St. Laurent Paperboard Inc. Announces 1998 Third Quarter Results Part 1 of 2 - Financial Tables to Follow.MONTREAL--(BUSINESS WIRE)--Oct. 21, 1998--PAPERBOARD (ME:SPI (1) (Stateful Packet Inspection) See stateful inspection. (2) (Service Provider Interface) The programming interface for developing Windows drivers under WOSA. ) (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :SPI) For the third quarter of 1998, St. Laurent Paperboard Inc. reports a net loss of $12.8 million, or $0.26 per share, on net sales Net Sales 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 of $197.7 million, compared to a net loss of $6.8 million, or $0.14 per share, on net sales of $193.9 million for the same quarter in 1997. The net loss includes a special charge of $8.3 million ($12.9 million before taxes) or $0.17 per share, related to the major product restructuring project to be implemented at the West Point, Virginia This article is about a town in Virginia. For the United States Military Academy, see West Point, New York West Point is an incorporated town in King William County, Virginia, United States. The population was 2,867 at the 2000 census. mill. This special charge includes early retirement costs, severance and other related costs. Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before , before restructuring costs, amounted to $1.5 million for the quarter compared to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $1.4 million for the corresponding quarter in 1997. The improvement in operating earnings is attributable to: (1) a profitability enhancement program at the primary mills and the converting facilities; (2) progress in the achievement of the operating synergies tied to the May 1997 acquisition in the U.S.; (3) increased production volume; and (4) lower old 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. container (OCC OCC See: Options Clearing Corporation OCC See Options Clearing Corporation (OCC). ) costs BUSINESS REVIEW - Strategic restructuring of the West Point, Virginia mill - permanent shutdown of the hardwood kraft pulp machine on October 16,1998 - cost reduction of $20 million per year - 23 percent reduction in the labor force - Major improvement to the La Tuque, Quebec La Tuque is a city in northeastern Quebec, Canada on the Saint-Maurice River, between Trois-Rivières and Chambord. In 1960 it had a population of just over 11,000 (Latuquois). mill's solid bleached sulfate sulfate, chemical compound containing the sulfate (SO4) radical. Sulfates are salts or esters of sulfuric acid, H2SO4, formed by replacing one or both of the hydrogens with a metal (e.g., sodium) or a radical (e.g., ammonium or ethyl). machine - Cost reductions at primary mills and converting facilities - La Tuque, Quebec mill established a one-month production record in August NET SALES The third quarter net sales increased to $197.7 million from $193.9 million for the corresponding quarter in 1997. Primary mills net sales were down $10.3 million compared to the same quarter last year, as a result of lower prices and volume sold. Converting net sales increased by $10.8 million. Cut-up volume and selling price increased by 14 percent and 10 percent respectively. The Milwaukee sheet plant continued to show sale volume improvement as well as higher production volume. This plant had a positive operating earnings contribution for the quarter. Considering that the plant only started up late last year, the results are very encouraging. In September, the La Tuque, Quebec mill upgraded its No.4 solid bleached paper machine, which was down for 15 days. In addition, a general major maintenance outage was taken to make repairs on the recovery boilers, bleach towers and lime kilns. Production volume was therefore curtailed by 11,500 tons. -0-
Table 1 - Key Financial Results
In millions of US dollars Third Third Second
Quarter Quarter Quarter
1998 1997 1998
_____________________________________________________________
Net sales 197.7 193.9 203.6
Operating earnings (loss)
- before restructuring 1.5 (1.4) 8.2
Net earnings (loss)
- before restructuring (4.5) (6.8) (0.3)
Net earnings (loss) (12.8) (6.8) (0.3)
Per share (0.26) (0.14) (0.01)
_____________________________________________________________
Table 2 - Net Earnings (loss)
In millions of US dollar
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4
96 96 96 96 97 97 97 97
_____________________________________________________________
Before
Restruc-
turing 1.4 (1.0) (2.5) (3.7) (7.9) (13.8) (6.8) (5.0)
After
Restruc-
turing 1.4 (1.0) (2.5) (3.7) (7.9) (13.8) (6.8) (5.0)
Qtr 1 Qtr 2 Qtr 3
98 98 98
_____________________________________________________________
Before
Restruc-
turing 0.4 (0.3) (4.5)
After
Restruc-
turing 0.4 (0.3) (12.8)
