Nevada County Picayune and Gurdon Times Newspaper Archive

Potlatch Reports Lower Earnings

Potlatch Corporation reported January 21 lower earnings for the fourth quarter and full year of 1997, largely due to less favorable market conditions for most of the company's products. The company also experienced transportation problems during the fourth quarter, which negatively affected results.

For the fourth quarter, net earnings were $5.7 million, compared to $18.9 million for 1996's fourth quarter, which excluded a $.5 million extraordinary charge for refinancing of debt.

Fourth quarter 1996 net earnings were favorably affected by a reduction in the company's tax rate, resulting from federal tax credits.

Net earnings per common share were $.20, versus $.65 reported for the fourth quarter of 1996 before the $.02 per common share extraordinary charge.

Net sales for the quarter were $379.8 million, down slightly from $381.5 million in 1996.

Net earnings for 1997 were $36.1 million, or $1.25 per common share. For 1996, net earnings were $61.5 million or $2.13 per common share, before an extraordinary charge of $3.4 million or $.12 per common share for debt refinancing. Net sales for 1997 were $1.57 billion, slightly higher than $1.55 billion reported for 1996.

The Wood Products Group earnings were $12.5 million for the fourth quarter of 1997, compared to $19.2 million earned in 1996's fourth quarter.

"Lower net sales realizations for the company's lumber products and higher log costs were largely responsible for the decline," said John M. Richards, Potlatch chairman and chief executive officer.

The Minnesota Pulp and Paper Division reported earnings of $2.6 million, down significantly from the $10.7 million earned in the fourth quarter of 1996.

"Lower coated paper shipments and net sales realizations, combined with higher production costs, negatively affected earnings." Richards said.

The other pulp-based businesses, which include the Pulp and Paperboard Group and the Consumer Products Division, reported fourth quarter earnings of $12.9 million, slightly higher than the $12.2 million in the fourth quarter of 1996. Results for 1996 reflect a $3.0 million actuarial gain on post-retirement benefit programs.

"The Pulp and Paperboard Group's improved results were primarily attributable to higher paperboard shipments and slightly higher net sales realizations. This improvement more than offset lower results for the Consumer Products Division, which experienced lower net sales realizations even though shipments were higher," said Richards.

Potlatch is a diversified forest products company with timberlands in Arkansas (including Prescott), Idaho and Minnesota.