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 EPS SURGES 60% IN SECOND QUARTER
GREEN BAY, WI - July 23, 1997 - Fort Howard Corporation today reported
that net income per share reached $0.77 for the second quarter ending June 30,
1997. That is an increase of 60% compared to $0.48 in the same period of
1996.
Net sales, operating income, operating margin and earnings per share all
increased in the second quarter of 1997 compared to the same period of 1996.
Quarterly operating income increased year-on-year for the tenth consecutive
quarter.
"We continue to perform at a very high level due to successful
strategies, significant cost and efficiency advantages, as well as a positive
economic environment," said Fort Howard Chairman, President and CEO,
Michael T. Riordan. "Fort Howard is delighted to bring this exceptional
business momentum to our pending merger with James River Corporation."
-- More --
-- Ad One --
Operating Income Increases
Operating income increased 23% to $153,684,000 for the second quarter
compared to $124,699,000 for the second quarter of 1996. Operating income
increased 22% to $291,921,000 for the first six months of 1997 compared to
$238,902,000 for the first six months 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
second quarter of 1997 was 37.4% compared to 31.0% for the second quarter of
1996 and 34.5% in the first quarter of 1997. Fort Howard's operating income
margin for the first six months was 35.9% compared to 30.3% for the first six
months of 1996.
Net Income
For the second quarter of 1997, net income before an extraordinary item
was $58,889,000 an increase of 62% compared to second quarter 1996 net income
before an extraordinary item of $36,377,000. For the first six months of
1997, net income before an extraordinary item was $108,636,000, an increase
of 72% compared to the first six months of 1996 net income before an
extraordinary item of $63,317,000.
The net income after an extraordinary item was $0.77 per share in the
second quarter of 1997, compared to $0.48 per share in the second quarter of
1996. The net income after extraordinary item was $1.42 per share for the
first six months of 1997, compared to $0.91 per share in the first six months
of the previous year.
During the second quarter of 1996, Fort Howard completed a common stock
offering resulting in a higher level of outstanding shares in the three- and
six-month periods ended June 30, 1997, as compared to l996.
-- More --
-- Ad Two --
Extraordinary losses related to debt prepayments in 1997 and 1996 (see
Note to Financial Information) impacted the company's financial performance in
the first six months and the second quarters of 1997 and 1996.
Net Sales Performance
For the second quarter, Fort Howard's net sales increased 2.2% to
$411,415,000 compared to second quarter 1996 net sales of $402,397,000. Net
sales for each of the company's domestic, international and wastepaper
brokerage operations increased for the second quarter of 1997 compared to
second quarter 1996.
For the first six months of 1997, Fort Howard's net sales increased 3.0%
to $812,174,000 compared to the first six months of 1996 net sales of
$788,144,000. Net sales for each of the company's domestic, international,
and wastepaper brokerage operations increased for the first six months of 1997
compared to the first six months of 1996.
