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CHESAPEAKE REPORTS THIRD QUARTER EARNINGS

 RICHMOND, Va., Oct. 20 /PRNewswire/ -- Chesapeake Corporation (NYSE: CSK) announced third quarter net income of $2.6 million, or 11 cents a share, up from $1.3 million, or 5 cents a share, earned in the second quarter of 1993 and down from $6.5 million, or 28 cents a share, earned in the third quarter of 1992. The third quarter 1993 amounts include a charge of $2.4 million, or 10 cents a share, to reflect changes in deferred taxes resulting from the 1993 Revenue Reconciliation Act. Sales for the quarter ended Sept. 30, 1993, were a record $238.3 million, up 1 percent from $236.4 million in the second quarter of 1993 and $236.2 million during the third quarter of 1992. EBIT (earnings before interest and taxes) for the third quarter was $16.1 million, up 56 percent from $10.3 million in the second quarter of 1993 and down 7 percent from $17.3 million in 1992.
 Net income for the first nine months of 1993 was $3.1 million, or 13 cents a share, down from $13.1 million, or 58 cents a share, earned in 1992 before the cumulative effect of accounting changes. Year to date net sales of $684.0 million for 1993 increased $8.4 million compared to $675.6 million for the first three quarters in 1992. EBIT for the first three quarters was $33.6 million compared to $43.7 million in 1992. Excluding capitalized interest, year to date interest expense totaled $24.4 million, down $2.5 million from 1992. Long-term debt decreased $15.3 million in the third quarter, helping to lower Chesapeake's long-term debt to total capital ratio to 44 percent at the end of the third quarter of 1993 compared to 46 percent at the end of the second quarter.
 "EBIT + D" (earnings before interest and taxes plus depreciation and other non-cash charges) for the third quarter of 1993 was $34.6 million, or $5.8 million higher than $28.8 million in the second quarter of the year. For the first three quarters of 1993 "EBIT + D" was $88.7 million, or 7 percent less than $94.9 million in the first three quarters of 1992.
 Capital expenditures for the first nine months of 1993 were $50 million, or $15 million less than in the first nine months of 1992. Working capital declined $6.3 million during the third quarter of 1993 and has declined $21.2 million since the seasonal high at the end of the first quarter. Working capital is also $13 million lower than at the end of the third quarter of 1992.
 All three of Chesapeake's major businesses experienced strong shipments in the third quarter of 1993. Compared to the second quarter, tissue and packaging shipments were up 11 percent and 14 percent, respectively, while shipments of kraft products decreased 4 percent from last quarter's record volume. Compared to the first three quarters of 1992, year to date shipments were up 6 percent for tissue products, 3 percent for packaging products and 8 percent for kraft products.
 J. Carter Fox, president and chief executive officer, commented: "Third quarter results continued to show improvement over the first two quarters of the year and positive cash flow enabled us to reduce long- term debt further. Strong volume for our major businesses, particularly tissue and packaging, helped us achieve record net sales. In addition to improved volume, average tissue prices improved as the second price increase of the year took effect early in the third quarter. A third price increase was implemented late in the third quarter. Color-Box, our graphic packaging business, completed the final phase of an expansion program to double its capacity, and demand for its products remains strong.
 "All news is not good, however, as the economy remains weak and terrible pricing continues to plague our kraft products business. Average sales prices for bleached hardwood market pulp declined 15 percent during the third quarter, with no near-term relief in sight. Average sales prices for this product in the third quarter were 41 percent lower than in the third quarter of 1992."
 Fox continued: "Early in the fourth quarter we completed the conveyance of the assets of Chesapeake's wood treating business to Universal Forest Products. This conveyance enables us to better focus on our three primary businesses and will also improve our cash flow by approximately $20 million during the fourth quarter as we eliminate the working capital requirements for this business.
 "Fourth quarter 1993 is expected to be positively impacted by the sale of approximately 19,000 acres of non-strategic timberland holdings with an estimated pre-tax gain of $8 million. The sale of this timberland is possible because of the enhanced yield from our remaining timberlands produced by sound land management practiced by company foresters."
 Fox concluded: "With the anticipated land sale, fourth quarter results should improve over those of the third quarter. However, operating results are not expected to match the seasonally stronger third quarter when we had record operating earnings in our packaging and tissue businesses. We continue to have extraordinarily low fiber and other variable costs at our West Point kraft mill. We also have extraordinarily low selling prices for this business's products. We are optimistic that the price increase for containerboard products implemented October 1 is a sign that we are on the road to recovery."
 Chesapeake Corporation, a Fortune 500 company headquartered in Richmond, is a paper and packaging company. Chesapeake's primary businesses are tissue and kraft paper products and packaging. Other businesses include consumer tissue products, land development and wood products.
 CHESAPEAKE CORPORATION
 Third Quarter 1993 1992 Pct. Change
 Net Sales $238,297,000 $236,182,000 1 pct.
 Income from Operations 14,489,000 17,179,000 (16 pct.)
 Interest Expense 7,822,000 7,189,000 9 pct.
 Income Before Taxes 8,284,000 10,144,000 (18 pct.)
 Income Taxes(A) 5,703,000 3,652,000 56 pct.
 Net Income 2,581,000 6,492,000 (60 pct.)
 Earnings per share $0.11 $0.28 (61 pct.)
 Weighted average shares
 and equivalents
 outstanding 23,453,000 23,346,000
 Year to Date 1993 1992 Pct. Change
 Net Sales $683,973,000 $675,611,000 1 pct.
 Income from Operations 31,073,000 41,744,000 (26 pct.)
 Interest Expense 24,201,000 23,229,000 4 pct.
 Income Before Taxes and
 Cumulative Effect of
 Accounting Changes 9,434,000 20,492,000 (54 pct.)
 Income Taxes 6,334,000 7,377,000 (14 pct.)
 Income Before Cumulative
 Effect of Accounting
 Changes 3,100,000 13,115,000 (76 pct.)
 Cumulative Effect of
 Accounting Changes -- (9,665,000) --
 Net Income 3,100,000 3,450,000 10 pct.
 Per Share:
 Earnings Before Cumulative
 Effect of Accounting Changes 0.13 $0.58 (78 pct.)
 Cumulative Effect of
 Accounting Changes -- (0.46) --
 Earnings 0.13 0.12 8 pct.
 Weighted average shares
 and equivalents
 outstanding 23,389,000 22,462,000
 (A) Includes charge of $2.4 million, or 10 cents a share, to reflect changes in deferred taxes resulting from the 1993 Revenue Reconciliation Act.
 -0- 10/20/93
 /CONTACT: Andrew J. Kohut, chief financial officer, of Chesapeake Corporation, 804-697-1153/
 (CSK)


CO: Chesapeake Corporation ST: Virginia IN: PAP SU: ERN

MH-DC -- DC016 -- 4481 10/20/93 10:32 EDT
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Date:Oct 20, 1993
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