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 DAYTON, Ohio, Oct. 20 /PRNewswire/ -- Mead Corporation (NYSE: MEA) today reported third quarter net earnings of $30.0 million, or 50 cents per share, which included a 15 cent charge for recently enacted tax legislation, compared to net earnings of $37.5 million, or 63 cents per share, in 1992. Mead's earnings were 65 cents per share before the impact of the tax adjustment, which consisted of 12 cents to revalue deferred tax liabilities, 2 cents to reflect the higher income tax rate in the first half, and 1 cent to reflect the higher rate in the third quarter.
 Sales for the third quarter of 1993 were $1.262 billion, slightly ahead of last year's sales of $1.255 billion.
 Net earnings for the first nine months of 1993 were $102.8 million, or $1.72 per share, compared to $54.5 million, or 92 cents per share, in 1992. Excluding the 1993 tax increase and special items in the first half of 1992, earnings for the first nine months were $111.8 million, or $1.87 per share, in 1993 compared to $97.1 million, or $1.64 per share, a year ago.
 Sales for the first nine months were $3.661 billion in 1993, up 3 percent from $3.568 billion in 1992.
 "Mead's results show progress in our efforts to reduce costs and improve the productivity of our operations," said Steven C. Mason, chairman and chief executive officer. "However, slow growth in the U.S. economy and weakness in key international markets continued to take its toll, particularly on our paperboard and packaging businesses."
 Significantly lower earnings from Mead's packaging and paperboard segment were partially offset by gains in its paper, solid wood products and electronic publishing businesses. Lower interest expense and reduced selling, administrative and research expenses also contributed to earnings improvement.
 A weak European economy and sluggish summer beverage sales in the United States dampened demand for packaging, resulting in lower volumes and lower average prices for both packaging and coated board. Production volumes were strong for both corrugating medium and containers, but weak prices eroded the benefit of these gains.
 Earnings from Mead's paper businesses were higher than a year ago, chiefly due to lower manufacturing costs at the company's largest mills. Sales of coated publishing paper through the first nine months were at an all-time high, although prices remained weak.
 At Mead's jointly-owned Northwood companies, stronger prices for solid wood products more than offset weak demand and prices for pulp, resulting in higher earnings for the quarter.
 Mead Data Central, the company's electronic publishing business, showed a significant increase in earnings due to a number of different factors associated with its performance improvement efforts, including a hiring freeze, workforce reduction and other cost-saving measures. Strong sales of business information services contributed to overall revenue growth of 12 percent for the quarter.
 Sales increased for Mead's distribution and school and office products segment, although earnings were lower than the prior year. A successful back-to-school selling season resulted in higher revenues for Mead School and Office Products and a modest increase in earnings, excluding the sales and earnings generated by Ampad, which was sold in July 1992. Zellerbach, Mead's distribution company, saw earnings decline primarily due to weak margins for printing paper. Aggressive customer development efforts coupled with cost containment programs implemented earlier in the year partially offset the impact of weak margins on third quarter performance.
 In commenting on the quarter, Mason said, "The company-wide efforts we initiated last year to improve operating efficiency, increase productivity and enhance customer satisfaction are beginning to make a clear difference in our struggle to overcome adverse economic conditions. However, we're not out of the woods yet. We expect the pressures from depressed markets to continue in the fourth quarter."
 (All dollar amounts in millions, except EPS)
 Third Qtr. Ended Three Qtrs. Ended
 10/03/93 09/27/92 10/03/93 09/27/92
 Net sales $1,261.8 $1,254.5 $3,660.7 $3,568.1
