Bowater Announces Second Quarter Results and Completion of Korean Mill Purchase.GREENVILLE Greenville. 1 City (1990 pop. 45,226), seat of Washington co., W Miss., on Lake Ferguson, a deepwater harbor adjoining the Mississippi River; inc. 1886. , S.C.--(BUSINESS WIRE)--July 16, 1998--Bowater Incorporated (NYSE NYSE See: New York Stock Exchange :BOW) today reported net income for the second quarter of 1998 of $28.5 million, or $.68 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, before a net after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge of $9.6 million, or $.24 per diluted share, from currency hedges Currency hedge Applies mainly to international equities. Hedging technique to guard against foreign exchange fluctuations (i.e., short Euro l00 mm when holding a long position of Euro l00 mm in stocks). associated with the company's acquisitions of Avenor Av´e`nor n. 1. See Avener. Inc. and the Halla Halla may refer to:
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 second quarter of 1998 were $395.8 million, compared with $356.3 million for the second quarter of 1997. Net income for the first six months of 1998 was $49.3 million, or $1.17 per diluted share, on sales of $778.9 million, before net after-tax currency hedging charges of $12.3 million, or $.30 per diluted share, and before a $6.7 million after-tax gain, or $.16 per diluted share, on the sale of timberlands. Net income for the first six months of 1997 was $6.8 million, or $.12 per diluted share, on sales of $704.8 million. During the quarter, prices 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 coated paper Coated paper is paper which has been coated by an inorganic compound to impart certain qualities to the paper, including weight and surface gloss, smoothness or ink absorbency. Kaolinite is the compound most often used for coating papers used in commercial printing. were higher than in the second quarter of last year and up slightly from the first quarter of 1998. Pulp pulp: see paper. prices recovered from the low first quarter levels, and were about the same as the second quarter of last year. Demand for Bowater's paper and pulp products remained strong during the second quarter, despite the continued economic weakness in Asia. Second quarter earnings were helped by lower operating costs operating costs npl → gastos mpl operacionales compared with the first quarter of the year. Also today, Bowater Bowater NYSE: BOW is an American pulp and paper company based in Greenville, South Carolina. Bowater has 12 pulp and paper mills in the United States, Canada and South Korea and 13 North American sawmills. It has approximately 10,000 employees. announced that it has completed the acquisition of the Halla newsprint mill, which is located in the Daebul Industrial Complex on the southwest coast of Korea. Bowater purchased the production assets of the mill for approximately $201 million, and pre-paid all current accounts payable for approximately $22 million as required by the bankruptcy court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. proceedings. Upon closing, the mill is free and clear of all indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. . The company believes that this new mill, which started up in late 1996, is the lowest cost newsprint mill in Korea and one of the lowest cost newsprint mills in Asia. The mill has a high-quality work force and an annual production capacity of approximately 250,000 metric tons of recycled newsprint for Korean Korean, language of uncertain ancestry. It is thought by some scholars to be akin to Japanese, by others to be a member of the Altaic subfamily of the Ural-Altaic family of languages (see Uralic and Altaic languages), and by still others to be unrelated to any known and other Asian markets. The addition of production capacity in Asia will allow Bowater to build on its already strong export position in the region. Bowater will be able to achieve cost savings by optimizing shipments through its expanding network of export mills. Bowater Incorporated, headquartered in Greenville, SC, is a global leader in newsprint, and also 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. It has six 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 Korea, and 3.5 million acres of timberlands in the United States and Canada. Bowater Incorporated 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. . -0-
(Please see the attached tables.)
