SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE EXCHANGE ACT OF 1934
Commission file number: 333-42201
BEAR ISLAND PAPER COMPANY, L.L.C.
(Exact name of registrant as specified in its charter)
Virginia 06-0980835
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
10026 Old Ridge Road
Ashland, VA
(Address of Principal Executive Offices)
23005
(Zip Code)
(804) 227-3394
(Registrant's telephone number, including area code)
Former Name, Former Address and Former Fiscal Year, if
Changed Since Last Report: Not Applicable
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 and
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: Not Applicable.
<PAGE>
BEAR ISLAND PAPER COMPANY, L.L.C.
INDEX
Page(s)
Part I. Financial Information
Item 1
Condensed Balance Sheets 1
Condensed Statements of Income 2
Condensed Statements of Cash Flows 3
Notes to Condensed Financial Statements 4
Item 2
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
Part II. Other Information
Item 3. Exhibits and Reports on Form 8-K 10
Signatures 11
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
BEAR ISLAND PAPER COMPANY, L.L.C.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1999 1998
---------------- -----------------
(Unaudited)
<S> <C>
Current assets:
Cash and short-term investments $ 1,285,810 $ 2,130,787
Accounts receivable 11,781,006 13,669,351
Inventories 12,833,420 13,827,824
Other current assets 452,556 570,234
---------------- -----------------
Total current assets 26,352,792 30,198,196
Property, plant and equipment 202,543,594 201,618,960
Less accumulated depreciation 16,108,659 10,841,783
---------------- -----------------
Net property, plant and
equipment 186,434,935 190,777,177
---------------- -----------------
Deferred financing costs 7,924,604 8,275,781
---------------- -----------------
Total assets $220,712,331 $229,251,154
================ =================
LIABILITIES AND MEMBER'S EQUITY
Current liabilities:
Current portion of long-term debt 828,147 1,084,693
Accounts payable and accrued
liabilities 8,900,472 10,431,232
Accrued interest payable 1,260,074 1,307,030
---------------- -----------------
Total current liabilities 10,988,693 12,822,955
Long-term debt 175,667,000 183,861,470
---------------- -----------------
Total liabilities 186,655,693 196,684,425
---------------- -----------------
Member's equity:
Contributed capital 36,679,291 28,130,250
Retained earnings (accumulated deficit) (2,622,653) 4,436,479
---------------- -----------------
Total member's equity 34,056,638 32,566,729
---------------- -----------------
Total liabilities and
member's equity $220,712,331 $229,251,154
================ =================
</TABLE>
See accompanying notes to the condensed financial statements.
1
<PAGE>
BEAR ISLAND PAPER COMPANY, L.L.C.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
--------------------------------- -----------------------------------
1999 1998 1999 1998
<S> <C>
Net sales $26,474,098 $31,124,443 $52,451,889 $61,504,911
Cost of sales 23,980,580 23,271,112 46,004,946 45,946,249
-------------- -------------- ------------- --------------
Gross profit 2,493,518 7,853,331 6,446,943 15,558,662
Selling, general and administrative expenses:
Management fees to Brant-Allen (794,223) (933,733) (1,573,557) (1,845,147)
Other (195,336) (274,625) (274,805) (550,692)
-------------- -------------- ------------- ---------------
Income from operations 1,503,959 6,644,973 4,598,581 13,162,823
Other income (deductions):
Interest expense (4,394,001) (4,832,860) (9,031,323) (9,714,220)
Other income (expense) 332,271 55,812 376,993 91,235
--------------- ------------- ------------- ---------------
Net income (loss) $(2,557,771) $ 1,867,925 $(4,055,749) $ 3,539,838
=============== ============= ============= ===============
</TABLE>
See accompanying notes to the condensed financial statements.
