Pioneer Announces 2001 First Quarter Results

Apr 26, 2001, 01:00 ET from Pioneer Companies, Inc.

    HOUSTON, April 26 /PRNewswire/ -- Pioneer Companies, Inc.
 (OTC Bulletin Board:   PIONA) today reported that revenues for the first quarter
 of 2001 increased to $87.7 million from $84.3 million for the first quarter of
 2000.  The Company incurred a net loss for the first quarter of 2001 of
 $20.1 million or $1.74 per share compared with a net loss of $9.6 million or
 $0.83 per share during the first quarter of 2000.
     Revenues during the 2001 first quarter increased approximately 4% compared
 to the first quarter of 2000, although higher ECU (electrochemical unit)
 prices largely were offset by lower sales volumes, particularly at the Tacoma
 chlor-alkali facility.  The average ECU price during the first quarter of 2001
 was $374, a $67 increase from a year ago.  Cost of sales increased despite
 lower chlor-alkali sales volume principally because of substantially higher
 power costs.  The Company's EBITDA (earnings before interest, income taxes,
 depreciation, amortization and unusual charges) for the 2001 first quarter was
 $13.5 million, essentially the same as the EBITDA of $12.8 million in the 2000
 period, before the run-up in power costs.
     In comparison with the fourth quarter of 2000, average ECU prices rose
 from $353 to $374.  As a result, revenues during the 2001 first quarter
 increased 9% although volumes declined somewhat.  A substantial increase in
 power costs was partially offset by a decrease in other manufacturing costs.
 EBITDA for the 2001 first quarter increased by $7.2 million to $13.5 million
 from the EBITDA of $6.3 million for the fourth quarter 2000.
     Results for the 2001 first quarter included a $4.3 million unusual charge
 for operating and financial restructuring charges.  The operating
 restructuring charges relate principally to severance provisions for personnel
 reductions at the Tacoma chlor-alkali facility and in administrative positions
 to reduce costs.  The financial restructuring charges reflect expenses
 incurred in efforts to restructure the Company's debt.
     First quarter 2001 results also include a tax provision of $1.5 million
 compared to a tax benefit in the first quarter of 2000 of $4.6 million.  The
 tax provision for the 2001 period resulted from a provision for taxes in
 Canada that could not be offset by future tax reductions arising from the
 application of net operating loss carryforwards in the United States.  At
 December 31, 2000, the Company established a 100% valuation allowance for its
 domestic net operating loss carryforwards.
     Michael J. Ferris, President and Chief Executive Officer, said, "During
 the first quarter of 2001, we achieved significant ECU pricing improvements.
 Demand for caustic soda continues to be steady and demand for chlorine appears
 to be recovering.  This is a period of economic uncertainty which makes it
 difficult to project price movement for the rest of this year.  However, we
 believe that ECU prices are likely to rise for the second quarter."
     He continued, "Power costs, which escalated dramatically during mid-2000,
 have remained at extraordinarily high levels, particularly in the Northwest.
 In response, we have curtailed operations by 50% at the Tacoma chlor-alkali
 facility pending a determination expected in September of our power costs
 under a new contract effective October 1, 2001."
     Mr. Ferris concluded, "We ended the quarter with cash of $5.0 million,
 borrowings under our revolving credit agreement of $31.9 million and total
 liquidity, cash plus borrowing availability under the revolver after a special
 reserve of $5 million, of over $14 million.  Because higher power costs
 substantially reduced our cash flows, we have suspended debt service, except
 on our revolver, and we are discussing with our secured lenders a
 comprehensive financial restructuring program that is consistent with our
 revised cash flow projections.  We are hopeful that a consensual plan can be
 reached."
     Pioneer, based in Houston, Texas, manufactures chlorine, caustic soda,
 hydrochloric acid and related products used in a variety of applications,
 including water treatment, plastics, pulp and paper, detergents, agricultural
 chemicals, pharmaceuticals and medical disinfectants.  The Company owns and
 operates five chlor-alkali plants and several downstream manufacturing
 facilities in North America.  Current financial information and press releases
 of Pioneer Companies, Inc. can be obtained from its Internet web site at
 www.piona.com.
     The Company will conduct a teleconference on Friday, April 27, 2001 at
 10:00 a.m. central time in order to discuss its financial results for the
 first quarter of 2001.  Individuals who are interested in listening to the
 teleconference may call (888) 214-7573 at that time and request to listen to
 the Pioneer earnings teleconference.  A replay of this teleconference will be
 available from 8AM (central time) on April 30 until 5PM on May 1, 2001 by
 dialing (800) 633-8284.
     Certain statements in this news release regarding future expectations for
 the Company's businesses and the Company's results of operations may be
 regarded as "forward looking statements" within the meaning of the Securities
 Litigation Reform Act.  Such statements are subject to various risks,
 including the Company's high financial leverage, the cyclical nature of the
 markets for many of the Company's products and raw materials and other risks
 discussed in detail in the Company's SEC filings.  Actual outcomes may vary
 materially.
 
