FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended FEBRUARY 28, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number: 0-7574
WAUSAU PAPER MILLS COMPANY
(Exact name of registrant as specified in charter)
WISCONSIN 39-0690900
(State of incorporation) (I.R.S. Employer
Identification Number)
ONE CLARK'S ISLAND
P.O. BOX 1408
WAUSAU, WISCONSIN 54402-1408
(Address of principal executive office)
Registrant's telephone number, including area code: 715-845-5266
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such report), and (2) has been subject to such
filing requirements for the past 90 days.
X
Yes ________ No ________
The number of common shares outstanding at March 31, 1997 was 36,514,972.
WAUSAU PAPER MILLS COMPANY
AND SUBSIDIARIES
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of 1
Income Three and Six Months Ended
February 28, 1997 (unaudited) and
February 29, 1996 (unaudited)
Condensed Consolidated Balance 2
Sheets February 28, 1997 (unaudited)
and August 31, 1996 (derived from audited
financial statements)
Condensed Consolidated Statements 3
of Cash Flows Six Months
Ended February 28, 1997 (unaudited) and
February 29, 1996 (unaudited)
Notes to Condensed Consolidated 4 - 5
Financial Statements
Item 2. Management's Discussion and 6 - 9
Analysis of Financial Condition
and Results of Operations
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders 10
Item 5. Other Information 10 - 11
Item 6. Exhibits and Reports on Form 8-K 11 - 12
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
CONSOLIDATED STATEMENTS OF INCOME
Wausau Paper Mills Company and
Subsidiaries
(Dollars in thousands, except For the Three Months For the Six Months
per share data - unaudited) Ended February 28, 1997 and February 29,1996
1997 1996 1997 1996
Net sales $125,695 $128,590 $265,604 $270,494
Cost of products sold 102,569 109,985 215,868 232,261
GROSS PROFIT 23,396 18,605 49,736 38,233
Selling, administrative
and research expenses 6,831 7,072 14,847 14,488
OPERATING PROFIT 16,565 11,533 34,889 23,745
Interest income 21 159 110 369
Interest expense (649) (713) (1,234) (1,283)
Other income (expense) (19) (62) 17 (109)
EARNINGS BEFORE INCOME TAXES 15,918 10,917 33,782 22,722
Provision for income taxes 6,050 4,200 12,800 8,700
NET EARNINGS $ 9,868 $ 6,717 $ 20,982 $ 14,022
NET EARNINGS PER COMMON SHARE $ .27 $ .18 $ .57 $ .38
WEIGHTED AVERAGE NUMBER OF SHARES 36,514,000 36,832,000 36,513,000 36,831,000
CONSOLIDATED BALANCE SHEETS
Wausau Paper Mills Company and Subsidiaries
(Dollars in thousands) February 28 August 31
1997* 1996*
ASSETS
Current Assets
Cash and cash equivalents $ 1,253 $ 2,372
Accounts and notes receivable 39,727 37,217
Inventories 93,156 70,443
Other current assets 8,473 8,208
Total current assets 142,609 119,240
Property, plant and equipment 336,110 330,536
Other assets 13,529 17,252
TOTAL ASSETS $492,248 $467,028
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 6,348 $ 6,340
Accounts payable 27,535 26,307
Accrued and other liabilities 24,096 23,496
Accrued income taxes 2,910
Total current liabilities 57,979 59,053
LONG-TERM LIABILITIES
Long-term debt 58,397 53,119
Deferred income taxes 47,347 43,469
Other liabilities 47,348 46,676
Total long-term liabilities 153,092 143,264
Total shareholders' equity 281,177 264,711
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $492,248 $467,028
<FN>
* The consolidated balance sheet at February 28, 1997 is unaudited. The
August 31, 1996 consolidated balance sheet is derived from audited
financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Wausau Paper Mills Company and Subsidiaries
For the Six Months
(Dollars in thousands - unaudited) Ended Feb. 28, 1997 and Feb. 29, 1996
1997 1996
Operating Activities:
Net earnings $ 20,982 $ 14,022
Noncash items:
Provision for depreciation, depletion
and amortization 12,750 11,069
Deferred income taxes 3,878 2,501
