FiberMark Announces 5th Consecutive Year of Record Earnings for 1998
3 February 1999
FiberMark Announces Fifth Consecutive Year of Record Earnings for 1998
BRATTLEBORO, Vt.--Feb. 3, 1999--FiberMark, Inc. today announced record results for the year ended December 31, 1998 and quarterly earnings equal to the fourth quarter in 1997.
Net earnings on a recurring basis for the quarter ended December 31, 1998 were $4.0 million, or $.50 per share, compared with $3.3 million, or $.50 per share, for the comparable 1997 quarter. Excluded from 1998 results were a one-time gain of $.11 related to a payment received from a cogeneration developer, and a one-time charge of $.60 per share related to the January 30, 1999 closure of the company's Beaver Falls, NY facility. Excluded from 1997 results was a one-time charge of $.95 related to the closure of the Owensboro, KY mill.
Net sales for the quarter increased 28.5% to $75.4 million from $58.7 million for the fourth quarter of 1997. The January 1998 Steinbeis Gessner acquisition accounted for $19.1 million of this increase. Filter product sales for the most recent quarter rose 118.5% to $23.6 million compared with $10.8 million in the comparable 1997 quarter, with the Gessner acquisition accounting for $12.7 million of this increase. Technical specialties sales decreased 6.4% to $18.9 million compared with $20.2 million for the fourth quarter of 1997, with $1.7 million in sales due to the Gessner acquisition. Sales in durable specialties increased 33.3% to $18.8 million versus $14.1 million in the fourth quarter of 1997, with $4.7 million in sales due to the Gessner acquisition. Office products sales increased 3.7% to $14.1 million compared with $13.6 million for the same period last year.
Recurring earnings for the full year ended December 31, 1998 were $15.4 million, or $1.91 per share, compared with $12.3 million, or $1.90 per share, for year 1997. Net sales for the year ended December 31, 1998 increased 30.5% to $307.1 million compared with $235.4 million for 1997. The Gessner acquisition accounted for $81.2 million of this increase. Filter product sales for the year 1998 increased 126.6% to $98.8 million compared with $43.6 million in 1997, with $53.8 gained from the Gessner acquisition. Technical specialties sales for the year increased 1.9% to $79.9 million compared with 78.4 million in 1997, with the Gessner acquisition accounting for $7.2 million in sales. Sales in durable specialties for 1998 increased 30.4% to $75.9 million compared with $58.2 million in 1997, with $20.2 million due to the Gessner acquisition. Office products sales for 1998 declined by 4.9% to $52.5 million compared with $55.2 million in 1997.
"During the quarter, sales were generally in-line with expectations, with the exception of some late quarter softness in our U.S. technical specialties and Gessner businesses," said Alex Kwader, president and chief executive officer. "However, January order levels have strengthened across our businesses, particularly at Gessner. Furthermore, we are encouraged by signs of a mild recovery in our Asian business in tape backing materials (durable specialties) and printed circuit board base business during December."
"Our divisions did an excellent job of achieving cost and productivity improvements, allowing us to maintain profitability despite softer business conditions and significant trial activity," Kwader said. "During the first quarter, we expect to finalize the Beaver Falls' product transfers and gain final product approvals, minimizing the productivity impact during the transfer process."
"Looking ahead, while the overall economic outlook appears mixed, steady order levels in early 1999 across most of our businesses support an optimistic outlook," Kwader said. "Additionally, our key raw material costs continue to hold at favorable levels."
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 automotive, heavy equipment, vacuum bag and fast food applications; cover and presentation materials for office and school supplies; specialty tape base and labels for medical tapes and jeans labels; and technical specialties including base materials for photographic and graphic arts applications, printed circuit boards and abrasives. The company currently has nine facilities 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
FIBERMARK, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
Unaudited
THREE MONTHS ENDED DECEMBER
1998 1997
Actual Pro-Forma Actual Pro-Forma
Net Sales $ 75,400 $ 75,400 $ 58,699 $ 58,699
Cost of Sales 61,471 60,951 (a) 46,735 46,735
Gross Profit 13,929 14,449 11,964 11,964
General and Administrative
Expenses 6,131 6,131 4,097 4,097
Facility Closure Charge 7,274 (a) 10,000 (c)
Income from Operations 524 8,318 (2,133) 7,867
Other (Income)
Expenses, Net (1,482) (31)(b) 133 133
Interest Expense 2,677 2,677 2,321 2,321
Income Before
Income Taxes (671) 5,672 (4,587) 5,413
Provision for
Income Taxes (760) 1,682 (d) (1,770) 2,080(d)
Net Income Applicable
to Common Shares $ 89 $ 3,990 $ (2,817) $ 3,333
Income Per Common Share
Basic Earnings Per
Share $ 0.01 $ 0.51 $ (0.44) $ 0.52
Diluted Earnings Per
Share $ 0.01 $ 0.50 $ (0.42) $ 0.50
Average Basic Shares
Outstanding 7,778 7,778 6,355 6,355
Average Diluted Shares
Outstanding 7,997 7,997 6,727 6,727
(a) The company ceased operations at its Beaver Falls, New York
facility on January 30, 1999. Part of the historical production demand
from this facility has been taken in-house by an integrated customer.
