Exhibit 99.1
APPLETON REPORTS FOURTH QUARTER AND YEAR END 2006 RESULTS
APPLETON, Wis., Feb. 21 /PRNewswire/ -- Appleton's net sales for the fourth
quarter ended December 30, 2006, increased 3.0 percent to $277.2 million
compared to net sales of $269.0 million for the same quarter of 2005. Appleton's
net sales for fiscal 2006 were $1.087 billion compared to $1.047 billion for
fiscal 2005, a 3.8 percent increase.
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Appleton reported a net loss of $0.5 million for fourth quarter 2006
compared to a net loss of $0.7 million for the same quarter of 2005.
The Company reported net income of $11.3 million for fiscal 2006 compared
to a net loss of $3.0 million in fiscal 2005. The increase in net income was
driven by higher sales and a $7.0 million decrease in restructuring costs
compared to last year.
Technical Papers
Technical papers net sales for the fourth quarter of 2006 increased 4.1
percent to $208.6 million compared to net sales of $200.4 million for the same
period of fiscal 2005. During fiscal 2006, technical papers net sales increased
3.2 percent to $861.8 million, compared to $834.8 million of net sales in fiscal
2005.
Coated solutions net sales for fourth quarter 2006 increased 0.9 percent
compared to the fourth quarter 2005. Net sales for carbonless paper, which
accounts for the majority of the Company's coated solutions segment, increased
1.5 percent compared to the same quarter in fiscal 2005. For fiscal 2006, coated
solutions net sales were 3.1 percent lower than net sales in fiscal 2005.
Thermal papers net sales increased 9.1 percent during fourth quarter 2006
compared to fourth quarter 2005. Much of this sales increase was gained in the
Canadian and overseas markets where sales volumes increased 43.6 percent
compared to fourth quarter of 2005. For fiscal 2006, increased sales volumes of
19.6 percent resulted in increased thermal net sales of 18.6 percent compared to
fiscal 2005.
Security papers net sales rose 23.8 percent during fourth quarter 2006,
compared to the same quarter of fiscal 2005, due to continued solid sales growth
in many of its product offerings. For fiscal 2006, security papers experienced
increased net sales of 18.1 percent compared to fiscal 2005.
Operating income for technical papers in fiscal 2006 increased by 12.6
percent, to $65.9 million, compared to fiscal 2005 operating income of $58.5
million. Coated solutions fiscal 2006 operating income of $50.9 million
decreased $3.9 million or 7.1 percent compared to fiscal 2005. During fiscal
2006, thermal papers operating income nearly tripled to $13.4 million. Security
papers fiscal 2006 operating income rose to $1.6 million compared to a fiscal
2005 loss of $0.8 million.
Secure and Specialized Print Services
Net sales for fourth quarter 2006 increased 1.5 percent over fourth quarter
2005. In comparison to fiscal 2005, fiscal 2006 net sales were $1.5 million or
1.3 percent higher. This increase is primarily attributable to an increase in
sales of secure mail services, phone cards, bar-coded labels and security
papers, which offset a reduction in calendar and diary sales. Comparing fiscal
2006 to fiscal 2005, operating income was $0.2 million lower.
Performance Packaging
Fourth quarter net sales for Appleton's performance packaging companies were
1.8 percent lower in the fourth quarter of 2006 compared to fourth quarter 2005.
Performance packaging net sales for fiscal 2006 were $12.3 million or 12.4
percent higher than fiscal 2005 net sales. Fiscal 2006 operating income grew by
65.0 percent, to $9.8 million, as compared to fiscal 2005 due to continued sales
growth and improved expense control.
Balance Sheet
On December 30, 2006, the Company had a cash balance of $20.0 million. This
compares to a cash balance of $19.8 million on October 1, 2006 and $18.4 million
on December 31, 2005. During fourth quarter 2006, Appleton made debt repayments
totaling $5.5 million on the senior credit facility and repurchased $4.3 million
of its senior notes. Appleton also made semi-annual interest payments totaling
$14.6 million on its senior notes and senior subordinated notes. Total debt on
the balance sheet as of December 30, 2006 was $531.5 million in comparison to
$574.0 million on the balance sheet as of December 31, 2005.
Capital expenditures for fourth quarter 2006 were $18.8 million as compared
to $6.8 million during fourth quarter 2005. Capital expenditures for fiscal 2006
were $36.5 million as compared to $32.5 million for fiscal 2005.
During fiscal 2006, as a result of diversification requests, retirements and
employee terminations, the Company repurchased a portion of its stock at an
aggregate amount of $27.1 million, of which, $9.6 million occurred during the
fourth quarter. Also during fiscal 2006, the Company received $8.2 million from
the issuance of its stock as purchased by the employees using pre-tax deferrals,
rollovers and loan payments.
Earnings release conference call
Appleton will host a conference call to discuss its fourth quarter and full
year 2006 results Thursday, February 22 at 11:00 a.m. ET. The call will be
broadcast through its Web site, http://www.appletonideas.com/investors . A
replay will be available through March 23.