                              PIONEER COMPANIES, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Unaudited, in thousands, except per share data)
 
                                                       Three Months Ended
                                                            March 31,
                                                       2001           2000
 
     Revenues                                        $87,731        $84,304
     Cost of sales                                    77,119         72,968
     Gross profit                                     10,612         11,336
     Selling, general and administrative expenses     10,582         11,271
     Unusual charge                                    4,262            872
     Operating loss                                   (4,232)          (807)
     Interest expense, net                           (15,663)       (13,492)
     Other income, net                                 1,303            128
     Loss before taxes                               (18,592)       (14,171)
     Income tax provision (benefit)                    1,538         (4,585)
     Net loss                                       $(20,130)       $(9,586)
 
     Net loss per share-
       Basic and Diluted                              $(1.74)        $(0.83)
 
     Weighted average number of
     common shares outstanding-
       Basic and Diluted                              11,538         11,529
 
 
                              PIONEER COMPANIES, INC.
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Unaudited, in thousands)
 
                                                       March 31,      Dec. 31,
                                                         2001           2000
 
     Assets
       Current assets                                  $84,290        $82,875
       Property, plant and equipment, net              293,978        300,384
       Other assets, net of accumulated amortization    24,508         27,218
       Excess cost over the fair value of net
        assets acquired, net of
        accumulated amortization                       177,368        179,560
       Total assets                                   $580,144       $590,037
 
     Liabilities and Stockholders' Equity (Deficit)
       Current liabilities                            $695,756       $685,535
       Long-term debt, less current maturities           3,907          4,086
       Other liabilities                                27,435         27,240
       Preferred stock                                   5,500          5,500
       Stockholders' deficit                          (152,454)      (132,324)
       Total liabilities and stockholders'
        equity (deficit)                              $580,144       $590,037
 
 
                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Unaudited, in thousands)
 
                                                         Three Months Ended
                                                              March 31,
                                                         2001           2000
 
     Cash flows from operations                        $(2,743)        $2,164
     Cash flows from investing activities               (2,313)        (3,273)
     Cash flows from financing activities                4,083          4,950
     Effect of exchange rate on cash                        82           (173)
 
     Net increase (decrease) in cash                     $(891)        $3,668
 
     Additional information:
     EBITDA                                            $13,455        $12,824
 
