Wausau Paper Announces Third-Quarter Results
Wausau Paper Announces Third-Quarter Results
MOSINEE, Wis.--(BUSINESS WIRE)-- Wausau Paper
- Excluding special items, third-quarter adjusted net earnings from continuing operations were $0.06 per diluted share, compared to adjusted net earnings of $0.12 per diluted share during the same period last year.
- Net earnings from continuing operations, excluding special items, for the nine months ended September 30, 2012 and 2011, were $0.25 per diluted share and $0.27 per diluted share, respectively.
During 2012, the Company completed the sale of its premium Print & Color brands, inventory and select equipment, and the permanent closure and sale of its Brokaw, Wisconsin, manufacturing site. The Company began reporting the operations of the Brokaw manufacturing facility and related closure activities as a discontinued operation as of March 31, 2012, in the condensed consolidated balance sheet. Additionally, the discontinued operation is separately presented from continuing operations for all periods presented in the condensed consolidated statements of operations. All results discussed below exclude the discontinued operation unless otherwise indicated.
Third-quarter net loss from continuing operations was $5.2 million, or $0.10 per share compared to net earnings of $5.4 million, or $0.11 per diluted share a year ago. On a year-over-year basis, consolidated net sales decreased five percent to $202 million with shipments measured in tons decreasing three percent. Year-to-date, the Company reported a net loss from continuing operations of $1.5 million, or $0.03 per share, compared with net earnings of $10.0 million, or $0.20 per diluted share in the comparable 2011 period. For the nine months ended September 30, consolidated net sales increased two percent to $631 million as shipments increased four percent.
On an adjusted basis, third-quarter results included after-tax expenses of $7.6 million, or $0.15 per diluted share related to settlement charges on certain defined benefit pension plans and $1.2 million, or $0.02 per diluted share for capital-related expense for the Tissue expansion project. Prior-year third-quarter results included after-tax capital-related expenses of $0.4 million, or $0.01 per diluted share for the Tissue expansion project.
For the first nine months of 2012, adjusted net earnings from continuing operations were $12.3 million, or $0.25 per diluted share, compared with prior-year adjusted net earnings of $13.2 million, or $0.27 per diluted share. Although these comparisons are non-GAAP measures, the Company believes that the presentation of adjusted net earnings from continuing operations provides a useful analysis of ongoing operating trends. Adjusted earnings for the three and nine-month periods are reconciled to GAAP earnings below.
|3 Months Ended||9 Months Ended|
|September 30||September 30|
|GAAP Net (Loss) Earnings Per Share from Continuing Operations||$||(0.10||)||$||0.11||$||(0.03||)||$||0.20|
|Capital Related Expenses (1)||$||0.02||$||0.01||$||0.07||$||0.07|
|Charge for Contract at Former Manufacturing Facility (2)||-||-||$||0.04||-|
|Defined Benefit Retirement Plan Settlement Charges||$||0.15||-||$||0.18||-|
|Gain on Sale of Timberlands||-||-||-||$||(0.01||)|
|Settlement of Income Tax Matters||$||(0.01||)||-||$||(0.01||)||-|
|Adjusted Net Earnings Per Diluted Share||$||0.06||$||0.12||$||0.25||$||0.27|
Note:Totals may not foot due to rounding differences.
(1)Expenses associated with the rebuild of a paper machine at Brainerd, Minnesota, in 2011, and the Tissue expansion project at Harrodsburg, Kentucky, in 2011 and 2012.
(2)Charge associated with a natural gas transportation contract for a former manufacturing facility in Groveton, New Hampshire.
Including discontinued operations, net of tax, third-quarter net loss was $5.3 million, or $0.11 per share, compared to net earnings of $5.2 million, or $0.10 per diluted share, for the same period last year. Current-quarter and prior-year results included earnings from continuing operations before income taxes offset by income tax expense and a net loss from discontinued operations of $0.2 million, or $0.00 per share.
For the nine months ended September 30, 2012, including discontinued operations, net of tax, net earnings were $3.1 million, or $0.06 per diluted share, compared to net earnings of $7.0 million, or $0.14 per diluted share, for the same period last year. Net earnings in the current year included earnings from continuing operations before income taxes offset by income tax expense and net earnings from discontinued operations of $4.6 million, or $0.09 per diluted share. Net earnings in the prior year included earnings from continuing operations before income taxes, offset by income tax expense, and a net loss from discontinued operations of $3.0 million, or $0.06 per share.
Henry C. Newell, president and CEO, commenting on the Company's continued progress against strategic initiatives, said, "Our Tissue expansion is on track as three to four percent case shipment growth continues to drive improving operating margins, now approaching 13 percent. The second half is proving to be a challenge for our Paper segment, as we see slowing demand in industrial and tape markets at a time when we are commercializing new technical capacity at our Brainerd, Minnesota, facility. Despite these pressures, technical volumes are up six percent this year and specifically, tape sector volume is up 14 percent, the result of new customer business and new product introductions.
