Printer Friendly

GAYLORD REPORTS LOSS FOR THIRD QUARTER OF FISCAL 1992

 GAYLORD REPORTS LOSS FOR THIRD QUARTER OF FISCAL 1992
 DEERFIELD, Ill. Aug. 5 /PRNewswire/ -- Gaylord Container Corporation


(AMEX: GCR) today reported a net loss of $32.9 million, or $2.13 per share, for the third quarter of fiscal 1992 ended June 30, 1992, compared with a net loss of $125.5 million, or $8.14 per share, for the third quarter of fiscal 1991. Net sales in the fiscal 1992 third quarter totaled $190 million, up from $171 million for the year-ago third quarter. The company reported an operating loss for the fiscal 1992 third quarter of $4.1 million compared with an operating loss of $120.3 million for the third quarter of fiscal 1991.
 Commenting on the third quarter, Chairman and Chief Executive Officer Marvin A. Pomerantz said, "Results for both the fiscal 1992 and fiscal 1991 periods include one-time charges to operating earnings. As previously announced, the acquisition of the remaining ownership interests in our grocery bag and sack and corrugated sheet joint ventures resulted in a $10 million charge to operating earnings in the fiscal 1992 third quarter. Operating earnings have also been reduced in the current quarter by $3 million for expenses relating to the company's financial restructuring. The year-ago third quarter includes a $125.2 million charge against operating earnings primarily for the write-down of the California East mill assets. Without these charges, the company would have reported an increase in operating earnings primarily as a result of higher volume and improved selling prices for most of the company's products versus the year-ago quarter."
 For the nine months ended June 30, 1992, the company had a net loss of $78.4 million, or $5.06 per share, compared with a net loss of $148.1 million, or $9.60 per share, for the same period a year ago. Net sales for the first three quarters of fiscal 1992 totaled $536 million, compared with $535 million for the first three quarters of fiscal 1991. Operating earnings for the nine months of fiscal 1992 totaled $6.7 million, compared with an operating loss of $105.2 million for the same period a year earlier.
 Factors Affecting Third Quarter Results
 The following are the major factors affecting results for the third quarter of fiscal 1992 versus the third quarter of fiscal 1991:
 -- East Mill Asset Write-down: In the third quarter of fiscal 1991, the company took a $125.2 million charge against operating earnings primarily due to the write-down of assets at the Antioch, California East mill which had been idled in February 1991.
 -- Purchase: In the third quarter of fiscal 1992, the company completed the purchase of the remaining interests in its grocery bag and sack and corrugated sheet joint ventures resulting in an approximately $9 million charge to operating earnings in the current quarter. In addition, operating earnings were reduced by approximately $1 million to include an extra month of Gaylord Bag's results which had been reported on a one-month lag basis.
 -- Volume: Increased production resulted in a positive variance in operating earnings of approximately $3 million.
 -- Price: Prices for containerboard, corrugated containers and multiwall bags rose quarter-over-quarter. While this increase was partially offset by a decline in prices for unbleached kraft paper and grocery bags and sacks, the net result was a positive effect on operating earnings of approximately $3 million.
 -- Selling and Administrative Costs: The approximately $3 million increase was primarily due to the accrual of costs for employee benefit plans designed to assure the continued services of employees throughout the restructuring process. Payouts under the plan are tied to achieving specified financial results.
 -- Restructuring: Operating earnings were adversely affected by $3 million of expenses related to the company's financial restructuring.
 -- Net Interest Expense: The $2.2 million increase in net interest expense was primarily due to the accrual of interest on unpaid subordinated debt interest.
 -- Tax Rate: The income tax rate for the third quarter of fiscal 1992 was zero. In the year-ago third quarter, the company recorded a tax benefit of approximately $21 million which was computed using a 14 percent tax benefit rate. The elimination of tax benefits was due to limitations on the recording of deferred tax benefits.
 Operating Results
 During the third quarter of fiscal 1992, the company produced 266,000 tons of containerboard, a 3 percent increase from 259,000 tons a year ago. Unbleached kraft paper production declined 2 percent to 57,000 tons for the quarter.
