ 0.65 $ 0.43
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Average shares outstanding 74,531 63,372
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FORT HOWARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
1997 1996
------------ ------------
(In thousands)
Assets
Current assets:
Cash and cash equivalents $ 663 $ 759
Receivables, less allowances of $3,484 in 1997
and $3,343 in 1996 70,830 63,194
Inventories 149,301 151,248
Deferred income taxes 54,000 60,000
Income taxes receivable 10,121 10,121
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Total current assets 284,915 285,322
Property, plant and equipment 2,062,864 2,057,446
Less: Accumulated depreciation 831,337 809,650
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Net property, plant and equipment 1,231,527 1,247,796
Other assets 64,581 82,262
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Total assets $1,581,023 $1,615,380
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Liabilities and Shareholders' Deficit
Current liabilities:
Accounts payable $ 118,758 $ 131,205
Interest payable 21,171 60,443
Income taxes payable 21,282 7,700
Other current liabilities 68,800 110,357
Current portion of long-term debt 11,425 11,972
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Total current liabilities 241,436 321,677
Long-term debt 2,441,446 2,451,373
Deferred and other long-term income taxes 252,474 247,464
Other liabilities 49,141 49,703
Shareholders' deficit:
Common Stock 746 744
Additional paid-in capital 1,115,323 1,108,976
Cumulative translation adjustment 1,311 4,717
Retained deficit (2,520,854) (2,569,274)
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Total shareholders' deficit (1,403,474) (1,454,837)
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Total liabilities and shareholders' deficit $1,581,023 $1,615,380
========== ==========
FORT HOWARD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
--------------------
1997 1996
---- ----
(In thousands)
Cash provided from (used for) operations:
Net income $ 48,420 $ 26,940
Depreciation 25,855 25,112
Non-cash interest expense 3,235 3,294
Deferred income tax expense 9,829 6,295
Pre-tax loss on debt repurchases 2,194 --
Decrease in restricted cash 14,916 --
(Increase) decrease in receivables (7,636) 14,219
Decrease in inventories 1,947 4,729
Decrease in accounts payable (12,447) (8,699)
Decrease in interest payable (39,272) (40,644)
Increase in income taxes payable 13,582 8,131
All other, net (39,311) (27,277)
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Net cash provided from operations 21,312 12,100
Cash used for investment activity:
Additions to property, plant and equipment (14,896) (8,873)
Cash provided from (used for) financing activities:
Proceeds from long-term borrowings 99,700 22,324
Repayment of long-term borrowings (109,505) (26,111)
Issuance of Common Stock 3,293 208
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Net cash used for financing activities (6,512) (3,579)
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Decrease in cash (96) (352)
Cash at beginning of period 759 946
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Cash at end of period $ 663 $ 594
========= =========
*****
FORT HOWARD CORPORATION
NOTE TO FINANCIAL INFORMATION
(Unaudited)
1. The Company's net income in the first quarter of 1997 was decreased by an
extraordinary loss of $1.3 million (net of income taxes of $0.9 million)
representing the write-off of deferred loan costs associated with the
prepayment of a portion of the outstanding indebtedness under the 1995
Bank Credit Agreement.
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