Smurfit-Stone Reports 1st Quarter Results
CHICAGO, April 22, 1999 -- Smurfit-Stone Container Corporation (Nasdaq: SSCC) reported a net loss of $88 million or $.41 per diluted share in the first quarter of 1999, compared to a net loss of $5 million or $.04 per diluted share, in the first quarter of 1998.
The first quarter 1999 results included a charge of $.02 per share, related to the shutdown of former Jefferson Smurfit Corporation packaging plants under the company's restructuring program. First quarter 1998 results included an extraordinary charge of $.11 per diluted share related to the early extinguishment of the company's bank debt and a charge of $.03 per share related to the cumulative effect of an accounting change. Sales for the quarter were $1,720 million, compared to $764 million in the same period last year.
Smurfit-Stone Container Corporation was formed on November 18, 1998 as a result of the merger of Jefferson Smurfit Corporation and Stone Container Corporation. Smurfit-Stone's first quarter 1998 results include only the results of Jefferson Smurfit Corporation.
Commenting on the results, Ray Curran, president and chief executive officer, said that average prices for corrugated containers, containerboard and newsprint were down compared to the levels of the first quarter and fourth quarter of last year. In addition, the company took market-related downtime in newsprint. These factors had a negative impact on operating income.
However, Curran said, "Demand for packaging products was very strong. As a result, we increased shipment volumes of corrugated containers, folding cartons and industrial bags, compared to the first quarter of 1998. More important, the strong demand for corrugated enabled us to stabilize prices and begin to implement a price increase in March." Curran explained that the company gained minimal benefit from the price increase in the first quarter but expected to implement the bulk of the increase in April and May.
"One of the most important accomplishments of the quarter was that we were able to generate positive cash flow from working capital reductions and asset sales. As a result, we were able to reduce debt by approximately $130 million from year-end levels," Curran said. "Tuesday, the company sold the remaining shares of Abitibi-Consolidated, Inc., a major non-core asset, netting about $414 million in proceeds that will be applied to debt reduction. We continue to work on the disposal of non-core assets."
Curran noted that the company closed six packaging plants -- four corrugated container plants, a pallet plant and a folding carton plant -- which were made redundant by the merger. The company expects to continue the restructuring of its packaging system through the year.
Looking ahead, Curran said, "The first quarter should represent a bottoming for Smurfit-Stone, as well as for the packaging industry. If demand continues strong, we expect to see a realization of recent price initiatives in the second quarter. An improving market and price trend will position us well to further our agenda of strengthening our balance sheet."
Adobe(r) Acrobat(r) version of the Consolidated Statements of Operations and Supplementary Financial Information (1,300k)
To obtain Adobe(R) Acrobat(R) Reader, click here:
This document contains certain forward-looking statements within the meaning of Section 21 E of the Securities Exchange Act of 1934, as amended, about Smurfit-Stone Container Corporation. Although the company believes that, in making any such statements, its expectations are based on reasonable assumptions, any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. When used in this document, the words "anticipates," "believes," "expects," "intends," and similar expressions as they relate to Smurfit-Stone Container Corporation or its management are intended to identify such forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. Important factors that could cause actual results to differ materially from those in forward-looking statements, certain of which are beyond the control of Smurfit-Stone Container Corporation, include: the impact of general economic conditions in the U.S. and Canada and in other countries in which Smurfit-Stone Container Corporation and its subsidiaries currently do business (including Asia, Europe and Latin and South America); industry conditions, including competition and product and raw material prices; fluctuations in exchange rates and currency values; capital expenditure requirements; legislative or regulatory requirements, particularly concerning environmental matters; interest rates; access to capital markets; the timing of and value received in connection with asset divestitures; and obtaining required approvals, if any, of debt holders. The actual results, performance or achievement by Smurfit-Stone Container Corporation could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations and financial condition of Smurfit-Stone Container Corporation.