FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MAY 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number: 0-7574
WAUSAU PAPER MILLS COMPANY
(Exact name of registrant as specified in charter)
WISCONSIN 39-0690900
(State of incorporation) (I.R.S. Employer Identification
Number)
ONE CLARK'S ISLAND
P.O. BOX 1408
WAUSAU, WISCONSIN 54402-1408
(Address of principal executive office)
Registrant's telephone number, including area code: 715-845-5266
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such report), and (2) has been subject to such
filing requirements for the past 90 days.
X
Yes _____ No _____
The number of common shares outstanding at June 30, 1997 was 36,514,972.
<PAGE>
WAUSAU PAPER MILLS COMPANY
AND SUBSIDIARIES
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of 1
Income Three and Nine Months Ended
May 31, 1997 (unaudited) and
May 31, 1996 (unaudited)
Condensed Consolidated Balance 2
Sheets May 31, 1997 (unaudited)
and August 31, 1996 (derived from
audited financial statements)
Condensed Consolidated Statements 3
of Cash Flows Nine Months
Ended May 31, 1997 (unaudited) and
May 31, 1996 (unaudited)
Notes to Condensed Consolidated 4 - 5
Financial Statements
Item 2. Management's Discussion and 6 - 9
Analysis of Financial Condition
and Results of Operations
PART II. OTHER INFORMATION
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 11 - 12
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS:
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Wausau Paper Mills Company and Subsidiaries
<CAPTION>
(Dollars in thousands, except For the Three Months For the Nine Months
per share data - unaudited) Ended May 31 Ended May 31
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net Sales $ 143,555 $ 139,446 $ 409,159 $ 409,940
Cost of products sold 111,819 108,398 327,687 340,659
GROSS PROFIT 31,736 31,048 81,472 69,281
Selling, administrative and
research expenses 7,951 7,267 22,798 21,755
OPERATING PROFIT 23,785 23,781 58,674 47,526
Interest income 27 114 137 483
Interest expense (957) (799) (2,191) (2,082)
Other income (expense) 46 (202) 63 (311)
EARNINGS BEFORE INCOME TAXES 22,901 22,894 56,683 45,616
Provision for income taxes 8,450 8,800 21,250 17,500
NET EARNINGS $ 14,451 $ 14,094 $ 35,433 $ 28,116
NET EARNINGS PER COMMON SHARE $ .40 $ .38 $ .97 $ .76
WEIGHTED AVERAGE NUMBER OF SHARES 36,515,000 36,867,000 36,514,000 36,843,000
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
Wausau Paper Mills Company and Subsidiaries
<CAPTION>
(Dollars in thousands) May 31 August 31
1997* 1996*
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 4,076 $ 2,372
Accounts and notes receivable 47,828 38,217
Inventories 92,709 70,443
Other current assets 9,370 8,208
Total current assets 153,983 119,240
Property, plant and equipment 384,094 330,536
Other assets 13,552 17,252
TOTAL ASSETS $ 551,629 $ 467,028
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 6,352 $ 6,340
Accounts payable 27,491 26,307
Accrued and other liabilities 28,127 23,496
Accrued income taxes 2,910
Total current liabilities 61,970 59,053
LONG-TERM LIABILITIES
Long-term debt 98,862 53,119
Deferred income taxes 49,251 43,469
Other liabilities 48,177 46,676
Total long-term liabilities 196,290 143,264
Total shareholders' equity 293,369 264,711
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 551,629 $ 467,028
<FN>
* The consolidated balance sheet at May 31, 1997 is unaudited. The
August 31, 1996 consolidated balance sheet is derived from audited
financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Wausau Paper Mills Company and Subsidiaries
<CAPTION>
(Dollars in thousands - unaudited) For the Nine Months
Ended May 31
1997 1996
<S> <C> <C>
Operating Activities:
Net earnings $ 35,433 $ 28,116
Noncash items:
Provision for depreciation, depletion
and amortization 19,269 17,167
Deferred income taxes 5,782 4,502
Changes in operating assets and
liabilities:
Receivables (1,284) (545)
Inventories (18,042) (4,513)
Other assets (1,168) 87
Accounts payable and other liabilities 3,885 6,900
Accrued income taxes (2,910) 82
NET CASH PROVIDED BY OPERATING ACTIVITIES 40,965 51,796
Investing Activities:
Capital expenditures (29,263) (50,797)
Acquisition of Otis Specialty Papers (55,147)
Proceeds from property, plant and
equipment disposals 14 61
Net cash distributed from funds
restricted for capital additions 3,844 8,506
NET CASH USED IN INVESTING ACTIVITIES (80,552) (42,230)
Financing Activities:
Net Borrowings (repayments) under
revolving credit facility 51,085 (1,500)
Repayments of long-term debt (3,254) (3,380)
Dividends paid (6,572) (5,909)
Proceeds from stock option exercises 32 297
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 41,291 (10,492)
Net increase (decrease) in cash and
cash equivalents 1,704 (926)
Cash and cash equivalents at beginning
of year 2,372 2,347
CASH AND CASH EQUIVALENTS AT END OF
QUARTER $ 4,076 $ 1,421
Supplemental Information:
Interest paid (net of amount
capitalized) $ 2,027 $ 2,025
Income taxes paid 19,238 12,956
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: The accompanying unaudited condensed financial statements include
all adjustments, which are all normal and recurring in nature and,
in the opinion of management, present fairly the results for the
interim periods presented. Refer to the Notes to Financial
Statements which appear in the 1996 Annual Report for the company's
accounting policies which are pertinent to these statements.
