Wausau Paper reports loss, but sees progress toward profitability
Wausau Paper reported "a net loss for the second quarter of $9.6 million or $0.20 cents per share compared with net earnings of $4.8 million or $0.09 per share in the previous year."
The company reported net sales declined 4 percent to $305.2 million and shipments decreased 14 percent. Wausau Paper reported a net loss of $16.4 million for the first half of this year compared to the net earnings of $19.7 million it had for the same time period in 2007.
In a statement, Thomas Howatt, Wausau president and CEO, reported the economic weakness notable in 2007 accelerated this year adversely affecting demand in several key markets. "At the same time, record-high energy and near-record fiber costs pressured margins with those costs rising a combined $37 million through the first half of 2008 over year-ago levels."
But Howatt said progress was seen in the second quarter in the Towel and Tissue and Printing and Writing business segments. Improvements in those areas - part of the company's profit recovery plan - are expected to improve profitability in the coming quarters and enable the company to achieve its targeted profitability, Howatt said. The Printing and Writing segment reported a second quarter operating loss of $16.6 million compared to a $2.3 million loss in 2007. The company reported that was primarily because of the closure of the Groveton N.H. mill.
"We remain on pace to return Printing and Writing to profitable levels in the third quarter despite a significant decline in uncoated free sheet demand and a further escalation of input costs. Our move to a two-mill manufacturing system has allowed us to focus on core color and premium products."
The company reported it sold about 900 acres of timberlands in the second quarter and is progressing to sell 42,000 acres of what it calls non-strategic timberlands.
"We expect the economic weakness experienced in the first half of 2008 to extend into the second half of the year while fiber and energy prices are likely to remain at elevated levels," Howatt said, but he added a mixture of initiatives are creating an earnings momentum.
"As a result, we expect third-quarter results to improve meaningfully over the second quarter with earnings in the range of $0.06-0.08 per share excluding timberland sales gains and charges related to the Groveton mill closure. On the same basis, third quarter 2007 earnings were $0.09 per share."
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