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Copyright © 2000 Smurfit-Stone Container Corporation
Smurfit-Stone Reports 3rd Quarter Net Income of $0.32/Share Reflecting Firm Packaging Prices and Reduced Fiber Costs
CHICAGO, October 24, 2000 -- Smurfit-Stone Container Corporation (Nasdaq: SSCC) reported third quarter net income of $79 million, or $0.32 per diluted share, compared with a net loss of $16 million, or $0.07 per diluted share, in the third quarter of 1999. Excluding restructuring costs and a nonrecurring gain, the company earned $0.31 per share. Sales for the three month period rose 25 percent to $2,233 million from $1,792 million the year before.
For the first nine months, Smurfit-Stone earned $157 million, or $0.68 per diluted share, compared with a year-ago loss of $129 million, or $0.60 per diluted share. Sales for the nine months were $6,290 million, compared with $5,227 million in the same period last year. Smurfit-Stone's sales and earnings include the results of St. Laurent Paperboard Inc. since June 1.
EBITDA (earnings before interest, taxes, depreciation, amortization, restructuring, and nonrecurring items) for the third quarter was $406 million, an increase of $161 million over the third quarter of 1999. EBITDA for the first nine months was $1,064 million compared to $598 million in the first nine months of last year.
Ray M. Curran, president and chief executive officer, explained that the significant increase in third quarter profitability reflected substantial year-over-year price increases for containerboard, market pulp and packaging as well as synergy savings, including improved efficiency in its mill system. Strong profits from the folding carton and boxboard operations also contributed to the improved third quarter results.
"As important as our year-over-year profit improvement was our increase in earnings over this year's second quarter," Curran said. Excluding restructuring, third quarter operating profit improved significantly over this year's second quarter, reflecting firm prices for packaging, reduced costs for recycled fiber, efficiency improvements, and the addition of St. Laurent.
Curran noted that the improvements were achieved in spite of higher energy and chemical costs and 324,000 tons of downtime in Smurfit-Stone's containerboard mill system, most of which was taken to manage inventories in a market in which demand for packaging remains flat. Excluding maintenance, third quarter downtime increased 56 percent over second quarter levels, to about 15 percent of the company's containerboard capacity.
Continued strong free cash flow enabled Smurfit-Stone to pay down $223 million in debt during the third quarter, reducing total debt outstanding to $5.5 billion at September 30. "Debt reduction remains our top financial priority, and our goal is to bring total debt down to approximately $5.3 billion by year's end," Curran said.
During the quarter, the company began to implement the estimated $50 million in synergy savings related to the St. Laurent acquisition. The company also reorganized part of its packaging operations, reducing non-container packaging divisions from three to two, thereby reducing costs and focusing on cross-marketing opportunities.
Curran said the factors affecting third quarter results will carry over in the fourth quarter. "We should benefit from stable recycled fiber costs and our own initiatives to improve operations. However, this environment remains a difficult one for paper and packaging companies. Key manufacturing sectors are slowing partly because of higher interest rates. Of greater impact has been the strong dollar which has encouraged imports and dampened exports of domestic goods that would be shipped in US-made packaging," he said.
"We must continue to manage inventory and working capital by curtailing mill production indefinitely. We may see little sequential improvement in fourth quarter performance as a result. However, Smurfit-Stone has a solid foundation and operating momentum that stand us in good stead in a demanding market environment," Curran said.
Smurfit-Stone Container Corporation discusses its quarterly financial performance on conference calls broadcast and archived on its Web site, www.smurfit-stone.com. The third quarter call will be held at 10:00 a.m. Central Time October 24.
Adobe® Acrobat® version of the Consolidated Statements of Operations and Supplementary Financial Information (12k)
Smurfit-Stone Container Corporation is the premier
manufacturer of paper- and paperboard-based packaging. Smurfit-Stone holds
industry-leading positions in the production of containerboard (including
white-top linerboard and recycled medium), corrugated containers, industrial
bags, and clay-coated recycled boxboard; and is the world's largest paper
recycler. In addition, Smurfit-Stone is a leading producer of folding
cartons, solid bleached sulfate, paper tubes and cores, and labels. The
company operates more than 300 facilities worldwide and employs approximately
This press release contains statements relating
to future results, which are forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. Actual
results may differ materially from those projected as a result of certain
risks and uncertainties, including but not limited to changes in general
economic conditions, continued pricing pressures in key product lines,
seasonality and higher recycled fiber costs, as well as other risks and
uncertainties detailed from time to time in the Company's Securities and
Exchange Commission filings.