Quarterly and Full Year Earnings to be Below Expectations
DEERFIELD, Ill., Sept. 17 /PRNewswire/ -- Fort James Corporation
(NYSE: FJ) today announced that based on current margin trends, it anticipates
diluted earnings per share from continuing operations in the second half of
1999 will be approximately 20% below the prior year's $1.27, excluding non-
comparable items. For the third quarter, the company expects diluted earnings
per share from continuing operations to be approximately 25% below last year's
$.66 per share, on the same basis. These amounts exclude a non-recurring gain
on the August sale of the Packaging business and other non-recurring items.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990204/CGTH023 )
The current year has been complicated by significant systems and workflow
changes undertaken in the course of merging the two predecessor companies.
Increased distribution and warehousing costs, which affected earnings in the
first half of the year, continue to negatively impact second half results.
Additionally, accelerating pulp costs in Europe and significant recent
increases in wastepaper costs are squeezing margins in the North American
away-from-home and European tissue businesses. Promotional costs in the
retail tissue industry have also intensified as the year progressed, resulting
in additional pressure on margins.
"We are clearly disappointed with our 1999 earnings," said Miles Marsh,
chairman and chief executive officer. "We believe that our current situation
is not a reflection on the strength of our brands or market positions, but
reflects a transitory margin compression. During the course of this year we
have absorbed both substantial pricing erosion and inflation and other cost
increases. We believe it is appropriate at this time to adjust expectations
for 1999 to conform more closely to recent trends. We will stay focused on
our product initiatives, and we will intensify our cost reduction efforts to
mitigate these cost pressures."
Fort James expects to release third quarter earnings on October 20, 1999.
Fort James is a leading international consumer products company, serving
consumers both at home and away-from-home with bathroom and facial tissue,
paper towels, napkins, and cups, plates, cutlery and food wrap products. The
company's popular brands include Quilted Northern, Brawny, Dixie, Vanity Fair,
Mardi Gras, Soft 'N Gentle, Green Forest and So-Dri in North America and
Lotus, Colhogar, Tenderly, Embo, and Kittensoft in Europe. The company has
current annual sales of $6.8 billion from approximately 50 manufacturing
facilities in the U.S., Canada and 10 other countries around the world.
This release contains forward looking statements concerning Fort James'
operations, sales, earnings growth and cost reduction programs. These
statements reflect the Company's current beliefs and expectations regarding
future events based on information currently available to it. Such forward
looking statements rely on a number of assumptions and estimates, which could
be inaccurate, and which are subject to risks and uncertainties that could
cause the Company's actual results to vary materially from the results
anticipated. Such risks and uncertainties include, but are not limited to the
Company's ability to sustain momentum in the retail marketplace, maintain
continuing improvement in the away from home market, successfully introduce
new products, increase customer service levels and concurrently manage
distribution costs, and the ability to achieve projected net cost reductions.
Fort James undertakes no obligation to update publicly or revise any forward
looking statements. Please refer to the Company's 10-K and 10-Q filings for
additional detailed explanation of the inherent limitations in such forward
looking statements.
Copies of today's news release, along with additional information on Fort
James, is available, at no charge, by calling 888-526 3711. You may also
access the company's web site at Internet address http://www.fortjames.com .
SOURCE Fort James Corporation
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Related links:
http://www.fortjames.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/19990204/CGTH023
or PR Newswire Photo Desk, 888-776-6555 or 201-369-3467
CONTACT:
Financial, Celeste Gunter, 847-317-5355, or
Media, Mark Lindley, 847-317-5280, both of Fort James Corporation
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