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FEDERAL PAPER BOARD ANNOUNCES CHARGE TO FOURTH-QUARTER EARNINGS

 FEDERAL PAPER BOARD ANNOUNCES CHARGE TO FOURTH-QUARTER EARNINGS
 MONTVALE, N.J., Dec. 9 /PRNewswire/ -- Federal Paper Board Company, Inc. (NYSE: FBO) today announced a fourth-quarter non-operating after- tax charge to earnings of approximately $7.3 million, reflecting machinery write-offs, increased reserves for environmental matters and increased reserves in connection with previously sold or closed facilities. The non-operating charge coupled with an increase in the effective tax rate will amount to about $.22 per share, after tax.
 After-tax net income for the quarter, excluding the non-operating charge, is estimated to be about $.30 per fully diluted share compared to $.74 on the same basis last year.
 Operating earnings will be affected by several factors: the shutdown for 28 days of the No. 1 machine at the Augusta, GA mill for a rebuild, originally scheduled to take place in early 1992; major maintenance expenses at Augusta, timed with the shutdown of the No. 1 machine; inconsistency in maintaining full production from the Augusta No. 3 machine; pulp price erosion of more than $100 per ton from the fourth quarter last year; lower earnings from cup and lumber operations; and 20 days of downtime at the Sprague, Conn., recycled mill for tie in of major new equipment.
 The company has elected not to take a charge at this time for early adoption of FASB Statement No. 106, reflecting post employment benefits. After a preliminary review, the one time pre-tax charge when taken is expected to be approximately $20 million.
 John R. Kennedy, president, stated, "Our business has been hurt during the quarter and the entire year by a generally poor economy. The fourth-quarter non-operating charge is a one time charge, now behind us. It and the reduced earnings due to machine downtime will have no further or continuing effect on our future earnings."
 Kennedy further said, "There are a number of encouraging signs for 1992. Market conditions for pulp are improving. Bleached board backlogs are stable at about 14 days. The No. 1 rebuilt machine at Augusta will start-up in early January. The Augusta No. 3 machine is showing steady improvement with daily production rates approaching our goal and industry bleached board operating rates should generally be good, as anticipated new industry capacity has not materialized. The capital dollars spent over the last few years will not only increase our capacity, but also greatly reduce our costs."
 Federal Paper Board Company, Inc. manufactures and sells solid bleached paperboard, bleached market pulp, recycled paperboard, paper and plastic cups, lumber, folding cartons, and in the European market, uncoated free-sheet paper. The company operates two bleached kraft paperboard and pulp mills, one recycled paperboard mill, four sheeting and distribution centers, six cup converting plants, four folding carton plants and five wood products mills in the United States and one uncoated free-sheet paper mill in the United Kingdom. Federal has approximately 7,200 employees.
 -0- 12/9/91
 /CONTACT: Quentin J. Kennedy, executive vice president of Federal Paper Board Company, 201-391-1776/
 (FBO) CO: Federal Paper Board Company Inc. ST: New Jersey IN: PAP SU:


KD -- NY047 -- 0563 12/09/91 12:51 EST
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Publication:PR Newswire
Date:Dec 9, 1991
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