Printer Friendly

RIVERWOOD INTERNATIONAL REPORTS RECORD SALES AND STRONGER OPERATING EARNINGS

 RIVERWOOD INTERNATIONAL REPORTS RECORD SALES
 AND STRONGER OPERATING EARNINGS
 ATLANTA, July 21 /PRNewswire/ -- Riverwood International Corporation (NYSE: RVW) reported record sales in the second quarter of 1992. Sales for the quarter were $282.2 million compared to $257.3 million last year, representing a 10 percent increase. Net income for the three months ended June 27, 1992 was $13.9 million versus $14.0 million for the similar period of 1991.
 Higher interest expense relating to the company's recent recapitalization had the effect of decreasing 1992's second quarter net income by $8.2 million. Earnings per share were $.28 for the second quarter of 1992 and $.55 for the first half of 1992. Due to the recapitalization, earnings per share for previous periods are not comparable. The recapitalization included the issuance of 12.1 million shares (approximately 19 percent) of common stock for $172 million and $500 million of senior and senior subordinated notes.
 Year to date sales were $531.5 million compared to $488.5 million last year. For the first six months of 1992, income before cumulative effect of accounting changes was $27.8 million versus $22.6 million for the similar period of 1991.
 "In the second quarter we continued our growth, with record sales, a 22 percent increase in income from operations over the same period in 1991, and, in July, the completion of a major acquisition," said Thomas H. Johnson, president and chief executive officer of Riverwood International.
 "All three business segments -- Coated Board System, Containerboard and U.S. Timberlands/Wood Products -- showed net sales growth during the quarter," said Johnson. "Income from operations of our Coated Board System segment increased by 17 percent from the second quarter of 1991, reflecting the continued growth of our primary business in world markets. Our U.S. Timberlands/Wood Products segment benefited from selling price improvements and showed an 80 percent increase in operating profits. The Containerboard segment continued to show the effects of weaknesses in worldwide linerboard markets and the Brazilian economy, resulting in lower earnings."
 On July 1, Riverwood International announced it had completed the purchase of substantially all of the assets of Macon Kraft, Inc. of Macon, Ga. from Pratt Industries (USA) by utilizing financing raised through its initial public offering. The purchase price of the Macon mill was approximately $220 million, of which $169 million represented debt assumed by Riverwood International. The public offerings were done primarily to finance the growth and expansion of Riverwood International's paperboard production capabilities through the acquisition and conversion of the Macon Kraft mill.
 The acquisition of Macon Kraft and the related $250 million capital program to convert the mill enables the company to increase substantially its coated board capacity by converting the mill's number one paper machine to produce coated board. The conversion, involving one of the two paper machines at the mill, is underway and is now expected to be completed by first quarter 1994. The mill currently produces approximately 525,000 tons of linerboard annually.
 "Our results reflect continued growth in demand from our beverage and food customers for our coated board packaging system, and our acquisition and conversion of Macon Kraft will provide additional coated board capacity to support growth in world markets," said Johnson. "However, the prefunding of the Macon Kraft conversion to coated board will result in a negative interest rate spread between the cost of the debt and interest income from short-term cash investments that will dilute our earnings during the construction process. We also expect a dilutive effect from the Macon Kraft operations until the linerboard price increases anticipated for this fall become effective."
 Riverwood International Corporation is a global packaging systems and paper products company. At the end of 1991, the company employed more than 8,000 people worldwide and had assets of approximately $1.4 billion with annual sales of approximately $1 billion. The company is headquartered in Atlanta, Ga. and has seven major business operations spanning North America, Europe, Asia-Pacific, Central and South America.
