Gaylord Container Reports Fiscal Second Quarter Results

Apr 26, 2001, 01:00 ET from Gaylord Container Corporation

    DEERFIELD, Ill., April 26 /PRNewswire/ -- Gaylord Container (Amex:   GCR)
 reported a net loss of $9.7 million ($0.17 per share) for the second quarter
 of fiscal 2001 ended March 31, 2001.  This compares to a net loss of
 $3.4 million ($0.06 per share) in the second quarter of fiscal 2000.
     Net sales were $265.8 million in the second quarter of fiscal 2001,
 compared to $291.2 million in the year-earlier period.  The Company reported
 operating income of $8.1 million in the second quarter of fiscal 2001 compared
 to operating income of $17.2 million in the year-ago second quarter.
     Commenting on the second quarter results, Gaylord's Chairman and Chief
 Executive Officer Marvin A. Pomerantz said, "Anemic domestic economic
 conditions and an excessively strong dollar translated into reduced primary
 and converted product shipments compared to the same quarter last fiscal year,
 which more than offset the gains in pricing achieved during that same period.
 In addition, the benefit of lower recovered fiber costs and lower SG&A
 expenses compared to the year-ago quarter were not enough to offset escalating
 energy costs, primarily for natural gas."
 
     OPERATING RESULTS
     Production of containerboard decreased to 274 thousand tons for the second
 quarter of fiscal 2001 compared to 314 thousand tons in the fiscal 2000 second
 quarter.  Unbleached kraft paper production decreased to 65 thousand tons
 versus 68 thousand tons for the same quarter in fiscal 2000.  Corrugated
 shipments for second quarter fiscal 2001 decreased to 3.4 billion square feet
 from 3.9 billion square feet during the year-ago quarter.
     Looking ahead, Mr. Pomerantz remarked, "Despite the soft demand we have
 recently experienced, inventories remain at the Company's target levels.  With
 the annual maintenance outage at our Bogalusa mill behind us and with slight
 signs of customer order pick up, we anticipate increased shipments of primary
 and converted products during the upcoming quarter.  However, given the
 current weak economic climate, we do not expect financial results in the
 upcoming quarter to vary materially from current results."
     Mr. Pomerantz added, "In this business environment we are continuing to
 focus our efforts on the controllable areas of our business, including working
 capital, capital expenditures and overhead costs."
     Gaylord Container Corporation is a major national manufacturer and
 distributor of brown paper packaging products including corrugated containers
 and sheets, multiwall and retail bags, containerboard and unbleached kraft
 paper.  For more information, visit our web site at www.gaylordcontainer.com .
 
     Forward-looking statements in this release are made pursuant to the safe
 harbor provisions of the Private Securities Litigation Reform Act of 1995.
 Such forward-looking statements are subject to risks and uncertainties, and
 actual results could differ materially.  Such risks and uncertainties include,
 but are not limited to, general economic and business conditions both in the
 U.S., and globally, competitive market pricing, increases in raw material,
 energy and other manufacturing costs, fluctuations in demand for the Company's
 products, potential equipment malfunctions, and pending litigation.  For
 additional information, see the Company's annual report on Form 10-K for the
 most recent fiscal year and Form 10-Q for the most recent fiscal quarter.
 
 
                         GAYLORD CONTAINER CORPORATION
                    SELECTED FINANCIAL AND OPERATIONAL DATA
 
                            Three Months Ended,         Six Months Ended
                                March 31                   March 31
                                          % Inc.                      % Inc.
                        2001      2000     (Dec.)    2001      2000    (Dec.)
                         (In millions of dollars, except per share amounts)
 
     Financial Summary
     Net sales         $265.8   $291.2     (8.7%)  $560.9    $570.8   (1.7%)
     Operating income     8.1     17.2    (52.9%)    32.3      40.1  (19.5%)
     Interest expense
      - net              22.9     23.0     (0.4%)    45.3      45.1     0.4%
     Loss before
      taxes and
      accounting
      change            (14.6)   ( 5.4)  (170.4%)   (12.1)  ( 4.0)(202.5%)
     Income tax
      benefit             4.9      2.0    145.0%      3.9       1.5   160.0%
     Accounting change     --       --       N/M      0.1        --      N/M
     Net loss            (9.7)   ( 3.4)  (185.3%)   ( 8.1)   ( 2.5)  (224.0%)
 
     Net loss per
      share
       Basic           ($0.17)  ($0.06)  (183.3%) ($0.15)   ($0.05)(200.0%)
       Diluted (A)        N/A      N/A       N/A      N/A       N/A      N/A
 
