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MEAD REPORTS IMPROVED FOURTH QUARTER, YEAR-END RESULTS

 DAYTON, Ohio, Jan. 28 /PRNewswire/ -- Mead Corporation (NYSE: MEA) today reported net earnings for 1992 of $71.6 million, or $1.21 per share, up from $6.9 million, or 12 cents per share, in 1991.
 Net earnings for the fourth quarter of 1992 were $17.1 million, or 29 cents per share, compared to $8.2 million, or 14 cents per share, in the fourth quarter of 1991.
 Mead's net earnings for both years were reduced by a number of special items, as previously reported. Earnings before these special items were $114.2 million in 1992, or $1.93 per share, as compared to $1.21 per share in 1991. Earnings before special items in the fourth quarter of 1991 were 23 cents per share, as compared to 29 cents in the fourth quarter of 1992, which had no special items. (A further explanation of special items in both years is provided later in this release.)
 "Improvements in cost control and productivity helped many of Mead's businesses achieve higher earnings in 1992, although temporary operating problems at our Alabama coated board mill reduced net earnings 10 cents per share in the fourth quarter," said Steven C. Mason, chairman and chief executive officer.
 "While market conditions overall were only marginally better than last year, Mead benefited materially from stronger performance by Zellerbach, our distribution business, and our jointly owned Northwood pulp and wood products operations," Mason said.
 Mead also reported a 3 percent increase in sales for the year, despite lower average paper prices and a loss of revenue due to the sale of Ampad Corporation, a commercial office products business, at the end of July. Sales for the fourth quarter of 1992 were $1.14 billion, and $4.70 billion for the full year. These results compare to 1991 sales of $1.09 billion for the quarter and $4.58 billion for the full year.
 Higher prices and productivity at Northwood lumber and oriented structural board mills had a major positive impact on earnings from Mead's investees. Improved operations at Northwood's British Columbia pulp mill and a weaker Canadian dollar also contributed to higher returns, despite pulp prices that averaged 2 percent lower for the year.
 Mead's paper businesses continued to suffer the effect of weak pricing, which has resulted from large industry capacity expansions of recent years and a sluggish economy. The Publishing Paper division in Escanaba, Mich., was particularly hard hit, with prices averaging 9 percent below a year ago and operating problems during the first half that reduced production volume. The mill ran well during the second half, however, and ended the year at near-record production levels.
 Performance improvements at Mead's Chillicothe, Ohio, mill helped offset weaker prices for coated and uncoated paper. Sales of carbonless paper, also manufactured there, were higher than a year ago, due to improved quality and customer service. Operating difficulties and sharply reduced prices for uncoated cut-size and coated one-side paper (down 9 percent and 6 percent, respectively) reduced earnings from Mead's mill in Kingsport, Tenn.
 The company's packaging and paperboard segment benefited from improved cost control and productivity at its coated board and containerboard operations. Increased tonnage from the expanded coated board mill in Alabama raised sales and earnings levels above the prior year, although fourth quarter operating problems cut into these gains. The mill experienced higher costs during aplanned maintenance shutdown in October, which included quality improvements to the older of its two paperboard machines, as well as a difficult start-up following the shutdown. Those short-term problems were solved and production was back on plan for the month of December.
 Mead Containerboard benefited from strong operating performance and good cost control by its box plants and Stevenson, Ala., corrugating medium mill. Stable prices and a favorable mix, as well as record production volume of corrugating medium, helped the division achieve higher earnings in 1992.
 Sales continued to grow at Mead Packaging, chiefly due to increased business overseas. North American sales were roughly equal to those of a year ago, as cool weather and an uncertain economy dampened consumer demand for soft drinks and beer.
 At Zellerbach, gains made from increased customer focus and cost- effective distribution more than offset the negative impact of lower prices, helping the division achieve a significant improvement in earnings for the year.
 At Mead's School and Office Products division, sales were below 1991 levels due to the loss of revenue from the sale of Ampad. Excluding Ampad's sales in both years, division revenues were moderately higher in 1992. Earnings were somewhat lower, chiefly due to the provision for a loss on uncollectable receivables associated with the bankruptcy of a major retail customer.
 Mead Data Central's (MDC) sales continued to grow in 1992, nearly reaching the half-billion dollar mark. Revenues were 9 percent higher than the previous year, adjusted for the sale of Micromedex at the end of 1991. By increasing revenues while controlling expense growth, MDC achieved a strong improvement in earnings. Mead continues to fund aggressive growth for its electronic publishing business, focusing on enhanced product development and customer support.
 "Across the company, we are seeing progress from our efforts to improve customer satisfaction and productivity," said Mason. "There are signs of gradual improvement in market activity, and we look forward to conditions strengthening throughout the year."
