-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nz1B3WdLDbMjRlNm8h6KFYpOmJve8WbgqYGrc9BTYqu0dspAAOLfIyg8aW9GXUDl B06jvvz060wHqm5owQtWcg== 0000038195-96-000011.txt : 19960425 0000038195-96-000011.hdr.sgml : 19960425 ACCESSION NUMBER: 0000038195-96-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960424 SROS: NASD 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20473 FILM NUMBER: 96549904 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 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 0-20473 FORT HOWARD CORPORATION (Exact name of registrant as specified in its charter) Delaware 39-1090992 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1919 South Broadway, Green Bay, Wisconsin 54304 (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: 414/435-8821 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at April 15, 1996 ----- ----------------------------- Common Stock, par value $.01 63,447,097 per share PART I. FINANCIAL INFORMATION FORT HOWARD CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended March 31, -------------------- 1996 1995 ---- ---- (In thousands, except per share data) Net sales................................. $385,747 $367,376 Cost of sales............................. 238,369 267,856 -------- -------- Gross income.............................. 147,378 99,520 Selling, general and administrative....... 33,175 28,745 -------- -------- Operating income.......................... 114,203 70,775 Interest expense.......................... 70,773 86,770 Other (income) expense, net............... 563 (224) -------- -------- Income (loss) before taxes................ 42,867 (15,771) Income taxes (credit)..................... 15,927 (6,253) -------- -------- Income (loss) before extraordinary item... 26,940 (9,518) Extraordinary item -- loss on debt repurchases (net of income taxes of $11,986 in 1995)..................... -- (18,748) -------- -------- Net income (loss)......................... $ 26,940 $(28,266) ======== ========= Earnings (loss) per share: Net income (loss) before extraordinary item.................... $ 0.43 $ (0.22) Extraordinary item...................... -- (0.44) -------- -------- Net income (loss)....................... $ 0.43 $ (0.66) ======== ======== Average shares outstanding................ 63,372 42,546 ======== ======== (/table> The accompanying notes are an integral part of these condensed consolidated financial statements. - 2
FORT HOWARD CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31, December 31, 1996 1995 ---------- ------------ (In thousands) Assets Current assets: Cash and cash equivalents................. $ 594 $ 946 Receivables, less allowances of $2,994 in 1996 and $2,883 in 1995.............. 83,488 97,707 Inventories............................... 158,347 163,076 Deferred income taxes..................... 38,000 29,000 Income taxes receivable................... 700 700 ---------- ---------- Total current assets.................... 281,129 291,429 Property, plant and equipment............... 1,976,841 1,971,641 Less: Accumulated depreciation........... 729,804 706,394 ---------- ---------- Net property, plant and equipment....... 1,247,037 1,265,247 Other assets................................ 93,608 95,761 ---------- ---------- Total assets............................ $1,621,774 $1,652,437 ========== ========== Liabilities and Shareholders' Deficit Current liabilities: Accounts payable.......................... $ 103,685 $ 112,384 Interest payable.......................... 23,731 64,375 Income taxes payable...................... 9,470 1,339 Other current liabilities................. 59,099 85,351 Current portion of long-term debt......... 84,109 62,720 ---------- ---------- Total current liabilities............... 280,094 326,169 Long-term debt.............................. 2,877,638 2,903,299 Deferred and other long-term income taxes... 240,322 225,043 Other liabilities........................... 35,976 36,355 Shareholders' deficit: Common Stock.............................. 634 634 Additional paid-in capital................ 895,860 895,652 Cumulative translation adjustment......... (3,819) (2,844) Retained deficit.......................... (2,704,931) (2,731,871) ---------- ---------- Total shareholders' deficit............. (1,812,256) (1,838,429) ---------- ---------- Total liabilities and shareholders' deficit............................... $1,621,774 $1,652,437 ========== ==========