2
<PAGE>
BEAR ISLAND PAPER COMPANY, L.L.C.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six months ended June 30,
----------------------------
1999 1998
Operating activities:
Net income (loss) $ (4,055,749) $ 3,539,838
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and depletion 5,292,811 5,003,754
Amortization of deferred financing
costs 351,177 476,316
Gain on disposal of property, plant
and equipment (261,706)
Changes in current assets and liabilities:
Accounts receivable 1,888,345 (247,897)
Inventory 994,404 1,387,406
Other current assets 117,678 (86,226)
Accounts payable and accrued
liabilities (481,719) 1,192,988
Accrued interest payable (46,956) 5,693
------------- ------------
Cash provided by operating
activities 3,798,285 11,271,872
------------- ------------
Investment activities:
Purchases of property, plant and
equipment (1,285,569) (3,070,219)
Proceeds from disposal of property, plant
and equipment 596,706
------------- ------------
Net cash used in investing
activities (688,863) (3,070,219)
------------- ------------
Financing activities:
Proceeds from issuance of long-term
debt 5,000,000
Principal payments on long-term debt (13,451,016) (6,531,345)
Payment of deferred financing costs (525,270)
Tax distribution to parent (3,003,383)
Contributions to capital from parent 7,500,000
------------- ------------
Net cash used in financing
activities (3,954,399) (7,056,615)
------------- ------------
Net increase (decrease) in cash (844,977) 1,145,038
Cash and short-term investments, beginning
of period 2,130,787 1,353,049
-------------- -------------
Cash and short-term
investments, end of
period $ 1,285,810 $ 2,498,087
============= ============
Noncash financing activities:
Contributions from Brant-Allen $ 1,049,041 $ 1,446,655
============= ============
See accompanying notes to the condensed financial statements.
3
<PAGE>
BEAR ISLAND PAPER COMPANY, L.L.C.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. In the opinion of management, the accompanying condensed financial
statements of Bear Island Paper Company, L.L.C. (the "Company") contain all
adjustments necessary to present fairly, in all material respects, the
Company's financial position as of June 30, 1999 and December 31, 1998 and
the Company's condensed results of operations for the three- and six-month
periods ended June 30, 1999 and 1998 as well as the Company's condensed
cash flows for the six-month periods ended June 30, 1999 and 1998. All
adjustments are of a normal and recurring nature. These condensed financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's Annual Report on Form 10K filed on
March 31, 1999. The December 31, 1998 balance sheet data was derived from
audited financial statements, but does not include all disclosures required
by generally accepted accounting principles.
The results of operations for the six-month period ended June 30, 1999
should not be regarded as necessarily indicative of the results that may be
expected for the entire year.
2. The Company is a wholly owned subsidiary of Brant-Allen Industries, Inc.
("Brant-Allen"), a Delaware corporation.
A component of selling, general and administrative expenses as shown on the
statements of operations includes aggregate management fees charged by
Brant-Allen. There are restrictions on payment of the management fee.
During the six months ended June 30, 1999 the Board of Directors of
Brant-Allen contributed the unpaid accrued portion of the management fee
totaling $1,049,041 through June 30, 1999 to the Company's capital. The
corresponding management fee for the period ended June 30, 1998 was
$1,446,655. This portion of the management fee is limited as to payment in
cash by the Company to Brant-Allen under the restrictive covenants to the
$100 million principal amount of 10% Senior Secured Notes due 2007 (the
"Notes"). The contribution of this accrued liability has been reflected as
an addition to contributed capital in the accompanying condensed balance
sheet at June 30, 1999. Brant-Allen's Board also agreed that until further
action is taken by the Board, future accrued fees (which are not payable in
cash because of the Notes' restrictive covenants) should be contributed to
the Company's capital.
There are also certain restrictions on distributions paid to Brant-Allen.
Distributions are allowed for a portion of profits in excess of certain
amounts. In addition, distributions are allowed for amounts necessary to
pay for the tax liabilities of the members resulting from the Company's
operations. During the six-months ended June 30, 1999 $3,003,383 was paid
to Brant-Allen to pay such tax liabilities. No similar amounts were paid in
1998.
4
<PAGE>
BEAR ISLAND PAPER COMPANY, L.L.C.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
3. No provision for income taxes is required in the financial statements since
the member is individually liable for any income tax that may be payable on
the Company's taxable income.
