1. CONTRACT FORMATION-IF THIS OFFER TO SELL IS ISSUED BY SELLER PRIOR TO THE ISSUANCE OF A PURCHASE ORDER BY BUYER, ACCEPTANCE OF THIS OFFER TO SELL IS EXPRESSLY LIMITED TO ACCEPTANCE BY BUYER OF ALL OF THE TERMS AND CONDITIONS CONTAINED HEREIN. ANY TERMS CONTAINED IN BUYERS PURCHASE ORDER OR ANY OTHER FORM OR COMMUNICATION RECEIVED FROM BUYER WHICH ARE IN ADDITION TO OR DIFFERENT FROM THE TERMS AND CONDITIONS CONTAINED HEREIN ARE EXPRESSLY OBJECTED TO AND SHALL BE DEEMED REJECTED BY SELLER, UNLESS EXPRESSLY ACCEPTED IN WRITING BY SELLER. Unless Seller receives written notice from Buyer of any objection hereto within fifteen (15) days after the date of Buyers receipt of this Offer to Sell and in all events prior to any delivery or other performance by Seller hereunder, any subsequent conduct of Buyer which expresses an intention to purchase the goods described herein shall constitute an unconditional acceptance by Buyer of all the terms and conditions of this Offer to Sell (1) Buyer issues a Purchase Order in response to or in acknowledgment of this Offer to Sell which does not effectively state that it is expressly conditional on assent by Seller to all of the additional and different terms and conditions contained therein and (2) this Offer to Sell and Buyer’s Purchase Order are in substantial agreement with regard to the “bargained terms” (usually including, but not limited to, quantity, description, price, payment terms, shipping instructions, etc.), Buyer’s Purchase Order will constitute an acceptance of all of the terms and conditions of this Offer to Sell and the writings of the parties will establish a contract for the purchase and sale of the goods described herein. If (1) Buyer issues a Purchase Order in response to or in acknowledgment of this Offer to Sell which effectively states that it is expressly conditional on assent by Seller to all of the additional and different terms and conditions contained therein, (2) Seller does not affirmatively assent in writing to such terms and conditions, and (3) Buyer accepts Seller’s performance hereunder, Buyer shall be deemed to have waived the express condition that all such additional and different terms and conditions be assented to by Seller. All Purchase Orders issued by Buyer will be subject to approval by Seller. If this Offer to Sell is issued by Seller subsequent to the issuance of and in response to or in acknowledgment of a Purchase Order by Buyer, acceptance by Seller of such Purchase Order is expressly conditional on assent by Buyer to all of the additional and different terms and conditions contained here. If (1) such Purchase Order effectively states that acceptance by Seller of such Purchase Order is expressly limited to the terms and conditions contained therein, (2) Seller does not affirmatively assent in writing to such terms and conditions, and (3) Buyer accepts Seller’s performance hereunder, Buyer shall be deemed to have waived the express condition that acceptance by Seller of such Purchase Order be limited to the terms and conditions contained therein.
2. CANCELLATION BY BUYER – BUYER SHALL NOT HAVE THE RIGHT TO CANCEL OR SUSPEND ALL OR ANY UNDELIVERED OR UNEXECUTED PORTION OF THIS OFFER TO SELL. IF, CONTRARY TO THE PROHIBITIONS OF THIS PARAGRAPH 2, BUYER EXPRESSLY OR, BY BUYER’S ACTIONS OR OMISSIONS, IMPLIEDLY CANCELS OR SUSPENDS ALL OR ANY SUCH UNDELIVERED OR UNEXECUTED PORTION OF THIS OFFER TO SELL, BUYER AGREES TO MAKE PAYMENT TO SELLER, IMMEDIATELY UPON DEMAND BY SELLER THEREFORE, OF ALL OUTSTANDING INVOICES (INCLUDING CHARGES FOR INTEREST, PACKAGING, AND SHIPPING) AND OF SELLER’S EXPENSES WHICH IN ANY WAY RESULT FROM OR ARE ATTRIBUTABLE TO ANY SUCH CANCELLATION OR SUSPENSION.
3. PACKAGING, LABELING AND SHIPPING-Unless and only to the extent otherwise agreed by Seller, Seller will package the goods, at Buyer’s expense, so as to avoid any damage in transit, identify the goods by displaying Buyer’s name and Purchase Order number on each unit or package shipped and ship the goods, at Buyer’s expense, at the then prevailing transportation rates for the mode of shipment requested by Buyer, if any, or selected by Seller. If the goods are shipped at Seller’s expense, Seller shall pay shipment charges based upon the transportation rates which are in effect for the designated route and carrier on the date of this Offer to Sell and Buyer shall pay Seller the difference, if any, between such shipment charges and the actual shipment charges incurred by Seller. All orders will be deemed to authorize Seller to use “cut and fill” items as deemed necessary by Seller to receive quantity allowances.
