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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 7, 1998
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SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-13948 62-1612879
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
100 NORTH POINT CENTER EAST, SUITE 600 30022-8246
ALPHARETTA, GEORGIA ----------
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(Address of principal executive offices)
(Registrant's telephone number, including area code): 1-800-514-0186
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Not Applicable
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
The information in the registrant's press release dated July 7, 1998 attached as
Exhibit 99 incorporated in this Item 5 by reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
See the Index to Exhibits that appears at the end of this document and
which is incorporated by reference herein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
(Registrant)
By: /s/ WILLIAM J. SHARKEY
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William J. Sharkey
General Counsel and Secretary
July 7, 1998
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SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
CURRENT REPORT ON FORM 8-K
DATED JULY 7, 1998
INDEX TO EXHIBITS
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<CAPTION>
EXHIBIT NO. DESCRIPTION
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99 Press Release of Schweitzer-Mauduit International, Inc. issued July 7, 1998.
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EXHIBIT 99
PRESS RELEASE Contact: Bill Foust Paul Roberts
770-569-4203 770-569-4277
SCHWEITZER-MAUDUIT EXPECTS SECOND QUARTER EARNINGS
TO BE $.73 TO $.78 PER SHARE
RESULTS TO BENEFIT FROM NON-RECURRING INCOME TAX ADJUSTMENT
Alpharetta, GA, July 7, 1998. Schweitzer-Mauduit International, Inc. (NYSE: SWM)
today announced that it anticipates diluted earnings per share for the second
quarter of 1998 to be in the range of $.73 to $.78 per share. Second quarter
earnings in 1997 were $.78 per share.
Results for the quarter will benefit from a one-time income tax adjustment in
France resulting from a reduction in the valuation allowance related to certain
net operating loss carryforwards (NOL's). This adjustment will reduce the
provision for income taxes by approximately $5.2 million in the quarter, or
$.32 per share. The reduction of the valuation allowance is necessary because
of continued strong earnings and projected future earnings at the French
business units that utilize the NOL's, reducing the uncertainty that these
NOL's will be fully used in the future. After this adjustment, valuation
allowances totaling approximately $11 million will remain.
During the second quarter of 1998, Schweitzer-Mauduit will also take a one-time
pre-tax restructuring charge of approximately $1.7 million, or $.06 per share,
related to a previously-announced voluntary retirement program for certain
hourly employees at its Spotswood, New Jersey mill. On an on-going basis, the
net annualized pre-tax cost savings resulting from the program are projected to
be approximately $5 million, with a portion of these cost savings expected to
be realized commencing in the third quarter of 1998.
Excluding the two one-time items discussed above, diluted earnings per share
for the second quarter of 1998 are expected to be in the range of $.47 to $.52
per share. Wayne H. Deitrich, Chairman of the Board and Chief Executive
Officer, said that "the disappointing results from on-going operations were
caused by a decline in operating profit in the U.S. business unit and an
operating loss in our Brazilian operations. Both business units experienced
lower than expected sales volumes of tobacco-related papers that contributed to
production inefficiencies and machine downtime. The lower U.S. business unit
volumes were primarily a result of lower domestic shipments relating to a
reduction in the export of cigarettes by U.S. cigarette manufacturers and
weakened demand for cigarettes in the U.S. Operating profit in the U.S. was
also impacted by higher computer systems expenses of approximately $1 million
and, excluding the Spotswood restructuring charge, is expected to be
approximately $5 to $6 million lower than in the prior year quarter. A decline
in domestic cigarette sales was also experienced in Brazil which unfavorably
impacted our results. The Brazilian operations are expected to incur a pre-tax
operating loss of approximately $2 million for the quarter. Operating profit in
France is expected to be higher than in the prior year quarter."
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Mr. Deitrich added that, "earnings per share in the third and fourth quarters
of 1998 are expected to be under those of the comparable prior year quarters.
The year-to-year comparisons will continue to be negatively impacted by higher
corporate income tax rates in France and increased computer systems expenses in
the United States. The direction of the U.S. cigarette market remains unclear
at this time although order entry for our tobacco-related papers in the U.S. is
stronger at the beginning of the third quarter than it was during the second
quarter. We expect the Brazilian operations to have an operating loss for the
balance of 1998, however, some improvement is expected."
Schweitzer-Mauduit International, Inc. is a diversified producer of premium
specialty papers and the world's largest supplier of fine papers to the tobacco
industry. It also manufactures specialty papers for use in alkaline batteries,
vacuum cleaner bags, business forms, and printing and packaging applications.
Schweitzer-Mauduit and its subsidiaries conduct business in over 80 countries
and employ 3,500 people worldwide, with operations in the United States,
France, Brazil and Canada.
Certain comments contained in this news release concerning the business outlook
and anticipated financial and operating results of the Company constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and are subject to the safe harbor created by that
Act. The forward-looking statements are based upon management's expectations and
beliefs concerning future events impacting the Company. There can be no
assurances that such events will occur or that the Company's results will be as
estimated. Many factors outside the control of the Company also could impact the
realization of such estimates. Such factors are discussed in more detail in the
Company's SEC reports, including the Company's Annual Report on Form 10-K for
the year ended December 31, 1997.
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