4. Finished goods and raw materials inventories are valued at the lower of
cost or market, with cost determined on the first-in, first-out ("FIFO")
basis. Stores inventories are valued at the lower of average cost or
market.
Inventories consisted of:
June 30, 1999 December 31, 1998
--------------- -----------------
Raw materials $ 1,759,545 $ 3,908,772
Stores 8,373,856 8,759,809
Finished goods 2,700,019 1,159,243
--------------- -----------------
$ 12,833,420 $ 13,827,824
=============== =================
5. Long-term debt consisted of:
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998
---------------- -----------------
<S> <C>
Senior Secured Notes $ 100,000,000 $ 100,000,000
Term Loan Facility 64,266,316 69,300,000
Revolving Credit Facility 11,934,335 15,000,000
Long-term purchase obligations 294,496 646,163
---------------- -----------------
176,495,147 184,946,163
Less current portion 828,147 1,084,693
---------------- -----------------
Total long-term debt $ 175,667,000 $ 183,861,470
================ =================
</TABLE>
5
<PAGE>
BEAR ISLAND PAPER COMPANY, L.L.C.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
6. The Company was a party to a wood supply contract with Bear Island
Timberlands Company, L.L.C. ("Timberlands") an affiliate and wholly owned
subsidiary of Brant-Allen, whereby Timberlands guaranteed to supply a
portion of the Company's log and pulp chip requirements at market prices.
Purchases under the wood supply contract approximated $1,145,000 for the
six months ended June 30, 1998. During the six months ended June 30, 1999
all log and pulp chips were purchased from outside vendors due to the
suspension of Timberlands' operations in 1998. The Company has negotiated a
number of fiber supply contracts covering approximately 183,000 cords of
chips and roundwood for periods ranging from three months to one year.
Management anticipates liquidating all Company and Timberlands owned
timberlands and that future fiber requirements will be supplied by
independent parties.
The Company charged Timberlands for certain administrative and other
expenses. These charges approximated $798,000 and $385,000 during the six
months ended June 30, 1999 and 1998, respectively.
The Company's receivables and payables and the Company's sales to an
affiliate were as follows:
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998
---------------- -----------------
<S> <C>
Due from Brant-Allen $ 34,238 $ 53,138
Due from Newsprint Sales 39,144 1,205,553
Due from Dow Jones & Company, Inc. 3,370,636 2,369,136
Due from Timberlands 80,586
Due to Timberlands 67,661
Due from F.F. Soucy, Inc. and Partners 11,647 52,181
Due to F.F. Soucy, Inc. 63,219 78,192
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months ended June 30,
1999 1998 1999 1998
------------------------------ --------------------------
<S> <C>
Net sales to Dow Jones & Company, Inc. $5,389,119 $7,089,597 $10,950,318 $13,187,741
</TABLE>
Sales to Dow Jones & Company, Inc. represented approximately 20% and 21% of
total sales during the three- and six- month periods ended June 30, 1999
and 23% and 21% during the three- and six- month periods ended June 30,
1998, respectively. The remaining sales were to other unaffiliated printing
and publishing enterprises located primarily in the eastern United States.
6
<PAGE>
BEAR ISLAND PAPER COMPANY, L.L.C.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
7. Statement of Financial Accounting Standards No. 133 ("SFAS No. 133"),
"Accounting for Derivative Instruments and Hedging Activities," was issued
by the Financial Accounting Standards Board ("FASB") in June 1998, which is
effective for all fiscal quarters of all fiscal years beginning after June
15, 1999. In June 1999, SFAS No. 137 "Accounting for Derivative Instruments
and Hedging Activities-Deferral of the Effective Date of FASB Statement No.
133", was issued by the FASB, postponing SFAS No. 133's effective date one
year to June 15, 2000. SFAS No. 133 establishes accounting and reporting
standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. At the
time of adoption of SFAS No. 133, this standard is not expected to have a
material impact on the financial position or results of operations of the
Company.
