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MEAD REPORTS IMPROVED SECOND QUARTER RESULTS

 DAYTON, Ohio, July 21 /PRNewswire/ -- Mead Corporation (NYSE: MEA) today reported second quarter earnings of $47.2 million, or 78 cents per share, up 10 percent from earnings of $41.9 million before special charges, or 71 cents per share, in 1992. For last year's second quarter, Mead recorded a net loss of $34.7 million, or 59 cents per share, due to a reserve established in conjunction with a company-wide performance improvement effort and a loss on the sale of a business.
 Sales for the second quarter of 1993 were $1.263 billion, up 3 percent from sales of $1.225 billion the year before.
 Earnings for the first half werel?lion, or $1.22 per share, compared to $59.6 million, or $1.01 per share, before special items in 1992. Including the impact of special items in both quarters of 1992, net earnings were $17.0 million, or 29 cents per share. First half sales increased nearly 4 percent in 1993 to $2.399 billion.
 "Improved operations at our publishing paper mill, higher solid wood products prices and reduced corporate overhead helped Mead weather the adverse market conditions which continue to challenge our industry," said Steven C. Mason, chairman and chief executive officer. "Good cost control at several of our largest facilities also played a role. In spite of low prices and sluggish demand for pulp, paper and paperboard, Mead is managing to hold its own."
 Mead's Paper segment reported higher sales for the quarter, primarily due to increased demand for coated publishing grades produced at the company's publishing paper mill in Escanaba, Mich. Despite these gains, weak prices reduced earnings for the segment. Average prices for uncoated grades, although improving through the quarter, were substantially below prior year levels.
 At Mead's jointly-owned Northwood companies, higher prices for solid wood products increased earnings in spite of poor pulp mill operations and continued weak demand and prices for pulp worldwide. Lumber, plywood and oriented structural board prices started the quarter near historically high levels due to an apparent shortage of supply, but declined as much as 50 percent during the quarter when real demand fell short of expectations.
 Sales and earnings for the Packaging and Paperboard segment were up for the quarter. Increased volume and good cost control at Mead's expanded coated board mill in Alabama more than offset increased market pressures. Sales volume for multiple packaging and packaging systems equalled prior year levels, reflecting continued weakness in the North American, European and Asian economies. Price deterioration in corrugating medium and containers had a negative impact on segment earnings.
 The Distribution and School and Office Products segment reported second quarter sales and earnings about equal to those of a year ago. Zellerbach, Mead's distribution company, achieved a slight gain in sales volume, but earnings were hurt by weak pricing, particularly for printing papers. Brisk sales of new products and commodity items increased revenue from Mead School and Office Products, replacing a good share of the revenue formerly generated by Ampad, which was sold in July 1992.
 At Mead Data Central, the company's electronic publishing subsidiary, sales growth in business information services helped push revenues 11 percent higher, although increased spending for product development and sales force restructuring reduced earnings significantly. In addition, expenses for software development were higher than the previous year.
 "Mead Data Central's first half results reflect strategic investments to enhance the features and functionality of its services, as well as expand the portion of its workforce that has direct customer contact," said Mason. "We expect to begin seeing some benefit from these actions yet this year."
 In looking ahead, Mason said, "Difficult market conditions and a weak global economy continue to create a climate of uncertainty. Sustaining the first half's rate of growth will be a challenge for the remainder of the year. However, we remain confident that Mead will meet its expectations for modest growth for 1993."
 STATEMENT OF EARNINGS
 (All dollar amounts in millions, except EPS)
 Second Qtr. Ended First Half Ended
 July 4, June 28, July 4, June 28,
 1993 1992 1993 1992
 Net sales $1,263.4 $1,225.4 $2,398.9 $2,313.6
 Cost of products sold 1,003.9 974.9 1,914.5 1,862.6
 Gross profit 259.5 250.5 484.4 451.0
 Selling, administrative and
 research expenses 169.2 161.9 340.0 319.3
 Other expenses -- 95.0 -- 95.0
 Earnings (loss) from
 operations 90.3 (6.4) 144.4 36.7
 Other revenues (expenses)-net 4.7 (18.4) 5.5 (9.6)
 Interest and debt expense (24.1) (25.9) (48.5) (51.7)
 Earnings (loss) before
 income taxes 70.9 (50.7) 101.4 (24.6)
 Income taxes (benefit) 27.3 (13.8) 39.0 (3.9)
 Earnings (loss) before
 equity in net earnings
 of investees 43.6 (36.9) 62.4 (20.7)
 Equity in net earnings of
 investees 3.6 2.2 10.4 3.7
 Earnings (loss) before
 cumulative effect of change