 RIVERWOOD INTERNATIONAL CORPORATION
 CONSOLIDATED STATEMENTS OF INCOME
 (Millions of dollars, except per share amounts)
 (unaudited)
 Three Months Six Months
 Ended Ended
 6/27/92 6/22/91 6/27/92 6/22/91
 Net Sales $282.2 $257.3 $531.5 $488.5
 Cost of Sales 208.0 196.9 395.8 380.4
 Selling, General and
 Administrative 25.8 24.5 52.0 47.4
 Research, Development
 and Engineering 1.6 1.2 3.1 2.3
 Other Income (Expense) (1.4) 2.6 (3.0) 3.6
 Income from
 Operations 45.4 37.3 77.6 62.0
 Interest Income 0.5 0.4 0.7 1.2
 Interest Expense 20.6 7.2 27.7 14.7
 Income before Income
 Taxes and Cumulative
 Effect of Accounting
 Changes 25.3 30.5 50.6 48.5
 Income Taxes 11.4 16.5 22.8 25.9
 Income before
 Cumulative Effect
 of Accounting
 Changes 13.9 14.0 27.8 22.6
 Cumulative Effect of
 Accounting Changes --- --- --- 42.5
 Net Income $ 13.9 $ 14.0 $ 27.8 $ 65.1
 Earnings per Share Data:
 Weighted Average
 Shares (000) 50,482 --- 50,222 ---
 Earnings per
 Common Share $ 0.28 --- $ 0.55 ---
 RIVERWOOD INTERNATIONAL CORPORATION
 Notes to Consolidated Statements of Income
 Note 1
 On March 27, 1992, the Company paid a $400 million dividend to
 Manville Corporation in the form of a $400 million, unsecured
 13 percent note payable to Manville. The Company prepaid
 $300 million of the note with the net proceeds of the debt
 offering discussed below (see note 2). Interest expense (net of
 tax) relating to this debt decreased net income by $7.9 million in
 the second quarter and first half of 1992. The remaining
 $100 million note was exchanged for a $37.5 million,
 10.75 percent, senior note due 2000 and a $62.5 million,
 11.25 percent, senior subordinated note due 2002.
 Note 2
 On June 24, 1992, Riverwood International completed an initial
 public offering of 19.5 percent of its common stock, or
 12,100,000 shares, for $172 million and issued $400 million of
 bonds in a public debt offering. The net proceeds from these
 offerings amounted to $553 million. The primary purposes of the
 public offerings were to facilitate expansion of the company's
 paperboard production capacity and to prepay $300 million of
 existing debt. Subsequent to the initial public offering, the
 Company had 62,051,282 shares of common stock outstanding of which
 80.5 percent are held by Manville Corporation. The debt offering
 consisted of $150 million, 10.75 percent, senior notes due 2000
 and $250 million, 11.25 percent, senior subordinated notes due
 2002.
 Note 3
 On July 1, 1992 the Company purchased substantially all the assets
 of Macon Kraft, Inc. including a linerboard mill located in Macon,
 Ga. The purchase price of the assets was approximately
 $220 million, of which $169 million was paid through the
 assumption of debt.
 Note 4
 The earnings per common share amounts for the three months and six
 months ended June 27, 1992 are based on the weighted average
 number of common shares outstanding during the period. Earnings
 per common share for the same periods of 1991 have not been
 presented since such amounts are not comparable due to the
 recapitalization described in Notes 1 and 2.
 Note 5
 Effective January 1, 1991, the Company adopted Statement of
 Financial Accounting Standards No. 106, "Employers' Accounting for
 Postretirement Benefits Other Than Pensions" ("SFAS No. 106") for
 its postretirement medical and life insurance benefit plans. The
 Company elected to immediately recognize the accumulated
 postretirement benefit obligation of $18,861,000, net of tax of
 $11,571,000, upon adoption of SFAS No. 106.
 Also in 1991, the Company recorded a $61,408,000 credit to net
 income to reflect the cumulative effect on prior years of a change
 in method of accounting for income taxes. The credit resulted
 from the adoption of Statement of Financial Accounting Standards
 No. 109, "Accounting for Income Taxes," effective January 1, 1991.
 Note 6
 The Company's principal business segments are the Coated Board
 System, Containerboard segment and U.S. Timberlands/Wood Products
 segment. The Coated Board System includes the production of
 coated board grades on three paper machines in Louisiana and a
 recycle paperboard mill in Sweden, beverage carrier and folding
 carton facilities in the U.S., Australia, Spain and the U.K. and
 the Company's worldwide packaging machinery operations. The
 Containerboard segment includes bag kraft and medium produced in
 the U.S., linerboard and medium produced at two mills in Brazil,
 three corrugating box plants in Brazil and 171,000 acres of owned
 and leased timberlands in Brazil used exclusively for wood chip
 and energy requirements of the paper mills. The U.S.
