Champion International Corporation Reports Significantly Improved Third Quarter Earnings.STAMFORD, Conn.--(BUSINESS WIRE)--Oct. 14, 1999-- Champion International Corporation (NYSE:CHA) today reported third quarter net income of $75 million or 78 cents per share. This includes an extraordinary charge of $2.3 million or two cents per share for the early retirement of debt. Earnings per share increased 144% over the third quarter of last year and 90% over last quarter. Third quarter 1999 results compare to net income of $39 million or 41 cents per share in the second quarter of 1999 and net income of $31 million or 32 cents per share in the third quarter of last year. The company's pulp and paper operations in North and South America reported operating income of $90 million compared to $40 million last quarter and $69 million in the third quarter of last year. The improvement from last quarter was due primarily to improved prices for uncoated freesheet and coated groundwood papers and pulp, as well as higher pulp shipments. The improvement from the third quarter of 1998 was due mainly to lower manufacturing costs and improved results at the company's Brazilian operations. The company's wood products segment reported income from operations of $71 million compared to $69 million last quarter and $34 million in the third quarter of 1998. The improvement from last quarter was due mainly to higher average Canadian lumber and plywood prices, which more than offset lower Canadian shipments. The improvement from the year-ago quarter was due to significantly higher lumber and plywood prices in Canada and the United States and significantly increased lumber and plywood shipments in Canada. In commenting on the quarter, chairman and chief executive officer Richard E. Olson said, "Results for this quarter were significantly improved due to stronger markets for all of our pulp and paper grades and continued strong building products markets." He added, "With the strengthening of demand for our pulp and paper products, we are optimistic about the fourth quarter." Olson also stated, "We had solid operating performance at most of our facilities, and in particular at our Inpacel coated papers mill in Brazil, which we acquired last year. Our employees at Inpacel have, in a relatively short time, made tremendous progress in reducing costs, improving the quality of the products they produce, and increasing Champion's local market position by 20%." Mr. Olson also noted that the company's $400 million Profit Improvement Program, which was launched in October 1997, will be completed by the end of 1999, one year early. "In the past two years, our employees have worked hard to reduce costs, strengthen relationships with our customers, and improve our operating performance overall. The fact that they achieved these goals fully twelve months ahead of schedule is a testament to their superior efforts," Olson said. Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results and company plans and objectives to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties include, but are not limited to, changes in the United States and international economies; changes in worldwide demand for the company's products; changes in worldwide production and production capacity in the forest products industry; competitive pricing pressures for the company's products; changes in raw material, energy, and other costs; and currency fluctuations. -0-
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(in millions, except per share)
Three Months Nine Months
Ended Ended
September 30, September 30,
---------------- ---------------
1999 1998 1999 1998
--------- --------- --------- ---------
Net Sales (Note 1) $ 1,344.4 $ 1,358.0 $ 3,920.2 $ 4,308.8
========= ========= ========= =========
Income Before
Income Taxes:
Pulp and Paper:
North America $ 48.0 $ 39.7 $ 38.2 $ 160.8
Brazil 36.4 26.5 103.9 75.4
Distribution 5.4 2.4 15.1 9.2
--------- --------- --------- ---------
Total Pulp
and Paper 89.8 68.6 157.2 245.4
Wood Products 70.6 33.8 181.7 61.4
General corporate
expense (10.4) (7.2) (32.4) (30.4)
Interest and debt
expense (61.2) (61.4) (185.5) (196.2)
Other income (expense)
- net 24.8 8.1 85.8 29.8
--------- --------- --------- ---------
Income Before Income Taxes
and Extraordinary Item 113.6 41.9 206.8 110.0
Income Taxes 36.2 10.6 48.5 27.6
--------- --------- --------- ---------
Income Before
Extraordinary Item 77.4 31.3 158.3 82.4
Extraordinary Item -
Loss on Early Retirement
of Debt, Net of Taxes (2.3) - (2.3) -
--------- --------- --------- ---------
Net Income $ 75.1 $ 31.3 $ 156.0 $ 82.4
========= ========= ========= =========
Average number of common
shares outstanding 96.1 95.7 95.8 96.0
========= ========= ========= =========
Basic Earnings Per
Common Share:
Income Before
Extraordinary Item $ .80 $ .33 $ 1.65 $ .86
Extraordinary Item (.02) - (.02) -
--------- --------- --------- ---------
Net Income $ .78 $ .33 $ 1.63 $ .86
========= ========= ========= =========
Diluted Earnings Per
Common Share:
Income Before
Extraordinary Item $ .80 $ .32 $ 1.64 $ .85
Extraordinary Item (.02) - (.02) -
--------- --------- --------- ---------
Net Income $ .78 $ .32 $ 1.62 $ .85
========= ========= ========= =========
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(in millions of dollars)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------------ ------------------
1999 1998 1999 1998
--------- --------- --------- ---------
Note 1:
Net Sales by
Business Segment:
Pulp and Paper:
North America $ 693.5 $ 772.3 $ 2,080.4 $ 2,610.1
Brazil 99.9 109.5 287.9 335.9
Distribution 217.7 208.4 614.2 631.9
--------- --------- --------- ---------
Total Pulp
and Paper 1,011.1 1,090.2 2,982.5 3,577.9
Wood Products 333.3 267.8 937.7 730.9
--------- --------- --------- ---------
Total $ 1,344.4 $ 1,358.0 $ 3,920.2 $ 4,308.8
========= ========= ========= =========
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions of dollars)
September 30, December 31,
1999 1998
(unaudited)
--------------- ---------------
ASSETS:
Cash and temporary
cash investments $ 605.1 $ 300.4
Receivables - net 522.8 520.5
Inventories 398.6 503.5
Prepaid expenses 41.8 27.5
Deferred income taxes 82.4 86.6
--------------- ---------------
Total Current Assets 1,650.7 1,438.5
Timber and timberlands
- net 2,260.9 2,430.4
Property, plant and
equipment - net 3,859.5 4,228.8
Other assets and
deferred charges 648.2 742.2
--------------- ---------------
Total Assets $ 8,419.3 $ 8,839.9
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable and
accrued liabilities $ 676.7 $ 720.3
Current installments
of long-term debt 353.3 228.0
Short-term borrowings 69.6 89.8
Income taxes 25.3 10.4
--------------- ---------------
Total Current Liabilities 1,124.9 1,048.5
Long-term debt 2,571.6 2,947.5
Other liabilities 799.1 786.8
Deferred income taxes 948.0 961.2
Shareholders' Equity 2,975.7 3,095.9
--------------- ---------------
Total Liabilities
and Shareholders' Equity $ 8,419.3 $ 8,839.9
=============== ===============
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