Note 2: Selling, administrative and research expenses include stock
appreciation rights (SARs) and stock option income of $219,000
or less than $.01 per share for the quarter ended May 31, 1997
and $79,000 or less than $.01 per share for the quarter ended
May 31, 1996. For the nine months ended May 31, 1997, SARs and
stock option expense was $255,000 or less than $.01 per share
compared to $749,000 or $.01 per share for the nine months ended
May 31, 1996.
<TABLE>
Note 3: Accounts receivable consisted of the following:
<CAPTION>
MAY 31, 1997 AUGUST 31, 1996
<S> <C> <C>
Customer Accounts $47,548,000 $42,818,000
Misc. Notes and Accounts
Receivable 5,312,000 1,403,000
$52,860,000 $44,221,000
Less: Allowance for Discounts,
Doubtful Accounts and Pending
Credits 5,032,000 6,004,000
Net Receivables $47,828,000 $38,217,000
</TABLE>
<TABLE>
NOTE 4: THE VARIOUS COMPONENTS OF INVENTORIES WERE AS FOLLOWS:
<CAPTION>
MAY 31, 1997 AUGUST 31, 1996
<S> <C> <C>
Raw Materials and Supplies $ 50,797,000 $40,822,000
Work in Process
and Finished Goods 53,141,000 41,630,000
$103,938,000 $82,452,000
Less: LIFO Reserve 11,229,000 12,009,000
Net Inventories $ 92,709,000 $70,443,000
</TABLE>
NOTE 5: THE ACCUMULATED DEPRECIATION ON FIXED ASSETS WAS $182,262,000
AS OF MAY 31, 1997 AND $164,983,000 AS OF AUGUST 31, 1996.
<TABLE>
NOTE 6: A SUMMARY OF LONG-TERM DEBT IS AS FOLLOWS:
<CAPTION>
MAY 31, 1997 AUGUST 31, 1996
<S> <C> <C>
Bonds, Mortgages and
Similar Debt $98,753,000 $52,744,000
Capitalized Leases 109,000 375,000
Total Long Term Debt $98,862,000 $53,119,000
</TABLE>
<PAGE>
<TABLE>
NOTE 7: DIVIDENDS PER SHARE WERE AS FOLLOWS:
<CAPTION>
THREE MONTHS ENDING THREE MONTHS ENDING
May 31, 1997 May 31, 1996 May 31 1997 May 31, 1996
<S> <C> <C> <C>
$.0625 $.055 $.1875 $.165
</TABLE>
THE COMPANY'S BOARD OF DIRECTORS MEETING SCHEDULE RESULTED IN THE
DECLARATION OF CASH DIVIDENDS OF $.0625 AND $.055 PER SHARE IN
THE THREE MONTHS ENDED MAY 31, 1997 AND MAY 31, 1996, RESPECTIVELY.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS*:
RESULT OF OPERATIONS
Net Sales
For the three months ended May 31, 1997, net sales were a record $143,555,000
or 2.9% ahead of last year's third quarter net sales of $139,446,000. Selling
prices for the company's products declined from a year ago due to weaker paper
market conditions. Shipments of 116,700 tons were also an all time quarterly
record and were 9.2% better than a year ago. For the first nine months of
fiscal 1997, net sales were $409,159,000, down .2% from a year ago as a result
of lower average selling prices, while shipments of 326,500 tons were 6.9%
better than last year. Fiscal 1997 results include twenty days of
contribution from the May 12, 1997 acquisition of Otis Specialty Papers,
located in Jay, Maine, from Rexam Inc. Wausau Papers has combined the Otis
and Rhinelander mills to create its newly formed Technical Specialty Division.
