Bowater Announces Financial Results for the Third Quarter of 2000.Business Editors GREENVILLE, S.C.--(BUSINESS WIRE)--Oct. 24, 2000 Bowater Incorporated (NYSE NYSE See: New York Stock Exchange : BOW) today reported financial results for the third quarter of 2000. Net income for the third quarter was $50.0 million, or $.96 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, after deducting unusual charges totaling $9.8 million (pre-tax), or $.12 per share. The company earned $1.08 per share before such charges, which included a loss on foreign exchange, a charge for certain stock-based incentive arrangements, and a casualty loss for pine-beetle damage to woodlands in the southern United States The Southern United States—commonly referred to as the American South, Dixie, or simply the South—constitutes a large distinctive region in the southeastern and south-central United States. . This compares with a net loss of $.98 per diluted share in the third quarter of last year, including a loss on the sale of assets of $.68 per share. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the quarter were $628.0 million, compared with $511.0 million for the third quarter of 1999. Bowater implemented a $50 per metric ton price increase for 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 and a $30 per metric ton increase for market pulp during the quarter. Net income for the first nine months of 2000 was $100.9 million, or $1.90 per diluted share, on sales of $1.72 billion. This compares with net income of $58.3 million, or $1.04 per diluted share, on sales of $1.61 billion. The improvement over the company's performance last year was due to higher prices for pulp and paper, combined with significantly lower operating costs operating costs npl → gastos mpl operacionales . The company is setting a new goal to improve profitability by approximately $100 million per year, through cost reductions and productivity gains, to be implemented by the end of 2001. "Bowater's continuous improvement culture has contributed more than $250 million in improved costs and efficiencies since 1995. We are now prepared to make another significant improvement to our overall operating structure," said Arnold M. Nemirow, Bowater's Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . Bowater will hold a management conference call to discuss these financial results at 1:00 PM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT , October 24, 2000. The conference call number is 800-260-0718. The call will be also be broadcasted via the Internet. Interested parties may connect to the Bowater home page at www.bowater.com, then follow the on-screen on·screen or on-screen adj. & adv. 1. As shown on a movie, television, or display screen. 2. Within public view; in public. instructions for access to the call. Bowater Incorporated, headquartered in Greenville, SC, is a global leader in newsprint. In addition, the company makes coated and uncoated groundwood papers, bleached kraft pulp and lumber lumber, term for timber that has been cut into boards for use as a building material. The major steps in producing lumber involve logging (the felling and preparation of timber for shipment to sawmills), sawing the logs into boards, grading the boards according to products. With its pending acquisition of the Sepoong mill in South Korea, the company will have ten pulp and paper mills in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada and South Korea. The company also owns and operates a coating operation and three sawmills that produce softwood softwood Timber obtained from coniferous trees (mainly of the pine and fir families). With the exception of bald cypress, tamarack, and larch, softwood trees are evergreens. dimension lumber. These operations are supported by 1.8 million acres of timberlands owned or leased in the United States and Canada and over 14 million acres of timber cutting rights in Canada. The company is one of the world's largest consumers of recycled newspapers and magazines. Bowater common stock is listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , U.S. regional exchanges and the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. . A special class of stock exchangeable into Bowater common stock is listed on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). : BWX). Statements in this news release that are not reported financial results or other historical information are "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 the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. They include, for example, statements about our business outlook, assessment of market conditions, strategies, future plans, future sales, prices for our major products, inventory levels, capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. and tax rates. These forward-looking statements are not guarantees of future performance. They are based on management's expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. The risks and uncertainties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the forward-looking statements in this news release include those described under the caption "Cautionary Statement Regarding Forward-Looking Information" in Bowater's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 1999, and from time to time, in Bowater's other filings with the Securities and Exchange Commission.
