[GRAPHIC OMITTED][BADGER PAPER LOGO]
For Immediate Release
Contacts: Badger Paper: Figel Murphy:
William H. Peters, CFO William Murphy, Partner
715-582-5203 312-223-9536
Badger Paper Reports A
First Quarter Loss Due to Rising Expenses
News Highlights
- ---------------
o Steps already underway to better control energy costs
o Company looking at ways to lower pulp costs
o Second-quarter price increase announced
o Badger still on track for revenue growth goal this year
Peshtigo, WI - April 21, 2003 - Badger Paper Mills, Inc. (Nasdaq SmallCap:
BPMI), today reported a loss of $0.50 per diluted share in the first quarter of
2003. Significantly higher operating expenses, primarily caused by continuing
increases in pulp and natural gas prices, were the main factors in the loss
which overshadowed Badger's continued gains in overall revenues and specialty
paper market share. Pricing pressures related to the Company's printing and
writing paper products also contributed to the loss.
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Badger Paper Mills, Inc.
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Results from the first quarter ended March 31, 2003 include net sales of $19.7
million compared to net sales of $18.2 million for the year ago quarter. Net
loss for the first quarter was $1.02 million or $0.50 per share basic and
diluted, compared to net income of $1.17 million or $0.58 per basic and $0.57
per share diluted for the year ago period. Included in the first quarter 2002
results was a pretax gain on the sale of Company-owned land and facilities
totaling $1.1 million, a $747,000 gain after taxes. Average shares outstanding,
both basic and diluted, increased slightly in the first quarter of 2003 compared
to last year and those numbers can be found in the accompanying financial
tables.
"A bright note for us during this challenging quarter was our ability to grow
top-line revenues when other paper companies are losing sales," noted Mr. Robert
Olah, Badger's President and Chief Executive Officer. "We began shifting our
product mix to specialty paper products about two years ago. One of our major
goals has been to grow revenues and increase our specialty markets penetration.
We were able to accomplish those goals during the quarter and we still feel we
are on track for our full-year goal of growing revenues by 11 percent.
"Badger's first quarter margins were severely impacted by rapidly increasing
operating expenses," noted Olah. "Specifically, our energy costs doubled this
winter and we also saw significant cost increases in pulp, our main raw
material."
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Badger Paper Mills, Inc.
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According to Olah, the Company has already taken positive steps to minimize
energy and materials cost increases in the future. "We are investigating new
energy and pulp purchasing agreements that would help cushion us better against
drastic price increases in the future," said Olah. "We have also initiated price
increases on specialty paper products in the second quarter and we will closely
watch and see how the market reacts to our action."
Badger Paper Mills, Inc. is a growing leader in the manufacture of
flexible packaging and specialty papers for customers throughout North America.
Badger Paper Mills offers advice and leadership, while developing advanced
specialty paper solutions for its customers. Badger adds value for customers
through high-quality manufacturing capabilities, inventory management services,
just-in-time distribution and a full array of printing services.
Forward-Looking Statements
This release may include one or more forward-looking statements within the
meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities
Exchange Act of 1934 as enacted in the Private Securities Litigation Reform Act
of 1995. The Company undertakes no obligation to publicly update or revise any
such statement. The forward-looking statements are subject to the risks and
uncertainties, which could cause actual results to differ materially from
management expectations. Such risks and uncertainties include but are not
limited to:
- Increased competition from domestic or foreign paper producers, or
providers of alternatives to the Company's products, including
increases in competitive production capacity and/or weakness in demand
for paper products
Badger Paper Mills, Inc.
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- Changes in the price of pulp, the Company's main raw material. The
Company purchases all of its pulp on the open market and price changes
for pulp have a significant impact on the Company's costs
- Interruptions in the supply of, or increases and/or changes in the
price of energy (principally electricity, natural gas, and fuel oil)
that the Company needs in its manufacturing operations
- Changes in demand for the Company's products due to overall economic
activity affecting the rate of consumption of the Company's paper
products, growth rates of the end markets for the Company's products,
technological or consumer preference changes and acceptance of the
Company's products by the markets it serves
Further information about risks and uncertainties discussed above as well as
additional material risks related to the Company's business can be found in the
Company's Annual Report on Form 10-K for the year 2002 and other filings the
Company has made from time to time with the Securities and Exchange Commission.
Financial Tables Follow
Badger Paper Mills, Inc.
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Badger Paper Mills, Inc.
CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
(dollars in thousands except per share data)
For Three Months Ended
March 31
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2003 2002
Net Sales $19,669 $18,250
Cost of Sales 19,663 16,176
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Gross Profit 6 2,074
Selling and Administrative Expenses 1,461 1,347
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Operating (Loss) Income (1,455) 727
Interest Expense (97) (104)
Interest Income 2 3
Gain on Sale of Non Core Assets 1,131
Other Income (Expense), Net 3 17
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(Loss) Income Before Income Taxes (1,547) 1,774
Income Tax (Benefit) Expense (526) 603
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Net (Loss) Income ($1,021) $1,171
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Net (Loss) Income Per Share - Basic ($0.50) $0.58
Average Shares Outstanding - Basic 2,030,480 2,023,874
Net (Loss) Income Per Share - Diluted ($0.50) $0.57
Average Shares Outstanding - Diluted 2,030,480 2,059,702