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POPE & TALBOT REPORTS LOSS FOR SECOND QUARTER AND SIX MONTHS, OUTLINES RESTRUCTURING ACTIVITIES

 POPE & TALBOT REPORTS LOSS FOR SECOND QUARTER AND SIX MONTHS,
 OUTLINES RESTRUCTURING ACTIVITIES
 PORTLAND, Ore., July 29 /PRNewswire/ -- Pope & Talbot Inc. (NYSE: POP) today announced losses for this year's second quarter and first six months, and expanded on a restructuring report made earlier this month.
 Second-quarter results were a loss of $4,280,000, or 37 cents per share, compared with a profit of $1,798,000, or 15 cents per share, reported for the June quarter a year ago. Revenues of $129.8 million were about even with last year. Six-month results were a loss of $4,177,000, or 36 cents per share, compared with a loss of $2,520,000, or 22 cents per share, in 1991's first half. Revenues of $256.9 million were 2 percent below 1991's first six months. Last year's loss included a 56-cent-per-share charge for the adoption of Financial Accounting Standard No. 106, Employers' Accounting for Postretirement Benefits other than Pensions.
 Lumber operations have been profitable throughout 1992, despite a 6-1/2 percent tariff imposed, starting in early March, by the U.S. government on lumber imported from Canada, where 60 percent of Pope & Talbot's lumber capacity is located.
 Pulp prices improved during the second quarter because of strengthening worldwide markets. However, demand for Pope & Talbot's pulp was weaker than during the first quarter, and the weakness caused expensive downtime at the company's pulp mill. Very competitive markets resulted in unsatisfactory pricing and also contributed to machine downtime in the company's tissue operations during the quarter. Demand for Pope & Talbot's disposable diapers improved late in the quarter, but sales and earnings during the period were soft, as customers awaited a recently released, expanded line of diaper products.
 Several restructuring decisions were made during the quarter that, when fully implemented by the end of this year, will significantly lower Pope & Talbot's future costs of doing business. The salaried work force is being cut by about 20 percent, and hourly employees by about 10 percent. Some of the employment decline is being caused by the previously announced closure of a tissue mill in Ladysmith, Wis. The consolidation of disposable diaper capacity from Maryville, Mo., into other existing diaper facilities will also cut employment. Finally, employee cutbacks are being made in other divisions and in corporate staff as well.
 The financial costs of this restructuring are projected at $11.9 million, pretax. In other restructuring activities, the company generated a pretax profit of $10.3 million from sale of about 22,000 acres of Oregon timberland, which was announced during the quarter. The net effect of all restructuring activities was a net charge of $1,657,000.
 Peter T. Pope, chairman, president and chief executive officer, stressed that "When the restructuring activities are complete by around the end of this year, lumber capacity will have increased by about 40 percent because of a lumber mill acquisition in Castlegar, B.C., earlier this year, and pulp capacity will be unchanged." He continued, "Diaper capacity actually will increase slightly as efficiencies are realized from consolidating diaper manufacturing equipment at fewer locations." Pope continued, "Tissue sales capacity will decline only slightly because some of the converting equipment from Ladysmith is being moved to the company's Eau Claire, Wis., tissue facility."
 Pope stated, "These restructuring activities will return Pope & Talbot to profitability unless markets for our products deteriorate further." He concluded, "Therefore, even though this is proving to be a more difficult year than we expected either late in 1991 or at the end of this year's first quarter, we are positive about the future of the company."
 Pope & Talbot Inc. is a publicly held, Portland-based paper, pulp and wood products company traded on the New York Stock Exchange. Pope & Talbot was founded in 1849 and has operations throughout the United States and in Canada.
 POPE & TALBOT INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited, in thousands, except per share)
 Three Months Six Months
 Ended June 30: 1992 1991 1992 1991
 Revenues:
 Wood products $ 56,045 $ 45,646 $105,502 $ 87,943
 Pulp and paper products 73,719 85,081 151,404 174,850
 Total 129,764 130,727 256,906 262,793
 Costs and expenses:
 Cost of sales 125,924 120,774 245,036 241,755
 Selling, general and
 administrative 6,977 6,502 13,697 13,040
 Interest 1,213 801 2,317 1,910
 Total 134,114 128,077 261,050 256,705
 Other gains (losses) (1,657) 227 (1,657) 227
 Income (loss) before income
 taxes and cumulative effect
 of accounting change (6,007) 2,877 (5,801) 6,315
 Income tax provision (1,727) 1,079 (1,624) 2,368
 Income (loss) before
 cumulative effect of
 accounting change (4,280) 1,798 (4,177) 3,947
 Cumulative effect of
 accounting change -
 net of tax -- -- -- (6,467)
 Net income (loss) $ (4,280) $ 1,798 $ (4,177) $ (2,520)
 Net income (loss) per common share:
 Primary $ (0.37) $ 0.15 $ (0.36) $ (0.22)
 Fully diluted $ (0.37) $ 0.15 $ (0.36) $ (0.22)
 Segment information:
 Operating profit (loss):
 Wood products $ 3,238 $ 1,844 $ 7,022 $ (129)
 Pulp and paper products (4,819) 3,247 (5,533) 11,442
 Total (1,581) 5,091 1,489 11,313
 Other gains (losses) (1,657) 227 (1,657) 227
 Interest expense (1,213) (801) (2,317) (1,910)
 General corporate expense (1,556) (1,640) (3,316) (3,315)
 Income (loss) before income
 taxes and cumulative
 effect of accounting
 change $ (6,007) $ 2,877 $ (5,801) $ 6,315
 POPE & TALBOT INC. AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS
 (Unaudited, in thousands)
 June 30: 1992 1991
 Assets:
 Current assets $138,004 $109,096
 Properties 223,586 213,817
 Other assets 9,738 11,739
 Total $371,328 $334,652
 Liabilities and stockholders' equity:
 Current liabilities $ 61,922 $ 45,742
 Postretirement benefits and other 21,821 14,543
 6 percent convertible subordinated
 debentures 40,000 40,000
 Other long-term debt 63,000 21,415
 Deferred income taxes 7,595 12,710
 Total liabilities 194,338 134,410
 Stockholders' equity 176,990 200,242
 Total $371,328 $334,652
 -0- 7/29/92
 /CONTACT: C. Lamadrid of Pope & Talbot, 503-228-9161/
 (POP) CO: Pope & Talbot Inc. ST: Oregon IN: PAP SU: ERN


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Date:Jul 29, 1992
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