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FiberMark Announces Plans to Cease Operations at NY Facility

5 November 1998

FiberMark Announces Plans to Cease Operations At Beaver Falls, NY Facility


    BRATTLEBORO, Vt.--Nov. 4, 1998--FiberMark, Inc. today announced plans to cease operations at its Beaver Falls, NY facility during the first quarter of 1999. The closure of this facility will result in a one-time after-tax charge of approximately $5.0 million during the fourth quarter of 1998. The closure is expected to generate annual after-tax savings of approximately $1.0 million, or $.12 per share. These savings are expected to materialize late in the second quarter of 1999, and should reach full scale by the third quarter.
    "The Beaver Falls facility faced lower demand for its latex-content materials due to industry consolidation, including the recent purchase of its largest customer by a competitor in the book cover market," said Alex Kwader, president and chief executive officer. "We believe other facilities offer more economical alternatives for this business. Working with our customers, we have pursued qualification of materials now made in Beaver Falls at other FiberMark operations, particularly at our Fitchburg, Mass. facility, where equipment upgrades were recently completed." Kwader noted that the timing of the closure of the Beaver Falls facility will depend on completing approvals for transferred products into other FiberMark facilities, "ensuring that our customers' needs are met during and after the transition," he said.
    "Consolidating operations to achieve the most cost effective mix of facilities remains a necessary component of our operating strategy. While the cost savings benefit shareholders, decisions to close facilities are not made hastily or lightly," said Kwader. "Changing market conditions, which were beyond the control of the very capable and dedicated employees at our Beaver Falls facility, were the key factor in this decision. Senior management's long history with this facility and ties to the community made this an extremely difficult decision for us," he added.
    The Beaver Falls facility, purchased from J. P. Lewis and Uniroyal in 1977, currently employs approximately 100 people.
    FiberMark is a leading producer of specialty fiber-based materials meeting industrial and consumer needs worldwide. Products cover a broad spectrum including filter materials for the automotive, heavy equipment, beverage and fast food industries; cover and presentation materials for office and school supplies; specialty tape base and labels for medical tapes and jeans labels; and technical specialties such as photographic and graphic arts materials, transformer paper, and base materials for printed circuit boards, book covers and abrasives. The company, a leader in the use of recycled materials, currently has ten facilities and 1400 employees throughout the United States and Europe.
    This press release contains forward-looking statements. Actual results may differ depending on the economy and other factors discussed in the company's Form 10K filed with the SEC March 31, 1998.
    Web address: http://www.fibermark.com