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GAYLORD REPORTS LOSS FOR FISCAL 1992

 GAYLORD REPORTS LOSS FOR FISCAL 1992
 DEERFIELD, Ill., Nov. 5 /PRNewswire/ -- Gaylord Container


Corporation (AMEX: GCR) reported a net loss of $132.5 million, or $8.54 per share, for fiscal 1992 ended Sept. 30, 1992, compared with a net loss of $180.3 million, or $11.68 per share, for fiscal 1991. Net sales in fiscal 1992 totaled $723 million, compared with $724 million for fiscal 1991. In fiscal 1992, the company had an operating loss of $21.5 million compared with an operating loss of $111.5 million in fiscal 1991.
 Commenting on the fiscal year, Chairman and Chief Executive Officer Marvin A. Pomerantz said, "Results for both fiscal 1992 and fiscal 1991 include charges to operating earnings related to the company's financial restructuring, the consolidation of certain joint venture operations and non-cash charges for asset write-downs. While these actions contributed to the significant net losses reported for both years, all of them related to actions designed to improve the company's financial and strategic position. As we announced earlier this week, the financial restructuring is complete and has resulted in a significant reduction in our debt and debt service requirements."
 Factors Affecting Fiscal 1992
 The following are the major factors affecting results for fiscal 1992 versus fiscal 1991:
 -- East Mill Asset Write-down: In fiscal 1991, the company idled its California East mill and recorded a $125.2 million non-cash charge against operating earnings, primarily due to the write-down of the mill's assets to their estimated recovery value. The shutdown of the uneconomic California East mill in fiscal 1991 resulted in a positive year-over-year variance in operating earnings of approximately $11 million. The company recently determined it is unlikely that the property can be sold as a mill site or that the mill, or some portion thereof, can be economically operated by the company. Further, the company estimates that the recovery value of the land and equipment, if sold separately, would be less than book value. Consequently, the company recorded a non-cash charge against operating earnings in the fourth quarter of fiscal 1992 of $32.9 million. The charge includes a provision for demolition and the related cost of asbestos removal and for estimated carrying costs pending disposition.
 -- Volume: Increased shipments from the Bogalusa, Louisiana and the California West mills and from grocery bag and sack operations resulted in a positive variance in operating earnings of approximately $15 million.
 -- Fiber: Lower prices for old corrugated containers on the West Coast and reduced costs of transportation of wood chips at the Bogalusa mill had an approximately $9 million positive impact on operating earnings:
 -- Purchase: In 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 addition, operating earnings were reduced by approximately $1 million to include an extra month of the grocery bag joint venture's results which had been reported on a one-month lag basis.
 -- Selling and Administrative Costs: The $7.4 million increase was primarily due to the accrual of costs for benefit plans designed to help assure the continued services of employees throughout the now completed restructuring process.
 -- Restructuring: Fiscal 1992 operating earnings were adversely affected by $17 million of expenses related to the company's financial restructuring. In fiscal 1991, restructuring expenses totaled $9.9 million.
 -- Price: Operating earnings in fiscal 1992 were adversely affected by a decline in average prices for unbleached kraft paper. This was partially offset by small increases in average linerboard and corrugated container prices; however, the net effect was a decrease in operating earnings of approximately $6 million versus fiscal 1991.
 -- Net interest expense: The $3.8 million increase in net interest expense was primarily due to the accrual of interest on unpaid subordinated debt interest.
 -- Tax rate: In fiscal 1992, the company did not record a tax benefit on its loss due to limitations on the recording of deferred tax benefits. In fiscal 1991, the company recorded a tax benefit of $39.2 million.
 Operating Results
