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RIVERWOOD INTERNATIONAL SHOWS IMPROVED OPERATING RESULTS FOR FOURTH QUARTER AND YEAR

 ATLANTA, Ga., Feb. 9 /PRNewswire/ -- Riverwood International Corporation (NYSE: RVW) today reported 1992 fourth quarter net sales were $305.3 million, up 15 percent from $265.6 million in the fourth quarter of 1991, despite the fact that there were five fewer days in the last fiscal quarter of 1992 than in the same period of 1991 for U.S. operations. Most of the increase was due to the early July acquisition of a 525,000-ton capacity linerboard mill in Macon, Ga. (Riverwood Georgia). Income from operations was $35.3 million, up 31 percent from $27.0 million in the year-ago quarter. Net income was $8.2 million, or $.13 per share, down 13 percent from $9.4 million for the same period last year because of increased interest expense associated with the company's mid-year recapitalization, public debt offering, and acquisition. This incremental interest expense reduced fourth quarter 1992 net income by $10.8 million, net of taxes and capitalized interest. Once the company's newly acquired Macon, Ga. mill begins producing coated board in 1994, this interest burden should be offset by higher operating earnings. Earnings per share for the prior period are not comparable because of the company's recapitalization in June, 1992.
 For the year, 1992 net sales were $1.138 billion, up 13 percent compared with $1.009 billion in 1991. Income from operations increased 14 percent to $146.1 million from $127.6 million in 1991. Income before cumulative effect of accounting changes declined modestly to $43.8 million from $46.8 million despite a substantial increase in interest expense that reduced the 1992 figure by $29.2 million, net of taxes and capitalized interest. The prior year included after tax income of $42.5 million for the cumulative effect of accounting changes. Net income was $43.8 million, or $.78 per share, compared with $89.3 million last year.
 "We made substantial progress toward our long-term goals in 1992," said Thomas H. Johnson, president and chief executive officer. "We successfully accessed financial markets with initial public offerings of both stock and debt which have allowed us to finance our growth in coated board. We acquired Riverwood Georgia and began the two-year conversion of over one-half of its capacity to our coated board product. We are now a leading innovator in paperboard packaging and we penetrated new markets with significant packaging machinery placements. In fact, the only serious disappointment was the continued sluggishness of the global economy which led to soft pricing in a few key markets.
 "Our financial condition remains strong as we pursue significant capital investments to facilitate our coated board growth strategy," Johnson added. "Although we have increased our debt leverage with the 1992 financings, at year-end we maintained over $150 million worldwide in cash and marketable securities."
 Fourth Quarter Segment Commentary
 The coated board system segment's net sales were $200.5 million in the quarter compared with $197.1 million last year despite the shorter U.S. fiscal period mentioned above. Income from operations was up 9 percent to $28.5 million due to strength in beverage carrier sales despite increased marketing and product development expenses as the company increased its package machinery capability in order to expand and further strengthen its position in the beverage carrier market. One factor that contributed to the improved fourth quarter performance in 1992 was that the company shut mills down for maintenance outages in the fourth quarter of 1991; similar outages were taken in the third quarter of 1992. Partially offsetting this effect is the 96-day fourth quarter in 1992 compared with the 101-day period in the prior year for U.S. operations. Demand for AquaKote(TM), the company's beverage carrier grade of coated board, continued strong with mill shipments up 14 percent over fourth quarter 1991 and selling prices holding firm. In addition, packaging machinery placements continued to significantly outpace the prior year. Sales and income from operations from the folding carton side of the coated board segment reflected weaker markets and some price discounting worldwide.
 Net sales in the containerboard segment were $76.6 million in the quarter, up markedly from $44.5 million last year. The 1992 net sales include $29.3 million of sales from Riverwood Georgia. Income from operations was $1.1 million, down from $3.3 million in the prior year due to a loss at Riverwood Georgia and a decline in Brazil. The operating losses at the Georgia mill were caused by mill upgrade programs and weak worldwide linerboard pricing. Fourth quarter results in Brazil were off about 35 percent from 1991 due to the weak domestic market in Brazil and lower linerboard prices.