4. DELIVERY-Unless and only to the extent otherwise agreed by Seller, Seller shall deliver the goods to Buyer or Buyer’s agent free on board (F. 0. B.) at Seller’s plant or other point of shipment designated by Seller on the date of the availability of the goods for shipment, which date shall be determined in Seller’s sole discretion, or if applicable, at such other time and/or place as shall be specified pursuant to Buyer’s written instructions which are agreed to in writing by Seller. Regardless of whether Buyer or Seller is to pay shipment charges, Buyer hereby authorizes any truck, rail or other carrier to whom delivery of goods is made hereunder to act as Buyer’s agent for the purpose of acceptance of possession of such goods, allocation of risk of loss, and transfer of title. SELLER MAY, FROM TIME TO TIME, MAKE PARTIAL DELIVERIES OR CHANGE OR TEMPORARILY SUSPEND DELIVERY SCHEDULES, ESTIMATED DELIVERY DATES ARE APPROXIMATE AND ARE DEPENDENT UPON MANY FACTORS INCLUDING, BUT NOT LIMITED TO, SELLER’S ABILITY TO OBTAIN THE NECESSARY RAW MATERIALS, SELLER’S SUBCONTRACTORS, IF ANY, MEETING SCHEDULED DELIVERY DATES, AND SELLER’S PROMPT RECEIPT OF ALL INFORMATION NECESSARY TO PERMIT SELLER TO PROCEED WITH WORK IMMEDIATELY AND WITHOUT INTERRUPTION SELLER SHALL HAVE NO LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES DUE TO DELAYS IN DELIVERY. Claims for shortages, damages or other errors in delivery must be made in writing to Seller within ten (1O) days after receipt of each shipment. Failure to give such notice shall constitute acceptance of each such shipment and a waiver of all such claims by Buyer. Claims for loss or damage to goods in transit by common carrier must be made to such carrier and not to Seller.
5. RISK OF LOSS AND TITLE - Risk of loss to goods will be borne by and title to goods will pass to Buyer from the point and at the time of delivery specified in paragraph 4 hereof.
6. FORCE MAJEURE - In the event of the existence, happening or continuance of any contingency preventing or substantially interrupting or curtailing the ability of Seller or suppliers to Seller to perform the work required under this Offer to Sell including, but not limited to, fire, theft, accident, war, order, act, authority, regulation or request of or threat thereof by any federal, state or local unit of government or department or agency thereof, judicial action, industrial disturbance, shortage of labor, fuel, power, components, facilities or raw materials, delay of suppliers, act of or omission to act by Buyer, restriction or lack of transportation facilities, failure or delay in transportation, act of God, breakage or accident to machinery or equipment, involuntary or voluntary shutdown of Seller’s production facilities or any cause beyond the reasonable control of Seller, Seller shall not be under any obligation during the period of such prevention, interruption or curtailment to continue production or make delivery of any goods described herein. If any period of such prevention, interruption or curtailment to continue production or make delivery of any goods described herein is caused, in whole or in part, directly or indirectly, by an act of or omission to act by Buyer, Buyer shall pay to Seller all additional charges resulting therefrom. Seller will be entitled to an extension of time for performance of its obligations equal to the period of such prevention, interruption or curtailment. Upon the occurrence of any such contingency, Seller may, but is under no obligation to, allocate production and delivery among Seller’s customers. If Seller, in Seller’s sole discretion, determines that Seller’s performance hereunder would result in a loss to Seller on this sale, as computed under Seller’s normal accounting procedures because of causes beyond Seller’s control, then Seller may terminate this Offer to Sell, in whole or in part, without liability for loss or damage of any nature whatsoever including, but not limited to, incidental and consequential damages for any delay in the delivery of or failure to deliver the goods otherwise to be said to Buyer hereunder.
