-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, jTLetPFQ+eR7ezQGzIbggk0m/Fn25Byzj1NLLw/ehpCp/uFUHATpU4WVoBuzxZNH aB0pNUcScVcuvhM2Qn57cw== 0000038195-94-000009.txt : 19940216 0000038195-94-000009.hdr.sgml : 19940216 ACCESSION NUMBER: 0000038195-94-000009 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19940215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORT HOWARD CORP CENTRAL INDEX KEY: 0000038195 STANDARD INDUSTRIAL CLASSIFICATION: 2621 IRS NUMBER: 391090992 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 33 SEC FILE NUMBER: 033-51876 FILM NUMBER: 94508982 BUSINESS ADDRESS: STREET 1: 1919 S BROADWAY CITY: GREEN BAY STATE: WI ZIP: 54304 BUSINESS PHONE: 4144358821 MAIL ADDRESS: STREET 1: P O BOX 19130 CITY: GREEN BAY STATE: WI ZIP: 54307-9130 FORMER COMPANY: FORMER CONFORMED NAME: FORT HOWARD PAPER CO/DE DATE OF NAME CHANGE: 19870506 FORMER COMPANY: FORMER CONFORMED NAME: MARYLAND CUP CORP/WI DATE OF NAME CHANGE: 19840612 FORMER COMPANY: FORMER CONFORMED NAME: FORT HOWARD PAPER CO DATE OF NAME CHANGE: 19830926 424B3 1 FORT HOWARD CORPORATION Filed Pursuant to Rule 424(b)(3) of the Rules and Regulations Under the Securities Act of 1933 Registration Statement Nos. 33-23826, 33-43448 and 33-51876 PROSPECTUS SUPPLEMENT (To Prospectus dated November 24, 1993) FORT HOWARD CORPORATION 12-3/8% Senior Subordinated Notes Due 1997 12-5/8% Subordinated Debentures Due 2000 14-1/8% Junior Subordinated Discount Debentures Due 2004 9-1/4% Senior Notes Due 2001 10% Subordinated Notes Due 2003 1991 Pass Through Trust, Pass Through Certificates, Series 1991 - - - - - - - - - - - - - - - RECENT DEVELOPMENTS Attached hereto and incorporated by reference herein is the news release announcing Fort Howard Corporation's financial results for its fiscal year ended December 31, 1993. - - - - - - - - - - - - - - - This Prospectus Supplement, together with the Prospectus, is to be used by Morgan Stanley & Co. in connection with offers and sales of the above-referenced securities in market-making transactions at negotiated prices related to prevailing market prices at the time of sale. Morgan Stanley & Co. Incorporated may act as principal or agent in such transactions. February 15, 1994 Fort Howard's sales for the fourth quarter increased to $291,619,000 from $285,709,000 for the fourth quarter of 1992. For fiscal year 1993, Fort Howard's net sales were $1,187,387,000, a 3.1% increase over 1992 net sales of $1,151,351,000. Domestic tissue pricing and, to a lesser extent, volume improved in the fourth quarter of 1993 compared to 1992. These improvements were partially offset by a decline in fourth quarter 1993 net sales in the company's United Kingdom tissue operations compared to 1992 due to slightly lower volume and significantly lower selling prices. For the fourth quarter of 1993, operating income was $71,453,000 compared to $57,267,000 for the same period of 1992. Operating income for the fourth quarter benefited from the elimination of amortization of goodwill of $14 million for the quarter as a result of the company's goodwill write-off in the third quarter of 1993. However, operating income was adversely impacted in the fourth quarter of 1993 by approximately $2 million of additional depreciation resulting from the acceleration of the depreciable lives of certain equipment. Excluding the effects of these items, reported operating income for the fourth quarter of 1993 increased slightly compared to the fourth quarter of 1992. Principally as a result of the goodwill write-off, the company incurred an operating loss of $1,716,636,000 for 1993 compared to operating income of $270,675,000 in 1992. Excluding the effects of the goodwill write-off, the reversal of previously accrued employee stock compensation and the acceleration of the depreciable lives of certain equipment, operating income would have declined 10.2% for the full year of 1993. An extraordinary loss related to debt repurchases in 1993 and the adoption of Statement of Financial Accounting Standards No. 106 in 1992 (See Notes to Financial Information), impacted the company's financial performance in 1993 compared to the same period in 1992. For the fourth quarter of 1993, the company's net loss decreased to $6,034,000 from $28,004,000 for the same period in 1992, in part due to the elimination of the amortization of goodwill. As a result of the goodwill write-off, the company's net loss for the fiscal year 1993 increased to $2,052,082,000 from $79,989,000 in 1992. As previously announced, on February 2, 1994, the company sold $100 million principal amount of 8 1/4% Senior Notes due 2002 and $650 million principal amount of 9% Senior Subordinated Notes due 2006. The proceeds from the sale of the 8 1/4% Senior Notes and the 9% Subordinated Notes have been used to prepay $100 million of the company's