 Statements of Earnings
 Comparison of Quarterly Net Earnings
 Sales and Earnings Segment Reporting
 Balance Sheets
 Statements of Cash Flows
 STATEMENTS OF EARNINGS
 (All dollar amounts in millions, except EPS)
 Fourth Qtr. Ended Year Ended
 Dec. 31, Dec. 31, Dec. 31, Dec. 31,
 1992 1991 1992 1991
 NET SALES $1,135.1 $1,094.8 $4,703.2 $4,579.3
 COST OF PRODUCTS SOLD 916.4 876.9 3,779.4 3,712.2
 GROSS PROFIT 218.7 217.9 923.8 867.1
 SELLING, ADMINISTRATIVE &
 RESEARCH EXPENSES 178.5 168.4 671.7 634.7
 OTHER EXPENSES 34.5 95.0 34.5
 EARNINGS FROM OPERATIONS 40.2 15.0 157.1 197.9
 OTHER REVENUES - NET 5.4 51.9 (0.5) 64.5
 INTEREST & DEBT EXPENSE (24.3) (27.5) (101.1) (114.4)
 EARNINGS BEFORE INCOME
 TAXES 21.3 39.4 55.5 148.0
 INCOME TAXES 6.5 15.7 23.9 54.3
 EARNINGS BEFORE EQUITY
 IN NET EARNINGS (LOSS)
 OF INVESTEES 14.8 23.7 31.6 93.7
 EQUITY IN NET EARNINGS (LOSS)
 OF INVESTEES 2.3 (5.5) 6.0 (18.1)
 EARNINGS FROM CONTINUING
 OPERATIONS 17.1 18.2 37.6 75.6
 LOSS FROM DISCONTINUED
 OPERATIONS (10.0) (10.0)
 EARNINGS BEFORE CUMULATIVE
 EFFECT OF CHANGE IN
 ACCOUNTING PRINCIPLE 17.1 8.2 37.6 65.6
 CUMULATIVE EFFECT OF CHANGE
 IN ACCOUNTING PRINCIPLE 34.0 (58.7)
 NET EARNINGS $ 17.1 $ 8.2 $ 71.6 $ 6.9
 PER COMMON AND COMMON EQUIV.
 SHARE:
 EARNINGS FROM CONTINUING
 OPERATIONS $ 0.29 $ 0.31 $ 0.63 $ 1.29
 LOSS FROM DISCONTINUED
 OPERATIONS (0.17) (0.17)
 EARNINGS BEFORE CUMULATIVE
 EFFECT OF CHANGE IN
 ACCOUNTING PRINCIPLE $ 0.29 $ 0.14 $ 0.63 $ 1.12
 CUMULATIVE EFFECT OF CHANGE
 IN ACCOUNTING PRINCIPLE 0.58 (1.00)
 NET EARNINGS $ 0.29 $ 0.14 $ 1.21 $ 0.12
 CASH DIVIDENDS PER COMMON
 SHARE $ 0.25 $ 0.25 $ 1.00 $ 1.00
 AVERAGE COMMON AND COMMON
 EQUIVALENT SHARES
 OUTSTANDING (MM) 59.2 58.6 59.1 58.6
 COMPARISON OF QUARTERLY NET EARNINGS (LOSS) IN 1992 AND 1991
 1992 1992 EPS Before 1991 1991 EPS Before
 Quarter Net EPS Special Items Net EPS Special Items
 First $ .86 a $ .31 $(.77) c $ .23
 Second (.59) b .71 .32 .32
 Third .63 .63 .43 .43
 Fourth .29 .29 .14 d .23
 Full year $1.21(A) $1.93(A) $ .12 $1.21


(a) Reflects a gain of 55 cents per share in the first quarter from early adoption of FASB 109. (Gain of 58 cents per share for the full year.) (b) Reflects an after-tax charge of $58.9 million ($1.00 per share) for the establishment of a reserve to cover a corporate-wide performance improvement program and an after-tax loss of $17.7 million (30 cents per share) to reflect the sale of Ampad Corporation. (c) Reflects an after-tax charge of $58.7 million ($1.00 per share) to cover the early adoption of FASB 106. (d) Reflects after-tax amounts as follows:
 -- $26.4 million gain (45 cents per share) on the sale of
 Micromedex, Inc., a medical information subsidiary;
 -- $21.6 million (37 cents per share) to cover the costs of
 safeguarding landfills to meet environmental requirements,
 consolidations within some business units, and previously
 incurred engineering costs;
 -- $10.0 million charge (17 cents per share) to increase the
 provision for estimated run-off costs of Mead's discontinued
 reinsurance business.
 (A) -- The number of shares used in the calculation of per
 share data varies from period to period since stock options
 and convertible debentures are included in the calculations
 only for the periods in which they are dilutive; therefore,
 the sum of individual quarterly earnings per share may not
 equal the annual computation.
 SALES AND EARNINGS SEGMENT REPORTING FOR THE YEAR
 (All dollar amounts in millions)
 Year Ended
 Dec. 31, 1992 Dec. 31, 1991
 Industry Segment Sales
 to Unaffiliated Customers:
 Paper $ 1,090.6 $ 1,091.3
 Paperboard & Packaging 1,163.2 1,022.8
 Distribution & School & Office 1,954.6 1,995.7
 Electronic Publishing 494.8 469.5
 TOTAL NET SALES $ 4,703.2 $ 4,579.3
 Year Ended 12/31/92 Year Ended 12/31/91
 Earn.(Loss) Earn.(Loss)
 Before Before
 Special Special Earn. Special Special Earn.
