[2] Smurfit-Stone Reports 4th Quarter EPS of $.20, Excluding Asset Sale Gains.Business Editors CHICAGO--(BUSINESS WIRE)--Jan. 24, 2000 Smurfit-Stone Container Smurfit-Stone Container Corporation (NASDAQ: SSCC) is an American paperboard and paper-based packaging company based in Chicago, Illinois. It has approximately 38,600 employees. Smurfit-Stone was formed in 1998 as a result of the merger between Jefferson Smurfit Corp. Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : SSCC SSCC Serial Shipping Container Code (EAN barcoding) SSCC Sacred Hearts of Jesus and Mary (religious order) SSCC Space Station Control Center SSCC Sulphide Stress Corrosion Cracking ) the 33% owned associate of Jefferson Jefferson, uninc. city (1990 pop. 25,782), Fairfax co., N Va. It is a residential suburb of Washington, D.C. Smurfit Group plc (Dublin Dublin, city, Republic of Ireland Dublin, Irish Baile Átha Cliath, county borough (1991 pop. 915,516), Leinster, capital of the Republic of Ireland, on Dublin Bay at the mouth of the Liffey River. : SMFT SMFT Semi-trailer Mounted Fabric Tank SMFT So Much For That .I; London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. : SMFT.L and NYSE NYSE See: New York Stock Exchange :JS) made the following announcement today: Smurfit-Stone Container Corporation (Nasdaq: SSCC) today reported net income of $286 million, or $1.28 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the fourth quarter of 1999, compared to a loss of $214 million, or $1.33 per diluted share, in the same period a year ago. The company earned $.20 per share from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , excluding an after-tax gain of $245 million resulting from the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of non-core assets. Sales for the period were $1.9 billion, compared to $1.2 billion in the fourth quarter of 1998. For the full year 1999, the company reported net income of $157 million, or $.71 per diluted share, compared to a net loss of $200 million, or $1.61 per diluted share, in 1998. The 1999 results included an after-tax gain on the sale of non-core assets of $268 million, or $1.22 per diluted share. Sales for the full year were $7.2 billion compared to $3.5 billion in 1998. Smurfit-Stone's 1998 results include the results of Jefferson Smurfit Corporation (JSC JSC Johnson Space Center (NASA) JSC Joint Stock Company JSC Java Studio Creator JSC Joint Steering Committee JSC Joint Standing Committee JSC Journal of Symbolic Computation JSC Joint Scientific Committee ), the predecessor of SSCC, for the full year, and the results of Stone Container from the date of the merger with JSC through the end of the year. Ray Curran, president and chief executive officer, noted that the fourth quarter was the first profitable quarter since Smurfit-Stone was established. &uot;The results reflect the company's year-long focus on achieving synergies, divesting assets and reducing debt and interest expense. This effort has lowered the company's break-even point break-even point - In the process of implementing a new computer language, the point at which the language is sufficiently effective that one can implement the language in itself. at a time of improving demand and prices for corrugated cor·ru·gate v. cor·ru·gat·ed, cor·ru·gat·ing, cor·ru·gates v.tr. To shape into folds or parallel and alternating ridges and grooves. v.intr. containers and other packaging products and market pulp,&uot; Curran said. The company completed two major asset sales during the quarter: its Southeastern U.S. timberlands and the Newberg, OR, newsprint newsprint low grade paper used for newspapers. Old newspapers are fed to cattle as an alternative roughage and may occasionally be ingested by dogs. Significant amounts of lead are accumulated in tissues; no cases of poisoning have been recorded in cattle, though it has been mill. The proceeds of these sales and refinancing Refinancing An extension and/or increase in amount of existing debt. activities enabled the company to reduce debt by $1.1 billion to about $4.8 billion at year-end, Curran said. Commenting on the full year, Curran said, &uot;Our goals in 1999 were to reduce financial risk, settle major outstanding litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , refocus Verb 1. refocus - focus once again; The physicist refocused the light beam" focus - cause to converge on or toward a central point; "Focus the light on this image" 2. the company on its core packaging business and integrate the major packaging operations. We met our expectations in all these areas. We achieved 90 percent of our asset divestiture target by November, enabling us to reduce debt by $1.8 billion for the year. We eliminated overlapping activities and continued the rationalization rationalization, in psychology: see defense mechanism. of our converting operations, enabling us to further streamline our business.&uot; In addition, the company exited several non-strategic joint ventures during the year. &uot;The impact of the 1999 initiatives,&uot; Curran said, &uot;has left us with a substantially strengthened company. We can now focus attention equally on customer satisfaction, operational excellence and financial discipline. We will continue the integration of our container and containerboard con·tain·er·board n. A corrugated or solid cardboard used to make containers. system and work to achieve full potential in all of our businesses. &uot;Domestic demand for packaging continues to be healthy, and we are experiencing a pick-up in demand in export markets for containerboard,&uot; he concluded. Smurfit-Stone Container Corporation was formed on November 18, 1998 as a result of the merger of Jefferson Smurfit Corporation and Stone Container Corporation. The company is the industry's leading manufacturer of paper and paperboard-based packaging, including containerboard, corrugated containers, industrial bags, and claycoated recycled boxboard box·board n. A firm cardboard used for making boxes. ; and is the world's largest paper recycler. In addition, Smurfit-Stone is a leading producer of solid bleached sulfate sulfate, chemical compound containing the sulfate (SO4) radical. Sulfates are salts or esters of sulfuric acid, H2SO4, formed by replacing one or both of the hydrogens with a metal (e.g., sodium) or a radical (e.g., ammonium or ethyl). , folding cartons The folding carton created the packaging industry as it is known today, beginning in the late 19th century. Basically, a folding carton is made of paperboard, and is cut, folded, laminated and printed for transport to manufacturers. , paper tubes and cores, and labels. The company operates about 300 facilities worldwide and employs approximately 35,000. This document contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 21 E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , about Smurfit-Stone Container Corporation. Although the company believes that, in making any such statements, its expectations are based on reasonable assumptions, any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. When used in this document, the words &uot;anticipates,&uot; &uot;believes,&uot; &uot;expects,&uot; &uot;intends,&uot; and similar expressions as they relate to Smurfit-Stone Container Corporation or its management are intended to identify such forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. Important factors that could cause actual results to differ materially from those in forward-looking statements, certain of which are beyond the control of Smurfit-Stone Container Corporation, include: the impact of general economic conditions in the U.S. and Canada and in other countries in which Smurfit-Stone Container Corporation and its subsidiaries currently do business (including Asia, Europe and Latin and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. ); industry conditions, including competition and product and raw material prices; fluctuations in exchange rates and currency values; capital expenditure requirements; legislative or regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. , particularly concerning environmental matters; interest rates; access to capital markets; the timing of and value received in connection with asset divestitures; and obtaining required approvals, if any, of debt holders. The actual results, performance or achievement by Smurfit-Stone Container Corporation could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations and financial condition of Smurfit-Stone Container Corporation.
