Wausau Paper reportedthat:
- Third-quarter net earnings of $0.10 per diluted share compared with second-quarter and prior-year third-quarter earnings of $0.07 per diluted share and $0.27 per diluted share, respectively.
- Excluding special items, third-quarter adjusted net earnings of $0.11 per diluted share compared with second-quarter and prior-year third-quarter earnings of $0.08 per diluted share and $0.20 per diluted share, respectively.
- The Company has been evaluating strategic alternatives for the Paper unit's print & color business since the first quarter and has engaged a financial advisor to assist in the process.
- The Company commenced a process to sell its remaining timberlands.
The Company reported third-quarter net earnings of $5.2 million, or $0.10 per diluted share, compared with net earnings of $13.2 million, or $0.27 per diluted share in the prior year. Net sales decreased 3 percent to $266 million, as shipments decreased 5 percent to 160,000 tons, due primarily to planned volume reductions in the Paper segment's print & color market category.
Third-quarter results included after-tax capital-related expenses of $0.4 million, or $0.01 per diluted share, associated with the Tissue segment's expansion project in Harrodsburg, Kentucky, and after-tax timberland sales gains of $0.1 million, or less than $0.01 per diluted share. Prior-year results included after-tax gains of $2.6 million, or $0.05 per diluted share, from the sale of timberlands; and after-tax gains of $0.8 million, or $0.02 per diluted share, as a result of Internal Revenue Service guidance regarding calculation of a 2009 alternative fuel mixtures tax credit. Excluding these items, adjusted third-quarter net earnings were $5.5 million, or $0.11 per diluted share, compared with adjusted net earnings of $9.8 million, or $0.20 per diluted share, last year. Adjusted net earnings for the first nine months of 2011 were $10.6 million, or $0.21 per diluted share, compared with prior-year earnings of $17.2 million, or $0.35 per diluted share. Although this comparison is a non-GAAP measure, the Company believes that the presentation of adjusted net earnings provides a useful analysis of ongoing operating trends. Adjusted net earnings for the three-month and nine-month periods are reconciled to GAAP earnings.
Commenting on third-quarter results, Thomas J. Howatt, president and CEO, said, "Consistent with our earlier expectations, third-quarter earnings improved from second-quarter levels as pricing actions and improved product mix offset record-high fiber costs and continuing demand weakness. While market conditions cause us to be cautious in our near-term earnings outlook, our focus remains on strategic execution and long-term shareholder value creation," Mr. Howatt continued. "To that end, our Board of Directors approved the conditional sale of our remaining timberland assets and reaffirmed the Company's initiatives to evaluate strategic alternatives for the print & color portion of our Paper business unit. These initiatives are entirely consistent with our approach to support investment in our highly successful Tissue business and narrow our Paper unit focus to growth-oriented technical markets."