_____________________________________________________________
OPERATING EARNINGS During the third quarter of 1998, operating earnings, before the West Point restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , were $1.5 million compared to an operating loss of $1.4 million for the corresponding quarter last year. The improvement is attributable to lower manufacturing costs at the primary mills. The cash manufacturing costs were 8 percent lower in the third quarter compared to those in the same quarter of 1997. Selling price erosion continued during the quarter at the primary mills which resulted in a $9.4 million net sales reduction, compared to those of the second quarter of 1998. Sales volume at the converting level increased by 4.8 percent compared to the second quarter of 1998 resulting in a $2.9 million net sales increase. The company's foreign exchange hedging program and the translation of inventory denominated in CAN$ resulted in a loss of $ 6.5 million during the third quarter compared to a loss of $0.4 million for the same quarter in 1997. The average rate on forward contracts and options was US$0.71, while the actual rate during the quarter was US$0.66. Table 3 - EBITDA Margin (p.cent) Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 96 96 96 96 97 97 97 97 98 98 98 __________________________________________________________________ 14.0 10.4 7.6 4.2 -1.0 -0.3 7.6 12.8 12.2 12.1 9.2 __________________________________________________________________ Note: EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become stands for Earnings Before Income Taxes, Depreciation and Amortization. EBITDA margin is the ratio of EBITDA divided by net sales. LIQUIDITY AND CAPITAL EXPENDITURES ^During the third quarter, cash provided by operating activities, before change in working capital, was $8.6 million compared to $1.4 million for the corresponding quarter in 1997. Capital expenditures were $10.5 million during the quarter of which $3.4 million were spent to improve productivity at the Latta, South Carolina Latta is a town in Dillon County, South Carolina, United States. The population was 1,410 at the 2000 census. The town is the birthplace of soul vocalist Chuck Jackson and opera composer Carlisle Floyd. It is also the hometown of NBA basketball player Raymond Felton. converting facility and the La Tuque, Quebec mill. The improvement on paper machine #4 at the La Tuque La Tuque (lä tük), town (1991 pop. 10,003), S Que., Canada, on the St. Maurice River, NW of Quebec. La Tuque, in a lumbering and farming region, was established as a trading post in the French period; it grew after the coming of the railroad mill included a new head box, variable speed drives and winder modifications. Preliminary results show outstanding quality improvements that should allow market share gain in solid bleached liner. SYNERGIES AND PROFITABILITY IMPROVEMENT PROGRAM ^Synergies of $4.3 million have been achieved during the quarter in line with the plan. The cost reduction/profitability improvement program has also contributed $2.3 million in the third quarter. YEAR 2000 COMPLIANCE ^The company has completed a detailed inventory and compliance assessment, utilizing outside consultants, to identify vulnerable areas. An organization has been put in place, corporately and within the facilities, to validate this assessment and initiate appropriate corrective measures, of which several have already been launched or completed. Given the progress thus far, the Company continues to be confident that all issues will be adequately resolved in advance of the millennium. The total cost of achieving compliance is currently estimated at between $4.5 and $5.5 million. OUTLOOK Paperboard shipments particularly to Asia are expected to continue declining for the foreseeable future and, as a result, increased supply may keep domestic prices under pressure. Domestic GDP GDP (guanosine diphosphate): see guanine. is also trending down, which may contribute to the weakening of the domestic paperboard market in the fourth quarter. On the other hand, a seasonal pick-up in demand in the fourth quarter of 1998 related to pre-holiday season demand may mitigate the slowdown. St. Laurent Paperboard is a major North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. producer, supplier and converter of high quality, value-added paperboard products, serving a diverse customer base in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and selected international markets. The Company has more than 3,500 employees at its primary mills, converting facilities and sales and administrative offices in Canada and the United States The United States and Canada share a unique legal relationship. U.S. law looks northward with a mixture of optimism and cooperation, viewing Canada as an integral part of U.S. economic and environmental policy. . St. Laurent Paperboard owns and operates four primary mills, located in La Tuque and Matane, Quebec; in Thunder Bay, Ontario; as well as in West Point, Virginia, with an aggregate annual paperboard production capacity of approximately 1.5 million short tons. It also owns eleven converting facilities located in Canada and the United States as well as 919,000 acres of forestland for·est·land n. A section of land covered with forest or set aside for the cultivation of forests. , the largest freehold in Quebec. The Company's common shares are listed on the Toronto and Montreal stock exchanges Montreal Stock Exchange See Bourse de Montreal, Inc. (Canadian Derivatives Exchange) (SPI). |
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