For further information on the Otis acquisition, refer to Item 5.
Third quarter shipments at the Printing and Writing Division rose 3.8% over
the prior year. Market conditions improved slightly during the third quarter
of fiscal 1997 compared to the previous quarter, however, paper prices
continued to remain under pressure during the quarter. At May 31, 1997, order
backlog was at a historically strong level, but slightly lower than a year
ago.
Shipments at the company's Technical Specialty Division were 20.2% higher than
last year's third quarter due to strong demand and the additional shipments
from the Otis mill. Shipments of the division's pressure sensitive grades
were 34.7% ahead of a year ago. Paper prices for the company's technical
specialty grades remained relatively stable during the third quarter of fiscal
1997. Order backlog at May 31, 1997 was higher than a year ago due to strong
customer demand and the addition of the Otis mill.
Early in the fourth quarter of fiscal 1997, the company announced the opening
of a regional sales office in Singapore. The new office will be used to
service existing business in the Far East, as well as to pursue new business
opportunities for the company's Printing and Writing and Technical Specialty
Divisions. For further information regarding the Singapore sales office,
refer to Item 5.
Gross Profit
Fiscal 1997 third quarter gross profit was $31,736,000 or 22.1% of net sales
compared to gross profit of $31,048,000 or 22.3% of net sales last year.
During the third quarter, the benefit of higher production levels was offset
primarily by lower average selling prices, compared to the prior year,
resulting in a decrease in the gross profit percent for the period. For the
nine months ended May 31, 1997, gross profit was $81,472,000 or 19.9% of net
sales compared to $69,281,000 or 16.9% of net sales a year ago. Higher
production levels and lower pulp costs, offset partially by lower paper
selling prices, were the primary factors for the increase in gross profit for
the first three quarters of fiscal 1997 compared to the prior year.
* This discussion and analysis contains forward-looking statements. See
Item 5
<PAGE>
Market prices for pulp, the company's primary raw material, remained
relatively stable during the third quarter of fiscal 1997. Pulp prices did
increase modestly in May and June and additional pulp price increases have
been announced for July, however, it is yet unclear whether there is
sufficient market strength to support the July announcement. Natural gas and
other energy prices, which rose dramatically during the second quarter of
fiscal 1997, returned to more normal historical levels during the third
quarter.
All four of the company's paper mills operated at capacity during the third
quarter of fiscal 1997. Paper mill production at the Printing and Writing
Division was 7% higher than a year ago, resulting primarily from capital
improvement related productivity gains. Repairs to two pulp digesters were
completed during the third quarter, enabling the Brokaw pulp mill to return to
full operation. Printing and writing paper inventories decreased during the
third quarter of fiscal 1997 due to the company's intent to reduce inventories
by accepting more commodity manufacturing business. Third quarter paper mill
production at the Technical Specialty Division increased 26% compared to a
year ago primarily due to increased production at Rhinelander, as a result of
capital improvements, and the benefit of twenty days of operation at the Otis
mill. Rhinelander's silicone coaters operated at approximately 78% of
available machine time during the third quarter of fiscal 1997. Although
shipments of release-coated products have increased 7.9% through the first
nine months of fiscal 1997, compared to a year ago, business volume is not yet
strong enough to maintain full operations on the coaters. Paper inventory
levels at the Technical Specialty Division rose during the third quarter of
fiscal 1997, primarily due to the addition of the Otis mill and strong
production at the Rhinelander mill.
Selling, Administrative and Research Expenses
Selling, administrative and research expenses were $7,951,000 in the third
quarter of fiscal 1997, compared to $7,267,000 for the prior year. Stock
appreciation rights (SARs) and stock option discount income was $219,000 and
$79,000 in the third quarter of fiscal 1997 and fiscal 1996, respectively. For
the nine months ended May 31, 1997, selling, administrative and research
expenses were $22,798,000 compared to $21,755,000 for the same fiscal 1996
period. SARs and stock option discount expense was $255,000 in the first
three quarters of fiscal 1997 compared to $749,000 a year ago. Higher
marketing and promotional expenses along with the addition of the Otis mill
are the primary reasons for the higher costs in the fiscal 1997 periods
compared to last year.