BOWATER INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in thousands except per share amounts)
Three Months Ended Six Months Ended
--------------------------------------------
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
------------- -------------- ---------- ---------
Net sales $ 395,763 $ 356,342 $ 778,937 $ 704,849
Cost of sales 280,379 272,259 554,773 552,773
Depreciation,
amortization,
and cost of
timber harvested 43,133 41,069 88,285 83,718
-------------- ------------ ---------- --------
Gross profit 72,251 43,014 135,879 68,358
Selling and
administrative
expense 13,793 19,824 31,087 35,045
------------ ------------ ---------- --------
Operating income 58,458 23,190 104,792 33,313
Other expense
(income):
Interest income (6,196) (4,853) (12,730) (10,146)
Interest expense,
net 16,667 16,761 33,251 33,579
Sale of
timberlands (1) (48) (12) (21,067) (23)
Other, net (2) 16,664 (770) 21,088 (495)
----------- ------------- --------- ---------
----------- ------------- --------- ---------
27,087 11,126 20,542 22,915
----------- ------------- --------- ---------
Income before
income taxes
and minority
interests 31,371 12,064 84,250 10,398
Provision for
income taxes 11,922 4,465 32,016 3,848
Minority
interests 560 503 8,558 (232)
---------- ---------- --------- ---------
Net income $ 18,889 $ 7,096 $ 43,676 $ 6,782
=========== =========== ========== =========
Basic earnings per
common share: (3) $ 0.45 $ 0.16 $ 1.05 $ 0.12
=========== =========== ========== ========
Average common
shares outstanding 40,551 40,677 40,470 40,497
=========== =========== ========== ========
Diluted earnings
per common
share: (3) $ 0.44 $ 0.16 $ 1.03 $ 0.12
=========== =========== ========== =========
Average common and common
equivalent shares
outstanding 41,268 40,707 41,156 40,551
============ =========== =========== =========
BOWATER INCORPORATED AND SUBSIDIARIES
(Unaudited, in thousands)
Consolidated Balance Sheet June 30, December 31,
1998 1997
------------- -------------
Current assets:
Cash and cash equivalents $ 420,484 $ 228,688
Marketable securities 25,351 176,834
Accounts receivable, net 200,955 190,594
Inventories 104,851 105,514
Other current assets 16,612 16,745
-------------- --------------
-------------- --------------
Total current assets 768,253 718,375
-------------- --------------
Timber and timberlands 382,073 394,039
Fixed assets, net 1,541,681 1,554,529
Other assets 80,210 78,855
-------------- --------------
$ 2,772,217 $ 2,745,798
=============== ==============
Current liabilities:
Current installments of
long-term debt $ 1,796 $ 1,800
Accounts payable and accrued
liabilities 175,141 168,327
Income taxes payable 7,726 15,861
Dividends payable 8,668 8,663
--------------- --------------
---------------- --------------
Total current liabilities 193,331 194,651
---------------- --------------
Long-term debt, net of current
installments 756,205 757,100
Other long-term liabilities 169,151 169,510
Deferred income taxes 348,712 345,166
Minority interests in subsidiaries 115,936 125,206
Shareholders' equity 1,188,882 1,154,165
================ ================
$ 2,772,217 $ 2,745,798
================ ================
Six Months Ended
-----------------------------
Consolidated Cash Flow June 30, June 30,
1998 1997
Cash flow from operating
activities $ 132,235 $ 74,233
---------------- --------------
Cash flow from investing activities:
Cash invested in fixed
assets and timberlands (73,226) (45,829)
Disposition of fixed assets
and timberlands 31,681 2,342
Cash invested in
option contracts (22,738) -
Cash from sale of
marketable securities, net 151,483 87,115
-------------- ---------------
87,200 43,628
--------------- ---------------
Cash flow from financing activities:
Cash dividends, including
minority interests (34,141) (38,805)
Payments of long-term debt (936) (884)
Purchase of common stock - (57,244)
Redemption of LIBOR preferred
stock - (25,000)
Stock options exercised 6,510 13,032
Other 928 884
------------- --------------
(27,639) (108,017)
--------------- --------------
Increase in cash and cash
equivalents $ 191,796 $ 9,844
============== =============
BOWATER INCORPORATED AND SUBSIDIARIES Notes to 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 quarter of 1998, the company sold approximately 26,000 acres of non-strategic timberlands resulting in a pre-tax gain of $21 million, or $.16 per diluted share, after tax and minority interest. (2) During the first quarter of 1998, the Company purchased options on the Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents at a cost of $22.7 million to hedge its pending acquisition of Avenor Inc. During the first and second quarters, the Company adjusted the cost of these options to fair market value resulting in pre-tax charges to the first and second quarters of 1998 of $4.3 million and $18 million or $.07 and $.28 per diluted share, respectively. In addition, during the second quarter of 1998, the Company closed out Korean won
foreign exchange contracts resulting in a pre-tax gain of $2.6 million or $.04 per diluted share. (3) The calculations 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 six months ended June 30, 1998 include deductions of $.6 million and $1.1 million, respectively, 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. For the three and six months ended June 30,1997, the calculations included deductions of $.7 million and $1.8 million for the dividend requirements of the Company's LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). and Series C preferred stock and the amortization of the difference between the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the LIBOR preferred stock and its mandatory redemption value Redemption Value refers to the value that is placed on a party's head after they wrong you in some way. It is seen as the payment you are willing to make to get justice. . A schedule of historical financial and operating statistics is available upon request. CONTACT: Bowater, Inc. Media contact, Deborah L. Humphrey, 864/282-9571 Analyst contact, James H. Dorton, 864/282-9500 |
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