The accompanying notes are an integral part of these condensed consolidated financial statements. - 3 - FORT HOWARD CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31, ------------------ 1996 1995 ---- ---- (In thousands) Cash provided from (used for) operations: Net income (loss)............................... $ 26,940 $(28,266) Depreciation.................................... 25,112 24,331 Non-cash interest expense....................... 3,294 3,223 Deferred income taxes (credit).................. 6,295 (16,191) Pre-tax loss on debt repurchases................ -- 30,734 (Increase) decrease in receivables.............. 14,219 (16,134) (Increase) decrease in inventories.............. 4,729 (14,468) Increase in income taxes receivable............. -- (3,000) Increase (decrease) in accounts payable......... (8,699) 25,828 Decrease in interest payable.................... (40,644) (21,081) Increase (decrease) in income taxes payable..... 8,131 (112) All other, net.................................. (27,277) (30,281) -------- -------- Net cash provided from (used for) operations.. 12,100 (45,417) Cash used for investment activity: Additions to property, plant and equipment...... (8,873) (10,845) Cash provided from (used for) financing activities: Proceeds from long-term borrowings.............. 22,324 655,800 Repayment of long-term borrowings............... (26,111) (832,596) Debt issuance costs............................. -- (48,201) Issuance of Common Stock, net of offering costs. 208 281,047 -------- -------- Net cash provided from (used for) financing activities........................ (3,579) 56,050 -------- -------- Decrease in cash................................. (352) (212) Cash at beginning of period....................... 946 422 -------- -------- Cash at end of period........................... $ 594 $ 210 ======== ======== Supplemental Cash Flow Disclosures: Interest paid................................... $108,082 $104,755 Income taxes paid - net......................... 1,182 956
The accompanying notes are an integral part of these condensed consolidated financial statements. - 4 - FORT HOWARD CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION The condensed consolidated financial statements reflect all adjustments (consisting only of normally recurring accruals) which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. Certain reclassifications have been made to conform prior years' data to the current format. These financial statements should be read in conjunction with the Company's annual report on Form 10-K for the year ended December 31, 1995. 2. EARNINGS (LOSS) PER SHARE Earnings (loss) per share is computed on the basis of the weighted average number of common shares outstanding during the periods. The weighted average number of common shares outstanding for the three month periods ended March 31, 1996 and 1995 were 63,372,063 and 42,545,683, respectively. The assumed exercise of all outstanding stock options has been excluded from the computation of earnings (loss) per share for the three month periods ended March 31, 1996 and 1995 because the result was not material or was antidilutive. 3. INVENTORIES Inventories consist of: March 31, December 31, 1996 1995 --------- ------------ (In thousands) Raw materials and supplies.............. $ 72,453 $ 80,134 Finished and partly-finished products... 85,894 82,942 -------- -------- $158,347 $163,076 ======== ======== 4. LEGAL PROCEEDINGS The Company and its subsidiaries are parties to lawsuits and state and federal administrative proceedings in connection with their businesses. Although the final results in such suits and proceedings cannot be predicted with certainty, the Company currently believes that the ultimate resolution of all such lawsuits and proceedings, after taking into account the liabilities accrued with respect to such matters, will not have a material adverse effect on the Company's financial condition or on its results of operations. - 5 - FORT HOWARD CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS First Quarter 1996 Compared to 1995
Three Months Ended March 31, -------------------- 1996 1995 ---- ---- (In thousands, except percentages) Net sales: Domestic tissue......................... $324,908 $293,928 International operations................ 43,808 36,187 Harmon.................................. 17,031 37,261 -------- -------- Consolidated............................ $385,747 $367,376 ======== ======== Operating income: Domestic tissue......................... $106,920 $ 67,364 International operations................ 6,305 1,972 Harmon.................................. 978 1,439 -------- -------- Consolidated............................ 114,203 70,775 ======== ======== Consolidated net income (loss)............ $ 26,940 $(28,266) ======== ======== Operating income as a percent of net sales 29.6% 19.3%
