JAMES RIVER CORPORATION OF VIRGINIA RELEASES ANNOUNCEMENT
RICHMOND, Va., April 22 /PRNewswire/ -- Robert C. Williams, Chairman, President, and Chief Executive Officer of James River Corporation (NYSE: JR) today reported at the company's Annual Meeting results for its first quarter which ended on March 28, 1993. Net sales for the quarter were $1.1 billion, equivalent to last year's first quarter results. The company reported a net loss for the quarter of $10.1 million, compared to a net loss before the cumulative effect of accounting changes of $14.0 million for the same period a year ago. Results for the first quarter of 1992 have been restated for the impact of a new accounting standard for postretirement benefits other than pensions, which was adopted at the end of 1992 retroactive to the beginning of that year. Results for the first quarter of 1993 reflect a loss of $0.22 per share compared with a loss of $0.25 per share for the previous year's first quarter before accounting changes and special charges. On the same basis, the $0.22 per share loss compares favorably to the loss of $0.72 per share for the fourth quarter of 1992. The following table illustrates these comparisons: 1993 1992 1991 First Fourth First Quarter Quarter Quarter Earnings (loss) per share, as reported $(0.22) $(1.97) $(3.60) Add back accounting changes and special charges: Accounting change for postretirement benefits --- --- 3.79 Accounting change for income taxes --- --- (.44) Restructuring charge --- .87 --- Extinguishment of debt --- .38 --- Comparable basis $(0.22) $(0.72) $(0.25) The first quarter of 1993 showed significant improvement in all business segments over the fourth quarter of 1992. Results for the Consumer Products Business were up over both last quarter and last year. Volume increases in the retail segment related to new product introductions, such as the successful rollout of new Quilted Northern bathroom tissue, contributed to the stronger first quarter performance. While pricing remains depressed in the commercial market related to the soft economy and aggressive competition, a 5 percent price increase has been announced to take effect during the second quarter.
Results for the Packaging Business have rebounded from fourth quarter levels; however, margins continue to be under pressure from the ongoing impact of food customer consolidation. The Communications Papers Business began to show signs of recovery in both business and coated papers toward the end of the quarter. Price increases of $40 to $60 per ton have been announced for uncoated freesheet grades to take effect in the second quarter, which follow a similar increase already realized near the end of the first quarter. A comparable price increase has been announced for coated groundwood grades which is expected to take effect
toward the end of the second quarter.
At the end of 1992, the company recorded a $111.7 million pretax charge related to a restructuring program to cover costs associated with a productivity enhancement program. The intent of this program, expected to be substantially complete by the end of 1993, is to reduce business operating expenses by $200 million. This will be achieved through the disposal and consolidation of certain under- performing operations and assets, organizational streamlining, and other initiatives at all levels. Progress has been made toward this goal with over 2,000 positions of the company's total workforce of 29,000, excluding European affiliates, targeted for elimination by year end. In connection with this restructuring program, the Consumer Products Business announced that it will close its Williamsport, Pennsylvania party goods facility, transferring its operations to other James River locations. The Communications Papers Business' Groveton, New Hampshire paper mill was sold to Wausau Paper Mills Company in April, with the manufacture of printing and writing grades being relocated to other James River facilities. Based on the transaction, the total value of these operations was $45 million. The company also completed the sale of its specialty and industrial papers mill located in Pepperell, Massachusetts to a subsidiary of Merrimac Paper Company. The Packaging Business has announced that it will close one plant and reduce the scope of a second in order to improve performance and better serve key selected markets. The Sunnyside, Washington plant will be closed and its flexible packaging operations will be consolidated with the company's North Portland, Oregon facility. The Dayton, Ohio flexible packaging operation will be reduced by approximately 50 percent to concentrate on specific printing and lamination capabilities. The manufacture of selected products will be transferred to two other Packaging facilities. James River will continue to evaluate other asset rationalization opportunities throughout the company to be implemented during the year. Also during the quarter, the company received approximately $47 million upon the redemption of its shares of exchangeable preferred stock of Specialty Coatings International (SCI), which occurred as a result of the acquisition of SCI by Rexham Inc., a subsidiary of Bowater plc of the United Kingdom. Management is encouraged by recent results which demonstrate significant improvement over the fourth quarter of last year. As cost savings are realized from restructuring efforts and pricing within our various businesses continues to firm, prospects are favorable for continued improvement during the year. CONSOLIDATED STATEMENTS OF OPERATIONS James River Corporation of Virginia and Subsidiaries For the Quarters (13 Weeks) Ended March 28, 1993 and March 29, 1992 (in thousands, except per share amounts) 1993 1992 Net sales $1,113,625 $1,136,353 Cost of goods sold (a) 934,720 948,395 Selling and administrative expenses 161,251 173,474 Income from operations 17,654 14,484 Interest expense 39,185 37,770 Other income, net 4,189 1,358 Loss before income taxes and the cumulative effect of changes in accounting principles (17,342) (21,928) Income tax benefit (7,212) (7,927) Net loss before the cumulative effect of changes in accounting principles (10,130) (14,001) Cumulative effect of changes in accounting principles: Change in accounting for income taxes (b) --- 35,923 Change in accounting for post- retirement benefits other than pensions, net of income tax benefit of $189,534 (c) --- (309,765) Net loss $ (10,130) $ (287,843) Preferred dividend requirements (8,208) (6,150) Net loss applicable to common shares $ (18,338) $ (293,993) Net loss per common share and common share equivalent: Before the cumulative effect of changes in accounting principles $(.22) $ (.25) Cumulative effect of change in accounting for income taxes --- .44 Cumulative effect of change in accounting for postretirement benefits other than pensions --- (3.79) Net loss per share $(.22) $(3.60) Weighted average number of common shares and common share equivalents -- fully diluted 81,745 81,736 (a) During the first quarter of 1992, James River accrued approximately $13 million of charges ($.11 per share after taxes) for the refinement of estimates of final restructuring costs associated with the 1990 restructuring program and environmental and litigation costs. (b) Effective as of the beginning of 1992, James River adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"), which requires the adoption of the liability method of accounting for income taxes. In connection with the adoption of SFAS 109, the Company recorded a credit of $35.9 million, or $.44 per share. (c) James River adopted Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" ("SFAS 106"), during the fourth quarter of 1992, retroactive to the first day of 1992. Results for the first quarter of 1992 have been restated for the impact of SFAS 106. SFAS 106 requires the accrual of the cost of providing postretirement benefits during the years that employees render service. The Company elected immediate recognition of the cumulative effect of this change in accounting of $499.3 million ($309.8 million net of income tax benefits of $189.5 million, or $3.79 per share). -0- 4/22/93 /CONTACT: Celeste C. Gunter (Financial), 804-649-4307, or Steve Garnett (Media), 804-649-4362, both of James River/ (JR)
CO: James River Corporation ST: Virginia IN: PAP SU: ERN
CC -- DC026 -- 9702 04/22/93 16:31 EDT
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|Date:||Apr 22, 1993|
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