 Cost of products sold 1,014.6 1,000.4 2,929.1 2,863.0
 Gross profit 247.2 254.1 731.6 705.1
 Selling, administrative &
 research expenses 168.2 173.9 508.2 493.2
 Other expenses 95.0
 Earnings from operations 79.0 80.2 223.4 116.9
 Other revenues (expenses)-
 net 0.6 3.7 6.1 (5.9)
 Interest & debt expense (23.6) (25.1) (72.1) (76.8)
 Earnings before
 income taxes 56.0 58.8 157.4 34.2
 Income taxes 29.3 21.3 68.3 17.4
 Earnings before equity
 in net earnings of
 investees 26.7 37.5 89.1 16.8
 Equity in net earnings of
 investees 3.3 --- 13.7 3.7
 Earnings before cumula-
 tive effect of change
 in accounting
 principle 30.0 37.5 102.8 20.5
 Cumulative effect of change
 in accounting principle --- --- --- 34.0
 Net earnings $ 30.0 $ 37.5 $ 102.8 $ 54.5
 Per common and common
 equivalent share:
 Earnings before cumula-
 tive effect of change
 in accounting
 principle $ 0.50 $ 0.63 $ 1.72 $ 0.35
 Cumulative effect of change
 in accounting principle 0.57
 Net earnings $ 0.50 $ 0.63 $ 1.72 $ 0.92
 Cash dividends per common
 share $ 0.25 $ 0.25 $ 0.75 $ 0.75
 Average common and common
 equivalent shares
 outstanding (MM)(A) 59.7 61.7 62.2 59.0
 (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.~
 (All dollar amounts in millions)
 Oct. 3, Sept. 27,
 1993 1992
 Current assets:
 Cash and cash equivalents $ 14.4 $ 4.0
 Accounts receivable 648.3 667.0
 Inventories 398.9 418.4
 Other current assets 87.9 77.1
 Total current assets 1,149.5 1,166.5
 Investments and other assets:
 Investments in and advances to investees 62.1 63.9
 Other assets 515.9 486.8
 Total 578.0 550.7
 Property, plant and equipment - net 2,363.0 2,327.0
 Total assets $4,090.5 $4,044.2
 Current liabilities:
 Notes payable $ 42.5 $ ---
 Accounts payable 292.3 307.0
 Accrued liabilities 331.5 413.1
 Current maturities of long-term debt 14.9 9.2
 Total current liabilities 681.2 729.3
 Long-term debt 1,332.3 1,292.5
 Deferred items 513.0 517.7
 Shareowners' equity:
 Common shares 176.4 175.1
 Additional paid-in capital 24.8 10.9
 Foreign currency translation
 adjustment (4.5) 12.4
 Retained earnings 1,367.3 1,306.3
 Total shareowners' equity 1,564.0 1,504.7
 Total liabilities and share-
 owners' equity $4,090.5 $4,044.2
 (All dollar amounts in millions)
 Three Qtrs. Ended
 Oct. 3, Sept.27,
 1993 1992
 Cash flows from operating activities:
 Net earnings $102.8 $ 54.5
 Adjustments to reconcile net earnings to net
 cash provided by operating activities:
 Depreciation, amortization and depletion
 of property, plant and equipment 194.1 183.2
 Depreciation & amortization of other assets 40.2 40.9
 Other expenses --- 95.0
 Deferred income taxes 41.5 6.7
 Investees-earnings and dividends (5.7) 2.4
 Loss on sale of subsidiary --- 22.5
 Current taxes on loss on sale --- (20.6)
 Cumulative effect of change in accounting
 principle --- (34.0)
 Other (23.0) (19.6)
 Change in assets and liabilities:
 Accounts receivable (68.4) (128.6)
 Inventories 27.0 11.7
 Other current assets 10.3 (3.9)
 Accounts payable and accrued liabilities (95.4) 2.5
 Net cash provided by operating activities 223.4 212.7
 Cash flows from financing activities:
 Additional borrowings 361.4 ---
 Payments on borrowings (358.2) (25.9)
 Notes payable 42.5 (45.0)
 Cash dividends paid (44.2) (43.9)
 Common shares issued 13.7 10.5
 Net cash provided by (used in) financing
 activities 15.2 (104.3)
 Cash flows from investing activities:
 Capital expenditures (208.4) (165.4)
 Additions to equipment rented to others (35.4) (33.8)
 Proceeds from sale of subsidiaries --- 75.0
 Investments in and advances to investees (0.9) (1.1)
 Other 3.7 3.2
 Net cash (used in) investing activities (241.0) (122.1)
 Net cash (used in) continuing operations (2.4) (13.7)
 Cash (used in) discontinued operations (1.6) (6.9)
 (Decrease) in cash and cash equivalents (4.0) (20.6)
 Cash and cash equivalents at beginning of year 18.4 24.6
 Cash and cash equivalents at end of quarter $ 14.4 $ 4.0
 -0- 10/20/93
 /CONTACT: Sharon Williamson of The Mead Corporation, 513-495-3535/

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

BM -- CL008 -- 4359 10/20/93 08:09 EDT
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Publication:PR Newswire
Date:Oct 20, 1993

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