Interest Income and Expense
Interest income in the third quarter of fiscal 1997 was $27,000 compared to
$114,000 a year ago. Interest income was $137,000 and $483,000 for the first
nine months of fiscal 1997 and fiscal 1996, respectively. Higher interest
income for both fiscal 1996 periods is primarily due to interest income on a
declining balance of undistributed proceeds from a $19 million industrial
development bond issue in August 1995. In January 1997, the bond proceeds
were fully disbursed.
<PAGE>
Interest expense was $957,000 in the three months ended May 31, 1997 compared
to $799,000 for the same period a year ago. For the nine months ended May 31,
1997, interest expense was $2,191,000 compared to $2,082,000 last year. There
was no capitalized interest recorded in the third quarter of fiscal 1997
compared to $118,000 last year. Capitalized interest was $198,000 for the
first nine months of fiscal 1997 compared to $790,000 for the same fiscal 1996
period. Capitalized interest was higher in the fiscal 1996 periods due to
several major projects under construction last year which were completed by
fiscal 1997. Lower interest expense in the first nine months of fiscal 1997
is due to lower average debt levels compared to a year ago.
Income Taxes
The income tax provision for the three months ended May 31, 1997 was
$8,450,000 for an effective tax rate of 36.9%. The effective tax rate for the
same period a year ago was 38.4%. The reduction in the effective tax rate in
the third quarter of fiscal 1997 is due primarily to a decrease in the ratio
of non-deductible items to income as a result of increased earnings, and state
tax apportionment changes. The income tax provision for the first nine months
of fiscal 1997 was $21,250,000 for an effective tax rate of 37.5% compared to
an effective tax rate of 38.4% in fiscal 1996.
Net Earnings
Fiscal 1997 third quarter net earnings were $14,451,000 or $.40 per share
compared to net earnings of $14,094,000 or $.38 per share a year ago. For the
nine months ended May 31, net earnings were $35,433,000 or $.97 per share in
fiscal 1997 compared to net earnings of $28,116,000 or $.76 per share in
fiscal 1996.
Cash Provided by Operations
Cash provided by operations was $27,290,000 in the third quarter of fiscal
1997 compared to $25,432,000 for the same period a year ago. The improvement
in cash provided by operations over the prior year is due primarily to a
decrease in inventories compared to a slight inventory increase last year.
For the first nine months of fiscal 1997, cash provided by operations was
$40,965,000 compared to $51,796,000 last year. The decrease in cash provided
by operations is due mainly to a combination of strong production and moderate
market conditions at the Printing and Writing Division, resulting in an
increase in paper inventories at this division. In addition, the company took
advantage of opportunities to purchase pulp at attractive prices, leading to
increased pulp inventories. Pulpwood inventories are also higher than a year
ago as a result of extensive digester repairs at the Brokaw mill.
Capital Expenditures
Capital expenditures totaled $7,540,000 million for the three months ended May
31, 1997 compared to $19,392,000 last year. During the first nine months of
fiscal 1997, capital expenditures were $29,263,000 compared to $50,797,000 for
the same period a year ago. Capital expenditures were higher a year ago due
to a $42 million capacity expansion at the Rhinelander mill which was
implemented in the second and third quarters of fiscal 1996. Capital
expenditures exclude $55,147,000 for the acquisition of Otis Specialty Papers
on May 12, 1997. For further information regarding the Otis acquisition,
refer to Item 5.
<PAGE>
During the third quarter of fiscal 1997, work was completed on the
installation of an additional rewinder at the Rhinelander mill to support its
silicone coating operation. Also during the third quarter, $9.4 million was
approved by the company's Board of Directors for a new digester and process
upgrade for the Brokaw pulp mill. This project will increase pulp production
capacity by approximately 15%, improve pulp quality and reduce operating
costs. The new digester and process upgrade are expected to be completed in
the fourth quarter of fiscal 1998.
Fiscal 1997 capital expenditures are projected to be approximately $40
million, excluding the acquisition of Otis Specialty Papers.
Financing
During the three months ended May 31, 1997, long-term debt increased $40.5
million due primarily to the acquisition of Otis Specialty Papers on May 12,
1997. Long-term debt at the end of third quarter of fiscal 1997 consisted
primarily of $51.5 million outstanding under the company's revolving credit
facility with effective interest rates ranging from 5.88% to 6.00% and $15.0
million in notes to Prudential Insurance Company of America and its
subsidiaries at a fixed rate of 6.03%. The company also had $19.0 million in
variable rate development bonds with an interest rate of 4.15% at the end of
the quarter along with $13.1 million in commercial paper with effective
interest rates ranging from 5.88% to 5.97%.
