Wausau Paper (NYSE:WPP)
announced today that its Board of Directors has approved the sale of its premium Print & Color brands – including Astrobrights
and the Royal family of products – and closure of its Brokaw, Wisconsin, paper mill. The sale, to Neenah Paper, Inc., is scheduled to close on January 31, 2012. The Brokaw mill will be permanently closed by March 31, 2012, marking the end of the Company’s material participation in the Print and Color markets. The Brokaw shutdown will affect approximately 450 hourly and salaried jobs.
Today’s announcement reflects the outcome of a strategic review of alternatives for the Print & Color business, begun early in 2011. Commenting on the announcement, Wausau Paper President and Chief Executive Officer Thomas J. Howatt stated, “I wish to express my sincere gratitude to our Print & Color employees for their unceasing efforts to reengineer and sustain this business. Our decision to exit Print & Color was ultimately driven by dramatic and irreversible market demand decline and the need for consolidation to bring these markets properly into balance.” Mr. Howatt continued, “While the effort to secure a buyer for the mill was unsuccessful, the employees of the Print & Color business have done all that has been asked and this closure is in no way a reflection of their skill, talents or determination to return this business to acceptable levels of profitability.”
The Company will continue to support the product needs of its customers during transfer of the business to Neenah Paper.
Anticipated after-tax closure-related costs and impairment charges, net of proceeds from the premium brand sale, are expected to total approximately $49 million, or $1.00 per diluted share, including after-tax non-cash charges of $45 million, or $.92 per diluted share. In the fourth quarter of 2011, after-tax charges are expected to be approximately $49 million, or $0.99 per diluted share, with non-cash charges totaling approximately $48 million, or $.96 per diluted share, including approximately $38 million, or $0.78 per diluted share, related to the impairment charge on mill assets. Remaining closure-related charges, net of the proceeds from the premium brand sale, will be recognized during 2012. Sales proceeds and liquidation of working capital, net of closure costs, are expected to generate estimated cash flows of approximately $20 million in 2012. Closure of the Brokaw mill is expected to be accretive to both operating earnings and EBITDA on an annual basis.