Wausau Paper (NYSE:WPP)
today reported fourth-quarter and full-year results for 2012.
2012 EXECUTIVE SUMMARY
- Achieved the safest year in the Company’s history.
- Full-year 2012 adjusted net earnings were $10.8 million versus $16.1 million a year ago.
- Fourth-quarter 2012 adjusted net loss was $1.5 million compared to net earnings of $2.5 million for the prior year period.
- On January 11, 2013, announced intent to strategically reposition the Company to focus on the Tissue business and explore alternatives for Paper segment.
- Tissue Segment.
- Grew Tissue case volume 3.3 percent, with 4.0 percent growth in the fourth quarter.
- Invested $220 million in new tissue machine in Kentucky; started production in December; business poised to deliver significant returns in 2013.
- Paper Segment.
- Realized technical specialty full-year shipment growth of 4.5 percent in a deteriorating demand environment.
- Experienced margin pressure in Paper segment due to operational challenges at Brainerd, Minnesota.
- Exited the Print & Color business, including sale of premium brands and closure and sale of the Brokaw, Wisconsin, manufacturing site, delivering $52 million in cash versus the targeted $20 million.
- Managed year-end debt to $196 million reflecting strong cash generation and balance sheet management.
On January 11 the Company publicly announced its intent to focus its efforts and future capital investment on the continued growth of the highly successful Tissue business. The Company intends to:
- Accelerate growth in Tissue through organic investment and adjacency expansion.
- Initial $220 million investment in Tissue business positions the segment to significantly accelerate year-over-year growth and increase target EBITDA margin to 23-25 percent within five years.
- Further establishes Company’s “green leadership” in away-from-home tissue markets through improved product performance and the introduction of new-to-the-market premium recycled products.
- Divest the technical specialty paper business in a way that delivers maximum value to all shareholders.
- Reduce and realign selling and administrative costs by approximately $13 million.
- Achieve near-term return on capital commitment of 15 percent by the end of 2014.
Henry C. Newell, president and CEO, stated, “Over the last 18 months we have focused on generating cash to fund our $220 million Tissue expansion, constructing a new tissue machine and upgrading our converting infrastructure while maintaining a conservative approach to working capital and the overall balance sheet. This investment is about to begin delivering significant value and our expectations are high as we build momentum and deliver new premium recycled tissue products later this year. We are also taking the appropriate actions in our Paper segment to explore alternatives for this business and to evaluate our near-term options for our Brainerd operations.”