8. In May 1999 the Company and Timberlands sold approximately 83,000 acres of
timberland. As required under the debt agreements, proceeds from this sale,
net of tax distributions, were used to retire all debt outstanding on
Timberlands as well as all debt incurred by Brant-Allen in its purchase of
Timberlands. Brant-Allen made a capital contribution to the Company with
the remainder of the proceeds, $7.5 million, which was used to retire a
portion of the debt outstanding under the Company's $70 million 8-year
senior secured term loan facility ("Term Loan Facility") and the Company's
$50 million 6-year senior secured revolving credit facility ("Revolving
Credit Facility"). The Company and Timberlands have entered into a joint
sales agreement to sell approximately 46,000 acres of timberland to two
independent investors. This transaction is expected to close during the
fourth quarter of 1999. The net proceeds, after distributions for income
taxes, will be used to retire debt outstanding under the Company's Term
Loan Facility and the Company's Revolving Credit Facility.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors affecting the results of operations of the Company during the periods
included in the accompanying condensed statements of operations and the changes
in the Company's financial condition since December 31, 1998.
Some of the information contained in this report constitutes forward-looking
comments within the meaning of the Private Securities Litigation Act of 1995.
Although the Company's management believes its expectations are based on
reasonable assumptions within the bounds of its knowledge of its business and
operations, no assurance is offered that actual results will not differ
materially from expectations. Factors that could cause actual results to differ
from expectations are included in the Company's latest Annual Report on Form
10-K.
General:
The Company manufactures and is dependent on one product, newsprint, which is
used in general printing and the newspaper publishing industry and for
advertising circulars. Accordingly, demand for newsprint fluctuates with the
economy, newspaper circulation and purchases of advertising lineage which
significantly impacts the Company's selling price of newsprint and, therefore,
its revenues and profitability. In addition, variation in the balance between
supply and demand as a result of global capacity additions have an increasing
impact on both selling prices and inventory levels in the North American
markets. Capacity is typically added in large blocks because of the scale of new
newsprint machines.
As a result, the newsprint market is highly cyclical, depending on changes in
global supply, demand and inventory levels. These factors significantly impact
the Company's sales volume and newsprint prices and, therefore, the Company's
revenues and profitability. Given the commodity nature of newsprint, the
Company, like other suppliers to this market, has little influence over the
timing and extent of price changes. Sales are recognized at the time of shipment
from the Company's mill. However, significant fluctuations in revenue can and do
occur as a result of the timing of shipments caused by increases and decreases
in mill inventory levels.
THREE MONTHS ENDED JUNE 30, 1999, COMPARED TO THREE MONTHS ENDED JUNE 30, 1998
Net sales decreased by $4.6 million, or 14.8%, to $26.5 million in the second
quarter of 1999, from $31.1 million in the second quarter of 1998. This decrease
was attributable to a 16.0% decrease in the average net selling price of the
Company's products and was offset in part by a 1.3% increase in sales volumes to
approximately 57,225 metric tons ("tonnes") in the second quarter of 1999, from
approximately 56,500 tonnes in the second quarter of 1998. The Company's net
selling price for newsprint decreased to an average of $463 per tonne in the
second quarter of 1999 from an average of $551 per tonne in the second quarter
of 1998. The decrease in average net selling price per tonne was primarily
caused by the continued competitive conditions in the industry resulting from
excess capacity.
Cost of sales increased by $0.7 million, or 3.0%, to $24.0 million in the second
quarter of 1999 from $23.3 million in the second quarter of 1998. This increase
was attributable primarily to a 1.7% increase in unit manufacturing costs per
tonne and by a 1.3% increase in sales volumes. The increase in unit
manufacturing cost per tonne was a result of net overall cost increases in the
manufacturing process. Cost of sales as a percentage of net sales increased to
90.6% in the second quarter of 1999, from 74.9% in the second quarter of 1998,
due to depressed newsprint selling prices in the second quarter of 1999 and
increased unit costs of manufacturing as noted above.
Selling, general and administrative expenses decreased by $0.2 million, or
16.7%, to $1.0 million in the second quarter of 1999 from $1.2 million in the
second quarter of 1998. This decrease was primarily attributable to a decrease
in management fee to Brant-Allen that resulted from lower net sales and a
reduction of other administrative expenses.
