Printer Friendly

MANVILLE THIRD QUARTER EARNINGS IMPROVE

 MANVILLE THIRD QUARTER EARNINGS IMPROVE
 DENVER, Oct. 22 /PRNewswire/ -- Manville Corporation (NYSE: MVL)


reported improved third quarter net earnings applicable to common stock of $0.8 million, or $0.01 per share, compared with a loss of $3.7 million, or $0.03 per share, in the third quarter of 1991. Sales were up 11.2 percent over the prior year period to $592.6 million compared with $532.7 million in the third quarter of 1991.
 Income from operations for the quarter quadrupled to $51.4 million compared with $11.7 million in the third quarter of 1991. However, last year's income from operations was net of $34.0 million of restructuring charges for environmental cleanup and costs related to rationalization of operations. Excluding those charges, income from operations in the quarter would have been up 12.4 percent from $45.7 million last year. This increase in income from operations on a comparable basis principally reflected improvement in operating results in the Building Products segment.
 "We are pleased to see the increase in operating earnings in spite of a sluggish to declining economy in most of our markets around the world," said Manville chairman, president and CEO Tom Stephens. "We did incur some operating problems at Riverwood International which should not recur, and generally we look for a return to better performance in the fourth quarter. However, until the Macon mill is converted to coated board, we are likely to continue to see earnings dilution due to the interest cost associated with the prefunding of the project. In addition we have completed all the financing required to pay the first two special dividends to the shareholders."
 Riverwood International Corporation, the paperboard and packaging products business, showed an 18.3 percent sales increase to $301.2 million, compared with $254.6 million in the third quarter of 1991. All three of Riverwood International's business segments -- Coated Board System, Containerboard, and Wood Products -- showed sales growth during the quarter. However, operating profit declined 13.9 percent to $33.2 million due to short-term outages and other operating problems in the coated board system business as well as weakness in the worldwide linerboard markets compounded by the continued recession affecting Riverwood International's Brazilian operations. Conversely, the wood products business was up markedly due to favorable pricing associated with supply constraints around the country.
 "Despite our third quarter problems, we are looking for our fourth quarter to be better than last year," said Tom Johnson, president and CEO of Riverwood International. "We see the effects of continued unit growth of our paperboard into the beverage industry. In fact, our packaging machinery placements are outpacing 1991 placements by two-to-one, indicating continual, longer-term growth in multiple packaging markets. In addition, the lumber and plywood markets are strong worldwide. The fourth quarter comparison will also benefit from our taking some maintenance outages in the third quarter this year which are normally taken in the fourth quarter. Also, we believe that our third quarter's manufacturing problems are behind us. However, it should be noted that the fourth quarter is seasonally low in this business."
 Manville's two other reporting segments, Engineered Products and Building Products, primarily comprise its fiber glass-based subsidiary, Schuller International, Inc. Combined, these segments enjoyed a 6.3 percent increase in sales despite price declines in key markets, and the sum of income from operations from these two segments was up dramatically to $22.1 million from $3.4 million in third quarter 1991. Excluding the unusual restructuring charges in 1991's third quarter, combined third quarter 1992 operating profit was up 4.2 percent from $21.2 million in 1991. In addition, in the third quarter of 1991, Schuller recognized a gain of $3.2 million from the sale of technology associated with a former line of business. Excluding this gain and the unusual restructuring charges from 1991 results, third quarter combined income from operations in 1992 would have been up 22.8 percent over the same period last year.
 "Our improved third quarter operating results reflect the strong performance of our building products businesses in slowly-recovering markets," said Dick Kashnow, president of Schuller. "In the engineered products segment, earnings have been negatively affected by continuing price pressures in OEM businesses and by the economic environment in Europe."
 Below the income from operations line, a number of income statement items are not directly comparable:
 -- the third quarter of 1991 included a $13.5 million gain, after
 tax, for the disposal of the Celite business;
 -- the third quarter of 1992 included higher interest expense
 associated with debt placed in June by Riverwood International.
 It also included a $1.5 million charge to recognize the minority
 interest in Riverwood International's business following the
 sale of 19.5 percent of the subsidiary to the public in June.