     Basic common
      shares
      outstanding        55.9     53.8      3.9%     55.4      53.7     3.2%
     Diluted common
      shares
      outstanding        55.9     54.1      3.3%     55.4      54.1     2.4%
 
     Depreciation and
      amortization (B)   13.7     13.7      0.0%     27.4      27.0     1.5%
 
     Capital
      expenditures
      (including
      capitalized
      interest)           8.0     11.7    (31.6%)    15.2      20.1  (24.4%)
 
     Operating Summary
     Mill production
     (thousands of tons)
       Containerboard   274.3    314.3    (12.7%)   588.9     645.9   (8.8%)
       Unbleached
        kraft paper      65.5     67.7     (3.2%)   132.6     139.4   (4.9%)
 
     Corrugated
      shipments
      (billions of
      square feet)        3.4      3.9    (12.8%)     7.3       7.7   (5.2%)
 
     Industrial and
      Retail Bags (C)
     (thousands of tons) 75.2     81.1     (7.3%)   156.5     143.9      N/M
 
     Selected Balance
      Sheet and Other                      % Inc.                    % Inc.
      Data             3/31/01 12/31/00    (Dec.)  3/31/01  3/31/00    (Dec.)
     Cash and
      equivalents        $4.7     $5.8    (19.0%)    $4.7     $11.4  (58.8%)
     Debt               953.1    946.2      0.7%    953.1     976.9   (2.4%)
     Liquidity -
      Revolver
      availability and
      cash              104.7    129.8    (19.3%)   104.7     112.9   (7.3%)
     EBITDA              21.1     37.2    (43.3%)    58.3      66.0  (11.7%)
 
     (A) Not presented where the effect of potential shares is antidilutive.
     (B) Includes $0.7 million and $1.4 million of deferred financing costs
         included in interest expense for the three- and six- month periods
         ended March 31, 2001, respectively, and $0.6 million and $1.1 million
         for the three- and six-month periods ended March 31, 2000,
         respectively.
     (C) The shipments for the six months ended March 31, 2000 include the
         shipments of S&G Packaging after October 28, 1999, the date it became
         wholly owned by Gaylord Container Corporation.
     N/M = Not Meaningful
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X35770204
 
 

SOURCE Gaylord Container Corporation
    DEERFIELD, Ill., April 26 /PRNewswire/ -- Gaylord Container (Amex:   GCR)
 reported a net loss of $9.7 million ($0.17 per share) for the second quarter
 of fiscal 2001 ended March 31, 2001.  This compares to a net loss of
 $3.4 million ($0.06 per share) in the second quarter of fiscal 2000.
     Net sales were $265.8 million in the second quarter of fiscal 2001,
 compared to $291.2 million in the year-earlier period.  The Company reported
 operating income of $8.1 million in the second quarter of fiscal 2001 compared
 to operating income of $17.2 million in the year-ago second quarter.
     Commenting on the second quarter results, Gaylord's Chairman and Chief
 Executive Officer Marvin A. Pomerantz said, "Anemic domestic economic
 conditions and an excessively strong dollar translated into reduced primary
 and converted product shipments compared to the same quarter last fiscal year,
 which more than offset the gains in pricing achieved during that same period.
 In addition, the benefit of lower recovered fiber costs and lower SG&A
 expenses compared to the year-ago quarter were not enough to offset escalating
 energy costs, primarily for natural gas."
 
     OPERATING RESULTS
     Production of containerboard decreased to 274 thousand tons for the second
 quarter of fiscal 2001 compared to 314 thousand tons in the fiscal 2000 second
 quarter.  Unbleached kraft paper production decreased to 65 thousand tons
 versus 68 thousand tons for the same quarter in fiscal 2000.  Corrugated
 shipments for second quarter fiscal 2001 decreased to 3.4 billion square feet
 from 3.9 billion square feet during the year-ago quarter.
     Looking ahead, Mr. Pomerantz remarked, "Despite the soft demand we have
 recently experienced, inventories remain at the Company's target levels.  With
 the annual maintenance outage at our Bogalusa mill behind us and with slight
 signs of customer order pick up, we anticipate increased shipments of primary
 and converted products during the upcoming quarter.  However, given the
 current weak economic climate, we do not expect financial results in the
 upcoming quarter to vary materially from current results."
     Mr. Pomerantz added, "In this business environment we are continuing to
 focus our efforts on the controllable areas of our business, including working
 capital, capital expenditures and overhead costs."
     Gaylord Container Corporation is a major national manufacturer and
 distributor of brown paper packaging products including corrugated containers
 and sheets, multiwall and retail bags, containerboard and unbleached kraft
 paper.  For more information, visit our web site at www.gaylordcontainer.com .
 