 U.S. Timberlands/Wood Products net sales were up 19 percent in the fourth quarter to $33.3 million from $28.1 million last year. Income from operations more than tripled to $9.2 million from $3.0 million last year. The improved results were due to favorable pricing and higher production levels.
 Outlook
 "Because our product mix is temporarily weighted more heavily with linerboard, our outlook for the first quarter of 1993 is for a decline in income from operations since weak worldwide economies are depressing linerboard prices. In addition, the near-term outlook in Brazil is for continued economic difficulties. However, we believe lumber and plywood pricing will remain firm," said Johnson. "Looking longer term, our business prospects are very strong, and we expect a significant increase in net earnings for 1993 compared with 1992. The new packaging concepts we introduced into the market in 1992 were very well received and our machine placements continue to be robust. That's key for Riverwood since these machine placements will pull demand for coated board that will be produced by the Georgia paper machine once it's converted in 1994."
 Riverwood International Corporation is an international packaging systems and paper products company with more than 8,500 employees worldwide. The company is headquartered in Atlanta, Ga., and has seven major business operations spanning North America, Europe, Asia-Pacific, Central America and South America.
 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, which at that time was the Company's sole shareholder. The Company prepaid $300 million of the note with proceeds of the debt offering discussed below (see note 2). The remaining $100 million of the 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 gross proceeds of $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 stock 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 $219 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 twelve months ended December 31, 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, linerboard and medium produced at two mills 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.
 RIVERWOOD INTERNATIONAL CORPORATION
 BUSINESS SEGMENT DATA
 (millions)
 Unaudited
 Full
 1991 Quarterly Results Year
 First Second Third Fourth 1991
 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 Prod. 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 Prod. 0.5 3.5 3.3 3.0 10.3
 Eliminations (5.2) (5.2) (6.0) (5.4) (21.8)
 $24.7 $37.3 $38.6 $27.0 $127.6
 Full
 1992 Quarterly Results Year
 First Second Third Fourth 1992
 NET SALES
 Coated Board System $187.2 $212.2 $200.1 $200.5 $800.0
 Containerboard 37.9 44.0 72.0 76.6 230.5
 U.S. Timberlands/
 Wood Prod. 28.5 30.3 33.7 33.3 125.8
 Eliminations (4.3) (4.3) (4.6) (5.1) (18.3)
 $249.3 $282.2 $301.2 $305.3 $1,138.0
 INCOME FROM OPERATIONS
 Coated Board System $27.2 $39.4 $30.9 $28.5 $126.0
 Containerboard 3.9 4.4 (0.7) 1.1 8.7
 U.S. Timberlands/
 Wood Prod. 7.0 6.3 8.4 9.2 30.9
 Eliminations (5.9) (4.7) (5.4) (3.5) (19.5)
 $32.2 $45.4 $33.2 $35.3 $146.1
 RIVERWOOD INTERNATIONAL CORPORATION
 CONSOLIDATED STATEMENTS OF INCOME
 (Millions of dollars, except per share amounts)
 Unaudited
 Three Months Ended Year Ended
 12/31/92 12/31/91 12/31/92 12/31/91
 Net Sales $305.3 $265.6 $1,138.0 $1,008.7
 Cost of Sales 237.1 204.9 869.5 778.1
 Selling, General and
 Administrative 29.4 29.2 108.7 100.8
 Research, Development
 and Engineering 0.8 1.2 5.8 4.8
 Other Income (Expense) (2.7) (3.3) (7.9) 2.6
 Income from Operations 35.3 27.0 146.1 127.6
 Interest Income 2.2 0.2 5.5 1.9
 Interest Expense 23.2 7.4 74.8 29.1
 Income before Income
 Taxes and Cumulative
 Effect of Accounting
 Changes 14.3 19.8 76.8 100.4
 Income Taxes 6.1 10.4 33.0 53.6
 Income before
 Cumulative Effect
 of Accounting Changes 8.2 9.4 43.8 46.8
 Cumulative Effect of
 Accounting Changes 0.0 0.0 0.0 42.5
 Net Income $8.2 $9.4 $43.8 $89.3
 Earnings per Share Data:
 Weighted Average
 Shares (000) 62,051 56,266
 Earnings per
 Common Share $0.13 $0.78
 -0- 2/9/93
 /CONTACT: Sharon Sweet of Riverwood International Corporation, 303-978-4694/
 (RVW)


CO: Riverwood International Corporation ST: Georgia IN: PAP SU: ERN

BB -- DV002 -- 4400 02/09/93 06:02 EST
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Date:Feb 9, 1993
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