 Items Items (Loss) Items Items (Loss)
 Industry Segment Earnings
 from Operations:
 Paper $ 87.3 $ (22.3) $ 65.0 $115.6 $(20.7) $ 94.9
 Ppbd. & Pkg. 149.8 (23.8) 126.0 115.7 (1.6) 114.1
 Dist. & Sch.
 & Office 50.7 (16.3) 34.4 41.0 (9.2) 31.8
 Elec. Pub. 55.1 (9.2) 45.9 44.5 (3.0) 41.5
 Corp. & other
 -Other Rev.(exp) 7.6 (22.5) (14.9) 5.2 44.1 49.3
 -Interest exp. (101.1) (101.1) (114.4) (114.4)
 -Performance
 Improvement
 Program (23.4) (23.4)
 Other (76.4) (76.4) (69.2) (69.2)
 $173.0 $(117.5) $ 55.5 $138.4 $ 9.6 $148.0
 BALANCE SHEETS
 (All dollar amounts in millions)
 Dec. 31, Dec. 31,
 1992 1991
 Current assets:
 Cash and cash equivalents $ 18.4 $ 24.6
 Accounts receivable 582.1 578.3
 Inventories 425.9 454.6
 Deferred tax asset 51.3
 Prepaid expenses 51.7 35.4
 Total current assets 1,129.4 1,092.9
 Investments and other assets:
 Investments in and advances to investees 58.9 67.8
 Other assets 493.0 460.4
 551.9 528.2
 Property, plant and equipment - net $2,350.1 $2,365.1
 Total assets $4,031.4 $3,986.2
 Current liabilities:
 Notes payable $ $ 45.0
 Accounts payable 364.7 347.7
 Accrued liabilities 354.5 342.2
 Current maturities of long-term debt 10.7 11.4
 Total current liabilities 729.9 746.3
 Long-term debt 1,332.3 1,315.7
 Deferred items 473.8 445.8
 Shareowners' equity:
 Common shares 175.2 174.0
 Additional paid-in capital 12.3 1.5
 Foreign currency translation adjustment (0.8) 7.2
 Retained earnings 1,308.7 1,295.7
 1,495.4 1,478.4
 Total liabilities and shareowners' equity $4,031.4 $3,986.2
 STATEMENTS OF CASH FLOWS
 Increase (decrease) in cash and cash equivalents
 (All dollar amounts in millions)
 Year Ended
 Dec. 31, Dec. 31,
 1992 1991
 Cash flows from operating activities:
 Net earnings $ 71.6 $ 6.9
 Adjustments to reconcile net earnings to net
 cash provided by operating activities:
 Depreciation, amortization and depletion
 of property, plant and equipment 246.1 236.4
 Depreciation and amortization of other
 assets 53.5 52.0
 Other expenses 95.0 34.5
 Deferred income taxes 11.1 (13.1)
 Investees - earnings and dividends 3.9 24.6
 (Gain) loss on sale of subsidiaries 22.5 (44.1)
 Current income taxes on gain (loss) (20.6) 14.2
 Loss from discontinued operations 10.0
 Cumulative effect of change in accounting
 principle (34.0) 58.7
 Other (23.6) (12.0)
 Change in assets and liabilities, excluding
 effects of acquisitions and dispositions:
 Accounts receivable (38.5) 6.0
 Inventories 4.3 (53.7)
 Prepaid expenses (29.7) 1.3
 Accounts payable and accrued liabilities (23.1) (27.6)
 Net cash provided by operating
 activities 338.5 294.1
 Cash flows from financing activities:
 Additional borrowings 49.7 148.4
 Payments on borrowings (44.8) (108.1)
 Notes payable (45.0) 45.0
 Cash dividends paid (58.6) (58.3)
 Common shares issued 12.0 1.5
 Net cash provided by financing
 activities (86.7) 28.5
 Cash flows from investing activities:
 Capital expenditures (265.1) (265.5)
 Additions to equipment rented to others (43.7) (35.9)
 Payments for acquired businesses (14.0) (7.4)
 Proceeds from sale of subsidiary 76.5
 Investments in and advances to investees (1.3) (1.5)
 Other (1.6) 18.0
 Net cash (used in) investing activities (249.2) (292.3)
 Net cash provided by cont. operations 2.6 30.3
 Cash (used in) discontinued operations (8.8) (26.8)
 Increase (decrease) in cash and cash equivalents (6.2) 3.5
 Cash and cash equivalents at beginning of year 24.6 21.1
 Cash and cash equivalents at end of year $ 18.4 $ 24.6
 -0- 1/28/93
 /CONTACT: Sharon Williamson of The Mead Corporation, 513-495-3535/
 (MEA)


CO: The Mead Corporation ST: Ohio IN: PAP SU: ERN

KK -- CL013 -- 0280 01/28/93 12:51 EST
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