Changes in operating assets and liabilities:
Receivables (1,510) 410
Inventories (22,713) (4,147)
Other assets (397) 256
Accounts payable and other liabilities 3,595 1,860
Accrued income taxes (2,910) 393
NET CASH PROVIDED BY OPERATING ACTIVITIES 13,675 26,364
Investing Activities:
Capital expenditures (21,723) (31,405)
Proceeds from property, plant and
equipment disposals 11 60
Net cash distributed from funds
restricted for capital additions 3,844 5,650
NET CASH USED IN INVESTING ACTIVITIES (17,868) (25,695)
Financing Activities:
Net borrowings under
revolving credit facility 10,500 5,498
Repayments of long-term debt (3,168) (3,245)
Dividends paid (4,290) (3,883)
Proceeds from stock option exercises 32 32
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 3,074 (1,598)
Net decrease in cash and cash equivalents (1,119) (929)
Cash and cash equivalents at beginning of year 2,372 2,347
CASH AND CASH EQUIVALENTS AT END OF QUARTER $ 1,253 $ 1,418
Supplemental Information:
Interest paid (net of amount capitalized) $ 1,268 $ 1,220
Income taxes paid 12,262 5,840
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: The accompanying unaudited condensed financial statements include all
adjustments, which are all normal and recurring in nature and, in the
opinion of management, present fairly the results for the interim
periods presented. Refer to the Notes to Financial Statements which
appear in the 1996 Annual Report for the company's accounting policies
which are pertinent to these statements.
Note 2: Selling, administrative and research expenses include stock
appreciation rights and stock option discount income of $110,000 or
less than $.01 per share for the quarter ended February 28, 1997 and
expense of $175,000 or less than $.01 per share for the quarter ended
February 29, 1996. For the six months ended February 28, 1997, SARs
and stock option expense was $474,000 or $.01 per share compared to
expense of $828,000 or $.01 per share for the six months ended
February 29, 1996.
Note 3: Accounts receivable consisted of the following:
FEBRUARY 28, 1997 AUGUST 31, 1996
Customer Accounts $42,913,000 $42,818,000
Misc. Notes and Accounts
Receivable 1,594,000 1,403,000
$44,507,000 $44,221,000
Less: Allowance for Discounts,
Doubtful Accounts and Pending
Credits 4,780,000 6,004,000
Net Receivables $39,727,000 $38,217,000
NOTE 4: THE VARIOUS COMPONENTS OF INVENTORIES WERE AS FOLLOWS:
FEBRUARY 28, 1997 AUGUST 31, 1996
Raw Materials and Supplies $ 54,695,000 $40,822,000
Work in Process
and Finished Goods 50,470,000 41,630,000
$105,165,000 $82,452,000
Less: LIFO Reserve 12,009,000 12,009,000
Net Inventories $ 93,156,000 $70,443,000
NOTE 5: The accumulated depreciation on fixed assets was $175,960,000 as of
February 28, 1997 and $164,983,000 as of August 31, 1996.
NOTE 6: A summary of long-term debt is as follows:
FEBRUARY 28, 1997 AUGUST 31, 1996
Bonds, Mortgages and
Similar Debt $58,198,000 $52,744,000
Capitalized Leases 199,000 375,000
Total Long Term Debt $58,397,000 $53,119,000
NOTE 7: Dividends per share were as follows:
THREE MONTHS ENDING
February 28, 1997 February 29, 1996
$.125* $.110*
<FN>
* The company's Board of Directors meeting schedule resulted in the
declaration of cash dividends of $.125 and $.110 per share in the
three months ended February 28, 1997 and February 29, 1996,
respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS*:
RESULT OF OPERATIONS
Net Sales
Net sales for the quarter ended February 28, 1997 were $125,965,000, 2.0%
below last year's second quarter sales of $128,590,000 due to lower average
selling prices. Shipments totalled 99,600 tons, up 5.2% from last year's
shipment level. For the first six months of fiscal 1997, net sales were
$265,604,000, down 1.8% from the prior year as a result of lower selling
prices, while shipments of 209,800 tons were 5.7% higher than the first half
of fiscal 1995.