 Proceeds were used to finance the acquisition of a linerboard
 paper mill in Macon, Ga. and were also set aside for the
 conversion of one of the paper machines at Macon to produce high
 quality coated paperboard for use in the domestic and
 international beverage and food markets; and,
 -- the effective tax rate was unusually high in the third quarter of
 1991 primarily due to the geographic mix of earnings. A U.S.
 loss from continuing operations generated tax benefits at
 relatively low U.S. rates while foreign income from continuing
 operations generated taxes at higher foreign rates.
 Because of these items, a comparison of third quarter net income for the two years is not particularly meaningful. It should be noted, however, that the third quarter 1992 statement reflects no non-recurring items. The higher interest expense and minority interest expense reflect the company's current financial structure after the Riverwood International debt offering and initial public offering of common stock.
 Nine month results
 For the nine months ended September 30, Manville's sales were up 8.2 percent to $1.6 billion compared with $1.5 billion in the year ago period. Net earnings applicable to common stock were $6.4 million, or $.05 per share, compared with $54.3 million, or $.45 per share, in the same period last year.
 Last year's net earnings included a number of non-recurring items:
 -- a $36.1 million pretax charge, or approximately $23.9 million
 after tax, for restructuring charges;
 -- a favorable patent infringement judgment of $38.6 million pretax,
 or approximately $26.1 million after tax, reflected in the other
 income and interest income lines;
 -- $4.3 million of income, net of tax, associated with the company's
 Celite business before it was sold in July 1991;
 -- a $13.5 million gain, net of tax, on the sale of the Celite
 business;
 -- a charge of $173.4 million, net of tax, for the cumulative effect
 of a change in accounting for postretirement benefits other than
 pensions; and,
 -- a $220.8 million gain for the cumulative effect of a change in
 the accounting for income taxes.
 The 1992 results included a $9.4 million extraordinary loss, net of tax, on early extinguishment of debt payable to the Manville Personal
Injury Settlement Trust. Excluding the unusual items from both years and the corresponding adjustments to profit sharing, net income applicable to common stock would have increased significantly to approximately $15.8 million in the first nine months of 1992 from an adjusted net loss of $5.5 million for the same period in 1991.
 "Our businesses have taken the necessary steps to position themselves to take advantage of any upturn in the economy," said Tom Stephens. "Our short-term outlook is for continued improvement at Schuller. At Riverwood, we expect improvement given the strength in our shipments to the beverage market combined with better mill production than in the third quarter. However, we are particularly sensitive to soft linerboard prices in the short-term because the new Macon mill will be producing linerboard until we convert to coated board. The conversion is scheduled to be completed in 1994."
 Manville Corporation is an international holding company with two principal subsidiaries -- Schuller International, Inc. and Riverwood International Corporation (NYSE: RVW). Products sold by Schuller International, Inc. include insulation, reinforcements, filtration and building products. Some of its products are marketed under the Manville brand name. Riverwood International Corporation is a global packaging systems and paper products company. Founded in 1858, Manville Corporation and its subsidiaries employ approximately 16,000 people at more than 50 locations worldwide. Manville and its subsidiaries had approximately $3 billion in assets as of December 31, 1991.
 MANVILLE CORPORATION
 CONDENSED CONSOLIDATED STATEMENT OF INCOME
 (Thousands of dollars except per share amounts)
 (unaudited)
 Three Months
 Ended September 30, Percent
 1992 1991 Increase
 INCOME
 Net Sales $592,642 $532,733 11.2
 Cost of Sales 470,222 425,922 10.4
 Selling, General and
 Administrative 59,741 54,386 9.8
 Research, Development
 and Engineering 10,755 8,391 28.2
 Restructuring of
 Operations (Loss) --- (33,980) ---
 Other (Loss) Income, net (543) 1,670 ---