The balance of the production demand will be absorbed by other mills
within the company. It is estimated at this time that the asset value
write down and related charges due to this closure will be
approximately $7.8 million pre-tax or 4.8 million on a tax adjusted
basis. Additionally the company reclassified $.5 million of previously
accrued expenses related to its Owensboro, Kentucky mill from facility
closure expense to cost of sales. While all of these expenses were
directly related to the closure of the Kentucky mill, the
reclassification was necessary to conform with current guidelines.
(b) The company is a landlord to a cogeneration facility located
on its Beaver Falls, New York property. In December 1998, the owner of
the cogeneration facility sold the business and related equipment to
another party. The company received a one-time payment of
approximately $1.5 million as consideration for its consent to the
assignment of the related ground lease to the new owner.
(c) The company ceased operations at its Owensboro, Kentucky mill
on January 14, 1998. The mill's output will be absorbed by other mills
within the company. It is estimated at this time that the asset value
write down, because of the closure, will be $6,150,000 on a tax
adjusted basis.
(d) The effect of the charges related to the facility closures
and the cogeneration income related to the cogeneration facility have
been tax adjusted at a rate of 38.5%.
FIBERMARK, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
Unaudited
TWELVE MONTHS ENDED DECEMBER
1998 1997
Actual Pro-Forma Actual Pro-Forma
Net Sales $ 307,092 $ 307,092 $ 235,358 $ 235,358
Cost of Sales 249,337 248,817(a) 189,294 189,294
Gross Profit 57,755 58,275 46,064 46,064
General and
Administrative
Expenses 22,684 22,684 16,331 16,331
Facility Closure Expense 7,274 (a) 10,000 (c)
Income from Operations 27,797 35,591 19,733 29,733
Other (Income)
Expenses, Net (1,299) 152(b) 351 351
Interest Expense 10,495 10,495 9,221 9,221
Income Before Income
Taxes 18,601 24,944 10,161 20,161
Provision for Income
Taxes 7,092 9,534(d) 3,992 7,842(d)
Net Income Applicable
to Common Shares $ 11,509 $ 15,410 $ 6,169 $ 12,319
Income Per Common Share
Basic Earnings
Per Share $ 1.48 $ 1.99 $ 1.00 $ 2.01
Diluted Earnings
Per Share $ 1.43 $ 1.91 $ 0.95 $ 1.90
Average Basic Shares
Outstanding 7,751 7,751 6,141 6,141
Average Diluted Shares
Outstanding 8,070 8,070 6,492 6,492
(a) The company ceased operations at its Beaver Falls, New York
facility on January 30, 1999. Part of the historical production demand
from this facility has been taken in-house by an integrated customer.
The balance of the production demand will be absorbed by other mills
within the company. It is estimated at this time that the asset value
write down and related charges due to this closure will be
approximately $7.8 million pre-tax or 4.8 million on a tax adjusted
basis. Additionally the company reclassified $.5 million of previously
accrued expenses related to its Owensboro, Kentucky mill from facility
closure expense to cost of sales. While all of these expenses were
directly related to the closure of the Kentucky mill, the
reclassification was necessary to conform with current guidelines.
(b) The company is a landlord to a cogeneration facility located
on its Beaver Falls, New York property. In December 1998, the owner of
the cogeneration facility sold the business and related equipment to
another party. The company received a one-time payment of
approximately $1.5 million as consideration for its consent to the
assignment of the related ground lease to the new owner.
(c) The company ceased operations at its Owensboro, Kentucky mill
on January 14, 1998. The mill's output will be absorbed by other mills
within the company. It is estimated at this time that the asset value
write down, because of the closure, will be $6,150,000 on a tax
adjusted basis.
(d) The effect of the charges related to the facility closures
and the cogeneration income related to the cogeneration facility have
been tax adjusted at a rate of 38.5%.
FIBERMARK, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
Unaudited
Unaudited
December 31 December 31
1998 1997
ASSETS
CURRENT ASSETS:
Cash $ 33,804 $ 37,275
Accounts Receivable 35,907 23,278
Inventories 47,893 37,486
Other 883 210
Deferred Income Taxes 3,769 3,769
TOTAL CURRENT ASSETS 122,256 102,018
PROPERTY, PLANT AND
EQUIPMENT, NET 125,238 90,243
GOODWILL, NET 50,126 45,179
OTHER INTANGIBLE
ASSETS, NET 8,012 8,146
PREPAID EXPENSE 1,379 1,073
OTHER LONG TERM
ASSETS 4,960 1,342.00
TOTAL ASSETS $311,971 $248,001
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 19,877 $ 18,822
Accrued Liabilities 19,026 21,213
TOTAL CURRENT LIABILITIES 38,903 40,035
LONG TERM LIABILITIES:
Long Term Debt 137,182 100,000
TOTAL LONG TERM DEBT 137,182 100,000
Deferred Gain 9,166 10,885
Deferred Income Tax 9,308 9,308
Other Long Term Liabilities 19,871 5,002
TOTAL LONG TERM LIABILITIES 175,527 125,195
STOCKHOLDERS' EQUITY:
Common Stock 68 8
Additional Paid in Capital 76,380 73,709
Accumulated Earnings 21,035 9,525
Accumulated Other Comprehensive Gain 58 (471)
TOTAL STOCKHOLDERS' EQUITY 97,541 82,771
TOTAL LIABILITY AND
STOCKHOLDERS' EQUITY $ 311,971 $ 248,001