BOWATER INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in millions except per share amounts)
Three Months Ended Nine Months Ended
--------------------------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
--------- --------- --------- --------
Net sales $628.0 $511.0 $1,715.2 $1,609.7
Cost of sales 402.3 404.3 1,150.5 1,245.1
Depreciation, amortization,
and cost of timber
harvested 74.9 75.0 217.2 226.8
Impairment of asset (1) - - - 92.0
Selling and administrative
expense 32.3 28.6 86.6 73.7
Net gain (loss) on sale
of assets (2) 0.1 (55.3) 3.4 198.4
--------- --------- --------- --------
Operating income (loss) 118.6 (52.2) 264.3 170.5
Other expense (income):
Interest income (4.0) (1.9) (11.7) (3.7)
Interest expense, net 36.1 31.3 98.8 94.3
Foreign exchange (gain)
loss 2.2 (3.3) 7.5 (32.5)
Other, net 0.1 2.9 0.6 3.9
--------- --------- --------- --------
34.4 29.0 95.2 62.0
--------- --------- --------- --------
Income (loss) before income
taxes and minority
interests 84.2 (81.2) 169.1 108.5
Provision for income taxes 31.8 (24.7) 65.9 50.3
Minority interests 2.4 (3.1) 2.3 (0.1)
--------- --------- --------- --------
Net income (loss) $ 50.0 $(53.4) $ 100.9 $ 58.3
========= ========= ========= ========
Basic earnings (loss) per
common share: (3) $ 0.97 $(0.98) $ 1.92 $ 1.05
========= ========= ========= ========
Average common shares
outstanding 51.6 54.3 52.6 54.3
========= ========= ========= ========
Diluted earnings (loss)
per common share: (3) $ 0.96 $(0.98) $ 1.90 $ 1.04
========= ========= ========= ========
Average common and common
equivalent shares
outstanding 52.1 54.3 53.1 55.2
========= ========= ========= ========
BOWATER INCORPORATED AND SUBSIDIARIES
(Unaudited, in millions of US dollars)
Consolidated Balance Sheet September 30, December 31,
2000 1999
---------- ---------
Current assets:
Cash and cash equivalents $ 21.8 $ 24.7
Marketable securities 0.4 2.1
Accounts receivable, net 399.2 314.3
Inventories 161.5 145.4
Other current assets 46.6 46.0
---------- ---------
Total current assets 629.5 532.5
---------- ---------
Timber and timberlands 271.5 283.2
Fixed assets, net 2,940.5 2,581.3
Notes receivable 145.9 146.0
Goodwill 852.4 870.6
Other assets 152.5 138.6
---------- ---------
$ 4,992.3 $ 4,552.2
========== =========
Current liabilities:
Current installments of
long-term debt $ 3.8 $ 35.5
Short-term bank debt 488.7 15.0
Accounts payable and accrued
liabilities 317.2 336.4
Income taxes payable 8.7 -
Dividends payable 10.3 10.9
---------- ---------
Total current liabilities 828.7 397.8
---------- ---------
Long-term debt, net of
current installments 1,450.3 1,454.6
Other long-term liabilities 336.5 326.1
Deferred income taxes 510.1 481.4
Minority interests in subsidiaries 125.6 121.5
Shareholders' equity 1,741.1 1,770.8
---------- ---------
$ 4,992.3 $ 4,552.2
========== =========
Nine Months Ended
------------------------
Consolidated Cash Flow September 30, September 30,
2000 1999
---------- ---------
Cash flow from operating activities $ 273.5 $ 105.0
---------- ---------
Cash flow from investing activities:
Acquisition of Newsprint
South, Inc.(4) (384.0) -
Cash invested in fixed assets
and timberlands (164.5) (154.8)
Purchase of assets previously
leased (24.2) -
Disposition of fixed assets and
timberlands (2) 5.9 361.2
Disposition of Great Northern
Paper, Inc. - 108.0
Cash from maturities of marketable
securities, net 6.1 0.5
Cash paid on maturity of
hedging contracts (20.2) (29.3)
--------- ---------
(580.9) 285.6
--------- ---------
Cash flow from financing activities:
Cash dividends, including minority
interests (38.0) (42.4)
Purchase of common stock (103.7) (75.3)
Proceeds from short-term borrowings 749.9 269.1
Payments of short-term borrowings (276.3) (479.1)
Proceeds from long-term borrowings 0.4 32.3
Payments of long-term borrowings (30.9) (4.3)
Stock options exercised 2.4 10.2
Redemption of Series C Preferred Stock - (26.4)
Redemption of Convertible Subordinated
Debentures - (65.9)
Other 0.7 1.5
--------- ---------
304.5 (380.3)
--------- ---------
Increase (decrease) in cash and
cash equivalents $ (2.9) $ 10.3
========= =========
BOWATER INCORPORATED AND SUBSIDIARIES Notes to the Consolidated Financial Statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge (1) During the first nine months of 1999, Bowater recorded an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $92.0 million pre-tax, or $1.02 per diluted share, after tax, per Statement of Financial Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. Of", on the assets of its Great Northern Paper (GNP GNP See: Gross National Product ) facility. (2) During the first nine months of 2000, Bowater sold fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → resulting in a pre-tax gain of $3.4 million, or $0.04 per diluted share, after tax. In the third quarter of 1999, Bowater completed the sale of GNP to Inexcon Maine, Inc. for $250 million and recorded a pre-tax loss of $55.3 million, or $0.68 per diluted share, after tax. During the first nine months of 1999, we sold 1.6 million acres of timberlands resulting in a pre-tax gain of $253.7 million, or $2.80 per diluted share, after tax. (3) For the calculation of basic and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the three and nine months ended September 30, 2000, no adjustments to net income are necessary. For the nine months ended September 30, 1999, the calculations include a deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. of $0.1 million for Series C preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividends and a deduction of $1.0 million for deferred issuance costs associated with the redemption of the remaining outstanding Series C Preferred Stock. (4) In August 2000, Bowater acquired the Newsprint South, Inc. paper mill, located in Grenada, Mississippi Grenada is a city in Grenada County, Mississippi, United States. The population was 14,879 at the 2000 census. It is the county seat of Grenada CountyGR6. , from GE Capital Structured Finance Group and shareholders for $384.0 million in cash and the assumption of $8.9 million in debt. The consolidated financial statements include the operations and cash flow of the Grenada mill for the period August 1, 2000, to September 30, 2000, and the assets and liabilities as of September 30, 2000. (5) Certain amounts in 1999 have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the 2000 presentation. A schedule of historical financial and operating statistics is available upon request. |
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