Cascades Inc.
Cascades Inc. reported net earnings of $40 million for the second quarter ended June 30, 2003 compared to net earnings of $40 million for the same period in 2002.
Net sales decreased by 5 percent during the second quarter, amounting to $813 million, compared to $857 million for the same period last year
Net earnings for the first six months were $56 million, compared with net earnings of $95 million for the corresponding period in 2002.
Alain Lemaire, president and CEO stated: "The rapid depreciation of the U.S. dollar and the continued poor performance of the American economy have had a direct impact on our overall sales and profitability. However, our increased presence in the U.S. and the fact that we have refinanced most of our long-term debt in U.S. funds provide us with a natural hedge against fluctuations in the exchange rate."
Caraustar Industries
Company also elects new chairman.
Caraustar Industries, Inc. announced that revenues for the second quarter were $246.8 million, an increase of 7.7 percent from revenues of $229.1 million for the same quarter in 2002.
Net loss for the quarter was $8.5 million, compared to second quarter 2002 net loss of $581,000. The second quarter 2003 loss, compared to the same quarter in 2002, was driven primarily by significantly higher selling, general and administrative costs attributable to the acquired Smurfit Industrial Products Division operations, bad debt expense, employee benefit costs and facility rationalization expenses, as well as reduced volume and selling prices in our custom packaging group due to highly competitive markets.
Total mill and converting volume increased 2.5 percent in the second quarter to 285,000 tons. By business group, total volume in tubes, cores and composite cans increased 26.0 percent to 84,000 tons; carton volume decreased 6.2 percent to 101,000 tons. Gypsum volume was essentially flat at 44,000 tons, while other specialty business volume decreased 5.1 percent to 56,000 tons.
For the recycled boxboard industry the second quarter was marginally softer than the comparable 2002 second quarter figures. Total volume was down 1.0 percent with a 6.0 percent decline in folding carton board demand and a minimal drop in tube, core and can demand, offset primarily by a 4.7 percent increase in gypsum facings and a 1.1 percent growth in the other specialty market.
For the first six months revenues were $499.7 million, an increase of 11.5 percent from revenues of $448 million for 2002. The net loss for the first six months was $15.6 million compared to a net loss of $82,000 last year.
Total mill and converting volume for the first six months increased 9 percent to 590,000 tons compared with the same period in 2002. Volume in the tube and core product line for the first half grew 35.4 percent to 169,000 tons, while volume in folding cartons increased 2.9 percent to 221,000 tons. Gypsum volume was unchanged from the first half of 2002 and other specialty volume declined 1.4 percent to 112,000 tons.
Thomas Brown, president and CEO of Caraustar, stated, "Although demand in the second quarter for Caraustar and the industry was not as strong as in the first, the industry growth during the first six months was the first sustained period of improvement in the last three years. We were also encouraged to see that mill price increases were reflected in our tube and core converted product pricing; however, the same cannot be said for the carton converting market. The events that contributed primarily to the financial losses for the quarter were the difficult pricing factors in the carton market in combination with the referenced unusual SG&A increases and plant rationalization costs.
Caraustar’s board also announced that it elected James Rogers to serve as its chairman, effective July 17, 2003.
Smurfit-Stone Container
Smurfit-Stone Container Corporation reported a net loss available to common stockholders of $8 million for the second quarter. For the year-ago period, the company reported net income of $20 million. Sales for the quarter were $1.988 billion, compared to $1.867 billion the same time last year.
For the first half of the year Smurfit-Stone reported a net loss of $41 million, compared to year-ago net income available to common stockholders of $26 million. Sales for the first half were $3,865 million, compared to $3,626 million in the first half of 2002.
Patrick Moore, chairman, president and CEO, said that the company's second quarter results were down compared to the year-ago period due to several factors, including higher energy costs of $15 million, higher virgin and recycled fiber costs totaling $18 million and increases in employee benefit expenses of approximately $19 million.
Moore added that sequential improvement from the first to the second quarter primarily reflected seasonal volume increases and higher shipments due to acquisitions. "Overall, the industry continued to confront sluggish demand during the period. However, pricing remained stable in the second quarter. Smurfit-Stone continues to deliver on its pledges to strengthen the balance sheet, build back market share and produce only to meet orders." Energy costs trended downward in the second quarter after natural gas prices peaked in early winter, and were $16 million lower in the second quarter as compared to the first quarter. However, virgin and recycled fiber costs rose by $12 million during the period as compared to the first quarter, offsetting most of the positive energy variance.
In the second quarter, Smurfit-Stone's North American corrugated container shipments increased 9 percent compared to first quarter levels and 5 percent compared to last year. Results in the second quarter benefited from the purchase of the remaining 50 percent of Canadian corrugated producer Smurfit-MBI as well as the acquisition of the former MeadWestvaco plants in late 2002.
The company also announced that it continued to take substantial downtime. The company's operating rate for the second quarter was 90.4 percent, compared to 89.2 percent for the prior year period, and 90.1 percent for the first quarter of 2003.
Consumer packaging profits were down $13 million from year-ago levels, reflecting higher recycled fiber costs, energy and employee benefit expenses. Consumer packaging profits were flat in the second quarter compared to the first quarter. Multiwall bag shipments increased 4.7 percent in the second quarter, compared to the first quarter.
Commenting on the outlook, Moore said, "We will face significant challenges in the second half of 2003. Although we anticipate continued low inventory levels, higher operating rates and pricing improvement will be dependent upon a sustained pick-up in business activity. We expect to see improvement over first half performance while posting a modest loss in the second half of 2003."