Exhibit 99.2
News Release
CONTACT:
Martha A. Buckley JoAnn P. Huston
Director, Corporate Communications Manager, Investor Relations
610-722-3511 610-722-3513
UNISOURCE ANNOUNCES PLAN TO STREAMLINE COMPANY
Berwyn, Pennsylvania (January 21, 1998) -- Unisource Worldwide, Inc. (NYSE:
UWW) announced today that it will take a number of significant steps to
streamline the company's organization, accelerate profitable growth and improve
its return to shareholders. The steps outlined include moving from a regional to
a functionally-aligned organizational structure, closing or consolidating
underperforming and overlapping locations, and implementing more consistent
business practices across the company. As many as 50 locations and approximately
800 employees will be impacted by these moves. The company expects to take a
pre-tax charge in the range of $55 million to $70 million in the second fiscal
quarter, which ends March 31, 1998, to reflect the costs of the realignment.
Ray B. Mundt, chairman and chief executive officer of Unisource, stated:
"Our results during our first year as a public company did not meet our
expectations. In fact, they have been a significant disappointment. As a result,
we have reviewed our entire U.S. organization to determine what steps need to be
taken to position this company for consistent and dependable growth in revenues,
earnings and shareholder value for the future."
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Unisource became a separate publicly traded company following a spin-off
from Alco Standard Corporation in December 1996. The company's US operations are
currently organized into 143 operating divisions and 426 locations, which report
through five regional headquarters.
"Too much of our capital is invested in assets which are not producing
adequate returns for our shareholders," Mundt said. "Additionally, our current
organizational structure and diverse business processes are too costly, and
inhibit both efficient operation and effective communication."
Charles F. White, president and chief operating officer of Unisource,
added, "Customers today demand responsive, cost-effective solutions.
Streamlining our company and moving to more consistent business processes will
accelerate our ability to initiate change and leverage our size and scale, while
delivering value to our customers and shareholders." The company will complete
its plans and begin implementation by the end of March, 1998.
As part of its first quarter earnings release today, the company also
announced that it will not proceed with implementation of its SAP-based
information system, and will focus instead on consolidating its existing
information systems and bringing them into 2000 compliance. To reflect the
write-off of the deferred asset and related costs, Unisource took a
first-quarter pre-tax charge of $168 million, which is primarily non-cash.
"Our management team is committed to grow this company and to provide an
appropriate return on our investment, " Mundt stated. "Clearly, with all the
change and realignment announced today, 1998 is a transitional year for
Unisource. We'll begin to realize the full benefits of these changes in fiscal
1999. Our earnings in 1998, excluding special charges, will be sufficient to
comfortably cover our dividend, and we are committed to our $.20 per share
quarterly dividend to shareholders," Mundt concluded.
-more-
Unisource Worldwide, Inc. (http://www.unisourcelink.com), headquartered in
Berwyn, Pennsylvania, is the largest marketer and distributor of paper products
and supply systems in North America. The company's revenues for fiscal 1997 were
more than $7 billion.
This press release contains certain forward-looking statements which
involve known and unknown risks, uncertainties or other factors not under the
company's control which may cause the actual results, performance or
achievements of the company to be materially different from the results,
performance or other expectations implied by these forward-looking statements.
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