7. PRICES—Unless and only to the extent otherwise agreed by Seller, all prices for goods are exclusive of any charges for packaging, shipping, technical advice, or other necessary services incidental to Seller’s performance hereunder. All such charges will be made in accordance with rates established by Seller on or prior to the date on which the services to which they apply are rendered and are subject to change without notice at any time prior to such date. All prices for goods are subject to change without notice at any time prior to the date of the availability of the goods for shipment or, if applicable, such other time as shall be specified pursuant to Buyer’s written instructions which are agreed to in writing by Seller, to prices prevailing on such date. If Seller’s price for the goods described herein is based upon delivery to and acceptance by Buyer of a specified quantity of goods, such price shall be subject to adjustment if Buyer does not accept the applicable quantities of goods at the times specified herein and Buyer will be invoiced at Seller’s price for such goods prevailing on the date of the availability of such goods for shipment without quantity discounts, if any, for the quantity of goods actually accepted by Buyer.
8. TAXES—All prices are exclusive of any applicable present or future domestic or foreign federal, state or local manufacturer’s, retailer’s, occupation, sales, use, excise or other similar taxes, duty, custom, inspection or testing fees, or any other taxes, fees, or charges of any nature whatsoever which may be imposed by any governmental authority on or which are measured by this transaction between Buyer and Seller. All such taxes shall be borne by Buyer and will be paid by Buyer to Seller upon submission of Seller’s invoices. In the event Seller is required to pay any such taxes, fees or charges, Buyer shall promptly reimburse Seller therefore upon submission of Seller’s invoices or, in lieu of such payment, buyer shall provide to Seller at or prior to the time of contract formation an exemption certificate or other similar document acceptable to the governmental authority imposing such tax, fee or charge the effect of which is to exempt Seller from the duly to remit such taxes, fees or charges to such governmental authority.
9. CREDIT- All sales are subject to the approval of Seller’s credit department. Seller may, at any time and from time to time and without prejudice to Seller’s other legal and equitable remedies, suspend or terminate performance or delivery hereunder or require full or partial payment in cash or by letter of credit prior to delivery, security, guarantees or other adequate assurance satisfactory to Seller, when, in Seller’s opinion the financial condition of Buyer or other grounds for insecurity warrant such action. In the event of buyer (i) becoming insolvent; (ii) being unable, or admitting in writing its inability, to pay its debts as they mature; (iii) failing to promptly lift any execution, garnishment or attachment of such consequence as will, in the judgment of Seller, impair the ability of Buyer to carry on its business operations; (iv) making a general assignment for the benefit of creditors or to an agent authorized to liquidate any amount of its property; (v) entering into an agreement of composition with its creditors; (vi) becoming the subject of an “order for relief” within the meaning of the U.S Bankruptcy Code; (vii) filing a petition in bankruptcy or for reorganization or to effect a plan or other arrangement with creditors under the provisions of the Bankruptcy Reform Act of 1978, as amended, or under any similar act in any domestic or foreign jurisdiction which may now be in effect or hereafter enacted; (viii) filing an answer to a creditor’s petition (admitting the material allegations thereof) for reorganization or to effect a plan or other arrangement with creditors; (ix) applying to a court for the appointment of a receiver for any of its assets; (x) having a receiver appointed for any of its assets (with or without the consent of Buyer) and such receiver not being discharged within sixty (60) days after his/her appointment; or (xi) failing to make any payment hereunder when due, then the entire contract price hereunder, including, but not limited to, any and all charges for packing, shipping, and interest, shall immediately become due and payable without notice to Buyer.
10. INVOICES – Invoices will be rendered as of the date of the availability of all or any portion of the goods for shipment or, if applicable, at such other time as shall be specified pursuant to Buyer’s written instructions which are agreed to in writing by Seller or, if applicable, on the date specified in any invoice and or payment schedule agreed to by Seller.
11. PAYMENT – Unless Buyer and Seller agree to terms other than those specified herein, payment will be made in U.S. Dollars to the specified remit to address noted on your invoice within thirty (30) days after the date of the availability of all or any portion of the goods for shipment or, if applicable, at such other time as shall be specified pursuant to Buyer’s written instructions which are agreed to by Seller.
12. WARRANTIES – SELLER MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS, IMPLIED (EXCEPT TITLE) STATUTORY, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH REGARD TO THE GOODS SOLD AND SERVICES, IF ANY, PROVIDED HEREUNDER. BUYER ACKNOWLEDGES THAT IT ALONE HAS DETERMINED THAT THE GOODS PURCHASED HEREUNDER WILL SUITABLY MEET THE REQUIREMENTS OF THEIR INTENDED USE, NO EMPLOYEE, REPRESENTATIVE OR AGENT OF SELLER IS AUTHORIZED TO ALTER OR MODIFY ANY PROVISION OF THIS PARAGRAPH 12 OR TO MAKE ANY GUARANTEE, WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ORALLY OR IN WRITING, WHICH IS CONTRARY TO THE FOREGOING.
13. RETURN OF GOODS - Buyer shall have no right to return goods to Seller without Seller’s written authorization to do so and shipping instructions. Unless otherwise agreed by Seller, any such return of goods to Seller shall be at Buyer’s expense. Seller’s physical possession of such goods pursuant to an authorized return shall not alter the allocation of risk of loss or passage of title to the goods specified in paragraph 5 hereof.
14. TECHNICAL ADVICE - Seller shall not be liable for any ordinary, proximate, incidental or consequential damages arising directly or indirectly from any technical advice furnished or suggestions or recommendations made by Seller concerning the installation, maintenance, repair, replacement adjustment use, suitability or application of any goods, furnished under this Offer to Sell regardless of whether such technical advice is given or recommendations are made prior to or after substantial completion, final inspection or initial use of such goods. The limitation of liability contained in this paragraph 14 shall survive the completion of the work to be performed by Seller under this Offer to Sell and shall apply to all technical advice given and recommendations made by Seller thereafter with regard to the goods furnished under this Offer to Sell.
15. LIMITATION OF SELLER’S LIABILITY – SELLER’S LIABILITY FOR ANY LEGAL CLAIM, WHETHER IN CONTRACT, TORT (INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE AND STRICT LIABILITY, WHETHER SOLE OR CONCURRENT) OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, OR RESULTING FROM THE MANUFACTURE, SALE, DELIVERY, RESALE, REPAIR, REPLACEMENT OR USE OF THE GOODS SOLD BY SELLER HEREUNDER SHALL IN NO EVENT EXCEED THE PURCHASE PRICE OF SUCH GOODS OR SERVICES AND ALSO SHALL BE LIMITED TO , AT SELLER’S OPTION, REPLACING OR REPAIRING OR ISSUING A CREDIT OR REFUND FOR THAT PART OF THE PURCHASE PRICE OF SUCH GOODS OR SERVICES WHICH IS ALLOCABLE TO THE PART OR PARTS OF THE GOODS OR ANY SERVICES RELATED THERETO WHICH GIVE RISE TO SUCH CLAIM. BUYER SHALL INSPECT AND PERFORM ANY NECESSARY TESTS OF THE GOODS SOLD HEREUNDER PRIOR TO ANY USE THEREOF BY BUYER TO BE DEFECTIVE, SHALL GIVE NOTICE OF SUCH CLAIMED DEFECT TO SELLER WITHIN TEN (1O) DAYS OF THE DATE OF DELIVERY OF SUCH GOODS TO BUYER. ANY DEFECTIVE GOODS MAY, AT SELLER’S OPTION, BE RETURNED BY BUYER, AT BUYER’S EXPENSE, TO SELLER’S FACTORY FOR INSPECTION. BUYER WILL PREPAY ALL FREIGHT CHARGES TO RETURN ANY GOODS TO SELLER, SELLER MAY, AT SELLER’S OPTION, DELIVER REPAIRED OR REPLACEMENT GOODS TO BUYER FREIGHT PREPAID TO THE ORIGINAL DESTINATION OF THE ORIGINAL GOODS. SELLER SHALL HAVE NO LIABILITY FOR ANY COSTS OR EXPENSES OF DISASSEMBLY, REMOVAL, REASSEMBLY OR REINSTALLATION OF ANY DEFECTIVE, REPAIRED OR REPLACEMENT GOODS OR OF FINISHING THE REINSTALLATION THEREOF. GOODS RETURNED TO SELLER FOR WHICH SELLER ELECTS TO PROVIDE REPAIRED OR REPLACEMENT GOODS UNDER THIS PARAGRAPH 15 SHALL BECOME THE PROPERTY OF SELLER.
16. INCIDENTAL AND CONSEQUENTIAL DAMAGES - IN NO EVENT SHALL SELLER BE LIABLE FOR ANY PENALTIES, SPECIAL, CONTINGENT, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL LOSSES. DAMAGES OR EXPENSES DUE TO BREACH OF WARRANTY, BREACH OF CONTRACT OR OTHERWISE INCLUDING, BUT NOT LIMITED TO, DAMAGES FOR DESTRUCTION OF OR LOSS TO PROPERTY, PERSONAL INJURY, LOSS OF USE OF THE GOODS OR ANY ASSOCIATED EQUIPMENT, LOSS OF PRODUCTION, REVENUE OR PROFITS, COST OF CAPITAL, COST OF SUBSTITUTE PRODUCTS, FACILITIES OR SERVICES, OR FOR ANY OTHER TYPES OF ECONOMIC LOSS, OR FOR CLAIMS OF CUSTOMERS OF BUYER OR USERS OF BUYER’S PRODUCTS FOR ANY SUCH DAMAGES.
17. NOTICES—All written notices, requests, demands, consents, certificates or other communications required or permitted to be given hereunder shall be sufficiently given when mailed by certified mail, return receipt requested, postage prepaid, addressed to Seller at 1150 Industry Road, P.O Box 189, Harrodsburg, Kentucky 40330 and to Buyer at the most current address for Buyer in Seller’s possession. Either party may by like notice at any time and from time to time designate a different address to which notices shall be sent.
18. SUBCONTRACTING—Seller may, without the necessity of obtaining Buyers prior written consent, subcontract the production of all or any portion of the goods covered by this Offer to Sell.
19. WAIVER—No waiver shall be implied by Seller’s failure to insist on performance of any of the terms or conditions herein or to exercise any right or privilege granted to Seller hereby. No express waiver by Seller shall be construed as waiving any breach hereunder or the performance of any the terms or conditions hereof not specified in the express waiver, and then only for the time and to the extent stated therein. One or more waivers of any covenant, term or condition hereof shall not be construed as a waiver of a subsequent breach of the same covenant, term or condition.
20. SEVERABILITY—If any covenant, term or condition hereof or the application thereof to any circumstance or person shall, to any extent, be held invalid or unenforceable by any court of competent jurisdiction, the remaining valid and enforceable covenants, terms and conditions hereof and the application of such invalid or unenforceable covenant, term or condition to circumstances or persons other than those as to which it has been held invalid or unenforceable shall not be affected thereby and each remaining valid and enforceable covenant, term and condition shall be valid and enforceable to the fullest extent permitted by law.
21. ENTIRE AGREEMENT—The terms and conditions contained in this Offer to Sell, together with all additional terms and conditions contained on all attachments hereto and all amendments hereof (collectively this “Offer to Sell”), shall constitute the complete and exclusive statement of the terms and conditions of the contract between Buyer and Seller for the purchase and sale of the goods to be purchased and sold hereunder and may hereafter be modified, amended or changed only by written instrument or change order executed by the duly authorized representatives of both Buyer and Seller. No statements, representations, writing, understandings or agreements by either party or any representative of either party, either in negotiations leading to this Offer to Sell or during the term hereof shall be binding or of any force or effect. No course of performance, course of dealing or usage of trade shall be relevant to explain or supplement this Offer to Sell.
22. STATUTE OF LIMITATIONS - ANY ACTION, WHETHER BASED UPON THEORIES OF BREACH OF WAR-RANTY, BREACH OF CONTRACT, NEGLIGENCE OR OTHERWISE, WITH REGARD TO THE GOODS OR SERVICES DELIVERED HEREUNDER MUST BE COMMENCED WITHIN ONE (1) YEAR AFTER THE CAUSE OF ACTION HAS OCCRUED.
23. GOVERNING LAW—This agreement shall be governed and construed according to the internal laws of the State of Kentucky. The terms and conditions contained herein shall be applicable to sales of goods only, to mixed sales of goods and services (regardless of which factor predominates), and to sales of services only and, in either of the latter two cases, the term ‘goods’ as used herein shall be construed as including all services rendered hereunder, unless the context clearly indicates otherwise.
24. FORUM AND JURISDICTION—Seller and Buyer hereby agree that any legal action deemed necessary by either party to this Offer to Sell shall be brought in either the District Court in and for the Eastern District of Kentucky, Lexington Division, or the Circuit Court in and for Mercer County, Kentucky and hereby consent to the personal jurisdiction of such courts in any such action over the parties hereto. If, contrary to the provisions of this paragraph 24, Buyer commences any legal action involving this Offer to Sell or the goods provided hereunder in any forum other than either of those specified above, Seller shall be entitled to the dismissal of such action based upon the agreement of the parties contained in this paragraph 24.
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MOSINEE, Wis.--(BUSINESS WIRE)--April 24, 2007--Wausau Paper
(NYSE:WPP) today reported net earnings for the first quarter of $15.0
million, or $0.29 per share, compared with a net loss of $0.5 million,
or $0.01 per share, in the previous year. Net sales rose 6 percent to
a record first-quarter $299.4 million, and shipments increased 1
percent to a record 227,000 tons.
Included in current-year results were one-time state tax benefits
of $12.0 million, or $0.24 per share, related to the January 1, 2007,
restructuring of the company's subsidiaries to realign them more
closely with Wausau Paper's current operating structure. The
subsidiary realignment allows for the utilization of previously
reserved state net operating loss and credit carryovers.
First-quarter results also included an after-tax gain of $0.4
million, or $0.01 per share, from the sale of timberlands and stock
incentive credits of less than $0.01 per share. Prior-year
first-quarter results included after-tax timberland sales gains of
$1.0 million, or $0.02 per share, and stock incentive charges of $1.2
million, or $0.02 per share, including a cumulative effect charge of
$0.4 million, or $0.01 per share, related to the adoption of Statement
of Financial Accounting Standards No. 123 (revised 2004), Share-Based
Payments.
"Record shipments and net sales, coupled with relentless efforts
to improve operations in the face of historically high energy and
rising fiber costs, produced solid gains in the first quarter compared
with a year ago," said Thomas J. Howatt, president and CEO.
"Importantly, our growth continues to be driven by our core business
strategies - pursuit of niche markets, product innovation, benchmark
customer service and operating excellence. Innovative product
solutions - such as the recent expansion of our ExperTec(R),
EcoSelect(TM), and ProGard(R) lines of specialty products - have
enabled us to consistently exceed our new product goals, increase
sales in targeted niche markets and improve customer service by
recognizing market trends and meeting specific product needs,"
continued Mr. Howatt. "During the first quarter, nearly 30 percent of
net sales came from products developed in the last three years,
eclipsing our goal of 25 percent, while at the same time paper mill
productivity gains again exceeded our corporate target of 1 percent."
Specialty Products reported first-quarter operating profits of
$2.7 million compared with $3.2 million last year, with the decrease
primarily attributable to cost pressures, most notably market pulp.
Net sales increased 2 percent while shipments declined 2 percent.
"First-quarter profits improved substantially from the breakeven
result reported in the fourth quarter and represent Specialty's best
performance since last year's first quarter," Mr. Howatt stated.
"Despite competitive market conditions we were successful in expanding
our line of environmentally preferable products, allowing us to
further penetrate attractive niche markets. At the same time, strong
operations and cost containment activities have allowed us to
partially offset continuing cost pressures."
Printing & Writing reported first-quarter operating losses of $1.8
million compared with losses of $6.8 million last year. Net sales and
shipments increased 7 percent and 3 percent, respectively. "In
contrast, the industry's uncoated freesheet shipments declined
approximately 6 percent in the same period, a clear indicator that we
are gaining market share," commented Mr. Howatt. "Moreover, industry
consolidation and capacity closures are beginning to create pricing
momentum in printing and writing grades. Year-over-year comparisons
also reflect the enhanced productivity we've achieved as well as the
reduction of market-related downtime taken in the first quarter of
2006."
Towel & Tissue operating profits reached record first-quarter
levels of $9.7 million compared with operating profits of $9.2 million
last year. Net sales and shipments increased 11 percent and 6 percent,
respectively. Mr. Howatt commented, "Selling price increases, mix
improvements and volume gains offset increased wastepaper costs and
helped drive a ninth consecutive quarterly profit record. Despite
'away-from-home' market growth of less than 2 percent, our Green
Seal(R) certified and value-added product shipments each increased
more than 20 percent. This above-market growth continues to be driven
by strong placements of our innovative proprietary dispensers and the
introduction of new products."
Discussing the second-quarter outlook, Mr. Howatt said, "Energy
costs remain at historically high levels while fiber costs continue
their upward trend. At the same time, we are encouraged by signs of
returning pricing leverage in many of our product areas. The initial
influence of pricing leverage, and efforts to contain costs and
improve efficiency are expected to drive profit improvement compared
with year-ago levels. As a result, we expect second-quarter earnings
in the range of $0.08 and $0.10 per share, including timberland sales
gains of $0.02 per share." Second-quarter 2006 results were $0.07 per
share and included $0.02 per share in timberland sales gains.
Wausau Paper's first-quarter conference call is scheduled for
11:00 a.m. (EDT) on Wednesday, April 25, and can be accessed through
the company's Web site at www.wausaupaper.com under "Investor
Information." A replay of the webcast will be available at the same
site through May 2.
Wausau Paper, with record revenues of $1.2 billion in fiscal 2006,
produces fine printing and writing papers, technical specialty papers,
and "away-from-home" towel and tissue products. Green Seal(R) is a
registered trademark of Green Seal, Inc., in Washington D.C., and is
used by permission. To learn more about Wausau Paper visit:
www.wausaupaper.com.
Safe Harbor under the Private Securities Litigation Reform Act of
1995: The matters discussed in this news release concerning the
company's future performance or anticipated financial results are
forward-looking statements and are made pursuant to the safe harbor
provisions of the Securities Reform Act of 1995. Such statements
involve risks and uncertainties which may cause results to differ
materially from those set forth in these statements. Among other
things, these risks and uncertainties include the strength of the
economy and demand for paper products, increases in raw material and
energy prices, manufacturing problems at company facilities, and other
risks and assumptions described under "Information Concerning
Forward-Looking Statements" in Item 7 and in Item 1A of the company's
Form 10-K for the year ended December 31, 2006. The company assumes no
obligation to update or supplement forward-looking statements that
become untrue because of subsequent events.
Wausau Paper
Interim Report - Quarter Ended March 31, 2007
(in thousands, except per share amounts)
Condensed Consolidated Statements Three Months
of Operations (unaudited) Ended March 31,
-------------------------
2007 2006
------------ ------------
Net sales $299,393 $283,663
Cost of sales 271,307 260,057
------------ ------------
Gross profit 28,086 23,606
Selling & administrative expenses 20,802 20,976
Restructuring - 132
------------ ------------
Operating profit 7,284 2,498
Interest expense (2,807) (2,713)
Other income, net 206 42
------------ ------------
Earnings (loss) before income taxes and
cumulative effect of a change in accounting
principle 4,683 (173)
Credit for income taxes (10,282) (64)
------------ ------------
Earnings (loss) before cumulative effect of
a change in accounting principle 14,965 (109)
Cumulative effect of a change in accounting
principle (net of income taxes) - (427)
------------ ------------
Net earnings (loss) $14,965 $(536)
============ ============
Earnings (loss) per share before cumulative
effect of a change in accounting principle
(basic and diluted) $0.29 $0.00
Cumulative effect of a change in accounting
principle (net of income taxes) 0.00 (0.01)
------------ ------------
Net earnings (loss) per share (basic and
diluted) $0.29 $(0.01)
============ ============
Weighted average shares outstanding-basic 50,746 51,041
============ ============
Weighted average shares outstanding-diluted 51,100 51,041
============ ============
Condensed Consolidated Balance Sheets (Note
1) March 31, December 31,
2007 2006
------------ ------------
Current assets $298,190 $294,247
Property, plant & equipment, net 462,793 468,372
Other assets 37,680 36,495
------------ ------------
Total Assets $798,663 $799,114
============ ============
Current liabilities $146,739 $155,182
Long-term debt 166,555 160,287
Other liabilities 194,284 209,571
Stockholders' equity 291,085 274,074
------------ ------------
Total Liabilities and Stockholders'
Equity $798,663 $799,114
============ ============
Condensed Consolidated Statements Three Months
of Cash Flow (unaudited) Ended March 31,
-------------------------
2007 2006
------------ ------------
Net cash used in operating activities $(6,355) $(10,409)
------------ ------------
Cash flows from investing activities:
Capital expenditures (5,986) (4,912)
Proceeds from property, plant and
equipment disposals 893 1,655
------------ ------------
Net cash used in investing activities (5,093) (3,257)
------------ ------------
Cash flows from financing activities:
Net issuances of commercial paper 6,500 9,500
Payments under capital lease obligation
and note payable (64) (35)
Dividends paid (4,313) (4,340)
Proceeds from stock option exercises 0 1,405
Excess tax benefits related to stock
options 35 94
Payments for purchase of company stock 0 (967)
------------ ------------
Cash provided by financing activities 2,158 5,657
------------ ------------
Net decrease in cash & cash equivalents $(9,290) $(8,009)
============ ============
Note 1. Balance sheet amounts at March 31, 2007, are unaudited. The
December 31, 2006, amounts are derived from audited financial
statements.
Note 2. Effective January 1, 2007, we adopted Financial Accounting
Standards Board ("FASB") Staff Position No. AUG AIR-1,
"Accounting for Planned Major Maintenance Activities." This
FSP prohibits companies from recognizing planned major
maintenance costs under the "accrue-in-advance" method that
allowed the accrual of a liability over several reporting
periods before the maintenance is performed. We have adopted
the direct expensing method, under which the costs of planned
major maintenance activities are expensed in the period in
which the costs are incurred. The comparative financial
statements for 2006 have been adjusted to apply the new method
retrospectively, resulting in an increase in net earnings for
the three months ended March 31, 2006, of $0.8 million, or
$0.02 per basic and diluted share, an increase in net earnings
of $0.1 million for the three months ended June 30, 2006, a
decrease in net earnings of $0.3 million, or $0.01 per basic
and diluted share for the three months ended September 30,
2006, and a decrease of $0.6 million, or $0.01 per basic and
diluted share for the three months ended December 31, 2006.