Shipments at the company's Printing and Writing Division increased 1.6% in the
second quarter, compared to a year ago. Market conditions in the company's
printing and writing product lines softened during the second quarter of
fiscal 1997, resulting in lower average selling prices compared to the first
quarter of the year. Demand has gained some strength since the end of the
second quarter as market conditions show signs of improvement in this sector
of the company's business. At February 28, 1997, order backlog was at the
same level as a year ago.
Demand was strong for the company's technical specialty grades during the
second quarter of fiscal 1997. Shipments were 11.5% ahead of a year ago, lead
by strong demand for Rhinelander's pressure sensitive grades, where shipments
were 29.1% better than last year. Rhinelander's order backlog at the end of
the second quarter was essentially at the same level as a year ago.
Gross Profit
Gross profit for the three months ended February 28, 1997 was $23,396,000 or
18.6% of net sales, compared to $18,605,000 or 14.5% of net sales recorded in
last year's second quarter. For the first half of fiscal 1997, gross profit
was $49,736,000 or 18.7% of sales. Gross profit was $38,233,000 or 14.1% of
net sales for the first six months of fiscal 1996. The increase in gross
profit during the second quarter and first half of fiscal 1997, compared to
the prior year, is due primarily to lower pulp prices and higher production
levels.
Market prices for pulp, the company's primary raw material, remained
relatively flat during the second quarter of fiscal 1997. However, natural
gas and other energy prices increased dramatically in the second quarter,
resulting in a $1.8 million increase in energy costs compared to a year ago.
Repairs at the Brokaw mill to two of its pulp mill digesters have taken longer
than anticipated, which also negatively impacted second quarter gross margin
as a result of curtailed pulp production. Repairs to both digesters are
expected to be completed early in the third fiscal quarter and no further
negative material impact on gross margin is anticipated.
* This discussion and analysis contains forward-looking statements. See
"Cautionary Statement" set forth in Item 5.
The Printing and Writing Division operated at capacity during the second
quarter of fiscal 1997. Paper mill production was 5% higher than last year
due primarily to productivity increases from capital improvements. Inventory
levels rose during the quarter as a result of the productivity increases and
less than robust market demand. Rhinelander's paper machines also operated at
capacity in the second quarter. Rhinelander production was 11% higher than a
year ago primarily as a result of capital improvements, including a $42
million capacity expansion completed in fiscal 1996. Rhinelander's silicone
coaters operated at approximately 76% of available machine time during the
second quarter of fiscal 1997. Through the first half of the year, volume in
the release-coated products area has grown 24% over the prior year, but is not
yet sufficient to sustain full operation on the coaters. Paper inventory
levels at Rhinelander remained essentially unchanged during the second quarter
of fiscal 1997.
Selling, Administrative and Research Expenses
Selling, administrative and research expenses were $6,831,000 for the three
months ended February 28, 1997 compared to $7,072,000 in last year's second
quarter. Stock appreciation rights (SARs) and stock option income of $110,000
was recorded during the second quarter compared to expense of $175,000
recorded in last year's second quarter.
For the six months ended February 28, 1997, selling, administrative and
research expenses totalled $14,847,000 compared to $14,488,000 for the first
half of fiscal 1995. SARs and stock option expense of $474,000 was incurred
in the first half of fiscal 1997 compared to expense of $828,000 for the same
period a year ago. Higher marketing and promotional costs are the main reason
for the balance of the increase in spending compared to the previous year.
Interest Income and Expense
Interest income of $21,000 was recorded in the second quarter of fiscal 1997
compared to $159,000 for the same period a year ago. Interest income totalled
$110,000 and $369,000 for the first six months of fiscal 1997 and fiscal 1996,
respectively. The decrease in interest income in the second quarter and first
six months of fiscal 1997 compared to the prior year is due to interest income
on a declining balance of undistributed proceeds from a $19 million industrial
development bond issuance in August 1995. The bond proceeds were fully
disbursed in January 1997.