 Corrugated container shipments increased approximately 8 percent to approximately 2.8 billion square feet and grocery bag and sack shipments were up more than 16 percent to 33,000 tons in the third quarter of fiscal 1992 compared with the year-ago quarter. Multiwall bag shipments were unchanged at 48 million bags.
 Subsequent Event
 As previously announced, the company is implementing a financial restructuring plan designed to reduce its debt and debt service requirements. The company has commenced an exchange offer to holders of its subordinated debt and a solicitation of acceptances of a prepackaged plan of reorganization, both of which will expire on Friday, Sept. 11, 1992, unless extended.
 Pomerantz noted that since the company began the restructuring process one year ago, it has paid operating expenses and remained current with its trade creditors. "At June 30, 1992, we had approximately $59 million of cash on hand and approximately $29 million of available bank credit. With these resources, combined with cash flow from operations, the company expects to continue to meet operating expenses and to pay trade creditors in the ordinary course of business. Should the company decide to finalize the restructuring by filing the prepackaged plan, Gaylord has received a commitment from its agent bank to replace the company's existing bank credit availability with a new $100 million line of credit."
 Gaylord Container Corporation is a major national manufacturer and distributor of corrugated containers, containerboard, unbleached kraft paper, multiwall bags and grocery bags and sacks.
 GAYLORD CONTAINER CORPORATION
 Selected Financial and Operational Data
 Periods ended Quarter(A) Pct. Nine Months(A) Pct.
 June 30 1992 1991 Inc./ 1992 1991 Inc./
 (Dec.) (Dec.)
 FINANCIAL SUMMARY
 (In millions, except per share amounts)
 Net sales $190.0 $ 171.4 10.9 $535.9 $ 534.6 0.2
 Debt restructuring
 expenses 3.0 -- N/M 9.0 -- N/M
 Operating earnings
 (loss) (B) (4.1) (120.3) N/M 6.7 (105.2) N/M
 Interest exp.-net 28.8 26.6 8.3 84.9 79.6 6.7
 Loss before taxes (32.9) (146.1) N/M (78.4) (183.1) N/M
 Income taxes -- (20.6) N/M -- (35.0) N/M
 Net loss $(32.9) $(125.5) N/M $(78.4) $(148.1) N/M
 Net loss per share $(2.13) $ (8.14) N/M $(5.06) $ (9.60) N/M
 Aver. com. & com.
 equivalent shares
 outstanding 15.5 15.5 -- 15.5 15.4 0.6
 (A) -- The quarter and nine months ended June 30, 1991, have been restated to reflect the consolidation of Gaylord Bag Partnership's results of operations. The effect of the restatement was to increase net sales by $7.7 million and $24.7 million, respectively, and increased the operating loss by $2.1 million and $4.5 million, respectively. Net loss was unchanged.
 (B) -- The quarter and nine months ended June 30, 1992, include a $10.0 million charge for one-time costs associated with the acquisition of the remaining ownership interests of Gaylord Bag Partnership and Bay Sheets, Inc. The quarter and nine months ended June 30, 1991, include a pre-tax charge for an asset write-down of $125.2 million.
 OPERATING SUMMARY
 Mill production
 (thousands of tons):
 Containerboard 266.1 258.6 2.9 809.3 834.5 (3.0)
 Unbleached kraft
 paper 57.3 58.4 (1.9) 167.3 168.2 (0.5)
 Corrugated shipments
 (billions of sq. ft.) 2.8 2.6 7.7 7.6 7.6 --
 Multiwall bag shipments
 (millions of bags) 47.8 47.9 (0.2) 140.1 142.6 (1.8)
 Grocery bag and sack
 shipments (thousands
 of tons) 33.2 28.6 16.1 100.5 90.5 11.0
 N/M -- Not meaningful.
 -0- 8/5/92
 /CONTACT: Kathryn Chieger of Gaylord, 708-405-5645/
 (GCR) CO: Gaylord Container Corporation ST: Illinois IN: PAP SU: ERN


GK-SL -- NY059 -- 7191 08/05/92 15:02 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 5, 1992
Words:1391
Previous Article:MEDICAL PROPERTIES REPORTS RESULTS
Next Article:FAIRCHILD ANNOUNCES SUCCESSFUL COMPLETION OF NOTE PLACEMENT
Topics:


Related Articles
GAYLORD REPORTS LOSS FOR FISCAL 1992
GAYLORD REPORTS FIRST QUARTER FISCAL 1993 RESULTS
GAYLORD REPORTS RESULTS FOR FIRST QUARTER OF FISCAL 1994
Gaylord Container Reports Fiscal 1996 Results Debt Reduction Continues Share Repurchases Commenced
Gaylord Container Reports Fiscal 1997 First Quarter Loss of $0.18 Per Share
Gaylord Container Reports Fiscal 1997 Second Quarter Loss
Gaylord Container Reports Improved First Quarter Fiscal 1999 Results.
Gaylord Container Reports Substantially Improved Third Quarter Fiscal 1999 Results.
Gaylord Container Earns $0.05/Share Before Non-Recurring Charges.
Gaylord Container Reports Fiscal Third Quarter Results.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters