Domtar announces continuing strong financial results for third quarter of 1995.MONTREAL--(BUSINESS WIRE)--Oct. 19, 1995--Domtar (ME, TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). , NYSE NYSE See: New York Stock Exchange : DTC DTC See: Depository Transfer Check DTC See: Depository Trust Company DTC See Depository Trust Company (DTC). ) Thursday announced for the quarter ending September 30, 1995 a continuing strong financial performance with net earnings of $90 million ($0.69 net basic earnings per share), compared to $22 million ($0.16 net basic earnings per share) in the corresponding period of last year. This mirrors the quarterly record established in the second quarter of 1995, with net earnings of $91 million. Net earnings for the nine months ended September 30, 1995 reached $256 million ($1.97 net basic earnings per share) compared to net earnings of $41 million ($0.30 net basic earnings per share) realized in the corresponding period of 1994. Net earnings in 1994 also included a $33 million net gain on 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 businesses. Net earnings 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 for the first nine months of 1995, improved by $257 million, a significant turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. from the net loss from continuing operations of $1 million ($0.03 net loss from continuing operations per share) incurred in the same period of 1994. Prices for many of Domtar's products were higher than in the second quarter and considerably higher than those realized during the corresponding period last year. However, shipments were lower than those in the second quarter of 1995 in fine papers, 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 and packaging and were generally lower than in the third quarter of last year. This decline reflected decelerating economic growth in the second and third quarters of 1995, which led to customer and mill inventory increases during the second quarter and to reduced order activity during the third quarter. "Overall, the performance achieved during the second quarter of 1995 was maintained during the third quarter. However, the price escalation es·ca·late v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. trend which began in the second-half of 1994 and continued through the first-half of 1995 is not expected to continue in the near future," said Stephen C. Larson, Domtar's President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "Prices, which for many of our businesses are at record levels, stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. during the third quarter. While industry fundamentals are still strong, inventory reductions in both Packaging and Fine Papers will likely continue in the fourth quarter impacting shipments and, to a lesser extent, price," he added. In the third quarter of 1995, Domtar generated net cash flow from operating activities of $102 million, a $98-million improvement from a year earlier. Capital expenditures in the third quarter of 1995 were $96 million, while after nine months, capital expenditures in 1995 reached $249 million. In addition, during the third quarter of 1995, $48 million was disbursed on completion of Domtar's two acquisitions. As at September 30, 1995, the Corporation's total long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , net of short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, was $758 million compared to $864 million as at December 31, 1994. Consequently, Domtar's debt-to-total- capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. percentage decreased to 38 percent as at September 30, 1995, from 46 percent as at December 31, 1994. Third-quarter 1995 results by market segment compared to third-quarter 1994: - Fine Papers - Sales increased 59 percent to $354 million; - Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $81 million vs. $15 million. - Pulp pulp: see paper. and Forest Products - Sales increased 8 percent to $93 million; - Operating profit of $34 million vs. $26 million. - Packaging - Sales increased 33 percent to $157 million; - Operating profit of $38 million vs. $7 million. - Construction Materials - Sales of $146 million, remained essentially at the same level; - Operating profit of $15 million vs. $16 million. Other Developments - Secondary effluent effluent waste from an abattoir carried away in liquid form. Disposal is a major problem because of the need to avoid pollution of waterways. See aerobic effluent treatment, anaerobic effluent treatment. treatment facilities During the third quarter, new secondary effluent treatment facilities began operations at Domtar's fine paper mill in Beauharnois, Quebec Beauharnois is a city located in southwestern Quebec, Canada. According to the Canada 2006 Census:
Coordinates: was completed. During the fourth quarter of 1995, similar projects will be completed at Domtar's kraft linerboard lin·er·board n. A type of paperboard used in making corrugated cartons. mill in Red Rock, Ontario Red Rock is a township on the north shore of Lake Superior in Northwestern Ontario, Canada, located in the Thunder Bay District. The population as of 2006 is 1,063. During the Second World War a POW camp was established here housing primarily German prisoners. and at the fine paper mill in St. Catharines, Ontario St. Catharines (2006 population 131,989; metropolitan population 390,317) is the largest city in the Niagara Region and the sixth largest urban area in Ontario, Canada, with 97.11 square kilometres (37.5 sq mi) of land. . In addition, a closed effluent treatment system will be in operation at the 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. medium mill in Trenton, Ontario Trenton, Ontario (2001 population 19,374) is a community on the Bay of Quinte. It is the main population centre in the municipality of Quinte West, Ontario, Canada. by the end of the year. The completion of these projects will ensure compliance with Federal, Quebec and Ontario environmental regulations at all of Domtar's facilities. - Strategic plan During the third quarter, Domtar announced a revised business and financial strategy emphasizing delivery of shareholder value and focussing the Corporation's activities in the areas of pulp and forest products, fine papers and packaging. Although Gypsum gypsum (jĭp`səm), mineral composed of calcium sulfate (calcium, sulfur, and oxygen) with two molecules of water, CaSO4·2H2O. It is the most common sulfate mineral, occurring in many places in a variety of forms. and Decorative Panels are both good, profitable businesses, with solid market positions in attractive industry segments, they are not part of Domtar's key business strategy. Depending on both financial and market considerations, these units may be either sold or retained. While the Corporation is actively exploring the sale of these businesses, it is also committed to keeping them competitive and enhancing their value. - Acquisitions During the third quarter, the Corporation completed the previously-announced acquisitions of the eastern Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. fine papers distributor, "La Compagnie J.B. Rolland et Fils," and of a large sawmill sawmill, installation or facility in which cut logs are sawed into standard-sized boards and timbers. The saws used in such an installation are generally of three types: the circular saw, which consists of a disk with teeth around its edge; the band saw, which in Grand-Remous, Quebec. Also, in a move to bolster This article is about the pillow called a bolster. For other meanings of the word "bolster", see bolster (disambiguation). A bolster (etymology: Middle English, derived from Old English, and before that the Germanic word bulgstraz the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. market leadership of its Decorative Panels division, on October 10, 1995, Domtar announced that it has purchased all the shares of a U.S. producer of decorative panels from Melamine melamine (mĕl`əmēn'), common name for 2,4,6-triamino-1,3,5-triazine. Melamine is a trimer (see polymer) of cyanamide, H2NC≡N, and is synthesized from calcium carbide. Decorative Laminate laminate, n a thin slice of porcelain or plastic fabricated in a dental lab, which is cemented to the front of the teeth to cover gaps, whiten stained teeth, or reshape chipped or broken teeth. , Inc., an Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. corporation. This acquisition will make the decorative panels business more attractive for potential strategic buyers or, in the event that it is not sold, will strengthen its base. Domtar is a major North American manufacturer of pulp and paper products and construction materials. A leading manufacturer and marketer of printing and writing papers, Domtar is also a significant Canadian producer of containerboard con·tain·er·board n. A corrugated or solid cardboard used to make containers. and corrugated containers and is a major Eastern Canadian lumber producer. Likewise, Domtar is one of the continent's largest manufacturers of decorative panels and gypsum products. In order to ensure sustainable development Sustainable development is a socio-ecological process characterized by the fulfilment of human needs while maintaining the quality of the natural environment indefinitely. The linkage between environment and development was globally recognized in 1980, when the International Union of forest resources, the Corporation applies an integrated resource management policy. -0-
APPENDIX 1
Domtar Inc.
Highlights (Unaudited)
(In millions of Canadian dollars, unless otherwise noted)
Three months ended Nine months ended
September 30 September 30
1995 1994 1995 1994