For the three months ended February 28, 1997, interest expense was $649,000
compared to $713,000 in the second quarter of fiscal 1996. For the first six
months of fiscal 1997, interest expense was $1,234,000 compared to $1,283,000
for the same period a year ago. Lower interest expense in the second quarter
and first half of fiscal 1997 is due to lower average debt levels compared to
the same periods a year ago. Capitalized interest recorded in the second
quarter of fiscal 1997 was $56,000 compared to $289,000 in last year's second
quarter. Capitalized interest was $198,000 and $672,000 for the first six
months of fiscal 1997 and fiscal 1996, respectively. Higher capitalized
interest in the fiscal 1996 periods was due to capital spending on major
projects under construction a year ago.
Income Taxes
The income tax provision in the second quarter of fiscal 1997 was $6,050,000
for an effective tax rate of 38.0%. The effective tax rate in last year's
second quarter was 38.5%. The income tax provision for the first six months
of fiscal 1997 was $12,800,000 for an effective tax rate of 37.9% compared to
an effective tax rate of 38.3% for the same fiscal 1996 period.
Net Earnings
Net earnings for the three months ended February 28, 1997 were $9,868,000 or
$.27 per share compared to net earnings of $6,717,000 or $.18 per share for
the three months ended February 29, 1996. Net earnings for the first half of
fiscal 1996 were $20,982,000 or $.57 per share compared to net earnings of
$14,022,000 or $.38 per share for the same period a year ago.
CAPITAL RESOURCES AND LIQUIDITY
Cash Provided by Operations
Cash used in operations in the second quarter of fiscal 1997 was $6,127,000
compared to cash provided by operations of $7,894,000 in last year's second
quarter. For the six months ended February 28, 1997, cash provided by
operations was $13,675,000 compared to $26,364,000 for the first half of
fiscal 1996. The decrease in cash provided by operations in the second
quarter and first half of fiscal 1997, compared to the prior year, is due
primarily to a substantial increase in inventories. A combination of strong
production and somewhat soft market conditions resulted in a sizeable increase
in paper inventories at the Printing and Writing Division. In addition, the
company has taken advantage of opportunities to purchase pulp at attractive
prices, substantially increasing pulp inventories. Digester repairs at the
Brokaw mill have contributed to higher pulpwood inventories as well.
Capital Expenditures
Capital expenditures totalled $11,489,000 during the second quarter of fiscal
1997 compared to $14,089,000 for the same period last year. In the first half
of fiscal 1997, capital expenditures were $21,723,000 compared to $31,405,000
a year ago.
During the second quarter of fiscal 1997, a $6 million upgrade to the Brokaw
mill's wood processing facility was completed. The total benefits of improved
wood yield, increased process efficiencies and reduced operating costs will be
realized once the digester repairs are completed and the pulp mill resumes
full operation. At Rhinelander, work is nearing completion on the
installation of an additional rewinder to support the silicone coater
operation. Start-up is expected by the middle of the third fiscal quarter.
Capital expenditures in fiscal 1997 are projected to be approximately $40 to
$45 million.
Financing
Long-term debt increased $16,824,000 in the second quarter of fiscal 1997 to
$58,397,000 due to working capital requirements. Long-term debt includes
$15.0 million in notes to Prudential Insurance Company of America and its
subsidiaries at a fixed rate of 6.03% and revolving credit agreement
borrowings of $22.5 million at effective interest rates ranging from 5.55% to
5.69% at February 28, 1997. The company also had $1,500,000 in commercial
paper outstanding at the end of the quarter with an effective interest rate of
5.60%. In addition, the company had $19.0 million in variable rate industrial
development bonds with an interest rate of 3.60% at February 28, 1997.
