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MEAD REPORTS OPERATING EARNINGS UP, NET DOWN DUE TO SPECIAL CHARGES

 MEAD REPORTS OPERATING EARNINGS UP,
 NET DOWN DUE TO SPECIAL CHARGES
 DAYTON, Ohio, July 15 /PRNewswire/ -- Mead Corporation (NYSE: MEA) reported today that its second quarter operating earnings were more than double a year ago, but special charges reduced these gains to a net loss of $34.7 million, or 59 cents per share.
 Earnings before the special charges were $41.9 million or 71 cents per share. This compares to second quarter 1991 earnings of $18.7 million, or 32 cents per share.
 The previously reported special charges included $95 million ($58.9 million after tax), or $1.00 per share, for the establishment of a reserve to cover a corporate-wide performance improvement program and $17.7 million after tax, or 30 cents per share, to reflect the sale of Ampad Corporation, Mead's commercial office products business.
 In announcing the company's performance improvement plan on July 2, Chairman and Chief Executive Officer Steven C. Mason said, "We are determined to move our performance from good to excellent. We simply won't be satisfied until we achieve our full potential."
 Sales for the second quarter were $1.225 billion, up 4 percent from 1991 sales of $1.176 billion for the same period. Sales for the first half of 1992 were $2.314 billion, compared to $2.274 billion in 1991.
 "Most of our businesses showed improvement in sales and earnings during the quarter, with marked gains from paperboard, distribution and Northwood, Mead's jointly owned Canadian affiliate," said Mason. "However, weak pricing continued to depress earnings from the paper business."
 First-half earnings from operations before special charges were $1.01 per share in 1992 versus 55 cents per share in 1991. Net earnings for the first half of 1992 were $17.0 million, or 29 cents per share, compared to a loss after special charges of $26.6 million, or 45 cents per share, in 1991.
 Mead's first quarter earnings in both years were affected by the adoption of new accounting standards. First quarter 1991 results were reduced $1.00 per share by the early adoption of FASB 106, which primarily concerns retiree health care benefits. First quarter 1992 results were increased by 55 cents per share with the adoption of FASB 109, which requires determination of all tax liabilities at current tax rates.
 At Northwood results were better than a year ago, primarily due to improved lumber prices. Stronger demand and prices for northern softwood pulp also contributed to the improved results. However, a province-wide strike in mid-June has shut down the Northwood pulp mill, which will have an unfavorable impact on third quarter earnings.
 Major factors in improved earnings were increased sales volume and strong operating results from Mead's recently expanded coated paperboard mill. Stable prices for coated natural kraft paperboard, a favorable mix of grades, and good cost control also contributed to the mill's performance, the company reported.
 Strong performance by Mead's corrugating medium mill pushed production volume ahead of 1991 levels, which boosted earnings from the containerboard business. Mead's packaging plants continued to operate well during the quarter, in the face of heavy seasonal demand from beverage distributors. International sales were substantially ahead of the prior year.
 /FIRST AND FINAL ADD TO FOLLOW/
 -0- 7/15/92
 /CONTACT: Sharon Williamson of The Mead Corporation, 513-495-3535/
 (MEA) CO: The Mead Corporation ST: Ohio IN: PAP SU: ERN


KK -- CL006 -- 9418 07/15/92 09:36 EDT
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Publication:PR Newswire
Date:Jul 15, 1992
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