<B>Gaylord Posts Gain for Quarter</B>

Gaylord Container Corp. reported net income of $4.5 million for the fourth quarter of fiscal 2000, compared to a $4.0 million net loss for the same time last year. Included in this quarter's results was a $14.4 million non-recurring gain associated with the sale of emission credits in California. Net sales were $297.6 million in the fourth quarter of fiscal 2000 compared to $241.8 million in the year-earlier period. Operating earnings of $17.5 million for the fourth quarter of fiscal year 2000, excluding the non-recurring gain, were approximately 5% higher than the same quarter last year.

Marvin Pomerantz, Gaylord chairman and CEO, said, ``Higher average selling prices for the company's containerboard and converted packaging products ($22 million) and lower fiber costs ($3 million) were offset by reduced mill production volumes ($14 million), increased energy costs associated with higher natural gas prices ($5 million) and increased S&A expenses associated primarily with the consolidation of the retail bag business ($3 million).'' The tax rates for the fourth quarter and the full fiscal year were 47% and 53%, respectively. These unusually high tax rates were the result of the relatively high level of permanent differences between book and taxable income compared to the low level of pre-tax income.

Pomerantz noted that the company took approximately 75,000 tons of downtime during the fourth quarter to reduce inventories to appropriate levels in the face of weaker domestic and export containerboard and kraft paper demand.

 

Pomerantz noted that because of continued weakness in the domestic and export linerboard and kraft paper markets, the company may need to take as much as 30,000 tons of market-related downtime during the current quarter to maintain its desired inventory levels, and is currently planning to take its annual 7-day maintenance shutdown at the Bogalusa mill in early January.