-----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, tY1T6MtDsyHbCrhJEER3x8FPDz9tlHCaNkxNCM4vhmI4//rUz5mOSEnhZXz7na7c Fd1YWlsB0aPlT3T3mGoD8w== 0000038195-95-000004.txt : 19950515 0000038195-95-000004.hdr.sgml : 19950515 ACCESSION NUMBER: 0000038195-95-000004 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950206 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORT HOWARD CORP CENTRAL INDEX KEY: 0000038195 STANDARD INDUSTRIAL CLASSIFICATION: PAPER MILLS [2621] IRS NUMBER: 391090992 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-51876 FILM NUMBER: 95505577 BUSINESS ADDRESS: STREET 1: 1919 S BROADWAY CITY: GREEN BAY STATE: WI ZIP: 54304 BUSINESS PHONE: 4144358821 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 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, 33-51876 and 33-51557 PROSPECTUS SUPPLEMENT (To Prospectus dated July 6, 1994) FORT HOWARD CORPORATION 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 8-1/4% Senior Notes Due 2002 9% Senior Subordinated Notes Due 2006 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 fourth quarter and fiscal year ended December 31, 1994. - - - - - - - - - - - - - - - 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 6, 1995 Fort Howard's sales for the fourth quarter increased 17.9% to $343,748,000 from $291,619,000 for the fourth quarter of 1993. For fiscal year 1994, Fort Howard's sales were $1,274,445,000, a 7.3% increase over 1993 net sales of $1,187,387,000. Domestic tissue sales increased 15.0% for the fourth quarter of 1994 compared to 1993 principally due to higher sales volume and higher selling prices. The net sales increase was also attributable to higher net selling prices at the Company's wastepaper brokerage subsidiary. For the fourth quarter of 1994, operating income was $52,597,000 compared to $71,453,000 for the same period of 1993. The decrease in operating income for the fourth quarter of 1994 reflects a charge of $20,000,000 which represents the Company's current estimate of environmental remediation, legal and consulting costs for past events. (See Notes to Financial Information.) Excluding the environmental charge, fourth quarter operating income increased 1.6%, reflecting the higher sales volume and selling prices in domestic tissue operations, offset by rising wastepaper costs both domestically and in the U.K. In the Company's domestic tissue operations, wastepaper prices for the grades of wastepaper used in Fort Howard's products nearly doubled from July 1994 to December 1994. As a result of these rapidly increasing costs, the Company announced price increases in the fourth quarter of 1994 for both the commercial and consumer markets effective in January 1995. These price increases follow a commercial market price increase effective mid-October 1994, which is expected to principally benefit 1995 results. The Company's operating income increased to $276,803,000 for 1994 compared to an operating loss of $1,716,636,000 in 1993. The operating loss in 1993 resulted entirely from the Company's goodwill write-off in that year. (See Notes to Financial Information). Excluding the environmental charge from 1994 results and the goodwill write-off, amortization of goodwill and the reversal of employee stock compensation expense from 1993 results, operating income declined to $296,803,000 in 1994 from $298,535,000 in 1993. For the fourth quarter of 1994, earnings before the environmental charge, interest, taxes, depreciation and amortization ("EBITDA") increased 1.9% to $98,538,000 from $96,657,000 in the fourth quarter of 1994. For fiscal year 1994, EBITDA increased 1.5% to $392,530,000 from $386,632,000 in 1993. Extraordinary losses related to debt repurchases in 1994 and 1993 (See Notes to Financial Information) impacted the Company's financial performance in 1994 compared to 1993. For the fourth quarter of 1994, the Company's net loss increased to $25,194,000 from $6,034,000 for the same period in 1993 due principally to the environmental charge. The Company's net loss for fiscal year 1994 decreased to $70,295,000 from $2,052,082,000 in 1993. The significant net loss in 1993 principally resulted from the goodwill write-off. - 2 - FORT HOWARD CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Year Ended December 31, December 31, ------------------ ---------------- 1994 1993 1994 1993 ---- ---- ---- ---- (In thousands) Net Sales $343,748 $291,619 $1,274,445 $1,187,387 Operating Income (Loss) (See Note 1) 52,597 71,453 276,803 (1,716,636) Interest Expense 86,139 83,635 337,701 342,792 Other (Income) Expense, Net (97) 2,479 118 (2,996) -------- -------- ---------- ---------- Loss Before Taxes (33,445) (14,661) (61,016) (2,056,432) Income Taxes (Credit) (8,251) (10,831) (18,891) (16,314) -------- -------- ---------- ---------- Loss Before Extraordinary Items (25,194) (3,830) (42,125) (2,040,118) Extraordinary Items--Losses on Debt Repurchases, Net -- (2,204) (28,170) (11,964) -------- -------- ---------- ---------- Net Loss $(25,194) $ (6,034) $ (70,295) (2,052,082) ======== ======== ========== ==========
- 3 - FORT HOWARD CORPORATION NOTES TO FINANCIAL INFORMATION 1. Based upon currently available information and analysis, and taking into account all the Company's clean-up obligations and damages related to matters subject to legal proceedings or pertaining to on-going operations, the Company recorded a $20 million charge in the fourth quarter of 1994, which represents its current estimate of environmental remediation, legal and consulting costs for past events. 2. 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 had been adversely affecting tissue industry operating conditions and the Company's operating results from 1991 through the third quarter of 1993. Accordingly, the Company had revised its projections as of September 30, 1993 and had 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. 3. Also in 1993, due to the effects of adverse tissue industry operating conditions on its long-term earnings forecast as of September 30, 1993, 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 fiscal year 1993. 4. In 1994, the Company reported an extraordinary loss of $28 million (net of income taxes of $15 million) representing the redemption premiums and write-offs of deferred loan costs associated with the repayment of $100 million of term loan indebtedness under the Company's Bank Credit Agreement on February 10, 1994 and the repurchases of all the Company's remaining 12 3/8% Senior Subordinated Notes and $238 million of the Company's 12 5/8% Subordinated Debentures on March 11, 1994. In 1993, the Company reported an extraordinary loss of $12 million (net of income taxes of $7 million) representing the write-off of deferred loan costs associated with the repayment of $250 million of term loan indebtedness under the Company's Bank Credit Agreement on March 23, 1993, the repurchases of all the Company's Junior Subordinated Debentures on April 21, 1993, and the repurchase of $50 million of the Company's 12 3/8% Senior Subordinated Notes on November 1, 1993. - 4 - -----END PRIVACY-ENHANCED MESSAGE-----