On May 8, 1997, the company amended its revolving credit facility with its
four banks in order to finance the acquisition of Otis Specialty Papers. The
amended agreement increased the company's revolving credit line from $40
million to $105 million, extending through March 29, 2001 at which time, or
earlier at the company's option, the agreement converts to a one-year term
loan. Other terms and conditions of the amended credit facility remained
essentially unchanged.
Cash provided by operations and the revolving credit facility are expected to
meet current and anticipated working capital needs and dividend requirements,
as well as fund the company's planned capital expenditures. The company
believes additional financing is readily available, should it be needed, to
fund a major expansion or another acquisition.
Common Stock Repurchase
On June 30, 1994, the company's Board of Directors authorized the repurchase
of up to 1,856,250 shares (adjusted for subsequent stock dividends or splits)
of the company's common stock from time to time in the open market or through
privately negotiated transactions at prevailing market prices. There have
been no repurchases of company stock during the first nine months of fiscal
1997.
Dividends
The Board of Directors declared a quarterly cash dividend of $.0625 per share
payable July 1, 1997 to shareholders of record on June 13, 1997.
<PAGE>
ITEM 5. OTHER INFORMATION
OTIS SPECIALTY PAPERS ACQUISITION{*}
On May 12, 1997, Wausau Paper Mills Company completed the purchase of the
assets and business of Otis Specialty Papers from Rexam Inc. The acquisition,
which was initially announced on February 11, 1997 when a letter of intent was
signed, expands Wausau Papers' technical specialty business by 70,000 tons per
year. The Otis mill, located in Jay, Maine, consists of two paper machines
and supercalenders and produces high quality supercalendered kraft release
paper, thermal paper and other high performance papers. The purchase price
was approximately $58 million, subject to certain post closing adjustments.
In the news release issued on May 12, 1997, Daniel D. King, President and
Chief Executive Officer of Wausau Paper Mills Company commented on the
transaction, "We are very excited about the many opportunities the Otis
Specialty Papers acquisition brings to Wausau Papers. This high quality
business, facility and workforce will provide the capacity, expertise,
manufacturing efficiencies and new product opportunities to better serve the
technical specialty marketplace. The acquisition will play an important part
in our strategy of accelerating revenue and earnings growth for the technical
specialty segment of our business."
SINGAPORE SALES OFFICE{*}
On June 9, 1997, the company announced the opening of a regional sales office
in Singapore. The Singapore office will be managed by Mr. Clint Beutelschies,
Regional Director, Asia Pacific. Mr. Beutelschies will be responsible for
servicing the existing business in the Far East, as well as pursuing new
business opportunities and relationships for both the Technical Specialty and
Printing and Writing Divisions of Wausau Papers.
In the June 9, 1997 news release issued, Daniel D. King, President and Chief
Executive Officer of Wausau Paper Mills Company stated, "The establishment of
a Singapore office underscores the commitment Wausau Papers has made to be a
global business partner for its customers. We are very excited about the
opportunities available in the Asia Pacific region for Wausau Papers'
specialty products. I am optimistic that our physical presence in Asia will
produce outstanding growth results."
{*} These discussions contains forward-looking statements. See "Cautionary
Statement" below.
CAUTIONARY STATEMENT
This quarterly report includes certain of management's expectations and other
forward-looking information regarding the company. While the company believes
that these forward-looking statements are based on reasonable assumptions, all
such statements involve risk and uncertainties that could cause actual results
to differ materially from those contemplated in this report. The assumptions,
risks and uncertainties relating to the forward-looking statements in this
report include those described under the caption "Cautionary Statement" in the
company's Form 10-K for the year ended August 31, 1996.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits required by Item 601 of Regulation S-K
Incorporated
EXHIBIT 3 - ARTICLES OF INCORPORATION AND BYLAWS Exhibit<dagger>
(a) Articles of Incorporation, as amended
December 21, 1995. . . . . . . . . . . . . . . . . . 3(1)
(b) Bylaws, as restated July 17, 1992 . . . . . . . . . 3(b)(2)
EXHIBIT 4 - INSTRUMENTS DEFINING THE RIGHTS OF
SECURITY HOLDERS
(a) Articles and Bylaws (see Exhibit 3)
EXHIBIT 10 - MATERIAL CONTRACTS*
(a) Executive Officers' Deferred Compensation
Retirement Plan, as amended 09/18/96 . . . . . . . . 10(a)(3)
(b) Incentive Compensation Plans, as amended
09/18/96 (Printing and Writing Division
and Rhinelander Paper Company, Inc.) . . . . . . . . 10(b)(3)
(c) Corporate Management Incentive Plan, as
amended 09/18/96 . . . . . . . . . . . . . . . . . . 10(c)(3)
(d) 1988 Stock Appreciation Rights Plan, as amended
04/17/91 . . . . . . . . . . . . . . . . . . . . . . 10(d)(3)
(e) 1988 Management Incentive Plan, as amended 04/17/91 . 10(e)(3)
(f) 1990 Stock Appreciation Rights Plan, as amended
04/17/91 . . . . . . . . . . . . . . . . . . . . . . 10(f)(3)
(g) Deferred Compensation Agreement dated 03/02/90,
as amended 07/01/94 . . . . . . . . . . . . . . . . . 10(h)(4)
(h) 1991 Employee Stock Option Plan . . . . . . . . . . . 10(h)(5)
(i) 1991 Dividend Equivalent Plan . . . . . . . . . . . . 10(i)(5)
(j) Supplemental Retirement Benefit Plan dated
01/16/92, as amended 11/13/95 . . . . . . . . . . . . 10(6)
(k) Directors' Deferred Compensation Plan
(l) Director Retirement Benefit Policy . . . . . . . . . 10(o)(7)
*All exhibits represent executive compensation
plans and arrangements.
EXHIBIT 21 - SUBSIDIARIES . . . . . . . . . . . . . . . . 22(7)
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
<dagger>Where exhibit has been previously filed and is incorporated herein
by reference, exhibit numbers set forth herein correspond to the
exhibit numbers where such exhibit can be found in the following
reports of the company (Commission File No. 0-7574) filed with
the Securities and Exchange Commission:
(1) Registrant's quarterly report on Form 10-Q for the quarterly period
ended February 29, 1996.
(2) Registrant's annual report on Form 10-K for the fiscal year ended
August 31, 1992.
<PAGE>
(3) Registrant's annual report on Form 10-K for the fiscal year ended
August 31, 1996.
(4) Registrant's annual report on Form 10-K for the fiscal year ended
August 31, 1994.
(5) Registrant's quarterly report on Form 10-Q for the quarterly period
ended November 30, 1996.
(6) Registrant's quarterly report on Form 10-Q for the quarterly period
ended November 30, 1995.
(7) Registrant's annual report on Form 10-K for the fiscal year ended
August 31, 1993.
(b) Reports on Form 8-K
Registrant filed a Form 8-K with respect to the Otis acquisition
described herein. The report was dated May 12, 1997 and filed with
the Commission on May 15, 1997.
<PAGE>
S I G N A T U R E
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 thereunto duly authorized.
WAUSAU PAPER MILLS COMPANY
Registrant
By: STEVEN A. SCHMIDT
Steven A. Schmidt
Vice President Finance,
Secretary and Treasurer
(Principal Financial Officer)
Date: July 11, 1997
<PAGE>
EXHIBIT INDEX
TO
FORM 10-Q
OF
WAUSAU PAPER MILLS COMPANY
FOR THE PERIOD ENDED MAY 31, 1997
Pursuant to Section 102(d) of Regulation S-T
(17 C.F.R. <section>232.102(d))
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS
ENDED MAY 31, 1997 OF WAUSAU PAPER MILLS COMPANY AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> MAY-31-1997
<CASH> 4,076
<SECURITIES> 0
<RECEIVABLES> 52,860
<ALLOWANCES> 5,032
<INVENTORY> 92,709
<CURRENT-ASSETS> 153,983
<PP&E> 566,356
<DEPRECIATION> 182,262
<TOTAL-ASSETS> 551,629
<CURRENT-LIABILITIES> 61,970
<BONDS> 98,862
<COMMON> 139,208
0
0
<OTHER-SE> 154,161
<TOTAL-LIABILITY-AND-EQUITY> 551,629
<SALES> 409,159
<TOTAL-REVENUES> 409,159
<CGS> 327,687
<TOTAL-COSTS> 327,687
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,191
<INCOME-PRETAX> 56,683
<INCOME-TAX> 21,250
<INCOME-CONTINUING> 35,433
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,433
<EPS-PRIMARY> .97
<EPS-DILUTED> .97
</TABLE>