 Timberlands/Wood Products segment includes two U.S. lumber mills,
 a U.S. plywood plant and 589,000 acres of timberland in Louisiana,
 Arkansas and Texas. Net sales and income from operations for the
 four quarters of 1991 and the first two quarters of 1992 are as
 follows:
 RIVERWOOD INTERNATIONAL CORPORATION
 BUSINESS SEGMENT DATA
 (millions)
 (unaudited)
 1991 Quarterly Results 1991
 First Second Third Fourth Year
 NET SALES
 Coated Board System $179.5 $196.5 $192.8 $197.1 $765.9
 Containerboard 34.9 39.6 39.9 44.5 158.9
 U.S. Timberlands/Wood
 Products 19.9 24.8 25.5 28.1 98.3
 Eliminations (3.1) (3.6) (3.6) (4.1) (14.4)
 $231.2 $257.3 $254.6 $265.6 $1,008.7
 INCOME FROM OPERATIONS
 Coated Board System $ 26.7 $ 33.7 $ 39.9 $ 26.1 $126.4
 Containerboard 2.7 5.3 1.4 3.3 12.7
 U.S. Timberlands/Wood
 Products 0.5 3.5 3.3 3.0 10.3
 Corporate (5.2) (5.2) (6.0) (5.4) (21.8)
 $ 24.7 $ 37.3 $ 38.6 $ 27.0 $127.6
 1992 Quarterly Results 1992
 First Second First
 Half
 NET SALES
 Coated Board System $187.2 $212.2 $399.4
 Containerboard 37.9 44.0 81.9
 U.S. Timberlands/Wood
 Products 28.5 30.3 58.8
 Eliminations (4.3) (4.3) (8.6)
 $249.3 $282.2 $531.5
 INCOME FROM OPERATIONS
 Coated Board System $ 27.2 $ 39.4 $ 66.6
 Containerboard 3.9 4.4 8.3
 U.S. Timberlands/Wood
 Products 7.0 6.3 13.3
 Corporate (5.9) (4.7) (10.6)
 $ 32.2 $ 45.4 $ 77.6
 -0- 7/21/92
 /CONTACT: Charles Lemons (Financial), 800-942-3950; or Jonna Manes of Riverwood International, 404-916-7914/
 (RVW) CO: Riverwood International Inc. ST: Georgia IN: PAP SU: ERN


MC-BB -- DV002 -- 1079 07/21/92 08:03 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 21, 1992
Words:1779
Previous Article:USAIR, BRITISH AIRWAYS TO HOLD PRESS/ANALYST CONFERENCE TODAY AT 11 A.M. IN NEW YORK
Next Article:SAAB AUTOMOBILE AB NAMES HRUSCHKA ASSOCIATE REGIONAL DIRECTOR, JAPAN; SWEDISH AUTOMAKER RELOCATES OFFICE IN JAPAN
Topics:


Related Articles
ACCOUNTING CHANGE DELAYS MANVILLE 1991 RESULTS; PRELIMINARY EARNINGS RELEASED
MANVILLE 1991 NET INCOME $35 MILLION; REFLECTS ADOPTION OF NEW ACCOUNTING STANDARDS
RIVERWOOD INTERNATIONAL EXPECTS TO REPORT LOWER FIRST QUARTER EARNINGS
RIVERWOOD INTERNATIONAL REPORTS SECOND QUARTER RESULTS
MANVILLE REPORTS STRONG THIRD QUARTER OPERATING RESULTS
Riverwood International Corporation Reports Fourth Quarter Results.
Riverwood International Corporation Reports First Quarter Results.
Riverwood International Corporation Reports Fourth Quarter Results.
Riverwood International Corporation Reports First Quarter Results.
Riverwood International Corporation Reports Second Quarter Results.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters