Wausau Paper Announces Third-Quarter Earnings, Record Sales and Shipments

• Published in: Business Wire
• Format: Newsletter
• Language: English
• Published: New York Business Wire 24.10.2006
• Subjects: Accounting policies; Administrative expenses; Audited financial statements; Capital expenditures; Capital leases; Corporate profits; Current liabilities; Dilution; Earnings per share; Energy prices; Financial performance; Howatt, Thomas J; Incentive plans; Income taxes; Net losses; Profitability; Pulp & paper mills; Safe harbor; Sales; Shareholders equity; Stockholders; Tax reform; Writing; MOSINEE, Wis

Note 1. Balance sheet amounts at September 30, 2006, are unaudited. The December 31, 2005, amounts are derived from audited financial statements.Note 2. Effective January 1, 2006, Wausau Paper adopted Statement of Financial Accounting Standard No. 123 (revised 2004), "Share-Based Payment." This accounting standard requires compensation cost relating to share-based payment transactions be recognized in the financial statements. We elected the modified prospective transition method to implement this new standard. Share-based payment awards that are settled in cash continue to be classified as a liability; however, rather than remeasuring the award at the intrinsic- value each reporting period, the award is remeasured at its fair value each reporting period. The difference between the liability as previously computed (i.e., intrinsic value) and the fair value of the liability award on the date of adoption, net of any related tax effects, is recorded as a cumulative effect of a change in accounting principle.Note 3. In July 2005, Wausau Paper announced plans to permanently close the sulfite pulp mill at our Brokaw, Wisconsin, facility. The pulp mill was closed in November 2005 and the related long-lived assets were abandoned. No closure-related charges impacting cost of sales were incurred during the three-month period ended September 30, 2006. The cost of sales for the three-month period ended September 30, 2005, as reflected in the Condensed Statements of Operations, includes a pre-tax charge of $20.6 million for adjustments of pulp mill inventory to net realizable value and accelerated depreciation on assets that were abandoned upon closure. The cost of sales for the nine-month period ended September 30, 2006 and 2005, include $0.1 million and $29.9 million, respectively, in pre-tax charges for adjustments of pulp mill inventory to net realizable value and, in 2005, accelerated depreciation on the long-lived assets that were abandoned upon closure. Restructuring expense for the three-month period ended September 30, 2006 and 2005, reflects a pre-tax charge of $0.01 million and $0.2 million, respectively, for other associated closure costs. Restructuring expense for the nine-month period ended September 30, 2006 and 2005, reflects a pre-tax charge of $0.2 million and $0.4 million, respectively, for other associated closure costs.Note 4. Interim Segment Information Wausau Paper has reclassified certain prior-year interim segment information to conform to the 2006 presentation. The reclassification is the result of a reporting change, effective January 1, 2006, for timberland assets held for sale and gains from the disposal of such assets from operating segments to corporate. Wausau Paper's operations are classified into three principal reportable segments: Specialty Products, Printing & Writing, and Towel & Tissue, each providing different products. Separate management of each segment is required because each business unit is subject to different marketing, production, and technology strategies. Specialty Products produces specialty papers at its manufacturing facilities in Rhinelander, Wisconsin; Mosinee, Wisconsin; and Jay, Maine. Specialty Products also includes two converting facilities that produce laminated roll wrap and related specialty finishing and packaging products. Printing & Writing produces a broad line of premium printing and writing grades at manufacturing facilities in Brokaw, Wisconsin; Groveton, New Hampshire; and Brainerd, Minnesota. Printing & Writing also includes a converting facility that converts printing and writing grades. Towel & Tissue produces a complete line of towel and tissue products that are marketed along with soap and dispensing systems for the "away-from-home" market. Towel & Tissue operates a paper mill in Middletown, Ohio and a converting facility in Harrodsburg, Kentucky.