     Forward-looking statements in this release are made pursuant to the safe
 harbor provisions of the Private Securities Litigation Reform Act of 1995.
 Such forward-looking statements are subject to risks and uncertainties, and
 actual results could differ materially.  Such risks and uncertainties include,
 but are not limited to, general economic and business conditions both in the
 U.S., and globally, competitive market pricing, increases in raw material,
 energy and other manufacturing costs, fluctuations in demand for the Company's
 products, potential equipment malfunctions, and pending litigation.  For
 additional information, see the Company's annual report on Form 10-K for the
 most recent fiscal year and Form 10-Q for the most recent fiscal quarter.
 
 
                         GAYLORD CONTAINER CORPORATION
                    SELECTED FINANCIAL AND OPERATIONAL DATA
 
                            Three Months Ended,         Six Months Ended
                                March 31                   March 31
                                          % Inc.                      % Inc.
                        2001      2000     (Dec.)    2001      2000    (Dec.)
                         (In millions of dollars, except per share amounts)
 
     Financial Summary
     Net sales         $265.8   $291.2     (8.7%)  $560.9    $570.8   (1.7%)
     Operating income     8.1     17.2    (52.9%)    32.3      40.1  (19.5%)
     Interest expense
      - net              22.9     23.0     (0.4%)    45.3      45.1     0.4%
     Loss before
      taxes and
      accounting
      change            (14.6)   ( 5.4)  (170.4%)   (12.1)  ( 4.0)(202.5%)
     Income tax
      benefit             4.9      2.0    145.0%      3.9       1.5   160.0%
     Accounting change     --       --       N/M      0.1        --      N/M
     Net loss            (9.7)   ( 3.4)  (185.3%)   ( 8.1)   ( 2.5)  (224.0%)
 
     Net loss per
      share
       Basic           ($0.17)  ($0.06)  (183.3%) ($0.15)   ($0.05)(200.0%)
       Diluted (A)        N/A      N/A       N/A      N/A       N/A      N/A
 
     Basic common
      shares
      outstanding        55.9     53.8      3.9%     55.4      53.7     3.2%
     Diluted common
      shares
      outstanding        55.9     54.1      3.3%     55.4      54.1     2.4%
 
     Depreciation and
      amortization (B)   13.7     13.7      0.0%     27.4      27.0     1.5%
 
     Capital
      expenditures
      (including
      capitalized
      interest)           8.0     11.7    (31.6%)    15.2      20.1  (24.4%)
 
     Operating Summary
     Mill production
     (thousands of tons)
       Containerboard   274.3    314.3    (12.7%)   588.9     645.9   (8.8%)
       Unbleached
        kraft paper      65.5     67.7     (3.2%)   132.6     139.4   (4.9%)
 
     Corrugated
      shipments
      (billions of
      square feet)        3.4      3.9    (12.8%)     7.3       7.7   (5.2%)
 
     Industrial and
      Retail Bags (C)
     (thousands of tons) 75.2     81.1     (7.3%)   156.5     143.9      N/M
 
     Selected Balance
      Sheet and Other                      % Inc.                    % Inc.
      Data             3/31/01 12/31/00    (Dec.)  3/31/01  3/31/00    (Dec.)
     Cash and
      equivalents        $4.7     $5.8    (19.0%)    $4.7     $11.4  (58.8%)
     Debt               953.1    946.2      0.7%    953.1     976.9   (2.4%)
     Liquidity -
      Revolver
      availability and
      cash              104.7    129.8    (19.3%)   104.7     112.9   (7.3%)
     EBITDA              21.1     37.2    (43.3%)    58.3      66.0  (11.7%)
 
     (A) Not presented where the effect of potential shares is antidilutive.
     (B) Includes $0.7 million and $1.4 million of deferred financing costs
         included in interest expense for the three- and six- month periods
         ended March 31, 2001, respectively, and $0.6 million and $1.1 million
         for the three- and six-month periods ended March 31, 2000,
         respectively.
     (C) The shipments for the six months ended March 31, 2000 include the
         shipments of S&G Packaging after October 28, 1999, the date it became
         wholly owned by Gaylord Container Corporation.
     N/M = Not Meaningful
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X35770204
 
 SOURCE  Gaylord Container Corporation