___________________________________________________________
Sales $ 750 $ 573 $ 2,146 $ 1,544 Operating profit 168 64 484 101 Earnings (loss) from 90 22 256 (1) continuing operations Net earnings 90 22 256 41 Net cash flow from continuing operations 102 4 346 34 Additions to property, plant and equipment 96 42 249 152 EBITDA 205 101 593 208 ___________________________________________________________ Per common share Earnings (loss) from continuing operations Basic $ 0.69 $ 0.16 $ 1.97 $ (0.03) Fully diluted $ 0.55 $ 0.13 $ 1.52 Net earnings Basic $ 0.69 $ 0.16 $ 1.97 $ 0.30 Fully diluted $ 0.55 $ 0.13 $ 1.52 $ 0.25 Weighted average number of common shares outstanding (millions) Basic 127.7 127.3 127.6 127.2 Fully diluted 165.9 176.6 170.5 176.5 ___________________________________________________________ Common shares Market price Toronto & Montr al stock exchanges High $ 14 3/4 $ 8 5/8 $ 14 3/4 $ 9 1/8 Low $ 11 7/8 $ 6 5/8 $ 9 1/4 $ 6 1/2 New York Stock Exchange (U.S.$) High $ 10 7/8 $ 6 3/8 $ 10 7/8 $ 6 7/8 Low $ 9 1/4 $ 4 7/8 $ 6 3/4 $ 4 3/4 Trading volume (thousands) Canada 20,464 14,557 72,293 36,917 United States 2,265 1,604 6,183 3,856 ___________________________________________________________ ___________________________________________________________ Selected Segmented Information Sales Fine papers $ 354 $ 222 $ 967 $ 600 Pulp and forest 93 86 274 221 products __________________________________
Total - pulp and paper 447 308 1,241 821
Packaging 157 118 463 322
Construction materials 146 147 442 401
__________________________________
$ 750 $ 573 $ 2,146$ 1,544
__________________________________________________________
Operating profit
Fine papers $ 81 $ 15 $ 243 $ 11
Pulp and forest products 34 26 95 48
__________________________________
Total - pulp and paper 115 41 338 59
Packaging 38 7 96 13
Construction materials 15 16 50 29
__________________________________
$ 168 $ 64 $ 484 $ 101
__________________________________________________________
__________________________________________________________
APPENDIX 2 Domtar Inc. Consolidated Statement of Earnings (Unaudited) (In millions of Canadian dollars, unless otherwise noted)
Three months ended Nine months ended
September 30 September 30
1995 1994 1995 1994
_______________________________________________________________
Sales $ 750 $ 573 $ 2,146 $ 1,544
Operating expenses
Cost of sales 506 432 1,438 1,232
Selling, general and
administrative 39 40 115 104
Amortization 37 37 109 107
___________________________________
582 509 1,662 1,443
___________________________________
Operating profit 168 64 484 101
Financing expenses 30 33 98 106
___________________________________
Earnings (loss) from
continuing operations
before income taxes 138 31 386 (5)
Income taxes 48 9 130 (4)
___________________________________
Earnings (loss) from
continuing operations 90 22 256 (1)
Earnings from discontinued
operations - - - 42
___________________________________
Net earnings 90 22 256 41
Dividend requirements of
preferred shares 2 1 4 3
___________________________________
Net earnings applicable
to common shares $ 88 $ 21 $ 252 $ 38
___________________________________
___________________________________
Per common share Earnings (loss) from continuing operations Basic $ 0.69 $ 0.16 $ 1.97 $(0.03) Fully diluted $ 0.55 $ 0.13 $ 1.52 Net earnings Basic $ 0.69 $ 0.16 $ 1.97 $ 0.30 Fully diluted $ 0.55 $ 0.13 $ 1.52 $ 0.25 Weighted average number of common shares outstanding (millions) Basic 127.7 127.3 127.6 127.2 Fully diluted 165.9 176.6 170.5 176.5 APPENDIX 3 Domtar Inc. Consolidated Balance Sheet (Unaudited) (In millions of Canadian dollars)
September 30 December 31
1995 1994
_______________________________________________________________
Assets
Current assets
Short-term investments, at cost $ 274 $ 87
Short-term deposits held in trust - 226
Receivables 376 307
Inventories 343 259
Prepaid expenses 18 9
________________________________
1,011 888
Investments and advances 25 24
Property, plant and equipment $ 3,637 $ 3,377
Less: accumulated amortization 1,662 1,568
______ ______
1,975 1,809
Other assets, net of
accumulated amortization 85 120
________________________________
$ 3,096 $ 2, 841
________________________________
________________________________
Liabilities and convertible debentures and shareholders' equity
Current liabilities
Bank indebtedness $ 38 $ 16
Trade and other payables 318 311
Income and other taxes payable 25 17
Long-term debt due within one year 8 9
________________________________
389 353
Long-term debt 1,024 1,168 Deferred credits 73 79 Deferred income taxes 222 101 Other liabilities 100 104
Convertible debentures and
shareholders' equity
Convertible debentures $ 150 $ 150
Preferred shares 216 219
Common shares 722 719
Retained earnings (deficit) 223 (30)
Accumulated foreign currency
translation adjustments (23) (22)
______ ______
1,288 1,036
________________________________
$ 3,096 $ 2,841
________________________________
________________________________
CONTACT: Domtar Inc., Montreal Pierre Fitzgibbon, 514/848-5860 REPEATS: New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of 212-575-8822 or 800-221-2462; Boston 617-236-4266 or 80 |
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