Exhibit 99.1
WAUSAU PAPER REPORTS 36 PERCENT GAIN
IN THIRD-QUARTER EARNINGS, HIGHEST PROFIT
IN FIVE YEARS
MOSINEE, Wis...Oct. 19, 2004...Wausau Paper (NYSE:WPP) today reported
third-quarter earnings rose 36 percent to $8.1 million, or $0.16 per diluted
share, from $6.0 million, or $0.12 per diluted share, the year before,
reflecting ongoing progress with its strategic initiatives. Third-quarter
earnings included stock incentive credits of less than $0.01 per diluted share
in 2004 and charges of $0.01 per diluted share in 2003. Net sales increased 5
percent to $262.4 million from $249.5 million last year, while shipments
declined 1 percent.
Net earnings for the first nine months were $15.3 million, or $0.29 per diluted
share, an increase of 45 percent over $10.5 million, or $0.20 per diluted
share, during the same period last year. Earnings included stock incentive
charges of $0.02 per diluted share in 2004 and $0.01 per diluted share in 2003.
Net sales increased 6 percent to $778.4 million from $732.2 million. Shipments
were up 2 percent.
"The third-quarter performance represented our strongest quarterly earnings in
five years," said Thomas J. Howatt, president and CEO. "This improvement was
achieved despite fiber-related price increases of approximately $9 million,
natural gas price increases of $1 million and only modest improvement in market
conditions. Average selling price increased 6 percent as compared to the third
quarter of 2003 with nearly half of the improvement the result of sales mix
enhancements.
"Much of the improvement in profitability can be attributed to the continued
progress of our strategic initiatives," Mr. Howatt said. "On a year-to-date
basis, approximately 40 percent of net sales were generated by products
developed within the last three years, far exceeding our corporate goal of 25
percent; productivity improved by more than our targeted 1 percent; and cost
reduction results approached our corporate goal of 2 percent of prior-year cost
of sales."
Specialty Products reported its ninth consecutive quarter of year-over-year
improvement with operating profits of $5.2 million, more than doubling the $2.4
million earned a year ago. Net sales and shipments rose 12 percent and 3
percent, respectively. "Demand for our specialty papers continued to improve
through the third quarter," commented Mr. Howatt. "Selling price gains,
product mix enhancements and increased production efficiencies offset higher
market pulp and natural gas costs to generate the earnings improvement."
Printing & Writing reported third-quarter operating profits of $5.1 million
compared to $5.3 million last year. Net sales and shipments declined 1 percent
and 5 percent, respectively. "Volume of our higher-margin premium printing and
writing papers increased 9 percent and consumer product shipments increased 15
percent, reflecting the value of our niche market focus," Mr. Howatt said.
"Lower overall shipments were principally due to inconsistent demand and
competitive market conditions for paper mill packaging products. In addition,
uncoated freesheet markets have softened in recent months from the gains
experienced earlier in the year."
Towel & Tissue reported third-quarter operating profits of $7.9 million
compared to $7.6 million last year. Net sales increased 6 percent while
shipments improved slightly. "Selling price increases and record shipments of
value-added products helped offset wastepaper and parent roll price increases
of nearly $2 million, enabling Towel & Tissue to report a year-over-year
profit improvement," said Mr. Howatt.
Looking ahead, Mr. Howatt said, "We remain committed to putting Wausau Paper on
a growth track by pursuing higher-margin niche and emerging markets, using
innovative product development techniques that allow us to effectively partner
with customers, and focusing on new customer service initiatives. The pending
$9.6 million acquisition of the Brainerd, Minnesota, facility, fits well with
that growth strategy. The 170,000-ton per year uncoated freesheet mill
provides the capability and scale to expand our sales of higher-margin premium
printing and writing papers, driving profitability and generating superior
long-term growth.
"The fourth quarter is a seasonally weaker period for most of our businesses.
While fiber costs are easing, they remain well above year ago levels. In
addition, energy, freight and pulpwood costs are moving higher and uncoated
paper market gains have yet to provide any meaningful pricing leverage. As a
result, we expect fourth-quarter earnings to be in line with prior year
earnings of $.10 per share, excluding the potential expense of the Brainerd
mill start-up which is estimated to be $.02 per share."
Wausau Paper produces fine printing and writing papers, technical specialty
papers, and "away-from-home" towel and tissue products.
Safe Harbor under the Private Securities Litigation Reform Act of 1995: The
matters discussed in this news release concerning the Company's future
performance or anticipated financial results are forward-looking statements and
are made pursuant to the safe harbor provisions of the Securities Reform Act of
1995. Such statements involve risks and uncertainties which may cause results
to differ materially from those set forth in these statements. Among other
things, these risks and uncertainties include the strength of the economy and
demand for paper products, increases in raw material and energy prices,
manufacturing problems at Company facilities, and other risks and assumptions
described in Item 1 of the Company's Form 10-K for the year ended December 31,
2003. The Company assumes no obligation to update or supplement forward-
looking statements that become untrue because of subsequent events.