As a result of the above factors, income from operations decreased by $5.1
million to $1.5 million in the second quarter of 1999 from $6.6 million in the
second quarter of 1998.
Interest expense was $4.4 million in the second quarter of 1999 compared to $4.8
million in the second quarter of 1998, due to the payments made on the Revolving
Credit Facility and Term Loan Facility.
Other income increased by $0.3 million due to the sale of timberland in the
second quarter of 1999.
As a result of the above factors, the Company reported a net loss of $2.6
million in the second quarter of 1999 compared to net income of $1.9 million in
the second quarter of 1998.
SIX MONTHS ENDED JUNE 30, 1999, COMPARED TO SIX MONTHS ENDED JUNE 30, 1998
Net sales decreased by $9.0 million, or 14.6%, to $52.5 million in the first six
months of 1999, from $61.5 million in the first six months of 1998. This
decrease was primarily attributable to a 11.9% decrease in the average net
selling price of the Company's products and a 3.2% decrease in sales volumes to
approximately 107,600 tonnes in the first six months of 1999, from approximately
111,150 tonnes in the first six months of 1998. The Company's net selling price
for newsprint decreased to an average of $487 per tonne in the first six months
of 1999 from an average of $553 per tonne in the first six months of 1998. The
decrease in average net selling price per tonne was primarily caused by the
continued competitive conditions in the industry resulting from excess capacity.
Cost of sales increased by $0.1 million, or 0.2%, to $46.0 million in the first
six months of 1999 from $45.9 million in the first six months of 1998. This
increase was attributable primarily to a 3.6% increase in unit manufacturing
costs per tonne and offset by a 3.2% decrease in sales volumes. The increase in
unit manufacturing cost per tonne was a result of an overall net cost increase
in the manufacturing process and a nonrecurring charge for severance benefits
incurred during the first quarter of 1999. Cost of sales as a percentage of net
sales increased to 87.8% in the first six months of 1999, from 74.6% in the
first six months of 1998, due to depressed newsprint selling prices in the first
six months of 1999 and increased unit costs of manufacturing as noted above.
Selling, general and administrative expenses decreased by $0.6 million, or
25.0%, to $1.8 million in the first six months of 1999 from $2.4 million in the
first six months of 1998. This decrease was primarily attributable to a decrease
in the management fee to Brant-Allen that resulted from lower net sales and a
reduction of administrative and regulatory expenses.
As a result of the above factors, income from operations decreased by $8.6
million to $4.6 million in the first six months of 1999 from $13.2 million in
the first six months of 1998.
8
<PAGE>
Interest expense was $9.0 million in the first six months of 1999 compared to
$9.7 million in the first six months of 1998, as a result of a decrease in the
average debt outstanding due to payments made on the Revolving Credit Facility
and the Term Loan Facility.
Other income increased by $0.3 million due to the sale of timberland in the
first six months of 1999.
As a result of the above factors, the Company reported a net loss of $4.1
million in the first six months of 1999 compared to net income of $3.5 million
in the first six months of 1998.
Liquidity and Capital Resources.
The Company's principal liquidity requirements have been for working capital,
capital expenditures and debt service under the Company's loan agreements. These
requirements have been met through cash flows from operations and/or loans under
the Company's Revolving Credit Facility. In addition, the Company received a
$7.5 million capital contribution in May 1999, representing net excess proceeds
from the sale of timberland of Bear Island Timberlands Company LLC. In
accordance with security agreements the capital contribution proceeds were used
to pay down bank debt.
The Company's cash and short-term investments at June 30, 1999 were $1.3
million, representing a decrease of $0.8 million from $2.1 million at December
31, 1998. Net cash provided by operating activities was $3.8 million for the
first six months ended June 30, 1999. Cash provided by financing activities was
$12.5 million and cash provided by investment activities was $0.6 million for
the first six months ended June 30, 1999. In total, $16.9 million was used to
cover capital expenditures of $1.3 million, a tax distribution of $3.0 million
and reductions in long-term debt of $13.4 million. The Company anticipates that
cash provided from operations in the future, combined with borrowings under the
Revolving Credit Facility will be sufficient to pay its operating expenses,
satisfy debt-service obligations and fund capital expenditures.
