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Copyright © 2000-2001 Smurfit-Stone Container Corporation
Smurfit-Stone Earns $.26/Share in 4th Quarter 2000 Compared to $.20/Share in 4th Quarter 2000 Compared to $.20/Share in 4th Quarter 1999
CHICAGO, January 29, 2001 Smurfit-Stone Container Corporation (Nasdaq: SSCC) today reported net income available to common shareholders of $67 million, or $.27 per diluted share, for the fourth quarter of 2000, compared to net income of $286 million in 1999. The company earned $.26 per share from continuing operations, excluding restructuring charges of $1 million and an after-tax gain of $6 million. The company earned $.20 per share from continuing operations in 1999, excluding an after-tax gain of $245 million resulting from the divestiture of non-core assets. Sales for the period were $2.2 billion compared to $2.0 billion in the fourth quarter of 1999.
For the full year 2000, the company reported net income available to common shareholders of $224 million, or $.96 per diluted share, compared to net income of $157 million, or $.71 per diluted share, in 1999. The 1999 results included after-tax gains on the sale of non-core assets of $268 million, or $1.22 per diluted share. Sales for the full year were $8.8 billion compared to $7.4 billion in 1999. Smurfit-Stones sales and earnings include the results of St. Laurent Paperboard Inc. since June 1, 2000.
Commenting on the quarterly results, Ray Curran, president and chief executive officer, said the favorable year-over-year profit comparison resulted primarily from higher average prices for the companys paperboard and packaging products. In addition, the acquisition of St. Laurent added approximately $45 million of operating profits this quarter. These additions more than offset the impact of higher interest expense and energy costs, and substantial mill downtime. The company took 320,000 tons of downtime in its containerboard mill system during the quarter, including 259,000 tons to manage inventory. Total downtime for the quarter represented about 17 percent of the companys containerboard capacity.
Product prices were unchanged in the fourth quarter compared to third quarter levels, with the exception of recycled fiber, which declined. Despite the pricing stability, operating profits decreased from third quarter levels, primarily because of a drop in demand for corrugated containers and market pulp, which prompted further downtime. Energy costs continued to trend upward during the quarter, although the impact was offset by the lower recycled fiber costs.
The packaging business faced many challenges in 2000. In a year of overall economic growth, a strong dollar resulted in a drop in US manufacturing activity and domestic packaging demand, Curran said. We countered these negatives through inventory management and successful implementation of product price increases.
In addition, the company moved forward with strategic objectives. We strengthened our packaging portfolio with the acquisition of St. Laurent Paperboard and continued to improve the efficiency of our mill system. We also carefully managed our finances to generate free cash flow for debt reduction, Curran said. The company reduced debt by $150 million in the fourth quarter and has eliminated a total of $572 million since the acquisition of St. Laurent Paperboard. Total debt stood at approximately $5.3 billion at the end of the quarter.
Looking ahead to the next two quarters, Smurfit-Stone anticipates several factors that will put downward pressure on current profit levels. These include sluggish packaging demand in a weakening overall economy, reduced containerboard pricing and high energy costs. In this climate, Smurfit-Stone will focus on producing to orders only and generating cash flow. Substantial economic downtime is anticipated. We need a weaker dollar to generate the economic stimulus to revitalize containerboard demand, Curran said.
Smurfit-Stone discusses its quarterly financial performance on conference calls broadcast and archived on its website, www.smurfit-stone.com. The fourth quarter call will be Monday, January 29 at 11am Central Time.
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 worlds 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 40,000 people.
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.