Just for comparison, here is what's happening at what I assume
is a competitor of Repap. Interesting that they are running
at 98% of capacity and still losing money. How bad does it get
in a downturn? Stock price down about 60% today. Ouch!
Very similar company. Coated and other paper, highly leveraged.
Read on....
OAKLAND, Calif.--(BUSINESS WIRE)--July 29, 1998--Crown Vantage
Inc. (NASDAQ:CVAN) today reported a net loss of $12.3 million or $1.32
per share, compared to a net loss of $14.2 million or $1.55 per share
in the first quarter of 1998 and a net loss of $10.9 million or $1.22
per share in the second quarter of 1997.
The 1998 second quarter results include a charge of $2.5 million,
with a per-share impact of 17 cents for a 5-percent work force
reduction announced in May, which will reduce costs by an estimated $8
million per year. The operating loss of $3.0 million in the second
quarter of 1998 compared favorably to an operating loss of $5.8
million in the prior quarter versus a loss of $1.5 million in the 1997
second quarter.
Net sales for the 1998 second quarter were $215.4 million,
compared to $221.8 million in the first quarter and $224.9 million in
the 1997 second quarter.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) for this year's second quarter were $18.6 million, compared
to $15.7 million in the first quarter and $20.4 million in the
year-ago second quarter.
The failure of two transformers owned by the company's energy
provider at the St. Francisville, La., pulp and paper mill reduced
operating profit by an estimated $1.6 million for the quarter through
a combination of lost production and equipment repair. "With the
exception of these uncontrollable events, the mill's coated groundwood
production neared 98 percent of capacity levels, contributing to the
second quarter's improved performance," said Ernest S. Leopold,
chairman and chief executive officer.
"Another favorable development is the start-up this month of a
second coater on No. 4 paper machine at the Port Huron, Michigan,
mill, which provides the capability to expand market penetration for
higher value-added coated specialty papers used for labels and other
premium packaging applications," Leopold said. "Economical
manufacturing enhancements such as this project continue the upgrade
of our product mix across the mill system and improve our competitive
position."
A net loss of $26.5 million or $2.86 per share for the first six
months of 1998 compared to a net loss of $20.5 million or $2.33 per
share for the first half of 1997. Net sales for the first six months
of 1998 were $437.2 million compared to $453.6 million in the
comparable period of 1997. For the first six months of 1998, EBITDA
totaled $34.3 million compared to $41.8 million in the first six
months of 1997.
The company announced separately today that it continues to
explore various alternatives to fund the repurchase of the company's
pay-in-kind notes held by Fort James under the terms of the previously
announced option, although it is no longer actively exploring doing so
by means of the separation of its specialty paper businesses from its
St. Francisville pulp and paper mill, with the possibility of
divestiture.
Crown Vantage, headquartered in Oakland, California, manufactures
papers for printing, publishing and specialty packaging and converting
applications at its 10 mills in the United States and Scotland. Crown
Vantage information can be found on the Internet at
www.crownvantage.com. |