Net Sales. Consolidated net sales increased 5.0% to $386 million in the first quarter of 1996 compared to $367 million in the first quarter of 1995. Domestic tissue net sales increased 10.5% in the first quarter of 1996 compared to the first quarter of 1995 due to a 17.6% increase in net selling prices offset by a 6.0% decrease in sales volume. Although consumer volume increased significantly during the first quarter of 1996, units sold to commercial customers decreased from the first quarter of 1995 when volume may have been affected by inventory buildups by the Company's distributors in anticipation of the implementation of the Company and industry announced price increases. Net selling prices increased significantly in both the commercial and consumer markets for the first quarter of 1996 compared to the first quarter of 1995 in response to rising raw material costs in late 1994 and early 1995. Accordingly, the Company implemented price increases in both markets in 1995. From the fourth quarter of 1995 through the first quarter of 1996, overall domestic net selling prices declined slightly. In the first quarter, modest price discounting occurred in the marketplace. Also, in March and April 1996, certain of the Company's competitors announced price decreases as a result of lower fiber costs. - 6 - Net sales of the Company's international operations increased 21.1% in the first quarter of 1996 compared to the first quarter of 1995 due to a significant increase in net selling prices and a higher volume of converted products, while parent roll volume was reduced. The 54.3% decrease in net sales of the Company's wastepaper brokerage subsidiary, Harmon Assoc., Corp. ("Harmon"), principally reflects lower wastepaper selling prices. Gross Income. For the first quarter of 1996, consolidated gross income increased 48.1% to $147 million from $100 million for the first quarter of 1995 due to higher net selling prices and lower raw material costs, partially offset by lower sales volume. Consolidated gross margins increased to 38.2% for the first quarter of 1996 from 27.1% for the first quarter of 1995. Domestic tissue gross margins increased for the first quarter of 1996 compared to the first quarter of 1995 primarily due to higher net selling prices and lower wastepaper costs. Wastepaper prices began to decline in the third quarter of 1995, declined sharply in the fourth quarter of 1995 and continued to decline moderately in the first quarter of 1996. The direction of wastepaper price trends in succeeding quarters is uncertain due to general economic factors, virgin market pulp price trends and changes in demand for wastepaper arising from export markets and scheduled start-ups of deinked market pulp mills. Gross margins of international operations increased in the first quarter of 1996 compared to the first quarter of 1995 due to higher net selling prices and lower wastepaper costs. Consolidated gross margins were positively affected for the first quarter of 1996 compared to the first quarter of 1995 because net sales of Harmon (which typically has very low margins compared to either domestic or international tissue operations) were a smaller proportion of total net sales. Selling, General and Administrative Expenses. Selling, general and administrative expenses, as a percent of net sales, increased to 8.6% for the first quarter of 1996 compared to 7.8% in 1995 principally due to the impact of the Company's strong earnings performance on employee compensation plans and higher selling expenses resulting from increased sales in the Company's consumer market segment. Operating Income. Operating income increased 61.4% to $114 million in the first quarter of 1996 compared to $71 million in the first quarter of 1995. Operating income as a percent of net sales increased to 29.6% in the first quarter of 1996 compared to 19.3% in the first quarter of 1995. Domestic tissue operating income as a percent of net sales increased to 32.9% in the first quarter of 1996 from 22.9% in the first quarter of 1995 due to higher net selling prices and lower wastepaper costs. International operating income as a percent of sales rose significantly in the first quarter of 1996 compared to the first quarter of 1995 also due to higher net selling prices and lower wastepaper costs. In addition, consolidated operating income increased as a percent of net sales because net sales of Harmon (which typically has very low operating income margins compared to either domestic or international tissue operations) were a smaller proportion of total net sales. Extraordinary Loss. The Company's net loss in the first quarter of 1995 was increased by an extraordinary loss of $19 million (net of income taxes of $12 million) from debt repurchases. - 7 - Net Income (Loss). For the first quarter of 1996, net income was $27 million compared to a net loss of $28 million for the first quarter of 1995. FINANCIAL CONDITION For the first three months of 1996, cash decreased $352,000. Capital additions of $9 million and debt repayments of $26 million were funded principally by borrowings of $22 million and $12 million of cash from operations provided by strong operating results, partially offset by seasonal working capital requirements. During the first three months