On February 11, 1997, the company announced the signing of a letter of intent
to purchase substantially all the assets of Otis Specialty Papers, a
subsidiary of Rexam Inc. for approximately $58 million. The company is in the
process of amending its revolving credit facility in order to finance the Otis
acquisition. The amended agreement will increase the revolving credit line
from $40 million to $105 million and extend through March 29, 2001, at which
time, or earlier at the company's option, the agreement will convert to a one-
year term loan. Terms and conditions of the amended credit facility will
remain essentially unchanged. For further information on the acquisition
announcement, refer to Item 5 on Page 10.
Cash provided by operations and the amended revolving credit facility are
expected to meet current and anticipated working capital needs and dividend
requirements, as well as fund the Otis acquisition and planned capital
expenditures. The company believes additional financing is readily available,
should it be needed, to fund a major expansion or an additional acquisition.
Common Stock Repurchase
On June 30, 1994, the Board of Directors authorized the repurchase of up to
1,856,250 shares (adjusted for the effect of stock splits) of the company's
common stock from time to time in the open market or through privately
negotiated transactions at prevailing market prices. There have been no
repurchases of company stock during the first six months of fiscal 1997.
Dividends
On December 16, 1996, the Board of Directors increased the quarterly cash
dividend by 13.6%, from $.055 to $.0625 per share. The cash dividend was paid
on January 10, 1997 to shareholders of record as of December 31, 1996.
The Board of Directors, at the February 19, 1997 meeting, declared a quarterly
cash dividend of $.0625 per share payable April 1, 1997 to shareholders of
record on March 14, 1997.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
The annual meeting of shareholders of the company was held on December 16,
1996.
The matters voted upon, including the number of votes cast for, against or
withheld, as well as the number of abstentions and broker non-votes, as to
each such matter were as follows:
MATTER SHARES
Broker
1. Election of Class II For Against Withheld Abstain Non-Vote
Directors
(a) Gary W. Freels 31,723,391 N/A 148,888 N/A 0
Broker
2. Approval of appointment of For Against Withheld Abstain Non-Vote
independent auditors for
year ending August 31, 1997 31,765,102 28,961 N/A 78,216 0
ITEM 5. OTHER INFORMATION
OTIS SPECIALTY PAPERS ACQUISITION*
On February 11, 1997, Wausau Paper Mills Company announced the signing of a
letter of intent with Rexam Inc. to purchase substantially all of the assets
of Otis Specialty Papers, a subsidiary of Rexam Inc. Otis Specialty Papers is
a leading producer of quality technical specialty papers such as
supercalendered kraft release base paper, thermal papers and other high
performance papers. Located in Jay, Maine and employing 300 people, the Otis
operation is capable of producing 70,000 tons per year on its two paper
machines and supercalenders. Terms of the transaction call for a purchase
price of $58 million, subject to certain adjustments on the date of closing.
In the news release issued on February 11, 1997, Daniel D. King, President and
Chief Executive Officer of Wausau Paper Mills Company commented on the
transaction, "The acquisition of Otis Specialty Papers is an excellent fit
with our Rhinelander Paper Company division adding over 40 percent to our
technical paper making capacity. The Otis facility brings special
manufacturing capabilities that will provide new product opportunities,
production and scheduling efficiencies and geographical advantages to allow us
to better serve our customers. Otis has a stellar reputation for supplying
high quality products to the pressure sensitive and other technical markets.
We look forward to working with the experienced and dedicated Otis work force
and welcoming them to the Wausau Papers team. They will play a key role in
the growth of our business."
Mr. King added, "While the Otis acquisition is an outstanding addition to
Rhinelander's specialty technical business, we continue to search for and
evaluate similar acquisition opportunities for our printing and writing
division so that we might accelerate revenue and earnings growth for this
segment of our business as well."
The acquisition is subject to a number of conditions including the completion
of due diligence activities, approval by the Boards of Directors of a
definitive purchase agreement and regulatory approvals. The waiting period
under the Hart, Scott, Rodino Act 15 USC Section 18A, expired on March 23,
1997. The acquisition is expected to close by the end of April 1997.
* This discussion contains forward-looking statements. See "Cautionary
Statement" below.