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SOURCE Pioneer Companies, Inc.
    HOUSTON, April 26 /PRNewswire/ -- Pioneer Companies, Inc.
 (OTC Bulletin Board:   PIONA) today reported that revenues for the first quarter
 of 2001 increased to $87.7 million from $84.3 million for the first quarter of
 2000.  The Company incurred a net loss for the first quarter of 2001 of
 $20.1 million or $1.74 per share compared with a net loss of $9.6 million or
 $0.83 per share during the first quarter of 2000.
     Revenues during the 2001 first quarter increased approximately 4% compared
 to the first quarter of 2000, although higher ECU (electrochemical unit)
 prices largely were offset by lower sales volumes, particularly at the Tacoma
 chlor-alkali facility.  The average ECU price during the first quarter of 2001
 was $374, a $67 increase from a year ago.  Cost of sales increased despite
 lower chlor-alkali sales volume principally because of substantially higher
 power costs.  The Company's EBITDA (earnings before interest, income taxes,
 depreciation, amortization and unusual charges) for the 2001 first quarter was
 $13.5 million, essentially the same as the EBITDA of $12.8 million in the 2000
 period, before the run-up in power costs.
     In comparison with the fourth quarter of 2000, average ECU prices rose
 from $353 to $374.  As a result, revenues during the 2001 first quarter
 increased 9% although volumes declined somewhat.  A substantial increase in
 power costs was partially offset by a decrease in other manufacturing costs.
 EBITDA for the 2001 first quarter increased by $7.2 million to $13.5 million
 from the EBITDA of $6.3 million for the fourth quarter 2000.
     Results for the 2001 first quarter included a $4.3 million unusual charge
 for operating and financial restructuring charges.  The operating
 restructuring charges relate principally to severance provisions for personnel
 reductions at the Tacoma chlor-alkali facility and in administrative positions
 to reduce costs.  The financial restructuring charges reflect expenses
 incurred in efforts to restructure the Company's debt.
     First quarter 2001 results also include a tax provision of $1.5 million
 compared to a tax benefit in the first quarter of 2000 of $4.6 million.  The
 tax provision for the 2001 period resulted from a provision for taxes in
 Canada that could not be offset by future tax reductions arising from the
 application of net operating loss carryforwards in the United States.  At
 December 31, 2000, the Company established a 100% valuation allowance for its
 domestic net operating loss carryforwards.
     Michael J. Ferris, President and Chief Executive Officer, said, "During
 the first quarter of 2001, we achieved significant ECU pricing improvements.
 Demand for caustic soda continues to be steady and demand for chlorine appears
 to be recovering.  This is a period of economic uncertainty which makes it
 difficult to project price movement for the rest of this year.  However, we
 believe that ECU prices are likely to rise for the second quarter."
     He continued, "Power costs, which escalated dramatically during mid-2000,
 have remained at extraordinarily high levels, particularly in the Northwest.
 In response, we have curtailed operations by 50% at the Tacoma chlor-alkali
 facility pending a determination expected in September of our power costs
 under a new contract effective October 1, 2001."
     Mr. Ferris concluded, "We ended the quarter with cash of $5.0 million,
 borrowings under our revolving credit agreement of $31.9 million and total
 liquidity, cash plus borrowing availability under the revolver after a special
 reserve of $5 million, of over $14 million.  Because higher power costs
 substantially reduced our cash flows, we have suspended debt service, except
 on our revolver, and we are discussing with our secured lenders a
 comprehensive financial restructuring program that is consistent with our
 revised cash flow projections.  We are hopeful that a consensual plan can be
 reached."
     Pioneer, based in Houston, Texas, manufactures chlorine, caustic soda,
 hydrochloric acid and related products used in a variety of applications,
 including water treatment, plastics, pulp and paper, detergents, agricultural
 chemicals, pharmaceuticals and medical disinfectants.  The Company owns and
 operates five chlor-alkali plants and several downstream manufacturing
 facilities in North America.  Current financial information and press releases
 of Pioneer Companies, Inc. can be obtained from its Internet web site at
 www.piona.com.
     The Company will conduct a teleconference on Friday, April 27, 2001 at
 10:00 a.m. central time in order to discuss its financial results for the
 first quarter of 2001.  Individuals who are interested in listening to the
 teleconference may call (888) 214-7573 at that time and request to listen to
 the Pioneer earnings teleconference.  A replay of this teleconference will be
 available from 8AM (central time) on April 30 until 5PM on May 1, 2001 by
 dialing (800) 633-8284.
     Certain statements in this news release regarding future expectations for
 the Company's businesses and the Company's results of operations may be
 regarded as "forward looking statements" within the meaning of the Securities
 Litigation Reform Act.  Such statements are subject to various risks,
 including the Company's high financial leverage, the cyclical nature of the
 markets for many of the Company's products and raw materials and other risks
 discussed in detail in the Company's SEC filings.  Actual outcomes may vary
 materially.
 
                              PIONEER COMPANIES, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Unaudited, in thousands, except per share data)
 
                                                       Three Months Ended
                                                            March 31,
                                                       2001           2000
 
     Revenues                                        $87,731        $84,304
     Cost of sales                                    77,119         72,968
     Gross profit                                     10,612         11,336
     Selling, general and administrative expenses     10,582         11,271
     Unusual charge                                    4,262            872
     Operating loss                                   (4,232)          (807)
     Interest expense, net                           (15,663)       (13,492)
     Other income, net                                 1,303            128
     Loss before taxes                               (18,592)       (14,171)
     Income tax provision (benefit)                    1,538         (4,585)
     Net loss                                       $(20,130)       $(9,586)
 
     Net loss per share-
       Basic and Diluted                              $(1.74)        $(0.83)
 
     Weighted average number of
     common shares outstanding-
       Basic and Diluted                              11,538         11,529
 
 
                              PIONEER COMPANIES, INC.
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Unaudited, in thousands)
 
                                                       March 31,      Dec. 31,
                                                         2001           2000
 
     Assets
       Current assets                                  $84,290        $82,875
       Property, plant and equipment, net              293,978        300,384
       Other assets, net of accumulated amortization    24,508         27,218
       Excess cost over the fair value of net
        assets acquired, net of
        accumulated amortization                       177,368        179,560
       Total assets                                   $580,144       $590,037
 
     Liabilities and Stockholders' Equity (Deficit)
       Current liabilities                            $695,756       $685,535
       Long-term debt, less current maturities           3,907          4,086
       Other liabilities                                27,435         27,240
       Preferred stock                                   5,500          5,500
       Stockholders' deficit                          (152,454)      (132,324)
       Total liabilities and stockholders'
        equity (deficit)                              $580,144       $590,037
 
 
                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Unaudited, in thousands)
 
                                                         Three Months Ended
                                                              March 31,
                                                         2001           2000
 
     Cash flows from operations                        $(2,743)        $2,164
     Cash flows from investing activities               (2,313)        (3,273)
     Cash flows from financing activities                4,083          4,950
     Effect of exchange rate on cash                        82           (173)
 
     Net increase (decrease) in cash                     $(891)        $3,668
 
     Additional information:
     EBITDA                                            $13,455        $12,824
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X62634374
 
 SOURCE  Pioneer Companies, Inc.