 Income from Operations 51,381 11,724 338.3
 Interest Income 6,607 3,330 98.4
 Interest Expense 40,257 27,568 46.0
 Profit Sharing Expense 1,347 (2,092) ---
 Income (Loss) from Continuing
 Operations Before Income Taxes 16,384 (10,422) ---
 Income Taxes 9,011 2,352 283.1
 Income (Loss) from
 Continuing Operations 7,373 (12,774) ---
 Gain on Disposal of Discontinued
 Operations, net of tax --- 13,512 ---
 Income before Minority Interest 7,373 738 899.1
 Minority Interest in
 Consolidated Subsidiary (1,528) --- ---
 Net Income 5,845 738 692.0
 Preference Stock Accretion (5,079) (4,427) 14.7
 Net Income (Loss) Applicable
 to Common Stock $ 766 $ (3,689) ---
 EARNINGS (LOSS) PER COMMON SHARE
 (AFTER PREFERENCE STOCK ACCRETION)
 Primary and Fully Diluted:
 Income (Loss) from Continuing
 Operations $ .02 $(.14) ---
 Gain on Disposal of Discontinued
 Operations, net of tax --- .11 ---
 Income (Loss) before
 Minority Interest .02 (.03) ---
 Minority Interest in
 Consolidated Subsidiary (.01) --- ---
 Net Income (Loss) $ .01 $(.03) ---
 MANVILLE CORPORATION
 CONDENSED CONSOLIDATED STATEMENT OF INCOME
 (Thousands of dollars except per share amounts)
 (unaudited)
 Nine Months Percent
 Ended September 30, Increase
 1992 1991 (Decrease)
 INCOME
 Net Sales $1,644,913 $1,519,799 8.2
 Cost of Sales 1,284,324 1,226,775 4.7
 Selling, General and
 Administrative 171,413 163,384 4.9
 Research, Development
 and Engineering 26,942 27,274 (1.2)
 Restructuring of
 Operations Gain (Loss) 697 (36,143) ---
 Other Income, net 171 20,618 (99.2)
 Income from Operations 163,102 86,841 87.8
 Interest Income 10,876 35,444 (69.3)
 Interest Expense 95,246 83,157 14.5
 Profit Sharing Expense 7,484 14,350 (47.8)
 Income from Continuing
 Operations Before Income
 Taxes 71,248 24,778 187.5
 Income Taxes 39,186 23,210 68.8
 Income from Continuing
 Operations 32,062 1,568 1,944.8
 Income from Discontinued
 Operations, net of tax --- 4,290 ---
 Gain on Disposal of
 Discontinued Operations,
 net of tax --- 13,512 ---
 Income before Minority
 Interest, Extraordinary
 Item and Cumulative Effect
 of Accounting Changes 32,062 19,370 65.5
 Minority Interest in
 Consolidated Subsidiary (1,528) --- ---
 Income Before Extraordinary
 Item and Cumulative Effect
 of Accounting Changes 30,534 19,370 57.6
 Extraordinary Loss on Early
 Extinguishment of Debt,
 net of tax (9,385) --- ---
 Cumulative Effect of a Change
 in Accounting for
 Postretirement Benefits
 Other Than Pensions,
 net of tax --- (173,398) ---
 Cumulative Effect of a Change
 in Accounting for Income
 Taxes --- 220,795 ---
 Net Income 21,149 66,767 (68.3)
 Preference Stock Accretion (14,727) (12,517) 17.7
 Net Income Applicable to
 Common Stock $ 6,422 $ 54,250 (88.2)
 MANVILLE CORPORATION
 CONDENSED CONSOLIDATED STATEMENT OF INCOME (Cont'd)
 (unaudited)
 Nine Months
 EARNINGS PER COMMON SHARE Ended September 30,
 (AFTER PREFERENCE STOCK ACCRETION) 1992 1991
 Primary and Fully Diluted:
 Income from Continuing Operations $ .14 $ (.09)
 Income from Discontinued Operations,
 net of tax --- .04
 Gain on Disposal of Discontinued
 Operations, net of tax --- .11
 Income before Minority Interest,
 Extraordinary Item and Cumulative
 Effect of Accounting Changes .14 .06
 Minority Interest in Consolidated
 Subsidiary (.01) ---
 Income Before Extraordinary Item
 and Cumulative Effect of
 Accounting Changes .13 .06
 Extraordinary Loss on Early
 Extinguishment of Debt,
 net of tax (.08) ---
 Cumulative Effect of a Change in
 Accounting for Postretirement
 Benefits Other Than Pensions,
 net of tax --- (1.44)
 Cumulative Effect of a Change in
 Accounting for Income Taxes --- 1.83
 Net Income $ .05 $ .45
 MANVILLE CORPORATION
 CONDENSED CONSOLIDATED BUSINESS SEGMENTS
 (Thousands of dollars)
 (unaudited)
 Three Months Percent
 Ended September 30, Increase
 1992 1991 (Decrease)
 NET SALES
 Riverwood International
 Paperboard/Packaging $301,221 $254,568 18.3
 Schuller Operating Segments
 Engineered Products 130,095 120,827 7.7
 Building Products 171,809 163,312 5.2
 Total 301,904 284,139 6.3
 Corporate & Eliminations (10,483) (5,974) 75.4
 Total Company Net Sales $592,642 $532,733 11.2
 INCOME FROM OPERATIONS
 Riverwood International
 Paperboard/Packaging $ 33,221 $ 38,606 (13.9)
 Schuller Operating Segments
 Engineered Products 7,931 7,811 1.5