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 Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
(In thousands, except per share amounts)
Net sales....................... $411,415 $402,397 $812,174 $788,144
Cost of sales................... 225,821 243,487 454,861 481,856
-------- -------- -------- --------
Gross income.................... 185,594 158,910 357,313 306,288
Selling, general and
administrative................ 31,910 34,211 65,392 67,386
-------- -------- -------- --------
Operating income................ 153,684 124,699 291,921 238,902
Interest expense................ 57,156 66,201 115,018 136,974
Other expense (income), net..... 655 475 1,435 1,038
-------- -------- -------- --------
Income before taxes............. 95,873 58,023 175,468 100,890
Income tax expense ............. 36,984 21,646 66,832 37,573
-------- -------- -------- --------
Net income before
extraordinary item............ 58,889 36,377 108,636 63,317
Extraordinary item -- loss
on debt repurchases, net...... (601) (3,340) (1,928) (3,340)
-------- -------- -------- --------
Net income ..................... $ 58,288 $ 33,037 $106,708 $ 59,977
======== ======== ======== ========
Net income per share:
Before extraordinary item..... $ 0.78 $ 0.53 $ 1.45 $ 0.96
Extraordinary item............ (0.01) (0.05) (0.03) (0.05)
-------- -------- -------- --------
Net income.................... $ 0.77 $ 0.48 $ 1.42 $ 0.91
======== ======== ======== ========
Average shares outstanding...... 75,215 68,759 74,875 66,066
======== ======== ======== ========
FORT HOWARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
1997 1996
-------- ------------
Assets (In thousands)
Current assets:
Cash and cash equivalents................. $ 4,107 $ 759
Receivables, less allowances of $3,389 in
1997 and $3,343 in 1996................. 77,466 63,194
Inventories............................... 150,061 151,248
Deferred income taxes..................... 48,000 60,000
Income taxes receivable................... -- 10,121
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Total current assets.................... 279,634 285,322
Property, plant and equipment............... 2,092,311 2,057,446
Less: Accumulated depreciation........... 856,067 809,650
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Net property, plant and equipment....... 1,236,244 1,247,796
Other assets................................ 69,964 82,262
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Total assets............................ $1,585,842 $1,615,380
========== ==========
Liabilities and Shareholders' Deficit
Current liabilities:
Accounts payable.......................... $ 106,402 $ 131,205
Interest payable.......................... 58,015 60,443
Income taxes payable...................... 3,684 7,700
Other current liabilities................. 80,649 110,357
Current portion of long-term debt......... 7,015 11,972
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Total current liabilities............... 255,765 321,677
Long-term debt.............................. 2,332,196 2,451,373
Deferred and other long-term income taxes... 259,561 247,464
Other liabilities........................... 48,517 49,703
Shareholders' deficit:
Common Stock.............................. 762 744
Additional paid-in capital................ 1,148,971 1,108,976
Cumulative translation adjustment......... 2,636 4,717
Retained deficit.......................... (2,462,566) (2,569,274)
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Total shareholders' deficit............. (1,310,197) (1,454,837)
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Total liabilities and shareholders'
deficit............................... $1,585,842 $1,615,380
========== ==========
FORT HOWARD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
------------------
1997 1996
---- ----
(In thousands)
Cash provided from (used for) operations:
Net income ................................... $ 106,708 $ 59,977
Depreciation.................................. 51,569 50,231
Non-cash interest expense..................... 7,200 6,645
Deferred income tax expense................... 22,745 11,975
Pre-tax loss on debt repurchases.............. 3,186 5,519
Decrease in restricted cash................... 14,916 --
(Increase) decrease in receivables............ (14,272) 10,639
Decrease in inventories....................... 1,187 27,453
Decrease in income taxes receivable........... 10,121 --
Decrease in accounts payable.................. (24,803) (8,769)
Decrease in interest payable.................. (2,428) (3,391)
Increase (decrease) in income taxes payable... (4,016) 1,282
All other, net................................ (38,069) (8,891)
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Net cash provided from operations .......... 134,044 152,670
Cash used for investment activity:
Additions to property, plant and equipment.... (44,403) (24,384)
Cash provided from (used for) financing
activities:
Proceeds from long-term borrowings............ 36,300 192
Repayment of long-term borrowings............. (159,550) (332,529)
Debt issuance costs........................... -- (1,481)
Issuance of Common Stock, net of
offering costs.............................. 36,957 205,318
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Net cash used for financing activities...... (86,293) (128,500)
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Increase (decrease) in cash..................... 3,348 (214)
Cash at beginning of period..................... 759 946
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Cash at end of period......................... $ 4,107 $ 732
========== =========
FORT HOWARD CORPORATION
NOTE TO FINANCIAL INFORMATION
(Unaudited)
1. The Company's net income in the first six months and second quarter of
1997 was decreased by an extraordinary loss of $1.9 million and $0.6
million (net of income taxes of $1.3 million and $0.4 million),
respectively, 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. The Company's net
income in the first six months and the second quarter of 1996 was
decreased by an extraordinary loss of $3.3 million (net of income taxes
of $2.2 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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