Note 3. On January 1, 2007, we adopted FASB Interpretation No. 48,
"Accounting for Income Tax Uncertainties" ("FIN 48"). FIN 48
defines the threshold for recognizing the benefits of tax
return positions in the financial statements as
"more-likely-than-not" to be sustained by the taxing
authority. The literature provides guidance on the
derecognition, measurement and classification of income tax
uncertainties, along with any related interest and penalties.
FIN 48 also includes guidance concerning accounting for income
tax uncertainties in interim periods and increases the level
of disclosures associated with any income tax uncertainties.
The adoption of FIN 48 did not have a significant impact on
our financial statements.
Note 4. Effective January 1, 2007, we reorganized the various
subsidiaries which comprised our operating segments to align
more closely with our operating structure. Each segment is
now organized as a single member limited liability company and
operates as a direct subsidiary of Wausau Paper Corp. The new
structure allowed us to utilize state net operating loss and
credit carryovers of certain subsidiaries for which full
valuation allowances had been previously established due to
the fact that separate state tax returns were filed under our
previous structure. During the three months ended March 31,
2007, we recorded state tax benefits of $12.0 million, or
$0.24 per basic and diluted share, as a result of the release
of these valuation allowances. No additional state tax
benefits resulting from the reorganization are anticipated.
Note 5. Effective January 1, 2006, we adopted Statement of Financial
Accounting Standards No. 123 (revised 2004), "Share-Based
Payment" ("SFAS 123R"), using the modified prospective
application transition method. The modified prospective
application transition method requires that as of the
effective date, compensation cost related to share-based
payment transactions is recognized as an operating expense in
the statement of operations over the requisite service period
of the grant based on the grant-date fair value of the award.
Under SFAS 123R, 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 until final settlement. The difference
between the liability as previously computed (i.e., intrinsic
value) and the fair value of the liability award on January 1,
2006, was $0.4 million net of any related tax effects ($0.7
million pretax), and was recorded as a cumulative effect of a
change in accounting principle.
Note 6. In July 2005, we 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. Pre-tax restructuring expense related
to certain assets disposed as a direct result of the closure
and other associated costs were $0.1 million for the three
months ended March 31, 2006. No restructuring expense was
incurred for the three months ended March 31, 2007.
Note 7. Interim Segment Information
We have reclassified certain prior-year interim segment
information to conform to the 2007 presentation. The
reclassifications are the result of a reporting change,
effective January 1, 2007, in accordance with FASB FSP AUG
AIR-1 (see Note 2), and as a result of restructuring the
assets, operating results, and depreciation, depletion and
amortization of one facility from the Corporate and
Unallocated segment to the Towel & Tissue segment (see Note
4).
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.
Sales, operating profit, and asset information by segment is
as follows:
(in thousands, except ton data) March 31, December 31,
2007 2006
------------ ------------
Segment assets (Note 1)
Specialty Products $324,007 $319,387
Printing & Writing 245,240 243,362
Towel & Tissue 187,323 184,140
Corporate & Unallocated(a) 42,093 52,225
------------ ------------
$798,663 $799,114
============ ============
Three Months
Ended March 31,
2007 2006
------------ ------------
Net sales external customers (unaudited)
Specialty Products $123,955 $121,492
Printing & Writing 105,914 99,318
Towel & Tissue 69,524 62,853
------------ ------------
$299,393 $283,663
============ ============
Operating profit (loss) (unaudited)
Specialty Products $2,673 $3,207
Printing & Writing (1,792) (6,846)
Towel & Tissue 9,693 9,181
Corporate & Eliminations (3,290) (3,044)
------------ ------------
$7,284 $2,498
============ ============
Depreciation, depletion and amortization
(unaudited)
Specialty Products $5,661 $6,043
Printing & Writing 3,071 3,078
Towel & Tissue 5,727 5,208
Corporate & Unallocated 162 229
------------ ------------
$14,621 $14,558
============ ============
Tons sold (unaudited)
Specialty Products 99,919 102,287
Printing & Writing 86,101 83,631
Towel & Tissue 40,573 38,289
------------ ------------
226,593 224,207
============ ============
(a) Segment assets do not include intersegment accounts
receivable, cash, deferred tax assets and certain other assets which
are not identifiable with the segments.
CONTACT: Wausau Paper
Investor and Media Contact:
Perry Grueber, Director Investor Relations, 715-692-2056
Fax: 715-692-2020
SOURCE: Wausau Paper