CAUTIONARY STATEMENT
This quarterly report includes certain of management's expectations and other
forward-looking information regarding the company. While the company believes
that these forward-looking statements are based on reasonable assumptions, all
such statements involve risk and uncertainties that could cause actual results
to differ materially from those contemplated in this report. The assumptions,
risks and uncertainties relating to the forward-looking statements in this
report include those described under the caption "Cautionary Statement" in the
company's Form 10-K for the year ended August 31, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
Incorporated
(a) Exhibits required by Item 601 of Regulation S-K Exhibit<dagger>
EXHIBIT 3 - ARTICLES OF INCORPORATION AND BYLAWS
(a) Articles of Incorporation, as amended
December 21, 1995 .................................... 3(1)
(b) Bylaws, as restated July 17, 1992 .................... 3(b)(2)
EXHIBIT 4 - INSTRUMENTS DEFINING THE RIGHTS OF
SECURITY HOLDERS
(a) Articles and Bylaws (see Exhibit 3)
EXHIBIT 10 - MATERIAL CONTRACTS*
(a) Executive Officers' Deferred Compensation Retirement
Plan, as amended 09/18/96 ........................... 10(a)(3)
(b) Incentive Compensation Plans, as amended 09/18/96
(Printing and Writing Division and Rhinelander Paper
Company, Inc.) ..................................... 10(b)(3)
(c) Corporate Management Incentive Plan, as amended
09/18/96 ............................................ 10(c)(3)
(d) 1988 Stock Appreciation Rights Plan, as amended
04/17/91 ............................................ 10(d)(3)
(e) 1988 Management Incentive Plan, as amended 04/17/91 . 10(e)(3)
(f) 1990 Stock Appreciation Rights Plan, as amended
04/17/91 ............................................ 10(f)(3)
(g) Deferred Compensation Agreement dated 03/02/90,
as amended 07/01/94 ................................. 10(h)(4)
(h) 1991 Employee Stock Option Plan ..................... 10(h)(5)
(i) 1991 Dividend Equivalent Plan ....................... 10(i)(5)
(j) Supplemental Retirement Benefit Plan dated 01/16/92,
as amended 11/13/95 ................................. 10(6)
(k) Directors' Deferred Compensation Plan
(l) Director Retirement Benefit Policy .................. 10(o)(7)
*All exhibits represent executive compensation plans and arrangements.
EXHIBIT 21 - SUBSIDIARIES ................................ 22(7)
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
<dagger>Where exhibit has been previously filed and is incorporated herein
by reference, exhibit numbers set forth herein correspond to the exhibit
numbers where such exhibit can be found in the following reports of the
company(Commission File No. 0-7574) filed with the Securities and Exchange
Commission:
(1) Registrant's quarterly report on Form 10-Q for the quarterly period
ended February 29, 1996.
(2) Registrant's annual report on Form 10-K for the fiscal year ended
August 31, 1992.
(3) Registrant's annual report on Form 10-K for the fiscal year ended
August 31, 1996.
(4) Registrant's annual report on Form 10-K for the fiscal year ended
August 31, 1994.
(5) Registrant's quarterly report on Form 10-Q for the quarterly period
ended November 30, 1996.
(6) Registrant's quarterly report on Form 10-Q for the quarterly period
ended November 30, 1995.
(7) Registrant's annual report on Form 10-K for the fiscal year ended
August 31, 1993.
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
WAUSAU PAPER MILLS COMPANY
Registrant
By: STEVEN A. SCHMIDT
Steven A. Schmidt
Vice President Finance, Secretary
and Treasurer
(Principal Financial Officer)
Date: April 11, 1997
EXHIBIT INDEX
TO
FORM 10-Q
OF
WAUSAU PAPER MILLS COMPANY
FOR THE PERIOD ENDED FEBRUARY 28, 1997
Pursuant to Section 102(d) of Regulation S-T
(17 C.F.R. <section>232.102(d))
EXHIBIT 10 - MATERIAL CONTRACTS*
(k) Directors' Deferred Compensation Plan
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
*Executive compensation plan or arrangement