of 1996, receivables decreased $14 million due to seasonally lower domestic tissue sales in the first quarter of 1996 compared to the fourth quarter of 1995. Inventories decreased by $5 million due to lower raw material costs partially offset by higher quantities in anticipation of seasonal sales requirements. Accounts payable decreased $9 million due to falling wastepaper costs. The liability for interest payable decreased $41 million due to semi-annual interest payments made in February and March 1996. Other current liabilities declined $26 million resulting from the payment of obligations due on an annual basis, including employee bonuses and customer incentive payments. As a result of all these changes, net working capital increased to $1 million at March 31, 1996 from a deficit of $35 million at December 31, 1995. The 1995 Revolving Credit Facility of the Company's 1995 Bank Credit Agreement, which may be used for general corporate purposes, has a final maturity of March 16, 2002. At March 31, 1996, the Company had $203 million in available capacity under the 1995 Revolving Credit Facility. The Company has filed a registration statement with the Securities and Exchange Commission in connection with a proposed offering of 10 million shares of its common stock. If the offering is completed, the Company intends to use the net proceeds to prepay a portion of the outstanding indebtedness under the 1995 Bank Credit Agreement. - 8 - PART II. OTHER INFORMATION 1. LEGAL PROCEEDINGS None 2. CHANGES IN SECURITIES None 3. DEFAULTS UPON SENIOR SECURITIES None 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 5. OTHER INFORMATION None 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit No. Description 10 Form of Amendment No. 2 to Supplemental Retirement Agreements for certain directors and officers. 27 Financial Data Schedule for the three months ended March 31, 1996. 99 News release containing financial results for the quarter ended March 31, 1996. b) No reports on Form 8-K were filed by the Company for the quarter for which this report is filed. - 9 - FORT HOWARD CORPORATION SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FORT HOWARD CORPORATION Registrant April 23, 1996 /s/ Kathleen J. Hempel --------------------------------------- Kathleen J. Hempel, Vice Chairman and Chief Financial Officer and Principal Accounting Officer April 23, 1996 /s/ James W. Nellen II -------------------------------------- James W. Nellen II, Vice President and Secretary - 10 - INDEX TO EXHIBITS Exhibit No. Description 10 Form of Amendment No. 2 to Supplemental Retirement Agreements for certain directors and officers. 27 Financial Data Schedule for the three months ended March 31, 1996. 99 News release containing financial results for the quarter ended March 31, 1996. - 11 - EX-10 2 Exhibit 10 ---------- FORM OF AMENDMENT NO. 2 SUPPLEMENTAL RETIREMENT AGREEMENT WHEREAS, Paragraph _____ of the Supplemental Retirement Agreement entered into between ________________________ (the "PARTICIPANT") and Fort Howard Corporation (the "COMPANY") effective __________ (the "AGREEMENT") provides that the AGREEMENT may be amended by the PARTICIPANT and the COMPANY in accordance with the terms of such Paragraph; and WHEREAS, the PARTICIPANT desires to amend the AGREEMENT to increase the PARTICIPANT'S percentage of base salary deferred during each calendar year; NOW, THEREFORE, the PARTICIPANT and the COMPANY hereby agree to amend the AGREEMENT effective April 1, 1996 as follows: The words "eight percent (8%)" contained in the first sentence of Paragraph 2 of the AGREEMENT are deleted and the words "ten percent (10%)" are inserted in place thereof. This amendment is hereby entered into as of the ___ day of March, 1996. FORT HOWARD CORPORATION Witness: _______________________ By: _________________________ Title: Witness: _______________________ _________________________ Participant Title: EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORT HOWARD CORPORATION'S UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000038195 FORT HOWARD CORPORATION 1,000 U.S. DOLLARS 3-MOS DEC-31-1996 MAR-31-1996 1 594 0 86,482 2,994 158,347 281,129 1,976,841 729,804 1,621,774 280,094 2,877,638 634 0 0 (1,812,890) 1,621,774 385,747 385,747 238,369 238,369 0 0 70,773 42,867 15,927 26,940 0 0 0 26,940 0.43 0.43