SMURFIT-STONE CONTAINER CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three months ended Twelve months ended
December 31, December 31,
1999 1998 1999 1998
---- ---- ---- ----
Net sales $ 1,924 $ 1,183 $ 7,151 $ 3,469
Costs and expenses (Note 1) 1,722 1,419 6,728 3,533
------- ------- ------- -------
Income (loss) from operations 202 (236) 423 (64)
Interest expense, net (127) (99) (563) (247)
Other, net 419 6 479 4
------- ------- ------- -------
Income (loss) from continuing
operations before income taxes,
minority interest, extraordinary
item and cumulative effect
of accounting change 494 (329) 339 (307)
Benefit from (provision for)
income taxes (203) 128 (168) 114
Minority interest expense (2) (1) (8) (1)
------- ------- ------- -------
Income (loss) from continuing
operations before extraordinary
item and cumulative effect
of accounting change 289 (202) 163 (194)
Discontinued operations: Income
(loss) from discontinued operations
and gain on disposition, net
of income taxes 7 (12) 6 10
------- ------- ------- -------
Income (loss) before extraordinary
item and cumulative effect
of accounting change 296 (214) 169 (184)
Extraordinary item: Loss from
early extinguishment of debt,
net of income tax benefits (10) - (12) (13)
Cumulative effect of accounting change
Start-up costs, net of income
tax benefits - - - (3)
------- ------- ------- -------
Net income (loss) $ 286 $ (214) $ 157 $ (200)
======= ======= ======= =======
Basic earnings per common share
Income (loss) from continuing
operations before extraordinary
item and accounting change $ 1.33 $ (1.25) $ 0.75 $ (1.56)
Discontinued operations 0.03 (0.08) 0.02 0.08
Extraordinary item (0.05) - (0.05) (0.11)
Cumulative effect of accounting
change - - - (0.02)
------- ------- ------- -------
Net income (loss) $ 1.31 $ (1.33) $ 0.72 $ (1.61)
======= ======= ======= =======
Weighted average shares
outstanding 218 161 217 124
Diluted earnings per common share
Income (loss) from continuing
operations before extraordinary
item and accounting change $ 1.29 $ (1.25) $ 0.74 $ (1.56)
Discontinued operations 0.03 (0.08) 0.02 0.08
Extraordinary item (0.04) - (0.05) (0.11)
Cumulative effect of accounting
change - - - (0.02)
------- ------- ------- -------
Net income (loss) $ 1.28 $ (1.33) $ 0.71 $ (1.61)
======= ======= ======= =======
Weighted average shares
outstanding 226 161 220 124
Note 1: 1999 includes restructuring charges of $10 million
year-to-date.
SMURFIT-STONE CONTAINER CORPORATION
PRO FORMA PRODUCTION AND SHIPMENTS
1st 2nd 3rd 4th Total
Qtr Qtr Qtr Qtr Year
--- --- --- --- ----
Containerboard mill
production (M tons) - 1999 1,460 1,476 1,527 1,510 5,973
- 1998 1,674 1,661 1,615 1,460 6,410
Coated boxboard and
SBS shipments (M tons) - 1999 194 190 193 193 770
- 1998 193 190 195 189 767
Newsprint shipments
(metric tons) - 1999 136 134 142 105 517
- 1998 143 138 146 145 572
Corrugated shipments
- U.S. only (BSF) - 1999 18.7 18.5 18.7 18.4 74.3
- 1998 18.2 19.1 19.3 18.9 75.5
Industrial bag
shipments (M tons) - 1999 79.2 78.0 79.2 79.2 315.6
- 1998 74.1 74.1 76.3 77.0 301.5
Carton shipments (M tons) - 1999 141 147 146 149 583
- 1998 133 130 138 135 536
Fiber reclaimed
and brokered (M tons) - 1999 1,591 1,630 1,648 1,691 6,560
- 1998 1,279 1,263 1,291 1,322 5,155
SSCC SUPPLEMENTARY FINANCIAL INFORMATION
(in Millions)
Balance sheet 12/31/99 12/31/98
-------- --------
Total debt $4,793 $6,633
Twelve Months Ended December 31,
1999 1998
---- ----
Cash flows
Depreciation, depletion &goodwill
amortization 430 168
Capital investment 156 287
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