term loan indebtedness under its Bank Credit Agreement on February 10, 1994 and will be used to redeem all of its remaining 12 3/8% Senior Subordinated Notes and $238 million of its 12 5/8% Subordinated Debentures on March 11, 1994. (Financial information and notes follow on a separate page. The notes are an integral part of this statement.) # # # # FORT HOWARD CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended Year Ended December 31, December 31, ------------ ------------ 1993 1992 1993 1992 ---- ---- ---- ---- (In thousands) Net Sales $ 291,619 $ 285,709 $ 1,187,387 $ 1,151,351 Operating Income (Loss) 71,453 57,267 (1,716,636) 270,675 Interest Expense 83,635 89,681 342,792 338,374 Other (Income) Expense, Net 2,479 2,479 (2,996) 2,101 --------- ---------- ----------- ----------- Loss Before Taxes (14,661) (34,893) (2,056,432) (69,800) Income Taxes (Credit) (10,831) (6,889) (16,314) (398) --------- ---------- ----------- ----------- Net Loss Before Extraordinary Item and Adjustment for Accounting Change (3,830) (28,004) (2,040,118) (69,402) Extraordinary Item - Loss on Debt Repurchases, Net (2,204) - (11,964) - Adjustment for Adoption of SFAS 106 - - - (10,587) --------- ---------- ----------- ----------- Net Loss $ (6,034) $ (28,004) $(2,052,082) $ (79,989) ========= ========= =========== =========== ***** FORT HOWARD CORPORATION NOTES TO FINANCIAL INFORMATION 1. The company's goodwill balance was originally recorded as an intangible asset at the time of its leveraged buyout in 1988. In the third quarter of 1993, the company concluded its previously announced study to evaluate the carrying value of its goodwill. Low industry operating rates, aggressive competitive activity, overcapacity, adverse economic conditions and other factors have been adversely affecting tissue industry operating conditions and the company's operating results since 1991. Accordingly, the company has revised its projections and has determined that its projected results would not support the future amortization of the company's remaining goodwill balance of approximately $1.98 billion at September 30, 1993. As a result, the company wrote off its remaining goodwill balance in the third quarter of 1993. 2. Due to the effects of adverse tissue industry operating conditions on its long-term earnings forecast, the company decreased the estimated fair market valuation of its common stock and, as a result, reversed all previously accrued employee stock compensation expense in the third quarter of 1993. The reversal of accrued employee stock compensation expense resulted in a reduction of selling, general and administrative expenses of $7.8 million for the fiscal year 1993. 3. Other income in 1993 includes a $5.1 million gain upon the disposition of the company's remaining equity interest in Sweetheart Holdings Inc. ("Sweetheart"), the company's former North American cup operations. The company had previously reduced the carrying value of its investment in Sweetheart to zero in 1991. 4. As announced during the first quarter of 1993, on March 22, 1993 the company sold $450 million principal amount of 9 1/4% Senior Notes due 2001 and $300 million principal amount of 10% Subordinated Notes due 2003 in a registered public offering. The proceeds from the sale of the 9 1/4% Senior Notes and the 10% Subordinated Notes together with funding from a new $100 million bank term loan agreement were used to prepay $250 million of the company's term loan indebtedness under its Bank Credit Agreement and all the company's outstanding 14 5/8% Junior Subordinated Debentures. 5. In the first quarter of 1993, the company reported an extraordinary loss of $9.8 million (net of income taxes of $6.0 million) representing the write-off of unamortized deferred loan costs associated with the repayment of $250 million of term loan indebtedness under the company's Bank Credit Agreement and the repurchases of all the company's 14 5/8% Junior Subordinated Debentures. In the fourth quarter of 1993, the company reported an extraordinary loss of $2.2 million (net of income taxes of $1.3 million) representing the write-off of unamortized deferred loan costs associated with the repurchases of $50 million of the company's 12 3/8% Senior Subordinated Notes. 6. The company adopted Statement of Financial Accounting Standards ("SFAS") No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" during the first quarter of 1992. The standard requires that the expected cost of postretirement health care benefits must be charged to expense during the years that employees render service. The cumulative effect on years prior to 1992 of adopting SFAS No. 106 is stated separately in the company's consolidated statement of income for 1992 as a one-time, after-tax charge of $10.6 million. # # # # # -----END PRIVACY-ENHANCED MESSAGE-----