EX-99 4 Exhibit 99 NEWS ---------- ______________________________________________________________________________ For further information contact: (Fort Howard logo here) Media: Cliff Bowers, Ext. 4087 P. O. Box 19130 Financial: Green Bay, WI 54307-9130 Mike Lempke, Ext. 2492 414/435-8821 FOR RELEASE: IMMEDIATELY FORT HOWARD OPERATING INCOME INCREASES 61% FOR FIRST QUARTER GREEN BAY, WI - April 23, 1996 - Fort Howard Corporation today reported increased sales, operating income and margin for the first quarter of 1996. "Our strategies to extend Fort Howard's market penetration and profitability are paying off," said Fort Howard Chairman and CEO, Donald H. DeMeuse. "Proof of that is our 61.4% increase in operating income compared to the first three months of last year." Fort Howard's operating income margin for the quarter was 29.6% compared to 19.3% for the first quarter of 1995 and 25.5% in the fourth quarter of 1995. "Improved pricing in both the consumer and commercial markets, lower wastepaper costs, and the continuing growth of our branded and private label consumer products all contributed to our strong start for the year compared to the first quarter of '95," DeMeuse said. -- More -- -- Ad One -- For the first quarter of 1996, net income was $26,940,000 compared to a net loss for the first quarter of 1995 of $28,266,000. The net income was $0.43 per share in the first quarter of 1996 compared to a net loss before extraordinary items of $(0.22) per share in the first quarter of 1995. The company completed a recapitalization, including an IPO of 25 million shares of common stock, in April 1995. Had the recapitalization been completed on January 1, 1995, net loss per share before extraordinary items for the first quarter of 1995 would have been $(0.02) on a pro forma basis. "We're focused on continuing this momentum," DeMeuse said. "Our first- quarter entry into the premium segment of the commercial market with our Preference Ultra product line is part of our core strategy for building shareholder value. The early reaction of the marketplace to these products has been very positive." In addition, the company's joint venture project in Shanghai, China, began shipping tissue products during the first quarter, DeMeuse said. For the first quarter, Fort Howard's net sales increased 5.0% to $385,747,000 compared to first quarter 1995 net sales of $367,376,000. Domestic tissue sales increased 10.5% for the first quarter of 1996 compared to first quarter 1995. Also, net sales of the company's international operations increased 21.1% for the first quarter of 1996 compared to first quarter 1995. Offsetting sales increases at domestic and international tissue operations were lower sales from the company's wastepaper brokerage operations resulting from lower wastepaper prices. Operating income increased to $114,203,000 for the first quarter compared to $70,775,000 for the first quarter of 1995. The increase was due to higher net selling prices and lower wastepaper costs in both the company's domestic and international operations. -- More -- -- Ad Two -- Extraordinary losses related to debt repurchases in 1995 (see Note to Financial Information) impacted the company's financial performance in the first quarter of 1995. On March 14, 1996, the company announced that, subject to market conditions, it intends to sell approximately 10 million primary shares of common stock in a registered public offering. The net proceeds of the offering, which is expected to take place in the second quarter and will be made only by means of a prospectus, will be used to reduce outstanding bank debt. It is also anticipated that the offering will include up to approximately 6 million additional secondary shares of common stock which may be sold by certain shareholders of Fort Howard. The company will not receive any proceeds from the sale of shares by the selling shareholders. Fort Howard is a leading manufacturer and marketer of consumer tissue products for both the away-from-home and at-home markets in the United States and United Kingdom. In the domestic at-home market, its principal brands include Mardi Gras printed napkins (which hold the leading domestic market position) and paper towels, Soft 'n Gentle bath and facial tissue, So-Dri paper towels, and Green Forest, the leading domestic line of environmentally positioned recycled tissue paper products. -- More -- -- Ad Three -- (Financial information and note follow on separate pages. The note is an integral part of these statements.) A registration statement relating to the company's common stock has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor any offers to buy be accepted prior to the time of the registration statement becoming effective. This financial release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there by any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities law of such State. # # # # # FORT HOWARD CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended March 31, ---------------------- 1996 1995 ---- ---- In thousands, except per share amounts) Net sales $385,747 $367,376 Cost of sales 238,369 267,856 -------- -------- Gross income 147,378 99,520 Selling, general and administrative 33,175 28,745 -------- -------- Operating income 114,203 70,775 Interest expense 70,773 86,770 Other (income) expense, net 563 (224) -------- -------- Income (loss) before taxes 42,867 (15,771) Income taxes (credit) 15,927 (6,253) -------- -------- Income (loss) before extraordinary item 26,940 (9,518) Extraordinary item - loss on debt repurchases, net -- (18,748) -------- -------- Net income (loss) $ 26,940 $(28,266) ======== ======== Net income (loss) per share: Before extraordinary item $ 0.43 $ (0.22) Extraordinary item -- (0.44) -------- -------- Net income (loss) $ 0.43 $ (0.66) ======== ========