 Building Products 14,173 (4,405) ---
 Total 22,104 3,406 549.0
 Corporate & Eliminations (3,944) (30,288) (87.0)
 Total Company Income
 from Operations $ 51,381 $ 11,724 338.3
 Nine Months Percent
 Ended September 30, Increase
 1992 1991 (Decrease)
 NET SALES
 Riverwood International
 Paperboard/Packaging $ 832,720 $743,072 12.1
 Schuller Operating Segments
 Engineered Products 389,692 364,390 6.9
 Building Products 447,010 432,149 3.4
 Total 836,702 796,539 5.0
 Corporate & Eliminations (24,509) (19,812) 23.7
 Total Company Net Sales $1,644,913 $1,519,799 8.2
 INCOME FROM OPERATIONS
 Riverwood International
 Paperboard/Packaging $ 110,782 $ 100,624 10.1
 Schuller Operating Segments
 Engineered Products 41,920 33,101 26.6
 Building Products 26,082 (6,914) ---
 Total 68,002 26,187 159.7
 Corporate & Eliminations (15,682) (39,970) (60.8)
 Total Company Income
 from Operations $ 163,102 $ 86,841 87.8
 Third Quarter, 1992 Earnings Release Addendum
 Manville and its principle subsidiaries filed for reorganization
 under Chapter 11 in 1982 because of actual and contingent
 liabilities associated with the Company's previous asbestos-related
 business operations. The plan of reorganization, finalized in 1988,
 included an injunction prohibiting the filing of asbestos claims
 against Manville. These claims must be filed against the Manville
 Personal Injury Settlement Trust (the Trust) and the Manville
 Property Damage Settlement Trust. The Trust received 50 percent of
 the Company's common stock and the right to acquire an additional
 30 percent. In addition, Manville is obligated to fund the Trust
 via bond payments and a profit sharing arrangement. The profit
 sharing arrangement obligates the Company to pay the Trust 20
 percent of profits (as defined in the glossary to the plan of
 reorganization) for as long as the Trust has claims to resolve.
 The Company and the Trust have entered into a set of agreements
 which revise in certain respects the way the Trust is funded and the
 way the Trust pays asbestos claimants. The agreements provide for,
 among other things, the payment of special dividends on the
 Company's common stock of which the Trust owns 80 percent on a fully
 diluted basis. The first four annual dividends are $1.04 per share
 in the first two years and $.42 per share in the next two years
 after the first dividend. Additional dividends will be paid in the
 third through sixth years after the first dividend depending on the
 Company's annual performance. Subject to other certain legal
 requirements, including action by the Company's board of directors,
 the first of these dividends will not be paid until definitive
 resolution of a class action lawsuit brought to restructure the
 method by which the Trust would pay claims.
 The $34 million restructuring of operations loss in the third
 quarter of 1991 included a $16.5 million provision for environmental
 cleanup costs, and $18.5 million of write-downs of assets and
 provisions for severance and related costs, primarily in the fiber
 glass-based businesses, offset in part by gains from the sales of a
 folding carton plant and a small railroad company. The nine month
 1991 restructuring loss also included $2.2 million in second
 quarter restructuring charges. In 1992, the nine-month results
 include $0.7 million of net restructuring gain.
 In the first quarter of 1991, Manville received approximately $15
 million in a patent infringement judgment against Guardian
 Industries Corporation of Northville, Michigan. That amount, net of
 approximately $2 million of deferred litigation costs, was reflected
 in other income in the Company's first quarter 1991 financial
 statements. In addition, about $25 million of accrued interest
 income was received, and is reflected in interest income in the
 first quarter of 1991.
 Manville's 1991 effective tax rate on income from continuing
 operations was unusually high primarily due to the geographic mix of
 earnings. A U.S. loss from continuing operations generated tax
 benefits at relatively low rates while foreign income from
 continuing operations generated taxes at higher foreign rates.
 During the second quarter of 1992, Riverwood International
 Corporation, the Company's paperboard and packaging business,
 completed an initial public offering of 12.1 million common shares.