About Appleton
Appleton uses ideas that make a difference to create product solutions
through its development and use of coating formulations and applications,
encapsulation technology and secure and specialized print services. The Company
produces carbonless, thermal, security and performance packaging products.
Appleton is headquartered in Appleton, Wisconsin, and has manufacturing
operations in Wisconsin, Ohio, Pennsylvania, Massachusetts and the United
Kingdom, employs approximately 3,200 people and is 100 percent employee owned.
For more information visit http://www.appletonideas.com .
Notice regarding forward-looking statements
This news release contains forward-looking statements. The words "will,"
"believes," "anticipates," "intends," "estimates," "expects," "projects,"
"plans," or similar expressions are intended to identify forward-looking
statements. All statements in this news release other than statements of
historical fact, including statements which address our strategy, future
operations, future financial position, estimated revenues, projected costs,
prospects, plans and objectives of management and events or developments that
Appleton expects or anticipates will occur, are forward-looking statements. All
forward-looking statements speak only as of the date on which they are made.
They rely on a number of assumptions concerning future events and are subject to
a number of risks and uncertainties, many of which are outside of Appleton's
control, that could cause actual results to differ materially from such
statements. These risks and uncertainties include, but are not limited to, the
factors listed under the heading "Risk Factors" in Appleton's 2005 Annual Report
on Form 10-K. Appleton disclaims any obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Appleton Papers Inc. is a wholly- owned subsidiary of
Paperweight Development Corp. Paperweight Development Corp. has guaranteed
Appleton's senior credit facility and senior and senior subordinated notes.
Appleton Papers Inc.
Consolidated Statements of Operations
(dollars in thousands)
For the For the
Three Months Three Months
Ended Ended
December 30, December 31,
2006 2005
------------- -------------
Net sales $ 277,242 $ 268,998
Cost of sales 211,860 203,884
Gross profit 65,382 65,114
Selling, general and administrative
expenses 51,989 49,448
Restructuring and other charges 1,517 2,607
Operating income 11,876 13,059
Interest expense 12,159 12,519
Interest income (270) (305)
Other expense 14 377
(Loss) income before income taxes (27) 468
Provision for income taxes 450 1,140
Net loss $ (477) $ (672)
Other Financial Data:
Depreciation and amortization $ 18,813 $ 19,668
Appleton Papers Inc.
Consolidated Statements of Operations
(dollars in thousands)
For the For the
Year Ended Year Ended
December 30, December 31,
2006 2005
------------- -------------
Net sales $ 1,087,381 $ 1,046,504
Cost of sales 818,783 785,061
Gross profit 268,598 261,443
Selling, general and administrative
expenses 205,657 204,469
Restructuring and other charges 3,605 10,637
Operating income 59,336 46,337
Interest expense 49,365 49,780
Interest income (903) (976)
Other (income) expense (267) 904
Income (loss) before income taxes 11,141 (3,371)
Benefit for income taxes (204) (357)
Net income (loss) $ 11,345 $ (3,014)
Other Financial Data:
Depreciation and amortization $ 75,755 $ 79,844
Appleton Papers Inc.
Consolidated Balance Sheets
(dollars in thousands)
December 30, December 31,
2006 2005
------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 19,975 $ 18,422
Accounts receivable, less allowance
for doubtful accounts of $2,799 and
$1,984, respectively 139,776 123,968
Inventories 138,754 142,592
Other current assets 26,416 21,016
Total current assets 324,921 305,998
Property, plant and equipment, net 432,710 460,357
Goodwill 80,669 77,882
Intangible assets, net 97,283 106,238
Environmental indemnification receivable 58,031 57,312
Other assets 22,509 17,147
Total assets $ 1,016,123 $ 1,024,934
LIABILITIES, REDEEMABLE COMMON STOCK,
ACCUMULATED DEFICIT AND
ACCUMULATED OTHER COMPREHENSIVE LOSS
Current liabilities
Current portion of long-term debt $ 6,384 $ 7,941
Accounts payable 76,281 61,150
Restructuring reserve 2,305 6,597
Other accrued liabilities 97,886 84,501
Total current liabilities 182,856 160,189
Senior secured notes payable 189,149 223,368
Revolving lines of credit 186 2,000
Variable rate industrial development bonds 8,650 8,650
Postretirement benefits other than pension 57,180 58,928
Accrued pension 44,458 55,211
Environmental liability 83,031 82,312
Other long-term liabilities 8,442 7,820
Senior notes and senior subordinated notes
payable 324,600 329,000
Commitments and contingencies -- --
Redeemable common stock, $0.01 par value,
shares authorized: 30,000,000, shares issued
and outstanding: 11,550,231 and 11,938,060,
respectively 190,466 185,292
Accumulated deficit (67,885) (61,982)
Accumulated other comprehensive loss (5,010) (25,854)
Total liabilities, redeemable common
stock, accumulated deficit and accumulated
other comprehensive loss $ 1,016,123 $ 1,024,934
SOURCE Appleton
-0- 02/21/2007
/CONTACT: Bill Van Den Brandt, Manager, Corporate Communications, of
Appleton, +1-920-991-8613, bvandenbrandt@appletonideas.com /
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