FORT HOWARD CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31, December 31, 1996 1995 ------------ ------------ (In thousands) Assets Current assets: Cash and cash equivalents $ 594 $ 946 Receivables, less allowances of $2,994 in 1996 and $2,883 in 1995 83,488 97,707 Inventories 158,347 163,076 Deferred income taxes 38,000 29,000 Income taxes receivable 700 700 ---------- ---------- Total current assets 281,129 291,429 Property, plant and equipment 1,976,841 1,971,641 Less: Accumulated depreciation 729,804 706,394 ---------- ---------- Net property, plant and equipment 1,247,037 1,265,247 Other assets 93,608 95,761 ---------- ---------- Total assets $1,621,774 $1,652,437 ========== ========== Liabilities and Shareholders' Deficit Current liabilities: Accounts payable $ 103,685 $ 112,384 Interest payable 23,731 64,375 Income taxes payable 9,470 1,339 Other current liabilities 59,099 85,351 Current portion of long-term debt 84,109 62,720 ---------- ---------- Total current liabilities 280,094 326,169 Long-term debt 2,877,638 2,903,299 Deferred and other long-term income taxes 240,322 225,043 Other liabilities 35,976 36,355 Shareholders' deficit: Common Stock 634 634 Additional paid-in capital 895,860 895,652 Cumulative translation adjustment (3,819) (2,844) Retained deficit (2,704,931) (2,731,871) ---------- ---------- Total shareholders' deficit (1,812,256) (1,838,429) ---------- ---------- Total liabilities and shareholders' deficit $1,621,774 $1,652,437 ========== ==========
FORT HOWARD CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31, -------------------- 1996 1995 ---- ---- (In thousands) Cash provided from (used for) operations: Net income (loss) $ 26,940 $ (28,266) Depreciation 25,112 24,331 Non-cash interest expense 3,294 3,223 Deferred income tax credit 6,295 (16,191) Pre-tax loss on debt repurchases -- 30,734 (Increase) decrease in receivables 14,219 (16,134) (Increase) decrease in inventories 4,729 (14,468) Increase in income taxes receivable -- (3,000) Increase (decrease) in accounts payable (8,699) 25,828 Decrease in interest payable (40,644) (21,081) Increase (decrease) in income taxes payable 8,131 (112) All other, net (27,277) (30,281) --------- --------- Net cash provided from (used for) operations 12,100 (45,417) Cash used for investment activity: Additions to property, plant and equipment (8,873) (10,845) Cash provided from (used for) financing activities: Proceeds from long-term borrowings 22,324 655,800 Repayment of long-term borrowings (26,111) (832,596) Debt issuance costs -- (48,201) Issuance of Common Stock, net of offering costs 208 281,047 --------- --------- Net cash provided from (used for) financing activities (3,579) 56,050 --------- --------- Decrease in cash (352) (212) Cash at beginning of period 946 422 --------- --------- Cash at end of period $ 594 $ 210 ========= =========
***** FORT HOWARD CORPORATION NOTE TO FINANCIAL INFORMATION (Unaudited) 1. The company completed a recapitalization, including an IPO of 25 million shares of common stock, in April 1995. A. In connection with the recapitalization in the first quarter of 1995, the company reported an extraordinary loss of $19 million (net of income taxes of $12 million) representing the redemption premiums on the repurchases of all of the company's outstanding 12 5/8% Subordinated Debentures at a redemption price of 102.5% of the principal amount thereof and write-offs of deferred loan costs associated with the prepayment or repurchases of all indebtedness outstanding under the company's 1988 Bank Credit Agreement, the 1993 Term Loan and the Senior Secured Floating Rate Notes on March 16, 1995, and the repurchase of all outstanding 12 5/8% Subordinated Debentures and 14 1/8% Junior Subordinated Discount Debentures on April 15, 1995. B. Assuming that all components of the recapitalization had been consummated as of January 1, 1995, for the first quarter of 1995, pro forma interest expense would have decreased $14 million from amounts reported to $73 million. After adjusting income taxes (credit) for the decrease in interest expense at an effective rate of 39%, the pro forma net loss before extraordinary item and pro forma net loss per share before extraordinary item (assuming that 63,101,239 weighted average shares were outstanding for the quarter) would have been $1 million and $0.02 per share for the first quarter of 1995, respectively. # # # # # -----END PRIVACY-ENHANCED MESSAGE-----