Nevada County Picayune and Gurdon Times Newspaper Archive

Potlatch Reports Higher Earnings For 4th Quarter

Potlatch Corporation reported higher earnings for the fourth quarter of 1995 compared with 1994 as the company's bleached paperboard and tissue businesses showed significant improvement.

Partially offsetting the improvements were lower earnings for the Wood Product Group and the Northwest Paper Division. For the year, earnings were well ahead of 1994, reflecting the positive market conditions for pulp-based products that prevailed in 1995.

For the fourth quarter, net earnings were $29.4 million, compared to $26.9 million for 1994's fourth quarter. Earnings per common share were $1.01, versus 92 cents reported for the fourth quarter of 1994. Net sales for the quarter were $402.2 million, up from $387.5 million in 1994.

Earnings for 1995 were $108.5 million, or $3.72 per common share. Earnings for 1994 were $55.2 million, or $1.89 per common share, before a one-time, pre-tax charge of $10 million for early retirment programs in Idaho. Including the charge, 1994 earnings were $49 million or $1.68 per common share. Net sales for 1995 were $1.61 billion, an increase of nine percent over 1994's net sales of $1.47 billion.

The Wood Products group earnings were $37.2 million for the fourth quarter of 1995, compared with $41.6 million earned in 1994's fourth quarter. John M. Richards, Potlatch chairman and chief executive officer, noted that lower shipments for the company's panel products and generally lower net sales realizations for most solid wood products were largely responsible for the decline.

"Canadian lumber imports and the expansion of oriented strand board capacity have had a negative effect on product pricing in this segment for our business," Richards said. The Wood Products Group's results for the fourth quarter of 1995 also include a $2 million pre-tax charge for early retirement and severance programs in Arkansas.

The Northwest Paper Division reported earnings of $4.4 million, down from the $16.4 million earned in the fourth quarter of 1994. "Although coated paper net sales realizations were higher, product shipments did not equal those of a year ago," Richards said.

"Down times for the rebuild of one of our paper machines at our Brainerd, Minn., plant also had an adverse effect on fourth quarter earnings," Richards added. In addition, the roof over one of the company's coated paper machines at the Cloquet, Minn., mill collapsed in December. The machine was out of service for more than two weeks while repairs were made. A significant portion of the related costs are covered by insurance.

The other pulp-based businesses, which include the Pulp and Paperboard Group and the Consumer Products Division, reported fourth quarter earnings of $19.8 million, versus a loss of $.3 million in the fourth quarter of 1994. "Much of the improvement is due to the significant increase in net sales realizations for pulp, paperboard and tissue over 1994 levels," said Richards.

Richards also noted that the company's shift to premium private-label tissue manufacturing is proving to be very successful.

At the company's mill in Lewiston, Idaho, repairs to the plup mill washers were completed during the quarter. "The repairs should allow the mill to operate at acceptable levels until the planned replacement is completed," said Richards. The company has commenced a legal action against the washer manufacturer for reimbursement of the replacement cost as well as other damages.

"Looking forward into 1996, we see a mixed marketplace for our products," Richards said. "However, we are optimistic about the long-term outlook for the company's busineses."

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