American Tissue Reports Figures for Quarter

Revenues for the first nine months were $431.4 million, compared to $358.2 million for the first nine months of fiscal 2000, an increase of $73.2 million, or 20.4%.

The sales growth was primarily due to higher market demand for tissue products. The company's capability to meet this higher market demand was primarily due to an increase in its installed capacity for the manufacture of jumbo tissue rolls and converted tissue products. This increase in tissue products sales was partially offset by a net sales decrease of virgin pulp, primarily due to higher internal usage due to lower prevailing market demand conditions and lower average sales prices to outside customers.

In its quarterly report filed with SEC, American Tissue reported that it has been experiencing increasing liquidity problems. The company is in default under its revolving credit facility, which also has caused a default under the indenture governing its senior secured notes

The company's liquidity problems have resulted from further weaknesses in the market for pulp, weaknesses in commodity grade paper prices, increases in energy costs and, since April 2001, the limited availability of funds under its revolving credit facility.

In an immediate attempt to reduce cash expenses and provide for reduction of inventories, the company has temporarily shut down certain of its pulp, tissue and uncoated freesheet paper mills. The company expects to continue converting and shipping operations at all of these locations during this period.