 During fiscal 1992, the company produced 1,087,000 tons of containerboard, a 2 percent decline from 1,109,000 tons a year ago. Adjusting for the five months of California East mill production included in the fiscal 1991 total, containerboard production would have increased 7 percent year over year. Unbleached kraft paper production increased slightly to 227,000 tons for the current fiscal year compared with 225,000 tons in fiscal 1991.
 Corrugated container shipments decrease slightly to approximately 10.3 billion sq. ft. in fiscal 1992. Grocery bag and sack shipments were up more than 12 percent to approximately 135,000 tons in fiscal 1992, compared with the prior fiscal year primarily due to increased production of the Gaylord Handle Bag(TM). Multiwall bag shipments were up slightly to approximately 194 million bags.
 Fourth Quarter Results
 The company had a net loss of $54.1 million, or $3.48 per share, for the fourth quarter of fiscal 1992 ended Sept. 30, 1992, compared with a net loss of $32.2 million, or $2.08 per share, for the fourth quarter of fiscal 1991. Net sales in the fiscal 1992 fourth quarter totaled $187 million, down from $189 million for the year-ago fourth quarter. The company had an operating loss of $28.2 million for the fiscal 1992 fourth quarter primarily due to the previously mentioned California East mill write-down, compared with an operating loss of $6.3 million for the fourth quarter of fiscal 1991.
 Subsequent Event
 As previously announced, the company implemented a financial restructuring plan by filing a prepackaged plan of reorganization. The plan was confirmed at a hearing before the U.S. Bankruptcy Court on Oct. 16, 1992 and was consummated on Nov. 2, 1992. As a result of the restructuring, Gaylord has reduced its subordinated debt obligations by approximately $300 million and its annual interest expense by approximately $38 million. The effect of the restructuring on the company's financial statements will not be reflected until fiscal 1993.
 The company noted that the financial projections included in its Proxy Statement - Prospectus dated July 24, 1992, assumed product price increases in early fiscal 1993. Although the company announced price increases for certain of its products to take effect in early fiscal 1993, market factors have made the timing of these increases uncertain. It now appears that these price increases are unlikely to take effect as projected. Consequently, the company said that the financial projections are based on pricing assumptions which have not materialized and, therefore, should not be relied upon.
 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 Year
 Sept. 30 Pct. Incr. Pct. Incr.
 1992 1991 (Decr.) 1992 1991 (Decr.)
 Financial Summary
 (In millions, except per share amounts)
 Net sales $186.9 $189.2 ( 1.2) $722.8 $723.8 (0.1)
 Debt restructuring exps. 8.0 9.9 (19.2) 17.0 9.9 71.7
 Oper. loss (A) (28.2) (6.3) N/M (21.5) (111.5) N/M
 Interest exp.-net 25.9 27.4 (5.5) 110.8 107.0 3.6
 Loss bef. taxes (54.1) (36.4) N/M (132.5) (219.5) N/M
 Income taxes -- (4.2) N/M -- (39.2) N/M
 Net loss (54.1) (32.2) N/M (132.5) (180.3) N/M
 Net loss per share (3.48) (2.08) N/M (8.54) (11.68) N/M
 Avg. com. & com. equiva.
 shares outstanding 15.5 15.5 -- 15.5 15.4 0.6
 Operating Summary
 Mill production
 (thousands of tons)
 Containerboard 278.0 274.7 1.2 1,087.3 1,109.2 (2.0)
 Unbleached kraft
 paper 60.1 57.0 5.4 227.4 225.2 1.0
 Corrugated shipments
 (billions of square
 feet) 2.7 2.8 (3.6) 10.3 10.4 (1.0)
 Multiwall bag shipments
 (millions of bags) 53.9 48.6 10.9 194.0 191.2 1.5
 Grocery bag and sack
 shipments (thousands)
 of tons) 34.3 29.5 16.3 134.8 120.0 12.3
 (A) The year ended Sept. 30, 1992 includes a $10 million charge for one-time costs associated with the acquisition of the remaining ownership interests of the company's grocery bag and sack and corrugated sheet joint ventures. The years ended Sept. 30, 1992 and 1991, include pre-tax charges for an asset write-down of $32.9 million and $125.2 million, respectively.
 -0- 11/5/92
 /CONTACT: Kathryn Chieger of Gaylord Container Corporation, 708-405-5645/
 (GCR) CO: Gaylord Container Corporation ST: Illinois IN: PAP SU: ERN


AH-OS -- NY081 -- 7812 11/05/92 14:45 EST
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