In the first six months of 1999, the Company's cash provided by operating
activities decreased by 66.4% to $3.8 million from $11.3 million in the first
six months of 1998, primarily due to lower selling prices and higher costs of
sales resulting in a net loss in first six months 1999 compared to net income in
the first six months of 1998.
The Company made capital expenditures of $1.3 million and $3.1 million in the
first six months of 1999 and the first six months of 1998, respectively, in
connection with upgrading and maintaining its manufacturing facility. Management
anticipates that the Company's total capital expenditures for the balance of
1999 and 2000 will primarily relate to maintenance of its newsprint facilities
and cost reduction projects, allowing the Company to improve quality and
increase capacity, and, therefore, enhance its competitive position.
At June 30, 1999, the Company had approximately $176.5 million of indebtedness,
consisting of borrowings of $11.9 million under the Revolving Credit Facility,
$64.3 million under the Term Loan Facility, $100 million under the Notes and
approximately $0.3 million in long term purchase obligations. In addition, $26.7
million was available in unused borrowing capacity under the Revolving Credit
Facility.
New Accounting Pronouncements.
Statement of Financial Accounting Standards No. 133 ("SFAS No. 133"),
"Accounting for Derivative Instruments and Hedging Activities," was issued by
the Financial Accounting Standards Board ("FASB") in June 1998, which is
effective for all fiscal quarters of all fiscal years beginning after June
15, 1999. In June 1999, SFAS No. 137 "Accounting for Derivative Instruments and
Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133",
was issued by the FASB, postponing SFAS No. 133's effective date one year to
June 15, 2000. SFAS No. 133 establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. At the time of
adoption of SFAS No. 133, this standard is not expected to have a material
impact on the financial position or results of operations of the Company.
Year 2000 Compliance.
The Company is in the process of modifying, upgrading or replacing its computer
software applications and systems which management expects will accommodate the
"Year 2000" dating changes necessary to permit correct recording of year dates
for 2000 and later years. The Company does not expect that the cost of its Year
2000 compliance program will be material to its financial condition or results
of operations. The Company believes that it will be able to achieve compliance
by the end of 1999, and does not currently anticipate any material disruption in
its operations as the result of any failure by the Company to be in compliance.
The Company has had formal communications with its major suppliers and customers
concerning their Year 2000 readiness. At the present time the Company has
received no negative responses from any of the suppliers or customers contacted.
9
<PAGE>
PART II. OTHER INFORMATION
ITEM 3. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27, Financial Data Schedule
(b) No reports on Form 8-K have been filed during the quarter for
which this report is filed.
10
<PAGE>
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, there unto duly authorized.
BEAR ISLAND PAPER COMPANY, L.L.C.
By: /s/ Peter M. Brant
-----------------------------------------
Peter M. Brant
President, Chairman of the Board and
Chief Executive Officer
By: /s/ Edward D. Sherrick
-------------------------------------------
Edward D. Sherrick
Vice President of Finance
(Principal Financial Officer and
Chief Accounting Officer)
11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,286
<SECURITIES> 0
<RECEIVABLES> 11,849
<ALLOWANCES> 68
<INVENTORY> 12,833
<CURRENT-ASSETS> 26,353
<PP&E> 202,544
<DEPRECIATION> 16,109
<TOTAL-ASSETS> 220,712
<CURRENT-LIABILITIES> 10,988
<BONDS> 175,667
0
0
<COMMON> 0
<OTHER-SE> 34,057
<TOTAL-LIABILITY-AND-EQUITY> 220,712
<SALES> 52,452
<TOTAL-REVENUES> 52,530
<CGS> 46,005
<TOTAL-COSTS> 1,849
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,031
<INCOME-PRETAX> (4,355)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,355)
<DISCONTINUED> 0
<EXTRAORDINARY> 299
<CHANGES> 0
<NET-INCOME> (4,056)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
