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QUNO'S REVENUE, NET INCOME IMPROVE -- AS LOWER EXPENSES, MANUFACTURING COSTS HELP OFFSET DECLINING NEWSPRINT PRICES

 ST. CATHARINES, Ontario, Oct. 19 /PRNewswire/ -- QUNO Corporation today reported third quarter and year-to-date improvements in net income and revenue over the same periods in 1992.
 QUNO recorded a quarterly net loss of $4.4 million (loss of $0.20 per share), compared with a loss of $17.2 million for the third quarter last year. Quarterly revenue was $114.7 million, up seven percent from $106.7 million for the third quarter of 1992. Newsprint accounts for about 90 percent of QUNO's total revenue.
 A reversal in the newsprint price improvements experienced in the second quarter of this year contributed to the quarterly loss. However, the improvement over last year's results was due to higher newsprint transaction prices, which have increased year-over-year, aided by the weaker Canadd?ollar, lower interest expense, lower manufacturing costs, and improved lumber prices and lumber sales volumes.
 Through the first three quarters, QUNO recorded a net loss of $7.9 million, a $43.9 million improvement over the $51.8 million loss recorded for the first nine months of 1992. Revenue for three quarters is $376.4 million, up 18 percent from $319.8 million for the same period last year.
 William J. McNally, QUNO's president and chief executive officer, said "The outlook for newsprint prices remains uncertain pending some correction in current, higher than normal newsprint inventories. QUNO will continue its cost controls and efficiency improvements as a means to ensure long-term financial progress."
 QUNO's Thorold, Ontario mill recorded significantly higher quarterly and nine-month production levels and lower manufacturing costs than in 1992. The Baie-Comeau, Quebec mill also continues to achieve steady production and cost improvements. To avoid high inventory levels, QUNO shut down the Baie-Comeau newsprint mill for two weeks during September and announced that both Baie-Comeau and Thorold will close for one week during the fourth quarter.
 Year-to-date interest expense of $15.1 million is 59 percent lower than in the first three quarters of 1992, largely due to lower debt levels and interest rates that resulted from the company's initial public offering early this year. Funds provided by operations through the first nine months total $12.0 million, compared to $0.1 million for the same period in 1992. Capital spending for the first three quarters was $26.5 million, down from $33.4 million last year.
 Lumber market prices, which continue to fluctuate, increased in the third quarter, as a result of timber shortages, inventory building by wholesalers and a slight improvement in housing starts. QUNO's lumber production from its modernized Scierie des Outardes sawmill in Baie- Comeau continues to improve. Current production averages more than 90 percent of capacity, and daily production has exceeded design capacity on several occasions.
 QUNO Corporation is North America's seventh largest newsprint manufacturer, with fully integrated pulp and paper mills in Thorold, Ontario and Baie-Comeau, Quebec. QUNO owns and operates Scierie des Outardes sawmill and has a 60 percent interest in and operates a hydro power generating station in Baie-Comeau. t also owns and operates QUNO Recycling Corporation of Toronto, one of Canada's largest multi-material recycling operations. It is a leading supplier of recycled content newsprint. QUNO's common shares are listed on the Montreal Exchange and The Toronto Stock Exchange.
 QUNO CORPORATION
 (Unaudited, in Cdn.$ millions)
 Consolidated Statement of Operations
 Periods ended Three Months Nine Months
 9/26/93 9/27/92 9/26/93 9/27/92
 Operating revenues $114.7 $106.7 $376.4 $319.8
 Operating expenses
 Cost of goods
 and services 83.6 84.5 275.1 264.0
 Distribution 15.5 16.3 49.6 47.7
 Selling, general
 and administrative 19.8 15.9 53.4 47.1
 Total operating
 expenses 118.9 116.7 378.1 358.8
 Operating loss (4.2) (10.0) (1.7) (39.0)
 Other expenses
 (income)
 Foreign exchange
 loss (gain), net (1.4) 3.5 (2.3) 2.2
 Interest expense
 Long-term 3.5 12.4 14.4 35.8
 Other 0.3 0.4 1.0 1.9
 Interest income (0.1) (0.2) (0.3) (0.5)
 Loss on
 disposal of
 properties, net 0.6 --- 0.3 1.2
 Loss before
 income taxes and
 minority interest (7.1) (26.1) (14.8) (79.6)
 Recovery of
 income taxes (2.9) (9.1) (7.5) (28.4)
 Minority interest 0.2 0.2 0.6 0.6
 Net loss ($4.4) ($17.2) ($7.9) ($51.8)
 Net loss
 per common share(A) $(0.20) --- ($0.40) ---
 Weighted number of
 outstanding common
 shares (thousands)(A) 22,047 19,423
 (A) -- QUNO shares began trading publicly Feb. 17, 1993.
 Shares outstanding end of third quarter - 22,047
 Supplemental Financial Information
 Periods ended Three Months Nine Months
 9/26/93 9/27/92 9/26/93 9/27/92
 Total debt to
 capital ratio 0.33 0.82 0.33 0.82
 Total bank
 indebtedness $227.2 $507.5 $227.2 $507.5
 Shareholders' equity $277.2 $111.1 $277.2 $111.1
 Total assets $756.9 $723.1 $756.9 $723.1
 Capital expenditures $15.2 $14.5 $26.5 $33.4
 Operating cash flow $16.6 ($21.3) $12.0 $0.1
 Production
 - Newsprint (tonnes) 178,100 190,100 577,200 584,600
 - Lumber (million
 board feet) 25.5 11.3 74.7 28.0
 -0- 10/19/93
 /CONTACT: Garry W. Smith, director-corporate communications of QUNO, 905-641-4378/
 (QNO.)


CO: Quno Corporation ST: Ontario IN: PAP SU: ERN

TS -- NY071 -- 4024 10/19/93 13:33 EDT
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Publication:PR Newswire
Date:Oct 19, 1993
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