 in accounting principle 47.2 (34.7) 72.8 (17.0)
 Cumulative effect of change
 in accounting principle -- -- -- 34.0
 Net earnings (loss) $ 47.2 $ (34.7) $ 72.8 $ 17.0
 Per common and common equivalent
 share:
 Earnings (loss) before cumu-
 lative effect of change in
 accounting principle $ .78 $ (.59) $ 1.22 $ (.29)
 Cumulative effect of change in
 accounting principle -- -- -- .58
 Net earnings (loss) $ .78 $ (.59) $ 1.22 $ .29
 Average common and common
 equivalent shares outstanding
 (millions)(A) 62.3 58.6 62.1 58.9
 (A) The number of shares used in the calculation of per share data varies from period to period since the stock options and convertible debentures are included in the calculations only for the periods in which they are dilutive.
 SALES AND EARNINGS FROM OPERATIONS BY INDUSTRY SEGMENT
 ($ amounts in millions)
 First Half Ended
 July 4, 1993 June 28, 1992
 Industry Segment Sales
 to Unaffiliated Customers:
 Paper $ 566.0 $ 525.9
 Paperboard and Packaging 595.0 570.4
 Distribution & School & Office 975.3 976.9
 Electronic Publishing 262.6 240.4
 TOTAL NET SALES $2,398.9 2,313.6
 First Half Ended
 July 4, 1993 June 28, 1992
 Industry Segment Earnings
 from Operations (A):
 Paper $ 44.5 $ 37.3
 Paperboard and Packaging 81.5 76.8
 Distribution & School & Office 32.6 30.2
 Electronic Publishing 14.9 24.8
 $ 173.5 $ 169.1
 Other revenue (expense) - corporate 2.5 (18.5)(B)
 General corporate expense (26.1) (28.5)
 Interest and debt expense (48.5) (51.7)
 Performance improvement program (95.0)(C)
 EARNINGS (LOSS) BEFORE
 INCOME TAXES $ 101.4 $ (24.6)
 (A) -- In 1993 Mead changed its manner of allocating certain common net expenses to business segments after determining that different percentages of such amounts were directly related to business unit operations. Segment earnings for 1992 have been restated to reflect this change. Net earnings were not affected.
 (B) -- Includes $22.5 million loss on the sale of Ampad.
 (C) -- Allocable to Mead's segments as follows: Paper ($22.3); Paperboard and Packaging ($23.8); Distribution and School and Office Products ($16.3); Electronic Publishing ($9.2); Corporate ($23.4).
 BALANCE SHEETS
 (All dollar amounts in millions)
 July 4, June 28,
 1993 1992
 Current assets:
 Cash and cash equivalents $ 11.3 $ 22.0
 Accounts receivable 734.4 707.1
 Inventories 468.7 476.2
 Other current assets 92.6 83.9
 Total current assets 1,307.0 1,289.2
 Investments and other assets:
 Investments in and advances to investees 63.5 63.1
 Other assets 516.1 472.5
 579.6 535.6
 Property, plant and equipment - net 2,358.9 2,322.4
 Total assets $4,245.5 $4,147.2
 Current liabilities:
 Notes payable $ 165.4 $ 115.1
 Accounts payable 319.7 343.4
 Accrued liabilities 362.1 399.0
 Current maturities of long-term debt 14.9 9.0
 Total current liabilities 862.1 866.5
 Long-term debt 1,332.3 1,307.2
 Deferred items 498.8 503.1
 Shareowners' equity:
 Common shares 176.2 174.7
 Additional paid-in capital 21.6 7.9
 Foreign currency translation adjustment 2.5 4.4
 Retained earnings 1,352.0 1,283.4
 1,552.3 1,470.4
 Total liabilities and shareowners' equity $4,245.5 $4,147.2
 STATEMENTS OF CASH FLOWS
 (All dollar amounts in millions)
 First Half Ended
 July 4, June 28,
 1993 1992
 Cash flows from operating activities:
 Net earnings $ 72.8 $ 17.0
 Adjustments to reconcile net earnings to net
 cash provided by operating activities:
 Depreciation, amortization and depletion
 of property, plant and equipment 128.4 121.2
 Depreciation and amortization of other assets 27.0 29.5
 Other expenses -- 95.0
 Deferred income taxes 26.7 (17.9)
 Investees-earnings and dividends (4.1) 2.4
 Loss on sale of subsidiary -- 22.5
 Current taxes on loss -- (20.6)
 Cumulative effect of change in accounting principle -- (34.0)
 Other (13.6) (7.1)
 Change in assets and liabilities:
 Accounts receivable (156.7) (138.7)
 Inventories (42.8) (46.1)
 Other current assets 7.4 (10.8)
 Accounts payable and accrued liabilities (37.4) 34.8
 Net cash provided by operating activities 7.7 47.2
 Cash flows from financing activities:
 Additional borrowings 213.1 --
 Payments on borrowings (209.5) (11.1)
 Notes payable 165.4 70.1
 Cash dividends paid (29.5) (29.3)
 Common shares issued 10.3 7.1
 Net cash provided by financing activities 149.8 36.8
 Cash flows from investing activities:
 Capital expenditures (134.6) (101.3)
 Additions to equipment rented to others (24.9) (24.8)
 Proceeds from sale of subsidiary -- 45.0
 Investments in and advances to investees (0.6) (0.7)
 Other (3.5) (2.6)
 Net cash (used in) investing activities (163.6) (84.4)
 Net cash (used in) continuing operations (6.1) (0.4)
 Cash (used in) discontinued operations (1.0) (2.2)
 (Decrease) in cash and cash equivalents (7.1) (2.6)
 Cash and cash equivalents at beginning of year 18.4 24.6
 Cash and cash equivalents at end of half $ 11.3 $ 22.0
 -0- 7/21/93
 /CONTACT: Sharon Williamson of The Mead Corporation, 513-495-3535/
 (MEA)


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

BM -- CL011 -- 3816 07/21/93 09:38 EDT
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