 As a result, Manville recorded $1.5 million of minority interest in
 1992 which reflects the 19.5 percent interest in Riverwood
 International earnings no longer owned by Manville. Manville
 intends to maintain ownership of 80.5 percent of Riverwood
 International's common stock for the foreseeable future.
 Manville and the Trust are negotiating an agreement by which
 Manville will prepay $150 million of bonds held by the Trust and
 which will grant the Trust a two year option to exchange an
 additional $100 million of bonds for notes owed by Riverwood
 International to Manville. In June 1992, the Company recorded an
 extraordinary loss of $9.4 million, net of related income tax
 benefit of $5.8 million, in anticipation of this prepayment and
 possible exchange.
 Effective January 1, 1991, the Company adopted SFAS No. 106,
 "Employers' Accounting for Postretirement Benefits Other Than
 Pensions" and recognized a liability for $173.4 million, net of tax
 of $91.4 million.
 Also, effective January 1, 1991, the Company adopted SFAS No. 109,
 "Accounting for Income Taxes", and recorded a $220.8 million credit
 to net income.
 Dividends on Manville's Cumulative Preference Stock, Series B, are
 payable beginning in 1994 at an annual rate of $2.70 per share. The
 amounts on the balance sheet associated with this stock are being
 accreted until the date cash payments begin. No preference stock
 dividends have been declared by the Company's board of directors.
 Manville's earnings per share calculation assumes conversion of the
 Company's Series A Convertible Preferred Stock, all held by the
 Trust, into an additional 72 million shares of common stock.
 Accordingly, the calculation assumes 123 million common equivalent
 shares outstanding during 1992 and 120.5 million during 1991.
 On July 1, 1992, Riverwood International completed the acquisition
 of Macon Kraft, Inc., a linerboard mill located in Macon, Georgia.
 The 1992 statements of income and the segment data reported for the
 Paperboard and Packaging Products segment include the results of the
 Macon Kraft mill for the three months ended September 30, 1992.
 Manville reports results for three business segments. The
 Paperboard and Packaging Products segment is Riverwood International
 Corporation and includes Riverwood's Coated Board System segment,
 Containerboard segment, and Wood Products segment. Schuller
 International, Inc. is primarily comprised of the Engineered
 Products segment and the Building Products segment, although certain
 items related to Schuller operations are included in Corporate and
 Eliminations. The Engineered Products segment includes continuous
 filament fiber glass products and specialty fiber glass insulations.
 The Building Products segment combines the Company's building
 insulations, roofing and mechanical insulations businesses. Net
 sales included in Corporate and Eliminations relate principally to
 the elimination of intersegment sales, primarily from the Engineered
 Products segment to the Building Products segment.
 Refer to the Company's 1991 Form 10-K for additional information relative to its accounting policies, operations and financial position.
 -0- 10/22/92
 /CONTACT: Sharon Sweet of Manville, 303-978-4694/
 (MVL RVW) CO: Manville Corporation ST: Colorado IN: PAP SU: ERN


MC -- DV002 -- 3304 10/22/92 08:38 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:Oct 22, 1992
Words:3341
Previous Article:ALLIED GROUP, INC. INCREASES EARNINGS FOR THIRD QUARTER AND YEAR-TO-DATE
Next Article:CompUSA INC TO ENTER 22ND MARKET WITH FIRST OHIO COMPUTER SUPERSTORE IN CINCINNATI; SECOND BOSTON-AREA STORE TO OPEN
Topics:


Related Articles
MANVILLE REPORTS INCOME FROM CONTINUING OPERATIONS IS UP "DRAMATICALLY" IN 2ND QUARTER
MANVILLE RESULTS IMPROVE FOR THE YEAR AND FOURTH QUARTER
/END OF FIRST AND FINAL ADD -- MANVILLE TABULAR MATERIAL/
MANVILLE RECEIVES $31.4 MILLION IRS REFUND
MANVILLE REPORTS SECOND QUARTER EARNINGS
MANVILLE REPORTS SECOND QUARTER EARNINGS
MANVILLE ANNOUNCES SUBSIDIARIES' FOURTH QUARTER ACTIONS
MANVILLE REPORTS SIGNIFICANT IMPROVEMENT IN SECOND QUARTER OPERATING INCOME
MANVILLE REPORTS STRONG 1994 OPERATING RESULTS
MANVILLE REPORTS STRONG THIRD QUARTER RESULTS

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