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SPECIALTY PAPERBOARD REPORTS EARNINGS

 BRATTLEBORO, Vt., April 27 /PRNewswire/ -- Specialty Paperboard Inc. (NASDAQ-NMS: SPBI), a producer of special paper grades used in the manufacture of office products, book covers and gaskets, today reported results for its first public quarter ended March 31, 1993.
 "It was an excellent quarter but the company's actual financial performance is masked by extraordinary and non-recurring items related to a major debt reduction," said Alex Kwader, president and chief executive officer.
 Sales for the quarter were up 4.5 percent to $21.1 million from $20.2 million in the same 1992 period, reflecting increased market share in the office products market and higher demand for gasket material. Gross profit rose to $4.4 million, 20.8 percent of sales, up from $3.3 million, 16.2 percent of sales a year ago.
 "The gain stemmed from both increased volume and improved operating efficiencies," said Kwader. As a result, operating income was up 54 percent at $2.9 million compared to $1.9 million in the 1992 quarter.
 "Without extraordinary and non-recurring items, net income would have been $1.4 million, or 35 cents per share, on the 4,019 million shares outstanding after our initial public offering in March 1993," he said.
 The extraordinary charge, related to early retirement of debt, amounted to $2.1 million net of tax which resulted in a net loss of $1.9 million versus a net loss of $.654 million in the year-ago quarter.
 "First-quarter earnings were also negatively impacted by $1.6 million in higher levels of interest, debt amortization expense and preferred dividends for the period prior to our March 11 initial public offering," Kwader explained.
 Proceeds from the public offering of 2.5 million shares were used to retire $28.4 million in subordinated debt which carried a 15-percent interest rate. An additional $1.3 million was used to cancel an interest collar agreement, which effectively reduced interest rate on a senior debt by nearly 4 percent.
 "This debt reduction lowers our interest expense going forward by approximately $1.3 million quarterly which provides a significant boost to our profitability," Kwader said. "We're also looking at ways to restructure the terms of our remaining debt and early indications point to the possibility of further lowering of interest expense."
 During the quarter, the company continued its effort to penetrate the international market by adding sales of $1.5 million annually in office products materials to a customer in Mexico.
 "Significant progress has also been made in financing a cogeneration plant at our Beaver Falls, N.Y., mill by the outside firm seeking to construct the facility," Kwader said. "If the plant is built, Specialty Paperboard will save on its steam costs as well as receive significant cash payments over a four-year period."
 Specialty Paperboard, which had 1992 revenues of $84.2 million, manufactures office products materials which are converted by its customers into products such as databinders, report covers, ring binders and file and index guides. The company also produces latex reinforced book cover and gasket materials.
 SPECIALTY PAPERBOARD INC.
 STATEMENT OF INCOME
 (In thousands except per-share data)
 Three Months Ended March 31: 1993 1992
 Net sales $21,067 $20,187
 Cost of sales 16,695 16,922
 Gross profit 4,372 3,265
 General and administrative expenses 1,507 1,407
 Income from operations 2,865 1,858
 Other expenses, net 133 132
 Interest expense 1,776 1,956
 Income (loss) before income
 taxes and extraordinary items 956 (230)
 Provision for income taxes 350 --
 Income before extraordinary items 606 (230)
 Extraordinary item-early extinguishment of debt
 (net of income tax benefit of $1,415) (A) (2,103) --
 Net income (loss) ($1,497) ($230)
 Preferred dividends 359 424
 Net loss applicable to common shares (1,856) (654)
 Loss Per Common Share:
 Income (loss) before extraordinary items 0.32 (1.93)
 Early extinguishment of debt (2.74) --
 Net loss (2.42) (1.93)
 Average number of shares outstanding 768 339
 (A) Reflects a $943,000 charge for previously deferred debt financing costs related to debt retired from proceeds of the company's March 11, 1993, initial public offering, a $1,276,000 charge for unamortized original issue discount related to the retired debt and $1,299,000 fee in connection with the termination of an interest rate collar agreement related to the retired debt.
 -0- 4/27/93
 /CONTACT: Bruce Moore, vice president and chief financial officer, Specialty Paperboard, 802-257-5902; or Dolores Chenoweth of in.ves'com, 503-221-2087, for Specialty Paperboard/
 (SPBI)


CO: Specialty Paperboard Inc. ST: Vermont IN: PAP SU: ERN

LM -- SE002 -- 1111 04/27/93 07:50 EDT
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Publication:PR Newswire
Date:Apr 27, 1993
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