"The successful exit of our Print franchise has resulted in an exceptionally well positioned balance sheet as we continue to commercialize technical capacity on our Brainerd asset and complete the installation, start-up and commercialization of the new towel and tissue machine at Harrodsburg, Kentucky. We expect to report continued progress over the coming quarters against the long-term growth targets and timelines we've outlined this year."
The Tissue segment's third-quarter operating profit of $7.5 million included pre-tax expense of $1.9 million related to the expansion activity. This result compared favorably to prior-year operating profit of $7.0 million, including $0.7 million in expansion-related pre-tax expense.
During 2012, the Company completed the sale of this segment's premium Print & Color brands, inventory and select equipment, and ceased papermaking and converting operations at its former primary Print & Color manufacturing site in Brokaw. In the third quarter, we sold the mill site to an unrelated third party. Results of operations related to the former Brokaw manufacturing facility are reported as discontinued operations and for the third quarter and the same period last year included, net-of-tax, a loss of $0.2 million from operations.
From continuing operations, the Paper segment reported a third-quarter operating loss of $7.9 million versus an operating profit of $5.9 million for the same period in 2011. The 2012 third-quarter operating loss included pre-tax expense of $7.7 million related to a settlement charge on a certain defined benefit pension plan associated with our former Jay, Maine, facility. The operating results reflect the impact of transitioning capacity to technical grades, including extensive trialing activity at our Brainerd papermaking operations and the pace of working capital liquidation as a result of the premium Print & Color sale and Brokaw closure activity.
In a release issued October 1, the Company set forth full-year guidance for adjusted net earnings from continuing operations of $0.28-$0.30 per diluted share compared to prior-year adjusted net earnings of $0.33 per diluted share.
Wausau Paper's third-quarter conference call is scheduled for 10:00 a.m. Eastern on Tuesday, October 30, and can be accessed through the Investors section of the Company's website at www.wausaupaper.com. A replay of the webcast will be available at the same site through November 6.
About Wausau Paper:
Wausau Paper produces and markets specialty papers for industrial, commercial and consumer end markets as well as a complete line of away-from-home towel and tissue products. The Company is headquartered in Mosinee, Wisconsin, and is listed on the NYSE under the symbol WPP. To learn more about Wausau Paper visit:www.wausaupaper.com.
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 under "Information Concerning Forward-Looking Statements" in Item 7 and in Item 1A of the Company's Form 10-K for the year ended December 31, 2011. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
|Interim Report - Quarter Ended September 30, 2012|
|(in thousands, except per share amounts)|
|Condensed Consolidated Statements||Three Months||Nine Months|
|of Operations (unaudited)||Ended September 30,||Ended September 30,|
|Cost of sales||180,706||187,481||557,579||548,073|
|Selling & administrative expenses (Note 3)||30,185||14,697||74,837||50,045|
|Operating (loss) profit||(8,642||)||10,310||(1,113||)||21,937|
|Loss on early extinguishment of debt||-||-||-||(666||)|
|Other expense, net||(7||)||(5||)||(17||)||(15||)|
|Earnings from continuing operations before income taxes||(9,297||)||8,665||(3,518||)||15,799|
|Provision (credit) for income taxes||(4,144||)||3,312||(2,006||)||5,809|
|(Loss) earnings from continuing operations||(5,153||)||5,353||(1,512||)||9,990|
|(Loss) earnings from discontinued operations, net of taxes (Note 2)||(156||)||(172||)||4,646||(2,970||)|
|Net (loss) earnings||$||(5,309||)||$||5,181||$||3,134||$||7,020|
|Net (loss) earnings per share:|
|Net (loss) earnings per share - basic *||$||(0.11||)||$||0.11||$||0.06||$||0.14|
|Net (loss) earnings per share - diluted||$||(0.11||)||$||0.10||$||0.06||$||0.14|
|Weighted average shares outstanding-basic||49,323||49,171||49,309||49,155|
|Weighted average shares outstanding-diluted||49,323||49,425||49,528||49,386|
|* Totals may not foot due to rounding differences.|
|Condensed Consolidated Balance Sheets (Unaudited) (Note 1)||September 30,||December 31,|
|Property, plant, and equipment, net||444,267||369,836|
|Assets of discontinued operations (Note 2)||444||-|
|Liabilities of discontinued operations (Note 2)||1,482||-|
|Total Liabilities and Stockholders' Equity||$||696,429||$||678,830|
|Condensed Consolidated Statements||Nine Months|
|of Cash Flows (Unaudited) (Note 1)||Ended September 30,|
|Cash flows from operating activities:|
|Provision for depreciation, depletion, and amortization||34,455||42,298|
|Gain on sale of business||(12,535||)||-|
|Impairment of long-lived assets||2,075||-|
|Loss on early extinguishment of debt||-||666|
|Other non-cash items||6,433||(1,989||)|
|Changes in operating assets and liabilities:|
|Net cash provided by operating activities||31,344||32,208|
|Cash flows from investing activities:|
|Grants received for capital expenditures||236||610|
|Proceeds from sale of business|